Opinion ID: 2382094
Heading Depth: 1
Heading Rank: 3

Heading: Maryland Defenses to Enforcement

Text: Whether Smith's Maryland judgment results from a separate suit on the foreign judgment in this state, or a filing under Maryland's UEFJA, it is appropriate for this Court to examine whether the Florida District judgment has been satisfied. The Fourth Circuit did just this in Guinness PLC v. Ward, 955 F.2d 875 (4th Cir.1992), a case heard under diversity jurisdiction. Although this case concerned an English judgment filed pursuant to the Maryland Uniform Foreign Money-Judgments Recognition Act (UFMJRA), CJ §§ 10-701 through 10-709, the Fourth Circuit described the UFMJRA and the UEFJA as complementary, discussed the Weiner account of the UEFJA, and emphasized the language of CJ § 10-703, which makes the foreign [nation] judgment... enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit. Id. at 889-91. Guinness PLC involved a money judgment entered by the High Court of Justice in London, England (the High Court) against Ward. Ward appealed, but meanwhile Guinness initiated a suit in the District of Columbia involving an attorney's lien that Ward had asserted against Guinness. During the pendencies of this suit and of the appeal in England, Ward entered into negotiations for a settlement with Guinness of all claims; this resulted in a preliminary letter agreement in 1987 which provided that Guinness would render the High Court judgment against Ward unenforceable. In 1988, Guinness sued in the United States District Court for the District of Maryland to enforce its High Court judgment under Maryland's UFMJRA. Guinness contended that it never finally approved the settlement, while Ward contended that Guinness simply had breached it. The district court granted Guinness's motion for summary judgment in part because it concluded that a post-judgment settlement, or accord and satisfaction, was not a basis for refusing to recognize a foreign money judgment under the UFMJRA. Id. at 877-81. On appeal, the Fourth Circuit opined that the Maryland Court of Appeals would hold that it was not the intent of the Maryland legislature in enacting the [UFMJRA] to totally prohibit a foreign judgment debtor from raising a post judgment settlement as a defense to a recognition and enforcement action brought by the judgment creditor. Id. at 886. Specifically, the court found that CJ § 10-702 (requiring the foreign judgment to be enforceable where rendered) allowed Ward to raise the defense that the post-judgment settlement extinguished the High Court judgment by operation of law, and stressed that the `where rendered' language of this provision would appear to require a recognition court to focus on the law of the rendering country in making such determination. Id. at 889. The court also found, under the language of CJ § 10-703 quoted above, that a foreign money judgment entitled to recognition is only enforceable to the same extent that a sister state judgment entitled to full faith and credit would be under the same circumstances. Thus, we believe that any defenses and counterclaims which could be raised regarding the judgment's enforcement, as opposed to its recognition, if the judgment was that of a sister state and entitled to full faith and credit may also be raised against the enforcement of the foreign judgment. Accordingly, we find that a foreign judgment debtor may raise a post judgment settlement under § 10-703 as a defense not to the recognition of the judgment but rather to its enforcement or degree thereof. Id. (footnote omitted). The Fourth Circuit decided, however, not to remand the case for a determination of these issues because Ward had failed to inform the High Court or the English appellate court of the settlement allegedly reached during the pendency of the English appeal, and thus was judicially estopped from asserting the settlement as a defense in the district court proceeding. Id. at 893, 898-99. As noted above, the Fourth Circuit based its analysis in part on the analogy between the UFMJRA and the UEFJA. In this regard, the court observed that the language of § 11-805(b) of the [UEFJA, allowing the creditor to bring a separate action as an alternative to filing under the Act,] when it is remembered that the Act was designed merely as a facilitating device and was not intended to alter any substantive rights or defenses which would otherwise be available to a judgment creditor or judgment debtor in an action for enforcement of a foreign judgment, supports our conclusion that any defenses ordinarily available to the enforcement of a Maryland judgment, and accordingly a sister state judgment which is entitled to full faith and credit, is also available to the enforcement of a foreign country judgment which is entitled to recognition under the [UFMJRA].... Id. at 892 (citations omitted). The passage above in particular, and the Fourth Circuit's decision in generalthat Ward, had he not been judicially estopped, could have raised the defense of a post-judgment settlement to the enforcement of the foreign judgmentindicate that the issue in the instant case should not depend upon whether Smith filed its Florida District judgment under the UEFJA or whether it brought a separate action in Maryland to enforce that judgment. In either case, the issue is whether M-B has a defense[ ] ordinarily available to the enforcement of a Maryland judgment, i.e., the judgment recorded in the Circuit Court for Harford County. And just as the Guinness PLC court looked in part to the original English judgment and to the facts relevant to determining whether the debtor had satisfied that judgment, in order to determine if there was a defense to the enforcement of that judgment, so this Court may look to the original Florida District judgment and to the facts relevant to determining whether the debtor has satisfied that judgment, in order to determine if M-B has a defense to its enforcement in Maryland. In addition, because the UEFJA was not intended to alter any substantive rights or defenses which would otherwise be available to a judgment creditor or judgment debtor in an action for enforcement, this Court may look to common law defenses to enforcement that have been and continue to be available under Maryland law. Some defenses challenge the validity of the original judgment. For example, in Concannon v. Hampton, 584 P.2d 218 (Okla.1978), the court noted that [d]raftsmen of the [1964 UEFJA] act as well as the 1948 act were primarily concerned with preserving a defendant's right to assert defenses as to the validity of the foreign judgment, to insure that the judgment was entitled to full faith and credit. Id. at 221 (citing Gem Mfg. Corp. v. Lents Indus., Inc., 276 Or. 87, 554 P.2d 166 (1976) (in banc)). In addition, in enforcement proceedings prior to the UEFJA, post-judgment defenses have been recognized that do not seek to challenge the validity of the judgment, but instead its enforcement. See Milwaukee County v. M.E. White Co., 296 U.S. 268, 275, 56 S.Ct. 229, 233, 80 L.Ed. 220, 227 (1935) (noting, as one bar to the enforcement of a judgment, the defense that it has ceased to be obligatory because of payment or other discharge); 2 J.P. Poe, Pleading and Practice in Courts of Common Law § 404C, at 382 (Tiffany 5th ed. 1925) (Poe) (referring to defenses arising since the recovery of the judgment, such as payment, release, limitations, discharge in insolvency or bankruptcy). For this reason, some courts distinguish between the domestication (or recognition) of a judgment and its enforcement. For example, in Sun First National Bank of Orlando v. Gainesville 75, Ltd., 155 Ga.App. 70, 270 S.E.2d 293 (1980), the court recognized that the Florida judgment [there involved] is entitled to full faith and credit and domestication in Georgia, but the court noted that the judgment debtor had raised [the defense of partial payment] which put into issue the extent of the enforceability of the judgment. Id. at 296. See also Guinness PLC, 955 F.2d at 889 ([U]nder the [UFMJRA] questions of whether a judgment should be recognized are distinct and separate inquiries from those concerning whether such a judgment once recognized is entitled to enforcement.). The distinction between recognition and enforcement applies in the instant case. Smith did indeed domesticate its Florida District judgment by filing it under Maryland's UEFJA. While this Court must recognize this judgment as a valid Maryland judgment, this Court also may inquire into post-judgment defenses in order to determine the extent to which it is enforceable. Cf. Barry Properties, Inc. v. Blanton & McCleary, 71 Md.App. 280, 292, 525 A.2d 248, 254 (noting that a motion under Md. Rule 2-643(c)(1) to declare a judgment satisfied by a post-judgment accord and satisfaction is in recognition of the judgment and not a collateral attack upon its validity), cert. denied, 310 Md. 490, 530 A.2d 272 (1987). M-B asserts that [t]he issue in this case is and always has been whether the satisfaction filed in Florida federal district court ... serves to satisfy, vacate, or release the filed foreign judgment. Smith, in turn, characterizes the holdings of the lower courts in this casethat the payment and satisfaction by [M-B] of the Florida judgment, also paid and satisfied the `Maryland judgment'as the [mistaken] application of foreign law and defenses to [its Maryland] judgment. Although Smith is correct that, under the UEFJA, it has, at least in some sense, an independent Maryland judgment, Smith is wrong to characterize payment as a foreign defense. It is a Maryland defense to the enforcement of the domesticated judgment. In Coane v. Girard Trust Co., 182 Md. 577, 35 A.2d 449 (1944), Girard Trust recovered a confessed judgment in Pennsylvania against Coane for approximately $23,000; the execution resulted in a sale of her real property for $50. A few weeks later, Girard Trust filed suit in Maryland, where Coane lived, in order to enforce the judgment against her. Coane defended on the ground that the Pennsylvania judgment was subject to Pennsylvania's Mortgage Deficiency Judgment Act, which required that the value of property sold on execution to a mortgagee be fixed at fair market value, and that, after the entry of the original confessed judgment in Pennsylvania and after the initial filing of the enforcement action in Maryland, the Pennsylvania court had fixed the fair market value of the property at $14,000, and thus reduced the amount owed on the confessed judgment. This Court, treating the original confessed judgment as final and entitled to full faith and credit, affirmed the decision of the circuit court to admit the second Pennsylvania judgment, which indicated the reduction, because [t]he fact that partial release was decreed between the filing of the declaration and the pleas did not bar an exemplification of the record from admission in evidence. A defendant in an action based on a judgment against him may file a special plea setting up the defense of complete or partial release, or payments made since the rendition of the judgment. Id. at 583, 35 A.2d at 452 (citing, inter alia, Poe § 404C). More recently, in Young v. Progressive Casualty Insurance Co., 108 Md.App. 233, 671 A.2d 515 (1996), the Court of Special Appeals considered a similar issue. Young obtained a default judgment in the District of Columbia against Progressive's insured on a tort claim, enrolled that judgment in the Circuit Court for Prince George's County, and obtained a writ of garnishment against the insurer. The District of Columbia later vacated the default judgment for lack of personal jurisdiction, on which action the Maryland court dismissed the garnishment proceeding. Affirming this ruling, the court, speaking through Judge Cathell (now a judge of this Court) stated: The continued enrollment in this State of a judgment vacated by the rendering state is an irregularity and/or a mistake. That mistake, even though made by the foreign court, was a jurisdictional mistake. The Maryland court may, under those circumstances, dismiss the Maryland proceedings in their entirety or, as in the case at bar, in part, ie., solely the garnishment proceedings. Id. at 248, 671 A.2d at 523 (citation omitted). The court's italicized language reflects the fact that, although the garnishment proceedings had been dismissed, there ha[d] been no formal request that the actual judgment be stricken. Id. at 240 n. 1, 671 A.2d at 519 n. 1. Accordingly, the vacating of the D.C. judgment for want of personal jurisdiction undercut the basis on which the Maryland judgment rested and would have resulted, if the defendant had requested it, in striking the Maryland judgment as well. Thus far we have determined that Smith's Maryland judgment carried interest at the same rate as a judgment originally rendered in Maryland and that M-B was entitled to all defenses against enforcement as would a judgment debtor under a judgment originally rendered in Maryland. The next question is when that interest began to run.