Case of the Day: Silver Star Alpine Meadows v. Quinlan

The case of the day is Silver Star Alpine Meadows Development, Ltd. v. Quinlan (Cal. Ct. App. 2016). Lora and Stephen Quinlan had a contract to purchase lots in an undeveloped subdivision in a British Columbia ski resort. They refused to close, believing the seller, Silver Star, had changed the topography of the lots in a way that would disadvantage them. Silver Star sued in a British Columbia court. The court held that Silver Star had performed, that the Quinlans had breached their obligation, and that Silver Star had sought to mitigate its damages. Judgment was for more than $1.1 million (CDN), because in the relevant time period the value of the lots had declined precipitously. Silver Star sought recognition and enforcement of the judgment in California. The Quinlans counterclaimed for fraud and argued, in defense, that the contract had a liquidated damages provision that the British Columbia court should have applied. They claimed that the Canadian court’s mistake meant that it would be contrary to public policy to recognize the judgment.

The court correctly rejected this argument. It engaged in a fairly detailed analysis of the contract to show that the Canadian court’s construction was reasonable, but then it got to the heart of the matter: “even if the Canadian court erred … that does not warrant refusal to recognize the Canadian judgment. Errors in foreign legal proceedings—especially when correction might have been sought at the trial or appellate levels—do not rise to a fundamental violation of California public policy.” Public policy “is violated only if recognition or enforcement of the foreign-country judgment would tend clearly to injure public health, the public morals, or the public confidence in the administration of law, or would undermine that sense of security for individual rights, whether of personal liberty or of private property, which any citizen ought to feel.”

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