                                  NO. COA14-214

                      NORTH CAROLINA COURT OF APPEALS

                           Filed: 16 September 2014


FELICIA RENEE CROGAN,

    Plaintiff,

    v.                                          Granville County
                                                No. 12 CVD 744
JON BRENT CROGAN,

    Defendant.


    Appeal by plaintiff from order entered 24 September 2013 by

Judge Daniel F. Finch in Granville County Superior Court.                      Heard

in the Court of Appeals 28 August 2014.


    Dunlow & Wilkinson, P.A., by John M. Dunlow, for plaintiff-
    appellant.

    Tharrington Smith,           LLP,     by    Jill    Schnabel    Jackson,      for
    defendant-appellee.


    STEELMAN, Judge.


    Where claims arose in tort, the trial court did not err in

applying   a     three-year     statute    of    limitations       to   claims    for

fraud, duress, and undue influence.              Where plaintiff’s claim for

breach of contract arose pursuant to a contract under seal, the

trial    court     erred   in     applying       a     three-year       statute    of

limitations.
                                   -2-



                I. Factual and Procedural Background

    Felicia   Renee    Crogan   (plaintiff)     and   Jon    Brent    Crogan

(defendant) were married on 23 March 1985.            There were three

children born to the marriage.

    Plaintiff    and   defendant    separated    on   1     October    2004.

Defendant’s attorney prepared a Separation Agreement which was

executed by the parties under seal and notarized on 16 November

2004.   Paragraph 27 of the Separation Agreement dealt with the

effect of a reconciliation of the parties upon their property

settlement:

          27. RECONCILIATION. In the event of a
          reconciliation and resumption of the marital
          relationship     between   the    parties,   the
          provisions hereof regarding settlement and
          disposition of property rights and other
          rights shall nevertheless continue in full
          force and effect without the abatement of
          any term or provision hereof, except as
          otherwise specifically provided herein or as
          later agreed in writing, by and between the
          parties. Except as otherwise provided by
          this Agreement or by an agreement or
          modification to this Agreement, performed in
          writing and notarized and executed by each
          of the parties after the date of this
          Agreement     or     the    date     of    their
          reconciliation, no act on the part of either
          party shall serve to modify the property
          rights of the parties as established herein
          in this Agreement and the rights of the
          parties    to     the    property    which    is
          transferred, set over and designated as
                                    -3-
           property   of  either party  shall   remain
           separate property upon a reconciliation of
           the parties.

    On 1 October 2005, the parties reconciled and resumed their

marital relationship.       The parties moved to West Virginia, but

separated again on       13 March 2011.        The parties subsequently

engaged in litigation in the Family Court of Preston County,

West Virginia.      This litigation involved, among other things,

the distribution of the parties’ marital property.              That court

directed the parties to have the courts of this State determine

the validity of the Separation Agreement.

    On 17 August 2012, plaintiff filed a verified complaint,

seeking   a   declaratory      judgment   as   to   the    status   of   the

Separation Agreement.          The complaint also sought to void the

Separation Agreement based upon the alleged fraud, duress, and

undue   influence   of   the    defendant.     Plaintiff    also    asserted

breach of contract, alleging that defendant materially breached

the provisions of paragraph 21 of the Separation Agreement:

           21. FULL DISCLOSURE. Each party warrants, as
           part   of   the    consideration    for   this
           Agreement, that each party has fully and
           completely    disclosed    all     information
           regarding property and finances requested by
           the other and that no information of such
           nature has been subjected to distortion, nor
           in any manner been misrepresented.
                                          -4-
      Plaintiff alleged that defendant falsely represented to her

that the values of their respective retirement accounts were

“virtually the same,” when in fact the value of plaintiff’s

account was $31,192.99 and the value of defendant’s account was

about $130,000.00.

      On 10 October 2012, defendant filed an answer, asserting

the   affirmative      defenses      of   ratification      and    the      statute   of

limitations,      as   well     as    a   counterclaim      for        a    declaratory

judgment    declaring     the   Separation       Agreement        to   be    valid    and

enforceable.       On 7 December 2012, plaintiff filed a reply to

defendant’s counterclaim.

      On   10    May   2013,    defendant       filed   a   motion         for   summary

judgment.       On 24 September 2013, the trial court entered summary

judgment in favor of defendant, declaring that “the Separation

Agreement and Property Settlement executed by the parties on

November 16, 2004, is a valid and enforceable contract.”

      Plaintiff appeals.

                           II. Standard of Review

      “Our standard of review of an appeal from summary judgment

is de novo; such judgment is appropriate only when the record

shows that ‘there is no genuine issue as to any material fact

and that any party is entitled to a judgment as a matter of
                                           -5-
law.’” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572,

576   (2008)      (quoting     Forbis    v.    Neal,      361    N.C.    519,    524,   649

S.E.2d 382, 385 (2007)).

                  III. Fraud, Duress, and Undue Influence

      In her first argument, plaintiff contends that the trial

court erred in applying a three-year statute of limitations to

her claims for fraud, duress, and undue influence.                        We disagree.

      “Under North Carolina law, there is a three-year limitation

for filing an action for duress, undue influence and fraud.”

Dawbarn v. Dawbarn, 175 N.C. App. 712, 717, 625 S.E.2d 186, 190

(2006) (citing N.C. Gen. Stat. § 1-52(9) (2005)).                             According to

N.C. Gen. Stat. § 1-52(9), the statute of limitations begins to

run   on     an    action      for    fraud    upon       discovery      of     the   facts

constituting the fraud.              N.C. Gen. Stat. § 1-52(9) (2013).

      The    statute      of    limitations       for      plaintiff’s         claims    for

duress     and    undue     influence     began      to    run   in     2004,    when   she

alleges she was coerced into signing the Separation Agreement.

The statute of limitations on those claims would therefore have

expired in 2007.

      With     regard     to   the     claim   for     fraud,     in    her     complaint,

plaintiff        does   not    allege     when    she       discovered         the    fraud.

However, in her deposition, plaintiff admitted that she began to
                                 -6-
manage defendant’s account in “[m]aybe 2005, 2006.”           At that

time, she would have discovered the fraud.        During the hearing

on summary judgment, defense counsel noted:

         She acknowledged, I believe on page 91 of
         the -– the –- of her deposition that she had
         the ability to look at the balance of his
         account at that time. So, my contention is
         that by the end of 2006, by her testimony,
         it was the latest, 2006, she had the ability
         to look at his Thrift Savings account. She
         had full access to his accounts and that the
         cause of action for fraud would have accrued
         no later than 2006 when she had full access
         to his retirement accounts. Which means, the
         three-year statute of limitations expired in
         2009.

    If plaintiff discovered the fraud in 2006, then the statute

of limitations on that claim would have expired in 2009.

    Plaintiff’s complaint was filed in 2012, well after the

statute of limitations on her claims for fraud, duress, and

undue influence expired.

    Plaintiff     contends,   however,   that   these   actions   arose

pursuant to a document under seal.       Plaintiff contends that, as

a result, the ten-year statute of limitations in N.C. Gen. Stat.

§ 1-47 applies.

    N.C. Gen. Stat. § 1-47(2) provides that a ten-year statute

of limitations applies:


         Upon a sealed instrument or an instrument of
                                       -7-
           conveyance of an interest in real property,
           against the principal thereto. Provided,
           however, that if action on an instrument is
           filed, the defendant or defendants in such
           action may file a counterclaim arising out
           of the same transaction or transactions as
           are   the   subject  of  plaintiff's   claim,
           although a shorter statute of limitations
           would    otherwise  apply    to   defendant's
           counterclaim. Such counterclaim may be filed
           against such parties as provided in G.S. 1A-
           1, Rules of Civil Procedure.

N.C. Gen. Stat. § 1-47(2) (2013).

    Plaintiff contends that her lawsuit in the instant case is

effectively a counterclaim.        More specifically:

           In the present case, the Plaintiff-Appellant
           was   functioning,   for    all   intents   and
           purposes, as a Defendant, in that she was
           forced to come to the state of North
           Carolina to "defend" against the claim made
           by   the  Defendant-Appellee    in   the   West
           Virginia litigation. Further, the Plaintiff-
           Appellant's claims for fraud, duress, undue
           influence   and  breach    are,   in   essence,
           counterclaims     asserted      against     the
           Defendant-Appellee in response to his claims
           asserted in the West Virginia litigation.

    We find this logic baseless.              We note that there is no

indication   in   the    record   of    whether   plaintiff   or   defendant

initiated the litigation in West Virginia; however, it is clear

from the record that plaintiff initiated the instant action in

North   Carolina.       Nothing   in   the   record   supports   plaintiff’s

claim that she was “forced” to come to this State to “defend”
                                           -8-
against a claim by defendant; quite to the contrary, the filing

of plaintiff’s complaint forced action by defendant.

    We acknowledge that a counterclaim for fraud pursuant to an

instrument    under     seal       is   subject     to       a    ten-year     statute     of

limitations.       See McGuire v. Dixon, 207 N.C. App. 330, 338, 700

S.E.2d 71, 76 (2010) (holding that the trial court erred in

applying the three-year limitations period for fraud under N.C.

Gen. Stat. § 1-52(9) where the ten-year statute of limitations

under N.C. Gen. Stat. § 1-47(2) applied).                            Duress and undue

influence are “forms of fraud,” under N.C. Gen. Stat. § 1-52(9).

Swartzberg v. Reserve Life Ins. Co., 252 N.C. 150, 156, 113

S.E.2d    270,     276-77      (1960).           Under       that     logic,      then,     a

counterclaim for fraud, duress, or undue influence pursuant to a

document under seal should be controlled by a ten-year statute

of limitations.

    However,       it   is     clear      from    the    record       before      us      that

plaintiff’s      claims      are    not    counterclaims,            and   thus      do   not

involve the provisions of N.C. Gen. Stat. § 1-47(2).                            Thus, the

three-year statute of limitations applies to plaintiff’s claims

for fraud, duress, and undue influence.                      We hold that the trial

court    applied    the     correct       statute       of       limitations    to     these
                                  -9-
claims, and did not err in granting summary judgment in favor of

defendant on the issues of fraud, duress, and undue influence.

    This argument is without merit.

                        IV. Breach of Contract

    In her second argument, plaintiff contends that the trial

court erred in applying a three-year statute of limitations to

her claim for breach of contract.        We agree.

    The Separation Agreement, executed under seal, contained a

warranty of full disclosure.          The Separation Agreement further

provided that, in the event of reconciliation by the parties,

the Separation Agreement would remain in full force.               As stated

above, a ten-year statute of limitations applies to an agreement

under seal.    N.C. Gen. Stat. § 1-47(2) (2013).

    Plaintiff alleged that defendant breached the warranty of

full disclosure in the Separation Agreement by misrepresenting

the balance in their respective retirement accounts.                 Because

the Separation Agreement was executed under seal, a ten-year

statute of limitations, rather than the three-year statute of

limitations,   is   applicable   to   plaintiff’s    breach   of    contract

claim.   Since this action was commenced within ten years of the

execution of the Separation Agreement, it was not barred.
                                  -10-
    We hold that the trial court erred in granting summary

judgment in favor of defendant on the issue of breach of the

Separation Agreement.

                             V. Conclusion

    The trial court did not err in granting summary judgment in

favor of defendant on the issues of fraud, duress, and undue

influence.   The trial court erred in granting summary judgment

in favor of defendant on the issue of breach of the Separation

Agreement.   This   matter   is   remanded   to   the   trial   court   for

further proceedings on the issue of breach of the Separation

Agreement.

    AFFIRMED IN PART, REVERSED AND REMANDED IN PART.

    Judges GEER and HUNTER, Robert N., Jr. concur.

    Robert N. Hunter, Jr. concurred on this opinion prior to 6

    September 2014.
