235 N.C. App. 6
N.C. Ct. App.2014Background
- Defendant borrowed $150,000 secured by a deed of trust on Moore County property; he eventually defaulted.
- Plaintiffs filed two actions on 24 May 2010: one for $57,500 under the note, another for deed-of-trust reform.
- Initial service attempts at Turnberry Circle failed; Defendant allegedly no longer resided there.
- A later address, 2201 Skyview Drive, was identified but there is no record of service there.
- Plaintiffs published service by publication after failed attempts, and the trial court entered default judgments on 17 March 2011 and later sanctions on 18 October 2012.
- Defendant moved to set aside the defaults under Rule 60(b) and sought to challenge the sanctions; trial court denied both actions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether service by publication was proper | Dowd contends publication was proper under Rule 4(j1) | Johnson contends service by publication was improper due to lack of due diligence | Service by publication improper; default judgments void |
| Whether the default judgments were void for lack of personal jurisdiction | Dowd argues service by publication conferred jurisdiction | Johnson asserts no valid service; no general appearance | Judgments void for lack of personal jurisdiction |
| Whether sanctions under Rule 11 were appropriate | Sanctions warranted due to improper filings | Motions merited; no improper purpose shown | Sanctions vacated; Rule 11 not applicable |
Key Cases Cited
- Jones v. Wallis, 211 N.C. App. 353 (2011) (jurisdictional defect from service by publication renders judgment void)
- Cotton v. Jones, 160 N.C. App. 701 (2003) (strict construction of service by publication; due diligence required)
- Thomas v. Thomas, 43 N.C. App. 638 (1979) (due diligence required before resorting to publication; void if not done)
- Barnes v. Wells, 165 N.C. App. 575 (2004) (no general appearance before entry of challenged order waives jurisdictional defects)