Motion to set aside entry of default and default judgment

Author: LegalEase Solutions 

Motion to set aside entry of default and default judgment

Obtaining a default judgment involves a two-step process; first, the actual entry of default, and then the entry of the default judgment itself. Rules Civ.Proc., Rule 55(a, b), G.S. § 1A-1. Strauss v. Hunt, 140 N.C. App. 345, 536 S.E.2d 636 (2000).  Rule 55(d) of the North Carolina Rules of Civil Procedure provides that the trial court may set aside an entry of default “for good cause shown.” G.S. 1A-1, Rule 55(d).  Byrd v. Mortenson, 308 N.C. 536, 539, 302 S.E.2d 809, 812 (1983).

North Carolina General Statues Rule 4 – service of process sub-clause (d)(2)  states that:

“The plaintiff may sue out an alias or pluries summons returnable in the same manner as the original process. Such alias or pluries summons may be sued out at any time within 90 days after the date of issue of the last preceding summons in the chain of summonses or within 90 days of the last prior endorsement.”

Rule 4(e) reads as follows:

Summons – Discontinuance. – “When there is neither endorsement by the clerk nor issuance of alias or pluries summons within the time specified in Rule 4(d), the action is discontinued as to any defendant not theretofore served with summons within the time allowed. Thereafter, alias or pluries summons may issue, or an extension may be endorsed by the clerk, but, as to such defendant, the action shall be deemed to have commenced on the date of such issuance or endorsement.”

Further, pursuant to Rule 4 of the North Carolina Rules of Civil Procedure, a summons must be served within 30 days of its issuance. N.C.Gen.Stat. §1A-1, Rule 4(c) (1990).  A summons not served within 30 days loses its vitality and becomes functus officio, and service obtained thereafter does not confer the trial court’s jurisdiction over the defendant. Dozier v. Crandall, 105 N.C. App. 74, 75-76, 411 S.E.2d 635, 636 (1992).  Therefore, upon the expiration of the sixty days, the alias and pluries summons become dormant, and any service effected thereafter does not confer jurisdiction over the case upon the trial court. Wetchin v. Ocean Side Corp., 167 N.C. App. 756, 759, 606 S.E.2d 407, 409 (2005).

Moreover, Rule 4(e) specifically provides that where there is neither endorsement nor issuance of alias or pluries summons within 90 days after issuance of the last preceding summons, the action is discontinued as to any defendant not served within the time allowed and treated as if it had never been filed. Dozier v. Crandall, 105 N.C. App. 74, 78, 411 S.E.2d 635, 638 (1992).

In this case, the Complaint was filed on October 29, 2010 and CD & E Consulting was served on January 14, 2011.  A new summons was then issued on March 4, 2011, or 48 days after the previous summons.  The March 4, 2011 summons was then endorsed on June 2, 2011, or, within 90 days of the issuance of the March 4, 2011 summons. On January 17, 2013, the alias and pluries summons was issued, well beyond the expiration of the statutory time period for service of summons. Because the alias and pluries summons were not issued until January 2013, the action was discontinued because the defendants were not served within the time allowed.  Hence, the plaintiff did not comply with this specific time limit.  The effect pursuant to Rule 4(e) is that the original action is discontinued, and any subsequent issuance of a summons in the case will result in the action being deemed to have commenced from that date.

Here, on receiving the summons on March 15, 2013, Mr. Conard and his attorney had several email, telephone, and fax communications related to assigning the case to the attorney.  On June 19, 2013, Mr. Conard’s attorney, Burton C. Smith, Jr., telephoned the Clay County Clerk of Superior Court and discovered that there was no motion or order in the court file to obtain an entry of default and/or a default judgment against Defendants. He also discovered that the last pleading in the file was a “return of service” reflecting the service of the complaint as amended, and the summons.  On June 26, 2013, Mr. Conard engaged Mr. Burton to represent him in this action and at approximately 1:02 p.m., Mr. Burton faxed a notice of appearance to Plaintiffs’ attorney.   That same day, at approximately 4:34 p.m., Plaintiffs’ attorney served Mr. Burton by faxing a Motion for Entry of Default Pursuant to NCRCP Rule 55(a); an Affidavit of Plaintiff Lawrence K. Beal, Jr.; an Affidavit of Plaintiffs’ attorney; a Motion for Default Judgment Pursuant to NCRCP Rule 55(b)(1); an Entry of Default and Default Judgment, and a Certificate of Service.

As stated above, the obtaining of a judgment by default involves a two-step process. Strauss v. Hunt, 140 N.C. App. 345, 348, 536 S.E.2d 636, 638 (2000). The first step is the entry of default, and the second is the entry of a default judgment.  If a plaintiff seeks a default judgment, he must abide by these procedural requirements. Ruiz v. Mecklenburg Utilities, Inc., 189 N.C. App. 123, 657 S.E.2d 432 (2008).  Before a trial court rules on a motion for default judgment, a plaintiff should file a motion for entry of default, and receive a ruling on that motion from either the clerk or trial court. Id. The Plaintiffs in the instant case faxed an entry of default and default judgment on the same day.  No entry of default was made prior to the purported rendition of the Default judgment.

In the case of Dozier v. Crandall and the case of Russ v. Hedgecock, 161 N.C.App. 334, 588 S.E.2d 69 (2003), disc. review denied, 358 N.C. 545, 599 S.E.2d 407 (2004), the summons was not served within ninety days, and the action was discontinued.  The plaintiffs in the case subsequently obtained an alias and pluries summons, which was served upon the defendant.  In that case, the plaintiff sought an order extending the time for issuance of the alias and pluries summons.  This Court held that once the summons expired because of the passage of ninety days, the action was discontinued.  Upon discontinuance of the action, the statute of limitations barred the plaintiff’s claims and the trial court was without authority to retroactively extend the time for issuance of the alias and pluries summons. Wetchin v. Ocean Side Corp., 167 N.C. App. 756, 760, 606 S.E.2d 407, 409-10 (2005).

It is clear that a summons remains dormant and unserveable unless it is extended by endorsement or alias or pluries summons. Rules Civ.Proc., Rule 4(c), G.S. § 1A-1.  Here, the action was discontinued when plaintiff failed to obtain continuance by endorsement or issuance of alias or pluries summons within 90 days, regardless of whether excusable neglect was shown. Thus, the subsequent summons meant that the action was deemed to have commenced from the date it was issued.  Provisions prescribing manner of service of process must be strictly construed and prescribed procedure must be strictly followed; unless specified requirements are complied with, there is no valid service. Rules of Civil Procedure, rule 4(j)(1)a, G.S. § 1A-1. Williams v. Hartis, 18 N.C. App. 89, 195 S.E.2d 806 (1973).

Nevertheless, determination of good cause to set aside default judgment under Rule 55(a) is in the sound discretion of the trial judge. Williams v. Jennette, 77 N.C. App. 283, 335 S.E.2d 191 (1985).  After judgment of default has been entered, a motion to vacate is governed by a rule which provides that prior judgment may be set aside for “[m]istake, inadvertence, surprise, or excusable neglect.” Rules Civ.Proc., Rules 55(d), 60(b), G.S. § 1A–1. Estate of Teel by Naddeo v. Darby, 129 N.C. App. 604, 500 S.E.2d 759 (1998).  However, provisions relating to setting aside a default judgment should be liberally construed so litigants have the opportunity to get a case disposed of on the merits. Rules Civ.Proc., Rule 60(b), G.S. § 1A–1. Estate of Teel by Naddeo v. Darby, 129 N.C. App. 604, 500 S.E.2d 759 (1998).

Under Rule 60(b)(1) of the North Carolina Rules of Civil Procedure, a judgment may be set aside when it is shown that the judgment from which relief is sought was the result of excusable neglect. N.C. Gen.Stat. § 1A1, Rule 60(b)(1) (2007). Rose v. Forester, 201 N.C. App. 159, 688 S.E.2d 118 (2009).  To justify setting aside a judgment on the ground of excusable neglect, the moving party must show (1) that the judgment rendered against him was due to his excusable neglect, and (2) that he has a meritorious defense. Id.  In the instant case, the judgment rendered against Defendant was due to excusable neglect.

Here, the Defendant has been diligent in communicating with his attorney and is not otherwise at fault.  The determination of whether a particular act of negligence or carelessness is “excusable” requires consideration of any relevant circumstance, including: (1) “the danger of prejudice to the adverse party”; (2) “the length of any delay caused by the neglect and its effect on the proceedings”; (3) “the reason for the neglect, including whether it was within the reasonable control of the moving party”; and (4) “whether the moving party acted in good faith.” Couch v. Private Diagnostic Clinic, 133 N.C. App. 93, 102-03, 515 S.E.2d 30, 38 aff’d, 351 N.C. 92, 520 S.E.2d 785 (1999).  Whether a party moving for relief from judgment has shown excusable neglect must be determined by party’s actions at or before entry of judgment. Matter of Hall, 89 N.C. App. 685, 366 S.E.2d 882 (1988).  Here, the defendant has acted with due diligence in handling the case, but the plaintiffs failed to do so by not properly adhering to and complying with the specific requirements under the rules.  The party served with a summons must give the matter the attention that a person of ordinary prudence would give to his important business. Grant v. Cox, 106 N.C. App. 122, 125, 415 S.E.2d 378, 381 (1992).  But here, the party serving the summons did not give proper attention to the matter and did not act with ordinary prudence to his important business by properly serving the summons.

In view of the above, the entry of default and default judgment in the instant case should be set aside.

  • Motion to enlarge time in which to file responsive pleadings

North Carolina General Statute 1A-1, Rule 6(b) gives the trial court the discretionary authority to enlarge the time period for filing an answer.  If, as in this case, the request for such an enlargement is made after the expiration of the time to file, the court may enlarge the time period for filing if the failure to file was the result of excusable neglect. Norris v. W., 35 N.C. App. 21, 23, 239 S.E.2d 715, 716-17 (1978).  Defendants’ motion to set aside and vacate entry of default under Rule 55(d) is here coupled with a motion to enlarge the time in which to file answer under Rule 6(b).

Whether actions constitute excusable neglect depends upon what, under all the surrounding circumstances, may be reasonably expected of a party in paying proper attention to his case. Rules Civ.Proc., Rule 60(b)(1), Scoggins v. Jacobs, 169 N.C. App. 411, 610 S.E.2d 428 (2005). Whether neglect is “excusable” or “inexcusable,” for purposes of a motion for relief from judgment, is a question of law which depends upon what, under all the surrounding circumstances, may be reasonably expected of a party to litigation. JMM Plumbing And Utilities, Inc. v. Basnight Const. Co., Inc., 169 N.C. App. 199, 609 S.E.2d 487 (2005).

In the instant case, the various communications between Mr. Conard, his attorney, and the Plaintiffs’ attorney make clear that Mr. Conard was paying proper attention to his case.  The Plaintiffs’ attorney faxed the motions, affidavit, entry of default and default judgment on the same day the Defendant’s attorney had served a notice of appearance.  Just before a week the Defendant’s attorney got information from the County Clerk of Superior Court that the last pleading in the file was “return of notice” and no motion is seen filed or pending. Therefore, the entry of default and the default judgment itself were not in compliance with the relevant rules.  The Defendants acted with all the proper attention to the case that may be reasonably expected of a party.  Thus, the trial court has discretionary authority to, and should, enlarge the time period for filing an answer.