Podgorny v. Great Central Ins. Co.

• Decision Date: 30 May 1974
• Docket Number: No. 3--673A64,3--673A64
• Citation: 311 N.E.2d 640,160 Ind.App. 244
• Court: Indiana Appellate Court
• Parties: Leo PODGORNY, Defendant-Appellant, v. GREAT CENTRAL INSURANCE CO., Plaintiff-Appellee.

Page 640

311 N.E.2d 640

160 Ind.App. 244

Leo PODGORNY, Defendant-Appellant, v. GREAT CENTRAL INSURANCE CO., Plaintiff-Appellee.

No. 3--673A64.

Court of Appeals of Indiana, Third District.

May 30, 1974.

Frank J. Galvin, Jr., Hammond, for defendant-appellant.

Foster, Stanish & Kouris, Hammond, for plaintiff-appellee.

GARRARD, Judge.

This appeal concerns the granting of summary judgment in a suit brought to enforce a default judgment rendered by an Illinois state court.

The appellant (Podgorny) had secured from the appellee (Great Central) a surety bond assuring that Podgorny would pay to the Illinois Department of Revenue sales tax monies which might become due and owing. Podgorny defaulted in payment of the taxes, and the State of Illinois then collected from Great Central. In turn Great Central sued Podgorny in the Circuit Court of Cook County, Illinois, and secured a default judgment against him on July 23, 1971. Thereafter, suit was commenced in Indiana to enforce the Illinois judgment. The defense asserted by Podgorny is that he was never served with process in the Illinois suit and therefore the Illinois judgment is void.

Both parties moved for summary judgment. The trial court's order denying summary judgment to Podgorny and granting it, instead, to Great Central upon the record before it provides the dual basis for this appeal. ¹

Before examining the specifics presented to the trial court by the parties, it is necessary to briefly review the status of a foreign judgment when suit is brought upon it in Indiana.

U.S.Const. art. I, § 4 requires that full faith and credit be given to the judicial proceedings of every other state. In addition, 28 U.S.C. § 1738 provides:

'The Acts of the legislature of any State, Territory, or Possession of the United States, or copies thereof, shall be authenticated by affixing the seal of such State, Territory or Possession thereto.

'The records and judicial proceedings of any court of any such State, Territory or Possession, or copies thereof, shall be proved or admitted in other courts within the United States and its Territories and Possessions by the attestation of the clerk and seal of the court annexed, if a seal exists, together with a certificate of a judge of the court that the said attestation is in proper form.

'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 or usage in the courts of such State, Territory or Possession from which they are taken.'

On the other hand, to ensure due process it is well recognized that a judgment rendered in one state can be collaterally attacked in a second state when the original court was lacking in jurisdiction of either the subject matter or the person. Williams v. North Carolina (1945), 325 U.S. 226, 65 S.Ct. 1092, 89 L.Ed. 1577; Old Wayne Life Ass'n. v. McDonough (1907), 204 U.S. 8, 27 S.Ct. 236, 51 L.Ed. 345; Ulrey v. Ulrey (1952), 231 Ind. 63, 106 N.E.2d 793.

Furthermore, where a foreign judgment is collaterally attacked for want of jurisdiction, the defect need not appear on the face of the record. Old Wayne Mut. Life Ass'n. v. Flynn (1903), 31 Ind.App. 473, 68 N.E. 327.

As the United States Supreme Court stated in Old Wayne Life Ass'n. v. McDonough, supra:

'The constitutional requirement that full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state is necessarily to be interpreted in connection with other provisions of the Constitution, and therefore no state can obtain in the tribunals of other jurisdictions full faith and credit for its judicial proceedings if they are wanting in the due process of law enjoined by the fundamental law. 'No judgment of a court is due process of law, if rendered without jurisdiction in the court, or without notice to the party.' Scott v. McNeal, 154 U.S. 34, 46, 38 L.Ed. 896, 901, 14 S.Ct. 1108. No state can, by any tribunal or representative, render nugatory a provision of the supreme law. And if the conclusiveness of a judgment or decree in a court of one state is questioned in a court of another government, Federal or state, it is open, under proper averments, to inquire whether the court rendering the decree or judgment had jurisdiction to render it.

'Such is the settled doctrine of this court. In the leading case of Thompson v. Whitman, 18 Wall. 457, 468, 21 L.Ed. 897, 901, the whole question was fully examined in the light of the authorities. Mr. Justice Bradley, speaking for the court and delivering its unanimous judgment, stated the conclusion to be clear that the jurisdiction of a court rendering judgment in one state may be questioned in a collateral proceeding in another state, notwithstanding the averments in the record of the judgment itself. The court, among other things, said that if it be once conceded that 'the validity of a judgment may be attacked collaterally by evidence showing that the court had no jurisdiction, it is not perceived how any allegation contained in the record itself, however strongly made, can affect the right so to question it. The very object of the evidence is to invalidate the paper as a record. If that can be successfully done no statements contained therein have any force. If any such statements could be used to prevent inquiry, a slight form of words might always be adopted so as effectually to nullify the right of such inquiry. Recitals of this kind must be regarded like asseverations of good faith in a deed, which avail nothing if the instrument is shown to be fraudulent." 204 U.S. 8, 15--16, 27 S.Ct. 236, 238.

It has also been repeatedly stated that the burden of undermining the decree of a sister state 'rests heavily upon the assailant.' Williams v. North Carolina, supra; Ulrey v. Ulrey, supra; Irons v. Irons (1961), 242 Ind. 504, 180 N.E.2d 105.

Thus, where it appears that the court is one of general jurisdiction there is generally a presumption, albeit rebuttable that the judgment is valid. ² Williams v. North Carolina, supra.

In the case before us jurisdiction is grounded upon the Illinois long-arm statute, and no question has been raised asserting a lack of jurisdictional basis. Neither has appellant asserted that the Illinois statutes providing for substituted service are lacking in due process so as to render the judgment void. The sole attack concerns whether service was effected.

If it was not, the judgment is not entitled to full faith and credit. McDonough, supra, 204 U.S. 15, 27 S.Ct. 236.

In making that determination, we must look to the law of the rendering state. If under the law of Illinois there was such a defect in process as to render the judgment void there, it is void here also. Kniffen v. Courtney (1971), 148 Ind.App. 358, 266 N.E.2d 72.

The rule is properly set forth in Restatement, Judgments, § 6, comments b, c and d, wherein it is stated:

'Where a method of notification is provided for by statute but the method is not followed in its entirety, a judgment against the defendant is not necessarily void. If what was done was not reasonably calculated to give the defendant notice of the action, the judgment will be void. So also, the judgment will be void if there was a failure to comply with a requirement which was a condition precedent to the exercise of jurisdiction by the court; but the judgment will not be void if the requirement was not jurisdictional.' (our emphasis)

'If a method of notification provided . . . where the action is brought is reasonable, and the method provided for is followed, the judgment is not void merely because the defendant did not receive actual knowledge of the action. . . .'

'The mere fact that the defendant had actual knowledge of the action is not sufficient to make the judgment valid. . . .'

Thus, comment b, § 8 of the same Restatement concludes:

'Where a State has jurisdiction and where the defendant is given reasonable notice and an opportunity to be heard, the question whether the failure to comply with the requirements of the law as to the method of service of process makes the judgment void is a question of the local law of the State in which the judgment is rendered. If by that law the judgment is valid, it cannot be collaterally attacked in that State or in another State. If by that law the judgment is not merely erroneous but is void, it is subject to collateral attack in that State or in another State.'

The Illinois cases distinguish between those instances where the defendant is actually served and those where substituted service is employed. In Tomaszewski v. George (1953), 1 Ill.App.2d 22, 116 N.E.2d 88, the defendant attacked a default judgment previously entered on the basis that the judgment was void because, in contravention of Illinois requirements, (a) the deputy sheriff who served the return upon defendant's wife did not inform her of the contents thereof; (b) that service was had on the sidewalk by defendant's house and not at his normal place of abode; (c) that the deputy did not identify himself as a police officer; and (d) that defendant never received a copy of the summons in the mail. In holding that these allegations constituted a defense, the court stated:

'The return of an officer making service of a summons for a defendant by copy delivered to another person must show a strict compliance with every requirement of the statute authorizing such service or the court will not obtain jurisdiction of the person.' 116 N.E.2d 88, 90.

Accord: Chiaro v. Lenberis (1960), 28 Ill.App.2d 164, 171 N.E.2d 81.

Thus, in Wells v. Braxton (1967), 82 Ill.App.2d 354, 227 N.E.2d 137, the Illinois Appellate Court affirmed the action of the trial court in quashing process against the defendant, Braxton, where jurisdiction was based upon the long-arm statute and substituted service was employed. The court initially...