Feldman v. Magnetix Corp.

Moylan, J., delivered the opinion of the Court. Article IV, Section 1 of the Constitution of the United States provides: "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.” The ultimate issue before us on this appeal is whether Maryland shall extend full faith and credit to a judgment entered by a court in the State of Florida. The appellant, Richard W. Feldman, is a resident of Maryland.

The appellee, Magnetix Corporation, is a Florida corporation in the business of, inter alia, duplicating magnetic tapes from original tapes. Pursuant to an oral agreement between them starting in 1973, Feldman would send tapes from his place of business in Maryland to Magnetix in Florida, where the tapes would be reproduced and then returned to Feldman in Maryland. In June, 1975, Magnetix received an order from Feldman, performed the reproduction services requested, shipped the completed tapes to Feldman in Maryland and billed him for the services in the amount of $2,036.90. Feldman failed to make payment.

Magnetix brought suit against Feldman in the County Court for Orange County, Florida. It obtained service upon Feldman, in compliance with the Florida "Long Arm” Statute, by having a copy of the complaint served upon Feldman’s wife at Feldman’s residence in Maryland. 1 Feldman failed to answer the complaint and failed to appear ³¹⁰ in Florida. On September 28, 1978, a final judgment was rendered against him by the Florida court in the amount of $2,036.90 in damages and $90.20 in court costs. Magnetix subsequently sued Feldman in the District Court of Maryland for Baltimore County, seeking to have the Florida judgment enforced.

Feldman elected a jury trial and the case was transferred to the Circuit Court for Baltimore County. Based on certified copies of the records from Florida, Magnetix moved for summary judgment. On February 6, 1981, Judge Austin W. Brizendine conducted a hearing on Magnetix’s motion for summary judgment (and a cross-motion for summary judgment by Feldman) and granted the motion on behalf of Magnetix (denying the cross-motion of Feldman). Upon this timely appeal, Feldman raises two related issues.

He claims that "there is a genuine issue of material fact respecting the Defendant’s liability. The debt sued upon was a corporate debt of Communitape Corporation, and the Defendant was not and is not personally liable for the said debt.” Our response to that claim is that, if the Florida judgment is entitled to full faith and credit in Maryland, the factual dispute as to liability, however genuine, is not material. The materiality of that dispute ended with the handing down of the judgment in Florida; under principles of res judicata, the dispute may still be very genuine but is utterly immaterial. Feldman’s oblique attempt to resuscitate materiality by relating the factual dispute to the jurisdictional issue rather than to the liability issue is foreclosed by Groom v. Margulies, 257 Md. 691 , 265 A.2d 249 .

The well-reasoned decision of Judge Barnes dealt with a similar contention. Margulies there challenged the jurisdiction of the State of Maryland, under our "Long Arm” Statute, on the grounds that he had not done business personally in Maryland but had only acted for a corporation which did business in Maryland. The Court of Appeals pointed out that the contention went to the merits of the case and not to the question of jurisdiction. It reasoned, at 257 Md. 703 -704: ³¹¹ "In considering problems arising under the Long Arm Statute, it is important to distinguish between the jurisdiction of the forum state over the out-of-state defendant, on the one hand, and the merits of the case, on the other.

The defendant Margulies contends, in effect, that inasmuch as he was acting in Maryland as an agent for a disclosed principal, he was not transacting any business in Maryland for himself as an individual, but only for his principal and hence the lower court had no jurisdiction over him under the 'Long Arm’ Statute. We do not agree with this contention. The declaration in the present case, the itemized statement of account and the affidavit in support of Groom’s motion for summary judgment indicate on their face that the agreement was entered into in Maryland with Margulies individually even though he was trading as Marko Distributors, Inc.; that Groom dealt with Margulies 'exclusively’ and paid the $10,000.00 to him. The service by mail was sent to Margulies in New Jersey and he signed the return receipt without qualification.

There is really no contention that the negotiation of the agreement and lease, the execution of these documents in Maryland and the payments in Maryland do not amount to the transaction of any business in this State. Cf. Vitro Electronics v. Milgray, 255 Md. 498, 258 A.2d 749 (1969). The contention is that the 'transaction of business’ was not for Margulies individually but for a corporation, which Margulies contends was a disclosed principal.

This contention, however, in our opinion is directed at the question of ultimate liability in the case. The statute makes the test of jurisdiction in the present circumstances, the transaction of any business without any qualification. Margulies did transact business in Maryland and Maryland has personal jurisdiction over him. His defense that he is not liable because he was acting for a disclosed corporate principal ³¹² goes to the merits of the case, not to the power of the court to make the adjudication.” 2 The mootness of any factual dispute as to the merits of liability, however, does not render immaterial a genuine dispute as to other facts bearing upon the State of Florida’s in personam jurisdiction over the appellant Feldman.

As Judge Oppenheimer expertly traced for the Court of Appeals in Van Wagenberg v. Van Wagenberg, 241 Md. 154 , 215 A.2d 812 , a party proceeded against under an out-of-state judgment may collaterally attack the jurisdiction of the court which rendered that judgment. "[I]f there was no jurisdiction, the judgment is not entitled to faith and credit.” 241 Md. at 160 . As Judge Oppenheimer pointed out at 241 Md. 161 : "If the court of the state rendering the judgment sued upon was not authorized by that state to exercise its jurisdiction in the particular matter, the purported judgment is subject to collateral attack. The power of the state (Maryland) in which the suit on the judgment of the sister state (New York) is brought, to examine into whether, under New York law, the court of that state which rendered the judgment had authority to do so, is beyond question.” In defending against summary judgment in this case, ³¹³ Feldman mounted such an attack against the in personam jurisdiction of the Florida court in two regards: (1) that the exercise of jurisdiction by Florida violated Florida law and (2) that the exercise of jurisdiction by Florida violated the due process clause of the Fourteenth Amendment to the United States Constitution.

Under Maryland Rule 610d 1, summary judgment is appropriate where "the pleadings, depositions and admissions on file, together with the affidavits, if any, show there is no genuine dispute as to any material fact and that the moving party is entitled to a judgment as a matter of law.” From the pleadings and the answers to interrogatories in this case, there is some genuine factual dispute between Feldman and Magnetix over the extent to which their business transactions and negotiations implicated the State of Florida. If the difference between their versions of the facts would be pivotal in determining Florida’s jurisdiction over Feldman either under the Florida statutes or under the Federal Constitution, the dispute would be material and summary judgment would be inappropriate. The normal processes of fact-finding, by judge or jury, with the opportunity to condition for trustworthiness, to probe through cross-examination, to observe witnesses’ demeanors, would then be resorted to for purposes of assessing competing credibilities, weighing contradictory evidence and resolving such genuine factual disputes on material issues. In reviewing a summary judgment, we must consider the facts, and all legitimate inferences flowing therefrom, in the light most favorable to the party opposing the motion.

Berkey v. Delia, 287 Md. 302 , 413 A.2d 170 ; Lawless v. Merrick, 227 Md. 65 , 175 A.2d 27 . In this case, we shall affirm the actions of Judge Brizendine for we conclude, as a matter of law, that even the version of the facts submitted by Feldman and most favorable to him demonstrates that Florida had jurisdiction over him, both under Florida law and without violation of any due process protection. Two of the affidavits of Feldman himself reveal that from 1971 through 1975, he was the president and principal shareholder of the Communitape Corporation. ³¹⁴ Communitape was in the business of producing audio-visual programs. During all of that period, Mr. Feldman devoted all of his professional efforts to the business of Communitape.

On several occasions from 1973 through July, 1975, Communitape, through Mr. Feldman, did business with Magnetix. On each occasion, a master tape was shipped from Communitape in Maryland to Magnetix in Florida. In Florida, it was duplicated in the quantities specified by Feldman. The product would then be shipped from Florida back to Communitape in Maryland.

Payment would be remitted to Magnetix in Florida. The oral contract in issue was entered into between Feldman and a representative of Magnetix in about May, 1975, in Columbia, Maryland. Pursuant to that contract, the master tape was shipped from Maryland to Florida. Mr. Feldman acknowledged the possibility that he or his agents may have made "one or two telephone calls from Maryland to