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COA Considers Factors Determining Timeliness of Motion for Relief From Judgment

By Sean E. Andrussier

Today the COA held that a Rule 60(b) motion for relief from judgment's timeliness is determined in part by "extraordinary circumstances" surrounding the judgment. The case is Sharyn's Jewelers v. Ipayment, Inc.

In this case, Sharyn's took telephone orders and charged them to the same credit card for about three months. Despite Sharyn's inquiries on the validity of a credit card, iPayment continued to make charges to that card and kept drawing processing fees for the transactions from Sharyn's account. Sharyn's was finally notified that the card had been reported stolen. As a result of the fraudulent transactions, Sharyn's credit card machine was "frozen" and it could no longer take credit card payments. Sharyn's sued Ipayment, Vericomm, and JPMorgan for fraud, unfair and deceptive trade practices, and negligent misrepresentation. Only JPMorgan entered a responsive pleading, and the trial court entered a default judgment against iPayment and Vericomm and awarded Sharyn attorneys' fees and punitive damages against both, jointly and severally.

The COA held that the unfair and deceptive trade practices claims against Vericomm had been awarded in excess of the relief supported by the allegations, because the Complaint only stated claims for relief from Vericomm on theories of breach of contract and negligent misrepresentation. The COA vacated the part of the default judgment imposing liability on Vericomm for punitive damages, attorneys' fees, and injunctive relief.

The COA further held that the timeliness for filing a motion for relief from a judgment is determined by the facts and circumstances surrounding each judgment. Even though Ipayment and Vericomm filed their motion seventeen months after entry of the default judgment, in this case the "extraordinary circumstances" of the excess judgment warranted the consideration of Vericomm's motion for relief from the default judgment. Judge Hunter wrote a separate concurrence to note that he believed the timeliness of such a motion should be determined from the time the defendant received notice of the judgment awarding excess relief.

Full post as published by North Carolina Appellate Blog on April 07, 2009 (boomark / email).