finding, however, was made in the context of this Court's adjudication of Allstate's motion to amend its complaint. In that context, this Court observed that ADAS's claims based on the Bucharest Judgment and the Executive Order "addressed the merits of Allstate's claim," and that "arguments that address the merits are not relevant to a motion for leave to amend the pleadings." Id. (citations omitted). This Court's statement that these arguments were "without merit," therefore, pertained only to the issue of whether Allstate should be permitted to amend its complaint, not to the merits of the claims Allstate alleges in its complaint.
As a result, this Court has yet to consider the effect of the Bucharest Judgment and the Executive Order upon the merits of Allstate's claims against ADAS. Because these issues have never been considered, they do not constitute the law of the case, see Quern v. Jordan, 440 U.S. 332, 347 n.18, 99 S. Ct. 1139, 1148 n.18, 59 L. Ed. 2d 358 (1979); 18 Charles A. Wright et al., Federal Practice & Procedure § 4478, at 789 (1981) ("questions that have not been decided do not become law of the case merely because they could have been decided"), and thus are properly resolved in the instant opinion.
As a preliminary matter, this Court will set forth the legal standard controlling the resolution of ADAS's cross-motion for summary judgment.
I. SUMMARY JUDGMENT STANDARD
Pursuant to Rule 56, summary judgement is appropriate where "the pleadings, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). A party seeking summary judgment bears the initial burden of demonstrating the absence of a genuine issue of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 1609, 26 L. Ed. 2d 142 (1970). The movant may discharge this burden by demonstrating to the court that there is an absence of evidence to support the non-moving party's case on an issue which that party would have the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2552-53, 91 L. Ed. 2d 265 (1986). As the Second Circuit has noted, "it has long been the rule that on summary judgment the inferences to be drawn from the underlying facts contained in [the moving party's] materials must be viewed in the light most favorable to the party opposing the motion." Lendino v. Trans Union Credit Info. Co., 970 F.2d 1110, 1112 (2d Cir. 1992) (quotation omitted).
To defeat a motion for summary judgment, the non-moving party must do "more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538 (1986). Instead, the non-moving party must "set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e); Matsushita, 475 U.S. at 587, 106 S. Ct. at 1356. If the adverse party does not respond to the motion for summary judgement, "summary judgement, if appropriate, shall be entered against the adverse party." Fed. R. Civ. P. 56(e).
In considering a motion for summary judgment, a court is not to resolve contested issues of fact, but rather, it is to determine the existence of any disputed issues of material fact. Knight v. United States Fire Ins. Co., 804 F.2d 9, 11 (2d Cir. 1986), cert. denied, 480 U.S. 932, 94 L. Ed. 2d 762, 107 S. Ct. 1570 (1987). The existence of a genuine issue of material fact depends on both the genuineness and the materiality of the issues raised by the motion. See Scottish Air Int'l, Inc. v. British Caledonian Group, 867 F. Supp. 262, 266 (S.D.N.Y. 1994), aff'd, 81 F.3d 1224 (2d Cir. 1996). Indeed, "the mere existence of factual issues--where those issues are not material to the claims before the court--will not suffice to defeat a motion for summary judgment." Quarles v. General Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985) (per curiam). To evaluate a fact's materiality, it is the substantive law's identification of which facts are critical and which facts are irrelevant that governs. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). While "disputes over facts that might affect the outcome of a suit under the governing law will properly preclude the entry of summary judgment[,] factual disputes that are irrelevant or unnecessary will not be counted." Id. (citations omitted); see Knight, 804 F.2d at 11-12. According to the Supreme Court, "all that is required is that sufficient evidence supporting the claimed factual dispute be shown to require a judge or jury to resolve the parties' differing versions of the truth at trial." Anderson, 477 U.S. at 249, 106 S. Ct. at 2510 (quotation omitted). Nevertheless, "courts should not be reluctant to grant summary judgment in appropriate cases." A.F.L. Falck S.p.A. v. E.A. Karay Co., Inc., 722 F. Supp. 12, 15 (S.D.N.Y. 1989). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually insupportable claims," Celotex, 477 U.S. at 323-24, 106 S. Ct. at 2552-53, thereby permitting courts to avoid "protracted, expensive and harassing trials." Meiri v. Dacon, 759 F.2d 989, 998 (2d Cir.) cert. denied, 474 U.S. 829, 88 L. Ed. 2d 74, 106 S. Ct. 91 (1985).
II. ADAS'S MOTION
To reiterate, ADAS advances two arguments in support of its cross-motion for summary judgment: (1) that this Court should recognize the Bucharest Judgment which allegedly voids the Retrocession Agreement upon which Allstate's claims are based; and (2) pursuant to the Executive Order, ADAS lacks the capacity to be sued. This Court will consider each of these arguments individually.
A. The Bucharest Judgment
ADAS asserts that the Bucharest Judgment "declares null and void ab initio the agency and reinsurance agreements" underlying Allstate's claims against ADAS, and that "under New York law and the doctrine of international judicial comity," that judgment is entitled to recognition and enforcement by this Court. (ADAS Memo at 5.) This argument implicates this Court's ability to recognize the judgments of foreign judicial entities.
Unlike judgments of American state courts which are enforced domestically with full faith and credit, see U.S. Const. Art. IV, § 1; 28 U.S.C. § 1738 (1994) (implementing the Full Faith and Credit Clause), there is no comparable "international full faith and credit clause." See Aetna Life Ins. Co. v. Tremblay, 223 U.S. 185, 190, 32 S. Ct. 309, 310, 56 L. Ed. 398 (1912). Moreover, neither Congress nor the Executive branch has provided such authority in the form of legislation or treaties governing the recognition of foreign judgments. See Ronald A. Brand, Enforcement of Foreign Money-Judgments in the United States: In Search of Uniformity and International Acceptance, 67 Notre Dame L. Rev. 253, 257-58 (1991). Thus lacking constitutional, congressional or executive guidance, American courts have been uncertain in their approach to the enforcement of foreign judgments. Id. at 255. Instead, the law has developed both through the state and federal common law, as well as through recent state-law codifications.
Because this litigation arises under this Court's diversity jurisdiction, see Allstate, 948 F. Supp. at 296, this Court must apply the law of the state in which it sits, New York, to its consideration of whether to enforce the Bucharest Judgment. See Pariente v. Scott Meredith Literary Agency, Inc., 771 F. Supp. 609, 615 (S.D.N.Y. 1991) ("New York law governs actions in New York to enforce foreign judgments") (citation omitted); Choi v. Kim, 50 F.3d 244, 248 n.7 (3d Cir. 1995) ("the consensus among the State courts and lower federal courts which have passed upon the question is that, apart from federal question cases, such recognition [of foreign judgments] is governed by State law and that the federal courts will apply the law of the State in which they sit").
By enacting Article 53 of the New York Civil Practice Law and Rules ("Article 53"), New York became one of the twenty-seven states which have adopted versions of the Uniform Foreign Money-Judgments Act, 13 U.L.A. 263 (1986). 7B N.Y. Civ. Prac. L. & R. §§ 5301-09 (Table) (McKinney 1997 Supp.)). ADAS argues that, pursuant to Article 53, this Court should enforce the Bucharest Judgment. (ADAS Memo at 5-9.) ADAS's reliance upon Section 53 is misplaced, however, because that section is, by its terms, applicable only to foreign money-judgments. Section 5301 specifically defines the term "foreign country judgment" as "any judgment of a foreign state granting or denying recovery of a sum of money, other than a judgment for taxes, a fine or other penalty, or a judgment for support in matrimonial or family matters." 7B N.Y. Civ. Prac. L. & R. § 5301(b) (Mckinney 1997 Supp.) (emphasis added). The Bucharest Judgement is, by contrast, a judgment which allegedly nullifies a contract, not one which awards money. See (Notice of Cross-Motion at Exh. C.) As a result, Article 53 does not provide authority for this Court to enforce the Bucharest Judgment.
At common law, however, there is an another potential avenue for the enforcement of the Bucharest Judgement. Under the "the comity of nations," courts may give force to foreign judgments, and enforcement is not limited to foreign money judgments. See Canadian Imperial Bank v. Pamukbank Tas, 166 Misc. 2d 647, 650-51, 632 N.Y.S.2d 918, 920-21 (N.Y. Sup. Ct. 1994) (applying principles of comity to, but ultimately not enforcing, a Turkish court order restraining a New York bank from complying with a letter of credit); Lasry v. Lasry, 180 A.D.2d 488, 489, 579 N.Y.S.2d 393, 393-94 (N.Y. App. Div. 1992) (enforcing, on grounds of comity, a Swiss court's injunction freezing defendant's bank account).
The seminal case in the area of enforcement of foreign judgments, Hilton v. Guyot, 159 U.S. 113, 16 S. Ct. 139, 40 L. Ed. 95 (1895), explained the doctrine of comity as follows:
No law has any effect . . . beyond the limits of the sovereignty from which its authority is derived. The extent to which the law of one nation as put in force within its territory, whether by executive order, by legislative act, or by judicial decree, shall be allowed to operate within the dominion of another nation, depends upon what our greatest jurists have been content to call the "comity of nations." . . . Comity, in the legal sense, is neither a matter of absolute obligation on the one hand, nor a mere courtesy and good will upon the other. But it is a recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of persons under the protection of its laws.
Id. at 163-64, 16 S. Ct. at 143. In New York, courts "generally will accord recognition to the judgments rendered in a foreign country under the doctrine of comity absent a showing of fraud in the procurement of the foreign judgment or unless recognition of the foreign judgment would offend a strong policy of New York." Lasry, 180 A.D.2d 488 at 489, 579 N.Y.S.2d at 393-94; (citation omitted); see also Canadian Imperial Bank, 166 Misc. 2d at 651, 632 N.Y.S.2d at 921. The Restatement (Second) of Conflict of Laws relies upon Hilton to shed more light on the standards controlling the enforcement of foreign judgments:
A foreign nation judgment will not be recognized in the United States unless the American court is convinced that the foreign court had jurisdiction and that there has been opportunity for a full and fair trial abroad before a court of competent jurisdiction, conducting the trial upon regular proceedings, after due citation or voluntary appearance of the defendant, and under a system of jurisprudence likely to secure an impartial administration of justice between the citizens of its own country and those of other countries, and there is nothing to show either prejudice in the court, or in the system of laws in which it is sitting, or fraud in procuring the judgment . . . Hilton v. Guyot, 159 U.S. 113, 202, 40 L. Ed. 95, 16 S. Ct. 139 (1895). If these conditions are met, the judgment will not be refused recognition on the ground that the rendering court made an error of law or fact.