Note: We are crunching Supreme Court of Wisconsin decisions down to size. The rule for this is that no justice gets more than 10 paragraphs as written in the actual decision. The "upshot" and "background" sections do not count as part of the 10 paragraphs because of their summary and very necessary nature. We've also removed citations from the opinion for ease of reading, but have linked to important cases cited or information about them. Italics indicate WJI insertions except for case names, which also are italicized.
Majority opinion: Justice Annette K. Ziegler (30 pages), for a unanimous court.
Concurrence: Justice Rebecca F. Dallet (6 pages), joined by Justices Brian Hagedorn and Jill J. Karofsky.
In Wisconsin, a foreign country's law must be proven before a circuit court as a question of fact. We reaffirm this principle and decline the Hennessys' invitation to consider foreign law de novo. Upon a review of the record, the court cannot conclude that the circuit court's interpretation of Mexican law was clearly erroneous. Further, the circuit court did not erroneously exercise its discretion by choosing to recognize the Mexican judgment in Wisconsin. Thus, the court of appeals is affirmed, and Wells Fargo's judgment against the Hennessys was properly domesticated.
The Hennessys (Daniel and Jane) took out a loan of $7.5 million owed to Wells Fargo to build a condominium in San Jose del Cabo, Mexico. As part of the transaction, the parties signed three separate agreements. They executed a construction loan agreement, a promissory note, and an addendum to the note. These documents are governed by Wisconsin law and are written in English. In addition, the parties entered into a trust agreement. The trust held the property underlying the transaction as collateral in case of the Hennessys' default. Mexican law governs the trust agreement, which is written in Spanish.
The agreements are closely interlinked and reference each other. For instance, the loan agreement stated that the security is "granted . . . under the Guaranteed Trust Agreement." The trust agreement, for its part, stated that the Hennessys must "comply with all obligations [they] assumed under the Loan Documents," and, in the case of default, the Hennessys were obligated to "immediately pay any and all amounts [they] owe under the Loan Documents."
The Hennessys defaulted under the agreements, and in May 2012, Wells Fargo initiated a foreclosure action in Mexico....
In March 2014, the Mexican district court issued a judgment in favor of Wells Fargo ("the Mexican judgment"), and both parties appealed the decision. In October 2014, an appellate court, the Third Unitary Court of Mexico ("the Mexican appellate court"), affirmed in part the Mexican district court's decision and awarded a judgment in favor of Wells Fargo. The Mexican appellate court amended the judgment issued by the district court.
The appellate court said the Hennessys owed $7.5 million, plus interest and costs. Wells Fargo subsequently pursued an action in Milwaukee County Circuit Court to allow enforcement of the Mexican court decision.
[T]he circuit court issued a written decision holding that the Mexican judgment was valid and could be enforced against the Hennessys personally. The circuit court reasoned that the Mexican judgment mandated that the Hennessys either pay the amounts owed to Wells Fargo or surrender the property as collateral. Under Mexican law, if the Hennessys failed to pay Wells Fargo, the bank could recover any deficiency remaining after the collateral was sold, and, by seeking a deficiency, Wells Fargo was enforcing the Mexican judgment. The court later ruled that Wells Fargo was entitled to recognition of the Mexican judgment.
The Hennessys also lost in the Court of Appeals.
The Hennessys ask this court to alter its current standard for reviewing questions of a foreign country's law. In addition, the Hennessys seek reversal of the circuit court and court of appeals based upon their interpretations of the Mexican judgment and on international comity (the recognition one country gives to another country's laws and judgments.) We will first address the Hennessys' arguments on the proper standard of review.
For centuries, the common law established that, unlike the laws of the domestic jurisdiction, a foreign country's laws must be pleaded and proven as facts....
Even though Wisconsin's standard of review has been long established, the standard has been reaffirmed by this court on numerous occasions, and Wisconsin's statutory notice provisions on foreign law have not been changed, the Hennessys ask that the court resolve issues of foreign countries' laws as questions of law. (A question of law involves the interpretation of principles that might be relevant in other cases; a question of fact requires interpretation of circumstances of the particular case.) Whether we treat this issue solely as a matter of stare decisis, statutory interpretation, or both, we decline to do so....
As was true in centuries past, applying a wholly independent standard of review to a foreign country's jurisprudence can create substantial difficulties for courts, and having a question of fact standard can relieve the pressure placed on the judicial system. The standard places the burden on the parties to present what evidence and expert testimony they believe are relevant on the issue of foreign law, and limits appellate review to clearly erroneous interpretations. The process may serve to facilitate efficient and effective resolution of foreign law disputes. These disputes may otherwise consume court resources without consequent development of Wisconsin law.
Nonetheless, the Hennessys cite policy rationales in support of their position. They argue that recrafting issues of a foreign country's laws as questions of law would allow courts to exercise independent judgment, and it would give courts the opportunity to fully analyze the substance of foreign law....
The Hennessys fail to cite a single case where litigants, under the question of fact standard, were inhibited from presenting to the court a full and accurate body of a foreign country's law. Although the Hennessys disagree with the circuit court's findings in this case, there is no indication that the record was incomplete or somehow inadequate....
The Hennessys argue that the circuit court incorrectly interpreted Mexican law to allow recovery against them personally under the Mexican judgment. In addition, the Hennessys claim that the circuit court misapplied the doctrine of comity. Wells Fargo disputes both these assertions. It argues that the circuit court accurately interpreted Mexican law and properly applied its discretion to domesticate the Mexican judgment. We will address the two issues in turn....
[W]e affirm the circuit court's interpretation of Mexican law. The circuit court properly determined that the Mexican judgment allowed Wells Fargo to collect a money judgment from the Hennessys personally and seek any deficiency after foreclosure on the property is complete....
The Hennessys argue that the circuit court should not have domesticated the Mexican judgment because it was insufficiently specific as to the amounts the Hennessys owed. They argue that the judgment does not contain a "sum certain" and leaves open additional calculations of deficiencies, interest, fees, and expenses owed to Wells Fargo. Thus, according to the Hennessys, the Mexican judgment is not final....
Upon a review of the record, this court cannot conclude that the circuit court erroneously exercised its discretion in domesticating the Mexican judgment. The circuit court accurately examined the facts, recognized the applicability of the comity doctrine, "us[ed] a demonstrative rational process" in applying the doctrine, and came to a reasonable conclusion. We affirm the circuit court's judgment in favor of Wells Fargo.
I join the majority opinion but write separately only because I would focus on Wis. Stat. § 902.02(5), which requires Wisconsin courts to treat foreign countries' laws as questions of fact that must be proven to the circuit court. Therefore, I respectfully concur....
Because Wis. Stat. § 902.02(5) requires foreign countries' laws be treated as questions of fact, any change to that standard must come through legislation....
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