Civil Practice-Statutes of Limitations – Contract under Seal – Domestic Relations – Separation Agreement – Tort/Negligence – Fraud

Crogan v. Crogan (Lawyers Weekly No. 14-07-0882, 10 pp.) (Sanford Steelman Jr., J.) Appealed from Granville County District Court (Daniel Finch, J.) N.C. App.

Holding: Since plaintiff alleges that defendant breached the full disclosure provision in their 2004 separation agreement, and since the separation agreement was signed under seal, plaintiff’s 2012 breach of contract claim was filed within the 10-year statute of limitations applicable to documents signed under seal.

We reverse summary judgment for defendant as to plaintiff’s breach of contract claim but affirm summary judgment for defendant as to plaintiff’s tort claims.

The statute of limitations for plaintiff’s duress and undue influence claims began to run in 2004, when she alleges she was coerced into signing the separation agreement. The statute of limitations on those claims expired in 2007.

Plaintiff’s complaint does not allege when she discovered defendant’s alleged fraud: his false representation that the values of their respective retirement accounts were “virtually the same,” when in fact plaintiff’s account was worth $31,192.99 while defendant’s account was worth about $130,000. However, the parties reconciled in 2005 (the separation agreement provided that it remained valid if the parties reconciled), and plaintiff acknowledged in her deposition that she had begun managing defendant’s retirement account by the end of 2006, giving her the opportunity to discover the fraud. Therefore, the statute of limitations on plaintiff’s fraud claim expired in 2009.

When the parties separated again in 2011, they litigated the distribution of their marital property in family court in West Virginia. That court directed the parties to have the courts of this state determine the validity of the separation agreement.

Based on these facts, plaintiff argues that her tort claims are subject to a 10-year statute of limitations because they are actually counterclaims for fraud pursuant to an instrument under seal. The court rejects this argument because plaintiff’s claims are not counterclaims and thus do not come within the language of G.S. § 1-47(2).

Affirmed in part; reversed in part.