## Facts

- Emil Bendix, who was Jewish, owned an apartment building in Berlin and sold it in 1933 under duress during the early Nazi period.
- After World War II, the property was administered under the German Democratic Republic (GDR).
- Following German reunification, Germany enacted a property-return law aimed at restoring certain properties taken by the GDR.
- While restitution claims were pending, the law provided for government-appointed administrators to operate the properties, including collecting rents, paying taxes, and performing maintenance and repairs.
- Under the restitution framework, claimants who recovered property were required to reimburse administrators for qualifying maintenance and repair expenses incurred during the administration period.
- WIP Wohnungsbaugesellschaft Prenzlauer Berg mbH (WIP) administered Bendix’s former property during the restitution process.
- Bendix’s daughter, Sutton, filed a restitution claim and ultimately recovered the property.
- WIP sued Sutton in Berlin courts seeking reimbursement for expenses including roofing work, window installation, and an antenna system.
- WIP’s reimbursement claims were initially rejected but later reinstated on appeal.
- The German courts ordered Sutton to reimburse WIP for roof and window work and to pay most litigation costs, with the combined award totaling nearly US$385,000.
- WIP then sought recognition and enforcement of the German money judgments in New York state court.
- Sutton opposed recognition, arguing the German judgments should not be enforced because (a) the claim was repugnant to New York public policy, (b) enforcement would amount to an unconstitutional taking without just compensation, and (c) the judgments conflicted with the U.S. Constitution’s Contracts Clause by disregarding WIP’s alleged waiver of reimbursement rights when the property was transferred.

## Issues

1. Should a New York court recognize and enforce German money judgments awarding an administrator reimbursement and litigation costs under Germany’s post-reunification restitution law?
2. Is recognition barred because the German reimbursement obligation is repugnant to New York public policy?
3. Is recognition barred because enforcement would give effect to an unconstitutional taking without just compensation?
4. Is recognition barred because the German courts’ treatment of WIP’s alleged waiver conflicts with the Contracts Clause?

## Decision

- The New York Supreme Court recognized and enforced the German money judgments.
- The court rejected Sutton’s public-policy objection, concluding the German restitution-and-reimbursement arrangement was not so offensive to New York’s fundamental principles as to justify nonrecognition.
- The court rejected Sutton’s takings argument, treating the reimbursement obligation as part of the statutory conditions attached to receiving restitutionary relief rather than a taking by New York.
- The court rejected Sutton’s Contracts Clause theory, viewing the transfer and reimbursement duty as arising from the German statutory restitution scheme and the resulting judgments, not from an impaired New York contract right that would bar recognition.

## Legal Principles

- New York generally recognizes foreign-country money judgments as a matter of comity, subject to limited exceptions.
- The public-policy exception to recognition is construed narrowly; a foreign judgment is not refused simply because New York law would reach a different result or allocate costs differently.
- In a recognition action, the New York court does not retry the foreign merits; it asks whether a statutory or common-law ground for nonrecognition is established.
- Constitutional objections do not automatically defeat recognition where the challenged obligation arises from a foreign sovereign’s restitution statute and has been reduced to final foreign money judgments; the question remains whether New York’s recognition standards are met.

## Conclusion

New York recognized and enforced German judgments requiring Sutton, a successful restitution claimant, to reimburse WIP for certain property-maintenance expenses and most litigation costs, holding that Sutton’s public-policy, takings, and Contracts Clause objections did not justify nonrecognition.


WIP Wohnungsbaugesellschaft Prenzlauer Berg mbH v. Sutton, 2007 WL 7286871 (2007)