Schwilling v. Horne

• Decision Date: 02 June 1983
• Docket Number: No. 14225,14225
• Citation: 669 P.2d 183,105 Idaho 294
• Parties: , 36 UCC Rep.Serv. 1446 Stephen F. SCHWILLING, Plaintiff-Respondent, v. Brunner HORNE, Defendant-Appellant.
• Court: Idaho Supreme Court

Page 183

669 P.2d 183

105 Idaho 294, 36 UCC Rep.Serv. 1446

Stephen F. SCHWILLING, Plaintiff-Respondent, v. Brunner HORNE, Defendant-Appellant.

No. 14225.

Supreme Court of Idaho.

June 2, 1983.

Rehearing Denied Sept. 26, 1983.

Frank T. Elam, Udell & Elam, McCall, for defendant-appellant.

William M. Killen, Killen & Pittenger, McCall, for plaintiff-respondent.

BAKES, Justice.

This is an appeal from an order of the district court denying defendant appellant's motion to strike a foreign judgment entered in Alaska and filed in Idaho pursuant to I.C. § 10-1301 et seq.

On October 24, 1979, Stephen Schwilling the plaintiff respondent, entered into an agreement with Brunner Horne, defendant appellant, for the purchase and sale of a small airplane, in which Horne agreed to sell the airplane in exchange for consideration consisting in part of a cash payment and in part of contract rights owned by Schwilling and his wife and brother. In addition to the agreement, the Schwillings executed a security agreement providing that the aircraft would be located in Adams County, Idaho. ¹

In August, 1980, appellant learned that the airplane had been taken to Alaska and, claiming that the terms and conditions of the sale and security agreement had been violated, he requested the Adams County sheriff to contact state police officers in Alaska who confirmed the location of the airplane in Palmer, Alaska. Appellant then flew to Anchorage, Alaska, and engaged the assistance of Mr. Dave Klosterman, a representative of Alaska Bush Carriers, Inc., to repossess the aircraft. Appellant and Klosterman drove to Palmer, Alaska, and took possession of the airplane without the knowledge or consent of the respondent. Klosterman then flew the airplane back to Anchorage and met appellant, and appellant authorized the performance of certain maintenance work by Alaska Bush Carriers, Inc., necessary to transport the airplane back to Idaho.

Upon learning of the appellant's repossession, respondent retained counsel in Anchorage and commenced a civil action against appellant in the Superior Court of the State of Alaska, Third Judicial District of Anchorage, Case No. 3AN-30-5887. The amended complaint alleged that appellant was in breach of the contract of sale, that the dispossession of the airplane had caused respondent to suffer loss of employment contracts, and that respondent had been required to pay for the maintenance work authorized by appellant. In the prayer for relief, respondent prayed for recovery of the damages he had suffered as a result of being dispossessed of the airplane. Notice of the amended complaint in Case No. 3AN-30-5887 was served at appellant's residence in New Meadows, Idaho, and copies of the summons and complaint were allegedly left with appellant's wife. The Alaska court ordered that possession of the airplane be returned to respondent pending a final determination. On November 20, 1980, the Alaska court entered a Judgment by Default for the failure of appellant to either plead or defend. ² The Alaska court awarded damages, costs and attorney fees against appellant and made permanent its previous orders with regard to respondent's possession of the airplane.

Respondent then filed an inadequately authenticated copy of the Alaska default judgment as a foreign judgment in Valley County on December 29, 1980, as Case No. 2451. After a series of proceedings, including motions to vacate the judgment and to restrain execution of the judgment against appellant, respondent, pursuant to court order, filed a properly authenticated copy of the Alaska judgment pursuant to I.C. §§ 10-1301 et seq. on February 12, 1981.

Appellant subsequently filed a motion in Case No. 2451 to strike the entry of the Alaska judgment, alleging that Alaska did not have personal jurisdiction over him and that the judgment was therefore not entitled to full faith and credit. The Idaho district court determined that Alaska's long arm jurisdiction statute conferred jurisdiction over the appellant and that appellant had minimum contacts with Alaska so that maintenance of the Alaska suit did not violate due process and, in its Decision and Order filed on June 2, 1981, denied appellant's motion to strike the entry of the foreign judgment. Appellant appeals from that order pursuant to I.A.R. 11(a)(5).

The issue on appeal is whether the district court's denial of defendant's motion to strike a foreign judgment, which denial was based upon the court's determination as a matter of law that the Alaska court had personal jurisdiction over the defendant, was in error. For the reasons set forth below, we reverse and remand for further proceedings in the district court.

A valid final judgment entered in a state having jurisdiction over the parties and subject matter is entitled to full faith and credit in the courts of another state to the same extent it has by law in the courts of the state where the judgment was rendered. United States Constitution Art. 4, § 1; Nevada v. Hall, 440 U.S. 410, 99 S.Ct 1182, 59 L.Ed.2d 416, rehear. den., 441 U.S. 917, 99 S.Ct. 2018, 60 L.Ed.2d 389 (1979). A judgment of a sister state, however, is not entitled to full faith and credit in the foreign state, where such judgment would be void in the state in which the judgment was entered for lack of in personam jurisdiction. Cf., Kremer v. Chemical Const. Corp., 456 U.S. 461, 102 S.Ct. 1883, 1898, 72 L.Ed.2d 262, rehear. den., 458 U.S. 1133, 103 S.Ct. 20, 73 L.Ed.2d 1405 (1982) (states not required to accord full faith and credit to judgment rendered in another state which is constitutionally infirm); Sierra Life Ins. Co. v. Granata, 99 Idaho 624, 586 P.2d 1068 (1978) (judgment entered by court without jurisdiction over subject matter is void). See generally 47 Am.Jur.2d Judgments § 1236 (1969).

Appellant argues that the district court erred in denying his motion to strike the Alaska judgment because the Alaska court did not have personal jurisdiction over him, and a personal judgment rendered without in personam jurisdiction over a defendant is in violation of the due process clause of the fourteenth amendment of the United States Constitution and, hence, is void. See Hess v. Pawloski, 274 U.S. 352, 47 S.Ct. 632, 71 L.Ed. 1091 (1927); Sierra Life Ins. Co. v. Granata, supra; Nalder v. Crest Corp., 93 Idaho 744, 472 P.2d 310 (1970) (rendition of judgment without jurisdiction is void); Garren v. Rollis, 85 Idaho 86, 375 P.2d 994 (1962) (personal judgment entered without service of process on defendant is void).

When a court is called upon to enforce a foreign judgment, "it may inquire into the jurisdictional basis of the foreign court's decree" to determine whether full faith and credit must be accorded. Underwriters Nat'l Assurance Co. v. North Carolina Life & Accident & Health Ins. Guaranty Assoc., 455 U.S. 691, 102 S.Ct. 1357, 1365, 71 L.Ed.2d 558 (1982). Appellant apparently chose not to appear in the Alaska action either to defend on the merits of respondent's claim or to challenge the assertion of jurisdiction by the Alaska court. Therefore, the jurisdictional question has not been previously litigated, and the district court in Idaho properly proceeded to determine the jurisdictional basis for the judgment entered by the Alaska court. See Underwriters Nat'l Assurance Co. v. North Carolina Life, supra; Durfee v. Duke, 375 U.S. 106, 111, 84 S.Ct. 242, 245, 11 L.Ed.2d 186 (1963) (although court may inquire into jurisdiction, where question of jurisdiction has been fully and fairly litigated and finally decided, judgment is entitled to full faith and credit).

A challenge to the jurisdiction of a state court over a non-resident defendant not personally served within the state involves a two part analysis. First, the defendant's alleged conduct must fall within the terms of the long arm statute in question; and, secondly, the defendant must have had minimum contacts with the forum so that assertion of jurisdiction through application of that statute will not violate defendant's right to due process of law guaranteed by the fifth and fourteenth amendments to the United States Constitution. See International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Modern Trailer Sales, Inc. v. Traweek, 561 P.2d 1192, 1195 (Alaska 1977); Jonz v. Garrett/Airesearch Corp., 490 P.2d 1197, 1199 (1971); Schneider v. Sverdsten Logging Co., Inc., 104 Idaho 210, 657 P.2d 1078 (1983). The respondent argues that the appellant's activities within the State of Alaska are embraced by two separate subsections of Alaska Stat. § 09.05.015, which provides in part relevant to this decision:

"(a) A court of this state having jurisdiction over the subject matter has jurisdiction over a person served in an action according to the rules of civil procedure

....

"(3) in an action claiming injury to person or property in or out of this state arising out of an action or omission in this state by the defendant;

....

"(6) in an action which arises out of

"(C) a claim that the defendant return, restore, or account to the plaintiff for an asset or thing of value which was in this state at the time the defendant acquired possession or control over it ...."

The district court focused upon Alaska Stat. § 09.05.015(a)(3) and noted that the phrase "injury to property" has been construed to mean "not much more than mere pecuniary loss." See Fairbanks Air Service, Inc. v. Air Operations Intl. Corp., 378 F.Supp. 1405, 1406 (D.C.Alaska 1974). The district court stated that it was not questioned that plaintiff had suffered pecuniary loss as a result of defendant's actions in taking possession of the plane, namely loss of employment contracts and the cost of repairs, and concluded that "defendant's willful acts in dispossessing plaintiff of the airplane appear to be sufficient 'minimum contacts with (Alaska) such that maintenance of the suit does not offend traditional notions of fair play and...