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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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 Procedure.
NORTH CAROLINA COURT OF APPEALS
Filed: 21 August 2007
DENTAL CERAMIC ART, INC.
No. 05 CVS 16485
SUNG H. KWON
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-
Randolph J. Hill, for defendant-appellant.
A defendant against whom a default has been entered may either
show good cause to set aside the default or contest the amount of
(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.
, 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
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
Judges TYSON and CALABRIA concur.
Report by Rule 30(e).
North Am. Acceptance Corp. v. Samuels
, 11 N.C. App. 504,
509-10, 181 S.E.2d 794, 798 (1971).
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