First Nat. Bank of Libby, Montana v. Rector, 14434

• Decision Date: 16 April 1986
• Docket Number: No. 14434,14434
• Citation: 710 S.W.2d 100
• Parties: FIRST NATIONAL BANK OF LIBBY, MONTANA, Appellant, v. Ken RECTOR, et ux., Appellees.
• Court: Texas Court of Appeals

Page 100

710 S.W.2d 100

FIRST NATIONAL BANK OF LIBBY, MONTANA, Appellant, v. Ken RECTOR, et ux., Appellees.

No. 14434.

Court of Appeals of Texas,

Austin.

April 16, 1986.

John F. Paniszczyn, Reagan, Burrus, Dierksen, Lamon & Bluntzer, New Braunfels, for appellant.

Mark E. Cusack, Chunn & Chunn, New Braunfels, for appellees.

Before SHANNON, C.J., and GAMMAGE and CARROLL, JJ.

ON MOTION FOR REHEARING

GAMMAGE, Justice.

Our prior opinion is withdrawn and the following is substituted.

The First National Bank of Libby, Montana sued Ken and Pauline Rector to enforce a default deficiency judgment obtained in Montana. The trial court granted summary judgment for the Rectors, and the Bank appealed. We will reverse the judgment of the trial court and here render judgment for the Bank.

On November 17, 1980, the 19th Judicial District Court of Lincoln County, Montana entered a default judgment in favor of the Bank in its suit against the Rectors and Samuel and Janet Jones to recover on a promissory note and to foreclose a mortgage securing the note. Following a sheriff's sale of real property described in the judgment, the Bank obtained a deficiency judgment against the two couples in the amount of $26,211.91 plus interest at the rate of 13% per annum from December 16, 1980, until payment of the judgment. The Bank brought this lawsuit in Comal County to enforce the deficiency judgment against the Rectors. After denying the Bank's first motion for summary judgment, the trial court considered both a second motion for summary judgment by the Bank and a motion for summary judgment by the Rectors. The trial court denied the Bank's second motion and granted summary judgment for the Rectors, and the Bank brought this appeal.

By four points of error the Bank contends that the trial court erred in granting summary judgment for the Rectors, and in denying the Bank's motion for summary judgment. In making the latter assertion, the Bank argues that viewing the evidence in the light most favorable to the Rectors no genuine issues of material fact exist, and that the Montana court's exercise of in personam jurisdiction over the Rectors was proper.

I. SUMMARY JUDGMENT REVIEW

Summary judgment is a harsh remedy which must be strictly construed. International Ins. v. Herman G. West, Inc., 649 S.W.2d 824, 825 (Tex.App.1983, no writ). It is proper only when "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Tex.R.Civ.P.Ann. 166-A(c) (Supp.1986); McFadden v. American United Life Ins. Co., 658 S.W.2d 147, 148 (Tex.1983). In determining whether there is a genuine issue of fact in a case, the evidence must be viewed in the light most favorable to the party opposing the motion. Gaines v. Hamman, 358 S.W.2d 557, 562 (Tex.1962). "The burden of demonstrating the lack of a genuine issue of material fact is upon the movant, and all doubts are resolved against the movant." Smith v. University of Texas, 664 S.W.2d 180 (Tex.App.1984, writ ref'd n.r.e.).

At the outset we note the presence of detailed findings of fact and conclusions of law entered by the trial court. It is well settled that findings of fact and conclusions of law have no place in a summary judgment proceeding. State v. Easley, 404 S.W.2d 296, 297 (Tex.1966); Yarbrough v. Phillips Petroleum Company, 670 S.W.2d 270 (Tex.App.1983, writ ref'd n.r.e.); Fulton v. Duhaime, 525 S.W.2d 62 (Tex.Civ.App.1975, writ ref'd n.r.e.).

II. ENFORCEMENT OF FOREIGN JUDGMENTS IN TEXAS

The law with regard to the enforcement of foreign judgments is basic and well-established. It is fundamental that a state must give the final judgment of a sister state the same force and effect the judgment would be entitled to in the state in which it was rendered. U.S.Const.Art. IV, § 1. Texas courts may nonetheless examine the facts in each case to determine whether the court of the sister state did in fact have jurisdiction to enter the judgment for which full faith and credit is sought. Williams v. State of North Carolina, 325 U.S. 226, 65 S.Ct. 1092, 89 L.Ed. 1577 (1945); Country Clubs, Inc. v. Ward, 461 S.W.2d 651, 655 (Tex.Civ.App.1970, writ ref'd n.r.e.). When a plaintiff sues upon a judgment of a sister state in a Texas court and introduces a properly authenticated copy of the judgment as provided by 28 U.S.C.A. § 1738 (1966), he thereby establishes a prima facie case. Medical Administrators v. Koger Properties, 668 S.W.2d 719, 721 (Tex.App.1983, no writ); Hamilton v. Newbury, 412 S.W.2d 801, 805 (Tex.Civ.App.1967, writ ref'd n.r.e.). The burden of attacking the judgment and establishing reasons why it should not be given full faith and credit, e.g., that it was not final and subsisting or that the court did not have jurisdiction to enter it, then shifts to the defendant. Williams v. State of North Carolina, supra; Mitchim v. Mitchim, 518 S.W.2d 362, 364 (Tex.1975). Furthermore, the presumptions arising from the federal constitution and statute in favor of a plaintiff seeking to enforce a foreign judgment make the defendant's attack on the foreign judgment an affirmative defense "on which the defendant has the burden to offer some summary judgment proof." A & S Distributing Co. v. Providence Pile, Etc., 563 S.W.2d 281, 283 (Tex.Civ.App.1977, writ ref'd n.r.e.) (emphasis added).

The fact that a foreign judgment was taken by default does not defeat the presumption of validity. Hart v. Calkins Manufacturing, Inc., 623 S.W.2d 451 (Tex.App.1981, no writ); A & S Distributing Co. v. Providence Pile, Etc., supra. In an attack on the judgment of another state, which by its very nature is a collateral attack, recitals in the foreign judgment are presumed to be valid and the attacker has the burden to produce evidence showing lack of jurisdiction. Mitchim v. Mitchim, supra; Fuhrer v. Rinyu, 647 S.W.2d 315, 318 (Tex.App.1982, no writ), and cases cited therein.

The authenticated copy of the Montana judgment attached to the Bank's petition created a presumption of the judgment's validity and its entitlement to full faith and credit pursuant to U.S.Const.Art. IV, § 1 and 28 U.S.C.A. § 1738 (1966), and is sufficient in itself to establish a prima facie case for enforcement. Mitchim v. Mitchim, supra; Medical Administrators v. Koger Properties, supra; Hamilton v. Newbury, supra. Therefore we must first determine whether the Rectors produced some evidence at least raising an issue of material fact as to the validity of the Montana judgment.

A defendant's challenge to the jurisdiction of a sister state can be two-fold in nature. First, the defendant may try to demonstrate that service of process was inadequate under the service of process rules of the sister state. Second, he may assert that the sister state's exercise of in personam jurisdiction does not meet the requirements of due process of law. The validity of the Montana judgment is controlled by the law of Montana but due process must be satisfied in order for that state's exercise of in personam jurisdiction to be valid. O'Brien v. Lanpar Company, 399 S.W.2d 340 (Tex.1966). We will first examine whether service of process was inadequate under Montana law.

III. SERVICE OF PROCESS UNDER MONTANA LAW

Rule 4 of the Montana Rules of Civil Procedure provides for in personam jurisdiction and service of process. Mont.Code Ann. ch. 20, § II, Rule 4 (1985). The Montana long-arm statute, Rule 4B, was originally enacted in 1961 and was patterned in part after the Texas long-arm statute. Mason, The Montana Rules of Civil Procedure, 29 F.R.D. 23, 27 (1962). At times relevant to this cause, Rule 4B provided in part:

All persons found within the state of Montana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts:

(a) the transaction of any business within this state;

* * *

(c) the ownership, use or possession of any property, or of any interest therein, situated within this state;

* * *

(2) Acquisition of jurisdiction. Jurisdiction may be acquired by our courts over any person through service of process as herein provided; or by the voluntary appearance in an action by any person either personally, or through an attorney, or through any other authorized officer, agent or employee.

1961 Montana Laws, ch 13, § 4. Subdivision 4D(3) of the rules provides for personal service outside Montana, and provides in part: "Where service upon any person cannot, with due diligence, be made personally within this state, service of summons and complaint may be made by service outside this state in the manner provided for service within this state, with the same force and effect as though service had been made within this state...." Mont.Code Ann. supra, Rule 4D(3). Subdivision 4D(1) specifies who may serve process under the rules, and at times relevant to this action provided in part: "Service of all process shall be made by a sheriff of the county where the party to be served is found, by his deputy, by a constable authorized by law, or by any other person over the age of 18 not a party to the action...." 1961 Mont. Laws, supra. At times relevant to this lawsuit, Subdivision 4D(2) provided that

[t]he summons and complaint shall be served together unless two or more defendants are residents of the same county, in which case a copy of the complaint need only be served upon one of such defendants.... Service shall be made as follows:

(a) Upon an individual other than an infant or an incompetent person, by delivering a copy of the summons and of the complaint to him personally or by delivering a copy of the summons and of the complaint to an agent authorized by appointment or by law to receive service of process...

Id. ¹

The evidence on service of process consists of the return on the service of...