Civil Practice – North Carolina Rule of Civil Procedure 60(b) – Voluntary Dismissal with Prejudice

The trial court did not abuse its discretion by indicating that it would grant Plaintiff relief from its voluntary dismissal with prejudice under Rule 60(b). The trial court also did not err by granting Plaintiff’s motion to enforce the settlement agreement and denying Defendant’s motion to enforce the settlement agreement.

We affirmed the trial court’s order and remanded to enter a final order consistent with its indicative order.

This appeal arose out of an agreement for the sale of a business and the real property on which it sits. Defendant Affordable Mini Storage of Newton, LLC appealed from the trial court’s order indicating it would grant Plaintiff Yang Real Estate Investments, LLC’s motion for relief under North Carolina Rule of Civil Procedure 60(b) were an appeal not pending before this Court and the trial court’s order granting Plaintiff’s motion to enforce the settlement agreement executed between the parties.

Defendant first argued the trial court erred by indicating it would set aside Plaintiff’s voluntary dismissal under Rule 60(b). We disagreed. The main objective of Rule 60(b) is to “strike a proper balance between the conflicting principles of finality and relief from unjust judgments.” Carter v. Clowers, 102 N.C. App. 247, 254 (1991). Rule 60(b)(1) authorizes the trial court to relieve a party from a final judgment or order due to “[m]istake, inadvertence, surprise, or excusable neglect.” N.C. Gen. Stat. § 1A-1, Rule 60(b)(1) (2023). To grant relief from a final order on the grounds of excusable neglect under Rule 60(b)(1), “the moving party must show that the judgment rendered against him was due to his excusable neglect and that he has a meritorious defense.”

Here, the trial court found that the requirement that Plaintiff sign a new purchase agreement within 14 days was not a material term to the settlement agreement; thus, Defendant’s “refusal to sign the new purchase agreement after receiving the signed purchase agreement from [] Plaintiff was arbitrary . . . .” The trial court therefore concluded: By refusing to execute the purchase agreement and close on the sale of the Business, Defendant deprived Plaintiff of the benefit of the bargain of the Settlement, and to deprive Plaintiff of the benefit of the bargain on the sole basis of Plaintiff’s returning the executed purchase agreement one day later than contemplated in the Settlement would be unjust. We agreed with the trial court.

Plaintiff filed for a voluntary dismissal with prejudice pursuant to the terms of the settlement agreement, which had been signed by both parties. In doing so, Plaintiff was acting under the assumption that once it filed for a voluntary dismissal with prejudice and performed the other requirements listed in the settlement agreement, Plaintiff and Defendant would close on the sale of the Business. Plaintiff intentionally filed for a voluntary dismissal with prejudice because doing so was an enumerated term of the settlement agreement. This constitutes excusable neglect. Defendant argued that the voluntary dismissal is not excusable neglect because although Plaintiff intended to dismiss its claims, Plaintiff “simply did not appreciate the consequences of the dismissal.” This mischaracterizes Plaintiff’s action. Plaintiff acted in good faith when it attempted to fulfill its obligations under the settlement agreement; Defendant deprived Plaintiff of the benefit of the bargain by refusing to go through with the sale. Accordingly, the trial court did not err by indicating it would grant Plaintiff relief from its voluntary dismissal with prejudice under Rule 60(b)(1).

Defendant argued the trial court erred by granting Plaintiff’s motion to enforce the settlement agreement and denying Defendant’s motion to enforce the settlement agreement. The trial court found that, under the settlement agreement, “Plaintiff and Defendant would enter into a new purchase agreement, drafted by counsel for [] Defendant, to be signed by [] Plaintiff within fourteen (14) days of the date of mediation (which would set that date as September 5, 2022, also the Labor Day Holiday)[.]” Closing on the sale of the Business, however, was to take place “on or before December 31, 2022 (which was 131 days after the mediation).” Defendant unilaterally chose to allow [Plaintiff] one additional day,” or until September 6, 2022, to sign and return the new purchase agreement; this action indicates that Defendant did not consider the 14-day deadline material. Plaintiff signed the new purchase agreement and sent it to Defendant on September 7, 2022. All essential terms of the parties’ contract remained intact, and Plaintiff’s intention to fulfill the terms of the settlement agreement and purchase the Business from Defendant remained clear. Plaintiff’s breach is not material. Accordingly, the court did not err by granting Plaintiff’s motion to enforce the settlement agreement.

Affirmed and remanded.

Yang Real Estate Investments LLC v. Affordable Mini Storage of Newton LLC (Lawyers’ Weekly No. 011-182-25, 13 pp.) (Allegra Collins, J.) Appealed from Catawba County Superior Court (William A. Long, J.) Morgan Law, PLLC, by William E. Morgan, for Plaintiff-Appellee. Davis Hartman & Wright, LLP, by R. Daniel Gibson, for Defendant-Appellant. North Carolina Court of Appeals