Century Intern. Management v. Gonzalez

• Decision Date: 13 March 1992
• Citation: 601 So.2d 105
• Parties: CENTURY INTERNATIONAL MANAGEMENT v. Eduardo GONZALEZ, M.D. 2910097.
• Court: Alabama Court of Civil Appeals

Page 105

601 So.2d 105

CENTURY INTERNATIONAL MANAGEMENT v. Eduardo GONZALEZ, M.D.

2910097.

Court of Civil Appeals of Alabama.

March 13, 1992.

Rehearing Denied April 24, 1992.

Certiorari Denied July 24, 1992

Alabama Supreme Court 1911285.

C. Paul Davis of Leo and Associates, Huntsville, for appellant.

Billy C. Burney, Decatur, for appellee.

L. CHARLES WRIGHT, Retired Appellate Judge.

Century International Management Consultants (Century) filed an action in the Circuit Court of Lawrence County to recover on a Nevada judgment entered in favor of Century and against Dr. Eduardo Gonzalez. The action was filed pursuant to the Uniform Enforcement of Foreign Judgments Act, §§ 6-9-230 through -238, Code 1975. Following a hearing, the trial court entered an order finding the Nevada judgment was entered without jurisdiction. Enforcement of the judgment was denied. Century appeals.

The record reflects that in June 1989 Gonzalez, a resident of Alabama, returned a business reply card to Century requesting additional information on the formation of a captive insurance company. Following negotiations with a Century representative by phone, Gonzalez executed a consulting agreement with Century in July 1989. The agreement defined the professional services to be performed by Century in the organization of the captive insurance company. It provided that Gonzalez would pay to Century a fee of $9,500 for its professional services. It further provided that no deductions would be made from the fee if the project were suspended for reasons other than the fault of Century. The agreement provided that its enforcement would be by arbitration in Nevada.

Century agreed to accept the fee from Gonzalez in $1,000 monthly installments. Gonzalez paid installments for the months of August and September. In September 1989 Gonzalez attempted to terminate the agreement and requested the return of his money. He stopped payment on the September installment.

Century subsequently initiated an arbitration proceeding before the American Arbitration Association. Gonzalez was given notice of the proceedings. He filed no pleadings or briefs in the matter. The only response from Gonzalez was a letter written by his attorney to the arbiter denying his jurisdiction.

In October 1990 the arbiter entered an award on behalf of Century and against Gonzalez in the amount of $8,500 plus $300 for administrative fees.

In December 1990 Century filed an action in the District Court of Nevada to enforce the award. Century submitted a return and an affidavit from a process server in Alabama stating that Gonzalez had been served by him with a copy of the Nevada summons and complaint. Gonzalez failed to file an answer or any other responsive pleading. In February 1991 Century filed a request for Submission of Default Judgment. In March 1991 a default judgment was entered against Gonzalez by the Nevada court.

In April 1991 Century initiated this action in Alabama to enforce the Nevada judgment. Gonzalez filed a motion to strike the Nevada judgment, alleging that the consulting agreement was invalid, that compulsory arbitration is against the public policy of Alabama, that Nevada did not have personal jurisdiction over him, and that service of process on Gonzalez was defective.

A hearing was held. The hearing consisted of the record of the Nevada court, counsel's argument and brief, and the testimony of Gonzalez's wife asserting that her husband was not served with the Nevada complaint.

In its order setting aside the Nevada judgment, the trial court found that the Nevada court did not have jurisdiction over Gonzalez and that the service of process on Gonzalez out of the Nevada court was defective. It further found the compulsory arbitration clause in the agreement to be against public policy.

Merits

Century initially contends that the trial court erred in finding that the Nevada court did not have jurisdiction over Gonzalez.

If the court of another state has personal and subject matter jurisdiction over an individual and enters judgment accordingly, that judgment is entitled to full faith and credit in the courts of this state. Tongue, Brooks & Co. v. Walser, 410 So.2d 89 (Ala.Civ.App.1982); U.S. Const. art. IV, § 1. The effect and the validity of the foreign judgment are determined by the law of the rendering state. Morse v. Morse, 394 So.2d 950 (Ala.1981).

When the judgment of a foreign state is properly produced at trial and verified, it is presumed that the rendering court had jurisdiction to enter the judgment. Teng v. Diplomat Nat'l Bank, 431 So.2d 1202 (Ala.1983). The party challenging the foreign judgment on jurisdictional grounds has the burden to produce evidence to overcome the presumption. Teng.

Nevada Revised Statute 14.065, the Nevada long-arm-statute, provides, in pertinent part, the following:

"1. Personal service of summons upon a party outside this state is sufficient to confer upon a court of this state jurisdiction of the person of the party so served if:

"(a) The service is made by delivering a copy of the summons, together with a copy of the complaint, to the party served in the manner provided by statute or rule of court for service upon a person of like kind within the state; and

"(b) The party has submitted himself to the jurisdiction of the court of this state in a manner provided by this section.

"2. Any person who, in person or through an agent or instrumentality, does any of the acts enumerated in this subsection thereby submits...