In The Matter Of Registration Of A Ohio Judgment Michael J. Gardner v. Tallmadge
| Decision Date | 05 October 2010 |
| Docket Number | No. COA10-125.,COA10-125. |
| Citation | 700 S.E.2d 755 |
| Parties | In the Matter of Registration of a[n] Ohio Judgment Michael J. GARDNER, Plaintiff, v. Bruce TALLMADGE, dba Tallmadge Holding Co., LLC, Defendant. |
| Court | North Carolina Court of Appeals |
OPINION TEXT STARTS HERE
Appeal by Plaintiff from order entered 26 October 2009 by Judge L. Todd Burke in Rockingham County Superior Court. Heard in the Court of Appeals 9 June 2010.
Rockingham County, No. 09 CVS 8421. 1
Gerald S. Schafer, Greensboro, for Plaintiff-Appellee.
Robertson, Medlin & Blocker, PLLC, by John F. Bloss, Greensboro, for Defendant-Appellant.
Defendant Bruce Tallmadge, dba Tallmadge Holding Co., LLC., executed a demand cognovit promissory note (“Note”) dated 25 March 2004 to Plaintiff Michael J. Gardner which, reproduced here, 2 reads as follows:
FOR VALUE RECEIVED, the undersigned, Tallmadge Holding Co., LLC., a North Carolina Limited Liability Company and Bruce Tallmadge (referred to in this Note as the “Borrowers”), promise to pay to the order of Michael J. Gardener (referred to in this Note as “Lender”) at 2151 Industrial Drive, Findlay, Ohio 45840, or at such other place as Lender may designate in writing from to time, in legal tender of the United States, the principal sum of Two Hundred Thousand Dollars ($200,000.00), together with interest on the unpaid principal balance thereof from the date of this Note at the rate and payable in the manner hereinafter provided.
Interest on the principal balance of this Note from time to time outstanding shall be charged and owing at an annual rate of Three Hundred Thirty-seven and one-half per cent (337.5%) per annum. Interest in the mount of $56,250.00 shall be payable monthly in arrears on the first day of each calendar month, commencing June 1 (BJT), 2004 and continuing on the first day of each month thereafter.
Principal shall be due and payable upon demand; provided however, notwithstanding any other provision in this Note, the unpaid principal balance and all accrued and unpaid interest shall be due and payable on or before April 1, 2005.
This Note may be prepaid in whole or in part without payment of any prepayment premium.
This Note is Unsecured.
The entire unpaid principal balance of this Note and all accrued and accruing interest thereon shall become immediately due and payable by Borrowers to Lender without notice at the option of Lender upon any default in the payment of any amount when due under this Note. In addition, Borrowers shall pay Lender's costs and attorney fees incurred in collecting or enforcing payment, whether suit be brought or not. Any failure of Lender to exercise such option to accelerate shall not constitute a waiver of
the right to exercise such option to accelerate at any future time.
Acceptance by Lender of any payment in an amount less than the amount due shall be deemed an acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be an event of default. At any time thereafter and until the entire amount then due has been paid, Lender shall be entitled to exercise all rights conferred upon it in this Note upon the occurrence of a default.
Borrowers, for themselves and their respective heirs, successors and assigns, expressly waive presentment, demand, protest, notice of dishonor, notice of nonpayment, notice of acceleration, notice of maturity, and presentment for the purpose of accelerating maturity.
This Note shall be the joint and several obligation of Tallmadge Holding Co., LLC, a North Carolina Limited Liability Company, and Bruce Tallmadge, and of all sureties, guarantors and endorsers, and shall be binding upon them and their respective heirs, administrators, executors, successors and assigns.
Borrowers do each hereby authorize any attorney at law to appear for Borrowers (or either one of the Borrowers) in an action on this Note at any time after the same becomes due, as herein provided, whether by acceleration or otherwise, in any Court of record in or of the State of Ohio or in any other state or territory of the United States, and to waive the issuing and service of process against Borrowers (or either one of the Borrowers), to admit the maturity of this Note by acceleration or otherwise, and to confess judgment in favor of the legal holder of this Note against Borrowers (or either one of the Borrowers) for the amount then due, with interest, late charge(s) and default interest all at the rate(s) herein mentioned, and attorney fees and costs of suit, and to waive and release all errors in said proceedings and judgment and all right to appeal from the judgment rendered.
This Note is made in the State of Ohio and shall be governed and construed in accordance with its laws. If any provision(s) of this Note are in conflict with any statute or applicable rule of law, or are otherwise unenforceable for any reason whatsoever, such provision(s) shall be deemed null and void to the extent of such conflict or unenforceability but shall be deemed separate from and shall not invalidate any other
provision of this Note. The rights and remedies provided to Lender in this Note are cumulative and the use of any one right or remedy shall not preclude or waive its ability to use any or all other rights and remedies Lender may have at law or in equity. In this Note, the singular and plural are interchangeable and words of gender shall include all genders. This Note shall, in accordance with its terms, be binding upon Borrowers, and their respective heirs, administrators, executors and assigns. Tallmadge Holding Co., LLC represents that the execution of this Note has been authorized by the governing documents of said limited liability company. The paragraph headings provided in this Note are for convenience only.
IN WITNESS WHEREOF, Borrowers, Tallmadge Holding Co., LLC, a North Carolina Limited Liability Company, and Bruce Tallmadge, have executed and delivered this Note to Lender on the ____ day of March, 2004.
WARNING-BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF THE COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.
On 14 January 2009, Plaintiff filed a verified complaint in the common pleas court of Hancock County, Ohio (“Ohio court”) alleging that the Note was in default on 8 December 2008 when Defendant failed to pay the amount owed. Also on 14 January 2009, Steven M. Powell, an attorney designated by Plaintiff, filed an answer on behalf of Defendant. The answer purported to waive the issuance and service of process, confess judgment in favor of Plaintiff, and waive Defendant's right to appeal.
On 13 April 2009, Plaintiff filed a notice of filing of foreign judgment in Rockingham County District Court. On 4 May 2009, Defendant filed a motion for relief from and notice of defense to foreign judgment and a motion to transfer the matter to superior court. On 22 June 2009, Judge Edwin G. Wilson, Jr. entered a consent order transferring the action to superior court.
On 26 October 2009, Judge Burke entered an order recognizing and giving full faith and credit to the Ohio judgment, denying Defendant relief from such foreign judgment, and denying Defendant's request for written findings of fact under Rule 52 of the North Carolina Rules of Civil Procedure. From the order of Judge Burke, Defendant appeals.
On appeal, Defendant argues that the trial court erred in enforcing the Ohio judgment because: (1) the Ohio court did not have personal jurisdiction, (2) the Ohio court did not have subject matter jurisdiction, (3) Defendant did not receive notice in time to properly defend himself, (4) charging an interest rate of 337.50% is penal in nature, and (5) charging an interest rate of 337.50% is against Ohio and North Carolina public policy.
Because we conclude that the Ohio court did not have subject matter jurisdiction, the trial court's order denying Defendant relief from foreign judgment is reversed. In light of this holding, we need not address Defendant's remaining assignments of error.
The Constitution's full faith and credit clause requires states to recognize and enforce valid judgments rendered in sister states. U.S. Const. art. IV, § 1. The Uniform Enforcement of Foreign Judgments Act (“the Act”) governs the enforcement of foreign judgments that are entitled to full faith and credit in North Carolina.
N.C. Gen.Stat. §§ 1C-1701 et seq. (2009). The Act requires that the judgment creditor file with the clerk of ...
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