Lemcon U.S. Corp. v. Icon Tech. Consulting, Inc.

• Citation: 804 S.E.2d 347
• Decision Date: 28 August 2017
• Docket Number: S17G0141.
• Parties: LEMCON USA CORPORATION v. ICON TECHNOLOGY CONSULTING, INC.
• Court: Georgia Supreme Court

301 Ga. 888

804 S.E.2d 347

LEMCON USA CORPORATION

v.ICON TECHNOLOGY CONSULTING, INC.

S17G0141.

Supreme Court of Georgia.

Decided: August 28, 2017

Michael Lane Solis, David Harrison Wood, WOOD & SOLIS, LLP, 3333 Piedmont Road, NE, Suite 2050, Atlanta, Georgia 30305, for Appellant.

Brad Elliott Macdonald, HILL–MACDONALD, LLC, 329 Lawrence Street, Marietta, Georgia 30060, Craig Alan Smith, Craig Smith Law, LC, 141 N. Meramec, Suite 201, St. Louis, Missouri 63105, for Appellee.

Peterson, Justice.

Icon Technology Consulting, Inc. ("Icon") filed this lawsuit seeking to enforce a default judgment it obtained from a Missouri court against Lemcon USA Corp. ("Lemcon"). A Georgia trial court rejected Lemcon's attempt to set aside the default judgment, and the Court of Appeals of Georgia dismissed Lemcon's appeal on the ground that Lemcon (1) could not invoke the Georgia trial court's inherent power to set aside a judgment within the same term of court in which it was entered and (2) had failed to file an application for discretionary appeal as was necessary to seek review of the trial court's order to the extent it was based on OCGA § 9–11–60 (d). Lemcon USA Corp. v. Icon Tech. Consulting, Inc., 338 Ga. App. 459, 789 S.E.2d 832 (2016)(physical precedent only). We granted certiorari to consider whether the inherent power of a Georgia court to set aside a judgment within the same term of court in which it was entered extends to a foreign judgment domesticated under OCGA § 9–12–130 et seq. We conclude that this inherent power does not extend to domesticated foreign judgments.

Icon obtained a default judgment of $52,589 plus interest against Lemcon on January 27, 2015. On May 7, 2015, Icon filed a complaint in Fulton County State Court seeking enforcement of the judgment under Georgia's Uniform Enforcement of Foreign Judgment Law, OCGA § 9–12–130 et seq. ("the Act"). Lemcon filed a motion to set aside the default judgment, claiming that although its registered agent apparently had been served with the Missouri lawsuit on December 3, 2014, a misunderstanding over the proper address for sending served documents to Lemcon meant that Lemcon itself was not aware of the lawsuit until well after the default judgment was obtained. Lemcon argued in its motion that it was within the inherent power of the Fulton court to vacate the judgment as a matter of the court's discretion because the motion to set aside was filed in the same term of court in which the judgment was entered of record in the

Fulton court and, alternatively, the Fulton court was authorized to set aside the judgment under OCGA § 9–11–60 (d) because it was obtained due to accident or mistake. The Fulton court denied the motion to set aside in a two-sentence order.

Lemcon filed a direct appeal, which was dismissed by the Court of Appeals. That court concluded that Lemcon did not file its motion within the term of court in which the subject judgment was rendered, and rejected Lemcon's argument that the default judgment was entered for purposes of that question on May 7, 2015, the date the Missouri judgment was filed in Fulton County. Lemcon, 338 Ga. App. at 461 (1), 789 S.E.2d 832. Because Lemcon therefore failed to invoke the trial court's inherent power to set aside the judgment for any meritorious reason, the Court of Appeals concluded, the trial court's order must be construed as addressing the merits of only Lemcon's alternative theory that invoked the trial court's authority to set aside under OCGA § 9–11–60 (d). Id. at 462 (1), 789 S.E.2d 832. The Court of Appeals thus concluded that it lacked jurisdiction to consider Lemcon's appeal given Lemcon's failure to file an application for discretionary appeal. Id. at 462 (2), 789 S.E.2d 832.

We granted Lemcon's petition for certiorari, directing the parties to address two questions:

(1) Does the inherent power of a Georgia court to set aside a judgment in the term of court within which the judgment was entered extend to a foreign judgment domesticated under OCGA § 9–12–130 et seq. ?

(2) If so, for purposes of the exercise of that inherent power, is the domesticated judgment deemed to be entered on the date that it was originally entered by the foreign court or on the date that it was filed for domestication in the Georgia court?

We answer the first question in the negative, and thus need not consider the second.

The Act establishes Georgia's procedure for domesticating a foreign judgment. The Act provides that an authenticated copy of a foreign judgment may be filed in "any court of competent jurisdiction of this state" and that, once filed, such a judgment "has the same effect ... as a judgment of the court in which it is filed and may be enforced or satisfied in like manner." OCGA § 9–12–132. At the heart of Lemcon's argument, OCGA § 9–12–132 also provides that "[a] filed foreign judgment ... is subject to the same procedures, defenses, and proceedings for reopening, vacating, staying, enforcing, or satisfying as a judgment of the court in which it is filed[.]"

The Act operates within the shadow of the Full Faith and Credit Clause of the U.S. Constitution.¹ As a court of another state to adopt the uniform act has noted, the Uniform Enforcement of Foreign Judgments Act "does not ... create substantive rights not conferred by the Full Faith and Credit Clause of the United States Constitution, but is merely a uniform act by which procedurally those rights and defenses afforded under the Full Faith and Credit Clause may be enforced or imposed." Jones v. Roach, 118 Ariz. 146, 575 P.2d 345, 349 (Ariz. Ct. App. 1977). Indeed, the Act defines a "foreign judgment" to which the Act applies as "a judgment, decree, or order of a court of the United States or of any other court that is entitled to full faith and credit in this state ." OCGA § 9–12–131 (emphasis added). Under the Full Faith and Credit Clause, "a judgment of a foreign court will be enforced by the courts of this state unless it is shown that the foreign court lacked jurisdiction of the person or subject matter or that the judgment was procured by fraud." Dropkin v. Dropkin, 237 Ga. 768, 770–771, 229 S.E.2d 621 (1976). If a challenge to the foreign court's jurisdiction or an allegation the judgment was procured by fraud was raised and decided against the judgment debtor in the foreign court, that determination by the foreign court must be given full faith and credit, as well. Gordon v. Gordon, 237 Ga. 171, 172 (1), 227 S.E.2d 53 (1976). In short, although the Act allows for "reopening, vacating, [or] staying" a filed foreign judgment, the availability of such procedures is limited by the Full Faith and Credit Clause.

Our Court of Appeals has long held that the proper way to attack a foreign judgment filed in Georgia—and thereby raise the bases for attack permitted by the Full Faith and Credit Clause—is to move to set aside under OCGA § 9–11–60 (d). See Noaha, LLC v. Vista Antiques & Persian Rugs, Inc., 306 Ga. App. 323, 326 (1), 702 S.E.2d 660 (2010) ; Arrowhead Alternator, Inc. v. CIT Communications Fin. Corp., 268 Ga. App. 464, 466, 602 S.E.2d 231 (2004) ; Arnold v. Brundidge Banking Co., 209 Ga. App. 278, 278–279, 433 S.E.2d 388 (1993), overruled on other grounds by Okekpe v. Commerce Funding Corp., 218 Ga. App. 705, 706, 463 S.E.2d 23 (1995). OCGA § 9–11–60 (d) specifically includes fraud and lack of jurisdiction among the bases on which a judgment may be set aside. The question raised by this appeal is whether a trial court's inherent power to set aside a judgment in the term of court within which the judgment was entered is an alternative means to attack a foreign judgment filed in Georgia.

At common law, a court had broad inherent power to set aside its own judgments within the term of court in which they were entered:

a court has plenary control of its judgments, orders, and decrees during the term at which they are rendered, and may amend, correct, modify, or supplement them, for cause appearing, or may, to promote justice, revise, supersede, revoke, or vacate them, as may, in its discretion, seem necessary. But after the expiration of the term at which a judgment or decree was rendered it is out of the power of the court to amend it in any matter of substance or in any matter affecting the merits.

McCandless v. Conley, 115 Ga. 48, 50–51 (1), 41 S.E. 256 (1902) (citation, punctuation, and emphasis omitted), cited in Moon v. State, 287 Ga. 304, 305–306, 696 S.E.2d 55 (2010) (Nahmias, J., concurring). This common law rule has remained essentially unchanged for final judgments in civil and criminal cases. Moon, 287 Ga. at 306, 696 S.E.2d 55 (Nahmias, J., concurring).² It does not apply where a judgment is based on a jury verdict. Martin v. GM Corp., Fisher Body Div., 226 Ga. 860, 862 (1), 178 S.E.2d 183 (1970). This rule is based on the notion that, during the term in which a decree is rendered, it is "in the breast of the judge; after it is over, it is upon the...