Triad MacK Sales and Service, Inc. v. Clement Bros. Co.

438 S.E.2d 485, 113 N.C. App. 405, 1994 N.C. App. LEXIS 29
CourtCourt of Appeals of North Carolina
DecidedJanuary 18, 1994
Docket9321SC199
StatusPublished
Cited by8 cases

This text of 438 S.E.2d 485 (Triad MacK Sales and Service, Inc. v. Clement Bros. 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
Triad MacK Sales and Service, Inc. v. Clement Bros. Co., 438 S.E.2d 485, 113 N.C. App. 405, 1994 N.C. App. LEXIS 29 (N.C. Ct. App. 1994).

Opinion

GREENE, Judge.

Appeal by Clement Brothers Company (Clement Brothers) from an order filed 21 October 1992 entering default against Clement Brothers as a sanction for the failure of a representative of Clement Brothers to personally appear at a court-ordered mediated settlement conference.

In 1990, Blue Ridge Mack Sales and Service, Inc. (Blue Ridge) entered into a contract with Clement Brothers under which Blue Ridge was to sell Clement Brothers two new Mack trucks at a total purchase price of $205,664. When Blue Ridge tendered the two trucks for delivery, Clement Brothers refused delivery. Blue Ridge subsequently merged into Triad Mack Sales and Service, Inc. (Triad Mack), which brought suit against Clement Brothers seeking $222,981 in damages for Clement Brothers’ breach of contract.

On 26 June 1992, Judge Judson D. DeRamus, Jr., entered an order for a mediated settlement conference pursuant to N.C. *407 Gen. Stat. § 7A-38, with such conference to be held on or before 28 September 1992. The order included the following provision:

The following persons shall physically attend the mediated settlement conference:
3. For a corporate party, a representative (officer, director, employee, or in-house counsel) with full authority to settle the claim must attend.

By consent of counsel for both parties, the mediated settlement conference was scheduled for 3 September 1992 at 10:00 a.m.

When the conference was held, Triad Mack was represented by its attorney and by its president, James E. Bland, while Clement Brothers was represented only by its attorney, Richard R. Reamer. No officer, director, employee, or in-house counsel of Clement Brothers was physically present at the mediated settlement conference. At the request of Triad Mack’s counsel, Mr. Reamer unsuccessfully attempted to contact by telephone Clarence Clement, the president of Clement Brothers. Because Mr. Reamer had no settlement authority, the conference resulted in no progress toward a settlement.

On 10 September 1992, Triad Mack filed a motion seeking sanctions for Clement Brothers’ failure to comply with the mediated settlement conference order, requesting among other things, that Clement Brothers’ answer be stricken and that a default be entered. Triad Mack’s motion came on for argument before Judge DeRamus on 19 October 1992, and following a hearing and review of the documents on file, Judge DeRamus entered an order finding that “there was no good cause for [Clement Brothers] failure to appear at the mediated settlement conference . . . , [and] that [Clement Brothers] was not excused from attending the conference.” After considering the imposition of lesser sanctions, Judge DeRamus entered an order which struck Clement Brothers’ answer, entered a default against Clement Brothers, taxed Clement Brothers with Triad Mack’s share of the mediation expenses, and ordered Clement Brothers to pay Triad Mack $170.00 in attorney’s fees. On 10 November 1992, Triad Mack motioned for a default judgment, and on 16 November 1992 Clement Brothers filed notice of appeal from the order imposing sanctions.

*408 Although Triad Mack’s motion for default judgment has not yet been decided by the trial court, this interlocutory appeal of the order striking Clement Brothers’ answer and entering a default does affect a substantial right and is thus properly before this Court. Adair v. Adair, 62 N.C. App. 493, 495, 303 S.E.2d 190, 192, disc. rev. denied, 309 N.C. 319, 307 S.E.2d 162 (1983); Walker v. Liberty Mut. Ins. Co., 84 N.C. App. 552, 554-55, 353 S.E.2d 425, 426 (1987).

The issues presented are whether: (I) Clement Brothers had good cause for failing to attend the settlement conference; and (II) the trial court abused its discretion by striking Clement Brothers’ answer and entering default for Clement Brothers’ failure to attend the conference.

Pursuant to N.C. Gen. Stat. § 7A-38, the North Carolina Supreme Court adopted “Rules Implementing Court Ordered Mediated Settlement Conferences” for those judicial districts selected by the Director of the Administrator of Courts to participate in the mediated settlement conference program. See N.C.G.S. § 7A-38 (Supp. 1991). Under these Rules the Senior Resident Superior Court Judge is authorized to “require parties and their representatives to attend a pre-trial mediated settlement conference in any civil action except habeas corpus proceedings or other actions for extraordinary writs.” Rules Implementing Court Ordered Mediated Settlement Conferences, Rule 1(a) (1993). The Rules specifically require that a corporate party have “an officer, director or employee having authority to settle the claim” “physically attend” the conference. Id., Rule 4(a)(1). Additionally, the corporate party’s counsel of record must attend the conference. Id., Rule 4(a)(2). “If a person fails to attend a duly ordered . . . conference without good cause [or an excuse from the Senior Resident Superior Court Judge, N.C. Gen. Stat § 7A-38(f)], a Resident or Presiding Judge may impose upon the party or his principal any lawful sanction, including . . . any . . . sanction authorized by Rule 37(b) of the Rules of Civil Procedure.” Rules Implementing Court Ordered Mediated Settlement Conferences, Rule 5 (1993). “Good cause” for a person’s failure to attend is an inability to attend caused “neither by its own conduct nor by circumstances within its control.” See Societe Internationale Pour Participations Industrielles v. Rogers, 357 U.S. 197, 211, 2 L. Ed. 2d 1255, 1267 (1958) (discussing sanctions under Rule 37(b)). Rule 37(b)(2) permits the imposition of sanctions “as are just” in- *409 eluding “[a]n order striking out pleadings or parts thereof . . . or rendering a judgment by default against the disobedient party.” N.C.G.S. § 1A-1, Rule 37(b)(2) (1990).

I

At the hearing on sanctions, Triad Mack presented evidence that Clement Brothers, a corporation, was ordered to appear at the conference and that no officer, director, or employee appeared. Clement Brothers, who had the burden of showing its good cause for failing to attend, offered only the unsworn statement of its lawyer that its president was ill and that all other officers, directors and employees were outside the state. This statement is not evidence, see Laing v. Liberty Loan Co. of Smithfield and Albermarle, 46 N.C. App. 67, 71-72, 264 S.E.2d 381, 384, disc. rev. denied and appeal dismissed, 300 N.C. 557, 270 S.E.2d 109 (1980), and was properly not relied upon by the trial court. Furthermore, the record does not reflect that Clement Brothers made any effort to be excused from the conference or to delay the conference.

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Bluebook (online)
438 S.E.2d 485, 113 N.C. App. 405, 1994 N.C. App. LEXIS 29, Counsel Stack Legal Research, https://law.counselstack.com/opinion/triad-mack-sales-and-service-inc-v-clement-bros-co-ncctapp-1994.