Providian National Bank v Bryant, 155 NC App 777 (01-1546) 01/21/2003

Appeal by defendants from judgment entered 16 July 2001 by Judge Chester C. Davis in Forsyth County Superior Court. Heard in the Court of Appeals 11 September 2002.

Faison & Gillespie, by Reginald B. Gillespie, Jr., for plaintiff appellee.

George A. Bryant, pro se, and Nancy M. Bryant, pro se, defendant appellants.

PER CURIAM.

    This appeal arises out of a credit card dispute between plaintiff Providian National Bank (Providian) and defendants George and Nancy Bryant. The pertinent facts are as follows: Defendants entered into a revolving credit account agreement with First Union Direct Bank, N.A. (First Union). First Union subsequently sold the account to Providian, who is now the holder in due course. Over time, defendants accepted and used the credit cards, but failed to pay their credit card balances and defaulted under the terms of the credit agreement. By 27 September 2000, defendants were jointly and severally indebted to Providian in the amount of $12,780.79plus interest, which accrued at a contract rate of 21.9% per year. On 2 November 2000, Providian filed suit to collect the unpaid credit card balance, interest, costs, and attorney's fees. On 30 November 2000, defendants answered, denying the existence of a written credit agreement and requesting dismissal of plaintiff's complaint pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(6) (2001). The case was referred to court-ordered, nonbinding arbitration pursuant to N.C. Gen. Stat. § 7A-37.1 (2001), and an arbitration hearing was set for 1 February 2001.
    Before the arbitration hearing, Providian gave its attorneys, Mr. Stuart M. Sessoms, Jr., and Mr. Robert E. Price, Jr., express written authority “to make binding decisions on its behalf in all matters in controversy related to this proceeding.” Defendants attended the hearing, and Mr. Price appeared on behalf of Providian. Defendants objected to his presence at the arbitration on the grounds that Mr. Sessoms was the attorney named in Providian's documents and Mr. Price stated he represented neither Providian nor Mr. Sessoms. The arbitrator knew that Mr. Price worked with Mr. Sessoms and exercised his power under N.C. Arbitration Rule 3(j) to proceed without a notified party being present. The arbitrator overruled defendants' objection, received evidence, and entered an award on the merits in favor of Providian. On 20 February 2001, defendants appealed the arbitrator's award by timely requesting a trial de novo.
    On 16 March 2001, defendants filed a motion for sanctions against Mr. Sessoms for failing to appear at the arbitrationhearing; the motion also sought dismissal of the action. On 2 April 2001, the trial court conducted an evidentiary hearing on defendants' motion for sanctions. During the hearing, the trial court received a copy of a Certificate of Authority dated 22 January 2001, which stated:
        Providian National Bank has granted to its North Carolina counsel, Sessoms & Rogers, P.A. (and to any duly licensed attorney at law associated by the said Sessoms & Rogers, P.A., to appear on its behalf at any arbitration conducted herein), full and complete authority to make binding decisions on its behalf in all matters in controversy related to this proceeding against [Defendants] . . . before any arbitrator assigned to hear this case.

Thereafter, on 1 May 2001, the trial court entered an order denying defendants' motion for sanctions. Defendants filed an interlocutory appeal   (See footnote 1) from the denial of their motion for sanctions on 9 May 2001 to this Court, No. COA01-754. In a separate opinion filed 21 January 2003, we addressed defendants' arguments and affirmed the trial court's denial of the motion for sanctions.
    The case proceeded in the trial court. In early June 2001, defendants received written notice that the case had been peremptorily set for trial on 2 July 2001. Defendants also received a trial calendar which indicated a trial date of 2 July 2001. Despite the notification, defendants failed to appear at the trial because they believed their appeal from the order denying theirmotion for sanctions stayed any further proceedings. After reviewing both defendants' appeal and N.C. Gen. Stat. § 1-294 (2001), the trial court determined that the case could go forward and exercised its discretion to begin the trial the next day.
    Both the courtroom clerk and the trial judge made several attempts to contact defendants by telephone and left messages on their answering machine telling them the trial would begin on 3 July and that they had to appear if they wanted to be heard regarding the trial court's decision that their appeal did not stay further proceedings. The trial court also informed defendants that the 3 July court date was set so the parties could proceed with the trial de novo defendants previously requested. Defendants called the trial court's voice mail system after 5:00 p.m. on 2 July and left a message acknowledging receipt of the earlier messages and reiterating their belief that their appeal from the order denying their motion for sanctions stayed further proceedings. Defendants did not appear in court the next day. The trial court proceeded with the trial and entered a judgment for Providian on 16 July 2001. On 1 October 2001, defendants appealed to this Court, No. COA01-1546. By order dated 12 March 2002, this Court ordered that the two appeals be consolidated for hearing pursuant to N.C.R. App. P. 40 (2002).
    Defendants filed two separate appeals which both arose out of the same factual history. Consequently, two separate opinions have been issued by this Court. In their appeal from the denial of their motion for sanctions, defendants challenged the trial court'sfindings of fact regarding Mr. Price's authority to appear at the arbitration and argued that the trial court committed reversible error in denying their motion for sanctions. Upon review, we affirmed the trial court's order denying defendants' motion for sanctions. See No. COA01-754, filed 21 January 2003. We fully adopt and incorporate the reasoning of that opinion and now turn to the present appeal, which deals with defendants' contention that the judgment on the merits in favor of Providian was erroneous.
    In their appeal from the trial court's judgment in favor of Providian, defendants argue that the trial court's findings of fact were not supported by competent evidence and that the trial court committed reversible error by denying their motion for sanctions. Defendants further argue that the trial court lacked jurisdiction to proceed with the trial de novo because they perfected their appeal of the denial of their motion for sanctions and stayed all further proceedings in the case. We disagree.
    N.C. Gen. Stat. § 1-294 (2001) provides:
            When an appeal is perfected as provided by this Article it stays all further proceedings in the court below upon the judgment appealed from, or upon the matter embraced therein; but the court below may proceed upon any other matter included in the action and not affected by the judgment appealed from.

After considering defendants' appeal and consulting N.C. Gen. Stat. § 1-294, the trial court made the following pertinent findings of fact:
            9.    The defendants' interlocutory appeal was taken specifically with respect to thedecision of the Court not to grant sanctions against the plaintiff and its counsel. No part of the appeal dealt with any substantive issues involved in the underlying action which is the subject of this trial.

            * * * *

            14. The Court carefully reviewed the nature of the matter on appeal, and consulted with the Clerk of the N.C. Court of Appeals, who referred the Court to G.S. § 1-294.

            15.    After reviewing the contents and substance of the defendants' interlocutory appeal, and the statutory and case law related to the scope of the stay on appeal, the Court concluded that the order denying the defendants' motion for sanctions did not deprive the defendants of any substantial right, and the defendants' appeal on that narrow issue did not serve to stay the trial of the underlying action in this case. In the exercise of its discretion, the Court concluded that the ends of justice would best be served by proceeding with the trial, after notice to the defendants. (See, e.g., Veazey v. City of Durham, 231 N.C. 354, 57 S.E.2d 375 (1950), Cox v. Cox, 246 N.C. 528, 98 S.E.2d 879 (1957), and Carleton v. Byers, 71 N.C. 331 1874).)

    Although defendants were entitled to appeal the denial of their motion for sanctions pursuant to N.C. Gen. Stat. § 1-277 (2001), the appeal did not stay further proceedings. The trial court correctly determined that the appeal dealt solely with the issue of sanctions and did not address the substantive issues in the underlying action. We hold the trial court correctly applied the law to this case and retained jurisdiction to proceed with the trial on the merits. Defendants' arguments are without merit and are therefore overruled.
     After careful examination of the records below and thearguments of the parties, we believe the trial court acted properly in all respects. Accordingly, the trial court's judgment in favor of Providian is affirmed.
    Affirmed.
    Panel consisting of:
    Judges McCULLOUGH, TYSON and BRYANT.
    Report per Rule 30(e).

Footnote: 1