Milton M. Croom Unitrust v. Hedrick

• Decision Date: 15 January 2008
• Docket Number: No. COA05-1586.,COA05-1586.
• Citation: 654 S.E.2d 716
• Court: North Carolina Court of Appeals
• Parties: MILTON M. CROOM CHARITABLE REMAINDER UNITRUST, W. Brian Howell, Trustee, Plaintiff, v. Robert T. HEDRICK, Defendant and Third-Party Plaintiff, v. P.D. Williams, Individually and as Co-Trustee of the Croom Trust, Third-Party Defendant.

654 S.E.2d 716

MILTON M. CROOM CHARITABLE REMAINDER UNITRUST, W. Brian Howell, Trustee, Plaintiff, v. Robert T. HEDRICK, Defendant and Third-Party Plaintiff, v. P.D. Williams, Individually and as Co-Trustee of the Croom Trust, Third-Party Defendant.

No. COA05-1586.

Court of Appeals of North Carolina.

January 15, 2008.

Appeal by third-party defendant from an order entered 20 September 2005 by Judge J.B. Allen, Jr., in Wake County Superior Court. Heard in the Court of Appeals 19 September 2007.

Robert T. Hedrick, Raleigh, for third-party plaintiff-appellee.

Stubbs & Perdue, P.A., by Trawick H. Stubbs, Jr., Laurie B. Biggs, and Thomas Reston Wilson, Raleigh, for third-party defendant-appellant.

JACKSON, Judge.

P.D. Williams ("Williams") appeals from an order entered 20 September 2005 denying her Rule 60(b) motion for relief from judgment entered 18 July 2005. For the following reasons, we affirm in part and dismiss in part.

Beginning several years prior to 1998, Robert T. Hedrick ("Hedrick") performed legal services for Williams and various corporations in which Williams had an interest as an officer or stockholder, including Cal-Tone Paints, Inc., Southeastern Sundries and Supplies, Inc., Tri-Coatings Company, Inc., Nathaniel Macon, Inc., and Slim & None, Inc. After becoming president of Cal-Tone Paints, Inc., Williams assured Hedrick that he would be paid for the services he had performed. Based upon this representation, Hedrick continued to perform legal services for Williams and the various corporations.

Williams also was appointed co-trustee of the Milton M. Croom Charitable Remainder Unitrust ("the Croom Trust"), and among the Croom Trust's assets was a sailboat ("the boat"). Since the inception of the Croom Trust, there had been no funds available with which to pay the expenses associated with maintaining the boat. In September 1999, the boat washed onto a marshy bank as a result of Hurricane Floyd and needed to be moved because it was blocking a commercial fishing trawler. Williams informed Hedrick that the Croom Trust did not have the funds to pay for moving the boat and asked Hedrick to assume ownership of the boat, with the understanding that Williams would pay the purchase price. Williams further asked Hedrick to prepare a promissory note for $50,000.00 for him to sign payable in two years, which would provide her sufficient time to acquire the funds to pay for the boat. Williams indicated that she would mark the promissory note paid and satisfied in full in order to assure that Hedrick would not be responsible for payment on the note.

On 22 September 1999, Hedrick executed a promissory note ("the note") in the amount of $50,000.00 payable to the Croom Trust, which Williams, as trustee, signed as being satisfied. Williams also instructed Hedrick to date the satisfaction at a time beyond the payment due date. Thereafter, Williams assured Hedrick on numerous occasions that she intended to pay the Croom Trust for the boat as soon as she was in a financial position to do so. In the summer of 2001, Williams requested that Hedrick prepare an extension of the note since she had been unable to obtain the funds as anticipated. Hedrick prepared the extension with the understanding that Williams remained responsible for payment for the boat to the Croom Trust.

In October 2002, Williams indicated that she would pay $50,000.00 for the boat, but refused to pay the interest that had accumulated. Thereafter, Brent E. Wood ("Wood"), attorney for Williams, indicated that Williams would attempt to obtain financing on property that she had agreed to purchase and that if she could obtain such financing, she would put $50,000.00 into an escrow account. Hedrick responded to Wood and informed him that such a proposal was unacceptable.

On 13 October 2003, the Croom Trust filed a complaint against Hedrick alleging that Hedrick was liable on the note. On 12 December 2003, Hedrick filed an answer and counterclaim as well as a third-party complaint alleging cross-claims against Williams. On 8 April 2004, the Croom Trust filed a motion for summary judgment against Hedrick, which the trial court granted by order entered 27 May 2004. On 4 June 2004, Williams filed a motion to dismiss Hedrick's third-party complaint, and on 17 February 2005, Williams filed an answer to the third-party complaint. On 16 March 2005, Hedrick filed a more definite statement, and on 21 April 2005, Wood filed a motion to withdraw as Williams' counsel. By order entered 22 April 2005, the trial court denied Williams' motion to dismiss, and by order entered 28 April 2005, the trial court ordered Wood withdrawn as Williams' counsel.

At a hearing held on 18 July 2005 and unattended by Williams, the trial court found Williams liable on Hedrick's cross-claims and awarded Hedrick $150,000.00 in treble damages for unfair and deceptive trade practices, along with interest on the note and the costs of the action. On 19 July 2005, Hedrick dismissed his counterclaims against the Croom Trust. On 1 August 2005, Williams filed a Rule 60(b) motion for relief from the 18 July 2005 judgment, which the trial court denied by order entered 20 September 2005. Thereafter, Williams filed timely notice of appeal.

As this Court recently explained,

Rule 60(b) of the North Carolina Rules of Civil Procedure provides that a court may relieve a party from a judgment or order because: (1) of mistake, surprise, or excusable neglect; (2) of newly discovered evidence that could not have been timely discovered by due diligence; (3) of fraud, misrepresentation, or other misconduct; (4) the judgment or order is void; (5) the judgment or order has been satisfied or discharged, or a prior judgment or order upon which it is based has been reversed or vacated; or (6) any other equitable justification for relief from the judgment or order.

Williams v. Walker, ___ N.C.App. ___, ___, 648 S.E.2d 536, 540 (2007) (citing N.C. Gen.Stat. § 1A-1, Rule 60(b) (2005)). In the instant case, Williams based her motion for relief upon Rule 60(b)(1), (2), (3), and (6). Williams, however, has offered no argument on appeal with respect to Rule 60(b)(2). Accordingly, we confine our review to her motion for relief with respect to Rule 60(b)(1), (3), and (6). See N.C. R.App. P. 28(b)(6) (2006).

The standard of review for the denial of a Rule 60(b) motion is abuse of discretion. See Davis v. Davis, 360 N.C. 518, 523, 631 S.E.2d 114, 118 (2006). "A judge is subject to reversal for abuse of discretion only upon a showing by a litigant that the challenged actions are manifestly unsupported by reason." Clark v. Clark, 301 N.C. 123, 129, 271 S.E.2d 58, 63 (1980). "A trial court is not required to make written findings of fact when ruling on a Rule 60(b) motion, unless requested to do so by a party." Creasman v. Creasman, 152 N.C.App. 119, 124, 566 S.E.2d 725, 729 (2002); accord Condellone v. Condellone, 137 N.C.App. 547, 550, 528 S.E.2d 639, 642, disc. rev. denied, 352 N.C. 672, 545 S.E.2d 420 (2000). But see Trent v. River Place, LLC, 179 N.C.App. 72, 79, 632 S.E.2d 529, 534 (2006) ("Upon hearing such a [Rule 60(b)] motion, it is the `duty of the judge presiding . . . to make findings of fact and to determine from such facts whether the movant is entitled to relief from a final judgment or order.'" (alteration in original) (quoting Hoglen v. James, 38 N.C.App. 728, 731, 248 S.E.2d 901, 903 (1978))). When, as in the instant case, "the trial court does not make findings of fact in its order denying the motion to set aside the judgment, the question on appeal is `whether, on the evidence before it, the court could have made findings of fact sufficient to support its legal conclusion.'" Grant v. Cox, 106 N.C.App. 122, 125, 415 S.E.2d 378, 380 (1992) (alteration omitted) (quoting Tex. W. Fin. Corp. v. Mann, 36 N.C.App. 346, 349, 243 S.E.2d 904, 907 (1978)).

First, with respect to Rule 60(b)(1), "[t]he issue of `what constitutes "excusable neglect" is a question of law which is fully reviewable on appeal.'" McIntosh v. McIntosh, ___ N.C.App. ___, ___, 646 S.E.2d 820, 825 (2007) (quoting In re Hall, 89 N.C.App. 685, 687, 366 S.E.2d 882, 884, disc. rev. denied, 322 N.C. 835, 371 S.E.2d 277 (1988)). "While there is no clear dividing line as to what falls within the confines of excusable neglect as grounds for the setting aside of a judgment, what constitutes excusable neglect depends upon what, under all the surrounding circumstances, may be reasonably expected of a party in paying proper attention to his case." Thomas M. McInnis & Assocs., Inc. v. Hall, 318 N.C. 421, 425, 349 S.E.2d 552, 554-55 (1986).

In the case sub judice, Williams contended in her Rule 60(b) motion that after Wood withdrew from representation,

Williams never received any calendar or other written notice indicating that the above-captioned civil action was proceeding to any hearing or trial. To the contrary, the only communication received by Williams from Hedrick after Mr. Wood withdrew as counsel . . . was a letter and audiotape from Hedrick, with which Hedrick attempted to blackmail Williams.¹

The record demonstrates that the instant case was placed on the six-month trial calendar published in April, and Williams was represented by Wood until the trial court granted his motion to withdraw on 28 April 2005. Williams was present at the hearing when the court ordered Wood withdrawn as counsel. Although Williams contends that her attorney had not been sent a calendar for the trial date by the Wake County Clerk of Court as of the date she began representing herself pro se, there is no evidence in the record to support her assertion. Williams did not present an affidavit from Wood to the trial court, and Wood did not testify at the hearing on Williams' Rule 60(b) motion.

Additionally, Williams' only justification for not obtaining representation after Wood withdrew was that "[n]othing was happening." She acknowledged that at the time Wood...