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Equitable Distribution and Statutes of Limitation

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

Imagine that you and your wife separate from each other. It is now 15 years later. While you have both moved forward in life, neither of you filed for divorce. You are still married. One day you get a notice in the mail. There was an outstanding loan that originated during the marriage, while you two were still together, that has not been paid and now the lenders are threatening some legal action. Is it too late to file for equitable distribution and have a court order that you both pay on the debt? 

  1. Facts: Husband and wife married in 1990. Wife decided to attend school to be a chiropractor in 1991. Husband, at the time, worked in a restaurant. Wife took out student loans for the tuition, and for living expenses. Husband and Wife had children during the time that Wife was in school. Wife took out further loans for tuition, and for living expenses during each trimester she was in school. The total amount of the student loans was $193,981.40. Of this, tuition costs were only $49,173. Eventually Wife graduated and she bought a chiropractic business. The business netted between $16,000 and $25,000. The parties separated in 2001. While there was custody litigation, the parties never filed for divorce. In 2018, Wife sought divorce and Equitable Distribution (ED). Husband filed a motion to dismiss, partly based on a statute of limitations defense. Trial court denied the motion. Husband appealed. 


  1. Issue:  Did the trial court err in denying husband’s motion? 


  1. Holding: No. 


  1. Rationale:  Husband argued that statutory 3-year and 10-year statutes of limitation should have applied and barred Wife’s ED claim. However, the ED statute contains no language limiting the time in which to file a claim, other than the limitations that it be filed any time after separation, and before the entry of divorce. To the Court, this language was clear and unambiguous—a pending claim filed after separation and before the entry of a divorce judgment preserves the claim. There are no statutes of limitation that would bar a claim otherwise.