Tropic Leisure Corp. v. Hailey

• Decision Date: 16 August 2016
• Docket Number: No. COA15–1254,COA15–1254
• Citation: 249 N.C.App. 198,791 S.E.2d 233
• Court: North Carolina Court of Appeals
• Parties: TROPIC LEISURE CORP., Magen Point, Inc. d/b/a Magens Point Resort, Plaintiffs, v. Jerry A. HAILEY, Defendant.

249 N.C.App. 198
791 S.E.2d 233

TROPIC LEISURE CORP., Magen Point, Inc. d/b/a Magens Point Resort, Plaintiffs,
v.
Jerry A. HAILEY, Defendant.

No. COA15–1254

Court of Appeals of North Carolina.

Filed: August 16, 2016

The Armstrong Law Firm, P.A., Smithfield, by L. Lamar Armstrong, Jr. and Daniel K. Keeney, for defendant-appellant.

Warren, Shackleford & Thomas, P.L.L.C., by R. Keith Shackleford, for plaintiffs-appellees.

791 S.E.2d 235

DAVIS, Judge.

249 N.C.App. 198

Jerry A. Hailey ("Defendant") appeals from an order denying his motion for relief from a foreign judgment that Tropic Leisure Corp. and Magens¹ Point, Inc., d/b/a Magens Point Resort (collectively "Plaintiffs") sought to enforce in North Carolina. On appeal, Defendant argues that the foreign judgment should not be enforced because it was rendered in violation of his due process rights. After careful review, we affirm.

Factual Background

On 2 April 2014, Plaintiffs, who are corporations organized under the laws of the United States Virgin Islands (the "Virgin Islands"), obtained

249 N.C.App. 199

a default judgment (the "Judgment") in the small claims division of the Virgin Islands Superior Court against Defendant, who is a resident of North Carolina, in the amount of $5,764.00 plus interest and costs. Defendant did not appeal the default judgment. On 17 February 2015, Plaintiffs filed a Notice of Filing Foreign Judgment in Wake County District Court along with a copy of the Judgment and a supporting affidavit.

Defendant filed a motion for relief from foreign judgment on 6 April 2015 in which he argued that the Judgment was not entitled to full faith and credit in North Carolina because it was obtained in violation of his constitutional rights and was against North Carolina public policy. Plaintiffs subsequently filed a motion to enforce the foreign judgment.

The parties’ motions were heard before the Honorable Debra Sasser on 30 July 2015. On 10 September 2015, the trial court entered an order denying Defendant's motion for relief and concluding that Plaintiffs were entitled to enforcement of the Judgment under the Full Faith and Credit Clause of the United States Constitution, U.S. Const. art. IV, § 1, and North Carolina's Uniform Enforcement of Foreign Judgments Act ("UEFJA"), N.C. Gen. Stat. §§ 1C–1701 et seq . Defendant filed a timely notice of appeal.

Analysis

On appeal, Defendant argues that the trial court erred in extending full faith and credit to the Judgment. This issue involves a question of law, which we review de novo . See DOCRX, Inc. v. EMI Servs. of N.C., LLC , 367 N.C. 371, 375, 758 S.E.2d 390, 393 (applying de novo review to whether Full Faith and Credit Clause required North Carolina to enforce foreign judgment), cert. denied , ––– U.S. ––––, 135 S.Ct. 678, 190 L.Ed.2d 390 (2014).

The Full Faith and Credit Clause "requires that the judgment of the court of one state must be given the same effect in a sister state that it has in the state where it was rendered."² State of New York v. Paugh , 135 N.C.App. 434, 439, 521 S.E.2d 475, 478 (1999) (citation omitted). "[B]ecause a foreign state's judgment is entitled to only the same validity and effect in a sister state as it had in the rendering state, the foreign

249 N.C.App. 200

judgment must satisfy the requisites of a valid judgment under the laws of the rendering state before it will be afforded full faith and credit." Bell Atl. Tricon Leasing Corp. v. Johnnie's Garbage Serv., Inc. , 113 N.C.App. 476, 478–79, 439 S.E.2d 221, 223, disc review denied , 336 N.C. 314, 445 S.E.2d 392 (1994).

The UEFJA "governs the enforcement of foreign judgments that are entitled to full faith and credit in North Carolina." Lumbermans Fin., LLC v. Poccia , 228 N.C.App. 67, 70, 743 S.E.2d 677, 679 (2013) (citation and quotation marks omitted). In order to domesticate a foreign judgment under the UEFJA, a party must file a properly authenticated foreign judgment with the office of the clerk of superior court in any North Carolina county along with an affidavit attesting to the fact that the foreign judgment

791 S.E.2d 236

is both final and unsatisfied in whole or in part and setting forth the amount remaining to be paid on the judgment. See N.C. Gen. Stat. § 1C–1703(a) (2015).

The introduction into evidence of these materials "establishes a presumption that the judgment is entitled to full faith and credit." Meyer v. Race City Classics, LLC , 235 N.C.App. 111, 114, 761 S.E.2d 196, 200, disc. review denied , 367 N.C. 796, 766 S.E.2d 624 (2014). The party seeking to defeat enforcement of the foreign judgment must "present evidence to rebut the presumption that the judgment is enforceable...." Rossi v. Spoloric , ––– N.C.App. ––––, ––––, 781 S.E.2d 648, 654 (2016). A properly filed foreign judgment "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[.]" N.C. Gen. Stat. § 1C–1703(c). Thus, a judgment debtor may file a motion for relief from the foreign judgment on any "ground for which relief from a judgment of this State would be allowed." N.C. Gen. Stat. § 1C–1705(a) (2015).

Our Supreme Court has held that "the defenses preserved under North Carolina's UEFJA are limited by the Full Faith and Credit Clause to those defenses which are directed to the validity and enforcement of a foreign judgment." DOCRX , 367 N.C. at 382, 758 S.E.2d at 397. In DOCRX , the Court provided the following examples of potential defenses to enforcement of a foreign judgment:

that the judgment creditor committed extrinsic fraud, that the rendering state lacked personal or subject matter jurisdiction, that the judgment has been paid, that the parties have entered into an accord and satisfaction, that the judgment debtor's property is exempt from execution, that the judgment is subject to continued modification,

249 N.C.App. 201

or that the judgment debtor's due process rights have been violated.

Id....