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Unifund CCR, LLC v. Francois

Court of Appeals of North Carolina

July 17, 2018

UNIFUND CCR, LLC, Plaintiff,
v.
ISABELLE FRANCOIS, Defendant.

          Heard in the Court of Appeals 17 May 2018.

          Appeal by plaintiff from order entered 13 July 2017 by Judge Becky T. Tin in Mecklenburg County No. 16-CVD-20456 District Court.

          Sessoms & Rogers, P.A., by Andrew E. Hoke, for plaintiff-appellant.

          No appellee brief filed.

          DIETZ, JUDGE.

         Plaintiff Unifund CCR, LLC brought a debt collection action against Defendant Isabelle Francois and obtained an entry of default after Francois failed to appear and respond to Unifund's complaint.

         At the default judgment hearing-where Francois again failed to appear-the trial court, on its own initiative, denied Unifund's motion for default judgment and dismissed the complaint, concluding that the complaint was barred by the statute of limitations and violated a statutory provision prohibiting debt collectors from pursuing claims they know are barred by the statute of limitations.

         We reverse and remand for entry of judgment in Unifund's favor. As explained below, the trial court had no authority to raise a statute of limitations defense on behalf of a defaulting litigant who did not appear. Likewise, the court had no authority to dismiss the complaint based on a perceived violation of a statute that does not authorize courts to act on their own initiative, but instead creates a separate civil enforcement mechanism for the debtor and the Attorney General.

         Facts and Procedural History

         In 2011, Defendant Isabelle Francois opened a credit card account with Citibank. Francois began making purchases on the account in March 2013 and exceeded the account's credit limit in May 2013. Francois stopped making payments in May 2013. Citibank then closed the account and sent Francois a final billing statement showing a balance of $4, 618.08 with a payment due date of 20 November 2013.

         After six consecutive months of nonpayment, Citibank charged off the account. Plaintiff Unifund CCR, LLC ultimately acquired the past due account.

         On 14 November 2016, Unifund filed a complaint against Francois for the past due amount owed on the account. With its complaint, Unifund filed an affidavit from its custodian of records along with the billing records for the account, and documentation showing Unifund's acquisition of the account. The complaint stated that it was filed within the statute of limitations. Unifund served Francois with the summons but Francois did not appear in the action or file a responsive pleading.

         On 31 May 2017, Unifund moved for entry of default and for default judgment. The Mecklenburg County Clerk of Superior Court entered default against Francois the same day.

         The trial court heard the motion for default judgment on 10 July 2017. Francois did not appear at the hearing. Unifund presented testimony from a Citibank custodian of records and its own custodian of records. Unifund also submitted the ...


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