CPB Int'l, Inc. v. Fed. Labs. Corp.

• Decision Date: 01 February 2013
• Citation: 2013 N.Y. Slip Op. 00649,103 A.D.3d 1183,958 N.Y.S.2d 854
• Parties: CPB INTERNATIONAL, INC., Plaintiff–Respondent, v. FEDERAL LABORATORIES CORP., Defendant–Appellant.
• Court: New York Supreme Court — Appellate Division

103 A.D.3d 1183

958 N.Y.S.2d 854

2013 N.Y. Slip Op. 00649

CPB INTERNATIONAL, INC., Plaintiff–Respondent,

v.FEDERAL LABORATORIES CORP., Defendant–Appellant.

Supreme Court, Appellate Division, Fourth Department, New York.

Feb. 1, 2013.

Amigone, Sanchez & Mattrey, LLP, Buffalo (Arthur G. Baumeister, Jr., of Counsel), for Defendant–Appellant.

Gross, Shuman, Brizdle & Gilfillan, P.C., Buffalo (John K. Rottaris of Counsel), for Plaintiff–Respondent.

PRESENT: SMITH, J.P., PERADOTTO, LINDLEY, SCONIERS, AND VALENTINO, JJ.

MEMORANDUM:

Defendant appeals from an order denying its motion to dismiss the complaint in this action, which seeks, inter alia, to enforce a default judgment entered against it by a Pennsylvania court. We conclude that Supreme Court properly denied the motion.

Plaintiff is a Delaware corporation with its principal place of business in Pennsylvania. Defendant is a New York corporation engaged in the manufacture and sale of nutritional supplements, and its principal place of business is in the Town of Alden, New York. In 2006, plaintiff sold quantities of a substance known as chondroitin sodium sulfate to defendant pursuant to three separate contracts. In 2007, plaintiff commenced an action in the United States District Court for the Middle District of Pennsylvania, alleging that defendanthad breached those contracts by failing to pay the sums due thereunder. The federal court granted defendant's motion to dismiss that action for lack of personal jurisdiction ( see generally World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291–294, 100 S.Ct. 559, 62 L.Ed.2d 490;International Shoe Co. v. Washington, 326 U.S. 310, 316–319, 66 S.Ct. 154, 90 L.Ed. 95).

Plaintiff thereafter commenced an action in a Pennsylvania court, asserting the same breach of contract causes of action against defendant that had been dismissed in the federal court action. The complaint alleged that jurisdiction was proper in the Pennsylvania court pursuant to the “General Terms and Conditions” of each contract, in which the parties agreed that the contracts would be governed by Pennsylvania law and that disputes arising therefrom would be resolved in the state courts of Pennsylvania or the federal courts in Pennsylvania. Although the record establishes that defendant received service of process in that action, defendant did not answer or otherwise appear, and a default judgment was entered against it.

Plaintiff subsequently commenced the instant action seeking enforcement of the Pennsylvania court's default judgment and asserting three causes of action each for breach of contract and account stated. Defendant moved to dismiss the complaint on the grounds that the Pennsylvania court lacked personal jurisdiction to render the default judgment that plaintiff seeks to enforce ( seeCPLR 3211[a][1] ) and that the remaining causes of action are barred by the applicable statute of limitations ( seeCPLR 3211[a][5] ). Supreme Court properly denied the motion.

“The full faith and credit clause of the United States Constitution (U.S. Const., art. IV, § 1) requires a judgment of one state court to have the same credit, validity, and effect in every other court of the United States [as] it ha[s] in the state in which it was pronounced” ( Matter of Bennett, 84 A.D.3d 1365, 1367, 923 N.Y.S.2d 715,lv. denied19 N.Y.3d 801, 2012 WL 1500072;see Boudreaux v. State of La., Dept. of Transp., 11 N.Y.3d 321, 325, 868 N.Y.S.2d 575, 897 N.E.2d 1056,cert. denied––– U.S. ––––, 129 S.Ct. 2864, 174 L.Ed.2d 578). Thus, “[a]s a matter of full faith and credit, ... the courts of this State [are] limited to determining whether the rendering court had jurisdiction” before enforcing a judgment of a sister state, including one obtained upon default ( Fiore v. Oakwood Plaza Shopping Ctr., 78 N.Y.2d 572, 577, 578 N.Y.S.2d 115, 585 N.E.2d 364,rearg. denied79 N.Y.2d 916, 581 N.Y.S.2d 668, 590 N.E.2d 253,cert. denied506 U.S. 823, 113 S.Ct. 75, 121 L.Ed.2d 40;see generally Parker v. Hoefer, 2 N.Y.2d 612, 616–617, 162 N.Y.S.2d 13, 142 N.E.2d 194,cert. denied355 U.S. 833, 78 S.Ct. 51, 2 L.Ed.2d 45).

Here, contrary to defendant's contention, we conclude that the order dismissing the federal action did not deprive the Pennsylvania court of personal jurisdiction over it. While that order may have provided a basis for asserting the defense of collateral estoppel in the Pennsylvania action, which defe...