Opinion ID: 1801820
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Heading: When a Foreign Judgment Is Final Under the UFMJRA

Text: California adopted the UFMJRA in 1967. Before the Legislature codified the provisions of this uniform act, the recognition and enforcement of foreign money judgments proceeded as a matter of comity. ( Renoir v. Redstar Corp. (2004) 123 Cal.App.4th 1145, 1150 [20 Cal.Rptr.3d 603]; see Hilton v. Guyot (1895) 159 U.S. 113, 202-203, 205-206 [40 L.Ed. 95, 16 S.Ct. 139].) Comity remains the basis for recognizing foreign judgments not covered by the act, such as domestic relations judgments. (§§ 1715, subd. (b)(3), 1723; see In re Stephanie M. (1994) 7 Cal.4th 295, 314 [27 Cal.Rptr.2d 595, 867 P.2d 706] [observing, with respect to Mexican child custody decree, that courts of this state may, but are not required to, execute the judgment of a foreign nation as a matter of comity].) The purpose of the uniform act was to codify the most prevalent common law rules for recognizing foreign money judgments and thereby encourage the reciprocal recognition of United States judgments in other countries. (13 pt. II West's U. Laws Ann. (2002) U. Foreign Money-Judgments Recognition Act, Prefatory Note, p. 40 (uniform act).) Many civil law countries make the recognition of foreign judgments dependent upon reciprocity. Drafters of the uniform act believed codification of uniform rules would satisfy foreign reciprocity concerns and encourage greater recognition and enforcement of American judgments abroad. ( Ibid. ; see also Bank of Montreal v. Rough (N.D.Cal. 1977) 430 F.Supp. 1243, 1249 [The purpose of the Uniform Act was to create greater recognition of the state's judgments in foreign nations. This was to be accomplished by informing the foreign nations of particular situations in which their judgments would definitely be recognized, and thus encourage them to recognize California judgments.].) (1) The dispute here centers on the meaning of section 1713.2, which describes the type of foreign judgments that may be recognized under the UFMJRA. Section 1713.2 stated: This chapter applies to [1] any foreign judgment that is final and conclusive and enforceable where rendered [2] even though an appeal therefrom is pending or it is subject to appeal. (Former § 1713.2.) California courts have disagreed about the extent to which the second clause undermines the first. The Court of Appeal in this case gave primacy to the first clause, interpreting section 1713.2 to consider a foreign judgment final, despite an appeal, if it is otherwise `final and conclusive and enforceable where rendered. ' (§ 1713.2, italics added.) The court observed that, unlike California, some foreign jurisdictions consider a judgment to be final and conclusive even if subject to appeal or modification. Recognizing these differences, the Court of Appeal interpreted section 1713.2 to mean that, in all cases, recognition of a foreign judgment depends upon the judgment's finality, conclusiveness, and enforceability in the country where rendered, even if the foreign country's rules are different from those we apply in California. The opposite conclusion was reached in Korea Water, supra, 115 Cal.App.4th 389. There, the court termed the second clause of section 1713.2 the appellate caveat. Giving primacy to the caveat, the Korea Water court interpreted the statute to mean California ... will recognize foreign judgments that are final, conclusive, and enforceable, notwithstanding the fact they may still be subject to appellate review, regardless of the foreign law on this point. ( Korea Water, supra, at p. 398.) The Korea Water court recognized that there is considerable tension between the two clauses. Its attempt to reconcile them ultimately fails the tests of logic and practicality, however. The court observed, section 1713.2's reference to a final, conclusive and enforceable judgment `where rendered' makes it clear it is the status of the foreign judgment in the foreign country that determines whether the judgment is ripe for recognition in California. ( Ibid. ) Yet it ultimately undermined this observation by concluding that the appellate caveat language was meant to override any contrary foreign law concerning the effect of an appeal: The appellate caveat to section 1713.2 makes it clear that the fact that a foreign judgment is still vulnerable to change on appeal in the foreign country is not alone enough to preclude recognition of a foreign judgment which is otherwise final, conclusive, and enforceable in the foreign country. ( Ibid., second italics added.) The court appeared to say that we look to foreign law to decide whether a judgment is final, conclusive and enforceable, but if, under foreign law, the judgment is not final because of a pending or a potential appeal, we ignore foreign law and recognize the judgment anyway. The Korea Water court went on to apply this principle in the case before it, which involved a multimillion-dollar Korean judgment. ( Korea Water, supra, 115 Cal.App.4th at p. 394.) After the judgment was affirmed by Korea's intermediate appellate court, the judgment creditor filed a recognition action in California and obtained a writ of attachment on the judgment debtor's assets in this state. ( Id. at pp. 394-395.) However, the appellate process in Korea was not finished. The judgment debtor moved for summary judgment in the recognition action on the ground that the Korean judgment was not final, conclusive, and enforceable in Korea because it was on appeal before the Korea Supreme Court. ( Id. at p. 395.) He relied on article 471(1) of the Korean code of civil procedure, which states that a Korean judgment `shall not become final and conclusive during the period in which an appeal may be filed or when a lawful appeal has been filed within the prescribed period.' ( Korea Water, supra, at p. 399.) The trial court did not dismiss the recognition proceeding but stayed it, pursuant to section 1713.6, [4] to await the Korea Supreme Court's ruling. ( Korea Water, supra, at p. 395.) Later, after the Korea Supreme Court rejected the legal theory of liability on which the case had been tried, canceled the intermediate appellate court's judgment, and remanded the case for a new trial, the California trial court concluded the Korean judgment was no longer final, conclusive, and enforceable for purposes of allowing recognition here. ( Ibid. ) It therefore dismissed the recognition action and discharged the writ of attachment. ( Ibid. ) The Court of Appeal agreed the recognition action was properly dismissed because the judgment at issue had been largely undermined by the decision of the Korea Supreme Court. ( Korea Water, supra, 115 Cal.App.4th at p. 402.) The Korea Supreme Court's ruling had rendered the judgment uncertain not only as to amount but also as to whether it is supported by a viable legal theory. ( Ibid. ) As a result, the Court of Appeal concluded the judgment was not sufficiently conclusive, under section 1713.2, to be recognized in California. ( Korea Water, supra, at pp. 402-403.) However, the Court of Appeal also discussed whether the recognition action should have been dismissed previously because the judgment was not final and conclusive under Korean law when it was on appeal. ( Korea Water, supra, 115 Cal.App.4th at pp. 399-400.) [5] The court did not consider Korea's law on finality determinative. It reasoned that doing so would in effect be eviscerating the appellate caveat provision of section 1713.2. ( Korea Water, supra, at p. 399.) In other words, the court interpreted section 1713.2 to mean that California has chosen not to preclude recognition merely because the judgment is subject to appellate review ( Korea Water, supra, at p. 400), even if this result is directly contrary to the law of the country where the judgment was rendered. Perhaps recognizing the practical difficulties this interpretation could imposedifficulties which were in fact presented in the case before it, when the Korea Supreme Court overturned the very judgment a California court was prepared to recognizethe Court of Appeal posited that the Legislature must have included the appellate caveat to give judgment creditors access to provisional remedies. ( Korea Water, supra, 115 Cal.App.4th at pp. 401-402.) Under the court's view, a party could bring a recognition action to obtain provisional remedies to satisfy an appealed foreign judgment. The court could then stay the action until conclusion of the appellate process to avoid preserving a foreign judgment that might later be reversed. ( Id. at p. 401.) The problem is there is no basis in legislative history, or elsewhere, to indicate that this process was contemplated or intended. On the contrary, as we have explained, the stated purpose of the uniform act was to satisfy the reciprocity concerns of foreign nations and encourage them to recognize judgments from the United States. (13 pt. II West's U. Laws Ann., supra, U. Foreign Money-Judgments Recognition Act, Prefatory Note, p. 40.) Korea Water's interpretation of section 1713.2 appears to run counter to this goal of international cooperation because it would permit California courts to override foreign law with respect to the finality of a judgment pending on appeal. (2)We believe the better interpretation of section 1713.2 is the one reached by the Court of Appeal here. That is, California courts must recognize a foreign judgment, regardless of whether it has been appealed or is subject to appeal, so long as the judgment is final, conclusive, and enforceable in the country where it was rendered. The statutory language requiring recognition even though an appeal therefrom is pending or [the judgment] is subject to appeal (former § 1713.2) is not an exception to the requirements of finality, conclusiveness, and enforceability in the nation of origin. Rather, this language is meant to amplify the directive that finality, conclusiveness, and enforceability are to be assessed based on the law of the foreign jurisdiction where judgment was rendered. In other words, the appellate caveat operates to ensure that foreign rules regarding finality are honored, even if they differ from the California approach. A cursory review of cases under the uniform act reveals that foreign countries have different standards governing when a judgment is final. (Compare S.C. Chimexim S.A. v. Velco Enterprises Ltd. (S.D.N.Y. 1999) 36 F.Supp.2d 206, 213 [Romanian law regards a judgment as final despite a pending appeal]; Dart v. Dart (1997) 224 Mich.App. 146, 153-154 [568 N.W.2d 353, 357] [English law regards a judgment as final even though it is subject to appeal or subsequent modification] with Mayekawa Manufacturing Co. v. Sasaki (1995) 76 Wn.App. 791, 797 [888 P.2d 183, 187] [under Japanese law, the lodging of an appeal prevents a judgment from becoming final].) Indeed, even in this country, federal and state laws may differ about when a judgment is final, conclusive, and enforceable. While in California a judgment is not final and conclusive between the parties when it is on appeal, or for as long as it remains subject to appeal, the federal rule is contrary. ( Franklin & Franklin v. 7-Eleven Owners for Fair Franchising (2000) 85 Cal.App.4th 1168, 1174 [102 Cal.Rptr.2d 770]; Sandoval v. Superior Court (1983) 140 Cal.App.3d 932, 936-937 [190 Cal.Rptr. 29]; see Nathanson v. Hecker (2002) 99 Cal.App.4th 1158, 1163, fn. 1 [121 Cal.Rptr.2d 773] [explaining difference between California and federal law on finality].) By clarifying that a foreign judgment must be recognized in California if it is regarded as final under the rendering country's law, even though it has been appealed or is subject to appeal, the Legislature apparently sought to deter a judicial impulse to apply California's own, potentially contrary, understanding of when a judgment becomes final. If a foreign jurisdiction's law provides that a judgment is final and conclusive despite an appeal, section 1713.2 requires California courts to recognize a judgment from that jurisdiction unless certain grounds for nonrecognition apply (see former §§ 1713.4-1713.5). However, in such cases section 1713.6 gives the court discretion to stay the recognition proceedings until all foreign appeals have concluded. This interpretation is generally consistent with decisions reached in other states that have adopted the uniform act. For example, in Dart v. Dart, supra, 568 N.W.2d at page 357 (applying Michigan law) and S.C. Chimexim S.A. v. Velco Enterprises Ltd., supra, 36 F.Supp.2d at page 213 (applying New York law), the courts concluded foreign judgments could be recognized under the act, despite the fact that the judgments were on appeal ( Chimexim ) or subject to modification ( Dart ), because they were final under the laws of the countries where they were rendered. Our interpretation is also consistent with the one decision we have found that addresses the precise issue before us, i.e., whether the uniform act permits recognition of a foreign judgment that is not final under the law of the foreign jurisdiction where judgment was entered. In Mayekawa Manufacturing Co. v. Sasaki, supra, 888 P.2d at pages 184-185, a party sought recognition of a Japanese money judgment that stated it could be `preliminarily' enforced. However, the judgment resulted from a special proceeding to which objections had been lodged, and Japanese law provided that a judgment does not `become final and conclusive' until the time for taking an appeal or lodging an objection has expired. ( Id. at p. 187.) Based on Washington's version of the uniform act's applicability provision, which mirrors our section 1713.2, [6] the court concluded it could not recognize the Japanese judgment. ( Mayekawa Manufacturing Co. v. Sasaki, supra, at p. 188.) Although the judgment was preliminarily enforceable, it was not final and conclusive under Japanese law, and the Washington court considered this deficiency fatal to the recognition action. ( Id. at pp. 187-188.) The court observed, however, that its ruling did not preclude a later application for recognition after the judgment became final and conclusive in Japan. ( Id. at p. 189.) (3) To our knowledge, no court or other authority has reached the conclusion in Korea Water that the uniform act's requirement of a final judgment refers only to finality in the trial court, i.e., a judgment that is not interlocutory ( Korea Water, supra, 115 Cal.App.4th at pp. 398-399). If the Legislature had intended to restrict the meaning of final in such a manner, it could have easily added the phrase in the trial court after final. Moreover, this interpretation of final would require California courts to recognize all noninterlocutory foreign judgments, regardless of whether such judgments are considered final under the law of the country where [they were] rendered (former § 1713.2). The plain meaning of the statutory language requires California courts to look to the foreign jurisdiction's law to assess the finality and conclusiveness of a judgment. When foreign law holds that a judgment is not final if it is interlocutory or if it is subject to appeal, section 1713.2 requires a California court to honor this procedural rule. We see no basis in the statute for courts to distinguish between the types of finality for which foreign law will be considered. [7] It is also worth noting that the Legislature recently removed the appellate caveat language so heavily relied upon by Bezdikian here and by the Korea Water court. The newly enacted UFCMJRA (see ante, fn. 1) applies to a foreign-country judgment to the extent that the judgment both: ¶ (1) Grants or denies recovery of a sum of money, ¶ (2) Under the law of the foreign country where rendered, is final, conclusive, and enforceable. (§ 1715, subd. (a).) Although provisions of the UFCMJRA apply only to recognition actions begun after the act's effective date of January 1, 2008 (§ 1724), legislative history indicates the new uniform act was intended primarily to clarify provisions of the earlier act that had led to confusion. (See Sen. Com. on Judiciary, Analysis of Sen. Bill No. 639 (2007-2008 Reg. Sess.) May 8, 2007, p. 2 [[Sen. Bill No.] 639 would, according to the sponsors, update and clarify the UFMJRA and correct problems created by the courts' interpretations of various provisions of that Act over the years since its adoption in 1967].) (4) Manco submitted evidence indicating the judgment in this case was not final under Qatari law until May 23, 2000, when the Qatari appellate court issued an amended judgment. [8] Under section 1713.2, a cause of action to recognize the judgment could not have been maintained before its finality in 2000. Accordingly, Manco's May 20, 2004 complaint seeking recognition of the judgment was timely even under the four-year statute of limitations of section 343, and the trial court erred in granting summary judgment. As we discuss next, however, section 343 does not furnish the limitations period for recognition actions. [9]