In the absence of a specific treaty between the United States and Germany, and because of the lack of multicultural conventions signed by both the U.S. and Germany, the number of recognized and subsequently enforced U.S. tort judgments in Germany has been extremely small.
One of the main underlying factors is the strong criticism of the (very) much higher level of American personal injury awards and the refusal of acknowledging punitive damage compensation.
There are some signs of a possible change of mind as was fairly recently shown in decisions by the Frankfurt Appellate Court and the Federal Supreme Court.1
1 as discussed by Dr. Wulf Merkel, Ashurst,Morris,Crisp (Frankfurt/Main) and Daniel W. Shinn, Shook,Hardy & Bacon (Kansas City) in "Enforcement of Judgments"(Lawrence W. Newman, Editor, JURIS)
33 ATLA Law Reporter, 266
United States district court judgment was enforceable in
Germany against a German insurer.Grubbs v. Zayas, Federal Republic of Germany, Frankfurt Court of Appeals, May 19, 1989.
Grubbs and Zayas, both members of the U.S. Army soldiers stationed in Germany, were riding on a motorcycle driven by Zayas. Grubbs was thrown from the vehicle and sustained serious injuries resulting in permanent physical impairment. He then filed claim with Hessen-Nassauische, Zayas' German insurer. The company refused to pay benefits, arguing that Zayas had not been negligent.
When Grubbs returned to the United States, he sued Zayas and the company in Federal District Court in North Carolina, Hessen-Nassauische failed to appear or defend Zayas, and the court entered a default judgment against him equal to his policy limits of $300,000. Then Zayas assigned his rights to recover under the policy to Grubbs.
Grubbs sued to enforce the judgment in the Wiesbaden Regional Court. He brought a direct action against the insurer under provisions of German insurance contract law, which permits a claimant to proceed directly against the insurer. Plaintiff also argued that under German Civil Code §257 and Code of Civil Procedure §722, he was entitled to have the rights Zayas assigned to him converted into a compensatory damages claim against the insurer. Grubbs also requested legal aid under a pauper's oath that is available to a petitioner who shows an inability to bear litigation costs and probability of success on his case's merits.
The regional court denied that request, finding that a direct action against the insurer was barred. Because the U.S. court lacked jurisdiction over the German company, the court found the assignment claim barred by German Motor Vehicle Insurance Act §3(4), which requires an insurer's consent to third party assignments.
On appeal, the Frankfurt Courts of Appeals affirmed as to the direct action but reversed the assignment claim. It determined that §3(4) had been designed to prevent collusion between an insured and a claimant. The court found the collusion argument inapplicable here since plaintiff had already had a valid claim, based on the uncollected judgment, against the insured at the time of the assignment. The court concluded that plaintiff should be exempt from litigation costs and ordered the case retried.
At retrial, the regional court found that plaintiff could recover the full amount of the U.S. judgment.
The Frankfurt Court of Appeals affirmed the regional court's findings and added postjudgment interest of $192,000, which it determined should be computed at the 8-percent rate used by the North Carolina Court.
Plaintiff's Counsel:
* Hans W. Roepke, Frankfurt am Main, Germany
(The German Supreme Court denied defendant certiorari in this matter)
Contact Form
Background | The Personal Injury Claims Process in Germany | Auto Insurance | Home Page