ENRON (THRACE) EXPLORATION v. Clapp
| Decision Date | 31 May 2005 |
| Citation | 378 N.J. Super. 8,874 A.2d 561 |
| Parties | ENRON (THRACE) EXPLORATION & PRODUCTION BV and ECT Europe Finance, Inc., Plaintiffs-Respondents, v. Ann. K. CLAPP, David S. Clapp and Harvey R. Clapp, III, Defendants-Appellants, and Guy O. Dove, III, Defendant (Two Cases). Enron (Thrace) Exploration & Production BV and ECT Europe Finance, Inc., Plaintiffs-Respondents, v. Ann. K. Clapp, David S. Clapp and Harvey R. Clapp, III, Defendants, and Guy O. Dove, III, Defendant-Appellant. |
| Court | New Jersey Superior Court |
Pitney Hardin, Florham Park, for appellants Ann K. Clapp, David S. Clapp and Harvey R. Clapp, III (Joy Harmon Sperling and Jeffrey S. Mandel, on the brief).
John R. Altieri, Hackensack, for appellant Guy O. Dove, III (Mr. Altieri joins in the brief with Ms. Sperling and Mr. Mandel).
Greenberg Traurig, Florham Park, for respondents Enron (Thrace) Exploration & Production BV, and ECT Europe Finance, Inc. (Roger B. Kaplan, of counsel; Mr. Kaplan and William J. Votta, Woodbridge, on the brief).
Before Judges PETRELLA, LINTNER and YANNOTTI.
The opinion of the Court was delivered by
YANNOTTI, J.A.D.
In these related appeals, we address the question of whether money-judgments issued by courts in foreign nations may be filed with the Clerk of the Superior Court and enforced in New Jersey without a prior judicial determination recognizing the judgments and authorizing their enforcement in this State. The judges below concluded that the Foreign Country Money-Judgment Recognition Act, N.J.S.A. 2A:49A-16 to -24 (FCMJRA), permits the judgments to be filed without prior judicial approval. We agree and affirm.
This dispute arises from an agreement between Thrace Basin Natural Gas (Turkiye) Corporation (TBNG), an entity registered in the British Virgin Islands, and plaintiffs Enron (Thrace) Exploration & Production BV (Enron) and ECT Europe Finance, Inc. (ECT). TBNG is the owner of rights to certain hydrocarbon deposits in the Republic of Turkey and approached Enron to obtain financial and technical assistance to exploit these natural resources. In December 2000, TBNG and Enron entered into a joint venture agreement under which TBNG granted Enron an option to acquire a 55% interest in the deposits in exchange for Enron's agreement to provide a minimum commitment of up to $3,000,000. The contract provides that, upon the occurrence of specified events of default, the non-defaulting party could tender notice immediately terminating the agreement and, if such notice were tendered prior to closing on transfer of the 55% interest, Enron would be entitled to the return of any funds it expended on the project.
Enron also entered into a certain Charge Agreement with defendants Ann K. Clapp, David S. Clapp, Harvey R. Clapp, III and Guy O. Dove, III (defendants), in which defendants agreed to pay Enron any monies due to it from TBNG under the joint venture agreement. The Charge Agreement provides that the courts of England shall have jurisdiction to settle any disputes arising thereunder. In the agreement, defendants waived any objection to the venue of such proceedings in the English courts and further agreed that a judgment in the proceedings shall be "conclusive and binding" and "may be enforced in the courts of any other jurisdiction."
On January 23, 2001, Enron exercised its option under the joint venture agreement to acquire the 55% interest, however, a closing on this acquisition did not occur. Asserting that Enron was in default, on January 11, 2002, TBNG sent Enron a notice immediately terminating the joint venture agreement. On January 23, 2003, Enron demanded from TBNG the monies that it had expended on the project and, on September 3, 2003, Enron insisted that defendants pay it the monies due under the Charge Agreement.
When defendants did not accede to Enron's demand, Enron and ECT (plaintiffs) brought an action against defendants in the High Court of Justice of England and Wales, Queen's Bench Division, at the Royal Courts of Justice in London. In November 2003, defendants filed certain Acknowledgments of Service, which are deemed to constitute appearances in the English court system. However, because they lacked an address for service in the United Kingdom, the Acknowledgements were considered to be of no force and effect and in December 2003, default judgments were entered in the amount of $8,106,543.12 against the Clapp defendants and $8,110,128.82 against defendant Dove.
Plaintiffs forwarded the English judgments to New Jersey counsel, who presented the same for filing with the Clerk of the Superior Court. The Clerk refused to file the judgments until they were presented to and reviewed by a Superior Court judge. Plaintiffs made an ex parte application before a Superior Court judge who entered an order on February 20, 2004 upon which he wrote that judicial approval was not necessary and the judgments could be filed with the Clerk pursuant to the Uniform Enforcement of Foreign Judgments Act, N.J.S.A. 2A:49A-25 to -33 (UEFJA). On February 23, 2004, plaintiffs filed the judgments with the Clerk, who thereupon provided notice of filing to defendants. See N.J.S.A. 2A:49A-28(b)(requiring the Clerk to mail notice "promptly" upon the filing of the foreign judgment).
On March 8, 2004, defendants brought a motion in the English court to vacate the default judgments. Defendants asserted, among other contentions, that the time for defendants to respond to the complaint had not expired when default was entered against them and plaintiffs' claims were without merit. Defendants also moved on March 8, 2004 in the Law Division, Middlesex County, for an emergent stay of execution of the judgments. On March 9, 2004, a temporary stay was granted and the judge scheduled a hearing on defendants' application to vacate the filing and docketing of the English judgments. After hearing argument, the judge entered an order on March 18, 2004 denying the motion and staying enforcement pending resolution of defendants' motion in the English court. Defendants filed separate appeals from the February 20, 2004 and March 18, 2004 orders. We now consolidate the appeals for purposes of decision.
We note that, after the appeals were filed, the English court entered an order which granted in part and denied in part defendant's motion. The court reduced the judgments to $3,900,538. Plaintiffs moved in the Law Division to amend the English judgments that had been previously filed with the Clerk. They also moved to vacate the stay of execution or, alternatively, require defendants to post a bond to secure payment of the judgments. The motion was denied in view of the pendency of these appeals. R. 2:9-1(a).
Defendants first argue that the appeals are moot because the English court granted in part defendants' application to set aside the default judgments. We disagree. "A case is moot if the disputed issue has been resolved, at least with respect to the parties who instituted the litigation." Caput Mortuum v. S. & S., 366 N.J.Super. 323, 330, 841 A.2d 430 (App.Div.2004) (). The disputed issue raised in this case is whether plaintiffs are permitted by the FCMJRA to file their English judgments with the Clerk without authorization by a Superior Court judge. Although reduced by order of the English court, the judgments have not been vacated in their entirety and remain on file with the Clerk. Therefore, the issue as to whether the English judgments should have been filed without prior judicial authorization is not moot.
The FCMJRA is New Jersey's version of the Uniform Foreign Money Judgments Recognition Act. Kam-Tech Systems, Ltd. v. Yardeni, 340 N.J.Super. 414, 421, 774 A.2d 644 (App.Div.2001). Because the United States Constitution makes no specific provision for the enforcement of judgments of foreign nations, recognition and enforcement of such judgments has been considered a matter of comity. Id. at 420, 774 A.2d 644 (citing Hilton v. Guyot, 159 U.S. 113, 164, 16 S.Ct. 139, 143, 40 L.Ed. 95, 108 (1895)). Generally the law governing the recognition of judgments of foreign nations had not been codified. The National Conference of Commissioners of Uniform State Laws accordingly proposed the enactment of uniform legislation, which was thereafter passed and is now in effect in thirty states, with some local variations. Id. at 421, 774 A.2d 644. The FCMJRA provides the statutory basis for enforcing judgments of other nations in New Jersey. Ibid.
The FCMJRA additionally provides that a foreign country judgment need not be recognized if, among other reasons, the judgment debtor did not have notice in sufficient time to defend, the judgment was obtained by fraud and the cause of action is contrary to the public policy of this State. N.J.S.A. 2A:49A-20(b)(1),(2) and (3). Furthermore, N.J.S.A. 2A:49A-19 states:
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