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RECOGNITION OF FOREIGN JUDGMENTS - DIRECTORY ASSISTANTS, INC. V. COOKE, CAMERON, TRAVIS AND COMPANY, P.C.

In Directory Assistants, Inc. v. Cooke, Cameron, Travis and Company, P.C., [Ms. 2080256 and 2081186, Apr. 16, 2010] __ So. 3d __ (Ala. Civ. App. 2010), the Alabama Court of Civil Appeals held that a Connecticut court had jurisdiction to enter a judgment against an Alabama law firm and recognized that full faith and credit prohibited it from inquiring into the merits of the original cause of action that led to the judgment. The law firm of Cooke, Cameron, Travis and Company, P.C. ("the law firm") entered into a contract with a Connecticut advertising and consulting firm. The contract contained an arbitration provision. After the contract was signed, the law firm notified the consulting firm that it no longer needed its services and refused to pay an invoice thereafter issued to it. The consulting firm initiated arbitration proceedings and the arbitrator determined the contract was valid and enforceable and required the law firm to pay liquidated damages to the consulting firm. During the course of the arbitration proceedings, the law firm filed a declaratory judgment action in Jefferson County Circuit Court seeking a declaration that the contract between the parties was void based on, among other things, Alabama's "door closing statute," Ala. Code ¤ 10-2B-15.02, which "prohibits foreign corporations that fail to qualify to do business in Alabama from enforcing contracts in the state." The consulting firm entered a limited appearance in the declaratory judgment action and filed a motion to dismiss for lack of subject matter jurisdiction. The Alabama trial court denied the motion to dismiss. The consulting firm appealed to the Alabama Supreme Court, which transferred the appeal to the Alabama Court of Civil Appeals. During the pendency of the declaratory judgment action, a court in Connecticut confirmed the previously entered arbitration award and entered a judgment in favor of the consulting firm for $33,421.32 plus interest. The consulting firm commenced an action in the Jefferson County Circuit Court to register the Connecticut judgment pursuant to the Uniform Enforcement of Foreign Judgments Act ("UEFJA"), Ala. Code 1975, ¤ 6-9-230, et seq. The Jefferson County Circuit Court registered and entered the judgment. The law firm moved to set aside entry of the Connecticut judgment, which was denied by the Jefferson County Circuit Court. The law firm appealed. Both pending appeals were consolidated. The Alabama Court of Civil Appeals held that the Jefferson County Circuit Court properly afforded the Connecticut court's judgment full faith and credit in refusing to set aside the registration judgment. Because the entry of the Connecticut judgment prevented the Jefferson County Circuit Court from granting contrary declaratory relief, the appeal relating to the declaratory judgment action was determined to be moot.

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