Court of Appeal:
Debtor Need Not Have Minimal Contacts With California, Third District Declares
By a MetNews Staff Writer
A sister-state judgment may be registered and enforced in California notwithstanding a judgment debtor’s lack of minimal contacts with this state, the Third District Court of Appeal declared yesterday.
In an opinion by Justice Peter A. Krause, it reversed an order by Sacramento Superior Court Judge Christopher E. Krueger quashing a now-expired 2010 judgment as well a 2020 renewed judgment for $2,611,083.08.
The judgment was first entered in May 2020 in Nevada against a realtor there, Tiger Mynarcik, and three others: a borrower who was in default on a loan and two persons who, like Mynarcik, had guaranteed repayment. The borrower declared bankruptcy and the co-guarantors made token payments to gain releases as judgment debtors.
In 2010, the judgment was domesticated by the Sacramento Superior Court; in 2016, the judgment in Nevada expired; and in 2020 the California judgment was renewed for another 10 years. It was when the successor judgment creditor, WV 23 Jumpstart, LLC, attempted to register the California judgment in Nevada that Mynarcik challenged the judgment that was entered by the Sacramento court.
A court in Nevada has indicated that the California judgment will be honored if validated in California. However, Krueger declared it to be infirm because Mynarcik lacks minimal contacts here.
Noting that “the issue before us presents a novel question of law,” Krause said the California judgment is lawful.
The jurist quoted Article IV, §1 of the United States Constitution as saying:
“Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State.”
He noted that the Sister State Money Judgments Act was enacted by the California Legislature in 1974 permitting registration of out-of-state judgments here.
Frustration of Purpose
“The automatic nature of registration suggests that the Act was intended to create a straightforward enforcement mechanism to allow a judgment creditor to collect a monetary award from a judgment debtor without judicial intervention. Imposing a personal jurisdiction requirement would frustrate this intent by permitting the relitigation of a presumptively valid judgment entered in another forum, and by preventing creditors from collecting on lawfully obtained judgments.
“Of course, the Act does contemplate possible judicial intervention insofar as it allows judgment debtors to challenge the enforcement of a sister-state judgment in California through a motion to vacate….But this language does not open the door for a judgment debtor to raise every defense that might be available in an original civil action filed in California.”
Observance of the Full Faith and Credit Clause, he explained, forecloses relitigation of matters decided by the courts of a sister state. Krause declared:
“Where, as here, a judgment debtor has had the action fully adjudicated in a court of competent jurisdiction, the debtor’s due process rights are not infringed by the Act’s registration process, even where personal jurisdiction in California might be lacking. At the time of registration, the Nevada case had already reached judgment, and the sister-state’s findings—even if erroneous or inconsistent with California law—are binding on California courts….[S]o long as the originating state had jurisdiction over the parties, the judgment was authorized, and the litigants were afforded due process, there is no basis to read an additional jurisdictional requirement into the Act based upon the ministerial act of registration.”
Applying these principles, he said:
“The original judgment obtained by plaintiffs was valid and enforceable in Nevada when it was registered in California. The Nevada court had jurisdiction over Mynarcik. We see no reason, then, why this validly obtained judgment could not be registered in California simply because one or more debtors lack minimum contacts with this state. The Act does not require it; indeed, its text and application indicate that it was not the Legislature’s intent to impose such a constraint.”
The case is WV 23 Jumpstart, LLC v. Mynarcik, 2022 S.O.S. 5723.
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