Hodges v. Carter

Annotate this Case

80 S.E.2d 144 (1954)

239 N.C. 517


No. 21.

Supreme Court of North Carolina.

February 24, 1954.

*145 Allen, Allen & Langley, Kinston, for plaintiff-appellant.

Grimes & Grimes, Rodman & Rodman, and L. H. Ross, Washington, for defendant appellees.

BARNHILL, Chief Justice.

This seems to be a case of first impression in this jurisdiction. At least counsel have not directed our attention to any other decision of this Court on the question here presented, and we have found none.

Ordinarily when an attorney engages in the practice of the law and contracts to prosecute an action in behalf of his client, he impliedly represents that (1) he possesses the requisite degree of learning, *146 skill, and ability necessary to the practice of his profession and which others similarly situated ordinarily possess; (2) he will exert his best judgment in the prosecution of the litigation entrusted to him; and (3) he will exercise reasonable and ordinary care and diligence in the use of his skill and in the application of his knowledge to his client's cause. McCullough v. Sullivan, 102 N.J.L. 381, 132 A. 102, 43 A.L.R. 928; In re Woods, 158 Tenn. 383, 13 S.W.2d 800, 62 A.L.R. 904; Great American Indemnity Co. v. Dabney, Tex. Civ.App., 128 S.W.2d 496; Davis v. Associated Indemnity Corp., D.C., 56 F. Supp. 541; Gimbel v. Waldman, 193 Misc. 758, 84 N.Y.S.2d 888; Annotation 52 L.R.A. 883; 5 A.J. 287, § 47; Prosser Torts, p. 236, sec. 36; Shearman & Redfield Negligence, sec. 569.

An attorney who acts in good faith and in an honest belief that his advice and acts are well founded and in the best interest of his client is not answerable for a mere error of judgment or for a mistake in a point of law which has not been settled by the court of last resort in his State and on which reasonable doubt may be entertained by well-informed lawyers. 5 A.J. 335, sec. 126; 7 C.J.S., Attorney and Client, § 142, page 979; McCullough v. Sullivan, supra; Hill v. Mynatt, Tenn.Ch.App., 59 S.W. 163, 52 L.R.A. 883.

Conversely, he is answerable in damages for any loss to his client which proximately results from a want of that degree of knowledge and skill ordinarily possessed by others of his profession similarly situated, or from the omission to use reasonable care and diligence, or from the failure to exercise in good faith his best judgment in attending to the litigation committed to his care. 5 A.J. 333, sec. 124; In re Woods, supra; McCullough v. Sullivan, supra; Annotation 52 L.R.A. 883.

When the facts appearing in this record are considered in the light of these controlling principles of law, it immediately becomes manifest that plaintiff has failed to produce a scintilla of evidence tending to show that defendants breached any duty the law imposed upon them when they accepted employment to prosecute plaintiff's actions against his insurers or that they did not possess the requisite learning and skill required of an attorney or that they acted otherwise than in the utmost good faith.

The Commissioner of Insurance is the statutory process agent of foreign insurance companies doing business in this State, G.S. § 58-153, Hodges v. New Hampshire Insurance Co., 232 N.C. 475, 61 S.E.2d 372, and when defendants mailed the process to the Commissioner of Insurance for his acceptance of service thereof, they were following a custom which had prevailed in this State for two decades or more. Foreign insurance companies had theretofore uniformly ratified such service, appeared in response thereto, filed their answers, and made their defense. The right of the Commissioner to accept service of process in behalf of foreign insurance companies doing business in this State had not been tested in the courts. Attorneys generally, throughout the State, took it for granted that under the terms of G.S. § 58-153 such acceptance of service was adequate. And, in addition, the defendants had obtained the judicial declaration of a judge of our Superior Courts that the acceptance of service by the Commissioner subjected the defendants to the jurisdiction of the court. Why then stop in the midst of the stream and pursue some other course?

Doubtless this litigation was inspired by a comment which appears in our opinion on the second appeal, Hodges v. Home Insurance Co., 233 N.C. 289, 63 S.E.2d 819. However, what was there said was pure dictum, injectedperhaps ill advisedlyin explanation of the reason we could afford plaintiff no relief on that appeal. We did not hold, or intend to intimate, that defendants had been in any wise neglectful of their duties as counsel for plaintiff.

*147 The judgment entered in the court below is


PARKER, J., took no part in the consideration or decision of this case.

Primary Holding
In a legal malpractice action, there is no liability when an attorney makes a mistake of law or an error of judgment in good faith, assuming that he or she used as much care as a reasonable attorney would have used in a similar situation.
A fire destroyed Hodges' drug store and its contents. His insurers rejected his claims, so he sued them with the assistance of two attorneys, Topping and Carter. They served notice of the suit by mail to the commissioner of insurance in North Carolina, who then forwarded copies by registered mail to the insurers, which were all located outside the state. They sought to challenge jurisdiction in North Carolina court, and the state Supreme Court ultimately ruled that this manner of service was invalid, even though it had been used for 20 years.

By this time, the statute of limitations for bringing claims against the insurers had expired. Hodges brought a negligence claim against Topping and Carter for the type of service that they used and for failing to send alias summons within the 60-day period that was required. The trial court dismissed the complaint for failing to state a claim.


  • Barnhill (Author)

Barnhill noted that the method of service was commonly used in the jurisdiction over the preceding decades. Attorneys cannot be held accountable when they give inaccurate advice based on a reasonable mistake made in good faith regarding an unsettled area of the law. The lawyers had no reason to suspect that the method of service that they used was invalid, so Hodges would not be able to show that they had fallen short of the duty of exercising reasonable care, diligence, and good faith, or that they lacked the expected level of skill and knowledge in their profession.

Case Commentary
If the law in an area is unsettled, a lawyer may not be liable for an interpretation of it that turns out to be incorrect. The fact that these attorneys followed customary service of process that had been used in the state for the last 20 years was critical in the court's decision. However, they would have been liable if they had shown a lack of knowledge or skill that would be possessed by others in the profession or a lack of reasonable care.

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