STATE OF MICHIGAN

IN THE 6th CIRCUIT COURT FOR THE COUNTY OF OAKLAND

UNION FUNDING SOURCE, INC, Case No. 2019-175338-CZ

d/b/a UNION FUNDING SOURCE,

Plaintiff, Hon. Shalina Kumar

v.

RENAISSANCE RESTORATIONS, INC, and

JAMIE DAVID CRAIG,

Defendants.

_____________________________________________________________________________/
ROOSEN VARCHETTI & OLIVIER PLLC SECREST WARDLE
Richard G. Roosen (P35222) Matthew J. Consolo (P75214)
James Varchetti (P79606) Attorney for Defendants
Attorneys for Plaintiff 2600 Troy Center Dr., PO Box 5025
PO Box 2305 Troy, MI 48007
Mount Clements, MI 48046 (248) 851-9500
(586) 868-2737 (248) 538-1223 (Fax)
(586) 868-0259 (Fax)
_____________________________________________________________________________/
PLAINTIFF’S REPLY TO DEFENDANTS’ “OBJECTION TO JUDGMENT
CREDITOR’S NOTICE OF ENTRY OF FOREIGN JUDGMENT, REQUEST FOR
HEARING, AND REQUEST FOR STAY IN THE PROCEEDINGS”

Now Comes Plaintiff, by and through its attorneys, Roosen, Varchetti and Olivier, PLLC,

and replies to Defendants’ Objection and Request for Stay as follows:

In March of 2019, Plaintiff secured a judgment by confession against Defendants in the

Supreme Court of the State of New York for the County of Albany. Plaintiff filed the

authenticated judgment in this Court in conformance with the Uniform Enforcement of Foreign

Judgments Act (“UEFJA”), MCL 691.1171 et seq., and this Court entered the judgment.

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 Now, Defendants filed an objection to entry of the judgment in this Court and have

requested a stay in proceedings. But Defendants’ “objection” is actually an impermissible

collateral attack on a valid New York judgment that is entitled to full faith and credit.

Accordingly, this Court should deny Defendants’ objection and request for a stay.

The Full Faith and Credit Clause of the U.S. Constitution provides that “Full Faith and

Credit shall be given in each State to the Public Acts, Records, and Judicial Proceedings of every

other State.” U.S. Const art IV, § 1. The purpose of the Full Faith and Credit Clause “is to

prevent the litigation of issues in one state that have already been decided in another.” Martino v

Cottman Transmission Sys, Inc, 218 Mich App 54, 58; 554 NW2d 17 (1996). A judgment

entered in a sister state is “presumptively valid” and subject to recognition in Michigan under the

Full Faith and Credit Clause. Hare v Starr Commonwealth Corp, 291 Mich App 206, 216; 813

NW2d 752 (2011). A foreign judgment must be recognized if jurisdiction has been obtained

over the parties and the subject matter. Baker v Gen Motors Corp, 522 US 222, 233; 118 S Ct

657; 139 L Ed 2d 580 (1998); see also Nat'l Equip Rental, Ltd v Miller, 73 Mich App 421, 424-

425; 251 NW2d 611 (1977) (recognizing that foreign judgments are conclusive if the rendering

court had personal and subject-matter jurisdiction, and that confessions of judgment in foreign

jurisdictions have been given full faith and credit in Michigan). A collateral attack on a foreign

judgment is only permitted when the attack is based on the issuing court lacking personal or

subject-matter jurisdiction over the parties. See Pecoraro v Rostagno-Wallat, 291 Mich App

303, 315; 805 NW2d 226 (2011).

The Defendants’ instant “objection” is an impermissible collateral attack because it is

simply a list of substantive arguments that Defendants believe should defeat Plaintiff’s claim.

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But Plaintiff already secured a valid judgment by confession1 against Defendants in the State of

New York. Indeed, the New York Confession of Judgment was based upon an affidavit signed

by Defendants. See Exhibit A (Defendants’ Affidavit of Confession of Judgment). Thus, the

judgment is conclusive and not subject to Defendants’ collateral attack on the grounds asserted in

Defendants’ objection. Northern Ohio Bank v Ket Assocs, Inc, 74 Mich App 286, 289; 253

NW2d 734 (1977) (“A judgment entered by a court of competent jurisdiction is not subject to

collateral attack against the underlying obligation.”); Accord Nat’l Equip Rental, 73 Mich App at

424; Baker 522 US at 233.

Significantly, Defendants do not challenge the jurisdiction of the Courts of New York,

which is the only permissible attack that can be made on the New York judgment. Pecoraro,

291 Mich App at 315. In any event, such an attack would be futile. Defendants submitted to both

personal jurisdiction and venue in the Courts of the State of New York and specifically waived

any objection to jurisdiction and venue in paragraph 20 of the parties’ contract as well as in

Defendants’ own signed affidavit. See Exhibit A (Affidavit) and Exhibit B at ¶ 20 (Contract).

Nor could there be any argument that the Supreme Court of the State of New York lacked

subject-matter jurisdiction; indeed, under New York law, the Supreme Court is the trial-level

court vested with far-reaching general jurisdiction. See N.Y. Jud. Law §140-B. Thus, the New

York Supreme Court had both subject-matter and personal jurisdiction, which means that its

judgment is conclusive and must be recognized pursuant to the Full Faith and Credit Clause.

Baker 522 US at 233; Northern Ohio Bank, 74 Mich App at 289. In sum, the Defendants’

1
New York law provides for a judgment by confession to be entered upon an affidavit executed
by the defendant. NY CPLR § 3218. Notably, Michigan allows a similar procedure to obtain a
confession of judgment. See MCL 600.2906.

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“objection” is an impermissible collateral attack on the underlying obligation, and it cannot

warrant granting a stay in proceedings or any other relief.

Further, even if Defendants’ arguments were considered on the merits—and they cannot

be for the reasons stated above—the arguments would fail because they lack merit.

First, Defendants assert that the underlying contract could not be breached for lack of

“payment” because “payment” is contingent upon Defendants’ continuous business operations.

But paragraph 15 of the contract specifies the numerous ways in which the Defendants could

default and breach the contract, including where “[Defendants] fail[] to provide timely notice to

[Plaintiff] such that . . . within any 30 day period four or more ACH transactions attempted by

[Plaintiff] are rejected by [Defendants’] bank account.” See Ex. B at ¶ 15(f). Thus,

Defendants’ argument that the contract could not be breached is incorrect.

Second, Defendants contend that Plaintiff only has a right to future receipts and asserts

that there is no provision of the agreement that grants Plaintiff a security interest in Defendants’

assets, which, according to Defendants, is being requested by the entry of a foreign judgment. It

is not clear why Defendants contend that a security interest in Defendants’ property “is being

requested by entry of a foreign judgment” given that the foreign judgment makes no mention of

such a security interest. Defendants abandoned this line of argument by providing no

meaningful argument, explanation, or citation to authority. See Mitcham v Detroit, 355 Mich

182, 203; 94 NW2d 388 (1959). In any event, to the extent that Defendants are attempting to

argue that the full purchased amount (minus remitted receivables) should not be recoverable by

way of this judgment, Paragraph 16.1 of the parties’ agreement expressly states that “If any

Event of Default occurs . . . [t]he full uncollected Purchased Amount plus all fees and charges

(including legal fees) due under this Agreement will become due and payable in full

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immediately.” See Paragraph 16.1. Moreover, Defendants make no colorable argument why

that provision should not be enforced.

Third, Defendants argue that the “assignment of future benefits” under the contract is

invalid because it is not allowed under Michigan law. But this argument misses the mark

because the contract was for the sale of future receipts to Plaintiff, not for an assignment of any

“benefit” to a third party.2 Indeed, the contract characterized the future receipts as “accounts” or

“payment intangibles” in which Plaintiff has a security interest under the Uniform Commercial

Code. Even assuming, arguendo, the underlying contractual sale would not be valid under

Michigan law, it would have no effect on Michigan’s obligation to enforce the New York

judgment. This is true because foreign judgments rendered by sister states are enforceable in

Michigan even if underlying debt would be contrary to Michigan law. Int’l Recovery Sys v

Gabler, 210 Mich App 422, 423 (1995) (holding that Michigan must give full faith and credit to

a Nevada judgment based on gambling debt that would not otherwise be legal in Michigan). In

any event, the foreign judgment is conclusive and cannot be collaterally attacked now. Nat’l

Equip Rental, 73 Mich App at 424.

Fourth and finally, Defendants assert that the amount requested in the judgment is

inaccurate because Defendants remitted “over $54,000.” However, Defendants’ counsel’s

inclusion of an exhibit to the memorandum of law purporting to be a record Defendants’

remittances lacks an evidentiary foundation and should be disregarded. See e.g. MRE 803(6)

(governing admissibility regularly conducted activities, e.g. business records); MRE 902(11)

(governing self-authentication authentication). Moreover, the foreign judgment itself already

2
In any event, it has long been held that a party can assign its future earnings. See e.g. Kane v
Clough, 36 Mich 436 (1877) (stating that a party can assign future earnings).

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accounted for the proper amount of remittances received from Defendants at the time of filing

and deducted them from the amount confessed. Thus, this line of argument is meritless.

WHEREFORE, Plaintiff prays that this honorable court DENY Defendants’ objection

and request for a stay of proceedings.

Respectfully Submitted,

/s/ James Varchetti_____________________

ROOSEN VARCHETTI & OLIVIER, PLLC
Richard G. Roosen (P35222)
James Varchetti James Varchetti (P79606)
Attorneys for Plaintiff
OFN: 211456 P.O. Box 2305
Date: 08/15/19 Mt. Clemens, MI 48046