In Re Proceeding To Enforce Judgment Against National Partitions, Inc.
E2016-00339-COA-R3-CV
| Tenn. Ct. App. | Mar 27, 2017Background
- APT and RDI (Illinois corporations) contracted with National Partitions, Inc. (NP), a Tennessee corporation, for manufacture and assembly of clean-room components; APT paid a $60,000 deposit.
- After delays and disputes over payment timing, NP refused to ship; APT/RDI sued in Cook County, Illinois; NP did not appear and an Illinois default judgment awarded Plaintiffs $60,000 plus costs.
- Plaintiffs sought to domesticate (enroll) the Illinois judgment in Tennessee chancery court; NP answered, challenged the Illinois court's jurisdiction/venue and filed a counterclaim alleging Plaintiffs breached and seeking ~$77,361 in damages.
- The Tennessee court granted summary judgment enrolling the Illinois judgment, finding Illinois had personal and subject-matter jurisdiction and NP received notice but chose not to defend.
- The Tennessee court dismissed NP’s counterclaim as barred by res judicata (full faith and credit to the Illinois final default judgment).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Tennessee must enroll the Illinois judgment | Illinois judgment valid; entitled to Full Faith and Credit; enroll as a matter of law | Illinois judgment invalid due to lack of jurisdiction/venue; Tennessee venue/control should apply | Enroll judgment — Illinois judgment valid; Full Faith and Credit applies |
| Whether Illinois had subject-matter jurisdiction | Illinois circuit courts have general SMJ over breach of contract claims | SMJ/venue belonged in Knox County, Tenn. as transitory action | Illinois had subject-matter jurisdiction; claim is justiciable in Illinois |
| Whether Illinois had personal jurisdiction over NP | NP transacted business with Illinois (contract, deposits, repeated Illinois customers); forum selection clause does not oust jurisdiction | Forum selection clause and contacts favor Tennessee; lack of sufficient Illinois contacts | Personal jurisdiction proper — specific and general jurisdiction bases satisfied under Illinois long-arm and due process |
| Whether NP’s counterclaim in Tennessee is permissible | NP may assert counterclaims when registering foreign judgments | Counterclaim seeks to relitigate same operative facts; res judicata bars it | Counterclaim barred by res judicata (Illinois final default judgment precludes same operative-fact claim) |
Key Cases Cited
- Rye v. Women’s Care Ctr. of Memphis, MPLLC, 477 S.W.3d 235 (Tenn. 2015) (summary-judgment standards)
- Guseinov v. Synergy Ventures, Inc., 467 S.W.3d 920 (Tenn. Ct. App. 2014) (limits on refusing to enroll foreign judgments)
- Milwaukee Cty. v. M.E. White Co., 296 U.S. 268 (1935) (purpose and reach of Full Faith and Credit Clause)
- Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 770 N.E.2d 177 (Ill. 2002) (circuit court subject-matter jurisdiction)
- Rein v. David A. Noyes & Co., 665 N.E.2d 1199 (Ill. 1996) (elements for res judicata in Illinois)
- Coastcom, Inc. v. Cruzen, 981 S.W.2d 179 (Tenn. Ct. App. 1998) (applying full faith and credit to out-of-state judgments)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (due-process framework for personal jurisdiction)