[WSBARP] New WA Sup Ct. Decision on Foreign State Choice of Law

[Mark Phelps]

Listmates:

The WA Supreme Court just issued this decision:

http://www.courts.wa.gov/opinions/pdf/938237.pdf

The short version: A  Hong Kong bank only got the husband's signature on loan docs which also included choice of law and forum clauses designating Hong Kong (which, like most foreign jurisdictions and states, does not recognize community property).

On obtaining a judgment, it attempted to collect on both the husband's separate property and the community property.  The husband and wife argued that, per WA law, without her signature, it could not collect against the community property - only against his (limited) separate property.  Enforcing the clause and finding that, even if the clause was not effective, Hong Kong law would  apply, the Supreme Court affirmed a Court of Appeals decision that the judgment could be enforced against all interests of the couple other than her separate property.

A cautionary tale to WA residents who may think that they may have a "gotcha" where a foreign company does not get both members of a marital community to sign.

As our firm does a fair bit of international transactions, this sort of issue occasionally raises its head.

Mark J. Phelps
Attorney, Litigation Practice Group Leader
Desh International & Business Law * www.deshlaw.com<http://www.deshlaw.com/>
11400 SE 8th Street, Suite 260, Bellevue, WA 98004
Direct: (425) 242-3398 * Fax: (425) 968-7571
Email: mphelps at deshlaw.com<mailto:mphelps at deshlaw.com>
Podcast: http://www.deshlaw.com/deshcast

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