Karstetter v. Voss
| Decision Date | 07 February 2006 |
| Docket Number | No. 05-05-00876-CV.,05-05-00876-CV. |
| Citation | 184 S.W.3d 396 |
| Parties | Matt KARSTETTER, Appellant v. Chris VOSS and Jensen Investments, Inc., Appellees. |
| Court | Texas Court of Appeals |
Gergory W. Mitchell, The Mitchell Law Firm, L.P., Rowlett, for appellant.
Robert Slim, Rockwall, for appellees.
Before Justices WHITTINGTON, WRIGHT, MAZZANT.
Appellant Matt Karstetter, a Kansas resident, appeals an order vacating a Kansas judgment against appellees Chris Voss and Jensen Investments, Inc. for lack of personal jurisdiction. For the following reasons, we affirm the judgment of the trial court.
Appellees are Texas residents in the business of automobile sales. In January 2004, they placed an advertisement on eBay to sell a 1996 Dodge Ram pick-up truck. The auction ran until February 1, 2004. During the auction, appellant e-mailed appellees inquiring as to whether the truck would "make the drive to Kansas." On January 30, 2004, appellant e-mailed appellees again and asked if they would be willing to end the auction early and deal directly with him for the sale of the vehicle. Appellees declined and continued the auction. Of the fifty-seven bids received, appellant was the highest bidder. Appellant paid for the vehicle and arranged for it to be picked up and driven to Kansas. After the sale, appellant filed suit against appellees in the District Court of McPherson County, Kansas. Appellees did not appear in the suit and appellant received a default judgment in the amount of $5,200.52. Appellant then sought to enforce the Kansas judgment in Texas and filed it in the trial court pursuant to the Uniform Enforcement of Foreign Judgments Act ("UEFJA") and the requirements of the Texas Civil Practice and Remedies Code. See 28 U.S.C. § 1738; TEX. CIV. PRAC. & REM.CODE ANN. § 35.001-008 (Vernon Supp.2005).
Appellees filed a Motion to Vacate the Judgment asserting the Kansas court lacked personal jurisdiction. At the hearing on the motion, appellees presented evidence that they never owned property in Kansas, did not have any bank accounts in Kansas, did not advertise in Kansas, and did not have an office or an agent in Kansas. Approximately one percent of appellees' sales are through eBay. The sale of this truck was the only transaction between the parties. The parties exchanged two e-mails before the auction and had one telephone conversation after the auction to set up payment for the truck. Appellant had a driver pick up the truck in Texas. Appellees mailed the title to the truck to appellant in Kansas. After the hearing, the trial court vacated the Kansas judgment for lack of personal jurisdiction.
Under the United States Constitution, each state must give a 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; Bard v. Charles R. Myers Ins. Agency, Inc., 839 S.W.2d 791, 794 (Tex.1992). Under the authority of the full faith and credit clause of the United States Constitution, Congress enacted a statute which dictates the manner of proving the records of judicial proceedings of other states and also provides that copies of such proceedings, when properly authenticated under the statute, "shall have. . . full faith and credit in every court within the United States. . . ." 28 U.S.C. § 1738.
In Texas, the enforcement of foreign judgments is governed by the Texas version of the UEFJA. TEX. CIV. PRAC. & REM.CODE ANN. § 35.001 et seq. Courts have held that, when a plaintiff sues on a foreign judgment of a sister state and introduces a properly authenticated copy of the judgment, a prima facie case for enforcement of the judgment is presented. See TEX. CIV. PRAC. & REM.CODE ANN. § 35.003; Cook v. Cook, 342 U.S. 126, 128, 72 S.Ct. 157, 96 L.Ed. 146 (1951); Walnut Equip. Leasing Co., Inc. v. Wu, 920 S.W.2d 285, 286 (Tex.1996); First Nat'l Bank of Libby, Montana v. Rector, 710 S.W.2d 100, 103 (Tex.App.-Austin 1986, writ ref'd n.r.e.). The foreign judgment becomes enforceable as a Texas judgment on the date it is filed and is subject to the same defenses and proceedings for reopening, vacating, or staying a judgment as a judgment of a Texas court. See TEX. CIV. PRAC. & REM.CODE ANN. § 35.003(c); Mindis Metals, Inc. v. Oilfield Motor & Control, Inc., 132 S.W.3d 477, 483 (Tex.App.-Houston [14th Dist.] 2004, pet. denied). In interpreting the UEFJA, courts have held that the enforcing state may make a reasonable inquiry into a sister state's judgment and the jurisdiction over the parties before affording the judgment full faith and credit. See Williams v. State of North Carolina, 325 U.S. 226, 232, 65 S.Ct. 1092, 89 L.Ed. 1577 (1945); Boyes v. Morris Polich & Purdy, LLP, 169 S.W.3d 448, 454 (Tex.App.-El Paso 2005, no pet.); Rector, 710 S.W.2d at 103.
The burden of attacking the judgment and establishing any reason why it should not be given full faith and credit is on the defendant. Williams, 325 U.S. at 235, 65 S.Ct. 1092; Minuteman Press Intern., Inc. v. Sparks, 782 S.W.2d 339, 340-41 (Tex.App.-Fort Worth 1989, no writ); Rector, 710 S.W.2d at 103. The defendant may try to prove any affirmative defense to the judgment, such as lack of jurisdiction, faulty service, or lack of finality. Minuteman Press, 782 S.W.2d at 342; Rector, 710 S.W.2d at 103. Specifically, a defendant may challenge the jurisdiction of a sister state to render a foreign judgment on two grounds: (1) the defendant may try to demonstrate that service of process was inadequate under the service of process rules of the sister state or (2) the defendant may assert that the sister state's exercise of jurisdiction offends due process because it does not have minimum contacts with the sister state. Cash Register Sales & Servs. of Houston, Inc. v. Copelco Capital, Inc., 62 S.W.3d 278, 281 (Tex.App.-Houston [1st Dist.] 2001, no pet.); Rector, 710 S.W.2d at 103; see also O'Brien v. Lanpar Co., 399 S.W.2d 340 (Tex.1966).
A defense asserted in a Texas court against the enforcement of a foreign judgment is a collateral attack. Cash Register Sales, 62 S.W.3d at 281; Rector, 710 S.W.2d at 103. In a collateral attack on a sister state's judgment, no defense that goes to the merits of the original controversy may be raised. Cash Register Sales, 62 S.W.3d at 281. This is true for questions of jurisdiction if those issues were fully and fairly litigated and decided in the sister court. Mayhew v. Caprito, 794 S.W.2d 1, 2 (Tex.1990). A collateral attack on a judgment is successful only where the judgment is established as void. A judgment is void only when it is apparent the court rendering it lacked (1) jurisdiction over the parties or property, (2) jurisdiction over the subject matter, (3) jurisdiction to enter the particular judgment, or (4) the capacity to act as a court. See Browning v. Placke, 698 S.W.2d 362, 363 (Tex.1985).
A motion contesting enforcement of a foreign judgment operates as a motion for new trial. Navarro and Assoc. v. San Remo Mfg., Inc., 2006 WL 10093, *1 (Tex.App.-Dallas January 3, 2006); Moncrief v. Harvey, 805 S.W.2d 20, 23 (Tex.App.-Dallas 1991, no writ); Mindis, 132 S.W.3d at 486; see also Cash Register Sales, 62 S.W.3d at 281. A trial court has broad discretion and we may not disturb its ruling absent manifest abuse of discretion. See Champion Int'l Corp. v. Twelfth Court of Appeals, 762 S.W.2d 898, 899 (Tex.1988); TEX.R. CIV. P. 320. The test for abuse of discretion is whether the trial court acted without reference to any guiding rules or principles or whether the trial court's actions were arbitrary or unreasonable under the circumstances. Don Navarro, 2006 WL 10093 at *1; Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985).
We apply the abuse of discretion standard recognizing that the law required the trial court to give full faith and credit to the Kansas judgment unless the appellees established an exception. See Mindis, 132 S.W.3d at 485. The determination of whether the appellees established an exception to full faith and credit generally involves a factual inquiry not resolution of a question of law. Id. The trial court has no discretion in applying the law to the established facts. Id. Therefore, we review the record to determine whether the trial court misapplied the law to the established facts in concluding whether the appellees established an exception to full faith and credit. Id.
In this case, the Texas trial court vacated the Kansas trial court's judgment for lack of personal jurisdiction. Whether a court has personal jurisdiction over a defendant is a question of law. Am. Type Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 805-806 (Tex.2002)(citing BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.2002)). In resolving this question of law, a trial court must frequently resolve questions of fact. Coleman, 83 S.W.3d at 806 (citing BMC Software, 83 S.W.3d at 794).
The Kansas long-arm statute authorizes Kansas courts to exercise jurisdiction over a nonresident defendant that does business in Kansas. See K.S.A. § 60-308(b); McNeal v. Zobrist, 365 F.Supp.2d 1166, 1169 (D.Kan.2005). As in Texas, the Kansas long-arm statute is liberally construed to assert personal jurisdiction over nonresident defendants to the full extent permitted by the due process clause. See Anderson v. Heartland Oil & Gas, Inc., 249 Kan. 458, 819 P.2d 1192, 1197-1199 (1991); OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir.1998); Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir.1994); see also BMC Software, 83 S.W.3d at 795.
Personal jurisdiction over nonresident defendants meets the due process requirements of the Constitution when two conditions are...
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