The opinion of the court was delivered by: SOFAER
Plaintiff Frances Ackerman has brought this action against her former husband, Martin S. Ackerman, for enforcement of a judgment of $ 1,097,250, entered on July 1, 1980 by the English High Court of Justice, Queen's Bench Division, for defendant's breaches of a Separation Agreement from 1971 through 1976. Plaintiff also seeks an award for legal fees incurred in the English action; damages for breaches in the Separation Agreement from December 1976 to the present; and costs and expenses (including attorney fees) in this action. The suit was filed in New York County Supreme Court on December 15, 1980, and defendant removed it to this court on December 22, 1980 on the basis of diversity of citizenship.
Defendant has moved for summary judgment on plaintiff's claims for enforcement of the English judgment, for counsel fees in that action, and for damages based on alleged violations of the property settlement that occurred both prior to and after the dismissal by plaintiff of a California action for breach of the Separation Agreement. Defendant asserts that all of these claims are barred by the doctrine of res judicata. Plaintiff, too, has moved for summary judgment, on the count that seeks enforcement of the English judgment.
Defendant is not entitled to summary judgment, for he has failed to establish that the California dismissal would be deemed res judicata in California or New York. In any event, plaintiff is correct in contending that the English judgment is entitled to overriding recognition, and she is therefore entitled to summary judgment on that portion of her complaint.
Plaintiff and defendant were married on July 4, 1954 in Brooklyn, New York. Thereafter, they lived in Nassau County and had three children. The parties separated in 1970 and entered into a Separation Agreement on March 5, 1971. The Separation Agreement was subsequently incorporated, but not merged, into a Judgment of Divorce rendered by the New York Supreme Court in Nassau County on June 18, 1971. See Defendant's Exhibits 1, 2 (hereinafter cited as "Def. Ex. (number)").
In 1972, plaintiff sued defendant in the New York County Supreme Court for breaches of the Separation Agreement specifically, of P 7, for the value of a new automobile, P 4, for expenses of the parties' children, and P 18, for attorney fees. Def. Ex. 3. The action was settled by a stipulation entered on the record in open court on June 12, 1973, pursuant to which defendant was required to pay certain sums to plaintiff. Defendant failed to pay these sums, however, and on June 11, 1975, judgment was entered in favor of plaintiff for $ 4,870.34. Def. Ex. 4.
In March 1975, plaintiff filed a second suit in New York Supreme Court against defendant for additional breaches of the Separation Agreement that occurred after the 1973 Stipulation of Settlement. She alleged breaches of P 10, for monthly support payments to the plaintiff totalling $ 3,750, P 5, for medical and dental expenses, P 4, for child-rearing expenses, and PP 9 and 18, for attorney fees. Def. Ex. 5. The action was in the form of a motion for summary judgment in lieu of complaint, but because it did not seek solely monetary relief, the court denied the motion on June 25, 1975. Def. Ex. 6. The action remained on the docket for another two years, but was not prosecuted apparently because Mr. Ackerman left the United States.
In July 1975, a month after the entry of judgment for plaintiff in the first New York action, plaintiff's attorneys sought to enforce the judgment by serving a subpoena duces tecum on defendant in order to obtain information concerning his assets. Defendant succeeded in quashing the subpoena on the ground, inter alia, that he had been a resident of London since September 1974.
Plaintiff was advised by her New York attorneys in late 1975 that, although they could not locate any of defendant's assets in New York, a detective had found that defendant owned lien-free real property in California worth $ 120,000. Plaintiff thereupon commenced a quasi-in-rem action against defendant in the Los Angeles County Superior Court. The complaint, filed on March 10, 1976, sought to enforce the judgment for $ 4,870.34 entered in the first New York action, and to recover approximately $ 45,000 in damages for defendant's breaches of his support obligations pursuant to PP 4, 5, 7, and 10 of the Separation Agreement. Def. Ex. 7.
Plaintiff's attorney learned in July 1976 that defendant had practically no equity in the California property; defendant had defaulted on $ 36,000 of a $ 50,000 mortgage on the property. Plaintiff declined defendant's offer of $ 500 to $ 750 to relinquish her entire claim. In response to plaintiff's California attorney's request for an answer to the complaint, defendant's California counsel stated in September 1976 that defendant did not intend to defend the action, to appear voluntarily, or to file a responsive pleading.
Plaintiff's New York attorneys then recommended that plaintiff bring suit in London, where defendant was living. Plaintiff's father, acting on her behalf, instructed her California attorney on October 6, 1976 to discontinue the California action because plaintiff would attempt to prosecute the action in England. Plaintiff's California counsel did not, however, follow the father's instructions. Plaintiff's father repeated his instructions in November and again in January. Nevertheless, plaintiff's attorney failed to dismiss the action.
Plaintiff filed suit in the High Court of Justice, Queen's Bench Division, in London on December 22, 1976. Def. Ex. 8. This action, like the second New York action and the quasi-in-rem California action, sought recovery for defendant's breaches of PP 4, 7, and 10 of the Separation Agreement, relating to support obligations and amounts that had accrued since the filing of the California suit. In addition, plaintiff sought to collect unpaid amounts due under P 9 of the Agreement, which required the defendant to pay $ 950,000 in settlement of plaintiff's estate and property rights.
Defendant was served in London by plaintiff's English solicitors with a writ and statement of claim on December 29, 1976. On January 11, 1977 four months after defendant's California counsel informed plaintiff's attorney that defendant would not appear or defend the suit, and three months after the statutory time for answering the complaint
defendant voluntarily appeared in the California action, filed an answer generally denying the allegations, and filed a cross-complaint requesting the California court to enjoin the plaintiff from prosecuting the dormant New York and English actions. Def. Ex. 9, 10. On January 25, 1977, defendant applied to the English court for a dismissal or stay of the English action because of the pendency of the California and New York actions.
Plaintiff's California attorney then suggested to defendant's attorneys that the parties terminate the California action without prejudice. Defendant's attorneys refused to agree. On February 11, 1977, plaintiff's California counsel filed a request for dismissal on a form prescribed by the California Judicial Council, checking the boxes for dismissal of the "entire action," "with prejudice." Def. Ex. 13. Plaintiff insists that her attorney did not obtain permission from her or her father to dismiss the action with prejudice and that he did not inform them of his action. Shortly thereafter, defendant's California attorneys filed a dismissal form, requesting dismissal of the "cross complaint only," "without prejudice." The court clerk failed to stamp the date of submission on the form. Id.
The court clerk did not indicate on the form submitted by plaintiff the disposition of her attorney's request. The portion of the form that is to be completed by the clerk appears to have been filled-in, whited-out, and then crossed-out by hand. The word "over" and the number "1" are written in the crossed-out portion at the bottom of the page, and the reverse side of the form is blank. On the form submitted by defendant, the number "2" is written at the bottom of the page, and the portion that is to be completed by the clerk has been marked "dismissal entered as requested on" and stamped "February 14, 1977." Defendant's form is signed by a deputy clerk. The clerk may have meant to combine the two requests for dismissal and to dismiss the entire action without prejudice. The numbers "1" and "2" on the bottom of the pages suggest that the clerk meant to combine the two documents, and the portion crossed-out on the page marked "1" may have been obliterated because the action taken on the page marked "2" rendered a disposition of plaintiff's request unnecessary.
In May 1977, plaintiff's New York attorney moved to dismiss the then-pending, second New York action without prejudice; defendant moved for dismissal with prejudice on the ground that the California action was res judicata. The New York Supreme Court granted plaintiff's motion and denied defendant's cross-motion on July 12, 1977. Def. Ex. 15. Defendant appealed, and the Appellate Division (First Department) affirmed, stating that:
(it appears) that the only use that the defendant can have of a determination from us that the California action is res judicata of any other action on the same claim is that defendant will then be able to argue in the English court that a New York court has said that the California action is a judgment on the merits. This is unnecessary. One judgment on the merits is all that is necessary to protect the parties' rights.
Ackerman v. Ackerman, 60 A.D.2d 520, 521, 399 N.Y.S.2d 682, 683 (1977).
Defendant's application for dismissal or stay of the English action, on the ground that the California action was res judicata, was dismissed by an English master on February 13, 1978. On May 9, 1978, defendant's appeal of that order was rejected by the High Court of Justice, Queen's Bench Division, which also rejected defendant's arguments that England was an inappropriate forum in which to try the case. Def. Ex. 16. On November 2, 1978, defendant entered the defense that the California action barred plaintiff's recovery. Defendant also filed a counterclaim for recision of the Separation Agreement. Defendant then moved back to the United States, but continued to defend the suit.
The English court tried the case between June 23 and July 1, 1980; the sole issue was whether the California action barred plaintiff's claims. Justice Boreham noted that the Separation Agreement was governed by New York law, "that one applies the law of New York by applying California law," and that the law of England, as the forum, governed the res judicata issue. Plaintiff's Exhibit C at 13 (hereinafter cited as "P. Ex. (letter)"). The judge determined the effect of the California dismissal upon plaintiff's claims, first under California law and then under English law. He examined relevant California statutes and case law and consulted two California law professors as experts for each party on the effect of the California dismissal. Justice Boreham concluded that he was "far from being satisfied that the California court would find (the California dismissal to be) a final adjudication," and that, even if a California Court were to find that the dismissal was a final adjudication, it nevertheless might apply the California exception to res judicata. He also held that an English court would not find the California dismissal to be a final adjudication. P. Ex. C at 27-29, 33-35. He concluded that plaintiff was entitled to the award of an amount previously agreed to by counsel for the parties ($ 1,097,250 plus costs). Id. at 43. Justice Boreham dismissed defendant's counterclaim for recision of the Separation Agreement. Id. Judgment in favor of plaintiff and against defendant, in the sum of $ 1,097,250, plus plaintiff's costs, was duly entered on July 1, 1980 and filed in the Central Office of the Supreme Court of Judicature in London. P. Ex. E. Defendant appealed that decision, but because he failed to post the required bond for cost, the appeal was dismissed on November 18, 1980. P. Ex. F.
I. Defendant's Motion for Summary Judgment: Effect of the California Dismissal
Defendant's motion for summary judgment is based on the assertion that most of the present action is barred due to the res judicata effect of the California dismissal. A determination on this issue is necessary despite this Court's decision that plaintiff is entitled to summary judgment enforcing the English judgment, because it helps to clarify the issues that were before the English court, and because some aspects of defendant's motion survive a grant of summary judgment to plaintiff.
California law must be applied to determine the res judicata effect of the dismissal with prejudice in the California courts, and under the Full Faith and Credit Clause of the Constitution, New York law must be applied to determine the dismissal's effect in the New York courts. Defendant has the burden of proving that no genuine issue of material fact exists with regard to the res judicata effect in New York of the California dismissal and that he is entitled to summary judgment as a matter of law.
a motion for summary judgment on the basis of a prior judgment should be denied if ... there is a genuine issue of material fact as to the validity of the prior judgment, its scope and coverage, privity, or whether it was on the merits so that it is controlling in the case at bar.
6 Moore's Federal Practice P 56.17(52) (2d ed. 1980) (citations omitted).
Defendant contends that the California dismissal is res judicata and that plaintiff is estopped from questioning its validity because she failed to do so in California and has benefited from that failure. Plaintiff argues that the California dismissal is void and has no res judicata effect; alternatively, she ...