The case of the day is Jenner v. Ecoplus, Inc. (N.C. Ct. App. 2012). Matthew Jenner and Julia Markson, both UK nationals, lent money to Ecoplus, Inc., a Wisconsin corporation doing business in North Carolina. Ecoplus defaulted on the loans, and Jenner and Markson sued in the Western District of North Carolina. But Ecoplus moved to dismiss, citing an exclusive choice of court clause in the loan agreements, and the parties agreed to dismiss the action voluntarily without prejudice. Jenner and Markson then sued Ecoplus in the High Court in London. They served Ecoplus with the complaint and “an informational leaflet from the English court system stating that Defendant had 22 days to either respond to the claims or request an extension of up to 36 days.” Ecoplus failed to answer the complaint, and Jenner and Markson obtained a default judgment.
They then sought recognition and enforcement of the judgment in the Mecklenburg County Superior Court. There was some initial procedural sparring, and then the judge, on his own motion, found that “because the informational leaflet from the English court system appeared to give Defendant 36 days to respond to the complaint, and only 28 days had elapsed between service of the complaint on Defendant and entry of the default judgment,” the default judgment was premature. He accordingly denied the motion for recognition and enforcement, and Jenner and Markson appealed.
On appeal, the court began with an unusual procedural ruling, one that I haven’t seen before: it held that when a judgment creditor is seeking mere recognition of a foreign judgment, but not enforcement, it is unnecessary to bring a civil action; the judgment creditor can instead proceed by motion. I am not sure this is right, but I don’t want to comment on it now. I will plan to write a post on this separately.
On the substance, the court reversed and remanded. It was Ecoplus’s burden, under the UFCMJRA, to prove a ground for nonrecognition, and Ecoplus had offered no evidence or argument against recognition at the hearing; the judge truly acted sua sponte. Moreover, the court thought it highly likely that Ecoplus could not have prevailed even if it had tried. Even if the English court had made a procedural error under English law (it does not appear that it did), the error was not one that rendered the foreign judgment fundamentally unfair, and fundamental unfairness was the only category under the statute to which Ecoplus could point in its arguments. There must be limits to this principle, of course; but given the description of the notice that was provided to Ecoplus in this case, it seems clear there was no fundamental unfairness and indeed, no mistake of law.