Our justice system depends on due process: the idea that legal proceedings follow established rules and individuals are protected from arbitrary acts of the government. One kind of due process, commonly called procedural due process, is guaranteed by the Fifth and Fourteenth Amendments and means that parties to judicial proceedings must have notice and an opportunity to be heard. Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 313 (1950).

Your right to know if you are being sued and to challenge the lawsuit in court is fundamental in federal as well as state law. As part of an opportunity to be heard, a party being sued can challenge the court’s jurisdiction, that is, its ability to decide the case. But if a party invokes the judgment of the court without making such a challenge, it is possible to waive the right to challenge one kind of jurisdiction—personal jurisdiction—at a later time. Previous decisions in the North Carolina Court of Appeals have been split on whether a post-judgment motion can waive this right. A recent North Carolina Supreme Court decision clarifies that it can.

Personal Jurisdiction Basics

To issue orders and render judgments, a North Carolina court requires two kinds of jurisdiction: subject matter and personal. Subject matter jurisdiction is “the power of the court to deal with the kind of action in question.” Marlow v. TCS Designs, Inc., 288 N.C.App. 567, 572 (2023). Without it, a court’s actions are void. Parties cannot create subject-matter jurisdiction by consent; in other words, they cannot agree to have a North Carolina court hear a type of case that it cannot hear.

Personal jurisdiction is a court’s power over the parties to a lawsuit. Much of the time, a court exercises personal jurisdiction through service of process—think a sheriff’s deputy handing someone a summons and complaint, a person signing a Postal Service “green card” when receiving a certified mailing, or the publication of a legal notice in a newspaper. For more, see previous On the Civil Side posts by Emily Turner on this topic.

Even if service of process is defective, a party can consent to the jurisdiction of the court at any time by making a general appearance. In recent years, North Carolina’s appellate courts have considered which actions are general appearances. (The short answer: almost everything!) Recently, the North Carolina Supreme Court held in Slattery v. Appy City, 385 N.C. 726 (2024), that a defendant may make a general appearance even after judgment. Making a general appearance “waives any objections to the lack of personal jurisdiction or the sufficiency of service of process if [the defendant] does not raise those objections at that time.” Id. at 733.

The Facts in Slattery

In September 2019, an investor plaintiff filed a lawsuit in a North Carolina court alleging that the defendants tricked him into investing in a “sham technology company.” Id.  at 727. The plaintiff alleged the defendants then hid his money in cryptocurrency. The clerk issued a summons, which was allegedly served on one defendant via FedEx. The court entered default against the defendants and granted summary judgment to the plaintiff in March 2021.

The defendant who had allegedly been served by FedEx would later swear in an affidavit that the first time she learned of the lawsuit was in June 2021, when a person she believed to be a plainclothes sheriff’s deputy came to her home and handed her some papers. Later in June 2021, she filed a motion to set aside exempt property. She did not object to personal jurisdiction or service of process until October 2021.

Protections for Judgment Debtors in North Carolina

Let’s talk about what the defendant in Slattery filed. Both the North Carolina Constitution and the General Statutes contain protections for individuals who are judgment debtors. N.C. Const. art. X Sec. 1; G.S. 1C-1601 et seq. When a money judgment is entered against a person, that person becomes a judgment debtor until that judgment is satisfied. The person who obtained the judgment is a judgment creditor. Judgment creditors can seek execution of a judgment, which can result in a sheriff seizing property, selling it at auction, and then turning the proceeds over to the clerk of superior court, who will pay the judgment creditor up to the amount of the judgment and then return the rest to the judgment debtor. See G.S. 1-302 et seq.

But every individual in North Carolina has the right to ask the clerk of superior court to set aside some of their property so that judgment creditors cannot get to it—and every individual also has the right to know about this right. That’s due process again! In this instance, the specific form that judgment debtors receive is called a Notice of Right to Have Exemptions Designated. And the way that a judgment debtor asks the court to set aside property is called a Motion to Claim Exempt Property. This is the procedure that the judgment debtor in Slattery used. Remember that she did not object to lack of service in the lawsuit at the same time as she asked the court to save some of her property from seizure. The North Carolina Supreme Court tells us why that matters.

A General Appearance Even after Judgment

This is how the court describes the issue in Slattery: “[t]he precise question we must answer is, by filing a motion to claim exempt property, did defendant make a general appearance in the underlying action? In other words, if defendant made a general appearance during the proceeding to enforce the judgment, is the general appearance ‘in [the] action?’” Id. at 732. The court’s answer: yes.

Previous decisions in the North Carolina Court of Appeals differed on whether post-judgment motions could be general appearances. Faucette v. Dickerson, 103 N.C.App. 620 (1991), held that a defendant moving the court to set aside exempt property gives up the right to challenge the court’s jurisdiction over her—the same facts and issue as in Slattery. “If the defendant by motion or otherwise invokes the adjudicatory powers of the court in any other matter not directly related to the questions of jurisdiction, he has made a general appearance and has submitted himself to the jurisdiction of the court whether he intended to or not.” Id. at 624 (cleaned up). But two later cases stated that judgments entered without personal jurisdiction are void so that a defendant’s acts following judgment could not retroactively give jurisdiction to the court. Barnes v. Wells, 165 N.C.App. 575 (2004); Dowd v. Johnson, 235 N.C.App. 6 (2014).

The court in Slattery resolved the split by expressly overruling Barnes and Dowd: “defendant invoked the jurisdiction of the court and requested its affirmative intervention on her behalf, submitting herself to the Business Court’s adjudicatory power. She did not simultaneously object, however, to the Business Court’s personal jurisdiction. She therefore made a general appearance. Moreover, defendant’s general appearance was in the action because the judgment collection process is simply a continuation of the underlying action. Therefore, defendant made a general appearance in the action.” Slattery, 385 N.C. at 732 (cleaned up).

Some earlier cases held that judgments entered while the court lacked personal jurisdiction are void. Now, “lack of personal jurisdiction renders a court’s actions voidable rather than void.” Id. at 731. The two concepts are distinct. “Void” means “of no legal effect” while “voidable” means “valid until annulled.” Black’s Law Dictionary (12th ed. 2024). A void judgment requires no action to render it unenforceable. But if a judgment is merely voidable, the defendant must challenge it to invalidate it. For example, the defendant in Slattery could have filed a motion objecting to personal jurisdiction either with or before filing her motion to set aside exempt property. The court would then decide whether to declare the judgment void for lack of personal jurisdiction.

What is Invoking Judgment?

But wait a minute: Faucette and Slattery state that to make a general appearance, a defendant must invoke the judgment of the court. Did the defendant in Slattery actually do that? The dissent in Slattery said no, reasoning that “[t]he filing of a motion to claim exemptions does not, in and of itself, call upon the trial court to exercise its judgment or adjudicate a dispute in any meaningful sense[.]” Slattery, 385 N.C. at 741 (J. Riggs, dissenting). The majority in Slattery makes clear that the law in North Carolina is that a general appearance can be made by requesting the court’s affirmative intervention on anything except jurisdiction, even if the court does not exercise discretion to grant that intervention. Almost every act before a North Carolina court is a general appearance.

Takeaways for Practitioners

What does Slattery mean for litigants and their attorneys? First, if you are going to challenge the personal jurisdiction of a court, you must do so at the first opportunity, even if the case has already proceeded to judgment. A person learning about a lawsuit at the post-judgment execution phase might be worried about the sheriff seizing their property, but it is important to know that asking the court to set aside one’s property gives up the right to challenge personal jurisdiction at a later time. That challenge must be brought right away or not at all. Second, earlier case law referring to certain judgments as void for lack of personal jurisdiction must be carefully re-examined before litigants rely on those holdings—the court in Slattery has clarified its interpretation of subject matter jurisdiction, personal jurisdiction, void judgments, and voidable judgments. Not every earlier decision uses those terms in the same way as the court in Slattery.

I write on civil procedure in North Carolina state courts. Contact me at jlaizure@sog.unc.edu with questions or comments about this piece, or about civil procedure generally. I look forward to hearing from you.