## Facts

- A Canadian bank obtained a default money judgment in an Alberta court against a Texas corporation based on a guaranty of up to $250,000 for liabilities of the corporation’s Canadian affiliate.
- The Texas corporation had commercial ties to Alberta connected to the guaranty and the underlying Canadian indebtedness.
- The bank served the Texas corporation in the Canadian action in a manner permitted by Canadian law.
- The bank filed a diversity action in federal court in Texas seeking recognition and enforcement of the Alberta judgment.
- The bank moved for summary judgment.
- The Texas corporation opposed recognition, asserting (i) lack of personal jurisdiction in Alberta, (ii) improper service/insufficient notice, and (iii) a reciprocity bar because Canadian courts allegedly would not enforce a comparable Texas default judgment.

## Issues

1. In a diversity action to recognize and enforce a foreign-country judgment, does state law (Texas) or federal common law govern the recognition standard?
2. Under Texas recognition principles, should a Canadian default judgment be recognized where the debtor challenges personal jurisdiction and service/notice in the foreign proceeding?
3. Does Texas require reciprocity as a condition to recognizing a foreign-country judgment?

## Decision

- Texas law governed under Erie because the dispute was a private commercial enforcement action and no dominant federal interest displaced state law.
- The Alberta court had personal jurisdiction over the Texas corporation based on its purposeful, substantial commercial connections tied to the guaranty and foreseeable litigation in Alberta.
- Service and notice satisfied due process standards for recognition because the method used was authorized by Canadian law and was reasonably calculated to provide notice.
- Texas did not require reciprocity as a prerequisite to recognizing a foreign-country judgment.
- The court granted summary judgment for the bank and ordered the Alberta judgment recognized and enforceable in Texas.

## Legal Principles

- In diversity cases seeking recognition of foreign-country judgments, federal courts generally apply the forum state’s recognition law under Erie absent a strong countervailing federal interest.
- Texas recognizes foreign-country money judgments as a matter of comity when the foreign court had jurisdiction, the defendant received notice and an opportunity to be heard consistent with due process, and recognition does not violate Texas public policy.
- Purposeful commercial conduct creating substantial connections with the foreign forum can support personal jurisdiction for recognition purposes.
- Texas recognition doctrine, as applied here, did not condition enforcement of a foreign judgment on proof of reciprocal enforcement by the foreign country.

## Conclusion

The court applied Texas comity principles to recognize and enforce an Alberta default judgment, holding that the Canadian court had personal jurisdiction, service provided constitutionally adequate notice, and reciprocity was not required; summary judgment was entered for the judgment creditor.


Royal Bank of Can. v. Trentham Corp., 491 F. Supp. 404 (S.D. Tex. 1980)