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Delving into a matter of international comity, an appellate panel in Albany has held that a New York company that has no presence in Canada, conducts no business there and did not appear in a lawsuit is nonetheless bound by a default judgment issued by a Quebec court. The Appellate Division, Third Department, ruling in Wimmer Canada Inc. v. Abele Tractor, 91665, marked the first time the Albany tribunal has had occasion to apply the catchall provision of CPLR 5305(b) to an international dispute. All four departments are now in agreement that a domestic business involved in a cross-border relationship can be brought into court in a foreign jurisdiction without ever setting foot in the other country. In affirming the “well-reasoned decision” of Albany Supreme Court Justice Bernard J. Malone Jr., the Third Department agreed that the Quebec court holds personal jurisdiction over the defendant. While noting that none of the bases listed in CPLR 5305 for a foreign court’s exercise of in personam jurisdiction over a judgment debtor were present here, the Third Department held the transaction does fall under the “broad catchall provision” of CPLR 5305(b). The dispute involves Wimmer Canada, a Quebec firm that manufactures and services heavy construction equipment, and Abele Tractor & Equipment Co. Inc., an Albany-area company that sells and services heavy machines. Wimmer extended credit to Abele and sued the defendant in Quebec over the debt. Abele objected to the jurisdiction of the Canadian court via letter, but failed to appear and formally challenge jurisdiction. The Quebec court issued a default judgment against Abele for $45,842. Justice Malone then granted summary judgment to enforce the foreign country ruling. On appeal, Abele’s primary argument was that the Quebec Superior Court lacked personal jurisdiction because the firm has no offices in the province and conducted no business there. In an opinion by Justice Edward O. Spain, the Third Department concurred with the First, Second and Fourth departments that New York should recognize under CPLR 5305(b) a foreign judgment that it acknowledges under internal law. “Contrary to defendant’s contentions, it was not necessary that plaintiff show that the contract was executed in Canada. … Courts have long eschewed the need for a defendant’s actual physical presence in Canada at the time of the transactions to confer in personam jurisdiction,” he wrote. Justice Spain was joined by Presiding Justice Anthony V. Cardona and Justices Karen K. Peters, Anthony J. Carpinello and Robert S. Rose. Janice B. Weintraub of Yonkers argued for Wimmer Canada. Linda A. Mandel Clemente of Mandel, Clemente & Associates in Albany appeared for Abele Tractor. SALES TAX ON CAR LEASE Also last week, the Third Department confirmed a determination of the Tax Appeals Tribunal that said Stroock & Stroock & Lavan partner Charles G. Moerdler is responsible for sales tax on a car lease that was never paid because the vehicle was stolen. Matter of Moerdler, 90085, stems from the lawyer’s 1997 lease of a Land Rover from a dealership in White Plains. Moerdler leased the vehicle through BMW Financial Services and agreed to make 36 monthly payments of $743.87. He paid sales tax on the total amount, $26,779, up front. The lease was terminated several months later when the vehicle was stolen, and Moerdler requested a tax refund of $1,963. His reasoning: The tax was based on receipts that never materialized because the lease was terminated. However, the Division of Taxation, the Tax Appeals Tribunal and now the Third Department all held otherwise. The court found that there is no Tax Law provision authorizing a refund of a sales tax paid on a prematurely terminated lease. Justice Thomas A. Mercure wrote for the court in a unanimous opinion joined by Justices Peters, Carpinello, Rose and Carl J. Mugglin. Stanley Parness of Stroock argued for Moerdler. Assistant Attorney General Julie S. Mereson appeared for the Tax Appeals Tribunal.

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