Howard v. Williams

253 S.E.2d 571 (1979)

40 N.C. App. 575

Paul HOWARD, Plaintiff Appellant, v. Jerry R. WILLIAMS t/d/b/a Commercial Package & Delivery Service, Inc. and Commercial & Package Delivery Service, Inc. a/k/a Commercial Package & Delivery Service and a/k/a Commercial Package & Delivery Service, Inc., Defendant Appellee.

No. 785DC474.

Court of Appeals of North Carolina.

April 3, 1979.

*572 Parker, Rice & Myles by Charles E. Rice, III, Wilmington, for plaintiff-appellant.

Burney, Burney, Barefoot & Bain by R. C. Bain, Wilmington, for defendant-appellee.

CARLTON, Judge.

Plaintiff's primary contention is that the facts found by the trial court are insufficient to support its conclusion that there was excusable neglect on the part of the individual defendant, and that the evidence is insufficient to support such findings.

G.S. 1A-1, Rule 55(d) provides: "For good cause shown the court may set aside an entry of default, and, if a judgment by default has been entered, the judge may set it aside in accordance with Rule 60(b)."

The judgment entered by the clerk was not a mere entry of default, but was a final judgment which may be set aside only for the reasons stated in Rule 60(b) which provides in part as follows:

(b) . . .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) mistake, inadvertence, surprise, or excusable neglect; .....

Rule 60(b)(1) replaces former G.S. 1-220 and the cases interpreting it are still applicable. Doxol Gas of Angier, Inc. v. Barefoot, 10 N.C.App. 703, 179 S.E.2d 890 (1971).

In order to have a judgment set aside, the movant must show excusable neglect and a meritorious defense. 8 Strong, N.C. Index 3d, Judgments, § 24, p. 55; Whitaker v. Raines, 226 N.C. 526, 39 S.E.2d 266 (1946).

Defendant contends that he turned the matter over to an attorney and thereafter relied on the attorney to do whatever needed to be done to protect him, asserting that the neglect of the attorney is not chargeable to him.

Numerous decisions of the Supreme Court and this Court have been based on evaluations of situations similar to that presented in the case at bar. See especially Norton v. Sawyer, 30 N.C.App. 420, 227 S.E.2d 148 (1976); Moore v. Deal, 239 N.C. 224, 79 S.E.2d 507 (1954).

We think this case is controlled by the principles enunciated in Jones v. Statesville Ice & Fuel Co., 259 N.C. 206, 209, 130 S.E.2d 324, 326 (1963), in which the Supreme Court stated:

*573 It is generally held under the above statute [G.S. 1-220] that "(p)arties who have been duly served with summons are required to give their defense that attention which a man of ordinary prudence usually gives his important business, and failure to do so is not excusable." (Citations omitted, emphasis added.) Where a defendant engages an attorney and thereafter diligently confers with the attorney and generally tries to keep informed as to the proceedings, the negligence of the attorney will not be imputed to the defendant. If, however, the defendant turns a legal matter over to an attorney upon the latter's assurance that he will handle the matter, and then the defendant does nothing further about it, such neglect will be inexcusable. (Citations omitted, emphasis added.)

The trial court, to support its conclusion that defendant's neglect was excusable, found as a fact "That Granville A. Ryals, even though a member of the New Hanover County Bar, spends as much as four days out of every week in South Carolina and was unable to be contacted by the Defendant Jerry R. Williams." No finding was made as to what attempts, if any, defendant made to contact his attorney or otherwise attend to the business of defending the suit against him.

Moreover, the evidence presented to the trial court does not reflect that defendant gave his defense that attention which "`a man of ordinary prudence usually gives his important business.'" Jones v. Statesville Ice & Fuel Co., supra. On direct examination, the defendant was asked if he made an effort "to get [the] papers from Mr. Ryals." He replied, "Yes, sir. Mr. Ryals, I found out, was in South Carolina more than he is here in Wilmington. He spends about four or five days a week somewhere in South Carolina." Here, there is no indication of the nature or extent of defendant's efforts to contact his attorney.

However, on cross-examination, the following exchange took place:

Q. When you got the Complaint, you took it to Mr. Ryals and said: "Mr. Ryals, handle this". Is that right? A. When I got the note from the Sheriff's Department? Q. Yeah. This Complaint. A. Yes, Sir. Q. And you said "Mr. Ryals, handle this." And then you had Mr. Ryals give it to Mr. Bain and you said "Mr. Bain, handle this." Right? A. Yes, Sir. Q. And you didn't do anything else about it until there was the execution, is that right? A. I didn't do anything about it; no, Sir. Q. You left it up to your Attorneys? A. Yes, Sir. Q. And you didn't specifically go to them and say "Now, look, take care of this thing right here, right now?" A. That's what I did when I carried it to Granville Ryals originally. Q. But after that you didn't do that? A. No, I just assumed that he had. Q. Ok. A. I assumed he was a reputable Attorney. Q. Of course. And you just thought it would go through the process of whatever it was and come out ok? A. Right.

In our opinion, when the defendant Williams turned the matter over to attorney Ryals and thereafter made little, if any, inquiry as to whether anything had been done, the neglect of the attorney is imputable to him. He has shown no excusable neglect. We note also that this transpired during a period when, according to the record, other lawsuits were being served against the defendants and the corporate defendant was preparing for bankruptcy proceedingsa period when properly and diligently attending to business and legal matters would be uppermost in the mind of the man of ordinary prudence in conducting his important business.

We agree with the general view that provisions relating to the setting aside of *574 default judgments should be liberally construed so as to give litigants an opportunity to have the case disposed of on the merits to the end that justice be done. Any doubt should be resolved in favor of setting aside defaults so that the merits of the action may be reached. However, statutory provisions designed to protect plaintiffs from defendants who do not give reasonable attention to important business affairs such as lawsuits cannot be ignored. See generally, 49 C.J.S. Judgments § 334, p. 612; Alopari v. O'Leary, 154 F. Supp. 78 (E.D.Pa.1957).

In the absence of sufficient showing of excusable neglect, the question of meritorious defense becomes immaterial. Stephens v. Childers, 236 N.C. 348, 72 S.E.2d 849 (1952) and cases there cited. We, therefore, do not discuss plaintiff's argument with respect to meritorious defense.

The order of the trial court is

Reversed.

PARKER and HEDRICK, JJ., concur.