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2009-UP-393 - United Capital Funding v. Bryan

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

United Capital Funding Corporation, a Florida Corporation, Respondent,

v.

Technamax, Inc., a Foreign Corporation, and Lisa Bryan, an individual, d/b/a Technamax, Defendants,

of whom Lisa Bryan, an individual, d/b/a Technamax is the Appellant.


Appeal From Beaufort County
Marvin H. Dukes, III, Master-in-Equity


Unpublished Opinion No. 2009-UP-393
Heard May 27, 2009 – Filed July 16, 2009   


AFFIRMED


Lisa Bryan, of Hilton Head, pro se, for Appellant. 

Robert E. Stepp, A. Jackson Barnes, and Tina M. Cundari, all of Columbia, for Respondent. 

PER CURIAM:  Lisa Bryan appeals the master-in-equity's denial of her "motion to dismiss" a judgment against her that was entered in Florida and recorded in South Carolina.  Bryan argues the master erred in refusing to set aside the judgment because the Florida court lacked personal and subject matter jurisdiction and the Florida judgment is constitutionally defective.  We affirm. 

FACTS

In December 2001, Bryan filed Articles of Incorporation for Technamax, Inc., a close corporation, in Maryland.  Bryan was listed as Technamax's registered agent and sole director.  On October 7, 2003, the State of Maryland administratively dissolved Technamax.  In 2004, Bryan moved from Maryland to South Carolina and signed a contract on behalf of Technamax, hiring Beacon Technology Group, LLC (Beacon), a South Carolina company, as a subcontractor to provide contract labor to Technamax's customers.  Technamax or its customers found the labor Beacon provided to be unsatisfactory, and Technamax refused to pay Beacon under their contract. 

Under a prior agreement between Beacon and United Capital Funding Corp. (United), a Florida corporation, Beacon sold its uncollected accounts to United.  United contacted Bryan concerning Technamax's debt to Beacon, and in May, June, and July 2004, Bryan tendered three checks to United.  Bryan signed the checks, all of which were drawn on Technamax's account.  The three payments totaled $41,913.84. 

I.       Florida Lawsuit

In January 2005,[1] United filed suit against Technamax and Bryan individually, doing business as Technamax, in Pinellas County, Florida, for $47,258.92, plus interest, attorney's fees, and costs.  United's complaint indicated this amount reflected credit for the three payments it had received.  An affidavit of service indicates Bryan's husband was personally served on February 23, 2005; however, both Bryan and her husband filed statements indicating no such service was ever effected and they were unaware of the existence of the suit. 

On April 28, 2005, the clerk of the Florida trial court entered a default against Bryan individually, doing business as Technamax.  Upon receiving notice of United's motion to convert the clerk's default into a final judgment, Bryan filed a motion to dismiss or for summary judgment.  On United's motion, the trial court struck Bryan's motion as an improper pleading.  Bryan retained attorney Peter Graham to represent her in the Florida trial court, but when attorney Graham failed to appear, a default judgment was entered by the circuit court against Bryan.  Bryan then retained attorney Paul Hitchens, who appeared on her behalf and persuaded the Florida trial court to enter an order setting aside the default judgment, striking Bryan's improper pro se motion, and giving Bryan leave to file an answer.  United appealed this order, arguing the Florida trial court had abused its discretion in granting Bryan relief because she had failed to make a showing of excusable neglect.  The Florida appellate court agreed, reversing and remanding the suit for reinstatement of the default judgment.  Subsequently, Hitchens signed a stipulation on Bryan's behalf requesting the Florida trial court enter an order reinstating the default judgment. 

II.      South Carolina Filing of Judgment

In April 2007, United filed its notice of filing of its Florida judgment against Bryan in South Carolina.  Bryan responded with a motion to dismiss or stay, seeking a determination the Florida judgment was invalid and, therefore, not entitled to full faith and credit.[2]  The master-in-equity heard arguments on Bryan's motions in December 2007.[3]  Finding Bryan submitted to the jurisdiction of the Florida court when she stipulated to re-entry of the default judgment, the master ultimately denied her motion to dismiss and found her motion to stay moot.  This appeal followed.

STANDARD OF REVIEW

An action to enforce a foreign judgment is an action at law.  Minorplanet Sys. USA Ltd. v. Am. Aire, Inc., 368 S.C. 146, 149, 628 S.E.2d 43, 44-45 (2006).  In an action at law tried by a master, an appellate court will correct any error of law but must affirm the master's factual findings unless no evidence reasonably supports those findings.  Sea Cabins on the Ocean IV Homeowners Ass'n v. City of N. Myrtle Beach, 337 S.C. 380, 388, 523 S.E.2d 193, 197 (Ct. App. 1999); Twelfth RMA Partners, L.P. v. Nat'l Safe Corp., 335 S.C. 635, 639, 518 S.E.2d 44, 46 (Ct. App. 1999); see also Wigfall v. Fobbs, 295 S.C. 59, 60-61, 367 S.E.2d 156, 157 (1988).

LAW/ANALYSIS

I.       Personal and Subject Matter Jurisdiction

Bryan asserts the master erred in declining to dismiss the Florida judgment because the Florida court had neither personal jurisdiction over her nor subject matter jurisdiction over this dispute.  We disagree. 

The Full Faith and Credit Clause of the United States Constitution requires the courts of one state give "such force and effect to a foreign judgment as the judgment would receive in its own state."  Col. Pac. Leasing Corp. v. Taylor, 326 S.C. 529, 532, 484 S.E.2d 595, 597 (Ct. App. 1997); see U.S. Const. art. IV, § 1 ("Full Faith and Credit shall be given in each State to the public acts, records, and judicial proceedings of every other State."). 

A judgment debtor in South Carolina "may file a motion for relief from, or notice of defense to, the foreign judgment . . . on any . . . ground[s] for which relief from a judgment of this State is allowed. . . .  The South Carolina Rules of Civil Procedure apply.  The judgment creditor has the burden of proving that the foreign judgment is entitled to full faith and credit."  S.C. Code Ann. § 15-35-940 (2005).  However, "[i]f [a judgment] appears on its face to be a record of a court of general jurisdiction, such jurisdiction over the cause and the parties is to be presumed unless disproved by extrinsic evidence, or by the record itself."  Taylor v. Taylor, 229 S.C. 92, 97, 91 S.E.2d 876, 879 (1956).  If a party successfully proves a judgment is void, then "[o]n motion and upon such terms as are just," a South Carolina court may relieve the party from his obligations under that judgment.  Rule 60(b)(4), SCRCP. 

A.      Personal Jurisdiction

South Carolina law holds "[t]he Full Faith and Credit Clause does not prevent the litigation of personal jurisdiction in an action to enforce a foreign judgment" if the party did not make a general appearance in the foreign jurisdiction.  Col. Pac. Leasing, 326 S.C. at 532-33, 484 S.E.2d at 596-97 ("Only a defendant who 'remains aloof' by not making an appearance and has a default judgment entered against him may contest the issue of personal jurisdiction in a later proceeding.").  By the same token, a party who "appears [in the foreign jurisdiction] to litigate the merits without properly preserving an objection to personal jurisdiction waives the right to raise the objection in the initial proceeding and is bound by the resulting judgment."  Id. at 533, 484 S.E.2d at 597 (quoting 18 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 4430 (1981)).  Similarly, in Florida, "although a court has already entered judgment, a party waives the right to contest personal jurisdiction by entering a general appearance without contesting personal jurisdiction at the same time."  Johnson v. State Dep't of Revenue ex rel. Lamontagne, 973 So. 2d 1236, 1239 (Fla. Dist. Ct. App. 2008). 

In determining whether a party made a general appearance in the foreign jurisdiction, the laws of the state that rendered the judgment must be applied.  Loyd & Ring's Wholesale Nursery, Inc. v. Long & Woodley Landscaping & Garden Ctr., Inc., 315 S.C. 88, 91, 431 S.E.2d 632, 634 (Ct. App. 1993) ("The validity and effect of a foreign judgment must be determined by the laws of the state that rendered the judgment.").  In Florida, absent a contemporaneous challenge to personal jurisdiction, a motion to vacate a default judgment constitutes a general appearance and a waiver of the right to contest personal jurisdiction.  Buttigieg v. Prunetti, 610 So. 2d 667, 669 (Fla. Dist. Ct. App. 1992); see also Bay City Mgmt., Inc. v. Henderson, 531 So. 2d 1013, 1016 (Fla. Dist. Ct. App. 1988). 

We affirm the master's finding the Florida judgment was valid because Bryan waived her right to challenge personal jurisdiction.  Bryan argues Florida lacked personal jurisdiction over her because she had no contacts with Florida, no business dealings therein, and no relationship with United.[4]  Nonetheless, the evidence before us supports the master's finding Bryan waived her right to contest personal jurisdiction under Florida law.  Not only did Bryan move the Florida trial court to set aside the default judgment against her, but through counsel, she submitted to re-entry of the default judgment.  See Johnson, 973 So. 2d at 1239; Buttigieg, 610 So. 2d at 669; Bay City Mgmt., 531 So. 2d at 1016.  Bryan argues by raising the issue of personal jurisdiction in her initial motion to dismiss or for summary judgment, she preserved her right to contest personal jurisdiction.  However, the Florida trial court struck this motion as an improper pleading.  The order striking this pleading was neither reversed nor otherwise modified.  Consequently, the issues raised in the stricken pleading were not properly before the Florida trial court.  See George J. Karr, D.D.S., P.A. v. Sellers, 620 So. 2d 1104, 1105 (Fla. Dist. Ct. App. 1993) (holding trial court's striking of defensive pleading rendered default judgment proper).  Having waived her right to contest this issue in Florida, Bryan is precluded from raising it in a collateral attack in South Carolina.  See Col. Pac. Leasing, 326 S.C. at 533, 484 S.E.2d at 597.  Accordingly, the master did not err in finding Bryan waived her challenge to the Florida court's exercise of personal jurisdiction. 

B.      Subject Matter Jurisdiction

Subject matter jurisdiction is the "power to hear and determine cases of the general class to which the proceedings in question belong."  Dove v. Gold Kist, 314 S.C. 235, 237-38, 442 S.E.2d 598, 600 (1994); see also In re D.N.H.W., 955 So. 2d 1236, 1238 (Fla. Dist. Ct. App. 2007) (holding subject matter jurisdiction is conferred by statute or constitution and not by consent of the parties).  To the extent an objection to subject matter jurisdiction challenges a court's authority to hear a certain class of cases, that objection may not be waived.  Pastor v. Pastor, 929 So. 2d 576, 578 (Fla. Dist. Ct. App. 2006).  However, "[i]f a court has subject matter jurisdiction and that jurisdiction has been properly invoked by pleadings and properly perfected by service of process, its judgments, although erroneous as to law or fact and subject to reversal on appeal, are nevertheless not void."  Palmer v. Palmer, 479 So. 2d 221, 221 (Fla. Dist. Ct. App. 1985).  Both South Carolina law and Florida law hold void a judgment of a court lacking subject matter jurisdiction.  Thomas & Howard Co. v. T.W. Graham & Co., 318 S.C. 286, 291, 457 S.E.2d 340, 343 (1995); Zitani v. Reed, 992 So. 2d 403, 409 (Fla. Dist. Ct. App. 2008). 

Although the master did not expressly rule on the issue of subject matter jurisdiction, it is properly before this court nonetheless.  Subject matter jurisdiction may be raised at any time.  GNOC Corp. v. Estate of Rhyne, 312 S.C. 86, 88, 439 S.E.2d 274, 275 (1994).  Subject matter jurisdiction is rebuttably presumed to exist in foreign judgments presented for enforcement in South Carolina.  Taylor, 229 S.C. at 97, 91 S.E.2d at 879.  However, the record contains no evidence sufficient to rebut the presumption that the Florida court was empowered to hear a Florida company's action to collect a debt from a foreign judgment debtor.  Consequently, the master did not err in finding the Florida judgment was valid and entitled to full faith and credit in South Carolina. 

II.      Remaining Issues

Bryan asserts the master erred in declining to dismiss the Florida judgment because Florida was an inconvenient forum and the judgment was obtained by fraud.  We decline to reach these issues because they are unpreserved.

For an issue to be preserved for appellate review, it must have been raised to and ruled upon by the master-in-equity.  Ellie, Inc. v. Miccichi, 358 S.C. 78, 102-03, 594 S.E.2d 485, 498 (Ct. App. 2004).  An appellate court will not consider any issue upon which the master did not rule.  Id. at 103, 594 S.E.2d at 498.  If an issue is raised to the trial court but not addressed in the court's final order, that issue is only preserved for appellate review if raised in a motion pursuant to Rule 59(e), SCRCP.  West v. Newberry Elec. Coop., 357 S.C. 537, 543, 593 S.E.2d 500, 503 (Ct. App. 2004).

Here, Bryan raised these issues in her motion to dismiss or stay.  However, the master ruled on only one issue, finding Bryan failed to present proof sufficient to overcome the presumption favoring the validity of the foreign judgment.  The record does not indicate the master made any additional rulings or Bryan raised her additional issues in a Rule 59(e) motion.  Rather, Bryan's January 28, 2008, notice of appeal suggests the opposite.  That document reflects the master heard and orally denied her motion to dismiss on December 3, 2007, and her appeal was from the written order of that denial, which she received January 19, 2008.  Because the master did not rule on these issues and Bryan failed to raise them in a motion pursuant to Rule 59(e), they are unpreserved and not properly before this court. 

CONCLUSION

We find evidence in the record supports the master's decision that Florida properly exercised personal and subject matter jurisdiction over Bryan.  Therefore, we affirm the order of the master-in-equity on this matter.  We decline to reach Bryan's remaining issues because the master did not rule on them and Bryan failed to preserve them through a motion pursuant to Rule 59(e).  Accordingly, the order of the master is

AFFIRMED.

THOMAS and KONDUROS, JJ., and CURETON, A.J., concur. 


[1] United's complaint was dated January 18, 2004, but "2004" appears to be a scrivener's error.  The document bears a 2005 case number and prays for interest on the debt beginning June 4, 2004.   

[2] Bryan attempted to represent both herself and Technamax but was advised South Carolina law does not permit a pro se litigant to represent a corporation.  Therefore, her appearance applied only to herself. 

[3] The master indicated he made his decision based on the pleadings, and no court reporter was present at this hearing.  Consequently, no transcript is available for our review.   

[4] Additionally, Bryan asserts she never did business in Florida and she neither resided in Florida nor received service of process there.  The issue of personal jurisdiction subsumes these additional arguments.  Because we find Bryan waived her right to challenge personal jurisdiction, we do not address these arguments individually.