Civil Procedure--Rule 60 motion for relief--default judgment
The trial court abused its discretion by allowing
defendants' Rule 60 motion for relief from a default judgment
where the record was devoid of any evidence excusing defendant
Mena, defendant Carreta was aware of the pending litigation prior
to the judgment, and defendant Caretta's insurance carrier knew
that entry of default had been rendered, but failed to give
defense of the lawsuit the attention usually given to important
business in the exercise of ordinary prudence. N.C.G.S. § 1A-1,
Rule 60(b).
George M. Anderson, G. Henry Temple, Jr. and Stephen W.
Petersen, for plaintiff-appellant.
Anderson, Johnson, Lawrence, Butler & Bock, L.L.P., by Steven
C. Lawrence, for defendant-appellees.
JOHN, Judge.
Plaintiff Audrey Joyner Gibson appeals the trial court's 29
September, 1999 order (the Order) setting aside a default judgment
entered against defendants Idael Mena and Carreta Transport, Inc.
(collectively “defendants”; individually Mena and Carreta) in favor
of plaintiff. We reverse the trial court.
The instant action was instituted by complaint filed 18
November 1997. Plaintiff alleged defendants' negligence arising
out of an automobile collision occurring 25 July 1996 on Interstate
Highway 95 in Robeson County. Service upon defendants, out-of-state individuals or entities, was effected through the North
Carolina Department of Motor vehicles pursuant to N.C.G.S. § 1-105
(1999). Specifically, copies of the summons and complaint were
personally served upon Janice Faulkner, North Carolina Commissioner
of Motor Vehicles (the Commissioner), who, through her agent,
mailed notice of summons and complaint along with copies thereof to
each defendant on 2 December 1997. The set of documents for Mena
were mailed to an address in Syracuse, New York, but were returned
to the Commissioner undelivered. Carreta's documents were directed
to the care of Orlando Silva, statutory service agent, as well as
to the “President of Carreta Transport, Inc.” The documents sent
to Carreta's president were delivered and received 5 December 1997.
In addition, Notice of Service of Process by Publication on
defendants appeared in The Robesonian, a newspaper published in
Robeson County, on 14, 21 and 28 December, 1998. Defendants
neither filed answer, nor requested an extension of time in which
to answer, nor otherwise filed any other pleading in response to
the complaint.
On 5 April 1999, plaintiff moved for entry of default and
default judgment, and notice of hearing of the motions was mailed
to Mena and Carreta on 25 and 26 March 1999 respectively.
Following an 8 April 1999 entry of default, the trial court entered
default judgment (the Judgment) against defendants on 3 May 1999 in
the amount of $950,000.00 plus costs and interest.
Defendants thereafter filed a 29 July 1999 motion (defendants'
motion) to set aside the Judgment on grounds defendants had acted
with excusable neglect. However, defendants sought to contest onlythe issue of compensatory damages.
Attached to defendants' motion were affidavits from Evelio
Prieto (Prieto), owner of Carreta, Michaele J. Grove (Grove),
senior claims supervisor for John Deere Transportation Services
(John Deere), defendants' insurance carrier, and Anthony Thomas
Foley (Foley), a certified adjuster retained by John Deere.
Inter alia, defendants' motion asserted as follows:
9. That neither the Defendants nor John Deere
was aware of the Motion for Default Judgment
(see attached Affidavits of Foley and Grove
and supplementary Affidavit of Evelio Prieto);
. . .
12. That the failure of Defendants and John
Deere to retain defense counsel upon the
filing and service of this action based on
John Deere's desire to first evaluate the case
to determine if it could be settled prior to
proceeding with litigation, constituted
excusable neglect[.]
After a hearing, both plaintiff and defendants submitted
proposed orders to the trial court. Plaintiff's submission,
entitled “Plaintiff's Proposed Findings of Fact and Conclusions of
Law,” included findings of fact. Subsequently, the trial court
entered the Order, stating
the failure of Defendants to file answer or
otherwise plead or appear in this action was
due to excusable neglect, and good cause exist
[sic.] for setting aside the default
judgment[.]
The Order included no supporting findings of fact. Plaintiff
appeals.
Initially, we note the appealed Order set aside the Judgment
and that orders setting aside default judgments are interlocutoryand ordinarily not appealable. Bailey v. Gooding, 301 N.C. 205,
208-09, 270 S.E.2d 431, 433 (1980). Notwithstanding, we elect in
our discretion to treat plaintiff's purported appeal as a petition
for certiorari pursuant to North Carolina Rule of Appellate
Procedure 21, and to grant the writ and address the merits. See
N.C.G.S. § 7A-32(c) (1999)(Court of Appeals has jurisdiction to
issue writ of certiorari “in aid of its own jurisdiction”; N.C.R.
App. P. 21(a)(1)(“writ of certiorari may be issued in appropriate
circumstances by either appellate court to permit review of . . .
orders of trial tribunals when . . . no right of appeal from an
interlocutory order exists); and Munn v. Munn, 112 N.C. App. 151,
154, 435 S.E.2d 74, 76 (1993) (it is “within [the] prerogative” of
this Court to treat an “appeal as a petition for writ of certiorari
and grant the writ”).
Plaintiff first contends the trial court erred by failing to
set out findings of fact in the Order. Plaintiff also maintains
the trial court abused its discretion in setting aside the Judgment
because the evidence was insufficient to support the court's
ruling. We consider plaintiff's arguments ad seriatim.
N.C.G.S. § 1A-1, Rule 60(b) (1999) allows a party, on motion
to the trial court, to seek relief from a final judgment on the
grounds of mistake, inadvertence, surprise or excusable neglect.
A Rule 60(b) motion is addressed to the sound discretion of the
trial court and its ruling will not be disturbed absent an abuse of
that discretion. Vuncannon v. Vuncannon, 82 N.C. App. 255, 258,
346 S.E.2d 274, 276 (1986). Rendition of findings of fact is notrequired of the trial court in ruling upon a Rule 60(b) motion
absent the request of a party, “although it is the better practice
to do so.” Grant v. Cox, 106 N.C. App. 122, 125, 415 S.E.2d 378,
380 (1992); see also N.C.G.S. § 1A-1, Rule 52(a)(2) (1999).
In the case sub judice, the trial court entered no findings of
fact upon which to base its legal conclusion of excusable neglect.
Plaintiff asserts its proposed order contained a request for
findings of fact as follows:
Plaintiff, Audrey Joyner Gibson, respectfully
submits to the Court pursuant to Rule 52 of
the North Carolina Rules of Civil Procedure
and hereby moves that Findings of fact and
Conclusions of Law be included in its Order on
Defendants' Motion to Set Aside Judgment heard
by Honorable Robert F. Floyd, Jr., on August
16, 1999, as follows:
. . . .
Subsequently, twenty-three findings of fact and nine conclusions of
law were delineated. [Petition for Writ of Certiorari].
Although plaintiff's proposed order arguably might be
construed, as she contends, as a generalized Rule 52 request for
findings of fact in support of the court's subsequent Order as
opposed to requested specific findings, we are unable to resolve
this question conclusively in plaintiff's favor. The Order
therefore is not subject to being vacated due to the absence of
findings of fact.
However, a Rule 60(b) order without findings of fact must be
reversed unless there is evidence in the record sustaining findings
which the trial court could have made to support such order. See
Grant, 106 N.C. App. at 125, 415 S.E.2d at 380 (where trial courtrenders no findings of fact in order denying Rule 60(b) motion,
“the question on appeal is 'whether, on the evidence before it, the
court could have made findings of fact sufficient to support its
legal conclusion'” (citation omitted)).
In short, the issue before us is whether, given the evidence
presented to the trial court, that court could have made findings
of fact sufficient to support its legal conclusion that excusable
neglect had been shown. See id.
While there is no clear dividing line as to
what falls within the confines of excusable
neglect as grounds for the setting aside of a
judgment, what constitutes excusable neglect
depends upon what, under all the surrounding
circumstances, may be reasonably expected of a
party in paying proper attention to his case.
Excusable neglect must have occurred at or
before entry of judgment and must be the cause
of the default judgment being entered.
Thomas M. McInnis & Assoc., Inc. v. Hall, 318 N.C. 421, 425, 349
S.E.2d 552, 554-55 (1986)(citations omitted).
In materials presented to the trial court, defendants explained
the failure to retain counsel as being based upon their insurance
carrier's “desire to first evaluate the case to determine if it
could be settled prior to proceeding with litigation[.]” In his
affidavit dated 30 July 1999, for example, Prieto stated,
[a]lthough I was aware of the lawsuit prior to
April of 1999, I assumed that my company's
insurance carrier, John Deere Transportation
Services, was handling this matter.
. . . .
[p]rior to several weeks ago, I have never
received nor been made aware of any Motions
for Default or Default Judgments being entered
against my company.
Grove's affidavit related that, in his capacity as senior
claims adjuster for John Deere, he became aware of the 1996
accident within one week thereafter, that he assigned the case to
an adjuster who attempted to resolve plaintiff's bodily injury
claim, and that the adjuster could not obtain all pertinent medical
bills and records and closed plaintiff's file in January, 1997.
Grove stated he had notified plaintiff's attorney that John Deere
would like to settle plaintiff's claim. Grove also expressed his
April, 1998 understanding that entry of default had been directed
against defendants as to liability only, but that no default
judgment had been entered.
Foley submitted an affidavit stating John Deere had accepted
liability for the collision involving plaintiff and had authorized
him to attempt to settle all viable claims. After plaintiff had
resolved her daughter's claim and the property damage claim, Foley
continued, he requested plaintiff's medical bills in January, 1997.
When Foley received no response from plaintiff, he closed her file
in April, 1997.
Upon careful review, we hold the foregoing evidence before the
trial court was insufficient as a matter of law to show excusable
neglect. Defendant Carreta was aware of the pending litigation
prior to the Judgment, and John Deere, Caretta's insurance carrier,
knew in April, 1998, that entry of default had been rendered
against Caretta, yet failed to give defense of the lawsuit that
attention usually given to important business in the exercise of
ordinary prudence. See Financial Corp. v. Mann, 36 N.C. App. 346,
350, 243 S.E.2d 904, 907 (1978) (no excusable neglect where“defendant simply did not give to his defense the attention which
a man of ordinary prudence usually gives his important business”).
Further, the record is devoid of any evidence excusing defendant
Mena.
In sum, the trial court abused its discretion in allowing
defendants' motion for relief from default judgment, and the Order
setting aside the Judgment is therefore reversed. See id.
(“[b]ecause defendant presented insufficient evidence to support
the trial court's conclusion of excusable neglect, the order
setting aside the judgment” must be reversed).
Reversed.
Judges WYNN and MCGEE concur.
*** Converted from WordPerfect ***