Unifund CCR Partners v. Young

871 S.E.2d 347

UNIFUND CCR PARTNERS, Plaintiff,

v.Delores L. YOUNG, Defendant.

No. COA20-916

Court of Appeals of North Carolina.

Filed March 15, 2022

Sessoms & Rogers, P.A., by Andrew E. Hoke, for Plaintiff-Appellee.

J. Jerome Hartzell, for Defendant-Appellant.

COLLINS, Judge.

¶ 1 Defendant Delores L. Young appeals the trial court's order granting summary judgment to Plaintiff Unifund CCR Partners on Plaintiff's 2019 action to renew a default judgment entered in 2010 against Defendant. Defendant argues that the default judgment is void because it was procured by fraud and the clerk lacked jurisdiction to enter the default judgment for various reasons. Defendant also argues that Plaintiff's interest rates on Defendant's debt violate North Carolina law.

¶ 2 We affirm the trial court's order.

I. Factual and Procedural Background

¶ 3 The facts are not in dispute. Defendant entered into a written credit agreement with Citibank (South Dakota), N.A., establishing a credit card account. Defendant failed to make the required payments. On 1 February 2008, Citibank "charged off" the outstanding balance on Defendant's account as bad debt, and sold the account to Plaintiff.

¶ 4 Plaintiff commenced a civil action against Defendant by filing an unverified complaint, dated on or about 31 August 2009, in Wake County District Court.¹ Plaintiff attached a copy of the Citibank credit card agreement to the complaint. Plaintiff served the complaint and summons on Defendant on or about 23 October 2009, alleging in part:

6. Pursuant to the terms and provisions of the note or credit agreement, the defendant is lawfully indebted to the plaintiff in the principal sum of $10,500.69 together with interest thereon at the contract rate of 23.99% per annum. Said sum has been outstanding since February 1, 2008.

7. The credit agreement between the parties contains provisions for the payment of attorneys fees in the event of default. The balance outstanding is currently $14,413.95. Pursuant to the provisions of [N.C. Gen. Stat.] § 6-21.2, the plaintiff hereby gives notice to the defendant that it intends to enforce those provisions of the credit agreement calling for the payment of attorneys fees....

WHEREFORE, the plaintiff prays the court as follows:

1. That the plaintiff have and recover from the defendant the sum of $10,500.69.

2. That the plaintiff further have and recover from said defendant interest on said sum at the contract rate of 23.99% per annum from February 1, 2008 to the date of judgment, and at the rate of 8% per annum thereafter until paid.

3. That the plaintiff further have and recover from said defendant its reasonable attorneys fees in the sum of $2,162.09 which sum is fifteen (15%) percent of $14,413.95, the current balance outstanding, pursuant to [N.C. Gen. Stat.] § 6-21.2.

¶ 5 After Defendant failed to file an answer or any other pleading, or appear in court, Plaintiff filed a motion on 17 February 2010 for entry of default and default judgment. The motion was accompanied by an affidavit from Plaintiff's attorney, stating, "[m]ore than thirty (30) days have passed since service was had upon [D]efendant, and the time allowed for the [D]efendant to respond to the complaint has expired," and that "[D]efendant is indebted to the [P]laintiff herein in the principal sum of $10,500.69, together with interest thereon on the contract rate of 23.99% per annum from and after February 1, 2008, and the costs of this action." The motion was also accompanied by an affidavit from Steve Ballman, Plaintiff's "duly authorized representative," stating:

He is familiar with the books and records of Unifund CCR Partners, and particularly with the account of Delores L. Young, ... the Defendant in this action, and is cognizant of the facts constituting and underlying this cause of action.

The Defendant entered into a promissory note or written credit agreement with Citibank (South Dakota), N.A.[ ] The Plaintiff is the assignee of the account referred to herein. A true and accurate copy of the terms of the promissory note or account agreement between the parties was attached to the Complaint filed herein. The Defendant is in default under the terms thereof for failure to make the required payments. As a result of the Defendant's default, [Plaintiff] has declared the entire outstanding balance due and payable.

....

[Defendant] is currently indebted to [Plaintiff] in the principal sum of $10,500.69, together with interest thereon at the rate of 23.99% per annum from and after February 1, 2008, reasonable attorneys fees, and costs.

¶ 6 On 25 February 2010, the assistant clerk of superior court ("clerk") entered default and judgment by default ("2010 Default Judgment") against Defendant. See N.C. Gen. Stat. § 1A-1, Rule 55(a)-(b) (2009). In the 2010 Default Judgment, the clerk found that "the time allowed for [D]efendant to respond to the complaint has expired" and that the action was "for a sum certain or a sum which can by computation be made certain," and ordered recovery for Plaintiff of the principal sum of $10,500.69 plus interest at a rate of 23.99% per annum calculated to the date of entry of the judgment, and interest accrued at 8% per annum after the date of entry of the judgment until paid. Costs of the action were also awarded to Plaintiff.²

¶ 7 On 5 September 2019, Plaintiff filed an unverified complaint in Wake County District Court ("2019 Action") seeking to renew the 2010 Default Judgment. The complaint alleged that Plaintiff had obtained a default judgment against Defendant on 25 February 2010 and that no payments had been received since entry of that judgment. Plaintiff attached to the complaint the 2010 Default Judgment and an affidavit signed by counsel, swearing to the remaining balance.

¶ 8 Defendant filed an amended answer on 13 August 2020 wherein she did not challenge the existence of the underlying debt or the 2010 Default Judgment, but stated that she "does not know whether payments have been made" on that debt since entry of the 2010 Default Judgment. She further alleged in her answer that the 2010 Default Judgment was "not a proper basis for a new judgment," based on various legal theories.

¶ 9 Plaintiff filed a motion for summary judgment and a memorandum of law in support of its motion. Defendant filed a brief in opposition to Plaintiff's motion for summary judgment and in support of summary judgment in her favor. On 19 October 2020, the trial court held a hearing and entered an order granting Plaintiff summary judgment and denying Defendant summary judgment ("2020 Order"). Defendant timely appealed to this Court.

II. Discussion

A. Standard of Review and Legal Background

¶ 10 Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C. Gen. Stat. § 1A-1, Rule 56(c) (2019). The court must consider the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Caswell Realty Assocs. v. Andrews Co. , 121 N.C. App. 483, 484, 466 S.E.2d 310, 311 (1996). The burden is on the moving party to show that the non-moving party has failed to establish the existence of an element essential to that party's case, such that there is no genuine issue of material fact and the movant is entitled to a judgment as a matter of law. Leiber v. Arboretum Joint Venture, LLC , 208 N.C. App. 336, 344, 702 S.E.2d 805, 810 (2010).

¶ 11 An order granting summary judgment is reviewed de novo on appeal. Unifund CCR Partners v. Loggins , 270 N.C. App. 805, 808, 841 S.E.2d 835, 838 (2020). Likewise, whether a trial court has subject matter jurisdiction to enter judgment is a question of law, reviewed de novo on appeal. Id. at 808, 841 S.E.2d at 837-38.

¶ 12 "A challenge to jurisdiction may be made at any time." Hart v. Thomasville Motors, Inc. , 244 N.C. 84, 90, 92 S.E.2d 673, 678 (1956) (citation omitted). "A judgment is void, when there is a want of jurisdiction by the court ...." Id. (citation omitted). A void judgment "is a nullity [and i]t may be attacked collaterally at any time [because] legal rights do not flow from it." Cunningham v. Brigman , 263 N.C. 208, 211, 139 S.E.2d 353, 355 (1964).

¶ 13 The owner of a judgment may obtain a new judgment to collect any unpaid amount due on the prior judgment by bringing "an independent action on the prior judgment, which ... must be commenced and prosecuted as in the case of any other civil action brought to recover judgment on a debt." Raccoon Valley Inv. Co. v. Toler , 32 N.C. App. 461, 463, 232 S.E.2d 717, 718 (1977) (citation omitted). An independent action seeking to renew a judgment must be brought within ten years of entry of the original judgment, and such renewal action can be brought only once. N.C. Gen. Stat. § 1-47(1) (2019). In an action to renew a judgment, a plaintiff should allege the existence of a prior judgment against the defendant; the fact that full payment on the judgment has not been made; and an accounting of the unpaid balance due and any applicable interest. See Raccoon Valley , 32 N.C. App. at 463-64, 232 S.E.2d at 718-19.

B. Procurement by Fraud

¶ 14 Defendant first argues that the 2010 Default Judgment could not be the basis of the 2019 Action because the 2010 Default Judgment was "procured by fraud." Defendant's specific argument is that Plaintiff's submission of "in-house" affidavits, those signed by a Unifund representative to support its claim on the acquired Citibank credit card account and its amount, contravenes this Court's unpublished decision in Unifund CCR Partners v. Dover , 198 N.C. App. 406, 681 S.E.2d 565 (2009) (unpublished). Defendant's argument is misplaced.

¶ 15 First, Dover involved the sufficiency of the evidence of an "account stated" in an action to collect an amount of money allegedly owed to plaintiff...