Golden Dawn Corporation v. Fabrizio Dulcetti Neves

• Court: Court of Appeals for the Eleventh Circuit
• Decided: November 1, 2019
• Docket: 19-11688
• Status: Unpublished

Opinion

Case: 19-11688 Date Filed: 11/01/2019 Page: 1 of 5

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-11688 Non-Argument Calendar ________________________

D.C. Docket No. 1:17-cv-21818-KAM, Bkcy No. 1:09-bkc-33043-LMI

In re: FABRIZIO DULCETTI NEVES,

Debtor.

__________________________________________________________________

GOLDEN DAWN CORPORATION, MARKWOOD INVESTMENTS LTD.,

Plaintiffs - Appellants,

versus

FABRIZIO DULCETTI NEVES,

Defendant - Appellee.

________________________

Appeal from the United States District Court for the Southern District of Florida ________________________

(November 1, 2019) Case: 19-11688 Date Filed: 11/01/2019 Page: 2 of 5

Before WILSON, ROSENBAUM, and BRANCH, Circuit Judges.

PER CURIAM:

This is a cross-border bankruptcy dispute. The Frieri brothers founded the

appellant corporations Golden Dawn Corporation and Markwood Investments Ltd.

The appellee Fabrizio Dulcetti Neves owed these corporations money, but then he

went bankrupt. The Frieris—acting as their corporations—obtained a final

judgment in a bankruptcy proceeding against Neves. It turns out, though, that an

Italian court has entered an order seizing the Frieris’ control of the corporations

and entrusting that control to an Italian-appointed administrator.

Upon learning this, Neves settled his debt with the administrator, not the

Frieris. He then notified the bankruptcy court that he had satisfied the judgment.

The Frieris, still purporting to act for their corporations, opposed the settlement,

arguing that they were the rightful corporate representatives and that the

bankruptcy court should not grant comity to the Italian court’s seizure order.

The bankruptcy court disagreed. It granted comity to the Italian court order

and accepted the settlement. The district court then affirmed. Because these courts

did not abuse their discretion in granting comity to the Italian court’s seizure order,

we affirm as well.

I.

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Comity is “the recognition which one nation allows within its territory to the

legislative, executive or judicial acts of another nation, having due regard both to

international duty and convenience, and to the rights of its own citizens, or of other

persons who are under the protection of its laws.” Hilton v. Guyot, 159 U.S. 113,

164 (1895). We review a court’s grant or denial of comity for abuse of discretion.

Belize Telecom, Ltd. v. Gov’t of Belize, 528 F.3d 1298, 1303 (11th Cir. 2008). A

court “abuses its discretion if it applies an incorrect legal standard, applies the law

in an unreasonable or incorrect manner, follows improper procedures in making a

determination, or makes findings of fact that are clearly erroneous.” F.T.C. v.

AbbVie Prods. LLC, 713 F.3d 54, 61 (11th Cir. 2013).

To determine whether comity is appropriate, courts typically consider three

factors: “(1) whether the foreign court was competent and used proceedings

consistent with civilized jurisprudence, (2) whether the judgment was rendered by

fraud, and (3) whether the foreign judgment was prejudicial because it violated

American public policy notions of what is decent and just.” Daewoo Motor Am.,

Inc. v. Gen. Motors Corp., 459 F.3d 1249, 1258 (11th Cir. 2006) (internal

quotation marks omitted). For bankruptcy matters, “the extension of comity

enables the assets of a debtor to be dispersed in an equitable, orderly, and

systematic manner, rather than in a haphazard, erratic or piecemeal fashion.” Id.

(internal quotation mark omitted).

3 Case: 19-11688 Date Filed: 11/01/2019 Page: 4 of 5

II.

Because the Italian seizure proceedings satisfied the standards for comity,

neither the district court nor the bankruptcy court abused its discretion in extending

comity to the seizure order. Indeed, the Italian court held a prompt hearing so that

the Frieris could contest the seizure of the corporations. The court gave Salvatore

Frieri, the main manager of the corporations, notice of this hearing. The court also

appointed defense counsel for Salvatore Frieri. And the seizure order is subject to

two levels of appellate review in the Italian courts, through which the Frieris can

contest the seizure order and appointment of the administrator.

These procedures are “consistent with civilized jurisprudence” and do not

violate “American public policy notions of what is decent and just.” Id. And the

appellants do not contend that the seizure order was somehow obtained through

fraud. 1 Further, both the bankruptcy court and the district court were right to

consider only the procedures surrounding the seizure order, as that was the only

order for which the appellee sought comity.

The bankruptcy court and the district court thus applied the correct legal

standards in a reasonable manner, and neither court’s factual findings were clearly

1 Though the appellants argued in the bankruptcy court that a later Italian court order may have been obtained through fraud, they do not press this point on appeal. And in any event, the bankruptcy court correctly reasoned that the later order did not affect the initial seizure order— the order that entrusted the administrator with power over the appellants. Fraud therefore played no role in the Italian court’s decision to seize the corporations. 4 Case: 19-11688 Date Filed: 11/01/2019 Page: 5 of 5

erroneous. As a result, the bankruptcy court was within its bounds to extend

comity to the Italian court’s seizure order, and the district court was within its

bounds to affirm.2

For these reasons, the district court’s order is AFFIRMED.

2 It is also no issue that some of the Italian proceedings were ex parte because, as the bankruptcy court explained, all of the ex parte proceedings related to an order that merely clarified and confirmed the initial seizure order appointing the administrator. See In re Enercons Virginia, Inc., 812 F.2d 1469, 1472 (4th Cir. 1987) (affirming a grant of comity for an Italian court order, even though the Italian court used ex parte proceedings, since the ex parte proceedings merely confirmed a prior order developed through the adversarial process). Since the initial seizure order was obtained through an adversarial process, the after-the-fact ex parte proceedings do not impact the decision to grant comity to the seizure order. 5