Statute of Limitations--registration of foreign judgment--Full Faith and Credit
The trial court erred by ordering that a Florida judgment in a fraud action had been
properly domesticated in North Carolina where the Florida judgment was procured on 9
September 1987 and plaintiff sought to register that judgment in North Carolina on 1 July 1998, a
date beyond the ten year limitation period of N.C.G.S. § 1-47(1) but within Florida's twenty year
statute of limitations. North Carolina classifies statutes of limitation as procedural and the Full
Faith and Credit Clause is not violated by imposition of forum state rules affecting procedural
matters.
Henson & Paul, P.A., by Brian Philips, for plaintiff-appellee.
Hunter, Large & Sherrill, P.L.L.C., by William P. Hunter, III,
for defendants-appellants.
JOHN, Judge.
Defendants appeal the trial court's order providing that a
foreign judgment in favor of plaintiff “has been properly
domesticated” against defendants. We reverse the trial court.
Pertinent facts and procedural history include the following:
Plaintiff Todd A. Wener initiated suit alleging fraud against
defendants Perrone & Cramer Realty, Inc. and Nicholas A. Perrone in
the state of Florida. Summary judgment in favor of plaintiff was
entered 9 September 1987 in the Circuit Court of the Eleventh
Judicial Circuit, Dade County, Florida (the Florida judgment), and
plaintiff was awarded $180,000.00. Pursuant to the Uniform
Enforcement of Foreign Judgments Act, N.C.G.S. §§ 1C-1701 - 1C-1708(1999), plaintiff filed the Florida judgment in the Jackson Co
unty
Office of the Clerk of Superior Court on 1 July 1998, coupled with
an affidavit alleging the judgment remained unsatisfied and that
interest had accrued at the rate of 12% per annum, the total amount
due plaintiff thereby being calculated at $446,139.00.
Defendants filed a Notice of Defense to Foreign Judgment 24
July 1998 in accordance with G.S. § 1C-1705(a), pleading “the
statute of limitations, [N.C.G.S. § 1-47(1) (1999)] as defense in
bar of plaintiff's filing.” G.S. § 1-47(1) prescribes a ten year
period for commencement of actions “[u]pon a judgment or decree of
any court of the United States, or of any state or territory
thereof, from the date of its rendition.” However, the statute of
limitations for commencement of similar actions under Florida law
is twenty years. Fla. Stat. Ann. § 55.081 (West 1994).
Following a hearing, the trial court issued an order 14
October 1998 providing that
[t]he Florida Statute of Limitations on a
Judgment has a longer period than the North
Carolina Statute of Limitations and the
application of this Statute of Limitations
would effectively shorten the time period for
the validity of a Florida Judgment.
The Court hereby finds that [G.S. § 1-47(1)]
would be unconstitutional as it applies to
this out-of-state Florida Judgment as urged by
defense counsel and that the ten (10) year
Statute of Limitations does not apply . . . .
WHEREFORE, The Court hereby finds that the
Judgment filed by the Plaintiff has been
properly domesticated and that the Courthereby denies the Notice of Defense filed by
the [defendants].
Defendants timely appealed.
The issue is whether the Constitution of the United Statespermits courts of this state to bar enforcement of foreign
judgments upon expiration of the ten year period specified in G.S.
§ 1-47(1) under circumstances where a lengthier limitation period
for enforcement of judgments has been effected by the foreign
jurisdiction rendering the judgment. Plaintiff understandably
complains that, in light of Florida's twenty year statute of
limitations, barring his North Carolina action to enforce the
Florida judgment would not only violate the Full Faith and Credit
Clause of the United States Constitution, but
would [also] require any party to know the
statute of limitations of all fifty (50)
states [and] would place the burden upon the
creditor to register his judgment in every
state in which the Defendant might decide to
relocate.
Although sympathetic with plaintiff's policy arguments, we conclude
that application of G.S. § 1-47(1) in the instant circumstances
withstands constitutional scrutiny.
Prior to commencing, we note G.S. § 1-47(1) affects foreign
and domestic judgments alike. See McDonald v. Dickson, 85 N.C.
248, 251-52 (1881). Accordingly, we are not confronted with
differing periods of limitation for foreign and domestic judgments
whereby equal protection concerns might be implicated. See U.S.
Const. amend. XIV, § 1; compare Watkins v. Conway, 385 U.S. 188,
189, 17 L. Ed. 2d 286, 288 (1966) (per curiam) (statute of
limitations which discriminates against foreign actions “might well
. . . violate[] the Federal Constitution”); with Carter v. Carter,
349 S.E.2d 95, 98 (Va. 1986) (Virginia statutes imposing ten year
limitation period on foreign judgments and twenty year limitationperiod on domestic judgments do not violate Equal Protection Clause
as foreign and domestic “creditors are not similarly situated”).
The Full Faith and Credit Clause of the United States
Constitution states that:
Full Faith and Credit shall be given in each
State to the public Acts, Records, and
Judicial Proceedings of every other State.
U.S. Const. art. IV, § 1. However,
[i]t has long been established that the
enforcement of a judgment of a sister state
may be barred by application of the statute of
limitations of the forum state. Application
of the forum's statute of limitations entails
no violation of the full faith and credit
clause of the Constitution since such statutes
are deemed to affect procedure only and not
the substance of the action.
Matanuska Valley Lines, Inc. v. Molitor, 365 F.2d 358, 359-60 (9th
Cir. 1966), cert. denied, 386 U.S. 914, 17 L. Ed. 2d 786 (1967)
(citation omitted).
The Matanuska court relied upon an early United States Supreme
Court holding that
there is no direct constitutional inhibition
upon the states, nor any clause in the
Constitution from which it can be even
plausibly inferred, that the states may not
legislate upon the remedy in suits upon the
judgments of other states, exclusive of all
interference with their merits. It being
settled that the statute of limitations may
bar recoveries upon foreign judgments; that
the effect intended to be given under our
Constitution to judgments, is, that they are
conclusive only as regards the merits; the
common law principle then applies to suits
upon them, that they must be brought within
the period prescribed by the local law, the
lex fori, or the suit will be barred.M'Elmoyle v. Cohen, 38 U.S. (13 Pet.) 312, 328, 10 L. Ed. 177, 185
(1839).
In recent years, the United States Supreme Court has re-
examined the M'Elmoyle decision and found it to be “sound.” Sun
Oil Co. v. Wortman, 486 U.S. 717, 722, 100 L. Ed. 2d 743, 752
(1988). In Sun Oil, the Supreme Court held a state “may apply its
own procedural rules to actions litigated in its courts,” id.,
noting that statutes of limitation are recognized by most states as
procedural rules, id. at 724-26, 100 L. Ed. 2d at 754-55. Although
the Court commented that such characterization is not mandatory,
id. at 729, 100 L. Ed. 2d at 756, North Carolina courts have
consistently viewed statutes of limitation as procedural:
[t]he plea of the statute [of limitations], in
an action in our State on a judgment obtained
in another State, is a plea to the remedy, and
consequently the lex fori must prevail in such
an action.
Arrington v. Arrington, 127 N.C. 190, 197, 37 S.E. 212, 214 (1900)
(citing M'Elmoyle); accord, Boudreau v. Baughman, 322 N.C. 331,
335, 340, 368 S.E.2d 849, 854, 857 (1988) (“statutes of limitation
are clearly procedural,” therefore courts must apply the “lex fori,
the law of the forum”).
In Arrington, the plaintiff sought collection of alimony
payments due from a North Carolina resident under an Illinois
judgment. Our Supreme Court held North Carolina's statute of
limitations applied such that the
sums adjudged in favor of the plaintiff which
became due and collectible more than ten years
before the institution of this action, are
barred . . . .
Arrington, 127 N.C. at 198, 37 S.E. at 214.
A similar result was reached in Powles v. Kandrasiewicz, 886
F. Supp. 1261 (W.D.N.C. 1995), wherein a 1979 negligence judgment
in favor of the plaintiff had been entered by an Alabama federal
district court. Seeking to register the judgment in a North
Carolina federal district court some sixteen years later, the
plaintiff encountered the objection that North Carolina's ten year
statute of limitations had expired. The district court, relying on
Matanuska and Arrington, ruled that
even though the present judgment has an
effective life of twenty years under Alabama
law, the ten-year statute of limitations
imposed by North Carolina law bars Plaintiff
from enforcing such judgment in this state.
Powles, 886 F. Supp. at 1268.
In the case sub judice, the Florida judgment was procured 9
September 1987 and plaintiff sought to register that judgment in
North Carolina on 1 July 1998, a date beyond the ten year
limitation period provided in G.S. § 1-47(1). Under the
authorities cited herein, it appears that the Full Faith and Credit
Clause of the United States Constitution would not be violated by
imposition of forum state rules affecting procedural matters. See
Sun Oil, 486 U.S. at 722, 100 L. Ed. 2d at 752. As North Carolina
classifies statutes of limitation as procedural, see Arrington, 127
N.C. at 197, 37 S.E. at 214 and Boudreau, 322 N.C. at 340, 368
S.E.2d at 857, plaintiff's argument, i.e., that application of G.S.
§ 1-47(1) under the instant circumstances is unconstitutional,-must
fail, notwithstanding the twenty year limitation period underFlorida law, see Sun Oil, 486 U.S. at 722, 100 L. Ed. 2d at 752;
Powles, 886 F. Supp. at 1268.
In sum, the order of the trial court is reversed and this
cause remanded for entry of judgment in favor of defendants on
grounds that enforcement of the Florida judgment is barred by the
applicable North Carolina statute of limitations. See G.S. § 1-
47(1).
Reversed and remanded with instructions.
Judges LEWIS and MCGEE concur.
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