Patrick v. Ronald Williams, Professional Ass'n

• Decision Date: 02 April 1991
• Docket Number: No. 9026SC350,9026SC350
• Parties: , 59 USLW 2692 Bobby Charles PATRICK and wife, Omie Patrick, Plaintiffs, v. RONALD WILLIAMS, PROFESSIONAL ASSOCIATION and Ronald C. Williams, Individually, Defendants.
• Court: North Carolina Court of Appeals

Page 452

402 S.E.2d 452

102 N.C.App. 355, 59 USLW 2692

Bobby Charles PATRICK and wife, Omie Patrick, Plaintiffs, v. RONALD WILLIAMS, PROFESSIONAL ASSOCIATION and Ronald C Williams, Individually, Defendants.

No. 9026SC350.

Court of Appeals of North Carolina.

April 2, 1991.

Charles M. Welling, Charlotte, for plaintiff appellants-appellees.

Hedrick, Eatman, Gardner & Kincheloe by Mel J. Garofalo, Charlotte, for defendant appellants-appellees.

COZORT, Judge.

Seeking compensatory and punitive damages, plaintiffs sued defendants for legal malpractice. We affirm in part and reverse in part the trial court's Order of 19 January 1990 disposing of various motions and granting partial summary judgment to plaintiffs and defendants.

The case below has its origin in an automobile accident. On 5 December 1984 Bobby Charles Patrick (Patrick), while driving a truck owned by his employer, was involved in a collision with a truck driven by James H. Greene (Greene). As a result of Patrick's injuries, his damages exceed $63,000 for medical expenses, treatment, and lost wages.

In January 1985, plaintiffs (Patrick and his wife) employed defendant herein, Ronald Williams (Williams), to represent them in "all matters and things arising out of or connected with" the accident of 5 December 1984. In July 1986, Williams, on behalf of the Patricks, filed an action alleging that Greene's negligence caused the accident and seeking recovery for damages including loss of consortium. The action joined the following parties as defendants in a declaratory judgment claim to determine Bobby Patrick's rights, if any, under applicable policies of the defendants: Iowa National Mutual Insurance Company (Iowa National), Bobby Patrick's liability insurance carrier; Michigan Mutual Insurance Company (Michigan Mutual), the liability insurance carrier of Patrick's employer; and State Farm Mutual Insurance Company (State Farm), Greene's liability insurance carrier. Iowa National became insolvent, and the North Carolina Insurance Guaranty Association (North Carolina Guaranty) was substituted in its place. North Carolina Guaranty, Michigan Mutual, and Greene filed answers to the complaint.

In December 1986, Greene's attorney sent to Williams an offer of judgment pursuant to Rule 68 of the North Carolina Rules of Civil Procedure. Although the text of that offer (in the amount of $25,000) is not included in the Record, Williams responded to the offer by sending a letter, dated 15 December 1986, to the attorneys for North Carolina Guaranty and Michigan Mutual. Williams' letter read as follows:

Pursuant to North Carolina General Statutes 20-279.21(b)(4) please accept this letter as written notice in advance of settlement between the underinsured motorist, Jimmy Harris Greene, and Bobby Charles Patrick. By copy of this letter we are notifying Mr. Greene's attorney that we accept the Offer of Judgment.

The record indicates that on 19 December 1986 Greene's attorney filed an affidavit, with attached copies of his offer and of Patrick's letter quoted above, to prove service and acceptance of the offer of judgment. The record also indicates that, on the same day, the clerk, in accordance with Rule 68, entered judgment for the plaintiffs against Greene in the amount of $25,000 plus costs. On 19 December 1986, Greene's attorney also petitioned the court to determine the distribution of the judgment proceeds pursuant to N.C.Gen.Stat. § 97-10.2(j) (1985). On 21 January 1987, an Order was entered directing that the proceeds of the judgment against Greene "be distributed in part to Plaintiffs, in part to counsel for Plaintiffs [Williams] and in part to Michigan Mutual [the workers' compensation insurance carrier]." Neither the text of the 19 December 1986 Judgment against Greene, nor that of the 21 January 1987 Order, distributing the proceeds, appears of record.

On 27 January 1987, Williams filed a motion pursuant to Rule 60 of the North Carolina Rules of Civil Procedure to have the Judgment of 19 December 1986 set aside. After a hearing on 10 June 1987, the trial court entered an Order on 7 July 1987 denying the Rule 60 motion on the grounds, among others, that "any alleged mistake claimed by the Plaintiffs in support of their motion [by Williams] to set aside the judgment of December 19, 1986 was a unilateral mistake, and a mistake of law, and it is therefore not appropriately remedied under Rule 60(b)(1)." Williams failed to file an appeal of that Order, consequently, the Judgment of 19 December 1986 remains final.

On 26 August 1988 the Patricks filed a complaint alleging that Williams was negligent in providing legal services to them. The essence of their complaint was that Williams committed "gross legal malpractice" by accepting the $25,000 offer of judgment and failing to appeal the order denying relief from the judgment entered on 19 December 1986, "thereby releasing forever ... the primary tort-feasor, Jimmy H. Greene, and by operation of law ... releasing" the insurance companies providing applicable underinsured motorist coverage. Williams answered, and, after further pleadings, the parties made cross motions for partial summary judgment.

Amending an earlier order, the trial court entered an Order on 19 January 1990, which included the following dispositions: (1) denied defendants' motion to amend their answer; (2) granted defendants' motion for partial summary judgment on the plaintiffs' claim for punitive damages; (3) granted defendants' motion for a protective order from plaintiffs' discovery request for documents related to defendants' financial worth; (4) granted plaintiff's motion for partial summary judgment "in regard to negligence of the original tort feasor Jimmy Harris Greene;" and (5) granted plaintiffs' motion for partial summary judgment on their claim regarding defendants' legal malpractice. Further, the order provided: (6) "that the liability insurance policies were in effect prior to the 1985 amendments to N.C.G.S. § 20-179.21(b)(4), and the Michigan Mutual policy provided $60,000.00 underinsurance coverage, and the Iowa National policy provided for $50,000.00 underinsurance coverage"; and (7) "[t]hat the issue of any credit for amounts paid to or for the benefit of the Plaintiff, Bobby Charles Patrick, pursuant to the Workers' Compensation Act is not an issue before the Court at this time, and the Court declines to rule thereon."

Plaintiffs and defendants appealed the Order of 19 January 1990. We shall discuss defendants' appeal first. Defendants assign error to the trial court's rulings in issues (1), (4), (5), and (7) above. We address these assignments of error seriatim.

The defendants contend that the trial court abused its discretion in denying their motion to amend their answer. We disagree.

Rule 15(a) of the North Carolina Rules of Civil Procedure provides that, after the time for amendment as a matter of right expires, "a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." N.C.Gen.Stat. § 1A-1, Rule 15(a) (1990). As defendants correctly note, a motion to amend is addressed to the sound discretion of the court, and its decision will not be disturbed on appeal without a clear showing of abuse of discretion. United Leasing Corp. v. Miller, 60 N.C.App. 40, 42, 298 S.E.2d 409, 411 (1982), disc. review denied, 308 N.C. 194, 302 S.E.2d 248 (1983). It does not appear of record that defendants moved, pursuant to Rule 52(a) of the North Carolina Rules of Civil Procedure, for findings and conclusions to support the court's decision. Without such a motion, formal findings and conclusions are not required, and it is " 'presumed that the Judge, upon proper evidence, found facts to support' " the ruling. Allen v. Wachovia Bank and Trust Co., 35 N.C.App. 267, 269, 241 S.E.2d 123, 125 (1978) (quoting Haiduven v. Cooper, 23 N.C.App. 67, 69, 208 S.E.2d 223, 224 (1974)).

Where there is no declared reason for the denial of a motion to amend, an appellate court "may examine any apparent reasons for such denial." Leasing Corp., 60 N.C.App. at 43, 298 S.E.2d at 411. Among the reasons justifying denial of amendment are: "(a) undue delay, (b) bad faith or dilatory tactics, (c) undue prejudice, (d) futility of amendment, and (e) repeated failure to cure defects by previous amendments." Id. at 43, 298 S.E.2d at 411-12. In the case below defendants moved to amend their answer almost a full year after filing it and after both parties had conducted extensive discovery. Moreover, if the trial court had allowed amendment, plaintiffs would have been required to produce evidence of Greene's negligence approximately five years after the accident. Thus, at least on grounds of defendants' undue delay and undue prejudice to plaintiffs, the trial court's ruling was justified. We note finally that by their motion to amend the defendants sought to deny the allegation that plaintiff Bobby Patrick was damaged "as a direct and proximate result of the negligence of James H. Greene." Defendants' original answer admitted that allegation, and the withdrawal of a judicial admission is not favored. 31A C.J.S. § 299 (1964). Accordingly, we hold the trial court did not abuse its discretion.

We turn next to defendants' contention that the trial court erred "in allowing the plaintiffs' motion for partial summary judgment on the issue of the negligence of Jimmy H. Greene." Emphasizing in particular Greene's affidavit dated 27 November 1989, defendants contend that for purposes of summary judgment there remains a genuine issue of fact regarding Greene's negligence in the 1984 accident. We disagree.

We first note that summary judgment is to be granted when, viewing the record in the light most favorable to the non-moving party, there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Beckwith v. Llewellyn, ...