Court Opinion

ID: 9752809
Source: CourtListenerOpinion
Date Created: 2023-08-28 18:35:52.454136+00
Date Added: 2024-06-11T09:46:44.038221
License: Public Domain

SCHREIBER, J.,
dissenting.
Despite the novel approach of the majority to the full faith and credit clause of the federal constitution, a careful analysis of the law satisfies me, as it did the trial court and three Appellate Division judges, that N.J.S.A. 2A:17-17 meets that constitutional standard.
Article IV, section 1 of the United States Constitution requires that each state shall give full faith and credit to the judicial proceedings of every other state. The federal implementing statute provides that judgments “shall have the same full faith and credit in every court within the United States * * * as they have by law or usage in the courts of such State * * * from which they are taken.” 28 U.S.C.A. § 1738 (West 1966). Simply put, New Jersey must give full faith and credit to a monetary judgment obtained in Pennsylvania irrespective of its *385underlying basis. City of Philadelphia v. Austin, 86 N.J. 55, 66 (1981) (Schreiber, J., concurring).
It is important to note that the Pennsylvania judgment is not effective in New Jersey until reduced to a new judgment in New Jersey. Anglo-American Provision Co. v. Davis Provision Co., 191 U.S. 373, 374, 24 S.Ct. 92, 93, 48 L.Ed. 225, 227 (1903); Cole v. Cunningham, 133 U.S. 107, 112, 10 S.Ct. 269, 270, 33 L.Ed. 538 (1890); M’Elmoyle v. Cohen, 38 U.S. (13 Pet.) 312, 324-25, 10 L.Ed. 177 (1839). At that point, after full faith and credit has been given so that the plaintiff then has a New Jersey judgment, the judgment stands on the same footing as other New Jersey judgments of like nature. In that process New Jersey may not inquire into the basis of the Pennsylvania judgment to determine the validity of that judgment. In Milwaukee County v. M.E. White Co., 296 U.S. 268, 275, 56 S.Ct. 229, 233, 80 L.Ed. 220, 227 (1935), Justice Stone pointedly noted: “In a suit upon a money judgment for a civil cause of action the validity of the claim upon which it was founded is not open to inquiry, whatever its genesis. Regardless of the nature of the right which gave rise to it, the judgment is an obligation to pay money in the nature of a debt on a specialty. Recovery upon it can be resisted only on the grounds that the court which rendered it was without jurisdiction.” (Emphasis added.)
The majority distorts this principle with the notion that somehow a merger of judgment and its basis exists for all purposes. Nothing could be further from the truth. One need only review the cases in which the Supreme Court has not accepted the face value of a foreign judgment. See Milwaukee County, supra, 296 U.S. at 273, 56 S.Ct. at 232, 80 L.Ed. at 225-26, and cases cited therein.
After paying lip service to the established proposition that local law may determine the remedies available to satisfy' a judgment obtained as a result of full faith and credit, the majority then concludes that New Jersey may not deny enforce*386ment of claims protected by the full faith and credit clause by affecting the remedy. However, it is New Jersey law that governs the remedy to be afforded to judgments, and to that extent New Jersey law may affect judgments that are founded on judgments of a sister state. For example, a foreign judgment would not enjoy a priority to which it was entitled in the foreign state, but only that which the lex fori gives it by its law. See Milwaukee County, supra, 296 U.S. at 276, 56 S.Ct. at 233, 80 L.Ed. at 227; Cole v. Cunningham, supra, 133 U.S. at 112,10 S.Ct. at 270, 33 L.Ed. at 541.
N.J.S.A. 2A:17-17, the statute at issue here, relates to a remedy available to a judgment creditor. It reads as follows:
All real estate shall be liable to be levied upon and sold by executions to be issued on judgments obtained in any court of record in this State, except county district courts, for the payment and satisfaction of the debt, damages, sum of money and costs so recovered or to be recovered; but no real estate of any testator or intestate shall be sold or in anywise affected by any judgment or execution against executors or administrators. No judgment obtained for the payment and satisfaction of any employment wage tax, including penalties, shall be enforced pursuant to this section.
The statute has two significant exclusions. First, a district court judgment may not be satisfied by levy and sale of realty. Second, any judgment obtained on account of any employment wage tax also may not be satisfied in that manner. Neither exclusion violates the full faith and credit clause. All such judgments, district court or those obtained on account of unpaid employment wage taxes, are treated alike. The so-called merger doctrine advocated by the majority invalidates the exclusion of judgments based on the Philadelphia employment wage tax and not those owed to New Jersey governmental bodies. Thus, instead of being placed on a parity with New Jersey judgments, those of the sister state are given superior status.
Moreover, the Pennsylvania judgment was given full faith and credit when it was sued upon in the Camden County District Court and became a New Jersey judgment. At that point the full faith and credit clause has expended itself. As a judgment of the New Jersey District Court, it did not constitute ’ *387a lien on real property. No one could reasonably contend that a Pennsylvania judgment that could have been the basis for a New Jersey Superior Court judgment but was not would automatically be entitled to a lien on New Jersey real property. The reason why that is so is because district court judgments had not been given that force by the Legislature. So even though the Pennsylvania judgment as a district court judgment could not be satisfied by execution and sale of New Jersey realty, the argument that the statute did not include that remedy would certainly not be invalidated under the full faith and credit clause.
Here, Philadelphia subsequently docketed the district court judgment as a Superior Court judgment. N.J.S.A. 2A:18-32. The clerk’s docket entry stated the name of the county district court in which the judgment was obtained. N.J.S.A. 2A:18-34. After docketing, the judgment “operate[d]” as though it were a judgment obtained in an action originally commenced in the Superior Court. N.J.S.A. 2A:18-38. At that point in time the Pennsylvania judgment was treated in the same fashion, insofar as remedies are concerned, as any other Superior Court judgment based upon an employment wage tax.
The majority places substantial reliance on the case of Broderick v. Rosner, 294 U.S. 629, 55 S.Ct. 589, 79 L.Ed. 1100 (1935). In Broderick, the Superintendent of Banks of New York brought an action in New Jersey against 557 stockholders of a New York bank to recover unpaid assessments levied on them pursuant to New York law. A New Jersey statute provided that if a “statutory personal liability be created by or arise from the statutes or laws of any other state or foreign country,” then enforcement would be limited to an action “in the nature of an equitable accounting.” Id. at 638, 55 S.Ct. at 591, 79 L.Ed. at 1105. The New Jersey statute also provided that all the corporation’s creditors and shareholders were necessary parties. The Supreme Court wrote:
A State may adopt such system of courts and form of remedy as it sees fit. It may in appropriate cases apply the doctrine of forum non conveniens. *388Anglo-American Provision Co. v. Davis Provision Co., 191 U.S. 373, 48 L.Ed. 225, 24 S.Ct. 92. But it may not, under the guise of merely affecting the remedy, deny the enforcement of claims otherwise within the protection of the full faith and credit clause, when its courts have general jurisdiction of the subject matter and the parties. [294 U.S. at 642-43, 55 S.Ct. at 592-93, 79 L.Ed. at 1107.]
The Court observed that if the statute had imposed the single condition of limiting the New Jersey proceeding to suits only in equity and not in law, the law would have passed constitutional muster. The requirements as to necessary parties, however, were legally and practically impossible for the Superintendent to meet. Id. at 639-40, 55 S.Ct. at 591, 79 L.Ed. at 1105-06. Broderick is not this case. There the statute expressly was directed to and applied only to actions arising under the laws of another state. Here the statute was not so limited and Philadelphia is not deprived of legal and effective means of enforcing its rights. All that is required by the full faith and credit clause is that the foreign judgment, when sued on in the for-um state, be treated the same as any other like suit for a sum due and owing.
It is in Part III of its opinion that the majority discloses its true motivation, stressing that the statute affects a class of one, claiming that the statute eliminates “any effective remedy” for Philadelphia, and asserting that the statute “is against the declared public policy of the state.” Ante at 379-81. None of these contentions is sound. The majority argues that the provision excluding employment wage tax judgments in N.J.S.A. 2A:17-17 was aimed at Philadelphia. That is not dispositive. The statute is written broadly and no matter what governmental body — state, county, or municipality — adopts a wage tax and obtains a judgment for its satisfaction, all such judgments will be treated alike.
The public policy of the State supports the statute. Preventing a levy on realty for relatively small judgments ascribable to wage taxes is assuredly a valid purpose. See Assembly Judiciary, Law, Public Safety and Defense Committee, Statement to Assembly Bill No. 3547 (November 16, 1981) (expressing the policy that “the collection of judgments in these types of matters by execution against real property is inappropriate and *389unwarranted. In most eases, real estate represents the primary personal or family asset and, therefore, should be subject to execution only in matters of a more significant nature.”). The Governor’s message upon which the majority relies reads as follows:
A-3547 * * * would shield real estate from levies or judgments for the payment of wage taxes and penalties. The intent of the bill is to block the City of Philadelphia from attaching or disposing of the property of New Jersey residents to satisfy judgments for unpaid Philadelphia city wage taxes. However, the legislation does not deny recognition of the wage tax judgments, simply one method of enforcement.
The Governor’s comments should be read in context. First, the “intent” to block the City of Philadelphia does not negate the general intent of the Legislature. Second, the Governor points out that recognition of wage tax judgments is not affected, but only one method of enforcement is.
When the majority quarrels with the Legislature’s policy, ante at 380, it simply replaces its concept of what it believes is appropriate for that of the duly-elected representatives of the people. There is a failure to recognize that the Legislature may attack a problem segmentally, David v. Vesta Co., 45 N.J. 301, 315 (1965) (Legislature may proceed cautiously, “step by step,” though objective could be achieved by “more expansive classification”), and that the Legislature may functionally and realistically consider the problem differently from the way a court does. Further, I believe that the majority in order to make its point exaggerates the likely magnitude of an individual’s wage employment tax debt. See City of Philadelphia v. Smith, 82 N.J. 429, 431 (1980) (four judgments for unpaid wage employment taxes in amounts ranging from $1,413 to $2,216). There is nothing in the record to support the hypothetical example of a $15,000 judgment for unpaid wage employment taxes. Ante at 380.
Remedies other than the sale of realty exist to satisfy wage tax judgments. In the first place, levy and execution on personal property are available. Bank accounts, securities, motor vehicles, and innumerable other assets may be seized and
*390sold. Second, though the realty may not be sold to satisfy the debt, the judgment, having been docketed in the Superior Court, would remain a lien on the land. Third, though garnishment of wages of a federal employee is not possible, an order directed to the debtor to pay in installments on account of the judgment is available. N.J.S.A. 2A: 17-64 frequently has been used “when the judgment debtor requests that no wage execution be issued for fear that it will adversely affect his standing with his employer or result in his dismissal.” E. Fulop, “Collection of Judgments,” in 20 New Jersey Practice § 1911 (1973). Judge Fulop also observed that:
A judgment debtor may be required to pay out of income received from the state, or any county, municipal or other governmental source. Although no wage execution can be issued against wages or other money received from the Federal Government, the judgment debtor may be required to pay out of such income, provided that it is not exempt under State or Federal law. [Id. (footnotes omitted).]
Philadelphia’s district court judgment should be and is on the same footing as any other district court judgment. None is a lien on realty. Moreover, Philadelphia’s district court judgment, when docketed as a Superior Court judgment, is treated the same as other New Jersey Superior Court judgments based on employment wage taxes. To say that all district court judgments and all Superior Court judgments, including those of Philadelphia, whose satisfaction may not be accomplished by execution and sale of realty are virtually “worthless,” ante at 380, is unsupported in fact and in law.
I would affirm.
For reversal — Chief Justice WILENTZ, and Justices CLIFFORD, HANDLER, POLLOCK, O’HERN and GARIBALDI — 6.
For affirmance — Justice SCHREIBER — 1.