In Daniel J. Hennessy, Jr. v. Wells Fargo Bank, N.A. (2019AP001206), the Wisconsin Court of Appeals ruled that a Mexican court judgment applying Mexican law was valid in Wisconsin under principles of comity, a legal principle where political entities recognize each other’s judicial acts.

Facts

The Hennessys planned to build a new condominium building on property in the city of San José del Cabo located in Mexico. Mexican law limits ownership of certain types of real property by non-Mexican citizens such as the Hennessys. For this reason, the Hennessys placed the property (and mortgage) in trust with a Mexican entity as trustee. Per the agreement, if the Hennessys defaulted, and the bank holding the mortgage made a request, the Mexican trustee would “sell the Trust Property and use the income received from the sale to pay” the bank. 

The Hennessys defaulted on the loan and Wells Fargo Bank initiated a form of foreclosure action in a Mexican federal court. The court awarded Wells Fargo Bank $ 7,500,000.00 plus interest. 

After a failed appeal to the Mexican appellate courts, the Hennessys filed an action in Milwaukee County Circuit Court and sought a declaration “that Wells Fargo is barred from asserting any action or claim against the Hennessys to enforce any obligation under” the mortgage. The action was based on Wisconsin’s six-year statute of limitations for breach of contract claims. (WIS. STAT. § 893.43(1)) Separately, Wells Fargo Bank counterclaimed and asked the court to make the Mexican judgement enforceable. 

After weighing this evidence and the arguments of the parties, the circuit court found that the Mexican judgment was valid under Mexican law and required enforcement under the principles of comity. 

Decision

The Court of Appeals addressed two questions: whether the circuit court clearly erred in finding that the Mexican judgment was valid under Mexican law and whether it erroneously exercised its discretion in recognizing the Mexican judgment for domestication in Wisconsin. It sided with the circuit court on both issues. 

 After analyzing its role in reviewing the circuit court and contrasting the Hennessys’ claims with the actual fact findings, the court concluded: “[A]t most the Hennessys point to grounds for potential legitimate differences of opinion about what the Mexican court may have intended to establish in the Mexican judgment, but not to clear error by the circuit court.”

It also added on the comity issue,

“It is important to recognize that we review the circuit court’s comity decision based on the circuit court’s findings about Mexican law, including the degree to which the Mexican judgment represents a final judgment. The circuit court found that the Mexican judgment represented a judicial determination that Wells Fargo, as the creditor, could recover the deficiency after the sale of the Mexican property…We cannot say this was clear error.”