T.H. v. SHL Health Two, Inc.

900 S.E.2d 719

T.H., Plaintiff,

v.SHL HEALTH TWO, INC., d/b/a Massage Envy-Arboretum, Torsten A. Schermer, and Stephen Jacob Oxendine, Defendants.

No. COA23-665

Court of Appeals of North Carolina.

Filed April 16, 2024

Appeal by Plaintiff from order entered 13 February 2023 by Judge Eric L. Levinson in Mecklenburg County Superior Court. Heard in the Court of Appeals 10 January 2024. Mecklenburg County, No. 21 CVS 13458

Edwards Beightol, LLC, by J. Bryan Boyd, for Plaintiff-Appellant.

Thurman, Wilson, Boutwell & Galvin, P.A, Charlotte, by John D. Boutwell, Van Hoy, Reutlinger, Adams & Pierce, PLLC, by C. Grainger Pierce, Jr., & Arnold & Smith, PLLC, Charlotte, by Ronnie D. Crisco, Jr., for Defendants-Appellees.

CARPENTER, Judge.

T.H. ("Plaintiff’) appeals from the trial court’s order denying her motion for relief under Rule 60(b). On appeal, Plaintiff argues the trial court abused its discretion by denying her Rule 60(b) motion. After careful review, we disagree with Plaintiff and affirm the trial court’s order.

I. Factual & Procedural Background

On 10 October 2020, Plaintiff and others filed a complaint, under case number 20 CVS 5678, against SHL Health Two, Inc. and others ("Defendants") in Mecklenburg County Superior Court. On 12 July 2021, the trial court severed the matter, separating "each individual plaintiff’s cause of action," More specifically, the trial court ordered Plaintiff to file, within thirty days, "a Second Amended Complaint based on the same exact factual allegations and same exact causes of action." The trial court continued: "The clerk of court shall then create a new civil action with a separate case number for these claims …."

On 12 August 2021, Plaintiff filed a new complaint under a new case number, 21 CVS 13458. But as ordered by the trial court, Plaintiff should have filed the complaint under the original case number—20 CVS 5678. Recognizing his mistake, Plaintiff’s counsel¹ contacted Defendants' counsel, who consented to a voluntary dismissal of the incorrectly filed claims docketed at 21 CVS 13458.

On 8 September 2021, Plaintiff refiled her complaint under the original case number, 20 CVS 5678. On 4 October 2021, Plaintiff filed a notice of dismissal, styled "Notice of Voluntary Dismissal with Prejudice," concerning the action docketed at 21 CVS 13458. On 17 November 2021, Defendants filed a motion to dismiss the complaint filed in case number 20 CVS 5678 because of Plaintiff’s dismissal with prejudice of the same claims in case number 21 CVS 13458.

On 18 January 2022, Plaintiff filed a Rule 60(b) motion, seeking relief from her dismissal with prejudice. In support of the motion, Plaintiff’s counsel submitted his own affidavit. In his affidavit, Plaintiff’s counsel averred that "[a]t no time did I express any opinion or legal reasoning that these incorrectly filed matters must have been dismissed with prejudice." On the other hand, Defendants’ counsel filed an affidavit, averring that Plaintiff’s counsel believed he had "no choice" but to dismiss with prejudice. Defendants’ counsel further asserted that Plaintiff’s counsel explained his legal reasoning for filing dismissals with prejudice, as opposed to without prejudice.

On 13 February 2023, the trial court denied Plaintiff’s Rule 60(b) motion. The trial court reasoned that the "filing of the Voluntary Dismissal With Prejudice, including without limitation the taking of such dismissal ‘with prejudice,’ was an intentional, deliberate, volitional, and willful decision of the Plaintiff’s counsel at the time …. " The trial court also found that, "[m]ore likely than not, Plaintiff’s counsel did not appreciate the res judicata impact of the filing of the Voluntary Dismissal With Prejudice."

Concerning the competing affidavits, the trial court found Plaintiff’s counsel "made material untruthful statements to the Court in connection with the Motion, in an attempt to obtain relief sought under Rule 60, and in an attempt to salvage the claims from res judicata concerns." The trial court found Defendants' counsel’s affidavit, however, to be "accurate, and the Court accept[ed] the content thereof as true." On 8 March 2023, Plaintiff filed written notice of appeal.

II. Jurisdiction

This Court has jurisdiction under N.C. Gen. Stat. § 7A-27(b)(1) (2023).

III. Issue

[1, 2] Generally, a plaintiff may refile a claim after voluntarily dismissing the claim without prejudice. N.C. Gen. Stat. § 1A-1, Rule 41(a)(1) (2023). But a plaintiff cannot refile a claim after voluntarily dismissing the claim with prejudice. See id. Indeed, a voluntary dismissal with prejudice "operates as an adjudication upon the merits." See id.; Barnes v. McGee, 21 N.C. App. 287, 289, 204 S.E.2d 203, 205 (1974) ("A dismissal ‘with prejudice’ is the converse of a dismissal ‘without prejudice’ and indicates a disposition on the merits.").

The parties here do not dispute whether Plaintiff voluntarily dismissed her claims with prejudice: Her voluntarily submitted dismissal is styled "Notice of Voluntary Dismissal with Prejudice," and "with prejudice" is reiterated and underlined in the body of the notice. So without relief, Plaintiff cannot refile her claims. See Barnes, 21 N.C. App. at 289, 204 S.E.2d at 205. Therefore, the issue is whether the trial court abused its discretion by denying Plaintiff relief under Rule 60(b).

IV. Analysis

[3] "[T]he standard of review of a trial court’s denial of a Rule 60(b) motion is abuse of discretion." Davis v. Davis, 360 N.C. 518, 523, 631 S.E.2d 114, 118 (2006) (citing Sink v. Easter, 288 N.C. 183, 198, 217 S.E.2d 532, 541 (1975)). "Abuse of discretion results where the court’s ruling is manifestly unsupported by reason or is so arbitrary that it could not have been the result of a reasoned decision." State v. Hennis, 323 N.C. 279, 285, 372 S.E.2d 523, 527 (1988). "Our Supreme Court has indicated that this Court cannot substitute ‘what it consider[s] to be its own better judgment’ for a discretionary ruling of a trial court, and that this Court should not disturb a discretionary ruling unless it ‘probably amounted to a substantial miscarriage of justice.’ " Huggins v. Hallmark Enters., Inc., 84 N.C. App. 15, 25, 351 S.E.2d 779, 785 (1987) (quoting Worthington v. Bynum, 305 N.C. 478, 486–87, 290 S.E. 2d 599, 604–05 (1982)).

[4] A mistake of the law, however, is an abuse of discretion. State v. Rhodes, 366 N.C. 532, 535–36, 743 S.E.2d 37, 39 (2013) (citing Koon v. United States, 518 U.S. 81, 100, 116 S. Ct. 2035, 2047, 135 L. Ed. 2d 392, 414 (1996)). The "abuse-of-discretion standard does not mean a mistake of law is beyond appellate correction. A [trial] court by definition abuses its discretion when it makes an error of law." Koon, 518 U.S. at 100, 116 S. Ct. at 2047 (citations omitted).

A. Rule 60(b)(1)

Plaintiff first argues that the trial court erred by not granting her relief under Rule 60(b)(1). After careful review, we disagree.

Under Rule 60(b)(1), a trial "court may relieve a party or his legal representative from a final judgment" if the judgment stems from "[m]istake, inadvertence, surprise, or excusable neglect." N.C. Gen. Stat. § lA-1, Rule 60(b)(1) (2023).

We analyzed Rule 60(b)(1) in Carter v. Clowers, 102 N.C. App. 247, 252, 401 S.E.2d 662, 665 (1991) (citing N.C. Gen. Stat. § 1A-1, Rule 60(b)(1)). There were two defendants in Carter: Clowers and Deeney. The plaintiff eventually dismissed his claims against both Clowers and Deeney with prejudice. Id. at 254, 401 S.E.2d at 666. But while "the parties agreed to dismiss Clowers … a dismissal with prejudice of Deeney was never contemplated by either party." Id. at 254, 401 S.E.2d at 666. "[Deeney’s] dismissal was not entered with the consent of the minor plaintiff, and neither was it based on any agreement between the parties." Id. at 254, 401 S.E.2d at 666. The plaintiff did not file a Rule 60(b) motion; instead, the trial court allowed the plaintiff to amend his notice of dismissal. See id. at 250, 401 S.E.2d at 664.

On appeal, however, "we construe[d] the motion to amend the dismissal as a Rule 60(b) motion and grant[ed] plaintiff the relief he sought from the original dismissal." Id. at 254, 401 S.E.2d at 666. We reasoned that "[t]he purpose of Rule 60(b) is to strike a proper balance between the conflicting principles of finality and relief from unjust judgments." Id. at 254, 401 S.E.2d at 666. Further, we explained that "[p]rocedural actions that prevent litigants from having the opportunity to dispose of their case on the merits are not favored." Id. at 254, 401 S.E.2d at 666 (citing Howard v. Williams, 40 N.C. App. 575, 253 S.E.2d 571 (1979)). Therefore, we affirmed the trial court on Rule 60(b) grounds. Id. at 254, 401 S.E.2d at 666.

In Couch v. Private Diagnostic Clinic, however, we reversed a grant of relief under Rule 60(b)(1). 133 N.C. App. 93, 103–04, 515 S.E.2d 30, 38, aff’d without precedential value, 351 N.C. 92, 520 S.E.2d 785 (1999) (per curium).² There, the voluntarily dismissal with prejudice "was a carefully considered decision, a trial strategy, and thus constitute[d] a deliberate willful act precluding relief under Rule 60(b)(1)." Id. at 103, 515 S.E.2d at 38. We said that a misunderstand- ing of "legal consequences" was immaterial. Id. at 103, 515 S.E.2d at 38.

We went on to distinguish Carter. Id. at 104 n.3, 515 S.E.2d at 38 n.3. We said: "In effect, the [Carter] attorney never intended to dismiss the action against Deeney with prejudice. The trial court found that the attorney had entered the Deeney dismissal by ‘mistake and inadvertence’ and allowed an amendment of the notice of dismissal." Id. at 104 n.3, 515 S.E.2d at 38 n.3 (citations omitted). Intention distinguished Couch from Carter. See id. at 104 n.3, 515 S.E.2d at 38 n.3 ("By contrast, in the case sub judice, Ms. Couch’s attorney intended to dismiss the claim against the [defendant] and made that decision after some deliberation.") (emphasis added).

[5–7] Read together, Couch and Carter³ draw a...