North Carolina Court of Appeals Weighs in on Foreign Judgment
September 26, 2021 by Lincoln Derr
Has the clock started running on my foreign judgment?
In a recent decision by the North Carolina Court of Appeals, a panel unanimously held that the 10-year period for enforcement of a foreign judgment accrues on the date the judgment is filed in North Carolina. The Court’s August 3, 2021 opinion, Nielson v. Schmoke, 2021-NCCOA-400, addressed the timing of when the 10-year period for enforcement of a foreign judgment begins to run, and its decision now permits a woman to pursue a claim of over $1.3M against her ex-husband.
The Nielson Decision
The parties, Nielson and Schmoke, had their divorce judgment entered in Michigan state court in 2003, and a supplemental judgment was entered in 2009. In 2013, Nielson enrolled both the 2003 and 2009 judgments in North Carolina state court under North Carolina’s version of the Uniform Enforcement of Foreign Judgments Act (UEFJA). In 2015, the trial court determined that Nielson met all requirements under the UEFJA and that the foreign judgments were entitled to full faith and credit in this state.
Cool, payout time for Nielson.
Not so fast. The foreign judgments remained unsatisfied in an amount exceeding $1.3 million so she began supplemental proceedings through an oral examination and motions to produce under N.C. Gen. Stat. § 1-352.2. Schmoke, Nielson’s ex-husband, challenged these supplemental proceedings arguing that the statutory 10-year period for enforcing the foreign judgments had expired and the post-judgment enforcement efforts were improper.
However, the trial court determined that the 10-year period had not expired, granted Nielson’s motions in 2019, and ordered Schmoke to comply with the requests.
Time for an Appeal
Schmoke appealed the trial court’s decision, arguing that the statutory 10-year period had expired at the latest in 2019. His position was that the clock began running the date the judgment was entered back in Michigan.
The North Carolina Court of Appeals analogized to the Fourth Circuit’s decision in Wells Fargo Equip. Fin., Inc. v. Asterbadi, 841 F.3d 23 (4th Cir. 2016) and held that “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.’ 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.” Nielson at ¶ 24.
Start the clock where?
In North Carolina, a party seeking to enforce a money judgment entered out-of-state has 10 years to enforce that judgment starting on the date it is filed in North Carolina, not the date it was originally entered. This essentially results in a “new” judgment, providing a new 10 year enforcement period.
This opinion impacts all money judgments entered outside of North Carolina that are sought to be enforced in the state of North Carolina For instance, if a judgment was entered in your favor out of state, it cannot impact property owned by the judgment debtor within North Carolina. That is, until the judgment is domesticated in North Carolina. Reach out to an attorney for assistance domesticating and enforcing your judgment and in ensuring all statutory deadlines are met.