Byrd v. Mortenson

BRANCH, Chief Justice. The questions presented by this appeal are (1) whether the trial judge properly refused to set aside the entries of default and (2) whether it was error for the trial judge to deny defendants’ motion for additional time to file answer. Rule 55(d) of the North Carolina Rules of Civil Procedure provides that the trial court may set aside an entry of default “for good cause shown.” G.S. 1A-1, Rule 55(d). The determination of whether an adequate basis exists for setting aside the entry of default rests in the sound discretion of the trial judge. Frye v. Wiles, 33 N.C. App. 581, 235 S.E. 2d 889 (1977); Howell v. Haliburton, 22 N.C. App. 40, 205 S.E. 2d 617 (1974); Crotts v. Camel Pawn Shop, Inc., 16 N.C. App. 392, 192 S.E. 2d 55, cert. denied, 282 N.C. 425, 192 S.E. 2d 835 (1972). Defendants’ motion to set aside and vacate entry of default under Rule 55(d) was here coupled with a motion to enlarge the time in which to file answer under Rule 6(b). Under Rule 6(b), a trial judge may permit an enlargement of time to file answer “where the failure to act [is] the result of excusable neglect. ” G.S. 1A-1, Rule 6(b) (emphasis added). The Court of Appeals found the facts presented in instant case so compelling that it chose to make the extraordinary ruling *540 that the trial judge abused his discretion in refusing to set aside the entries of default and in denying defendants’ motion for extension of time to file answer. We do not reach these questions decided by the Court of Appeals because it appears that rather than exercising his discretion, the trial judge erroneously ruled as a matter of law that defendants had not demonstrated “good cause” to justify setting aside the entries of default against them. There is nothing in the record to support a conclusion that Judge Bailey discretionarily refused to set aside the entries of default. We therefore express no opinion concerning the Court of Appeals’ decision that the trial judge’s refusal to set aside the entries of default and permit defendants to file answer was “manifestly unsupported by reason.” The default judgment entered by the trial court is vacated and this cause is remanded to the Court of Appeals, with directions to remand to the Superior Court of Wake County, to the end that the trial judge may exercise his discretion as to whether defendants have demonstrated “good cause” sufficient to justify setting aside the entries of default. In the event the trial judge determines that the entries of default should be vacated, he must also exercise his discretion as to whether defendants’ failure to file answer within the time allowed by Rule 12(a) was due to “excusable neglect,” thereby entitling defendants to additional time in which to file answer. Modified, affirmed and remanded.