## Facts

- Sellers agreed to sell a 14.8-acre parcel in Pennsylvania to a developer later succeeded by Oakwood Plaza Shopping Center, Inc.
- The parties modified payment terms at purchasers’ request to defer part of the purchase price and provide additional security.
- At closing, purchasers paid $700,000 and executed a $1.1 million purchase-money mortgage.
- Oakwood and its principals also executed a “bond and warrant” containing a warrant of attorney authorizing confession of judgment for $1.1 million plus interest.
- Purchasers defaulted; sellers filed a confession-of-judgment proceeding in Pennsylvania, and a judgment was entered against purchasers for over $1.1 million plus interest and costs.
- Pennsylvania procedure permitted a post-judgment petition to open or strike the confessed judgment; purchasers pursued that relief but were unsuccessful.
- Sellers then sued in New York to enforce the Pennsylvania judgment; purchasers argued that cognovit judgments violate due process and New York public policy.

## Issues

1. Whether New York must give full faith and credit to a Pennsylvania cognovit judgment when New York restricts confessions of judgment under its own law.
2. Whether the warrant-of-attorney clause reflected a knowing and voluntary waiver of notice and a pre-judgment hearing sufficient to satisfy due process.
3. Whether the judgment debtor may relitigate the underlying merits in the New York enforcement action.

## Decision

- The Court of Appeals affirmed enforcement of the Pennsylvania judgment in New York.
- The court held the judgment was entitled to full faith and credit absent a jurisdictional or due-process defect.
- The court found a valid waiver of notice and pre-judgment hearing rights in this commercial transaction.
- The court rejected an attempt to relitigate the underlying dispute in New York.

## Legal Principles

- Sister-state judgments must be enforced under full faith and credit unless the rendering court lacked jurisdiction or the proceedings denied due process.
- A cognovit/confession-of-judgment clause can be constitutionally valid in a commercial setting if the debtor’s waiver of notice and hearing is voluntary, knowing, and intelligent.
- New York’s statutory limits on domestic confessions of judgment do not create a categorical public-policy bar to enforcing a foreign cognovit judgment.
- Prior New York precedent refusing enforcement of a foreign cognovit judgment applies where circumstances show overreaching or an ineffective waiver, not as an automatic rule.
- Once a valid sister-state judgment is shown, the enforcing forum generally may not revisit the merits of the underlying claim.

## Conclusion

New York enforced the Pennsylvania cognovit judgment because the judgment was final and constitutionally sound, and the record showed a knowing, voluntary waiver by sophisticated, represented parties in an arm’s-length commercial transaction; New York’s policy limits on local confessions of judgment did not defeat full faith and credit.


Fiore v. Oakwood Plaza Shopping Ctr., Inc., 78 N.Y.2d 572 (1991)