A state appeals court in New Jersey has reversed a lower court’s ruling that was allowing the sale of a property to go forward as part of a judgment that had been awarded in Arkansas. The judgment — $12.5 million — was awarded in a Telephone Consumer Protection Act lawsuit after the defendant failed to properly respond to a lawsuit alleging he violated the TCPA by sending an unsolicited fax.
A copy of the ruling in M.S. Wholesale Plumbing v. Gen-Kal Pipe & Steel Corp., and Eugene Kalsky can be accessed by clicking here.
Astute readers of AccountsRecovery.net will remember the details of this case from last summer. Gene Kalsky, who owns and operates Gen-Kal Pipe and Steel Corp. in New Jersey, was accused of sending an unsolicited fax to a company in Arkansas. Kalsky said he responded to the lawsuit, but did not respond to an accusation that he sent 25,000 unsolicited faxes, which, when multiplied by the $500 damages award allowed in the TCPA, added up to $12.5 million. Because he was personally named in the suit, Kalsky’s home was seized and sold at auction.
The appeals court in New Jersey ruled that the Arkansas court erred in considering a letter that Kalsky had sent to the court as an answer to the original lawsuit, even though there is a law in Arkansas prohibiting a corporation from appearing unless represented by an attorney.
An appeal before a state court in Arkansas remains pending.
“We find that the trial court failed to properly consider defendants’ objections to the personal jurisdiction of the Arkansas court before affording full faith and credit to the Arkansas judgment,” wrote the appeals court in its unpublished opinion, determining there was a denial of due process.
This case remains a cautionary tale for what happens when an individual or company fails to adequately respond to a lawsuit.