MARLIN LEASING CORP., Plaintiff.
WALID ESSA, Defendant.
in the Court of Appeals 14 November 2018.
by defendant from order entered 27 February 2018 by Judge Ned
W. Mangum in Wake County No. 15 CVD 672 District Court.
Debnam Narron Drake Saintsing & Myers, LLP, by Byron L.
Saintsing, for plaintiff-appellee.
Sharpless & Stavola, P.A., by Peter F. O'Connell and
Eugene E. Lester, III, for defendant-appellant.
Full Faith and Credit Clause of the United States
Constitution provides that a judgment entered in one state
must be given the same effect in another state that it
possesses in the state where it was rendered. A foreign
judgment must, however, meet the criteria for a valid
judgment under the laws of the rendering state - including
the requirement of proper service of process upon the
defendant - before it will be afforded full faith and credit.
Walid Essa appeals from an order in which the trial court
found that a default judgment rendered against him in
Pennsylvania was entitled to full faith and credit in North
Carolina. Because we conclude that Essa was never properly
served with process under Pennsylvania law and lacked a full
and fair opportunity to litigate the action in Pennsylvania,
and Procedural Background
February 2011, Essa, who operates a restaurant called The
Dugout in Archdale, North Carolina, entered into an equipment
lease contract (the "Lease") with Trinity Data
Systems ("Trinity"). The Lease provided that
Trinity was to install a point-of-sale system at The Dugout.
The terms and conditions of the Lease provided that it was to
be governed by the laws of Pennsylvania, any lawsuit arising
out of the Lease would be brought in Pennsylvania, and Essa
would be subject to jurisdiction in Pennsylvania. Trinity
subsequently assigned the Lease to Marlin Leasing Corporation
April 2013, Marlin filed a complaint against Essa in
municipal court in Philadelphia, Pennsylvania. In its
complaint, Marlin alleged that Essa was in default under the
Lease and claimed damages of $8, 562.75. On 15 August 2014,
Marlin filed with the municipal court a document captioned
"Affidavit of Service by Mail" in which counsel for
Marlin stated that (1) he "sent a certified letter
(return receipt requested) to the defendant and the receipt
was returned marked either 'UNCLAIMED' or
'REFUSED'"; (2) he then sent a letter by regular
mail to Essa at the same address where the original certified
letter had been mailed, which was 2104 Francis St., High
Point, NC 27263 (the "High Point Address"); and (3)
the letter was never returned to him despite the fact that
his return address was listed thereon. In fact, the
letter sent by certified mail had been returned to Marlin
with the notation that it had been "unclaimed."
hearing was held in municipal court for which Essa was not
present. A default judgment (the "Pennsylvania
Judgment") was entered by the court on 3 September 2014.
On 20 January 2015, Marlin filed a complaint in Wake County
District Court in which it asserted that the Pennsylvania
Judgment was entitled to full faith and credit in North
Carolina and requested that the judgment be enforced. Essa
filed an answer on 7 July 2017 in which he argued that the
Pennsylvania Judgment was not entitled to full faith and
credit due, in part, to the fact that Essa had not received
notice of the Pennsylvania action.
January 2018, Marlin filed a motion for summary judgment
pursuant to Rule 56 of the North Carolina Rules of Civil
Procedure along with a supporting affidavit from Karen
Shields, Vice President and Deputy General Counsel for
Marlin. The affidavit stated, in pertinent part, as follows:
Service on the Defendant was made in accordance with 231 Pa.
Code Rule 403(1) by mailing the documents by ordinary mail
via U.S. Postal Service and by U.S. Postal Service, Certified
Mail, Return Receipt Requested as evidenced by the Affidavit
of Service. Defendant refused to accept service by certified
mail sent to 2104 Francis Street, High Point, NC 27263 and
therefore Plainitf [sic] mailed a copy of the Relisted
Pennsylvania Suit to the same address which was not returned
to Marlin by the U.S. Postal Service.
filed a cross-motion for summary judgment supported by his
own affidavit on or about 5 January 2018. Essa's
affidavit stated, in pertinent part, as follows:
4. I am the owner of The Dugout restaurant located at 11246
N. Main St., Archdale, NC 27263. . . .
5. The Dugout has been continuously located at the address
stated in the preceding paragraph since prior to February
6. I was not served with a copy of a Summons and Complaint in
the Commonwealth of Pennsylvania, Philadelphia Municipal
Court, First Judicial District of Pennsylvania, Case No.
SC-13-04-18-4746 (the "Pennsylvania Action").
7. I did not refuse service of a copy of a Summons and
Complaint in the Pennsylvania Action.
8. Prior to the commencement of this civil action, I had no
knowledge of the Pennsylvania Action.
hearing was held on both motions in Wake County District
Court on 22 February 2018 before the Honorable Ned W. Mangum.
On 27 February 2018, the trial court issued an order granting
Marlin's motion for summary judgment and denying
Essa's cross-motion. In the order, the court stated that
"the Plaintiff's Pennsylvania judgment against the
Defendant is entitled to full faith and credit in the State
of North Carolina and . . . the Defendant had a full and fair
opportunity to litigate any issues regarding jurisdiction in
the Commonwealth of Pennsylvania."
filed a timely notice of appeal with this Court.
contends that the trial court erred in granting summary
judgment in favor of Marlin because the Pennsylvania Judgment
is not entitled to full faith and credit in North Carolina in
that it was entered ...