In re Cole

• Decision Date: 07 February 2006
• Docket Number: No. COA05-7.,COA05-7.
• Citation: 625 S.E.2d 155
• Court: North Carolina Court of Appeals
• Parties: In the Matter of the Foreclosure of a Deed of Trust Executed by Hercules COLE and Elsie Celestine Cole, husband and wife, H. Terry Hutchens, PA, Substitute Trustee. Hercules Cole and Celestine Cole, Plaintiffs, v. Branch Banking and Trust Company, Thomas M. Neville, Individually and as agent of Branch Banking and Trust Company, Patricia Davis, Individually and as agent of Branch Banking and Trust Company, and H. Terry Hutchens, P.A., Substitute Trustee, Defendants. Hercules Cole and Celestine Cole, Plaintiffs, v. Vestal E. Yarbrough, Shirley Yarbrough, Edward Winslow Quality Builders, Inc., Branch Banking and Trust Company, Thomas M. Neville, Individually and as agent of Branch Banking and Trust Company, Patricia Davis, Individually and as agent of Branch Banking and Trust Company, and H. Terry Hutchens, P.A., Substitute Trustee, Defendants.

625 S.E.2d 155

In the Matter of the Foreclosure of a Deed of Trust Executed by Hercules COLE and Elsie Celestine Cole, husband and wife, H. Terry Hutchens, PA, Substitute Trustee.

Hercules Cole and Celestine Cole, Plaintiffs, v. Branch Banking and Trust Company, Thomas M. Neville, Individually and as agent of Branch Banking and Trust Company, Patricia Davis, Individually and as agent of Branch Banking and Trust Company, and H. Terry Hutchens, P.A., Substitute Trustee, Defendants.

Hercules Cole and Celestine Cole, Plaintiffs, v. Vestal E. Yarbrough, Shirley Yarbrough, Edward Winslow Quality Builders, Inc., Branch Banking and Trust Company, Thomas M. Neville, Individually and as agent of Branch Banking and Trust Company, Patricia Davis, Individually and as agent of Branch Banking and Trust Company, and H. Terry Hutchens, P.A., Substitute Trustee, Defendants.

No. COA05-7.

Court of Appeals of North Carolina.

February 7, 2006.

Appeal by plaintiffs from an order entered 14 April 2004 by Judge J. Richard Parker in Pasquotank County Superior Court. Heard in the Court of Appeals 10 October 2005.

Moore & Moore, by Milton E. Moore; James R. Streeter, Greenville, for plaintiff-appellants.

Hall and Horne, L.L.P., by John F. Green, II, Wilmington, for defendant-appellees Vestal E. Yarbrough and Shirley Yarbrough.

C. Everett Thompson, II for defendant-appellee Edward Winslow Quality Builders, Inc. Mary Jane Eisenbeis, Elizabeth City, for defendant-appellee H. Terry Hutchens, P.A.

G. Wendell Spivey, Elizabeth City, for defendant-appellee Branch Banking and Trust Company.

Hornthal, Riley, Ellis & Maland, L.L.P., by M.H. Hood Ellis and L. Phillip Hornthal, III, Elizabeth City, for defendant-appellees Branch Banking and Trust Company, Thomas M. Neville, Patricia Davis and H. Terry Hutchens, P.A.

HUNTER, Judge.

Hercules Cole and Celestine Cole ("plaintiffs") appeal from an order entered 14 April 2004 denying plaintiffs' counsel's Motion for Admission to Practice Pro Hac Vice and granting defendants' motion for sanctions and attorneys' fees. For the reasons stated herein, we affirm the judgment of the trial court.

Plaintiffs hired Waverly W. Jones ("Jones") in October 2003 to represent them in an action related to the foreclosure on their house located in Elizabeth City. Jones was licensed to practice in the state of Virginia, but did not have a North Carolina law license.

Jones first appeared on behalf of plaintiffs on 13 November 2003 before the Clerk of Superior Court of Pasquotank County at the scheduled foreclosure hearing. Jones advised the clerk he had been unable to associate with North Carolina counsel and requested a continuance, which was granted. A complaint against Branch Banking and Trust Company ("BB & T"), Thomas M. Neville, Patricia Davis, and H. Terry Hutchens (collectively "defendants-BB & T") and Jones's Motion for Admission to Practice Pro Hac Vice were filed with the trial court on 18 December 2003. The motion for limited admission was signed by Katherine Parker-Lowe ("Parker-Lowe"), an attorney admitted to practice in North Carolina. A hearing on the filed motions was scheduled on the first available date, 8 March 2004. The foreclosure hearing was rescheduled for 21 January 2004, however, due to the ill health of one of the opposing parties. Jones filed a motion for a preliminary injunction against defendants-BB & T on 17 January 2004, and moved at the foreclosure hearing on 21 January 2004 to allow all motions scheduled for 8 March 2004 to be heard. The clerk denied the motion to continue and proceeded with the foreclosure hearing, ordering that the trustee could proceed to foreclose on the property. Jones filed an appeal of the order of foreclosure on behalf of plaintiffs.

Jones also filed an action on behalf of plaintiffs alleging fraud and other wrongful acts against defendants-BB & T, Vestal E. Yarbrough and Shirley Yarbrough ("defendants-Yarbrough"), and Edward Winslow Quality Builders, Inc. ("defendant-Quality Builders)" on 1 March 2004. This complaint sought specific amounts of damages in excess of $10,000.00. Defendant-Quality Builders filed a motion to dismiss the complaint on 5 March 2004.

The motions originally scheduled to be heard on 8 March 2004 were cancelled on 2 March 2004 by the trial court and moved to 12 April 2004. Notices of deposition for plaintiffs were received by Jones on 11 March 2004, and scheduled for 23 March 2004. However, on 18 March 2004, Jones requested the deposition be rescheduled, as the hearing had not yet occurred on the motion for admission to practice. Defendants-Yarbrough's attorney advised Jones on 22 March that they were unable to continue the depositions due to their clients' poor health. Plaintiffs did not appear for the scheduled deposition.

On 23 March 2004, Parker-Lowe, the associated North Carolina counsel, filed a notice of withdrawal of association by local counsel. On 26 March 2004, defendants-Yarbrough filed a motion for sanctions for failure to make discovery and motion to dismiss. On the same day, defendants-BB & T filed a motion to dismiss, motion for sanctions, and motion for attorneys' fees, and defendant-Quality Builders also filed a motion for sanctions and attorneys' fees.

On 31 March 2004, plaintiffs filed pro se an amended complaint against defendants, amending the amount demanded in judgment to "an amount in excess of Ten Thousand Dollars ($10,000.00)[.]" Defendant-Quality Builders filed a motion for sanctions and attorneys' fees, and defendants-Yarbrough and BB & T filed motions to dismiss and motions for sanctions and attorneys' fees. Jones again filed a motion for admission to practice pro hac vice which was joined by James R. Streeter ("Streeter"), a North Carolina licensed attorney, on 12 April 2004.

In a hearing on 12 April 2004, the trial court denied Jones's motion for admission to practice. The trial court also denied plaintiffs' motion for continuance made by Streeter. Plaintiffs then elected to take a voluntary dismissal on all claims. The trial court heard the remaining motions for sanctions and attorneys' fees and found Jones to have been engaged in the unauthorized practice of law. The trial court fined Jones $5,000.00, and ordered plaintiffs and Jones to pay the attorneys' fees of opposing counsel as sanctions. Plaintiffs appeal.

I.

Plaintiffs first contend that the trial court's delay of nearly four months before hearing the motion for admission to practice pro hac vice deprived them of their fundamental right to select counsel to represent them. We disagree.

N.C. Gen.Stat. § 84-4.1 (2005) governs the limited practice of out-of-state attorneys in our North Carolina state courts. "[P]arties do not have a right to be represented in the courts of North Carolina by counsel who are not duly licensed to practice in this state. Admission of counsel in North Carolina pro hac vice is not a right but a discretionary privilege." Leonard v. Johns-Manville Sales Corp., 57 N.C.App. 553, 555, 291 S.E.2d 828, 829 (1982). "The right to appear pro hac vice in the courts of another state is not a right protected by the Due Process Clause of the Fourteenth Amendment." In re Smith, 301 N.C. 621, 630, 272 S.E.2d 834, 840 (1981). "The Federal Constitution does not obligate state courts to grant out-of-state attorneys procedural due process in the grant or denial of their petition for admission to practice pro hac vice in the courts of the state." Id.

As plaintiffs have no fundamental right to select out-of-state counsel to represent them in our state courts, we find this assignment of error to be without merit.

II.

Plaintiffs next contend that the trial court abused its discretion by denying Jones's motion for admission to practice pro hac vice. We disagree.

N.C. Gen.Stat. § 84-4.1 states that the power to allow or reject an application for limited practice by an out-of-state attorney lies within the discretion of the trial court. Id. "`[A] trial court may be reversed for abuse of discretion only upon a showing that its actions are manifestly unsupported by reason.'" Smith v. Beaufort County Hosp. Ass'n., 141 N.C.App. 203, 210, 540 S.E.2d 775, 780 (2000) (citation omitted). "`A ruling committed to a trial court's discretion is to be accorded great deference and will be upset only upon a showing that it was so arbitrary that it could not have been the result of a reasoned decision.'" Id. (citation omitted).

A review of the trial court's order fails to reveal a decision so arbitrary that it could not have been the result of a reasoned decision. Rather, the trial court noted that Jones had filed two motions for admission to practice pro hac vice in the various actions involved in the suit, and that North Carolina attorneys had signed statements of intent in connection with both motions. However, the trial court further found that the North Carolina attorneys had not signed other papers filed with the court regarding the related matters, and that Jones had been participating in the unauthorized practice of law "from the outset of his representation of the plaintiff." The trial court then, in its discretion, denied Jones's motion for admission to practice. As the trial court clearly set out reasons for its denial of Jones's motion, we find no abuse of discretion.

Plaintiffs contend, however, that the case of Holley v. Burroughs Wellcome Co., 56 N.C.App. 337, 289 S.E.2d 393 (1982), controls. In Holley, the trial court found that the attorney's required affidavit under section 84-4.1 did not meet the requirements of the statute, but denied the attorney's application in the exercise of its discretion. Id. at 344, 289 S.E.2d at 397. This Court found that the trial court's discretionary power was not invoked until all of the requirements of the statute were met, and remanded the case for further proceedings. Id. at 344-45, 289 S.E.2d at 397.

Holley is distinguishable from the instant case, however. Here the trial court did not...