Source: https://m.openjurist.org/955/f2d/875
Timestamp: 2020-07-13 21:28:45
Document Index: 156765299

Matched Legal Cases: ['§ 4473', '§ 1268', '§ 11', '§ 2', '§ 3533', '§ 3533', '§ 10', '§ 10', '§ 10', '§ 1738']

955 F2d 875 Guinness Plc v. Ward | OpenJurist
955 F. 2d 875 - Guinness Plc v. Ward
955 F2d 875 Guinness Plc v. Ward
955 F.2d 875
Guinness then initiated a suit in the District of Columbia involving in part an attorney's lien which Ward's law firm had asserted against Guinness due to alleged non-payment of legal fees. Ward contends that "[d]uring the pendency of that suit and [his] British appeal, Guinness and [he] engaged in negotiations aimed at achieving a 'global settlement' of all of the disputes." Ward further contends that such negotiations resulted in an agreement which settled all of the parties' disputes in London, the Isle of Jersey3 and Washington, D.C.
We begin our analysis of the issues presented by noting that on appeal we review de novo a district court's grant of summary judgment. Higgins v. E.I. DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th Cir.1988). Fed.R.Civ.P. 56(c) provides that "[summary judgment] shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." As noted by the district court, the standards for granting summary judgment are generally well defined. See Celotex Corp. v. Catrett, Inc., 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
In assessing a motion for summary judgment, a court "must perform a dual inquiry into the genuineness and materiality of any purported factual issues." Ross v. Communications Satellite Corp., 759 F.2d 355, 364 (4th Cir.1985). "As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. While "[g]enuineness means that the evidence must create fair doubt; wholly speculative assertions will not suffice." Ross, 759 F.2d at 364; accord Goldberg v. B. Green & Co., Inc., 836 F.2d 845, 848 (4th Cir.1988); Felty v. Graves-Humphreys Co., 818 F.2d 1126, 1128 (4th Cir.1987); Ash v. United Parcel Service, Inc., 800 F.2d 409, 411-12 (4th Cir.1986). Thus, upon reviewing all evidence presented regarding any alleged genuine issue of material fact:
Of course, however, when examining the record the court must be ever mindful that all justifiable inferences must be drawn in favor of the nonmoving party for "[c]redibility determinations, the weighing of evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge". Anderson, 477 U.S. at 255, 106 S.Ct. at 2513. But where a faithful examination of the record establishes that no genuine issue of material fact exists, this Circuit has noted "the affirmative obligation of the trial judge to prevent 'factually unsupported claims and defenses' from proceeding to trial." Felty, 818 F.2d at 1128 (quoting Celotex Corp., 477 U.S. at 323-24, 106 S.Ct. at 2552-53).
Mindful of the above noted standards applicable to the entry of summary judgment, we now turn to the applicable substantive law. Inasmuch as the district court's jurisdiction was invoked on diversity of citizenship grounds, we must look to the substantive law of the forum state to determine the merits of this action. Andes v. Versant Corp., 878 F.2d 147, 150 (4th Cir.1989); Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction § 4473 (noting that while sound reasons exist in this area of the law for the creation of federal law applicable to federal and state courts alike, majority of federal courts sitting with diversity jurisdiction refer questions regarding the effects of foreign judgments to the choice of law principles followed by the state in which the court sits).
Wolff v. Wolff, 40 Md.App. 168, 389 A.2d 413, 417 (1978), aff'd, 285 Md. 185, 401 A.2d 479 (1979); accord Bank of Montreal v. Kough, 430 F.Supp. 1243, 1249 (N.D.Cal.1977), aff'd, 612 F.2d 467 (9th Cir.1980) ("[t]he purpose of the Uniform Act was to create greater recognition of the state's judgments in foreign nations ... by informing the foreign nations of particular situations in which their judgments would definitely be recognized").
As to Ward's argument that such a narrow construction would ignore the legal principle that comity does not require the recognition and enforcement of a foreign judgment which violates the public policy of the recognition state, we note that the Maryland Court of Appeals has stated that "[d]eclarations of the public policy of the State is normally the function of the legislative branch of government; in discerning that policy, courts consider, as a primary source, statutory ... provisions." Jones v. Malinowski, 299 Md. 257, 273 n. 4, 473 A.2d 429 (1984). Thus, to the extent that the Maryland legislature would desire to elevate Maryland's public policy in achieving recognition of domestic judgments by foreign courts through the means of providing notice to foreign countries of a minimum of their judgments which must be recognized by Maryland courts by statutorily narrowing the grounds for nonrecognition of foreign judgments at the expense of other policies of public concern, it would certainly appear competent to do so.
The potential effect of a post judgment settlement in extinguishing the judgment and cause of action upon which such judgment was based has long been recognized in this country. See County of Dakota v. Glidden, 113 U.S. 222, 225, 5 S.Ct. 428, 429, 28 L.Ed. 981 (1885). More recently, the Maryland Court of Appeals noted "[i]n Clark v. Elza, 286 Md. 208, 406 A.2d 922 (1979), ... that there are two somewhat similar, but legally distinct, methods by which parties to an action can resolve their dispute through compromise. They may enter into either a 'substitute contract' or an 'executory accord.' " Hauswald Bakery v. Pantry Pride Enterprises, Inc., 78 Md.App. 495, 553 A.2d 1308, 1311 (1989).
"[t]he term 'accord executory' is and always has been used to mean an agreement for the future discharge of an existing claim by a substituted performance. In order for an agreement to fall within this definition, it is the promised performance that is to discharge the existing claim, and not the promise to render such performance. Conversely, all agreements for a future discharge by a substituted performance are accords executory. It makes no difference whether or not the existing claim is liquidated or unliquidated, undisputed or disputed, except as these factors bear upon the sufficiency of the consideration for some promise in the new agreement. It makes no difference whether or not a suit has already been brought to enforce the original claim; or whether that claim arises out of an alleged tort or contract or quasi-contract...." [6 Corbin on Contracts § 1268 at 71 (1962) ] ... On the other hand, where the parties intend the new agreement itself to constitute a substitute for the prior claim, then this substituted contract immediately discharges the original claim. Under this latter type of arrangement, since the original claim is fully extinguished at the time the agreement is made, recovery may only be had upon the substituted contract....
... [i]t is logical to hold that executory accords are enforceable. An executory accord is simply a type of bilateral contract. As long as the basic requirements to form a contract are present, there is no reason to treat such a settlement agreement differently than other contracts which are binding. This is consistent with the public policy dictating that courts should "look with favor upon the compromise or settlement of law suits in the interest of efficient and economical administration of justice and the lessening of friction and acrimony." Chertkof v. Harry C. Weiskittel Co., 251 Md. 544, 550, 248 A.2d 373, 377 (1968), cert. denied, 394 U.S. 974, 89 S.Ct. 1467, 22 L.Ed.2d 754 (1969).
The Maryland Court of Special Appeals has further held that "[e]ven a judgment, which is an undisputed liquidated claim, may be settled by means of an accord and satisfaction." Barry Properties, Inc. v. Blanton & McCleary, 71 Md.App. 280, 525 A.2d 248, 251, cert. denied, 310 Md. 490, 530 A.2d 272 (1987); accord Air Power, Inc. v. Omega Equipment Corp., 54 Md.App. 534, 538-39, 459 A.2d 1120 (1983). Of course,
a claim which is liquidated and undisputed[, such as a judgment,] is not discharged by acceptance of a lesser sum tendered in full settlement.... This is so because "[a] mere agreement to accept less than the real debt would be a nudum pactum." Geiser v. Kershner, 4 G. & J. 305, 310. "But if in addition to the part payment there be some other collateral consideration such as in law is sufficient to support a contract, then the agreement to relinquish the residue is not a nudum pactum." Prudential Ins. Co. v. Cottingham, 103 Md. 319, 63 A. 359 (1906).
We believe that this conclusion is further buttressed by Maryland's adoption of the Uniform Enforcement of Foreign Judgments Act, Md.Code Ann., Courts and Jud.Proc. Art., § 11-801 et seq., which became effective in Maryland on July 1, 1987. See Weiner v. Blue Cross of Maryland, Inc., 730 F.Supp. 674, 677 (D.Md.1990), aff'd, 925 F.2d 81 (4th Cir.), cert. denied, --- U.S. ----, 112 S.Ct. 69, 116 L.Ed.2d 43 (1991). The Uniform Enforcement Act was generally adopted to streamline and make uniform among the those states adopting it the procedure for enforcing foreign judgments. In Weiner, then District Judge Niemeyer noted that
In such instance, the two Acts, or at least relevant portions thereof, would appear to be complementary rather than mutually exclusive. See Hennessy v. Marshall, 682 S.W.2d 340 (Tex.Ct.App.1984). Moreover, the Commissioner's Comment following Section 3 of the Uniform Recognition of Foreign Money-Judgments Act11 provides that "[t]he method of enforcement will be that of the Uniform Enforcement of Foreign Judgments Act of 1948 in a state having enacted that Act" and accordingly would appear to establish that this position is at least consistent with the understanding of the Commissioner of the Uniform Recognition Act. Uniform Foreign Money-Judgments Recognition Act, 13 U.L.A. 261, 265 (1986); Accord Von Mehren & Patterson, Recognition and Enforcement of Foreign Country Judgments in the United States, 6 Law & Policy in International Business 37, 72-73 (1974).
Nevada v. United States, 463 U.S. 110, 129-30 [103 S.Ct. 2906, 2917-18, 77 L.Ed.2d 509] (1983) (footnote omitted); accord Allen v. McCurry, 449 U.S. 90, 94 [101 S.Ct. 411, 414, 66 L.Ed.2d 308] (1980); Federal Deposit Ins. Corp. v. Jones, 846 F.2d 221, 234-35 (4th Cir.1988); Kenny v. Quigg, 820 F.2d 665, 669 (4th Cir.1987); Welsh, 555 A.2d at 489; MPC, Inc. v. Kenny, 279 Md. 29, 32, 367 A.2d 486 (1977); Alvey v. Alvey, 225 Md. 386, 390, 171 A.2d 92 (1961).
Henderson v. Henderson, 3 Hare 100, 115 (1843);15 see Bank of Montreal v. Kough, 612 F.2d 467, 472 (9th Cir.1980).
... a prior judgment "cannot be given the effect of extinguishing claims which did not even exist and which could not possibly have been sued upon in the previous case." Lawlor v. National Screen Service Corp., 349 U.S. 322, 328, 75 S.Ct. 865, 868, 99 L.Ed. 1122 (1955); see also Harnett [v. Billman ], 800 F.2d [1308] at 1313 [4th Cir.1986), cert. denied U.S. , 107 S.Ct. 1571, 94 L.Ed.2d 763 (1987) ] (existence of present claim at time of prior suit is determinative for res judicata purposes).
Milwaukee County, 296 U.S. at 275, 56 S.Ct. at 233 (citations omitted) (emphasis added); accord Sun First Nat. Bank v. Gainsville, 75 LTD., 155 Ga.App. 70, 270 S.E.2d 293, 296 (1980); Bahr v. Bahr, 85 S.D. 240, 180 N.W.2d 465, 467 (1970); Crescent Hat Co. v. Chizik, 223 N.C. 371, 26 S.E.2d 871, 872 (1943).
We now turn to the question of whether Ward's attempt to raise the post judgment settlement becomes a prohibited collateral attack due to the fact of his pending appeal in the British system. Our research reveals that a post judgment settlement of the litigants' relevant disputes reached during the pendency of an appeal will generally result in at least the dismissal of the appeal. Where a post judgment settlement truly renders the parties' disputes moot, this Circuit as well as Maryland State appellate courts have not hesitated to not only dismiss the parties' appeal but also have vacated the judgment on appeal and remanded the case with instructions for the trial court to dismiss the case. See Kennedy v. Block, 784 F.2d 1220, 1222-24 (4th Cir.1986) (This Court noting that "[t]he Constitution authorizes federal courts to hear cases and controversies, U.S. Const. art. III, § 2, and by that limitation forbids the consideration by federal courts of matters that have become moot. Powell v. McCormack, 395 U.S. 486, 496 n. 7, 89 S.Ct. 1944, 1950 n. 7, 23 L.Ed.2d 491 (1969). '[A] case is moot when the issues presented are no longer "live" or the parties lack a legally cognizable interest in the outcome.' Id. at 496, 89 S.Ct. at 1951."); Area Development Corp. v. Free State Plaza, Inc., 254 Md. 269, 254 A.2d 355 (1969) (Maryland Court of Appeals holding that a post judgment settlement rendered the case moot); Lloyd v. Board of Supervisors of Elections, 206 Md. 36, 111 A.2d 379, 381 (1954) (Maryland Court of Appeals holding that question of mootness is generally based in Maryland on rule of decision that courts generally "... do not sit to decide abstract questions of law," as opposed to being based on constitutional principles); see also Federal Data Corp. v. SMS Data Products Group, Inc., 819 F.2d 277 (Fed.Cir.1987); Nestle Co., Inc. v. Chester's Market, Inc., 756 F.2d 280 (2d Cir.1985). In such a case, the vacated judgment generally has no res judicata effect. Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction §§ 3533.10 and 4433.
[a] settlement while the case is on appeal is a reason why the losing party no longer wants the judgment reversed. The case is neither more nor less moot than it would be if the loser were satisfied with the judgment and complied without appealing. Cf. CFTC v. Chicago Board of Trade, 701 F.2d 653, 657 (7th Cir.1983). Compliance does not require the judgment to be set aside; compliance in part (the upshot of a settlement) should not be treated differently.... [United States v.] Munsingwear[, 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950) ] holds that the judgment in a moot case should be vacated to relieve the parties of collateral consequences when they were unable to obtain appellate review. [In the case of a post judgment settlement pending appeal, appellants are] not disabled from obtaining review; they have simply chosen, for reasons they deem sufficient, to forego the entitlement they possess.
Matter of Memorial Hosp. of Iowa County, Inc., 862 F.2d 1299, 1301 (7th Cir.1988). The Seventh Circuit also concluded in Memorial Hosp. that lower court decisions as public acts of public officials are not the parties' property and therefore may not properly be used as bargaining chips in the process of settlement. Rather, the Seventh Circuit stated that if parties desire to avoid the potential stare decisis and preclusive effects of such judgments they need only settle before such decisions are rendered. Id. at 1302.
More flexible approaches, however, have been adopted by a number of courts. An example of one of these approaches is found in the Ninth Circuit which, when confronted with the post judgment settlement, dismisses the appeal and remands the case to the lower court to determine whether its judgment should be vacated by balancing the various equities and hardships presented. See National Union Fire Ins. Co. v. Seafirst Corp., 891 F.2d 762, 765-69 (9th Cir.1989).
This case, of course, presents the additional factor of the parties not agreeing as to whether a binding settlement was ever reached. As correctly noted by Ward, American appellate courts are courts of limited jurisdiction and are normally bound by the record before them. Accordingly, unless otherwise expressly provided such as by statute, such courts do not act as trial courts and will not normally litigate new matters. See also Commissioners of Vienna v. Phillips Packing Co., Inc., 207 Md. 12, 113 A.2d 89, 92 (1955); Halsbury's Laws of England (4th Edition) volume 37, paragraphs 677 and 693. This, of course, however, does not mean that a party may not present evidence to an appellate court concerning a post judgment settlement, such as a signed settlement agreement, for the United States Supreme Court has long held that appellate courts are "... compelled, as all courts are, to receive evidence dehors the record affecting their proceeding in a case before them on error or appeal." Glidden, 113 U.S. at 225, 5 S.Ct. at 430; see Halsbury's Laws of England (4th Edition) volume 37, paragraph 693.
Where the existence or validity of such a settlement, however, is legitimately contested by one of the parties, appellate courts, of course, will not normally act as a court of original jurisdiction and litigate the matter. Rather the appropriate course in such an instance would appear to be that of continuing or staying the appeal so that a competent court may decide the issue. See Board of Liquidation v. Louisville & N.R. Co., 109 U.S. 221, 226-27, 3 S.Ct. 144, 448-49, 27 L.Ed. 916 (1883); Glidden, 113 U.S. at 226-27, 5 S.Ct. at 430. This approach appears to be consistent with that taken by British appellate courts. See National Benzole 3 All E.R. at 1099 ("If this had been a case where the defendant could have advanced that he wished to impeach that agreement on some recognized grounds, this court might have thought some steps could be taken to leave open the appeal until that matter had been adjudicated on ..."); Lees v. Motor Insurers' Bureau [1953] 1 WLR 620, 97 Sol Jo 298, CA (British Court of Appeal noting that the proper order to enter where the parties had reached a post judgment settlement would be one staying the appeal pending enforcement of the agreement); Halsbury's Laws of England, (4th edition) volume 37(3), paragraphs 4128 and 4129.
With the above discussion in mind, however, we believe that the more appropriate ground for Ward's estoppel or preclusion becomes apparent. There is no dispute in this case that Ward was to dismiss his appeal in light of the settlement. See Wood v. Virginia Hauling Co., 528 F.2d 423, 425 (4th Cir.1975) ("A settlement agreement by definition should end litigation."); Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction §§ 3533.2 and 3533.10. Ward contends that he continued his appeal through the British appellate courts once Guinness breached the settlement for the purpose of mitigating his damages. The requirement that a party mitigate his damages is a fundamental principle of contract law which needs no discussion here. However, we are not here dealing with an ordinary contract action where only the equities concerning the contracting parties or their beneficiaries are involved. Rather, a third party of eminent concern is involved here--an appellate court with limited jurisdiction and powers of review.
Duplan Corp. v. Deering Milliken, Inc., 397 F.Supp. 1146, 1177-78 (D.S.C.1975); Accord Federal Deposit, 846 F.2d at 234; Allen v. Zurich Ins. Co., 667 F.2d 1162, 1166-67 (4th Cir.1982);19 United Virginia Bank/Seaboard National v. B.F. Saul Real Estate Investment Trust, 641 F.2d 185, 190 (4th Cir.1981); Scarano v. Central R. Co., 203 F.2d 510, 512-13 (3d Cir.1953).
Ingersoll Milling Machine Co. v. Granger, 833 F.2d 680, 687 (7th Cir.1987) (citation and footnote omitted); see also Hilton, 159 U.S. at 205, 16 S.Ct. at 159. "The polestar is whether a reasonable method of notification is employed and reasonable opportunity to be heard is afforded to the person affected." Somportex LTD. v. Philadelphia Chewing Gum Corp., 453 F.2d 435, 443 (3d Cir.1971), cert. denied, 405 U.S. 1017, 92 S.Ct. 1294, 31 L.Ed.2d 479 (1972).
Consistent with contentions of Guinness, the Mareva injunction originated in the case of Mareva Compania Naviera S.A. v. International Bulk Carriers S.A. "the Mareva", [1980] 1 All E.R. 213, and is designed to prevent a defendant from dissipating or hiding his assets at the outset of a case thus making any judgment subsequently rendered against him either worthless or difficult to enforce. See Halsbury's Laws of England (4th Edition) volume 37, paragraphs 362 and 363. As such, it would appear to be similar to the procedure of obtaining a temporary restraining order utilized in our federal system pursuant to Fed.R.Civ.P. 65(b).
The district court entered an order certifying its August 24, 1990, order pursuant to Fed.R.Civ.P. 54 on August 31, 1990. Ward subsequently filed a motion to reconsider the August 24 and 31 orders which was denied on October 11, 1990
In Victrix S.S. Co., S.A. v. Salen Dry Cargo A.B., 65 B.R. 466 (S.D.N.Y.1986), aff'd, 825 F.2d 709 (2d Cir.1987), the United States District Court for the Southern District of New York was faced with the question of whether it should recognize and enforce a British judgment, which was contrary to Swedish Bankruptcy proceedings, under New York's version of the Uniform Recognition Act. The district court initially noted that "... comity cannot require enforcement of a foreign judgment where a domestic judgment would not be enforced." Victrix, 65 B.R. at 469. After determining that the Second Circuit would extend comity to the Swedish Bankruptcy proceedings, the district court concluded that the English judgment would not be entitled to enforcement stating that the "[p]laintiff argues that non-enforcement of the London judgment is itself a violation of comity. We disagree. While comity may require recognition of the London judgment--meaning that we may be required to give it res judicata and collateral estoppel effect--recognition is not the same as enforcement." Id. at 470
On appeal, without any express indication that it was reversing the district court's noted distinction between recognition and enforcement, and without any explanation for its conclusion, the Second Circuit noted that "[t]he Act requires a court to enforce a 'conclusive' and valid foreign money judgment subject to seven discretionary bases for nonenforcement, N.Y.Civ.Prac.L. & R. 5304(b)." Victrix, 825 F.2d at 715. To the extent that such statement was meant to reverse the distinction noted by the district court and to the further extent that such conclusion was not dictated by any significant distinction between the New York Uniform Recognition Act and the Maryland Uniform Recognition Act, we do not find the Second Circuit's conclusion persuasive.
Res judicata effect has, of course, traditionally been afforded foreign country judgments entitled to recognition consistently with principles of comity. The Maryland Uniform Recognition Act, itself, codifies such principles by indicating in § 10-703 that "[e]xcept as provided in § 10-704, a foreign judgment meeting the requirements of § 10-702 is conclusive between the parties to the extent that it grants or denies recovery of a sum of money. The foreign judgment is enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit." (Emphasis added)
Guinness cites several cases including Ingersoll Milling Machine Co. v. Granger, 833 F.2d 680 (7th Cir.1987); Porisini v. Petricca, 90 A.D.2d 949, 456 N.Y.S.2d 888 (1982); and Federal Deposit Insurance Corp. v. Jones, 846 F.2d 221 (4th Cir.1988), the latter of which the district court found controlling, in support of its contention that the doctrine of res judicata would bar Ward from raising the post judgment settlement agreement in the district court. We will not discuss these cases in detail for we agree with Ward that such cases are distinguishable in that they all involved settlement agreements, or legal theories such as promissory or equitable estoppel resulting from the parties' actions or promises concerning alleged agreements, which existed prior to the entry of final judgment and thus either were or could have been raised in the prior proceeding before the court of original jurisdiction
See also Fairfax Countywide Citizens v. Fairfax County, 571 F.2d 1299, 1305 (4th Cir.), cert. denied, 439 U.S. 1047, 99 S.Ct. 722, 58 L.Ed.2d 706 (1978); Harman v. Pauley, 678 F.2d 479, 481 (4th Cir.1982); United States v. American Nat. Bank and Trust Co., 101 F.R.D. 770, 771-72 (N.D.Ill.1984) (Courts noting in cases involving a party's attempt to reopen a case pursuant to Fed.R.Civ.P. 60(b)(5) to enforce prejudgment settlements which resulted in dismissal of the cases that these attempts to enforce such settlements are normally separate causes of action and that the parties should more appropriately bring separate actions to so enforce in either an appropriate federal court, if grounds for jurisdiction exist, or state court; unless the terms of such settlements were expressly incorporated in the district court's dismissal order)
This Court also noted in Zurich that "[a]lthough this is a diversity case, we consider that federal law controls the application of judicial estoppel, since it relates to protection of the integrity of the federal judicial process. We think that neither 28 U.S.C. § 1738, the full faith and credit statute, nor Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), requires inquiry into the possible existence of a conflicting state rule." Id. at 1167 n. 4