North Carolina Farm Bureau Mutual Insurance v. Balfour

EAGLES, Judge. The facts of this case raise a question of first impression, that being whether plaintiff insurer’s recovery against defendant for intentional damage to property can be offset by defendant’s claim for child support owed to her by the insured. We answer that question in the negative since we hold that defendant’s counterclaim for child support was a compulsory counterclaim in the action entitled Kenneth Balfour v. Diana J. Balfour, 81CVD481. The trial court erred when it granted summary judgment in favor of defendant and against Farm Bureau on the basis of defendant’s counterclaim for unpaid child support. Rule 13 of the North Carolina Rules of Civil Procedure, provides that Rule 13. Counterclaim and crossclaim. (a) Compulsory counterclaims. — A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject [582] matter of the opposing party’s claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. . . . When defendant filed her counterclaim on 17 July 1981, there were two suits pending against her. One action, brought by Farm Bureau, was instituted to recover from defendant $1,522.00 in property damages resulting from defendant’s attack on Kenneth Balfour’s truck. The other action, brought by Kenneth Balfour against the defendant, sought to determine the parties’ legal rights under the 24 February 1981 separation agreement. Defendant’s counterclaim was compulsory to the action brought by Kenneth Balfour since 1) defendant’s claim was in existence at the time of serving defendant’s answer against plaintiff Kenneth Balfour in the separation agreement action, 2) the counterclaim arose out of the transaction or occurrence that is the subject matter of Kenneth Balfour’s claim, 3) the counterclaim would not require the presence of third parties of whom the court could not acquire jurisdiction, and 4) the counterclaim was not the subject of another pending action. Faggart v. Biggers, 18 N.C. App. 366, 197 S.E. 2d 75 (1973). Both Kenneth Balfour’s action and defendant’s counterclaim were related to the 24 February 1981 separation agreement. Since defendant’s claim for child support was a compulsory counterclaim to Kenneth Balfour’s action arising out of the separation agreement, 81CVD481, defendant is precluded by the doctrine of res judicata from asserting the claim as a counterclaim in plaintiff Farm Bureau’s action to recover the $1,522.00 in property damage to Kenneth Balfour’s truck. See Jocie Motor Lines v. Johnson, 231 N.C. 367, 57 S.E. 2d 388 (1950). Plaintiffs’ other assignments of error need not be addressed, as we hold the trial court erred in granting summary judgment for the defendant. For the above reasons we Reverse. Chief Judge VAUGHN and Judge WEBB concur.