Foreign Judgment by Confession Issued Without Pre-Judgment Notice Can Be Domesticated in New Jersey

New Jersey, like many states, is suspicious of judgments by confession and allows them to be issued only if the procedures in R. 4:45-2 are strictly followed. Among those procedures is a requirement that the prospective judgment debtor be given notice of the prospective judgment creditor’s application for entry of judgment and an opportunity to be heard.

Some states, including Maryland, do not require pre-judgment notice, although Maryland does give the judgment debtor 60 days after the entry of a judgment by confession to seek to open, modify, or vacate the judgment. What happens when a judgment creditor seeks to enforce in New Jersey a Maryland judgment by confession issued without any pre-judgment notice?

New Jersey’s Appellate Division, in a recently issued to-be-published opinion, Ewing Oil, Inc. v. John T. Burnett, Inc., answered that question, holding that New Jersey courts may — indeed, must — enforce such a judgment despite the fact that Maryland provided fewer procedural safeguards to the judgment debtor than New Jersey would have.

According to the Ewing court, the United States Constitution’s Full Faith and Credit clause requires New Jersey courts to enforce “any judgment properly executed in a foreign state, which complies with the due process clause.” Relying on case law from the Supreme Court of the United States, the court determined that judgments by confession issued without pre-judgment notice do not offend the due process clause so long as notice and an opportunity to be heard were “knowingly and voluntarily waived.”

The judgment by confession in Ewing was issued in conformity with Maryland law, and the judgment debtor, the court found, did not show that its waiver of pre-judgment notice was not voluntary and knowing. Consequently, the Appellate Division found that the Maryland judgment by confession conformed with due process and therefore must be given full faith and credit in New Jersey.

The lesson of Ewing is that a party wanting to enforce a foreign judgment in New Jersey should not shy away from doing so simply because the judgment was obtained through procedures that are not consistent with New Jersey’s judgment procedures. Rather, so long as the judgment was obtained in accordance with the foreign state’s law and the procedures met the minimal requirements of due process, the judgment must be accepted and enforced by New Jersey courts.

Christopher Walsh is a Director in the Gibbons Business & Commercial Litigation Department.
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