Strong Medicine: Pay The Shekles

The Massachusetts Supreme Judicial Court upheld the ability of an Israeli law firm to enforce a judgment secured in Israel for unpaid legal fees

After the defendant, Amy Diamond, failed to pay the plaintiff, the Israeli law firm Cassouto-Noff & Co., its agreed-upon fees, an Israeli court held her liable for the debt. The plaintiff then initiated the current action in the Superior Court to recognize the Israeli judgment under the Massachusetts Uniform Foreign Money-Judgments Recognition Act, G. L. c. 235, § 23A (recognition act), a statute governing the enforcement of foreign money-judgments. Following a bench trial, the judge recognized the judgment, allowing it to be enforced. The defendant appealed, and we transferred the case to this court sua sponte. Although the defendant argues otherwise, we hold that the recognition act does not require compliance with Mass. R. Civ. P. 4 (d), as amended, 370 Mass. 918 (1976), and the  Israeli judgment does not offend public policy. We thus affirm.

The representation

In 2012 and 2013, the defendant held executive-level positions in business organizations collectively called the Bandel Group. After a venture launched by the Bandel Group in Israel encountered legal issues, the defendant contacted the plaintiff. Acting on behalf of the Bandel Group, the defendant entered into a written fee agreement for legal services with the plaintiff. The final provision specified that the agreement was
governed exclusively by Israeli law and that Israeli courts would have sole jurisdiction over disputes arising from the agreement. In addition to signing the agreement, the defendant repeatedly declared that "She was Bandel," and agreed, albeit orally, to be personally responsible for paying the fees.

The courts found that the defendant had evaded service and that "repugnancy" did not prevent enforcement

Repugnancy is strong medicine, best administered sparingly. A judgment will offend public policy when "the original claim is repugnant to fundamental notions of what is decent and just in the State where enforcement is sought." Restatement (Second) of Conflict of Laws § 117 comment c (1971).

...The Israeli judgment is not repugnant. This judgment was premised on the plaintiff asking the Israeli court to pierce the Bandel Group's corporate veil and hold the defendant personally liable.  As both the Superior Court judge and other courts have noted, Israeli courts take corporate veil piercing seriously.

Thus

The defendant should have argued in Israel against holding her personally liable, not in Massachusetts. See Ohno v. Yasuma, 723 F.3d 984, 1003 (9th Cir. 2013) ("Foreign judgments are not to be 'tried afresh' in [United States] courts, applying domestic concepts")

(Mike Frisch)