Godwin v. Clark

MARTIN (Harry C.), Judge. The sole assignment of error on this appeal was the trial court’s acceptance and entry of judgment on the referee’s report. Plaintiff filed exceptions to the referee’s report and defendants moved to adopt the report, all pursuant to Rule 53(g)(2). Plaintiff contends the report was fatally defective and was not in compliance with Rule 53. Specifically, plaintiff alleges the referee’s report is defective because it contained no records and exhibits considered by the referee in rendering his decision, no hearings were held, nor was there an audit. Plaintiff contends these defects manifest a denial of constitutional and statutory due process requirements in that plaintiff was not given an adversary hearing with the opportunity to present evidence and testimony, and to challenge the evidence and testimony presented by other parties. Defendants contend plaintiff failed to enter a timely objection to the order of reference. [712] The procedures to be applied in a compulsory reference are set out in the statute. The statute provides: Rule 53. Referees. (a) Kinds of reference.— (2) Compulsory. — Where the parties do not consent to a reference, the court may, upon the application of any party or on its own motion, order a reference in the following cases: a. Where the trial of an issue requires the examination of a long or complicated account; in which case the referee may be directed to hear and decide the whole issue, or to report upon any specific question of fact involved therein. (e) Powers. — The order of reference to the referee may specify or limit his powers and may direct him to report only upon particular issues or to do or perform particular acts. . .. Subject to the specifications and limitations stated in the order, every referee has power to administer oaths in any proceeding before him, and has generally the power vested in a referee by law. . . . (f) Proceedings.— (1) Meetings. — When a reference is made, the clerk shall forthwith furnish the referee with a copy of the order of reference. Upon receipt thereof unless the order of reference otherwise provides, the referee shall forthwith set a time and place for the first meeting of the parties or their attorneys to be held within 20 days after the date of the order of reference and shall notify the parties or their attorneys. . . . [713] (2) Statement of Accounts. —When matters of accounting are in issue before the referee, he may prescribe the form in which the accounts shall be submitted . . .. Upon objection of a party to any of the items thus submitted or upon a showing that the form of statement is insufficient, the referee may require a different form of statement to be furnished, or the accounts of specific items thereof to be proved by oral examination of the accounting parties or upon written interrogatories or in such other manner as he directs. N.C. Gen. Stat. 1A-1, Rule 53. In the case sub judice, defendants entered a motion for reference pursuant to Rule 53 for the reason that one of the issues in the lawsuit involved the examination of a long and complicated account. The trial judge found the issue did involve a long and complicated account and properly granted the motion. Rule 53(a)(2)a; Shute v. Fisher, 270 N.C. 247, 154 S.E. 2d 75 (1967). In entering a compulsory reference, the statute spells out the powers that a judge may give the referee. The duty and powers of the referee are not inherent but are determined by the order of the judge. Jones v. Beaman, 117 N.C. 259, 23 S.E. 248 (1895). Mr. Eikenberry, ■ a certified public accountant, was appointed referee “for the purpose of valuing Plaintiff’s stock” and was instructed to make the valuation “in accordance with the terms of the stock redemption agreement” as of 30 June 1974. The trial judge further instructed Mr. Eikenberry that he was to “function as the ‘certified public accountant’ ” as utilized in the stock redemption agreement. The order authorized, but did not require, the referee to conduct a hearing and take evidence. The meeting under Rule 53(f) is not required if the “order of reference otherwise provides.” The trial judge found that a meeting as contemplated under Rule 53(f) was not necessary, but left this in the discretion of the referee. Plaintiff challenges the instructions given the referee in the order of the trial court and the procedures followed by referee in conducting the valuation. Plaintiff maintains that the trial court and referee did not comply with the terms of Rule 53 in that referee did not conduct hearings, examine witnesses under oath, [714] admit exhibits into evidence, prepare a record, make definite findings of fact and conduct an audit before making the valuation. None of these procedures are required under the statute. The trial court order did not require any of these procedures. The stock redemption agreement did not require an audit of the corporate books to determine the value of the stock. The judge instructed the referee to make the valuation according to the terms of the agreement. Therefore, the referee acted properly in not conducting an audit. At the time the order for a compulsory reference was entered, plaintiff did not object to the contents of the order. Plaintiff cannot now complain. We find no error in these exceptions. Plaintiff complains on appeal that the referee’s activities were conducted ex parte. To the contrary, the record shows plaintiff, his attorney and accountant appeared before the referee and participated in the proceedings. The record indicates that none of the defendants nor their representatives contacted the referee during the proceedings, except to agree by letter to extensions of time for the filing of the referee’s report. During the proceedings before the referee, plaintiff did not object at any time to the procedures used. We find no error in this exception. Plaintiff further contends the referee’s report is fatally defective because it is ambiguous and equivocal in its language and not supported by any evidence. The referee’s report established a value of the stock according to the formula prescribed in the stock redemption agreement. The report contained a balance sheet for Clark, Godwin, Harris & Li, P.A.; explanations of the items appearing in the balance sheet; and how the valuation procedures in the agreement were applied to the figures. The order of reference did not require the referee to make findings of fact and conclusions of law and there were none labeled as such in the report. The referee’s report was very clear in its language, and the value placed on the stock by the referee was supported by the exhibit submitted as a part of the report. Plaintiff made no exception to the referee’s finding as to the value of his stock. Under the terms of the order of reference, the finding of fact by the referee that plaintiff’s stock had a value of $5,395 is supported by the evidence in the record, and the trial [715] court’s approval of this finding is conclusive on appeal and is affirmed. Williamson v. Spivey, 224 N.C. 311, 30 S.E. 2d 46 (1944). Affirmed. Judges Vaughn and Erwin concur.