Addressing NY Judgments: by State

Please note - Corporate Debt Advisors is not a law firm, and simply not lawyers. The information provided on this website is not being offered as legal advice or suggestion, and for more thorough legal information an attorney should be consulted. The legal information on our website is provided without any representations or warranties, express or implied.


 

If you have a merchant cash advance, chances are you have signed a confession-of-judgment (COJ).  A COJ is a draconian remedy that lets a creditor take a judgment without notice to the debtor – whose first knowledge of the lawsuit usually occurs when the creditor seizes the debtor’s bank accounts, demands financial information and seeks a turnover of assets.

Important question – what are your rights if you do not defend the New York (or sister state  action)? What if you wait until the lender gets their New York judgment and tries to enforce it in your home state?  In your home state, can you still contest the action on the merits and force the lender to prove that the claim against you is valid? Most states (47) have adopted the Uniform Enforcement of Foreign Judgments Act, and will enforce a valid judgment from a sister state, even if that home state does not permit a confession of judgment.

Uniform Enforcement of Foreign Judgments Act

A judgment rendered in a “sister” state or a territory of the U.S. is also referred to a “foreign judgment”.  47 states, the District of Columbia and the Virgin Islands have adopted the Uniform Enforcement of Foreign Judgments Act, 13 U.L.A. 261 (1986), which requires the states and the territories to give effect to the judgments of other states and territories, if an exemplified copy of the foreign judgment is registered with the clerk of a court of competent jurisdiction.

The only U.S. states which have not adopted the Act are Indiana, Massachusetts and Vermont.  When seeking to enforce a judgment in or from a state that has not adopted the Uniform Act, the holder of the judgment files a suit known as a “domestication” action.  Even in the absence of the expedited procedure under the UEFJA, the domestication of a judgment from another state is generally a formality since the full faith and credit clause of the U.S. constitution requires that states honor the judgments of other states.

Grounds for Challenging a Foreign State Claim:
  • The judgment was obtained by fraud;
  • The judgment is repugnant to the public policy of the state where enforcement is sought;
  • The judgment conflicts with another final and conclusive judgment;
  • The judgment was rendered in the absence of impartial tribunals or procedures compatible with the requirements of due process of law;
  • The foreign court did not have personal jurisdiction over the defendant;
  • The foreign court did not have jurisdiction over the subject matter;
  • The defendant did not receive notice of the proceedings in sufficient time to enable him/her to defend;
  • In the case of jurisdiction based only on personal service, the foreign court was an inconvenient forum for the trial; or
  • The judgment seeks to enforce the revenue and taxation laws of a foreign jurisdiction.
  • The proceeding in the foreign court was contrary to an agreement between the parties under which the dispute was to be settled;

Confessions of Judgment and Domestication Issues By State

Alabama: Generally COJs are void.  “All agreements, contracts, or stipulations to confess judgment in any of the courts of this state, to be sued in any county other than that fixed by the venue statutes of this state, or to authorize another to confess judgment in any of the courts of this state made before the commencement of the action in which such judgments are so confessed shall be void, and all judgments by such unlawful confession, or otherwise taken or had in violation of this section, shall be set aside and annulled on motion if made within six months after the entry of such judgment.”  Alabama Code Title 8. Commercial Law and Consumer Protection § 8-9-11

Alaska: A judgment by confession may be entered with or without action against a person for any amount or relief. The confession may be made only by the confessor in person or by the person’s attorney in fact under a power of attorney so authorizing, or, if the confessor is a corporation, only by a person who at that time has a relation to the corporation that would authorize the service of summons on that person. AS 09.30.050. Confession of Judgment.

Arizona: A. A party may appear in person or by an agent or attorney before a justice of the peace without issuance or service of process and confess judgment for an amount within the jurisdiction of the justice of the peace, and such judgment shall be entered thereon upon the filing by plaintiff, his agent or attorney of an affidavit of the justness of plaintiff’s claim.  B. Where the judgment is confessed by an agent or attorney, the warrant of agent or attorney authorizing the confession shall be filed with the justice and noted in the docket.  Revised Statutes §22-219

California: The only ground on which the New York judgment can be set aside is lack of jurisdiction. The merits cannot be contested. An “exemplified” copy of the New York judgment can be filed in California, with a notice served on the debtor who then has 30 days to file a motion challenging the judgment. The only grounds are those related to jurisdiction, not to the underlying merits. More on CA COJs here.

Colorado: Colorado follows the Uniform Enforcement of Foreign Judgments Act when domesticating a sister state judgment. A copy of any foreign judgment authenticated in accordance with the act of congress or the laws of this state may be filed in the office of the clerk of any court of this state which would have had jurisdiction over the original action had it been commenced first in this state. A judgment so filed has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a judgment of the court of this state in which filed and may be enforced or satisfied in like manner.  CO Rev Stat § 13-53-103 (2016)

Delaware: Foreign judgments controlled by DELAWARE UNIFORM FOREIGN-MONEY CLAIMS ACT (here).  COJs have been recognized in Delaware statutes since the Code of 1852. The current codification is found in 10 Del.C. § 2306(a).  Confession of judgment statutes have been found not to be per se invalid and thus not constitutionally offensive. However, due process requires that the consent involved in the warrant must be shown to be knowing, intelligent and voluntary. When judgment is confessed by virtue of a warrant of attorney for a penalty, the attorney confessing the judgment shall, in a written direction to the officer entering the judgment, set down the real debt, and the time from which interest is to be calculated; which shall be entered by the officer upon the docket of the judgment. Code 1852, § 2409; Code 1915, § 4304; Code 1935, § 4776; 10 Del. C. 1953, § 4732.;

Florida: COJs are void in Florida (here), but out of state judgments are respected. A foreign (New York) judgment could be set aside on many grounds, including excusable neglect, new evidence, fraud, misrepresentation, and no jurisdiction. (FL Civil Practice And Procedure § 55.503 and Rule 1.540).

Georgia: The judgment can be domesticated in the county where the debtor resides and then post-judgment remedies such as asset discovery and garnishments can be employed. The judgment can generally be attached only on the absence of jurisdiction. There is a possibility that the amount of the judgment can be attacked because a garnishee of the judgment debtor was allowed to do that  240 Ga. App. 419.

Illinois: The Illinois court will only review whether the (New York) court had jurisdiction but will not even review jurisdiction if the issue had already been determined in New York. Ross & Chatterton Law Offices v Lewis, 109 Ill App 3d 856, 441 NE2d 129, 65 Ill Dec 337 (4th D Ill App 1982). (In an action based on the registration of a foreign judgment, an Illinois court did not reconsider jurisdiction issues that a Wisconsin court decided previously.)

Indiana: Indiana prohibits COJs (Ind. Code § 34-6-2-22), but will enforce the COJ of another state . See EBF Partners, LLC v. Evolving Solutions Inc., 95 N.E.3d 145 (Ind. App. 2018). The foreign action to domesticate the judgment will not review the merits of the original decision, applying the principle of res judicata, but the court can inquire into whether the foreign court’s finding of personal and subject matter jurisdiction was correct. Commercial Coin Laundry Systems v Enneking, 766 NE2d 433 (Ind App 2002).

Maryland: The only defense to the judgment is to challenge the jurisdiction of the original court, but judges have been known to bend over backwards for consumers. Most judges will advise the debtor to go attack the NY judgment in NY.

Michigan: As long as New York had jurisdiction, the New York judgment cannot be attacked on the merits.

Nevada: generally adopts the Uniform Enforcement of Foreign Judgments Act. (NRS 17.330-17.400..) and permits judgment by confession for debt due or contingent liability.

New Hampshire: The State of New Hampshire generally adopts the Revised Uniform Enforcement of Foreign Judgments Act. (Title 53, Chapter 524A.).

New Jersey:  While judgments by confession are generally disfavored in New Jersey, if a judgment is properly entered in a state which authorizes such judgments, the judgment creditor may register and enforce the judgment in New Jersey. As long as the forum court possesses personal jurisdiction over the defendant and the judgment is not entered in violation of due process, the judgment will be enforceable in New Jersey even though the underlying claim could not have been successfully asserted in a New Jersey court. Therefore, ordinarily, a New York judgment can be registered in New Jersey and the only objection would be on jurisdiction. The merits would be immaterial.

North Carolina: like most states, has adopted the Uniform Enforcement of Foreign Judgments Act. Confessions of Judgment are permitted. A judgment by confession may be entered without action at any time in accordance with the procedure prescribed under G.C. §1A-1, R.68.1 (Here).

Pennsylvania: The New York judgment can only be filed and enforced if there was personal service on the defendant, not service of process by the secretary of state or by mail. Otherwise, the lender must start an action in Pennsylvania, based on the judgment and including a “count” on the underlying cause of action.

Texas: Unless a consumer loan is involved, the New York judgment could only be set aside if the court lacked jurisdiction.

Wisconsin: Wisconsin has also adopted the Uniform Enforcement of Foreign Judgments Act. Wis Stat § 806.24(6), and is similar to Illinois.

Addressing NY Judgments: by State

If you have a merchant cash advance, chances are you have signed a confession-of-judgment (COJ).  A COJ is a draconian remedy that lets a creditor take a judgment without notice to the debtor – whose first knowledge of the lawsuit usually occurs when the creditor seizes the debtor’s bank accounts, demands financial information and seeks a turnover of assets.

Important question – what are your rights if you do not defend the New York (or sister state  action)? What if you wait until the lender gets their New York judgment and tries to enforce it in your home state?  In your home state, can you still contest the action on the merits and force the lender to prove that the claim against you is valid? Most states (47) have adopted the Uniform Enforcement of Foreign Judgments Act, and will enforce a valid judgment from a sister state, even if that home state does not permit a confession of judgment.

Uniform Enforcement of Foreign Judgments Act

A judgment rendered in a “sister” state or a territory of the U.S. is also referred to a “foreign judgment”.  47 states, the District of Columbia and the Virgin Islands have adopted the Uniform Enforcement of Foreign Judgments Act, 13 U.L.A. 261 (1986), which requires the states and the territories to give effect to the judgments of other states and territories, if an exemplified copy of the foreign judgment is registered with the clerk of a court of competent jurisdiction.

The only U.S. states which have not adopted the Act are Indiana, Massachusetts and Vermont.  When seeking to enforce a judgment in or from a state that has not adopted the Uniform Act, the holder of the judgment files a suit known as a “domestication” action.  Even in the absence of the expedited procedure under the UEFJA, the domestication of a judgment from another state is generally a formality since the full faith and credit clause of the U.S. constitution requires that states honor the judgments of other states.

Grounds for Challenging a Foreign State Claim:
  • The judgment was obtained by fraud;
  • The judgment is repugnant to the public policy of the state where enforcement is sought;
  • The judgment conflicts with another final and conclusive judgment;
  • The judgment was rendered in the absence of impartial tribunals or procedures compatible with the requirements of due process of law;
  • The foreign court did not have personal jurisdiction over the defendant;
  • The foreign court did not have jurisdiction over the subject matter;
  • The defendant did not receive notice of the proceedings in sufficient time to enable him/her to defend;
  • In the case of jurisdiction based only on personal service, the foreign court was an inconvenient forum for the trial; or
  • The judgment seeks to enforce the revenue and taxation laws of a foreign jurisdiction.
  • The proceeding in the foreign court was contrary to an agreement between the parties under which the dispute was to be settled;

Confessions of Judgment and Domestication Issues By State

Alabama: Generally COJs are void.  “All agreements, contracts, or stipulations to confess judgment in any of the courts of this state, to be sued in any county other than that fixed by the venue statutes of this state, or to authorize another to confess judgment in any of the courts of this state made before the commencement of the action in which such judgments are so confessed shall be void, and all judgments by such unlawful confession, or otherwise taken or had in violation of this section, shall be set aside and annulled on motion if made within six months after the entry of such judgment.”  Alabama Code Title 8. Commercial Law and Consumer Protection § 8-9-11

Alaska: A judgment by confession may be entered with or without action against a person for any amount or relief. The confession may be made only by the confessor in person or by the person’s attorney in fact under a power of attorney so authorizing, or, if the confessor is a corporation, only by a person who at that time has a relation to the corporation that would authorize the service of summons on that person. AS 09.30.050. Confession of Judgment.

Arizona: A. A party may appear in person or by an agent or attorney before a justice of the peace without issuance or service of process and confess judgment for an amount within the jurisdiction of the justice of the peace, and such judgment shall be entered thereon upon the filing by plaintiff, his agent or attorney of an affidavit of the justness of plaintiff’s claim.  B. Where the judgment is confessed by an agent or attorney, the warrant of agent or attorney authorizing the confession shall be filed with the justice and noted in the docket.  Revised Statutes §22-219

California: The only ground on which the New York judgment can be set aside is lack of jurisdiction. The merits cannot be contested. An “exemplified” copy of the New York judgment can be filed in California, with a notice served on the debtor who then has 30 days to file a motion challenging the judgment. The only grounds are those related to jurisdiction, not to the underlying merits. More on CA COJs here.

Colorado: Colorado follows the Uniform Enforcement of Foreign Judgments Act when domesticating a sister state judgment. A copy of any foreign judgment authenticated in accordance with the act of congress or the laws of this state may be filed in the office of the clerk of any court of this state which would have had jurisdiction over the original action had it been commenced first in this state. A judgment so filed has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a judgment of the court of this state in which filed and may be enforced or satisfied in like manner.  CO Rev Stat § 13-53-103 (2016)

Delaware: Foreign judgments controlled by DELAWARE UNIFORM FOREIGN-MONEY CLAIMS ACT (here).  COJs have been recognized in Delaware statutes since the Code of 1852. The current codification is found in 10 Del.C. § 2306(a).  Confession of judgment statutes have been found not to be per se invalid and thus not constitutionally offensive. However, due process requires that the consent involved in the warrant must be shown to be knowing, intelligent and voluntary. When judgment is confessed by virtue of a warrant of attorney for a penalty, the attorney confessing the judgment shall, in a written direction to the officer entering the judgment, set down the real debt, and the time from which interest is to be calculated; which shall be entered by the officer upon the docket of the judgment. Code 1852, § 2409; Code 1915, § 4304; Code 1935, § 4776; 10 Del. C. 1953, § 4732.;

Florida: COJs are void in Florida (here), but out of state judgments are respected. A foreign (New York) judgment could be set aside on many grounds, including excusable neglect, new evidence, fraud, misrepresentation, and no jurisdiction. (FL Civil Practice And Procedure § 55.503 and Rule 1.540).

Georgia: The judgment can be domesticated in the county where the debtor resides and then post-judgment remedies such as asset discovery and garnishments can be employed. The judgment can generally be attached only on the absence of jurisdiction. There is a possibility that the amount of the judgment can be attacked because a garnishee of the judgment debtor was allowed to do that  240 Ga. App. 419.

Illinois: The Illinois court will only review whether the (New York) court had jurisdiction but will not even review jurisdiction if the issue had already been determined in New York. Ross & Chatterton Law Offices v Lewis, 109 Ill App 3d 856, 441 NE2d 129, 65 Ill Dec 337 (4th D Ill App 1982). (In an action based on the registration of a foreign judgment, an Illinois court did not reconsider jurisdiction issues that a Wisconsin court decided previously.)

Indiana: Indiana prohibits COJs (Ind. Code § 34-6-2-22), but will enforce the COJ of another state . See EBF Partners, LLC v. Evolving Solutions Inc., 95 N.E.3d 145 (Ind. App. 2018). The foreign action to domesticate the judgment will not review the merits of the original decision, applying the principle of res judicata, but the court can inquire into whether the foreign court’s finding of personal and subject matter jurisdiction was correct. Commercial Coin Laundry Systems v Enneking, 766 NE2d 433 (Ind App 2002).

Maryland: The only defense to the judgment is to challenge the jurisdiction of the original court, but judges have been known to bend over backwards for consumers. Most judges will advise the debtor to go attack the NY judgment in NY.

Michigan: As long as New York had jurisdiction, the New York judgment cannot be attacked on the merits.

Nevada: generally adopts the Uniform Enforcement of Foreign Judgments Act. (NRS 17.330-17.400..) and permits judgment by confession for debt due or contingent liability.

New Hampshire: The State of New Hampshire generally adopts the Revised Uniform Enforcement of Foreign Judgments Act. (Title 53, Chapter 524A.).

New Jersey:  While judgments by confession are generally disfavored in New Jersey, if a judgment is properly entered in a state which authorizes such judgments, the judgment creditor may register and enforce the judgment in New Jersey. As long as the forum court possesses personal jurisdiction over the defendant and the judgment is not entered in violation of due process, the judgment will be enforceable in New Jersey even though the underlying claim could not have been successfully asserted in a New Jersey court. Therefore, ordinarily, a New York judgment can be registered in New Jersey and the only objection would be on jurisdiction. The merits would be immaterial.

North Carolina: like most states, has adopted the Uniform Enforcement of Foreign Judgments Act. Confessions of Judgment are permitted. A judgment by confession may be entered without action at any time in accordance with the procedure prescribed under G.C. §1A-1, R.68.1 (Here).

Pennsylvania: The New York judgment can only be filed and enforced if there was personal service on the defendant, not service of process by the secretary of state or by mail. Otherwise, the lender must start an action in Pennsylvania, based on the judgment and including a “count” on the underlying cause of action.

Texas: Unless a consumer loan is involved, the New York judgment could only be set aside if the court lacked jurisdiction.

Wisconsin: Wisconsin has also adopted the Uniform Enforcement of Foreign Judgments Act. Wis Stat § 806.24(6), and is similar to Illinois.

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