Case Name: MARLENE R. GRIMSLEY and DENNY A. GRIMSLEY v. LEROY JEROME NELSON
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1996-02-09
Citations: 342 N.C. 542
Docket Number: No. 35A95
Parties: MARLENE R. GRIMSLEY and DENNY A. GRIMSLEY v. LEROY JEROME NELSON
Judges: Justice FRYE dissenting in separate opinion.
Reporter: North Carolina Reports
Volume: 342
Pages: 542–554

Head Matter:
MARLENE R. GRIMSLEY and DENNY A. GRIMSLEY v. LEROY JEROME NELSON
No. 35A95
(Filed 9 February 1996)
1. Appearance § 10 (NCI4th)— answer filed by UM carrier— no general appearance by defendant motorist
The attorney for plaintiffs’ uninsured motorist (UM) carrier, an unnamed party, did not make a general appearance for defendant uninsured motorist when she filed an answer “in the name of the Defendant” and thereby preclude defendant from raising the defense of lack of personal jurisdiction based on insufficiency of service of process where the record shows that defendant and the UM carrier are separate and distinct parties represented by separate counsel, and there is no evidence in the record indicating that counsel for the UM carrier represented the defendant, professed to represent the defendant, or had the authority to appear on defendant’s behalf.
Am Jnr 2d, Appearance §§ 1, 2.
Stipulation extending time to answer or otherwise proceed as waiver of objection to jurisdiction for lack of personal service: state cases. 77 ALR3d 841.
2. Insurance § 512 (NCI4th)— lack of personal jurisdiction against uninsured tortfeasor — dismissal of case against UM carrier
Where the trial court properly dismissed plaintiffs’ negligence action against defendant tortfeasor, an uninsured motorist, for lack of personal jurisdiction, the court also correctly dismissed the case against plaintiffs’ uninsured motorist (UM) carrier, an unnamed party, even though the UM carrier failed to assert the defense of lack of personal jurisdiction in its answer, since the UM carrier’s only obligation in the case would be to pay any judgment entered against defendant tortfeasor, N.C.G.S. § 20-279.21(b)(3)a, and the UM carrier has no liability to plaintiffs because the tortfeasor has no liability to them.
Am Jur 2d, Automobile Insurance §§ 322, 330.
Justice Frye dissenting.
Justice Webb dissenting.
Appeal by Travelers Indemnity Company, an unnamed party, pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of the Court of Appeals, 117 N.C. App. 329, 451 S.E.2d 336 (1994), affirming in part and reversing in part orders entered 21 September 1993 and 1 November 1993 by Phillips, J., in Superior Court, Craven County. On 6 April 1995, this Court allowed plaintiffs’ petition for writ of certiorari of an additional issue. Heard in the Supreme Court 13 September 1995.
Bailey & Dixon, L.L.P., by Gary S. Parsons and Kenyann G. Brown; and Anderson & Anderson, by Albeon G. Anderson, for plaintiff-appellants and -appellees.
Dunn, Dunn & Stoller, by David A. Stoller and Andrew D. Jones, for defendant-appellee.
Johnson & Lambeth, by Beth M. Bryant, for appellant and appellee Travelers Indemnity Company, an unnamed party.

Opinion:
ORR, Justice.
This case arises out of a 4 June 1989 automobile accident involving plaintiffs, Marlene R. Grimsley and Denny A. Grimsley. Plaintiffs were allegedly hit from behind by a vehicle driven by defendant Leroy Jerome Nelson, an uninsured motorist. As a result, on 18 May 1992, plaintiffs filed this action for personal injuries and loss of consortium resulting from the automobile accident. The summons and complaint were improperly served on the defendant's son, Leroy Jerome Nelson, Jr. Pursuant to N.C.G.S. § 20-279.21(b)(3)a, plaintiffs served their uninsured motorist (UM) carrier, Travelers Indemnity Company (Travelers), with a copy of the summons and complaint.
Section 20-279.21(b)(3)a of the Motor Vehicle Safety and Financial Responsibility Act provides as follows:
[A plaintiff's uninsured motorist] insurer shall be bound by a final judgment taken by the insured against an uninsured motorist if the insurer has been served with copy of summons, complaint or other process in the action against the uninsured motorist by registered or certified mail, return receipt requested, or in any manner provided by law . The insurer, upon being served as herein provided, shall be a party to the action between the insured and the uninsured motorist though not named in the caption of the pleadings and may defend the suit in the name of the uninsured motorist or in its own name.
N.C.G.S. § 20-279.21(b)(3)a (1993) (emphasis added).
Travelers retained the law firm of Johnson & Lambeth to represent it. After various exchanges of correspondence between counsel for Travelers and counsel for plaintiffs, Beth Bryant of Johnson & Lambeth filed an answer in the action in which she stated, "the undersigned Counsel, appearing in the name of the Defendant, answers the Complaint . . . ." Ms. Bryant signed the answer, "Beth M. Bryant Appearing in the name of the Defendant." The answer denied the allegations of the complaint and alleged contributory negligence. The plaintiffs then filed a reply denying contributory negligence and pleading last clear chance.
David A. Stoller of the law firm of Dunn, Dunn & Stoller then filed a motion to dismiss on behalf of defendant Nelson on the grounds of insufficiency of process and insufficiency of service of process. On 21 September 1993, the trial court granted defendant Nelson's motion to dismiss for lack of personal jurisdiction on the ground that he had never been served with process. Travelers made a motion for judgment on the pleadings. On 1 November 1993, the trial court granted Travelers' motion, dismissing plaintiffs' action against it on the ground that all issues raised by the complaint in the case against defendant Nelson had been resolved. Since Nelson had no liability to the plaintiffs, Travelers, as the uninsured carrier, had no liability.
Plaintiffs timely appealed the 21 September 1993 and 1 November 1993 orders to the Court of Appeals, which affirmed the trial court's dismissal of plaintiffs' action against defendant Nelson for lack of personal jurisdiction. The Court of Appeals held that Ms. Bryant had not made a general appearance for the defendant when she filed an answer "in the name of the Defendant." The Court of Appeals, however, reversed the trial court's dismissal of the action against Travelers, stating that Travelers waived the jurisdictional defense by filing a general answer to the complaint without raising the defense. The Court of Appeals said that by waiving this defense, Travelers could not now assert as a defense the fact that plaintiffs could not get a judgment against defendant Nelson.
In the dissent, Judge Wynn agreed with the majority that the action against the defendant should be dismissed, but asserted that plaintiffs could not proceed against Travelers after the action against defendant Nelson was dismissed.
Pursuant to N.C.G.S. § 7A-30(2), Travelers appealed as of right from the decision of the Court of Appeals. Plaintiffs filed a petition for writ of certiorari seeking this Court's review of that portion of the Court of Appeals' opinion affirming the trial court's dismissal of the case as to defendant Nelson, which this Court allowed by order entered 6 April 1995.
I.
We first address plaintiffs' contention that the trial court, as affirmed by the Court of Appeals, erred in granting defendant Nelson's motion to dismiss for lack of personal jurisdiction. The basis of plaintiffs' contention is that while defendant Nelson was not actually served with summons and complaint, Travelers' 12 October 1992 answer constituted a general appearance by defendant Nelson, thereby precluding defendant Nelson from raising the defense of lack of personal jurisdiction. We disagree.
Jurisdiction of the court over the person of a defendant is obtained by service of process, voluntary appearance, or consent. Hale v. Hale, 73 N.C. App. 639, 641, 327 S.E.2d 252, 253 (1985). Rule 4 of the North Carolina Rules of Civil Procedure provides the methods of service of summons and complaint necessary to obtain personal jurisdiction over a defendant, and the rule is to be strictly enforced to insure that a defendant will receive actual notice of a claim against him. Guthrie v. Ray, 31 N.C. App. 142, 144, 228 S.E.2d 471, 473 (1976), rev'd on other grounds, 293 N.C. 67, 235 S.E.2d 146 (1977). Although a return of service showing service on its face constitutes prima facie evidence of service, such showing can be rebutted by the affidavits of more than one person showing unequivocally that proper service was not made upon the person of the defendant. Guthrie, 293 N.C. at 71, 235 S.E.2d at 149; Harrington v. Rice, 245 N.C. 640, 642, 97 S.E.2d 239, 241 (1957).
In this case, no evidence was introduced suggesting that personal service was made upon defendant Nelson by any means authorized by the North Carolina Rules of Civil Procedure. The evidence in the record on appeal, including three affidavits, unequivocally establishes that the deputy sheriff's return of service indicating service on defendant Nelson was erroneous. The affidavits of defendant Nelson, his son, and his former wife, which were before the trial court, show that Nelson's son was the person who was served with summons and complaint at the Sheriff's Department and that defendant Nelson has never been served with summons and complaint as required by the Rules of Civil Procedure.
Because defendant Nelson has never been served with summons and complaint, the court may exercise jurisdiction over defendant Nelson only if he or his attorney has consented to the jurisdiction of the court by voluntarily appearing in the case. N.C.G.S. § 1-75.7 (1983). Essentially, plaintiffs argue, without citation of authority, that by signing the 12 October 1992 answer, filed on behalf of Travelers "[appearing in the name of the Defendant," Ms. Bryant made a general appearance on behalf of not only Travelers, but also defendant Nelson, thereby subjecting Nelson to personal jurisdiction and waiving jurisdictional defenses.
Where counsel signs a pleading on behalf of a party, the law imposes a presumption that the attorney held the authority to act for the client he or she professed to represent. People's Bank of Burnsville v. Penland, 206 N.C. 323, 173 S.E. 345 (1934). N.C.G.S. § 20-279.21(b)(3)a establishes, however, that the insurer, in this case Travelers, is a separate party to the action between the insured plaintiffs and defendant Nelson, an uninsured motorist. It also establishes that Travelers may defend the suit "in the name of the uninsured motorist" or in its own name.
There exists ample evidence in the record to show that Johnson & Lambeth did not represent defendant Nelson. First, counsel for Travelers never professed to represent defendant Nelson. By affidavit, Ms. Bryant states "[t]hat my firm is counsel of record for Travelers Indemnity Co." and that "Johnson & Lambeth was retained by Travelers Indemnity Co. to defend its interests in this action." In June 1992, Robert Johnson of Johnson & Lambeth informed plaintiffs by letter that "Travelers had retained me to represent its interest as uninsured motors [sic] carrier in [this] matter." In October 1992, Ms. Bryant informed defendant Nelson by letter, addressed to the home where defendant Nelson resided at the time of the accident and thereafter, that "it is important for you to protect your interest in this lawsuit, while I try to protect the interest of the insurance company which provides uninsured motorist coverage to [plaintiffs]." Defendant Nelson and Travelers are separate and distinct parties, each represented by separate counsel — Travelers by Johnson & Lambeth and defendant Nelson by Dunn, Dunn & Stoller.
Thus, the undisputed evidence in the record demonstrates that the law firm of Johnson & Lambeth represented Travelers Indemnity Company in this action and that the scope of such firm's representation was known to plaintiffs' counsel, was confirmed in writing to plaintiffs' counsel, and was communicated in writing to defendant Nelson by Travelers' counsel. There is no evidence in the record indicating that counsel for Travelers represented defendant Nelson, professed to in fact represent defendant Nelson, or had the authority to appear on his behalf. Therefore, because Ms. Bryant had not made a general appearance for the defendant when she filed an answer "in the name of the Defendant," the Court of Appeals was correct in affirming the trial court's dismissal of plaintiffs' action for lack of personal jurisdiction against defendant Nelson. This assignment of error is overruled.
II.
Travelers contends that the Court of Appeals erred in deciding that "this action may proceed against Travelers to determine whether plaintiffs are entitled to uninsured motorist coverage," Grimsley, 117 N.C. App. at 336, 451 S.E.2d at 340, and asserts that the trial court's entry of judgment on the pleadings was correct because the order dismissing defendant Nelson's action resolved all issues raised by the complaint.
In McLaughlin v. Martin, the Court of Appeals held that a UM carrier's liability "does not attach until a valid judgment is obtained against an uninsured motorist." McLaughlin, 92 N.C. App. 368, 369, 374 S.E.2d 455, 456 (1988). In Brown v. Lumbermens Mut. Cas. Co., this Court stated that a "[p]laintiff's right to recover against his intestate's insurer under the uninsured motorist endorsement is derivative and conditional." Brown, 285 N.C. 313, 319, 204 S.E.2d 829, 834 (1974); see Silvers v. Horace Mann Ins. Co., 324 N.C. 289, 294, 378 S.E.2d 21, 25 (1989) (UM carrier's liability is derivative of the tortfeasor's liability).
In Buchanan v. Buchanan, 83 N.C. App. 428, 350 S.E.2d 175 (1986), disc. rev. denied, 319 N.C. 224, 353 S.E.2d 406 (1987), the plaintiff accepted a settlement from the tort-feasor's insurance carrier and signed a general release. The trial court granted summary judgment for the underinsured motorist (UIM) carrier in a subsequent action holding that a release of the tort-feasor released the UIM carrier on the basis of derivative liability. There, the Court of Appeals stated:
When the release was signed, the Travelers Indemnity Company was also released as a matter of law because of the derivative nature of the insurance company's liability. Once the plaintiff released all claims against Givens and the O'Connors, there is no basis of liability on which the defendant insurance company can be held responsible under the terms of the policy.
Id. at 430, 350 S.E.2d at 177; see also Spivey v. Lowery, 116 N.C. App. 124, 126, 446 S.E.2d 835, 837 (holding that because plaintiff released the tort-feasor, plaintiff may not assert a claim against the UIM carrier because of the derivative nature of the UIM carrier's liability), disc. rev. denied, 338 N.C. 312, 452 S.E.2d 312 (1994).
These cases are consistent with the language of N.C.G.S. § 20-279.21(b)(3)a, which provides that all insurance policies in the State will be deemed to include a provision that "the insurer shall be bound by a final judgment taken by the insured against an uninsured motorist," N.C.G.S. § 20-279.21(b)(3)a (emphasis added), providing the insurer is served with a copy of summons and complaint.
The complaint in this case alleged a negligence claim exclusively against defendant Nelson. That cause of action was dismissed pursuant to Nelson's motion to dismiss. Therefore, on the face of the pleadings, nothing remained to be decided, and no liability cari be imposed upon the unnamed defendant, Travelers. Travelers' only obligation in this case would be to pay any judgment entered against defendant Nelson. Travelers was properly served with summons and complaint in the action filed by plaintiffs against defendant Nelson pursuant to statute and, therefore, would be bound by any judgment taken by the plaintiffs against defendant Nelson. N.C.G.S. § 20-279.21(b)(3)a. However, having concluded that the trial court correctly dismissed the action against defendant Nelson, we conclude that the trial court correctly dismissed the action against Travelers and that the Court of Appeals erred in reversing the trial court. Accordingly, we affirm the Court of Appeals' decision insofar as it affirmed the trial court's dismissal of plaintiffs' action against defendant Nelson on the basis of lack of personal jurisdiction. We reverse that part of the Court of Appeals' decision that reversed the trial court's order dismissing the action against Travelers. The case is remanded to the Court of Appeals for further remand to the Superior Court, Craven County, for reinstatement of the trial court's order of 1 November 1993 granting Travelers' motion for judgment on the pleadings.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Justice FRYE dissenting in separate opinion.
Justice WEBB dissenting in separate opinion.