Jurisdiction

• Pages: 25-29

Page 25

According to the complaint, Kitchen International, Inc. (Defendant) and Evans Cabinet Corp. (Plaintiff) entered into a contract in 2004. Plaintiff agreed to supply Defendant with manufactured cabinetry for several residential building sites on the U.S. East Coast . Defendant placed these orders from its Montreal headquarters with the Plaintiff's Georgia offices.

Defendant also claims that the two parties agreed in 2004 that they would set up a products showroom at Defendant's office in Montreal.. According to Defendant, Plaintiff manufactured and shipped cabinetry and related products plus sales and promotional materials to Québec for use in the showroom later that year. Plaintiff denies the existence of such an agreement.

At some point, various issues came up as to the quality and conformity of the products that Plaintiff had shipped to the East Coast projects. As a result, in May 2006, Defendant hired a Canadian attorney to sue Plaintiff in the Superior Court of Québec for breach of contract Plaintiff was duly served with process. Plaintiff, however, failed to answer or otherwise respond to the suit. On May 31, 2007, the Superior Court of Québec entered a default judgment against Plaintiff in the amount of $149,354.74.

On April 23, 2007, Plaintiff filed this diversity action for breach of contract and quantum meruit in the Massachusetts federal court. Defendant moved to dismiss on the ground that res judicata barred the action. Plaintiff opposed the motion contending that the Superior Court of Québec had lacked jurisdiction over it. On November 4,

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2008, the district court gave summary judgment to Defendant.

The court first determined that, because it was sitting in diversity, it should apply the Massachusetts's version of the Uniform Foreign Money-Judgments Recognition Act (UFMJRA or the Act) to determine whether it should enforce the Québec judgment. In order to enforce a judgment under the Act, the court reasoned, the Québec court must have had the power to exercise personal jurisdiction over Plaintiff.

The court first noted that Massachusetts courts had interpreted its long-arm statute as an assertion of personal jurisdiction to the limits allowed by the U.S. Constitution. The district court then ruled that the Quebec Superior Court's exercise of personal jurisdiction over Plaintiff did not contravene traditional notions of fair play and substantial justice since the Plaintiff had had several meaningful contacts with Quebec.

As a result, the court employed Québec rules of res judicata to determine whether it should give the default judgment preclusive effect. The court then concluded that Canadian law would bar Plaintiff's suit. The district court, therefore, held that res judicata precluded the present action and entered summary judgment for Defendant. Plaintiff duly noted an appeal. The U.S. Court of Appeals for the First Circuit reverses.

The Court then set forth its rationale. "Defendant's motion to dismiss the Massachusetts action did not attempt simply to bar the prosecution of the current action in Massachusetts on the ground that the district court lacked authority to adjudicate Plaintiff's present contract claim there. Rather, it was a motion addressed to the merits of the Massachusetts action."

"It sought a...