Storecom v. Kan. City Sch. Bd.

• Decision Date: 11 January 2011
• Docket Number: No. WD 71726.,WD 71726.
• Citation: 265 Ed. Law Rep. 1255,334 S.W.3d 574,73 UCC Rep.Serv.2d 410
• Parties: OFFICE SUPPLY STORE.COM, Respondent,v.KANSAS CITY SCHOOL BOARD, Appellant.
• Court: Missouri Court of Appeals

334 S.W.3d 574
265 Ed. Law Rep. 1255
73 UCC Rep.Serv.2d 410

OFFICE SUPPLY STORE.COM, Respondent,
v.
KANSAS CITY SCHOOL BOARD, Appellant.

No. WD 71726.

Missouri Court of Appeals, Western District.

Jan. 11, 2011.Motion for Rehearing and/or Transfer to

Supreme Court Denied March 1, 2011. Application for Transfer Denied April 26, 2011.

[334 S.W.3d 576]

Maurice A. Watson, Esq., Lyndsey J. Conrad and Kara S. Bemboom, Esq., Kansas City, MO, for appellant.John G. Dorsey, Esq., Claycomo, MO, for respondent.Before: JOSEPH M. ELLIS, P.J., and ALOK AHUJA and KAREN KING MITCHELL, JJ.ALOK AHUJA, Judge.

The Kansas City School District appeals the Jackson County Circuit Court's registration of a default judgment entered against it in a California state court. Because we conclude that the California court lacked personal jurisdiction over the School District, we reverse.

Factual Background

OfficeSupplyStore.com, is an internet domain registered to Office Supply Store, Inc., a corporation based in the state of Washington. As its name suggests, Office Supply sells office supplies and related goods.

Office Supply alleges that School District employees made a series of purchases for which Office Supply has not been paid. On October 6, 2008, Office Supply filed suit against the School District ¹ in the Superior Court of Los Angeles County, California, to recover $17,642.54, plus interest at an annual rate of 18.00% from and after November 10, 2005. (It is unclear from the record how Office Supply calculated the amount it claimed to be owed.) Office Supply's complaint asserted six causes of action: breach of contract; open book and account; account stated; conversion; quantum merit; and unjust enrichment.²

The School District did not appear in the California lawsuit. Office Supply moved for a default judgment, which the California court granted on May 26, 2009. Judgment was entered against the School District in the amount of $30,542.15, comprised of $17,642.54 in damages, $11,615.33 in prejudgment interest, $919.28 in attorney fees, and $365.00 in costs.

On August 10, 2009, Office Supply filed a petition in the associate division of the Jackson County Circuit Court, seeking to register the California judgment pursuant to Supreme Court Rule 74.14. On September 3, 2009, the School District filed a motion to set aside or vacate registration of the foreign judgment, which the circuit court denied on October 8, 2009. This appeal follows.

Standard of Review

A circuit court's decision regarding whether a foreign judgment should

[334 S.W.3d 577]

be registered is a legal conclusion. Likewise, a circuit court's determination of personal jurisdiction is a legal conclusion. The circuit courts' legal conclusions are subject to a de novo review on appeal. Therefore, when a defendant appeals a circuit court's decision regarding a claim of lack of personal jurisdiction in a registration-of-foreign-judgment proceeding, the appellate court reviews the legal conclusions de novo and determines whether the foreign court had personal jurisdiction over the defendant and whether the judgment should be registered.Peoples Bank v. Frazee, 318 S.W.3d 121, 127 (Mo. banc 2010) (citations omitted).

Analysis

The School District argues that the circuit court erred in registering the California judgment because the California court lacked personal jurisdiction over it. If the California court lacked personal jurisdiction, its judgment is void and not entitled to enforcement here. Peoples Bank, 318 S.W.3d at 126–27 (citing Phillips v. Fallen, 6 S.W.3d 862, 864 (Mo. banc 1999)).

Although the School District chose not to contest personal jurisdiction in California, it is not precluded from doing so now. [I]f the issues of personal jurisdiction or subject matter jurisdiction were not litigated during the previous proceedings in the sister state, a party may raise them when the foreign judgment is filed in Missouri. L & L Wholesale, Inc. v. Gibbens, 108 S.W.3d 74, 80 (Mo.App. S.D.2003); Peoples Bank, 318 S.W.3d at 127. The School District faces an uphill climb, however:

[A] foreign judgment, regular on its face, ... is entitled to a strong presumption that the foreign court had jurisdiction both over the parties and the subject matter and the court followed its laws and entered a valid judgment. The burden to overcome the presumption of validity and jurisdiction must be met with the clearest and most satisfactory evidence, and this burden lies with the party asserting the invalidity of the foreign judgment.

Peoples Bank, 318 S.W.3d at 127 (quoting Phillips, 6 S.W.3d at 868). In determining whether personal jurisdiction existed, this Court is not bound by the record in the California proceeding, or by the California court's findings of fact: “[l]ack of jurisdiction may be shown by evidence dehors the record, notwithstanding jurisdictional recitals of the foreign judgment.” In re Aldridge, 841 S.W.2d 793, 797 (Mo.App. S.D.1992); Peoples Bank, 318 S.W.3d at 128.

“To be entitled to full faith and credit, the rendering court's exercise of jurisdiction must not only be permissible under the federal law of due process, but it must also be valid under the state law of the rendering court.” Gletzer v. Harris, 159 S.W.3d 462, 466 (Mo.App. E.D.2005). Here, however, California's long-arm statute provides that “[a] court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or the United States,” Cal. Civ. P.Code § 410.10, and the School District has not identified any relevant limitations on personal jurisdiction contained in the California constitution; we accordingly address only federal due process principles.

Personal jurisdiction can be general or specific. A court has general jurisdiction over a non-resident defendant if the defendant has “continuous and systematic” contacts with the forum not necessarily related to the cause of action. A court has specific jurisdiction over a non-resident defendant when the suit “aris[es] out of or [is] related to the defendant's contacts with the forum.”

[334 S.W.3d 578]

Peoples Bank, 318 S.W.3d at 129 n. 6 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn. 8, 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)); see also Bryant v. Smith Interior Design Group, Inc., 310 S.W.3d 227, 232 (Mo. banc 2010).

There is no basis for finding that the School District subjected itself to the general jurisdiction of the California courts. The...