Pitts v. Fink

• Decision Date: 30 June 2010
• Docket Number: No. 4706.,4706.
• Citation: 389 S.C. 156,698 S.E.2d 626
• Court: South Carolina Court of Appeals
• Parties: Patricia H. PITTS and Robert G. Pitts, Respondents,v.Chad FINK, Appellant.

389 S.C. 156

698 S.E.2d 626

Patricia H. PITTS and Robert G. Pitts, Respondents,v.Chad FINK, Appellant.

No. 4706.

Court of Appeals of South Carolina.

Submitted May 3, 2010.

Decided June 30, 2010.

Withdrawn, Substituted and Refiled Aug. 24, 2010.

Rehearing Denied Aug. 24, 2010.

COPYRIGHT MATERIAL OMITTED

J. René Josey and Jeffrey L. Payne, of Florence, for Appellant.

Charles J. Hupfer, Jr. and Van Whitehead, of Florence, for Respondents.

PIEPER, J.

In this appeal challenging the enforcement of an Alabama default judgment in South Carolina, Chad Fink asserts the circuit court erred in denying his motion for relief from judgment, arguing the judgment was void for lack of personal jurisdiction. We affirm.¹

FACTS/PROCEDURAL HISTORY

This action to domesticate an Alabama default judgment stems from a dispute over funds loaned by Patricia and Robert Pitts (Mr. and Mrs. Pitts) to Fink, Charles Hobbs, and Barton Pitts pursuant to a loan agreement. The $455,000 loan was in furtherance of the business interests of Roundabout Plantation, an Alabama L.L.C., which was operated by Fink, Hobbs, and Pitts for the purpose of developing a golf course and subdivision in Houston County, Alabama. Hobbs and Pitts were also named as defendants in the action on the loan.

The loan agreement, which was prepared by the borrowers, bore the caption, “State of Alabama, Houston County,” and contained a choice of law provision stating, “[t]he parties hereto agree that this agreement shall be construed and enforced according to the laws of the State of Alabama.” The agreement further provided that each of the members of Roundabout Plantation agreed and acknowledged they would be jointly and severally liable for the payment of all sums advanced and all sums which may become due under the terms and conditions of the agreement. A provision for the payment of attorney's fees, in the event the lender would have to employ the services of an attorney to collect any sums due under the agreement, was also included.

When Mr. and Mrs. Pitts were not repaid under the terms of the loan agreement, they initiated the underlying action in Houston County, Alabama. Despite signing the return of service, Fink did not file a response, and a judgment by default was entered against him for the sum of $795,940.78, plus interest and costs.

Thereafter, in an effort to enforce the Alabama default judgment in South Carolina, Mr. and Mrs. Pitts filed the judgment in Darlington County, South Carolina. Fink responded by filing a motion for relief from judgment pursuant to Rule 60(b)(4), SCRCP, and section 15-35-940 of the South Carolina Code (2005), asserting the Alabama judgment was void for lack of personal jurisdiction.

During the discovery that ensued, Mr. and Mrs. Pitts learned that Fink went to Alabama approximately a dozen times to monitor the progress of the golf course. Fink testified in his deposition that the loan proceeds were used for the construction and development of the golf course. Fink further testified that although he did not remember executing the loan agreement, his signature appeared on the document. He also conceded that the signature on the return of service to the summons and complaint appeared to be his own.

Following a hearing on the matter, the circuit court issued an order denying the motion for relief from judgment. The order further directed that the Alabama default judgment be entered in South Carolina in accordance with the notice of filing of foreign judgment by Mr. and Mrs. Pitts. Fink did not file a motion to alter or amend. This appeal followed.

STANDARD OF REVIEW

“An action to enforce a foreign judgment is an action at law.” Minorplanet Sys. USA Ltd. v. Am. Aire, Inc., 368 S.C. 146, 149, 628 S.E.2d 43, 44 (2006). In an action at law, tried by a judge without a jury, we accept the findings of the trial court if there is any evidence to support the findings. Townes Assocs., Ltd. v. City of Greenville, 266 S.C. 81, 86, 221 S.E.2d 773, 775 (1976).

LAW/ANALYSIS

This case involves a challenge to the domestication of an Alabama default judgment due to lack of personal jurisdiction; thus, we are not called upon to review the merits of the underlying claim. Pursuant to South Carolina's version of the Uniform Enforcement of Foreign Judgments Act (UEFJA), a judgment debtor is permitted to file a motion for relief from judgment or a notice of defense to a foreign judgment on any ground for which relief from a judgment of this state is allowed. S.C.Code Ann. § 15-35-940(A) (2005); cf. Law Firm of Paul L. Erickson, P.A. v. Boykin, 383 S.C. 497, 505, 681 S.E.2d 575, 579-80 (2009) (striking a portion of section 15-35-940(b) as unconstitutional but severable from the remainder of the statute). Applying the appropriate constitutional and due process considerations, we find the motion for relief from judgment was properly denied.

Under Article IV, Section 1 of the United States Constitution, “Full Faith and Credit shall be given in each state to the public acts, records, and judicial proceedings of every other State.” U.S. Const. art. IV, § 1. In accordance with this provision, every state is required to give to a judgment at least the res judicata effect which the judgment would be accorded in the state where rendered. Hospitality Mgmt. Assocs., Inc. v. Shell Oil Co., 356 S.C. 644, 653, 591 S.E.2d 611, 616 (2004) (citing Durfee v. Duke, 375 U.S. 106, 109, 84 S.Ct. 242, 11 L.Ed.2d 186 (1963)). However, “[a] judgment of a court without jurisdiction of the person or of the subject matter is not entitled to recognition or enforcement in another state, or to the full faith and credit provided for in the federal Constitution.” Fin. Fed. Credit Inc. v. Brown, 384 S.C. 555, 562-63, 683 S.E.2d 486, 490 (2009) (quoting 50 C.J.S. Judgments § 986 (1997)). Where the court of the issuing state has fully and fairly litigated and finally decided the question of jurisdiction, further inquiry into the jurisdiction of the issuing court is precluded. Durfee, 375 U.S. at 111, 84 S.Ct. 242. Otherwise, “before a court is bound by the judgment rendered in another State, it may inquire into the jurisdictional basis of the foreign court's decree.” Underwriters Nat'l Assurance Co. v. N.C. Life & Accident & Health Ins. Guar. Ass'n, 455 U.S. 691, 705, 102 S.Ct. 1357, 71 L.Ed.2d 558 (1982). Similarly, under the UEFJA, a judgment debtor may seek relief from a judgment due to a lack of personal jurisdiction. PYA/Monarch, Inc. v. Sowell's Meats & Servs., Inc., 327 S.C. 469, 473, 486 S.E.2d 766, 768 (Ct.App.1997).

Turning to the instant case, since the issue of personal jurisdiction in Alabama was neither fully litigated nor finally decided, we undertake the jurisdictional inquiry suggested in Underwriters Nat'l Assurance Co. When determining the validity and effect of a foreign judgment based on lack of personal jurisdiction, courts look to the law of the state that rendered the judgment. Fin. Fed. Credit Inc., 384 S.C. at 566-67, 683 S.E.2d at 492. Thus, to ascertain whether the Alabama court properly exercised jurisdiction over Fink, we must consult Alabama law regarding personal jurisdiction.

Alabama's long-arm rule authorizes the assertion of personal jurisdiction to the limits of due process under the federal and state constitutions. Leithead v. Banyan Corp., 926 So.2d 1025, 1030 (Ala.2005) (noting “Alabama's long-arm ‘statute,’ which is actually Rule 4.2, Ala. R. Civ. P., extends to the limits of due process.”). ² Alabama courts have interpreted the due process rights guaranteed under the Alabama Constitution to be coextensive with the due process rights guaranteed by the United States Constitution. Elliott v. Van Kleef, 830 So.2d 726, 730 (Ala.2002). Courts employ a two-pronged test for due process. First, the defendant must have certain minimum contacts with the forum state. Id. at 730-31 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). Second, the exercise of jurisdiction over the defendant must not offend “traditional notions of fair play and substantial justice.” Int'l Shoe Co., 326 U.S. at 316, 66 S.Ct. 154. Under the minimum contacts prong, the defendant's conduct and connection with the forum state must be “such that [the defendant] should reasonably anticipate being haled into court there.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). Further, “the minimum contacts test ... is not susceptible of mechanical application; rather, the facts of each case must be weighed to determine whether the requisite affiliating circumstances are present.” Kulko v. Sup. Ct. of Cal., 436 U.S. 84, 92, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978) (internal quotation omitted).

The level and character of a party's minimum contacts is assessed based on whether the contacts are general or specific. Ex Parte Full Circle Distribution, L.L.C., 883 So.2d 638, 644 (Ala.2003). “General contacts, which give rise to general personal jurisdiction, consist of the defendant's contacts with the forum state that are unrelated to the cause of action and that are both ‘continuous and systematic.’ ” Ex Parte Phase III Constr., Inc., 723 So.2d 1263, 1266 (Ala.1998) (Lyons, J., concurring) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)). “Specific contacts, which give rise to specific personal jurisdiction, consist of the defendant's contacts with the forum state that are related to the cause of action.” Id. (citing Burger King Corp., 471 U.S. at 472-75, 105 S.Ct. 2174). “Although the related contacts [for specific jurisdiction] need not be continuous and systematic, they must rise to such a level as to cause the defendant to anticipate being haled into court in the forum state.” Id.

Because Fink had no “continuous and systematic” contacts with Alabama, principles of general jurisdiction are not controlling. See Helicopteros Nacionales de Colombia, S.A., ...