Appeal by defendant from order entered 31 July 2002, from
judgment entered 31 July 2002, and from order entered 4 September
2002 by Judge Albert A. Corbett, Jr., in District Court, Lee
County. Heard in the Court of Appeals 18 September 2003. As the
issues presented by defendant's appeals to this Court arise out of
the same action and involve common questions of law, we have
consolidated the appeals pursuant to Rule 40 of the North Carolina
Rules of Appellate Procedure.
Bain & McRae, by Edgar R. Bain and Alton D. Bain, for
plaintiffs-appellees.
Walker, Clark, Allen, Grice & Ammons, L.L.P., by Jerry A.
Allen, Jr. and Gay Parker Stanley, for defendant-appellant.
McGEE, Judge.
Patrick Elliott, guardian
ad litem for Brian Elliott, and
Maria Elliott, hereafter referred to collectively as plaintiffs,
filed suit against Shirley Birth (defendant) on 26 May 1998.
Defendant filed an answer and demand for jury trial on 5 August
1998. Defendant filed an offer of judgment for $1,501.00 on 22
December 1998, which plaintiff Patrick Elliott rejected. Defendant
also filed an offer of judgment for $2,001.00, which plaintiff
Maria Elliott rejected. Prior to trial, defendant stipulated that
her negligence was the proximate cause of the accident. The cases
were consolidated and tried before a jury on 7 January 1999 only on
the issue of the amount of damages. The jury returned a $350.00
verdict in favor of Patrick Elliott and a $1,000.00 verdict in
favor of Maria Elliott. Plaintiffs filed motions to set aside the
verdicts on the grounds they were inadequate and not supported by
the evidence. The trial court granted the motions to set aside the
verdicts. Following two subsequent appeals by defendant to this
Court, we reversed the trial court and reinstated the jury
verdicts.
Plaintiffs then filed motions for allowance of attorney's fees
on 14 May 2002 and defendant filed a response to the motions on 2
July 2002. The trial court announced its decision to award
attorney's fees to plaintiffs in open court on 12 July 2002.
Defendant filed a motion for reconsideration and rehearing on 30
July 2002. The trial court entered an order on 31 July 2002
allowing plaintiffs' motions for attorney's fees. The trial court denied defendant's motion for reconsideration and rehearing in an
order entered 4 September 2002. Defendant appeals the 31 July 2002
order and the 4 September 2002 order.
Brian Elliott, a minor child, and Maria Elliott were injured
in a motor vehicle accident on 27 November 1997 in Wake County.
Plaintiffs' attorney wrote a letter to defendant's liability
carrier, Allstate Insurance Company (Allstate), on 30 December
1997, informing Allstate that he represented plaintiffs regarding
the accident. Allstate received the letter on 31 December 1997,
and a claims representative, Debra Gibbens (Ms. Gibbens), responded
to the letter on 12 January 1998.
Plaintiffs' attorney acknowledged receipt of the 12 January
1998 letter on 14 April 1998 and forwarded plaintiffs' medical
records and bills and a demand for settlement for Maria Elliott in
the amount of $4,000.00. Ms. Gibbens completed her evaluation of
the settlement packages for each claimant on 22 May 1998.
Plaintiffs filed suit on 26 May 1998. Ms. Gibbens received
settlement authority on 2 June 1998 for each claim arising out of
the automobile accident.
"As a general rule, in the absence of some contractual
obligation or statutory authority, attorney fees may not be
recovered by the successful litigant as damages or a part of the
court costs."
Washington v. Horton, 132 N.C. App. 347, 349, 513
S.E.2d 331, 333 (1999). "However, N.C. Gen. Stat. § 6-21.1 (1999)
'creates an exception to the general rule that attorney's fees are
not allowable as part of the costs in civil actions.'"
Robinson v.Shue, 145 N.C. App. 60, 64, 550 S.E.2d 830, 833 (2001) (quoting
Hill v. Jones, 26 N.C. App. 168, 169, 215 S.E.2d 168, 169,
cert.
denied, 288 N.C. 240, 217 S.E.2d 664 (1975)). N.C. Gen. Stat. § 6-
21.1 (2003) provides that
[i]n any personal injury or property
damage suit, or suit against an insurance
company under a policy issued by the defendant
insurance company and in which the insured or
beneficiary is the plaintiff, upon a finding
by the court that there was an unwarranted
refusal by the defendant insurance company to
pay the claim which constitutes the basis of
such suit, instituted in a court of record,
where the judgment for recovery of damages is
ten thousand dollars ($10,000) or less, the
presiding judge may, in his discretion, allow
a reasonable attorney fee to the duly licensed
attorney representing the litigant obtaining a
judgment for damages in said suit, said
attorney's fee to be taxed as a part of the
court costs.
Our Supreme Court set forth the following rationale for the statute
in
Hicks v. Albertson,
284 N.C. 236, 239, 200 S.E.2d 40, 42 (1973):
The obvious purpose of this statute is to
provide relief for a person who has sustained
injury or property damage in an amount so
small that, if he must pay his attorney out of
his recovery, he may well conclude that [it]
is not economically feasible to bring suit on
his claim. In such a situation the
Legislature apparently concluded that the
defendant, though at fault, would have an
unjustly superior bargaining power in
settlement negotiations. . . . This statute,
being remedial, should be construed liberally
to accomplish the purpose of the Legislature
and to bring within it all cases fairly
falling within its intended scope.
Defendant first argues the trial court abused its discretion
in granting plaintiffs' motions for attorney's fees under N.C. Gen.
Stat. § 6-21.1. "The allowance of attorney fees is in thediscretion of the presiding judge, and may be reversed only for
abuse of discretion."
Washington, 132 N.C. App. at 351, 513 S.E.2d
at 334. "To prevail, defendant must show that the trial court's
ruling is 'manifestly unsupported by reason or is so arbitrary that
it could not have been the result of a reasoned decision.'"
Robinson, 145 N.C. App. at 65, 550 S.E.2d at 833 (quoting
State v.
Hennis, 323 N.C. 279, 285, 372 S.E.2d 523, 527 (1988)). Within
this argument, defendant asserts multiple assignments of error.
Several of defendant's assignments of error, being numbers
seven, thirteen, fifteen, and eighteen, present the single question
of how defendant's settlement offers, pursuant to N.C. Gen. Stat.
§ 1A-1, Rule 68, compared to the judgments finally obtained by
plaintiffs. Defendant argues that the trial court's finding that
the offers of judgment were less favorable than the judgments
finally obtained was not supported by the evidence. We find this
argument to be without merit.
In
Poole v. Miller, 342 N.C. 349, 464 S.E.2d 409 (1995),
our
Supreme Court determined that within the context of offers of
judgment, the phrase "judgment finally obtained" means "the amount
ultimately entered as representing the final judgment, i.e., the
jury's verdict as modified by any applicable adjustments, by the
respective court in the particular controversy, not simply the
amount of the jury's verdict."
Poole, 342 N.C. at 353, 464 S.E.2d
at 411.
Defendant offered plaintiff Patrick Elliott $1,501.00.
However, the judgment finally obtained, including the $350.00verdict and the $4,285.00 attorney's fee, is more favorable than
defendant's offer. Similarly, defendant offered plaintiff Maria
Elliott $2,001.00. However, the judgment finally obtained, the
$1,000.00 verdict plus $4,285.00 in attorney's fees, is also more
favorable than defendant's offer of judgment.
See Poole, 342 N.C.
at 354, 464 S.E.2d at 412. Accordingly, the trial court did not
err when it found that "[t]he offers of judgment made pursuant to
Rule 68 by the Defendant were less favorable than the judgments
which are finally obtained in these cases."
By assignments of error numbers four, five, twelve, fourteen,
and seventeen, defendant presents the issue of whether defendant's
settlement offers were timely. Specifically, defendant argues that
the trial court's findings and conclusions that (a) there was no
reasonable excuse for defendant's failure to make an offer prior to
plaintiffs' filing suit and (b) that the offers finally made were
untimely, are not supported by the evidence. Again, we find this
argument to be without merit.
The automobile collision occurred on 27 November 1997 and
plaintiffs' attorney sent a demand for settlement to defendant on
14 April 1998. Plaintiffs waited six weeks before filing suit on
26 May 1998. Defendant filed and served a request for monetary
relief sought on 14 August 1998. Plaintiffs served a response
three days later, requesting $9,500.00 for each plaintiff.
Plaintiffs made no other demands. Defendant filed two offers of
judgment on 22 December 1998: (1) a $1,501.00 offer to Patrick
Elliott and (2) a $2,001.00 offer to Maria Elliott. Defendant argues that because plaintiffs waited only six weeks
between the demand for settlement and filing suit, defendant did
not have adequate time to propose an offer to plaintiffs. However,
we hold the trial court did not err in finding the timing to be
unreasonable because defendant had authority to settle plaintiffs'
claims as of 2 June 1998. Liability was clear as evidenced by
defendant's stipulation prior to trial that her negligence was the
proximate cause of the accident and therefore the only issue
submitted to the jury was damages. The case was set for trial the
week of 4 January 1999, and defendant waited until 22 December 1998
to file offers of judgment. These facts support a finding that
defendant's timing was unreasonable and the trial court did not
err.
Defendant's assignments of error six and sixteen present the
issue of whether the trial court erred in finding that defendant
"unjustly exercised superior bargaining power over the Plaintiffs."
In addressing this factor, the trial court noted the following:
Defendant unjustly exercised superior
bargaining power over the Plaintiffs by not
making any offers of settlement until on
December 22, 1998, at a time when the matters
were set for trial on January 4, 1999. The
timing of the offers so closely to the date of
trial and the timing of the offers during the
Christmas holidays are evidence of the
Defendant's attempt to exercise superior
bargaining power. The Court further has
considered the letter of Jerry Allen,
Defendant's attorney, to Edgar R. Bain in
which it was stated that if the Court allowed
any attorney fees in this case, the matter
would be appealed to the Court of Appeals,
even though this matter had twice been
appealed to the North Carolina Court of
Appeals previously. The offers of judgmentlikewise included all costs, attorney fees and
recovery for the Plaintiffs. This was an
attempt to escape the payment costs and
reasonable fees.
In recognition of the broad discretion of the trial court, we hold
the trial court did not err in finding an exercise of superior
bargaining power by defendant based on these facts. Accordingly,
these assignments of error are also overruled.
Defendant's assignments of error eight, nine, and ten relate
to how the trial court determined the amount of attorney's fees to
be awarded in these cases. When determining if attorney's fees are
reasonable, "'the record must contain findings of fact as to the
time and labor expended, the skill required, the customary fee for
like work, and the experience or ability of the attorney' based on
competent evidence."
Porterfield v. Goldkuhle, 137 N.C. App. 376,
378, 528 S.E.2d 71, 73 (2000) (quoting
Brookwood Unit Ownership
Assn. v. Delon, 124 N.C. App. 446, 449-50, 477 S.E.2d 225, 227
(1996)
(quoting
West v. Tilley, 120 N.C. App. 145, 151, 461 S.E.2d
1, 4 (1995) (citations omitted)). The trial court made the
appropriate findings which were adequately supported by the
evidence. The trial court relied on an affidavit by plaintiffs'
attorney regarding the time expended on the cases. Further, the
trial court referenced affidavits of practicing attorneys who
asserted that $200.00 was a reasonable hourly rate. The trial
court also noted plaintiffs' attorney's experience of forty years
and his "A" rating in
Martindale Hubbell. In light of the broad
discretion of the trial court, we hold the trial court did not err
in its finding of the number of hours worked by plaintiffs'attorney and its finding of an appropriate hourly rate based on
these facts. Accordingly, we overrule these assignments of error.
Defendant also argues in assignments of error numbers three,
twenty, and twenty-one, that the trial court erred in summarily
denying defendant's motion for reconsideration and rehearing
without considering the affidavit of Ms. Gibbens. We first note
defendant did not cite any relevant authority in her brief to this
Court in support of her argument, and pursuant to N.C.R. App. P.
28(b)(6), has waived appellate review of this issue. However, in
our discretion, we elect to review this argument. N.C.R. App. P.
2.
Defendant moved for reconsideration and rehearing pursuant to
N.C. Gen. Stat. § 1A-1, Rules 59 and 60. "A Rule 59(e) motion to
amend the trial court's judgment or order is, of course, made
subsequent to the judgment and is, itself, a matter within the
trial court's discretion."
Strickland v. Jacobs, 88 N.C. App. 397,
399, 363 S.E.2d 229, 230 (1988). A trial court's ruling on the
motion is not reviewable on appeal in the absence of abuse of
discretion.
Hamlin v. Austin, 49 N.C. App. 196, 270 S.E.2d 558
(1980).
In its 4 September 2002 order, the trial court made the
following findings of fact:
2. The motion for attorney's fees and
costs was pending for more than 30 days prior
to the time that the matter was heard by the
Court.
3. The Defendant had ample opportunity
to file counter affidavits in connection with
the motion for fees and costs.
. . .
5. The Court considered the affidavits
and oral arguments of the Defendants' counsel,
and the Court is of the opinion that the
Defendants' motion for reconsideration and
rehearing should be denied.
Upon these facts, defendant has failed to show the trial court
abused its discretion in denying the motion for reconsideration
under Rule 59.
Rule 60 of the North Carolina Rules of Civil Procedure permits
relief from judgment for specified reasons. In the case before us,
none of the specific reasons is asserted. Rather, defendant relies
on Rule 60(b)(6), which is "[a]ny other reason justifying relief
from the operation of the judgment."
The rule empowers the court to set aside or
modify a final judgment, order or proceeding
whenever such action is necessary to do
justice under the circumstances. The test for
whether a judgment, order or proceeding should
be modified or set aside under Rule 60(b)(6)
is two pronged: (1) extraordinary
circumstances must exist, and (2) there must
be a showing that justice demands that relief
be granted.
Howell v. Howell, 321 N.C. 87, 91, 361 S.E.2d 585, 588 (1987)
(citations omitted). In this case, defendant has failed to meet
this threshold test. Accordingly, we find these assignments of
error to be without merit.
Affirmed.
Judges HUNTER and CALABRIA concur.
Report per Rule 30(e).
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