Judgments of Foreign Courts (Recognition and Enforcement)

• Author: International Law Group, PLLC
• Pages: 173-177

Page 173

Manfred Zorn (Defendant) worked in Germany as a freelance broker on the Frankfurt Securities Exchange. His work included settling security transactions through Lombardkasse AG, a German company that is now known as GENUJO LOK Beteiligungs GmbH. (Plaintiff ). When Defendant was doing business with Plaintiff , his sole domicile was Maine.

In the course of his dealings with Plaintiff , Defendant ran up a debt of 2.4 million deutsche marks (DM) to the company. On May 18, 1998, Defendant executed and delivered to Plaintiff a German notarized Recognition of Debt, also known as an "enforceable deed," which is similar to a settlement agreement in Maine. In the Recognition, the parties agreed that Defendant would pay Plaintiff 1.6 DM, according to an agreed repayment plan, as settlement for Plaintiff's claim.

The agreement included the following relevant conditions: (1) the acknowledgment of indebtedness shall itself provide the basis for Defendant's liability; (2) with respect to the payment of a partial amount of the overall debt in the amount of 1.6 DM, Defendant is liable to the immediate compulsory attachment of his entire assets; (3) Defendant expressly waives the right to all forms of appeal concerning the basis or the amount of the debt; (4) if Defendant fails to comply with the repayment plan, he must pay back the remaining amount of the original 2.4 DM debt; (5) all claims arising in connection with or as a result of the agreement or claims relating to its validity are subject to German law; and (6) the place of jurisdiction for all disputes arising in connection with or as a result of the agreement or disputes relating to its termination or validity shall be Frankfurt am Main, Germany. Defendant had no significant assets in Germany when the parties entered into the Recognition.

Defendant repaid 358,576.46 DM but failed to comply with the remainder of the repayment plan, leaving 2,041,423.54 DM unpaid. Because Defendant agreed in the Recognition to compulsory attachment of his assets, the Recognition was automatically enforceable in Germany. Defendant's only assets, however, lay in the United States. Therefore, Plaintiff instituted court proceedings in Frankfurt am Main, Germany to obtain a judgment, which it could then seek to enforce in the United States.

Page 174

Plaintiff served Defendant in the United States on August 19, 2003. Defendant appeared before the Frankfurt am Main Regional Court, through his German attorney, and raised a number of jurisdictional and substantive arguments. These included (1) that the Frankfurt am Main Regional Court lacked jurisdiction; (2) that Defendant was at a disadvantage during the notarization of the deed because he did not have an attorney; (3) the parties intended the Recognition to apply in the event of Defendant's success in another lawsuit and thus did not create any new grounds for indebtedness; and (4) Plaintiff had no legitimate interest in taking legal action.

The Frankfurt am Main Regional Court rejected Defendant's arguments and issued a judgment on May 10, 2004, ordering Defendant to pay off the debt, plus interest, and to pay the costs of the lawsuit. The court issued the judgment in the name of GENUJO LOK Beteiligungs GmbH, as Plaintiff's successor, for the purpose of judicial enforcement.

Defendant appealed that decision to the Frankfurt am Main Higher Regional Court, which affirmed the judgment on May 25, 2005. That Court then issued two orders, on June 15, 2005 and July 29, 2005, fixing the costs that Defendant had to pay pursuant to its May 10, 2004 decision and the appellate court's decision of May 25, 2005, affirming that decision.

On March 17, 2006, Plaintiff filed the four German rulings with the clerk of the Cumberland County Superior Court pursuant to Maine's Enforcement Act, 14 M. R. S. §§ 8001-8008, and authenticated them pursuant to M. R. Civ. P. 44(a)(2). Defendant moved for nonrecognition of the German judgments and asked for an evidentiary hearing on this issue. After considering his substantive arguments against recognition and determining that Defendant did not raise any issues that could not be resolved in the...