{ "id": 8413032, "name": "ADVANCED WALL SYSTEMS, INC. v. HIGHLANDE BUILDERS, LLC", "name_abbreviation": "Advanced Wall Systems, Inc. v. Highlande Builders, LLC", "decision_date": "2004-12-21", "docket_number": "No. COA04-1", "first_page": "630", "last_page": "635", "citations": [ { "type": "official", "cite": "167 N.C. App. 630" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "351 S.E.2d 785", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "379 S.E.2d 665", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "pin_cites": [ { "page": "669" } ], "opinion_index": 0 }, { "cite": "94 N.C. App. 36", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526529 ], "year": 1989, "pin_cites": [ { "page": "43" } ], "opinion_index": 0, "case_paths": [ "/nc-app/94/0036-01" ] }, { "cite": "205 S.E.2d 617", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "pin_cites": [ { "page": "619" } ], "opinion_index": 0 }, { "cite": "22 N.C. App. 40", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11298992 ], "year": 1974, "pin_cites": [ { "page": "42" } ], "opinion_index": 0, "case_paths": [ "/nc-app/22/0040-01" ] }, { "cite": "351 S.E.2d 779", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1987, "pin_cites": [ { "page": "785" }, { "page": "785" }, { "parenthetical": "citations omitted" }, { "page": "785" } ], "opinion_index": 0 }, { "cite": "84 N.C. App. 15", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12167341 ], "weight": 3, "year": 1987, "pin_cites": [ { "page": "24-25" }, { "page": "25" }, { "page": "25" } ], "opinion_index": 0, "case_paths": [ "/nc-app/84/0015-01" ] }, { "cite": "42 S.E. 577", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1902, "pin_cites": [ { "page": "578" } ], "opinion_index": 0 }, { "cite": "131 N.C. 212", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8660017 ], "year": 1902, "pin_cites": [ { "page": "213" } ], "opinion_index": 0, "case_paths": [ "/nc/131/0212-01" ] }, { "cite": "371 S.E.2d 277", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": 0 }, { "cite": "322 N.C. 835", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2514757, 2512934, 2515369, 2514418, 2515515 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/322/0835-01", "/nc/322/0835-05", "/nc/322/0835-04", "/nc/322/0835-02", "/nc/322/0835-03" ] }, { "cite": "366 S.E.2d 882", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "page": "884" } ], "opinion_index": 0 }, { "cite": "89 N.C. App. 685", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524573 ], "year": 1988, "pin_cites": [ { "page": "687" } ], "opinion_index": 0, "case_paths": [ "/nc-app/89/0685-01" ] }, { "cite": "349 S.E.2d 552", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1986, "pin_cites": [ { "page": "554" }, { "page": "555" }, { "page": "554" } ], "opinion_index": 0 }, { "cite": "318 N.C. 421", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4736107 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "425" }, { "page": "425" } ], "opinion_index": 0, "case_paths": [ "/nc/318/0421-01" ] }, { "cite": "232 S.E.2d 215", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1977, "pin_cites": [ { "page": "217", "parenthetical": "where statute had similar language service on foreign corporation complete when Secretary of State served" }, { "page": "218" } ], "opinion_index": 0 }, { "cite": "32 N.C. App. 362", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550622 ], "year": 1977, "pin_cites": [ { "page": "366", "parenthetical": "where statute had similar language service on foreign corporation complete when Secretary of State served" } ], "opinion_index": 0, "case_paths": [ "/nc-app/32/0362-01" ] } ], "analysis": { "cardinality": 548, "char_count": 11567, "ocr_confidence": 0.758, "pagerank": { "raw": 5.8591662004228935e-08, "percentile": 0.3668426228710631 }, "sha256": "fd283f52f485f1a9dc7d8ca0faa4a585277dfd9b19d0acf63417ad8011cbab68", "simhash": "1:c16fd4e666ecc7fc", "word_count": 1896 }, "last_updated": "2023-07-14T15:53:28.670431+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges HUNTER and THORNBURG concur." ], "parties": [ "ADVANCED WALL SYSTEMS, INC. v. HIGHLANDE BUILDERS, LLC" ], "opinions": [ { "text": "WYNN, Judge.\nDefendant Highlande Builders, LLC, appeals from a default judgment entered 1 October 2003. Defendant contends that the trial court: (1) erred in denying its motion to set aside the default judgment because the judgment was void for lack of personal jurisdiction; and (2) abused its discretion in failing to grant Defendant relief under Rule 60(b) of the North Carolina Rules of Civil Procedure. For the reasons stated herein, we affirm.\nPlaintiff filed a complaint on 16 January 2002 to recover $15,140.82 owed on an account. Defendant\u2019s registered agent in North Carolina was D. Michael Little. In December 2001, Mr. Little went to Florida on an extended vacation. On 17 January 2002 Plaintiff filed service with the North Carolina Secretary of State. The Secretary of State attempted to send notice to the registered agent at the principal place of business address of record, but notice was returned \u201cunclaimed.\u201d On 11 February 2002, Plaintiff sent service to Defendant at its registered address by certified mail; this came back \u201cunclaimed.\u201d On 11 February 2002, Plaintiff sent a letter to Ashe County Sheriff\u2019s Department for service upon Defendant at both the mailing address and the physical address, however, the Sheriff was unable to locate the registered agent or other company official. Upon discovering the registered agent had gone to Florida for the winter, on 28 February 2002 Plaintiff sent a letter to the Sheriff\u2019s Department in Naples, Florida for service, however, the sheriff was unable to locate anyone at the forwarded address.\nDefault judgment was entered 4 March 2002. Following Defendant\u2019s motion to set aside the default judgment, the trial court entered final judgment on 1 October 2003, denying the motion to set aside the default judgment. Defendant appealed.\nWe first note that notice of appeal was not filed with the trial court until 5 November 2003, outside the thirty-day time period within which an appeal from a judgment order in a civil action must be taken pursuant to Rule 3 of the North Carolina Rules of Appellate Procedure, although notice was timely filed with this Court. However, we deny Plaintiffs motion to dismiss and grant Defendant\u2019s Petition for Writ of Certiorari pursuant to Rule 21 of the Rules of Appellate Procedure.\nOn appeal, Defendant contends that the trial court erred in denying its motion to set aside the default judgment because the judgment was void for lack of personal jurisdiction due to improper service. We disagree.\nSection 57C-2-43 of the North Carolina General Statutes provides rules for substituted service of process on limited liability companies.\nWhenever a limited liability company shall fail to appoint or maintain a registered agent in this State, or whenever its registered agent cannot with due diligence be found at the registered office, then the Secretary of State shall be an agent of the limited liability company upon whom any process, notice, or demand may be served. Service on the Secretary of State of any such process, notice, or demand shall be made by delivering to and leaving with the Secretary of State or with any clerk authorized by the Secretary of State to accept service of process, duplicate copies of the process, notice, or demand and the fee required by G.S. 57C-1-22(b). In the event any such process, notice, or demand is served on the Secretary of State in the manner provided for in this section, the Secretary of State shall immediately mail one of the copies thereof, by registered or certified mail, return receipt requested, to the limited liability company at its principal office or, if there is no mailing address for the principal office on file, to the limited liability company at its registered office. Service on a limited liability company under this subsection shall be effective for all purposes from and after the date of the service on the Secretary of State.\nN.C. Gen. Stat. \u00a7 57C-2-43(b) (2003) (emphasis added). It is the duty of limited liability companies to maintain a registered agent in the State of North Carolina. N.C. Gen. Stat. \u00a7 55D-30(a)(2) (2003). Since Defendant\u2019s registered agent left the State and Defendant failed to appoint a new agent, alternative service on the Secretary of State was proper. N.C. Gen. Stat. \u00a7 57C-2-43.\nDefendant contends that service was improper because the Secretary of State mailed the summons to the principal address instead of the registered office mailing address. Where the Secretary of State mailed the summons is immaterial because service was effective when Plaintiff served the Secretary of State. N.C. Gen. Stat. \u00a7 57C-2-43; see Royal Bus. Funds Corp. v. S. E. Dev. Corp., 32 N.C. App. 362, 366, 232 S.E.2d 215, 217 (1977) (where statute had similar language service on foreign corporation complete when Secretary of State served). \u201c[T]here is nothing in [the statute\u2019s] language to indicate that the registered mail must be either accepted or rejected in order for service to be complete. Such an interpretation would be contrary to the clear legislative intent . . . that service is complete when the Secretary of State is served.\u201d Id., 232 S.E.2d at 218.\nAs Defendant\u2019s registered agent had left the state, service was effective when served upon the Secretary of State. Therefore, the trial court had personal jurisdiction and entry of default judgment was proper.\nOn appeal, Defendant also contends that the trial court abused its discretion in failing to grant Defendant relief under Rule 60(b) of the North Carolina Rules of Civil Procedure and finding that Defendant\u2019s neglect was inexcusable. We disagree.\n\u201cOn motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) [m]istake, inadvertence, surprise, or excusable neglect; ... or; (6) [a]ny other reason justifying relief from the operation of the judgment.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 60(b) (2003). The decision whether to set aside a default judgment under Rule 60(b) is left to the sound discretion of the trial judge, and will not be overturned on appeal absent a clear showing of abuse of discretion. Thomas M. McInnis & Assocs., Inc. v. Hall, 318 N.C. 421, 425, 349 S.E.2d 552, 554 (1986).\nWhether neglect is \u201cexcusable\u201d or \u201cinexcusable\u201d is a question of law which \u201cdepends upon what, under all the surrounding circumstances, may be reasonably expected of a party\u201d to litigation. Id., 349 S.E.2d at 555. The trial judge\u2019s conclusion in this regard will not be disturbed on appeal if competent evidence supports the judge\u2019s findings, and those findings support the conclusion. In re Hall, 89 N.C. App. 685, 687, 366 S.E.2d 882, 884, disc. review denied, 322 N.C. 835, 371 S.E.2d 277 (1988). Once excusable neglect has been shown as a matter of law, \u201cwhether the judge shall then set aside the judgment or not rests \u2018in his discretion ....\u2019\u201d Morris v. Liverpool, London & Globe Ins. Co., 131 N.C. 212, 213, 42 S.E. 577, 578 (1902); accord McInnis, 318 N.C. at 425, 349 S.E.2d at 554.\nIn the case before us, the trial court found that the registered agent refused service and changed addresses, also that service upon the Secretary of State was proper. The trial court concluded that the Defendant\u2019s neglect was inexcusable. We hold that the evidence and findings support that conclusion.\nA default judgment may be set aside under Rule 60(b)(6) only upon a showing that: (1) extraordinary circumstances were responsible for the failure to appear, and (2) justice demands that relief. See Huggins v. Hallmark Enters., Inc., 84 N.C. App. 15, 24-25, 351 S.E.2d 779, 785 (1987). The decision to grant this rule\u2019s exceptional relief is within the trial court\u2019s discretion. Id. at 25, 351 S.E.2d at 785. Because this court \u201ccannot substitute \u2018what it considers] to be its own better judgment\u2019 for a discretionary ruling of a trial court,\u201d we may not overturn the judge\u2019s ruling unless it was \u201c \u2018manifestly unsupported by reason.\u2019 \u201d Id. (citations omitted).\nWhile the law does not favor default, preferring instead that controversies be resolved on their merits, \u201cit is also true that rules which require responsive pleadings within a limited time serve important social goals, and a party should not be permitted to flout them with impunity.\u201d Howell v. Haliburton, 22 N.C. App. 40, 42, 205 S.E.2d 617, 619 (1974). Likewise, courts justifiably disapprove of a limited liability company\u2019s failure to properly maintain a registered agent because that requirement is \u201cdesigned to inform potential litigants of necessary information,\u201d Huggins, 84 N.C. App. at 25, 351 S.E.2d at 785, thereby protecting the company\u2019s interests and guarding against judgment by default, as well as reducing the chance that the company will avoid paying a judgment by evading service of process. See Anderson Trucking Serv., Inc. v. Key Way Transp., Inc., 94 N.C. App. 36, 43, 379 S.E.2d 665, 669 (1989).\nAs Defendant failed to properly maintain a registered agent in the State of North Carolina, the trial court\u2019s decision was not \u201cmanifestly unsupported by reason.\u201d Huggins, 84 N.C. App. at 25, 351 S.E.2d 785. The trial court committed no error in refusing to set aside the default judgment under Rule 60(b)(6).\nAffirmed.\nJudges HUNTER and THORNBURG concur.", "type": "majority", "author": "WYNN, Judge." } ], "attorneys": [ "Turner & Yates, P.A., by David W. Yates for plaintiff-appellee.", "McElwee Firm, PLLC, by R. Tyson Ferrell for defendant-appellant." ], "corrections": "", "head_matter": "ADVANCED WALL SYSTEMS, INC. v. HIGHLANDE BUILDERS, LLC\nNo. COA04-1\n(Filed 21 December 2004)\n1. Appeal and Error\u2014 writ of certiorari \u2014 timeliness of notice of appeal\nPlaintiff\u2019s motion to dismiss defendant\u2019s appeal is denied and defendant\u2019s petition for writ of certiorari under N.C. R. App. P. 21 is granted even though notice of appeal was filed with the trial court outside the thirty-day time period within which an appeal from a judgment in a civil action must be taken under N.C. R. App. P. 3, because notice was timely filed with the Court of Appeals.\n2. Process and Service\u2014 substitute service \u2014 limited liability company \u2014 personal jurisdiction\nThe trial court did not err in an action to recover money owed on an account by refusing to set aside a default judgment in favor of plaintiff even though defendant limited liability company contends the judgment was void for lack of personal jurisdiction based on improper service, because: (1) defendant failed to properly maintain a registered agent in the State of North Carolina as required by N.C.G.S. \u00a7 55-30(a)(2) since its registered agent left the State and defendant failed to appoint a new agent; (2) alternate service on the Secretary of State was proper under N.C.G.S. \u00a7 57C-2-43; and (3) where the Secretary of State mailed the summons is immaterial since service was effective when plaintiff served the Secretary of State.\n3. Judgments\u2014 default judgment \u2014 motion to set aside\nThe trial court did not abuse its discretion in an action to recover money owed on an account by failing to grant defendant limited liability company relief under N.C.G.S. \u00a7 1A-1, Rule 60(b) from entry of default judgment and by finding that defendant\u2019s neglect was inexcusable, because: (1) the registered agent refused service and changed addresses; and (2) the trial court\u2019s decision was not manifestly unsupported by reason when defendant failed to properly maintain a registered agent in the State of North Carolina.\nAppeal by Defendant from judgment entered 1 October 2003 by Judge Penn Dameron in Superior Court, Watauga County. Heard in the Court of Appeals 12 October 2004.\nTurner & Yates, P.A., by David W. Yates for plaintiff-appellee.\nMcElwee Firm, PLLC, by R. Tyson Ferrell for defendant-appellant." }, "file_name": "0630-01", "first_page_order": 660, "last_page_order": 665 }