Introduction: This article will provide an overview of the law governing the recognition ( “domestication”) of a judgment rendered by a Court outside of New York state. A judgment rendered by a Court outside of New York state is known as a foreign judgment, and comes in two varieties, each governed by separate sections of New York’s Civil Practice and Rules (the CPLR):

·      A judgement rendered by a Court in the United States but outside of New York (i.e. a judgment from another state Court) is known as a foreign judgment but may also be referred to as an “out-of-state” judgment; and

·      A money judgment rendered by a Court in a country other than the United States is known as a foreign country judgment.

In each instance, the individual who obtained the judgment must make an application to a New York state court for the recognition of the foreign judgment to enforce it in New York. A person or entity that holds a money judgment is known as a judgment-creditor. The individual or entity against whom the judgment has been entered, is known as a judgment-debtor. Before the judgment-creditor can begin enforcement of a foreign judgment, the judgment-creditor must apply for the recognition or domestication of that judgment in the State of New York.  

The recognition of an out-of-state judgment is governed by Article 54 of the CPLR. The Recognition of a foreign country’s money judgment is governed by Article 53. In either circumstance, New York law provides for expedited proceedings for the recognition of the judgment. Recognition is not, however, automatic. In some instances, a foreign judgment-debtor may raise defenses to the recognition of the judgment, and the Court may refuse to recognize the judgment. The court may inquire into the sufficiency of due process provided in the foreign proceeding and other public policy concerns. It is therefore crucial for a judgment-creditor to obtain expert legal advice prior to commencing an action to recognize a foreign judgment, and for a judgment debtor to understand their rights to oppose the recognition of or stay the enforcement of a foreign judgment.

I.              CPLR Article 54 – Expedited Procedure for Recognition of Money Judgment Rendered in a State Outside of New York

Full Faith and Credit for Sister State Judgments. Article 54 of New York’s Civil Practice Law & Rules (CPLR) enacts the United States constitutional doctrine of “full faith and credit” (Article IV, Section 1 of the Constitution).It codified the federal Uniform Foreign Money Judgments Recognition Act, which requires state courts to respect the laws and judgments of courts from other states..

The Language of Article 54. Section 5401 of the CPLR provides the following definition for a foreign judgment:

“In this article “foreign judgment” means any judgment, decree, or order of a court of the United States or of any other court which is entitled to full faith and credit in this state, except one obtained by default in appearance, or by confession of judgment.”

The procedure set forth in Article 54 of the CPLR applies to out-of-state judgments not obtained by default or by confession of judgment. In other words, the judgment must have been obtained after the defendant appeared in, defended, and lost the lawsuit.

The Procedure for Recognizing Out of State Judgments. CPLR Section 5402 outlines the procedure for recognition of an out of state foreign judgment. First, a certified or authenticated copy of the foreign judgment must be obtained. Within 90 days after this, the judgment must be filed with the County Clerk of the applicable county of New York state, together with an affidavit from the judgment-creditor stating that the judgment was not obtained by default or confession of judgment, that it has not been paid or satisfied, the amount outstanding, that enforcement has not been stayed, and setting forth the last known address of the judgment-debtor.

Within thirty days of the filing of the certified or authenticated judgment and affidavit, a copy of the documents and notice of filing must be mailed to the judgment-debtor, and proof of service must be filed with the Clerk of Court. If these requirements are satisfied, the out-of-state judgment will be treated in the same manner as a judgment from a Court in the State of New York.

Applying for a Stay of Enforcement. Under CPRL Section 5404, the judgment debtor may apply for a stay of execution of the judgment on the grounds that: 1) an appeal in the out-of-state jurisdiction is pending or “will be taken”; or 2) a stay of execution has been granted. In either case, the judgment-creditor may commence judgment enforcement proceedings once the appeal is denied or the time to appeal expires, or once the stay of execution has been lifted. Finally, in certain circumstances the judgment-debtor may post a security (bond) with the County Clerk in New York to stay the enforcement of the recognized judgment.

II.            CPLR Article 53 – Recognition of Foreign Country Money Judgments, or Out of State Judgments Obtained by Default or Confession of Judgment

Article 53 of New York’s Civil Practice Law & Rules (CPLR), officially known as the “Uniform Foreign Country Money Judgments Act”, sets forth the conditions under which New York will recognize a money judgment obtained outside of the United States. CPLR Article 53 also applies to out of state foreign judgments obtained by default or confession of judgment.

The Language of Article 54. Section 5301 of the CPLR provides the following definitions:

Ҥ 5301. Definitions. As used in this article the following definitions shall be applicable.

(a) Foreign country. "Foreign country" means a government other than: 1. the United States; 2. a state, district, commonwealth, territory or insular possession of the United States; or 3. any other government with regard to which the decision in this state as to whether to recognize a judgment of that government's courts is initially subject to determination under the Full Faith and Credit Clause of the United States Constitution.

(b) Foreign country judgment. "Foreign country judgment" means a judgment of a court of a foreign country.”

Importantly, under CPLR Section 5302 a foreign country judgment does not include a judgment for taxes, fines or penalties, or a judgment related to divorce, spousal maintenance, or other judgment rendered in connection with domestic relations. A party seeking the recognition of a foreign country money judgment bears “the burden of establishing that [Article 53] applies to the foreign country judgment.”

The Elements for Recognizing Foreign Country Judgments. The elements required for domestication of a foreign judgment include: (1) the foreign court had both personal jurisdiction over the judgment debtor and subject matter jurisdiction over the case, (2) the foreign court was an impartial tribunal utilizing procedures compatible with due process of law, and (3) the enforcement of the foreign judgment would not be unfair, conducive to fraud, or violate New York public policy.

Mandatory and Discretionary Grounds for Non-Recognition. New York courts may refuse to recognize a foreign judgment under certain circumstances, some of which are mandatory, and some of which are discretionary (in other words, for a Judge to decide in his or her discretion). Section 5304(a) of the CPLR sets forth the mandatory grounds for non-recognition:

Ҥ 5304. Grounds for non-recognition. (a) A court of this state may not recognize a foreign country judgment if:

1. the judgment was rendered under a judicial system that does not provide impartial tribunals or procedures compatible with the requirements of due process of law;

2. the foreign court did not have personal jurisdiction over the defendant; or

3. the foreign court did not have jurisdiction over the subject matter.”

The discretionary grounds for non-recognition include situations where the defendant did not receive sufficient notice to defend the action, the judgment was obtained by fraud, the action is repugnant to New York or United States public policy, the judgment conflicts with another final and conclusive judgment, the foreign proceeding was contrary to an agreement between the parties, the foreign court was a seriously inconvenient forum for the trial, the judgment was rendered in circumstances that raise substantial doubt about the integrity of the foreign court, the specific foreign court proceeding leading to the judgment was not compatible with due process of law, or a foreign country defamation judgment was obtained without satisfying the protection for freedom of speech and press as provided by both United States and New York constitutions.

Stays of Enforcement. As with Article 54 of the CPLR, a judgment debtor may be protected from enforcement where the foreign judgment is subject to appeal or a stay of execution. CPLR Section 5306 provides:

“§ 5306. Stay of a proceeding pending appeal of a foreign country judgment. If a party establishes that an appeal from a foreign country judgment is pending or will be taken, the court may stay any proceeding with regard to the foreign country judgment until the appeal is concluded, the time for appeal expires, or the appellant has had sufficient time to prosecute the appeal and has failed to do so.”

CPLR Sec. 3213, Expedited Procedure for an Action to Recognize a Foreign Country Judgment. To apply for the recognition of a foreign money judgment under CPLR Article 53, the judgment-creditor may utilize the expedited procedure provided for in CPLR Section 3213 [LINK TO ARTICLE ON SUMMARY JUDGMENT IN LIEU OF COMPLAINT], which governs motions for summary judgment in lieu of complaint. Summary judgment in lieu of complaint is discussed in greater detail in another article on our website, but briefly it can be used “[w]hen an action is based upon an instrument for the payment of money only or upon any judgment.” It is “intended to provide a speedy and effective means of securing a judgment on claims presumptively meritorious … [and where] a formal complaint is superfluous and even the delay incident upon waiting for an answer and then moving for summary judgment is needless.”

Where a foreign judgment creditor satisfies the requirement for recognition in Article 53 of the CPLR, a motion under CPLR Section 3213 can provide a cost-effective method of recognizing and enforcing the judgment without the need to engage in time-consuming and expensive discovery and litigation.

Whether you are a judgment-creditor seeking to recognize a foreign judgment, or a judgment-debtor seeking to oppose recognition or stay enforcement of a foreign judgment, consulting an experienced legal practitioner is key to understanding and making use of your rights. 

III.          Important Amendments to CPLR Article 53 – the 2021 Recognition Act

In June 2021, the then New York Governor Andrew Cuomo signed into law the Uniform Foreign Country Money Judgments Act, which amended the same act of 1970, which first codified Article 53 of the CPLR. The 2021 law was intended to bring New York’s legislation in line with the revisions proposed by the Uniform Law Commission in 2005.

The key updates of the 2021 amendment include the following:

·      New mandatory grounds for non-recognition. Whereas a lack of subject matter jurisdiction was a discretionary basis for non-recognition under the 1970 act, under the 2021 amendment, a New York Court must refuse recognition where the foreign court lacked subject matter jurisdiction over the underlying dispute.

·      Several new discretionary grounds for non-recognition were added. First, where “the judgment was rendered in circumstances that raise substantial doubt about the integrity of the rendering courts with respect to the judgment” and second where “the specific proceeding in the foreign court leading to the judgment was not compatible with the requirement of due process of law.” Finally, the 2021 amendment expanded the scope of discretionary public policy considerations for non-recognition, providing that the Court may consider both whether the foreign judgment or the underlying causes of action on which the judgment is based are “repugnant to public policy of New York or of the United States.” Previously, a court could only consider the underlying causes of action, and not the judgment itself.

·      Differentiating between original and pending actions. The 2021 amendment clarified that when recognition is sought as an original matter, the party seeking recognition must file an action on the judgment (or a CPLR 3213 motion for summary judgment in lieu of complaint) to obtain recognition, but when recognition is sought in a pending action, it may be filed as a counter-claim, cross-claim, or affirmative defense.

·      Narrowing the definition of “foreign country judgment”. The 2021 amendment excluded “a judgment for divorce, support or maintenance, or other judgment rendered in connection with domestic relations” under CPLR Section 5302(b). Previously, the exception for family and domestic matters was narrower, excluding “a judgment for support in matrimonial or family matters” but not other money judgments related to domestic relations. As such, there is significant published case law illustrating that New York was a popular venue for the recognition and enforcement of money judgments awarded to divorced spouses arising out of, for example, prenuptial agreements, the distribution of marital assets, and other financial issues unrelated to spousal maintenance. If the amendment is applied as written, it is unlikely that New York Courts will continue to recognize judgments in instances involving domestic relations.  

·      Finally, the 2021 amendment established a statute of limitations period, providing that a New York Court may only enforce a foreign judgment that is still “effective in the foreign country”. If the foreign judgment contained no limitation period on enforcement, the recognition must be sought within 20 years of the date that the foreign judgment became effective in that country.

Conclusion: Foreign judgment creditors must therefore take into consideration the additional grounds for refusing to recognize a foreign judgment as well as the statute of limitations, and foreign judgment debtors may now consider whether any foreign judgment against them is compatible with the amendments of the 2021 amendments under New York law. In either case, consulting with an experienced attorney is indispensable to understand the complex requirements and defense to the recognition of a foreign judgment.

 

About Author

Marwan Faruq Sehwail

Marwan Faruq Sehwail graduated from the Northwestern University School of Law in 2010. Marwan joined the firm in 2015 and became a partner in 2023. Read more.


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