Eagle Leasing v. Amandus, A-C

• Decision Date: 18 September 1991
• Docket Number: A-C,No. 90-694,90-694
• Parties: EAGLE LEASING d/b/a Budget Rent-ar of Marietta/Parkersburg, et al., Appellee, v. Eldon D. AMANDUS, Defendant, and Jerry Watters, Appellant.
• Court: Iowa Supreme Court

Page 35

476 N.W.2d 35

EAGLE LEASING d/b/a Budget Rent-A-Car of Marietta/Parkersburg, et al., Appellee, v. Eldon D. AMANDUS, Defendant, and Jerry Watters, Appellant.

No. 90-694.

Supreme Court of Iowa.

Sept. 18, 1991.

James R. Cook, Des Moines, for appellant.

Mary S. Bernabe of Brick, Seckington, Bowers, Swartz & Gentry, P.C., Des Moines, for appellee.

Considered by McGIVERIN, C.J., and HARRIS, SCHULTZ, LAVORATO, and NEUMAN, JJ.

NEUMAN, Justice.

This appeal concerns the enforcement of a foreign judgment registered in Iowa in accordance with Iowa Code chapter 626A (1989). The appellant challenges the district court's refusal to set aside the judgment. We affirm.

I. Scope of review. The record on appeal consists of the pleadings filed in a West Virginia proceeding against Jerry Watters, an Iowa resident; written admissions by Watters' counsel concerning his client's participation in the underlying controversy; the West Virginia court's findings of fact, conclusions of law, and judgment entry; the Warren County Clerk of Court's "Notice of Foreign Judgment"; Watters' "Application to Set Aside Foreign Judgment and Application for New Trial"; plaintiff Eagle Leasing's resistance; and the district court's ruling. Our review is for the correction of errors at law. Iowa R.App.P. 4.

II. Background facts and proceedings. The record reveals that plaintiff Eagle Leasing (d/b/a Budget Rent-A-Car) sued Jerry Watters in West Virginia for intentional and malicious damage to a leased 4-door Lincoln Town Car. Service of original notice was upon the Secretary of State of West Virginia in accordance with that state's long arm statute. See W.Va.Code Ann. § 56-3-33. The Secretary of State then notified Watters by certified mail of the pending litigation.

Watters neither appeared nor answered. His attorney did, however, communicate with opposing counsel regarding settlement. In a letter dated January 5, 1988, counsel conceded that "Mr. Watters was driving the vehicle and Mr. Watters is the one who damaged the vehicle."

A judge for the Circuit Court of Wood County, West Virginia, subsequently rendered default judgment against Watters for $17,500, an amount less than the damages sought by Eagle Leasing in its petition. In its ruling, the court found that it had personal jurisdiction over the defendant by virtue of substituted service in accordance with the state's long arm statute. The court further found that Watters intentionally damaged the leased vehicle in the parking lot of the Holiday Inn in Parkersburg, West Virginia, by "racing it, crashing it into other cars, some of which were other rentals, and spinning the tires at excessive speeds." Regarding plaintiff's claim for punitive damages, the court noted evidence of Watters' consumption of alcohol in connection with the incident. He also reportedly bragged about his reckless conduct to an Eagle Leasing employee when he returned the car. Based on the cost of repairing damage to the vehicle's tires, trunk, left rear quarter panel and right front bumper, the loss of rentals during the repair period, and Watters' willful disregard for the property of others, the court entered judgment against him for $7500 actual and $10,000 punitive damages.

Eagle Leasing filed this judgment with the clerk of court for Warren County, Iowa (Watters' county of residence) in accordance with Iowa Code section 626A.2. Watters then petitioned the district court to set it aside. He urged the invalidity of the judgment on a number of general theories, principally lack of personal service or jurisdiction and failure of proof that the cause of action arose out of the operation of a motor vehicle. The district court found no merit in any of Watters' contentions, and refused to set aside the judgment or grant Watters a new trial in Iowa. It is from this ruling that Watters appeals.

III. Appellant's attack on the jurisdiction of the West Virginia court. Several fundamental principles guide our decision to affirm the district court. Article IV, section 1 of the United States Constitution requires the courts of each state to give "full faith and credit" to out-of-state judgments entered in accordance with recognized principles of due process. Nevada v. Hall, 440 U.S. 410, 421, 99 S.Ct. 1182, 1188, 59 L.Ed.2d 416, 425 (1979); National Equip. Rental, Ltd. v. Estherville Ford, Inc., 313 N.W.2d 538, 541 (Iowa 1981). Among the primary due process concerns of interstate litigation is proof of sufficient minimum contacts between the forum state and the defendant to justify the court's personal jurisdiction. Kulko v. Superior Court of California, 436 U.S. 84, 92, 98 S.Ct. 1690, 1696-97, 56 L.Ed.2d 132, 141 (1978); see also International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945). Because a state's power to regulate motor vehicle usage extends to nonresident as well as resident drivers, it has long been held that motorists who avail themselves of the privilege of driving in a "foreign" state may, consistent with due process, be subject to "long arm" statutes that confer jurisdiction upon the courts of a state in which an accident or injury occurs. Hess v. Pawloski, 274 U.S. 352, 355, 47 S.Ct. 632, 633, 71 L.Ed. 1091, 1094-95 (1927); accord Rosenblatt v. American Cyanamid Co., 86 S.Ct. 1, 3-4, 15 L.Ed.2d 39, 43 (1965).

The law upon which the West Virginia court rested its personal jurisdiction over Watters is just such a "long arm" statute. Section 56-3-33(a) of the West Virginia Code Annotated provides that the "engaging" by a nonresident in one or more specified acts "shall be deemed equivalent to an appointment by such nonresident" of the West Virginia Secretary of State as his "true and lawful attorney upon whom may be served all lawful process in any action or proceeding...." Among the specific acts covered by the statute are the ones upon which Eagle Leasing's claims rest, namely, transacting business in the state and causing tortious injury by act or omission within the state. W.Va.Code Ann. 56-3-33(a)(1), (3). Finally, the statute provides for certified or registered...