City of Philadelphia v. Stadler

• Decision Date: 11 December 1978
• Citation: 395 A.2d 1300,164 N.J.Super. 281
• Parties: CITY OF PHILADELPHIA, Plaintiff, v. Henry H. STADLER, Defendant. CITY OF PHILADELPHIA, Plaintiff, v. Salvatore DIMARTINO, Defendant. CITY OF PHILADELPHIA, Plaintiff, v. Joseph A. SULPIZIE, Defendant. CITY OF PHILADELPHIA, Plaintiff, v. James SPROULES, Defendant.
• Court: New Jersey District Court

Page 281

164 N.J.Super. 281

395 A.2d 1300

CITY OF PHILADELPHIA, Plaintiff, v. Henry H. STADLER, Defendant.

CITY OF PHILADELPHIA, Plaintiff, v. Salvatore DIMARTINO, Defendant.

CITY OF PHILADELPHIA, Plaintiff, v. Joseph A. SULPIZIE, Defendant.

CITY OF PHILADELPHIA, Plaintiff, v. James SPROULES, Defendant.

District Court, Burlington County, New Jersey.

Dec. 11, 1978.

Charles Crabbe Thomas, Camden, for plaintiff.

William S. Ruggierio, Marlton, for defendants.

WELLS, J. S. C.

These four cases consolidated for hearing and decision are before the court on plaintiff's motion for summary judgment. Plaintiff City of Philadelphia (city) seeks New Jersey judgments based upon judgments against each defendant entered in the Court of Common Pleas, Trial Division, of the County of Philadelphia, State of Pennsylvania, pursuant to the Full Faith and Credit Clause, U.S.Const., Art. IV, S 1. Defendants resist, asserting various constitutional defenses. The undisputed facts are:

Since 1939 the city has levied a tax upon wages earned by persons working within the County of Philadelphia, Philadelphia Pa. Code, S 19-1500 (1973). This tax, known as the wage and net profit tax (hereinafter wage tax), is a self-assessed tax which places the responsibility of filing a return upon the taxpayer. In these actions defendant taxpayers are residents of the State of New Jersey who are employed by the Federal Government on federal enclaves inside the boundaries of Philadelphia. ¹ The defendants refused to file the necessary forms or pay the assessed taxes.

In each case suits alleging the resultant tax deficiency against each defendant were filed in the Court of Common Pleas of Philadelphia County and served upon defendants under the Pennsylvania Long Arm Statute, 42 Pa.C.S.A. S 8301 Et seq., by serving the Secretary of the Commonwealth and defendants at their last known address by certified mail, return receipt. The records of the Pennsylvania proceedings before this court show that all the addresses were to communities within Burlington County and that in three cases the certified mail went unclaimed and that one was refused. After defendants failed to answer, appear or otherwise defend, the city moved to enter judgments by default for failure to plead. Notices pursuant to Pennsylvania R.C.P. 2082 were sent to each defendant by certified mail, return receipt requested, notifying them that default judgments would be entered within 20 days of the mailing of the notice. Once again defendants either refused delivery of the letter or it went unclaimed. Following expiration of the 20-day period without response from defendants, judgments were entered in favor of the city. These New Jersey actions on the aforesaid Pennsylvania judgments followed.

Defendants argue on various grounds that the judgments entered by the courts of the Commonwealth of Pennsylvania are not entitled to full faith and credit. U.S.Const., Art. IV, § 1. Generally, the Full Faith and Credit Clause requires every state to give at least the Res judicata Effect which the judgment would be accorded in the state which rendered it. Duke v. Durfee, 375 U.S. 106, 109, 84 S.Ct. 242, 11 L.Ed.2d 186 (1963). However, it is a well established constitutional principle that a judgment entered without due process of law is not entitled to full faith and credit and may not be enforced even as a matter of comity. Griffin v. Griffin, 327 U.S. 220, 228-229, 66 S.Ct. 556, 90 L.Ed. 635 (1946); See also, Restatement, Conflicts 2d, § 104 at 315 (1969). Thus, a court of this State, when asked to enforce a foreign state judgment, must deny full faith and credit if the rendering court lacked In personam jurisdiction, Duke v. Durfee, supra, 375 U.S. at 106, 84 S.Ct. 242, 11 L.Ed.2d 186; subject matter jurisdiction, James v. Francesco, 61 N.J. 480, 485, 295 A.2d 635 (1972); Klaiber v. Frank, 9 N.J. 1, 86 A.2d 679 (1952), or failed to provide adequate notice and an opportunity to be heard. National Exchange Bank v. Wiley, 195 U.S. 257, 25 S.Ct. 70, 49 L.Ed. 184 (1904); Griffin v. Griffin, supra. Defendants assert that the judgments recorded in the Commonwealth courts were entered without due process. U.S.Const. Amend XIV. The primary issues may be summarized as follows:

1. Did lack of notice to defendants of their rights to administrative review prior to the filing of the suits in Pennsylvania, combined with the probable application in Pennsylvania of its doctrine of exhaustion of remedies, deprive defendants of an effective right to be heard within the Commonwealth of Pennsylvania?

2. Did the application of Rule 306, Pa.R.C.P. (Philadelphia County), amended May 17, 1976, also cited as Rule 40-H(1) and (2), Philadelphia Civil Rules, Operate to deny defendants the effective opportunity to appear and defend in the Pennsylvania courts?

3. Did defendants have sufficient minimal contacts in Pennsylvania for its courts to render In personam judgments against them grounded upon service outside Pennsylvania under the Pennsylvania Long Arm Statute?

4. Does New Jersey public policy preclude the entry of judgments in these cases?

Addressing the first issue, defendants argue that the default judgments were entered in violation of their due process rights since they never received notice in the form of tax bills or assessment notices of their right to appeal to the Philadelphia Tax Review Board, an administrative agency in which all taxpayers must "exhaust any remedy" prior to either prosecuting or defending any action in court relative to the tax. ² See Philadelphia v. Kenny, 28 Pa.Cmwlth. 531, 369 A.2d 1343 (Cmwlth.Ct.1977) , Cert. den. 434 U.S. 1025, 98 S.Ct. 754, 54 L.Ed.2d 774 (1977).

The court is not satisfied that defendants have the right to complain that they did not receive such notice. The complaints filed in the actions before the Pennsylvania courts specifically alleged that such notices had been given. ³ Thus each of the defendants, had they chosen to receive the complaints served on them, would have been apprised that the city took the position that a notice of the right to an administrative remedy had been given. Defendants could then, in the Pennsylvania actions, have specifically denied that such notice had been sent and put the city to its proofs on the issue of notice of the availability of administrative review. Such notice is important to defendants since they argue that the doctrine of exhaustion of remedies, as applied in Pennsylvania, would have precluded them from a right to be heard on the merits within the Commonwealth of Pennsylvania, and cite the case of Philadelphia v. Kenny, supra. However, that case is clearly distinguishable. Although in Kenny the court did apply the doctrine of exhaustion of remedies, the issue of the mailing of the notice of administrative review was not disputed. No case shown to this court indicates that Pennsylvania would apply the doctrine of exhaustion of remedies if it found, in fact, that defendants had not received notice of the administrative remedy they were obliged to pursue.

Defendants next argue that Rule 306, Pa.R.C.P. (Phila. Cty.), amended May 17, 1976, also cited as Rule 40-H(1) and (2), Philadelphia Civil Rules precluded the defendants in these actions from appearing in the courts of the Commonwealth. The rule, before its amendment, provided as follows:

The first paper filed by a party in a case shall have endorsed thereon an address in the Commonwealth at which all papers and notices thereafter may be served upon him, and the Prothonotary shall not accept filing unless it contains such endorsement.

Defendants contend this rule precludes Pro se nonresident defendants from appearing in the Philadelphia Commonwealth Courts. This court disagrees with that interpretation. The rule on its face only requires that a party to a lawsuit list an address within the Commonwealth. It does not exclude a nonresident litigant from making his appearance. In these matters defendants could have provided a mailing address within the city since they worked on installations clearly within its boundaries. No authority has been presented to this court which holds that the Pennsylvania courts deny access to the court for failure to comply with the above-cited rule. Nor did defendants make any effort whatsoever to appear. Therefore, no shred of evidence supports the theory that this rule is violative of the Fourteenth Amendment.

The last due process argument utilized by defendants to resist enforcement of the Pennsylvania judgments is that they lacked sufficient minimal contacts with Pennsylvania to satisfy due process under the test announced in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In the Pennsylvania proceedings, service pursuant to the long arm statute, 42 Pa.C.S.A. S 8301 Et seq., was invoked on the theory that § 8304 thereof permits service in the manner described on nonresidents who "shall have done any business" in Pennsylvania. For purposes of this statute, working in Philadelphia is "doing business" there under the definition of that phrase given in 42 Pa.C.S.A. § 8309. Philadelphia v. Bullion, 28 Pa.Cmwlth. 485, 368 A.2d 1375 (Cmwlth.Ct.1977). This court is bound by that interpretation, for "where the construction of a foreign statute is involved, our courts will accept as controlling the interpretation placed thereon by the courts of that state." King v. Klemp, 26 N.J.Misc. 140, 145, 57 A.2d 530, 533 (Ch.1947); Watson v. Lane, 52 N.J.L. 550, 20 A. 894 (E. & A.1890); 73 Am.Jur.2d, Statutes, § 143 (1974).

In Bullion facts identical to those in the present case were involved except: (1) defendant conceded employment in Philadelphia and (2) appeared in Pennsylvania to contest service under the long arm statute. He lost. Consequently, the only avenue of inquiry open to the court is whether merely working in Pennsylvania satisfies the constitutional requirement of minimal contacts to give it long...