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  "name": "GEORGE LUKE, Plaintiff v. OMEGA CONSULTING GROUP, LC, d/b/a OMEGA CONSULTING GROUP, LLC, Defendant",
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    "judges": [
      "Judges TYSON and CALABRIA concur."
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      "GEORGE LUKE, Plaintiff v. OMEGA CONSULTING GROUP, LC, d/b/a OMEGA CONSULTING GROUP, LLC, Defendant"
    ],
    "opinions": [
      {
        "text": "McCullough, Judge.\nOmega Consulting Group, LC, d/b/a Omega Consulting Group, LLC (\u201cdefendant\u201d) appeals from an order and judgment entered in favor of George Luke (\u201cplaintiff\u2019). Defendant contends that the trial court erred by (1) denying defendant\u2019s motion to set aside entry of default, (2) granting plaintiff\u2019s motion in limine to exclude evidence, and (3) entering judgment when the findings of fact were not supported by the evidence. For the reasons discussed herein, we affirm.\nI. Background\nOn 7 June 2007, plaintiff filed an amended complaint against defendant, his former employer, claiming that it owed him for unpaid sales commissions. Defendant furnishes consulting services for health care providers and has its principal office in Fort Lauderdale, Florida.\nIn February of 2002, plaintiff began working as an independent contractor for defendant. On 15 October 2002, the parties executed a written agreement entitled \u201cNon-Exclusive Sales Representative Agreement\u201d (\u201cthe agreement\u201d). The agreement provided that plaintiff\u2019s territory was North Carolina and South Carolina and that he would be compensated by a monthly retainer fee and commission on the revenues derived from any consulting contract he developed for defendant. The agreement provided that his commission payments would be equal to five percent (5%) of the gross revenues derived from any contract he initiated and closed for defendant within his territory. The term of the agreement was from 15 October 2002 to 15 October 2003. The agreement would automatically renew each year unless terminated by either party with sixty (60) days written notice of the period\u2019s termination date or otherwise extended or shortened by an addendum signed by both parties. The agreement further provided that \u201c[i]n the event' that [defendant] declines to extend this Agreement past its original Term, except for a willful violation of any of the terms and conditions of this Agreement, [plaintiff] will be entitled to receive the Commissions for the balance of the Commission Period.\u201d\nOn or around 30 June 2003, plaintiff was hired by defendant as an employee. On 29 September 2004, plaintiff received a letter from defendant (\u201cthe termination letter\u201d), stating that \u201cour relationship with you as a Regional Representative is not working out. Effective immediately, your employment with Omega is terminated.\u201d The termination letter provided that plaintiff would continue to receive commission on the revenues generated within his territory and the revenues generated from any additional contracts that he had initiated and were closed by defendant before 31 December 2004.\nPlaintiff initially filed suit against defendant in August of 2005, alleging he was owed commissions on several accounts in his territory. He filed his amended complaint on 7 June 2006, and defendant was served by publication on 17 June 2006.\nWhen defendant learned of plaintiff\u2019s lawsuit in North Carolina, it reviewed plaintiff\u2019s compensation records and consulted with its attorneys licensed in Florida. Defendant contends that when plaintiff became an employee after June of 2003, he began receiving an annual salary and his commission rate was reduced to 2.5%. During defendant\u2019s review of plaintiff\u2019s compensation records, it discovered that due to an employee error, plaintiff had continued to be paid a commission rate of 5% after being employed by defendant and as a result, had been overpaid by $32,766.70. After consulting with its Florida attorneys and determining that it did not owe plaintiff any compensation, defendant concluded that it would incur substantial costs in defending plaintiff\u2019s lawsuit. Defendant, did not file a responsive pleading to plaintiff\u2019s complaint and plaintiff obtained an entry of default on 4 August 2006.\nOn 13 November 2006, plaintiff filed a motion for default judgment seeking $175,654.36 in damages. Defendant filed an answer and a motion to set aside entry of default on 13 December 2006. On 23 January 2007, the trial court denied defendant\u2019s motion to set aside entry of default and granted its motion for a jury trial on damages. Plaintiff\u2019s motion for summary judgment was subsequently denied.\nOn 11 January 2008, plaintiff filed a motion in limine to exclude the following evidence proffered by defendant: plaintiff was only entitled to a commission rate of 2.5% after July of 2003; plaintiff had been overpaid by defendant; plaintiff was not entitled to commission generated after his termination because he was terminated for poor performance; and plaintiff forfeited his commissions by willfully violating the terms and conditions of the agreement. After hearing arguments from both parties\u2019 counsel, the trial court granted the motion in limine. Both parties subsequently waived their requests for a jury trial. On 29 January 2008, the trial court filed a judgment, which contained its decision on plaintiff\u2019s motion in limine, and ordered defendant to pay plaintiff $167,771.61 in unpaid commissions and an equal amount in liquidated damages. Defendant appeals.\nII. Motion to set aside entry of default\nDefendant\u2019s first assignment of error is that the trial court erred in denying its motion to set aside entry of default and argues that it showed good cause to support its motion. Defendant asserts that the decision not to respond to plaintiff\u2019s complaint was based on the advice of its Florida attorneys and should not have been imputed to defendant. We find that the trial court properly denied defendant\u2019s motion and affirm.\nA trial court\u2019s decision of whether to set aside an entry of default, will not be disturbed absent an abuse of discretion. Automotive Equipment Distributors, Inc. v. Petroleum Equipment & Service, Inc., 87 N.C. App. 606, 608, 361 S.E.2d 895, 896 (1987). \u201cA judge is subject to a reversal for abuse of discretion only upon a showing by a litigant that the challenged actions are manifestly unsupported by reason.\u201d RC Associates v. Regency Ventures, Inc., 111 N.C. App. 367, 374, 432 S.E.2d 394, 398 (1993) (citation omitted).\nPursuant to Rule 55(d) of the North Carolina Rules of Civil Procedure, the trial court may set aside an entry of default for good cause. N.C. Gen. Stat. \u00a7 1A-1, Rule 55(d) (2007). \u201cWhat constitutes \u2018good cause\u2019 depends on the circumstances in a particular case, and ... an inadvertence which is not strictly excusable may constitute good cause, particularly \u2018where the plaintiff can suffer no harm from the short delay involved in the default and grave injustice may be done to the defendant.\u2019 \u201d Peebles v. Moore, 48 N.C. App. 497, 504, 269 S.E.2d 694, 698 (1980) (citations omitted), modified and affirmed, 302 N.C. 351, 275 S.E.2d 833 (1981). \u201cThis standard is less stringent than the showing of \u2018mistake, inadvertence, or excusable neglect\u2019 necessary to set aside a default judgment pursuant to N.C. Gen. Stat. \u00a7 1A-1, Rule 60(b).\u201d Brown v. Lifford, 136 N.C. App. 379, 382, 524 S.E.2d 587, 589 (2000) (citation omitted).\nThe defendant carries the burden of showing good cause to set aside entry of default. Granville Med. Ctr. v. Tipton, 160 N.C. App. 484, 487, 586 S.E.2d 791, 794 (2003). Our Court considers the following factors when determining if the defendant has shown good cause: \u201c(1) was defendant diligent in pursuit of this matter; (2) did plaintiff suffer any harm by virtue of the delay; and (3) would defendant suffer a grave injustice by being unabl\u00e9 to defend the action.\u201d Automotive Equipment Distributors, Inc., 87 N.C. App. at 608, 361 S.E.2d at 896-97. This Court \u201cgive[s] consideration to the fact that default judgments are not favored in the law. . . . [I]t 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).\nIn this case, the trial court ordered an entry of default because defendant did not file an answer or attempt to defend against plaintiff\u2019s complaint. Defendant still claims that it was diligent in the matter because it consulted with its Florida attorneys and reviewed plaintiff\u2019s compensation records as soon as it became informed of plaintiff\u2019s suit in North Carolina. Defendant asserts that its decision not to respond to plaintiff\u2019s complaint was based on the advice of its out-of-state attorneys as well as its conclusion that plaintiff was not owed any further compensation. Furthermore, defendant argues that a \u201cgrave injustice\u201d has occurred because it is now saddled with a $335,000.00 judgment when its records show that it overpaid plaintiff by $32,766.70.\nThe degree of attention or inattention shown by the defendant is a compelling factor in our consideration to set aside entry of default. Brown, 136 N.C. App. at 384, 524 S.E.2d at 590. In Automotive Equipment Distributors, Inc., we found that the defendant had shown good cause to justify setting aside entry of default. 87 N.C. App. at 609, 361 S.E.2d at 897. In that case, the defendant had consulted with his attorney twice about a breach of contract action and his attorney agreed to file an answer. Id. at 608-09, 361 S.E.2d at 897. Due to a family emergency, the attorney did not file a responsive pleading and the court made an entry of default. Id. at 606, 361 S.E.2d at 895. We reversed and held that the defendant had demonstrated good cause reasoning that \u201cwhen a defendant employs counsel and diligently confers with him and generally tries to keep informed of the proceedings, the attorney\u2019s negligence will not be imputed to the defendant.\u201d Id. at 609, 361 S.E.2d at 897.\nIn Howell, we affirmed the denial of defendant\u2019s motion to set aside entry of default. 22 N.C. App. at 42, 205 S.E.2d at 619. The defendant in Howell had informed his insurer that a complaint had been filed against him and mailed a copy of the complaint to his insurer. Id. at 42, 205 S.E.2d at 618-19. The insurer took no action, and there was no further contact between the defendant and his insurer until eight months later when plaintiff\u2019s counsel notified the defendant about the entry of default. Id. We affirmed the trial court\u2019s judgment and explained that we could not make a determination of good cause due to the defendant\u2019s continued inattention to the suit for over eight months. Id.\nSimilar to the facts in Howell, defendant demonstrated a continuous lack of attention to the matter for a significant amount of time. Even though the trial court made the entry of default on 4 August 2006, defendant did not respond to the matter until 13 December 2006, after plaintiff had moved for default judgment. We cannot find that defendant acted diligently. Contrary to the facts in Automotive Equipment Distributors, Inc., the trial court\u2019s entry of default was not solely attributable to the inaction of counsel. We acknowledge that defendant reviewed plaintiff\u2019s compensation records and consulted with its Florida attorneys after learning of the suit. However, it was defendant\u2019s decision not to file a responsive pleading or take any action to avoid the entry of default. Furthermore, defendant was being sued in North Carolina but did not attempt to consult with North Carolina counsel and instead conferred only with its Florida attorneys. See Harrell v. Welstead, 206 N.C. 817, 175 S.E. 283 (1934) (finding that the defendant\u2019s failure to answer was attributable to his own negligence because he entrusted his case to an attorney not licensed in North Carolina).\nDefendant has failed to show the trial court abused its discretion when it denied its motion to set aside entry of default. The assignment of error is overruled.\nIII. Motion in limine to exclude evidence\nNext, defendant argues that the trial court erred in granting plaintiff\u2019s motion in limine to exclude certain evidence at trial. We disagree.\nA motion in limine seeks \u201cpretrial determination of the admissibility of evidence proposed to be introduced at trial\u201d and is recognized in both civil and criminal proceedings. State v. Tate, 44 N.C. App. 567, 569, 261 S.E.2d 506, 508, rev\u2019d on other grounds, 300 N.C. 180, 265 S.E.2d 223 (1980). A trial court\u2019s ruling on a motion in limine will not be reversed absent an abuse of discretion. Heatherly v. Industrial Health Council, 130 N.C. App. 616, 619, 504 S.E.2d 102, 105 (1998).\nWhen the trial court granted plaintiffs motion in limine, it excluded defendant from introducing the following evidence: (1) plaintiff forfeited his commissions by willfully violating the terms and conditions of the agreement; (2) plaintiff was not entitled to commission generated after his termination because he was terminated for poor performance; (3) plaintiff was only entitled to a 2.5% commission rate after he became an employee of defendant; and (4) plaintiff had been overpaid by defendant. Defendant contends that the proffered evidence was admissible because it pertained to the sufficiency of plaintiff\u2019s claim, the amount of damages, and defendant\u2019s good faith defense to liquidated damages.\nWhen default is entered due to a defendant\u2019s failure to answer, the substantive allegations contained in plaintiff\u2019s complaint are no longer in issue, and for the purposes of entry of default and default judgment, are deemed admitted. Blankenship v. Town & Country Ford, Inc., 174 N.C. App. 764, 767, 622 S.E.2d 638, 640 (2005). Upon entry of default, the defendant will have no further standing to defend on the merits or contest the plaintiff\u2019s right to recover. Spartan Leasing v. Pollard, 101 N.C. App. 450, 460, 400 S.E.2d 476, 482 (1991). Defendant is, however, entitled to a hearing on the issue of damages. Potts v. Howser, 274 N.C. 49, 61, 161 S.E.2d 737, 746 (1968).\nIn the present case, defendant attempted to introduce evidence that plaintiff had forfeited his commissions by willfully violating the terms and conditions of the agreement and that he was terminated for poor performance. The agreement provides that, \u201c[i]n the event that [defendant] declines to extend this Agreement past its original Term, except for a willful violation of any terms and conditions of this Agreement, [plaintiff] will be entitled to receive the Commissions for the balance of the Commission Period.\u201d (Emphasis added.)\nDefendant argues that plaintiff\u2019s claim for unpaid commissions was insufficient because plaintiff did not assert that he did not willfully violate the agreement. Defendant\u2019s argument does not relate to the sufficiency of plaintiff\u2019s claim, but is an attempt by defendant to assert a defense after entry of default. Plaintiff sufficiently stated his claim for unpaid sales commissions under the North Carolina Wage and Hour Act and was not required to refute any defenses that had not been raised by defendant at that time. Furthermore, defendant has already been deemed to have admitted the following allegation contained in plaintiff\u2019s complaint: \u201cDefendant Omega has no policy or practice that would call for the forfeiture of any such commission by Plaintiff.\u201d Therefore, defendant is not permitted to introduce evidence contesting that allegation.\nSimilarly, the remaining evidence that defendant attempted to introduce was properly excluded by the trial court because defendant was attempting to defend on the merits of the case and refute plaintiff\u2019s allegations, which it was deemed to have admitted. Defendant intended to show that plaintiff\u2019s commission rate was reduced to 2.5% after June of 2003 and that due to an employee error, plaintiff continued to be compensated at his previous commission rate of 5% and was overpaid by $32,766.70. However, plaintiff\u2019s complaint alleged that he was \u201centitled to the same commission rate he had previously had as an independent contractor, specifically commissions of five percent (5%) of Omega\u2019s gross revenues for sales made by Plaintiff.\u201d By nature of defendant\u2019s default, it was deemed to have admitted that fact, and therefore, is prohibited from providing evidence to the contrary.\nDefendant also claims that it was entitled to present the excluded evidence as a good faith defense to liquidated damages. Under the North Carolina Wage and Hour Act, an employer is liable to the employee for liquidated damages in an amount equal to the wages due. N.C. Gen. Stat. \u00a7 95-25.22(a) (2007). The trial court is only permitted to reduce the award of liquidated damages if \u201cthe employer had reasonable grounds for believing that the act or omission was not a violation of this Article[.]\u201d N.C. Gen. Stat. \u00a7 95-25.22(al). Defendant\u2019s proffered evidence is an attempt to dispute its liability for liquidated damages. Defendant waived its right to defend against liability after default was entered. As such, the trial court properly granted plaintiff\u2019s motion in limine. The assignment of error is .overruled.\nIV. Judgment\nDefendant asserts that the trial court\u2019s judgment filed on 29 January 2008, should be set aside and assigns error to many of the trial court\u2019s findings of fact and conclusions of law. We find no error and affirm the judgment of the trial court.\nOn an appeal from a judgment entered after a non-jury trial, this Court reviews the trial court\u2019s findings of fact for whether they are supported by competent evidence in the record. Cartin v. Harrison, 151 N.C. App. 697, 699, 567 S.E.2d 174, 176, disc. review denied, 356 N.C. 434, 572 S.E.2d 428 (2002). We review the trial court\u2019s conclusions of law to determine if the conclusions are supported by the factual findings and are consistent with applicable law. Id.\nDefendant assigns error to the finding of fact and conclusions of law which state that plaintiff is owed commissions by defendant. Defendant argues again that there was insufficient evidence to support this determination because plaintiff failed to show that he did not willfully violate the agreement. We have already held that plaintiff sufficiently stated a claim under the North Carolina Wage and Hour Act and was not required to refute this defense in order to recover from defendant.\nAdditionally, defendant assigns error to the finding of fact and conclusions of law which state that because defendant did not show that it failed to pay plaintiff in good faith, plaintiff was entitled to liquidated damages. As discussed above, defendant waived its right to introduce evidence of good faith. Thus, the trial court correctly determined that plaintiff was entitled to recover liquidated damages from defendant because it waived its chance to assert a good faith defense, by failing to respond to plaintiff\u2019s complaint. The assignment of error is overruled.\nV. Conclusion\nFor the reasons discussed above, we affirm the trial court\u2019s order and judgment.\nAffirmed.\nJudges TYSON and CALABRIA concur.\nConcurred prior to 31 December 2008.\n. Plaintiff argues that defendant did not properly preserve this matter for appellate review. We find this issue to be properly preserved as the trial court\u2019s order specifically noted defendant\u2019s exception to this ruling.",
        "type": "majority",
        "author": "McCullough, Judge."
      }
    ],
    "attorneys": [
      "Merritt, Flebotte, Wilson, Webb & Caruso, PLLC by Joy Rhyne Webb, for plaintiff appellee.",
      "Steven A. Boyce for defendant appellant."
    ],
    "corrections": "",
    "head_matter": "GEORGE LUKE, Plaintiff v. OMEGA CONSULTING GROUP, LC, d/b/a OMEGA CONSULTING GROUP, LLC, Defendant\nNo. COA08-521\n(Filed 6 January 2009)\n1. Judgments\u2014 default \u2014 entry\u2014refusal to set aside \u2014 lack of attention \u2014 advice of out-of-state counsel\nThe trial court did not abuse its discretion in an action claiming unpaid sales commissions by refusing to set aside an entry of default. Defendant demonstrated a continuous lack of attention to the matter for a significant length of time; it was defendant\u2019s decision to consult with its Florida attorneys and not file a responsive pleading or take any action to avoid the entry of default.\n2. Evidence\u2014 motion in limine \u2014 default entry \u2014 trial on damages \u2014 evidence disputing liability \u2014 properly excluded\nThe trial court did not err by granting plaintiff\u2019s motion in limine in a trial to determine damages following an entry of default in an employment dispute. Defendant\u2019s proffered evidence was an attempt to dispute its liability for liquidated damages, and defendant had waived its right to defend against liability through entry of default..\n3. Employer and Employee\u2014 nonjury trial on damages \u2014 findings and conclusions \u2014 no error\nThere was no error in the trial court\u2019s judgment in a nonjury trial to determine damages in an employment dispute following entry of default. Plaintiff sufficiently stated a claim under the North Carolina Wage and Hour Act and was not required to refute defendant\u2019s defense; additionally, defendant waived its chance to assert good faith by not responding to the complaint.\nAppeal by defendant from order entered 23 January 2008 by Judge Michael R. Morgan in Wake County Superior Court and judgment entered 29 January 2008 by Judge Henry W. Hight in Wake County Superior Court. Heard in the Court of Appeals 9 October 2008.\nMerritt, Flebotte, Wilson, Webb & Caruso, PLLC by Joy Rhyne Webb, for plaintiff appellee.\nSteven A. Boyce for defendant appellant."
  },
  "file_name": "0745-01",
  "first_page_order": 777,
  "last_page_order": 785
}
