Nielson v. Schmoke, North Carolina Court of Appeals, August 3, 2021 (Enforcement of Foreign Judgments)

Pursuant to a Michigan divorce judgment, entered in December 2003, and a supplemental judgment, entered in October 2009, husband was to pay to wife a total of $1,323,096.31. In 2013, pursuant to the Uniform Enforcement of Foreign Judgments Act (UEFJA), wife enrolled the two Michigan judgments, along with supporting affidavits, and commenced an action in North Carolina. Husband filed a motion to strike and defenses to enforcement of the judgments. The trial court found wife had met the requirements of the UEFJA, found that the Michigan judgments were entitled to full faith and credit in North Carolina, and entered a North Carolina judgment against husband in the amount of $1,323,096.31.

Wife was unable to enforce the North Carolina judgment through execution, so in October 2019, she began supplemental proceedings to enforce the judgment. Husband argued that all enforcement efforts should abate because the statutory 10-year period to enforce the Michigan judgments in North Carolina had expired – specifically, that because the last judgment had been entered in Michigan in October 2009, the enforcement period in North Carolina expired in October 2019, and so the North Carolina judgment became unenforceable at that point.

The trial court denied husband’s motion and, relying upon case law from the Fourth Circuit Court of Appeals, found that the enforcement period began to run at the time the Michigan judgments were filed in North Carolina (June 2013), not on the date that the final Michigan judgment was entered (October 2009). Defendant appealed.

Husband’s argument on appeal was that foreign orders may be domesticated in North Carolina pursuant to the UEFJA for enforcement, and that procedure does not create a new, North Carolina judgment – in other words, a party may use the UEFJA to enable that party to enforce a foreign order in North Carolina using North Carolina procedures, but that does not create an North Carolina judgment for enforcement. As such, husband argued, the statute of limitation to enforce a judgment ran from entry of the final judgment in Michigan. Wife argued on appeal that this was a case of first impression for the North Carolina Court of Appeals, but that the courts here should also apply the logic applied by the Fourth Circuit in deciding this issue.

The Court of Appeals agreed with wife and affirmed the trial court’s order. In reaching this decision, the Court of Appeals compared the federal statute at issue in decision from the Fourth Circuit with this state’s statute and determined that the purposes of the federal and state statutes were the same – to provide a streamlined option for registration of a foreign judgment rather than requiring a judgment creditor to bring a separate suit on the foreign judgment. The court here also reviewed the decisions of other states that had addressed this issue under their version of the Uniform Act and found that other states also determined this issue in the same way as had the Fourth Circuit.

The Court of Appeals thus held that when a foreign judgment is filed in North Carolina within the 10-year statute of limitation to enforce that original judgment, a new judgment is created in North Carolina and there is then a 10-year statute of limitation to enforce the new North Carolina judgment.

October 13, 2021/by FamilyLaw