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FRANKLIN NATL. BANK v. KRAKOW

January 23, 1969

FRANKLIN NATIONAL BANK, Plaintiff,
v.
Bernard KRAKOW, as Co-executor. Blanche ROSE, as Co-executrix of the Estate of Charles Rose, Deceased, Defendants and Third-Party Plaintiffs, v. Marshall COYNE, Third-Party Defendant



The opinion of the court was delivered by: ROBINSON, JR.

 AUBREY E. ROBINSON, Jr., District Judge.

 This is an action for recovery of a disputed claim against an estate under Title 20 of the District of Columbia Code, D.C.Code § 20-1318 (1967). The claim is based on a default judgment in the sum of one hundred twenty-two thousand seven hundred and ninety-two dollars and fifty cents ($122,792.50) rendered by the Supreme Court of the State of New York, County of Nassau, in favor of Plaintiff bank against the estate of Charles Rose. The New York judgment was predicated upon a promissory note for one hundred thousand dollars ($100,000), dated January 6, 1966, and drawn by decedent Charles Rose and Marshall B. Coyne, the third party defendant in the instant case. The additional amount of the judgment includes a fifteen percent attorney's fee and six percent interest to the date of entry of the judgment. In short, the instant lawsuit is in the nature of a suit in the District of Columbia to enforce a judgment rendered by a court of another jurisdiction, namely the State of New York.

 The motion presently before the Court is a Motion by Plaintiff for Judgment on the Pleadings against Defendants, co-executor and co-executrix of the estate of Charles Rose. Plaintiff's motion is made under authority of Rule 12(c) of the Federal Rules of Civil Procedure. In support of the motion, Plaintiff argues that the United States District Court for the District of Columbia previously granted Plaintiff's motion to dismiss Defendants' counterclaim which had alleged the invalidity of the New York judgment; and that such decision is a recognition by this Court of the validity of the New York judgment for all purposes and is res judicata of all the issues involved.

 Defendants reply that the Motion for Judgment on the Pleadings should be denied because the answer raises issues of fact which, if proved, would defeat recovery. Specifically, they argue that the New York court did not have jurisdiction to render a default judgment, and, as a result, this Court is not bound to give full faith and credit to the New York judgment. In addition, they argue the invalidity of the New York judgment on the ground that Defendant Blanche Rose was not served with process of any nature in the New York action. Defendants also contend that the decision of another judge of this Court, in granting the motion to dismiss the counterclaim, was not an adjudication of the validity of the New York judgment, since the defense of lack of jurisdiction was not even in issue at that time.

 After carefully considering the arguments in support of and in opposition to the Motion for Judgment on the Pleadings raised in memoranda, argument in open court and then in supplemental memoranda, we conclude that the Motion must be denied.

 1. Previous Order of Court Not Res Judicata

 The Court's dismissal of Defendants' counterclaim on June 28, 1968, is not res judicata on the issue of the validity of the New York judgment. The issue of the New York court's jurisdiction to render that judgment, although mentioned in Defendants' points and authorities in opposition to the motion to dismiss, was apparently not the determinative factor in that decision. The order of dismissal in no way indicates that it was based on a finding that New York had jurisdiction, nor is there any reference in the order to the question of jurisdiction. Since the reason for the Court's decision was not enunciated, this Court cannot attribute one specific rationale to the order when there are other even more logical explanations for the action taken. In any event, this Court is not bound by another Court's action on an unrelated motion. See Indian Lake Estates, Inc. v. Ten Individual Defendants, 121 U.S.App.D.C. 305, 309 n. 13, 350 F.2d 435, 439 n. 13 (1965).

 2. Nature of Motion for Judgment on Pleadings

 The implication, contained in Plaintiff's Additional Memorandum of Law, that we are bound by the face of the record in the New York action or by the mere fact that its complaint alleges facts which might support jurisdiction, is contrary to the law governing a motion for judgment on the pleadings. The law is settled that judgment on the pleadings is not appropriate where the answer raises issues of fact which, if proved, would defeat recovery. For the purposes of such a motion, all allegations of the opposing party's pleadings are taken as true and all allegations of the moving party which have been denied are taken as false. 2A Moore's Federal Practice P12.15 (1968 ed.).

 Plaintiff further fails to consider that Rule 12(c) of the Federal Rules of Civil Procedure provides: "If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56 * * *." The parties have submitted and this Court has considered the Motion for Judgment on the Pleadings, the opposition to that Motion, the memoranda and supplemental memoranda in support of and in opposition to the Motion, other memoranda in the file and certain affidavits, all of these being outside the formal pleadings. Therefore, the pending motion must be considered in the context of Rule 56 of the Federal Rules of Civil Procedure pertaining to summary judgments. The question presented by a motion for summary judgment is, like that presented by a motion for judgment on the pleadings, one of law and, "if a genuine issue of material fact exists, the motion must be denied." 6 Moore's, supra at P56.09. Similarly, on a motion for summary judgment, as on a motion for judgment on the pleadings, any inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. United States v. Diebold, Inc., 369 U.S. 654, 82 S. Ct. 993, 8 L. Ed. 2d 176 (1962). See also Isen v. Calvert Corp., 126 U.S.App.D.C. 349, 379 F.2d 126 (1967). "If the inferences thus drawn would preclude a judgment for the movant, then a genuine issue of material fact exists and summary judgment must be denied." Continental Casualty Co. v. Beelar, 132 U.S. App. D.C. 1, 405 F.2d 377, 378 (D.C.Cir.1968). See also 6 Moore's supra at P56.09.

 Viewing the underlying facts and the inferences to be drawn therefrom in a light most favorable to Defendants, we find that Defendants' opposition to Plaintiff's Motion raises genuine issues of material fact which, if proved, would establish that the New York court lacked jurisdiction to render the default judgment and would thus defeat recovery in the instant action. Such factual issues are raised by the following allegations contained in Defendants' opposition to the Motion for Judgment on the Pleadings: Defendant Blanche Rose was not served with process of any kind in the New York action. Defendant Bernard Krakow was served in the District of Columbia. The negotiations leading to the loan made to the decedent and the co-maker were entered into in the District of Columbia by the parties and a representative of the bank who came to the District of Columbia and entered into the loan with them in the District. Neither of the makers of the note went to New York in connection with the note or the loan and they had no physical contacts with New York State in connection with the transactions involved in this suit. Decedent signed the note in the District of Columbia. Any actual transmission was by mail from the District of Columbia. The only connection with New York State is that a provision of the note provided that the note shall be governed and construed in accordance with the laws of New York.

 3. Full Faith and Credit and the Issue of Jurisdiction

 It is a well established principle that the courts of one state within our federal system are bound to give full faith and credit to the judgments of the courts of another. U.S.Const. art. IV § 1; Morris v. Jones, 329 U.S. 545, 67 S. Ct. 451, 91 L. Ed. 488 (1946); Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 437-439, 64 S. Ct. 208, 88 L. Ed. 149 (1943). And federal courts must give full faith and credit to judgments of state and territorial courts. Huron Holding Corp. v. Lincoln Mine Operating Co., 312 U.S. 183, 61 S. Ct. 513, 85 L. Ed. 725 (1941); Davis v. Davis, 305 U.S. 32, 59 S. Ct. 3, 83 L. Ed. 26 (1938). However, it is equally well settled that "a court of one state is not required by the full faith and credit clause to regard as conclusive a judgment of a court of another state if the court of the latter had no jurisdiction of the subject matter or of the parties in the constitutional sense." Operative Plasterers' & Cement Finishers' International Ass'n of the United States & Canada v. Case, 68 U.S.App.D.C. 43, 49, 93 F.2d 56, 62 (1937). See also Milliken v. Meyer, 311 U.S. 457, 61 S. Ct. 339, 85 L. Ed. 278 (1940); Bigelow v. Old Dominion Copper Mining & Smelting Co., 225 U.S. 111, 134, 32 S. Ct. 641, 56 L. Ed. 1009 (1921); Cole v. Cunningham, 133 U.S. 107, 112, 10 S. Ct. 269, 33 L. Ed. 538 (1890). The full faith and credit clause "does not preclude an inquiry into the jurisdiction of the court which pronounced the judgment," Bigelow, supra at 135, 32 S. Ct. at 645, by the court in which the judgment is sought to be enforced. Such a judgment may always be attacked in the courts of the second state "by proof that the [first] court had no jurisdiction, even when the record purports to show jurisdiction." Williams v. North Carolina, 325 U.S. 226, 229, 65 S. Ct. 1092, 1095, 89 L. Ed. 1577 (1945). Thus, a judgment of the courts of one state will be given full faith and credit by the courts of a sister state or by the federal courts only if it is a valid judgment, H. Goodrich, Conflict of Laws §§ 206, 208 (Scoles ed. 1964); it is a valid judgment only if the court in the judgment-rendering state "had power to pass on the merits -- had jurisdiction, that is, to render the judgment," Williams, supra at 229, 65 S. Ct. at 1095; the question of the court's jurisdiction may be examined ...


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