Carolina Home Sols. 1, Inc. v. Crystal Coast Home Sols., Inc.

2018 NCBC 57

• Court: North Carolina Business Court
• Decided: June 19, 2018
• Docket: 16-CVS-2743
• Status: Published

Opinion

Carolina Home Sols. 1, Inc. v. Crystal Coast Home Sols., Inc., 2018 NCBC 57.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION PITT COUNTY 16 CVS 2743

CAROLINA HOME SOLUTIONS 1, INC.,

Plaintiff/Counterclaim Defendant,

v.

CRYSTAL COAST HOME SOLUTIONS, INC., ORDER AND OPINION DENYING Defendant/Counterclaimant, PRO HAC VICE ADMISSION AND REFERRAL TO THE GEORGIA AND v. NORTH CAROLINA STATE BARS CHARLES BOUDREAU,

Additional Counterclaim Defendant.

1. THIS MATTER is before the Court upon Plaintiff Carolina Home Solutions

1, Inc. (“Plaintiff”) and Additional Counterclaim Defendant Charles Boudreau’s

(“Boudreau”) Motion for Pro Hac Vice Admission (the “Motion”) of Charles V. Loncon

(“Loncon”), filed June 1, 2018, in the above-captioned case.

2. Loncon is a member of the Georgia State Bar (admitted August 24, 1989).1

He is not licensed to practice law in North Carolina. As a result, to represent Plaintiff

or Boudreau in this action, Loncon is required to comply with North Carolina’s

requirements for pro hac vice admission under N.C. Gen. Stat. § 84-4.1. In particular,

Loncon is required to associate and personally appear in this action with a local, duly

licensed North Carolina attorney. See N.C. Gen. Stat. § 84-4.1(5). Despite first

1 See State Bar of Georgia online Membership Directory at https://www.gabar.org/MemberSearchDetail.cfm?ID=NDU2NTIz. advising the Court in May 2017 that he would be representing Plaintiff and Boudreau

in this action, and re-affirming that intention several times thereafter, at no time

prior to the filing of the current Motion on Friday, June 1, 2018—the eve of the

scheduled commencement of the trial of this action on Monday, June 4, 2018—did

any attorney licensed in the State of North Carolina file a notice of appearance on

behalf of Plaintiff or Boudreau or seek pro hac vice admission for Loncon.

3. On June 1, 2018, the Court held a telephone conference with the parties to

address the Motion. This Order and Opinion memorializes the Court’s oral ruling on

that conference call. For the reasons set forth below, the Court, in the exercise of its

discretion, hereby DENIES the Motion and REFERS this matter to the Georgia and

North Carolina State Bars for review.

Ward and Smith, P.A., by E. Bradley Evans, for Plaintiff and Counterclaim Defendant Carolina Home Solutions 1, Inc. and Additional Counterclaim Defendant Charles Boudreau. Lanier, King & Paysour, PLLC, by Jeremy King and Steven F. Johnson, for Defendant and Counterclaimant Crystal Coast Home Solutions, Inc.

Bledsoe, Judge.

I.

PROCEDURAL AND FACTUAL BACKGROUND

4. Plaintiff is a North Carolina corporation with its principal place of business

in Greenville, Pitt County, North Carolina, (Compl. ¶ 1, ECF No. 1), and was

administratively dissolved on October 6, 2016, (Mot., Defenses, Ans., Countercls. & Third-Party Compl. 3, ECF No. 2). Boudreau is the president and sole shareholder

of Plaintiff. (Mot., Defenses, Ans., Countercls. & Third-Party Compl. 3.)

5. On November 29, 2016, Jonathan Bridgers, a duly licensed North Carolina

attorney with the Bridgers Law Firm in Greenville, North Carolina (collectively,

“Bridgers”), filed the Complaint initiating this action on behalf of Plaintiff. (See

Compl. 3.)

6. On May 16, 2017, Bridgers filed a motion to withdraw as counsel for Plaintiff

and Boudreau (“Motion to Withdraw”), representing that Plaintiff and Boudreau had

terminated Bridgers’ services and refused to pay Bridgers’ attorneys’ fees. (Pl.’s and

Third-Party Def.’s Br. Supp. Mot. Withdraw 2–3, ECF No. 19.) Plaintiff and

Boudreau provided their written consent to the Motion to Withdraw. (See Mot.

Withdraw, ECF No. 19.1.)

7. The Court granted the Motion to Withdraw on May 17, 2017, stating that (i)

Plaintiff “is advised and put on notice that, under North Carolina law, a corporation

may not represent itself in the superior courts of this State and must instead be

represented by a licensed attorney to appear before this Court,” citing LexisNexis,

Division of Reed Elsevier, Inc. v. Travishan Corp., 155 N.C. App. 205, 209, 573 S.E.2d

547, 549 (2002), and (ii) “[a]ny new counsel for [Plaintiff] is hereby ordered to file and

serve a notice of appearance promptly upon retention.” (Order Mot. Withdraw 2–3,

ECF No. 20.)

8. On May 30, 2017, Defendant’s counsel, Steven F. Johnson, advised the

Court’s law clerk by email, copying Loncon, that Loncon had contacted Johnson to advise that Loncon had been retained by Plaintiff and Boudreau as their counsel in

this action. It was not apparent from Johnson’s email that Loncon was a member of

the Georgia State Bar or that Loncon was not licensed to practice law in the State of

North Carolina. Later that same day, via email, the Court’s law clerk advised Loncon

and all counsel of record that “Mr. Loncon should promptly comply with the Order on

the Motion to Withdraw and file a notice of appearance with the Court.” Loncon

shortly thereafter confirmed to the Court that he intended to represent Plaintiff and

Boudreau in this action but did not take the necessary steps under N.C. Gen. Stat. §

84-4.1 to appear in this action at that time.

9. On December 15, 2017, the Court held a pretrial scheduling conference by

telephone, after which the Court set this action for trial to commence on April 30,

2018. Defendant was represented by counsel at the conference. The Court, now

aware that Loncon was a member of the Georgia State Bar, but not of the North

Carolina State Bar, permitted Loncon to participate in the conference based on

Loncon’s May 2017 and December 2017 representations that he had been retained by

Plaintiff and Boudreau as counsel in this action and his further representations in

December 2017 that he would promptly associate with North Carolina-licensed

counsel and seek pro hac vice admission to practice in the courts of this State for

purposes of this action.

10. The Court emphasized to Loncon during the pretrial scheduling conference

that Plaintiff, as a North Carolina corporation, could not represent itself in this case

without North Carolina-licensed counsel of record and that Loncon must comply with the requirements of N.C. Gen. Stat. § 84-4.1 for pro hac vice admission, including

associating with North Carolina-licensed counsel, before proceeding further as

counsel for Plaintiff and Boudreau in this action. Loncon indicated that he would

promptly associate with local counsel and comply with North Carolina’s pro hac vice

admission requirements.

11. On December 21, 2017, the Court entered the Pretrial Scheduling Order,

which established dates and deadlines for, among other things, the exchange of

witness and exhibit lists (March 2, 2018), a pretrial conference among counsel (March

26, 2018), the exchange of objections to trial exhibits (March 30, 2018), the filing of

motions in limine (April 2, 2018), and the filing of a proposed pretrial order (April 2,

2018). (Pretrial Scheduling Order 1–4, ECF No. 26.) Plaintiff and Boudreau failed

to comply with any of these provisions of the Pretrial Scheduling Order, and, despite

his earlier representations, Loncon did not associate with North Carolina-licensed

counsel and seek pro hac vice admission prior to any of these case deadlines.

12. By order dated April 17, 2018 (the “April 17 Order”), the Court rescheduled

the trial to commence on June 4, 2018, the pretrial hearing for May 22, 2018, and the

deadline to submit motions in limine and a proposed pretrial order to May 8, 2018.

(Am. Pretrial Scheduling Order & Notice to Pl. 2–4, ECF No. 30.) The Court also

used the April 17 Order to remind Plaintiff of the previously cited ruling in

LexisNexis, Division of Reed Elsevier, Inc., 155 N.C. App. at 209, 573 S.E.2d at 549,

and to reiterate (i) that “unless Plaintiff is represented by a duly admitted and

licensed attorney-at-law at trial, Plaintiff will not be permitted to participate in the trial,” and (ii) that “Loncon may not represent Plaintiff in this action unless Plaintiff

and he promptly comply with the requirements of N.C. Gen. Stat. § 84-4.1, including,

in particular, Plaintiff’s retention of counsel duly licensed in North Carolina with

whom Mr. Loncon will be personally appearing in this action.” (Am. Pretrial

Scheduling Order & Notice to Pl. 6.)

13. On May 18, 2018, ten days after Plaintiff and Boudreau failed to confer with

Defendant’s counsel and submit a proposed pretrial order as required under the April

17 Order, Loncon sent an email to the Court’s law clerk on behalf of Plaintiff and

Boudreau seeking a continuance of the pretrial hearing scheduled for May 22, 2018.

14. By order dated May 21, 2018, the Court denied Loncon’s request because

Loncon had not properly associated with North Carolina-licensed counsel or complied

with section 84-4.1 and therefore did not have legal authority to represent Plaintiff

or Boudreau in this action.2 (See Order Denying Request for Extension 1–2, ECF No.

34.)

15. On May 22, 2018, prior to the pretrial hearing later that day, Loncon sent

an email to the Court’s law clerk (i) apologizing for not having successfully associated

local counsel with the case and fulfilling the requirements for pro hac vice admission,

(ii) advising that Boudreau would be available via telephone for the pretrial hearing,

and (iii) representing that Loncon would be filing a motion for pro hac vice admission

the following day, on May 23, 2018. Boudreau represented himself at the pretrial

2 The Court notes that had Loncon been duly admitted pro hac vice, his request still would have been subject to automatic denial for failure to comply with BCR 7.2 (requiring each motion to be set out in a separate document and electronically filed) and BCR 7.3 (requiring each motion to reflect consultation with opposing counsel). hearing via telephone and advised that he still intended for Loncon to represent

Plaintiff and Boudreau at trial.

16. Despite Loncon’s promise, neither Loncon nor any North Carolina-licensed

attorney filed a motion for pro hac vice admission for Loncon on May 23, 2018. On

that same day, despite the Court’s repeated admonitions that Plaintiff could not

represent itself in this action, Boudreau sent Defendant’s counsel a document titled

“Plaintiff and Third Party Defendant, Carolina Home Solutions 1, Inc.’s Portion of

Proposed Pretrial Order” signed by “Charles Boudreau, for Carolina Home Solutions,

1, Inc.” (See Def.’s Mot. Summ. J. Ex. A., at 6, ECF No. 36.) This document contains

six pages of information responding to the numbered paragraphs of Defendant’s

proposed pretrial order and appears to the Court to have been prepared by a lawyer.

17. On May 30, 2018, Boudreau filed a trial brief containing six pages of legal

argument. The brief stated that it was filed both in Boudreau’s individual capacity

and on behalf of Plaintiff, again ignoring the Court’s repeated admonitions that

Plaintiff could not represent itself in this action. (See Pl. & Third-Party Def., Carolina

Home Solutions I, Inc.’s Br. Under Rule 12.12, ECF No. 38.) As a result, the Court

struck the trial brief to the extent it was filed on behalf of Plaintiff. (See Order Strike

Pl.’s Trial Br., ECF No. 41.) Like Boudreau’s portion of the pretrial order, the trial

brief appears to the Court to have been prepared by a lawyer.

18. On the last business day before trial—June 1, 2018—Bradley Evans, an

attorney licensed in the State of North Carolina, filed a Notice of Appearance on

behalf of Plaintiff and Boudreau and immediately thereafter filed the Motion. (See Notice of Appearance, ECF No. 45; Pl. & Third Party Def. Carolina Home Solutions,

I, Inc.’s & Def. Boudreau’s Mot. Admission Pro Hac Vice of Loncon, ECF No. 43.) The

Court convened a telephone conference that same day with Mr. Evans and counsel

for Defendant, during which the Court orally denied the Motion. Mr. Evans informed

the Court that he had only been retained that day and requested a short continuance

to prepare for trial. Defendant’s counsel acknowledged that a modest delay in

commencing trial would not unduly prejudice Defendant. The Court therefore agreed

to continue the trial for a relatively short time period to permit Mr. Evans an

opportunity to prepare for trial and allow the parties to engage in mediation.

II.

LEGAL ANALYSIS

19. North Carolina law is clear that pro hac vice admission to practice in the

courts of this State “is not a right but a discretionary privilege.” Couch v. Private

Diagnostic Clinic, 146 N.C. App. 658, 669, 554 S.E.2d 356, 364 (2001); see N.C. Gen.

Stat § 84-4.1 (“Compliance with the [statutory requirements for a pro hac vice motion]

does not deprive the court of the discretionary power to allow or reject the

application.”). The authority provided by the statute governing pro hac vice

admission ensures “a means to control out-of-state counsel and to assure compliance

with the duties and responsibilities of attorneys practicing in this State.” Couch, 146

N.C. App. at 670, 554 S.E.2d at 365. “Such a right is ‘permissive and subject to the

sound discretion of the Court.’” Id. at 669, 554 S.E.2d at 364 (quoting State v. Hunter,

290 N.C. 556, 568, 227 S.E.2d 535, 542 (1976)). While “a litigant has a fundamental right to select the attorney who will represent him in his lawsuit,” Hagins v.

Redevelopment Comm’n, 275 N.C. 90, 102, 165 S.E.2d 490, 498 (1969), that right “is

not authority for the proposition that a litigant has a right to be represented in the

courts of North Carolina by counsel who are not duly licensed to practice in this state,”

Leonard v. Johns-Manville Sales Corp., 57 N.C. App. 553, 555–56, 291 S.E.2d 828,

830 (1982).

20. Here, after repeated representations that he would do so, and in disregard

of repeated instructions from the Court, Loncon failed to associate with North

Carolina-licensed counsel and seek pro hac vice admission to participate in this case

for over a year after first advising the Court that he intended to represent Plaintiff

and Boudreau as counsel in this action. Instead, Loncon waited until the Friday

afternoon before the trial’s scheduled Monday commencement to seek pro hac vice

admission with the aid of a North Carolina-licensed attorney who had been retained

that same day. This conduct alone justifies the Court’s denial of the Motion.

21. In addition, in light of the fact that (i) Boudreau is not a North Carolina-

licensed attorney, (ii) Loncon repeatedly indicated to the Court that he represented

Plaintiff and Boudreau in this matter but failed to associate with North Carolina-

licensed counsel and seek pro hac vice admission until June 1, 2018, and (iii)

Boudreau’s portion of the proposed final pretrial order and Boudreau’s trial brief each

appear to have been prepared by an attorney, although each is signed only by

Boudreau, the Court has serious concerns that Boudreau’s portion of the pretrial order submitted to Defendant’s counsel and the trial brief Boudreau filed with the

Court were in fact “ghostwritten” by Loncon.

22. An attorney licensed in North Carolina may draft pleadings on behalf of

a pro se party like Boudreau in a state court proceeding without making an

appearance as counsel of record. See North Carolina State Bar, RPC 114 (July 12,

1991); 2008 Formal Ethics Opinion 3. Such is not the case, however, for an out-of-

state attorney unless the attorney complies with the requirements of section 84-4.1.

Burgess v. Vitola, 2008 NCBC LEXIS 7, at *10–11 (N.C. Super. Ct. Mar. 26, 2008).

As this Court has previously stated, “[t]o hold otherwise would allow attorneys not

licensed or admitted to practice in North Carolina to circumvent this State's

requirements for pro hac vice admission.” Id. at *11.

23. As such, it appears to the Court that Loncon may have engaged in the

unauthorized practice of law in this State. See id. at *10–12 (finding that an out-of-

state attorney who had not made a pro hac vice appearance was engaged in the

unauthorized practice of law by assisting in defendant’s preparation of a motion to

dismiss and other filings submitted to the court).3

24. “[E]ngaging in the unauthorized practice of law is a Class 1 misdemeanor”

under North Carolina law. Id., 2008 NCBC LEXIS 7, at *9 (citing N.C. Gen. Stat. §§

3 Numerous federal courts have “condemn[ed] the ghostwriting of pleadings for parties purporting to appear pro se,” Bittle v. Elec. Ry. Improvement Co., 576 F. Supp. 2d 744, 755 n.9 (M.D.N.C. 2008), including on grounds that the practice constitutes the unauthorized practice of law, see, e.g., Fin. Fair v. Gaston Cty. Family YMCA, No. 3:11-CV-524-MOC-DSC, 2012 U.S. Dist. LEXIS 102493, at *2 (W.D.N.C. June 12, 2012); In re Dreamplay, Inc., 534 B.R. 106, 120 (Bankr. D. Md. 2015) (“[W]hether ‘ghostwriting’ may ever be deemed permissible in this Circuit, that would not excuse an out of state, unadmitted attorney from practicing law without either a license or pro hac vice approval.”). 84-4, 84-8). The Court’s reasonable suspicion that Loncon has engaged in the

unauthorized practice of law in this action provides a separate and independent basis

on which the Court denies the Motion. Foreclosure of a Deed of Trust v. Branch

Banking & Tr. Co., 175 N.C. App. 653, 658, 625 S.E.2d 155, 158–59 (2006) (upholding

trial court’s denial of pro hac vice motion where the trial court found that the out-of-

state attorney had participated in the unauthorized practice of law when he filed

papers with the court without local counsel’s signature while the pro hac vice motion

was pending).

25. In addition, considering the Court’s instructions to Loncon at the December

2017 Pretrial Scheduling Conference, and the specific admonition in the Court’s April

17 Order that “Loncon may not represent Plaintiff in this action unless Plaintiff and

he promptly comply with the requirements of N.C. Gen. Stat. § 84-4.1,” the Court has

serious concerns that Loncon not only engaged in the unauthorized practice of law in

this State, but did so knowingly, intentionally, and willfully to circumvent the

requirements of section 84-4.1 and the Court’s express and repeated directives,

including those contained in the April 17 Order.

26. As a result, the Court concludes that it is appropriate to forward this Order

and Opinion to the North Carolina and Georgia State Bars for review and, if deemed

appropriate, further action concerning Loncon. See Burgess, 2008 NCBC LEXIS 7, at

*18 (sending order addressing non-appearing out-of-state counsel’s ghostwriting to

State Bars of California and North Carolina for review); see also Clay v. United States,

1:11CR304-1, 1:13CV629, 2015 U.S. Dist. LEXIS 25352, at *11 (M.D.N.C. Mar. 3, 2015) (sending order addressing non-appearing out-of-state counsel’s ghostwriting to

State Bars of Florida and North Carolina for review).

III. CONCLUSION

27. WHEREFORE, based on the foregoing, the Court, in the exercise of its

discretion, hereby ORDERS as follows:

a. Plaintiff’s and Boudreau’s Motion is hereby DENIED. Plaintiff and

Boudreau shall continue to be represented by their North Carolina-

licensed counsel of record.

b. A copy of this Order and Opinion shall be provided to the North Carolina

and Georgia State Bars for each State Bar’s review concerning whether

Loncon should be subjected to discipline under the laws and rules of that

State.

SO ORDERED, this the 19th day of June, 2018.

/s/ Louis A. Bledsoe, III Louis A. Bledsoe, III Special Superior Court Judge for Complex Business Cases