Brewster v. Verbal ( 2014 )

NO. COA13-1344
NORTH CAROLINA COURT OF APPEALS
Filed: 1 July 2014
KARLETTE D. BREWSTER,
Plaintiff,
v. Durham County
No. 11 CVS 5754
CLAUDE A. VERBAL, II,
MARGIE H. VERBAL,
Defendants.
Appeal by defendant Margie H. Verbal from order entered 25
September 2013 by Judge Paul C. Ridgeway in Durham County
Superior Court. Heard in the Court of Appeals 22 April 2014.
Perry, Perry & Perry, P.A., by Robert T. Perry, for
plaintiff-appellee.
Attorney George Ligon, Jr., for defendant-appellant Margie
H. Verbal.
No brief was filed for defendant Claude A. Verbal, II.
BRYANT, Judge.
Where a joint property owner acted within the scope of his
apparent authority in retaining trial counsel to defend the
property owners against a negligence suit, we hold that
defendant property owner was bound by the acts of the joint
owner and subsequently bound by the acts of trial counsel
representing the owners. Therefore, we affirm the trial court
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order denying defendant’s motion to dismiss plaintiff’s
complaint for violations of Civil Procedure Rules 12(b)(2), (4),
(5), and (6). We also affirm the denial of defendant’s motion
to set aside a default judgment.
On 16 November 2011, plaintiff Karlette Dandy Brewster
filed a complaint against defendants Claude A. Verbal, II, and
Margie H. Verbal in Durham County Superior Court. Margie and
Claude are mother and son. Two civil summons were also filed in
the Durham County Superior Court Clerk’s Office stating that
each summons and a copy of the complaint had been received by
Pamela Verbal (Claude Verbal’s wife and Margie Verbal’s
daughter-in-law) at the address listed for Claude A. Verbal, II,
and Margie H. Verbal.
In her complaint, plaintiff alleged that defendants
exercised dominion and control over a property located at 4005
Destrier Drive in Durham, which defendants rented to Brewster.
On 17 April 2011, plaintiff was attempting to enter the rental
property when she fell in an unlit section of a stairwell.
Plaintiff asserted a claim of negligence.
On 23 January 2012, “Defendants Claude A. Verbal and Margie
H. Verbal . . . by and through [counsel Jonathan Wilson II]”
filed a motion to dismiss and an answer to plaintiff’s
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complaint. Subsequently, plaintiff filed a motion to compel
depositions and sanctions against defendants for failure to
attend two depositions. Following a settlement between the
parties as to plaintiff’s motion, the trial court entered a
consent order wherein Claude agreed to make himself available
for depositions. In its order, the trial court noted that
defendants were represented by Wilson. On 19 December 2012,
plaintiff filed a motion for default, contempt and sanctions
alleging that defendants failed to appear for scheduled
mediation and failed to respond to discovery requests. On 16
January 2013, the trial court entered a default judgment as to
defendants’ liability. On 8 August 2013, defense counsel
Jonathan Wilson, II, filed a motion to withdraw as counsel
stating that he was “retained by the Defendants to represent
them in this pending civil matter” but that “the Defendant has
refused to abide or respond to counsel’s means of
communication.” Defense counsel’s motion to withdraw was
granted. On 17 September 2013, Margie filed a motion to dismiss
and motion to set aside the default judgment.
In her motion, Margie contended that the action against her
should be dismissed pursuant to Civil Procedure Rules 12(b)(2)
(lack of jurisdiction of the person), (4) (insufficiency of
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process), (5) (insufficiency of service of process), and (6)
(failure to state claim upon which relief could be granted).
Margie contended that she did not reside in North Carolina and
had not resided in North Carolina in over thirty years, had
never been served with process, did not authorize or consent to
representation by Jonathan Wilson or the Law Offices of John C.
Fitzpatrick, and did not receive any notice to appear at a
mediation conference or deposition. Further, Margie alleged
that she had a meritorious defense to the negligence claim
including contributory negligence and that she never leased the
premises to plaintiff. In her affidavit, Margie averred that
she had no knowledge of the lawsuit naming her as a defendant
“until August 2013 when [she] received a letter . . . from the
plaintiff’s attorney.”
Jonathan Wilson also filed an affidavit. Wilson averred
that he was retained by Claude Verbal who represented to Wilson
that Margie Verbal was physically ill and resided in the
Midwestern part of the country, and that Margie was aware of
Wilson’s representation of her in this civil matter.
On 25 September 2013, the trial court entered an order in
which it concluded that by ceding all involvement with the
property to her son since at least 1997, Margie Verbal created
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an agency relationship with her son. In accordance with this
relationship, Claude had authority to procure legal counsel to
act for the benefit of both owners should the need arise; thus,
Claude’s retention of Wilson was within the scope of that
authority. The court concluded that any defenses to personal
jurisdiction based on insufficient process or service of process
had been waived. Margie’s motion to dismiss the action or set
aside the default judgment was denied. Margie Verbal appeals.
______________________________
On appeal, Margie Verbal raises the following issues:
whether the trial court erred in denying her (I) motion to
dismiss; and (II) motion to set aside default judgment.
I
Margie first argues that the trial court erred in denying
her motion to dismiss plaintiff’s claim as to her on the grounds
that the trial court lacked personal jurisdiction.
Specifically, Margie argues that North Carolina’s long-arm
statute does not permit the exercise of personal jurisdiction
over her and that the exercise of personal jurisdiction does not
comport with due process. Margie further argues that her son
Claude was not authorized to retain counsel on her behalf; that
attorney Jonathan Wilson was not authorized to act on her
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behalf; and that she did not waive her Rule 12(b) defenses. We
disagree.
The standard of review of an order
determining personal jurisdiction is whether
the findings of fact by the trial court are
supported by competent evidence in the
record. Where no exception is taken to a
finding of fact by the trial court, the
finding is presumed to be supported by
competent evidence and is binding on appeal.
We review de novo the issue of whether the
trial court's findings of fact support its
conclusion of law that the court has
personal jurisdiction over defendant.
Bell v. Mozley, 216 N.C. App. 540, 543, 716 S.E.2d 868, 871
(2011) (citation and quotations omitted).
As an appearance by an attorney on behalf of Margie
addressing the merits of plaintiff’s claim prior to contesting
personal jurisdiction will waive a defense to the exercise of
personal jurisdiction, we first consider whether her son Claude
acted as Margie’s agent in retaining counsel to address
plaintiff’s claims and, if necessary, whether Wilson’s
involvement in the initial stages of the action constituted a
general appearance made prior to contesting the exercise of
personal jurisdiction.
“An agent is one who acts for or in the place of another by
authority from him.” Julian v. Lawton, 240 N.C. 436, 440, 82
S.E.2d 210, 213 (1954) (citation omitted). “The power of an
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agent, . . . to bind his principal, may include, not only the
authority actually conferred, but the authority implied as usual
and necessary to the proper performance of the work intrusted
[sic] to him . . . .” Research Corp. v. Hardware, Inc., 263
N.C. 718, 721, 140 S.E.2d 416, 418 (1965) (citation omitted).
A principal-agent relationship arises upon
two essential elements: (1) [a]uthority,
either express or implied, of the agent to
act for the principal, and (2) the
principal's control over the agent. An
agency can be proved generally, by any fact
or circumstance with which the alleged
principal can be connected and having a
legitimate tendency to establish that the
person in question was his agent for the
performance of the act in controversy....
Forbes v. Par Ten Group, Inc., 99 N.C. App. 587, 599, 394 S.E.2d
643, 650 (1990) (citation and quotations omitted). Agency may
also be inferred from the nature of continuous acts known to the
principal such that the principal would not have allowed the
agent to so act unless authorized. See Reverie Lingerie, Inc.
v. McCain, 258 N.C. 353, 359, 128 S.E.2d 835, 839—40 (1963); see
also Partin v. Power & Light Co., 40 N.C. App. 630, 637, 253
S.E.2d 605, 611 (1979) (“Mere relationship or family ties,
unaccompanied by any other facts or circumstances, will not
justify an inference of agency, but such relationship is
entitled to great weight, when considered with other
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circumstances, as tending to establish agency.” (citations
omitted)).
In its 25 September 2013 order denying Margie’s motion to
dismiss, the trial court found that the property plaintiff
rented – located at 4005 Destrier Drive in Durham – was owned by
defendants Claude Verbal and his mother Margie Verbal; Margie
did not live in North Carolina but rather has resided in
Michigan for the past thirty years; and per Margie’s affidavit,
she “[has] not had any involvement with the real property
located at 405 Destrier Drive in Durham, North Carolina since
1997.” The trial court reasoned that by conceding to her son
Claude all involvement with the property since at least 1997,
Margie Verbal “expressly or implicitly created an agency
relationship with her son, whereby her son had authority to act
on her behalf to, among other things, lease the property to
tenants such as the Plaintiff and to receive tax notices and to
pay taxes on the property.” We agree. See Partin, 40 N.C. App.
at 637, 253 S.E.2d at 611 (“relationship or family ties . . .
[are] entitled to great weight, when considered with other
circumstances, as tending to establish agency.” (citation
omitted)).
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The trial court further concluded that retention of legal
counsel to defend the property owners from claims such as
plaintiff’s was reasonably foreseeable and thus, within the
scope of Claude’s authority to act on behalf of Margie.
“[A]n agent may usually bind his principal as to all acts
within the scope of his agency including not only the authority
actually conferred, but such as is usually confided to an agent
employed to transact the business which is given him to do, and
it is held that, as to third persons, this real and apparent
authority is one and the same . . . .” Research Corp., 263 N.C.
at 721, 140 S.E.2d at 418 (citation omitted). “Apparent
authority is that authority which the principal has held the
agent out as possessing or which he has permitted the agent to
represent that he possesses.” Heath v. Craighill, Rendleman,
Ingle & Blythe, P.A., 97 N.C. App. 236, 242, 388 S.E.2d 178, 182
(1990) (citation omitted). “The principal may be estopped to
deny that a person is his agent or that his agent has acted
within the scope of his authority.” Research Corp., 263 N.C. at
721, 140 S.E.2d at 419 (citations omitted). “Under the doctrine
of apparent authority, a principal's liability in any particular
case must be determined by what authority the third person in
the exercise of reasonable care was justified in believing that
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the principal had, under the circumstances, conferred upon his
agent.” Munn v. Haymount Rehab. & Nursing Ctr., 208 N.C. App.
632, 639, 704 S.E.2d 290, 295 (2010) (citation omitted).
The trial court found that per Jonathan Wilson’s affidavit,
he had been retained by Claude A. Verbal, II
and that based upon conversations with
Claude A. Verbal, II he was led to believe
that his mother, Margie H. Verbal was
physically ill and resided in the Midwest.
Mr. Wilson further asserted that based upon
conversations with Claude A. Verbal, II, he
was led to believe that Margie H. Verbal was
aware of the civil matter and his
representation of them . . . .
On the totality of the circumstances as presented to Wilson,
particularly noting that Claude was a co-owner of the property
rented to plaintiff, Claude was Margie’s son, and Margie did not
live in North Carolina, we hold that Claude Verbal’s retention
of Wilson as legal counsel on behalf of Margie was within
Claude’s apparent authority. See id.; see also Parsons v.
Bailey, 30 N.C. App. 497, 502, 227 S.E.2d 166, 168 (1976) (“It
would seem to be clear that if the agent is purporting to act as
an agent and doing the things which such agents normally do, and
the third person has no reason to know that the agent is acting
on his own account, the principal should be liable because he
has invited third persons to deal with the agent within the
limits of what, to such third persons, would seem to be the
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agent's authority.”); compare Johnson v. Amethyst Corp., 120
N.C. App. 529, 533, 463 S.E.2d 397, 400 (1995) (holding an
attorney had no right to appear on behalf of the defendant where
the attorney had no authority granted by the party for whom he
was appearing).
We next consider whether Wilson, appearing on behalf of
Margie, appeared before the trial court in a manner consistent
with a general appearance.
“A court of this State having jurisdiction of the subject
matter may, without serving a summons upon him, exercise
jurisdiction in an action over a person: (1) Who makes a general
appearance in an action . . . .” N.C. Gen. Stat. § 1-75.7(1)
(2013). “In G.S. ' 1—75.7 the legislature made the policy
decision that any act which constitutes a general appearance
obviates the necessity of service of summons.” Simms v. Stores,
Inc., 285 N.C. 145, 157, 203 S.E.2d 769, 777 (1974).
A general appearance is one whereby the
defendant submits his person to the
jurisdiction of the court by invoking the
judgment of the court in any manner on any
question other than that of the jurisdiction
of the court over his person. Other than a
motion to dismiss for lack of jurisdiction
virtually any action constitutes a general
appearance.
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Judkins v. Judkins, 113 N.C. App. 734, 737, 441 S.E.2d 139, 140
(1994) (citations and quotations omitted). “A party may appear
either in person or by attorney in actions or proceedings in
which he is interested.” N.C. Gen. Stat. § 1-11 (2013). “[A]
court may properly obtain personal jurisdiction over a party who
consents or makes a general appearance, for example, by filing
an answer or appearing at a hearing without objecting to
personal jurisdiction.” Stunzi v. Medlin Motors, Inc., 214 N.C.
App. 332, 336, 714 S.E.2d 770, 774 (2011) (citation omitted).
The record reflects that following the filing of
plaintiff’s complaint, Wilson filed an answer on behalf of
Claude and Margie answering the allegations of the complaint and
raising defenses of contributory negligence, no proximate cause,
failure to mitigate, and unclean hands. The answer also
included a motion to dismiss the complaint pursuant to Rule
12(b)(6). Moreover, Wilson represented defendants on
plaintiff’s motion to compel depositions and for sanctions. The
parties entered into a settlement which led to the trial court’s
entry of a consent order. Clearly, the trial court had
jurisdiction over the subject matter, a fact that Margie does
not contest. Wilson’s representation constituted a general
appearance submitting Margie to the jurisdiction of the court.
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Therefore, Margie has waived her right to challenge the trial
court’s exercise of personal jurisdiction. See N.C.G.S. § 1-
75.7(1); see also Lynch v. Lynch, 302 N.C. 189, 197, 274 S.E.2d
212, 219 (“[A]ny act which constitutes a general appearance
obviates the necessity of service of summons and waives the
right to challenge the court's exercise of personal jurisdiction
over the party making the general appearance.”) on reh'g, 303
N.C. 367, 279 S.E.2d 840 (1981).
Due to our holding affirming the trial court’s exercise of
personal jurisdiction based on an agency relationship, we need
not address Margie’s additional arguments challenging the trial
court’s exercise of personal jurisdiction.
II
Next, Margie argues that the trial court erred in denying
her motion to set aside the default judgment. Specifically, she
argues that because “the procedural manner by which [personal]
jurisdiction could have been exercised over her was never
legally accomplished . . . the Default Judgment entered against
her is void.”
As we have determined that Wilson’s representation of
Margie before the trial court was proper and constituted a
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general appearance submitting Margie to the jurisdiction of the
court, we overrule this argument.
Affirmed.
Judges HUNTER, Robert C. and STEELMAN concur.
Report per Rule 30(e).