New York Law Review

Tag: Foreign Judgment

  • Lanari v. Lanari, 22 N.Y.2d 273 (1968): Res Judicata Effect of Foreign Judgments

    Lanari v. Lanari, 22 N.Y.2d 273 (1968)

    A party who controls litigation, even if not formally a party, is bound by the judgment in that litigation under the doctrine of res judicata, precluding them from relitigating the same issues in a subsequent action.

    Summary

    A husband and wife, domiciled in France, opened a joint bank account with right of survivorship in New York. Upon the husband’s death, his daughter from a prior marriage claimed the funds, citing French forced heirship laws. She initiated litigation in France while the wife sued the bank in New York. After the wife’s death, her estate pursued the New York action. The French court ruled in favor of the daughter. The New York Court of Appeals considered whether the French judgment barred the New York action under res judicata. The Court held that the executors of the wife’s estate were bound by the French judgment because they effectively controlled the French litigation, even though they were not formal parties. The French judgment was therefore given res judicata effect, preventing the estate from claiming the funds in New York.

    Facts

    Aristide Lanari and his wife Roberta, French domiciliaries, opened a joint bank account in New York with right of survivorship.
    Upon Aristide’s death, his daughter, Maria Elena Meyer, from a previous marriage, claimed the funds, invoking French forced heirship laws that limited the amount Aristide could bequeath to his wife.
    The daughter sued the wife in France seeking a declaration that the New York funds were part of Aristide’s estate.
    The wife then sued the bank in New York to compel turnover of the funds.
    The wife died and her estate’s executors were substituted as plaintiffs in the New York action.
    The French action proceeded to judgment in favor of the daughter.
    The wife’s executors, who were also related to her sisters (the legatees), continued to pursue the New York action, arguing the French judgment should not preclude their claim.

    Procedural History

    The trial court in New York ruled in favor of the wife’s estate, holding that the French judgment did not control.
    The Appellate Division modified the judgment, giving res judicata effect to the French judgment and awarding recovery to the husband’s heir.
    The executors of the wife’s estate appealed to the New York Court of Appeals.

    Issue(s)

    Whether the French judgment should be given res judicata effect in New York, barring the wife’s estate from relitigating the ownership of the funds.
    Whether the executors of the wife’s estate were in privity with the parties in the French litigation, such that they are bound by the French judgment.
    Whether recognition of the French judgment would violate New York’s public policy.

    Holding

    Yes, the French judgment should be given res judicata effect because the executors of the wife’s estate effectively controlled the French litigation, placing them in privity with the parties in that action.
    No, recognizing the French judgment does not violate New York’s public policy because the principles of comity support recognition of foreign judgments from courts of competent jurisdiction.

    Court’s Reasoning

    The Court reasoned that the doctrine of res judicata prevents parties and those in privity with them from relitigating issues already decided by a court of competent jurisdiction. The term ‘privity’ extends to those who control an action, even if they are not formal parties.
    The Court emphasized the significant role of Sewell Watts, one of the executors and husband of one of the wife’s sisters, in controlling both the New York and French proceedings. Watts retained the same law firm (Coudert Brothers) for both actions and acted as the central point of contact.
    The Court found that the simultaneous prosecution of both actions by the same law firm strongly suggested that the executors controlling the New York action were deeply involved in the management of the French defense.
    Because the executors had practical control over the French litigation, they were bound by the French court’s determination, and the principle of res judicata barred them from relitigating the issue of ownership of the funds in New York.
    Regarding public policy, the Court stated that under principles of comity, New York courts should give full effect to judgments rendered by foreign courts of competent jurisdiction. Recognition would only be withheld if the foreign judgment contravened New York’s public policy. The Court concluded that the appellants failed to demonstrate such a contravention.
    The court noted, “Generally speaking, the doctrine of res judicata gives ‘ binding effect to the judgment of a court of competent jurisdiction and prevents the parties to an action, and those in privity with them, from subsequently relitigating any questions that were necessarily decided therein’”.

  • Jay’s Stores, Inc. v. Ann Lewis Shops, Inc., 15 N.Y.2d 141 (1965): Merger Doctrine and Jurisdiction After Corporate Dissolution

    Jay’s Stores, Inc. v. Ann Lewis Shops, Inc., 15 N.Y.2d 141 (1965)

    The doctrine of merger by judgment does not destroy all identifying characteristics of the original cause of action, and a foreign judgment based on a contract made in New York remains a liability incurred in New York for jurisdictional purposes, even after the defendant corporation has surrendered its authority to do business in the state.

    Summary

    Jay’s Stores sued Ann Lewis Shops in New York to enforce a Massachusetts judgment. The underlying contract was executed in New York while Ann Lewis Shops was authorized to do business there. Ann Lewis Shops had surrendered its authorization and argued that the action was not based on a New York liability and thus, New York lacked jurisdiction. The New York Court of Appeals held that the Massachusetts judgment did not extinguish the fact that the original obligation was incurred in New York. Therefore, service on the Secretary of State was sufficient to establish jurisdiction over Ann Lewis Shops.

    Facts

    Ann Lewis Shops, a Delaware corporation, was authorized to do business in New York. On October 21, 1953, while authorized to do business in New York, Ann Lewis Shops guaranteed certain obligations of a third party under a sublease of business property in Massachusetts. Ann Lewis Shops filed a certificate of surrender of authority to do business in New York on March 10, 1956, consenting to service on the Secretary of State for liabilities incurred in New York. A Massachusetts action between Jay’s Stores and Ann Lewis Shops resulted in a judgment on March 1, 1957, determining liabilities based on the guarantee. Jay’s Stores then sued in New York to enforce the Massachusetts judgment. Service was made on the NY Secretary of State.

    Procedural History

    Jay’s Stores commenced an action in New York on August 17, 1963, based on the 1957 Massachusetts judgment, serving process on the New York Secretary of State. Special Term granted summary judgment in favor of Ann Lewis Shops, dismissing the complaint. The Appellate Division affirmed the Special Term decision. Jay’s Stores appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether a Massachusetts judgment, based on a contract executed in New York, is considered a “liability or obligation incurred” in New York for the purpose of jurisdiction after the defendant corporation has surrendered its authority to do business in New York?
    2. Whether the doctrine of merger extinguishes the underlying obligation such that the action on the judgment is no longer considered an action on the original New York liability?

    Holding

    1. Yes, because the Massachusetts judgment was based on a liability incurred in New York, and its characteristics in this respect survive the adjudication.
    2. No, because the doctrine of merger does not destroy all of the identifying characteristics or relationships of the cause of action which the judgment determines.

    Court’s Reasoning

    The court reasoned that while the doctrine of merger prevents successive actions on the same cause, it doesn’t destroy the rights or identities the prevailing party had in the original cause. Quoting Walker v. Muir, 194 N.Y. 420, 423, the court stated that “a judgment is merely the old debt in a new form.” The court referenced Wyman v. Mitchell, 1 Cow. 316 (1823) and bankruptcy cases like Monroe v. Upton, 50 N.Y. 593, 597, to illustrate that courts can inquire into the underlying basis of a judgment to determine its enforceability. The court also cited Wisconsin v. Pelican Ins. Co., 127 U.S. 265, noting that “The essential nature and real foundation of a cause of action are not changed by recovering judgment upon it.” Applying these principles, the Court of Appeals determined that the action on the Massachusetts judgment should be treated as an action upon a liability incurred in New York. Therefore, service on the Secretary of State was sufficient to acquire jurisdiction over Ann Lewis Shops. The court reversed the lower court decisions and granted summary judgment to Jay’s Stores for $8,715, the specific amount stated in the Massachusetts judgment.