Court Opinion

ID: 2967363
Source: CourtListenerOpinion
Date Created: 2015-09-22 02:26:09.005321+00
Date Added: 2024-06-11T15:28:01.306090
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT

In Re: GENESYS DATA TECHNOLOGIES,       
INCORPORATED,
                          Debtor.

JOHN MEINDL; GENESYS DATA
TECHNOLOGIES, INCORPORATED,                       No. 98-2270
               Plaintiffs-Appellants,
                 v.
GENESYS PACIFIC TECHNOLOGIES,
INCORPORATED,
                Defendant-Appellee.
                                        
           Appeal from the United States District Court
            for the District of Maryland, at Baltimore.
               Frederic N. Smalkin, District Judge.
                  (CA-98-1635-S, BK-96-55018)

                      Argued: September 22, 1999

                       Decided: March 27, 2001

    Before WILKINS, WILLIAMS, and MOTZ, Circuit Judges.

Affirmed by published opinion. Judge Motz wrote the opinion, in
which Judge Wilkins and Judge Williams joined.

                             COUNSEL

ARGUED: Dale Andrew Cooter, COOTER, MANGOLD, TOM-
PERT & WAYSON, P.L.L.C., Washington, D.C., for Appellants.
2                IN RE: GENESYS DATA TECHNOLOGIES
Thomas Christopher Dame, GALLAGHER, EVELIUS & JONES,
L.L.P., Baltimore, Maryland, for Appellee. ON BRIEF: Donna S.
Mangold, COOTER, MANGOLD, TOMPERT & WAYSON,
P.L.L.C., Washington, D.C.; Morton A. Faller, SHULMAN, ROG-
ERS, GANDAL, PORDY & ECKER, P.A., Rockville, Maryland, for
Appellants. Stephen A. Goldberg, Michael W. Skojec, GAL-
LAGHER, EVELIUS & JONES, L.L.P., Baltimore, Maryland, for
Appellee.

                             OPINION

DIANA GRIBBON MOTZ, Circuit Judge:

   John Meindl and Genesys Data Technologies, Incorporated (collec-
tively Data) appealed from the district court’s allowance of the bank-
ruptcy claim of Genesys Pacific Technologies, Incorporated (Pacific).
That claim is based on a default judgment Pacific obtained against
Data in a Hawaii trial court. We previously held that "[if] a default
judgment would be entitled to preclusive effect under state law it
must be given such effect in bankruptcy claims allowance proceed-
ings, absent express congressional intent to create an exception to the
full faith and credit statute in such proceedings." Meindl v. Genesys
Pacific Techs. (In re Genesys Data Techs., Inc.), 204 F.3d 124, 126
(4th Cir. 2000). We further held that unless Pacific’s judgment was
void, "Hawaii law would afford it preclusive effect." Id. Finding
Hawaii law "unsettled" as to whether the judgment would be void
under Haw. R. Civ. P. 54(c), we certified that question to the Supreme
Court of Hawaii. Id.

   Specifically, we asked the Supreme Court of Hawaii to answer the
following question:

    Under Rule 54(c) of the Hawaii Rules of Civil Procedure,
    is Pacific’s default judgment for $1,262,067.24 void when
    Data received notice of Pacific’s complaint requesting
    "[g]eneral, special, treble, and punitive damages in an
    amount to be determined at trial" before the entry of any
    default, and Data received notice of the specific amount
                 IN RE: GENESYS DATA TECHNOLOGIES                     3
    requested and itemization of damages claimed after the
    entry of the default but before the entry of judgment?

Id. at 133. The Supreme Court of Hawaii accepted our request and has
now answered the certified question "in the negative." Meindl v.
Genesys Pacific Techs. (In re Genesys Data Techs., Inc.), 2001 WL
212627, at *1, ___ Haw. ___, ___ P.3d ___ (March 5, 2001).

   As we noted in our earlier opinion, federal courts "follow a two-
step process" when determining whether the full faith and credit stat-
ute, 28 U.S.C.A. § 1738 (West 2000), applies "in a particular situa-
tion." Meindl, 204 F.3d at 128. "First, a federal court must look to
state law to determine the preclusive effect of the state court judg-
ment." Id. We have now completed that task. The Supreme Court of
Hawaii has ruled in answer to our certified question that Pacific’s
judgment is not void under Haw. R. Civ. P. 54(c). Meindl, 2001 WL
212627, at *1. We have already determined that this constitutes the
only possible reason a Hawaii court would refuse to give that judg-
ment preclusive effect. See Meindl, 204 F.3d at 129-132. Accord-
ingly, given the Supreme Court of Hawaii’s answer to our certified
question, we can now conclude with assurance that state law would
afford Pacific’s default judgment preclusive effect.

   We must now engage in the second part of our two-step analysis.
We must determine if Congress created an express or implied excep-
tion to § 1738. See id. at 128; see generally, Kremer v. Chem. Constr.
Corp., 456 U.S. 461, 468 (1982) (no exception to § 1738 will be rec-
ognized "unless a later statute contains an express or implied partial
repeal"). To find such an exception, "there [must] be an ‘irreconciable
conflict’ between the two federal statutes at issue." Matsushita Elec.
Indus. Co. v. Epstein, 516 U.S. 367, 381 (1996) (quoting Kremer, 456
U.S. at 468). The Supreme Court has noted that it has "seldom, if
ever, held that a federal statute impliedly repealed § 1738 . . . due to
th[is] relatively stringent standard." Matsushita, 516 U.S. at 380-81.

   As we noted in our earlier opinion, Data has not even suggested
that Congress has explicitly or implicitly repealed § 1738 in this case.
See Meindl, 204 F.3d at 128. Accordingly, the second step of our
analysis can be easily resolved. There is no basis for finding an
exception to § 1738 here or for refusing to give the Hawaii default
4                IN RE: GENESYS DATA TECHNOLOGIES
judgment the preclusive effect to which it would be entitled under
Hawaii law.

   In sum, because Pacific’s default judgment is entitled to preclusive
effect under Hawaii law and because Congress has created no excep-
tion to § 1738 in the present context, that judgment is also entitled to
full faith and credit in bankruptcy claims allowance proceedings.
Therefore, the judgment of the district court granting it such effect is

                                                          AFFIRMED.