Capital Trust, Inc. v. Tri-National Development Corp.

Plaintiff Capital Trust, Inc. (Capital), received a judgment of confession, i.e., a proceeding allowing a judgment without an action being filed, against defendants Tri-National Development Corporation and various individuals (collectively Tri-National) in the State of New York. Entry of a judgment in California based on the New York judgment was made on Capital’s application pursuant to the Sister State and Foreign Money-Judgments Act of 1974 (SSMJ) (Code Civ. Proc., § 1710.10 et seq.). TriNational’s motion to vacate the judgment was denied. It appeals, arguing the motion should have been granted since the New York statute authorizing confessions of judgment violates the Fourteenth Amendment of the United States Constitution and thus is not entitled to full faith and credit.

Background

Capital loaned Tri-National a considerable amount of money. The loan was secured in part by affidavits for confession of judgment executed by Tri-National pursuant to New York law ( N.Y. C.P.L.R. § 3218 ). Tri-National defaulted. Capital filed Tri-National’s affidavits and was granted a judgment in the amount of $8,329,298 by the Supreme Court of the State of New York. On Capital’s…