Sheppard v. Community Federal Savings & Loan

352 S.E.2d 252 (1987)

Walter R. SHEPPARD, Jr., Guardian of William L. Sheppard, Incompetent
v.
COMMUNITY FEDERAL SAVINGS AND LOAN and Community Savings and Loan Association.
Walter R. SHEPPARD, Jr., Guardian of William L. Sheppard, Incompetent
v.
COMMUNITY SAVINGS AND LOAN ASSOCIATION, Community Federal Savings and Loan and Judy Hovey.

No. 8629SC241.

Court of Appeals of North Carolina.

February 3, 1987.

Long, Parker, Payne & Warren by Robert B. Long, Jr. and Ronald K. Payne, Asheville, for plaintiff-appellant.

Jackson & Jackson by Frank B. Jackson and Charles Russell Burrell, Hendersonville, for defendant-appellee Community Federal Sav. and Loan Ass'n.

David K. Fox and Hogan and Hogan by Lawrence A. Hogan and Robert L. Hogan, Hendersonville, for defendant-appellee Judy Hovey.

PHILLIPS, Judge.

Of the several contentions that the appellant makes in his quest for a new trial it is necessary to discuss just one, as a new trial is clearly required and the developments that gave rise to the other contentions are not likely to recur. For when Judge Cornelius disregarded Judge Burroughs' prior order directing that plaintiff be examined by a psychiatrist and that a hearing be held on the issue of plaintiff's competency this case took a wrong turn prejudicial to the plaintiff as the foregoing facts indicate. Judge Burroughs' order, entered several months before trial, was based upon a well supported finding that there was "a substantial question" as to the plaintiff's competency and it was error for the court to go forward with the case before that question was properly resolved. Rutledge v. Rutledge, 10 N.C.App. 427, 179 S.E.2d 163 (1971).

When a party to a lawsuit in this state is mentally incompetent he must be represented by his Guardian if he has one, and if not by a Guardian ad litem. Rule 17(b), N.C. Rules of Civil Procedure. As pointed out in Hagins v. Redevelopment Commission, 275 N.C. 90, 165 S.E.2d 490 (1969) and Rutledge, supra: When a question as to a party's competence arises during the course of a civil action or proceeding, as it did here, the court must conduct an evidentiary hearing and if it is found from the evidence that the party is mentally incompetent and he does not object a Guardian ad litem to act for him should be appointed; but if notwithstanding the court's finding the party asserts his competency the issue must be determined as provided in G.S. 35-2. This salutary and mandatory procedure for the protection of possible mentally incompetents was set in motion by Judge Burroughs' order and it was error not to continue the process until the issue was resolved in the way that the law provides. In determining from his observations that plaintiff was competent and an evidentiary hearing was not necessary Judge Cornelius not only failed to follow the course laid down for protecting the rights of possible incompetents, he also in effect overruled another Superior Court judge, which our law does not approve. East Coast Fertilizer Co. v. Hardee, 211 N.C. 56, 188 S.E. 623 (1936). That this erroneous step prejudiced the trial of plaintiff's case is strongly indicated by the recorded fact that about six weeks after plaintiff undertook to represent himself in the trial of the case he was adjudged to be mentally incompetent in a proceeding brought in accord with G.S. 35-2. Since this error may have deprived plaintiff of the needed aid of a Guardian or Guardian ad litem from that point forward in the litigation the orders and judgment entered thereafter that affect his property rights must be set aside. Thus we vacate the judgment entered upon the verdict for the defendants and the orders by Judge Owens imposing sanctions and dismissing plaintiff's complaint against the defendant savings and loan association.

The arguments of the defendants that Judge Cornelius did not err in cancelling the evidentiary hearing directed by Judge Burroughs because plaintiff's mother had withdrawn her earlier affidavit stating that he was incompetent are not persuasive. While the second affidavit was a change of sorts its contents and the circumstances that accompanied it added to, rather than eliminated, the uncertainty as to plaintiff's competency. Apart from the broadside, unexplained statement that she was forced to sign the first affidavit, the second affidavit is a rambling, argumentative and largely irrelevant document, the main thrust of which is that her husband and plaintiff's father, still listed as plaintiff's counsel in one of the cases, had "dealt treacherously" with plaintiff in other business transactions that apparently have nothing to do with the issues raised in these cases. And though the second affidavit was attached to and filed with a motion purportedly prepared and signed by Attorneys White & Dalton those lawyers, in a notice promptly filed with the court, disavowed any knowledge of either document. These circumstances, it seems to us, added to the need for an evidentiary hearing; for the question of plaintiff's competency still remained and grave new questions had arisen—questions concerning the truthfulness of contradictory and conflicting affidavits by the same affiant; the intimidation of a witness; and the claimed forgery of a law firm's name to documents filed with the court. That these urgent and significant questions were not resolved in the manner that the law requires before the cases were tried makes it necessary to try them again.

Vacated and remanded for a new trial.

BECTON and MARTIN, JJ., concur.