1. Judgments--motion to set aside default--no reason for failure to timely file
The trial court did not abuse its discretion by denying defendant's motion to set aside an
entry of default where the trial court found that defendant was careless and negligent in failing to
obtain an extension of time for filing an answer. There was no dispute that defendant's Virginia
counsel told its North Carolina office to file an extension of time, but no explanation was
included in the record for the failure to due so.
2. Judgments--default--sum certain
The trial court abused its discretion by not setting aside a default judgment where there
was nothing from which damages could be determined other than plaintiff's bare assertion of the
amount owed and the clerk lacked authority to enter the default judgment.
Aldridge, Seawell, Spence & Felthousen, L.L.P., by Christopher
L. Seawell and Thomas P. Routten, for plaintiff-appellee.
Hornthal, Riley, Ellis & Maland, L.L.P., by M.H. Hood Ellis,
for defendant-appellant.
ELMORE, Judge.
Peters & White Construction Company (defendant) appeals the
trial court's denial of its motion to set aside an entry of default
and default judgment against it. We discern no abuse of discretion
in the denial of defendant's motion to set aside the entry of
default, but must reverse the order denying defendant's motion to
set aside the default judgment. Defendant was a contractor building a collection of sewer
lines and treatment facilities for the Englehard Sanitary District
located in Hyde County, North Carolina. Basnight Construction
Company (plaintiff) was a subcontractor retained to install piping
on the project. Upon plaintiff's completion of the project, it was
not paid a portion of the money agreed to under the contract
between the parties. Accordingly, on 9 September 2003, plaintiff
filed suit against defendant for recovery of $51,799.49 under one
of two claims: breach of contract or quantum merit. Defendant, a
Virginia based corporation, was ultimately served with the
complaint via the North Carolina Secretary of State on 31 October
2003 after the Secretary's office received the alias and pluries
summons on 27 October 2003. Upon receipt, defendant sent the
complaint to James R. Harvey, III (Harvey), its counsel at
Vandeventer Black, L.L.P. (Vandeventer) in Norfolk, Virginia.
Harvey contacted an attorney in the firm's Kitty Hawk, North
Carolina, office in order to transfer the case to its local office.
Despite being requested by Harvey to file a motion for extension of
time, the Kitty Hawk office failed to do so. In the interim,
Harvey determined the firm had a conflict; could not represent
defendant in the matter; and sought out and secured Hornthal,
Riley, Ellis & Maland, L.L.P. (Ellis), to represent defendant.
Harvey informed Ellis of his belief that a responsive pleading was
due by 26 December 2003. But, in fact, the responsive pleading was
due much earlier, and on 11 December 2003 plaintiff filed for and
received an entry of default as well as a default judgment from theDare County Clerk of Court. Plaintiff was awarded $51,779.49, plus
interest and costs.
Harvey determined on 15 December 2003 that no extension was
entered on defendant's behalf and a default judgment had been
secured. He contacted Ellis who, on 6 January 2004, filed a motion
to set aside the entry of default and default judgment. The trial
court heard the motion on 22 March 2004 and entered an order
denying defendant's motion.
The trial court found that “the failure to obtain an extension
of time was the result of the Kitty Hawk Office of Vandeventer
Black, LLP's failure to act on the request of the Norfolk Office to
obtain said extension of time.” The court also found that the
failure to file for an extension “constitut[ed] carelessness and
negligence.” Based on those and other findings, the court
concluded:
4. That the evidence presented by the
Defendant does not constitute mistake,
inadvertence, surprise or excusable neglect
under the provisions of Rule 60(b)(1).
5. That the evidence presented by the
Defendant does not constitute a grounds [sic]
for relief from the default judgment under any
other provisions of Rule 60(b).
6. That carelessness and negligence of
Defendant's counsel does not constitute an
excusable neglect under Rule 60(b) of the
North Carolina Rules of Civil Procedure or
other grounds for relief under said Rule.
Defendant appeals from this order.
A trial court's decision to grant or deny a motion to set
aside an entry of default and default judgment is discretionary. See Grant v. Cox, 106 N.C. App. 122, 124-25, 415 S.E.2d 378, 380
(1992). Absent an abuse of that discretion, this Court will not
reverse the trial court's ruling. Id. N.C. Gen. Stat. § 1A-1,
Rule 55(d) (2003), notes that an entry of default may be set aside
for “good cause shown,” and a default judgment may be set aside “in
accordance with Rule 60(b).” Defendant's motion to set aside both
the entry of default and default judgment was brought “pursuant to
Rule 55” but, as did the trial court, we will look at each
individual claim under their appropriate standards. See Bailey v.
Gooding, 60 N.C. App. 459, 461, 299 S.E.2d 267, 269 (1983) (“An
entry of default may be set aside, not by motion pursuant to Rule
60(b), but by motion pursuant to Rule 55(d) and a showing of good
cause.”); see also Whaley v. Rhodes, 10 N.C. App. 109, 111-12, 177
S.E.2d 735, 736 (1970).
In its order denying defendant's motion, the trial court
rejected defendant's claim that “the failure to secure an extension
of time and enable a timely response or answer to be filed was
solely the result of a misunderstanding and mis communication [sic]
between Vandeventer Black, L.L.P.'s Norfolk and Kitty Hawk
offices.” Rather, it found that the delay was on the Kitty Hawk
office's “failure to act on the request,” noting that the failure
“constitut[ed] carelessness and negligence.”
The trial court determined that this omission was not a
sufficient showing for good cause to set aside the entry of
default. We cannot hold that the trial court abused its discretion
in this determination, despite the fact that perhaps other judgesmay have granted defendant's motion. See Kennedy v. Starr, 62 N.C.
App. 182, 187-88, 302 S.E.2d 497, 500-01 (1983) (Whichard, J.
concurring) (noting the tension between an abuse of discretion
standard and a favored result of allowing litigation on the merits
of cases). There was no dispute that Harvey informed the Kitty
Hawk office to file the extension of time. Yet, no explanation is
included in the record as to what caused that office to fail to
file the extension, whether that oversight was due to case load,
clerical error, or otherwise.
Defendant also appeals that portion of the trial court's order
denying his motion to set aside the default judgment. As
previously noted, this analysis proceeds under Rule 60(b).
Defendant argued that the trial court abused its discretion under
several theories, but we find the argument that the default
judgment was void most persuasive. See N.C. Gen. Stat. § 1A-1,
Rule 60(b)(4) (2003) (“[T]he court may relieve a party . . . from
a final judgment, order, or proceeding . . . [when] [t]he judgment
is void[.]”).
N.C. Gen. Stat. § 1A-1, Rule 55(b) deals with the entry of a
default judgment. When the plaintiff's claim is for a “sum certain
or for a sum which can by computation be made certain,” then the
default judgment can be entered by a clerk. N.C. Gen. Stat. § 1A-
1, Rule 55(b)(1) (2003). Absent a certain dollar amount, the
default judgment must be entered by a judge who may conduct a
hearing to adequately determine damages. N.C. Gen. Stat. § 1A-1,
Rule 55(b)(2) (2003). A review of our case law and the recordbefore us reveals that the default judgment here should have been
entered by the judge and not the clerk; the claim is not for a sum
certain and the clerk lacked authority to enter judgment.
Plaintiff's complaint for breach of contract stated:
4. The Plaintiff herein performed services
pursuant to a contract with the Defendant
installing piping materials in Hyde County,
North Carolina
5. Under the terms of the contract and oral
modification, the Defendant agreed to pay the
Plaintiff for labor and services performed
with the last labor and materials being
provided pursuant to said contract on or about
July 1, 2002.
6. The Plaintiff has made demand upon the
Defendant for the payment of labor and
services, but the Defendant has refused and
continues to refuse to pay same.
Plaintiff's second claim for relief was for quantum merit and did
allege that the value of the services was $51,779.49. Finally, in
the prayer for relief, plaintiff asked the trial court for
“$51,779.49 plus statutory interest as provided by law [] pursuant
to the contract between the Plaintiff and Defendant.”
The complaint was unverified and submitted without any
attachments or exhibits. Therefore, plaintiff filed an affidavit
with his motion for default judgment that verified the information
in the complaint was true and reiterated that $51,779.49 was due
pursuant to the contract. Nonetheless, no contract, invoice, or
other documentation from which the Clerk could compute a sum
certain was attached to the motion or the affidavit.
Our Court in Realty, Inc. v. Hastings, 45 N.C. App. 307, 262
S.E.2d 858 (1980), held that the mere demand for judgment of aspecified dollar amount was not enough under the statute to permit
the Clerk to enter a default judgment.
Plaintiff's claim as stated in its complaint
in the present case was neither for “a sum
certain” nor for “a sum which can by
computation be made certain” within the
meaning of Rule 55(b). The mere demand for
judgment of a specified dollar amount does not
suffice to make plaintiff's claim one for “a
sum certain” as contemplated by Rule 55(b).
Such a demand is normally included in the
prayer for relief in every complaint in which
monetary damages are sought, including
complaints alleging claims for damages for
bodily injuries caused by a defendant's
negligence. The complaint in the present case
alleged a breach of contract by the defendant,
but nothing in the allegations of the
complaint makes it possible to compute the
amount of damages to which plaintiff is
entitled by reason of the breach.
Id., 45 N.C. App. at 309-10, 262 S.E.2d at 859-60. In Cox, we
summarized and compared several cases dealing with this issue,
determining that for damages to be certain, more evidence is needed
“than simply the plaintiff['s] bare assertion of the amount owed.”
Cox, 106 N.C. App. at 127-28, 415 S.E.2d at 381-82.
There was nothing in the case sub judice to determine the
amount of damages other than bare assertion. What would help
identify the amount owed with some level of certainty would
typically be the contract or submitted invoice, with which the
Clerk could accurately calculate or verify the money owed. Here,
the six sentence affidavit which the Clerk reviewed, and the only
evidence of an exact amount, stated in one place that the amount
owed was $55,779.49, and in another $51,779.49. Plaintiff argues
that this is a typographical error. While that may be, this errordemonstrates the lack of certainty as to the amount owed. The
Clerk had no ability to verify which number was a typographical
error and could have easily entered an award of $55,779.49 as a sum
certain if all that is necessary is an assertion.
Accordingly, we find that the Clerk lacked authority to enter
the default judgment and the judgment was void as a matter of law.
Regardless of whether the trial court thought there was excusable
neglect, it was an abuse of discretion for it to find that the
evidence presented constituted no other grounds for relief under
Rule 60(b). N.C. Gen. Stat. § 1A-1, Rule 60(b)(4) states that a
trial court may provide relief from a void judgment. Under the
circumstances here, we find that the trial court did abuse its
discretion in denying defendant's motion to set aside the default
judgment against it.
Thus, we affirm the trial court's denial of defendant's motion
pertaining to the entry of default, but we reverse the order
denying defendant's motion to set aside the default judgment and
remand to the trial court to determine under Rule 55(b)(2) what
damages, if any, plaintiff is entitled to recover. See Cox, 106
N.C. App. at 128, 415 S.E.2d at 382.
Affirmed in part; vacated and remanded in part.
Chief Judge MARTIN and Judge McCULLOUGH concur.
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