Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ared-4_05-cv-01713/USCOURTS-ared-4_05-cv-01713-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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IN THE UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF ARKANSAS

WESTERN DIVISION

SKIT INTERNATIONAL, LTD. PLAINTIFF

v. No. 4:05CV01713 JLH

DAC TECHNOLOGIES OF ARKANSAS, INC.,

f/k/a DAC TECHNOLOGIES OF AMERICA, INC.,

and DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. DEFENDANTS

OPINION AND ORDER

This is a diversity action between Skit International, Ltd., and DAC Technologies of

Arkansas, Inc. DAC and Skit were previously parties to a state court action in which the Pulaski

County Circuit Court entered judgment in favor of DAC and against Skit in the amount of

$1,524,420. Skit now asks this Court for a declaratory judgment voiding that judgment on the

grounds of lack of personal jurisdiction. DAC alleges that res judicata bars the relief sought. The

parties have filed cross-motions for summary judgment.

Summary Judgment Standard

A court should enter summary judgment if the evidence, viewed in the light most favorable

to the nonmoving party, demonstrates that there is no genuine issue of material fact and that the

moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(c); see also Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986); Cheshewalla

v. Rand & Son Constr. Co., 415 F.3d 847, 850 (8th Cir. 2005). The party moving for summary

judgment bears the initial responsibility of demonstrating the absence of a genuine issue of material

fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986).

If the moving party carries its burden, the nonmoving party must “come forward with ‘specific facts

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 Prior to trial, Ross filed an answer on behalf of Skit in which he did not object to service

or personal jurisdiction. 

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showing that there is a genuine issue for trial.’” Matsushita Elec. Indus. Co. v. Zenith Radio, 475

U.S. 574, 587, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1985) (quoting FED. R. CIV. P. 56(e))

(emphasis in original). A genuine issue for trial exists only if there is sufficient evidence to allow

a jury to return a verdict for the nonmoving party. Anderson, 477 U.S. at 249, 106 S. Ct. at 2511.

When a nonmoving party cannot make an adequate showing on a necessary element of the case on

which that party bears the burden of proof, the moving party is entitled to judgment as a matter of

law. Celotex, 477 U.S. at 322, 106 S. Ct. at 2552.

Undisputed Facts

On August 15, 2000, DAC filed suit against Skit and another company, Uni-Skit

Technologies, Inc., in Pulaski County Circuit Court. A jury found in favor of DAC on August 13,

2003, and judgment was entered against Skit and Uni-Skit in the amount of $1,524,420. The

judgment states that Skit and Uni-Skit “appeared [at trial] by and through their attorney Mark L.

Ross of Ross & Ross, P.A.”1

On January 6, 2005, Skit filed a motion to set aside the judgment. The motion stated:

Defendant Skit International, Limited (hereinafter SIL), in a special appearance,

moves to set aside the judgment against it for lack of service of summons,

jurisdiction or venue and in support states:

1. SIL has no presence in the United States and this court has no jurisdiction

over SIL and never has. SIL has no office in the United States, is not registered to do

business in any state in the United States and has no agent for service in the United

States and never has. 

2. SIL was never served with summons in this case. Mark Ross filed an

answer and counterclaim for SIL and Uni-Skit Technologies, Inc. and judgment was

rendered against both defendants . . . . However, SIL never hired Mark Ross or

authorized him to file an answer or counterclaim. See affidavit of Victor Lee attached

to the effect that he appeared on behalf of Uni-Skit only, did not accept service for

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SIL or instruct a lawyer to defend on its behalf. See affidavit of Yung Lee Ho

attached of Hong Kong to the effect that he is the director of SIL, that SIL had no

agent for service in the United States, that no officer of SIL was aware of this action

until lately when a notice of talking deposition was passed to SIL from Uni-Skit

Technologies, Inc., and that Uni-Skit did not have authority to accept service or to

defend on behalf of SIL. Attached are internet printouts from the California and

Arkansas Secretary of State that SIL is not registered in either state.

WHEREFORE, SIL moves this judgment to be set aside for lack of service,

jurisdiction or venue. 

On March 22, 2005, the circuit court denied the motion. The order states:

On the 1st of March, 2005, the motion of Skit International, Limited, to set aside the

judgment against it came on for hearing, Skit International Limited appearing by its

attorney, R. David Lewis, and plaintiffs appearing by their attorney Ken Shemin.

After evidence was introduced and after argument of counsel, the Court finds no

good reason to set aside the judgment and the motion to set aside the judgment is

therefore denied. 

Skit filed a notice of appeal on April 4, 2005, and tendered the record to the clerk of the Arkansas

Supreme Court on June 28, 2005. On June 28, 2005, the clerk of the Arkansas Supreme Court called

counsel for Skit and told him that the tender of the record would be declined because the motion to

set aside judgment appeared to be untimely as the judgment was entered on November 10, 2003.

Pursuant to Rule 2-2 of the Arkansas Supreme Court Rules, Skit filed a motion for rule on the clerk

in the Arkansas Supreme Court on June 29, 2005, asking the supreme court for an order directing

the clerk to accept tender of the record. The supreme court denied the motion on September 8, 2005.

Skit filed the present action on November 9, 2005. The complaint states:

Defendant Skit International, Ltd., by and through its attorney, R. David Lewis, files

this declaratory judgment to collaterally attack a judgment for lack of service of

summons and alleges as follows:

* * *

3. Defendants obtained a judgment in Pulaski County Circuit Court . . . on August

13, 2003 against plaintiff and Uni-Skit Technologies, Inc. without ever serving

plaintiff with a summons or complaint. Plaintiff was not at the trial and didn’t know

there was a lawsuit against it until late in 2004. Defendants DAC had served Victor

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Lee with two summonses, one for Uni-Skit and one for Skit International but Lee was

only the agent for service for Uni-Skit Technologies, Inc. and not the agent for Skit

International, LTD. Uni-Skit had set a debt to a collection agency for collection from

the DAC corporations and that agency sent both summonses to a collection attorney

in Little Rock who filed an answer for both corporations, went to trial without ever

talking to anyone from plaintiff and lost.

4. Without service of summons Pulaski County Circuit Court had no jurisdiction over

the person of plaintiff and judgment is therefore void. That court didn’t have

jurisdiction over the plaintiff for the further reason that plaintiff had no assets or

office in the United States and had no contacts with Arkansas sufficient to give a

court in Arkansas jurisdiction over it.

As noted, Skit and DAC have filed cross-motions for summary judgment. Skit argues that

judgment is void for lack of personal jurisdiction. DAC argues that res judicata bars this action.

Discussion

It is well settled in Arkansas that service of valid process is necessary to bestow on a court

personal jurisdiction over a defendant. Raymond v. Raymond, 343 Ark. 480, 484, 36 S.W.3d 733,

735 (2001). Generally, “a judgment entered without jurisdiction of the person . . . is void.” Id. at

485, 36 S.W.3d at 735.

However, in Baldwin v. Iowa State Traveling Men’s Ass’n, 283 U.S. 522, 51 S. Ct. 517, 75

L. Ed. 1244 (1931), the Supreme Court held that a court has binding power to determine its own

jurisdiction over a defendant’s person and that, once made, a determination on this issue must be

afforded preclusive effect. See also Durfee v. Duke, 375 U.S. 106, 111-12, 84 S. Ct. 242, 245, 11

L. Ed. 2d 186 (1963); 18A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & EDWARD H. COOPER,

FEDERAL PRACTICE AND PROCEDURE § 4430 (2d. ed. 2002). In Baldwin, the defendant had made

special appearances in a prior action solely for the purpose of contesting personal jurisdiction.

Baldwin, 283 U.S. at 523, 51 S. Ct. at 517. The trial court denied the motions to dismiss, the

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defendant failed to plead, and default judgment was entered. Id. at 523-24, 51 S. Ct. at 517. In a

subsequent action on the judgment, the Supreme Court held that res judicata barred the defense of

improper personal jurisdiction, stating:

Public policy dictates that there be an end of litigation; that those who have contested

an issue shall be bound by the result of the contest; and that matters once tried shall

be considered forever settled as between the parties. We see no reason why this

doctrine should not apply in every case where one voluntarily appears, presents his

case and is fully heard, and why he should not, in the absence of fraud, be thereafter

concluded by the judgment of the tribunal to which he has submitted his cause.

Id. at 525-26, 51 S. Ct. at 518. The Court noted:

[T]he respondent entered the Missouri court for the very purpose of litigating the

question of jurisdiction over its person. It had the election not to appear at all. If, in

the absence of appearance, the court had proceeded to judgment, and the present suit

had been brought thereon, respondent could have raised and tried out the issue in the

present action, because it would never have had its day in court with respect to

jurisdiction. It had also the right to appeal from the decision of the [trial court] . . .

. It elected to follow neither of those courses, but, after having been defeated upon

full hearing in its contention as to jurisdiction, it took no further steps, and the

judgment in question resulted.

Id. at 525, 51 S. Ct. at 518 (internal citations omitted). 

Applying these principles to the present facts, the relief Skit seeks in this action is likewise

barred. Skit asserts here the same objections to jurisdiction that were asserted in the motion to set

aside judgment filed in the Circuit Court of Pulaski County. Even assuming that Ross’s appearance

on behalf of Skit during litigation of the suit prior to judgment was unauthorized and thus not a

waiver of Skit’s objections, cf. Pender v. McKee, 266 Ark. 18, 35-36, 582 S.W.2d 929, 937-38

(1979), Skit voluntarily appeared before the circuit court after judgment, presented these issues to

the circuit court, and was fully heard by that court. Accordingly, this Court is bound by the circuit

court’s determination of personal jurisdiction. Baldwin, 283 U.S. at 525-26, 51 S. Ct. at 518. It

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makes no difference that appearance and litigation of the issue occurred after judgment. See 18A

CHARLES ALAN WRIGHT, ET AL., FEDERAL PRACTICE AND PROCEDURE § 4430 (“[U]nsuccessful

submission of the question by motion to vacate a default judgment should have the same preclusion

effects as submission before judgment.”). Nor, in the Court’s opinion, does it make any difference

that the Arkansas Supreme Court refused to hear an appeal of the circuit court’s ruling.

Serpell-Winner-Jordan, Inc., v. Crete Mills, 51 F.2d 1028, 1029 (8th Cir. 1931) (preclusive effect

remains until determination is set aside or reversed).

Because lack of jurisdiction is the sole ground on which relief is sought in this case, and

because that issue was decided by the Circuit Court of Pulaski County, DAC is entitled to judgment

as a matter of law. DAC’s motion for summary judgment is hereby GRANTED. Document #17.

Skit’s motion for summary judgment is DENIED. Document #11.

IT IS SO ORDERED this 6th day of June, 2006.

 

J. LEON HOLMES

UNITED STATES DISTRICT JUDGE

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