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Judge raised statute of limitations defense for no-show debtor

Court of Appeals reverses ruling

Some judges pride themselves on going the extra mile in court. But sometimes that extra mile is a stretch too far.

In Mecklenburg County, District Court Judge Becky Tin took it upon herself to raise a statute of limitations defense for a debtor who was being sued by a debt collection agency and didn’t bother to show up in court for a default judgment hearing.

After stepping in for the no-show defendant, Tin dismissed the collection agency’s complaint, concluding that it was time-barred.

Her ruling unraveled at the North Carolina Court of Appeals, which held on July 17 that Tin had overstepped. Judge Richard Dietz wrote in the unanimous decision, in a breezy six pages, that the state’s civil procedure rules require a defendant to assert a statute of limitations defense, not a judge.  

Tin, a Harvard Law grad who has served on the district court bench since November 2002, had also ruled that the complaint in question violated a state law that says collection agencies engage in unfair and deceptive trade practices when their agents knowingly file collection actions after the statute of limitations has expired.

“As with the statute of limitations, the trial court had no authority to deny the default judgment and dismiss the complaint on this ground,” Dietz wrote. He added that the statute lets the debtor or state attorney general sue collection agencies that run afoul of the law. But in writing the statute, the state legislature did not authorize judges to take matters into their own hands.

“Instead, it chose a different means of enforcement,” Dietz wrote. “Neither the trial court nor this court can second-guess this policy decision by the General Assembly.”

Aside from challenging Tin’s decision to raise a defense for the absent debtor, the debt collection agency’s attorney, Andrew Hoke of Sessoms & Rogers in Durham, had contended that his client filed the complaint before the three-year statute of limitations expired—an issue that the appellate court declined to address.

Hoke said his argument hinged on the assertion that the collection agency pursued the debtor under an “accounts stated” cause of action, as opposed to the “open account theory.”

Under the latter action, the statute of limitations clock starts ticking at the time of the debtor’s last payment before the account went to collection, Hoke said. But under the accounts stated cause of action, the clock is triggered when the debtor fails to object to a creditor’s account statement “within a reasonable time,” the interpretation of which is up to a judge, Hoke said.

He added that he’d fully expected that the appellate court would find that Tin erred in raising the statute of limitations defense for the debtor, which is where the court’s analysis ended. It sent the case back to the trial court for “entry of an appropriate judgment in favor” of the collection agency.  

“We thought the law was already clear that the statute of limitations is an affirmative defense and is waived if not raised by the defendants,” Hoke said. “We think the Court of Appeals simply applied the law correctly.”

The six-page decision is Unifund CCR, LLC v. Francois (Lawyers Weekly No. 011-236-18). An opinion digest is available at

Follow Phillip Bantz on Twitter @NCLWBantz

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