WV 23 Jumpstart, LLC v. Mynarcik

• Decision Date: 21 November 2022
• Docket Number: C095046
• Parties: WV 23 JUMPSTART, LLC, Plaintiff and Appellant, v. TIGER MYNARCIK, Defendant and Respondent.
• Court: California Court of Appeals

WV 23 JUMPSTART, LLC, Plaintiff and Appellant, v. TIGER MYNARCIK, Defendant and Respondent.

C095046

California Court of Appeals, Third District, Sacramento

November 21, 2022

APPEAL from a judgment of the Superior Court of Sacramento County No. 334-2010-00092428-CU-EN-GDS Christopher E. Krueger Judge. Reversed.

Moskovitz Appellate Team and Myron Moskovitz for Plaintiff and Appellant.

Gordon Rees Scully Mansukhani, Matthew G. Kleiner, and Norvik Azarian for Defendant and Respondent.

KRAUSE, J.

In May 2010, the original plaintiffs in this matter (plaintiffs) obtained a sizable money judgment in Nevada state court against four defendants, including Tiger Mynarcik (Mynarcik) the respondent here. In November 2010, the Sacramento County Superior Court granted plaintiffs' application to domesticate the Nevada judgment in California, the state in which one of Mynarcik's codefendant's was last known to reside. The Nevada judgment expired by operation of law in 2016, while the sister-state judgment issued in California remained in effect.

In May 2020, plaintiffs assigned the California judgment to appellant WV 23 Jumpstart, LLC (Jumpstart). Two months later, Jumpstart renewed the California judgment and then applied to domesticate the renewed judgment back in Nevada, an action which Mynarcik vigorously challenged. In response, the Nevada court instructed Jumpstart to seek an order from the California courts regarding the validity of the renewed California judgment. In subsequent proceedings here, the Sacramento County Superior Court granted a motion by Mynarcik to quash entry of the renewed sister-state judgment for lack of personal jurisdiction over him.

On appeal, Jumpstart argues that the trial court erred in concluding that where a judgment creditor seeks to register a sister-state judgment in California, the judgment debtor must have "minimum contacts" with California. We agree with Jumpstart and therefore reverse the trial court's order.

FACTUAL AND PROCEDURAL HISTORY

The relevant facts in this appeal are not in dispute. In January 2009, the original plaintiffs, Galipeau Associates, Inc., and A.K. Partners, LLC, filed suit in Clark County, Nevada seeking a deficiency judgment against defendant Pahrump 161, LLC (Pahrump), and individual defendants Mynarcik, James W. Scott, and Brock E. Metzka. Following a bench trial, the Nevada state court found that Mynarcik and Metzka guaranteed a loan of $1.8 million from plaintiffs to Pahrump to develop residential real estate in Nevada, secured by a deed of trust. The individual defendants, Mynarcik, Scott, and Metzka, executed guarantees on the loan. Thereafter, Pahrump defaulted on the loan. In May 2010, the Nevada court entered a judgment for $1,346,474.25 against Pahrump and the three guarantors. In August 2010, the Nevada judgment was amended to include attorney fees, costs, and accrued interest, which increased the judgment to $1,584.893.71.

In November 2010, seeking to have the judgment domesticated in California, plaintiffs applied for entry of judgment on a sister-state judgment in the Sacramento County Superior Court pursuant to Code of Civil Procedure section 1710.10 et seq.^[1]Mynarcik was personally served with the application to domesticate the judgment and did not challenge it. As required by section 1710.25, the Sacramento County Superior Court clerk entered the amended $1.58 million judgment in favor of plaintiffs.

Thereafter, Mynarcik's codefendants, Scott and Metzka, settled their debts to plaintiffs for approximately $462,000 and $39,000, respectively. Mynarcik's remaining codefendant, Pahrump, filed a petition for Chapter 7 bankruptcy and paid plaintiffs nothing.

In 2016, the Nevada judgment's six-year enforcement period expired by statute, and plaintiffs did not seek to renew it. The California judgment remained valid and enforceable. However, plaintiffs did not pursue Mynarcik in California to collect on the judgment.

In May 2020, plaintiffs assigned the California judgment to Jumpstart. In July 2020, Jumpstart applied to renew the California judgment in the Sacramento County Superior Court, listing the modified balance as $2,611,083.08 to reflect additional accrued interest. Mynarcik was served by mail with the notice of renewal at his Nevada home. He did not respond or otherwise challenge renewal of the judgment.

In December 2020, Jumpstart applied in Nevada state court to domesticate the renewed California judgment. In response, Mynarcik moved to "quash, to vacate, and to declare the purported registration of an old and expired transplanted Nevada judgment null and void." For the first time, he also challenged the validity of the California judgment. On April 12, 2021, the Nevada court issued a stay, pending a determination of the validity of the California judgment with respect to Mynarcik. In doing so, it stated: "The registration of the renewed California Judgment in Nevada will then be deemed valid and enforceable in Nevada if a California court concludes or declares either one of the following: [¶] A. Mynarcik waived his right, under California law, to challenge the renewed California Judgment; or [¶] B. An amendment to the renewed California Judgment would relate back to the California Judgment's renewal date."

In response to the Nevada court's directions, Jumpstart moved for an order confirming that Mynarcik had forfeited his right to challenge the renewed judgment or, in the alternative, a nunc pro tunc order amending the renewed judgment in the Sacramento County Superior Court. Mynarcik opposed Jumpstart's motion, filed his own motion to quash the California judgment for lack of personal jurisdiction, as well as a motion to vacate the California judgment. Jumpstart opposed Mynarcik's motions.

The trial court granted Mynarcik's motion to quash the California judgment and denied Jumpstart's motion as moot. In doing so, it reasoned that "[w]ithout the constitutionally required 'minimum contacts' with California, [the Sacramento Superior Court] did not possess personal jurisdiction over Mr. Mynarcik in 2010 and thus, even though the judgment creditors may have served on Mr. Mynarcik in Nevada their 2010 application to register the Nevada judgment in California, Mr. Mynarcik was under no legal obligation to challenge or otherwise respond to the 2010 domestication proceedings in California due to this state's lack of personal jurisdiction over him." It further found that, "[f]or these same reasons, Mr. Mynarcik was likewise under no legal obligation to challenge or respond to Jumpstart's more recent 2020 application to renew the California judgment regardless of the fact that it was mailed to Mr. Mynarcik's residence in Nevada and/or that the Nevada judgment had expired in 2016. California's lack of personal jurisdiction over Mr. Mynarcik rendered the California renewal proceedings 'a nullity' at least as to Mr. Mynarcik. [¶] . . . [¶] Thus, to the extent the 2010 judgment domesticated in California and renewed in 2020 purports to be a judgment against Mr. Mynarcik[,] who has no demonstrable 'minimum contacts' with the State of California, the judgment must be and hereby is vacated due to this Court's lack of personal jurisdiction over Mr. Mynarcik." Jumpstart timely appealed.^[2]

DISCUSSION

There is no dispute that the original Nevada judgment was valid and that the court had jurisdiction over Mynarcik in that state. There also is no dispute that Mynarcik lacks" 'minimum contacts'" with California, and thus California courts could not obtain jurisdiction over Mynarcik under a traditional personal jurisdiction analysis. In view of these uncontested matters, the issue before us presents a novel question of law, which we review de novo (Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185, 1191): Must a California court have personal jurisdiction over a judgment debtor before a court clerk may register a sister-state judgment in California? We conclude that the answer is no.

A. Applicable legal principles

1. Full faith and credit clause

Article IV, section 1 of the United States Constitution provides that "[f]ull faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every other state." In accordance with this section, "[a] final judgment in one State, if rendered by a court with adjudicatory authority over the subject matter and persons governed by the judgment, qualifies for recognition throughout the land. For claim and issue preclusion (res judicata) purposes, in other words, the judgment of the rendering State gains nationwide force." (Baker v. General Motors Corp. (1998) 522 U.S. 222, 233 , fn. omitted.) "Moreover,' "[while] it is established that a court in one State, when asked to give effect to the judgment of a court in another State, may constitutionally inquire into the foreign court's jurisdiction to render that judgment, the modern decisions of [the Supreme] Court have carefully delineated the permissible scope of such an inquiry. From these decisions there emerges the general rule that a judgment is entitled to full faith and credit-even as to questions of jurisdiction-when the second court's inquiry discloses that those questions have been fully and fairly litigated and finally decided in the court which rendered the original judgment." '" (Bank of America v. Jennett (1999) 77 Cal.App.4th 104, 113 (Bank of America).) Thus, the Constitution requires that "a judgment entered by one state must be recognized by another state if the state of rendition had jurisdiction over the parties and the subject matter and all interested parties were given reasonable notice and an opportunity to be heard." (Thorley v. Superior Court (1978) 78 Cal.App.3d 900, 907.)

...