Carteret Savings and Loan Assn. v. Jackson
812 F.2d 36 (1st Cir. 1987)

  • Garfinkel scammed the Jacksons (who lived in Massachusetts) 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 in Florida 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 Florida 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.
    • The Massachusetts Appellate Court found that the Jacksons’ 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.