Opinion
No. COA10-759
Filed 5 April 2011 This case not for publication
Appeal by defendant from order entered 21 August 2009 by Judge William A. Leavell, III in Madison County District Court. Heard in the Court of Appeals 15 December 2010.
Ronald C. True, for plaintiff-appellee. Robert H. Owen, III, for defendant-appellant.
Madison County No. 08 CVD 0326.
Where defendant failed to assign error to the trial court's conclusion of law that she failed to show excusable neglect in not responding to plaintiff's complaint, the conclusion is binding on appeal. The trial court did not abuse its discretion in denying defendant's motion to set aside the default judgment.
I. Factual and Procedural Background
Nancy Gibbs (defendant) owns real property located in Madison County. In February 2008, defendant entered into a verbal contract with Espinosa Construction, LLC (plaintiff) to demolish and remodel the interior of her residence, including framing and electrical work. Plaintiff also agreed to perform additional construction to defendant's rental home in Asheville and to accompany defendant to Michigan to assess another potential construction job. Defendant agreed to pay plaintiff: $50.00 per hour for supervisors, $35.00 per hour for skilled labor, $22.50 per hour for unskilled laborers; compensation for materials and travel time; and extra compensation for overtime, for the duration of the construction projects.
On 15 February 2008, plaintiff began work on defendant's residence in Madison County, which lasted until 1 May 2008. During that time, employees of plaintiff traveled to Michigan to assess a construction project and also completed construction work on defendant's rental home. On 1 May 2008, plaintiff halted all work on defendant's residence after repeated demands for payment were ignored by defendant. On 5 August 2008, plaintiff filed a complaint against defendant alleging that she breached the contract by failing to pay defendant approximately $73,000.00 for materials and labor. Plaintiff further alleged that defendant acted fraudulently, maliciously, willfully, and wantonly in entering into the contract because she never intended to fulfill the terms of the contract. Plaintiff prayed for both compensatory and punitive damages.
Defendant failed to file any responsive pleadings. On 15 October 2008, plaintiff filed a motion for entry of default. This motion was granted by the Clerk of Superior Court and a hearing for a determination of the amount of damages was set for 29 October 2008. On 31 October 2008, the trial court entered a judgment against defendant in the amount of $104,918.76 for compensatory damages for breach of contract. The trial court also awarded plaintiff $10,000.00 in punitive damages. On 9 June 2009, defendant filed a motion to set aside the default judgment pursuant to Rule 60(b)(1)-(3) of the Rules of Civil Procedure, and a motion to enjoin the execution sale of defendant's property. On 10 June 2009, the trial court entered a temporary restraining order enjoining plaintiff from executing upon defendant's property.
On 21 July 2009, defendant's motion to set aside the default judgment was heard. On 21 August 2009, the trial court entered an order denying defendant's motion based upon her failure to show excusable neglect or fraud to merit relief from judgment. Defendant appeals.
II. Denial of Rule 60(b) Motion
Defendant contends that the trial court erred in denying her motion to set aside the default judgment pursuant to Rule 60(b). We disagree.
A. Standard of Review
"[T]he standard of review of a trial court's denial of a Rule 60(b) motion is abuse of discretion." Davis v. Davis, 360 N.C. 518, 523, 631 S.E.2d 114, 118 (2006) (citation omitted) . The trial court may be reversed for an abuse of discretion only upon a showing that its ruling was "manifestly unsupported by reason or one so arbitrary that it could not have been the result of a reasoned decision." Briley v. Farabow, 348 N.C. 537, 547, 501 S.E.2d 649, 656 (1998) (citations omitted).
B. Analysis
Rule 60(b) provides that "the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) Mistake, inadvertence, surprise, or excusable neglect[.]" N.C. Gen. Stat. § 1A-1, Rule 60(b)(1) (2009). In her motion to set aside the default judgment, defendant asserted that her failure to respond to plaintiff's complaint constituted excusable neglect based upon plaintiff's misconduct. This Court has stated that "[w]hen relief is sought under Rule 60(b)(1), the trial court first determines if there has been a mistake, inadvertence, surprise, or excusable neglect. Whether the facts found constitute excusable neglect or not is a matter of law and reviewable on appeal . . . ." In the Matter of Oxford Plastics v. Goodson, 74 N.C. App. 256, 259, 328 S.E.2d 7, 9 (1985) (citations omitted). "[W]hat 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 Assoc, Inc. v. Hall, 318 N.C. 421, 425, 349 S.E.2d 552, 555 (1986) (citation omitted). Once the trial court determines whether the movant has shown grounds for relief under subsection (1), it next considers whether the movant has demonstrated a meritorious defense. Oxford Plastics, 74 N.C. App. at 260, 328 S.E.2d at 10. However, "[i]n the absence of sufficient showing of excusable neglect, the question of meritorious defense becomes immaterial." Whitaker v. Raines, 226 N.C. 526, 528, 39 S.E.2d 266, 267 (1946) (citation omitted).
We note that defendant filed her motion to set aside the default judgment based upon Rule 60(b)(1)-(3). However, on appeal, defendant abandoned her arguments as to subsections (2) and (3).
In the instant case, defendant argued that she failed to file any responsive pleadings because she felt threatened by Roberto Espinosa (Roberto) and "a few other people in this county[.]" Defendant stated that Roberto had left threatening voice mail messages on her telephone. On 13 May and 7 October 2008, defendant's residence and vehicle were broken into and various items were stolen. Defendant believed that these offenses were directly related to Roberto's threatening statements and she feared that her personal safety and the safety of her property would be in jeopardy if she were to respond to plaintiff's complaint.
At the hearing, the trial court listened to the voice mail messages. After denying defendant's motion to set aside the default judgment in open court, the trial court stated that the voice mail messages did not give her a good reason not to come to court. The trial court's order does not contain any findings of fact about the voice mail messages. In its order, the trial court concluded that "[t]he Defendant has failed to show excusable neglect sufficient to merit relief from judgment in this matter." While defendant argues in her brief that the trial court abused its discretion by making such a conclusion, defendant failed to assign error to this conclusion of law.
Prior to the amendments to the North Carolina Rules of Appellate Procedure, effective 1 October 2009, the rules required appellants to set forth assignments of error upon which the appeal was predicated. N.C.R. App. P. 10(c)(1) (2009). The scope of review on appeal was confined to those assignments of error set forth in the record. N.C.R. App. P. 10(a) (2009). Our Supreme Court has now abolished the requirement of assignments of error in favor of proposed issues on appeal. N.C.R. App. P. 10(b) (2010) (amended October 1, 2009). Proposed issues on appeal "are to facilitate the preparation of the record on appeal and shall not limit the scope of the issues presented on appeal in an appellant's brief." N.C.R. App. P. 10(b) (emphasis added). In the instant case, defendant filed her notice of appeal on 15 September 2009. Because the notice of appeal was filed prior to 1 October 2009, the amendments to the Rules of Appellate Procedure are not applicable to this case. See Latta v. Rainey, ___ N.C. App. ___, ___, 689 S.E.2d 898, 905 n. 4 (2010). As such, defendant was required to assign error to any of the trial court's findings of fact or conclusions of law that she wished to challenge on appeal.
The failure to assign error has the following implications: "The appellant must assign error to each conclusion it believes is not supported by the evidence. Failure to do so constitutes an acceptance of the conclusion and a waiver of the right to challenge said conclusion as unsupported by the facts." Fran's Pecans, Inc. v. Greene, 134 N.C. App. 110, 112, 516 S.E.2d 647, 649 (1999) (citations omitted). Because defendant failed to assign error to the trial court's conclusion of law that she had failed to show excusable neglect, it is binding on appeal. Dobson v. Dobson, 185 N.C. App. 265, 267, 647 S.E.2d 638, 640 (2007). Where there is no excusable neglect on the part of the defendant, relief under Rule 60(b) will not be granted. See City of Durham v. Keen, 40 N.C. App. 652, 660, 253 S.E.2d 585, 590 ("The exceptional relief provided by Rule 60(b) will not be granted where there is inexcusable neglect on the part of the litigant. A lawsuit is a serious matter. He who is a party to a case in court must give it that attention which a prudent man gives to his important business." (quotations omitted)), disc. review denied, 297 N.C. 608, 257 S.E.2d 217 (1979).
Defendant asserts a number of arguments in her brief dealing with her alleged meritorious defense, i.e., that plaintiff was an unlicensed general contractor. However, without a sufficient finding of excusable neglect, any argument about a meritorious defense is moot. Whitaker, 226 N.C. at 528, 39 S.E.2d at 267.
We further note that defendant argues in her brief that the trial court failed to make findings or conclusions regarding plaintiff's award of punitive damages in the default judgment. However, defendant failed to timely file a notice of appeal from the default judgment. The only order properly before us is the order denying defendant's motion to set aside the default judgment. The issue of punitive damages was not part of this motion and it is not properly before us.
The trial court did not abuse its discretion in denying defendant's motion to set aside the default judgment.
AFFIRMED.
Judges STEPHENS and HUNTER, JR., ROBERT N. concur.
Report per Rule 30(e).