Garfinkel scammed the Jacksons
into buying a yacht as part of a fraudulent get-rich-quick scheme. They
obtained a loan from Carteret to purchase the yacht.
The scheme went bad and the
Jacksons lost money. Carteret repossessed the yacht and sold it at
auction. Carteret then sued the Jacksons to recover the balance of the
loan.
The Jacksons believed that
their only collateral for the loan was the yacht, but Carteret went after
their other assets as well.
The Trial Court found for
Carteret in default judgment.
This original case was in
Florida, which was the location of the yacht.
The Jackson did not enter a
plea.
Carteret took their Florida judgment
to Massachusetts and attempted enforce the judgment and take the Jacksons'
Massachusetts assets.
The Jacksons attempted to
claim fraud and deceptive business practices against Carteret in the
Massachusetts Court.
The Massachusetts Trial Court
barred the Jacksons from making counterclaims in a suit against the judgment. The Jacksons appealed.
The Massachusetts Appellate
Court affirmed.
Jackson's claims should have
been asserted as compulsory counterclaims in the original Florida lawsuit. They chose not to make a
counterclaim in that lawsuit, and were now barred from doing it in
Massachusetts pursuant to Rule 13(a).
The Jacksons argued that
they had never entered a plea in the Florida lawsuit, so Rule 13(a) wasn't applicable.
However, the Massachusetts
Appellate Court said that argument failed because the Jacksons had been required to make a pleading in the Florida Court.
When a defendant is
defaulted for failure to file a pleading, the default applies to
whatever the party should have pleaded.
