BORG-WARNER ACCEPTANCE CORP., A DELAWARE CORPORATION, PLAINTIFF-APPELLEE, CROSS-APPELLANT,
v.
LOVETT & THARPE, INC., A GEORGIA CORPORATION, DEFENDANT-APPELLANT, CROSS-APPELLEE
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A default judgment is not res judicata on the issue of personal jurisdiction and can be collaterally attacked in a sister state.
BWAC obtained a default judgment against Lovett & Tharpe in Missouri. BWAC then sued in Georgia to domesticate the judgment, but Lovett & Tharpe argue…
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PER CURIAM:
Borg-Warner Acceptance Corporation (BWAC), a Delaware corporation, filed suit against Lovett & Tharpe, Inc., a Georgia corporation, in a Missouri state court in 1982. Lovett & Tharpe received notice of the suit but failed to appear and defend. The Missouri court subsequently entered a default judgment in favor of BWAC after concluding that Lovett & Tharpe had conducted sufficient business in Missouri to subject it to in personam jurisdiction. The present diversity action began several months later when BWAC filed suit against Lovett & Tharpe in the District Court for the Southern District of Georgia in an attempt to domesticate and collect the Missouri judgment. Lovett & Tharpe opposed a motion for summary judgment by BWAC on the grounds that the Missouri court lacked in personam jurisdiction, rendering the default judgment void and unenforceable. The district court, 560 F.Supp. 905, concluded that the Missouri judgment acted as res judicata to any dispute concerning in personam jurisdiction and granted summary judgment against Lovett & Tharpe. We reverse and remand for the following reasons.
Both parties to this action mistakenly relied on an ambiguous footnote in a recent opinion in arguing that this issue is one of first impression. In Fehlhaber v. Fehlhaber, 681 F. 2d 1015 at n. 27 (Former fifth Cir.1982), cert. denied — U.S. -, 104 S.Ct. 79, 78 L.Ed.2d 90 (1983), a panel of our court stated that “[t]he res judicata effect of a default judgment on jurisdictional defects is an unsettled question ____” This statement, although dicta and not binding in any event, obviously refers to the lack of national uniformity on the issue of whether a default judgment is open to collateral attack for alleged jurisdictional defects. The question was settled in this jurisdiction in a decision of the former fifth Circuit. See Bonner v. City of Prichard, Ala., 661 F. 2d 1206, 1208 (11th Cir.1981) (en banc) (decisions of the Fifth Circuit decided before September 30, 1981, are binding precedent for the Eleventh Circuit). “In those cases ... in which the defendant makes no appearance and the judgment goes by default, the defendant may defeat subsequent enforcement in another forum by demonstrating that the judgment issued from a court lacking personal jurisdiction.” Hazen Research, Inc. v. Omega Minerals, Inc., 497 F. 2d 151, 154 (5th Cir.1974). Accordingly, the trial court erred in granting summary judgment in favor of BWAC. Lovett & Tharpe is entitled to an opportunity to establish its defense.
BWAC cross-appeals claiming that the trial court abused its discretion in denying a motion to amend the complaint in order to seek damages provided by Georgia law against a “stubbornly litigious” defendant. We believe the appropriate disposition of this issue is to vacate the order of the district court and remand with instructions to re-examine the question. The district court’s order denying the motion gives no reason or explanation for its decision. We note that, depending on the merits of the defense, Lovett & Tharpe’s “stubbornness” may turn out to be a bad faith avoidance of debt, or it may have been a very successful litigation strategy.
REVERSED in part and VACATED and REMANDED in part.
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Citator
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Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 786 F.2d 1055 (11th Cir. 1986)…al this court held that the Missouri default judgment did not preclude Lovett & Tharpe from defending against the judgment on the ground that the Missouri court had lacked personal jurisdiction. Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 734 F. 2d 639 (11th Cir.1984). On remand, Borg-Warner again moved for summary judgment in the district court. After a hearing, the district court denied the motion for summary judgment and dismissed the case on the ground that the Missouri court had lacked perso…
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Am. Steel Bldg. Co., Inc. v. Davidson & Richardson Constr. Co., 847 F.2d 1519 (11th Cir. 1988)…is court has held that where the defendant does not appear, and judgment is by default, the state court judgment does not preclude the federal court from reviewing the jurisdictional issues. See Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 734 F. 2d 639, 640-41 (11th Cir.1984); [*1522] Hazen Research Inc. v. Omega Minerals, Inc., 497 F. 2d 151, 154 (5th Cir.1974). We are thus required to review the jurisdictional issues in this case.3 As noted previously, American Steel attempted to serve Davidson…
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Hudson Drydocks Inc. v. Wyatt Yachts Inc., 760 F.2d 1144 (11th Cir. 1985)…rance, and judgment is by default, the defendant may defeat enforcement of that judgment in a federal forum by demonstrating that the state court lacked personal jurisdiction over the defendant. Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 734 F. 2d 639, 640-41 (11th Cir.1984); Hazen Research Inc. v. Omega Minerals Inc., 497 F. 2d 151, 154 (5th Cir. 1974). Although the burden of setting aside the judgment rests upon the party against whom it is sought to be enforced, Williams v. North Carolina, 3…
Previewing 3 of 7 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Bonner v. City OF Prichard, 661 F.2d 1206 (11th Cir. 1981)
- Verone Marin Fehlhaber v. Fehlhaber, 681 F.2d 1015 (5th Cir. 1982)
- Hazen Research, Inc. v. Omega Minerals, Inc., 497 F.2d 151 (5th Cir. 1974)