The 10-year period for enforcement of a foreign judgment accrues on the date that the judgment is filed in North Carolina, a unanimous panel of the North Carolina Court of Appeals has ruled, affirming an order allowing a woman to pursue a claim of more than $1.3 million against her ex-husband.
On Dec. 29, 2003, a Michigan state court entered a divorce judgment in favor of Lauri Nielson against Raymond Schmoke, and a supplemental judgment was entered in 2009.
Pursuant to North Carolina’s version of the Uniform Enforcement of Foreign Judgments Act (UEFJA), Nielson enrolled both judgments with the New Hanover Superior Court on June 28, 2013. In 2015, the trial court ruled that Nielson had met all the requirements under the UEFJA, and the foreign judgments were entitled to full faith and credit in North Carolina. The court entered judgment in her favor in the full amount, plus interest.
When Nielson was unable to enforce the judgment by writ of execution, she began supplemental proceedings by conducting an oral examination and filing multiple motions seeking to have Schmoke and his current spouse produce documents and information. Schmoke objected, arguing that all post-judgment enforcement efforts should stop because the statutory 10-year period for enforcing a foreign judgment in North Carolina had expired. The trial court disagreed, ordering Schmoke and his current spouse to produce the requested information.
Schmoke appealed. Writing for the court in its Aug. 3 opinion, Judge Toby Hampson found that the trial court correctly judged when the 10-year period began.
“When a foreign money judgment is filed in North Carolina in compliance with N.C. Gen. Stat. §§ 1C-1703 and 1C-1704, such filing has the effect of creating a new North Carolina judgment, which ‘shall be enforced or satisfied in like manner,’” Hampson wrote. “This includes the 10-year enforcement period contemplated in N.C. Gen. Stat. §§ 1-234 and 1-306, as well as the running of any statute of limitations to enforce the ‘new’ North Carolina judgment under N.C. Gen. Stat. § 1-47, which each begin to run upon the filing of the foreign judgment in North Carolina.”
Analogous 4th Circuit decision
As a general proposition, by application of statute, a money judgment remains enforceable in North Carolina for a period of 10 years from the entry of the judgment, Hampson said, pursuant to N.C. Gen. Stat. §§ 1-234, 1-306 and 1-47.
Schmoke argued that the clock began ticking when the foreign judgments were originally entered in Michigan. That meant that the 10-year enforcement period lapsed at the latest on Oct. 13, 2019, ten years after the entry of the supplemental judgment in Michigan.
Alternatively, Nielson told the court that pursuant to the UEFJA, the clock starts over when the foreign judgments are entered in the new jurisdiction—in this case, on June 28, 2013, giving her until 2023.
The court did not specifically say that the question was a matter of first impression in North Carolina, but to reach a decision, Hampson relied heavily upon a 4th U.S. Circuit Court of Appeals opinion from 2016, Wells Fargo Equip. Fin., Inc. v. Asterbadi. In that case, the federal appellate panel considered the time period of enforceability of a judgment originally entered in the Eastern District of Virginia but registered for enforcement in the District of Maryland.
Hampson found the UEFJA similar to the federal statute at issue in the Asterbadi case, as both govern the filing and enforcement of foreign judgments in the state and serve the purpose of providing a more streamlined option for registering a foreign judgment, rather than requiring a judgment creditor to have to bring a suit on the foreign judgment in North Carolina.
Given these similarities, “the analysis employed by the Fourth Circuit in Asterbadi is highly persuasive and equally employable to this case,” Hampson wrote. “Asterbadi’s persuasiveness here is further underscored by decisions of other state courts interpreting their own foreign judgment registration statutes,” including courts in Louisiana, Maryland, New Jersey and Utah, as well as the 5th and 8th Circuits.
Judgments remain timely
Schmoke countered that there was no need to look to other jurisdictions for guidance, instead pointing to North Carolina authorities, which stand for the proposition that in order for a foreign judgment to be enforceable in the state, it must be filed under the UEFJA or a separate civil action filed to enforce it within 10 years from its entry in the foreign jurisdiction under the statute of limitations found in N.C. Gen. Stat. § 1-47.
“However, our decision here is unrelated to efforts to register foreign judgments in North Carolina more than 10 years after their entry and has no bearing on the impact of the general rule applied in those cases,” Hampson wrote. “This is because, here, the initial Michigan divorce judgment was entered on Dec. 29, 2003 and the foreign judgments were filed on June 28, 2013 and were, thus, filed within the 10-year statute of limitations mandated by N.C. Gen. Stat. § 1-47. As such, these cases are inapplicable to the particular issue at bar.”
Applying the reasoning of Asterbadi and the related cases to North Carolina’s UEFJA, Hampson held that the trial court properly concluded the enforcement period began to run on June 28, 2013, the day the foreign judgments were properly filed in North Carolina.
“As the foreign judgments remained enforceable in North Carolina, the trial court also did not err by requiring [Schmoke] and his current spouse to respond to the discovery requests in supplemental proceedings under N.C. Gen. Stat. § 1-352,” Hampson wrote.
Hunter Fritz of Butler & Butler in Wilmington represented Nielson. Thomas Kerner of Wilmington represented Schmoke. Neither responded to requests for comment on the decision.
The 17-page decision is Nielson v. Schmoke (Lawyers Weekly No. 011–143–21). The full text of the opinion is available online at nclawyersweekly.com.