Court Opinion

ID: 2691491
Source: CourtListenerOpinion
Date Created: 2014-08-01 21:05:19.215031+00
Date Added: 2024-06-11T09:57:02.349671
License: Public Domain

J.A13032/14

                               2014 Pa. Super. 163

LOUIS DREYFUS COMMODITIES                   :
SUISSE SA,                                  :     IN THE SUPERIOR COURT OF
                                            :          PENNSYLVANIA
                          Appellant         :
                                            :
                    v.                      :
                                            :
FINANCIAL SOFTWARE SYSTEMS, INC.            :
                                            :     No. 2816 EDA 2013
                          Appellee          :

                 Appeal from the Order Entered August 30, 2013
              In the Court of Common Pleas of Montgomery County
                        Civil Division No(s).: 2013-03678

BEFORE: ALLEN, MUNDY, and FITZGERALD,* JJ.

OPINION BY FITZGERALD, J.:                              FILED JULY 29, 2014

order entered in the Montgomery County Court of Common Pleas granting

vacate the judgment entered in Pennsylvania in favor of Appellant and

dissolve the garnishment against National Penn Bank. We hold that a party

cannot enforce a foreign nation money judgment in Pennsylvania unless that

judgment has been recognized as valid pursuant to the Uniform Foreign

                                                                          -

22009. Accordingly, we affirm.

*
    Former Justice specially assigned to the Superior Court.
J. A13032/14

      The factual and procedural history, as recounted by the trial court, is

as follows:

         This is an action to enforce a foreign judgment commenced
         in this jurisdiction on February 20, 2013, with the filing of
         a praecipe to file and index a foreign judgment.[1] The

1

in relevant part, as follows:

         TO THE PROTHONOTARY OF MONTGOMERY COUNTY:

            Pursuant to the Uniform Enforcement of Foreign
         Judgment Act, 42 Pa.C.S. § 4306, kindly enter judgment in
         favor of Plaintiff, Louis Dreyfus Commodities Suisse SA,
         and against Defendant, Financial Software Systems, Inc.,
         in the amount of $717,893.15, plus $43,839.97
         (£28,302.11) in costs, for a total amount of $761,733.12,
         in accordance with the attached certified copies, duly
         authenticated by apostille pursuant to the Hague
         Convention of 5 October 1961, of the docket entries and
         judgment originally entered on January 18, 2013 in Claim
         No. 2MA40117
         Division, Manchester District Registry, Mercantile Court in
         Manchester, United Kingdom, and index the judgment
         against the Defendant.

(unpaginate
production of documents in aid of execution, provide, in relevant part:

            WHEREAS, on February 20, 2013, in accordance with
         the Uniform Enforcement of Foreign Judgments Act, 42
         Pa.C.S. § 4306, Louis Dreyfus submitted to the Court of
         Common Pleas of Montgomery County, Pennsylvania a
         Praecipe to File and Index Foreign Judgment, along with a
         duly certified and authenticated copy of the January 18,
         2013 judgment;

                                    cution, 2/20/13, at 2; Req. for Prod. of
Doc. in Aid of Execution, 2/20/13, at 2.

                                     -2-
J. A13032/14

           praecipe averred that [Appellant] obtained a judgment in
           the amount of $717,733.12 for a breach of contract

           Bench Division, Manchester District Registry, Mercantile
           Court in Manchester, UK on January 18, 2013.         This
           praecipe also requested costs in the amount of $43,839.97
           for a total judgment of $761,733.12. The parties began
           their contractual relationship when they entered into a
           Spectrum Software License and Maintenance Agreement
           on October 11, 1996. This Agreement was amended by
           further documentation between the parties in 1999 and
           2012.

              A writ of execution was filed on March 8, 2013. The
           certificate of service filed on February 20, 2013, averred

           execution [was] served upon National Penn Bank, where
           Appellee maintained its operating account, as garnishee,
           on March 12, 2013, by the Sheriff of Montgomery County.
           Appellee filed a petition to strike judgment and vacate
           execution on the grounds that Appellant failed to properly
           serve it pursuant to the terms of the Hague Convention on
           the Service Abroad of Judicial and Extra Judicial
           Documents, that this court lacked personal jurisdiction,
           and that the judgment was also unenforceable pursuant to
           the Uniform Enforcement of Foreign Judgments Act

           judgment against National Penn Bank on March 26, 2013.
           On March 27, 2013, Appellee filed a petition to stay
           execution of the garnishee judgment.          Testimony was
           taken . . . on April 5, 2013 . . . . After status conferences
           with the parties throughout the summer of 2013, the [trial
           court] entered an amended order on September 10, 2013,
           striking and vacating the judgment. Appellant filed a
           motion for reconsideration on September 27, 2013. Before
           this court had the opportunity to act upon this motion,
           Appellant filed the instant appeal . . . on September 30,
           2013.[2]

Trial Ct. Op., 12/6/13, at 1-2 (capitalization and footnote omitted).

2
    Both Appellant and the trial court have complied with Pa.R.A.P. 1925.

                                       -3-
J. A13032/14

     Appellant has raised the following five issues on appeal:

        Does § 22006(3) of the [Recognition Act], bar a party from
        challenging a judgment issued against it by a court in
        England for lack of personal jurisdiction, when the party
        attempting to challenge the judgment agreed to submit to
        the exclusive jurisdiction of the courts of England in a
        forum selection clause contained in a valid, binding
        contract with the party seeking to enforce the judgment?

        Does the [Enforcement Act], which is the sole procedural
        mechanism for enforcing any non-Pennsylvania judgment,
        including a foreign-nation judgment, apply to proceedings
        in which a party seeks to enforce a judgment issued by a
        court in England?

        Does the [Enforcement Act] require a party to initiate
        separate, preliminary proceedings for recognition of a
        foreign-nation judgment before the party is permitted to
        enforce that judgment?

        Does the Hague Convention on the Service Abroad of
        Judicial and Extrajudicial Documents in Civil and
        Commercial Matters require a party to effect service
        through the Central Authority of the country of
        destination?

        Does personal service, delivered in-hand to the Vice
        President, Director and Shareholder of a corporation at its
        corporate headquarters constitute effective service in this
        case under the Hague Convention on the Service Abroad of
        Judicial and Extrajudicial Documents in Civil and
        Commercial Matters, and satisfy the requirements of
        federal and/or state law?

     At its core, this case involves the interplay between the Recognition

arguments on appeal, we address the manner by which Appellant sought

recognition and enforcement of the English court judgment in its favor. To

                                    -4-
J. A13032/14

this end, we note th                  application of a statute raises a question

of law. As with all questions of law, the appellate standard of review is de

novo                                                        Olympus Corp. v.

Canady                                                   judgment is void on its

                                                                 Flynn v. Casa

Di Bertacchi Corp., 674 A.2d 1099, 1105 (Pa. Super. 1996). Furthermore,

we may affirm the decision of the trial court on any valid basis appearing of

record. Tosi v. Kizis, 85 A.3d 585, 589 (Pa. Super. 2014).

         Pursuant to the Recognition Act, a foreign government is defined as

                           other than the United States, or any state . . .

thereof

sum of money, other than a judgment for taxes, a fine or other penalty, or a

                                                Id. Foreign money judgments

same manner as the judgment[s] of another state which [are] entitled to full

       The Enforcement Act provides, in relevant part,

          (b) Filing and status of foreign judgments. A copy of
          any foreign judgment including the docket entries
          incidental thereto authenticated in accordance with act of
          Congress or this title may be filed in the office of the clerk

                                      -5-
J. A13032/14

         of any court of common pleas of this Commonwealth. The
         clerk shall treat the foreign judgment in the same manner
         as a judgment of any court of common pleas of this
         Commonwealth. A judgment so filed shall be a lien as of
         the date of filing and shall have the same effect and be
         subject to the same procedures, defenses and proceedings
         for reopening, vacating, or staying as a judgment of any
         court of common pleas of this Commonwealth and may be
         enforced or satisfied in like manner.

                                  *    *     *

         (f) Definition.
         means any judgment, decree, or order of a court of the
         United States or of any other court requiring the payment
         of money which is entitled to full faith and credit in this
         Commonwealth.

42 Pa.C.S. §§ 4306(b), (f) (emphasis added).

      Recognition of a judgment entered in one state by a sister state is

mandated by the full faith and credit clause of the U.S. Constitution and the

Full Faith and Credit Act.    U.S. Const. art. IV, § 1; 28 U.S.C. § 1738.

However, recognizing a judgment entered in a foreign nation is controlled by

a separate and distinct legal principle    comity. The United States Supreme

Court pronounced

         [n]o law has any effect, of its own force, beyond the limits
         of the sovereignty from which its authority is derived. The
         extent to which the law of one nation, as put in force
         within its territory, whether by executive order, by
         legislative act, or by judicial decree, shall be allowed to
         operate within the dominion of another nation, depends
         upon what our greatest jurists have been content to call

         often criticised,   no   satisfactory   substitute   has   been
         suggested.

                                      -6-
J. A13032/14

          within its territory to the legislative, executive or judicial
          acts of another nation, having due regard both to
          international duty and convenience, and to the rights of its
          own citizens, or of other persons who are under the
          protection of its laws.

Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S. Ct. 139, 143, 40 L. Ed. 95,

                                the Full Faith and Credit Clause of the United

States Constitution . . . does not extend to judgmen

Hilkmann v. Hilkmann, 579 Pa. 563, 573, 858 A.2d 58, 65 (2004).

sister states, which are entitled to full faith and credit, and those of foreign

courts,                                                    Somportex Ltd. v.

Phila. Chewing Gum Corp., 453 F.2d 435, 440 (3d. Cir. 1971).3 Thus, the

money judgments entered in the courts of foreign nations.

      With respect to recognition of foreign nation money judgments,

Matusevitch v. Telnikoff, 877 F. Supp. 1 (D.D.C. 1995),              , 159 F.3d
636 (D.C. Cir. May 5, 1998) (per curiam), is instructive. In Matusevitch,

the plaintiff brought an action seeking to preclude enforcement of a libel

judgment entered by an English court.       The Matusevitch court concluded

3
 Although decisions of the federal courts are not binding on this Court, we
may adopt their reasoning if we find them persuasive. NASDAQ OMX
PHLX, Inc. v. PennMont Secs., 52 A.3d 296, 303 (Pa. Super. 2012).

                                      -7-
J. A13032/14

that it must first ascertain whether the judgment is recognizable under
                                             4
                                                                         ty can

enforce a judgment from a foreign country in the United States, the moving

party must have the foreign judgment recognized by the state in which he

                                            Id. at 2 (emphases added).     The

Matusevitch court further noted                             -country judgment

                                                                         initial

recognition        Id. at 3 (emphasis added).    Accordingly, in that case, the

court found that

           the defendant filed the foreign-country judgment with the
           Clerk of the Circuit Court of Montgomery County,
           Maryland. The defendant, however, never attempted to
           get that judgment recognized before filing, as required by
           statute.   Consequently, the court determines that the
           defendant currently holds an unrecognized foreign-country
           judgment from the State of Maryland. The defendant must
           obtain recognition of this judgment in order to enforce it.

Id.5

4
    Md. Code Ann., Cts. & Jud. Proc. §§ 10-701 to 10-709 (West 1989).
5
  Although the Matusevitch court concluded that the defendant failed to
obtain

Ultimately, the court granted the motion for summary judgment, finding that
the judgment would not be recognized where it was entered under libel
standards that would be repugnant to the policies of Maryland and of the

Amendment rights. Matusevitch, 877 F. Supp. at 6.

                                      -8-
J. A13032/14

     Pennsylvania     parties   seeking     federal    court   recognition     and

enforcement of foreign nation judgments have consistently sought such

recourse   under    the   auspices   of   the   Recognition    Act.   In     ERBE

Elektromedizin GMBH v. Canady, 545 F. Supp. 2d 491 (W.D. Pa. 2008)

 ERBE

from an English court.     Id. at 493.    Then, invoking the Recognition Act,

ERBE filed a complaint in the Western District of Pennsylvania seeking

recognition of the judgment against Canady. Id.

recognized the judgment against Canady. Id. at 498.

     Similarly, in Novae Corporate Underwriting Ltd. v. Atlantic Mut.

Ins. Co.                                              Novae

District Court for the Eastern District of Pennsylvania considered the

Enforcement Act and the Recognition Act for the purposes of recognition and

enforcement of a foreign-nation judgment in Pennsylvania. Id. at 494. The

Novae court considered the express language of the Enforcement Act,

Section 4306(f) and the holding in Hilkmann, supra.              Id. at 496.    It

concluded that the statutory language and case law is clear that the

Enforcement Act only applies to sister-state judgments and not to judgments

                                      -9-
J. A13032/14

obtained in foreign countries.6   Id. at 495-96; see also Somportex, 453
F.2d at 440.

      Last, we acknowledge the holding of the Court of Appeals of Michigan

in Electrolines, Inc. v. Prudential Assurance Co., 677 N.W.2d 874 (Mich.

versions of the Enforcement Act and the Recognition Act as follows:

            Key to our resolution of this appeal is the understanding
         that a foreign country money judgment cannot be enforced
         until it has been recognized and that the [Recognition Act]
         is not an enforcement act. The [Recognition Act] only
         serves the purpose of providing a court with a means to
         recognize a foreign money judgment. The [Recognition
         Act] does not establish the procedure to file or enforce a
         foreign judgment. Rather, the act provides that once a
         foreign judgment is recognized, it is to be enforced in the

Id. at 882 (citations omitted).

      As the foregoing cases illustrate, courts have consistently held that the

Enforcement Act is applicable only to judgments of our sister states entitled

to full faith and credit under the U.S. Constitution. Hilkmann, 579 Pa. at

573, 858 A.2d at 65; see Novae, 556 F. Supp. 2d at 495-96. Accordingly,

6
  In addition, we note that in a non-precedential decision,
v. Mullin, 96 Fed. Appx. 100 (3d Cir. 2004), the United States Court of
Appeals for the Third Circuit affirmed an order granting summary judgment
                                                ed a judgment against Mullin
in the United Kingdom. Id.
against Mullin in the United States District Court for the Eastern District of
Pennsylvania seeking recognition and enforcement of the English judgment
pursuant to the Recognition Act. Id. at 102-03.

                                    - 10 -
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because foreign nation judgments are not entitled to full faith and credit,

Hilkmann, 579 Pa. at 573, 858 A.2d at 65, but rather are subject to the

principles of comity, Somportex, 453 F.2d at 440, a foreign nation

judgment cannot be enforced in the Commonwealth pursuant to the

Enforcement Act unless it is recognized as valid pursuant to the Recognition

Act. See Matusevitch, 877 F. Supp. at 3; see also Novae, 556 F. Supp.
2d at 495-96; ERBE, 545 F. Supp. 2d at 498.        A contrary holding would

contradict prior decisions highlighting the discrete purposes served by the

Recognition Act and the Enforcement Act.    Moreover, we note that Appellant

has not cited to any authority that would permit us to reach a different

conclusion.7

     Furthermore, invoking the appropriate statute is critical.   Hilkmann,
579 Pa. at 579, 858 A.2d at 68. In Hilkmann, an Israeli court awarded the

plaintiff guardianship of her mentally handicapped adult son.     Id. at 567,

858 A.2d at 61.   Subsequently, the plaintiff filed in the Allegheny County
                                                                            8

7
  Although not pertinent to our disposition, we note that at oral argument
this Court asked the parties whether Appellant was required to move for
recognition of the judgment prior to enforcement. Appellant opined that
invocation of the Enforcement Act was sufficient to implicitly invoke the
Recognition Act. In support of this novel proposition, Appellant cited no
authority.
8
  Apparently, that the order was in the nature of guardianship instead of
custody was lost in the translation of the order from Hebrew to English.
Hilkmann, 579 Pa. at 567-68, 858 A.2d at 61.

                                   - 11 -
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Id.     She attached to the petition a copy of the foreign guardianship

judgment and averred that under Section 5365 of the Uniform Child Custody

Jurisdiction   Act,    23   Pa.C.S.   §§   5341 5366

guardianship decree was entitled to the same effect as a custody order

rendered in Pennsylvania. Id.

concluding that the relevant law required that comity be afforded to the

Israeli order. Id. at 569, 858 A.2d at 62. On appeal, the Superior Court

Pennsylvania and Israeli procedure would allow any foreign citizen to enforce

a     guardianship    decree   and    commensurate   finding   of   incompetence,

regardless of th                                        Id. at 571, 858 A.2d at

Court affirmed, holding that while principles of comity control the recognition

of foreign nation judgments, the Israeli guardianship judgment would not be

afforded comity in Pennsylvania because the plaintiff failed to follow the

proper procedural steps for seeking recognition and enforcement of the

foreign judgment.9 Id. at 579, 858 A.2d at 68-69.

9
    Specifically, the Hilkmann Court noted that the plaintiff did not seek the
                                    -territorial extension or transfer of her

entry of a guardianship order, which include safeguards such as affording
specific notice to a putative ward, and instead mistakenly filed her petition
under the UCCJA, which does not apply to adults.

                                        - 12 -
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      In the instant matter, Appellant filed a praecipe to file and index a

foreign judgment on February 20, 2013. In the praecipe, and the discovery

requests filed in support thereof, Appellant cited the Enforcement Act as the

judgment against Appellee.     However, as aptly noted by Appellee in its

does not provide authority to enforce a UK judgment against a Pennsylvania

                         to Strike J. and Vacate Execution, 3/19/13, at 6-7

(unpaginated).

      The trial court agreed with Appellee that

         [t]he proper statute for the matter sub judice is the
         [Recognition Act] not the [Enforcement Act]. While the
         [Enforcement Act] also respects the constitutional principle
         of applying full faith and credit of foreign nation judgments
         as foreign state judgments, this statute also instructs that
         the international judgment must first be recognized by the
         state in which the judgment is filed before being enforced.

Trial Ct. Op. at 6-7.

      Our review of the record reveals that Appellant did not invoke the

Vacate Execution, 3/20/13, at 9.    In its answer, Appellant stated, without

to the [Enforcement Act], which is the sole and exclusive procedural

                                    - 13 -
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mechanism for enforcement in a Pennsylvania court of a judgment issued in

                                                                        Id.

the trial court and Appellee that Appellant improperly sought enforcement of

the English

Enforcement Act.

praecipe to enter judgment against Appellee was fatally flawed. By invoking

the Enforcement Act rather than the Recognition Act, Appellant failed to

                                   framework within which the effect of the

                                            See Hilkmann, 579 Pa. at 579,

858 A.2d at 68.    Furthermore, just like the defendant in Matusevitch,

                                                     See Matusevitch, 877
F. Supp. at 3.     Instead, Appellant improperly sought recognition and

enforcement of the foreign money judgment by invoking an inapplicable

statute. Cf. Hilkmann, 579 Pa. at 579, 858 A.2d 68-69.        Consequently,

the trial court was without authority to enter the foreign money judgment

and it was, therefore, void on its face.    See Flynn, 674 A.2d at 1105.

Accord

to strike and vacate judgment in favor of Appellant and dissolve the

                                   - 14 -
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garnishment against National Penn Bank, albeit on other grounds. 10   See

Tosi, 85 A.3d at 589.

       Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 7/29/2014

10
     We echo the sentiment articulated by our Supreme Court in Hilkmann

considerations and does no
substantive [claims]. Nothing here prevents [Appellant] from prospectively
                                                               Hilkmann,
597 Pa. at 580, 858 A.2d at 69.

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