Court Opinion

ID: 987438
Source: CourtListenerOpinion
Date Created: 2013-07-02 22:15:23.77763+00
Date Added: 2024-06-11T13:06:18.366676
License: Public Domain

FILED 

                                                              MARCH 26, 2013 

                                                        In the Office of the Clerk of Court 

                                                       WA State Court of Appeals, Division III 

         IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON 

                            DIVISION THREE 

MARLIN LEASING CORPORATION,                   )         No. 30554-6-111
                                              )
                     Respondent,              )
                                              )
              ~                               )         UNPUBLISHED OPINION
                                              )
ASSOCIATED CREDIT SERVICE, INC.,              )
                                              )
                     Appellant.               )

       KULIK, J.    Associated Credit Service, Inc. appeals the denial of its motion to

vacate a Philadelphia municipal court judgment, contending the trial court erred in

concluding that the foreign municipal court had jurisdiction over the dispute.

Specifically, it argues that the municipal court lacked subject matter jurisdiction because

it is not part of the Pennsylvania state court system and lacked personal jurisdiction

because service by mail was improper. The trial court did not err in concluding that the

Philadelphia municipal court is a state court and that it had jurisdiction over Associated

Credit based on the plain language of the lease between Associated Credit and Marlin

Leasing. The lease specified that any law suit would be brought in the state of

Pennsylvania, under Pennsylvania law. Associated Credit also agreed to submit to the
No.30554-6-III
Marlin Leasing Corp. v. Assoc. Credit Servo

jurisdiction of the Pennsylvania state court. Finally, Associated Credit received notice of

the law suit and chose to ignore it. We affirm the trial court and award attorney fees to

Marlin Leasing.

                                          FACTS

       Associated Credit Service, Inc., a Washington corporation, signed a 60-month

equipment lease with "JB II Funding, Inc." in July 2004. The lease was later assigned to

Marlin Leasing Corporation and stated in relevant part:

      This lease shall be governed by the laws of the Commonwealth of
      Pennsylvania. You agree that any suit under this Lease shall be brought in
      state or federal court in Pennsylvania, and you irrevocably consent and
      submit to the jurisdiction of such courts. Each party waives any right to a
      jury trial.

Clerk's Papers (CP) at 13.

      As the lease approached its end date, Associated Credit stopped its payments on

the lease because it believed that Marlin Leasing had made unauthorized insurance

deductions of $2,263.20 and failed to credit Associated Credit with an advance lease

payment of$1,537.02. Marlin Leasing filed suit in the Pennsylvania Municipal Small

Claims Court in 2009 and the court mailed notice of the suit to Associated Credit.

Associated Credit accepted service by mail, but decided not to appear in Pennsylvania to

defend the suit. Marlin Leasing then obtained a default judgment of $2,682.72 in

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September 2009.

       Marlin Leasing filed a Notice of Registration of Foreign Judgment on

September 19, 2011. Associated Credit moved to vacate the foreign judgment, arguing

the Philadelphia municipal court lacked subject matter jurisdiction because it was not a

federal or state court and that the court also lacked personal jurisdiction because service

by mail was improper.

       Marlin Leasing responded that the Philadelphia municipal court was part of the

state court system and submitted a page from the state court's website that stated, "The

First Judicial District (FJD) of Pennsylvania is composed of the three courts which make

up the Philadelphia County Court System; the Court of Common Pleas; Municipal Court;

and Traffic Court." CP at 28.

       The court denied Associated Credit's motion to vacate the judgment, stating,

"based upon what I have today, I'm satisfied that the matter was ... filed in the state

court." Report of Proceedings (RP) at 13.

                                        ANALYSIS

       The issue is whether the Philadelphia municipal court lacked jurisdiction to enter

the judgment against Associated Credit. Associated Credit contends that the municipal

court is not a "state" court as contemplated by the language of the lease because the

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municipal court's jurisdiction is limited to the city of Philadelphia. Associated Credit

also argues that the municipal court lacked personal jurisdiction over it because, under

Washington law, service by mail is not a proper method of service on a Washington

corporation.

       Marlin Leasing responds that Associated Credit consented to personal jurisdiction

and that the method of service was proper under Pennsylvania procedural rules. It also

points out that this court should not allow Associated Credit to frustrate justice by

claiming improper service after having acknowledged actual notice of the proceedings

and choosing not to respond to those proceedings.

       Jurisdiction is a question oflaw we review de novo. Young       V.   Clark, 149 Wash. 2d
130, 132,65 P.3d 1192 (2003). A court only has authorization to hear and decide a case

or proceeding if it has jurisdiction over the parties and the subject matter. Absent proper

jurisdiction, a court may do nothing more than enter an order of dismissal. Deschenes V.

King County, 83 Wash. 2d 714, 716, 521 P.2d 1181 (1974), overruled in part on other

grounds by Clark County Pub. Util. Dist. No.1      V.   Wilkinson, 139 Wash. 2d 840, 991 P.2d
1161 (2000).

       Generally, a judgment rendered in another state, if valid, is entitled to recognition

in the courts of another state under the full faith and credit clause. In re Estate o/Stein,

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78 Wash. App. 251, 261, 896 P.2d 740 (1995). However, '" [a] judgment rendered without

judicial jurisdiction ... will not be recognized or enforced in other states.'" City of

Yakima v. Aubrey, 85 Wn. App. 199,203,931 P.2d 927 (1997) (quoting RESTATEMENT

(SECOND) OF CONFLICT OF LAWS § 104 (1971)).

       Service of process is a prerequisite to obtaining jurisdiction, and judgment entered

without jurisdiction is void. Allstate Ins. CO.   V.   Khani, 75 Wn. App. 317,324, 877 P.2d
724 (1994) (quoting In re Marriage ofMarkow ski, 50 Wn. App. 633,635-36,749 P.2d

754 (1988)). But a party waives the claim oflack of personal jurisdiction by

"consent[ing], expressly or impliedly, to the court's exercising jurisdiction." In re

Marriage ofSteele, 90 Wn. App. 992,997-98, 957 P.2d 247 (1998).

       A party may consent to personal jurisdiction by written agreement, particularly in

the commercial context:

      [B]ecause the personal jurisdiction requirement is a waivable right, there
      are a "variety of legal arrangements" by which a litigant may give "express
      or implied consent to the personal jurisdiction of the court." For example,
      particularly in the commercial context, parties frequently stipulate in
      advance to submit their controversies for resolution within a particular
      jurisdiction. Where such forum-selection provisions have been obtained
      through "freely negotiated" agreements and are not "unreasonable and
      unjust," their enforcement does not offend due process.

Kysar v. Lambert, 76 Wash. App. 470, 484, 887 P .2d 431 ( 1995) (quoting Burger King

Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985)).

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In Kysar, Division Two of this court held that consent to venue in a particular court

constitutes implied consent to personal jurisdiction in that court, noting that consent to

venue would be meaningless if personal jurisdiction was lacking. Kysar, 76 Wn. App. at

486 (quoting Penn. House, Inc.   V.   Barrett, 760 F. Supp. 439, 448 (M.D. Pa. 1991».

       As already noted, the parties' lease agreement explicitly placed venue in the

"state or federal court in Pennsylvania," and further stated that the parties

"irrevocably consent[ ed]" to the jurisdiction of such court. CP at 13. Thus, by

explicit agreement, Associated Credit consented to the personal jurisdiction of the

Pennsylvania state courts. As such, it waived any claim of lack of personal

jurisdiction.

       The only remaining issue then is whether the Philadelphia municipal court

constitutes a Pennsylvania "state" court. The evidence provided by Marlin Leasing

establishes that the Pennsylvania state court system encompasses its municipal courts. A

page from the website of the Unified Judicial System of Pennsylvania states that the

Pennsylvania court system is structured like a pyramid with the municipal courts at its

base. The Philadelphia municipal court is identified as one of the "Minor Courts," which

are described as the "grass roots" level of the Pennsylvania state court system. Resp't's

Br., Attach. B. Thus, when Associated Credit consented to venue in a "state court" of

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Pennsylvania that consent was valid to give personal jurisdiction for the lawsuit filed in

the Philadelphia municipal court.

       "[T]he exercise ofjurisdiction must not offend traditional notions of fair play and

substantial justice in light of the quality, nature, and extent of the defendant's activity in

the state; the relative convenience of the parties; the benefits and protection of the laws

afforded the respective parties; and the basic equities of the situation." Raymond v.

Robinson, 104 Wash. App. 627, 641, 15 P.3d 697 (2001).

       Here, Associated Credit signed a lease with a foreign corporation and agreed that

any lawsuits under the lease would be brought in the state of Pennsylvania. When

Associated Credit stopped paying on the lease, it reasonably should have anticipated

being hailed into a Pennsylvania court to defend an alleged breach of the lease. Thus, a

conclusion that the Philadelphia municipal court has jurisdiction over Associated Credit

does not offend traditional notions of fairness and justice.

       The trial court did not err in concluding that the Philadelphia municipal court was

a Pennsylvania "state" court with jurisdiction over Associated Credit.

       Attorney Fees. Marlin Leasing asks for attorney fees under RCW 4.84.030 and

RAP 18.1. RCW 4.84.030 provides that where a contractual provision provides attorney

fees, the prevailing party shall be awarded reasonable attorney fees to defend the

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provisions of the contract.

       Here, the contract states: "If you do not pay us as agreed ... you agree that we may

... sue you for all past due payments and other charges and all payments due in the future

to the end of the Lease Term, plus our legal and collection costs." CP at 13.

       Because we affirm the trial court's decision, Marlin Leasing is entitled to fees and

costs against Associated Credit.

       A majority of the panel has determined this opinion will not be printed in the

Washington Appellate Reports, but it will be filed for public record pursuant to

RCW 2.06.040.

                                          Kulik, .

WE CONCUR:

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