Converted WP file 061334-1

Appeal by defendant from order entered 17 May 2006 by Judge John R. Jolly, Jr. in Superior Court, Wake County. Heard in the Court of Appeals 22 May 2007.

Harris & Hilton, P.A., by David N. Hilton, for plaintiff- appellee.

Randolph J. Hill, for defendant-appellant.

    WYNN, Judge.

    A defendant against whom a default has been entered may either show good cause to set aside the default or contest the amount of the recovery.   (See footnote 1) Here, because we find that Defendant Sung H. Kwon failed to show good cause to set aside the entry of default against him, we conclude that the trial court did not abuse its discretion by entering summary judgment against him.
    On 29 November 2005, Plaintiff Dental Ceramic Art, Inc. filed a complaint against Defendant Sung H. Kwon, a Michigan resident, alleging breach of contract, unjust enrichment, constructive fraud,and unfair or deceptive trade practices, in connection with a July 2005 sales agreement between Dental Ceramic Art and Mr. Kwon. Under the terms of the agreement, Dental Ceramic Art paid Mr. Kwon $20,000 in exchange for his promise to promote sales for Dental Ceramic Art for three months. Mr. Kwon was contractually required to establish a minimum of fifteen additional clientele or procure at least $15,000 in sales for each month of the contract period. The contract also specified particular periods during which Mr. Kwon would come to North Carolina and actively work as a salesman for Dental Ceramic Art. Additionally, Mr. Kwon was advanced another $10,000 for anticipated sales commissions and $500 for gasoline and vehicle expenses.
    After Mr. Kwon allegedly failed to perform under the terms of the contract, including not returning to North Carolina, Dental Ceramic Art sought a full refund of the money it had paid him and the termination of the contract. Following failed efforts by Dental Ceramic Art and Mr. Kwon to resolve their disagreement, Dental Ceramic Art filed its complaint, alleging that Mr. Kwon had failed, and then refused, to perform according to the terms of the contract and had not returned the $30,500 paid to him. Mr. Kwon received a copy of the verified complaint from Dental Ceramic Art on 19 December 2005; according to him, he then prepared a written response in his native tongue of Korean and sent it to Dental Ceramic Art's counsel. However, Mr. Kwon failed to file this response with the clerk of court, and there is also no evidence in the record of its delivery to or receipt by counsel for DentalCeramic Art.
    On 9 February 2006, a default was entered against Mr. Kwon. Dental Ceramic Art moved for summary judgment pursuant to Rule 56 of the North Carolina Rules of Civil Procedure on 22 February 2006, serving the motion on Mr. Kwon by mail on 2 March 2006. The matter was calendared to be heard on 17 May 2006. On 5 May 2006, Mr. Kwon filed a pro se motion to vacate the default and request leave to file an appearance and response. Mr. Kwon then retained counsel and filed a proposed answer to the complaint on 16 May 2006, which was served on Dental Ceramic Art on 17 May 2006, the day of the summary judgment hearing.
    On 17 May 2006, the trial court entered an order denying Mr. Kwon's motion to set aside the default judgment and granting summary judgment to Dental Ceramic Art pursuant to Rule 56. Dental Ceramic Art was awarded $31,150, plus interest and costs. Mr. Kwon now appeals, arguing that the trial court abused its discretion by (I) denying his motions to set aside the default judgment and for leave to file a responsive pleading; and (II) granting summary judgment to Dental Ceramic Art pursuant to Rule 56.

    In his first two arguments, Mr. Kwon contends that the trial court abused its discretion by denying his motion to set aside the default judgment and for leave to file a responsive pleading, as extraordinary circumstances existed and Mr. Kwon had a meritorious defense to Dental Ceramic Art's claim against him. Because these assignments of error are based on the same allegations, we considerthem together.
    Under our Rules of Civil Procedure, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead . . . and that fact is made to appear by affidavit, motion of attorney for the plaintiff, or otherwise, the clerk shall enter his default.” N.C. Gen. Stat. § 1A-1, Rule 55(a) (2005). Although such entry of default may be set aside by a trial court “[f]or good cause shown,” id. at Rule 55(c), such determination “rests in the sound discretion of the trial judge.” Byrd v. Mortenson, 308 N.C. 536, 539, 302 S.E.2d 809, 812 (1983).
    Here, Mr. Kwon argued to the trial court that the default should be set aside and he should be allowed to file a responsive pleading because (1) he had been attempting to resolve the matter through a third-party intermediary and had believed the parties could settle the dispute out of court; (2) the delay in his response had been due to his geographical distance and ignorance of court procedures; and (3) Dental Ceramic Art would not be prejudiced by the trial court's granting of the motion. We find no abuse of discretion by the trial court in holding that none of these contentions constitute “good cause” sufficient to set aside the entry of default.
    According to the record, Mr. Kwon received a copy of Dental Ceramic Art's complaint on 19 December 2005. Mr. Kwon asserts that he prepared a response in Korean and sent it to Dental Ceramic Art's counsel; however, that document contains no file stamp or other indication that it was either mailed or received in themanner described by Mr. Kwon. Moreover, Mr. Kwon provided no translation for the document. Mr. Kwon then took no further action in this case until six months after the complaint was originally filed and nearly three months after the default had been entered; at that time, he filed his own pro se motion to vacate the default and request leave to file an answer. Given that Mr. Kwon was able to file such a motion pro se, we are not persuaded that he was so geographically distant or ignorant of court procedures that he was incapable of responding to Dental Ceramic Art's complaint sooner. Nor is his claim of mediation by a third party convincing, as Mr. Kwon had clear notice from the entry of default and the motion for summary judgment that Dental Ceramic Art was moving forward in the legal system with its claims against him.
    In light of these circumstances, and Mr. Kwon's failure to file any kind of answer to Dental Ceramic Art's complaint, we find no abuse of discretion in the trial court's decision to deny his motion to set aside the default and allow him leave to file an answer. Accordingly, these assignments of error are overruled.

    Mr. Kwon also argues that the trial court abused its discretion by granting summary judgment to Dental Ceramic Art pursuant to Rule 56. We disagree.
    Under longstanding precedent of this Court, “[i]f the default is established, the defendant has no further standing to contest the merits of plaintiff's right to recover. His only recourse is to show good cause for setting aside the default and, failing that,to contest the amount of the recovery.” North Am. Acceptance Corp. v. Samuels, 11 N.C. App. 504, 509-10, 181 S.E.2d 794, 798 (1971) (quotation omitted). Thus, “[t]he effect of an entry of default is that the defendant against whom entry of default is made is deemed to have admitted the allegations in plaintiff's complaint . . . and is prohibited from defending on the merits of the case.” Spartan Leasing v. Pollard, 101 N.C. App. 450, 460, 400 S.E.2d 476, 482 (1991) (citation omitted); see also Bell v. Martin, 299 N.C. 715, 721, 264 S.E.2d 101, 105 (1980) (“When default is entered due to defendant's failure to answer, the substantive allegations raised by plaintiff's complaint are no longer in issue, and for the purposes of entry of default and default judgment are deemed admitted.”).
    Because the facts outlined by Dental Ceramic Art in its complaint were deemed admitted by Mr. Kwon's failure to answer and the subsequent entry of default against him, there remained no genuine issue of material fact between the parties. As such, the trial court did not abuse its discretion in granting summary judgment to Dental Ceramic Art. This assignment of error is therefore overruled.
    Affirmed.
    Judges TYSON and CALABRIA concur.
    Report by Rule 30(e).

Footnote: 1