An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced ure.

NO. COA05-26

NORTH CAROLINA COURT OF APPEALS

Filed: 18 October 2005

RODNEY B. NAIL,
    Plaintiff

v .                                     Forsyth County
                                        No. 04-CVS-1813
MEMBER SERVICES, INC.,
    Defendant

    Appeal by defendant from an order entered 23 November 2004 by Judge L. Todd Burke in Forsyth County Superior Court. Heard in the Court of Appeals 24 August 2005.

    David E. Shives, PLLC, by David E. Shives, for plaintiff- appellee.

    Blanco Tackabery Combs & Matamoros, P.A., by Reginald F. Combs, for defendant-appellant.

    HUNTER, Judge.

    Member Services, Inc. (“defendant”) appeals from an order of the trial court denying its motion to set aside entry of default, default judgment, and to recall a writ of execution. We affirm the order of the trial court.
    On 22 March 2004, Rodney B. Nail (“plaintiff”) filed a complaint against defendant in Forsyth County Superior Court seeking damages for breach of contract, conversion, fraud,constructive fraud, unfair and deceptive trade practices, breach of fiduciary duties, and unjust enrichment. Counsel for plaintiff subsequently filed an affidavit of service of process upon defendant corporation. In the affidavit, counsel for plaintiff certified that he mailed a copy of plaintiff's civil summons and complaint to defendant's registered agent and president, Roger Banks, at its registered office located at 4700 Yorkmont Road, Suite 102, Charlotte, North Carolina 28208. Such process was returned undelivered, however, with the notation by the U.S. Postal Service, “Forwarding Time Expired.” Thereafter, counsel for plaintiff achieved substitute service of process through the North Carolina Secretary of State pursuant to section 5D-33(b) of the North Carolina General Statutes. The Secretary of State received the documents on 19 April 2004 and immediately forwarded them to defendant at its registered address. The U.S. Postal Service returned the documents to the Secretary of State's office marked, “Forwarding Time Expired.”
    Defendant failed to appear for court. Default was entered by the clerk on 24 May 2004, and a default judgment was entered 28 June 2004. A writ of execution was issued against defendant on 11 August 2004. On 1 November 2004, defendant filed a motion to set aside entry of default, the default judgment, and to recall the writ of execution. Defendant's motion came before the trial courton 15 November 2004. Upon reviewing the record and considering arguments by counsel, the trial court denied defendant's motion. Defendant appeals.
    Defendant argues the trial court abused its discretion in denying its motion to set aside the entry of default, the default judgment, and to recall the writ of execution. For the reasons set forth herein, we affirm the order of the trial court.
    Defendant first contends the trial court should have granted its motion to set aside the entry of default, default judgment, and to recall the writ of execution pursuant to Rule 60(b)(4) of the North Carolina Rules of Civil Procedure. Defendant argues that the entry of default and default judgment are void for lack of service of process. Defendant acknowledges that plaintiff achieved substitute service of process through the Office of the Secretary of State pursuant to section 55D-33 of the North Carolina General Statutes, but contends that its due process rights were nonetheless violated because plaintiff had actual knowledge of an address where defendant could be located. Citing Interior Distributors, Inc. v. Hartland Construction Co., 116 N.C. App. 627, 449 S.E.2d 193 (1994), defendant argues that substitute service of process was ineffective, rendering the entry of default and default judgment void, and that the trial court therefore erred in failing to set them aside. We do not agree.    Section 55D-33 of the North Carolina General Statutes provides for substitute service of process, in pertinent part, as follows:
        When an entity required to maintain a registered office and registered agent under G.S. 55D-30 fails to appoint or maintain a registered agent in this State, or when its registered agent cannot with due diligence be found at the registered office, or when the Secretary of State revokes a certificate of authority or a statement of foreign registration of a foreign entity authorized to transact business or conduct affairs in this State, the Secretary of State becomes an agent of the entity upon whom any such process, notice or demand may be served. Service on the Secretary of State of any such process, notice or demand is made by delivering to and leaving with the Secretary of State or any clerk authorized by the Secretary of State to accept service of process, duplicate copies of the process, notice or demand and the applicable fee. In the event any such process, notice or demand is served on the Secretary of State in the manner provided by this subsection, the Secretary of State shall immediately mail one of the copies thereof, by registered or certified mail, return receipt requested, to the entity at its principal office or, if there is no mailing address for the principal office on file, to the entity at its registered office. Service on an entity under this subsection is effective for all purposes from and after the date of the service on the Secretary of State.

N.C. Gen. Stat. § 55D-33(b) (2003). Defendant concedes it failed to maintain its registered agent's address with the Office of the Secretary of State. As stated supra, defendant also concedes that plaintiff properly achieved substitute service of process.    In Interior Distributors, Inc., this Court held that substitute service of process on the Secretary of State was ineffective and violated the defendant's due process rights where the plaintiff's attorney had actual knowledge of an address where the defendant could be served and did not attempt to serve the defendant at the known address. Interior Distributors, Inc., 116 N.C. App. at 632, 449 S.E.2d at 195-96. The plaintiff in Interior Distributors, Inc. sought recovery for payment it alleged it never received after supplying building materials for a construction project on land owned by the defendant corporation. Id. at 628, 449 S.E.2d at 193. Although the plaintiff's complaint, the notice of claim of lien, the claim of lien, and the warranty deed for the property where the project was located all listed the defendant's principal place of business address as 903 Hampshire Court, Cary, North Carolina 27511, the plaintiff sent the civil summons and a copy of the complaint to the defendant's registered agent and office in Charlotte, North Carolina. The civil summons and complaint copy were returned to the plaintiff marked “'Moved-Left No Address.'” Id. at 629, 449 S.E.2d at 194. The plaintiff then achieved substitute service of process through the Office of the Secretary of State. Upon review, this Court held that because the plaintiff had actual knowledge of the defendant's address, the plaintiff had failed to exercise due diligence in serving processon the defendant and that substitute service was therefore ineffective.
    In the instant case, defendant argues that, like the plaintiff in Interior Distributors, Inc., plaintiff had actual knowledge of an address where defendant could be served. Defendant contends that several demand letters sent by plaintiff's counsel to defendant demonstrate that plaintiff had actual knowledge of defendant's address. Thus, defendant argues, substitute service of process was ineffective. We disagree.
    The record indicates that, prior to filing the complaint, counsel for plaintiff sent several demand letters to defendant at an address in Cornelius, North Carolina. One of the demand letters was sent by certified mail, with delivery restricted to Roger Banks, defendant's registered agent. Despite this restriction, the signature of a person named “Pamela Jenrette” appears upon the return receipt. Counsel for plaintiff testified in an affidavit that he had no knowledge of such a person or her relationship to defendant. Defendant never acknowledged or responded to the demand letters sent by plaintiff. Defendant's Cornelius address is not listed in the telephone directory. Based on the evidence of record, we conclude defendant has failed to show that plaintiff had “actual knowledge” of defendant's location. Defendant never responded to the demand letters. One of the letters was receivedby a person with no known connection to defendant. The trial court did not err in denying defendant's motion to set aside entry of default and the default judgment.
    Defendant next argues the trial court erred in failing to set aside the entry of default and default judgment pursuant to Rule 60(b)(6). Defendant contends that this case presents extraordinary circumstances, and that principles of equity and fairness justify allowing defendant to defend plaintiff's suit on its merits. We conclude the trial court did not abuse its discretion in denying defendant's motion.
    “A default judgment may be set aside under Rule 60(b)(6) only upon a showing that: (1) extraordinary circumstances were responsible for the failure to appear, and (2) justice demands that relief.” Advanced Wall Systems v. Highlande Builders, ___ N.C. App. ___, ___, 605 S.E.2d 728, 731 (2004). “The decision to grant this rule's exceptional relief is within the trial court's discretion.” Id. This Court cannot substitute its own judgment for a discretionary ruling of a trial court except when it is “'“manifestly unsupported by reason.”'” Id. (citations omitted).
            While the law does not favor default, preferring instead that controversies be resolved on their merits, “it is also true that rules which require responsive pleadings within a limited time serve important social goals, and a party should not be permitted to flout them with impunity.” Howell v.Haliburton, 22 N.C. App. 40, 42, 205 S.E.2d 617, 619 (1974). Likewise, courts justifiably disapprove of a limited liability company's failure to properly maintain a registered agent because that requirement is “designed to inform potential litigants of necessary information,” Huggins, 84 N.C. App. at 25, 351 S.E.2d at 785, thereby protecting the company's interests and guarding against judgment by default, as well as reducing the chance that the company will avoid paying a judgment by evading service of process.

Id.
    Here, defendant failed to properly register an agent with the Secretary of State for five years. Notably, there is evidence in the record tending to show that defendant has a history of evading service and collection actions by employing this tactic. Defendant filed its “Annual Report for Business Corporations” in 2001 with the Charlotte address as the contact information for the registered agent, despite the fact that Roger Banks, defendant's president and its registered agent, testified in an affidavit that the Charlotte address had not been correct since 1999. The 2001 report defendant filed was incorrect, and defendant did not report again until after the default judgment in late 2004. Defendant also failed to register in Mecklenburg County for auditing purposes from 1999 until the end of 2004.
    Plaintiff properly followed the statutory requirements for service of process. As there is no evidence that the trial court'sdiscretionary denial of defendant's motion is manifestly unsupported by reason, the trial court committed no error in refusing to set aside the default judgment under Rule 60(b)(6). The order of the trial court is affirmed.
    Affirmed.
    Judges TYSON and STEELMAN concur.
    Report per Rule 30(e).

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