Opinion
No. COA11–860.
2012-05-1
DODEKA, L.L.C., Plaintiff v. Reginald J. COBB and Keith Cobb, Administrators for the Estate of Katie Lee Cobb, Decedent, Defendant.
Weinstein & Riley, P.S., by Elizabeth H. Parrott, for plaintiff-appellant. Adrian M. Lapas, P.A., by Adrian M. Lapas, for defendant-appellee.
Appeal by plaintiff from judgment entered 8 March 2011 by Judge Les Turner in Wayne County District Court. Heard in the Court of Appeals 14 December 2011. Weinstein & Riley, P.S., by Elizabeth H. Parrott, for plaintiff-appellant. Adrian M. Lapas, P.A., by Adrian M. Lapas, for defendant-appellee.
CALABRIA, Judge.
Dodeka, L.L.C. (“plaintiff”) appeals from the trial court's judgment by default in favor of Reginald J. Cobb and Keith Cobb, as administrators for the Estate of Katie Lee Cobb (“defendant”). We affirm.
I. Background
On 12 January 2009, plaintiff filed a complaint against Katie C. Cobb (“Cobb”) to collect an unpaid credit card debt of $4,204.91. On 2 February 2009, Cobb filed an answer and counterclaims against plaintiff. Plaintiff did not file a reply to Cobb's counterclaims within 30 days as required by Rule 12(a)(1) of the North Carolina Rules of Civil Procedure. As a result, on 24 March 2009, Cobb filed a motion for entry of default. The Clerk of Superior Court made an entry of default that same day. Cobb subsequently moved for a judgment by default.
On 2 April 2009, plaintiff filed a “response” to Cobb's counterclaims. The next day, plaintiff filed a response to defendant's motion for default judgment. A hearing on defendant's motion was held on 6 April 2009. At the hearing, plaintiff made an oral motion to set aside the entry of default. On 18 June 2009, the trial court entered an order denying plaintiff's motion and allowing Cobb's motion for default judgment.
Plaintiff attempted to appeal the trial court's order by entering notice of appeal on 15 July 2009. The trial court subsequently dismissed this appeal due to plaintiff's failure to comply with the North Carolina Rules of Appellate Procedure. The case then proceeded to a determination of Cobb's damages.
A damages trial was conducted by the trial court on 8 December 2009. After the trial, Cobb passed away and the administrators of her estate were substituted in her place as party defendant. On 8 March 2011, the trial court entered a judgment awarding defendant $4,500.00 in actual damages and $17,912.11 in costs, including $17,627.50 in attorney's fees. The attorney's fee award reflected a payment of $275.00 per hour for 64.10 hours of work. Plaintiff appeals.
II. Entry of Default
Plaintiff argues that the trial court erred by denying its motion to set aside default and by entering a default judgment against it. We disagree. A. Preservation
Initially, we note that defendant contends that plaintiff failed to adequately preserve this issue for appellate review. In support of its contention, defendant notes that plaintiff's notice of appeal does not reference the trial court's order entered 18 June 2009, which denied plaintiff's motion to set aside the default and which purported to enter judgment by default to plaintiff. Rule 3(d) of our Rules of Appellate Procedure requires that a notice of appeal “shall designate the judgment or order from which appeal is taken ....“ N.C.R.App. P. 3(d) (2011). However,
our Court may still have jurisdiction to review an intermediate order even if an appellant omits a certain order from the notice of appeal ... [where] three conditions are met: (1) the appellant must have timely objected to the order; (2) the order must be interlocutory and not immediately appealable; and (3) the order must have involved the merits and necessarily affected the judgment.
Sellers v. FMC Corp., ––– N.C.App. ––––, ––––, 716 S.E.2d 661, 665 (2011)(internal quotations and citation omitted); see alsoN.C. Gen.Stat. § 1–278 (2011) (“Upon an appeal from a judgment, the court may review any intermediate order involving the merits and necessarily affecting the judgment.”).
In the instant case, the trial court's order denying plaintiff's motion to set aside default meets all three conditions. First, plaintiff objected to the order in a manner permitted by Rule 46 of the North Carolina Rules of Civil Procedure, which governs objections and exceptions. This rule states that in order to preserve an exception to an interlocutory order, “it shall be sufficient if a party, at the time the ruling or order is made or sought, ... makes known the action that the party desires the court to take and the party's grounds for its position.” N.C. Gen.Stat. § 1A–1, Rule 46(b) (2011). Thus, by making an oral motion to set aside default, plaintiff preserved its exception to the trial court's order. See Inman v. Inman, 136 N.C.App. 707, 712, 525 S .E.2d 820, 823 (2000)(Where the plaintiff filed a motion to dismiss, Rule 46 required no further action in the trial court in order to preserve his exception to the trial court's ruling on the motion.).
Second, the trial court's order was interlocutory. Although the trial court's order stated that default judgment was entered against plaintiff, it also set the case “for hearing on the issue of Defendant's damages, if any, to be awarded as prayed for by Defendant....” In a previous case with an identical procedural posture, this Court explained that
[g]enerally, there is first an interlocutory entry of default, and then a final judgment by default only after the requisites to its entry, including a jury trial on damages, have occurred. SeeG.S. 1A–1, Rule 55 comment. In Pendley v. Ayers, 45 N.C.App. 692, 263 S.E.2d 833 (1980), as here, the trial court had ordered a default judgment and a trial on damages. This Court held: “The purported judgment entered herein was an entry of default. An entry of default is not a final order or a final judgment.” Id. at 694, 263 S.E.2d at 834.
Duncan v. Duncan, 102 N.C.App. 107, 111, 401 S.E.2d 398, 400 (1991). Accordingly, since the trial court's order in the instant case did not determine the amount of damages, it “was not a final order or final judgment but was an interlocutory entry of default....” Id.
Finally, the trial court's order “involved the merits and necessarily affected the judgment.” Sellers, ––– N.C.App. at ––––, 716 S.E.2d at 665. “An order involves the merits and necessarily affects the judgment if it deprives the appellant of one of the appellant's substantive legal claims.” Yorke v. Novant Health, Inc., 192 N.C.App. 340, 348, 666 S.E.2d 127, 133 (2008). In the instant case, as a result of the trial court's entry of default, plaintiff was “deemed to have admitted the allegations in [defendant's counterclaims], and [wa]s prohibited from defending on the merits of the case.” Hartwell v. Mahan, 153 N.C.App. 788, 791, 571 S.E.2d 252, 253–54 (2002)(internal quotation and citation omitted). Consequently, the trial court's order involved the merits of the instant case and necessarily affected the trial court's final judgment. Since the trial court's order met the three requirements set forth in Sellers, plaintiff's appeal from that order is properly before this Court. B. Motion to Set Aside
“An entry of default may be set aside ‘[f]or good cause shown.’ “ Brown v. Lifford, 136 N.C.App. 379, 381, 524 S.E.2d 587, 588 (2000)(quoting N.C. Gen.Stat. § 1A–1, Rule 55(d)). “A trial court's determination of ‘good cause’ to set aside an entry of default will not be disturbed on appeal absent an abuse of discretion.” Id. at 382, 524 S.E.2d at 589. “What constitutes ‘good cause’ depends on the circumstances in a particular case, and ... an inadvertence which is not strictly excusable may constitute good cause, particularly where the plaintiff can suffer no harm from the short delay involved in the default and grave injustice may be done to the defendant.” Peebles v. Moore, 48 N.C.App. 497, 504, 269 S.E.2d 694, 698 (1980)(internal quotations and citation omitted), modified and aff'd, 302 N.C. 351, 275 S.E.2d 833 (1981).
In the instant case, plaintiff argues that there was good cause to set aside the default because the attorney representing plaintiff was suffering from shingles and this illness was “the cause of the failure to timely answer the counterclaim.” However, in its order denying plaintiff's motion to set aside default, the trial court found:
Plaintiff ... did not offer, by way of argument and/or documentation, such as medical records or a physician's synopsis or note, any specific information regarding the nature of said health issues/problems of Plaintiff's counsel of record or any specific time frame of said health issues/problems ... causing Plaintiff's counsel ... to be unable to maintain effective case management in support [of] Plaintiff's argument ... except for the scant statement of “shingles at the beginning of the year which have lingered.”
As a result, the trial court concluded that plaintiff failed to show good cause to set aside the default.
The party seeking to have a default set aside bears the burden of demonstrating good cause. Nguyen v. Taylor, ––– N.C.App. ––––, ––––, –––S.E.2d ––––, –––– (2012). The trial court's finding, which is unchallenged on appeal, indicates plaintiff's only proof of good cause was an assertion of its counsel's illness, without any supporting documentation of the illness. Under these circumstances, we discern no abuse of discretion in the trial court's determination that plaintiff failed to show good cause to set aside its default. This argument is overruled.
III. Award of Attorney's Fees
Plaintiff argues that the trial court erred by awarding defendant attorney's fees under N.C. Gen.Stat. § 6–21.5 (2011). We disagree.
In the instant case, the trial court's final judgment awarded defendant attorney's fees under three separate statutes, 15 U.S.C. § 1692k, N.C. Gen.Stat. § 75–16.1, and N.C. Gen.Stat. § 6–21.5. Each of these statutes, individually, would support an award of attorney's fees to defendant. However, plaintiff only argues that the award of attorney's fees under N.C. Gen.Stat. § 6–21.5 was improper. Plaintiff has failed to offer any argument as to why attorney's fees would be improper under the remaining statutes apart from its contention that the trial court should have set aside plaintiff's default. Accordingly, we affirm the award of attorney's fees under 15 U.S.C. § 1692k and N.C. Gen.Stat. § 75–16.1, and we decline to address plaintiff's argument regarding N.C. Gen.Stat. § 6–21.5. This argument is overruled.
IV. Amount of Attorney's Fees
Plaintiff argues that the trial court erred by awarding plaintiff $17,627.50 in attorney's fees. Plaintiff contends that the amount of time that defense counsel spent on the case was excessive. We disagree.
“For the appellate court to determine if an award of counsel fees is reasonable, ‘the record must contain findings of fact as to the time and labor expended, the skill required, the customary fee for like work, and the experience or ability of the attorney’ based on competent evidence.” West v. Tilley, 120 N.C.App. 145, 151, 461 S.E.2d 1, 4 (1995)(quoting United Laboratories, Inc. v. Kuykendall, 102 N.C.App. 484, 494, 403 S.E.2d 104, 111 (1991)). “The findings of the trial judge are conclusive on appeal if there is competent evidence in the record to support them ... This is true even though there may be evidence in the record which could sustain findings to the contrary.” Dyer v. State, 331 N.C. 374, 376, 416 S.E.2d 1, 2 (1992).
In the instant case, the trial court awarded defendant attorney's fees based upon an affidavit from defense counsel that indicated he had spent 64.10 hours on the case and that his hourly fee was $275.00. The trial court found that “64.10 hours is a reasonable amount of time expended in this matter....” Moreover, after considering defense counsel's affidavit and affidavits from four other attorneys in the area, the trial court found “$275.00 per hour is a reasonable rate....”
Plaintiff contends that 64.10 hours was an unreasonable amount of time to spend on the case and notes several entries in defense counsel's time log which it deems excessive or unnecessary. However, our Supreme Court has previously stated that a trial court “properly relied on the statement of the ... attorney as to the amount of time he devoted to the case” because “[t]he attorney was an officer of the court [and][t]he court observed the attorney during the trial and could determine his skill in trying the case as well as the difficulty of the problems faced by the attorney.” Id . at 378, 416 S.E.2d at 3. The instant case involved multiple hearings on many different matters, including the default and plaintiff's attempt to set aside the default, the attempted appeal, and the damages trial. Each of these matters was heard before the same district court judge who entered the judgment in this case. Defendant's counsel fastidiously documented the amount of time spent on all aspects of the case and submitted his documentation to the trial court. The trial court determined that defense counsel's time as submitted was reasonable and we find no abuse of discretion in this determination. This argument is overruled.
V. Conclusion
Although the trial court's order denying plaintiff's motion to set aside default was not designated on plaintiff's notice of appeal, it was an intermediate order under N.C. Gen.Stat. § 1–278 and was properly before this Court. The trial court did not abuse its discretion in denying plaintiff's motion to set aside default. The trial court properly awarded defendant attorney's fees and did not abuse its discretion in determining the amount of attorney's fees to be $17,627.50. The judgment of the trial court is affirmed.
Affirmed. Judges BRYANT and STROUD concur.
Report per Rule 30(e).