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  "name": "ROBERT PETER DOWD, III and JONATHAN CARTER DOWD, Plaintiffs v. CHARLES DEXTER JOHNSON, Defendant",
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      "ROBERT PETER DOWD, III and JONATHAN CARTER DOWD, Plaintiffs v. CHARLES DEXTER JOHNSON, Defendant"
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      {
        "text": "DAVIS, Judge.\nCharles Dexter Johnson (\u201cDefendant\u201d) appeals from the trial court\u2019s 18 October 2012 orders (1) denying his motions to set aside the default judgments entered against him; and (2) awarding Robert Peter Dowd, III and Jonathan Carter Dowd (collectively \u201cPlaintiffs\u201d) $1,500.00 in attorneys\u2019 fees. On appeal, Defendant contends that the default judgments entered against him were void because Plaintiffs failed to properly serve him with process. After careful review, we reverse the trial court\u2019s order denying Defendant\u2019s motions to set aside the default judgments, vacate its sanctions order awarding attorneys\u2019 fees to Plaintiffs, and vacate the underlying default judgments.\nFactual Background\nOn 29 July 2008, Plaintiffs loaned Defendant $150,000.00 pursuant to a promissory note that was secured by a deed of trust. The property securing the loan was located in Moore County, North Carolina. Defendant made several payments but eventually defaulted on the loan, and Plaintiffs initiated foreclosure proceedings on the Moore County property. The trial court entered an order of sale authorizing the trustee to proceed with the foreclosure, and Defendant appealed to this Court, arguing that the trial court erred in denying his motion for a continuance. In an unpublished opinion, this Court held that the trial court did not abuse its discretion in denying Defendant\u2019s motion to continue and affirmed the court\u2019s order of sale. See In re Foreclosure of Johnson, _ N.C. App. _, 729 S.E.2d 128 (2012) (unpublished).\nOn 24 May 2010, Plaintiffs filed two separate actions in Moore County Superior Court against Defendant. The first action sought recovery of $57,500.00 based on Defendant\u2019s nonpayment of amounts due under the promissory note. The second action sought reformation of the deed of trust securing the promissory note.\nThat same day, a civil summons was issued to Defendant fisting 3574 Tumberry Circle, Fayetteville, North Carolina as his address. The Cumberland County Sheriffs Office attempted service at the Tumberry Circle address, but the summons was returned unserved with a notation that Defendant \u201cno longer lives there.\u201d Plaintiffs also attempted to serve Defendant at that address via certified mail, but the mail was returned as undeliverable.\nOn 29 October 2010, a new civil summons was issued listing 2201 Skyview Drive, Fayetteville, North Carolina as Defendant\u2019s address. There is no indication in the record, however, that Plaintiffs ever attempted to actually serve Defendant at the Skyview Drive address.\nPlaintiffs subsequently commenced service by publication in both actions. A Notice of Service of Process by Publication was published in The Fayetteville Observer on 29 November, 6 December, and 13 December 2010.\nOn 8 February 2011, Plaintiffs filed motions seeking default judgments regarding their claim to recover $57,500.00 under the promissory note and with respect to their claim for reformation of the deed of trust. Plaintiffs filed accompanying affidavits attesting to their service by publication efforts along with their respective motions. The trial court granted both of Plaintiffs\u2019 motions and on 17 March 2011 entered default judgments (1) awarding Plaintiffs $57,500.00 in damages and $8,625.00 in attorneys\u2019 fees; and (2) reforming the deed of trust to match the property description provided for in the plat recorded in Plat Cabinet 5, slide 109 at the Moore County Register of Deeds office.\nOn 21 August 2012, Defendant filed amotion for atemporary restraining order seeking to prevent the substitute trustee from commencing the foreclosure sale. On 31 August 2012, Defendant filed motions to set aside the default judgments pursuant to Rule 60(b) of the North Carolina Rules of Civil Procedure. Defendant argued that the default judgments were void because Plaintiffs failed to properly serve him with process such that the trial court lacked personal jurisdiction over Defendant when it entered the judgments. On 28 September 2012, Plaintiffs filed a motion for Rule 11 sanctions, alleging that Defendant\u2019s motions to set aside the judgments were not well grounded in fact or supported by existing law.\nThe trial court denied Defendant\u2019s Rule 60(b) motions by order entered 18 October 2012, ruling that Plaintiffs had exercised due diligence in their attempts to locate Defendant and that their service of process by publication as to Defendant was proper. The trial court further ordered that \u201cno Notice of Appeal in this matter shall be filed with or accepted by the Clerk of Superior Court of Moore County until after such time as the Defendant shall have posted an Appeal Bond in the amount of Eighty-Eighty Thousand Dollars ($88,000.00).\u201d Finally, the trial court entered a separate order on 18 October 2012 granting Plaintiffs\u2019 motion for Rule 11 sanctions and ordering Defendant to pay $1,500.00 in attorneys\u2019 fees.\nDefendant attempted to file a notice of appeal from the 18 October 2012 orders on 19 November 2012, but the Moore County Clerk\u2019s Office marked out the file stamp and refused to accept the notice of appeal based on his failure to comply with the trial court\u2019s requirement that he post an appeal bond in the amount of $88,000.00. On 8 May 2013, this Court granted certiorari to review the trial court\u2019s 18 October 2012 orders denying Defendant\u2019s motions to set aside the default judgments and granting Plaintiffs\u2019 motion for sanctions.\nAnalysis\nI. Default Judgments\nDefendant\u2019s primary argument on appeal is that the trial court erred in denying his motions to set aside the default judgments because Plaintiffs\u2019 service of process by publication was improper. We agree.\nA trial court may set aside and relieve a defendant from a default judgment if the judgment entered is void. See N.C.R. Civ. P. 55(d) (\u201c[I]f a judgment by default has been entered, the judge may set it aside in accordance with Rule 60(b)); N.C.R. Civ. P. 60(b) (\u201c[T]he court may relieve a party or his legal representative from a final judgment, order, or proceeding ... [if] [t]he judgment is void....\u201d).\nA defect in service of process by publication is jurisdictional, rendering any judgment or order obtained thereby void. If a default judgment is void due to a defect in service of process, the trial court abuses its discretion if it does not grant a defendant\u2019s motion to set aside entry of default.\nJones v. Wallis, 211 N.C. App. 353, 356, 712 S.E.2d 180, 183 (2011) (citations and quotation marks omitted).\nAfter Plaintiffs\u2019 attempts to serve Defendant at the Tumberry Circle address were unsuccessful, Plaintiffs elected to serve Defendant by publication in The Fayetteville Observer. Rule 4(jl) of the North Carolina Rules of Civil Procedure permits service of process by publication on a party that cannot, through due diligence, be otherwise served. Cotton v. Jones, 160 N.C. App. 701, 703, 586 S.E.2d 806, 808 (2003). Rule 4(jl) provides as follows:\nA party that cannot with due diligence be served by personal delivery, registered or certified mail, or by a designated delivery service authorized pursuant to 26 U.S.C. \u00a7 7502(f)(2) may be served by publication. Except in actions involving jurisdiction in rem or quasi in rem as provided in section (k), service of process by publication shall consist of publishing a notice of service of process by publication once a week for three successive weeks in a newspaper that is qualified for legal advertising in accordance with G.S. 1-597 and G.S. 1-598 and circulated in the area where the party to be served is believed by the serving party to be located, or if there is no reliable information concerning the location of the party then in a newspaper circulated in the county where the action is pending. If the party\u2019s post-office address is known or can with reasonable diligence be ascertained, there shall be mailed to the party at or immediately prior to the first publication a copy of the notice of service of process by publication. The mailing may be omitted if the post-office address cannot be ascertained with reasonable diligence. Upon completion of such service there shall be filed with the court an affidavit showing the publication and mailing in accordance with the requirements of G.S. l-75.10(a)(2), the circumstances warranting the use of service by publication, and information, if any, regarding the location of the party served....\nN.C.R. Civ. P. 4Q1).\nBecause service by publication is in derogation of the common law, \u201cstatutes authorizing service of process by publication are strictly construed, both as grants of authority and in determining whether service has been made in conformity with the statute.\u201d Fountain v. Patrick, 44 N.C. App. 584, 586, 261 S.E.2d 514, 516 (1980). In determining whether service of process by publication is proper, this Court first examines whether the defendant was actually subject to service by publication \u2014 meaning that the plaintiff exercised due diligence as required by Rule 4(jl) prior to serving the defendant by publication. Jones, 211 N.C. App. at 357, 712 S.E.2d at 183: \u201cDue diligence dictates that plaintiff use all resources reasonably available to [him] in attempting to locate defendants. Where the information required for proper service of process is within plaintiff\u2019s knowledge or, with due diligence, can be ascertained, service of process by publication is not proper.\u201d Id. (citation and quotation marks omitted).\nIn this case, we conclude that service of process by publication was improper because there is no indication in the record that Plaintiffs ever attempted service on Defendant at his Skyview Drive address despite having knowledge of said address. Indeed, the record shows that on 29 September 2010, approximately two months before Plaintiffs commenced service by publication, Defendant\u2019s counsel sent Plaintiffs\u2019 counsel an email stating as follows:\nOne other thing I forgot to include. [Defendant] has asked me to provide you with his current mailing address, which is as follows: 2201 Skyview Dr., Fayetteville, NC 28304.\nThx, sieve\nAlthough Plaintiffs caused a summons to be issued listing this address, the record is devoid of any evidence that service was ever actually attempted on Defendant at 2201 Skyview Drive. Indeed, Plaintiffs do not dispute the absence of such evidence in the record.\nWhile the record reflects that Defendant has had numerous mailing addresses throughout this litigation, this cannot excuse Plaintiffs\u2019 failure to attempt service at the address provided by Defendant\u2019s counsel and described as Defendant\u2019s \u201ccurrent mailing address.\u201d Because Plaintiffs did not try to serve Defendant personally or by certified mail at the Skyview Drive address, we cannot conclude that they exercised the due diligence required before resorting to service by publication. See Thomas v. Thomas, 43 N.C. App. 638, 646, 260 S.E.2d 163, 169 (1979) (\u201c[S]ervice of process by publication is void... if the information required for personal service is within the plaintiff\u2019s actual knowledge or with due diligence could be ascertained.\u201d).\nPlaintiffs contend that Defendant nevertheless submitted to the jurisdiction of the trial court \u2014 thereby waiving any alleged defects in service of process \u2014 by (1) filing a motion for a temporary restraining order; and (2) seeking injunctive and declaratory, relief in his motions to set aside the default judgments. Plaintiffs\u2019 argument is without merit.\nIt is well established that by making a general appearance, a defendant \u201cwaives any defects in the jurisdiction of the court for want of valid summons or of proper service thereof.\u201d Tobe-Williams v. New Hanover Cty. Bd. of Educ., _ N.C. App. _, _ S.E.2d _, slip op. at 16 (No. COA13-679) (filed Jun. 17, 2014) (citation omitted). In this case, however, Defendant \u201cdid nothing that could be considered a general appearance prior to the entry of the [judgments] now challenged.\u201d Barnes v. Wells, 165 N.C. App. 575, 579, 599 S.E.2d 585, 588 (2004). Defendant is challenging the validity of default judgments entered on 17 March 2011 based on improper service of process. It was not until after the entry of the 17 March 2011 judgments that Defendant filed his motion for a temporary restraining order (on 21 August 2012) and his motions to set aside the default judgments (on 31 August 2012).\nAs we have previously explained, \u201c[i]f the trial court lacked personal jurisdiction over [the party] when it entered the order, actions subsequent to that order could not retroactively supply jurisdiction.\u201d Id. at 580, 599 S.E.2d at 589. Because Defendant did not make a general appearance before the entry of the default judgments, he has not waived his objection to improper service of process. See id. (concluding that party did not waive personal jurisdiction objection based on improper service in moving for relief from order pursuant to Rule 60(b) because party did not make any general appearances prior to entry of order being challenged).\nBecause service by publication on Defendant was invalid, the trial court did not possess personal jurisdiction over Defendant when it entered the 17 March 2011 default judgments. As such, these default judgments are void, and the trial court erred by denying Defendant\u2019s motions to set them aside. Consequently, we must reverse the trial court\u2019s 18 October 2012 order denying Defendant\u2019s motions to set aside and vacate the underlying default judgments. Cotton, 160 N.C. App. at 704, 586 S.E.2d at 808-09.\nII. Sanctions Order\nWe must also vacate the trial court\u2019s 18 October 2012 sanctions order. In its order, the trial court granted Plaintiffs\u2019 motion to impose Rule 11 sanctions against Defendant and ordered Defendant to pay $1,500.00 in attorneys\u2019 fees \u201cincurred in the successful defense of Defendant\u2019s most recent motions.\u201d\nRule 11 states, in pertinent part, as follows:\nEvery pleading, motion, and other paper of \u00e1 party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. . . . The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information and belief formed after reasonable inquiry it is well grounded in fact and warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.\nN.C.R. Civ. P. 11(a). If apleading, motion, orpaperis signed in violation of Rule 11, the trial court \u201cshall impose ... an appropriate sanction, which may include an order to pay the other party... reasonable expenses ... including a reasonable attorney\u2019s fee.\u201d Id.\nIt is well established that analysis under Rule 11 is three-pronged, requiring the trial court to determine whether the pleading, motion, or paper is (1) factually sufficient; (2) legally sufficient; and (3) not filed for an improper purpose. In re Will of Durham, 206 N.C. App. 67, 71, 698 S.E.2d 112, 117 (2010). \u201cA violation of any one of these requirements mandates the imposition of sanctions under Rule 11.\u201d Dodd v. Steele, 114 N.C. App. 632, 635, 442 S.E.2d 363, 365, disc. review denied, 337 N.C. 691, 448 S.E.2d 521 (1994).\nHere, we have already concluded that Defendant\u2019s motions to set aside the default judgments for lack of personal jurisdiction based on improper service were factually and legally meritorious. As such, Rule 11 sanctions are not appropriate based on either of the first two prongs. Accordingly, Rule 11 sanctions could only be appropriate if Defendant\u2019s motions were filed for an improper purpose. See Durham, 206 N.C. App. at 72, 698 S.E.2d at 118 (\u201cThe improper purpose prong of Rule 11 is separate and distinct from the factual and legal sufficiency requirements. ... Thus, even if a paper is well grounded in fact and in law, it may still violate Rule 11 if it is served or filed for an improper purpose.\u201d (citations, quotation marks, and alterations omitted)).\n\u201cAn improper purpose is any purpose other than one to vindicate rights ... or to put claims of right to a proper test.\u201d Mack v. Moore, 107 N.C. App. 87, 93, 418 S.E.2d 685, 689 (1992) (citation and quotation marks omitted). When determining whether a motion was filed for an improper purpose, the relevant inquiry is \u201cwhether the existence of an improper purpose may be inferred from the alleged offender\u2019s objective behavior.\u201d Id.\nHere, we have found no evidence in the record suggesting that Defendant filed his motions to set aside the default judgments for any improper purpose. Furthermore, the trial court\u2019s sanctions order did not contain any findings indicating that Defendant filed his motions for any such improper purpose, instead relying on its determination that the motions were not well grounded in fact or law to support its conclusion that sanctions were appropriate. See Page v. Roscoe, LLC, 128 N.C. App. 678, 686, 497 S.E.2d 422, 428 (1998) (concluding that improper purpose prong of Rule 11 was not violated where there was no evidence suggesting that complaint was filed for improper purpose and trial court made no such findings). As such, Rule 11 sanctions were not appropriate in this case, and we vacate the trial court\u2019s sanctions order.\nConclusion\nFor the reasons stated above, we (1) reverse the trial court\u2019s order denying Defendant\u2019s Rule 60(b) motions; (2) vacate the order granting Plaintiffs\u2019 motion for sanctions; and (3) vacate the underlying default judgments entered 17 March 2011.\nREVERSED AND VACATED.\nJudges STEELMAN and STEPHENS concur.\n. Plaintiffs\u2019 complaint seeking reformation of the deed of trust alleged that both parties intended for two parcels \u2014 a 7.3 acre parcel and a 1.44 acre parcel \u2014 to secure Defendant\u2019s repayment of the loan but that through a mutual mistake, the deed of trust included a description of only the 1.44 acre parcel.\n. Defendant also challenges the validity of the $88,000.00 appeal bond set by the trial court. The authority of a trial court to impose an appeal bond is limited by statute. Plaintiffs contend that the bond imposed was appropriate under N.C. Gen. Stat. \u00a7 1-292, which requires an appellant to execute a bond of \u201ca sum to be fixed by a judge\u201d in order to stay execution of a judgment \u201cdirect[ing] the sale or delivery of possession of real property.\u201d N.C. Gen. Stat. \u00a7 1-292 (2013). Because the trial court\u2019s 18 October 2012 order denying Defendant\u2019s motions to set aside the default judgments did not \u201cdirect[] the sale or delivery of possession of real property,\u201d N.C. Gen. Stat. \u00a7 1-292 does not apply. However, because we granted certiorari to review the trial court\u2019s 18 October 2012 orders and Defendant was not ultimately required to execute the $88,000.00 appeal bond, we need not address with specificity each of Defendant\u2019s arguments regarding the validity of the appeal bond.",
        "type": "majority",
        "author": "DAVIS, Judge."
      }
    ],
    "attorneys": [
      "Robbins May & Rich, LLP, by Neil T. Oakley, R. Palmer Sugg, and Robert M. Friesen, for plaintiffs-appellees.",
      "Gray, Layton, Kersh, Solomon, Furr, & Smith, P.A., by William E. Moore, Jr. and Marcus R. Carpenter, for defendant-appellant."
    ],
    "corrections": "",
    "head_matter": "ROBERT PETER DOWD, III and JONATHAN CARTER DOWD, Plaintiffs v. CHARLES DEXTER JOHNSON, Defendant\nNo. COA13-833\nFiled 15 July 2014\nProcess and Service\u2014default judgments\u2014service by publication\u2014improper\u2014no general appearance\nThe trial court erred by denying defendant\u2019s motions to set aside default judgments because plaintiffs\u2019 service of process by publication was improper. There was no indication in the record that plaintiffs ever attempted service on defendant at his Skyview Drive address, despite having knowledge of said address. Furthermore, defendant did not make a general appearance before the entry of the default judgments and has not waived his objection to improper service of process. Because service by publication on defendant was invalid, the trial court did not possess personal jurisdiction over defendant when it entered the default judgments. As such, these default judgments were void.\nAppeal by defendant from orders entered 18 October 2012 by Judge James M. Webb in Moore County Superior Court. Heard in the Court of Appeals 11 December 2013.\nRobbins May & Rich, LLP, by Neil T. Oakley, R. Palmer Sugg, and Robert M. Friesen, for plaintiffs-appellees.\nGray, Layton, Kersh, Solomon, Furr, & Smith, P.A., by William E. Moore, Jr. and Marcus R. Carpenter, for defendant-appellant."
  },
  "file_name": "0006-01",
  "first_page_order": 16,
  "last_page_order": 24
}
