HCA HEALTH SERVICES OF TEXAS, INC. D/B/A WEST HOUSTON MEDICAL
CENTER,
Plaintiff,
v
.
IRANCE REDDIX, M.D. A/K/A IRANCE REDDIX-NORMAN A/K/A IRANCE
REDDIX-COLLINS,
Defendant.
Smith Helms Mulliss & Moore, L.L.P., by Julie F. Youngman and
D. Todd Brosius, for plaintiff-appellant.
Reddix-Smalls & Carter Law Firm, by Brenda Reddix-Smalls and
Delores Jones Faison, for defendant-appellee.
HUDSON, Judge.
HCA Health Services of Texas, Inc. (“plaintiff”) appeals from
an order denying its motion to enforce a foreign judgment pursuant
to the Uniform Enforcement of Foreign Judgments Act, see N.C. Gen.
Stat. §§ 1C-1701 to -1708 (2001). For the reasons given below, we
vacate the order and remand for further proceedings.
The following facts are undisputed: In 1993, Dr. Irance
Reddix (“defendant”) entered into a contract with Rosewood
Hospital, pursuant to which defendant obtained loans.
Subsequently, plaintiff purchased Rosewood Hospital, and the
contract was assigned to plaintiff. Defendant failed to repay the
loans, and plaintiff filed suit in the District Court of HarrisCounty, Texas. Defendant filed an answer.
On 1 April 1994, plaintiff and defendant executed a Settlement
Agreement, which provides in part as follows:
1. [Defendant] agrees to pay to the
Hospital the sum of Fifty-four Thousand, Three
Hundred Ninety-one and 80/100 Dollars
($54,391.80) on a scheduled payout as follows
[omitted].
2. Contemporaneously with the execution
of this Agreement, the Parties shall also
execute an Agreed Judgment . . . in the
District Court of Harris County, Texas, 270th
Judicial District, said Agreed Judgment to be
in the amount of Fifty-four Thousand, Three
Hundred Ninety-one and 80/100 Dollars
($54,391.80) with interest thereon at the
statutory rate of ten percent (10%) per annum
from the date of execution of the Agreed
Judgment until paid. Said Agreed Judgment
shall remain in the possession of the Hospital
and/or its attorneys, and shall not be
submitted to nor entered by the Court unless
[defendant] shall fail to maintain her
obligations pursuant to Paragraph 1 above.
Upon any such breach of [defendant's]
obligations under Paragraph 1, the Hospital
shall have the right to file said Agreed
Judgment with the Court, without prior notice
or demand to [defendant], and to thereafter
pursue all legal remedies available to it for
collection of the sums due pursuant to the
Agreed Judgment, less all just and lawful
offsets and credits.
3. The Lawsuit shall remain pending
until the completion by [defendant] of all her
obligations pursuant to Paragraph 1 above.
Upon full and satisfactory completion of
[defendant's] obligations under Paragraph 1,
the Hospital shall dismiss the Lawsuit with
prejudice.
The record contains a copy of a letter dated 26 April 1994
from the law firm of Kirkendall, Isgur & Rothfelder, L.L.P.
addressed to attorney Gwendolyn F. Climmons. The letter providesas follows:
Please allow this letter to serve as
notice to you that your client is currently in
default on the previously agreed to settlement
in the above-referenced matter. Not only has
Dr. Reddix-Norman failed to make the April 10,
1994 and April 25, 1994 payments pursuant to
the Settlement Agreement, but the initial
payment of $2,460.40 paid upon the execution
of the Agreement by check has been returned
due to insufficient funds.
Clearly, the above conduct constitutes a
violation of the Settlement Agreement and
provides grounds for the filing of the Agreed
Judgment.
In the event that Dr. Reddix-Norman has
not made payment for the initial payment, the
April 10, 1994 payment, and the April 25, 1994
payment, by this Thursday, April 28, 1994, we
will file the Agreed Judgment and pursue all
available remedies at law for collection of
both the judgment and any costs and attorneys'
fees associated therewith. Given the return
of the initial payment check, we would request
that all payments be made by either cashier's
check or money order.
The record also contains a copy of a document entitled “Agreed
Judgment.” The Agreed Judgment begins: “On this the 1st day of
April, 1994, [plaintiff] and [defendant] agreed to resolve the
dispute between them as described in a Settlement Agreement entered
into and executed by the parties on this date.” The document then
recites the terms of the Settlement Agreement. The document was
signed by a judge in the District Court of Harris County, Texas, on
7 September 1994. Below the judge's signature appear the words,
“approved as to form and content,” followed by the signatures of an
attorney with the law firm of Kirkendall & Collins, for plaintiff,
and Gwendolyn F. Climmons, for defendant. In February 2000, plaintiff filed an Affidavit of Non-
Satisfaction of Foreign Judgment, accompanied by two certified
copies of the Texas judgment, in Nash County Superior Court.
Plaintiff notified defendant of the filing, and defendant filed a
document entitled, “Relief and Opposition to Foreign Judgment.”
Plaintiff moved for enforcement of the foreign judgment, and, after
a hearing, the court denied plaintiff's motion. Plaintiff appeals
the trial court's denial of its motion for enforcement of the Texas
judgment.
The Uniform Enforcement of Foreign Judgments Act (the “Act”)
provides that a judgment from another state, filed in accordance
with the procedures set out in the Act,
has the same effect and is subject to the same
defenses as a judgment of this State and shall
be enforced or satisfied in like manner;
provided however, if the judgment debtor files
a motion for relief or notice of defense
pursuant to G.S. 1C-1705, enforcement of the
foreign judgment is automatically stayed,
without security, until the court finally
disposes of the matter.
N.C.G.S. § 1C-1703(c). Once the foreign judgment has been filed
and the judgment debtor has been notified of the filing, the
judgment debtor has thirty days within which it
may file a motion for relief from, or notice
of defense to, the foreign judgment on the
grounds that the foreign judgment has been
appealed from, or enforcement has been stayed
by, the court which rendered it, or on any
other ground for which relief from a judgment
of this State would be allowed.
N.C.G.S. § 1C-1705(a); see N.C.G.S. § 1C-1704. If the judgment
debtor files a motion for relief or notice of defenses, then thejudgment creditor may move for enforcement of the judgment. See
N.C.G.S. § 1C-1705(b). The trial court must then hold a hearing,
conducted in accordance with the Rules of Civil Procedure, to
determine if the foreign judgment “is entitled to full faith and
credit.” Id.
Although the Act provides that the judgment creditor has the
burden of proving that the judgment is entitled to full faith and
credit, see id., we have held that “[t]he introduction into
evidence of a copy of the foreign judgment, authenticated pursuant
to Rule 44 of the Rules of Civil Procedure, establishes a
presumption that the judgment is entitled to full faith and
credit.” Lust v. Fountain of Life, Inc., 110 N.C. App. 298, 301,
429 S.E.2d 435, 437 (1993). The judgment debtor may rebut this
presumption by establishing any of various defenses available to
it. See id. Once the presumption is established, however, “the
[judgment creditor is] not required . . . to bring forth evidence
that none of the defenses available to [a judgment debtor are]
valid.” Id. at 302, 429 S.E.2d at 437.
The North Carolina Foreign Money Judgments Recognition Act,
see N.C. Gen. Stat. §§ 1C-1800 to -1808 (2001), provides the
defenses available to a judgment debtor. Specifically:
(a) A foreign judgment is not conclusive if:
(1) The judgment was rendered under a
system that does not provide
impartial tribunals or procedures
compatible with the requirements of
due process of law;
(2) The foreign court did not have
personal jurisdiction over the
defendant; or
(3) The foreign judgment did not havejurisdiction over the subject
matter.
(b) A foreign judgment need not be recognized
if:
(1) The defendant in the proceedings in
the foreign court did not receive
notice of the proceedings in
sufficient time to enable the
presentation of a defense;
(2) The judgment was obtained by fraud;
(3) The cause of action on which the
judgment is based is repugnant to
the public policy of this State;
(4) The judgment conflicts with another
final and conclusive judgment;
(5) The proceedings in the foreign court
were contrary to an agreement
between the parties under which the
dispute in question was to be
settled out of court;
(6) In the case of jurisdiction based on
personal service, the foreign court
was a seriously inconvenient forum
for the trial of the action; or
(7) The foreign court rendering the
judgment would not recognize a
comparable judgment of this State.
N.C.G.S. § 1C-1804; see also N.C.G.S. § 1C-1705(a) (providing that
judgment debtor may seek relief from enforcement of foreign
judgment “on any . . . ground for which relief from a judgment of
this State would be allowed”); Lust, 110 N.C. App. at 301, 429
S.E.2d at 437 (identifying defenses as “rendering court did not
have subject matter jurisdiction, did not have jurisdiction over
the parties, that the judgment was obtained by fraud or collusion,
that the defendant did not have notice of the proceedings, or that
the claim on which the judgment is based is contrary to the public
policies of North Carolina”).
Here, plaintiff complied with the procedural requirements of
the Act. Plaintiff filed a certified copy of the Agreed Judgmentwith the clerk of court and notified defendant of the filing.
Defendant filed a motion for relief from the judgment, and
plaintiff moved for enforcement of the judgment. Thereafter,
defendant filed a memorandum and response and an affidavit signed
by defendant.
At the hearing on the motion for enforcement, neither side
presented witnesses. Defendant argued, inter alia, that the Agreed
Judgment did not comport with Texas Rule of Civil Procedure 314,
which governs confessions of judgment. As a consequence, defendant
contended, the Texas court did not have personal jurisdiction over
defendant. Defendant also argued that she did not receive notice
of the entry of the Agreed Judgment and that plaintiff's
representation to the court that the Agreed Judgment is a valid
judgment constituted fraud.
At the conclusion of the hearing, the superior court denied
plaintiff's motion for enforcement. Plaintiff then requested
findings of fact and conclusions of law pursuant to N.C.R. Civ. P.
52. The court stated, “I'm going to make one simple finding,” and
asked defense counsel to prepare an order finding that “the
purported judgment proffered by the plaintiff in this matter did
not follow the procedures outlined in the Texas rules as it relates
to confession of judgment.”
The court's written order contained the following “findings of
fact”:
1. Plaintiff filed a certified Agreed
Judgment signed on September 7, 1994 by an
attorney in the State of Texas.
2. Plaintiff filed a Settlement
Agreement signed by the Defendant on April 14,
1994.
3. Plaintiff did not enter evidence
indicating that Defendant was provided with a
Notice of Hearing or opportunity to be heard
on the Agreed Judgment, dated September 7,
1994.
4. Defendant filed a Memorandum and
alleged that Plaintiff's judgment was void;
did not comply with the laws in the State of
Texas for valid judgments and Plaintiff did
not afford the Defendant the opportunity to
appear or to contest said judgment. Defendant
also alleged apparent fraud by Plaintiff HCA.
5. Defendant filed an affidavit stating
that she did not sign the Agreed Judgment; nor
was she given an opportunity to be heard on
the filing of the judgment. The Defendant
also stated in her affidavit that she was
informed and believed that HCA Columbia had
been sued by the United States Department of
Justice for violations in physician relations,
Mediare [sic] billing and home health issues.
6. Plaintiff entered evidence that
Defendant had attempted to discharge the debt
during the U.S. Bankruptcy Case No.: 95-40682-
H4-7. Further, that the U.S. Bankruptcy Court
entered an Order dated November 21, 1995
denying the discharge.
7. Defendant alleged that Plaintiff had
contested the Bankruptcy discharge, by filing
a Complaint Objecting to Discharge on May 5,
1995, and that filing the instant action was
in violation of Section 1-47 of the North
Carolina General Statutes.
8. Defendant filed a Motion for
Reconsideration on December 1, 1995.
The court's conclusions of law provide, in relevant part:
1. Plaintiff has not complied with the
laws in the State of Texas requiring the entry
of a valid Texas judgment; including but not
limited to Rule 314, Texas Rules of Civil
Procedure. If Defendant did not receivenotice of the proceedings in sufficient time
to enable the presentation of a defense, the
North Carolina Courts need not recognize the
foreign judgment. North Carolina General
Statute 1C-1804(b)(1).
2. Plaintiff failed to present evidence
to show that the Defendant was given notice or
an opportunity to be heard regarding the
judgment entered in Texas. The North Carolina
courts review of the jurisdiction of a court
rendering a judgment is limited to determining
if the issues were fully and fairly litigated.
Boyles v. Boyles, 308 N.C. 488, 302 S.E.2d
790.
3. As a result, the State of North
Carolina is not required to give full faith
and credit to the judgment. The judgment
creditor shall have the burden of proving that
the foreign judgment is entitled to full faith
and credit. N.C.G.S. § 1C-1705(b) (1989).
Reinward v. Swiggett, 107 N.C. App. 590
(1992).
Plaintiff argues that the trial court erroneously placed the
burden of proof on it, overlooking the fact that it had carried
that burden to the extent of raising a presumption in its favor by
submitting an authenticated judgment. See Lust, 110 N.C. App. at
301-02, 429 S.E.2d at 437. To the extent that the court placed the
burden of proof on plaintiff without reference to the Lust
presumption, the court did err. However, the defendant's
affidavit, in which she indicated that she did not sign the Agreed
Judgment or receive notice of the hearing, constitutes evidence
proffered to overcome the Lust presumption. The more serious
problem with the trial court's order is that we are unable to
determine what facts, if any, it found.
Although defendant's affidavit raised the issues of whether
defendant had proper notice and plaintiff engaged in fraud, thetrial court did not make necessary findings of fact, such as
whether defendant authorized the entry of the judgment or received
notice of any hearing thereon. The factual findings entered by the
trial court are not sufficient to permit our review of the court's
order. They are at most recitations of allegations and do not
resolve the crucial factual issues. See In re Green, 67 N.C. App.
501, 505 n.1, 313 S.E.2d 193, 195 n.1 (1984) (“The requirement for
appropriately detailed findings is . . . not a mere formality or a
rule of empty ritual; it is designed instead 'to dispose of the
issues raised by the pleadings and to allow the appellate courts to
perform their proper function in the judicial system.'” (quoting
Coble v. Coble, 300 N.C. 708, 712, 268 S.E.2d 185, 189 (1980))
(alteration in original)).
For these reasons, we must vacate the order and remand for
further proceedings, including an evidentiary hearing if necessary,
and a new order with appropriate findings of fact and conclusions
of law. See Andrews v. Peters, 75 N.C. App. 252, 258-59, 330
S.E.2d 638, 642 (1985) (vacating order and remanding to trial court
upon determination that the findings of fact were “not sufficient
for a clear understanding of the basis of its decision” and
observing that “the trial court's order is no more than a statement
of its discretionary authority without detailing the factual basis
for its decision”), aff'd, 318 N.C. 133, 347 S.E.2d 409 (1986).
With respect to defendant's assertion that the Texas court
lacked personal jurisdiction over her, we note that, pursuant to
the North Carolina Foreign Money Judgments Recognition Act, “[t]heforeign judgment shall not be refused recognition for lack of
personal jurisdiction” under certain enumerated circumstances.
N.C.G.S. § 1C-1805(a). Among the enumerated circumstances that may
be relevant here are the following: “(2) The defendant voluntarily
appeared in the proceedings . . . ; (3) The defendant, prior to the
commencement of the proceedings, had agreed to submit to the
jurisdiction of the foreign court with respect to the subject
matter involved; [and] (4) The defendant was domiciled in the
foreign state when the proceedings were instituted . . . .” Id.
Vacated and remanded.
Chief Judge EAGLES concurs.
Judge BRYANT dissents.
The majority vacates the order of the trial court on the grounds that the "findings entered by the trial court are not sufficient to permit our review of the court's order." I disagree and instead believe this Court should address the merits. It appears the trial court made sufficient findings of fact to clearly indicate the basis of its decision. The trial court essentially found inter alia that defendant was not provided with notice of hearing and an opportunity to be heard, and that plaintiff's judgment was void and did not comply with the laws of the state of Texas. Based on these and other findings the trial court concluded that "the State of North Carolina is not required to give full faith and credit to the [Texas] judgment." Therefore, I believethe findings of fact and conclusions of law are adequate to allow this Court to review the order of the trial court on the merits.
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