968 N.W.2d 684
Wis.2022Background:
- Daniel and Jane Hennessy borrowed $7.5 million from Wells Fargo to build a condominium in San José del Cabo, Mexico; the transaction involved a loan agreement, promissory note (Wisconsin law, English), and a trust agreement (Mexican law, Spanish) securing the property.
- The Hennessys defaulted and Wells Fargo sued in Mexico; the Mexican district court entered judgment and the Mexican appellate court affirmed in part, awarding Wells Fargo US$7,500,000 (to be converted to pesos), interest, fees, costs, and permitting seizure/auction of the collateral and potential recovery of any deficiency.
- The Hennessys sued in Milwaukee seeking a declaratory judgment that a Wisconsin breach claim was time-barred; Wells Fargo counterclaimed to domesticate the Mexican judgment in Wisconsin.
- The circuit court held two hearings: (1) as a factfinder on Mexican law (crediting Wells Fargo’s Mexican-law expert) and concluded the Mexican judgment created personal money liability (including a possible deficiency); (2) exercised discretion under comity to domesticate the judgment and enter it in Wisconsin.
- The court of appeals affirmed; the Wisconsin Supreme Court (1) reaffirmed that foreign law is a question of fact (Wis. Stat. §902.02(5)), (2) found the circuit court’s interpretation of Mexican law not clearly erroneous, and (3) held domestication under comity was a proper discretionary exercise.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper standard of review for foreign law | Hennessy: treat foreign law as a question of law and review de novo | Wells Fargo: maintain Wisconsin practice treating foreign law as a question of fact | Court: reaffirmed foreign law is a question of fact; appellate review is for clear error; declined to change standard (statutory and stare-decisis grounds). |
| Scope of Mexican judgment (in rem vs. in personam; deficiency) | Hennessy: Mexican proceedings were in rem (foreclosure) only; no personal money judgment/deficiency allowed | Wells Fargo: judgment expressly awards $7.5M, interest, fees and permits collateral transfer and enforcement of any deficiency | Court: credited Wells Fargo’s expert; held Mexican judgment allowed personal money recovery and pursuit of deficiency; circuit court not clearly erroneous. |
| Domestication under comity / finality / "sum certain" | Hennessy: judgment lacks a single sum certain because interest, fees, commissions, and deficiency require further computation; therefore not final for domestication | Wells Fargo: judgment is final and enforceable; further calculations are execution/enforcement, not reopening merits | Court: domesticating judgment was reasonable under comity; circuit court did not err in discretion; judgment was final enough to recognize and domesticate. |
Key Cases Cited
- Animal Sci. Prods., Inc. v. Hebei Welcome Pharm. Co. Ltd., 138 S. Ct. 1865 (U.S. 2018) (discussing treatment and appellate review of foreign law under federal procedure)
- Hilton v. Guyot, 159 U.S. 113 (U.S. 1895) (comity doctrine: courts should not relitigate merits of foreign judgments)
- Royster-Clark, Inc. v. Olsen's Mill, Inc., 290 Wis. 2d 264 (Wis. 2006) (deference to circuit court findings of fact; clear-error standard)
- Milwaukee Cheese Co. v. Olafsson, 40 Wis. 2d 575 (Wis. 1968) (foreign law must be pleaded and proved as a fact)
- Ingersoll Milling Mach. Co. v. Granger, 833 F.2d 680 (7th Cir. 1987) (foreign-money-judgment recognition can be proper even where additional computations of interest or currency conversion are needed)
