judgment by confession

In a reported decision issued June 19, 2015, Ewing Oil, Inc. v. John T. Burnett, Inc., the Appellate Division rejected a challenge to enforcement in New Jersey of a judgment entered by confession in Maryland and held that such judgments must be enforced by New Jersey courts pursuant to the Full Faith and Credit clause of the United States Constitution. 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.

The plaintiff, Ewing Oil Co., Inc., entered into a commercial supply agreement (“CSA”) with John T. Burnett, Inc. (“JTB, Inc.”) to supply gasoline and other petroleum products to JTB, Inc. The obligations of JTB, Inc. under the CSA were guaranteed by John T. Burnett, Henry A. Jackson, and C & H Tire Service, Inc. The Guaranty contained provisions whereby the Guarantors consented to the entry of judgment against them in Maryland. JTB, Inc. breached the CSA. Plaintiff obtained a judgment against JTB, Inc. and the Guarantors in Maryland on December 6, 2011. The judgment was served on the defendants. The Maryland judgment was recorded in New Jersey on July 24, 2012. John T. Burnett died on August 13, 2012. His executrix moved to vacate the foreign judgment pursuant to Rule 4:50-1(d), challenging its validity and enforceability.

The trial court denied the motion, finding that the Maryland judgment was entered in accordance with Maryland procedure and law, that Burnett had a fair opportunity to challenge the validity of the judgment in Maryland, after its entry, but failed to timely do so and, in light of the Full Faith and Credit clause, New Jersey’s recognition of the foreign judgment would not violate due process.

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