Case Title: Cassouto-Noff & Co. v. Diamond

Citation: 

Docket Number: SJC-13026

State: massachusetts

Court: Massachusetts Supreme Court

Date: 2021-07-06T00:00:00Z

Document:
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SJC-13026 
 
CASSOUTO-NOFF & CO.  vs.  AMY DIAMOND. 
 
 
 
Berkshire.     March 3, 2021. - July 6, 2021. 
 
Present:  Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt, 
& Georges, JJ. 
 
 
Money-Judgments of Foreign States.  Judgment, Enforcement.  Due 
Process of Law, Notice.  Practice, Civil, Service of 
process.  Public Policy. 
 
 
 
 
Civil action commenced in the Superior Court Department on 
February 18, 2016. 
 
 
The case was heard by John A. Agostini, J. 
 
 
The Supreme Judicial Court on its own initiative 
transferred the case from the Appeals Court. 
 
 
 
David E. Valicenti for the defendant. 
 
Laurence K. Richmond for the plaintiff. 
 
 
LOWY, J.  After the defendant, Amy Diamond, failed to pay 
the plaintiff, the Israeli law firm Cassouto-Noff & Co., its 
agreed-upon fees, an Israeli court held her liable for the debt.  
The plaintiff then initiated the current action in the Superior 
2 
 
Court to recognize the Israeli judgment under the Massachusetts 
Uniform Foreign Money-Judgments Recognition Act, G. L. c. 235, 
§ 23A (recognition act), a statute governing the enforcement of 
foreign money-judgments.  Following a bench trial, the judge 
recognized the judgment, allowing it to be enforced.  The 
defendant appealed, and we transferred the case to this court 
sua sponte.  Although the defendant argues otherwise, we hold 
that the recognition act does not require compliance with Mass. 
R. Civ. P. 4 (d), as amended, 370 Mass. 918 (1976), and the 
Israeli judgment does not offend public policy.  We thus affirm. 
 
Background.  We summarize the facts found by the trial 
judge.  In 2012 and 2013, the defendant held executive-level 
positions in business organizations collectively called the 
Bandel Group.  After a venture launched by the Bandel Group in 
Israel encountered legal issues, the defendant contacted the 
plaintiff.  Acting on behalf of the Bandel Group, the defendant 
entered into a written fee agreement for legal services with the 
plaintiff.  The final provision specified that the agreement was 
governed exclusively by Israeli law and that Israeli courts 
would have sole jurisdiction over disputes arising from the 
agreement.  In addition to signing the agreement, the defendant 
repeatedly declared that "She was Bandel," and agreed, albeit 
orally, to be personally responsible for paying the fees. 
3 
 
 
Once the representation concluded, the plaintiff sent a 
bill directed to the defendant for its services in February 
2013.  When the defendant did not respond to that bill, the 
plaintiff sent a second one in March 2013.  Months passed 
without payment.  In July 2013, the plaintiff sent an e-mail 
message to the defendant, stating:  "In our last conversation 
you have confirmed that you will transfer our legal fees by the 
end of June, but that transfer has not been made.  Therefore, I 
would kindly request you to do so [as] soon as possible."  A 
month later, the defendant replied, stating:  "We have set terms 
with the new operator and are waiting on contracts . . . .  
Apologies for the delay."  After this, the defendant did not 
communicate further, prompting the plaintiff to threaten to sue.  
These notifications went unanswered for a year, leading the 
plaintiff to send another demand for payment to the defendant, 
and when this, too, was met with silence, an e-mail message 
asserting application of the arbitration clause in the fee 
agreement.  The defendant did not respond. 
 
The plaintiff sued the defendant in Israel over the unpaid 
fees.  In conformity with the Israeli rules of civil procedure, 
the Israeli court permitted the plaintiff to serve the defendant 
at her residence in Massachusetts.  The plaintiff opted to use 
the Berkshire County sheriff's office to render service.  A 
deputy sheriff went to the defendant's residence four times, but 
4 
 
the defendant never answered the door.  On two of these 
occasions, the deputy spoke with the defendant's husband.  Once, 
the deputy spoke with the defendant over the telephone, and she 
said that "she would not arrange to accept the service and was 
told by her attorney that she did not have to." 
 
When the Israeli court was notified of these developments, 
it found that the defendant had evaded service and entered a 
default judgment against her.  The Superior Court judge 
subsequently found that the defendant had notice of the lawsuit 
before the default judgment entered. 
 
Discussion.1  1.  Notice.  The recognition act allows courts 
to enforce foreign money-judgments that are "final and 
conclusive and enforceable where rendered."  G. L. c. 235, 
§ 23A, first par.  To this end, a defendant must have received 
notice of the foreign court proceedings "in sufficient time to 
enable him [or her] to defend."2  G. L. c. 235, § 23A, third par.  
The defendant claims that the recognition act incorporates Mass. 
R. Civ. P. 4 (d) and that because the plaintiff failed to comply 
 
 
1 "The standard of review relating to a jury-waived 
proceeding is well established -- '[t]he findings of fact of the 
judge are accepted unless they are clearly erroneous' and '[w]e 
review the judge's legal conclusions de novo'" (citation 
omitted).  Cavadi v. DeYeso, 458 Mass. 615, 624 (2011). 
 
 
2 A foreign court must also have personal jurisdiction for a 
money-judgment to be recognizable.  G. L. c. 235, § 23A, second 
par.  Because the defendant conceded that a basis for personal 
jurisdiction existed, we do not address this issue. 
5 
 
with this rule, the Israeli judgment cannot be recognized.3  We 
disagree. 
 
The recognition act is derived from a model statute, one 
that aimed to streamline recognition procedures across the 
United States.  See Uniform Foreign Money-Judgments Recognition 
Act (1962).  If foreign courts had to comport with the 
idiosyncratic notice requirements of every State, then the goal 
of creating such uniformity would be frustrated.  See 18 C.A. 
Wright, A.R. Miller, & E.H. Cooper, Federal Practice and 
Procedure § 4473, at 743 (1981) ("It is intrinsically awkward to 
confront foreign judgments with the potentially divergent law of 
fifty states and federal courts . . ."). 
 
For this reason, the recognition act is best understood as 
requiring the same level of notice as required by due process.  
 
 
3 Rule 4 (d) (1) dictates that service of a summons and a 
copy of the complaint must be made on a defendant 
 
"by delivering a copy of the summons and of the complaint 
to him [or her] personally; or by leaving copies thereof at 
his [or her] last and usual place of abode; or by 
delivering a copy of the summons and of the complaint to an 
agent authorized by appointment or by statute to receive 
service of process, provided that any further notice 
required by such statute be given.  If the person 
authorized to serve process makes return that after 
diligent search he [or she] can find neither the defendant, 
nor defendant's last and usual abode, nor any agent upon 
whom service may be made in compliance with this 
subsection, the court may on application of the plaintiff 
issue an order of notice in the manner and form prescribed 
by law." 
6 
 
Notice, in other words, must be "reasonably calculated, under 
all the circumstances, to apprise interested parties of the 
pendency of the action and afford them an opportunity to present 
their objections."  Jones v. Flowers, 547 U.S. 220, 226 (2006), 
quoting Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 
306, 314 (1950).  Due process is a constitutional baseline; 
judgments cannot be enforced unless it is satisfied.  See Kulko 
v. Superior Court, 436 U.S. 84, 91 (1978).  Conversely, the 
requirement advances uniformity; all courts -- foreign and 
domestic -- must meet at least this standard for their judgments 
to be recognized in the United States.  We thus construe the 
notice provision in G. L. c. 235, § 23A, third par., to require 
notice that satisfies the requirements of due process. 
 
By its nature, personal service often satisfies due 
process.  See Greene v. Lindsey, 456 U.S. 444, 449 (1982).  Yet 
"certain less rigorous notice procedures [than personal service] 
have enjoyed substantial acceptance throughout our legal 
history."  Id.  Consequently, whether notice is adequate is 
ultimately a functional, not formal, inquiry.  See, e.g., Tulsa 
Professional Collection Servs., Inc. v. Pope, 485 U.S. 478, 484 
(1988) ("whether a particular method of notice is reasonable 
depends on the particular circumstances").  The absence of 
service of process is not dispositive.  Cf. Jones, 547 U.S. at 
226 ("Due process does not require that a property owner receive 
7 
 
actual notice before the government may take his property," only 
that reasonable efforts to provide such notice be made). 
 
The defendant received adequate notice.  After the 
defendant orally agreed to guarantee the legal fees, the 
plaintiff repeatedly notified her when these came due, making 
clear that it would hold her personally liable.  The defendant 
certainly received at least one of these requests, as she 
responded to the demand sent in July 2013, even apologizing for 
the delay.  Apologies aside, this would be the last that the 
plaintiff heard from the defendant during these exchanges.  More 
alerts about possible litigation followed, but the defendant 
continued not to respond. 
 
Although these facts alone are not sufficient notice, they 
contextualize what happened next:  four attempts to serve the 
defendant, one of which included a telephone conversation 
between the defendant and the process server in which the 
defendant informed the server that she would not accept the 
papers.  Throughout these efforts, the defendant cloaked herself 
in a veil of ignorance, leading the Israeli and Superior Court 
judges to make their respective findings about notice.  See 
Commonwealth v. Olivo, 369 Mass. 62, 69 (1975), quoting National 
Labor Relations Bd. v. Local 3, Bloomingdale, Dist. 65, Retail, 
Wholesale & Dep't Store Union, CIO, 216 F.2d 285, 288 (2d Cir. 
1954) ("A party may not 'shut his [or her] eyes to the means of 
8 
 
knowledge which he [or she] knows are at hand, and thereby 
escape the consequences which would flow from the notice of it 
had actually been received'").  The defendant's evasion, 
combined with the other indicia of notice, therefore satisfied 
the recognition act. 
 
2.  Repugnancy.  The recognition act also forbids the 
recognition of a foreign money-judgment if "the cause of action 
on which the judgment is based is repugnant to the public policy 
of this state."  G. L. c. 235, § 23A, third par.  Because she 
signed the agreement as a representative of the Bandel Group, 
the defendant contends that recognition -- which would lead to 
her being personally liable for the legal fees -- would violate 
Massachusetts's public policy of respecting the corporate form.  
See G. L. c. 156C, § 22 (limited liability company is solely 
responsible for its debts); Milliken & Co. v. Duro Textiles, 
LLC, 451 Mass. 547, 561 (2008) (noting, in context of 
determining successor liability, "our strong interest in 
respecting corporate structures" [citation omitted]).  We 
disagree. 
 
Repugnancy is strong medicine, best administered sparingly.4  
A judgment will offend public policy when "the original claim is 
 
 
4 Other courts have repeatedly made this point.  See, e.g., 
Corporación Mexicana De Mantenimiento Integral, S. De R.L. De 
C.V. v. Pemex-Exploración Y Producción, 832 F.3d 92, 106 (2d 
 
9 
 
repugnant to fundamental notions of what is decent and just in 
the State where enforcement is sought."  Restatement (Second) of 
Conflict of Laws § 117 comment c (1971).  "In the classic 
formulation, a judgment that 'tends clearly' to undermine the 
public interest, the public confidence in the administration of 
the law, or security for individual rights of personal liberty 
or of private property is against public policy."  Ackermann v. 
Levine, 788 F.2d 830, 841 (2d Cir. 1986), quoting Somportex Ltd. 
v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 443 (3d Cir. 
1971), cert. denied, 405 U.S. 1017 (1972). 
 
The Israeli judgment is not repugnant.  This judgment was 
premised on the plaintiff asking the Israeli court to pierce the 
Bandel Group's corporate veil and hold the defendant personally 
liable.5  As both the Superior Court judge and other courts have 
noted, Israeli courts take corporate veil piercing seriously.  
See Tahan v. Hodgson, 662 F.2d 862, 867 (D.C. Cir. 1981) ("With 
 
Cir. 2016), cert. dismissed, 137 S. Ct. 1622 (2017) ("The public 
policy exception does not swallow the rule [of recognizing 
qualifying foreign judgments]"); Ohno v. Yasuma, 723 F.3d 984, 
1002 (9th Cir. 2013) ("California courts have set a high bar for 
repugnancy under the Uniform Act"); Tahan v. Hodgson, 662 F.2d 
862, 866 n.17 (D.C. Cir. 1981) ("Only in clear-cut cases ought 
[repugnancy] to avail defendant"). 
 
 
5 The complaint also claimed that the defendant was liable 
because she personally, albeit orally, guaranteed the debt.  
Because the default judgment does not specify the grounds of 
relief, we do not address whether a judgment enforcing an oral 
debt guarantee is repugnant. 
10 
 
respect to the argument that enforcement of this judgment would 
violate the American policy against holding corporate officers 
personally liable for corporate debts, it should be pointed out 
that Israel also has a policy against lightly piercing the 
corporate veil").  The defendant should have argued in Israel 
against holding her personally liable, not in Massachusetts.  
See Ohno v. Yasuma, 723 F.3d 984, 1003 (9th Cir. 2013) ("Foreign 
judgments are not to be 'tried afresh' in [United States] 
courts, applying domestic concepts"). 
 
 
 
 
 
 
 
Judgment affirmed.