Court Opinion

ID: 2728102
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:29:03.854628+00
Date Added: 2024-06-11T10:03:16.037402
License: Public Domain

NO. COA13-1344

                        NORTH CAROLINA COURT OF APPEALS

                                 Filed: 1 July 2014

KARLETTE D. BREWSTER,
     Plaintiff,

    v.                                            Durham County
                                                  No. 11 CVS 5754
CLAUDE A. VERBAL, II,
MARGIE H. VERBAL,
     Defendants.

    Appeal by defendant Margie H. Verbal from order entered 25

September     2013     by   Judge   Paul     C.    Ridgeway     in    Durham     County

Superior Court.        Heard in the Court of Appeals 22 April 2014.

    Perry, Perry & Perry,                 P.A.,     by   Robert      T.   Perry,    for
    plaintiff-appellee.

    Attorney George Ligon, Jr., for defendant-appellant Margie
    H. Verbal.

    No brief was filed for defendant Claude A. Verbal, II.

    BRYANT, Judge.

    Where a joint property owner acted within the scope of his

apparent    authority       in   retaining      trial    counsel     to   defend    the

property      owners    against     a     negligence      suit,      we   hold     that

defendant property owner was bound by the acts of the joint

owner   and    subsequently       bound    by     the    acts   of    trial    counsel

representing the owners.            Therefore, we affirm the trial court
                                           -2-
order    denying        defendant’s        motion        to    dismiss        plaintiff’s

complaint for violations of Civil Procedure Rules 12(b)(2), (4),

(5), and (6).          We also affirm the denial of defendant’s motion

to set aside a default judgment.

    On       16     November     2011,   plaintiff       Karlette    Dandy      Brewster

filed a complaint against defendants Claude A. Verbal, II, and

Margie H. Verbal in Durham County Superior Court.                             Margie and

Claude are mother and son.               Two civil summons were also filed in

the Durham County Superior Court Clerk’s Office stating that

each summons and a copy of the complaint had been received by

Pamela       Verbal     (Claude     Verbal’s        wife      and   Margie      Verbal’s

daughter-in-law) at the address listed for Claude A. Verbal, II,

and Margie H. Verbal.

    In        her     complaint,     plaintiff         alleged      that       defendants

exercised dominion and control over a property located at 4005

Destrier Drive in Durham, which defendants rented to Brewster.

On 17 April 2011, plaintiff was attempting to enter the rental

property      when    she    fell   in   an    unlit     section    of    a    stairwell.

Plaintiff asserted a claim of negligence.

    On 23 January 2012, “Defendants Claude A. Verbal and Margie

H. Verbal . . . by and through [counsel Jonathan Wilson II]”

filed    a    motion        to   dismiss      and   an     answer    to       plaintiff’s
                                              -3-
complaint.         Subsequently, plaintiff filed a motion to compel

depositions        and   sanctions        against      defendants       for      failure    to

attend    two      depositions.          Following      a    settlement       between      the

parties as to plaintiff’s motion, the trial court                                 entered a

consent order wherein Claude agreed to make himself available

for   depositions.           In   its     order,      the    trial    court      noted    that

defendants were represented by Wilson.                            On 19 December 2012,

plaintiff filed a motion for default, contempt and sanctions

alleging      that       defendants          failed    to     appear       for    scheduled

mediation and failed to respond to discovery requests.                                   On 16

January 2013, the trial court entered a default judgment as to

defendants’        liability.           On    8    August     2013,     defense       counsel

Jonathan      Wilson,     II,     filed      a    motion     to    withdraw      as   counsel

stating that he was “retained by the Defendants to represent

them in this pending civil matter” but that “the Defendant has

refused       to     abide        or    respond        to         counsel’s      means      of

communication.”            Defense        counsel’s         motion    to    withdraw       was

granted.      On 17 September 2013, Margie filed a motion to dismiss

and motion to set aside the default judgment.

      In her motion, Margie contended that the action against her

should be dismissed pursuant to Civil Procedure Rules 12(b)(2)

(lack    of   jurisdiction         of   the       person),    (4)     (insufficiency        of
                                            -4-
process), (5) (insufficiency of service of process), and (6)

(failure to state claim upon which relief could be granted).

Margie contended that she did not reside in North Carolina and

had not resided in North Carolina in over thirty years, had

never been served with process, did not authorize or consent to

representation by Jonathan Wilson or the Law Offices of John C.

Fitzpatrick,        and   did    not    receive   any    notice    to   appear      at   a

mediation     conference        or     deposition.      Further,     Margie   alleged

that    she   had    a    meritorious       defense     to   the   negligence    claim

including contributory negligence and that she never leased the

premises to plaintiff.                In her affidavit, Margie averred that

she had no knowledge of the lawsuit naming her as a defendant

“until August 2013 when [she] received a letter . . . from the

plaintiff’s attorney.”

       Jonathan Wilson also filed an affidavit.                      Wilson averred

that he was retained by Claude Verbal who represented to Wilson

that    Margie      Verbal      was    physically     ill    and   resided    in     the

Midwestern part of the country, and that Margie was aware of

Wilson’s representation of her in this civil matter.

       On 25 September 2013, the trial court entered an order in

which    it   concluded      that      by   ceding    all    involvement     with    the

property to her son since at least 1997, Margie Verbal created
                                             -5-
an agency relationship with her son.                        In accordance with this

relationship, Claude had authority to procure legal counsel to

act for the benefit of both owners should the need arise; thus,

Claude’s      retention      of    Wilson     was      within      the   scope       of    that

authority.         The court concluded that any defenses to personal

jurisdiction based on insufficient process or service of process

had been waived.            Margie’s motion to dismiss the action or set

aside the default judgment was denied.                      Margie Verbal appeals.

                            ______________________________

       On    appeal,     Margie      Verbal        raises    the    following         issues:

whether      the   trial    court    erred     in      denying     her    (I)    motion     to

dismiss; and (II) motion to set aside default judgment.

                                                   I

       Margie first argues that the trial court erred in denying

her motion to dismiss plaintiff’s claim as to her on the grounds

that        the     trial      court         lacked         personal          jurisdiction.

Specifically,        Margie       argues     that      North     Carolina’s          long-arm

statute does not permit the exercise of personal jurisdiction

over her and that the exercise of personal jurisdiction does not

comport with due process.               Margie further argues that her son

Claude was not authorized to retain counsel on her behalf; that

attorney      Jonathan      Wilson     was    not      authorized        to    act    on    her
                                            -6-
behalf; and that she did not waive her Rule 12(b) defenses.                          We

disagree.

                    The standard of review of an order
               determining personal jurisdiction is whether
               the findings of fact by the trial court are
               supported by competent evidence in the
               record. Where no exception is taken to a
               finding of fact by the trial court, the
               finding is presumed to be supported by
               competent evidence and is binding on appeal.
               We review de novo the issue of whether the
               trial court's findings of fact support its
               conclusion of law that the court has
               personal jurisdiction over defendant.

Bell v. Mozley, 216 N.C. App. 540, 543, 716 S.E.2d 868, 871

(2011) (citation and quotations omitted).

    As     an    appearance       by   an    attorney     on     behalf    of    Margie

addressing the merits of plaintiff’s claim prior to contesting

personal jurisdiction will waive a defense to the exercise of

personal jurisdiction, we first consider whether her son Claude

acted     as    Margie’s    agent      in     retaining        counsel    to    address

plaintiff’s       claims     and,      if         necessary,     whether        Wilson’s

involvement in the initial stages of the action constituted a

general    appearance      made    prior     to     contesting    the     exercise   of

personal jurisdiction.

    “An agent is one who acts for or in the place of another by

authority from him.”          Julian v. Lawton, 240 N.C. 436, 440, 82

S.E.2d 210, 213 (1954) (citation omitted).                        “The power of an
                                       -7-
agent, . . . to bind his principal, may include, not only the

authority actually conferred, but the authority implied as usual

and necessary to the proper performance of the work intrusted

[sic] to him . . . .”           Research Corp. v. Hardware, Inc., 263

N.C. 718, 721, 140 S.E.2d 416, 418 (1965) (citation omitted).

            A principal-agent relationship arises upon
            two essential elements: (1) [a]uthority,
            either express or implied, of the agent to
            act   for   the  principal,   and   (2)   the
            principal's control over the agent. An
            agency can be proved generally, by any fact
            or circumstance with which the alleged
            principal can be connected and having a
            legitimate tendency to establish that the
            person in question was his agent for the
            performance of the act in controversy....

Forbes v. Par Ten Group, Inc., 99 N.C. App. 587, 599, 394 S.E.2d

643, 650 (1990) (citation and quotations omitted).                     Agency may

also be inferred from the nature of continuous acts known to the

principal such that the principal would not have allowed the

agent to so act unless authorized.                 See Reverie Lingerie, Inc.

v. McCain, 258 N.C. 353, 359, 128 S.E.2d 835, 839—40 (1963); see

also Partin v. Power & Light Co., 40 N.C. App. 630, 637, 253

S.E.2d    605,   611   (1979)      (“Mere    relationship       or   family   ties,

unaccompanied     by   any   other    facts    or    circumstances,      will   not

justify    an    inference    of     agency,       but   such   relationship     is

entitled    to     great     weight,        when     considered       with    other
                                             -8-
circumstances,        as     tending     to     establish         agency.”    (citations

omitted)).

      In its 25 September 2013 order denying Margie’s motion to

dismiss,     the     trial    court     found       that    the    property     plaintiff

rented – located at 4005 Destrier Drive in Durham – was owned by

defendants Claude Verbal and his mother Margie Verbal; Margie

did   not    live    in     North    Carolina        but    rather    has    resided     in

Michigan for the past thirty years; and per Margie’s affidavit,

she   “[has]    not    had     any     involvement         with    the   real      property

located at 405 Destrier Drive in Durham, North Carolina since

1997.”      The trial court reasoned that by conceding to her son

Claude all involvement with the property since at least 1997,

Margie      Verbal    “expressly        or     implicitly         created     an    agency

relationship with her son, whereby her son had authority to act

on her behalf to, among other things, lease the property to

tenants such as the Plaintiff and to receive tax notices and to

pay taxes on the property.”              We agree.          See Partin, 40 N.C. App.

at 637, 253 S.E.2d at 611 (“relationship or family ties . . .

[are]    entitled      to    great     weight,       when    considered      with    other

circumstances,        as     tending     to        establish      agency.”      (citation

omitted)).
                                        -9-
      The trial court further concluded that retention of legal

counsel     to   defend   the    property     owners   from     claims    such   as

plaintiff’s      was   reasonably    foreseeable       and    thus,   within     the

scope of Claude’s authority to act on behalf of Margie.

      “[A]n agent may usually bind his principal as to all acts

within the scope of his agency including not only the authority

actually conferred, but such as is usually confided to an agent

employed to transact the business which is given him to do, and

it is held that, as to third persons, this real and apparent

authority is one and the same . . . .”             Research Corp., 263 N.C.

at   721,    140   S.E.2d   at    418   (citation      omitted).         “Apparent

authority is that authority which the principal has held the

agent out as possessing or which he has permitted the agent to

represent that he possesses.”             Heath v. Craighill, Rendleman,

Ingle & Blythe, P.A., 97 N.C. App. 236, 242, 388 S.E.2d 178, 182

(1990) (citation omitted).           “The principal may be estopped to

deny that a person is his agent or that his agent has acted

within the scope of his authority.”             Research Corp., 263 N.C. at

721, 140 S.E.2d at 419 (citations omitted).                  “Under the doctrine

of apparent authority, a principal's liability in any particular

case must be determined by what authority the third person in

the exercise of reasonable care was justified in believing that
                                      -10-
the principal had, under the circumstances, conferred upon his

agent.”    Munn v. Haymount Rehab. & Nursing Ctr., 208 N.C. App.

632, 639, 704 S.E.2d 290, 295 (2010) (citation omitted).

      The trial court found that per Jonathan Wilson’s affidavit,

              he had been retained by Claude A. Verbal, II
              and that based upon conversations with
              Claude A. Verbal, II he was led to believe
              that his mother, Margie H. Verbal was
              physically ill and resided in the Midwest.
              Mr. Wilson further asserted that based upon
              conversations with Claude A. Verbal, II, he
              was led to believe that Margie H. Verbal was
              aware   of   the   civil   matter  and   his
              representation of them . . . .

On the totality of the circumstances as presented to Wilson,

particularly noting that Claude was a co-owner of the property

rented to plaintiff, Claude was Margie’s son, and Margie did not

live in North Carolina, we hold that Claude Verbal’s retention

of   Wilson    as   legal   counsel   on     behalf     of   Margie   was   within

Claude’s   apparent     authority.         See   id.;    see   also   Parsons   v.

Bailey, 30 N.C. App. 497, 502, 227 S.E.2d 166, 168 (1976) (“It

would seem to be clear that if the agent is purporting to act as

an agent and doing the things which such agents normally do, and

the third person has no reason to know that the agent is acting

on his own account, the principal should be liable because he

has invited third persons to deal with the agent within the

limits of what, to such third persons, would seem to be the
                                         -11-
agent's   authority.”);        compare    Johnson      v.    Amethyst    Corp.,    120

N.C.   App.    529,   533,     463   S.E.2d     397,   400    (1995)    (holding   an

attorney had no right to appear on behalf of the defendant where

the attorney had no authority granted by the party for whom he

was appearing).

       We next consider whether Wilson, appearing on behalf of

Margie, appeared before the trial court in a manner consistent

with a general appearance.

       “A court of this State having jurisdiction of the subject

matter    may,      without    serving    a     summons      upon     him,   exercise

jurisdiction in an action over a person: (1) Who makes a general

appearance in an action . . . .”                 N.C. Gen. Stat. § 1-75.7(1)

(2013).       “In   G.S.   '   1—75.7    the    legislature      made    the   policy

decision that any act which constitutes a general appearance

obviates the necessity of service of summons.”                      Simms v. Stores,

Inc., 285 N.C. 145, 157, 203 S.E.2d 769, 777 (1974).

                   A general appearance is one whereby the
              defendant   submits   his   person  to   the
              jurisdiction of the court by invoking the
              judgment of the court in any manner on any
              question other than that of the jurisdiction
              of the court over his person. Other than a
              motion to dismiss for lack of jurisdiction
              virtually any action constitutes a general
              appearance.
                                            -12-
Judkins v. Judkins, 113 N.C. App. 734, 737, 441 S.E.2d 139, 140

(1994) (citations and quotations omitted).                        “A party may appear

either in person or by attorney in actions or proceedings in

which he is interested.”               N.C. Gen. Stat. § 1-11 (2013).                    “[A]

court may properly obtain personal jurisdiction over a party who

consents or makes a general appearance, for example, by filing

an    answer       or   appearing     at     a    hearing      without     objecting      to

personal jurisdiction.”             Stunzi v. Medlin Motors, Inc., 214 N.C.

App. 332, 336, 714 S.E.2d 770, 774 (2011) (citation omitted).

       The     record       reflects        that     following       the        filing     of

plaintiff’s        complaint,       Wilson       filed    an    answer     on   behalf    of

Claude and Margie answering the allegations of the complaint and

raising defenses of contributory negligence, no proximate cause,

failure       to    mitigate,    and       unclean       hands.      The    answer       also

included a motion to dismiss the complaint pursuant to Rule

12(b)(6).               Moreover,     Wilson        represented          defendants        on

plaintiff’s motion to compel depositions and for sanctions.                               The

parties entered into a settlement which led to the trial court’s

entry    of    a    consent     order.           Clearly,      the   trial      court     had

jurisdiction over the subject matter, a fact that Margie does

not   contest.           Wilson’s    representation            constituted      a   general

appearance submitting Margie to the jurisdiction of the court.
                                           -13-
Therefore, Margie has waived her right to challenge the trial

court’s exercise of personal jurisdiction.                     See N.C.G.S. § 1-

75.7(1); see also Lynch v. Lynch, 302 N.C. 189, 197, 274 S.E.2d

212,   219    (“[A]ny        act   which   constitutes    a    general     appearance

obviates the necessity of service of summons and waives the

right to challenge the court's exercise of personal jurisdiction

over the party making the general appearance.”) on reh'g, 303

N.C. 367, 279 S.E.2d 840 (1981).

       Due to our holding affirming the trial court’s exercise of

personal jurisdiction based on an agency relationship, we need

not address Margie’s additional arguments challenging the trial

court’s exercise of personal jurisdiction.

                                               II

       Next, Margie argues that the trial court erred in denying

her motion to set aside the default judgment.                   Specifically, she

argues that because “the procedural manner by which [personal]

jurisdiction         could    have    been    exercised   over       her   was   never

legally accomplished . . . the Default Judgment entered against

her is void.”

       As    we   have      determined     that     Wilson’s   representation       of

Margie      before    the     trial   court   was    proper    and    constituted   a
                              -14-
general appearance submitting Margie to the jurisdiction of the

court, we overrule this argument.

    Affirmed.

    Judges HUNTER, Robert C. and STEELMAN concur.

    Report per Rule 30(e).