By Adam B. Brandon

 

The U.S. Constitution requires that each state give “full faith and credit” to judgments of other states. Consistent with this mandate, the Florida Enforcement of Foreign Judgments Act provides a process for litigants to enforce out-of-state judgments in Florida. However, as Florida’s Fourth District Court of Appeal recently noted in Spano v. Wells Fargo Equipment Finance , a foreign judgment is not valid if the foreign court itself lacked jurisdiction over the defendant.

 

Wells Fargo sued a Florida resident in Illinois for breach of a lease agreement ostensibly signed and guaranteed by defendant. To support its claim, Wells Fargo filed the lease agreement which appeared to contain defendant’s signature. Defendant answered that she never did business with Wells Fargo, never lived in or visited Illinois, and never signed the lease agreement filed by Wells Fargo. When Wells Fargo moved for summary judgment, defendant again challenged the court’s jurisdiction. The Illinois court entered summary judgment against defendant without holding a hearing on the jurisdictional challenge.

Under the Florida Enforcement of Foreign Judgments Act, Wells Fargo sought to domesticate the Illinois judgment in Florida and to begin the post-judgment collection process. In Florida, defendant again argued that the Illinois court failed to conduct a hearing on her jurisdictional challenge. The Florida trial court ruled that the defendant’s sole remedy was to appeal the order in Illinois, not to collaterally attack the order in Florida.

On appeal, the Fourth District Court of Appeal held that the defendant was entitled to a fully and fair opportunity litigate the jurisdiction of a foreign court. Had the Illinois court provided this opportunity, then she could not collaterally attack the foreign ruling in Florida. However, the record demonstrated that the defendant did not receive a full opportunity to present her jurisdictional challenge before the Illinois Court. Under these circumstances, the Fourth District Court of Appeal reversed the trial court and held that the defendant could challenge the jurisdiction of the foreign court in Florida without filing an appeal in Illinois.

Financial institutions seeking to domesticate foreign judgments in Florida should know of the Spano decision. Florida courts may not afford full faith and credit to a foreign judgment if the out-of-state court denied the debtor a meaningful change to contest jurisdiction. Creditors and their counsel should ensure that courts fully address jurisdictional questions on the record. If this does not occur, then a debtor may receive a second chance to litigate whether a creditor is entitled to a judgment.