DocketNumber: No. CV00 0159455
Citation Numbers: 2001 Conn. Super. Ct. 2831
Judges: DOHERTY, JUDGE.
Filed Date: 2/20/2001
Status: Non-Precedential
Modified Date: 7/5/2016
The plaintiff, Alken-Ziegler, Inc., is a Michigan corporation with a principal place of business in Kalkaska, Michigan. The defendant,Waterbury Headers Corp., is a New York corporation with a place of business in Waterbury, Connecticut.
On May 11, 1994, the plaintiff initiated an action in the Circuit Court for the County of Kalkaska, Michigan, against Waterbury Headers, Inc. (herein after referred to as "WHI") — the defendant corporation's predecessor in interest alleging breach of contract and implied warranty.
After learning that WHI sold substantially all of its assets to Waterbury Headers Corp. (defendant) in March, 1996, the plaintiff amended its complaint to include the defendant based on successor liability. The defendant failed to appear and the circuit court entered a default judgment on May 6, 1996. The defendant filed a motion to set aside the judgment of default on July 17, 1996, which was subsequently denied on December 2, 1996. The circuit court thereby entered judgment against the defendant in the amount of $337,453.93, plus interest and costs.
The defendant appealed the circuit court's denial of the motion to set aside the judgment of default and, on March 3, 1998, the Michigan Court of Appeals reversed and remanded the circuit courts decision on the ground that the court abused its discretion.
On October 12, 1999, the Michigan Supreme Court reversed the decision of the Court of Appeals and reinstated the circuit court's ruling.
On May 31, 2000, the plaintiff commenced the present action, seeking enforcement of the judgment rendered in its favor by the circuit court in Michigan against the defendant. On July 2, 2000, the defendant filed a motion to dismiss on the ground that the Connecticut courts lack jurisdiction over the present action. The defendant argues that the Michigan judgment was rendered by default and without personal jurisdiction, so the judgment should not be entitled to full faith and credit in Connecticut.
"The motion to dismiss shall be used to assert . . . lack of jurisdiction over the person . . ." Practice Book §
In its motion to dismiss, the defendant argues that the circuit court in Michigan lacked personal jurisdiction over the defendant, thereby rendering the default judgment void. It is further argued by the defendant that because the Michigan judgment was rendered by default and without personal jurisdiction, the judgment is not entitled to full faith and credit in Connecticut. The issue raised by the defendant's motion, therefore, is whether the Michigan judgment is entitled to full faith and credit under the United States Constitution. See U.S. Const., art.
"Since the interpretation of the full faith and credit clause is a question of federal law, we are bound by the decisions of the Supreme Court of the United States concerning the criteria for application of the clause." Packer Plastics, Inc. v. Laundon,
Because "[t]his rule includes the proposition that lack of jurisdiction renders a foreign judgment void. . . . [a] party can . . . defend against the enforcement of a foreign judgment on the ground that the court that rendered the judgment lacked personal jurisdiction, unless the jurisdictional issue was fully litigated before the rendering court or the defending party waived the right to litigate the issue." (Citations omitted.) Packer Plastics, Inc. v. Laundon, supra,
"Our Supreme Court has held that issues regarding the jurisdiction of a foreign court are determined by the law of the foreign state." Tri-StateTank Corp. v. Higganum Heating, Inc.,
The defendant argues that the Michigan circuit court lacked personal jurisdiction over it because the defendant did not assume the liabilities of WHI when purchasing its assets. Consequently, this analysis must specifically address the issues of personal jurisdiction and successor liability under Michigan law.
The Michigan Supreme Court has held that "when analyzing whether the exercise of limited personal jurisdiction over a given defendant is proper, a two-step inquiry is generally applied." Jeffrey v. RapidAmerican Corp.,
The due process clause of the
"Jurisdiction may be properly exercised over a corporate defendant when it reaches beyond its own state and purposely avails itself of the privilege of exploiting forum-based business opportunities. This requirement of purposeful availment ensures that a corporation will not be subjected to jurisdiction on the basis of random, fortuitous, or attenuated contacts." Jeffrey v. Rapid American Corp., supra,
In its motion to dismiss, the defendant argues that, because it "was not in existence during the period in question . . . [it] cannot be said that it was carrying on a continuous and systematic part of its general business in Michigan. . . ." (Motion to Dismiss, p. 12.)2 The plaintiff's objection to the motion to dismiss does not challenge the defendant's argument that it has no minimum contacts with Michigan so as to subject itself to personal jurisdiction within that state. It is submitted, therefore, that the court should find that the defendant did CT Page 2835 not purposefully avail itself of the privileges of conducting business in Michigan so as to establish minimum contacts for purposes of due process.
The defendant also argues in its motion to dismiss that the allegations set forth in the plaintiff's amended complaint as filed in the Michigan circuit court, were grounded solely on the premise that the defendant was a successor in interest to Waterbury #1, thereby enabling the state court to exercise jurisdiction over the corporation. The defendant further argues that personal jurisdiction does not lie where one corporation only buys the assets, and not the liabilities, of another corporation.
Michigan has addressed the issue of whether the contacts of one corporation may be imputed to the purchaser of that corporation so as to conform to the requirements of due process. In Michigan, it is generally recognized that "a corporation that merely purchases the assets of another corporation is not generally responsible for the liabilities of the selling corporation." Jeffrey v. Rapid American Corp., supra,
In its motion to dismiss, the defendant argues that it purchased only the assets of WHI and not any of its existing liabilities. This assertion is sufficiently substantiated by two affidavits that show that the defendant "purchased only specified assets and was not responsible for any liabilities of Waterbury Headers, Inc.[WHI]" (Motion to Dismiss, Exhibit E, ¶ 4.) Thus, under the precedent set by Jeffrey v. RapidAmerican Corp., supra, the contacts of WHI are not imputed to the defendant for the purposes of asserting personal jurisdiction. Because such contacts are not to be imputed to the defendant, the defendant does not fall under Michigan's long-arm statute.
In its objection to the defendant's motion to dismiss, the plaintiff argues that the defendant is prohibited from raising the issue of personal jurisdiction under the doctrine of collateral estoppel. "The legal doctrines of res judicata and collateral estoppel are designed to promote judicial economy by preventing relitigation of issues or claims CT Page 2836 previously resolved." (Internal quotation marks omitted.) DeMilo Co. v.Commissioner of Motor Vehicles,
The plaintiff argues that collateral estoppel applies because the defendant fully litigated the issue of personal jurisdiction in the forum state and because the Michigan Court of Appeals held that the defendant waived any objections to personal jurisdiction. A careful review of the procedural history of this case does not support the plaintiff's contention that the issue of personal jurisdiction was fully litigated in the Michigan courts. Furthermore, there is no merit in the plaintiff's argument that the Michigan Court of Appeals held that the defendant waived any objections to personal jurisdiction. The Court of Appeals held that "[b]ecause defendant failed to develop any further argument in the proceedings below, either orally or in writing, we find that defendant waived any objections to personal jurisdiction for purposes of thisappeal." (Emphasis added.) Alken-Ziegler, Inc. v. Waterbury HeadersCorp., No. 200042, p. 5 (Mich.Ct.App. March 3, 1998).
The fact that the Court of Appeals of Michigan recognized that the defendant did not fully develop a personal jurisdiction argument implicitly suggests that the issue was never fully litigated. Additionally, the Court of Appeals held that the defendant waived its right to object on such grounds only for that appeal. Alken-Ziegler,Inc. v. Waterbury Headers Corp., supra, No. 200042, p. 5. The court finds that the present action is not part of the appeal and collateral estoppel does not apply.
For the foregoing reasons, the court finds that the defendant's motion to dismiss should be and is hereby granted. CT Page 2837
By the Court,
Joseph W. Doherty, Judge
Smith v. Smith , 174 Conn. 434 ( 1978 )
Jeffrey v. Rapid American Corp. , 448 Mich. 178 ( 1995 )
International Shoe Co. v. Washington , 66 S. Ct. 154 ( 1945 )
Underwriters National Assurance Co. v. North Carolina Life &... , 102 S. Ct. 1357 ( 1982 )