Jaffe v. Accredited Surety & Casualty Co.Jaffe v. Accredited Surety & Casualty Co.
- Reporters:
- , , ,
- Before:
- Diana Gribbon Motz, King, Gregory
The court amends its opinion filed June 25, 2002, and reported at 294 F.3d 584, as follows:
On page 4, first full paragraph, lines 18-19 — the clause “Jaffe again immediately fled to Canada” is corrected to read “Jaffe immediately fled to Canada.”
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
Appeal from the United States District Court for the Eastern District of Virginia, at Alexandria. Gerald Bruce Lee, District Judge. (CA-00-1913-A)
Argued: February 26, 2002
Decided: June 25, 2002
Affirmed in part and certified in part by published opinion. Judge Motz wrote the opinion, in which Judge King and Judge Gregory joined.
COUNSEL
ARGUED: Harold M. Jaffe, Oakland, California, for Appellants. Michael Lee Sturm, WILEY, REIN & FIELDING, L.L.P., Washington, D.C., for Appellee. ON BRIEF: David Barger, KILPATRICK
OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
In this diversity action, Sidney Jaffe and his wife, Ruth Jaffe, Canadian citizens now living in Mexico, seek recognition of two default judgments — one in favor of Sidney Jaffe and one in favor of Ruth Jaffe. A Canadian court entered the default judgments against Accredited Surety & Casualty Co., Inc. (Accredited), a Florida corporation doing business in Virginia. The Canadian default judgments arise from the Jaffes’ contention that, after Sidney Jaffe jumped bail on Florida criminal charges, bail bondsmen employed by Accredited “kidnapped” him in Canada and illegally transported him to Florida for trial.
The district court refused to recognize the Canadian default judgments and granted summary judgment to Accredited. Because we must give full faith and credit to a Florida court‘s previous judgment refusing to recognize Ruth Jaffe‘s Canadian default judgment, we affirm the district court‘s grant of summary judgment to Accredited with respect to Ruth Jaffe‘s default judgment. However, because Virginia law is unclear as to whether the claim for relief on which Sidney Jaffe‘s default judgment is based “is repugnant to the public policy” of Virginia, or otherwise “need not be recognized” under Virginia‘s Foreign Country Money-Judgments Recognition Act,
I.
On August 7, 1980, Sidney Jaffe was arrested in Florida and charged with 28 counts of violating the Florida Uniform Land Sales
Jaffe was released on $137,500 bond, which Accredited posted on Jaffe‘s behalf. Jaffe signed a bond agreement with Accredited providing that Accredited had the right to “apprehend, arrest and surrender” Jaffe in the event Jaffe left the Florida jurisdiction “without the written consent of the court and [Accredited]” or if Jaffe moved from his then-current residence without notifying Accredited.
Once free on bail, Jaffe fled with family members to Toronto, Canada, without notifying or obtaining the permission of the court or Accredited. Jaffe subsequently failed to appear for trial in Florida, scheduled for May 18, 1981. At that time, Jaffe‘s counsel presented evidence to the Florida court that Jaffe‘s failure to appear was attributable to a basketball injury Jaffe had suffered in Canada. The Florida court added a failure to appear charge to the original charges against Jaffe and issued a warrant for Jaffe‘s arrest. The Florida court also estreated, or took away, Jaffe‘s bond based on his failure to appear. Accredited sought to have the estreature set aside, reiterating the representation by Jaffe‘s counsel that Jaffe‘s failure to appear was due to a basketball injury. On September 18, 1981, the court agreed to set aside the estreature on the condition that Accredited produce Jaffe within ninety days.
Later that month, two Accredited bondsmen, posing as police officers, located and apprehended Jaffe at his condominium building in Toronto, Canada, as he returned from jogging. The bondsmen then took Jaffe by car across the international border to Niagara Falls, New York, and returned with him by airplane to Florida. Jaffe stood trial and, on October 23, 1981, was convicted on all 28 Land Sales Practices counts and one count of failing to appear. See Jaffe v. State, 438 So. 2d at 74.
Florida authorities filed more criminal charges against Jaffe in March 1984, while Jaffe continued to reside in Canada. This time, Jaffe was charged with four counts of perjury stemming from answers to interrogatories in both the state civil action and in a subsequent federal civil action brought by Jaffe relating to the allegedly fraudulent land deals.1
In the meantime, Canadian officials “took a very jaundiced view” of the bondsmen‘s arrest of Jaffe, who had since become a Canadian citizen, in Canada, without notice or surrender to Canadian officials. See Kear v. Hilton, 699 F.2d 181, 182-83 & n.1 (4th Cir. 1983) (denying habeas relief to Accredited bondsman seeking to prevent his extradition to Canada for kidnapping Jaffe). Contrary to the law in each of the United States, in Canada a surety must either obtain an order from a Canadian court permitting the arrest of the accused or must surrender the accused to Canadian peace officers. Id. at 182 & n.3 (citing
Accredited and Snow entered special appearances and filed a motion to dismiss for lack of personal jurisdiction and forum non conveniens; the Canadian court dismissed that motion. See Jaffe v. Miller, [1989] 76 O.A.C. 15. Accredited and Snow elected not to defend further against the action. On November 22, 1990, the Canadian court entered two default judgments against Accredited — one in favor of Sidney Jaffe for $617,434.17 in Canadian dollars, plus $290,140.94 in U.S. dollars, plus interest, and a second and separate default judgment in favor of Ruth Jaffe for $115,293.56 in Canadian dollars, plus $903,481.47 in U.S. dollars, plus interest.3
In 1994, a Canadian court, after a full trial, issued a comprehensive, 93-page decision resolving the Jaffes’ claims as to the remaining defendants in the Jaffes’ Canadian action. The same court that previously had entered the default judgments in favor of the Jaffes (speaking through a different judge) dismissed each of the Jaffes’ claims and entered judgment in favor of one defendant on his counterclaim against the Jaffes. The Canadian court spared little scorn in detailing the Jaffes’ lack of credibility and the minimal foundation supporting their claims.4 As to the earlier default judgments entered against Accredited and Snow, the court declared that “[i]t strikes me as being wrong that Jaffe now has or should obtain a judgment against Accredited” based on his allegations of “kidnapping.” The court further stated:
I have no doubt that [the other judge of this court] granted judgment in favor of both Jaffe and Mrs. Jaffe on the basis of misstatements or misrepresentations knowingly made to him . . . and allow[ed] a recovery of money to which neither of them are entitled. I have a serious concern about this mat-
ter and question whether the judgments [in favor of the Jaffes] should now be enforced. I think the matter of their validity should be the subject of further consideration on another occasion.
On November 16, 2000, the Jaffes nonetheless filed this enforcement action against Accredited in the United States District Court for the Eastern District of Virginia, after having withdrawn a similar action from a Virginia state court in 1996. The Jaffes sought enforcement of both Canadian default judgments pursuant to the Foreign Country Money-Judgments Recognition Act,
The district court granted summary judgment to Accredited. The district court reasoned that the Florida court‘s refusal to recognize the Canadian default judgment barred Ruth Jaffe‘s claim for recognition of the same default judgment. The court held that Sidney Jaffe could not succeed on his claim for recognition of his Canadian default judgment because to permit this would be repugnant to Virginia public policy and therefore was barred by
Both Jaffes appeal. We review the district court‘s grant of summary judgment de novo. Guinness PLC v. Ward, 955 F.2d 875, 882 (4th Cir. 1992). We consider first Ruth Jaffe‘s claim and then Sidney Jaffe‘s claim.
II.
The full faith and credit statute,
A.
We therefore must first determine whether, under Florida preclusion law, the Florida court‘s judgment refusing to recognize Ruth Jaffe‘s Canadian default judgment bars her claim for recognition of that judgment in the present suit. Florida law provides that “several conditions must occur simultaneously if a matter is to be made res judicata: [1] identity of the thing sued for; [2] identity of the cause of action; [3] identity of parties; [4] identity of the quality in the person for or against whom the claim is made.” Albrecht v. State, 444 So. 2d 8, 12 (Fla. 1984), superseded by statute on other grounds, as stated in Bowen v. Florida Dep‘t of Envtl. Reg., 448 So. 2d 566 (Fla. Dist. Ct. App. 1984). Finally, under Florida law, the prior cause of action must have been resolved by a final “adjudication on the merits.” Ludovici v. McKiness, 545 So. 2d 335, 337 (Fla. Dist. Ct. App. 1989) (citations omitted).
Ruth Jaffe does not (and indeed cannot) maintain that the first four prongs of Florida‘s res judicata test have not been met. What Ruth Jaffe claims is that the Florida judgment would not be entitled to res judicata under Florida law because it is not “an adjudication on the
Ruth Jaffe‘s reliance on this argument seems to arise from her confusion as to what is at issue in her case. With respect to her claim, we must determine the enforceability of the prior Florida judgment refusing to enforce her Canadian default judgment, not the enforceability of the Canadian default judgment itself. Neither the full faith and credit statute, nor the Full Faith and Credit Clause of the Constitution, applies to judgments issued from foreign countries. See Miller v. Miller, 240 F.3d 392, 400 (4th Cir. 2001) (citations omitted); Guinness, 955 F.2d at 883. Accordingly, while both federal and state courts in the United States must give “full faith and credit” to any judgment of a state court empowered to enter the judgment, see Baker v. Gen. Motors Corp., 522 U.S. 222, 233 (1998), they need only recognize the judgment of a foreign court to the extent that this recognition comports with principles of judicial comity. See Hilton v. Guyot, 159 U.S. 113, 163, 203 (1895).
For this reason, a state can refuse, as Florida did, to recognize a foreign judgment on the ground that it conflicts with the public policy of that state. Id. at 163; Herron v. Passailaigue, 110 So. 539, 542 (Fla. 1926) (stating that a state court could refuse to enforce judgment from foreign country if contrary to “some paramount rule of public policy“); see also
But neither a state nor a federal court can refuse to give full faith and credit to the judgment of a state court because of disagreement with the public policy basis for that decision. Indeed, the Supreme
Ruth Jaffe simply ignores this precedent and argues that because the Florida judgment is based on Florida public policy, it, like some Rule 41(b) dismissals on limitations grounds, see Semtek Int‘l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 501-506 (2001), is not a judgment “on the merits” for res judicata purposes. Even if the line of Supreme Court cases from Fauntleroy to Baker did not apparently foreclose this argument, we would have to reject it. This is so because under Florida law, even an involuntary dismissal on limitations or other grounds, except for “a dismissal for lack of jurisdiction or for improper venue or for lack of an indispensable party,”
Accordingly, we must conclude that Florida law would afford the Florida court‘s grant of summary judgment to Accredited preclusive effect in any subsequent identical action, like the one at hand, brought by Ruth Jaffe.
B.
We now proceed to the second step of our inquiry in resolving whether the full faith and credit statute,
Ruth Jaffe has identified no statute that explicitly or implicitly repeals § 1738 and so “the second step of our analysis can be easily resolved.” See Meindl, 245 F.3d at 314 (citations omitted). We can only conclude that Congress has not repealed § 1738 to create some exception in this case; rather, the full faith and credit statute must be honored here. Hence, the district court properly held that the prior Florida judgment, refusing to recognize Ruth Jaffe‘s Canadian default judgment, must be given full faith and credit.
III.
Sidney Jaffe‘s claim seeking enforcement of his Canadian default judgment presents a more difficult question. Sidney Jaffe too seeks recognition and enforcement of his Canadian default judgment pursuant to Virginia‘s Foreign Country Money-Judgments Recognition Act (the “Act“),
In relevant part, the Act provides that a “foreign country money judgment need not be recognized if . . . [t]he claim for relief on which the judgment is based is repugnant to the public policy of this Commonwealth.”
Accredited principally contends6 that, as the district court held, recognition of Sidney Jaffe‘s Canadian default judgment “would be repugnant to Virginia public policy” for two interrelated reasons. To recognize Sidney Jaffe‘s default judgment would, Accredited main-
A.
The Supreme Court of Virginia has consistently refused to allow a party “to profit from its own wrongdoing.” Chosar Corp. v. Owens, 370 S.E.2d 305, 308 (Va. 1988); see Edwards v. Lowry, 348 S.E.2d 259, 261 (Va. 1986) (refusing to reduce a father‘s child support obligation where his changed circumstance — termination from his job — was “the consequenc[e] of his own wrongdoing“); McNeir v. McNeir, 16 S.E.2d 632, 633 (Va. 1941) (refusing to award ex-wife support payments when she admitted to fraudulently obtaining a divorce because it would “offend[ ] a principle of law, that one cannot profit by one‘s own wrong“); Eagle, Star & British Dominions Ins. Co. v. Heller, 140 S.E. 314, 321 (Va. 1927) (refusing to allow arsonist to recover under fire insurance policy for goods he intentionally burned).
“When [this principle is] applied to actions in tort . . . consent or participation in an immoral or unlawful act by plaintiff precludes recovery for injuries sustained as a result of that act.” Miller v. Bennett, 56 S.E.2d 217, 219 (Va. 1949); see also Zysk v. Zysk, 404 S.E.2d 721, 722 (Va. 1990) (stating that in a tort action, “consent, freely given without fraud or duress, bars recovery, even though the conduct constitutes a crime” because “courts will not assist the participant in an illegal act who seeks to profit from the act‘s commission“); Trace Mountain Prods., Inc. v. Special Data, Inc., 1994 WL 1031414 at *3 (Va. Cir. Ct. Nov. 3, 1994) (ruling that corporate directors who fail to keep “accurate records” cannot “profit from uncertainty created by their own wrongdoing“).
Applying this rule, the Supreme Court of Virginia has denied relief when “[t]he very illegal act to which the plaintiff consented and in which she participated produced the injuries and damages of which she complains.” Zysk, 404 S.E.2d at 722 (holding that a wife could not recover against her husband for disease contracted from him prior to marriage because she participated in and consented to unlawful
On the other hand, Virginia‘s highest court has held that this principle does not bar recovery if the plaintiff‘s unlawful act is not the direct cause of his injuries. Godbolt v. Brawley, 463 S.E.2d 657, 659-60 (Va. 1995); cf. Matthews v. Warner, 70 Va. 570 (Va. 1877) (stating that trial court was not required to instruct jury that if it found “that the death of the deceased . . . was the result of his own misconduct or neglect, then the jury must find for the defendant“). For example, Godbolt held that the plaintiff could maintain a civil action for assault against a security guard who shot him during a bar brawl, despite the plaintiff‘s participation in the brawl, because although the plaintiff “may have intentionally engaged in assaultive behavior, he did not engage in the use of deadly force and did not consent to its use.” Godbolt, 463 S.E.2d at 660.
We cannot determine from these precedents whether the Virginia courts would permit Jaffe to recover against Accredited for “wrongful abduction” when Jaffe‘s own illegal act — jumping bail — led to Accredited‘s actions in apprehending him. Under Virginia law, Jaffe‘s instigating act of jumping bail constitutes a felony, see
Nonetheless, a Virginia court might conclude that Jaffe‘s act of jumping bail and fleeing to Canada was not a sufficiently direct cause of his alleged injuries, as required by the Godbolt rule, to apply the principle that a party cannot profit from his own wrongdoing.
B.
Similarly, we cannot determine whether Virginia courts would preclude Jaffe‘s underlying claim as contrary to public policy based on the fugitive from justice doctrine. Pursuant to that doctrine, also known as the fugitive disentitlement doctrine, a court may “dismiss an appeal or writ of certiorari if the party seeking relief is a fugitive while the matter is pending.” Degen v. United States, 517 U.S. 820, 824 (1996); see also Ortega-Rodriguez v. United States, 507 U.S. 234, 242 (1993) (stating that the Supreme Court has upheld the doctrine “consistently and unequivocally“). A court has discretion in determining whether to apply the doctrine, which is equitable rather than jurisdictional in nature. See Molinaro v. New Jersey, 396 U.S. 365, 366 (1970).
Federal courts have adopted the doctrine, see, e.g., Goya Foods, Inc. v. Unanue-Casal, 275 F.3d 124, 129 (1st Cir. 2001); Prevot v. Prevot (In re Prevot), 59 F.3d 556, 562 (6th Cir. 1995), as have some state courts. See, e.g., In re J.J., 656 A.2d 1355, 1356 (Pa. 1995).
No Virginia statute or rule codifies the doctrine, and we have found no decisions in which a Virginia court has adopted it. Nevertheless, the considerations justifying the doctrine reflect substantial public policy interests Virginia likely shares with other jurisdictions that have applied the doctrine. These include (1) a party‘s fugitive status can render a judgment “impossible to enforce“; (2) the inequity of allowing a fugitive to “call upon the resources of the Court for determination of his claims,” and (3) the need to “discourage[ ] the felony of escape and encourage[ ] voluntary surrenders.” Degen, 517 U.S. at 824 (internal quotation marks and citations omitted).
Relying on these justifications, both federal and state courts have applied the fugitive from justice doctrine not only in criminal cases but in “a variety of civil cases and proceedings.” Empire Blue Cross & Blue Shield v. Finkelstein, 111 F.3d 278, 280-82 (2d Cir. 1997).9 Indeed, the Florida appellate court cited the doctrine as one of the grounds for affirming the dismissal of Ruth Jaffe‘s claim, explaining that “[t]he fugitive from justice doctrine bars any claim or defense that is solely derivative of the fugitive‘s claim.” Jaffe v. Snow, 610 So. 2d at 486, 488 (stating also that Florida courts had adopted the doctrine because a fugitive‘s “duplicitous approach” in “wield[ing] a sword against our judicial system by escaping criminal prosecution” while “shield[ing] himself with the protection of his rights in the civil
Although the fugitive from justice doctrine dates back more than one hundred years, the Supreme Court recently limited its application in the federal courts. In 1993, the Ortega-Rodriguez Court rejected the Eleventh Circuit‘s automatic rule mandating dismissal of fugitives’ appeals and held that “some connection between a defendant‘s fugitive status and his appeal” must exist for the doctrine to apply. Ortega-Rodriguez, 507 U.S. at 249. Then, in 1996, Degen expanded on the nexus requirement and held that a federal court could not rely on the fugitive from justice doctrine to dismiss a civil forfeiture action merely “because [the party] is a fugitive from, or otherwise is resisting, a related criminal prosecution.” Degen, 517 U.S. at 823. In reaching this conclusion, the Court held that fugitive status alone does not suffice to invoke the doctrine because disentitlement “is too blunt an instrument” for advancing the need to deter flight from prosecution by criminal defendants. Degen, 517 U.S. at 828.
Since Degen, both federal and state courts have continued to apply the doctrine in a civil setting. See, e.g., Goya Foods, 275 F.3d at 128-29; Pesin v. Rodriguez, 244 F.3d 1250, 1252-53 (11th Cir. 2001); Matsumoto v. Matsumoto, 792 A.2d 1222, 1232-33 (N.J. 2002); Guerin v. Guerin, 993 P.2d 1256, 1258 (Nev. 2000). Federal courts after Degen, however, have required a substantial nexus between a litigant‘s fugitive status and the issue before the court. See, e.g., Barnett v. YMCA, 268 F.3d 614 (8th Cir. 2001) (holding insufficient nexus between a claim that a work release program violated federal minimum wage laws and the prisoner‘s departure from a half-way house where he was paroled); Daccarett-Ghia v. C.I.R., 70 F.3d 621, 629 (D.C. Cir. 1995) (holding that “mere commonality of subject matter” did not establish a sufficient nexus between a Tax Court proceeding and a party‘s fugitive status based on “his failure to appear in a criminal case pending in another jurisdiction“). Although some state courts have also followed Degen and Ortega-Rodriguez to require a close nexus, see, e.g., Matsumoto, 792 A.2d at 1233; State v. Lundahl, 882 P.2d 644, 646-47 (Ore. Ct. App. 1994), not all state courts have regarded the Supreme Court cases as affecting the relevant state law. See, e.g., Scelba v. Scelba, 535 S.E.2d 668, 672 (S.C. Ct. App. 2000)
Jaffe maintains that even if Virginia follows the fugitive from justice doctrine, Virginia courts could not apply the doctrine in this case because, inter alia, an insufficient nexus exists to invoke the doctrine. Jaffe‘s status as a fugitive stems from charges that he committed criminal fraud through answers to interrogatories in two civil lawsuits, while his current enforcement action relates to the allegedly illegal acts of the bondsmen who kidnapped him in Canada after he jumped bond in an attempt to avoid criminal prosecution on charges that were related to, but preceded, the criminal fraud charges. In the absence of any Virginia statute, rule, or case stating or discussing the fugitive from justice doctrine, we cannot determine if a Virginia court would adopt the doctrine and, if so, whether a Virginia court would hold that under Virginia law the doctrine would apply to bar a claim like that which forms the basis of Jaffe‘s default judgment.
C.
Finally, even if we could conclude that Virginia law would not permit the claim for relief on which Jaffe‘s Canadian default judgment was based, under either the principle that a party cannot profit from his own wrongdoing or the fugitive from justice doctrine, we cannot determine whether a Virginia court would conclude that the conflict between Virginia public policy and the Canadian default judgment rises to a level that warrants non-recognition of the default judgment. See, e.g., Ackermann v. Levine, 788 F.2d 830, 842-43 (2d Cir. 1986) (explaining that under the common law “it is not enough merely that a foreign judgment fails to fulfill domestic practice or policy” and agreeing that it must “offend [a] sense of justice and menace the public welfare” (citation omitted)); McCord v. Jet Spray Int‘l Corp., 874 F. Supp. 436, 439 (D. Mass. 1994) (applying a similar standard in interpreting the Massachusetts version of the Uniform Foreign-Money Judgments Recognition Act).
D.
Given these several uncertainties, we will not substitute our judgment for the judgment of the Supreme Court of Virginia and, there-
Is the claim for relief that forms the basis for the Canadian default judgment in favor of Sidney Jaffe and against Accredited repugnant to the public policy of Virginia, such that the judgment need not be recognized pursuant to the Foreign Country Money-Judgments Recognition Act,
Va. Code Ann. § 8.01-465.6 et seq. ?
See Va. S. Ct. R. 5:42(a).
In certifying this question, we note that although our discussion of the possible grounds for non-recognition of Jaffe‘s Canadian default judgment has focused on the principle that one cannot profit from his own wrongdoing and on the fugitive from justice doctrine, we do not intend to foreclose the Supreme Court of Virginia from considering any other grounds for non-recognition that it believes the facts of this case present.
Should the Supreme Court of Virginia accept certification on the above question and answer in the affirmative, Jaffe‘s Canadian default judgment need not be recognized and, consequently, Jaffe is not entitled to enforce it. In the event the Supreme Court of Virginia court answers in the negative, we cannot refuse recognition of Jaffe‘s judgment based on the public policy exception of
IV.
For the above reasons, we hold that the full faith and credit statute bars Ruth Jaffe‘s claim for recognition of her Canadian default judgment. We therefore affirm summary judgment in favor of Accredited on Ruth Jaffe‘s claim. However, we certify to the Supreme Court of Virginia the question of whether the basis for Sidney Jaffe‘s Canadian default judgment is repugnant to Virginia public policy, rendering it unenforceable under
AFFIRMED IN PART AND CERTIFIED IN PART TO THE SUPREME COURT OF VIRGINIA.