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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Car
olina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the
print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be consid
ered authoritative.
TALMYR CLARK, COLIN A. HOLWAY and MICHAEL D. BAKER, in their
respective individual capacities and, alternatively, in their
capacities officers, directors and shareholders of FIBERCAP,
INC., Plaintiffs v. KRISTOPHER PENLAND, RANDY PENLAND, DAVID
PENLAND, in their individual capacities and in their respective
capacities as officers, directors and shareholders of Fibercap,
Inc. and Fibercap Digital, Inc.; and FIBERCAP, INC.; and FIBERCAP
DIGITAL, INC., Defendants
No. COA00-1152
(Filed 18 September 2001)
1. Discovery--sanctions--showing of prejudice--not required
The trial court did not abuse its discretion by entering
default and default judgment for plaintiffs as a sanction for
failure to comply with a discovery order where defendants
contended that there was no prejudice from their failure to
comply, but a showing of prejudice is not required to obtain
sanctions under Rule 37 for abuse of discovery. Moreover, the
court here specifically found that plaintiffs had been prejudiced
and stated that it had determined that lesser sanctions would not
suffice.
2. Appeal and Error--appealability--discovery sanctions--
interlocutory order--substantial right affected
A substantial right was affected by a discovery sanctions
order striking defendants' answer and affirmative defenses and
entering a default judgment.
3. Civil Procedure--Rule 59(e) motion for relief--failure to
state grounds
The trial court did not abuse its discretion by denying a
Rule 59(e) motion for relief from discovery sanctions and a
default judgment where the motion failed to state its grounds.
4. Civil Procedure--Rule 60 relief--carelessness of attorney
The trial court did not abuse its discretion by denying a
Rule 60(b)(1) motion for relief from discovery sanctions and a
default judgment where defendants argued that their counsel
failed to take notice of the order for sanctions. Ignorance,
inexcusable neglect, or carelessness by an attorney will not
provide grounds for Rule 60(b)(1) relief.
Appeal by defendants from orders entered 30 March 2000 and 25
May 2000 by Judge Orlando F. Hudson, Jr. in Wake County Superior
Court. Heard in the Court of Appeals 22 August 2001.
Jordan, Price, Wall, Gray, Jones & Carlton, P.L.L.C., by Paul
T. Flick and Jonathan P. Carr, for plaintiff-appellee.
Parker & Howes, L.L.P., by David P. Parker, for defendant-
appellant.
TYSON, Judge.
David Penland and Randy Penland (defendants) appeal the
trial court's entry of default and default judgment 30 March 2000
in favor of Talmyr Clark, Colin A. Holway, Michael D. Baker, and
Fibercap, Inc. (plaintiffs) and order denying defendants' motion
for relief dated 25 May 2000.
I. Facts
Plaintiffs and defendants agreed to incorporate Fibercap, Inc.
for the installation and sale of fiber optic communications cable
and conduit. During construction of a fiber optic loop for Wake
Forest University, plaintiffs learned that defendants were
appropriating money received from Wake Forest University.
Plaintiffs filed suit on 15 October 1998.
On 18 March 1999, plaintiffs served defendants with a first
set of interrogatories and on 29 July 1999 a second set of
interrogatories. Plaintiffs then moved for an order compelling
discovery. On 15 October 1999, the trial court ordered defendants
to supplement responses to first set of interrogatories and answer
second set of interrogatories within 30 days.
Defendants served their supplemental responses and answers on
15 November 1999. The trial court found defendants' answers were
insufficient. Plaintiffs moved for sanctions. On 30 March 2000,
the trial court found that defendants failed to comply with thecourt order and struck defendants' answer and affirmative defenses,
and entered default judgment on all claims as to liability only.
On 7 April 2000, defendants timely filed a motion for relief
from judgment or order, pursuant to Rule 59 and 60, which motion
was denied on 25 May 2000. Defendants filed notice of appeal on 12
June 2000.
II. Issues
Defendants raise twenty-three assignments of error. Those
assignments of error relating to the findings of facts and
conclusions of law not argued in defendants' brief are deemed
abandoned. N.C. R. App. P. 28(b)(5) (1999). Defendants raise two
issues and argue that the trial court abused its discretion in (1)
entry of default as sanctions against defendants for failure to
comply with discovery requests and (2) denying defendants' motion
for relief. We disagree and affirm the order of the trial court.
A. Sanctions
[1]Defendants argue that the trial court abused its
discretion in entering default and default judgment, and that such
a sanction was too severe. Rule 37(b)(2) allows judgment by
default against the disobedient party when a party or an officer,
director or managing agent of a party . . . fails to obey an order
to provide or permit discovery. N.C. Gen. Stat. Sec. 1A-1, Rule
37(b)(2) (1999). Sanctions under Rule 37 are within the sound
discretion of the trial court and will not be overturned on appeal
absent a showing of abuse of that discretion.
Hursey v. Homes By
Design, Inc., 121 N.C. App. 175, 177, 464 S.E.2d 504, 505 (1995)
(citation omitted). This Court may reverse for abuse of discretiononly upon a showing that the trial court's order is manifestly
unsupported by reason.
Cheek v. Poole, 121 N.C. App. 370, 374,
465 S.E.2d 561, 564 (1996),
cert. denied, 343 N.C. 305, 471 S.E.2d
68 (1996) (citations omitted).
Defendants assert that the trial court committed reversible
error because plaintiffs have not shown any prejudice due to
defendants failure to comply with the court's order compelling
discovery. We disagree. Rule 37 does not require the [movant] to
show that it was prejudiced by the [nonmovant's] actions in order
to obtain sanctions for abuse of discovery.
Roane-Barker v.
Southeastern Hosp. Supply Corp., 99 N.C. App. 30, 37, 392 S.E.2d
663, 668 (1990),
disc. rev. denied, 328 N.C. 93, 402 S.E.2d 418
(1991). Even so, the trial court specifically found that
plaintiffs had been prejudiced. The trial court further stated
that it considered less severe sanctions and determined that lesser
sanctions would not suffice.
Cheek at 374, 465 S.E.2d at 564
(trial court must consider less severe sanctions). We find no
abuse of discretion.
B. Motion for Relief
[2]The entry of default and default judgment by order on 30
March 2000 was not a final default judgment. The trial court
retained jurisdiction to determine the issue of damages. While
this appeal is interlocutory, the order striking defendants'
answer, affirmative defenses, and entering default affects a
substantial right.
Vick v. Davis, 77 N.C. App. 359, 360, 335
S.E.2d 197, 198 (1985) (appeal from order imposing sanctions afterdefendant refused to identify a material witness) (citing
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)).
[3]Defendants argue the trial court abused its discretion in
denying its motion for relief. Defendants' Rule 59(e) motion fails
to state the grounds therefor under section (a) of this rule and as
required under Rule 7(b).
See N.C. Gen. Stat. Sec. 1A-1, Rule
59(e) (1999); N.C. Gen. Stat. Sec. 1A-1, Rule 7(b)(1) (1999);
Meehan v. Cable, 135 N.C. App. 715, 721, 523 S.E.2d 419, 423
(1999). Defendants' Rule 59(e) motion was properly denied.
[4]Rule 60(b)(1) provides that a party may be relieved from
a final judgment, order, or proceeding for mistake, inadvertence,
surprise, or excusable neglect. N.C. Gen. Stat. Sec. 1A-1, Rule
60(b)(1) (1999). Excusable neglect is something which must have
occurred at or before entry of the judgment, and which caused it to
be entered.
PYA/Monarch, Inc. v. Ray Lackey Enterprises, Inc., 96
N.C. App. 225, 227, 385 S.E.2d 170, 171 (1989) (citations omitted).
In determining whether to grant relief under Rule 60(b)(1), the
trial court acts within its sound discretion.
Harris v. Harris,
307 N.C. 684, 687, 300 S.E.2d 369, 372 (1983) (citation omitted).
The ruling will be disturbed only upon a showing of abuse of
discretion.
Id.
Defendants claim that the trial court's denial of their motion
for relief was manifestly unsupported by reason. Defendants fail
to articulate the basis for this argument. We note that Defendants
argued in their Rule 60(b)(1) motion that defendants' counselmistakenly failed to take note of the order for sanctions, which
was timely served, and mistakenly thought that the motion for
sanctions that appeared on the court docket pertained to another
defendant. Ignorance, inexcusable negligence, or carelessness on
the part of an attorney will not provide grounds for relief under
Rule 60(b)(1).
Henderson v. Wachovia Bank of N.C., N.A., 145 N.C.
App. 621, ___ S.E.2d ___, ___ (2001) (citing
Briley v. Farabow, 348
N.C. 537, 545, 501 S.E.2d 649, 655 (1998). The choice of sanctions
under Rule 37 lies within the trial court's discretion and the
sanctions imposed by the trial court are among those expressly
authorized by the statute. We find no abuse of discretion by the
trial court in denying defendants' motion. The judgment and order
are affirmed.
Affirmed. &nbs
p;
Judges WYNN and HUNTER concur.
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