The Foreign Judgment Was Never Recognized In The California Court Given The Parties Entered Into A Settlement Agreement Prior To A Determination On The Request For Recognition.
The Uniform Foreign-Country Money Judgments Recognition Act (Code Civ. Proc., § 1713 et seq.) (UFCMJRA) allows California courts to recognize and enforce judgments entered by courts in foreign countries. However, recognition of a foreign judgment is not a foregone conclusion. Rather, the party seeking recognition and enforcement of a foreign judgment must first file an action in trial court, and has the burden of establishing that the foreign judgment is entitled to recognition. Once this burden is met, the opposing party then has the burden of establishing that a ground for nonrecognition exists.
In Vischer AG v. Appollo Enterprise Solutions, Case No. B289410 (2d Dist., Div. 1 October 25, 2019) (unpublished), plaintiff brought a motion under UFCMJRA based on a judgment entered in its favor by the Commercial Court of the Canton of Zurich, Switzerland. Defendant opposed the request for recognition and enforcement, but settled the dispute with plaintiff, approximately eleven months after the action was initiated, for slightly more than half of the amount plaintiff sought.
Plaintiff then moved for an award of attorney fees for the UFCMJRA action claiming entitlement as the prevailing party for having achieved more than half of what it was seeking in the California action. The trial court denied – determining that “[i]n a settlement there’s no prevailing party,” that there was no statutory basis for awarding attorney fees in this case, and that the Swiss judgment had never been recognized under the UFCMJRA as the action was dismissed following the parties’ settlement agreement.
On appeal, plaintiff argued that it was entitled to attorney fees for its judgment enforcement efforts under Swiss law and was therefore entitled to the same under the UFCMJRA. The Second District disagreed. The Swiss judgment had no force in California courts because it was never recognized under the UFCMJRA, and therefore could not provide a basis for an award of attorney fees.
BLOG COMMENT – The 2/1 DCA referenced its earlier decision Wertheim LLC v. Currency Corp. (2019) 35 Cal.App.5th 1124, 1131 in applying the standard of review for statutory entitlement to attorney fees. Co-contributor Mike was one of the appellate counsel on the Wertheim case which was discussed in our June 10, 2019 post.