Business and contract attorney David Katz was recently quoted in the Massachusetts Lawyers Weekly regarding a recent case dealing with the new Massachusetts Uniform Enforcement of Foreign Judgments Act. The case involved a pressing issue in business credit law and reach and apply injunctions: How can an out-of-state creditor enforce another state's court judgment against a Massachusetts debtor?
Appeals Court Faces First Cases Under the UEFJA
The case, Berg v. Ciampa, involved two sisters, each of whom had a 50 percent interest in the family trust. One of the sisters died, leaving her share to her two daughters. The surviving sister, who was also the fund's trustee, then took all $1.9 million in the trust for her own use, and provided no accounting for the expenses.
The two daughters sued their aunt in Florida and won. The Florida court awarded each of them over $200,000. However, the aunt was a Massachusetts resident. In March, 2019, the daughters filed a reach and apply complaint in Massachusetts Superior Court to enforce the Florida judgment. In May, 2019, just a month after Massachusetts passed its Uniform Enforcement of Foreign Judgments Act (UEFJA) the daughters filed another complaint, this time in the Boston Municipal Court, to domesticate the Florida judgment.
The defendant argued that the UEFJA prohibited the daughters from moving forward with both of the claims. The appeals court disagreed.
The UEFJA Simplifies the Process for Out-of-State Creditors
Massachusetts was one of the last states to pass a version of the UEFJA. Codified at G.L.c. 218, § 4A, the Massachusetts UEFJA lets out-of-state judgment creditors – people who have won a lawsuit for monetary damages in another state – to domesticate that judgment in Massachusetts by simply filing a certified copy of it in the district court where the debtor works or lives. This simplifies and expedites the process of collecting on a different state's court judgment; something required by the Full Faith and Credit Clause of the U.S. Constitution.
Before Massachusetts passed its UEFJA, out-of-state creditors would have to file a lawsuit in Massachusetts. This gave debtors the opportunity to claim that the out-of-state judgment was invalid. The UEFJA cuts the possibility off by letting the creditor domesticate the judgment in the state.
Case Puts Court's Imprimatur on the Collection Process
However, G.L.c. 218, §4A(g) states that “a judgment creditor shall retain the right to bring an action to enforce a judgment instead of proceeding under” the UEFJA. This lets out-of-state creditors choose between domesticating the judgment under the UEFJA and going the old route of filing a lawsuit in Massachusetts to enforce the foreign judgment.
The defendant in Berg, however, claimed that “instead of” meant that the creditors, her two nieces, had to choose one or the other. The appeals court rejected this contention and ruled that the remedies were not exclusive of each other, “provided that the creditor does not seek duplicative relief.”
When asked about the outcome by Massachusetts Lawyers Weekly for their January 13, 2022, publication, attorney David Katz saw the ruling as the appeals court “placing its imprimatur on… the need for a uniform process of domesticating foreign judgments in Massachusetts consistent with the terms of the Full Faith and Credit Clause.” While the UEFJA simplified the process of collecting foreign judgments, the appeals court in Berg helped to clarify the process in a way that made it more difficult for debtors to avoid payment.
Business Lawyers at the Katz Law Group Serve Massachusetts
The business attorneys at the Katz Law Group can help out-of-state creditors collect foreign court judgments in Massachusetts, including in Worcester, Marlborough, Framingham, and Norfolk or Middlesex Counties. Contact them online or call their law firm at (508) 480-8202.