Court: Court of Appeals of North Carolina; March 19, 2019; North Carolina; State Appellate Court
The trial court's decision to deny defendant Shirley Smith's motion for reconsideration regarding attorneys' fees was upheld due to the motion's failure to present valid grounds under Rule 60(b) of the North Carolina Rules of Civil Procedure. Instead, the motion introduced a new legal theory. The case originated in 2003 when Smith and Gregory Moore co-founded Associate Behavioral Services, Inc. (ABS) but later faced management disputes, leading Moore to file a complaint against Smith and her sister Jeanette for various claims in October 2009. Smith counterclaimed and sought dissolution of ABS. After several court proceedings and an appointed receiver, the trial court dismissed claims against Jeanette and LCBS and ruled that claims could only proceed through the receiver. In January 2013, Moore sought to remove the receiver and assert claims individually, while Smith requested attorneys' fees. A July 2016 order dismissed all claims and directed ABS’s liquidation but denied Smith’s request for attorneys' fees, stating Moore's misconduct did not pertain to any court document, making Rule 11 inapplicable for sanctions.
On August 23, 2016, Smith filed a motion for reconsideration regarding the Attorneys' Fees Order, which denied his request for attorney's fees, stating that Rule 11 was not appropriate for imposing sanctions based on the nature of the conduct in question. Smith sought approval under N.C.G.S. 55-7-46(2) for reasonable attorney's fees due to alleged unreasonable conduct by Moore that delayed the action Smith initiated for himself and on behalf of ABS. The trial court issued the Reconsideration Order on December 4, 2017, denying Smith's motion. Smith subsequently filed a notice of appeal on January 3, 2018, aimed at both the Attorneys' Fees Order and the Reconsideration Order.
The appeal of the Attorneys' Fees Order is considered untimely as Smith did not file her notice of appeal within thirty days of the order, which constituted a final judgment disposing of all claims and counterclaims. It is noted that motions filed under Rule 60 do not extend the filing period for an appeal. Consequently, her right to appeal the Attorneys' Fees Order was forfeited.
In contrast, Smith's appeal of the Reconsideration Order was timely, as her notice was filed within the required thirty days. Although her motion did not specify a rule, it is recognized that Rule 60(b) governs such motions. Relief under Rule 60(b) is discretionary and can only be overturned for an abuse of discretion. The rule allows relief from a final judgment for specific reasons, including mistake, newly discovered evidence, fraud, void judgments, or other justifying reasons.
Rule 60(b)(6) does not allow relief from errors of law or erroneous judgments, as established in Catawba Valley Bank v. Porter. Smith's initial motion for attorneys' fees was based on Rule 11, but her motion for reconsideration invoked a different legal basis, N.C. Gen. Stat. 55-7-46(2), which does not fall under the grounds for relief specified in Rule 60(b). Smith did not provide legal authority to support the idea that a litigant can change legal theories when seeking reconsideration. Case law, specifically Town of Sylva v. Gibson, reinforces that a court cannot modify a prior judgment by applying a different legal principle regarding attorneys' fees under Rule 60(b). Consequently, the trial court's denial of Smith's motion for reconsideration is upheld. The trial court's order from December 4, 2017, is affirmed, with Judges Hunter, Jr. and Berger concurring. Smith's brief did not address any specific provision of Rule 60(b).
