E-Filed Document Jan 12 2017 15:26:19 2016-CA-01085 Pages: 15 SUPREME COURT OF MISSISSIPPI COURT OF APPEALS OF THE STATE OF MISSISSIPPI CAUSE NO. 2016-CA-01085 MARLIN BUSINESS BANK APPELLANT V. STEVENS AUCTION COMPANY and JOHN D. STEVENS APPELLEES AMENDED BRIEF OF THE APPELLANT ORAL ARGUMENT NOT REQUESTED Submitted by: M. REED MARTZ, MSB NO. 101443 FREELAND MARTZ, PLLC 302 Enterprise Drive, Suite A Oxford, Mississippi 38655 662.234.1711 662.234.1739 fax reed@freelandmartz.com
SUPREME COURT OF MISSISSIPPI COURT OF APPEALS OF THE STATE OF MISSISSIPPI CAUSE NO. 2016-CA-01085 MARLIN BUSINESS BANK APPELLANT V. STEVENS AUCTION COMPANY and JOHN D. STEVENS APPELLEES CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons have an interest in the outcome of this case. These representations are made in order that the justices of the Supreme Court and judges of the Court of Appeals may evaluate possible disqualification or recusal. Marlin Business Bank, Appellant; M. Reed Martz, Counsel for the Appellant; Stevens Auction Company, Appellee; John D. Stevens, Appellee; and P. Nelson Smith, Jr., Counsel for Appellees. Attorney of Record for Appellant /s/ Reed Martz M. REED MARTZ, MSB No. 101443-1 -
CONTENTS CERTIFICATE OF INTERESTED PERSONS...- 1 - STATEMENT ON ORAL ARGUMENT... - 4 - STATEMENT OF ISSUES... - 5 - STATEMENT OF ASSIGNMENT... - 5 - STATEMENT OF THE CASE... - 5 - SUMMARY OF THE ARGUMENT... - 6 - ARGUMENT... - 8 - FULL FAITH AND CREDIT TO A FOREIGN JUDGMENT...- 8 - NO EVIDENCE IN THE RECORD... - 10 - FORUM SECTION CLAUSES...- 11 - CERTIFICATE OF SERVICE...- 14 - - 2 -
TABLE OF CASES AND OTHER AUTHORITIES Cases Alliance Trust Co. v. Armstrong, 186 So. 633, 635 (1939)... - 9 - Busching v. Griffin, 542 So.2d 860 (Miss. 1989)... - 9 - Cappaert Manufactured Hous., Inc. v. Thronson, 139 So.3d 100, 101 (Miss. App. 2013) - 10 - Educational Placement Services v. Wilson, 487 So.2d 1316, 1320 (Miss. 1986)... - 9 - Galbraith & Dickens Aviation Ins. Agency v. Gulf Coast Aircraft Sales, Inc., 396 So.2d 19, 21 (Miss. 1981)... - 8 - Galbraith & Dickens, 396 So.2d at 21...- 8 -, - 9 - Hicks v. Bridges, 580 So.2d 743, 746 (Miss. 1991)... - 9 - International Shoe Company v. State of Washington, 326 U.S. 310 (1942)...- 7 - Long Beach Auto Auction, Inc. v. United Security Alliance, 936 So.2d 351, 355 (Miss. 2006)... - 11 - Long Beach Auto Auction, Inc. v. United Security Alliance, Inc., 936 So.2d 351 (Miss. 2006)...- 5 -, - 8 - Long Beach, 936 So.2d at 356...- 12 - M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13 (1972)... - 11 - Marsh v. Luther, 373 So.2d 1039 (Miss. 1979)... - 8 - Pulliam v. Chandler, 872 So.2d 752, 754-55 (Miss. 2004)... - 7 -, - 10 - Shelton v. Kindred, 279 So.2d 642 (Miss. 1973)...- 10 - Sollitt v. Robertson, 544 So.2d 1378, 1381 (Miss. 1989)... - 8 - Tel-Com Management, Inc. v. Waveland Resort Inns, Inc., 782 So.2d 149, 153 (Miss. 2001)... - 9 - Titan Indem. Co., 895 So.2d at 146... - 11 - Titan Indemnity Co. v. Hood, 895 So.2d 138, 145 (Miss. 2004)... - 11 - Titan Indemnity Co., 895 So.2d at 147...- 12 -, - 13 - Willenbrock v. Brown, 239 So.2d 922 (Miss. 1970)...- 10 - Statutes MISS. CODE ANN. 11-7-301... - 6 - Rules Miss. R. App. P. 34(b)... - 4 - Treatises 47 Am.Jur. Judgments 1236 (1969)... - 9-47 Am.Jur.2d Judgments 1214 et seq. (1969)... - 8-50 C.J.S. Judgments 889 (1947)... - 8 - Constitutional Provisions Art. IV, I, CONSTITUTION OF THE UNITED STATES... - 8 - - 3 -
STATEMENT ON ORAL ARGUMENT Pursuant to Miss. R. App. P. 34(b), the Appellant does not request oral argument. This issue is a straightforward application of the applicable statutes and case law. The record is closed, no evidence can be added, and the authority in support of each party s position should be reflected in their briefs. Oral argument would unnecessarily add to the expense of the litigation. - 4 -
STATEMENT OF ISSUES I. Whether the Trial Court erred in denying the Pennsylvania judgment full faith and credit. II. Whether the Trial Court erred in relying solely on the factual assertions of counsel and treating them as evidence with nothing else, no exhibits or testimony, in the record. III. Whether the Trial Court erred in denying the Enrollment of Foreign Judgment in partial reliance on Long Beach Auto Auction, Inc. v. United Security Alliance, Inc., 936 So.2d 351 (Miss. 2006). STATEMENT OF ASSIGNMENT Appellant does not request that this appeal be assigned to the Supreme Court as opposed to the Court of Appeals. STATEMENT OF THE CASE This is an appeal from the denial of an enrollment of foreign judgment based upon facts which were not introduced into evidence before the trial court. On November 14, 2013, Appellees Stevens Auction Company and John D. Stevens (hereinafter collectively referred to as Stevens ) purchased a security system from Security Depot. R. 24. On November 21, 2013, Stevens executed an Equipment Lease Contract for Leases Under $100,000 (the Contract ) with Marlin Business Bank ( Marlin ). R. 42. Based on the respective agreements with Security Depot and Marlin, Security Depot, the seller of the security system, would install the system and once installed, Marlin would finance the system. Notably, the Contract is not in the record; however, according to the trial court s - 5 -
opinion below, the Contract contains a forum selection clause stating that any suit relating to the Contract shall be brought in Pennsylvania. R. 42. On November 28, 2013, Security Depot installed the security system on the premises of Stevens. R. 24. Once installed, Marlin began financing the security equipment. Thereafter, Stevens ceased making payments to Marlin, and, in accord with the terms of the Contract, Marlin filed suit in Philadelphia, Pennsylvania. R. 10. On August 26, 2014, the Philadelphia Municipal Court entered a Default Judgment in favor of Marlin and against Stevens for the sum of eleven thousand four hundred fifty-nine dollars and fifty cents ($11,459.50). R. 10. On January 16, 2015, pursuant to the Uniform Enforcement of Foreign Judgments Act, MISS. CODE ANN. 11-7-301 et seq., Marlin filed a Notice of Enrolling of Foreign Judgment in the Circuit Court of Monroe County, Mississippi. R. 7-9. On January 30, 2015, Stevens filed a Response in Opposition to Notice of Enrolling of Foreign Judgment, wherein Stevens requested the Court to strike the foreign judgment from the judgment rolls of Monroe County, Mississippi. R. 20-23. Stevens argued that the forum selection clause should not be enforceable as a matter of inconvenience. R. 20-23. On May 12, 2016, the Court held a hearing on Stevens motion opposing enrollment of the judgment into Monroe County. R. 38-39. On June 28, 2016, the Court entered an Order denying the Notice of Enrollment of Foreign Judgment. R. 41-43. SUMMARY OF THE ARGUMENT Under the Full Faith and Credit clause, judgments entered by sister courts are presumptively enforceable and should be carried out by the other state unless the judgment falls into one of a few narrow exceptions. The applicability of one of these exceptions must be proven by competent evidence. That did not happen in this case. - 6 -
To avoid enrollment of a judgment in Mississippi, one must prove that either a) the issuing court did not have jurisdiction to enter the judgment or b) the judgment was obtained by extrinsic fraud. Neither of these conditions was satisfied. Pursant to the Contract executed by Stevens, Pennsylvania had jurisdiction to hear and enter default judgment against Stevens. This has not been contested by Stevens, nor have they argued that the judgment was obtained by fraud. 3 The Contract unequivocally provides that jurisdiction rests in the state of Pennsylvania, and by signing the Contract, Stevens agreed to such jurisdiction and venue. Stevens complaint that the additional expense of having to travel to and defend in Pennsylvania is not sufficient to render the provision in the Contract invalid. Allowing Stevens to admit they signed the Contract yet not binding them to its terms renders contracts entirely meaningless. More importantly, there is nothing in the record to support the Circuit Court s decision. At the hearing, there was no testimony offered or exhibits admitted. There is, in fact, no evidence on which the Court could base its decision. Rather, the Court chose to rely on the assertions of counsel as evidence of the timing of a particular payment to Security Depot. As this Court well knows, the assertions of counsel are not evidence. Stevens are bound by the record and what is absent from the record. Absent any basis in the record to support its decision, this Court should reverse the decision of the Circuit Court. 4 Additionally, the trial court erroneously determined that the forum selection clause contained in the Contract could not be binding on the parties. The Court based its decision in part on Long Beach Auto Auction, Inc. v. United Security Alliance, Inc., 936 3 Nor have Stevens asserted that they are not subject to Pennsylvania s long arm statute based on the minimum contacts rule set forth in International Shoe Company v. State of Washington, 326 U.S. 310 (1942). 4 See Pulliam v. Chandler, 872 So.2d 752, 754-55 (Miss. 2004). - 7 -
So.2d 351 (Miss. 2006), and determined that because the second lease payment to Security Depot was presumably after the execution of the Contract, the Court could not uphold the Pennsylvania judgment under the Full Faith and Credit Clause. However, the trial Court s analysis should never have reached this point. Venue should have been challenged before the Pennsylvania court. There is nothing in the record that supports a conclusion that the incorporation of the forum selection clause into the Contract was a result of fraud, undue influence, or overweening bargaining power. ARGUMENT Full faith and credit to a foreign judgment The Pennsylvania Default Judgment is entitled to full faith and credit in this state. Art. IV, I, CONSTITUTION OF THE UNITED STATES; Sollitt v. Robertson, 544 So.2d 1378, 1381 (Miss. 1989) ( Under the United States Constitution, full faith and credit shall be given in each state to the public acts, record and judicial proceedings of every other state. ). It is well settled that a judgment rendered by a court of competent jurisdiction in a sister state is entitled to a presumption of validity as to that court s assumption of jurisdiction, and the burden is on the party attacking the judgment to affirmatively show its invalidity. Galbraith & Dickens Aviation Ins. Agency v. Gulf Coast Aircraft Sales, Inc., 396 So.2d 19, 21 (Miss. 1981) (citing Marsh v. Luther, 373 So.2d 1039 (Miss. 1979)). It is also a general rule that judgments entered in courts of a sister state, when sought to be made the judgment of another state, may only be attacked for lack of jurisdiction, otherwise they must be given the same effect as a domestic judgment. Galbraith & Dickens, 396 So.2d at 21 (citing 50 C.J.S. Judgments 889 (1947); 47 Am.Jur.2d Judgments 1214 et seq. (1969)). - 8 -
Said differently, [T]he courts of this state may inquire into no question other than those which would be considered upon collateral attack in the state in which the judgment was rendered. Sollitt v. Robertson, 544 So.2d at 1381 (citing Educational Placement Services v. Wilson, 487 So.2d 1316, 1320 (Miss. 1986) (emphasis added). Whether the issuing court had jurisdiction is based on the law of the issuing state. As a general rule, one must look to the law of the state which rendered the judgment sought to be enforced to determine its validity. Galbraith & Dickens, 396 So.2d at 21 (citing 47 Am.Jur. Judgments 1236 (1969)). Instead of attacking the issuing court s jurisdiction, Stevens argued the Philadelphia Municipal Court was the wrong venue. Stevens did not allege that the Philadelphia Municipal Court lacked personal or subject matter jurisdiction to hear the case. Stevens Opposition filed with the trial court contained not a single citation to Pennsylvania law. Whether Mississippi would have enforced the forum selection clause is inapplicable, although it almost certainly would have. To permit a party when sued on a written contract, to admit that he signed it but to deny that it expresses the agreement he made or to allow him to admit that he signed it but did not read it or know its stipulations would absolutely destroy the value of all contracts. Tel-Com Management, Inc. v. Waveland Resort Inns, Inc., 782 So.2d 149, 153 (Miss. 2001) (citing Hicks v. Bridges, 580 So.2d 743, 746 (Miss. 1991); Alliance Trust Co. v. Armstrong, 186 So. 633, 635 (1939); see also Busching v. Griffin, 542 So.2d 860 (Miss. 1989)). Stevens should be bound by the terms of the Contract they freely executed. Mississippi will only deny full faith and credit to a foreign judgment where the originating court lacked jurisdiction or the judgment was obtained through extrinsic fraud. Cappaert Manufactured Hous., Inc. v. Thronson, 139 So.3d 100, 101 (Miss. App. - 9 -
2013). Here, as plainly set forth in the Contract, the Philadelphia Municipal Court had jurisdiction over Marlin s case against Stevens. The default judgment was not fraudulently obtained. The Court s analysis should have ended there. No Evidence in the Record The appellate court cannot consider anything on appeal that does not appear in the record. Willenbrock v. Brown, 239 So.2d 922 (Miss. 1970). This Court may not act upon or consider matters which do not appear in the record and must confine itself to what actually does appear in the record. It must be presumed that the rulings of the trial court were correct, and such presumption will prevail, unless the actual record supports the contrary view. Shelton v. Kindred, 279 So.2d 642 (Miss. 1973). Because the Full Faith and Credit clause assumes the validity of the foreign judgment, the burden was upon Stevens not Marlin to show a legitimate reason why the judgment was not entitled to enforcement. Based on the complete lack of a record, Stevens failed to meet this burden. At the hearing, there was no testimony offered or exhibits admitted. There was no evidence on which the Court could base its decision. Instead, the Court chose to rely on the assertions of counsel at the hearing, which was not evidence. Pulliam v. Chandler, 872 So.2d 752, 754-55 (Miss. 2004). Because there is no basis in the record to support its decision, this Court should reverse the decision of the Circuit Court. - 10 -
Forum Section Clauses While Marlin does not believe it necessary to address Stevens improper and untimely challenge of venue in the Pennsylvania court, it does so out of an abundance of caution. Enforcement of a forum selection clause is deemed a question of law and is reviewed by this appellate court de novo. Titan Indemnity Co. v. Hood, 895 So.2d 138, 145 (Miss. 2004). Forum selection clauses are presumptively valid and enforceable, unless the resisting party can show: (1) Its incorporation into the contract was the result of fraud, undue influence or overweening bargaining power; (2) The selected forum is so gravely difficult and inconvenient that the resisting party will for all practical purposes be deprived of its day in court; or (3) The enforcement of the clause would contravene a strong public policy of the forum in which the suit is brought, declared by statute or judicial decision. Long Beach Auto Auction, Inc. v. United Security Alliance, 936 So.2d 351, 355 (Miss. 2006) (citing Titan Indem. Co., 895 So.2d at 146; M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12-13 (1972)). [T]he resisting party bears the burden of showing that the enforcement of the clause is unreasonable. Id. In Long Beach, at the time of being presented with the warranty agreement, the security system had already been installed, along with a deposit and first month s rent paid on the system. In this case, the security system had not yet been installed at the time the Contract was presented for execution, nor had Marlin received any payments from Stevens. In fact, installation did not occur until one week following the execution of the Contract. In Long Beach, the court specifically noted the following: Here, the system had been installed, the lease agreements concluded and binding, consideration passed with the deposit and first month s rent paid, all before the warranty was delivered. The window of opportunity to negotiate more favorable terms was already closed. Long - 11 -
Beach, 936 So.2d at 356. This simply is not the case with the facts set forth in the record. The security system had not yet been installed, and consideration had not passed between Marlin and Stevens. It was not as if Stevens was forced into the Contract without other options. This was not a contract in adhesion, nor are Stevens arguing that it is. Rather, they are simply arguing that the terms of the Contract with respect to jurisdiction and venue were inconvenient. Even so, challenging venue at this point is untimely. Stevens should have properly challenged venue before the Pennsylvania court. There is nothing in the record that supports a conclusion that the incorporation of the forum selection clause into the Contract was a result of fraud, undue influence, or overweening bargaining power. Stevens freely executed the Contract that provided for Pennsylvania jurisdiction and venue. With limited exceptions, persons enjoy the freedom to contract. When they do, they are bound by the terms of their contracts. Titan Indemnity Co., 895 So.2d at 147. Simply because Stevens owns a business in a small town in Mississippi does not preclude it from traveling to defend an action against it in another state nor does it imply that Stevens is an unsophisticated business/businessman as eluded to in the Circuit Court proceedings. See Response and Opposition To Notice of Enrolling of Foreign Judgment, 6. As noted in Titan Indemnity, [f]ew are immune from the societal demands and modern commerce considerations which require compliance with the terms of pre-written contracts every day. Titan Indemnity Co., 895 So.2d at 147. Having to defend in Pennsylvania should not have deprived Stevens from their day in court. There is nothing that could have prevented Stevens from defending the case in Pennsylvania. Stevens simply chose to sit back and have a default judgment entered against them. In Titan Indemnity, the court noted that the mere reference to the expense the litigant may incur to litigate the matter in another forum does not meet the burden of - 12 -
proof. Titan Indemnity Co., 895 So.2d at 147. Finally, Stevens has not made any showing of a contravention of public policy. CONCLUSION For the foregoing reasons, and on the basis of the authorities cited, the decision of the Circuit Court in Monroe County to deny the enrollment of foreign judgment should be reversed. Respectfully submitted, /s/ Reed Martz M. REED MARTZ, MS BAR 101443 FREELAND MARTZ, PLLC 302 Enterprise Drive, Suite A Oxford, Mississippi 38655 662.234.1711 662.234.1739 - fax reed@freelandmartz.com - 13 -
CERTIFICATE OF SERVICE I hereby certify that on the 12th day of January 2017, I electronically filed the foregoing with the Clerk of the Court using the MEC system which sent notification of such filing to the following: P. Nelson Smith, Jr., Esq. Hicks & Smith, PLLC 710 Main Street, 2nd Floor P.O. Box 1111 Columbus, MS 39703-111 nsmith@ghs-law.com By United States Mail, postage prepaid, a copy of the forgoing was sent to: Hon. Jim S. Pounds Monroe County Circuit Court P.O. Box 316 Boonville, MS 38829 This, the 12th day of January 2017. /s/ Reed Martz M. REED MARTZ - 14 -