Basnight Construction Co. v. Peters & White Construction Co.

610 S.E.2d 469, 169 N.C. App. 619, 2005 N.C. App. LEXIS 605
CourtCourt of Appeals of North Carolina
DecidedApril 5, 2005
DocketCOA04-951
StatusPublished
Cited by16 cases

This text of 610 S.E.2d 469 (Basnight Construction Co. v. Peters & White Construction Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Basnight Construction Co. v. Peters & White Construction Co., 610 S.E.2d 469, 169 N.C. App. 619, 2005 N.C. App. LEXIS 605 (N.C. Ct. App. 2005).

Opinion

*620 ELMORE, Judge.

Peters & White Construction Company (defendant) appeals the trial court’s denial of its motion to set aside an entry of default and default judgment against it. We discern no abuse of discretion in the denial of defendant’s motion to set aside the entry of default, but must reverse the order denying defendant’s motion to set aside the default judgment.

Defendant was a contractor building a collection of sewer lines and treatment facilities for the Englehard Sanitary District located in Hyde County, North Carolina. Basnight Construction Company (plaintiff) was a subcontractor retained to install piping on the project. Upon plaintiff’s completion of the project, it was not paid a portion of the money agreed to under the contract between the parties. Accordingly, on 9 September 2003, plaintiff filed suit against defendant for recovery of $51,799.49 under one of two claims: breach of contract or quantum merit. Defendant, a Virginia based corporation, was ultimately served with the complaint via the North Carolina Secretary of State on 31 October 2003 after the Secretary’s office received the alias and pluries summons on 27 October 2003. Upon receipt, defendant sent the complaint to James R. Harvey, III (Harvey), its counsel at Vandeventer Black, L.L.P. (Vandeventer) in Norfolk, Virginia.

Harvey contacted an attorney in the firm’s Kitty Hawk, North Carolina, office in order to transfer the case to its local office. Despite being requested by Harvey to file a motion for extension of time, the Kitty Hawk office failed to do so. In the interim, Harvey determined the firm had a conflict; could not represent defendant in the matter; and sought out and secured Hornthal, Riley, Ellis & Maland, L.L.P. (Ellis), to represent defendant. Harvey informed Ellis of his belief that a responsive pleading was due by 26 December 2003. But, in fact, the responsive pleading was due much earlier, and on 11 December 2003 plaintiff filed for and received an entry of default as well as a default judgment from the Dare County Clerk of Court. Plaintiff was awarded $51,779.49, plus interest and costs.

Harvey determined on 15 December 2003 that no extension was entered on defendant’s behalf and a default judgment had been secured. He contacted Ellis who, on 6 January 2004, filed a motion to set aside the entry of default and default judgment. The trial court heard the motion on 22 March 2004 and entered an order denying defendant’s motion.

*621 The trial court found that “the failure to obtain an extension of time was the result of the Kitty Hawk Office of Vandeventer Black, LLP’s failure to act on the request of the Norfolk Office to obtain said extension of time.” The court also found that the failure to file for an extension “constituted] carelessness and negligence.” Based on those and other findings, the court concluded:

4. That the evidence presented by the Defendant does not constitute mistake, inadvertence, surprise or excusable neglect under the provisions of Rule 60(b)(1).
5. That the evidence presented by the Defendant does not constitute a grounds [sic] for relief from the default judgment under . any other provisions of Rule 60(b).
6. That carelessness and negligence of Defendant’s counsel does not constitute an excusable neglect under Rule 60(b) of the North Carolina Rules of Civil Procedure or other grounds for relief under said Rule.

Defendant appeals from-this order.

A trial court’s decision to grant or deny a motion to set aside an entry of default and default judgment is discretionary. See Grant v. Cox, 106 N.C. App. 122, 124-25, 415 S.E.2d 378, 380 (1992). Absent an abuse of that discretion, this Court will not reverse the trial court’s ruling. Id. N.C. Gen. Stat. § 1A-1, Rule 55(d) (2003), notes that an entry of default may be set aside for “good cause shown,” and a default judgment may be set aside “in accordance with Rule 60(b).” Defendant’s motion to set aside both the entry of default and default judgment was brought “pursuant to Rule 55” but, as did the trial court, we will look at each individual claim under their appropriate standards. See Bailey v. Gooding, 60 N.C. App. 459, 461, 299 S.E.2d 267, 269 (1983) (“An entry of default may be set aside, not by motion pursuant to_ Rule 60(b), but by motion pursuant to Rule 55(d) and a showing of good cause.”); see also Whaley v. Rhodes, 10 N.C. App. 109, 111-12, 177 S.E.2d 735, 736 (1970).

In its order denying defendant’s motion, the trial court rejected defendant’s claim that “the failure to secure an extension of time and enable a timely response or answer to be filed was solely the result of a misunderstanding and mis communication [sic] between Vandeventer Black, L.L.P.’s Norfolk and Kitty Hawk offices.” Rather, it found that the delay was on the Kitty Hawk of *622 fice’s “failure to act on the request,” noting that the failure “consti-tut[ed] carelessness and negligence.”

The trial court determined that this omission was not a sufficient showing for good cause to set aside the entry of default. We cannot hold that the trial court abused its discretion in this determination, despite the fact that perhaps other judges may have granted defendant’s motion. See Kennedy v. Starr, 62 N.C. App. 182, 187-88, 302 S.E.2d 497, 500-01 (1983) (Whichard, J. concurring) (noting the tension between an abuse of discretion standard and a favored result of allowing litigation on the merits of cases). There was no dispute that Harvey informed the Kitty Hawk office to file the extension of time. Yet, no explanation is included in the record as to what caused that office to fail to file the extension, whether that oversight was due to case load, clerical error, or otherwise.

Defendant also appeals that portion of the trial court’s order denying his motion to set aside the default judgment. As previously noted, this analysis proceeds under Rule 60(b). Defendant argued that the trial court abused its discretion under several theories, but we find the argument that the default judgment was void most persuasive. See N.C. Gen. Stat. § 1A-1, Rule 60(b)(4) (2003) (“[T]he court may relieve a party . . . from a final judgment, order, or proceeding . . . [when] [t]he judgment is void['.]”).

N.C. Gen. Stat. § 1A-1, Rule 55(b) deals with the entry of a default judgment. When the plaintiff’s claim is for a “sum certain or for a sum which can by computation be made certain,” then the default judgment can be entered by a clerk. N.C. Gen. Stat. § 1A-1, Rule 55(b)(1) (2003). Absent a certain dollar amount, the default judgment must be entered by a judge who may conduct a hearing to adequately determine damages. N.C. Gen. Stat. § 1A-1, Rule 55(b)(2) (2003).

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Cite This Page — Counsel Stack

Bluebook (online)
610 S.E.2d 469, 169 N.C. App. 619, 2005 N.C. App. LEXIS 605, Counsel Stack Legal Research, https://law.counselstack.com/opinion/basnight-construction-co-v-peters-white-construction-co-ncctapp-2005.