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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: January 5, 2020

Foreign Judgment Takes Precedence over Settlement Agreement That the Judgment Enforced

On December 24, 2019, the Second Department issued a decision in Bernardo v. Ramos, 2019 NY Slip Op. 09245, holding that a foreign judgment takes precedence over a settlement agreement that the judgment enforced, explaining:

The parties entered into a compromise agreement dated May 18, 2004, in the Philippines, whereby the defendant agreed to pay the plaintiff a certain sum of money. Thereafter, a court in the Philippines issued an order dated May 25, 2004, awarding the plaintiff a sum of money less than that which was set forth in the May 18, 2004, compromise agreement. On consent of the parties, in this action to enforce a judgment of the Philippine court, based apparently on the mistaken belief that the May 18, 2004, compromise agreement had been approved by the Philippine court, the Supreme Court issued an order recognizing the May 18, 2004, compromise agreement as a New York judgment, pursuant to CPLR article 53. Thereafter, in an order dated September 5, 2013, on motion of the defendant, the court vacated that judgment, and recognized the May 25, 2004, order of the Philippine court as a New York judgment, instead of the May 18, 2004, compromise agreement. The plaintiff moved, in effect, to vacate the September 5, 2013, order and, upon vacatur, for summary judgment on the complaint, and the defendant moved to dismiss the complaint. In the order appealed from dated February 8, 2016, the court denied the plaintiff’s motion, and granted the defendant’s motion to dismiss the complaint to the extent it sought enforcement of the May 18, 2004, compromise agreement. We affirm.

The Supreme Court providently exercised its inherent discretion to vacate the judgment which was mistakenly based on the May 18, 2004, compromise agreement, which was not approved by the Philippine court, and to instead recognize the May 25, 2004, order of the Philippine court as a New York judgment.

(Internal citations omitted).

We have substantial experience in helping judgment creditors collect on judgments and search for and attach assets worldwide. One part of that effort is using procedures such as the one discussed above to make foreign judgements and arbitral awards enforceable against assets in New York. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client need help collecting on a judgment.

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