Court Opinion

ID: 4373652
Source: CourtListenerOpinion
Date Created: 2019-03-05 14:05:50.121556+00
Date Added: 2024-06-11T14:21:50.150476
License: Public Domain

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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                                 STEWART V. SHIPLEY

                                   Opinion of the Court

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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                                      STEWART V. SHIPLEY

                                        Opinion of the Court

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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                                  STEWART V. SHIPLEY

                                    Opinion of the Court

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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                                 STEWART V. SHIPLEY

                                   Opinion of the Court

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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                                    STEWART V. SHIPLEY

                                     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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                                   STEWART V. SHIPLEY

                                     Opinion of the Court

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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                                 STEWART V. SHIPLEY

                                  Opinion of the Court

             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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                                  STEWART V. SHIPLEY

                                    Opinion of the Court

             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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                                      STEWART V. SHIPLEY

                                       Opinion of the Court

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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