Opinion
Nos. COA02-1520, COA02-1521
Filed 3 February 2004 This case not for publication
Appeal by defendant from order entered 31 July 2002, from judgment entered 31 July 2002, and from order entered 4 September 2002 by Judge Albert A. Corbett, Jr., in District Court, Lee County. Heard in the Court of Appeals 18 September 2003. As the issues presented by defendant's appeals to this Court arise out of the same action and involve common questions of law, we have consolidated the appeals pursuant to Rule 40 of the North Carolina Rules of Appellate Procedure.
Bain McRae, by Edgar R. Bain and Alton D. Bain, for plaintiffs-appellees. Walker, Clark, Allen, Grice Ammons, L.L.P., by Jerry A. Allen, Jr. and Gay Parker Stanley, for defendant-appellant.
Lee County Nos. 98 CVD 471, 98 CVD 473.
Patrick Elliott, guardian ad litem for Brian Elliott, and Maria Elliott, hereafter referred to collectively as plaintiffs, filed suit against Shirley Birth (defendant) on 26 May 1998. Defendant filed an answer and demand for jury trial on 5 August 1998. Defendant filed an offer of judgment for $1,501.00 on 22 December 1998, which plaintiff Patrick Elliott rejected. Defendant also filed an offer of judgment for $2,001.00, which plaintiff Maria Elliott rejected. Prior to trial, defendant stipulated that her negligence was the proximate cause of the accident. The cases were consolidated and tried before a jury on 7 January 1999 only on the issue of the amount of damages. The jury returned a $350.00 verdict in favor of Patrick Elliott and a $1,000.00 verdict in favor of Maria Elliott. Plaintiffs filed motions to set aside the verdicts on the grounds they were inadequate and not supported by the evidence. The trial court granted the motions to set aside the verdicts. Following two subsequent appeals by defendant to this Court, we reversed the trial court and reinstated the jury verdicts.
Plaintiffs then filed motions for allowance of attorney's fees on 14 May 2002 and defendant filed a response to the motions on 2 July 2002. The trial court announced its decision to award attorney's fees to plaintiffs in open court on 12 July 2002. Defendant filed a motion for reconsideration and rehearing on 30 July 2002. The trial court entered an order on 31 July 2002 allowing plaintiffs' motions for attorney's fees. The trial court denied defendant's motion for reconsideration and rehearing in an order entered 4 September 2002. Defendant appeals the 31 July 2002 order and the 4 September 2002 order.
Brian Elliott, a minor child, and Maria Elliott were injured in a motor vehicle accident on 27 November 1997 in Wake County. Plaintiffs' attorney wrote a letter to defendant's liability carrier, Allstate Insurance Company (Allstate), on 30 December 1997, informing Allstate that he represented plaintiffs regarding the accident. Allstate received the letter on 31 December 1997, and a claims representative, Debra Gibbens (Ms. Gibbens), responded to the letter on 12 January 1998.
Plaintiffs' attorney acknowledged receipt of the 12 January 1998 letter on 14 April 1998 and forwarded plaintiffs' medical records and bills and a demand for settlement for Maria Elliott in the amount of $4,000.00. Ms. Gibbens completed her evaluation of the settlement packages for each claimant on 22 May 1998. Plaintiffs filed suit on 26 May 1998. Ms. Gibbens received settlement authority on 2 June 1998 for each claim arising out of the automobile accident.
"As a general rule, in the absence of some contractual obligation or statutory authority, attorney fees may not be recovered by the successful litigant as damages or a part of the court costs." Washington v. Horton, 132 N.C. App. 347, 349, 513 S.E.2d 331, 333 (1999). "However, N.C. Gen. Stat. § 6-21.1 (1999) `creates an exception to the general rule that attorney's fees are not allowable as part of the costs in civil actions.'" Robinson v. Shue, 145 N.C. App. 60, 64, 550 S.E.2d 830, 833 (2001) (quoting Hill v. Jones, 26 N.C. App. 168, 169, 215 S.E.2d 168, 169, cert. denied, 288 N.C. 240, 217 S.E.2d 664 (1975)). N.C. Gen. Stat. § 6-21.1 (2003) provides that [i]n any personal injury or property damage suit, or suit against an insurance company under a policy issued by the defendant insurance company and in which the insured or beneficiary is the plaintiff, upon a finding by the court that there was an unwarranted refusal by the defendant insurance company to pay the claim which constitutes the basis of such suit, instituted in a court of record, where the judgment for recovery of damages is ten thousand dollars ($10,000) or less, the presiding judge may, in his discretion, allow a reasonable attorney fee to the duly licensed attorney representing the litigant obtaining a judgment for damages in said suit, said attorney's fee to be taxed as a part of the court costs.
Our Supreme Court set forth the following rationale for the statute in Hicks v. Albertson, 284 N.C. 236, 239, 200 S.E.2d 40, 42 (1973):
The obvious purpose of this statute is to provide relief for a person who has sustained injury or property damage in an amount so small that, if he must pay his attorney out of his recovery, he may well conclude that [it] is not economically feasible to bring suit on his claim. In such a situation the Legislature apparently concluded that the defendant, though at fault, would have an unjustly superior bargaining power in settlement negotiations. . . . This statute, being remedial, should be construed liberally to accomplish the purpose of the Legislature and to bring within it all cases fairly falling within its intended scope.
Defendant first argues the trial court abused its discretion in granting plaintiffs' motions for attorney's fees under N.C. Gen. Stat. § 6-21.1. "The allowance of attorney fees is in thediscretion of the presiding judge, and may be reversed only for abuse of discretion." Washington, 132 N.C. App. at 351, 513 S.E.2d at 334. "To prevail, defendant must show that the trial court's ruling is `manifestly unsupported by reason or is so arbitrary that it could not have been the result of a reasoned decision.'" Robinson, 145 N.C. App. at 65, 550 S.E.2d at 833 (quoting State v. Hennis, 323 N.C. 279, 285, 372 S.E.2d 523, 527 (1988)). Within this argument, defendant asserts multiple assignments of error.
Several of defendant's assignments of error, being numbers seven, thirteen, fifteen, and eighteen, present the single question of how defendant's settlement offers, pursuant to N.C. Gen. Stat. § 1A-1, Rule 68, compared to the judgments finally obtained by plaintiffs. Defendant argues that the trial court's finding that the offers of judgment were less favorable than the judgments finally obtained was not supported by the evidence. We find this argument to be without merit.
In Poole v. Miller, 342 N.C. 349, 464 S.E.2d 409 (1995), our Supreme Court determined that within the context of offers of judgment, the phrase "judgment finally obtained" means "the amount ultimately entered as representing the final judgment, i.e., the jury's verdict as modified by any applicable adjustments, by the respective court in the particular controversy, not simply the amount of the jury's verdict." Poole, 342 N.C. at 353, 464 S.E.2d at 411.
Defendant offered plaintiff Patrick Elliott $1,501.00. However, the judgment finally obtained, including the $350.00verdict and the $4,285.00 attorney's fee, is more favorable than defendant's offer. Similarly, defendant offered plaintiff Maria Elliott $2,001.00. However, the judgment finally obtained, the $1,000.00 verdict plus $4,285.00 in attorney's fees, is also more favorable than defendant's offer of judgment. See Poole, 342 N.C. at 354, 464 S.E.2d at 412. Accordingly, the trial court did not err when it found that "[t]he offers of judgment made pursuant to Rule 68 by the Defendant were less favorable than the judgments which are finally obtained in these cases."
By assignments of error numbers four, five, twelve, fourteen, and seventeen, defendant presents the issue of whether defendant's settlement offers were timely. Specifically, defendant argues that the trial court's findings and conclusions that (a) there was no reasonable excuse for defendant's failure to make an offer prior to plaintiffs' filing suit and (b) that the offers finally made were untimely, are not supported by the evidence. Again, we find this argument to be without merit.
The automobile collision occurred on 27 November 1997 and plaintiffs' attorney sent a demand for settlement to defendant on 14 April 1998. Plaintiffs waited six weeks before filing suit on 26 May 1998. Defendant filed and served a request for monetary relief sought on 14 August 1998. Plaintiffs served a response three days later, requesting $9,500.00 for each plaintiff. Plaintiffs made no other demands. Defendant filed two offers of judgment on 22 December 1998: (1) a $1,501.00 offer to Patrick Elliott and (2) a $2,001.00 offer to Maria Elliott. Defendant argues that because plaintiffs waited only six weeks between the demand for settlement and filing suit, defendant did not have adequate time to propose an offer to plaintiffs. However, we hold the trial court did not err in finding the timing to be unreasonable because defendant had authority to settle plaintiffs' claims as of 2 June 1998. Liability was clear as evidenced by defendant's stipulation prior to trial that her negligence was the proximate cause of the accident and therefore the only issue submitted to the jury was damages. The case was set for trial the week of 4 January 1999, and defendant waited until 22 December 1998 to file offers of judgment. These facts support a finding that defendant's timing was unreasonable and the trial court did not err.
Defendant's assignments of error six and sixteen present the issue of whether the trial court erred in finding that defendant "unjustly exercised superior bargaining power over the Plaintiffs." In addressing this factor, the trial court noted the following:
Defendant unjustly exercised superior bargaining power over the Plaintiffs by not making any offers of settlement until on December 22, 1998, at a time when the matters were set for trial on January 4, 1999. The timing of the offers so closely to the date of trial and the timing of the offers during the Christmas holidays are evidence of the Defendant's attempt to exercise superior bargaining power. The Court further has considered the letter of Jerry Allen, Defendant's attorney, to Edgar R. Bain in which it was stated that if the Court allowed any attorney fees in this case, the matter would be appealed to the Court of Appeals, even though this matter had twice been appealed to the North Carolina Court of Appeals previously. The offers of judgmentlikewise included all costs, attorney fees and recovery for the Plaintiffs. This was an attempt to escape the payment costs and reasonable fees.
In recognition of the broad discretion of the trial court, we hold the trial court did not err in finding an exercise of superior bargaining power by defendant based on these facts. Accordingly, these assignments of error are also overruled.
Defendant's assignments of error eight, nine, and ten relate to how the trial court determined the amount of attorney's fees to be awarded in these cases. When determining if attorney's fees are 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." Porterfield v. Goldkuhle, 137 N.C. App. 376, 378, 528 S.E.2d 71, 73 (2000) (quoting Brookwood Unit Ownership Assn. v. Delon, 124 N.C. App. 446, 449-50, 477 S.E.2d 225, 227 (1996) (quoting West v. Tilley, 120 N.C. App. 145, 151, 461 S.E.2d 1, 4 (1995) (citations omitted)). The trial court made the appropriate findings which were adequately supported by the evidence. The trial court relied on an affidavit by plaintiffs' attorney regarding the time expended on the cases. Further, the trial court referenced affidavits of practicing attorneys who asserted that $200.00 was a reasonable hourly rate. The trial court also noted plaintiffs' attorney's experience of forty years and his "A" rating in Martindale Hubbell. In light of the broad discretion of the trial court, we hold the trial court did not err in its finding of the number of hours worked by plaintiffs'attorney and its finding of an appropriate hourly rate based on these facts. Accordingly, we overrule these assignments of error.
Defendant also argues in assignments of error numbers three, twenty, and twenty-one, that the trial court erred in summarily denying defendant's motion for reconsideration and rehearing without considering the affidavit of Ms. Gibbens. We first note defendant did not cite any relevant authority in her brief to this Court in support of her argument, and pursuant to N.C.R. App. P. 28(b)(6), has waived appellate review of this issue. However, in our discretion, we elect to review this argument. N.C.R. App. P. 2.
Defendant moved for reconsideration and rehearing pursuant to N.C. Gen. Stat. § 1A-1, Rules 59 and 60. "A Rule 59(e) motion to amend the trial court's judgment or order is, of course, made subsequent to the judgment and is, itself, a matter within the trial court's discretion." Strickland v. Jacobs, 88 N.C. App. 397, 399, 363 S.E.2d 229, 230 (1988). A trial court's ruling on the motion is not reviewable on appeal in the absence of abuse of discretion. Hamlin v. Austin, 49 N.C. App. 196, 270 S.E.2d 558 (1980).
In its 4 September 2002 order, the trial court made the following findings of fact:
2. The motion for attorney's fees and costs was pending for more than 30 days prior to the time that the matter was heard by the Court.
3. The Defendant had ample opportunity to file counter affidavits in connection with the motion for fees and costs.
. . .
5. The Court considered the affidavits and oral arguments of the Defendants' counsel, and the Court is of the opinion that the Defendants' motion for reconsideration and rehearing should be denied.
Upon these facts, defendant has failed to show the trial court abused its discretion in denying the motion for reconsideration under Rule 59.
Rule 60 of the North Carolina Rules of Civil Procedure permits relief from judgment for specified reasons. In the case before us, none of the specific reasons is asserted. Rather, defendant relies on Rule 60(b)(6), which is "[a]ny other reason justifying relief from the operation of the judgment."
The rule empowers the court to set aside or modify a final judgment, order or proceeding whenever such action is necessary to do justice under the circumstances. The test for whether a judgment, order or proceeding should be modified or set aside under Rule 60(b)(6) is two pronged: (1) extraordinary circumstances must exist, and (2) there must be a showing that justice demands that relief be granted.
Howell v. Howell, 321 N.C. 87, 91, 361 S.E.2d 585, 588 (1987) (citations omitted). In this case, defendant has failed to meet this threshold test. Accordingly, we find these assignments of error to be without merit.
Affirmed.
Judges HUNTER and CALABRIA concur.