DocRx, Inc. v. Emi Services of North Carolina, LLC
367 N.C. 371
| N.C. | 2014Background
- DocRx (Alabama corp.) obtained a default monetary judgment in Alabama for $453,683.14 after alleging EMI failed to pay commission; the Alabama judgment used affidavits and calculations by DocRx's president and counsel.
- DocRx filed the Alabama judgment in Stanly County, NC under North Carolina’s Uniform Enforcement of Foreign Judgments Act (UEFJA).
- EMI moved to avoid enforcement in NC, alleging the Alabama judgment was procured by fraud (pointing to emails suggesting unit prices far lower than those used to compute damages).
- The NC trial court found the judgment obtained by fraud (characterizing it as intrinsic fraud) and denied enforcement.
- The NC Court of Appeals vacated that order, holding intrinsic fraud cannot defeat enforcement of a sister-state monetary judgment under the Full Faith and Credit Clause.
- The North Carolina Supreme Court affirmed (as modified), holding UEFJA defenses are limited by the Full Faith and Credit Clause to defenses attacking a judgment’s validity/finality (e.g., lack of jurisdiction, extrinsic fraud), and that Alabama’s judgment was final there when filed in NC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NC may deny enforcement of an Alabama monetary judgment based on intrinsic fraud (Rule 60(b)(3)) | DocRx: Full Faith and Credit requires NC to enforce the Alabama judgment unless rendering state lacked jurisdiction or judgment was not final | EMI: UEFJA §1C‑1703(c) and NC Rule 60(b) allow raising intrinsic fraud to avoid enforcement | Held: Defenses under UEFJA are limited by Full Faith and Credit to challenges to a judgment’s validity/finality (e.g., jurisdictional infirmity, extrinsic fraud). Intrinsic‑fraud merits attacks cannot relitigate a final, valid sister‑state money judgment; Alabama’s judgment was final when filed in NC, so NC must give it the same effect it had in Alabama. |
Key Cases Cited
- Morris v. Jones, 329 U.S. 545 (establishes that a valid, final sister‑state money judgment is conclusive in forum state absent jurisdictional infirmity or fraud that renders judgment invalid)
- New York ex rel. Halvey v. Halvey, 330 U.S. 610 (a judgment has no greater conclusive effect in forum than in rendering state; forum may modify if rendering state could)
- Baker v. General Motors Corp., 522 U.S. 222 (discusses Full Faith and Credit purpose and national effect of state judgments)
- Matson v. Matson, 333 N.W.2d 862 (Minn. 1983) (UEFJA interpretation limiting collateral attacks on foreign judgments to defects in validity/enforceability)
- Thomas v. Frosty Morn Meats, Inc., 266 N.C. 523 (recognizes traditional limited grounds to attack foreign judgments: lack of jurisdiction or fraud)