Case of the Day: Banque de Tahiti v. Kurth

The case of the day is Banque de Tahiti v. Kurth (Haw. Ct. App. 2017). The Bank of Tahiti had a judgment against Filola Kurth, the representative of the estate of Thomas Kurth, from the Civil Court of First Instance of Papeete, the capital of French Polynesia. The Bank filed the judgment in Hawaii in 2003 under the UFMJRA (which Hawaii later repealed in favor of the UFCMJRA). Why was it permissible simply to file the judgment, rather than to bring an action on the judgment? Stay tuned. Kurth opposed enforcement of the judgment and raised affirmative defenses, including a defense that the French Polynesian procedures were inconsistent with due process, that service of process in the underlying case had been insufficient, and that the judgment had been discharged. But in 2006, the Hawaiian court granted summary judgment to the Bank.

For reasons that are not entirely clear, the parties continued to engage in motion practice, which, in 2009, resulted in an order vacating the summary judgment. But nothing much seemed to happen after that until 2013, when Kurth moved for dismissal, arguing that ten years had passed since the filing of the judgment in 2003, and that the judgment was therefore discharged as a matter of law under Hawaii Rev. Stat. 657-5, which provides:

Unless an extension is granted, every judgment and decree of any court of the State shall be presumed to be paid and discharged at the expiration of ten years after the judgment or decree was rendered. No action shall be commenced after the expiration of ten years from the date a judgment or decree was rendered or extended. No extension of a judgment or decree shall be granted unless the extension is sought within ten years of the date the original judgment or decree was rendered. A court shall not extend any judgment or decree beyond twenty years from the date of the original judgment or decree. No extension shall be granted without notice and the filing of a non-hearing motion or a hearing motion to extend the life of the judgment or decree.

The court agreed, and the Bank appealed.

The court began by finding that Section 657-5, the statute quoted above, applied. Why, you may ask, should the French Polynesian judgment be deemed a Hawaii judgment upon filing? If the judgment had been filed under the UFCMJRA (which was not in effect in Hawaii in 2003), then it’s clear that the foreign judgment would not be treated as a domestic judgment until the Hawaii court had decided to recognize it: UFCMJRA § 4 provides that the domestic court must recognize a foreign judgment that meets the requirements of the statute. To be sure, recognition is more or less mandatory when the judgment is entitled to recognition, but under the UFCMJRA, you can’t go straight to enforcement without first persuading the domestic court that the judgment is entitled to recognition. So under the UFCMJRA, you would think that the ten-year period would not begin to run until recognition.

Under the UFMJRA, which was in effect in Hawaii in 2003, the situation is a little less clear. UFMJRA § 3 provides that the foreign judgment “is enforceable in the same manner as the judgment of a sister state
which is entitled to full faith and credit.” On the other hand, it is clear that the judgment debtor should have the opportunity to raise the defenses listed in the UFMJRA before the judgment is enforced. So the statute, the Hawaii court held, was ambiguous. The court noted that Hawaii’s legislature had added language to its enactment of UFMJRA § 3 providing for the filing of the judgment rather than simply for bringing an action on the judgment. But on the other hand, the court looked to the legislative history and saw that the legislature intended a two-step process—first recognition, then enforcement, and it reasoned that the provision of the statute permitting filing of the judgment was not intended to override that intent. Thus, the court held, the ten-year period had not begun to run, because the Hawaii courts had not yet recognized the judgment. So the court remanded the case for further proceedings.

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