Entry of QDRO and Statute of Limitations

WELCH V. WELCH, 2023-NCCOA-______ (2023) 

1. Facts: Plaintiff and Defendant married in 1981. In 2007, the parties initiated divorce proceedings, including filing for equitable distribution (ED). In 2008, the parties entered into a consent judgment wherein marital property was distributed. One such item was an IRA at Charles Schwab. Pursuant to the parties’ consent judgment, each party was supposed to receive half of this IRA. This never happened, and eleven years had passed by the time Defendant realized it. After exhausting remedies under contempt and the rules of civil procedure due to being time-barred by the statute of limitations, Defendant moved for the entry of a domestic relations order (DRO) under the ED statute. This too was denied by the trial court, citing the ten-year statute of limitations. Defendant appealed. 

 

1. Issue:  Did the trial court err in concluding that the statute of limitations barred entry of a DRO for an IRA? 

 

1. Holding: Yes. 

 

1. Rationale:  North Carolina’s ED statute includes provisions for the entry of DROs to effectuate transfers of IRAs. The issue was whether a party could request entry of a DRO when there was a 10-year statute of limitations for initiating actions upon a judgment. Contempt and a Rule 70 motion were actions such as the statute of limitations barred. Additionally, a request for the entry of a DRO that changed the terms of the original ED order was time-barred. But this case was one of first impression, where the Court surveyed some other states that have addressed the issue. In these states, their Courts have held that if the proposed DRO does not alter any rights nor seek to modify an ED award, it is fair and equitable for a court to enter a DRO or QDRO to effectuate the transfer. Since those same principles of equity apply in North Carolina and our ED statute, a statute of limitations should not bar entry of a DRO for the IRA.