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  "name": "PURCELL INTERNATIONAL TEXTILE GROUP, INC., a North Carolina Company, Plaintiff v. ALGEMENE AFW N.V.; ALGEMENE USA, LLC; BRUVATEX N.V.; COSITEX, N.V., BRUVATEX USA, INC., ZENITH EXPORTS, LTD., ZENSILK, INC.; DECOVIZ-PRODUTOS DE DECORACAO LDA; TEVIZ DE VIZELA S.A.; PENELOPE; PENELOPE USA, LLC; HIGH FIVE TEXTILES, LLC; and LUC CALLENS, Defendants",
  "name_abbreviation": "Purcell International Textile Group, Inc. v. Algemene AFW N.V.",
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    "judges": [
      "Judges McGEE and STEPHENS concur."
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      "PURCELL INTERNATIONAL TEXTILE GROUP, INC., a North Carolina Company, Plaintiff v. ALGEMENE AFW N.V.; ALGEMENE USA, LLC; BRUVATEX N.V.; COSITEX, N.V., BRUVATEX USA, INC., ZENITH EXPORTS, LTD., ZENSILK, INC.; DECOVIZ-PRODUTOS DE DECORACAO LDA; TEVIZ DE VIZELA S.A.; PENELOPE; PENELOPE USA, LLC; HIGH FIVE TEXTILES, LLC; and LUC CALLENS, Defendants"
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    "opinions": [
      {
        "text": "ELMORE, Judge.\nJudge Richard D. Boner of the Catawba County Superior Court ordered an enforcement of judgment against Algemene AFW N.V.; Algemene USA, LLC; Bruvatex N.V.; Cositex N.V.; Bruvatex USA, Inc.; Zenith Exports, Ltd.; Zensilk, Inc.; Decoviz-Produtos de Decoracao \u2022 Lda; Teviz de Vizela S.A.; Penelope; Penelope USA, LLC; High Five Textiles, LLC; and Luc Callens (collectively, defendants) on 21 February 2006. Defendants appeal from this order, as well as from a pre-judgment order of attachment and from a post-judgment order denying relief from the judgment under Rule 60(b).\nPurcell International Textile Group (plaintiff), a North Carolina corporation, purchased an Illinois corporation that had entered into sales contracts with several of the defendants. The parties terminated the contracts on or about 27 November 2003, and on 20 April 2004, plaintiff filed suit against defendants with claims based in contract, fraud, and unfair and deceptive trade practices. W. Rickert Hinnant (Hinnant) represented defendants in the litigation.\nHinnant began settlement negotiations with plaintiff as the 9 January 2006 trial date approached. Hinnant reached a settlement agreement with plaintiff via telephone, and the parties announced the agreerhent in open court on the trial date. Pursuant to the agreement, defendants would pay plaintiff a total of $850,000.00 in three payments over a six-month time period. The first payment was due 31 January 2006. The total payment of $850,000.00 exceeded the authority defendants had vested in Hinnant; however, Hinnant represented to plaintiff that he had obtained defendants\u2019 approval. Plaintiff reduced the settlement agreement to writing, and Hinnant returned the writing with what purported to be the signatures of representatives from all but four of the defendant companies. In fact, Hinnant never informed any of the defendants of the agreement, never sent defendants the written agreement, never produced a signed confession of judgment, and forged all of the signatures forwarded to plaintiff.\nMeanwhile, Hinnant tried to convince defendants to agree to the terms of the settlement agreement, which he had negotiated without defendants\u2019 knowledge or consent. Defendants agreed to the monetary portion of the agreement but objected to several other material terms. As these discussions continued, defendants failed to make the 31 January 2006 payment due to plaintiff pursuant to the settlement agreement Hinnant had negotiated.\nOn 1 February .2006, plaintiff informed Hinnant that the first payment had not been made, and on 7 February 2006, plaintiff served a motion to enforce the settlement by entry of a judgment against all defendants jointly and severally. On 17 February 2006, the court granted plaintiff\u2019s motion for a pre-judgment attachment of up to the full amount of the judgment against any of the defendants. On 21 February 2006, the court entered judgment against defendants for $850,000.00 plus fifteen percent to cover attorneys\u2019 fees (as provided for in the settlement agreement in case of breach), for a total of $977,500.00. On 24 February and 27 February 2006, the court granted plaintiff\u2019s requests for a temporary restraining order and preliminary injunction to freeze defendants\u2019 funds in a trust account accessible by Hinnant.\nDefendants had no knowledge of the settlement agreement that Hinnant negotiated until after the court entered judgment against them. They claim that they never saw the written agreement until March, 2006. At that time, defendants retained new counsel, and on 9 March 2006 moved for relief from the judgment and the prejudgment attachment pursuant to Rule 60(b) of our Rules of Civil Procedure. On 15 March 2006, the trial court denied the motion, and this appeal followed.\nDefendants first argue that the court abused its discretion in denying defendants\u2019 Rule 60(b)(6) motion for relief from judgment. Defendants contend that Hinnant committed fraud on the court and that he exceeded his authority in the settlement agreement. They further contend that these two acts together resulted in circumstances so extraordinary that justice demands relief. We disagree.\nTo demonstrate an abuse of discretion, an appellant must show that the trial court\u2019s ruling was \u201cmanifestly unsupported by reason or one so arbitrary that it could not have been the result of a reasoned decision.\u201d Briley v. Farabow, 348 N.C. 537, 547, 501 S.E.2d 649, 656 (1998). Rule 60(b)(6) allows a court to relieve a party from a judgment for \u201cany .. . reason justifying relief.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 60(b)(6) (2005). This Court has held that setting aside judgments pursuant to Rule 60(b)(6) is only appropriate if (1) extraordinary circumstances exist, (2) there is a showing that justice demands it, and (3) the movant shows a meritorious defense. Royal v. Hartle, 145 N.C. App. 181, 184-85, 551 S.E.2d 168, 171 (2001). Relief from attorney fraud on the court \u201cis to be granted only where the judgment was obtained by the improper conduct of the party in whose favor it was rendered.\u201d Henderson v. Wachovia Bank of N.C. N.A., 145 N.C. App. 621, 625, 551 S.E.2d 464, 468 (2001).\n\u201cThe attorney-client relationship is based upon principles of agency.\u201d Harris v. Ray Johnson Constr. Co., 139 N.C. App. 827, 830, 534 S.E.2d 653, 655 (2000) (citations omitted). North Carolina presumes an attorney has the authority to act for a client he represents, and that presumption must be rebutted by proving to the satisfaction of the court that the attorney\u2019s actions were unauthorized. Id. at 829, 534 S.E.2d at 654-55.\nAn act is within the power of an agent if the agent has the legal ability to bind the principal to a third person thereby, even though the act constitutes a violation of the agent\u2019s duty to the principal .... When a[n] . . . agent acts within the scope of his apparent authority, and the third party has no notice of the limitation on such authority, the [principal] will be bound by the acts of the agent, and . . . where one of two persons must suffer loss by the fraud or misconduct of a third person, he who first reposes the confidence or by his negligent conduct made it possible for the loss to occur, must bear the loss.\nZimmerman v. Hogg & Allen Professional Assoc., 286 N.C. 24, 30, 209 S.E.2d 795, 799 (1974) (citations, quotations, and emphasis omitted).\nHenderson allows a court to grant relief on the basis of attorney fraud only when the adverse party\u2019s attorney commits the fraud. Henderson, 145 N.C. App. at 625, 551 S.E.2d at 468. Hinnant worked as defendants\u2019 attorney, and the court did not rely on any representations he made to render a judgment in favor of his clients. Therefore, defendants are not entitled to relief from any fraud Hinnant may have committed. Id. at 625, 551 S.E.2d at 468.\nHinnant\u2019s actions were binding on defendants, who hired him to act as their agent in handling the case and negotiating a settlement. Harris, 139 N.C. App. at 830, 534 S.E.2d at 655. Defendants granted Hinnant the authority to settle the case and never stripped him of that authority. Id. at 829, 534 S.E.2d at 654-55. Based on his actual authority, Hinnant engaged in negotiations offering settlement figures of $400,000.00 and $500,000.00, and plaintiff declined both offers. Each time plaintiff declined a settlement offer, Hinnant established a pattern of following up with a new offer featuring a larger amount of money. Thus, when Hinnant offered a settlement of $850,000.00, which exceeded his actual authority, plaintiff could have reasonably assumed that offer was within Hinnant\u2019s authority and had no reason to know that Hinnant had exceeded his limits. Zimmerman, 286 N.C. at 30, 209 S.E.2d at 799. Thus, the agreement negotiated by Hinnant bound defendants despite the fact that Hinnant exceeded his authority and violated his duty to defendants. Id. at 30, 209 S.E.2d at 799.\nBecause Hinnant acted with apparent authority as defendants\u2019 agent, defendants fail to meet the criteria for setting aside the judgment. N.C. Gen. Stat. \u00a7 1A-1, Rule 60(b)(1) (2005): Royal, 145 N.C. App. at 184-85, 551 S.E.2d at 171. The circumstances were not extraordinary, but dealt with basic North Carolina agency law. Id. at 184-85, 551 S.E.2d at 171. Furthermore, defendants failed to offer a meritorious defense as required by Royal, simply stating, \u201c[W]e need not show a meritorious defense.\u201d Id. at 184-85, 551 S.E.2d at 171. Accordingly, the court acted within its discretion, and defendants\u2019 assignment of error is without merit.\nDefendants next argue that the trial court abused its discretion in denying the Rule 60(b)(1) motion for relief from judgment for excusable neglect. We disagree.\nRule 60(b)(1) provides that a party may be granted relief from judgment for \u201c[m]istake, inadvertence, surprise, or excusable neglect.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 60(b)(1) (2005). A trial court\u2019s ruling on a Rule 60(b) motion stands unless the court abused its discretion. Thomas M. McInnis & Associates, Inc. v. Hall, 318 N.C. 421, 425, 349 S.E.2d 552, 554 (1986). However, a court\u2019s finding of excusable neglect, and what constitutes excusable neglect, is a question of law reviewable based on the court\u2019s findings of fact. Id. at 425, 349 S.E.2d at 554. \u201cClearly, an attorney\u2019s negligence in handling a case constitutes inexcusable neglect and should not be grounds for relief under the \u2018excusable neglect\u2019 provision of Rule 60(b)(1) .... Holding the client responsible for the lawyer\u2019s deeds ensures that both clients and lawyers take care to comply.\u201d Briley, 348 N.C. at 546, 501 S.E.2d at 655 (citations and quotations omitted).\nDefendants admit that Hinnant was negligent in handling the case. They attempt to rely on Dishman v. Dishman, 37 N.C. App. 543, 246 S.E.2d 819 (1978), and Wood v. Wood, 297 N.C. 1, 252 S.E.2d 799 (1979), for the proposition that attorney negligence may constitute grounds for excusable neglect. However, Dishman and Wood were decided well before Briley. This Court subsequently has recognized Briley as the controlling authority on the issue of excusable neglect under Rule 60(b)(1). Henderson, 145 N.C. App. at 626, 551 S.E.2d at 468. Accordingly, we hold that the trial court did not abuse its discretion.\nFinally, defendants argue that thfe trial court erred in entering judgments against defendants jointly and severally. Again, we disagree.\nA trial court\u2019s conclusions of law are reviewable de novo and are binding on appeal if supported by findings of fact based on competent evidence. Resort Realty of Outer Banks, Inc. v. Brandt, 163 N.C. App. 114, 116, 593 S.E.2d 404, 407-08 (2004). \u201cA valid contract is formed when parties assent to the same thing in the same sense, and their minds meet as to all terms. Moreover, there is no law requiring a compromise contract to be put in writing.\u201d Smith v. Young Moving & Storage, Inc., 167 N.C. App. 487, 493, 606 S.E.2d 173, 177 (2004) (citations and quotations omitted).\nThe trial court\u2019s conclusion that defendants entered into a settlement agreement with joint and several liability was supported by competent evidence. As we have noted, Hinnant had the legal authority as defendants\u2019 agent to bind defendants through his actions. The oral settlement agreement Hinnant and plaintiff reached called for joint and several liability of defendants. Therefore, Hinnant legally bound defendants to a settlement agreement with joint and several liability.\nDefendants contend that the settlement agreement was invalid because it was not signed by all the parties after it was reduced to writing. However, Hinnant finalized the settlement negotiation via telephone with plaintiff, and Smith does not require legal agreements to be reduced to writing. Id. at 493, 606 S.E.2d at 177.\nDefendants also contend that because they never signed the confession of judgment, there was no meeting of the minds and no legal settlement agreement. However, the trial court stated that executing the confession of judgment was a term of the settlement agreement; defendants\u2019 failure to execute the confession did not void the agreement, but instead constituted a further breach.\nThe trial court did not abuse its discretion in denying defendants relief from the judgment entered against them, nor did it err in enforcing the settlement agreement against defendants jointly and severally. Hinnant, as defendants\u2019 agent, entered into a valid settlement agreement on their behalf. As in Henderson, defendants\u2019 proper remedy is to seek relief through a malpractice claim against Hinnant. Henderson, 145 N.C. App. at 625-26, 551 S.E.2d at 468.\nAffirmed.\nJudges McGEE and STEPHENS concur.",
        "type": "majority",
        "author": "ELMORE, Judge."
      }
    ],
    "attorneys": [
      "Horade, Talley, Pharr & Lowndes, P.A., by John W. Bowers, and Wuersch & Gering LLP, by Gregory F. Hauser, for defendants-appellants.",
      "Sigmon, Clark, Mackie, Hutton, Hanvey, & Ferrell, PA., by Warren A. Hutton and Stephen L. Palmer, for plaintiff-appellee."
    ],
    "corrections": "",
    "head_matter": "PURCELL INTERNATIONAL TEXTILE GROUP, INC., a North Carolina Company, Plaintiff v. ALGEMENE AFW N.V.; ALGEMENE USA, LLC; BRUVATEX N.V.; COSITEX, N.V., BRUVATEX USA, INC., ZENITH EXPORTS, LTD., ZENSILK, INC.; DECOVIZ-PRODUTOS DE DECORACAO LDA; TEVIZ DE VIZELA S.A.; PENELOPE; PENELOPE USA, LLC; HIGH FIVE TEXTILES, LLC; and LUC CALLENS, Defendants\nNo. COA06-1075\n(Filed 7 August 2007)\n1. Attorneys\u2014 exceeding authority in settling case \u2014 Rule 60 motion for relief \u2014 not an extraordinary circumstance\nThe trial court did not abuse its discretion by denying defendants\u2019 motion for relief under N.C.G.S. \u00a7 1A-1, Rule 60(b)(6) for extraordinary circumstances where defendants\u2019 attorney exceeded his authority in reaching a settlement. The attorney acted with apparent authority as defendants\u2019 agent.\n2. Attorneys\u2014 exceeding authority in reaching settlement\u2014 Rule 60 motion for relief \u2014 not excusable neglect\nThe trial court did not abuse its discretion in denying defendants\u2019 motion for relief under N.C.G.S. \u00a7 1A-1, Rule 60(b)(1) for excusable neglect after their attorney exceeded his authority in negotiating a settlement.\n3. Agents\u2014 attorney exceeding authority \u2014 joint and several liability by defendants\nThe trial court did not err by entering judgments against defendants jointly and severally where their attorney, acting as their agent, exceeded his actual authority in negotiating a settlement which called for joint and several liability.\n4. Compromise and Settlement\u2014 agreement entered over telephone \u2014 confession of judgment not executed\nLegal agreements are not required to be in writing, and an unauthorized settlement agreement concluded over the telephone by defendants\u2019 attorney and plaintiff was valid.\nAppeal by defendants from judgment entered 21 February 2006 by Judge Richard D. Boner in Catawba County Superior Court. Heard in the Court of Appeals 27 March 2007.\nHorade, Talley, Pharr & Lowndes, P.A., by John W. Bowers, and Wuersch & Gering LLP, by Gregory F. Hauser, for defendants-appellants.\nSigmon, Clark, Mackie, Hutton, Hanvey, & Ferrell, PA., by Warren A. Hutton and Stephen L. Palmer, for plaintiff-appellee."
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