Robertson v. Steris Corp.

237 N.C.App. 263

765 S.E.2d 825

Terri Lynn ROBERTSON and Mary Dianne Godwin Daniel, Plaintiffs–Appellants,

v.STERIS CORPORATION, a Delaware Corporation; GE Medical Systems Information Technologies, Inc., a Wisconsin corporation; Brunswick Community Hospital, Inc., aka Columbia Brunswick Hospital, a North Carolina corporation; Novant Health, Inc., a North Carolina corporation; HCA, Inc. A Delaware corporation; Sealmaster Corporation aka Sealmaster, Inc., a Minnesota corporation; MICHAEL Wilbur, an Individual; K. Brown, an Individual; W. Green, an Individual; R. Martin, an Individual; and John Doe Defendants A, B, C, D, and E, Defendants.

Nos. COA14–253

COA14–254.

Court of Appeals of North Carolina.

Nov. 18, 2014.

The Lorant Law Firm, by D. Bree Lorant; and Womble, Carlyle, Sandridge & Rice, LLP, Raleigh, by Burley B. Mitchell, Jr. and Robert T. Numbers, II, Raleigh, for Plaintiffs–Appellants.

Young Moore and Henderson P.A., Raleigh, by Walter E. Brock, Jr. and Andrew P. Flynt, for Appellees G. Henry Temple, Jr. and Temple Law Firm.

McGEE, Chief Judge.

Terri Lynn Robertson and Mary Dianne Godwin Daniel ("Plaintiffs") were injured in a work-related accident in 2004. Plaintiffs initially hired G. Henry Temple, Jr. ("Temple") of Temple Law Firm, PLLC to represent them, and Plaintiffs filed their complaint on 18 January 2007. For reasons unclear from the record, Plaintiffs never entered into a written fee agreement with Temple, and the record does not reflect whether Temple discussed his standard fee agreement with Plaintiffs.

Several named defendants were dismissed during the course of the litigation. The case was declared exceptional in July 2009, and "a protracted discovery period with numerous lengthy hearings regarding discoverable materials and sanctions" followed. An initial mediation was conducted, and the remaining defendants Sealmaster, Inc. and Steris Corporation ("Defendants") offered settlement amounts. In an order dated 5 February 2013, the trial court found: "Temple determined more intensive discovery and trial preparation would be necessary for either an improved settlement position, or for the inevitable trial if the matter would not settle."

Defendant Sealmaster, in March 2011, agreed to settle for an amount slightly higher than its original offer. Following a second mediation in March 2011, Defendant Steris also agreed to settle with Plaintiffs. The settlement agreement Temple obtained from Defendant Steris was more than twice the initial settlement offer. However, Plaintiffs did not follow through on the settlement agreement and Defendant Steris filed a motion to enforce the settlement agreement in June 2011.

Plaintiffs decided to hire a new attorney, and discharged Temple. A letter to this effect was mailed to Temple on 8 September 2011. Temple filed a motion to intervene and a motion in the cause on 5 October 2011, seeking to recover in quantum meruit for more than four and one-half years of costs and fees incurred working on Plaintiffs' case.

The trial court conducted a conference call on 13 October 2011 that included Plaintiffs, their new attorney, the remaining Defendants, and Temple. "After discussion as to the positions of the respective parties and counsel, an agreement in principle was reached to provide for final dismissal of this matter between the Plaintiffs and Defendants Seal Master and Steris and for payment of the previously negotiated Worker's Compensation liens for both Plaintiffs." These agreements included confidentiality agreements concerning the amount of damages Plaintiffs were awarded.

Temple's 5 October 2011 motions were heard on 9 October 2012. In a 7 February 2013 order, the trial court concluded that Temple was "entitled to recover in quantum meruit for legal services rendered and expenses reasonably incurred during representation of [P]laintiffs" because Temple's legal representation "had value to [P]laintiffs" and Temple had represented Plaintiffs with an expectation of payment. The trial court concluded that "[t]o deny the motion by [Temple] would result in a windfall to [P]laintiffs [.]" The trial court then ruled that Temple should receive a certain sum in quantum meruit "representing the attorney fees and costs" the trial court had addressed in its findings of fact, which included expenses and one third of the recovery "after common costs."

Plaintiffs appealed on 4 March 2013.¹ Temple filed a "Motion to Correct Judgment" on 25 March 2013, requesting that the trial court correct the 7 February 2013 order by including "interest on the quantum meruit award, which pre- and post-judgment interest would accrue pursuant to G.S. 24–5(a)." This matter was heard on 17 April 2013. Judge D. Jack Hooks, Jr. signed a written order, dated 19 April 2013, ruling that Temple was entitled to interest on the quantum meruit award pursuant to N.C. Gen.Stat. § 24–5(b), and awarded interest at the legal rate from 5 October 2011, the date Temple filed motions in the cause and to intervene. Temple served Plaintiffs with the order on 26 April 2013. Judge Hooks resigned from office, which was effective 30 April 2013. The order was filed with the Brunswick County Clerk of Superior Court on 3 May 2013.

Plaintiffs filed a "Motion to Amend Order and Alternative Motion for Relief From Order" on 10 May 2013, seeking to have the trial court reverse its ruling granting Temple interest on the "quantum meruit award." Judge Hooks was sworn in as an Emergency Judge of the Superior Court on 31 May 2013, and was assigned to hear Plaintiffs' motions. The trial court denied Plaintiffs 10 May 2013 motions by order filed 25 July 2013. Plaintiffs then filed notices of appeal from the 3 May 2013 and 25 July 2013 orders on 23 August 2013. Plaintiffs docketed separate appeals from the two orders. Appeal from the 3 May 2013 order is before us in COA14–253, and appeal from the 25 July 2013 order is before us in COA14–254.² We address both appeals in this opinion. Additional facts may be found in Robertson I.

Appeal COA14–254

Plaintiffs appeal from the trial court's 25 July 2013 order, which, in relevant part, denied Plaintiffs' motion to set aside the 3 May 2013 order on the basis of lack of subject matter jurisdiction. Plaintiffs argue that the trial court lacked jurisdiction to enter the 3 May 2013 order because the order was filed after Judge Hooks had resigned.

Judge Hooks signed the written order on 19 April 2013. Temple's attorneys served Plaintiffs with this written and signed order on 26 April 2013. Judge Hooks' resignation was effective 30 April 2013. The Brunswick County Clerk of Superior Court filed this written and signed order on 3 May 2013. It is clear this order was not entered until it was filed on 3 May 2013, three days after Judge Hooks' resignation became effective. The question before us is whether the Clerk of Court was divested of jurisdiction to properly enter the order following Judge Hooks' resignation.

According to the relevant portion of Rule 58 of the North Carolina Rules of Civil Procedure,

a judgment is entered when it is reduced to writing, signed by the judge, and filed with the clerk of court. The party designated by the judge or, if the judge does not otherwise designate, the party who prepares the judgment, shall serve a copy of the judgment upon all other parties within three days after the judgment is entered. .... If service is by mail, three days shall be added to the time periods prescribed[.]

N.C. Gen.Stat. § 1A–1, Rule 58 (2013). "[T]he purposes of the requirements of Rule 58 are to make the time of entry of judgment easily identifiable, and to give fair notice to all parties that judgment has been entered." Durling v. King, 146 N.C.App. 483, 494, 554 S.E.2d 1, 7 (2001) (citations omitted).

Before the adoption of Rule 58, our statutes expressly required a detailed entry in the court minutes in order to constitute entry of judgment. N.C.G.S. § 1–205 provided:

Upon receiving a verdict, the clerk shall make an entry in his minutes, specifying the time and place of the trial, the names of the jurors and witnesses, the verdict, and either the judgment rendered thereon or an order that the cause be reserved for argument or further consideration. If a different direction is not given by the court, the clerk must enter judgment in conformity with the verdict. N.C.G.S. § 1–205 (1953) (repealed by 1967 N.C. Sess. Laws ch. 957, § 4).

Reed v. Abrahamson, 331 N.C. 249, 253, 415 S.E.2d 549, 551 (1992). "In 1967, the General Assembly repealed the entry of judgment provision of section 1–205 and enacted the North Carolina Rules of Civil Procedure, including Rule 58 [.]" Id. at 254, 415 S.E.2d at 551. Rule 58 was more complicated at the time Reed was decided, requiring:

Subject to the provisions of Rule 54(b): Upon a jury verdict that a party shall recover only a sum certain or costs or that all relief shall be denied or upon a decision by the judge in open court to like effect, the clerk, in the absence of any contrary direction by the judge, shall make a notation in his minutes of such verdict or decision and such notation shall constitute the entry of judgment for the purposes of these rules. The clerk shall forthwith prepare, sign, and file the judgment without awaiting any direction by the judge.

In other cases where judgment is rendered in open court, the clerk shall make a notation in his minutes as the judge may direct and such notation shall constitute the entry of judgment for the purposes of these rules. The judge shall approve the form of the judgment and direct its prompt preparation and filing.

In cases where judgment is not rendered in open court, entry of judgment for the purposes of these rules shall be deemed complete when an order for the entry of judgment is received by the clerk from the judge, the judgment is filed and the clerk mails notice of its filing to all parties. The clerk's notation on the judgment of the time of mailing shall be prima facie evidence of mailing and the

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