Harris v. Briggs

• Decision Date: 02 December 1980
• Docket Number: No. 16841,16841
• Citation: 621 P.2d 1244
• Parties: Anthony G. HARRIS, Receiver of Mobile Insurance Company, Plaintiff and Appellant, v. Robert BRIGGS and Intermountain General Agency, Inc., Defendants andRespondents.
• Court: Utah Supreme Court

Page 1244

621 P.2d 1244

Anthony G. HARRIS, Receiver of Mobile Insurance Company Plaintiff and Appellant, v. Robert BRIGGS and Intermountain General Agency, Inc. Defendants andRespondents.

No. 16841.

Supreme Court of Utah.

Dec. 2, 1980.

Jerry R. Kennedy of Christensen, Jensen, Kennedy & Powell, Salt Lake City, Christopher M. Maisel, Austin, Tex., for plaintiff and appellant.

Lambertus Jansen, Salt Lake City, for defendants and respondents.

WILKINS, Justice:

This is an appeal by Anthony G. Harris, who as receiver for the Mobile Insurance Company, a Texas corporation, commenced this action to enforce a Texas judgment against Defendants Robert Briggs and Intermountain General Agency, Inc. The Third District Court denied plaintiff's motion for summary judgment and granted defendants' motion on the basis that the Texas court lacked in personam jurisdiction over defendants.

On May 1, 1972, defendants entered into a general agency agreement with Mobile Insurance Company (hereafter "Mobile"), located in Dallas, Texas. Pursuant to that agency agreement defendants solicited, sold, and issued insurance policies in Utah written by Mobile. On a monthly basis defendants collected and remitted premiums to the insurance company. Policies were issued from Texas and loss claims were filed there where they were reviewed and acted upon. An account was established in Texas between Mobile and the defendants relating to payments made pursuant to the agency contract.

On August 21, 1975, delinquency proceedings were commenced by the State of Texas against Mobile under Articles 21.28 and 21.28-C of the Texas Insurance Code. Mobile was placed in receivership and plaintiff's predecessor, Herbert Crook, was duly appointed as receiver.

On August 19, 1977, Crook filed a complaint against defendants alleging the existence of the general agency agreement between defendants and Mobile, and that defendants were delinquent in paying earned premiums and returning unearned commissions owed to Mobile. This action was filed in the Travis County District Court in Texas. Defendants filed a special appearance and motion to quash, attacking the jurisdiction of the Texas court on August 31, 1977. Subsequently, an amended complaint was filed which was served on defendants on March 27, 1978, by the method of service upon the Texas Secretary of State in accordance with Article 2031b, Tex.Rev.Civ.Stat.Ann. Actual notice was thereafter given to the defendants by the Texas Secretary of State. Defendants answered this complaint, preserving their special appearance in March, 1978.

Thereafter, plaintiff filed a brief in opposition to the special appearance of the defendants, and the motion to quash was noticed for hearing on September 14, 1978. On July 18, 1978, notice of the September hearing was given to defendants by the District Court in Texas. Plaintiff's counsel in Texas also advised defendants' counsel by letter that the hearing was scheduled for September 14, and furthermore that the trial of the matter was set for September 21, 1978.

On September 14, defendants failed to appear at the hearing on their special appearance. Plaintiff presented evidence and the Texas court entered its order overruling defendants' special appearance. Defendants took no further action on this ruling and did nothing further with regard to their answer. Trial was held on September 21, 1978, but again defendants did not appear. At the trial plaintiff presented evidence in support of his complaint, and after reviewing the file and considering the evidence, the Texas court entered judgment against the defendants. No appeal was taken by defendants and so the judgment became final.

On January 29, 1979, plaintiff filed a complaint in the Utah District Court seeking to enforce the Texas judgment. Plaintiff moved for summary judgment, arguing that the Texas judgment was entitled to full faith and credit and to be enforced as a matter of law. Defendants also moved for summary judgment on the ground that the Texas court never acquired jurisdiction over them and therefore the judgment was void.

Plaintiff raises three points on appeal. He first argues that the Utah District Court erred in holding that the Texas judgment was not entitled to full faith and credit. He next argues that even if the Texas judgment is not entitled to full faith and credit, the District Court erred in holding as a matter of law that the Texas court did not have valid in personam jurisdiction over the defendants. Finally, plaintiff contends that the District Court erred in holding that because of potential third-party claims by defendants against their Utah sub-agents, this matter must be litigated in Utah.

Article IV, Section 1, of the United States Constitution provides:

Full Faith and Credit shall be given in each State to the Public Acts, Records, and Judicial Proceedings of every other State. And the Congress may by general Laws prescribe the manner in which such Acts, Records, and Proceedings shall be proved and the Effect thereof.

Pursuant to the mandate of the second clause of the foregoing provision, Congress enacted the Act of 1790, now codified in 28 U.S.Code, § 1738, which provides in pertinent part:

Such Acts, records and judicial proceedings or copies thereof, so authenticated, shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law of usage in the courts of such State, Territory or Possession from...