Davis v. Mitchell

265 S.E.2d 248 (1980)

Gene DAVIS
v.
Wilma M. MITCHELL, Executrix of the Estate of Paul C. Mitchell, Jr., and Dr. Richard R. Vensel.

No. 7929SC479.

Court of Appeals of North Carolina.

April 15, 1980.

Raymer, Lewis, Eisele & Patterson by Walter B. Patterson, II, Statesville, for plaintiff-appellant.

Robert W. Wolf, Forest City, for defendant-appellee.

WELLS, Judge.

While disposing of this appeal on its merits, we deem it nevertheless appropriate to comment briefly on its interlocutory nature. The frequency with which the appellate courts of our State are confronted with appeals which may be deemed interlocutory or fragmentary causes us some considerable concern. The Federal courts as well as a majority of the courts of other jurisdictions have concluded that the setting aside of a default judgment is not ordinarily appealable. See, Murphy v. Helena Rubenstein Co., 355 F.2d 553 (3rd Cir. 1965); 15 Wright & Miller, Federal Practice and Procedure: Civil § 3914, p. 586 (1976); 7 Moore's Federal Practice ¶ 60.30[3], pp. 431-432 (2d ed. 1979); Annot., Appealability of Order Setting Aside, or Refusing to Set Aside, Default Judgment, 8 A.L.R. 3d 1272 (1966). Our appellate courts have, however, historically entertained such appeals. See, e. g., Shackleford v. Taylor, 261 N.C. 640, 135 S.E.2d 667 (1964); Howard v. Williams, 40 N.C.App. 575, 253 S.E.2d 571 (1979). The practice has not escaped criticism. See, Comment, Survey of Developments in North Carolina Law, 1978, 57 N.C.L.Rev. 827, 914-918 (1979). Normally, an interlocutory order which does not affect a "substantial right" of one of the parties under G.S. 1-277 and G.S. 7A-27(d) is not appealable, and the avoidance of a rehearing or trial is not considered to be such a "substantial right." Industries, Inc. v. Insurance Co., 296 N.C. 486, 251 S.E.2d 443 (1979); Waters v. Personnel, Inc., 294 N.C. 200, 240 S.E.2d 338 (1978). As indicated in our opinion filed today in Leasing Corp. v. Myers, ___ N.C.App. ___, 265 S.E.2d 240 (1980), we perceive that our Supreme Court in Industries, supra and Waters, supra, has raised the flag of caution to the bench and bar with respect to interlocutory or fragmentary appeals.

Plaintiff's assignments of error present the question of whether Judge Riddle had authority to set aside the judgment of default entered by the clerk, and, if so, whether the evidence supports the findings of fact and the conclusions of law entered thereon.

G.S. 1A-1, Rule 55(d), provides:

For good cause shown the court may set aside an entry of default, and, if a judgment by default has been entered, the judge may set it aside in accordance with Rule 60(b).

The judgment entered by the clerk followed entry of default, and therefore was a final judgment which may be set aside pursuant to the provisions of Rule 60(b), which provides as follows:

On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons:

(1) Mistake, inadvertence, surprise, or excusable neglect . . . .

Although the facts found by the trial court are conclusive on appeal if they are supported by any evidence, whether or not these findings of fact constitute excusable neglect is a matter of law and is reviewable upon appeal. Dishman v. Dishman, 37 N.C.App. 543, 246 S.E.2d 819 (1978); Doxol Gas v. Barefoot, 10 N.C.App. 703, 179 S.E.2d 890 (1971). Even if there is evidence from which a finding of excusable neglect can be made, our case law requires a finding of meritorious defense before the judgment may be set aside. Doxol Gas v. Barefoot, supra.

Our review of the record indicates that the trial court's findings of fact, which were quite extensive, were amply supported by the evidence. We also find that the trial court properly concluded that defendant Vensel has shown excusable neglect and has asserted a meritorious defense. Judge Riddle went to the heart of the matter in his finding that based upon the complaint alone, defendant simply did not understand that his ownership of the aircraft was at stake. The complaint contains no allegation of any contractual relationship between plaintiff and defendant Vensel, nor any obligation of Vensel to plaintiff. In fact, it is alleged in the complaint that Vensel was the registered owner of the aircraft. While the complaint does allege that defendant Mitchell's deceased husband was indebted to plaintiff upon a promissory note and had executed a security agreement in which the aircraft was included as collateral for the note, the complaint does not, nevertheless, appear to set forth any claim upon which relief might be granted against the defendant Vensel. Under such circumstances, we find that the defendant's failure to respond to this action until judgment was entered against him declaring that plaintiff was entitled to all Vensel's right, title, and interest in the aircraft, was excusable. From defendant Vensel's answer it is abundantly clear that he had a meritorious defense to plaintiff's action.

The order of the trial court setting aside the entry and judgment of default against the defendant Richard R. Vensel is

Affirmed.

MORRIS, C. J., and ROBERT M. MARTIN, JJ., concur.