Summary
finding subject-matter jurisdiction over claims to enforce Indiana state court judgment
Summary of this case from EndoCare, Inc. v. Technologias Urologicas, Inc.Opinion
Civil No. 09-1500 (JAF).
March 8, 2010
OPINION AND ORDER
Plaintiff, Brightpoint North America L.P., brings the present diversity action to enforce an Indiana state-court judgment against Defendants, Ramón Acosta, Velia Fernández, and the conjugal partnership between them. (Docket No. 4.) Plaintiff moves for summary judgment. (Docket No. 17.) Defendants oppose and counter with a cross-motion for summary judgment. (Docket No. 27.) Plaintiff opposes. (Docket No. 28.)
I. Factual and Procedural Synopsis
We derive the following factual summary from Plaintiff's statement of uncontested material facts. (Docket No. 18.) According to Local Civil Rule 56(e), "[f]acts contained in a supporting or opposing statement of material facts . . . shall be deemed admitted unless properly controverted." L.Cv.R. 56(e). Because Defendants have failed to submit a statement of material facts as contemplated by the Local Rules, we take Plaintiff's facts as true. See Cosme-Rosado v. Serrano-Rodríguez, 360 F.3d 42, 45 (1st Cir. 2004) ("We have consistently upheld the enforcement of [the District Court of Puerto Rico's local rule], noting repeatedly that `parties ignore [it] at their peril' and that `failure to present a statement of disputed facts, embroidered with specific citations to the record, justifies the court's deeming the facts presented in the movant's statement of undisputed facts admitted.'" (quoting Ruiz Rivera v. Riley, 209 F.3d 24, 28 (1st Cir. 2001))).
Plaintiff is a Delaware limited partnership with its principal place of business in Indianapolis, Indiana. Acosta is a citizen of Puerto Rico and the president of CAT Communications, Inc. ("CAT"), a Puerto Rico corporation with its principal place of business in San Juan, Puerto Rico. CAT entered into a contract with Plaintiff, and Acosta guaranteed the payment of all liabilities of CAT to Plaintiff. The contract between Plaintiff and Acosta included a "Governing Law and Forum" clause. (Docket No. 18-4.) Should there be a lawsuit concerning the payment of the guaranty, the parties consented to the application of the laws of Indiana and the jurisdiction of the superior court of Marion County, Indiana. Id. at 10. In accordance with the forum-selection clause, Plaintiff filed a complaint in Marion Superior Court and served Defendants with a summons and complaint via certified mail. Defendants received service of process on November 3, 2008. (Docket No. 18-4.) On December 4, 2008, Plaintiff obtained entry of a partial summary judgment in the Marion Superior Court ("Indiana Judgment") against Acosta for $115,047.27. (Docket No. 1-2.) This was comprised of the principal amount of $102,087.87; pre-judgment interest on said amount at the rate of 1.5% per month for a total of $10,554.36; and Plaintiff's reasonable attorneys' fees in the sum of $2,405. Acosta owns undivided interests in property located in the Commonwealth of Puerto Rico, which includes real property jointly owned with Fernández outside of a conjugal partnership. Acosta and Fernández entered into a prenuptial agreement that stipulated against the creation of a conjugal partnership and for the individual ownership of all property during the marriage. (Docket No. 21.) Acosta has not paid any part of the Indiana Judgment.
Plaintiff filed an amended complaint in this court against Acosta, Fernández, and their conjugal partnership on June 18, 2009, seeking the enforcement of the Indiana Judgment. (Docket No. 4.) On September 21, 2009, Plaintiff moved for summary judgment (Docket No. 17) and filed a statement of uncontested facts (Docket No. 18). On October 20, 2009, Defendants filed a memorandum in opposition to Plaintiff's summary-judgment motion, as well as a cross-motion for summary judgment. (Docket No. 27.) Plaintiff submitted a motion in opposition to Defendants' summary-judgment motion on November 9, 2009. (Docket No. 28.)
II. Standard for Summary Judgment
We grant a motion for summary judgment "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A factual dispute is "genuine" if it could be resolved in favor of either party and "material" if it potentially affects the outcome of the case. Calero-Cerezo v. U.S. Dep't of Justice, 355 F.3d 6, 19 (1st Cir. 2004).
The movant carries the burden of establishing that there is no genuine issue as to any material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). In evaluating a motion for summary judgment, we view the record in the light most favorable to the non-movant. Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). "Once the moving party has made a preliminary showing that no genuine issue of material fact exists, the nonmovant must produce specific facts, in suitable evidentiary form, to establish the presence of a trialworthy issue." Clifford v. Barnhart, 449 F.3d 276, 280 (1st Cir. 2006) (internal quotation marks omitted). The non-movant "may not rely merely on allegations or denials in its own pleading; rather, its response must . . . set out specific facts showing a genuine issue for trial." Fed.R.Civ.P. 56(e)(2).
III. Analysis
Defendants argue that we cannot enforce the Indiana Judgment because Puerto Rico courts, applying the laws of the Commonwealth, would not enforce the judgment. They argue that the Indiana Judgment would not be recognized under Puerto Rico law because the Indiana court: (1) lacked personal and subject-matter jurisdiction; (2) lacked competence to hear the matter; (3) issued the judgment without observing due process of law; (4) was known for its bias against foreigners; and (5) honored a forum-selection clause that would contravene Puerto Rico's public policy. (Docket No. 27.) We begin our analysis by reviewing our jurisdiction and the proper procedure for enforcing state-court judgments in federal court. Then, we proceed to treat each of Defendants' arguments in turn.
Congress' grant of diversity jurisdiction to federal district courts provides "original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000." 28 U.S.C. § 1332 (emphasis added). We, therefore, have subject-matter jurisdiction over claims to enforce state-court judgments if those claims meet the § 1332 requirements of diversity and amount in controversy. Plaintiff is a citizen of Indiana and Defendants are citizens of Puerto Rico, while the judgment to be enforced exceeds $115,000.
Congress has mandated that federal courts grant full faith and credit to the judgments of all states, territories, and possessions of the United States, including Puerto Rico. See 28 U.S.C. § 1738. Federal courts sitting in diversity apply the Federal Rules of Civil Procedure unless the rule in question is shown to violate the Rules Enabling Act or the U.S. Constitution.Johnson Chem. Co. v. Condado Ctr., Inc., 453 F.2d 1044, 1046 (1st Cir. 1972) (citing Hanna v. Plumer, 380 U.S. 460, 469-74 (1965)). Rule 69(a) states that a federal court must execute a money judgment in accordance with the procedure of the state in which the court sits. Fed.R.Civ.P. 69(a). While the mandate of full faith and credit in § 1738 requires states and territories to recognize each other's valid judgments, it does not require them to apply the same mechanisms to enforce those judgments. See Baker v. Gen. Motors Corp., 522 U.S. 222, 235 (1998) ("Enforcement measures do not travel with the sister state judgment . . . [and] such measures remain subject to the evenhanded control of forum law.")
Because foreign judgments do not automatically operate in Puerto Rico, exequatur proceedings are required for such judgments to be officially recognized. Ex parte Márquez Estrella, 128 P.R. Dec. 243 (1991) (defining exequatur as a proceeding for the recognition and enforcement of foreign judgments by the courts of the forum where enforcement is sought); see infra App. A (certified translation of Ex parte Márquez). In a recent opinion, the Puerto Rico Supreme Court distinguished foreign judgments rendered by states of the U.S. from those rendered by foreign nations. Avilés v. P.R. Tel. Co., 09 TSPR 163, ¶¶ 12-13; see infra App. B (certified translation of the pertinent section of Avilés). When enforcing a judgment from a U.S. state, Puerto Rico courts utilize a simplified form of the exequatur procedure that looks only to whether the state court: (1) had personal and subject-matter jurisdiction to hear the case; (2) observed due process of law; and (3) did not issue its judgment on a fraudulent basis. Avilés infra App. B.
The crux of Defendants' argument is that the forum-selection clause contained in the contract between Plaintiff and Defendants was invalid and, therefore, that the Indiana court was not competent to hear the original case. (Docket No. 27 at 6-8.) Competence, however, is properly considered only in an exequatur analysis of judgments from foreign nations. See Avilés, infra App. B. There is no separate competence inquiry for the recognition of U.S. state-court judgments. Avilés, infra App. B. Since the case at bar concerns the recognition of a judgment from Indiana's state court, we will construe Defendants' argument for the invalidity of the forum-selection clause as pertaining solely to the personal and subject-matter jurisdiction prongs of exequatur.
In an exequatur analysis, "competence" refers to the power of a court to hear a case. See Efectos Litográficos v. Nat'l Paper Type Co., 12 P.R. Offic. Trans. 486, 501 (1982) (citing Restatement (Second) of Conflict of Laws § 105 (1980)); see also Black's Law Dictionary 406 (9th ed. 2009) (defining a competent court as "[one] that has the power and authority to do a particular act; one recognized by law as possessing the right to adjudicate a controversy"). Competence is distinct from exequatur's general inquiry into personal and subject-matter jurisdiction because it "shall be measured against the rules of the foreign nation." Efectos Litográficos, 12 P.R. Offic. Trans. at 501 (emphasis added). In other words, competence is a question of whether the rendering court's sovereign granted it the power to hear a case, not a question of whether jurisdiction existed by the standards of the nation where enforcement is sought. Thus, a competence inquiry would be inapposite when the judgment to be enforced was rendered by a court of the same nation.
Defendants also argue that the selection of the Indiana forum contravenes Puerto Rico's public policy as embodied by the Puerto Rico Dealers' Act, 10 L.P.R.A. § 278 (2004). (Docket No. 27 at 11.) But the Puerto Rico Supreme Court clearly held in Ex Parte Márquez that the public-order prong of the exequatur analysis does not apply to judgments from federal courts or state courts.Infra App. A, 9-10; accord Avilés, infra App. B. In addition, Defendants have made conclusory allegations that the Indiana forum could be prejudiced against foreigners. The Puerto Rico Supreme Court has held, however, that the "prejudice" prong of exequatur does not apply to state-court judgments. Avilés, infra App. B.
To the extent a claim of prejudice could be construed as a separate challenge to due process, we reject the argument as a conclusory allegation unsupported by the factual record. Defendants have not submitted any evidence as to partiality or prejudice exercised by Indiana courts against citizens of other jurisdictions.
We now proceed to address the remaining prongs of the exequatur analysis: Personal jurisdiction, subject-matter jurisdiction, due process, and fraud.
A. Personal Jurisdiction
Defendants attempt to deny the Indiana court's personal jurisdiction over them by casting doubt on the validity of both the forum-selection clause and the service of process; they succeed in neither argument. We turn first to the forum-selection clause. Indiana courts "may exercise jurisdiction on any basis not inconsistent with" the Indiana constitution or the U.S. Constitution. Ind. R. Trial P. 4.4(A) (2008). This language extends the personal jurisdiction of Indiana courts to the full extent of the Fourteenth Amendment's Due Process Clause. See LinkAmerica Corp. v. Albert, 857 N.E.2d 961, 967 (Ind. 2006). The Supreme Court has held that forum-selection clauses, where freely negotiated and neither unreasonable nor unjust, act as consent to personal jurisdiction and do not offend principles of due process. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473 n. 14 (1985). A valid forum-selection clause establishes specific personal jurisdiction for claims arising out of the contract of which it is a part.Jallali v. Nat'l Bd. of Osteopathic Med. Exam'rs, Inc., 908 N.E.2d 1168, 1174 (Ind. Ct. App. 2009). A forum-selection clause is presumptively enforceable in the absence of fraud, overreaching, unreasonableness of forum selection, or violation of the forum's public policy. M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15 (1972); Dexter Axle Co. v. Baan USA, Inc., 833 N.E.2d 43, 48 (Ind. Ct. App. 2005).
While Defendants have argued against the validity of the Indiana forum, they have not directly addressed the Indiana court's use of Indiana law in interpreting the contract's forum-selection clause. Regardless, the point is moot; the contract between the parties contained a choice of law clause stipulating to the application of Indiana law. (Docket No. 18-4 at 10.) Furthermore, the Puerto Rico and Indiana standards for measuring the validity of forum-selection clauses are identical and, thus, would lead to the same result. Compare Dexter Axle Co. v. Baan USA, Inc., 833 N.E.2d 43, 48 (Ind. Ct. App. 2005) (adopting federal standard for forum-selection clause validity),and Unisys P.R., Inc. v. Ramallo Bros. Printing, Inc., 128 P.R. Dec. 842 (1991) (same).
Under this standard, the forum-selection clause at issue in this case was enforceable. The contract between Acosta and Plaintiff included a provision under the heading "Governing Law and Forum" stating "that any and all disputes hereunder shall be decided exclusively by litigation in state or federal courts located within the Southern District of Indiana, Indianapolis Division, United States of America." (Docket No. 18-4 at 10.) Upon examining the record, there is nothing to bar the enforcement of the forum-selection clause. Defendants fail to establish that fraud or overreaching were factors in the negotiation of the contract. While Defendants argue that the forum-selection clause is unreasonable because it would entail "litigating this case in a court 2,000 miles from Puerto Rico" (Docket No. 27), such inconvenience is insufficient to invalidate the clause. While litigating a case in Indiana might indeed be burdensome for Acosta, a resident of Puerto Rico, nothing in the record leads us to believe that the selection of the Indiana forum was arbitrary. After all, it is paramount to note that Plaintiff's principal place of business is in Indianapolis, Marion County, Indiana. For the aforementioned reasons, the forum-selection clause is valid; the parties freely and voluntarily consented to bring suit within the jurisdiction of Indiana.
Defendants also argue a lack of personal jurisdiction owing to deficient service of process; they contend that service of process by certified mail cannot establish jurisdiction under Puerto Rico law. (Id.) Exequatur proceedings, however, are not concerned with whether the original judgment was issued by a court that would have had personal jurisdiction consistent with the laws of Puerto Rico. See Roseberry v. Registrar, 14 P.R. Offic. Trans. 958, 964 (1983). Rather, the question is whether personal jurisdiction existed under Indiana law and within the confines of Fourteenth Amendment Due Process jurisprudence as announced by the U.S. Supreme Court. See generally Underwriters Nat'l Assurance Co. v. N.C. Life Accident Health Ins. Guar. Ass'n., 455 U.S. 691, 704-05 (1982) (discussing jurisdictional exceptions to the Full Faith and Credit Clause); Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (illustrating Due Process Clause restraints on personal jurisdiction).
We have seen no persuasive argument that the service of process leading to the Indiana Judgment exceeded the Constitutional limits of due process. The U.S. Supreme Court, in Mullane v. Central Hanover Bank Trust Co., announced that service satisfies due process where it is "reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." 339 U.S. 306, 314 (1950). Service by certified mail with return receipt to Acosta's known business address was reasonably calculated to provide him with notice of a pending suit. See id. at 319 (endorsing mailings as a form of service reasonably calculated to provide notice); accord Greene v. Lindsey, 456 U.S. 444, 455 (1982). Furthermore, although actual notice is unnecessary, Plaintiff produced evidence of a phone message from Acosta to Plaintiff's attorney, a month after service was received, referencing a desire "to discuss a case with Brightpoint" and an affidavit from the same attorney testifying that Acosta admitted he had received the complaint and summons. (Docket No. 18-4.) Acosta has never explicitly denied receipt of actual notice.
The method of service in the prior case also comported with Indiana law, even where service was by certified mail with a return receipt signed by an individual other than Acosta and without evidence that Acosta himself ever received the service or knew its contents. Indiana Rule of Trial Procedure 4.1 provides that service on an individual may be effected by registered or certified mail with return receipt. Under Indiana law, however, the party being summoned need not sign the certified mail receipt. See Robinson v. Turner, 886 F. Supp. 1451, 1456 (S.D. Ind. 1995). Service is effective as long as the signer had actual, apparent, or implied authority to receive certified mail for the party. Id. at 1457. Furthermore, Indiana law does not require that the party actually receive the summons in order for due process to be satisfied. Precision Erecting v. Wokurka, 638 N.E.2d 472, 474 (Ind. Ct. App. 1994) ("[A]ctual delivery to the party is not jurisdictionally necessary"). The record reflects that the Marion County Clerk sent, via certified mail, a summons addressed to Acosta. (Docket No. 18.) Defendants do not argue that whoever signed for the summons was not authorized to do so. Thus, Acosta was properly served under Indiana law.
In light of the foregoing, we hold that the Marion Superior Court had personal jurisdiction over Acosta.
B. Subject-Matter Jurisdiction
Our analysis now turns to the question of whether the Marion Superior Court had subject-matter jurisdiction over the case. Under Indiana law, the Marion Superior Court has "concurrent and coextensive jurisdiction with the Marion circuit court in all cases and upon all subject matters." Ind. Code § 33-33-49-9(1) (2009). "The [Marion] circuit court has original jurisdiction in all civil cases and in all criminal cases. . . ." Ind. Code § 33-28-1-2(a). Therefore, the Marion Superior Court had subject-matter jurisdiction over the original case.
C. Due Process
Defendants argue that the Marion Superior Court did not observe due process of law in issuing its judgment. This argument, however, is based on deficient service of process, a claim we have already disposed of in our consideration of personal jurisdiction. We reiterate that service on Acosta by certified mail with return service met the requirements of due process.
D. Fraud
No argument has been advanced by Defendants that the Indiana Judgment was obtained through fraudulent means. Defendants point to a "lack of negotiating that occurred between the parties prior to the execution of the [contract]" from which the Indiana Judgment arose (Docket No. 27 at 8), but this alone is not evidence of fraud.
For the preceding reasons, we find that the Indiana Judgment meets the test for exequatur proceedings in Puerto Rico. We find that there is no genuine issue as to any material fact and the Plaintiff is entitled to summary judgment as a matter of law. However, because Defendant Fernández was not a party to the Indiana Judgment, we are unable to enforce that judgment against her.
Nor can we enforce the judgment against a conjugal partnership between Defendants. The Puerto Rico Civil Code dictates that a new legal entity separate from bride and groom, the conjugal partnership, is created upon marriage. 31 L.P.R.A. § 3622 (1993);Montes-Santiago v. State Ins. Fund Corp., 600 F. Supp. 2d 339, 343 (D.P.R. 2009). The conjugal partnership generally holds all property acquired by the spouses during marriage as community property, dividing interest in such property into equal shares upon dissolution of the marriage. See 31 L.P.R.A. §§ 3641, 3697. The Code also allows for prenuptial agreements that "stipulate the conditions for the conjugal partnership with regard to present and future property." 31 L.P.R.A. § 3551. Puerto Rico's Supreme Court has determined that parties are free to "totally eliminate the legal regime" of conjugal property through the use of prenuptial agreements. See Umpierre v. Torres Díaz, 14 P.R. Offic. Trans. 578, 592 (1983). Defendants' prenuptial agreement stipulates that they are not married under the "Community Property Partnership Regime provided in the Puerto Rico Civil Code" and that all property will be separately owned by Defendants. (Docket No. 21.) We cannot enforce a judgment against an entity that does not exist.
IV. Conclusion
For the reasons stated herein, we hereby GRANT IN PART Plaintiff's motion for summary judgment (Docket No. 17) with regard to Acosta. We DISMISS WITH PREJUDICE the complaint against the conjugal partnership (Docket No. 4). We DISMISS WITHOUT PREJUDICE of independent litigation the claim against Fernández (id.) if any remedy is otherwise available. We DENY Defendants' motion for summary judgment (Docket No. 27). The Plaintiff may request from the Clerk of Court the issuance of a writ for execution of judgment, by attachment or otherwise, based on the final Indiana Judgment against Acosta's share in his jointly-owned properties or any other property solely belonging to Acosta.
IT IS SO ORDERED.
APPENDIX "A" (Translation)
IN THE SUPREME COURT OF PUERTO RICO Ex parte Petra Márquez Estrella, Petitioner No. CE-90-655 Exequatur (Enforcement of Foreign Judgment)JUSTICE ANDREU GARCIA delivered the opinion of the Court. San Juan, Puerto Rico, April 12, 1991
By its very essence, the principle of sovereignty leads to the rejection of the automatic enforcement of judgments and orders issued by the courts of a state or foreign country. In keeping with this principle, the public law of the nations of the civilized world calls for the recognition and enforcement of foreign judgments by the courts of the forum where enforcement is sought. The proceeding for such recognition and enforcement has traditionally been termed exequatur.Although the former 1886 Law of Civil Procedure established the cases where foreign judgments could be enforced in Cuba and Puerto Rico, and at the same time prescribed the exequatur proceeding, the 1904 Code of Civil Procedure did not carry over the provisions of the former statute or set down the standards for recognizing such judgments. All subsequent adoptions and amendments to our Rules of Civil Procedure have in no way rectified this omission. Ramírez v. Registrar, 96 P.R.R. 332 (1968).
On the other hand, due to the degree of cosmopolitism attained by our society — not only because of population shifts to other cities outside Puerto Rico and vice versa, but also because of an increase in our overall economic activity, which has stretched to other parts of the North American continent and beyond — exequatur proceedings have increased and have thus grown in importance in the local legal milieu.
Aware of the fact that the two mentioned circumstances combined have caused certain confusion in the local legal community with regard to the purpose and handling of such proceedings, this opinion allows us to shed some more light on said proceeding and adopt the procedural rules that shall govern its future use. In so doing, we act in accordance with our inherent authority to set down whatever procedural rules may be necessary to facilitate the prosecution of cases. See also, Civil Procedure Rule 71, andPérez Pascual v. Vega Rodríguez, 124 D.P.R. ___ (1989).
Said rule provides:
"RULE 71. CASES NOT PROVIDED FOR BY THESE RULES
"Where no specific proceeding has been provided for in these rules, the court may regulate its practice in any manner not inconsistent therewith or with any applicable legal provision."
I
Petra Márquez Estrella and Manuel Oblites were divorced by judgment of the California Superior Court, County of Los Angeles, on April 7, 1989. The court adopted the stipulation of the parties and, consequently, awarded a parcel of land in the Guzmán Arriba Ward in Río Grande and a house in the Brisas del Mar Housing Development in Luquillo to Márquez Estrella.
In order to have such properties recorded in her name in the Registry of Property of Puerto Rico, Márquez Estrella filed an ex-parte petition in the San Juan Superior Court, seeking enforcement of the judgment pursuant to sec. 45 of the Mortgage and Property Registry Act (Mortgage Law) and Art. 59.1 of the Mortgage Law Regulations.
Mortgage and Property Registry Act, No. 198 of August 8, 1979 (30 L.P.R.A. § 2208). It reads:
"The Registry shall also record all titles, transactions and contracts, mentioned in section 2201 of this title, granted in the United States of America or in foreign countries, enforceable in Puerto Rico according to law, and the judgments issued by courts in the United States of America or foreign courts, which must be complied with in Puerto Rico according to the prevailing rules of legal procedure, provided their enforcement is carried out by a local court with jurisdiction."
Art. 59.1 of the Regulations for the Execution of the Mortgage and Property Registry Act, 30 L.P.R.A. § 2003, reads:
"Article 59.1 — The [judgments] referred to in article 45 of the Law [30 L.P.R.A. § 2208] will be [recorded] whenever they are included in a writ of execution resolution of the Supreme Court resulting from an ordinary proceeding of which the [Office of the Prosecutor] will be notified."
On June 27, 1990, the trial court (Hon. Angel D. Ramírez Ramírez, judge) denied Márquez Estrella's petition and required the former spouses to personally sign the petition or, in the alternative, that Márquez Estrella file a complaint against her former husband through the ordinary proceeding.
Márquez Estrella filed this Motion for Reconsideration (rehearing), alleging, among other things, that in a prior case filed by her counsel in the same Part of the Superior Court she was not required to comply with either of the two conditions set down by the trial court in this case, and that, therefore, these requirements did not lie. The trial court denied the motion for reconsideration, stating:
Elizabeth Ann Roseberry, Ex parte, Civil No. 84-237, filed on January 12, 1984, and adjudicated by the San Juan Superior Court on February 2, 1984 (Hon. William Fred Santiago, judge). See, with regard to this petition, Roseberry v. Registrador, 114 D.P.R. 743 (1983), discussed below.
The fact that another Honorable Judge has ruled otherwise is not binding, especially when the judge is of equal rank. The motion for reconsideration is denied.
Márquez Estrella came to us on appeal essentially assigning the following error: that she was ordered to use any of the proceedings ordered by the court a quo, even when they are not based on any regulation, thus implying needless delays and inconveniences.
II
In Ef. Litográficos v. Nat. Paper Type Co., 112 D.P.R. 389 (1982), we set forth the standards of Private International Law that will govern the recognition and enforcement of foreign judgments in Puerto Rico in the absence of a treaty or special laws. Said standards can be summed up as follows:
A foreign judgment is one issued by a court outside the jurisdiction of the Commonwealth of Puerto Rico, hence, foreign judgments are those issued by courts in foreign countries and by state courts in the United States. Judgments of federal courts are enforced through a writ of execution issued by the United States District Court for the district in which enforcement is sought, following the procedures set down in the state jurisdiction for the execution of its own judgments, unless an applicable federal statute exists, pursuant to Federal Civil Procedure Rule 69 (28 U.S.C.A.).
These standards were ratified in Silva Oliveras v. Durán Rodríguez, 119 D.P.R. 254 (1987).
1. That the foreign judgment has been issued by a court with jurisdiction over the person and the subject matter.
2. That the judgment has been rendered by a competent court.
3. That the court that issued judgment observed due process of law.
4. That the legal system in which judgment is rendered is known for its impartiality and absence of prejudice against foreigners.
5. That the foreign judgment is not contrary to the public policy order of the petitioned forum or local court, that it is not repugnant to the basic principles of justice, and has not been obtained by fraud.
In said case we cautioned that the standards were to be applied mainly in situations where the foreign judgment imposed a payment of money, whereas in other cases certain variation could be justified. Ef. Litográficos, supra, at 405.
A year later we addressed another aspect of the problem inRoseberry v. Registrador, 114 D.P.R. 743 (1983): the effects, if any, of the full faith and credit clause of Art. IV, Sec. 1 of the United States Constitution and Sec. 2 of the Federal Relations Act on Mortgage Law sec. 45 and Regulation Art. 59.1, when the foreign judgment was from a state of the United States.
This court ruled as follows:
The pertinent provisions of the Puerto Rico Mortgage Law and its Regulations are not in conflict with the Constitution of the United States or with the cited federal legislation. Section 1 of Art. IV of the Constitution does not prescribe the procedure for giving full faith and credit to public acts, documents and judicial proceedings of other domestic jurisdictions. Said section does not require a Puerto Rican Registry of Property to give full faith and credit directly to a foreign judgment, ignoring the provisions of our laws that require previous court intervention. It does not operate ex proprio vigore.
The reason behind such rule is clear. The full faith and credit clause is subject to exceptions. Judgments rendered in one state are not entitled to full faith and credit in another state if, for example, the judgment was rendered without jurisdiction over the parties or the subject matter. Williams v. North Carolina, 317 U.S. 287 (1942); Underwriters Assur. Co. v. N.C. Guaranty Assn., 455 U.S. 691 (1982); Restatement of the Law Second, Judgment 2d, sec. 81, at 251, St. Paul, Minn., American Law Institute Publishers (1982). A state may lawfully establish that foreign judgments may not be enforceable unless so ordered by its courts, which would afford an interested party the opportunity to oppose some of the recognized defenses to the application of the full faith and credit clause. Roseberry v. Registrador, supra, at 746-747. (Underscore supplied.)
See also: Figueroa Pesante v. Registrador, 126 D.P.R. ___ (1990) and Blatt Udell v. Core Cell, 110 D.P.R. 142 (1980), cases where Civil Procedure Code sec. 426 (32 L.P.R.A. § 1798), was construed in the light of said clause.
Having established that foreign judgments do not operate directly or ex proprio vigore, but require local court recognition, we must determine how to obtain such recognition.
III
Our case law has already adopted the standards that such foreign judgments should meet, even those issued in United States jurisdictions, in order to be recognized and enforced by our courts through an exequatur proceeding. With the only exception of Mortgage Regulations Art. 59.1, Puerto Rico does not at present have legislation setting down such procedures. This was recognized in Ramírez v. Registrar, supra, at 345-346, where absent regulation, we schematically adopted certain minimum requirements for this type of proceeding. Id. at 348-350.
Today, for the sake of uniformity, we ratify and broaden said requirements, harmonizing them with the provisions of Mortgage Law sec. 45 and Mortgage Regulations Art. 59.1, as well as with our pronouncements in Ef. Litográficos and Roseberry.
In so doing, we must, of course, take into consideration the Mortgage Law sec. 45 requirement and the two Regulation Art. 59.1 procedural requirements. As we said above, the first of these provides that the execution of the foreign judgment must be decreed by a local court with jurisdiction, and the latter requires that such decree result in "an ordinary proceeding of which the Office of the Prosecutor will be notified." (Underscore supplied.) The purpose of these requirements is to give any interested party a reasonable opportunity to raise any of the defenses recognized by Private International Law against the judgment whose recognition and enforcement is sought in the local forum. Such defenses derive from the standards adopted in Ef. Litográficos. Also, through the Regulations Art. 59.1 ordinary proceeding, evidence will be brought to prove that the foreign judgment met said standards.
Absent any other legislation on this matter, we thus hold that, for all pertinent legal intents, the rules set forth below shall be observed for the recognition and enforcement of all foreign judgments or judgments issued in a United States jurisdiction:
For an excellent discussion of the background of the formal aspects of this type of action, see, de Passalacqua, El Exequátur en el Derecho puertorriqueño, 63-64 Rev. D. P. 193 (1977).
1. The same shall begin with the filing of a complaint in the pertinent Part of the Superior Court of Puerto Rico against all the other parties affected by said judgment.
2. Instead of the aforementioned complaint, the court may accept an ex-parte petition when all the persons affected by the judgment, whose recognition and enforcement is sought, appear in the same. Said petition shall be signed under oath by each and every one of the appearing parties.
3. It shall be prosecuted as an ordinary proceeding pursuant to the Rules of Civil Procedure of Puerto Rico.
4. The complaint or the ex-parte petition filed shall be accompanied by a certified copy of the judgment whose enforcement is sought, and by a true and exact Spanish translation of the same if it was not originally drafted in Spanish or in English. The certified copy of the judgment shall be legible, complete, and meet all the pertinent requirements of Rule 79 of the Rules of Evidence of Puerto Rico, 32 L.P.R.A. App. IV.
5. In all cases where enforcement of the judgments referred to in Mortgage Law sec. 45 is sought, for purposes of its subsequent recordation in the Registry of Property, the same shall be notified to the Office of the Prosecutor.
6. In any case where the interests of minors or incapacitated persons could be affected, the complaint or ex-parte petition shall include the parents and/or guardian of the minor or incapacitated person, and it shall be notified to the Special Domestic Relations Solicitor so that said official may protect the interests of the minor or incapacitated person.
7. When, in the opinion of the Court, it involves a matter of public order (policy) or interest, a copy of the complaint or ex-parte petition shall be served on the Secretary of Justice of Puerto Rico so that the Secretary may appear in the proceedings on behalf of the Commonwealth of Puerto Rico.
8. The review of decisions, judgments, and other proceedings of the trial court shall be governed by the Rules of Civil Procedure and the Rules of the Supreme Court.
9. Once the recognition or enforcement of the foreign judgment is decreed, its execution shall be governed by the provisions of the procedural rules in force for the execution of our judgments.
In summary, in Puerto Rico, like in other foreign jurisdictions, foreign judgments, including those issued in United States jurisdictions, do not operate directly or ex proprio vigore, but require local court recognition prior to execution or before they can in any manner be enforced in the Commonwealth of Puerto Rico. The purpose of the recognition orexequatur proceeding is to guarantee due process to the parties affected by the foreign judgment, by affording them a reasonable opportunity to raise their defenses and to be heard. But the court entertaining such action cannot pass upon the merits of the foreign judgment. The court may only determine, after resolving the pertinent procedural issues, if the foreign judgment meets all the Private International Law requisites set forth in Ef. Litográficos.
With regard to this point, it bears noting that the validity of the foreign judgment and its recognition by the court that must enforce it are two different concepts. As we can gather from the above, validity is a requirement for recognition. The fact that a judgment is valid does not necessarily imply its recognition, inasmuch as recognition involves acceptance of the laws of the state or country where the judgment was issued, as to the persons and matter that will be affected by such action. Therefore, this acceptance shall be limited by public order (policy) and constitutional considerations, and by the interests, principles and values of the state or country of the forum where such recognition is sought. See, de Passalacqua, El Exequátur en el Derecho puertorriqueño, 63-64, Rev. D.P. 210-212 (1977). Nonetheless, it must be said that judgments coming from United States jurisdictions, the Commonwealth Courts, and those issued by other states, federal territories or possessions, shall be given full faith and credit, regardless of the public policy and legal provisions of Puerto Rico on the matter or issue at stake, if and when such judgments are issued by a court with jurisdiction over the person and subject matter, with all due process guarantees, and have not been obtained by fraud. In addition to Art. IV, Sec. 1 of the United States Constitution, see: 28 U.S.C.A. § 1738; Roche v. McDonald, 275 U.S. 449 (1928), and Fauntleroy v. Lum, 210 U.S. 230 (1908).
IV
For the foregoing reasons, the writ requested will be issued and, pursuant to the provisions of Rule 50 of this Court (4 L.P.R.A. App. I-A), judgment will be rendered modifying accordingly the decision appealed. Thus modified, it will be affirmed.
APPENDIX "B" (Official Translation)
It comes forth from the above standards that they are to be applied only to foreign judgments. In Márquez Estrella, Ex parte, 128 D.P.R. 243, 250 [28 P.R. Offic. Trans. ___] (1991), we specifically defined, for purposes and within the context of the exequatur procedure, what constitutes a judgment of this type, and stated that it is any judgment rendered by a court foreign to the Commonwealth, including state courts of the United States.
Now then, if the judgment is from a state of the United States, we have acknowledged that the exequatur procedure is relatively simpler. Therefore, and unlike foreign judgments, the recognition in Puerto Rico of judgments from a state of the United States is simply subject to the limitations of the full faith and credit clause of the United States Constitution. In these cases, Puerto Rican courts only have to give full faith and credit to these state judgments as long as they had been rendered by a court with personal and subject-matter jurisdiction, in keeping with due process guarantees, and as long as they had not been obtained through fraud. Thus, the exequatur procedure applies only to judgments rendered by courts that are not part of Puerto Rican jurisdiction; in turn, the requirements depend on whether the judgment sought to be validated is from a foreign country or from a state of the United States.
Roseberry v. Registrador, 114 D.P.R. 743 [14 P.R. Offic. Trans. 958] (1983); Márquez Estrella, Ex parte, 128 D.P.R. at 255-256 [28 P.R. Offic. Trans. at ___].
Id.
Márquez Estrella, Ex parte, 128 D.P.R. at 255-256 [28 P.R. Offic. Trans. at ___].