Bodie Island Beach Club Ass'n v. Wray, 215 N.C. App. 283

Background

Plaintiffs sued multiple defendants, including SRS North Carolina Properties, LLC, in a mandatory complex business case alleging legal malpractice and related claims.
Dr. Smith (not a licensed attorney) filed a letter responding to the complaint, leading to questions whether it could count as an answer on SRS’s behalf.
The court issued an Order to Show Cause about pro se pleadings by several defendants, restricting how they could respond and through whom they could appear.
Plaintiffs dismissed some defendants (Don Wray, Penny Wray, Jessica L. Smith, Sea Wray, LLC, and Croc, LLC) with prejudice in 2009; Feist was dismissed later.
SRS filed a Motion for Leave to Amend Answer; the court denied it as to SRS, while granting leave as to Dr. Smith only, and entered default against SRS on its own motion.
Plaintiffs moved for summary judgment against SRS; the court granted summary judgment and later denied SRS’s motions to set aside the default and the summary judgment.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the denial of leave to amend was an abuse of discretion	SRS contends the letter was an SRS reply and that denial relied on misreading law	SRS argues it should have been allowed to amend and that corporate representation through a non-attorney is permissible under exceptions	No abuse of discretion; denial affirmed
Whether default against SRS was proper	Plaintiffs contended SRS failed to answer or request extension	SRS argues due process and timing issues with amendments could bar default	Default properly entered; no abuse
Whether summary judgment as to SRS was proper	SRS failed to respond, so allegations admitted, justifying summary judgment	SRS argues the default taints the basis for summary judgment	Summary judgment proper; no reversible error
Whether denial of set aside default under Rule 60(b)(6) was proper	Set-aside defense relies on merits of claim and good cause	SRS asserts relief from judgment is warranted due to meritorious defenses	Discretionary denial upheld; no abuse
Whether denial of set aside under Rule 59(a)(8)/(9) was proper	Rule 59 motions are improper post-summary judgment; no basis to relitigate	SRS argues for relief for trial-error or other grounds	Rule 59 motions inappropriate; affirmed

Key Cases Cited

Lexis-Nexis v. Travishan Corp., 155 N.C. App. 205, 573 S.E.2d 547 (2002) (corporate appearance through non-attorney lacking exceptions)
Beard v. Pembaur, 68 N.C. App. 52, 54-56, 315 S.E.2d 596 (1984) (corporation must be represented by counsel; exceptions narrow)
Peebles v. Moore, 302 N.C. 351, 275 S.E.2d 833 (1981) (default should not be entered where justice may be served otherwise)
Carriker v. Carriker, 350 N.C. 71, 511 S.E.2d 2 (1999) (interlocutory orders and final judgments; Rule 54(b) discussion)
Harris v. Matthews, 361 N.C. 265, 643 S.E.2d 566 (2007) (interlocutory orders and final judgments; Rule 54(b) standard)
Gilbert v. N. C. State Bar, 363 N.C. 70, 678 S.E.2d 602 (2009) (substantial rights and appealability of interlocutory orders)
Thrash Ltd. P’ship v. County of Buncombe, 195 N.C. App. 678, 682, 673 S.E.2d 706 (2009) (standard for summary-judgment-related relief and related review)
Joslyn v. Blanchard, 149 N.C. App. 625, 628, 561 S.E.2d 534 (2002) (Rule 8(d) admissions effect on defendants in failure to respond)
Byrd v. Student Bar Ass’n Bd. of Governors, 293 N.C. 594, 612, 239 S.E.2d 415 (1977) (admissions and evidentiary treatment in default context)
Watson v. Millers Creek Lumber Co., 178 N.C. App. 552, 554, 631 S.E.2d 839 (2006) (interlocutory appeals demanding immediate review for title/rights)
Little v. Barson Fin. Servs. Corp., 138 N.C. App. 700, 702, 531 S.E.2d 889 (2000) (default judgments and non-responding defendants)
Student Bar Ass’n Bd. of Governors v. Byrd, 293 N.C. 594, 612, 239 S.E.2d 415 (1977) (admissions and effect on pleadings)