Stewart v. ShipleyÂ

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-745
Filed: 5 March 2019
Surry County, No. 16 CVS 199
TILLIE STEWART, Plaintiff,
v.
JAMES R. SHIPLEY, DPM, INSTRIDE MT. AIRY FOOT AND ANKLE
SPECIALISTS, PLLC d/b/a MT. AIRY FOOT & ANKLE CENTER, and NORTHERN
HOSPITAL DISTRICT OF SURRY COUNTY, Defendants.
Appeal by plaintiff from order entered 19 December 2016 by Judge Eric C.
Morgan in Surry County Superior Court. Heard in the Court of Appeals 29 January
2019.
Pangia Law Group, by Amanda C. Dure and Joseph L. Anderson, for plaintiff-
appellant.
Nelson Mullins Riley & Scarborough, LLP, by G. Gray Wilson and Lorin J.
Lapidus, for defendants-appellees.
DAVIS, Judge.
In this case, we consider the circumstances under which a defendant is
estopped from asserting the defense of insufficiency of service of process. Plaintiff
Tillie Stewart appeals from the trial court’s dismissal of her complaint against
defendants Dr. James R. Shipley and Instride Mt. Airy Foot and Ankle Specialists,
PLLC (collectively the “Shipley Defendants”). In her appeal, she argues that
principles of estoppel serve to bar the Shipley Defendants from asserting that they
STEWART V. SHIPLEY
Opinion of the Court
were not properly served with process in this lawsuit. After a thorough review of the
record and applicable law, we affirm.
Factual and Procedural Background
On 19 November 2012, Stewart began treatment for plantar fasciitis pain in
her left foot with Dr. Shipley at Mt. Airy Foot and Ankle Center in Mount Airy, North
Carolina. After three months of treatment, Dr. Shipley recommended that Stewart
undergo surgery on her left foot to alleviate her pain. The operation took place on 19
February 2013 at Northern Hospital of Surry County (“Northern”). Although Stewart
had consented to surgery only on her left foot, Dr. Shipley first operated on her right
foot and then repeated the procedure on her left foot. As a result, Stewart
subsequently experienced significant pain in both feet.
Stewart filed a complaint in Surry County Superior Court on 18 February 2016
alleging claims of medical malpractice and battery against Dr. Shipley, Instride Mt.
Airy Foot and Ankle Specialists, PLLC (“Instride”), and Northern. Summonses for
all of the defendants were issued that same day.
On 29 February 2016, counsel for Stewart sent an email to Courtney Witt, a
claims specialist for the Shipley Defendants’ insurer, containing the complaint and
summonses as attachments. In the email, Stewart’s counsel inquired whether the
Shipley Defendants would “accept service or if [Witt could] forward this to [the
Shipley Defendants’] attorney.” Witt responded that same day, stating that Stewart
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would “have to serve the insured” as the insurance company would “not be accepting
service.”
The Shipley Defendants filed a motion for an extension of time in which to
respond to Stewart’s complaint on 9 March 2016, which stated that the complaint had
been “allegedly served on or about February 19, 2016.” On 10 March 2016, a private
process server delivered a summons and complaint to the registered agent for
Instride. Instride subsequently filed an amended motion for extension of time on 31
March 2016, which the trial court granted that same day. In this motion, Instride
stated that Stewart’s complaint was “allegedly served on or about March 10 2016.” A
private process server delivered a summons and complaint to Dr. Shipley on 7 April
2016.
On 10 May 2016, the Shipley Defendants filed an answer asserting a number
of defenses, including lack of personal jurisdiction and insufficiency of service of
process pursuant to Rules 12(b)(2) and (5) of the North Carolina Rules of Civil
Procedure. The Shipley Defendants also submitted affidavits from Kevin McDonald,
the president of Instride, and Dr. Shipley. In their respective affidavits, McDonald
and Dr. Shipley each stated that they had been handed a copy of the complaint with
no accompanying summons by persons who did not identify their status or position.
On 25 August 2016, the Shipley Defendants filed a motion to dismiss the claims
against them for failure to state a claim upon which relief may be granted under Rule
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12(b)(6), lack of personal jurisdiction based on Rule 12(b)(2), and insufficiency of
service of process pursuant to Rule 12(b)(5). A hearing on the Shipley Defendants’
motion was held before the Honorable Eric C. Morgan on 14 November 2016. On 19
December 2016, the trial court issued an order granting the motion to dismiss based
on improper service. The court determined that Stewart “did not attempt to have
[the Shipley Defendants] served by the sheriff, and that the clerk of Surry County
has not appointed plaintiff’s process servers and, consequently, plaintiff’s attempted
service by private process servers is invalid under Rule 4[.]” Stewart gave timely
notice of appeal to this Court. 1
Analysis
“We review de novo questions of law implicated by the denial of a motion to
dismiss for insufficiency of service of process. The trial court’s factual determinations
are binding on this court if supported by competent evidence.” New Hanover Cty.
Child Support Enf’t ex rel. Beatty v. Greenfield, 219 N.C. App. 531, 533, 723 S.E.2d
790, 792 (2012) (internal citations omitted).
At the outset, it is important to note that Stewart does not claim that the trial
court erred in holding her attempted service of process on the Shipley Defendants
1 This case is before us for a second time. In Stewart v. Shipley, 805 S.E.2d 545, 2017 N.C.
App. LEXIS 859 (2017) (unpublished), we dismissed Stewart’s initial appeal as interlocutory. Id. at
*7. On 26 March 2018, Stewart voluntarily dismissed Northern as a defendant, thereby rendering the
trial court’s 19 December 2016 order a final judgment. Stewart then filed a new notice of appeal from
which the current appeal arises.
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was invalid. Nor could such an argument be properly made under these
circumstances.
This Court has stated the following regarding the use of private process
servers:
Service must generally be carried out by the sheriff of the
county where service is to occur. While the clerk of the
issuing court may appoint an alternative person to carry
out service, that clerk is not required or authorized to
appoint a private process server as long as the sheriff is not
careless in executing process.
B. Kelley Enters., Inc. v. Vitacost.com, Inc., 211 N.C. App. 592, 598, 710 S.E.2d 334,
339 (2001) (citation, brackets, and quotation marks omitted). We have also made
clear that a defendant’s actual notice of a lawsuit’s existence is not by itself sufficient
to confer personal jurisdiction over the defendant absent proper service of process.
While a defective service of process may give the defending
party sufficient and actual notice of the proceedings, such
actual notice does not give the court jurisdiction over the
party. Absent valid service of process, a court does not
acquire personal jurisdiction over the defendant and the
action must be dismissed.
Thomas & Howard Co. v. Trimark Catastrophe Servs., Inc., 151 N.C. App. 88, 91, 564
S.E.2d 569, 572 (2002) (internal citations and quotation marks omitted).
Stewart does not contend that she attempted to have the Shipley Defendants
served by the sheriff or that the Surry County Clerk of Court appointed the private
process servers who attempted to serve them. Instead, she asserts that even though
she failed to properly serve them, they should be estopped from asserting
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insufficiency of service of process as a defense because (1) they filed motions for
extension of time that appeared to acknowledge the fact that they had been served;
and (2) upon receiving the Shipley Defendants’ answer, Stewart had only one week
in which to obtain extensions on their summonses. Therefore, the only issue before
us in the present appeal is whether the Shipley Defendants are estopped from
asserting that they were never properly served with process.
Initially, the Shipley Defendants argue that Stewart failed to properly
preserve this argument for appeal because she did not raise the estoppel issue in the
trial court. The North Carolina Rules of Appellate Procedure provide that “[i]n order
to preserve an issue for appellate review, a party must have presented to the trial
court a timely request, objection, or motion, stating the specific grounds for the ruling
the party desired the court to make if the specific grounds were not apparent from
the context.” N.C. R. App. P. 10(a)(1).
Stewart admits that she did not specifically reference the estoppel doctrine
before the trial court. However, she asserts that because “contentions regarding the
Shipley Defendants’ knowledge of the lawsuit and subsequent filings regarding
service” are “[r]ife in the pleadings and hearing transcript surrounding the motion to
dismiss,” her intent to make an argument grounded in estoppel was apparent. She
specifically cites to the portion of the hearing transcript in which her counsel stated
the following:
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Opinion of the Court
On March 7, the Shipley Defendants filed a Motion for
Extension of Time to respond to the Plaintiff’s Complaint,
stating that the Complaint was . . . “allegedly served on or
about February 19, 2016.”
To my way of thinking, the fact that they filed a Motion for
Extension of Time to respond to the Complaint is pretty
darn good evidence that they knew they had been sued.
You don’t file a motion for an extension of time if you don’t
know you’ve been sued.
Based on our careful review of the record, we are unable to agree that Stewart
actually made an estoppel argument in the trial court. While Stewart’s counsel relied
upon the Shipley Defendants’ filing of motions for extension of time in arguing that
they knew of the lawsuit’s existence, her attorney did not go on to further argue that
the language contained in these motions led Stewart to rely to her detriment on the
belief that the Shipley Defendants would not be contesting the adequacy of service.
See Dogwood Dev. & Mgmt. Co., LLC v. White Oak Transp. Co., 362 N.C. 191, 195-
96, 657 S.E.2d 361, 364 (2008) (“[A] party’s failure to properly preserve an issue for
appellate review ordinarily justifies the appellate court’s refusal to consider the issue
on appeal.” (citations omitted)).
However, even had Stewart properly preserved the issue for appeal, we
conclude that her argument would still lack merit. In arguing that the Shipley
Defendants are estopped, Stewart relies primarily upon our decision in Storey v.
Hailey, 114 N.C. App. 173, 441 S.E.2d 602 (1994). In Storey, the plaintiff brought an
action against the defendant seeking compensation for services rendered. The
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defendant was not a resident of North Carolina and had appointed Thomas Wellman,
an attorney, as his process agent in North Carolina. A deputy sheriff attempted to
effect service by leaving a copy of the summons and complaint with Wellman’s law
partner at his office. Id. at 175, 441 S.E.2d at 603-604.
Wellman subsequently entered an appearance as counsel for the defendant and
filed a motion requesting an extension of time in which to respond to Storey’s
complaint, which was granted. Id. Two additional extensions of time were obtained
through stipulation of counsel, amounting to a total delay of “54 days past the date
when [Storey] could have procured endorsement of the original summons or issuance
of an alias and pluries summons[.]” Id. at 175, 177, 441 S.E.2d at 604, 605. At the
end of this extended response period, the defendant obtained new counsel, who filed
a motion to dismiss based, in part, on insufficiency of service of process, lack of
personal jurisdiction, and the expiration of the statute of limitations. The trial court
granted the motion. Id. at 175-76, 441 S.E.2d at 604.
On appeal, the plaintiff argued “that she was lured into a false sense of security
in that defendant’s initial trial counsel . . . manifestly [led] Plaintiff’s trial counsel to
believe that there would be no need to continue further process[.]” Id. at 176, 441
S.E.2d at 604. This Court agreed.
[The] plaintiff was deprived of any opportunity to cure any
defects in the process or in the service of process, because
defendant’s counsel led plaintiff’s counsel to believe it was
unnecessary to continue further process. Defendant,
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absent the additional extension of time stipulated to by
plaintiff’s counsel, would have been subject to entry of
default following the expiration of the second
extension . . . . The defendant’s conduct in securing
extensions of time, through opposing counsel’s professional
courtesy, to 54 days past the date when plaintiff could have
procured endorsement of the original summons or issuance
of an alias and pluries summons, acts to estop defendant
from asserting these defenses.
Id. at 177, 441 S.E.2d at 605.
We distinguished Storey in Washington v. Cline, 233 N.C. App. 412, 761 S.E.2d
650 (2013). In Washington, the plaintiffs brought suit against twelve defendants.
The plaintiffs failed to properly serve nine of the twelve defendants, although each
defendant received actual notice of the suit. The nine defendants received extensions
of time to file a responsive pleading from the trial court and subsequently filed
motions to dismiss based on the defense of insufficiency of service of process, which
the trial court granted. Id. at 413-15, 761 S.E.2d at 652-53.
The plaintiffs appealed the dismissal of the nine defendants to this Court,
arguing, in part, that they were estopped from raising the issue of insufficiency of
service of process based on Storey. We rejected this argument, stating as follows:
Here, although defendants did receive extensions of time
from the trial court, they explicitly stated that the reason
for the extensions was to “determine whether any Rule 12
or other defenses [were] appropriate.” Defendants-
appellees’ . . . motion to dismiss for insufficient service of
process w[as] entered pursuant to Rule 12(b)(5). Therefore,
plaintiffs had notice that such motions could be filed.
Furthermore, defendants-appellees in fact served plaintiffs
with their answer containing the defenses . . . four days
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before the last day in which plaintiffs could have obtained
extensions of the summonses. It is evident that plaintiffs
had actual notice of the defenses . . . . Therefore, because
defendants were not responsible for plaintiffs’ failure to
extend the life of the summonses, we find that Storey is
inapposite and defendants are not estopped from asserting
the defense of insufficient service of process.
Id. at 418, 761 S.E.2d at 654-55.
In the present case, we are of the view that Stewart has failed to demonstrate
the applicability of the estoppel doctrine. First, while the Shipley Defendants did
move for extensions of time, their original motion stated that the purpose of the
extension was “to respond to plaintiff’s complaint, which was allegedly served on or
about February 19, 2016.” (Emphasis added.) Similarly, Instride’s amended motion
recited that Stewart’s complaint “was allegedly served on or about March 10, 2016.”
(Emphasis added.) Thus, the Shipley Defendants’ motions did not actually concede
that the attempted service had been valid, and they served to put Stewart on notice
of a possible defect with regard to service of process.
Second, in Storey the defendant asserted insufficiency of service as a defense
almost two months after the expiration of the plaintiff’s deadline for extending the
summons. Here, conversely, Stewart concedes that there was a period of seven days
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between the date she received the Shipley Defendants’ answer expressly asserting
the defense and the last date on which she could have extended the summonses. 2
Thus, we are unable to agree with Stewart that the estoppel doctrine applies
under these circumstances. Accordingly, even had she properly preserved this
argument for appeal, we would nevertheless be compelled to affirm the trial court’s
dismissal of her claims against the Shipley Defendants.
Conclusion
For the reasons stated above, we affirm the trial court’s 19 December 2016
order.
AFFIRMED.
Judges BRYANT and INMAN concur.
2We note that the record reveals service efforts on behalf of Stewart continued even beyond
the date of the second motion for extension of time. According to the affidavit of a private process
server retained by Stewart, copies of the summons and complaint were delivered to Dr. Shipley on 7
April 2016.
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