Roy v. Buckley

• Decision Date: 18 July 1997
• Docket Number: Docket No. C
• Parties: Jean-Francois ROY v. John S. BUCKLEY, Sr. um-96-567.
• Court: Maine Supreme Court

Page 497

698 A.2d 497

Jean-Francois ROY v. John S. BUCKLEY, Sr.

Docket No. Cum-96-567.

Supreme Judicial Court of Maine.

Argued March 5, 1997.

Decided July 18, 1997.

Peter B. Bickerman (orally), Augusta, for plaintiff.

William C. Knowles (orally), Seth W. Brewster, Carl E. Kandutsch, Verrill & Dana, Portland, for defendant.

Before WATHEN, C.J., and ROBERTS, GLASSMAN, CLIFFORD, RUDMAN, and LIPEZ, JJ.

LIPEZ, Justice.

¶1 Jean-Francois Roy appeals from the summary judgment entered in the Superior Court (Cumberland County, Saufley, J.) in favor of John S. Buckley, Sr. Roy contends that the court erred by ruling that a Quebec judgment he obtained against Buckley could not be recognized and enforced in Maine pursuant to principles of comity because the means of service of process in the underlying action failed to satisfy United States Constitutional standards of due process. We agree and vacate the judgment.

I.

¶2 Roy and Buckley were two of the three shareholders of Carex Services, Inc., a Canadian corporation. ¹ During the events relevant to this appeal, Roy resided in Quebec and was represented by the Quebec law firm of Fournier, Perron. Buckley has resided at 6 Birds Nest Lane, Scarborough, Maine, since 1989. In the late 1980s Roy managed Carex and occasionally guaranteed its debts personally.

¶3 In 1990, when Roy sold his Carex stock (held by Les Investissements Jean-Francois Roy Ltee, the investment company of which he was sole shareholder) back to Carex, Roy and Buckley entered into a Memorandum of Agreement (the Agreement) which indemnifies Roy and his investment company for all of Roy's personal guarantees of Carex debt. The sections of the Agreement relevant to this appeal include the basic terms of indemnification, provisions relating to notice of claims, and the forum selection clause. These provisions state in pertinent part, respectively:

Carex, Buckley, Jr. and Buckley, Sr. (the "[I]ndemnifying Parties") hereby jointly and severally, without the benefit of discussion or division, agree, covenant and undertake to indemnify, defend and hold JFR [the corporate shareholder owned solely by Roy] and Roy (the "Indemnified Parties") harmless, from and against any and all claims, losses, liabilities, costs and expenses (including, without restriction, legal costs, interests and penalties) suffered or incurred by any of the Indemnified Parties (hereinafter referred to as "claims" or a "claim") arising as a result of any of the Indemnified Parties having given its personal guarantee with respect to any loan or generally any indebtedness of Carex or any of its subsidiaries .... including, without in any way restricting the generality of the foregoing, amounts owing by Carex to the following creditors: ... [including] ... Royal Bank....

....

The [I]ndemnified Parties shall promptly advise the Indemnifying Parties of any Claim and provide the same with full details thereof, including copies of any document, correspondence, suit or action received by or served upon any of the Indemnified Parties.... The Indemnified Parties shall fully cooperate with the Indemnifying Parties in any discussion, negotiations or other proceedings relating to any Claim.

....

This agreement shall be governed and construed in accordance with the laws of the Province of Quebec and the courts of such province shall have exclusive jurisdiction over any dispute hereunder. The Indemnifying Parties and the Indemnified Parties irrevocably submit to the courts of the province of Quebec in any action or proceedings arising ou[t] of or relating to this Agreement and hereby elect domicile, for all such purposes, in the judicial district of Montreal, and they furthermore agree to be bound by any final judgment of the said courts and undertake not to seek, and hereby waive, any review by the courts of any other jurisdiction with respect to the merits of any judgment obtained against either of them pursuant to this Agreement.

The Agreement also refers expressly to Buckley's residence, stating that he is "John S. Buckley, Sr., businessman residing at 6 Birds Nest Lane, Scarborough, in the state of Maine, United States of America." The Agreement does not prescribe a method for service of process.

¶4 After the Agreement was executed Carex defaulted on several obligations, including loans made by Royal Bank and guaranteed by Roy. In 1992 the Bank demanded payment of the amounts owed from Carex, Roy, and Buckley's son, but not Buckley himself. At this time, however, Buckley was the principal owner of Carex. Roy neither paid the amounts demanded nor informed Buckley of the claim as required by the Agreement. In 1993 Royal Bank filed suit in the Superior Court of Quebec, District of Montreal (the Quebec court) against Roy and Buckley's son, seeking recovery of $565,323.85 (Canadian), plus interest. Roy's Quebec counsel demanded that Buckley remit the sum sought by the Bank in the litigation within five days of receipt of a letter dated May 25-nearly a year after the Bank's formal demand for payment and two months after it filed suit--that he sent by registered mail to Buckley's Maine address. The demand letter states that if payment would not be forthcoming, "we have been instructed by our client to institute legal proceedings without further notice of delay." Buckley acknowledges that he received the letter and decided not to respond to it. ²

¶5 In June Roy filed against Buckley and Buckley's son in the Quebec court a Declaration in Warranty (the Declaration), the equivalent of a third-party complaint as to Buckley and a cross-claim as to Buckley's son in the suit brought by Royal Bank against Roy and Buckley's son. Roy first attempted to serve Buckley by serving a Quebec attorney who had represented Buckley during negotiation of the Agreement with a "Motion to Call a Guarantor," but the attorney apparently informed Roy that he was not authorized to accept service of process on Buckley's behalf; neither the Agreement nor any other document so designates him. Roy then obtained permission from the Quebec court to serve Buckley by registered mail, a mode of service alternative to personal service employed pursuant to Quebec law in certain circumstances. Roy's attorneys sent a summons and a copy of the Declaration to Buckley's residence in Maine by registered mail, return receipt requested, in an envelope on which the return address was that of Roy's attorneys Fournier, Perron. Buckley asserts there is "no evidence that this [registered] letter was actually delivered to [his] residence," and yet he does not deny that the letter was addressed to his residence, that he refused receipt, and that the envelope was returned to Roy's attorneys marked "Refused." Buckley claims he refused receipt because of prior bad experiences he allegedly had with Roy and his attorneys, and claims he was unaware that the envelope contained a summons and a complaint.

¶6 Roy's attorneys then obtained the Quebec court's permission ³ to serve the declaration by yet another alternative method, publication, and placed a legal notice describing the nature of the litigation, informing Roy of his right to appear, and describing the consequences of not doing so within 30 days, in the September 8, 1993, edition of the Portland Press Herald. Buckley claims he never saw the notice. Roy's attorneys did not attempt to send another copy of the summons and complaint, or a copy of the newspaper notice, by first-class mail to Buckley's residence, nor did Roy attempt to personally serve Buckley in the Quebec action. He did, however, personally serve Buckley in the action underlying this appeal in February 1995.

¶7 Buckley did not appear in the Quebec lawsuit and did not otherwise defend the action brought by Roy. Roy asserts that he was required to continue to defend the Bank's action without any assistance, despite what he claims were Buckley's contractual obligations pursuant to the agreement to defend Roy, indemnify him, and hold him harmless from the Bank's claims. In 1994 Roy entered a settlement agreement with the Bank and the Quebec court subsequently issued a default judgment against Buckley in the third-party action in the amount of $225,000.00 (Canadian), plus interest and costs. Buckley claims that he did not appear in the action involving the Bank because he was unaware of that suit until 1994, when one of Roy's Maine attorneys called him to collect on the default judgment after it was entered that August. Buckley never appealed or sought to modify the default judgment in the Quebec courts nor paid any portion of the judgment.

¶8 In 1995 Roy filed the present complaint seeking recognition and enforcement of the default judgment against Buckley. Buckley filed a motion to dismiss and Roy responded by filing a motion for a partial summary judgment. After a hearing, the court treated Buckley's motion to dismiss as one for a summary judgment, which it entered in his favor, and denied Roy's motion for a partial summary judgment. The court's order states that service by publication "in the underlying Canadian action failed to meet [United States constitutional] due process standards ... and on that basis this court cannot afford the Canadian judgment full faith and credit ⁴ or allow its enforcement."

II.

¶9 In reviewing an appeal from the entry of a summary judgment we view the evidence in the light most favorable to the party against whom judgment was entered and review the trial court's decision for errors of law. Gonzales v. Commissioner, Dept. of Public Safety, 665 A.2d 681, 682 (Me.1995). At the summary judgment stage of the proceeding, the court's task is not to decide any disputed factual questions, but to determine whether the record before the court generates a genuine issue of material fact. Casco Northern Bank, N.A. v. Edwards, 640 A.2d 213, 215 (Me.1994).

¶10 The application of the doctrine of comity, a recognition which one nation extends within its own territory...