Court Opinion

ID: 880293
Source: CourtListenerOpinion
Date Created: 2013-06-05 00:01:14.283775+00
Date Added: 2024-06-11T12:52:26.100853
License: Public Domain

NO.    89-060

               I N THE SUPREME COURT O THE STATE OF M N A A
                                      F              OTN

                                                1989

ANN LEWIS,

                p l a i n t i f f and R e s p o n d e n t ,                                x
                                                                                           o
       -vs-

JOSEPH ROSCOE LEWIS,

                D e f e n d a n t and A p p e l l a n t .

                                                                                           ;o
APPEAL FROM:    ~ i s t r i c t ourt of t h e Fourteenth J u d i c i a l D r S t r i c t ,
                              C
                 I n and f o r t h e County o f M u s s e l s h e l l ,
                 The H o n o r a b l e H . R . O b e r t , J u d g e p r e s i d i n g .

COUNSEL OF RECORD:

       For Appellant:

                K a r l K n u c h e l , L i v i n g s t o n , Montana

       For Respondent :

                Dane C . ~ c h o f i e l d ; P e t e r s o n , ~ c h o f i e l d& ~ e c k i e ,
                ~ i l l i n g s ,Montana
                J e a n S. S c h a n e n ; Schanen Law ~ i r r n , a s i l l a ,A l a s k a
                                                                        ~

                                                S u b m i t t e d on B r i e f s :   J u l y 7 , 1989

                                                   Decided:        October 31, 1 9 8 9
~ustice John C. Sheehy delivered the opinion of the Court.

     Ann Lewis filed an action in the ~istrict Court,
Fourteenth ~udicialDistrict, Musselshell County, to enforce
a default judgment entered in Alaska against her former
husband, Joseph Roscoe Lewis. Eventually the ~istrictCourt
awarded summary judgment in favor of Ann ~ e w i sand against
Joseph Lewis in the amount of      $388,405.91.     From that
judgment, defendant Joseph Lewis appeals.       We affirm the
District Court.
     The central issue in this cases is whether the Alaska
court had - personam jurisdiction of the defendant Joseph
           in
Lewis to render a valid judgment against him which could be
enforced in the sister state of Montana.
     When Ann Lewis filed this action in Musselshell County
against Joseph ~ e w i s ,she obtained personal service upon him
in Musselshell County.         Through his counsel, he made a
special appearance in the action, moving the court to dismiss
for lack of jurisdiction in the Alaska court, and because of
that lack of jurisdiction to quash the service of summons
made on him in the Musselshell County action. The District
Court received briefs from all parties and affidavits from
Jean S. Schanen, an Alaska attorney who represented Ann Lewis
in the Alaska court actions. The District Court denied the
motions to dismiss and eventually Joseph Lewis filed his
answer in the cause generally denying all the allegations of
Ann Lewis' complaint and praying the Montana court to hear
the merits of his case and render judgment in his favor.
     On September 1, 1 9 8 8 , the plaintiff Ann Lewis moved for
summary judgment in her favor. Joseph Lewis responded to the
motions saying that he agreed with the position of Ann ~ e w i s
that the previous ruling by the District Court on his
objections to jurisdiction were dispositive and that he
wanted to make the previous rulings appealable to the Supreme
Court of the state of Montana, after judgment.
     The ~istrict Court had held a hearing on December 4,
1987, at which the Alaska attorney Jean Schanen, and Ann
Lewis both testified.    Joseph R. Lewis did not testify at
that hearing, nor did he at any stage of the proceedings
present affidavits contesting in any respect the affidavits
or testimony of the plaintiff or her attorney. ~ccordingly,
the statement of facts which we set out hereafter is
unrebutted in the record.
     Joseph R. ~ e w i s and Ann ~ e w i s were husband and wife
residing primarily in Alaska during their 28 year marriage.
During the course of the marriage, the Lewises acquired
substantial property.     Joseph R. Lewis managed the couple's
business affairs and made the important business decisions.
In the latter years of the marriage, Joseph R. ~ e w i screated
a large number of foreign trusts, transferring real and
personal property into them, for purposes of tax avoidance.
From 1976 to 1983, Joseph R. Lewis filed no state or federal
tax returns.
     In 1983, Joseph R. Lewis left Alaska without disclosing
his whereabouts to his vrife or to others.     Several months
later Ann Lewis Learned that he was residing in Montana. She
filed an action in Alaska for divorce, serving Joseph R.
Lewis personally with a divorce complaint at his domicile
near Roundup, Montana.   Joseph R. Lewis did not answer the
complaint, although he acknowledged that he had received it.
H ~ default was subsequently entered against him.
    S
     prior to the default hearing in Alaska, the Internal
Revenue service contacted Ann Lewis regarding delinquent tax
returns from 1976 to 1983. She was informed that the foreign
trust schemes undertaken by Joseph R. Lewis were fraudulent,
and that a significant amount of tax, penalty and interest
was owing for which she was responsible. Ann ~ e w i smoved at
the default hearing before the Alaska court for leave to
amend her complaint to state additional claims against Joseph
R. Lewis for the penalties, interest and professional fees
that were involved.
     The Alaska court granted the motion to amend, but later
reversed that ruling, stating that Ann Lewis should file a
separate action against her husband with respect to those
matters.   Ann Lewis did file a separate action to recover
from her former husband the IRS taxes, penalty, interest and
professional expenses.   The divorce decree of September 10,
1984, which was sent to Joseph R. ~ e w i s by mail made
reference to the unadjudicated tax matters.
     In the divorce action, before the Alaska court reversed
itself, requiring the tax matter to be pursued as an
independent action, attempts had been made to serve the
amended complaint on Joseph R. Lewis at the address where the
original complaint was served. Certified mail at his last
known address was returned unclaimed.      Efforts to locate
Joseph Lewis through the Musselshell County sheriff's office
were also unsuccessful.
     Jean Schanen testified in this case that with respect to
the second action, she tried to serve Joseph Lewis by
certified mail which was returned with an indication from the
post office that he was no longer at that address. She then
attempted to obtain personal jurisdiction by having Lewis
served through the sheriff's office and she received a return
from the sheriff's office indicating that he could not be
found .    Other   information  respecting  Joseph ~ewis'
whereabouts was unavailing. Ann Lewis learned that he had
purchased a motor home and was traveling around from place to
place and no one knew exactly where he was at any given time.
     Counsel for Ann Lewis then made application to the
Alaska court for permission to serve Joseph R. ~ e w i s by
publication as permitted under the Alaska Rules of civil
Procedure. She filed an affidavit of diligent inquiry which
was required under the Alaska rules.       The court held a
hearing on the matter, and the presiding judge suggested that
they ascertain from Joseph R. Lewis' brother, C. R. Lewis of
Anchorage, Alaska, as to his whereabouts.           C. R. Lewis
confirmed to Ann ~ e w i s 'attorney's firm that his brother was
moving from place to place and C. R. Lewis did not know his
whereabouts at the time.      When the Alaska court learned of
this additional unsuccessful attempt, it allowed service by
publication upon Joseph R. Lewis in the Palmer, Alaska, area.
     After Joseph R. ~ e w i sdefaulted by not appearing in the
Alaska action, the Alaska court rendered a judgment of
$346,183.47 against him, with interest at 10.5% per annum.
     Ann Lewis then commenced her action in Montana to
enforce her Alaska judgment. By that time, Joseph ~ e w i s had
purchased a ranch and was served personally with the summons
in the action to enforce the Alaska judgment.
     We determine that the Alaska court had jurisdiction to
render an - personam judgment against Joseph R. ~ e w i s
          in                                             in the
circumstances of this case.
     In Montana, the effect of a judicial record of a sister
state is the same in this state as in the state where it was
made, except that it can only be enforced here by an action
or special proceeding. section 26-3-203, MCA. However, any
judicial record, including the record of a judgment of a
sister state may be impeached by evidence of want of
jurisdiction in the court or judicial officer from which the
record comes.   section 26-3-105, MCA.   In determining whether
the judgment of the sister state based upon long-arm service
or constructive service is valid, we examine the proceedings
in the record of the sister state to determine if they
comport with due process. Hughes v. Salo (1983), 203 Mont.
52, 659 P.2d 270; Kulko v. ~aliforniasuperior Court (1978),
436 U.S. 84, 91, 98 S. Ct. 1690, 1696, 56 L. Ed. 2d 132. If a
judgment is rendered in a sister state in violation of due
process, it is void in the rendering state, and is not
entitled to full faith and credit elsewhere.     Pennoyer v.
Neff (1878), 95 U.S. 714, 732-733, 24 L. Ed. 565.
     Alaska's Rules of Civil Procedure provide in Rule
4(12) (e) for service by publication where personal service
otherwise cannot be made outside the state:
            -
      (el Other service.     When it shall appear by
     affidavit of a person having knowledge of the facts
     filed with the clerk that diligent inquiry a party
     cannot be served with process under (d) [personal
     service outside the state1 of this rule, service
     shall be made by publication or as otherwise
     directed by the court as provided in this
     subdivision  .. .
     The same rule also provides in subparagraph (1), as to
what constitutes "diligent inquiry."  There is no question
that the facts of this case match up to the diligent inquiry
requirements in Alaska.
     Ann Lewis' suit was for her reimbursement of federal
income taxes, penalties and expenses which she had to pay
arising out of marriage of the parties in Alaska. Joseph R.
Lewis' contacts with Alaska were continuous and of long
duration. H ~ S    acts and omissions in Alaska gave rise to Ann
~ e w i s 'claims against him. H ~ Scontacts with Alaska met the
requirements for long-arm jurisdiction over him.       Hanson v.
Denkla (1958), 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283.
        In Kennecorp Mortgages, Inc. v. ~ i r s t~ationalBank of
Fairbanks   (Alaska 1984) , 685 P.2d 1232, the Alaska court
considered the question of long-arm jurisdiction in the
context of a motion to set aside a default judgment. The
court said at 1238:
     The primary inquiry in evaluating a nonresident
     defendant's contact with a forum state is a
     consideration   of   the  defendant's   purposeful
     activity with respect to that state. As explained
     by the United States Supreme Court, "it is
     essential in each case that there be some act by
     which the defendant purposefully avails itself of
     the privilege of conducting activities within the
     forum state, thus invoking the benefits and
     protections of its laws.  (Citing Hanson, supra.) "
     We determine that the judgment would be enforceable in
Alaska.   The Montana Rules of civil Procedure would not
permit service by publication in like circumstances.     Rule
4D(5), M.R.Civ.P.    However, our inquiry under S 26-3-203,
MCA, is to determine the effect of the judicial record in the
sister state, and to give it the same effect in this state if
it is otherwise valid.
     The Alaska court has determined that its rule permitting
long-arm service on nonresident defendants comports with due
process. It has stated:
     It is not enough that the legislature has asserted
     jurisdiction over appellee in the circumstances of
     this case. The constitutional requirements of due
     process of law must also be satisfied before
     jurisdiction will exist. Before a binding judgment
     in personam could be made against appellee, the due
     process clause of the federal constitution requires
     that appellee have sufficient contact with Alaska
     so as to make it reasonable and just, according to
     our traditional conception of fair play and
     substantial justice, to permit the state to enforce
     the obligations which appellee has allegedly
     incurred.
Northern Supply, Inc. v. ~urtiss- right Corporation (Alaska
1965), 397 P.2d 1013, 1017.
     The presence of Joseph R. ~ e w i sin Alaska during his
marriage, during which time he performed the acts which gave
rise to his eventual liability to his former wife constitutes
sufficient contact with Alaska to make the binding judgment
reasonable and just and in conformance with notions of fair
play and substantial justice. ~nternationalShoe Company v.
Washington (1945), 3 2 6 U.S. 310, 3 2 0 , 6 6 S. Ct. 154, 90 L. Ed.
95, 104.
     Joseph R. Lewis also contends in this appeal that a copy
of the judgment was not mailed to him as required by the
Alaska Rules of Civil Procedure. However, the same rule also
provides that such mailing must be made if the address of the
defendant is known. In this case, his address was not known.
Moreover, this is an issue that is raised for the first time
on appeal.   Wyman v. DuBray Land Realty ( ~ o n t .1988), 752
                   -
     We affirm the ~istrictCour