Granville Medical Center v. Tipton

• Decision Date: 07 October 2003
• Docket Number: No. COA02-1180.,COA02-1180.
• Citation: 586 S.E.2d 791,160 NC App. 484
• Court: North Carolina Court of Appeals
• Parties: GRANVILLE MEDICAL CENTER, Plaintiff, v. Tony TIPTON d/b/a Tipton & Associates Healthcare Consulting and Tipton & Associates, Inc., d/b/a Tipton & Associates Healthcare Consulting, Defendants.

586 S.E.2d 791

160 NC App. 484

GRANVILLE MEDICAL CENTER, Plaintiff, v. Tony TIPTON d/b/a Tipton & Associates Healthcare Consulting and Tipton & Associates, Inc., d/b/a Tipton & Associates Healthcare Consulting, Defendants.

No. COA02-1180.

Court of Appeals of North Carolina.

October 7, 2003.

Hopper & Hicks, L.L.P., by William L. Hopper and James C. Wrenn, Jr., Oxford, for plaintiff-appellee.

Edmundson & Burnette, L.L.P., by James T. Duckworth, III, Oxford, for defendant-appellant.

LEVINSON, Judge.

Defendant (Tony Tipton) appeals from entry of default and default judgment. The relevant facts are these: On 19 July 2001, plaintiff filed a complaint alleging breach of contract against defendants Tony Tipton, d/b/a Tipton & Associates Healthcare Associates; and Tipton & Associates, Inc., d/b/a Tipton & Associates Healthcare Consulting. The present appeal involves only Tony Tipton individually. Civil summonses were issued 19 July 2001, addressed to Tipton individually and as registered agent for Tipton & Associates, Inc. On 21 August 2001 plaintiff filed an Affidavit of Service by Certified Mail, accompanied by a signed postal receipt showing service of the summons on 23 July 2001.

On 29 October 2001, plaintiff filed a motion for entry of default, alleging that defendants had failed to respond to the summons and had not filed an answer or other pleading. The Clerk of Court filed entry of default against defendant on 29 October 2001. On 18 February 2002 plaintiff filed a motion for entry of default judgment against defendants. Defendant's first response to the lawsuit was on 15 March 2002, seven months after the summonses were issued, when he filed a motion to strike the entry of default, accompanied by his affidavit. A hearing was conducted on 28 March 2002. On 9 April 2002 the trial court entered an order denying defendant's motion to strike the entry of default, and entering default judgment against him. From this order, defendant appeals.

Defendant raises four issues on appeal. He argues first that the trial court's denial of his motion to strike the entry of default constituted an abuse of discretion. We disagree.

An entry of default may be set aside pursuant to N.C.G.S. § 1A-1, Rule 55(d) (2001), which provides that "[f]or good cause shown the court may set aside an entry of default...." A Rule 55 motion to set aside entry of default "is addressed to the sound discretion of the court[,]" Old Salem Foreign Car Serv. v. Webb, ___ N.C.App. ___, 582 S.E.2d 673, 676 (2003), "`whose decision will not be disturbed on appeal absent a showing of abuse of that discretion.'" Security Credit Leasing, Inc. v. D.J.'s of Salisbury, Inc., 140 N.C.App. 521, 528, 537 S.E.2d 227, 232 (2000) (quoting Automotive Equipment Distributors, Inc. v. Petroleum Equipment & Service, Inc., 87 N.C.App. 606, 608, 361 S.E.2d 895, 896 (1987), and Coulbourn Lumber Co. v. Grizzard, 51 N.C.App. 561, 563, 277 S.E.2d 95, 96 (1981)).

"Inasmuch as the law generally disfavors default judgments, any doubt should be resolved in favor of setting aside an entry of default[.]" Peebles v. Moore, 48 N.C.App. 497, 504-05, 269 S.E.2d 694, 698 (1980), modified and aff'd, 302 N.C. 351, 275 S.E.2d 833 (1981). However, while "it is entirely proper for the court to give consideration to the fact that default judgments are not favored in the law[,] ... 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). Further, the defendant "has the burden of establishing good cause to set aside entry of default. A judge is subject to a reversal for abuse of discretion only upon a showing by a litigant that the challenged actions are manifestly unsupported by reason." RC Associates v. Regency Ventures, Inc., 111 N.C.App. 367, 374, 432 S.E.2d 394, 398 (1993) (citing Roane-Barker v. Southeastern Hospital Supply Corp., 99 N.C.App. 30, 392 S.E.2d 663 (1990), disc. review denied, 328 N.C. 93, 402 S.E.2d 418 (1991), and Clark v. Clark, 301 N.C. 123, 271 S.E.2d 58 (1980)).

In his motion to set aside the entry of default, defendant argued that "good cause exists for the Court to strike the entry of default against him." He asserted that the "good cause" consists of [the following]:

That [defendant] is not a lawyer, and is unfamiliar with the procedural and substantive rules of law of the State of North Carolina. That he did not know nor understand the consequences of a failure to timely respond to the complaint and summons. That as soon as he learned the gravity and importance of the situation, he notified counsel ... to make an appearance for him and to draft a motion to strike the entry of default.

On appeal, defendant contends the trial court abused its discretion by denying his motion. In support of this argument, defendant relies heavily upon Beard v. Pembaur, 68 N.C.App. 52, 313 S.E.2d 853, cert. denied, 311 N.C. 750, 321 S.E.2d 126 (1984), in which this Court held the trial court abused its discretion, and reversed the court's denial of a motion to set aside the entry of default. However, the pertinent facts of Beard are quite different from those of the case sub judice. In Beard a plaintiff who was "vigorously" pursuing discovery nonetheless missed the deadline for filing an answer to defendant's counterclaim because of an error of law made by plaintiff's counsel. We concluded that "[p]laintiff's counsel made technical errors in this case ... but he was not dilatory." Id. at 57, 313 S.E.2d at 856 (emphasis added). However, in the instant case, defendant failed to respond for seven months after service of the summons as indicated by the signed postal receipt, and then asked to be excused because he "is not a lawyer." We conclude that Beard is inapposite to the present case, and that First Citizens Bank & Tr. Co. v. Cannon, 138 N.C.App. 153, 530 S.E.2d 581 (2000), presents a closer analogy. In First Citizens, this Court upheld a lower court's denial of a motion to set aside entry of default, stating:

[Defendant] filed her motion to set aside the entry of default ... [and] alleged that she "was unaware that she was required to file an Answer to the Plaintiff's complaint as she is not an attorney and has not been involved in civil litigation, other than the present domestic civil action." The trial court found that [defendant] had not shown "good cause" to set aside the entry of default and denied defendant [her] motion.... [W]e cannot say on these facts that the decision of the learned trial court not to set aside the entry of default was unsupported by reason.

Id. at 158, 530 S.E.2d at 584 (emphasis added). The ruling in First Citizens is consistent with other North Carolina appellate law; this Court generally has upheld the denial of a motion to set aside entry of default where the evidence shows defendant simply neglected the matter at issue. See, e.g., Old Salem, ___ N.C.App. at ___, 582 S.E.2d at 676 (upholding denial of motion where defendant "explained that [their company] normally did the suing" but "offered no other explanation for defendant's failure to respond to plaintiff's summons"); Silverman v. Tate, 61 N.C.App. 670, 673, 301 S.E.2d 732, 734 (1983) (upholding trial court's denial of motion to set aside entry of default where there was "ample evidence from which the court may have found that defendant was negligent in establishing promptly any defenses he may have had").

Defendant also argues that the order denying his motion is defective because it fails to articulate that the court applied the "good cause shown" standard. However, there is no evidence in the record that defendant asked the court to include in its order the standard applied:

When no reason is assigned by the court for a ruling which may be made as a matter of discretion ... or because of a mistaken view of the law, the presumption on appeal is that the court made the ruling in the exercise of its discretion. If a party adversely affected by the ruling desires to review it on appeal, he may request the court to let the record show whether the ruling is made as a matter of law or in the exercise of the court's discretion.

Brittain v. Piedmont Aviation, Inc., 254 N.C. 697, 703-04, 120 S.E.2d 72, 76 (1961) (emphasis added) (citations omitted). Where the record is silent on a particular point, we presume that the trial court acted correctly. See State v. Reaves, 132 N.C.App. 615, 620, 513 S.E.2d 562, 565,

disc. review denied, 350 N.C. 846, 539 S.E.2d 4 (1999); see also Phelps v. McCotter, 252 N.C. 66, 67, 112 S.E.2d 736, 737 (1960) (noting "well established principle that there is a presumption in favor of the regularity and validity of the proceedings in the lower court"). Adhering to this principle, we find no reason to presume that the trial court failed to apply the "good cause" standard.

Defendant also argues that the trial court engaged in an "entirely improper analysis" by weighing the credibility of affidavits and other record evidence in ruling on defendant's motion. However, assessing the credibility of defendant's affidavits was within the trial court's authority. See, e.g., Strauss v. Hunt, 140 N.C.App. 345, 351, 536 S.E.2d 636, 640 (2000)

:

"When the officer's return of the summons shows legal service, a presumption of valid service of process is created ... [which] is rebuttable." Defendant attempted to rebut this presumption [with two] affidavit[s].... As the evidence presented by the parties was contradictory, "the credibility of the witnesses and the weight of the evidence were for determination by the court below in discharging its duty to find the facts." We thus will not disturb the court's findings, and affirm that part of the court's order holding service was properly made on defendant.

(quoting Greenup v. Register, 104 N.C.App. 618, 620, 410 S.E.2d 398, 400 (1991), and ...