Civil Procedure Keyed to Field
Bank of Montreal v. Olafsson
Plaintiff, a Canadian corporation, brought an action against Defendant, an Icelandic citizen in federal district court to recover on promissory notes. Defendant did not appear and the court entered a default judgment in Plaintiff’s favor in May 1978. In June 1979, Defendant moved to set aside the default judgment for lack of subject matter jurisdiction. The trial court agreed, finding that because neither party was a U.S. citizen, there was no diversity jurisdiction. The court further found that Plaintiff should have known of the lack of diversity and that the policy against granting judgments without valid jurisdiction outweighed the prejudice to Plaintiff that resulted from its reliance on the default judgment. Plaintiff appealed.
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