CONTRACTING CO v. BEZDIKIAN

• Decision Date: 17 November 2008
• Docket Number: No. S154076.,S154076.
• Citation: 195 P.3d 604,85 Cal.Rptr.3d 233,45 Cal.4th 192
• Court: California Supreme Court
• Parties: MANCO CONTRACTING CO. (W.W.L.), Plaintiff and Appellant, v. Krikor BEZDIKIAN, Defendant and Respondent.

45 Cal.4th 192

195 P.3d 604

85 Cal.Rptr.3d 233

MANCO CONTRACTING CO. (W.W.L.), Plaintiff and Appellant,

v.Krikor BEZDIKIAN, Defendant and Respondent.

No. S154076.

Supreme Court of California

Nov. 17, 2008.

Benedon & Serlin, Gerald M. Serlin and Douglas G. Benedon, Los Angeles, for Plaintiff and Appellant.

Engstrom, Lipscomb & Lack, Walter L. Lack and Steven C. Shuman, Los Angeles, for Renato Guimaraes, Jr., as Amicus Curiae on behalf of Plaintiff and Appellant.

Revere & Wallace, Frank Revere, Gabriel S. Dermer, Los Angeles; Roxborough, Pomerance & Nye, Gary A. Nye and Michael G. Kline, Tarzana, for Defendant and Respondent.

Allen Matkins Leck Gamble Mallory & Natsis, A. Kristine Floyd and Robert C. Shaia, Irvine, for Northrop Grumman Corporation as Amicus Curiae on behalf of Defendant and Respondent.

CORRIGAN, J.

In this case we decide when a foreign judgment is final for purposes of recognition under the Uniform Foreign Money-Judgments Recognition Act (UFMJRA) (Code Civ. Proc., former § 1713.1 et seq., added by Stats.1967, ch. 503, § 1, p. 1847, repealed by Stats.2007, ch. 212, § 1, eff. Jan. 1, 2008) ¹ and what statute of limitations applies.

The UFMJRA authorizes recognition of “any foreign judgment that is final and conclusive and enforceable where rendered even though an appeal therefrom is pending or it is subject to appeal.” (Former § 1713.2.) When a foreign judgment is appealed, and the foreign nation's law provides that a judgment on appeal is not final, does section 1713.2 permit a California court to recognize the judgment? We conclude the answer is no. The most reasonable interpretation of the admittedly confusing statutory language is that the law of the nation where the judgment was rendered determines whether the judgment is sufficiently final, conclusive, and enforceable to be subject to recognition in California. If the foreign nation's rule is that judgments are final even though an appeal is pending, a judgment may be recognized in California despite an appeal. If the foreign rule is that judgments are not final while an appeal is pending, a judgment on appeal cannot be recognized in California. This interpretation is consistent with the conclusions reached by other states applying the uniform act and the apparent intent of the commissioners who drafted it.

The UFMJRA does not prescribe a statute of limitations for actions to recognize foreign judgments. ² However, the act does provide (with one exception not relevant here) that a “foreign judgment is enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit.” (Former § 1713.3.) An action to enforce a sister state judgment is subject to a 10-year statute of limitations ( § 337.5). It appears section 1713.3 reflects the Legislature's intent to apply the same limitations period to the enforcement of judgments from foreign nations. A 10-year limitations period is also consistent with the 10-year period of enforceability for California judgments. (§ 683.020; see also § 683.110 et seq. [providing for extension of the 10-year enforceability period by renewal of the judgment].) Over a century ago, this court did hold in Dore v. Thornburgh (1891) 90 Cal. 64, 27 P. 30 that the four-year “catchall” limitations period of section 343 applied to an action to recover upon a foreign judgment. However, Dore was decided long before the Legislature enacted the UFMJRA. Thus, it is no longer controlling.

BACKGROUND

On November 16, 1997, the Qatari company Manco Contracting Co. (W.L.L.) (Manco) obtained a multimillion-dollar judgment against Krikor Bezdikian in the Grand Civil Court of Doha, in the nation of Qatar. Bezdikian appealed from the judgment, then left the country. He now lives in California. On May 23, 2000, a Qatari appellate court amended the judgment, reducing the award from more than $4.2 million to approximately $3.76 million. The Qatari appellate court issued a new judgment awarding Manco this new amount plus “a reasonable share of court expenses” and an amount for attorney fees.

On May 20, 2004, Manco filed a complaint in the Los Angeles County Superior Court seeking to domesticate its Qatari judgment under the UFMJRA. Bezdikian sought summary judgment, arguing that the cause of action accrued in 1997, and was therefore barred by the four-year statute of limitations of section 343, which both sides believed applied. (See Dore v. Thornburgh, supra, 90 Cal. 64, 66-67, 27 P. 30.)

In response, Manco submitted an expert declaration stating that, under Qatari law, a judgment is “never final” before conclusion of an appeal unless the parties previously agreed to treat the judgment as final, the judgment is nonappealable, or the time for appeal has expired. Thus, Manco maintained its cause of action did not accrue until May 23, 2000, when the Qatari appellate court issued its amended judgment. The trial court rejected this argument. Based on the analysis in Korea Water Resources Corp. v. Lee (2004) 115 Cal.App.4th 389, 8 Cal.Rptr.3d 853 ( Korea Water ), the court interpreted section 1713.2 to provide that the UFMJRA permits recognition of a foreign judgment that has been appealed, or is subject to appeal, regardless of whether the foreign country recognizes it as “final” under such circumstances. Accordingly, the court concluded Manco's cause of action for recognition accrued in November 1997, when the Qatari trial court entered judgment against Bezdikian.

The Court of Appeal reversed. Disagreeing with Korea Water, the court interpreted section 1713.2 to mean that a foreign judgment is not subject to recognition under the UFMJRA unless and until it is final, conclusive, and enforceable under the law where the judgment was rendered. If the foreign jurisdiction's law does not consider a judgment to be final while it is on appeal, then a claim under section 1713.2 to recognize the judgment cannot be brought until after the appellate process has ended. The Court of Appeal concluded the expert testimony offered by Manco raised a triable issue of fact about whether the initial judgment was sufficiently “final” and “conclusive” under Qatari law to satisfy section 1713.2, and therefore summary judgment should have been denied. Because the court's interpretation of section 1713.2 meant that Manco's claim was timely even under the four-year statute of limitations of section 343, the Court of Appeal did not consider Manco's additional arguments, raised for the first time on appeal, that no statute of limitations applies to a recognition action, or, alternatively, that the 10-year limitations period applicable to enforcement of sister state judgments (§ 337.5) is controlling. ³

We granted review to resolve both the accrual and statute of limitations questions.

DISCUSSION

I. When a Foreign Judgment Is Final Under the UFMJRA

[1] California adopted the UFMJRA in 1967. Before the Legislature codified the provisions of this uniform act, the recognition and enforcement of foreign money judgments proceeded as a matter of comity. ( Renoir v. Redstar Corp. (2004) 123 Cal.App.4th 1145, 1150, 20 Cal.Rptr.3d 603; see Hilton v. Guyot (1895) 159 U.S. 113, 202-203, 205-206, 16 S.Ct. 139, 40 L.Ed. 95.) Comity remains the basis for recognizing foreign judgments not covered by the act, such as domestic relations judgments. (§§ 1715, subd. (b)(3), 1723; see In re Stephanie M. (1994) 7 Cal.4th 295, 314, 27 Cal.Rptr.2d 595, 867 P.2d 706 [observing, with respect to Mexican child custody decree, that “courts of this state may, but are not required to, execute the judgment of a foreign nation as a matter of comity”].)

[2] The purpose of the uniform act was to codify the most prevalent common law rules for recognizing foreign money judgments and thereby encourage the reciprocal recognition of United States judgments in other countries. (13 pt. II West's U. Laws Ann. (2002) U. Foreign Money-Judg. Recognition Act, Prefatory Note, p. 40 (uniform act).) Many civil law countries make the recognition of foreign judgments dependent upon reciprocity. Drafters of the uniform act believed codification of uniform rules would satisfy foreign reciprocity concerns and encourage greater recognition and enforcement of American judgments abroad. ( Ibid.; see also Bank of Montreal v. Kough (N.D.Cal.1977) 430 F.Supp. 1243, 1249 [“The purpose of the Uniform Act was to create greater recognition of the state's judgments in foreign nations. This was to be accomplished by informing the foreign nations of particular situations in which their judgments would definitely be recognized, and thus encourage them to recognize California judgments”].)

The dispute here centers on the meaning of section 1713.2, which describes the type of foreign judgments that may be recognized under the UFMJRA. Section 1713.2 states: “This chapter applies to [1] any foreign judgment that is final and conclusive and enforceable where rendered [2] even though an appeal therefrom is pending or it is subject to appeal.” (Former § 1713.2.) California courts have disagreed about the extent to which the second clause undermines the first.

The Court of Appeal in this case gave primacy to the first clause, interpreting section 1713.2 “to consider a foreign judgment final, despite an appeal, if it is otherwise ‘final and conclusive and enforceable where rendered.’ (§ 1713.2, italics added.)” The court observed that, unlike California, some foreign jurisdictions consider a judgment to be final and conclusive even if subject to appeal or modification. Recognizing these differences, the Court of Appeal interpreted section 1713.2 to mean that, in all cases, recognition of a foreign judgment depends upon the judgment's finality, conclusiveness, and enforceability in the country where rendered, even if the foreign country's rules are different from those we apply in California.

The opposite conclusion was reached in Korea Water, supra, 115 Cal.App.4th 389, 8...