## Facts

- Robert R. Addington executed a personal “Amended and Restated Guaranty Agreement” in favor of Virgin Green Fund I, L.P. to secure a promissory note issued by DTX Oil, LLC in the principal amount of $15,000,000.
- DTX later defaulted on the promissory note and filed for bankruptcy protection.
- Virgin Green sued Addington in Delaware state court to collect on Addington’s guaranty.
- Addington was properly served in the Delaware action but did not respond or appear.
- The Delaware court entered a default judgment against Addington (April 19, 2012) for $20,276,052.50 plus 5.75% post-judgment interest.
- Virgin Green filed an authenticated copy of the Delaware judgment in Fayette Circuit Court, Kentucky, along with a notice and affidavit seeking recognition under Kentucky’s Uniform Enforcement of Foreign Judgments Act (UEFJA), KRS 426.950–.990.
- Virgin Green moved to domesticate the judgment and execute on it in Kentucky.
- Addington opposed domestication in Kentucky by arguing defenses aimed at the merits of Virgin Green’s Delaware claim on the guaranty, rather than challenging the Delaware judgment’s validity.
- The Fayette Circuit Court domesticated the Delaware judgment and permitted execution; Addington appealed.

## Issues

1. Whether the Delaware default judgment qualified as a “foreign judgment” entitled to recognition and enforcement in Kentucky under the UEFJA and full faith and credit.
2. Whether Addington could defeat domestication in Kentucky by raising merits-based defenses to liability on the guaranty, without challenging the Delaware judgment as invalid or seeking to set it aside.

## Decision

- The Kentucky Court of Appeals affirmed the Fayette Circuit Court’s order domesticating the Delaware default judgment and allowing execution in Kentucky.
- The court treated the Delaware default judgment as a foreign judgment entitled to full faith and credit once properly filed and authenticated under the UEFJA.
- The court rejected Addington’s attempt to contest the underlying guaranty claim in the Kentucky enforcement action because those arguments addressed the merits and should have been raised in Delaware.
- Because Addington did not argue that the Delaware judgment was invalid under Delaware law and did not seek to set aside the default judgment, Kentucky courts were required to recognize and enforce it.

## Legal Principles

- Under KRS 426.950, a “foreign judgment” includes any judgment of another state that is entitled to full faith and credit in Kentucky.
- Under KRS 426.955, an authenticated foreign judgment filed in a Kentucky court is treated the same as a Kentucky judgment and may be enforced in the same manner, subject to the same procedures available for reopening, vacating, or staying a Kentucky judgment.
- Full faith and credit generally requires Kentucky courts to enforce a valid sister-state judgment; a domestication proceeding is not a forum to retry the underlying dispute.
- Permissible resistance to domestication focuses on defects affecting the judgment’s enforceability (such as lack of jurisdiction, lack of notice, fraud in procurement, or other grounds that would allow the judgment to be set aside under the rendering state’s law), not defenses to the contract claim that led to the judgment.
- A party who was properly served but chose not to appear in the rendering state cannot use a later enforcement action in Kentucky to raise merits defenses that could have been litigated in the original case.

## Conclusion

The Kentucky Court of Appeals held that the Delaware default judgment against Addington was entitled to full faith and credit and was properly domesticated under Kentucky’s UEFJA, and that Addington could not block enforcement by arguing defenses to the guaranty’s merits when he did not challenge the Delaware judgment’s validity or seek relief from it in Delaware.


Addington v. Virgin Green Fund I, L.P., 2014 WL 3714615 (2014)