Lang v. Lang

424 S.E.2d 190 (1993) 108 N.C. App. 440

Wilma LANG, Plaintiff,
v.
Manfred LANG, Defendant.

No. 9129SC966.

Court of Appeals of North Carolina.

January 5, 1993.

Smith Helms Mulliss & Moore by Robert H. Pryor and Gregory S. Hilderbran, Charlotte, for plaintiff-appellee.

Bazzle, Carr & Gasperson, P.A. by Ervin W. Bazzle, Hendersonville, for defendant-appellant.

EAGLES, Judge.

Defendant brings forth six assignments of error in his appeal from the Superior Court's 18 July 1991 denial of his G.S. 1A-1, Rule 60 motion to vacate or modify the 13 September 1990 summary judgment. We note initially that defendant made this motion on 8 May 1991, two days after his original appeal from the 13 September 1990 summary judgment was appropriately dismissed by the Superior Court. We further note that prior to that dismissal, defendant's motion for an extension of time to serve the record on appeal in that appeal was denied by this Court and defendant's petition for a writ of certiorari was subsequently denied by this Court and later by our Supreme Court. After careful examination of the record, we affirm the Superior Court's 18 July 1991 order.

I.

Defendant contends that the Superior Court erred by denying his G.S. 1A-1, Rule 60(b)(2) motion to vacate or modify the judgment on the grounds that new evidence had been discovered. Defendant asserts that he with due diligence could not have discovered that plaintiff had seized and foreclosed upon his property in Germany and that, had he known, he could have asserted the defense of partial or complete satisfaction of the 1985 German judgment on the loan. We disagree.

According to G.S. 1A-1, Rule 60(b)(2), a trial court may grant a party relief from a final judgment or order when there is "[n]ewly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b)." G.S. 1A-1, Rule 59(b) provides that a party has ten days after the entry of judgment to move for a new trial.

Defendant has failed to establish that the evidence could not have been discovered with due diligence within ten days after the summary judgment was entered on 13 September 1990. The divorce agreement entered before the German court in 1974 expressly stated that defendant's property would serve as security for defendant's obligation to pay the support payments. Defendant unilaterally ceased making these support payments in 1982. Because he had pledged his property as security for these support payments in the divorce decree, defendant should have reasonably expected that plaintiff would take appropriate actions (such as foreclosure) to assure payment of defendant's obligation.

Accordingly, by the express terms of the 1974 divorce agreement, defendant had at least constructive knowledge that one of plaintiff's possible alternatives included foreclosure on defendant's property mentioned in the agreement. We find no merit in defendant's contention that this constituted newly discovered evidence which by due diligence he could not have discovered in time to move for a new trial under G.S. 1A-1, Rule 59(b).

II.

Defendant contends that the Superior Court erred in denying his G.S. 1A-1, Rule 60(b)(3) motion by concluding as a matter of law that plaintiff had not made misrepresentations (concerning the proceeds from the German court's foreclosure sale) to the Superior Court in obtaining the 13 September 1990 summary judgment. We disagree.

We note initially that defendant states in his brief that he "did not ask the [t]rial [c]ourt and is not asking this Court to review or take any action regarding the German [c]ourt's seizure and sale of his property," and we additionally note that even if defendant tried to make this argument, it would fail. Despite this statement in defendant's brief, defendant nevertheless argues that plaintiff made misrepresentations to the Superior Court by alleging that plaintiff made misrepresentations to the German court, thus "demonstrat[ing] a pattern by the [p]laintiff of deception and misrepresentation to the presiding [c]ourt." This Court has previously held that

the final judgment of another jurisdiction may be collaterally attacked on three grounds: (1) lack of jurisdiction; (2) fraud in the procurement; or (3) that it is against public policy. Fungaroli v. Fungaroli, 53 N.C.App. 270, 278, 280 S.E.2d 787, 792 (1981); see also Courtney v. Courtney, 40 N.C.App. 291, 253 S.E.2d 2 (1979).

However, to make a successful attack upon a foreign judgment on the basis of fraud, it is necessary that extrinsic fraud be alleged. Id. Extrinsic fraud is that which is collateral to the foreign proceeding, and not that which arises within the proceeding itself and concerns some matter necessarily under the consideration of the foreign court upon the merits. See Horne v. Edwards, 215 N.C. 622, 624, 3 S.E.2d 1, 3 (1939).

J.I.C. Electric, Inc. v. Murphy, 81 N.C.App. 658, 660, 344 S.E.2d 835, 837 (1986) (emphasis in original). When the German judgments were rendered, defendant was a German citizen. Defendant has not contested before the German courts their exercise of jurisdiction in rendering those judgments. Defendant has failed to show extrinsic fraud and has failed to demonstrate that the judgments offend public policy. Accordingly, defendant has shown no reason for this Court to decline recognition under the principles of comity to all aspects of the German judgments. See Mayer v. Mayer, 66 N.C.App. 522, 527, 311 S.E.2d 659, 663, disc. review denied, 311 N.C. 760, 321 S.E.2d 140 (1984) ("Recognition of foreign decrees by a State of the Union is governed by principles of comity."); 1 R. Lee, N.C. Family Law § 104 (4th ed. 1979 & Cum.Supp.1989).

Defendant specifically contends that plaintiff committed a misrepresentation before the Superior Court when she stated that she had not received a "setoff" from defendant as to the 1985 German judgment arising from defendant's failure to repay the loan according to the terms of the 1974 divorce decree. Defendant contends that the excess funds received in the foreclosure action constituted this alleged setoff. However, as the record before us and the findings of the Superior Court clearly demonstrate, the foreclosure action resulted from defendant's failure to pay the support payments, an obligation unrelated to defendant's obligation to repay the loan. Accordingly, no setoff existed as to the 1985 German judgment and plaintiff committed no misrepresentation before the Superior Court. We find defendant's argument to be without merit.

III.

In his next two assignments of error, defendant contends that the Superior Court erred by: 1) finding that defendant was properly served with the German court's foreclosure action in accordance with German law because defendant was "a resident alien of the United States [and t]he German court was required to comply with the Hague Convention on Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters [20 U.S.T. 36, T.I.A.S. 6638 (Hague Convention) ]," and 2) finding that "[p]laintiff was entitled to a claim of DM 77,702.40 against the proceeds of the foreclosure action." Without reaching the merits, we find that these arguments fail because these issues were not a part of defendant's motion to vacate or modify judgment before the trial court.

Defendant first raised the issue of the personal jurisdiction of the German courts in his 4 August 1989 answer to plaintiff's 3 January 1989 complaint (filed in the Henderson County Superior Court) to enforce the 1985 German judgment. Defendant's appeal of the 13 September 1990 summary judgment, which arose from that complaint, was appropriately dismissed by the trial court after: 1) this Court's denial of defendant's motion for an extension of time and 2) subsequent denials of defendant's petitions for a writ of certiorari by this Court and our Supreme Court. Even if, assuming arguendo, this Court could address the issue of the German court's exercise of jurisdiction over defendant in the German court's own foreclosure action, such a discussion would be barred by the Superior Court's appropriate dismissal of plaintiff's appeal. Defendant's remedy, if it exists at all, exists in the courts of Germany, where the judgments were originally entered.

The amount of plaintiff's claim, DM 77,702.40, originally arose from the German court's evaluation of defendant's failure to pay his support obligations. This figure was approved by the German court in its plan of distribution. The Superior Court was presented no basis to disturb the German court's ruling. Again, defendant's appropriate route of appeal is to the German courts. We note that plaintiff received only DM 49,496.47 from the actual proceeds of the foreclosure action itself, which was partial satisfaction of the DM 77,702.40 owed by defendant.

IV.

Defendant argues that the trial court erred in denying his G.S. 1A-1, Rule 60(b)(5) motion to vacate or modify the judgment by finding that, under German law, plaintiff did not have to account for the profits from her sale of defendant's foreclosed-upon German property and by not crediting this amount towards the satisfaction of the 1985 German judgment arising from the default on the loan. Defendant cites no cases or statutes for this proposition but merely argues that

[t]he facts described in detail in Arguments II and IV [regarding the German court's foreclosure sale] show that the Plaintiff was unjustly enriched in the amount of 92,271.74 DM, due to her misrepresentations. This amount was taken in constructive trust by her for Defendant Lang, and, if nothing else, should be applied as a setoff against the 1985 [German] judgment [which arose separately from the default on the loan].

To allow the Plaintiff to recover the full amount of the judgment would be unfair.

As discussed supra, because there was no setoff under German law, plaintiff made no misrepresentations to the Superior Court. Additionally, defendant fails to cite any German statutes or cases to show that the German court erred or to challenge the existence of the 70% rule in German foreclosure actions, explained in the Superior Court's 18 July 1991 order, supra. Accordingly, this assignment of error fails.

V.

Finally, defendant argues that the Superior Court erred by denying his motion to vacate or modify the judgment under G.S. 1A-1, Rule 60(b)(6) because the exchange rate used in the 13 September 1990 summary judgment was incorrect. We disagree.

As defendant admits in his brief, defendant failed to perfect his appeal of the 13 September 1990 judgment. The Superior Court properly dismissed that appeal on 6 May 1991. Regarding the correction of erroneous judgments, this Court has previously held:

It is settled law that erroneous judgments may be corrected only by appeal, Young v. Insurance Co., 267 N.C. 339, 343, 148 S.E.2d 226, 229 (1966) and that a motion under G.S. 1A-1, Rule 60(b) of the Rules of Civil Procedure cannot be used as a substitute for appellate review. O'Neill v. Bank, 40 N.C.App. 227, 231, 252 S.E.2d 231, 234 (1979); see also In re Snipes, 45 N.C.App. 79, 81, 262 S.E.2d 292, 294 (1980); 2 McIntosh, N.C. Practice and Procedure § 1720 (Supp.1970).

Town of Sylva v. Gibson, 51 N.C.App. 545, 548, 277 S.E.2d 115, 117, disc. review denied, 303 N.C. 319, 281 S.E.2d 659 (1981). The Superior Court's appropriate dismissal of defendant's appeal bars any discussion of the merits of the exchange rate used in the judgment. Accordingly, the trial court properly denied defendant's G.S. 1A-1, Rule 60(b)(6) motion.

VI.

For the reasons stated, the order of the trial court is affirmed.

Affirmed.

PARKER and ORR, JJ., concur.