Directory Assistants, Inc. v. Cooke, Cameron, Travis, and Company P.C., released April 16, 2010, discusses potential challenges when a party seeks to challenge domestication of a valid foreign judgment.
Directory Assistants presented a complicated procedural and factual history, much of which can be ignored here. In essence, though, there was a contract between an Alabama law firm and a Connecticut consulting firm for consulting and marketing services in Alabama. It contained an arbitration provision. After the parties operated under the contract for a number of years, a dispute arose over whether the law firm still owed any money or not. The consulting firm initiated arbitration proceedings and, in December of 2007, rendered a decision as to the parties’ dispute in which it was determined that the contract was valid and enforceable, that the dispute was arbitrable, and that the law firm was due to pay the consulting firm the money the consulting fee claimed was owed to it.
While the arbitration proceedings were taking place, the law firm filed a complaint in the Jefferson County Circuit court seeking a declaratory judgment that, among other things, the consulting firm was not qualified to do business in Alabama pursuant to Alabama’s door-closing statute. The consulting firm entered a limited appearance in the declaratory judgment action and filed a motion to dismiss based on a lack of subject matter jurisdiction. It argued that the law firm’s claims were barred because they were subject to mandatory arbitration, precluded by the previous arbitration decision, and because venue was improper. The trial court denied the motion to dismiss and the consulting firm appealed.
During the pendency of the declaratory judgment action, a court in Connecticut confirmed the December 2007 arbitration award and entered a judgment on it. After the consulting firm filed its notice of appeal in the declaratory judgment action, it commenced another action in Jefferson County to register the Connecticut judgment under the Uniform Enforcement of Judgments Act ("UEFJA"). The judgment was registered and a judgment was entered by the Jefferson County Circuit Court on June 11, 2009. The law firm appealed and that appeal was consolidated with the consulting firm’s appeal from the declaratory judgment action.
Finding that the Connecticut’s entry of a judgment on the arbitration award "significantly alter[ed] the parties’ litigation playing field," the court considered the appeal in the registration action first. It noted that "when a party seeks domestication of a valid foreign judgment under the UEFJA, the only basis to challenge domestication is that the foreign court did not have jurisdiction to enter the judgment. Moreover, the authentication and filing of a foreign court’s judgment with an Alabama circuit court creates a rebuttable presumption that the court rendering that judgment had jurisdiction to do so and shifts to the party challenging that judgment the burden of producing evidence to rebut the presumption. Where a party produces no such evidence, then there is no valid basis for an Alabama circuit court to set aside its judgment based upon the foreign registered judgment.
On appeal, the law firm challenged the personal jurisdiction of the Connecticut court, but failed to offer any evidentiary support for its contentions. Moreover, in the contract between the law firm and the consulting firm, the parties waived personal jurisdiction objections to the court chosen by the prevailing party in arbitration to enter a judgment on the award.
Having determined that the law firm did not meet its burden of proof as to its personal jurisdiction challenge to the Connecticut court’s judgment entered on the arbitration award, the court concluded that the Jefferson County Circuit court properly recognized the foreign judgment. It affirmed the registration judgment.
The court next turned to the appeal in the declaratory judgment action and found that it was mooted by the ruling in the registration appeal. Since the consulting firm had a valid and outstanding Alabama judgment against the law firm based upon the arbitration award, the Jefferson County Circuit Court would be unable to grant contrary declaratory relief of the sort the law firm sought in the declaratory judgment action. As a result, the parties’ legal rights could no longer be "thwarted or affected" in light of the disposition of the registration action. The appeal and the underlying action were mooted and due to be dismissed.