BODIE ISLAND BEACH CLUB ASS'N, INC. v. Wray
716 S.E.2d 67
| N.C. Ct. App. | 2011Background
- Plaintiffs filed a civil action on July 10, 2009, asserting multiple claims against SRS North Carolina Properties, LLC and others.
- Dr. Smith, sole owner of SRS, submitted a letter response in September 2009 that did not clearly indicate it represented SRS and was on his personal letterhead; he is not an attorney.
- The trial court designated the case as a mandatory complex business case and directed counsel appearances; issues arose regarding proper representation and defaults.
- Plaintiffs sought summary judgment against SRS for failure to answer; SRS filed a Motion for Leave to Amend Answer (June 2010).
- The court entered default against SRS on its own motion, then granted summary judgment against SRS in July 2010, and denied motions to set aside default and summary judgment in September 2010.
- SRS appealed the June 14, 2010 order, the July 30, 2010 order granting summary judgment, and the September 24, 2010 order denying relief; the appellate court treated the June order as reviewable on certiorari.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the trial court abuse its discretion in denying leave to amend? | SRS failed to respond; the letter did not constitute a proper answer on SRS's behalf. | The letter should be treated as an attempt to respond for SRS; amendments should be allowed to cure pleading defects. | No abuse; denial affirmed because letter failed to constitute valid responsive pleading by SRS. |
| Was default entered against SRS proper and within court discretion? | SRS neglected to plead or respond within time, justifying default. | Default was improper due to the attempted amendment and potential delay harm to SRS. | Default was proper; court acted within its discretion. |
| Was summary judgment proper against SRS when default was upheld? | SRS failed to deny allegations; there were no genuine issues of material fact. | Because of the default, SRS should have a chance to respond; summary judgment based on flawed default. | Summary judgment proper; SRS admitted allegations by failure to respond. |
| Did the trial court abuse its discretion in denying relief under Rule 60(b)(6)? | No just reason to relief from default and summary judgment. | There were meritorious defenses and potential errors in default entry. | No abuse; Rule 60(b)(6) relief denied. |
| Was denial of relief under Rule 59(a)(8)/(9) proper at the summary-judgment stage? | Rule 59 relief could address legal errors in entry of default/sum-judgment. | Rule 59 relief is post-trial and inappropriate at summary-judgment stage; no grounds to set aside. | No error; relief under Rule 59(a)(8)/(9) denied. |
Key Cases Cited
- Lexis-Nexis v. Travishan Corp., 155 N.C. App. 205 (2002) (corporation generally must be represented by counsel unless exceptions apply)
- Beard v. Pembaur, 68 N.C. App. 52 (1984) (corporate appearance through non-attorney at times permissible; exceptions apply)
- Peebles v. Moore, 302 N.C. 351 (1981) (default should not be entered where justice can be served otherwise)
- Little v. Barson Fin. Servs. Corp., 138 N.C. App. 700 (2000) (default against non-responding defendants does not bar defenses of others)
- Thrash Ltd. P'ship v. County of Buncombe, 195 N.C. App. 678 (2009) (summary-judgment standard; de novo review on certain issues)