(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in
the interests of brevity, portions of any opinion may not have been summarized).
Argued May 4, 1999 -- Decided June 9, 1999
PER CURIAM
In this case, the Court reviews a judgment of the Appellate Division that had reinstated a complaint on a
foreign judgment of the State of Virginia.
The Virginia suit was initiated in 1980. Default judgment in the amount of $672,746.68 (plus interest) was
not entered until 1991. The judgment is against a New Jersey Corporation, Precipitation Associates of America
(PAA), which no longer exists, and one of its principal officers, Clifford J. Heath, Jr. The suit in New Jersey is
against Heath. The case concerns PAA's sale of an air pollution control system in 1978 to a corporation in
Virginia, W.S. Frey Company.
As part of its mandate, the Appellate Division directed the Law Division to conduct a plenary hearing on
the issue of proper notice to Heath and whether Heath had a fair opportunity to be heard. Following an extensive
hearing, the Law Division submitted detailed findings of fact and conclusions of law. It recommended that full faith
and credit not be afforded to the Virginia judgment because “the mode and method of service utilized as against
Mr. Heath, as to which there is a finding that he did not receive notice and was not in fact apprised of the
pendency of the action against him is offensive to due process and to fundamental fairness.”
Service on Heath had been made under the Virginia long-arm statute, which allows substituted service by
mail on absent defendants at the “last known post-office address of such person.” Pursuant to that statute, the
notice to Heath was mailed to Railroad Avenue, the last known post-office address of PAA, the corporation -- not
the last known address of “such person,” Heath. The signature on the certified mail receipt was plainly not that of
Heath, and no effort was made to confirm that he received the notice. The Law Division found as a fact that
Heath had no actual notice of the Virginia litigation.
The Supreme Court granted certification, the order partially remanding the matter to the Law Division to
permit it to conduct the proceedings ordered by the Appellate Division.
HELD: The Virginia judgment is not entitled to full faith and credit because an unusual combination of
circumstances produced an absence of due process in obtaining the judgment against Heath.
1. Unless a defendant is not reasonably identifiable, constructive notice alone does not apprise an interested party
of the pendency of the action and afford it an opportunity to present its objections. (pp. 3-4)
2. Although certified mail may be considered a reliable method of notification because delivery can be restricted to
the addressee or an authorized agent, here the individual who signed the postal receipt was neither an authorized
agent or even an employee of Heath. Thus, the Court cannot proceed with a high level of confidence that the
requisite notice has been given. (pp. 5-6)
3. Unless a defendant has departed for parts unknown, “last known address” means a defendant's actual address.
(pp. 6-7)
4. The eleven-year delay between the initiation of the Virginia suit in 1980 and W.S. Frey's application for entry of
the default judgment in 1991, as well as the almost twenty-year delay between the events leading up to this litigation
and this action for enforcement, compounded the potential for prejudice attendant to constructive as opposed to
actual service of process. (pp. 7-8)
Judgment of the Appellate Division is REVERSED and entry of judgment in favor of the defendant is
directed.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN, and
COLEMAN join in this PER CURIAM opinion.
SUPREME COURT OF NEW JERSEY
A-
55 September Term 1998
W. S. FREY COMPANY, INC.,
Plaintiff-Respondent,
v.
CLIFFORD J. HEATH, JR.,
Defendant-Appellant.
Argued May 4, 1999 -- Decided June 9, 1999
On certification to the Superior Court,
Appellate Division.
Mark L. Fleder argued the cause for appellant
(Connell Foley & Geiser, attorneys; Mr.
Fleder and Maureen McLoughlin, on the
briefs).
Robert A. Maren argued the cause for
respondent (Maloney and Katzman, attorneys).
PER CURIAM
We granted certification,
157 N.J. 540 (1998), to review a
judgment of the Appellate Division that had reinstated a
complaint on a foreign judgment of the State of Virginia.
Although the Virginia suit was initiated in 1980, default
judgment was not entered until 1991. The $672,746.68 judgment
(plus interest) is against a New Jersey corporation,
Precipitation Associates of America, Inc. (PAA), which no longer
exists, and one of its principal officers, Clifford J. Heath, Jr.
(Heath). The suit in New Jersey is against the individual. The
case concerns PAA's sale of an air pollution control system in
1978 to a corporation in Virginia, plaintiff W.S. Frey Company,
Inc. (Frey), which was engaged in the production of limestone and
limestone products.See footnote 1 As part of its mandate, the Appellate
Division directed the Law Division to conduct a plenary hearing
on the issue of proper notice to defendant and whether defendant
had a fair opportunity to be heard. Our order granting
certification partially remanded the matter to the Law Division
to permit it to conduct the proceedings ordered by the Appellate
Division. Following an extensive hearing, the Law Division
submitted detailed findings of fact and conclusions of law. It
recommended that full faith and credit not be afforded to the
Virginia judgment.
The federal constitution requires that we give full faith
and credit to the Virginia judgment if it was obtained with the
due process of the law. See U.S. Const. art. IV, § 1. We find
that an unusual combination of circumstances not likely to recur
produced an absence of due process in obtaining the judgment.
First, the liability of the individual defendant is
predicated on Va. Ann. Code § 13.1-119, a since-repealed Virginia
statute that made the officers of a foreign corporation
personally liable for the debts of the corporation if the
corporation had not obtained a certificate of authority prior to
engaging in business in the state. Cf. Coons v. American Honda
Motor Co.,
94 N.J. 307 (1983) (invalidating statute that deprived
unregistered foreign corporation of benefit of forum's statute of
limitations), on reh'g,
96 N.J. 419 (1984), cert. denied,
469 U.S. 1123,
105 S. Ct. 808,
83 L. Ed.2d 800 (1985).
Second, although due process of law does not require
personal service of process or even actual notice of suit,
“[s]ervice . . . must be reasonably calculated to inform the
defendant of the pendency of the proceedings in order that [the
defendant] may take advantage of the opportunity to be heard in
[preparing a] defense.” Mariash v. Morrill,
496 F.2d 1138, 1143
(2d Cir. 1974) (citing Hanson v. Denckla,
357 U.S. 235, 245,
78 S. Ct. 1228, 1235,
2 L. Ed. 1283, 1293 (1958)) (additional
citations omitted).
In this case, “notice [was not] reasonably calculated under
all the circumstances, to apprise interested parties of the
pendency of the action and afford them an opportunity to present
their objections.” Mullane v. Central Hanover Bank & Trust Co.,
339 U.S. 306, 314,
70 S. Ct. 652, 657,
94 L. Ed. 865, 873 (1950)
(citations omitted). “[U]nless the [defendant] is not reasonably
identifiable, constructive notice alone does not satisfy the
mandate of Mullane.” Mennonite Bd. of Missions v. Adams,
462 U.S. 791, 798,
103 S. Ct. 2706, 2711,
77 L. Ed.2d 180, 187
(1983).
The Virginia long-arm statute that allows substituted
service by mail on absent defendants requires service to be made
at the “last known post-office address of such person[.]” Va.
Ann. Code § 8.01-329C (emphasis added). “Since due process
concerns underpin effective service of process, compliance with
the statutory provision is mandatory.” Phillip Bros. (Cocoa),
Inc. v. M/V Ocea,
144 F.R.D. 312, 314 (E.D. Va. 1992) (citing
Virginia Lime Co. v. Craigsville Distrib. Co.,
670 F.2d 1366 (4th
Cir. 1982)). The notice to Heath was mailed to Railroad Avenue,
the last known post-office address of PAA, the corporation, not
the last known address of “such person,” defendant Heath. The
signature on the certified mail receipt was plainly not that of
Heath. No effort was made to confirm that Heath received the
notice. The Law Division has found as a fact that Heath had no
actual notice of the Virginia litigation.
“That the notice was sent . . . does not answer the question
of whether the means employed for transmittal of the notice was
constitutionally sufficient.” Miserandino v. Resort Properties,
Inc.,
691 A.2d 208, 215 (Md.), cert. denied, Resort Properties,
Inc. v. Miserandino,
118 S. Ct. 376,
139 L. Ed.2d 292, cert.
denied sub nom. Commonwealth Sec. of Va. v. Miserandino,
118 S.
Ct. 397,
139 L. Ed.2d 310 (1997). Certified mail is considered
a reliable method of notification because delivery may be
restricted to the addressee or an authorized agent. When “a
return that includes a postal receipt bearing the signature of
the defendant or his authorized agent and a copy of the process
that was mailed is filed, [] the court can proceed with a high
level of confidence that the requisite notice has been given.”
Ibid. Here, that confidence is lacking because the individual
who signed the postal receipt was not an authorized agent or even
an employee of Heath.
Considering the ease with which plaintiff in this case could
have obtained defendant's actual address, and the existence of
evidence that defendant had not been served, plaintiff's failure
to confirm that process was in fact served undermines confidence
that “[t]he means employed [were] such as one desirous of
actually informing the [defendant] might reasonably adopt to
accomplish it.” Mullane, supra, 339 U.S. at 315, 70 S. Ct. at
657, 94 L. Ed. at 874. Service at the Railroad Avenue address
may have satisfied the “last known address” requirement under
Virginia Lime Co., supra, 670 F.
2d at 1367, had there not been a
seven-month delay between the last contact and the time of
service. The “last known address” requirement is ”satisfied when
process is sent to the address at which the parties regularly
corresponded by mail, and the party serving process reasonably
could expect that process would reach the defendant at that
address.” Id. at 1368 (citing Wagner v. United States,
473 F.
Supp. 276 (E.D. Pa. 1979)). Moreover, “'last known address' does
not mean the last address known to the plaintiff, but does mean
the last address of the defendant so far as is known, that is, by
those who under the ordinary circumstances of life would know it.
Unless the defendant has departed for parts unknown, it means his
actual address[.]” Powell v. Knight, 74 F. Supp. 191, 195 (E.D.
Va. 1947).
The parties did indeed correspond by mail at the Railroad
Avenue address. However, August 17, 1979 was the last date of
correspondence from Frey to Heath at that address prior to the
date that the non-agent signed for the service by certified mail
on March 15, 1980. Had Frey and Heath been in regular contact,
Frey would have discovered that in 1980, because PAA was winding
down, Heath had set up a telephone line whereby a call placed to
the PAA address would ring at the office of his new employer in
Edison. (Heath also received his mail at the Edison address once
a week.) Frey could have simply used the telephone to verify
that PAA was defunct and no one was working at the PAA address,
and to ascertain Heath's actual address. Even if Frey did not
attempt to contact Heath at the Railroad Avenue address, Heath
was listed in the 1980 telephone directory for the same county in
which PAA was located. From June 1979 until late 1991, Heath
also resided in Manhattan where he was listed in the telephone
directory. Since 1991, Heath has resided in Basking Ridge where
Frey eventually served him in 1996 to enforce the default
judgment nearly seventeen years after the suit was initiated.
Finally, plaintiff delayed eleven years between the
initiation of the Virginia suit in 1980 and its application for
entry of the default judgment in 1991. Frey did not file this
suit on the Virginia judgment until 1996, almost twenty years
after the events that led to this litigation had transpired.
This long delay compounded the potential for prejudice attendant
to constructive as opposed to actual service of process.
In its report, the Law Division concluded:
[I]t is the opinion of this court that the
mode and method of service utilized as
against Mr. Heath, as to which there is a
finding that he did not receive notice and
was not in fact apprised of the pendency of
the action against him is offensive to due
process and to fundamental fairness. As a
result, if this court were called upon to do
so, I would deny the plaintiff's motion for
summary judgment and would grant the
defendant's cross-motion for summary judgment
on this alternate ground.
We are in agreement with the opinion and recommended
judgment of the Law Division. Accordingly, we reverse the
judgment of the Appellate Division and direct the entry of
judgment in favor of the defendant.
CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O'HERN, GARIBALDI, STEIN, and COLEMAN join in JUSTICE's opinion.
NO. A-55 SEPTEMBER TERM 1998
ON APPEAL FROM
ON CERTIFICATION TO Appellate Division, Superior Court
W. S. FREY COMPANY, INC.,
Plaintiff-Respondent,
v.
CLIFFORD J. HEATH, JR.,
Defendant-Appellant.
DECIDED June 9, 1999
Chief Justice Poritz PRESIDING
OPINION BY PER CURIAM
CONCURRING OPINION BY
DISSENTING OPINIONS BY
Footnote: 1Although Heath asserts that the contract only required PAA to design and supply a “venturi,” which is a “very small component” of the system, the purchase order from PAA refers to an “air pollution control system.” Prior to the default judgment, a settlement was reached between Frey and William Ward IV, an engineer and sales representative from Ward Engineering Equipment Co. who had facilitated the business arrangement between Frey and PAA.