1. Judgments; Liens--default judgment--validity--lien enforcement not ordered
No portion of a default judgment entered by the clerk of court in favor of a subcontractor
was void where plaintiff sought a lien under N.C.G.S. Ch. 44A in its complaint but did not move
for enforcement of a lien in its motion for default judgment, and the clerk of court did not order
enforcement of a lien in the default judgment. N.C.G.S. § 1A-1, Rule 55(b)(1).
2. Civil Procedure--default judgment--excusable neglect--
waiting to be informed of
hearing time
The trial court did not err by denying a motion for relief from a default judgment under
N.C.G.S. § 1A-1, Rule 60(b)(1) based on excusable neglect where defendant did not contact an
attorney until after the default judgment because it was under the impression that it would be
informed of a hearing time by plaintiff.
3. Civil Procedure_denial of Rule 60 motion_findings
The trial court made sufficient findings which addressed the issue of excusable neglect in
denying defendant's Rule 60 motion for relief from a default judgment.
Aldridge, Seawall, Spence & Felthousen, LLP. by Christopher L.
Seawall and Thomas P. Routten for defendant-appellant.
The Twiford Law Firm, P.C., by Edward A. O'Neal for plaintiff-
appellee.
WYNN, Judge.
When a party is duly served with a summons, yet fails to give
his or her defense the attention to which a person of ordinary
prudence usually gives his or her important business, there is no
excusable neglect to allow setting a default judgment aside underRule 60(b). E. Carolina Oil Transp., Inc. v. Petroleum Fuel &
Terminal Co., 82 N.C. App. 746, 748, 348 S.E.2d 165, 167 (1986),
disc. rev. denied, 318 N.C. 693, 351 S.E.2d 745 (1987). In this
case, Defendant through its agent contended that after receiving
the summons in this matter, he was under the impression that he
would be informed of a hearing time and did not contact an attorney
until after the default judgment was entered. Because a party's
failure to hire an attorney or mistaken belief that it would be
informed of a hearing date does not constitute excusable neglect,
we find no abuse of discretion by the trial court in denying
Defendant's Rule 60(b) motion.
Plaintiff, JMM Plumbing and Utilities, Inc. (“JMM Plumbing”),
is a North Carolina corporation with its principal place of
business in Pasquotank County. Defendant, Basnight Construction
Company, Inc. (“Basnight Construction”), is a North Carolina
corporation with its principal place of business in Dare County.
Basnight Construction was a subcontractor of Peters and White
Construction Company, located in Chesapeake, Virginia, on a
contract for the installation of sewage collection lines and
treatment facilities in Hyde County, North Carolina. On 30 May
2001, JMM Plumbing and Basnight Construction entered into a written
subcontract agreement for the Hyde County project. JMM Plumbing
billed Basnight Construction for work which it performed and
Basnight Construction did not pay those bills.
On 30 December 2002, JMM Plumbing filed a Complaint alleging
money was owed by Basnight Construction under the subcontract inthe amount of $41,776.87 plus statutory interest. JMM Plumbing
also requested a lien on all funds owed to Basnight Construction by
Peters and White Construction Company.
After receiving the complaint, Jimmie Basnight,
secretary/treasurer of Basnight Construction, contacted JMM
Plumbing about the lawsuit. After that conversation, he “assumed
that [JMM Plumbing and Basnight Construction] were going to go to
court to get [JMM Plumbing's] money.” Basnight Construction did
not file an answer or any response to the complaint.
On 11 February 2003, JMM Plumbing was granted an entry of
default and a judgment by default in the amount of $41,776.87 plus
interest and costs. JMM Plumbing voluntarily dropped its claim for
a lien. On 31 July 2003, Basnight Construction filed a motion for
relief from final judgment on the grounds of mistake, inadvertence,
and/or excusable neglect. After a hearing, Judge William C.
Griffin, Jr. entered an order on 21 January 2004, denying Basnight
Construction's motion for relief from judgment. Basnight
Construction appealed from this order.
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On appeal, Basnight Construction argues that the trial court
erred by: (1) granting JMM Plumbing's judgment by default; (2)
denying its motion for relief from judgment; and (3) failing to
make appropriate findings of fact in the order denying relief from
judgment. We disagree.
[1] Basnight Construction first contends that the trial court
erred by granting JMM Plumbing's judgment by default because theclerk of court was without jurisdiction to make a ruling on the
lien pursuant to Rule 55(b)(1) of the North Carolina Rules of Civil
Procedure. As this is an issue of subject-matter jurisdiction, it
can be raised for the first time on appeal. Forsyth County Bd. of
Soc. Servs. v. Div. of Soc. Servs., 317 N.C. 689, 692, 346 S.E.2d
414, 416 (1986).
The clerk of court may enter judgment by default
[w]hen the plaintiff's claim against a
defendant is for a sum certain or for a sum
which can by computation be made certain . . .
In all cases wherein, pursuant to this rule,
the clerk enters judgment by default upon a
claim for debt which is secured by any . . .
other contractual security . . . the clerk may
likewise make all further orders required to
consummate foreclosure . . ..
N.C. Gen. Stat. § 1A-1, Rule 55(b)(1) (2004). Here, JMM Plumbing
sought a lien pursuant to Chapter 44A of the North Carolina General
Statutes. In Ridge Cmty. Investors, Inc. v. Berry, 293 N.C. 688,
698, 239 S.E.2d 566, 572 (1977), our Supreme Court held that
liens established pursuant to Chapter 44A of
the General Statutes are not 'contractual
security' within the meaning of Rule 55(b)(1)
of the Rules of Civil Procedure and that a
clerk or assistant clerk of court is without
jurisdiction to make orders consummating
foreclosure of liens established pursuant to
Chapter 44A of the General Statutes.
Id. However, only the portion of a judgment entered by the clerk
of court ordering the enforcement of a lien is void. Id. Since
JMM Plumbing did not move for enforcement of a lien in its Motion
for Judgment by Default, none was ordered in the Judgment by
Default entered by the Clerk of Court of Hyde County. Therefore,no portion of the judgment by default entered 11 February 2003 is
void.
[2] Basnight Construction next argues that the trial court
erred in denying its motion for relief from judgment pursuant to
Rule 60(b)(1) of the North Carolina Rules of Civil Procedure. We
disagree.
“On motion and upon such terms as are just, the court may
relieve a party or his legal representative from a final judgment,
order, or proceeding for the following reasons: (1) [m]istake,
inadvertence, surprise, or excusable neglect; . . .” N.C. Gen.
Stat. § 1A-1, Rule 60(b) (2004). The party must also show the
existence of a meritorious defense. Howard v. Williams, 40 N.C.
App. 575, 577, 253 S.E.2d 571, 572 (1979). The decision whether to
set aside a default judgment under Rule 60(b) is left to the sound
discretion of the trial judge, and will not be overturned on appeal
absent a clear showing of abuse of discretion. Thomas M. McInnis
& Assocs., Inc. v. Hall, 318 N.C. 421, 425, 349 S.E.2d 552, 554
(1986).
Whether neglect is “excusable” or “inexcusable” is a question
of law which “depends upon what, under all the surrounding
circumstances, may be reasonably expected of a party” to
litigation. Id., 349 S.E.2d at 555. The trial judge's conclusion
in this regard will not be disturbed on appeal if competent
evidence supports the judge's findings, and those findings support
the conclusion. In re Hall, 89 N.C. App. 685, 687, 366 S.E.2d 882,
884, disc. review denied, 322 N.C. 835, 371 S.E.2d 277 (1988). When a party is duly served with a summons, yet fails to give
his or her defense the attention to which a person of ordinary
prudence usually gives his or her important business, there is no
excusable neglect. E. Carolina Oil Transp., Inc., 82 N.C. App. at
748, 348 S.E.2d at 167. “A party may not show excusable neglect by
merely establishing that she failed to obtain an attorney and was
ignorant of the judicial process.” Hall, 89 N.C. App. at 688, 366
S.E.2d at 885. “Similarly, the fact that the movant claims he did
not understand the case, or did not believe that the court would
grant the relief requested in the complaint, has been held
insufficient to show excusable neglect, even where the movant is
not well educated.” Id.
The record shows that Jimmie Basnight acknowledges receiving
the Complaint and summons and does not contest service of process.
However, he contends that he was under the impression that he would
be informed of a hearing time by JMM Plumbing and did not contact
an attorney until after the default judgment was entered, which
amounted to excusable neglect. E. Carolina Oil Transp., Inc., 82
N.C. App. at 748, 348 S.E.2d at 167; see Hall, 89 N.C. App. at 688,
366 S.E.2d at 885 (no excusable neglect where respondent failed to
respond to summons where she was unemployed and receiving aid from
charitable organizations); see, e.g., Creasman v. Creasman, 152
N.C. App. 119, 566 S.E.2d 725 (2002) (no excusable neglect where
the defendant was under the mistaken belief that he had not been
served with the Complaint and did not need to take action).
Basnight Construction's failure to obtain an attorney and itsmistaken belief that it would be informed of a hearing date does
not constitute excusable neglect.
As there was no excusable neglect, we do not need to address
whether Basnight Construction had a meritorious defense. The trial
court did not abuse its discretion by denying Basnight
Construction's motion for relief from judgment. Thomas M. McInnis
& Assocs., Inc., 318 N.C. at 425, 349 S.E.2d at 554.
[3] Finally, Basnight Construction argues that the trial court
erred by failing to make appropriate findings of fact in the order
denying relief from judgment. We disagree.
“A trial court is not required to make written findings of
fact when ruling on a Rule 60(b) motion, unless requested to do so
by a party.” Creasman, 152 N.C. App. at 124, 566 S.E.2d at 729.
“Where the trial court does not make findings of fact in its order
denying the motion to set aside the judgment, 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[.]'” Grant v. Cox, 106 N.C. App. 122, 125, 415 S.E.2d
378, 380 (1992) (quoting Financial Corp. v. Mann, 36 N.C. App. 346,
349, 243 S.E.2d 904, 907 (1978)).
Here, the trial court did in fact make findings of fact in its
21 January 2004 order denying relief from judgment. The trial
court made the following pertinent findings of fact:
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4. Jimmie Basnight, an officer of the
Defendant, testified and offered an affidavit,
setting out the actions which he took after helearned that the complaint had been served on
the Defendant corporation.
5. After being served with the complaint, he
did not seek legal counsel or hire an attorney
to defend the action and took no action to
defend the allegations of the complaint.
6. He made certain assumptions concerning the
lawsuit but did not take any further action to
defend the lawsuit.
Based upon the findings of fact the trial court concluded that
Basnight Construction had “failed to plead or show mistake,
inadvertence, or excusable neglect.” The findings of fact address
the issue of excusable neglect by stating Basnight Construction had
received the Complaint, but failed to hire an attorney or take any
steps to defend the lawsuit. Additionally, as we have stated
previously, there is ample evidence to support the trial court's
conclusion of law that Basnight Construction failed to plead or
show excusable neglect. Grant, 106 N.C. App. at 125, 415 S.E.2d at
380.
Affirmed.
Judges HUDSON and STEELMAN concur.
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