N.C. Ct. App.: Pelc v. Pham – Contempt Vacated; Execution, Not Incarceration, Required for Enforcement of Money Judgment

Summary:

In Pelc v. Pham (No. COA25-27, filed Oct. 15, 2025), the North Carolina Court of Appeals (Tyson, J.) vacated a Mecklenburg County contempt order imprisoning a former spouse for failure to pay a contractual debt arising from a Form I-864 “Affidavit of Support” and related loan. The appellate court held that the trial court lacked jurisdiction to use contempt powers to enforce a money judgment grounded in breach of contract.

The Court reaffirmed the longstanding principle that monetary judgments must be enforced through execution proceedings under N.C. Gen. Stat. § 1-302, not contempt. The Court also noted that the debtor had properly filed a Motion to Claim Exempt Property under N.C. Gen. Stat. §§ 1C-1601 and -1603, which the trial court erroneously disregarded when assessing his “ability to pay.”

After years of litigation between the parties—whose disputes began over financial obligations from a failed international marriage and immigration sponsorship—the district court had ordered payment of damages for breach of the Affidavit of Support and unjust enrichment. When the defendant failed to pay, the court imprisoned him for civil contempt. The Court of Appeals found this improper, vacating the order and remanding with instruction that the creditor may instead proceed by execution, “subject to Defendant’s statutory and lawful exemptions.”

Commentary:

This decision stands out as a rare example of the North Carolina appellate courts interpreting and applying the state’s exemption procedures under N.C. Gen. Stat. § 1C-1601, particularly in the context of enforcing a civil judgment outside of bankruptcy or domestic-support enforcement. The Court’s holding underscores the sharp statutory distinction between (1) support obligations enforceable by contempt (e.g., child support under § 50-13.4(f)) and (2) contractual or quasi-contractual debts, which must proceed through execution and respect debtor exemptions.

Judge Tyson’s opinion reinforces both the jurisdictional limits of the contempt power and the policy underlying the North Carolina Exemptions Act—to preserve a debtor’s basic means of living and prevent imprisonment for debt. The trial court’s refusal to honor Pelc’s claimed exemptions (including his residence and Australian retirement account) improperly blurred the line between contempt and execution, essentially transforming a civil money judgment into an imprisonable offense.

In practical terms, this opinion reminds creditors (and domestic attorneys dealing with Affidavit-of-Support claims or other contractual obligations) that execution—not contempt—is the lawful enforcement mechanism, and that exemption procedures under §§ 1C-1601 et seq. must be afforded full effect.

For consumer and bankruptcy practitioners, Pelc v. Pham also offers an instructive illustration of how North Carolina exemption law continues to operate outside of bankruptcy proceedings—rare appellate guidance in a state where exemption jurisprudence is more often developed in the bankruptcy courts than in the North Carolina appellate courts.

Additionally worth noting is that based on the Form I-864 “Affidavit of Support” and unjust enrichment / loan repayment,  this debt would   likely be dischargeable in bankruptcy, though with nuances depending on how it’s characterized and which chapter is used.  

With proper attribution,  please share this post.