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North Carolina National Bank v. Virginia Carolina Builders Inc.

Filed: June 15, 1982.

NORTH CAROLINA NATIONAL BANK
v.
VIRGINIA CAROLINA BUILDERS, INC.



Appeal by plaintiff from Long, Judge. Order entered 21 April 1981 in Superior Court, Rockingham County. Heard in the Court of Appeals 31 March 1982.

Hedrick, Judge. Judge Arnold concurs. Chief Judge Morris dissents.

Hedrick

Judge Long's order setting aside the default judgment must be reversed. We are advertent to the fact that orders setting aside default judgments are interlocutory and ordinarily not appealable. Bailey v. Gooding, 301 N.C. 205, 270 S.E.2d 431 (1980). Nevertheless, because the present order contains serious error regarding a matter of great importance we, in our discretion, choose to review it.

We first note our disapproval of the taking of judicial notice by Judge Long of a custom and practice which violates the law of

this State. The legislature has fixed the conditions under which an out-of-state attorney may be admitted to practice pro hac vice in this State in G.S. § 84-4.1. The purpose of this statute is to afford the courts a means to control out-of-state counsel and to assure compliance with the duties and responsibilities of attorneys practicing in this State. E.g., State v. Nickerson, 13 N.C. App. 125, 185 S.E.2d 326 (1971), cert, denied, 280 N.C. 304, 186 S.E.2d 179, cert. denied, 408 U.S. 925, 33 L. Ed. 2d 336, 92 S. Ct. 2503 (1972). The conditions in the statute are mandatory. Until they have been met, a court has no discretion to admit out-of- state counsel to practice before it. In re Smith, 301 N.C. 621, 272 S.E.2d 834 (1981). We have consistently refused to allow noncomplying out-of-state attorneys to appear in this Court. E.g., Resort Development Co. v. Phillips, 9 N.C. App. 158, 175 S.E.2d 782 (1970), aff'd in part, rev'd in part on other grounds, 278 N.C. 69, 178 S.E.2d 813 (1971); State v. Daughtry, 8 N.C. App. 318, 174 S.E.2d 76 (1970). Likewise, a party cannot nullify the statute merely by responding to actions of a noncomplying out-of-state attorney in the courts of this State, such as, in this case, replying to a purported answer filed by that attorney. The fact that a custom may have grown up among Virginia attorneys practicing near the North Carolina state line to ignore the requirements of G.S. § 84-4.1 is irrelevant to this case. Such custom in no way abrogates or excuses out-of-state counsel from complying with the statute. Compare Brown v. Hale, 93 N.C. 188 (1885).

Although Judge Long committed error in judicially noting said irrelevant and unlawful practice, he correctly concluded that counsel for defendant had been negligent in failing to comply with G.S. § 84-4.1. Not only did attorney Epperly fail to comply with G.S. § 84-4.1 initially, he took no action to rectify the matter for seventeen months after plaintiff filed its motion for entry of default. Such neglect was inexcusable. Judge Long further concluded, however, that this neglect should not be imputed to defendant because defendant had exercised proper care. With this conclusion we do not agree.

"[O]rdinarily a client is not charged with the inexcusable neglect of his attorney, provided the client himself has exercised proper care. . . . The standard of care required of the litigant is that which a man of ordinary prudence usually bestows on his important business." Moore v. Deal, 239 N.C. 224, 227, 79 S.E.2d

507, 510 (1954). To exercise proper care a party must not only pay proper attention to the case himself, he must employ counsel who is licensed or entitled to practice in the court where the case is pending. Moore v. Deal, supra; Kerr v. North Carolina Joint Stock Land Bank, 205 N.C. 410, 171 S.E. 367 (1933); Manning v. Roanoke & Tar River Railroad Co., 122 N.C. 824, 28 S.E. 963 (1898); Norton v. Sawyer, 30 N.C. App. 420, 227 S.E.2d 148, cert. denied, 291 N.C. 176, 229 S.E.2d 689 (1976). The attorney hired by defendant to defend it in this North Carolina action was not licensed to practice in the courts of North Carolina and, as we have previously discussed, was not entitled to practice there by reason of a custom and practice which violates the laws of this State. By hiring a Virginia attorney to defend it in a North Carolina action, defendant did not exercise the degree of care expected of a man of ordinary prudence in dealing with his important business. Defendant's default in this action must therefore be attributed to its own inexcusable negligence. See Harrell v. Welstead, 206 N.C. 817, 175 S.E. 283 (1934).

"It is only when there is excusable negligence (and not when there is inexcusable negligence) that the judge can in his discretion set the judgment aside . . ." Manning v. Roanoke & Tar River Railroad Co., supra at 831, 28 S.E. at 965. The order setting aside the default judgment is

Reversed and remanded for reinstatement of ...


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