North Carolina National Bank v. Virginia Carolina Builders, Inc.
292 S.E.2d 135
N.C. Ct. App.
1982
Check Treatment

*1 APPEALS COURT OF N.C.N.B. v. Carolina Builders Defendants here to the full appealed Commission and were to The compensate plaintiff. ordered for an award prerequisites to G.S. 97-88 thus were fulfilled. Bowman pursuant See v. Chair statute, however, The discretion; leaves the award Commission’s and we find no abuse of discretion in the failure to enter an award here.

In of our of defendants’ we light disposition appeal, need not address of error to the exclusion of plaintiffs assignment certain evidence.

Result In defendants’ affirmed. appeal, remanded for of an award of appeal, 97-29; otherwise, affirmed. expenses pursuant

medical (Robert M.) C.) (Harry concur. Judges MARTIN MARTIN BUILDERS, BANK v. NORTH CAROLINA NATIONAL VIRGINIA CAROLINA INC. No. 8117SC825 (Filed 1982) 15 June attorney practice pro Attorneys § 2— hac 1. at Law out-of-state —conditions vice 84-4.1, Until an out-of-state meets the conditions of G.S. court it. has no discretion to admit out-of-state counsel to before 2; Attorneys Judgments 25.2— default 2. at Law 8 —attributable defendant’s By hiring Virginia in a North to defend it ordinary expected degree of a man of of care defendant did exercise business, dealing important default in the prudence in with his and defendant’s negligence. action must to its own inexcusable therefore be attributed dissenting. Judge Moréis Chief OF APPEAL^ *2 by

Appeal from entered 21 plaintiff Long, Judge. Order Court, 1981 in April Superior County. Heard the ROCKINGHAM of on 31 March 1982. Appeals Court appealed The order allowed defendant’s motion to set aside a default against by entered the clerk of superior February court on 3 1981. The action was commenced on 3 July 1979 when plaintiff seeking filed a to recover complaint $32,000 over defendant, it on allegedly promissory by due note executed Attorney corporation. Epperly John filed answer on on July defendant’s behalf alleging that a much 1979. smaller amount was due on the note. deny- Plaintiff filed a reply on ing allegation July 1979. later, three

Approximately months on 19 plain- October tiff motion for entry filed a of default against defendant on the filed, ground that no answer had been pur- defendant’s ported having by been filed attorney had failed to with provisions the of 84-4.1 § by attorney. limited The attached cer- tificate of service that of copy indicates the motion was served on counsel for defendant.

On 8 November 1979 North attorney Bryant Victor filed a notice of appearance that stating representing he would be in the matter with along Epperly Virginia bar. clerk, 2 February entry

On of default was filed and on 3 February 1981 a default was entered $32,650.81. clerk in the amount of February

On and 17 1981 attorneys Bryant Epperly each filed a motion to set aside the default judgment, alleging they had received no notice on mo- hearing plaintiffs tion of default and that their first knowledge of the judgment came when a of it copy was delivered to them February defendant on 11 1981. a supplement to his motion attorney Bryant reasserted that defendant has a meritorious defense and attached a statement of showing account defendant’s $3,340.76. indebtedness plaintiff only be motion, filed a with Epperly sup-

On 16 March affidavits, to G.S. to be admitted to pursuant porting representing in North for the limited in this action. One, two orders. dated Judge Long entered April On motion. It was 20 March allowed limited Epperly’s any only, without prejudice rights stated to be prospective order, have arisen thereto. The other might prior which judgment previously set aside the default April dated the answer entered in favor and ordered theretofore on behalf be Epperly defendant’s *3 setting of the record. In the order aside proper portion declared a notice of a judicial long- the default took judgment, attorneys of standing among Virginia practic- and custom appear close to the North state line to courts ing Carolina fully with the complying provisions of North Carolina without although 84-4.1. He then found and concluded that counsel G.S. § may in not the re- negligent meeting for defendant have been of the prior judgment, of G.S. to quirements § should not be to defendant exercised imputed such the suit to its at- throughout delivering papers care He also found that defendant had torney for defense of the action. Plaintiff from this order. appeals a meritorious defense. asserted Thomas S. Maddrey, by Harrington, & Harrington, Stultz appellant. Warren, Broaddus, John D. Broaddus & Epperly, Epperly; Jr., Drew, Patterson, by Bryant, Crill & Victor S. Bryant, and appellee. HEDRICK, Judge. the default must

Judge Long’s setting order aside setting advertent the fact that orders be reversed. We are ordinarily not interlocutory ap- are and judgments aside default 205, 431 301 270 S.E. 2d Gooding, N.C. pealable. Bailey Nevertheless, contains serious error present because the order we, discretion, in our of great importance a matter regarding it. choose to review

by Judge Long [1] We first note our of a custom and disapproval which taking violates judicial law of notice 631 Builders the conditions under which this State. The has fixed legislature hac vice attorney may admitted to practice pro be is to af 84-4.1. The of this statute in this State G.S. § counsel and to a means to control out-of-state ford courts of at responsibilities assure with the duties compliance Nickerson, 13 State. State v. N.C. torneys practicing E.g., denied, 304, 125, (1971), 280 186 185 S.E. 2d 326 cert. App. denied, 92 33 L.Ed. 2d S.Ct. S.E. 2d cert. U.S. mandatory. in the statute are Until The conditions met, has to admit out-of- they have been a court no discretion Smith, it. In re state counsel to before allow non consistently refused to We have attorneys E.g., in this Court. complying 158, 175 S.E. 2d App. Co. v. Phillips, Resort Development (1970), other grounds, rev’d in on part, part aff’d Daughtry, State (1970). Likewise, nullify the statute cannot party S.E. 2d out-of-state at noncomplying of a merely by to actions responding case, State, as, replying such in this of this torney the courts attorney. The fact that a custom by that answer filed purported attorneys near the practicing among Virginia grown up have ignore requirements line to North state way in no Such custom to this case. 84-4.1 is irrelevant complying counsel from or excuses out-of-state abrogates *4 (1885). Hale, 93 188 Brown v. N.C. Compare statute. [2] said Although irrelevant and unlawful committed error practice, he correctly concluded that in judicially noting with failing comply negligent for defendant had been counsel fail to with only Epperly 84-4.1. Not did G.S. § for rectify the matter initially, took no action to he G.S. § its motion after months seventeen further con Long Judge was inexcusable. neglect Such default. cluded, however, to de be imputed should not neglect With this care. proper exercised defendant had fendant because agree. do not conclusion we the inexcusable with charged is not a client

“[Ojrdinarily has exercised himself the client attorney, provided of his is litigant of care required . . . The standard care. proper im- usually on his bestows ordinary prudence man of which a 224, 227, Deal, S.E. 2d 79 v. N.C. Moore business.” portant COURT OF APPEALS 507, 510 To only exercise care a must not party pay himself, proper attention to the case he must employ counsel who is licensed or entitled to the court where the case is Deal, pending. Moore v. Kerr v. supra; North Carolina Joint Bank, 410, (1933); Stock Land 171 S.E. N.C. v. Manning Co., 824, Roanoke Tar& River Railroad 28 S.E. Norton v. Sawyer, 227 S.E. 2d cert. denied, 291 The hired to defend it in this North action Carolina was not and, licensed to of North courts as we discussed, have previously was not to practice entitled there reason of a custom which violates the laws of this State. By defend a North did exercise the degree of care ex pected ordinary of a man of prudence in with dealing his impor tant business. Defendant’s default in this action must therefore be attributed its own inexcusable negligence. See Harrell v. Welstead, 175 S.E. 283 (and only

“It is when there is excusable negligence not when there is inexcusable negligence) that judge can his discre- ” tion set the . . . . judgment aside Manning Roanoke & Tar River Railroad at S.E. at 965. supra The order setting aside the is

Reversed and remanded reinstatement of the judgment. Judge Arnold concurs. Judge

Chief MORRIS dissents. Judge

Chief MORRIS dissenting. Plaintiff’s appeal should be dismissed. An order setting aside a default interlocutory is and not immediately ap- pealable unless it affects a substantial right the appellant and will work to him injury if not corrected before appeal final judgment. Bailey Gooding, 301 *5 (1980). The of purpose this rule is “to prevent fragmentary and premature appeals unnecessarily delay the administration of justice and to ensure that the trial fully divisions and finally dispose the case before an appeal can be heard.” Id. at merely delay S.E. 2d at 434. In this case dismissal will until after final would have to appeal judgment. Although plaintiff merits, undergo a trial on the avoidance of trial is not a “substan- tial immediate Id. Plaintiff has right” requiring appeal. preserved exception its to the order aside the default and setting appeal assign can and error thereto should a trial on the merits in a judgment result for defendant. Should a trial on the merits plaintiff result therefrom, for and should defendant appeal may set out its

plaintiff exception assign and cross as error the action of the trial court in aside the default setting 10(d), Rule North Pro- judgment. Appellate Carolina Rules cedure. authority

I no reason to perceive discretionary exercise our by treating to review the matter purported appeal peti- as tion for writ of writ. allowing certiorari and Another panel already has for writ of petition previously denied a certiorari view, by my filed here plaintiff. plaintiffs premature appeal clearly should be dismissed.

I disagree majority’s also decision on the merits. The law is well established in this may State that default not be 1A-1, by entered the clerk after answer has been filed. G.S. Rule 55; Davis, v. Bailey 55 S.E. 2d 919 An answer “is deemed to be it filed when is delivered Moore, officer and received him.” v. proper 351, 355, Peebles 2d S.E. This rule holds true even when the answer is delivered late or is deficient some respect. Moore, Peebles v. Rich v. supra; See Southern Railway, Norfolk (1956); Southard, 92 S.E. 2d 768 White v. Cranford, Steed instances, remedy In such plaintiff’s is mo- tion to strike the answer and then move default and Davis, judgment. Bailey an answer supra. Until is so however, it challenged, remains of record once it has been delivered to and accepted Clearly, court officer. case, plead defendant did not fail the present its though have been defective because prepared signed by had failed to qualify to However, action. never challenged the answer motion Indeed, to strike. a reply. even filed Upon plaintiffs subsequent default, judgment by motion for liberty clerk was not at to ig- *6 APPEALS OF Builders Because answer which remained filed record. nore defendant’s while authority to enter a default the clerk was without file, was set aside properly the was on Judge Long. action, the plead did not fail to

Because defendant reached, not be and Judge Long’s issue of excusable need neglect Nevertheless, I must express thereon are findings superfluous. my on this issue under disagreement majority’s decision I no excusable on the perceive part the facts of this case. defendant, Virginia Corporation, hiring Virginia in the courts of to where, it in an action filed North Carolina represent custom, that at- long standing practice virtue of a torney authority apparent had in the North Carolina taking judicial courts. did commit error note of because, although such custom did not excuse defendant’s at- 84-4.1, torney from with G.S. it was relevant complying of care exercised question degree defend- Furthermore, counsel, ing the action. in hiring Virginia merely was its fundamental exercising right select counsel of it in this choosing represent Holley its own action. v. Bur- roughs Wellcome barring order Holley appearing on the behalf because of his failure to with all of comply of G.S. was vacated requirements and remanded erroneously judge because the trial had exercised his discretion matter, effectively preventing in the from seeking attorney’s in her leave to amend deficiencies application. Likewise, this defendant should not be out-of- penalized apparent ability state counsel where that counsel had the to ap- where the laws of this State pear provide means in our which such counsel courts and where de- with those legal requirements, fendant’s counsel did belatedly. somewhat although appeal.

I vote to dismiss this