Judgments--foreign--enforcement--30-day waiting period
The trial court did not abuse its discretion by finding that
defendants' motion for relief and notice of defenses was timely
filed where defendants and plaintiff entered into a lease for
security equipment at defendants' restaurant; defendants rejected
the equipment as unsatisfactory; plaintiff brought an action in
Florida under a forum selection clause in the lease; plaintiff
obtained a default judgment on 11 August 1997; plaintiff filed
its petition to enforce a foreign judgment in North Carolina on
17 February 1998; defendants filed a motion for relief and notice
of defenses on 7 May 1998, alleging that Florida did not have
personal jurisdiction when it entered the judgment; and the court
denied plaintiff's motion to enforce the Florida judgment.
Although plaintiff argued that N.C.G.S. § 1C-1704(b) gives a
defendant debtor a maximum of 30 days in which to seek relief
from a foreign judgment, the thirty-day limitation is a waiting
period, a restriction on plaintiff-creditors rather than
defendant-debtors.
Adams Kleemeier Hagan Hannah & Fouts, by David A. Senter and
Brooks F. Bossong, for plaintiff-appellant.
Woodson, Sayers, Lawther, Short, Parrott & Hudson, LLP, by
Sean C. Walker, for defendant-appellees.
HUNTER, Judge.
Security Credit Leasing, Inc. (“plaintiff”) appeals the trial
court's order denying its Petition and Motion to Enforce Foreign
Judgment against defendant-appellees D.J.'s of Salisbury, Inc., and
Louie Mourouzidiz (collectively “defendants”). The following facts are undisputed. Plaintiff is a Flori
da
corporation in the business of leasing security equipment. Defendant Mourouzidiz, a resident of North Carolina, is president
of D.J.'s of Salisbury, Inc., a North Carolina corporation doing
business as a restaurant in Salisbury, North Carolina. On 12 June
1996, Mourouzidiz was approached while at D.J.'s by an agent of the
plaintiff who proposed leasing video surveillance equipment to the
restaurant. (Plaintiff's agent was headquartered in Greensboro,
North Carolina.) Defendants and plaintiff entered into a lease
agreement for security equipment, which agreement included a forum-
selection clause giving the State of Florida jurisdiction over any
controversy arising out of the lease agreement.
When plaintiff had the surveillance equipment delivered to
defendants, defendants rejected the equipment as unsatisfactory,
notifying plaintiff of the same. On 25 November 1996, plaintiff
sued defendants in Hillsborough County, Florida for breach of
contract. Although defendants were served by first class mail,
defendants did not answer the Florida complaint, and on 11 August
1997, plaintiff obtained a default judgment against defendants in
the Florida court. On 17 February 1998, plaintiff filed its
Petition to Enforce Foreign Judgment in Rowan County, North
Carolina. Defendants were properly served and in response, fileda Motion for Relief and Notice of Defenses on 7 May 1998, alleging
that the State of Florida did not have personal jurisdiction over
defendants at the time it rendered its judgment against them, thus
the court's judgment was void. In its order denying plaintiff's
motion to enforce the foreign judgment, the trial court found:
1. . . . Plaintiff filed and Defendants were
served with the complaint and summons in
the underlying matter by personal service
in Rowan County, North Carolina.
Defendants did not answer the complaint
of the plaintiff in the state of Florida
and Plaintiff obtained a default and
default judgment . . . .
. . .
6. On March 22, 1999 . . . [t]his Court
allowed Defendant's motion to dismiss and
denied the oral motion of Plaintiff to
strike Defendant's motion for relief and
notice of defenses for failure to file
within 30 days of service of Plaintiff's
Petition to Enforce Foreign Judgment.
7. [However,] [d]uring the same term of
Superior Court, the undersigned Judge
presiding reconvened the parties on March
29, 1999 and entered a revised ruling
pursuant to Rule 59 of the Rules of Civil
Procedure, in which the Court determined
that the motion to dismiss by the
Defendant was waived by failure to plead
in a timely manner and reinstated the
Plaintiff's Petition and Motion to
Enforce Foreign Judgment. Further, the
Court ruled that the Defendants['] Motion
for Relief and Notice of Defenses was
timely and properly before the Court.
The Court ordered the parties to present
evidence on the merits of their
respective motions at that time.
. . .
9. The court finds that the Defendants . . .
entered into a lease agreement with the
Plaintiff . . . . Plaintiff was
represented in this negotiation by an
agent operating out of Greensboro, North
Carolina.
. . .
11. That the Defendant Mourouzidis [sic] is a
native of Greece and immigrated to the
United States at age 14. The Defendant
speaks English as a second language and
speaks with a markedly heavy accent,
which is difficult to understand.
12. . . . The Defendants own only one
restaurant [located in Salisbury] and
live in Salisbury, North Carolina.
13. That the Defendants have no connection to
the State of Florida and have not availedthemselves of the protections of
Florida's laws.
14. That the lease signed by Defendants on
June 12, 1996 was proffered by the
Plaintiff and was pre-printed by or for
Plaintiff with terms on both the front
and reverse sides.
15. That the specific clause consenting to
jurisdiction in Florida is contained on
the reverse side of the lease in smaller
type-face than used on the front side, at
the very bottom of the page as the last
clause. The clause is written in
technical legal terminology. The second
page of the lease is not signed or
initialed by the Defendants.
16. That the provisions relating to
jurisdiction in Florida in the lease were
not highlighted or explained to the
Defendants by the Plaintiff or its
agents. Plaintiff did not submit any
evidence that the Defendants were aware
of this provision or of its significance.
17. That the consent to jurisdiction clause
included in the Plaintiff's lease
contract executed by the Defendants was
the product of unequal bargaining power
and that enforcement of that clause would
be unfair and unreasonable as to both
Defendants.
18. That based on the foregoing findings, the
Court finds an ultimate fact that the
matter before the Court was not fully and
fairly litigated in the State of Florida
in regards to personal jurisdiction.
Therefore, the trial court concluded:
2. That the notice filed by the Plaintiff
with its original Petition was
insufficient as to both Defendants;
however, this defect was waived by the
failure of the Defendants to properly
raise the issue in their pleadings.
3. That the Motion for Relief and Notice of
Defenses filed by the Defendants was
timely and not barred by any statute.
. . .
5. That there was not a full, fair, and
final litigation on the matters
pertaining to jurisdiction in this cause
in the State of Florida.
6. That the clause in the lease between the
parties ostensibly consenting the
Defendants to jurisdiction in Florida
courts is unenforceable because it is
unfair, unreasonable, and was procured as
a result of unequal bargaining power
favoring the Plaintiff and therefore the
judgement in the State of Florida entered
in this cause against the Defendants in
the State of Florida is not entitled to
Full Faith and Credit as a judgement in
this State pursuant to NCGS § 1C-1701 et
seq.
In the record, plaintiff preserved four assignments of error
all of which rely on the notion that defendants' Motion for Relief
and Notice of Defenses was time-barred pursuant to N.C. Gen. Stat.
§ 1C-1701 et seq. (the Uniform Enforcement of Foreign Judgments
Act, hereinafter, “the Act”). Consequently, defendants preserved
two cross-assignments of error. Due to our disposition of the
case, we need only address whether, in fact, the Act --
specifically § 1C-1704 -- serves as a statute of limitation for
defendants to file their Motion for Relief and Notice of Defenses.
Because we do not find the statute to be one of limitation for a
defendant-debtor, we affirm the trial court's ruling.
In its brief to this Court, plaintiff argues that the trial
court erred in its interpretation of N.C. Gen. Stat. § 1C-1704(b)
because the statute plainly gives a defendant-debtor a maximum ofthirty (30) days in which to seek relief from a foreign judgment.
Furthermore, plaintiff contends that where, as here, defendant-
debtor does not respond in the thirty (30) day time period,
defendant-debtor is time-barred from later doing so. Although we
find this an interesting argument, we are unpersuaded.
We recognize the statutes under the Act must be read in para
materia in order to ascertain the regulations and allowances
provided under the Act. Plaintiff's interpretation aside, in
actuality N.C. Gen. Stat. § 1C-1703(b) (1999) states that:
(b) Upon the filing of the foreign
judgment and the affidavit, the foreign
judgment shall be docketed and indexed in the
same manner as a judgment of this State;
however, no execution shall issue upon the
foreign judgment nor shall any other
proceeding be taken for its enforcement until
the expiration of 30 days from the date upon
which notice of filing is served in accordance
with G.S. 1C-1704.
Id. (emphasis added). Thus, we conclude that the thirty day
limitation period is not one barring a defendant-debtor's response
but instead the limitation period is specifically set to bar a
plaintiff-creditor from obtaining a foreign judgment against one of
our state's citizens and then immediately (within thirty days)
being able to enforce it without that defendant-debtor being
afforded the notice required by due process. Furthermore, in
keeping with our interpretation of N.C. Gen. Stat. § 1C-1703's
thirty day limitation period, we note our statutes clearly go on to
set out what a plaintiff-creditor must do in order to proceed with
enforcing its obtained judgment: (a) Promptly
upon the filing of a
foreign judgment and affidavit, the judgment
creditor shall serve the notice of filing
. . . on the judgment debtor . . . .
(b) The notice shall set fort
h the name
and address of the judgment creditor, of his
attorney if any, and of the clerk's office in
which the foreign judgment is filed in this
State, and shall state that the judgment
attached thereto has been filed in that
office, that the judgment debtor has 30 days
from the date of receipt of the notice to seek
relief from the enforcement of the judgment,
and that if the judgment is not satisfied and
no such relief is sought within that 30 days,
the judgment will be enforced in this State in
the same manner as any judgment of this State.
N.C. Gen. Stat. § 1C-1704(a), (b) (1999) (emphasis added). Thus
again, we are convinced that the Act's thirty day limitation at
issue is a “waiting period” -- a restriction on when plaintiff-
creditors may act and not on when defendant-debtors may not.
Nevertheless, to bolster its argument to this Court, plaintiff
cites Lust v. Fountain of Life, Inc., 110 N.C. App. 298, 429 S.E.2d
435 (1993), in which this Court stated,
If the judgment debtor takes no action within
thirty days of receipt of the notice to delay
enforcement of the judgment, “the judgment
will be enforced in this State in the same
manner as any judgment of this State.”
N.C.G.S. § 1C-1704(b). To delay enforcement
of the judgment, the judgment debtor may “file
a motion of relief from, or notice of defense
to,” the judgment on grounds as permitted in
the Act. N.C.G.S. § 1C-1705(a).
Id. at 300, 429 S.E.2d at 437 (emphasis added). However, we do not
agree that Lust stands for the premise asserted by plaintiff.
In Lust, there was no issue as to whether defendant-debtor
was time-barred from filing a motion for relief because the recordclearly reflected that defendants filed their response on the
thirtieth day. There is, therefore, nothing in the facts of Lust
to assist plaintiff in persuading this Court that it should hold
the present defendants time-barred from filing their notice of
defenses. Instead, we find the passage from which plaintiff quotes
dispositive in that, although the court stated that “the judgment
[would] be enforced” where the debtor took no action within the
thirty day notice period, the court continued by further stating
that in order for defendant-debtor to “delay enforcement” he may
file a motion for relief from or notice of defense to the
enforcement. Again, we find no issue of time limitation raised by
the court as to when defendant-debtor had to file his motion or
notice; we only find that after thirty days passed -- without
defendant-debtor filing a written response, plaintiff-creditor
could then move for enforcement. Id. at 300, 429 S.E.2d at 437.
Therefore, we hold that as long as defendant-debtor acts before
enforcement, defendant-debtor could properly delay enforcement by
filing his motion for relief and/or notice of defenses. Id.
Furthermore, we are reminded that our courts “are constrained
by the full faith and credit clause to treat foreign judgments the
same as domestic judgments. Boyles v. Boyles, 59 N.C. App. 389,
297 S.E.2d 405 (1982), aff'd, 308 N.C. 488, 302 S.E.2d 790 (1983).
They do not receive extra deference.” White v. Graham, 72 N.C.
App. 436, 441, 325 S.E.2d 497, 501 (1985) (emphasis in original).
Accordingly, if defendant-debtors of default judgments rendered
here in North Carolina are not bound by a thirty-day statute oflimitations, then defendant-debtors of foreign default judgments
cannot be held to a higher standard. Id.
Under the North Carolina statute governing domestic default
judgments, N.C. Gen. Stat. § 1A-1, Rule 55, the only time
limitation given is the same thirty day “waiting period” (as with
foreign judgments), required of a plaintiff-creditor IF:
The [plaintiff's] motion specifically provides
that the court will decide the motion for
judgment by default without a hearing if the
party against whom judgment is sought
[defendant-debtor] fails to serve a written
response, stating the grounds for opposing the
motion, within 30 days of service of the
motion . . . .
N.C. Gen. Stat. § 1A-1, Rule 55(b)(2)(b)(1) (1999) (emphasis
added). However, we note that the statute provides -- not an
“automatic enforcement” of a plaintiff's default judgment, but
instead requires a plaintiff-creditor to “motion [the court] for
judgment by default” once the thirty days have passed following
notice. Id. This concept is directly in line with our
interpretation of N.C. Gen. Stat. § 1C-1704(b)'s requirement that
once the thirty day “waiting period” ends, a plaintiff-creditor
must act by motioning the court for enforcement of its foreign
judgment before the defendant-debtor responds.
We further note, however, that even where a plaintiff includes
the required specificity within its motion, a trial court may still
set aside an entry of default or a default judgment for good cause.
N.C. Gen. Stat. § 1A-1, Rule 55(2)(b). “A motion to set aside an
entry of default pursuant to [this Rule] for 'good cause' shown
falls within the sound discretion of the trial court, whosedecision will not be disturbed on appeal 'absent a showing of abuse
of that discretion.'” Automotive Equipment Distributors, Inc. v.
Petroleum Equipment & Service, Inc., 87 N.C. App. 606, 608, 361
S.E.2d 895, 896 (1987) (quoting Lumber Co. v. Grizzard, 51 N.C.
App. 561, 563, 277 S.E.2d 95, 96 (1981)). “The law generally
disfavors default and 'any doubt should be resolved in favor of
setting aside an entry of default so that the case may be decided
on its merits.'” Id. (quoting Peebles v. Moore, 48 N.C. App. 497,
504-05, 269 S.E.2d 694, 698 (1980), modified and aff'd, 302 N.C.
351, 275 S.E.2d 833 (1981)).
In the case at bar, there is no dispute that defendants filed
their Motion for Relief and Notice of Defenses almost thirty days
after expiration of the thirty day time period but before plaintiff
moved for immediate enforcement of its default judgment against
defendants. And although plaintiff had the right and the
opportunity to file a motion for immediate enforcement BEFORE
defendants responded, plaintiff failed to do so. Additionally,
nowhere in the record or in plaintiff's brief to this Court does
plaintiff argue that it was prejudiced by defendants' delay. Thus,
in “treat[ing] [plaintiff's] foreign judgment[] the same as [any]
domestic judgment[,]” Boyles v. Boyles, 59 N.C. App. 389, 391, 297
S.E.2d 405, 406, we hold that the trial court did not abuse its
discretion in finding that “the Defendants Motion for Relief and
Notice of Defenses was timely and properly before the Court.”
After thorough review, we conclude the record supports the
trial court's findings and its findings support its conclusions oflaw. “'Where trial is by judge and not by jury, the trial court's
findings of fact have the force and effect of a verdict by a jury
and are conclusive on appeal if there is evidence to support them,
even though the evidence might sustain findings to the contrary.'”
Flanders v. Gabriel, 110 N.C. App. 438, 440, 429 S.E.2d 611, 612-13
(1993) (quoting In re Estate of Trogdon, 330 N.C. 143, 147, 409
S.E.2d 897, 900 (1991), aff'd, 335 N.C. 234, 436 S.E.2d 588
(1993)). Finally, we note that our Supreme Court has held that
forum selection clauses are valid and enforceable except when
compelling reasons dictate otherwise. Perkins v. CCH Computax,
Inc., 333 N.C. 140, 146, 423 S.E.2d 780, 784 (1992). Here, the
trial court's findings support those compelling reasons. Id. One
remedy may be to ensure that the forum selection clause is
prominently displayed in the document executed by the parties.
Another remedy may be for the parties to initial the forum
selection clause. Nevertheless, having found no abuse of
discretion in the case at bar, the trial court's order is
Affirmed.
Judges LEWIS and WALKER concur.
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