Earlier this week the Supreme Judicial Court (SJC) upheld a trial court decision validating an Israeli law firm’s judgment against a Massachusetts defendant.
According to the court’s opinion, the defendant agreed to pay the Israeli law firm for legal services in Israel. After the services were provided the defendant refused to pay the law firm’s bill despite numerous email requests.
This prompted the law firm to file suit against the defendant in Israel. The law firm attempted to serve notice on the defendant at her residence in Massachusetts. However, the defendant evade all efforts made by the sheriff’s department to serve her personally with the court summons. (The sheriff’s office went to the defendant’s residence four times to no avail. They also spoke to the defendant over the phone and she told them that she would not accept service of the summons.)
Despite the sheriff’s failure to serve the defendant with notice, the Israeli court entered a default judgment in favor of the law firm.
The law firm then filed an action in Massachusetts Superior Court seeking to enforce the Israeli judgment pursuant to the Uniform Foreign Money-Judgments Recognition Act, M.G.L. c. 235, section 23A, which states, in part, that
any foreign judgment that is final and conclusive and enforceable where rendered…shall be conclusive between the parties to the extent that it grants or denies recovery of a sum of money. The foreign judgment shall be enforceable in the same manner as the judgment of a sister state which is entitled to full faith and credit.
The defendant contested this enforcement of the judgment arguing that the law firm failed to properly serve her with notice of the lawsuit (Mass.R.Civ.P. 4(d)) and that enforcement of the Israeli judgment would be contrary to public policy.
The Superior Court rejected both of these arguments and the SJC affirmed the decision.
According to the SJC, the fact that the sheriff’s office did not serve the defendant personally with the initial summons is insufficient to render the judgment invalid.
whether a particular method of notice is reasonable depends on the particular circumstances. The absence of service of process is not dispositive….The defendant received adequate notice. After the defendant orally agreed to guarantee the legal fees, the plaintiff repeatedly notified her when these came due, making clear that it would hold her personally liable. The defendant certainly received at least one of these requests, as she responded to the demand sent in July 2013, even apologizing for the delay. Apologies aside, this would be the last that the plaintiff heard from the defendant during these exchanges. More alerts about possible litigation followed, but the defendant continued not to respond. Although these facts alone are not sufficient notice, they contextualize what happened next: four attempts to serve the defendant, one of which included a telephone conversation between the defendant and the process server in which the defendant informed the server that she would not accept the papers. Throughout these efforts, the defendant cloaked herself in a veil of ignorance, leading the Israeli and Superior Court judges to make their respective findings about notice.
Next the court rejected the defendant’s claim that the Israeli judgment was contrary to the Commonwealth’s public policy and thus unenforceable according to the Uniform Foreign Money-Judgments Recognition Act. The defendant’s claim was based on the fact that she did business through a corporate entity and that she, therefore, could not be personally liable for the judgment owed. The judgment was, according to the defendant, repugnant to public policy.
In rejecting this claim, the court wrote,
Repugnancy is strong medicine, best administered sparingly. A judgment will offend public policy when the original claim is repugnant to fundamental notions of what is decent and just in the State where enforcement is sought…In the classic formulation, a judgment that ‘tends clearly’ to undermine the public interest, the public confidence in the administration of the law, or security for individual rights of personal liberty or of private property is against public policy…The Israeli judgment is not repugnant. This judgment was premised on the plaintiff asking the Israeli court to pierce the…corporate veil and hold the defendant personally liable. As both the Superior Court judge and other courts have noted, Israeli courts take corporate veil piercing seriously.
Law Office of Justin R. McCarthy 