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Hack v. Edwards

Court of Appeals of Iowa

January 9, 2019

TROY HACK, Plaintiff-Appellee,
v.
BRETT EDWARDS, EDWARDS AUTOMOTIVE, Defendants-Appellants.

          Appeal from the Iowa District Court for Pottawattamie County, James M. Richardson, Judge.

         Brett Edwards appeals the district court's denial of his challenge to the validity of an out-of-state judgment.

          Matthew V. Stierman, Council Bluffs, for appellant.

          Daniel M. Northfield, Urbandale, for appellee.

          Considered by Potterfield, P.J., Doyle, J., and Danilson, S.J. [*]

          DANILSON, SENIOR JUDGE.

         Brett Edwards appeals the district court's denial of his challenge to the validity of an out-of-state judgment. The district court erred in concluding the issue of personal jurisdiction must be determined by the Texas court. We reverse and remand for entry of an order vacating the foreign judgment against Brett Edwards.

         I. Scope of Review.

         Our review is for correction of errors at law. Eagle Leasing v. Amandus, 476 N.W.2d 35, 36 (Iowa 1991).

         II. Background Facts and Proceedings.

         The record shows that on August 3, 2016, Troy Hack obtained a default judgment in the amount of $5702.00, plus interest and court costs, against a defendant "Edwards Automotive (Brett Edwards)" in a court in Hidalgo County, Texas. The default judgment indicated that "although duly served" "Edwards Automotive (Brett Edwards) . . . failed to file and answer or appear."

         On March 26, 2018, Hack filed the Texas judgment in the Iowa District Court for Pottawattamie County, and the clerk of court sent notice of the filing of foreign judgment to a Brett Edwards at 920 32nd Avenue, Council Bluffs, which was the address provided by Troy Hack to the clerk for "Edwards Automotive (Brett Edwards)."

         Pursuant to the Uniform Enforcement of Foreign Judgments Act, Iowa Code chapter 626A (2018), on April 6, 2018, Brett Edwards filed a motion to vacate judgment and motion for stay. He asserted:

Notice of Foreign Judgment was mailed by the clerk of court on March 27, 2018 on Defendant Brett Edwards. No mailing has been made, to the Defendants knowledge, on Defendant "Edwards Automotive". It is not clear from the Texas judgment whether "Edwards Automotive" was intended to be considered a separate legal entity, or an alter ego, because of the reference in the judgment as against Edwards Automotive, and parenthetically as against (Brett Edwards).

         Brett also stated-and filed a supporting affidavit-that he had no contact with Hack, "either in Iowa or Texas"; he was the General Manager of Edwards Chevrolet-Cadillac; he resides and works in Council Bluffs, Iowa; he has had no contact with the state of Texas "related to this sale or any matter related thereto"; and he "does not reside, do business, or otherwise have minimum contacts with the state of Texas as would be required for the Texas court to have personal jurisdiction over him." Brett contended:

In this case, the exercise of personal jurisdiction over Edwards would be improper where the contacts between Edwards and the state of Texas are non-existent, and indicate that Edwards did not purposefully avail himself of Texas's laws. See Tung v. Am. Univ. of the Caribbean, 353 N.W.2d 869, 871-72 (Iowa. Ct. App. 1984) (dismissing action where an uncontested affidavit indicated that defendant did not transact any business in the forum state, did not have any agents or employees in the forum state; did not own property in the forum state; and did not have any minimal contacts with the forum state).

         Hack filed a resistance, invoking the Full Faith and Credit Clause of the United States Constitution. Hack's resistance provides in part:

(3) The Defendant was properly served by the sheriff of Pottawattamie County on July 6, 2017.
(4) Such service provided notice to the Defendant that a pending case was presented to the court in Texas and it provided the time allowed to file an answer or risk having a default judgment entered against the Defendant.
(5) Defendant failed to file an answer and a default judgment was entered on August 3, 2017 under Rule 239 of the Texas Rules of Civil Procedure.
(6) The default judgment provided a notice of appeal allowing for 21 days from entry of default.

         Without identifying to which "defendant" he referred, Hack argued the question of whether the defendant had sufficient contacts with the state of Texas was for the Texas court to decide, and because there was no challenge in the Texas court, the defendant could not challenge the judgment now.

         In response, Brett noted that Hack had presented no supporting affidavits and challenged Hack's legal claims.

         Hack filed a written response asserting, "Edwards Automotive 'did business' in Texas" sufficient to establish sufficient contacts with Texas to support personal jurisdiction in Texas. He noted, "Edwards Automotive . . . specifically targeted and contacted the [Troy Hack] through targeted advertisements and personal phone calls by its employee, Josh Hack, its contact was purposeful in establishing a customer relationship, and it expected a benefit by selling [Troy Hack] a vehicle." Attached to this response was: (1) an affidavit of a Josh Hack signed by a Nebraska notary, and (2) a forwarded promotional email-dated December 12, 2017-from "Edwards Motorsports & RV" with an address of 1010 34th Avenue, Council Bluffs, to an email address "trwhack@yahoo.com." Josh Hack averred he "worked for Edwards Autogroup from Oct 2013 to April 2016." Josh Hack further stated, "Edwards contacted Troy directly while he was in Texas (through employees, ...


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