Ex Parte Trinity Automotive Services, Ltd.
Ex Parte Trinity Automotive Services, Ltd.
Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 1007
Trinity Automotive Services, Ltd. ("Trinity Automotive"), appeals from the judgment of the Geneva Circuit Court vacating the domesticated judgment it obtained in the Supreme Court of the State of New York, Nassau County, against Medical Supplies, L.L.C. ("Medical Supplies"). Trinity Automotive also petitions for a writ of mandamus directed to the Geneva Circuit Court, ordering that court to give full faith and credit to the New York judgment. We deny the petition and reverse and remand.
On November 9, 2001, Medical Supplies entered into an agreement with Shari Lyn Leasing Corp. for the lease of a 2002 Toyota Avalon. The lease was assigned to Sovereign Bank, which subsequently assigned it to Trinity Automotive. Paragraph 14 of the lease agreement provides in pertinent part:
"14. Legal Matters: This lease shall be interpreted in accordance with the State of New York and regardless of the order in which the signatures of the parties are affixed, it shall be deemed executed at lessor's place of business designated herein and in the county thereof, in the State of New York; Lessee and any guarantor hereof consent to the jurisdictions of any state or federal court located within the State of New York and agree that all actions or proceedings arising, directly or indirectly, from this lease shall be mitigated only in courts having such situs. . . ."
Medical Supplies defaulted on the lease agreement. Trinity Automotive brought *Page 1008 suit against Medical Supplies and Robert Lewis1 in the Supreme Court of New York, Nassau County, to recover $29,530.06, which it alleged was due and owing on the lease, along with interest and costs. On November 19, 2004, after Medical Supplies and Lewis failed to answer Trinity Automotive's complaint or otherwise appear in the action, the New York court entered a default judgment in Trinity Automotive's favor in the amount of $31,124.11.
On May 29, 2005, pursuant to the Uniform Enforcement of Foreign Judgments Act, Ala. Code 1975, §
On April 27, 2005, Medical Supplies filed a "Motion to Set Aside and/or Vacate the Judgment," pursuant to Rules 55 and 59, Ala. R. Civ. P. Medical Supplies argued that the New York court lacked in personam jurisdiction over it, and that the judgment the New York court entered was therefore "improperly obtained." Medical Supplies filed a brief in support of its motion, as well as the affidavit of James Anthony Eubanks, who was, at that time, Medical Supplies's sole member.2 In his affidavit, Eubanks stated:
"Medical Supplies is a limited liability company organized and existing in Geneva County, Alabama with its principal place of business in Geneva County, Alabama. It is a small company with only the one office in Geneva County, Alabama, and is limited to serving primarily the local area with durable medical equipment. The company has no office, employees, telephone numbers, assets, bank accounts or any other contacts with the State of New York."
Trinity Automotive filed a response to the motion on June 1, 2005. The trial court held a hearing on the motion on June 2, 2005.
On July 7, 2005, the trial court entered a judgment granting Medical Supplies' motion and vacating the domesticated judgment. The trial court found that Medical Supplies did not have contacts with the State of New York sufficient from a due process standpoint, to vest the New York Supreme Court in Nassau County with personal jurisdiction over Medical Supplies and that the forum-selection clause in the lease agreement was unenforceable.
On August 15, 2005, Trinity Automotive filed a petition for a writ of mandamus with this court, seeking an order directing the trial court to enforce the New York judgment. On August 18, 2005, Trinity Automotive filed a notice of appeal. On August 26, 2005, this court consolidated Trinity Automotive's petition and appeal ex mero motu.
Trinity Automotive contends that the trial court erred when it found that the forum-selection clause contained in the lease agreement was unenforceable. According to Trinity Automotive, the facts in *Page 1009 this case demonstrate that the forum-selection clause, by which Medical Supplies consented to the jurisdiction of New York courts for the resolution of all litigation related to the lease agreement, is fully enforceable and constitutes a waiver of Medical Supplies's due-process rights with regard to personal jurisdiction.
As a threshold matter, we note that, although Medical Supplies filed its motion to set aside or vacate the foreign judgment pursuant to Rules 55 and 59, Ala. R. Civ. P., Medical Supplies did not challenge as flawed the process by which Trinity Automotive domesticated its judgment in the Geneva Circuit Court. Compare Bartlett v. Unistar Leasing,
Turning now to Trinity Automotive's petition for a writ of mandamus, we observe what has often been observed by both this court and our Supreme Court: "Mandamus is an extraordinary remedy. An appellate court will grant a petition for a writ of mandamus only when `. . . the petitioner has no other adequate remedy'" and the other requirements for the issuance of such a writ are satisfied. See, e.g., Ex parte Amerigas,
Turning now to Trinity Automotive's appeal, we first note that "[t]he standard of review on appeal from an order granting relief under Rule 60(b)(4), Ala. R. Civ. P. (`the judgment is void'), is not whether the trial court has exceeded its *Page 1010
discretion. When the decision to grant or to deny relief turns on the validity of the judgment, discretion has no field of operation." Ex parte Full Circle Distribution, L.L.C.,
"If the court of another state has personal and subject matter jurisdiction over an individual and enters judgment accordingly, that judgment is entitled to full faith and credit in the courts of this state." Century Int'l Mgmt. v. Gonzalez,
The exercise of personal jurisdiction by a state court over a nonresident defendant must comport with the due-process clause of the
Likewise, under New York law, a forum-selection clause, like the one contained in the lease agreement in the present case, is sufficient, subject to certain exceptions, to vest New York courts with personal jurisdiction over a nonresident defendant without regard to whether another independent ground for personal jurisdiction exists under the New York long-arm statute (N.Y. C.P.L.R. §
Premium Risk Group, Inc.,"unreasonable, unjust, in contravention of public policy, invalid due to fraud or overreaching, or it is shown that a trial in the selected forum would be so gravely difficult that the challenging party would, for all practical purposes, be deprived of its day in court."
In the present case, the trial court based its holding — that the forum-selection clause was ineffective to vest the New York court with personal jurisdiction over Medical Supplies — solely on New York law. Medical Supplies did not argue to the trial court that the federal due-process clause rendered the forum-selection clause ineffective, nor did the trial court make such a finding or reach such a conclusion.4 Thus, with regard to the forum-selection clause, we consider only the question of whether the clause was enforceable under New York law.
In National Union Fire Insurance Company of Pittsburgh,Pennsylvania v. Weir,
In Bell Constructors, Inc. v. Evergreen Caissons,Inc.,
In 3H Enterprises v. Bennett,
In the present case, the trial court, applying New York law, held that the lease agreement's forum-selection clause did not vest the New York court with personal jurisdiction over Medical Supplies because the forum-selection clause was "unreasonable and unjust" and because "the distance between the state of New York and Geneva County, Alabama create[d] a gravely difficult circumstance for [Medical Supplies] to travel, participate in and defend [Trinity Automotive]'s complaint." The trial court based this determination on its finding that (1) Medical Supplies "is a small LLC doing business in rural Geneva County, Alabama"; (2) the authority of Lewis to enter into the lease agreement on behalf of Medical Supplies was "in question"; and (3) Medical Supplies had no contacts with the State of New York beyond the lease agreement and the lease payments that it sent to Trinity Automotive in New York.
We conclude that the trial court erred as a matter of law when it found that the forum-selection clause in the lease agreement did not provide the New York trial court with a basis upon which to exercise personal jurisdiction over Medical Supplies. The fact that New York courts have enforced forum-selection clauses against individuals undercuts any basis upon which to find that Medical Supplies' size prevents enforcement of a forum-selection clause under New York law, certainly in the absence of any evidence that Medical Supplies's financial situation was such that it could not defend itself in a New York court. The fact that there may be a question as to whether Lewis had the authority to enter into the lease agreement on Medical Supplies' behalf is likewise ineffective to render the forum-selection clause unenforceable, in the absence of any resolution of that question. The fact that Medical Supplies did not have contacts with the State of New York outside of the lease agreement and the payments it sent to Trinity Automotive in New York also does not form a basis to refuse enforcement of *Page 1013 the forum-selection clause; as previously stated, personal jurisdiction over a nonresident defendant that is founded on a forum-selection clause need not be supported by the defendant's contacts with the selected forum. Finally, in light of Weir,supra, wherein the New York court refused to dismiss a case against an individual residing in Texas for lack of personal jurisdiction where jurisdiction was founded on a forum-selection clause, and Bell Constructors, Inc., supra, wherein a New York court upheld a forum-selection clause against a Colorado company, we find that, under New York law, the distance between Alabama and New York is not sufficient to hold that the forum-selection clause in the present case is unenforceable in the absence of any evidence that Medical Supplies was unable to travel to New York for the purpose of defending itself against Trinity Automotive's claim.
Because the factual findings that the trial court set forth in its judgment do not support its legal conclusion that the lease agreement's forum-selection clause was unjust and unreasonable and that the clause's enforcement would have effectively deprived Medical Supplies of its day in court, we conclude that the trial court erred as a matter of law when it set aside its order domesticating the New York judgment. For this reason, the trial court's judgment is reversed.
2040984 — PETITION DENIED.
2041020 — REVERSED AND REMANDED.
CRAWLEY, P.J., and THOMPSON, PITTMAN, and BRYAN, JJ., concur.
We also note that Medical Supplies's foregoing arguments, which the trial court did not cite in its judgment, do not provide this court with an alternative basis upon which to sustain the trial court's judgment. As previously noted, a forum-selection clause can be sufficient under federal and New York law, without more, to vest a New York court with jurisdiction over a nonresident defendant, notwithstanding the defendant's lack of sufficient contacts with the State of New York or an independent jurisdictional basis under the New York long-arm statute. See Burger King Corp.,
Reference
- Full Case Name
- Ex Parte Trinity Automotive Services, Ltd. (In Re Trinity Automotive Services, Ltd. v. Medical Supplies, L.L.C., and Robert Lewis). Trinity Automotive Services, Ltd. v. Medical Supplies, L.L.C.
- Cited By
- 10 cases
- Status
- Published