Mueller v. Payn

Moore, J., delivered the opinion of the Court. This appeal presents the issues of whether a default judgment entered in Missouri against Maryland defendants was entitled to full faith and credit in Maryland and, if so, whether summary judgment was properly entered for appellee in a suit upon the judgment in the Circuit Court for Prince George’s County. I Marshall Payn, appellee, a resident of St. Joseph, Missouri, filed a declaration in the Circuit Court for Prince ³⁷⁹ George’s County on November 20, 1974, seeking recovery of the sum of $12,000, plus costs, against A. A. Mueller and National Technical Institute, appellants, of College Park, Maryland. Payn attached to his declaration an exemplified copy of a judgment in that amount rendered on May 31, 1974 by the Circuit Court of Jackson County, Missouri, at Independence, Missouri, against both appellants.

(The Missouri judgment recited that the appellants “although duly and lawfully summoned,” were in default.) The declaration was accompanied by a motion for summary judgment without a supporting affidavit. Appellants by their counsel thereafter filed separate but identical pleas interposing the general issue and pleading specially, inter alia, that the Missouri court lacked personal and subject matter jurisdiction, that the foreign judgment was obtained by fraud and that the appellants in the Missouri proceedings did not receive notice thereof in sufficient time to defend, that the Missouri judgment was invalid because “of errors and irregularities and that appellants had not been served with process in the Missouri action.” Appellants also made a demand for a jury trial and filed, without supporting affidavit, a motion to extend the time to oppose appellee’s motion for summary judgment. Without a hearing, the lower court (Mathias, J.) entered an order on January 28, 1975 that neither party was entitled to summary judgment, citing Maryland Rule 610 a 3. 1 Thereafter, on March 18, 1975, Mr. Payn again filed a motion for summary judgment annexing thereto an authenticated copy of the entire record of the proceedings in the Missouri court. The Missouri record included copies of the following: 1) Petition for Damages filed on May 24, 1973 against both appellants.

The petition alleged that on or about August 25, 1972 the parties had entered into a written contract whereby the plaintiff-appellee agreed to furnish the defendant ³⁸⁰ technical and consulting services in establishing and operating a private school business in the field of motorcycle technology for which he was to receive the sum of $12,000, and that the said amount had not been paid. 2) An affidavit filed with the Petition for Damages requesting foreign personal service as provided by Section 506.500 of the Revised Statutes of Missouri 1949, the long-arm statute, the defendants being non-residents of the State of Missouri. 2 3) Copy of communication dated August 25,1972 to Marshall V. Payn, St. Joseph, Missouri, confirming agreement between National Technical Institute and Marshall Payn as an individual “to act as a consultant and to render services as necessary for the motorcycle technology that National Technical Institute offers. Payment. . . will commence April, 1973 and will be for $1,000.00 per month for a period of 12 months.” This communication was signed by “A. A. Mueller, President, N.T.I.” 4) A return of service by Deputy Sheriff James Ephraim of Prince George’s County, Maryland, showing service upon National Technical Institute with service on A. A. Mueller, President, executed on September 25, 1973; and a separate return of service executed on September 25, 1973 upon appellant, A. A. Mueller. 5) Letter dated October 8, 1973 on the letterhead of National Technical Institute, College Park, Maryland, to the Clerk of the Circuit Court of Jackson County, Independence, Missouri, signed by A. A. Mueller and requesting that an attached letter be filed “as a reply to the Petition of Damages in the case of Marshall Payn against A. A. Mueller.” (Carbon copies of this communication were indicated to have been sent to the Deputy Clerk and to counsel for Marshall Payn.) 6) Letter dated October 8, 1973 (referred to in Item ³⁸¹ 5, supra) on letterhead of National Technical Institute, College Park, Maryland, signed by A. A. Mueller, addressed to the Clerk of Court in Missouri. The communication requested particulars of the claim and stated that “N.T.I. will counter-sue for the $3,000 plus other damages resulting to its business from Mr. Payn’s consulting services.” (Copies were also sent to the Deputy Clerk and to counsel for Mr. Payn.) 7) Motion by attorney for Payn in the Missouri proceedings “requesting order for proper answer on the alternative that the plaintiff be granted a default judgment.” The motion recited the filing of the Petition for Damages followed by Mr. Mueller’s two letters dated October 8, 1973 and alleged that “said letters are insufficient to constitute answer to the plaintiffs petition under the laws of the State of Missouri and under the Rules of civil procedure heretofore adopted by the Supreme Court of the State of Missouri. 3 The motion contained a Certificate of Service by mail to A. A. Mueller and National Technical Institute dated January 2,1974. 8) Formal order by the Circuit Court of Missouri, 16th Judicial Circuit, dated January 2, 1974, that the defendants (appellants here) within sixty days “file their proper answer to the plaintiff’s petition or, in the alternative, plaintiff be granted a default judgment against the defendant.” 9) Judgment rendered by the Circuit Court of Jackson County, Missouri on May 31, 1974 in favor of Marshall Payn against A. A. Mueller and National Technical Institute in the sum of $12,000 and costs because of defendants’ default although “timely and lawfully summoned.” Appellants responded to Payn’s motion for summary ³⁸² judgment in the proceedings below by filing an opposition thereto and by interposing their own motion for summary judgment. As grounds for their opposition, appellants asserted (a) that Payn's previously filed motion for summary judgment had been denied on January 29, 1975; and (b) that Payn had filed no new information in support of the second motion for summary judgment.

Mueller’s and National Technical Institute’s motion for summary judgment was based solely upon a claim that “the Missouri judgment was not obtained in compliance with Missouri law.” 4 Annexed to their motion was an affidavit by David H. Jeter, a member of the Bar of the State of Missouri, in which the affiant stated that Missouri Supreme Court Rule 44.01 (d) requires: “A written motion, other than one which may he heard ex parte, and notice of the hearing thereof, shall be served not later than five (5) days before the time specified for the hearing, unless a different period is affixed by law or court rule or by order of the court. . .” (Emphasis added.) Attorney Jeter further deposed that the court file in Missouri did not reflect that any notice of hearing was given to Mueller and National Technical Institute in the granting of the order dated January 2, 1975, supra, requiring the defendants in the Missouri action to file a proper answer “on the alternative” that the plaintiff be granted a default judgment. Appellee Payn thereafter filed an opposition to appellants’ motion for summary judgment in which it was stated that the second motion for summary judgment included the entire proceedings in the Missouri court (which had not been filed with the first motion for summary judgment) and that the official proceedings showed that the Missouri judgment against both Mueller and National Technical Institute was valid. ³⁸³ Prior to any hearing on the respective motions for summary judgment, appellants served a notice of the taking of the deposition of Marshall Payn, scheduled for April 28, 1975 at College Park, Maryland. (Notices had previously been given of the taking of his deposition on March 21 and April 4 but, for reasons not disclosed in the record, the deposition of Payn was not taken on either date.) Upon application of Payn’s Maryland counsel, a protective order was granted by the Circuit Court for Prince George’s County (Powers, J.) in which was ordered that the scheduled deposition of Mr. Payn be postponed, if necessary, to a date after the summary judgment motions of both parties had been ruled upon. It was further ordered that the deposition, if any, be taken in Missouri at the expense of Mueller and National Technical Institute.

A hearing in open court on the parties’ respective summary judgment motions was held on May 1, 1975 before Judge Powers. Payn’s motion for summary judgment was granted and, on May 5, 1975, the court signed a formal order that judgment be entered in favor of the appellee in the sum of $12,000 plus costs. It was further ordered, however, that the execution on the judgment be stayed for a period of forty-five days. As the transcript of the proceedings before Judge Powers discloses, counsel for appellants advised the court that a motion to set aside the Missouri judgment had recently been filed and that a stay of execution on the judgment was desired in order that appellants could pursue their available remedies in the State of Missouri.

We assume from the record that appellants’ recourse to the Missouri court did not meet with success because they subsequently posted a supersedeas bond in the amount of $14,000. We proceed to consider the assignments of error. II Appellants’ first principal contention is that the Missouri judgment is not entitled to full faith and credit in Maryland for the reasons that the Missouri judgment (a) Was not valid because it was not in compliance ³⁸⁴ with Missouri’s Supreme Court Rule 44.01 and because the court ignored the letters of defendants dated October '8, 1973; (b) Is not conclusive in Maryland if obtained by fraud; and (c) Should not be recognized because the “foreign court” was a seriously inconvenient forum within the meaning of the Maryland Uniform Foreign Money-Judgment Recognition Act, Md. Code Annot., Courts and Judicial Pro., Sec. 10-704 (b) (5) (1975). First, we hold that the Foreign Money-Judgment Recognition Act has no bearing whatever.

As Section 10-701 (c) specifically provides, a “foreign state” means “any governmental unit other than the United States, or any state, district, commonwealth, territory, insular possession thereof, or the Panama Canal Zone, the Trust Territory of the Pacific Islands or the Ryukyu Islands.” The act applies only to judgments of countries outside the United States, its territories and possessions. See generally, Patterson, C. H., Foreign Country Judgments and the Second Restatement of Conflict of Laws; 72 Columbia L. Rev. 220, 264 (1972); 47 Am. Jur. 2d Judgments, Sec. 1242. Accordingly, we disregard so much of appellants’ claims of error in (b) and (c) above as are based upon the Uniform Act.

Next, we observe that appellants make no contention that the Missouri court lacked jurisdiction of the subject matter or of the parties. In this connection, we note that personal service in Maryland of both appellants was effected, as previously stated, pursuant to the provisions of Section 506.500, Revised Statute of Missouri 1949, Missouri’s Long-Arm Statute. Furthermore, any defect of personal jurisdiction in the initiation of the action was effectively waived by the letters which appellants addressed to the Clerk of the Circuit Court of Jackson County, Missouri dated October 8,1973, requesting that they be filed as an answer to the petition for damages in the action against them by