Appeal by defendant Ballard from order and judgment entered 2 December 1996 by Judge Hollis M. Owens, Jr. in Cabarrus County Superior Court. Heard in the Court of Appeals 13 January 1998.
The opinion of the court was delivered by: Wynn, Judge.
In this case, we decide whether a letter, filed with the Clerk of Superior Court, which offered partial payment of a claim and promised future payment in full was sufficient to constitute an answer so that the trial court could consider and grant a Rule 12(c) Motion for Judgment on the Pleadings. Viewed in the totality of the circumstances, the letter substantively answered the complaint's allegations and therefore we hold that the letter did constitute an answer.
Plaintiff Steven D. Brown filed suit against American Messenger Services, Inc. ("AMS") and Herbert T. Ballard on 6 February 1996. The complaint alleged that Ballard, as the primary and controlling shareholder of AMS, solicited Brown to invest in the company by representing the business "as a successful and growing package delivery service and a lucrative investment." In reliance on these representations, Brown agreed both to work for AMS and to loan the company $80,000.00. In return Ballard, as president of AMS, signed a promissary note dated 4 October 1993 agreeing to make quarterly interest payments on the loan beginning 28 December 1993 and repayment of the principal balance by 28 September 1996.
The complaint further alleged that after Brown voluntarily resigned from his employment with AMS, AMS was "chronically late and in default" on its payment obligation. Brown accelerated the balance due and demanded payment. AMS failed to pay its obligations under the note.
As a consequence of these events, the complaint raised three causes of action: an action against AMS for the $80,000.00 and for unpaid interest, an alternate action against AMS for a declaration that AMS was liable under the note and for entry of judgment for Brown in the amount due under the note, and a cause of action against Ballard seeking to hold him personally liable on the note.
Ballard was served with Summons and the Complaint on 8 February 1996. On 5 March 1996, Ballard filed a letter written on AMS stationery with the court. The letter, signed by Ballard and addressed to Brown's lawyer, stated in pertinent part:
Enclosed, please find a certified check made payable to Steven Brown for $2,512.59 for accrued interest due through the fourth quarter of 1995.
Let me further state that I will pay by certified funds all future interest payments as they become due.
I will also make arrangements to repay the principal of $80,000.00 on the due date of September 28, 1995.
AMS filed for bankruptcy on 7 June 1996 and in response Brown voluntarily dismissed his claims against AMS on 7 August 1996. Brown moved for judgment on the pleadings on 1 October 1996, asserting that Ballard's letter was an answer. On 2 December 1996, the trial court entered a judgment granting Brown's motion for judgment on the pleadings and entering judgment against Ballard for $84,050.00 and costs. Ballard appeals.
Under N.C.R. Civ. P. 12(c), "[a]fter the pleadings are closed . . . any party may move for judgment on the pleadings." In Yancey v. Watkins, 12 N.C. App. 140, 182 S.E.2d 605 (1971), this Court held that filing or hearing a motion under this rule prior to the filing of the defendant's answer was improper, and that a judgment rendered in such a circumstance will be vacated. See id. at 141-42, 182 S.E.2d at 606. The issue in this case is whether the letter was an answer.
Brown argues on appeal that although the letter does not fully comply with North Carolina's Rules of Civil Procedure, we should nonetheless uphold the trial court's ruling that the letter constituted an answer.
First, he points out that a pleading has served its purpose if it provides notice of the facts asserted by a party for his or her cause of action or defense. He cites Thorpe v. Wilson, 58 N.C. App. 292, 293 S.E.2d 675 (1982) and Jones v. Whitaker, 59 N.C. App. 223, 296 S.E.2d 27 (1982) for the proposition that errors or defects in a pleading that do not affect substantial rights are to be disregarded. Furthermore, he directs our attention to the comment of Rule ...