Lead Opinion
OPINION
Diamond Offshore (Bermuda), Ltd. appeals the trial court’s recognition, pursuant to the Texas Uniform Foreign Country Money-Judgments Recognition Act,
BACKGROUND
Robert Duncan Burn Quinn and Thomas Joseph McCartney were employees of Diamond Offshore (Bermuda), Ltd. (“Diamond Bermuda”), working on an oil rig in the North Sea off the coast of The Netherlands. When Diamond Bermuda ceased operating the rig off the shore of The Netherlands, it offered Quinn and McCartney jobs on another rig. Instead of accepting the jobs, Quinn and McCartney filed suit against Diamond Bermuda in The Netherlands despite forum selection clauses contained in their written employment agreements with Diamond Bermuda providing for exclusive jurisdiction in Bermuda and the application of Bermuda law. The Dutch court rendered judgment in favor of Quinn and McCartney pursuant to Dutch law (the “Dutch judgments”).
On January 7, 2004, Quinn and McCartney filed their notice of filing of the Dutch judgments in Harris County, asking the Texas district court to recognize those judgments against Diamond Bermuda.
On May 3, 2006, the trial court entered an order granting Diamond Bermuda’s special appearance, and appellees appealed the judgment to this court. We reversed the judgment and remanded the case to the trial court. See Haaksman v. Diamond Offshore (Bermuda), Ltd.,
On August 23, 2010, the trial court held a hearing on Diamond Bermuda’s motion to quash service, motion to dismiss based on improper venue, and motion for nonrecognition and, on September 22, 2010, entered an order denying the motions and recognizing the Dutch judgments. In thir
Analysis
Because it is dispositive of this appeal, we shall address Diamond Bermuda’s twelfth issue. Diamond Bermuda contends that the trial court erred by denying its motion for nonrecognition because the Dutch proceeding was contrary to the forum-selection and choice-of-law clauses in the employment contracts. See Tex. Civ. Prac. & Rem.Code Ann. § 36.005(b)(5).
The UFCMJRA governs the recognition of foreign country money judgments. Courage Co., L.L.C. v. Chemshare Corp.,
Section 36.0044(g) provides that “[t]he court may refuse recognition of the foreign judgment if the motions, affidavits, briefs, and other evidence before it establish grounds for nonrecognition as specified in Section 36.005.” Tex. Civ. Prac. & Rem.Code Ann. § 36.0044(g). Section 36.005 sets forth the exclusive grounds for nonrecognition of a foreign-country judgment. Tex. Civ. Prac. & Rem.Code Ann. § 36.005. These are the only defenses available to a judgment debtor. Courage Co.,
A foreign-country judgment need not be recognized if “the proceeding in the foreign country was contrary to an agreement between the parties under which the dispute in question was to be settled otherwise than by proceedings in that court.” Tex. Civ. Prac. & Rem.Code Ann. § 36.005(b)(5); see also Courage Co.,
Appellees contend that Diamond Bermuda is required to show that the named forum recognizes the validity of forum-selection clauses. See Barnett v. Network Solutions, Inc.,
In 2004, the Texas Supreme Court adopted the federal approach set forth in M/S Bremen v. Zapata Off-Shore Co.,
Prior to the Texas Supreme Court’s adoption of the federal approach, a number of Texas intermediate appellate court decisions had developed their own approach to the enforceability of forum-selection clauses. In re Tyco Elecs. Power Sys., No. 05-04-01808,
In limiting the defenses that may be raised by a judgment debtor, the UFCMJRA creates standards for recognizing foreign judgments and prevents parties from relitigating issues that were conclusively settled by courts of foreign countries, unless such issues create an exception to recognition.
In its response to Diamond Bermuda’s motion for nonrecognition, appel-lees also argued that the forum-selection clause is not applicable because their recovery in the Dutch judgments did not arise out of the employment agreements, but from the Dutch “Employment in North Sea Mining Act.”
Finally, on the substantive question of nonrecognition under the forum-selection clause, Diamond Bermuda argues that appellees have not met their heavy burden to avoid the agreement. Specifically, Diamond Bermuda urges that appel-lees have not shown that trial in Bermuda would “be so gravely difficult and inconvenient that [they] will for all practical purposes be deprived of [their] day in court.” M/S Bremen,
Although the statute affords the trial court certain discretion regarding the recognition of foreign-country judgments, Texas law requires this court review the exercise of such discretion de novo. The facial incongruity of these standards is of no consequence in this case, however. Whether we apply a de novo standard or an abuse of discretion standard to the trial court’s determination in this case, our conclusion is the same because the trial court does not have discretion to improperly determine the law or misapply the law to the facts. See Walker,
We sustain Diamond Bermuda’s twelfth issue.
Notes
. See Tex. Civ. Prac. & Rem.Code Ann. §§ 36.001-008 (West 2008).
. Appellees also asked the trial court to recognize the Dutch judgments against Diamond Offshore Drilling Netherlands, B.V. ("Diamond Netherlands”). Appellees, however, subsequently abandoned their claims against Diamond Netherlands, and the trial court ordered those claims dismissed with prejudice.
. Although section 36.0044(g) provides a court with "discretion” to refuse recognition, a trial court never has "discretion” to improperly determine the law or misapply the law to the facts. Walker v. Packer,
. Diamond Bermuda filed its motion for nonrecognition, and appellees filed their response
. Appellees do not dispute that “Diamond Bermuda previously made its forum-selection clause argument — in the Dutch court, and those arguments were found wanting.”
. Tex. Civ. Prac. & Rem.Code Ann. § 36.005(b)(5).
. Moreover, in Courage Co., we also stated a ground for nonrecognition may be waived if a party had the right to assert that ground as an objection or defense in the foreign country court but failed to do so.
. Diamond Bermuda addresses this argument in its appellate brief. Although appellees raised this argument in the trial court, they do not address it in their appellate brief.
. Appellees appear to be addressing the issue as if they had to show that a trial in Bermuda would be seriously inconvenient when compared to Texas, rather than The Netherlands.
. In light of our disposition of Diamond Bermuda’s appeal on this issue, we need not address Diamond Bermuda’s issues challenging the denial of its motion to quash service
Dissenting Opinion
Justice, dissenting.
Under the unambiguous language of the Uniform Foreign Country Money Judgments Recognition Act, even if the evidence proves one or more of the discretionary grounds for nonrecognition, courts have discretion to recognize a foreign-country judgment based upon other factors in the case. The evidence in the record reflects that in two lawsuits in The Netherlands, the defendant failed to seek dismissal based upon the forum-selection clauses in its contracts with each plaintiff. Therefore, even though litigation in The Netherlands was contrary to these forum-selection clauses, this court should exercise its discretion to determine that the defendant’s nonrecognition motions under section 36.005(b)(5) should be denied.
Background
Duncan Burn Quinn and Thomas Joseph McCartney (hereinafter collectively, the “Employees”) sued their former employer, appellant Diamond Offshore (Bermuda), Ltd. (hereinafter, the “Company”) in a court in The Netherlands.
The Company appeals from the trial court’s order, challenging, among other things, the trial court’s denial of the Company’s motion for nonrecognition of each of the Dutch judgments under section 36.0044 of the Uniform Act. See Tex. Civ. Prac. & Rem.Code Ann. § 36.0044 (West 2008). Our record contains the two Dutch judgments and a certified translation of these judgments into the English language. Except for these judgments, our record contains no document filed in these two lawsuits in The Netherlands, nor does our record contain copies of any party’s pleadings, briefs, or other documents submitted in the Dutch lawsuits. If any hearing occurred before the Dutch court in either case, no transcript from that hearing is in our record. Our record contains a brief affidavit from a lawyer who represented the Company in the Dutch lawsuits, but this affidavit does not address any issue relating to the nonrecognition ground in section 36.005(b)(5). The language of the two Dutch judgments is substantially similar in most respects. In these judgments, the Dutch court states in pertinent part as follows:
• From 1987 through 1999, Quinn was a resident of The Netherlands working on a fixed drilling platform onthe Outer Continental Shelf off the coast of The Netherlands.
• From 1988 through 1999, McCartney was a resident of The Netherlands working on a fixed drilling platform on the Outer Continental Shelf off the coast of The Netherlands.
• The Employees began working for the Company on this platform in 1998.
• Each of the Employees had a written employment contract with the Company.
• Under each contract, the respective employee makes himself available to work for the Company anywhere in the world.
• When the Company’s contract to provide workers on the platform ended, the Company terminated the Employees’ contracts after they refused to relocate to work for the Company on a platform off the coast of Africa.
• The Employees asserted claims for damages under the laws of The Netherlands against the Company and Diamond Offshore Drilling (Netherlands) B.V. (hereinafter, “Dutch Affiliate”).
• In the context of their argument that the Company, rather than the Dutch Affiliate, was the employer of the Employees, the Company noted that each employment contract “states, as choice of applicable law and jurisdiction, the laws of the Bermuda Islands and the Court [sic] of Bermuda, respectively.”
• The Dutch court concluded that the Company was the employer of the Employees.
• The Dutch court also addressed “which legal system governs the employment contract” between the Company and the Employees. Based upon a Dutch statute, the Dutch court concluded that, because the Employees worked on a platform on the Outer Continental Shelf off the coast of The Netherlands, the law of The Netherlands applied to the Employees’ contracts, notwithstanding the parties’ choice of Bermuda law.
• The Dutch court concluded that the Company was liable to the Employees for money damages under the law of The Netherlands.
Grounds for Nonrecognition Under the Uniform Act
Under the Uniform Act, the trial court “may refuse recognition of the foreign country judgment if the motions, affidavits, briefs, and other evidence before it establish grounds for nonrecognition as specified in Section 36.005.” Tex. Civ. Prac. & Rem.Code Ann. § 36.0044(g). Under section 36.005, entitled “Grounds for Nonrecognition,” “a foreign country judgment is not conclusive if:
(1) the judgment was rendered under a system that does not provide impartial tribunals or procedures compatible with the requirements of due process of law;
(2) the foreign country court did not have personal jurisdiction over the defendant; or
(3) the foreign country court did not have jurisdiction over the subject matter.”
Tex. Civ. Prac. & Rem.Code Ann. § 36.005(a). These three bases for not recognizing a foreign-country judgment are the “mandatory grounds for nonrecognition.” See Beluga Chartering, B.V. v. Timber S.A.,
Under section 36.005, “a foreign country judgment need not be recognized if:
(1) the defendant in the proceedings in the foreign country court did not receive notice of the proceedings in sufficient time to defend;
(2) the judgment was obtained by fraud;
(3) the cause of action on which the judgment is based is repugnant to the public policy of this state;
(4) the judgment conflicts with another final and conclusive judgment;
(5) the proceeding in the foreign country court was contrary to an agreement between the parties under which the dispute in question was to be settled otherwise than by proceedings in that court;
(6) in the case of jurisdiction based only on personal service, the foreign country court was a seriously inconvenient forum for the trial of the action; or
(7) it is established that the foreign country in which the judgment was rendered does not recognize judgments rendered in this state that, but for the fact that they are rendered in this state, conform to the definition of ‘foreign country judgment.’ ”
Tex. Civ. Prac. & Rem. Code Ann. § 36.005(b) (emphasis added). These seven bases for not recognizing a foreign-country judgment are the “discretionary grounds for nonrecognition.” See Beluga Chartering,
It is presumed that this court reviews the trial court’s ruling under a de novo standard of review.
In a prior case, this court stated that a trial court’s ruling on a motion for nonrecognition of a foreign-country judgment is reviewed de novo. See Courage Co., L.L.C. v. Chemshare Corp.,
Under the Uniform Act, courts have discretion to recognize a foreign-country judgment even if the evidence proves one of the discretionary grounds for nonrecognition.
In construing a statute, this court’s objective is to determine and give effect to
If the evidence before the trial court proves one of the three mandatory grounds in section 36.005(a), then the trial court has no discretion and must grant the judgment debtor’s motion for nom-ecognition. See Tex. Civ. Prac. & Rem.Code Ann. § 36.005(a); Uniform Foreign Country Money Judgments Recognition Act, § 4, cmt. 3,13 Pt. II U.L.A. at 27. If none of the mandatory grounds for nonrecognition apply and if the evidence before the trial court proves one or more of the seven discretionary grounds in section 36.005(b), then the trial court “need not” recognize the foreign-country judgment. But, under the unambiguous language of the Uniform Act, the trial court also has discretion to recognize the foreign-country judgment. See Riff v. Riff,
The language of subparagraph (b) is not mandatory, but rather optional. In other words, even if [the judgment debtor’s] arguments with respect to the provisions of subparagraph (b) were valid, the statute does not require the district court to deny recognition of the judgment; it simply provides that it “may” deny recognition of that judgment.
Id. The Seventh Circuit noted that the trial court had concluded that it would not grant the motion for nonrecognition, even if one of the discretionary grounds were present. Id. In its appellate review, the Seventh Circuit stated that on the record presented it agreed with the district court’s analysis. Id. The Seventh Circuit further stated that the district court’s decision could not be characterized as an abuse of discretion. Id.
In a comment to the current version of the Uniform Foreign Country Money Judgments Recognition Act, the National Conference of Commissioners on Uniform State Laws states that “the forum court has discretion to decide whether or not to refuse recognition based on one of these [discretionary] grounds.” Uniform Foreign Country Money Judgments Recognition Act, § 4, cmt. 3,13 Pt. II U.L.A. at 27. In another comment, the Conference states that, even if the judgment debtor proves one of the discretionary grounds for nonrecognition, a court may exercise
Notably, for section 36.005(b)(5) to apply, the judgment debtor need not have sought dismissal of the case in the foreign country based upon the forum-selection clause. See Tex. Civ. Prac. & Rem.Code Ann. § 36.005(b). In addition, even if the forum-selection clauses at issue are unenforceable under the Bremen analysis, section 36.005(b)(5) still would apply because the foreign-court proceedings still would be contrary to a valid agreement between the parties under which the dispute in question was to be settled otherwise than by litigation in The Netherlands. See id.; M/S Bremen v. Zapata Off-Shore Co.,
Accordingly, despite the applicability of a forum-selection clause under section 36.005(b)(5), the trial court and this court have discretion to recognize a foreign-country judgment based upon other factors such as (1) the judgment debtor’s failure to seek dismissal of the foreign proceeding in the foreign trial court based upon the forum-selection clause, (2) the judgment debtor’s failure to raise the matter in question on appeal from the foreign-country judgment in the foreign country, despite the availability of an adequate appellate remedy, and (3) evidence upon which the foreign court reasonably could have determined that the forum-selection clause was unenforceable under the Bremen analysis. See Ingersoll Milling Mach. Co.,
Under a de novo review, this court should exercise its discretion to conclude that the nonrecognition motions should be denied to the extent the former employer asserts the ground in section 36.005(b)(5).
The evidence before the trial court showed that the proceedings in the Dutch court were contrary to the forum-selection clause in each employment agreement, under which the disputes in question were to be settled by litigation in Bermuda. Though the trial court had discretion to grant the Company’s nonrecognition motions on this ground, the trial court exercised its discretion to deny these motions. A factor that supports this exercise of discretion is the Company’s failure to seek
In each of the judgments, the Dutch court states that the Company cited the forum-selection and choice-of-law clauses in arguing that the Company, rather than the Dutch Affiliate, had employed the Employees. The Dutch court also concluded that Dutch law applied.
Though the Company may have cited the forum-selection clauses in seeking other relief, the evidence before the trial court shows that the Company did not seek dismissal of the Dutch lawsuits based upon the forum-selection clauses. Had the Company sought dismissal in the Dutch litigation, the Dutch courts might have granted this relief. Texas has a strong policy of requiring litigants to seek relief in the first court they encounter and discouraging litigants from sitting on their rights, awaiting the outcome of the litigation, and then later pursuing rights they chose not to exercise. See, e.g., General Chem. Corp. v. De La Lastra,
Principles of judicial economy are not served when a litigant is permitted to resurrect a contractual right the litigant chose not to pursue at the proper time and place and, after judgment, seek to enforce this right. The interests of litigants and courts are best served when the court in which the case is tried has an opportunity to consider the request for dismissal which, if granted, would obviate the need for trial and avoid the high cost of litigating the matter in the wrong forum. Though the Company may have gained a tactical advantage by its “wait and see” approach, the Dutch court and the Employees should not be put to unnecessary expense and delay in bringing the matter to conclusion. Under a de novo review this court should exercise its discretion to conclude that the Company’s nonrecognition motions should be denied to the extent they are based upon section 36.005(b)(5). See Ingersoll Milling Mach. Co.,
Rejecting the ground for nonrecognition under section 36.005(b)(5) in the case under review is also consistent with the goal of the Uniform Act. The United States is not party to any multilateral convention regarding recognition of foreign judgments. See Alenia Spazio, S.p.A. v. Reid,
In its appellate brief the Company cites section 36.005(b)(5) and asserts that “[t]his court must not recognize the foreign judgments if the proceedings in the Dutch court were contrary to an agreement between the parties under which the dispute in question was to be settled.” (emphasis added). The evidence before the trial court conclusively proved that the proceedings in the Dutch court were contrary to an agreement between the parties, under which the disputes in question were to be
The Company’s proffered construction renders the “need not” language of the Uniform Act meaningless, contrary to applicable rules of statutory construction. See Iliff,
The majority mentions the discretionary language of section 36.005(b) and states that this language provides courts with “certain discretion regarding the recognition of foreign country judgments.” Ante at 848. But, the majority does not describe this discretion, nor does the majority provide a legal standard by which this discretion can be applied, measured, or reviewed. See id. It can be inferred from the majority opinion that the majority bases its decision upon the Employees’ failure to prove that the forum-selection clauses are unenforceable under the Bremen analysis. See ante at pp. 848^19; Deep Water Slender Wells, Ltd.,
Conclusion
To give effect to the intent of the Legislature, as expressed in the unambiguous
. McCartney is an appellee in the case under review. The other appellee is Suzanne Elisabeth Haaksman, as beneficiary of Robert Duncan Bum Quinn, who was substituted in for Quinn after his death.
. Unless otherwise specified, all statutory references in this opinion are to the Texas Civil Practice and Remedies Code.
. It is somewhat unusual for the reviewing court to conduct a de novo review of a discretionary decision by the trial court. Nonetheless, it is possible for an appellate court to do so. For example, from 1991 through 2006, the Supreme Court of Texas required appellate courts to review de novo the trial court’s factual determinations relating to the issue of whether a claimant was required to segregate attorney's fees. See Stewart Title Guar. Co. v. Sterling,
. The Dutch court discussed a Dutch statute under which the law of The Netherlands must be applied to the employment contracts of workers on the Outer Continental Shelf off the coast of The Netherlands. ’Similarly, under American law a contractual provision is unenforceable if the parties choose the law of a jurisdiction other than the adjacent state to apply to operations conducted on fixed platforms off the coast of the United States. See 43 U.S.C. § 1301, et seq.; Gulf Offshore Co. v. Mobil Oil Corp.,
. In other trial court briefing the Company stated that the Dutch court "refused to recognize” the forum-selection clause. In addition, the Employees have cited the Dutch judgments and asserted that the Dutch court has rejected the Company's forum-selection clause argument. But these statements are not the same as saying that the court denied a motion to dismiss based upon the clause, and even if they were, they would not mandate a determination that the Company requested such relief in the Dutch court.
. If an abuse-of-discretion standard applied, this court should conclude that the trial court did not abuse its discretion under section 36.005(b)(5) in recognizing the Dutch judgments, in light of the Company’s failure to seek dismissal of the Dutch lawsuits based upon the forum-selection clauses.
. The issue in this case is whether the Dutch judgments should be enforced under the Uniform Act rather than whether the Dutch litigation should be dismissed based upon the forum-selection clauses.
