ARTICLE 1. Generally.

Sec.

§ 6-1. Items allowed as costs.

To the party for whom judgment is given, costs shall be allowed as provided in Chapter 7A and this Chapter.

History

(Code, s. 528; Rev., s. 1249; C.S., s. 1225; 1955, c. 922; 1971, c. 269, s. 1.)

Cross References. - As to prosecution bonds for costs, see G.S. 1-109 et seq.

As to partial recovery, see G.S. 6-18.

As to fees of witnesses, see G.S. 6-51 et seq.

Legal Periodicals. - For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

For article, "Mediation and the Elderly: Using Mediation to Resolve Probate Disputes Over Guardianship and Inheritance," see 32 Wake Forest L. Rev. 397 (1997).

CASE NOTES

I. GENERAL CONSIDERATION.

For discussion of costs generally, see State v. Massey, 104 N.C. 877, 10 S.E. 608 (1889).

Jurisdiction of Court to Make Award. - Because a successor judge lacked jurisdiction to overrule a prior judge's denial of summary judgment and to award summary judgment to plaintiffs on their second claim for relief, a valid judgment was not awarded to the plaintiffs so that they were not to be considered the prevailing parties; thus, there was not a statutory basis for the award of costs to the plaintiffs. Cail v. Cerwin, 185 N.C. App. 176, 648 S.E.2d 510 (2007), review denied, 365 N.C. 75, 705 S.E.2d 743, 2011 N.C. LEXIS 50 (2011).

In a medical malpractice action, the trial court erred by taxing costs against a doctor and a medical center, pursuant to G.S. 6-1, as the order taxing the costs was made after the appeal was filed, therefore, the trial court lacked subject matter to enter the order. Swink v. Weintraub, 195 N.C. App. 133, 672 S.E.2d 53 (2009), review denied, 363 N.C. 812, 693 S.E.2d 144, N.C. LEXIS 78 (2010).

Costs Follow the Judgment. - In general this section states the rule that costs follow the judgment, a rule which is founded on policy and natural justice, designed to prevent the unsuccessful litigant from escaping the consequence ensuing from the unfavorable termination of a suit, and which, to a great extent, acts as deterrent to the prosecution or appeal of promiscuous and frivolous litigation. Criminal actions and civil suits alike are controlled by the principle. In State v. Horne, 119 N.C. 853, 26 S.E. 36 (1896), it is said: "There is no exception in State cases to the rule prevailing in civil cases that the costs follow the result of the final judgment." The true and only test of liability for costs depends upon the nature of the final judgment, and the party cast in the suit is the one upon whom the costs must fall. Kincaid v. Graham, 92 N.C. 154 (1885); Williams v. Hughes, 139 N.C. 17, 51 S.E. 790 (1905); Smith v. Cashie & Cowan R.R. & Lumber Co., 148 N.C. 334, 62 S.E. 416 (1908); Kinston Cotton Mills v. Rocky Mount Hosiery Co., 154 N.C. 462, 70 S.E. 910 (1911); Ritchie v. Ritchie, 192 N.C. 538, 135 S.E. 458 (1926).

This basic rule of costs is underlying throughout and apparent from the other provisions of this chapter, and, as stated in Costin v. Baxter, 29 N.C. 111 (1846), "in no instance found in the books has the losing party recovered his costs or any part of them."

Investors' claim that the trial court erred in allowing costs under G.S. 6-1 to the appraisers based on a claim that the trial court erred in granting summary judgment to the appraisers was rejected as the summary judgment for the appraisers had been affirmed. Williams v. United Cmty. Bank, 218 N.C. App. 361, 724 S.E.2d 543 (2012).

Trial judges are authorized to tax court costs, and if the court misused its authority in taxing costs against pauper plaintiff, that error was waived by her failure to appeal therefrom. Schaffner v. Pantelakos, 98 N.C. App. 399, 391 S.E.2d 41 (1990).

At common law neither party to a civil action could recover costs. Costin v. Baxter, 29 N.C. 111 (1846); State v. Massey, 104 N.C. 877, 10 S.E. 608 (1889); Charwick v. Life Ins. Co., 158 N.C. 380, 74 S.E. 115 (1912); Waldo v. Wilson, 177 N.C. 461, 100 S.E. 182 (1919); City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

And each party paid his own witnesses. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Costs are entirely creatures of legislation, etc, without which they do not exist. Clerk's Office v. Commissioners of Carteret County, 121 N.C. 29, 27 S.E. 1003 (1897).

Today in this State, all costs are given in a court of law by virtue of some statute. Costs, in this State, are entirely creatures of legislation, and without this they do not exist. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

The court's power to tax costs is entirely dependent upon statutory authorization. State v. Johnson, 282 N.C. 1, 191 S.E.2d 641 (1972).

An award of costs is an exercise of statutory authority; if the statute is misinterpreted, the judgment is erroneous. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Plain meaning of G.S. 7A-320, 6-1, and 6-20 precluded a finding that any reasonable and necessary litigation expenses could be taxed as costs against a non-prevailing opposing party; pursuant to North Carolina Supreme Court precedent, the only expenses which could be taxed as costs were those specifically authorized by statute. DOT v. Charlotte Area Manufactured Hous., Inc., 160 N.C. App. 461, 586 S.E.2d 780 (2003).

Statutes Are Strictly Construed. - Since the right to tax costs did not exist at common law and costs are considered penal in their nature, statutes relating to costs are strictly construed. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Costs May Not Be Adjudged on Mere Equitable or Moral Grounds. - Since costs may be taxed solely on the basis of statutory authority, it follows a fortiori that courts have no power to adjudge costs against anyone on mere equitable or moral grounds. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Parties Are Entitled to Actual Costs Reasonably Incurred and Specifically Authorized. - Parties to whom judgment is given are entitled to recover their actual costs reasonably incurred and specifically authorized by statutes. Such reimbursement is the limit of their entitlement. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Failure to Segregate Mandatory From Discretionary Costs. - Trial court's failure to segregate statutorily required costs from discretionary costs is not a failure to exercise the court's discretion. Priest v. Safety-Kleen Sys., 191 N.C. App. 341, 663 S.E.2d 351 (2008).

Costs and Expenses Unnecessarily Incurred. - Even when allowed by statute, costs and expenses unnecessarily incurred by the prevailing party will not be taxed against the unsuccessful party. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

No Costs in Mistrial. - Trial court had no discretion to award witness expenses to the doctors as a cost from the first malpractice trial which ended in a mistrial. Smith v. Cregan, 178 N.C. App. 519, 632 S.E.2d 206 (2006).

Parties Subject to Costs. - Judgment awarding defendants costs after a partial summary judgment was entered for defendants on a negligent infliction of emotional distress claim was affirmed as under G.S. 1A-1, N.C. R. Civ. P. 54(b), a summary judgment on less than all of the claims or parties that had not been certified as final did not terminate the action as to any of the parties; since plaintiffs failed to obtain a certificate of finality and the trial court had the authority to revise or reverse the interlocutory order, defendants remained parties subject to costs under G.S. 6-1. Green v. Kearny, 225 N.C. App. 281, 739 S.E.2d 156 (2013), aff'd 367 N.C. 113, 748 S.E.2d 143, 2013 N.C. LEXIS 992 (2013).

Award of Costs Vacated When Judgment Reversed. - Since the court reversed a trial court's judgment in favor of a car manufacturer, the court vacated the trial court's order awarding costs in favor of the manufacturer under G.S. 6-1. Stark v. Ford Motor Co., 204 N.C. App. 1, 693 S.E.2d 253 (2010), rev'd 365 N.C. 468, 723 S.E.2d 753, 2012 N.C. LEXIS 266 (N.C. 2012).

Applied in In re Cox, 17 N.C. App. 687, 195 S.E.2d 132 (1973); Brady v. Smith, 18 N.C. App. 293, 196 S.E.2d 580 (1973); Miller v. Forsyth Mem'l Hosp., Inc., 173 N.C. App. 385, 618 S.E.2d 838 (2005).

Cited in Gay v. Thompson, 266 N.C. 394, 146 S.E.2d 425 (1966); Town of Chapel Hill v. Fox, 120 N.C. App. 630, 463 S.E.2d 421 (1995); Cosentino v. Weeks, 160 N.C. App. 511, 586 S.E.2d 787 (2003); Morgan v. Steiner, 173 N.C. App. 577, 619 S.E.2d 516 (2005); D.G. II, LLC v. Nix, 213 N.C. App. 220, 713 S.E.2d 140 (2011); Khomyak v. Meek, 214 N.C. App. 54, 715 S.E.2d 218 (2011), review denied, 720 S.E.2d 392, 2012 N.C. LEXIS 31 (2012).

II. PARTICULAR COSTS.
A. ATTORNEYS' FEES.

.

In the absence of express statutory authority, attorneys' fees are not allowable as part of the court costs in civil actions. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

In the absence of express statutory authority, attorneys' fees are not allowable. - Pursuant to G.S. 1-294, a trial court did not have jurisdiction to decide the issue of attorney fees after a county and its board of commissioners had filed their notice of appeal from the judgment in favor of a chairman of a county airport authority who had been improperly removed from his position; an exception did not apply, as the award of attorney fees under G.S. 6-1, G.S. 6-20, G.S. 6-19.1, G.S. 7A-314, and G.S. 143-318.16B was based upon the chairman being the prevailing party. McClure v. County of Jackson, 185 N.C. App. 462, 648 S.E.2d 546 (2007).

The power to make an allowance of attorneys' fees from a fund brought into court is susceptible of great abuse, and should be exercised with jealous caution. With the power of award being limited to items of reasonable attorneys' fees and expenses, so as to exclude compensation or allowance of any kind for the time and effort of the suing taxpayer, thus fixing it so the taxpayer may not capitalize on the suit, there is no real danger of abuse. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Attorney's Fees Denied. - Trial court lacked authority to award fees under 42 U.S.C.S. § 1988 in a proceeding seeking review of a school board's administrative assignment of a student because the case was not an action or proceeding under 42 U.S.C.S. § 1983; the mere assertion of a federal constitutional violation did not transform a proceeding into a § 1983 proceeding that carried with it the right to seek fees under § 1988. The case was brought under G.S. 115C-45(c), so the trial court was sitting as an appellate court and did not review the sufficiency of evidence presented to it. Rone v. Winston-Salem/Forsyth County Bd. of Educ., 220 N.C. App. 401, 725 S.E.2d 422 (2012).

B. WITNESS FEES.

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In General. - The losing party is taxed with the costs of his adversary's witness only if the witness was subpoenaed and examined or tendered. Hobbs v. Atlantic C.L.R.R., 151 N.C. 134, 65 S.E. 755 (1909); Chadwick v. Life Ins. Co., 158 N.C. 380, 74 S.E. 115 (1912); City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972). See also, Porter v. Durham, 79 N.C. 596 (1878); Sitton v. Edward-Eversole Lumber Co., 135 N.C. 540, 47 S.E. 609 (1904).

Witnesses Who Are Not Summoned or Who Are Nonresidents. - There is no provision in our law authorizing the taxation, as costs, of the fees for attendance and mileage of witnesses who have not been summoned, nor of witnesses who have been summoned but who are nonresidents of the State. Stern v. Herren, 101 N.C. 516, 8 S.E. 221 (1888).

Witness Fees Not Allowed and Taxed for Party Testifying in His Own Case. - The general rule is that, unless authorized by express statute provision, witness fees cannot be allowed and taxed for a party to the action. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

In construing this section, it is not necessary to resort to rules of construction. Clearly, the legislature did not contemplate that a party would disburse or become liable to himself for a fee when he testified as a witness for himself in his own case. Neither did it contemplate that a party would pay an officer to subpoena himself as a witness. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

If a successful party is not entitled to have a witness fee for himself taxed against his losing adversary, he is not entitled to have taxed an expert witness fee for himself. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Expert witness fees can be taxed against an adverse party only when the testimony of the witness examined or tendered was or would have been material and competent. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

The testimony of expert civil engineer that his plan for widening street was as good as city's was totally irrelevant to the question of city's right to condemn the property in question. The record disclosed no facts which would justify taxing, as a part of the costs for which the city was liable, an expert witness fee. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Where neither expert witness testified in obedience to a subpoena, the court was without authority to allow either of them an expert fee or to tax the losing party with the amount of the fee as a part of the costs. Couch v. Couch, 18 N.C. App. 108, 196 S.E.2d 64 (1973).

Witnesses Summoned by Both Parties. - A witness summoned by each party to a suit is entitled to compensation from each. Peace v. Person, 5 N.C. 188 (1808).

Expense of Transporting Witnesses. - A provision in an order for removal that movant should pay "costs" of transporting the witnesses of the adverse party was held to mean "expense," since such "costs" are no part of the costs of the action. Nichols v. Goldston, 231 N.C. 581, 58 S.E.2d 348 (1950).

This section does not include expenses for returning defendant to this State from points without the State. State v. Patterson, 224 N.C. 471, 31 S.E.2d 380 (1944).

Effect of Nonsuit. - The costs of the defendant's witnesses who are present when the case is brought for trial, but are not sworn, because the plaintiff takes a nonsuit, are properly taxed against the latter. Henderson v. Williams, 120 N.C. 339, 27 S.E. 30 (1897).

C. OTHER COSTS.

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Compensation for Time and Effort Devoted to Litigation. - Parties are not entitled to recover an hourly wage or per diem for the time they expend in attending hearings, or securing evidence or exhibits; a party is not entitled to compensation for the time and effort he devotes to the litigation. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Mileage, Meals and Hotel Bills. - No statute authorizes the inclusion of expenses of parties for mileage, meals and hotel bills expended in securing evidence and attending hearings in court costs. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

The expense of procuring surveys, maps, plans, photographs and documents are not taxable as costs unless there is clear statutory authority therefor or unless they have been ordered by the court. City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).

Nominal Damages Entitling Plaintiff to Costs Not Allowed in Action for Wrongful Death. - Where, in an action for wrongful death, the sole issue is that of damages, and there is no pecuniary loss on which recovery could be based, nominal damages, which would entitle plaintiff to costs, would not be allowed. Armentrout v. Hughes, 247 N.C. 631, 101 S.E.2d 793 (1958).

Where the appellate court allowed improvements claimed in partition proceedings, claimant would not be taxed with the costs of trial in the superior court involving her claim. Jenkins v. Strickland, 214 N.C. 441, 199 S.E. 612 (1938).

In a creditor's suit for a deficiency judgment, a debtor was properly awarded costs because judgment was rendered in favor of the debtor. Commercial Credit Group, Inc. v. Barber, 199 N.C. App. 731, 682 S.E.2d 760 (2009).

Mediation Fees. - As mediation fees were mandatory under former G.S. 7A-305(d)(7), plaintiffs were entitled to those costs as the prevailing parties in a personal injury action, and the trial court abused the court's discretion in not awarding these costs. Priest v. Safety-Kleen Sys., 191 N.C. App. 341, 663 S.E.2d 351 (2008).

Arbitration Fee. - Costs were properly allowed to a successful driver even though the driver's insurer paid all of his costs, as: (1) the judgment was entered for the driver and the costs award did not violate G.S. 6-1; (2) the driver incurred the expenses; (3) the award of an arbitration fee was specifically allowed in G.S. 7A-305(d)(7); (4) it was not an abuse of discretion under G.S. 6-20 to award the deposition fee; and (5) the preparation time fees of a driver's reconstruct expert were properly allowed. Hoffman v. Oakley, 184 N.C. App. 677, 647 S.E.2d 117 (2007).

Award of Service Fees Mandatory. - As service fees were mandatory under former G.S. 7A-305(d)(6), plaintiffs were entitled to those costs as the prevailing parties, and the trial court abused the court's discretion in not awarding these costs. Priest v. Safety-Kleen Sys., 191 N.C. App. 341, 663 S.E.2d 351 (2008).

An action upon a contract sounding in damages is one at law, and the costs are taxable under this section, and are not in the discretion of the court as an equity proceeding controlled by G.S. 6-20. Highland Cotton Mills v. Ragan Knitting Co., 194 N.C. 80, 138 S.E. 428 (1927).


§ 6-2: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-3. Sureties on prosecution bonds liable for costs.

When an action is brought in any court in which security is given for the prosecution thereof, or when any case is brought up to a court by an appeal or otherwise, in which security for the prosecution of the suit has been given, and judgment is rendered against the plaintiff for the costs of the defendant, the appellate court shall also give judgment against the surety for said costs, and execution may issue jointly against the plaintiff and his surety.

History

(1831, c. 46; R.S., c. 31, s. 133; R.C., c. 31, s. 126; Code, s. 543; Rev., s. 1251; 1913, c. 189, s. 1; C.S., s. 1227.)

Cross References. - As to appeal bonds, see G.S. 1-297.

As to use of mortgages in lieu of security for costs, etc., see G.S. 58-74-5.

CASE NOTES

Section Applies in Supreme Court. - This section could not be restricted in its application to appeals from the court of a justice of the peace, for the first sentence of the section would not apply to such a court, as no prosecution bond for costs is given there, but only in the superior court, or in the Supreme Court if an action is brought there against the State, or perhaps in some other cases not cognizable by a justice of the peace. Kenney v. Seaboard Air Line Ry., 166 N.C. 566, 82 S.E. 849 (1914); Grimes v. Andrews, 171 N.C. 367, 88 S.E. 513 (1916), decided prior to abolition of office of justices of the peace.

The words "appellate court," as used by the amendment of this section in 1913, in view of the context could mean only the Supreme Court. Kenney v. Seaboard Air Line Ry., 166 N.C. 566, 82 S.E. 849 (1914).

It Is Not Limited to Cases Where Plaintiff Appeals. - This section is so broadly worded as to apply to all cases where the costs are adjudged for the defendant against the plaintiff, and not simply to those where the plaintiff appeals. Kenney v. Seaboard Air Line Ry., 166 N.C. 566, 82 S.E. 849 (1914).

But it does not apply where the defendant does not gain an entire reversal in the appellate court; where a partial new trial only is awarded, the costs are in the discretion of the appellate court, as provided in G.S. 6-33. Rayburn v. Casualty Co., 142 N.C. 376, 55 S.E. 296 (1906).

Application Where Judgment Is Asked Against Sureties in Quo Warranto. - Where an action is brought to recover fees of an office, and in the same action judgment is asked against the sureties on a bond given in a quo warranto proceeding, the superior court has jurisdiction and judgment may be rendered against the sureties. McCall v. Zachary, 131 N.C. 466, 42 S.E. 903 (1902).

The words "security for the prosecution" mean the prosecution bond. Kenney v. Seaboard Air Line Ry., 166 N.C. 566, 82 S.E. 849 (1914).

Increasing Penalty of Bond. - Where the defendant has been successful on his appeal to the appellate court, and his judgment for costs against the sureties on the prosecution bond of the plaintiff results in making insecure the costs in the superior court, the remedy is by application to increase the penalty of the bond. Kenney v. Seaboard Air Line Ry., 166 N.C. 566, 82 S.E. 849 (1914).

Appeal by Surety. - Though a surety on a prosecution bond is not a party to the action, yet, when he is made a party to a proceeding to tax the costs in a case, he may appeal from the order allowing the motion to retax. Smith v. Arthur, Coffin & Co., 116 N.C. 871, 21 S.E. 696 (1895).


§ 6-4. Execution for unpaid costs; bill of costs to be attached.

When costs are not paid by the party from whom they are due, the clerk of superior court shall issue an execution for the costs, and attach a bill of costs to each execution. The sheriff shall levy the execution as in other cases.

History

(R.C., c. 102, s. 24; Code, s. 3762; Rev., s. 1252; C.S., s. 1228; 1969, c. 44, s. 17; 1971, c. 269, s. 2.)

CASE NOTES

Every execution presupposes a judgment of some sort, and the right given by this section to issue the one implies the existence of the other. Sheppard v. Bland, 87 N.C. 163 (1882).

Order to pay costs. - Trial court's order that an employee pay costs in the first case he brought against an agency was a civil judgment, and the trial court was not authorized to dismiss the employee's second case against the agency for his failure to pay costs ordered in first case; however, the agency's motion to dismiss was well founded, and the trial court's refusal to award sanctions was affirmed. Leverette v. Batts Temp. Servs., 165 N.C. App. 328, 598 S.E.2d 192 (2004), cert. denied, 359 N.C. 69, 604 S.E.2d 666 (2004).

As to the difference between including attorney's fees in the costs taxed against a party to a lawsuit and in ordering the payment of attorney's fees, see Smith v. Price, 315 N.C. 523, 340 S.E.2d 408 (1986).


§§ 6-5, 6-6: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-7. Clerk to enter costs in case file.

The clerk of superior court shall enter in the case file, after judgment, the costs allowed by law.

History

(Code, s. 532; Rev., s. 1255; C.S., s. 1231; 1971, c. 269, s. 3.)

CASE NOTES

Revision by Trial Judge. - The act of the superior court clerk of taxing costs is ministerial and is subject to revision by the trial judge. Leary v. Nantahala Power & Light Co., 76 N.C. App. 165, 332 S.E.2d 703 (1985).

Authority of Assistant Clerk to Tax Cost of Deposition. - An assistant clerk of the superior court had the authority to tax the cost of a deposition against a plaintiff who took a voluntary dismissal of his case before it reached the trial calendar. Thigpen v. Piver, 37 N.C. App. 382, 246 S.E.2d 67, cert. denied, 295 N.C. 653, 248 S.E.2d 257 (1978).

Costs Properly Adjudged After Decision of Appellate Court. - After decision of the appellate court modifying and affirming a judgment of the superior court on appeal from the referee, allowances constituting items of costs may be adjudged as provided by this section. Clark v. Cagle, 226 N.C. 230, 37 S.E.2d 672 (1946).

Referee's Fee as Part of Costs. - In Young v. Connelly, 112 N.C. 646, 17 S.E. 424 (1893), the court cited this section to the following statement: "The referee's fee was a part of the costs. It was necessary for the clerk to tax the costs and insert the amount in the entry of judgment in addition to the sum adjudged by his honor."

Applied in Thigpen v. Piver, 37 N.C. App. 382, 246 S.E.2d 67 (1978).

Cited in Ward v. Taylor, 68 N.C. App. 74, 314 S.E.2d 814 (1984).


§§ 6-8 through 6-12: Repealed by Session Laws 1971, c. 269, s. 15.

ARTICLE 2. When State Liable for Costs.

Sec.

§ 6-13. Civil actions by the State; joinder of private party.

In all civil actions prosecuted in the name of the State, by an officer duly authorized for that purpose, the State shall be liable for costs in the same cases and to the same extent as private parties. If a private person be joined with the State as plaintiff, he shall be liable in the first instance for the defendant's costs, which shall not be recovered of the State till after execution is issued therefor against such private party and returned unsatisfied.

History

(Code, s. 536; Rev., s. 1259; C.S., s. 1236.)

Legal Periodicals. - For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

CASE NOTES

Constitutionality. - In State ex rel. Blount v. Simmons, 119 N.C. 50, 25 S.E. 789 (1896), it was held that nothing in the Constitution deprived the legislature of power to enact this section.

Judgment May Be Rendered Against State for Costs. - Upon the failure of the litigation, the State is, under this section, liable for the costs of an action authorized by act of the General Assembly and prosecuted in its name by the district attorney, and judgment may be rendered in such action against the State for such costs. State ex rel. Blount v. Simmons, 119 N.C. 50, 25 S.E. 789 (1896).

State's Liability Dependent upon Statute. - The general statutes giving costs do not include the sovereign, and the State is only liable for costs in the event of express statutory provisions. State ex rel. Blount v. Simmons, 120 N.C. 19, 26 S.E. 649 (1897).

Disbarment Proceedings. - Where the proceedings for disbarment of an attorney have not been sustained, the costs are taxable against the State under the provisions of this section, and an order erroneously taxing them against the county in which the matter was tried will be vacated. State ex rel. Committee on Grievances v. Strickland, 201 N.C. 619, 161 S.E. 76 (1931).

Actions to Vacate Oyster-Bed Entry. - Where, in an action by the district attorney in the name of the State to vacate an oyster-bed entry, the plaintiff was nonsuited, it was error to tax the costs against the county, which was not a party to the action. State ex rel. Blount v. Simmons, 118 N.C. 9, 23 S.E. 923 (1896).

Under this section the State is liable for the costs of an action instituted by the district attorney solicitor to vacate an oyster-bed entry. In such case, it seems that the persons making the required affidavit, alleging that the entry is a fraud upon the State, might be held liable as relators if it should appear that the action was for their benefit and at their instance. State ex rel. Blount v. Simmons, 120 N.C. 19, 26 S.E. 649 (1897).


§ 6-14. Civil action by and against State officers.

In all civil actions depending, or which may be instituted, by any of the officers of the State, or which have been or shall be instituted against them, when any such action is brought or defended pursuant to the advice of the Attorney General, and the same is decided against such officers, the cost thereof shall be paid by the State Treasurer upon properly drawn warrants.

History

(1874-75, c. 154; Code, s. 3373; Rev., s. 1260; C.S., s. 1237; 1971, c. 269, s. 4.)

§ 6-15. Actions by State for private persons, etc.

In an action prosecuted in the name of the State for the recovery of money or property, or to establish a right or claim for the benefit of any county, city, town, village, corporation or person, costs awarded against the plaintiff shall be a charge against the party for whose benefit the action was prosecuted, and not against the State.

History

(Code, s. 537; Rev., s. 1261; C.S., s. 1238.)

§ 6-16: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-17. Costs of State on appeals to federal courts.

In all cases, whether civil or criminal, to which the State of North Carolina is a party, and which are carried from the courts of this State, or from the district court of the United States, by appeal or writ of error, to the United States circuit court of appeals, or to the Supreme Court of the United States, and the State is adjudged to pay the costs, it is the duty of the Attorney General to certify the amount of such costs to the Treasurer, who shall pay them upon properly drawn warrants.

History

(1871-2, c. 26; Code, s. 538; Rev., s. 1263; C.S., s. 1240; 1971, c. 269, s. 5.)

§ 6-17.1. Costs and expenses of State in connection with federal litigation arising out of State cases.

In all cases of litigation in any court of the United States arising out of or by reason of any cases pending or tried in any court of the State of North Carolina, or in any action originally instituted in any court of the United States, the expenses for State court costs, securing of court records and transcripts, and other necessary expenses in representing the State of North Carolina or any of its departments, officials or agencies shall be allocated from and paid out of the State Contingency and Emergency Fund.

History

(1963, c. 844.)

ARTICLE 3. Civil Actions and Proceedings.

Sec.

Legal Periodicals. - For article, "Awarding Attorney Fees Against Adversaries: Introducing the Problem," see 1986 Duke L.J. 435.

§ 6-18. When costs allowed as of course to plaintiff.

Costs shall be allowed of course to the plaintiff, upon a recovery, in the following cases:

  1. In an action for the recovery of real property, or when a claim of title to real property arises on the pleadings, or is certified by the court to have come in question at the trial.
  2. In an action to recover the possession of personal property.
  3. In an action for assault, battery, false imprisonment, libel, slander, malicious prosecution, criminal conversation or seduction, if the plaintiff recovers less than fifty dollars ($50.00) damages, he shall recover no more costs than damages.
  4. When several actions are brought on one bond, recognizance, promissory note, bill of exchange or instrument in writing, or in any other case, for the same cause of action against several parties who might have been joined as defendants in the same action, no costs other than disbursements shall be allowed to the plaintiff in more than one of such actions, which shall be at his election, provided the party or parties proceeded against in such other action or actions were within the State and not secreted at the commencement of the previous action or actions.
  5. In an action brought under Article 1 of Chapter 19A.

History

(R.C., c. 31, s. 78; 1874-5, c. 119; Code, s. 525; Rev., s. 1264; C.S., s. 1241; 1971, c. 269, s. 6; 1979, c. 808, s. 5.)

Legal Periodicals. - For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

For article, "Awarding Attorney Fees Against Adversaries: Introducing the Problem," see 1986 Duke L.J. 435.

For comment, "Murky Water: What Really Is Taxed as Court Costs in North Carolina?," see 32 Campbell L. Rev. 127 (2009).

For article, "Detecting Good Public Policy Rationales for the American Rule: A Response to the Ill Conceived Calls for 'Loser Pays' Rules," see 66 Duke L.J. 729 (2016).

CASE NOTES

I. GENERAL CONSIDERATION.

In North Carolina costs are taxed on the basis of statutory authority. Estate of Smith ex rel. Smith v. Underwood, 127 N.C. App. 1, 487 S.E.2d 807, cert. denied, 347 N.C. 398, 494 S.E.2d 410 (1997).

G.S. 6-20 followed G.S. 6-18 and G.S. 6-19, which required an award of costs to one of the parties in certain types of actions, and the costs to be awarded under G.S. 6-18 and G.S. 6-19 were the costs specifically delineated in G.S. 7A-305(d). DOT v. Charlotte Area Manufactured Hous., Inc., 160 N.C. App. 461, 586 S.E.2d 780 (2003).

G.S. 6-20 Governs Where This Section Inapplicable. - Where the action is not of such a nature that it falls within any of the subdivisions of this section or of the following section, it comes within the terms of and is included by G.S. 6-20. Parton v. Boyd, 104 N.C. 422, 10 S.E. 490 (1889); Yates v. Yates, 170 N.C. 533, 87 S.E. 317 (1915).

Negligence cases were not listed among the types of actions in which costs had to be awarded to a prevailing party pursuant to either G.S. 6-18 or G.S. 6-19; therefore, the trial court's costs ruling was governed by G.S. 6-20, and costs could be allowed or not, in the discretion of the court. Smith v. Cregan, 178 N.C. App. 519, 632 S.E.2d 206 (2006).

Section Inapplicable to Contempt Proceeding. - Although labeled "civil" contempt, a proceeding as for contempt is by no means a civil action or proceeding to which this section or G.S. 6-20, allowing costs in discretion of court, would apply. United Artists Records, Inc. v. Eastern Tape Corp., 18 N.C. App. 183, 196 S.E.2d 598, cert. denied, 283 N.C. 666, 197 S.E.2d 880 (1973); Green v. Crane, 96 N.C. App. 654, 386 S.E.2d 757 (1990).

A North Carolina court has no authority to award damages in the form of costs to a private party in a contempt proceeding. Green v. Crane, 96 N.C. App. 654, 386 S.E.2d 757 (1990).

When the trial court found plaintiff in contempt under G.S. 5A-21, it erred in awarding attorney fees to defendant as sanctions; such an award was not authorized by statute, as G.S. 6-18 and G.S. 6-20, governing costs, did not apply to a contempt proceeding. Sea Ranch II Owners Ass'n v. Sea Ranch II, Inc., 180 N.C. App. 230, 636 S.E.2d 307 (2006), review denied, stay denied, 361 N.C. 357, 644 S.E.2d 233 (2007), mot. dismissed, 361 N.C. 357, 644 S.E.2d 234 (2007).

But Attorney's Fees Permissible. - Although neither the provisions of this section or G.S. 6-20 are applicable to an action for civil contempt a trial court may properly award attorney's fees to a plaintiff who prevails in a civil contempt action. The Appellate Court has approved the allowance of attorney's fees in contempt actions where such fees were expressly authorized by statute as in the case of child support. Smith v. Smith, 121 N.C. App. 334, 465 S.E.2d 52 (1996).

Defamation Cases. - To the extent that any attorneys' fees were awarded to a beneficiary based solely on the statute, that award had to be vacated on remand because the statute did not authorize an award of attorneys' fees in defamation cases. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

Meaning of Recovery. - The recovery referred to in this section is a final determination upon the merits, and success in the appellate court is by no means equivalent to a recovery in the court below. Williams v. Hughes, 139 N.C. 17, 51 S.E. 790 (1905).

A recovery within the meaning of the section cannot be predicated upon anything coming to the plaintiff which was not in the contemplation of the plaintiff when he filed his complaint, and especially of a thing to which he virtually disclaimed any right or title. Patterson v. Ramsey, 136 N.C. 561, 48 S.E. 811 (1904).

In order to determine who should pay the costs, the general result must be considered and inquiry made as to who has, in the view of the law, succeeded in the action. Patterson v. Ramsey, 136 N.C. 561, 48 S.E. 811 (1904).

Because plaintiff's legal fees and other costs were not recoverable as independent damages on a fraud claim, and he did not allege that he suffered any other damage, he failed to prove that he suffered legally cognizable damages as a result of a misrepresentation by defendant. Under North Carolina law, a successful litigant could not recover attorneys' fees, whether as costs or as an item of damages, unless such a recovery was expressly authorized by statute, and costs were recoverable only in certain listed types of cases, none of which applied, or at the discretion of the court to a prevailing party, which necessarily meant establishing a prima facie case that, in the context of fraud, had to include independent damages aside from costs. Hoch v. Hoch (In re Hoch), - Bankr. - (Bankr. E.D.N.C. Jan. 25, 2018).

Partial Recovery. - There is no provision that limits the allowance of costs in favor of the plaintiff in case of only a partial recovery. The language of the statute as to them is comprehensive and without exceptive provision. In Wall v. Covington, 76 N.C. 150 (1877), it was held that no part of the costs in such actions can be taxed against the party recovering. And in Horton v. Horne, 99 N.C. 219, 5 S.E. 927 (1888), it was decided in an action to recover personal property, that if the plaintiff establishes his title to only a portion of the property delivered to him under claim and delivery proceedings, he will be entitled to costs. Wooten v. Walters, 110 N.C. 251, 14 S.E. 734 (1892); Ferrabow v. Green, 110 N.C. 414, 14 S.E. 973 (1892); Kinston Cotton Mills v. Rocky Mount Hosiery Co., 154 N.C. 462, 70 S.E. 910 (1911).

Action by Executor. - Where the action involves the question as to the recovery of a portion of the estate of a deceased person, and judgment is rendered in favor of the executor, the plaintiff, he is entitled to a judgment for costs under this section. White v. Mitchell, 196 N.C. 89, 144 S.E. 526 (1928).

Abuse of Discretion to Reduce Attorneys' Fees Based on Punitive Damages Award. - Trial court abused its discretion to the extent that it reduced the amount of attorneys' fees that it would have otherwise awarded to beneficiaries based solely on the fact that the beneficiaries received a large punitive damages award because the fact that they received a large punitive damages award was not relevant to a proper attorneys' fee calculation. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

As a result of the different purposes sought to be achieved by punitive damages and attorneys' fee awards, a decision to reduce an attorneys' fee award based on the fact that a party received a large punitive damages award would necessarily serve to thwart the purposes sought to be achieved by allowing the recovery of punitive damages without serving any purpose sought to be achieved by an award of attorneys' fees. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

Although attorneys' fee jurisprudence gives trial judges substantial discretion in determining what amount of attorneys' fees to award in any particular case, the use of a substantial punitive damages award as the sole reason for reducing an otherwise reasonable attorneys' fee award involves reliance upon a factor that has no reasonable bearing on the making of a proper attorneys' fee award and, for that reason, constitutes an abuse of the trial court's discretion. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

Applied in Wolfe v. Montgomery Ward & Co., 211 N.C. 295, 189 S.E. 772 (1937); Williams v. Boylan-Pearce, Inc., 69 N.C. App. 315, 317 S.E.2d 17 (1984); Delta Envtl. Consultants of N.C. Inc. v. Wysong & Miles Co., 132 N.C. App. 160, 510 S.E.2d 690 (1999); Coffman v. Roberson, 153 N.C. App. 618, 571 S.E.2d 255 (2002), cert. denied, 356 N.C. 668, 577 S.E.2d 111 (2003); McLennan v. Josey, 247 N.C. App. 95, 785 S.E.2d 144 (2016).

Cited in Dorsey v. Dorsey, 53 N.C. App. 622, 281 S.E.2d 429 (1981); Alsup v. Pitman, 98 N.C. App. 389, 390 S.E.2d 750 (1990); Powers v. Powers, 103 N.C. App. 697, 407 S.E.2d 269 (1991); Smith v. McDonald, 767 F. Supp. 732 (M.D.N.C. 1991); Sara Lee Corp. v. Carter, 129 N.C. App. 464, 500 S.E.2d 732 (1998), rev'd on other grounds, 351 N.C. 27, 519 S.E.2d 308 (1999); Lewis v. Setty, 140 N.C. App. 536, 537 S.E.2d 505 (2000); Cosentino v. Weeks, 160 N.C. App. 511, 586 S.E.2d 787 (2003); Handex of the Carolinas, Inc. v. County of Haywood, 168 N.C. App. 1, 607 S.E.2d 25 (2005); Morgan v. Steiner, 173 N.C. App. 577, 619 S.E.2d 516 (2005); Khomyak v. Meek, 214 N.C. App. 54, 715 S.E.2d 218 (2011), review denied, 720 S.E.2d 392, 2012 N.C. LEXIS 31 (2012); Tyll v. Berry, 234 N.C. App. 96, 758 S.E.2d 411 (2014).

II. ACTIONS FOR RECOVERY OF REAL PROPERTY, ETC.

Section States Common-Law Rule. - Subdivision (1) of the section is in affirmance of the principle established before its enactment. Moore v. Angel, 116 N.C. 843, 21 S.E. 699 (1895).

Construed with G.S. 6-19 - Costs were properly awarded to the animal shelter pursuant to G.S. 6-19, as G.S. 6-19 permitted the shelter, as a defendant, to recover costs in the same way as a plaintiff could pursuant to this section in an action for the recovery of real property. County of Moore v. Humane Soc'y of Moore County, Inc., 157 N.C. App. 293, 578 S.E.2d 682 (2003).

Construed with G.S. 6-21. - This section, allowing plaintiffs' costs as of course, upon recovery, in an action involving title to real estate, and G.S. 6-21, providing apportionment of costs in a special proceeding for the division or sale of realty or personalty are related sections, pertain to the same subject matter, and must be construed in pari materia. Bailey v. Hayman, 222 N.C. 58, 22 S.E.2d 6 (1942).

Actions to Recover Both Realty and Personalty. - Under this section, the plaintiff in an action to recover both real and personal property is entitled to recover costs, even if he recovers only the real property. Wooten v. Walters, 110 N.C. 251, 14 S.E. 734 (1892).

Jurisdiction for Award Under G.S. 50-20(i). - Trial court was not without jurisdiction at the time it entered its G.S. 50-20(i) order, and therefore the court had jurisdiction to award attorney's fees under that section, but not under subsection (2) of this section. McKissick v. McKissick, 129 N.C. App. 252, 497 S.E.2d 711 (1998).

Partial Recovery. - Where the plaintiff is adjudged entitled to a part of the land sued for, whether such land is a portion of one tract or is one of several tracts for which the action is brought, then the plaintiff is exonerated as to costs and no part thereof should be found against him. Ferrabow v. Green, 110 N.C. 414, 14 S.E. 973 (1892); Moore v. Angel, 116 N.C. 843, 21 S.E. 699 (1895); Field v. Wheeler, 120 N.C. 264, 26 S.E. 812 (1897); Vanderbilt v. Johnson, 141 N.C. 370, 54 S.E. 298 (1906). See Staley v. Staley, 174 N.C. 640, 94 S.E. 407 (1917).

Where the plaintiff has been required to introduce evidence of his title to the whole of the locus in quo, and then the defendant consents that the court charge the jury to find for the plaintiff if they believe the evidence as to a certain part, and the issue is found for the defendant as to the remaining land, the costs of the action are properly awarded against the defendant. Swain v. Clemmons, 175 N.C. 240, 95 S.E. 489 (1918).

When There Is More Than One Issue. - In an action of trespass to real property, where the plaintiff's title and the fact of trespass are both put in issue by the defendant's answer, and the jury find the issue as to the title in favor of the plaintiff, and the issue as to the trespass in favor of the defendant, the defendant is entitled to judgment for costs. To entitle the plaintiff to recover costs, both issues must be found in his favor. Murray v. Spencer, 92 N.C. 264 (1885).

Boundary Dispute. - Where, in an action in ejectment and for damages for cutting of timber, defendant files an answer defending plaintiffs' title to the land in dispute, and verdict is entered in favor of plaintiffs, plaintiffs, as a matter of law, are not liable for any of the costs, notwithstanding that upon the trial each party admitted the title of the other within the boundaries of their respective grants, and the only controversy was as to the location of the boundary between their respective grants. Cody v. England, 221 N.C. 40, 19 S.E.2d 10 (1942).

Necessity for Disclaimer in Order to Avoid Costs. - A defendant in an action concerning land should enter a disclaimer if he does not claim the land in controversy, or does not intend to litigate with the plaintiff, in order to escape the payment of costs. Swain v. Clemmons, 175 N.C. 240, 95 S.E. 489 (1918).

Where, in an action in trespass, the defendant failed to disclaim title to all the land declared for by plaintiff, but recovered according to the boundaries set up in his answer, with a greater amount for damages on his counterclaim than was allowed the plaintiff, plaintiff was nevertheless held entitled to costs. Moore v. Angel, 116 N.C. 843, 21 S.E. 699 (1895).

If the defendant disclaims title to all the land declared for, except that for which he proves his right, no issue as to the plaintiff's title will arise, and the findings that the defendant's title, disputed by the plaintiff, is good and that the defendant has sustained greater damages than his adversary, upon both necessarily, perhaps on either, will entitle the defendant to costs. Moore v. Angel, 116 N.C. 843, 21 S.E. 699 (1895).

In ejectment, where the defendant denies the right to possession and denies that the plaintiff holds the title in trust for him, and judgment is rendered that the defendant is entitled to the land upon payment of an amount found due the plaintiff, no part of the cost is taxable against the defendant. Patterson v. Ramsey, 136 N.C. 561, 48 S.E. 811 (1904).

It would seem that in order to escape potential liability for costs the defendant must enter his disclaimer of all the lands declared for, and that a disclaimer of half the locus in quo will not suffice to enable him to escape upon the unfavorable adjudication of the other half. See In re Hurley, 185 N.C. 422, 117 S.E. 345 (1923).

One who successfully maintains an equitable defense against the recovery of land on the bare legal title is entitled to judgment for his costs. Vestal v. Sloan, 83 N.C. 555 (1880).

Liability of Intervener. - Where the defendant intervenes in an action to recover real property, files a joint answer with his codefendant, and makes a joint defense, the plaintiff is entitled to the costs. Having joined in the controversy, and made common cause in the defense, interveners must abide the result. Spruill v. Arrington, 109 N.C. 192, 13 S.E. 779 (1891). See Willis v. Coleburn, 169 N.C. 670, 86 S.E. 596 (1915).

III. RECOVERY OF PERSONALTY.

.

Partial Recovery. - There is no exception to the partial recovery rule when the action is for the recovery of personalty, and when the plaintiff establishes title to any part of the property sued for, he is entitled to judgment for costs. Wooten v. Walters, 110 N.C. 251, 14 S.E. 734 (1892); Field v. Wheeler, 120 N.C. 264, 26 S.E. 812 (1897). This is not the case where some of the defendants recover judgment, in which case, of course, they recover costs. Phillips v. Little, 147 N.C. 282, 61 S.E. 49 (1908).

As an example of the application of this rule to claims for personal property, it has been held that the plaintiff on being adjudged entitled to only a portion of a crop in a suit for claim and delivery was entitled to costs. Field v. Wheeler, 120 N.C. 264, 26 S.E. 812 (1897).

Claim and Delivery. - Judgment in an action of claim and delivery carries all costs under this section. Rawlings v. Neal, 126 N.C. 271, 35 S.E. 597 (1900).

Enforcement of Lien. - Where controversy depended upon right of mechanic to repossess an automobile that he repaired, in order that he could enforce his lien thereon, and the jury found in the plaintiff's favor upon determinative issues, but in the defendant's favor upon an issue of fraud, the question of taxing the cost did not depend upon the finding of the jury on the issue of the defendant's fraud, and the plaintiff, having established his right to the possession, was entitled to recover the costs under this section. Maxton Auto Co. v. Rudd, 176 N.C. 497, 97 S.E. 477 (1918).

IV. COSTS WHEN DAMAGES ARE LESS THAN $50.00

.

In General. - In a civil action, if the provocation is great, the jury will usually see fit to return nominal or small damages, and if the amount is less than $50.00 the plaintiff, under this section, recovers no more costs than damages. Palmer v. Winston-Salem Ry. & Elec. Co., 131 N.C. 250, 42 S.E. 604 (1902).

For case in which the recovery for slander was less than $50.00, see Smith v. Myers, 188 N.C. 551, 125 S.E. 178 (1924).

For case in which one dollar damages were sustained by the erection of a mill, see Bridgers v. Purcell, 23 N.C. 232 (1840).

The former rule as to slander is stated in Coates v. Stephenson, 52 N.C. 124 (1859), where it was held that the costs of the plaintiff, under R.C., c. 31, G.S. 78, could not be taxed against the defendant.

Where the plaintiff is entitled to nominal damages, such damages will carry with it the costs under this section. Wilson v. Forbes, 13 N.C. 30 (1828); Britton v. Ruffin, 123 N.C. 67, 31 S.E. 271 (1898).

Instructed Verdict for One Penny Damages and One Penny Costs. - For a case where an instructed verdict for one penny damages and one penny costs, under this section, was held erroneous because actual and not nominal damage was shown, see Osborn v. Leach, 135 N.C. 628, 47 S.E. 811 (1904).


§ 6-19. When costs allowed as of course to defendant.

Costs shall be allowed as of course to the defendant, in the actions mentioned in G.S. 6-18 unless the plaintiff be entitled to costs therein. In all actions where there are several defendants not united in interest, and making separate defenses by separate answers, and the plaintiff fails to recover judgment against all, the court may award costs to such of the defendants as have judgment in their favor or any of them.

History

(C.C.P., s. 277; Code, ss. 526, 527; Rev., s. 1266; C.S., s. 1242; 2007-212, s. 1.)

Legal Periodicals. - For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

For comment, "Murky Water: What Really Is Taxed as Court Costs in North Carolina?," see 32 Campbell L. Rev. 127 (2009).

CASE NOTES

Not Applicable to Negligence Actions. - Negligence cases were not listed among the types of actions in which costs had to be awarded to a prevailing party pursuant to either G.S. 6-18 or G.S. 6-19; therefore, the trial court's costs ruling was governed by G.S. 6-20, and costs could be allowed or not, in the discretion of the court. Smith v. Cregan, 178 N.C. App. 519, 632 S.E.2d 206 (2006).

Where plaintiff fails to recover in an action involving title to real property in which a court survey is ordered, the clerk is without authority to tax the surveyor's fees in the bill of costs, but on appeal from the clerk's order, the superior court, while properly affirming the clerk's order, should pass upon the motion for taxing such fees as a part of the costs as a matter of right. Ipock v. Miller, 245 N.C. 585, 96 S.E.2d 729 (1957). See G.S. 38-4 and note.

Costs were properly awarded to the animal shelter pursuant to this section, as this section permitted the shelter, as a defendant, to recover costs in the same way as a plaintiff could pursuant to G.S. 6-18 in an action for the recovery of real property. County of Moore v. Humane Soc'y of Moore County, Inc., 157 N.C. App. 293, 578 S.E.2d 682 (2003).

Where the plaintiff fails in an action upon a covenant, the defendant recovers costs under this section. Britton v. Ruffin, 123 N.C. 67, 31 S.E. 271 (1898).

Unsuccessful Action to Set Aside Deed. - Costs were properly awarded to the grantee in a deed in an unsuccessful action to set aside such deed. D. B. Brisco & Co. v. Norris, 112 N.C. 671, 16 S.E. 850 (1893).

In an action for ejectment, this section was applicable, and therefore, the list of costs recoverable by a prevailing party in a civil action under G.S. 7A-305 was controlling. Minton v. Lowe's Food Stores, 121 N.C. App. 675, 468 S.E.2d 513 (1996).

In North Carolina costs are taxed on the basis of statutory authority. Estate of Smith ex rel. Smith v. Underwood, 127 N.C. App. 1, 487 S.E.2d 807, cert. denied, 347 N.C. 398, 494 S.E.2d 410 (1997).

G.S. 6-20 followed G.S. 6-18 and G.S. 6-19, which required an award of costs to one of the parties in certain types of actions, and the costs to be awarded under G.S. 6-18 and G.S. 6-19 were the costs specifically delineated in G.S. 7A-305(d). DOT v. Charlotte Area Manufactured Hous., Inc., 160 N.C. App. 461, 586 S.E.2d 780 (2003).

Taxing Costs. - Trial court did not err in taxing costs of defendant bakery company and its defendant driver to the mother and minor son personal injury plaintiffs, as the bakery company and its driver were found not liable to the mother and minor son and the decision to tax the costs was made pursuant to a motion under G.S. 6-19, not this section. Sterling v. Gil Soucy Trucking, Ltd., 146 N.C. App. 173, 552 S.E.2d 674 (2001).

Applied in Delta Envtl. Consultants of N.C. Inc. v. Wysong & Miles Co., 132 N.C. App. 160, 510 S.E.2d 690 (1999); Reo Props. Corp. v. Smith, 227 N.C. App. 298, 743 S.E.2d 230 (2013), review denied 748 S.E.2d 327, 367 N.C. 239, 2013 N.C. LEXIS 1041 (2013).

Cited in Gold v. Kiker, 218 N.C. 204, 10 S.E.2d 650 (1940); Smith v. McDonald, 767 F. Supp. 732 (M.D.N.C. 1991); Sara Lee Corp. v. Carter, 129 N.C. App. 464, 500 S.E.2d 732 (1998), rev'd on other grounds, 351 N.C. 27, 519 S.E.2d 308 (1999); Lewis v. Setty, 140 N.C. App. 536, 537 S.E.2d 505 (2000); Cosentino v. Weeks, 160 N.C. App. 511, 586 S.E.2d 787 (2003); Handex of the Carolinas, Inc. v. County of Haywood, 168 N.C. App. 1, 607 S.E.2d 25 (2005); Morgan v. Steiner, 173 N.C. App. 577, 619 S.E.2d 516 (2005); Khomyak v. Meek, 214 N.C. App. 54, 715 S.E.2d 218 (2011), review denied, 720 S.E.2d 392, 2012 N.C. LEXIS 31 (2012).


§ 6-19.1. Attorney's fees to parties appealing or defending against agency decision.

  1. In any civil action, other than an adjudication for the purpose of establishing or fixing a rate, or a disciplinary action by a licensing board, brought by the State or brought by a party who is contesting State action pursuant to G.S. 150B-43 or any other appropriate provisions of law, unless the prevailing party is the State, the court may, in its discretion, allow the prevailing party to recover reasonable attorney's fees, including attorney's fees applicable to the administrative review portion of the case, in contested cases arising under Article 3 of Chapter 150B, to be taxed as court costs against the appropriate agency if:
    1. The court finds that the agency acted without substantial justification in pressing its claim against the party; and
    2. The court finds that there are no special circumstances that would make the award of attorney's fees unjust. The party shall petition for the attorney's fees within 30 days following final disposition of the case. The petition shall be supported by an affidavit setting forth the basis for the request.
  2. Expired June 30, 2012, pursuant to Session Laws 2009-475, s. 8.

Nothing in this section shall be deemed to authorize the assessment of attorney's fees for the administrative review portion of the case in contested cases arising under Article 9 of Chapter 131E of the General Statutes.

Nothing in this section grants permission to bring an action against an agency otherwise immune from suit or gives a right to bring an action to a party who otherwise lacks standing to bring the action.

Any attorney's fees assessed against an agency under this section shall be charged against the operating expenses of the agency and shall not be reimbursed from any other source.

History

(1983, c. 918, s. 1; 1987, c. 827, s. 1; 2000-190, s. 1; 2009-475, s. 8.)

Effect of Amendments. - Session Laws 2009-475, s. 8, effective February 17, 2009, and expiring June 30, 2012, designated the existing provisions as subsection (a) and added subsection (b).

Legal Periodicals. - For article, "Defining North Carolina's Public Records and Open Meetings Feeshifting Provisions in the Larger National Context,” see 96 N.C.L. Rev. 1725 (2018).

CASE NOTES

The legislature, in enacting this section, obviously sought to curb unwarranted, ill-supported suits initiated by State agencies. Crowell Constructors, Inc. v. State, 342 N.C. 838, 467 S.E.2d 675 (1996).

Applicability. - State agency's claim that attorneys' fees were not warranted in an employment matter failed because (1) G.S. 126-34.02(e) authorized the award, and (2) fees were not awarded under G.S. 6-19.1. Hunt v. N.C. Dep't of Pub. Safety, 266 N.C. App. 24, 830 S.E.2d 865 (2019), review denied, 373 N.C. 60, 832 S.E.2d 732 (2019).

State Tort Claim - Counterclaim brought by the State in the content of a tort claim is the equivalent to "any civil action brought by the State pursuant to any other appropriate provisions of law" as intended under G.S. 6-19.1 and, therefore, the North Carolina Industrial Commission is justified to award attorney's fees under G.S. 6-19.1. Sprinkle v. N.C. Wildlife Res. Comm'n, 165 N.C. App. 721, 600 S.E.2d 473 (2004).

Administrative Hearings. - Pursuant to this section, an administrative hearing under G.S. 150B-22 et seq. is not a civil action brought pursuant to G.S. 150B-43. Walker v. North Carolina Coastal Resources Comm'n, 124 N.C. App. 1, 476 S.E.2d 138 (1996), cert. denied, 346 N.C. 185, 486 S.E.2d 220 (1997).

Award to petitioners for counsel fees and costs applicable to the "administrative review" portion of the case was reversed; award of counsel fees and costs for the "judicial review" portion of the case was affirmed. Walker v. North Carolina Coastal Resources Comm'n, 124 N.C. App. 1, 476 S.E.2d 138 (1996), cert. denied, 346 N.C. 185, 486 S.E.2d 220 (1997).

G.S. 6-19.1 authorizes a superior court to award fees to the employee of a county Department of Social Services who has prevailed under the State Personnel Act, G.S. 126-1 et seq.; therefore, a trial court was authorized to award fees for representation of a plaintiff during the administrative proceedings contesting her termination while on medical leave, which was adjudged without cause and wrongful. Early v. County of Durham Dep't of Soc. Servs., 172 N.C. App. 344, 616 S.E.2d 553 (2005).

By amending the statute to provide specifically for recovery of attorneys' fees incurred in the administrative review portions of North Carolina Administrative Procedure Act, Article 3 of Chapter 150B, cases, and omitting any mention of the administrative review portions of Article 3A cases, the legislature revealed its intent not to provide for recovery of attorneys' fees incurred in disciplinary actions by licensing boards. Winkler v. N.C. State Bd. of Plumbing, 261 N.C. App. 106, 819 S.E.2d 105 (2018), aff'd, 374 N.C. 726, 843 S.E.2d 206, 2020 N.C. LEXIS 493 (2020).

When read as a whole and based on the legislative history of the statute, the language "a disciplinary action by a licensing board" was intended to exclude such actions from the purview of the statute. Winkler v. N.C. State Bd. of Plumbing, 261 N.C. App. 106, 819 S.E.2d 105 (2018), aff'd, 374 N.C. 726, 843 S.E.2d 206, 2020 N.C. LEXIS 493 (2020).

Words "other than" exclude from the broader class of "any civil actions" certain specified actions listed immediately after the words "other than," and the phrase "an adjudication for the purpose of establishing or fixing a rate" is modified by the exclusionary words of "other than"; it follows that the exclusionary words also modify the phrase "a disciplinary action by a licensing board," which similarly begins with a singular indefinite article. Winkler v. N.C. State Bd. of Plumbing, 261 N.C. App. 106, 819 S.E.2d 105 (2018), aff'd, 374 N.C. 726, 843 S.E.2d 206, 2020 N.C. LEXIS 493 (2020).

By using the last comma to separate the phrase "disciplinary action by a licensing board" from the phrase "brought by the State," the legislature extended the statutory exclusion to disciplinary actions. Winkler v. N.C. State Bd. of Plumbing, 261 N.C. App. 106, 819 S.E.2d 105 (2018), aff'd, 374 N.C. 726, 843 S.E.2d 206, 2020 N.C. LEXIS 493 (2020).

Syntax of the statute, i.e., the phrase "in any civil action brought by the State," is separate and distinct from the phrase "other than an adjudication for the purpose of establishing or fixing a rate, or a disciplinary action by a licensing board"; this distinction exists as a means of delineating what is and is not within the scope of the statute and supports the interpretation of disciplinary actions as being categorized with the other exception to the statute. Winkler v. N.C. State Bd. of Plumbing, 261 N.C. App. 106, 819 S.E.2d 105 (2018), aff'd, 374 N.C. 726, 843 S.E.2d 206, 2020 N.C. LEXIS 493 (2020).

Because the phrase "a disciplinary action by a licensing board" is designated with the indefinite article "a," and is separated from the rest of the statute by way of commas, the plain language of the statute conveys the legislature's intent to exclude disciplinary actions by licensing boards from the purview of the statute. Winkler v. N.C. State Bd. of Plumbing, 261 N.C. App. 106, 819 S.E.2d 105 (2018), aff'd, 374 N.C. 726, 843 S.E.2d 206, 2020 N.C. LEXIS 493 (2020).

Disciplinary Actions by Licensing Boards Excluded from Statute. - Use of the word "any" before the phrase "civil action" differentiates the phrase from the two phrases following "other than," an adjudication for the purpose of establishing or fixing a rate and a disciplinary action by a licensing board, each introduced with a singular indefinite article, respectively "an" and "a"; he singular indefinite articles convey that rate cases and licensing board actions are separate and distinct members of the class of "any civil action," and therefore are excluded. Winkler v. N.C. State Bd. of Plumbing, 261 N.C. App. 106, 819 S.E.2d 105 (2018), aff'd, 374 N.C. 726, 843 S.E.2d 206, 2020 N.C. LEXIS 493 (2020).

G.S. 6-19.1 did not preclude a trial court from awarding attorney's fees in disciplinary actions by a licensing board where although no plain meaning emerged due to the misplacement of commas, such disciplinary actions were not civil in nature, and thus, the General Assembly could not have intended to except them from the category of civil actions. Winkler v. N.C. State Bd. of Plumbing, 374 N.C. 726, 843 S.E.2d 206 (2020).

Awarding a licensee attorney's fees pursuant to G.S. 6-19.1 was error where the North Carolina State Board of Plumbing, Heating, & Fire Sprinkler Contractors' arguments that the licensee's actions to a pool heating system constituted restoration were not irrational or illegitimate in light of the facts, and thus, despite failing to prevail on the merits of its claim, the Board was substantially justified in contending that the licensee engaged in the type of conduct the Board was authorized to discipline. Winkler v. N.C. State Bd. of Plumbing, 374 N.C. 726, 843 S.E.2d 206 (2020).

Discretionary Decision. - In a dispute involving a driveway, attorney fees were properly not awarded because, assuming that the trial court erred by concluding that the North Carolina Department of Transportation (DOT) acted with substantial justification, it also denied the award of fees in its discretion; an argument that the trial court was required to award attorney fees if the DOT acted without substantial justification and no special circumstances existed that made an award of attorney's fees unjust was rejected. Because there was no argument on appeal that the trial court abused its discretion in failing to award attorney's fees, any such argument was abandoned. High Rock Lake Partners, LLC v. N.C. DOT, 234 N.C. App. 336, 760 S.E.2d 750 (2014).

Services Performed Prior to Judicial Review. - This section allows for an award of attorney's fees in State Personnel Commission cases only for services rendered on judicial review, not for services performed prior to judicial review. Morgan v. North Carolina DOT, 124 N.C. App. 180, 476 S.E.2d 431 (1996).

Motion Timely. - Petitioner's motion for attorney's fees, filed well before final judgment, was timely; therefore, the trial court had jurisdiction to hear the matter. Whiteco Indus., Inc. v. Harrelson, 111 N.C. App. 815, 434 S.E.2d 229 (1993); Whiteco Indus., Inc. v. Harrington, 111 N.C. App. 839, 434 S.E.2d 234 (1993), cert. granted, 335 N.C. 565, 441 S.E.2d 135 (1994).

Motion Untimely. - Trial court lacked jurisdiction to award attorney's fees because an employee did not file his motion within 30 days of the final disposition of his case against the North Carolina Department of Transportation; because a petition is a formal written application to a court requesting judicial action on a certain matter, a request for attorney's fees contained within a complaint's prayer for relief does not constitute a "petition" within the meaning of G.S. 6-19.1(2). Hodge v. N.C. DOT, 161 N.C. App. 726, 589 S.E.2d 737 (2003), cert. denied, 358 N.C. 234, 595 S.E.2d 151 (2004).

Superior court was time barred under G.S. 6-19.1 from considering the attorney's petition for attorney's fees where the statute required the attorney to petition for fees within the 30-day time frame following final disposition of the underlying action; the attorney did not make his petition for well over a year from that date. McIntyre v. Forsyth County Dep't of Soc. Servs., 162 N.C. App. 94, 589 S.E.2d 745 (2004), cert. denied, 358 N.C. 377, 598 S.E.2d 136 (2004).

Findings of Fact Required. - Although the award of attorney's fees is within the discretion of the trial judge under this section, the trial court must make findings of fact as to the time and labor expended, the skill required, the customary fee for like work, and the experience or ability of the attorney. North Carolina Dep't of Cors. v. Harding, 120 N.C. App. 451, 462 S.E.2d 671 (1995).

Trail court erred in awarded North Carolina Department of Environment and Natural Resources (NCDENR) employees partial attorney fees in their appeal of the NCDENR's decision to suspend them from work because the trial court failed to make necessary findings of fact about the reasonableness of the award of attorney fees to enable the court of appeals to determine whether the award was within the trial court's sound discretion or was an abuse thereof. Kelly v. N.C. Dep't of Env't & Natural Res., 192 N.C. App. 129, 664 S.E.2d 625 (2008).

Accurate Calculations Required. - The trial court erred in calculating the attorney's fee which was reasonably found to be one fourth of the present value of the future benefits recovered by his client. Thornburg v. Consolidated Judicial Retirement Sys., 137 N.C. App. 150, 527 S.E.2d 351 (2000).

Jurisdiction of Superior Court. - Where permit holder petitioned the superior court for review of Department of Transportation revocation of permit for highway sign, this gave the superior court jurisdiction to determine the whole case including the taxing of costs including section providing for attorney's fees to be taxed as costs in some instances. Able Outdoor, Inc. v. Harrelson, 341 N.C. 167, 459 S.E.2d 626 (1995).

Trial court did not exceed its jurisdiction by addressing attorney's fees issue because "final disposition" for purposes of G.S. 6-19.1 had not yet occurred in the case and would not occur until the supreme court either declined to grant discretionary review of the decision of the court of appeals or until any proceedings resulting from supreme court review of its order concluded, and, as a result, the fact that a company had not yet filed a formal petition of the type contemplated by G.S. 6-19.1 stood as no obstacle to its ability to seek attorney's fees from the Secretary of Crime Control and Public Safety, particularly given the trial court's decision to require the company to file such a petition after the conclusion of all appellate proceedings in the case; a superior court judge reviewing administrative action on a de novo basis is entitled to award attorney's fees during the judicial review process even though "final disposition" has not occurred. Daily Express, Inc. v. Beatty, 202 N.C. App. 441, 688 S.E.2d 791 (2010).

Because the trial court's review of the State Highway Patrol's administrative determination to assess an overweight penalty against a company amounted to de novo review, jurisdiction attached to award attorney's fees pursuant to G.S. 6-19.1; the trial court had jurisdiction to consider the attorney's fees issue despite the lack of a "final disposition" or a formal petition, particularly since the amount of the award would be determined upon the "final disposition" of the case and since the trial court had ordered that a "petition" of the type specified in G.S. 6-19.1 be filed prior to the entry of an actual attorney's fee award. Daily Express, Inc. v. Beatty, 202 N.C. App. 441, 688 S.E.2d 791 (2010).

Substantial Justification. - In order to further the legislature's purpose of reining in wanton, unfounded litigation, the State's action for purposes of this section is measured by the phrase "substantial justification". Thus, the agency is required to demonstrate that its position, at and from the time of its initial action, was rational and legitimate to such degree that a reasonable person could find it satisfactory or justifiable in light of the circumstances then known to the agency. Crowell Constructors, Inc. v. State, 342 N.C. 838, 467 S.E.2d 675 (1996).

Where stockpiles of sand as high as 25 feet tall were placed upon surface soil and 24 years later the sand was covered with new surface soil which grew vegetation, including pine trees, the Department of Environment, Health and Natural Resources (now the Department of Environment and Natural Resources) was not "without substantial justification" in its position that the landowner was engaged in mining by removing the sand. Crowell Constructors, Inc. v. State, 342 N.C. 838, 467 S.E.2d 675 (1996).

To demonstrate that it acted with substantial justification an agency must show that its position, from the time of its initial action, was rational and legitimate such that a reasonable person could find it satisfactory or justifiable in light of the circumstances. North Carolina Div. of Sons of Confederate Veterans v. Faulkner, 131 N.C. App. 775, 509 S.E.2d 207 (1998).

The respondent was without "substantial justification" for denying the petitioner's retirement benefits and the trial court, therefore, reasonably awarded the petitioner attorney's fees pursuant to this section. The respondent accepted the petitioner's contributions after she began to take half year leaves of absence as part of a job sharing agreement and continued to represent to her that she was a full-fledged member of the retirement system until she prepared to collect her benefits at which time the respondent first informed petitioner that she was not a retirement system member although the North Carolina Administrative Code allowed for periods of interrupted employment. Wiebenson v. Board of Trustees, 138 N.C. App. 489, 531 S.E.2d 500 (2000).

Two conservation organizations were entitled to attorney's fees under G.S. 6-19.1 in a judicial review proceeding because a state administrative agency's decision was not substantially justified given the facts known at the time of the decision, and the trial court acted within the court's discretion in finding that no special circumstances existed that made the award unjust. Table Rock Chapter of Trout Unlimited v. Envtl. Mgmt. Comm'n, 191 N.C. App. 362, 663 S.E.2d 333 (2008).

Trial court did not err in awarding attorney's fees to a company under G.S. 6-19.1 because the decision of the Secretary of Crime Control and Public Safety to assess an additional overweight penalty against the company was substantially justified, and although the Secretary erroneously assessed a separate overweight penalty against the company, since the Secretary showed that its action was not without substantial justification, he was not liable for attorney's fees. Daily Express, Inc. v. Beatty, 202 N.C. App. 441, 688 S.E.2d 791 (2010).

Department of Health and Human Services rested on the plain meaning of the relevant statutory provisions and even if the appellate court declined to accept the interpretation of the statutory language advanced by DHHS, it would have reached the conclusion that the agency's refusal to acquiesce in the husband's interpretation of the relevant statutory provisions rested on a reasonable view of the controlling legal authorities. As a result, the appellate court was unable to agree with the trial court that the DHHS' position lacked substantial justification; thus, an award of attorney fees to the wife was improper. Joyner v. N.C. HHS, 214 N.C. App. 278, 715 S.E.2d 498 (2011).

Trial court did not err in denying the taxpayers' motion for attorneys' fees under G.S. 6-19.1(a) where there was conflicting evidence as to whether they had effectuated a change in their domicile, and thus, the North Carolina Department of Revenue acted with substantial justification in bringing its claim against them. Fowler v. N.C. Dep't of Revenue, 242 N.C. App. 404, 775 S.E.2d 350 (2015).

Plaintiff Entitled to Attorneys' Fees. - Superior court did not abuse its discretion in awarding attorney fees pursuant to G.S. 6-19.1 to an employee who was reinstated to her employment with a state administrative agency because sufficient evidence existed to support the superior court's findings that the state administrative agency acted without substantial justification and no special circumstances made the award of attorney fees unjust. Early v. County of Durham, Dep't of Soc. Servs., 193 N.C. App. 334, 667 S.E.2d 512 (2008), review denied, 363 N.C. 372, 678 S.E.2d 237 (2009).

When temporary state employees sued the state for employing the employees more than 12 months, contrary to N.C. Admin. Code 1C.0405(a), and the state contested the employees' attorney fees' award on sovereign immunity grounds, the award did not err because: (1) fees were awarded "as provided by law," and (2) the state waived sovereign immunity in G.S. 6-19.1. Sanders v. State Pers. Comm'n, 236 N.C. App. 94, 762 S.E.2d 850 (2014).

Plaintiffs Not Entitled to Attorneys' Fees. - Plaintiffs were not entitled to attorneys' fees under G.S. 6-19.1 and 42 U.S.C.S. § 1988, or the private attorney general doctrine as in the absence of express statutory authority, attorneys' fees were not allowable as part of the court costs in civil actions; Bailey v. State, 500 S.E.2d 54 (1998), was distinguishable as: (1) there was no common fund resulting from the litigation; (2) Bailey involved a class action in which the attorneys' fees borne by the class representatives were shared or equally distributed to the class from the recovery; and (3) plaintiffs sought to shift the burden of attorney fees to the State, instead of to a resulting fund. Stephenson v. Bartlett, 177 N.C. App. 239, 628 S.E.2d 442 (2006).

Trial court did not err in denying a health service facility's request for attorney's fees in its action seeking review of a decision of the North Carolina Department of Health and Human Services because the facility was not the prevailing party. Hope-A Women's Cancer Center, P.A. v. N.C. HHS, 203 N.C. App. 276, 691 S.E.2d 421 (2010), review denied, 365 N.C. 87, 706 S.E.2d 254, 2011 N.C. LEXIS 144 (2011).

After a property owner prevailed in an action, the owner's petition to recover attorney's fees from local government units, pursuant to G.S. 6-19.1(a), was denied because, in accordance with G.S. 150B-2(1a), local governmental units were not "agencies" for purposes of G.S. 6-19.1(a). Izydore v. City of Durham, 228 N.C. App. 397, 746 S.E.2d 324 (2013), review denied, 749 S.E.2d 851, 2013 N.C. LEXIS 1198 (2013).

In a dispute over funding for charter schools, attorneys' fees should not have been awarded under G.S. 6-19.1 because a local school board was not a state agency. Local school boards were not state agencies for purposes of the Administrative Procedures Act simply because the local boards could have been considered agents for the state under certain circumstances. Thomas Jefferson Classical Acad. Charter Sch. v. Cleveland County Bd. of Educ., 236 N.C. App. 207, 763 S.E.2d 288 (2014).

Trial court erred as a matter of law by awarding a heating company attorneys' fees because the language of the statute excluded a disciplinary action by a licensing board from the statute; based on the plain language of the statute, including not only the words but also the punctuation and ordering of phrases, disciplinary actions by licensing boards are not within the scope of the statute. Winkler v. N.C. State Bd. of Plumbing, 261 N.C. App. 106, 819 S.E.2d 105 (2018), aff'd, 374 N.C. 726, 843 S.E.2d 206, 2020 N.C. LEXIS 493 (2020).

When a state university was found to have improperly placed a tenured professor on unpaid leave, due to criminal conduct, without following tenure policies, it was not an abuse of discretion to deny the professor's request for attorney's fees because (1) the university did not act without substantial justification, in light of the circumstances existing at the time the university acted, and (2) special circumstances existed making such an award unjust, based on the university's responsibility to manage public funds and the professor's choices that precipitated the dispute. Frampton v. Univ. of N.C. 255 N.C. App. 15, 803 S.E.2d 862 (2017), review denied, 805 S.E.2d 687, 2017 N.C. LEXIS 865 (N.C. 2017).

State Action Not Found. - Trial court did not err in denying local boards' motion for attorneys' fees in their suit seeking to remedy educational deficiencies because, inter alia, the state took no affirmative actions against the local boards, and the state's failure to act was not be extrapolated into "state action" for purposes of G.S. 6-19.1. Hoke County Bd. of Educ. v. State, 198 N.C. App. 274, 679 S.E.2d 512 (2009).

Local School Boards Not Agency. - Local school boards are not state agencies for purposes of the North Carolina Administrative Procedures Act and the statute relating to awards of attorneys' fees for parties prevailing against a state agency simply because they may be considered agents of the state in certain circumstances. Therefore, charter schools should not have been awarded attorneys' fees in a fund dispute with a local school board. Thomas Jefferson Classical Acad. Charter Sch. v. Cleveland County Bd. of Educ., 236 N.C. App. 207, 763 S.E.2d 288 (2014).

Plaintiff Not Entitled to Attorney's Fees. - When a state university was found to have improperly placed a tenured professor on unpaid leave, due to criminal conduct, without following tenure policies, it was not an abuse of discretion to deny the professor's request for attorney's fees because, even if the university's actions were not substantially justified at the time the university acted and no special circumstances made such an award unjust, such an award was still entirely discretionary. Frampton v. Univ. of N.C. 255 N.C. App. 15, 803 S.E.2d 862 (2017), review denied, 805 S.E.2d 687, 2017 N.C. LEXIS 865 (N.C. 2017).

Applied in Tay v. Flaherty, 100 N.C. App. 51, 394 S.E.2d 217 (1990); State ex rel. Envtl. Mgt. Comm'n v. House of Raeford Farms, Inc., 101 N.C. App. 433, 400 S.E.2d 107 (1991); Able Outdoor, Inc. v. Harrelson, 113 N.C. App. 483, 439 S.E.2d 245 (1994).

Cited in In re Magee, 87 N.C. App. 650, 362 S.E.2d 564 (1987); S.E.T.A. UNC-CH, Inc. v. Huffines, 107 N.C. App. 440, 420 S.E.2d 674 (1992); Williams v. North Carolina Dep't of Economic & Community Dev., 119 N.C. App. 535, 458 S.E.2d 750 (1995); North Carolina Dep't of Cors. v. Myers, 120 N.C. App. 437, 462 S.E.2d 824 (1995); H.B.S. Contractors v. Cumberland County Bd. of Educ., 122 N.C. App. 49, 468 S.E.2d 517 (1996); Gordon v. N.C. Dep't of Corr., 173 N.C. App. 22, 618 S.E.2d 280 (2005); Kitchin v. Halifax County, 192 N.C. App. 559, 665 S.E.2d 760 (2008), review dismissed, as moot, 363 N.C. 127, 673 S.E.2d 136 (2009), review denied, 363 N.C. 127, 673 S.E.2d 135 (2009); Whitworth v. Whitworth, 222 N.C. App. 771, 731 S.E.2d 707 (2012).


§ 6-19.2: Repealed by Session Laws 1995, c. 388, s. 6.

§ 6-20. Costs allowed or not, in discretion of court.

In actions where allowance of costs is not otherwise provided by the General Statutes, costs may be allowed in the discretion of the court. Costs awarded by the court are subject to the limitations on assessable or recoverable costs set forth in G.S. 7A-305(d), unless specifically provided for otherwise in the General Statutes.

History

(Code, s. 527; Rev., s. 1267; C.S., s. 1243; 2007-212, s. 2.)

Cross References. - As to costs where new trial is granted, see G.S. 6-33 and the note thereto.

Legal Periodicals. - For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

For comment, "Murky Water: What Really Is Taxed as Court Costs in North Carolina?," see 32 Campbell L. Rev. 127 (2009).

CASE NOTES

The purpose of this provision is to give the court authority to allow costs, as the justice of the case may require. Gulley v. Macy, 89 N.C. 343 (1883); Parton v. Boyd, 104 N.C. 422, 10 S.E. 490 (1889).

In North Carolina costs are taxed on the basis of statutory authority, etc. Estate of Smith ex rel. Smith v. Underwood, 127 N.C. App. 1, 487 S.E.2d 807, cert. denied, 347 N.C. 398, 494 S.E.2d 410 (1997).

Plain meaning of G.S. 7A-320, and of G.S. 6-1, and G.S. 6-20 precluded a finding that any reasonable and necessary litigation expenses could be taxed as costs against a non-prevailing opposing party; pursuant to North Carolina Supreme Court precedent, the only expenses which could be taxed as costs were those specifically authorized by statute. DOT v. Charlotte Area Manufactured Hous., Inc., 160 N.C. App. 461, 586 S.E.2d 780 (2003).

In a condemnation action, the prevailing landowner's map expenses were not taxable as costs against the opposing condemning authority because G.S. 7A-305(d) did not mention maps, and G.S. 6-20 did not, on its face, make map expenses taxable. DOT v. Charlotte Area Manufactured Hous., Inc., 160 N.C. App. 461, 586 S.E.2d 780 (2003).

Section Inapplicable to Contempt Proceeding. - Although labeled "civil" contempt, a proceeding as for contempt is by no means a civil action or proceeding to which G.S. 6-18, providing when costs shall be allowed to plaintiff as a matter of course, or this section would apply. United Artists Records, Inc. v. Eastern Tape Corp., 18 N.C. App. 183, 196 S.E.2d 598, cert. denied, 283 N.C. 666, 197 S.E.2d 880 (1973); Green v. Crane, 96 N.C. App. 654, 386 S.E.2d 757 (1990).

A North Carolina court has no authority to award damages in the form of costs to a private party in a contempt proceeding. Green v. Crane, 96 N.C. App. 654, 386 S.E.2d 757 (1990).

When the trial court found plaintiff in contempt under G.S. 5A-21, it erred in awarding attorney fees to defendant as sanctions; such an award was not authorized by statute, as G.S. 6-18 and G.S. 6-20, governing costs, did not apply to a contempt proceeding. Sea Ranch II Owners Ass'n v. Sea Ranch II, Inc., 180 N.C. App. 230, 636 S.E.2d 307 (2006), review denied, stay denied, 361 N.C. 357, 644 S.E.2d 233 (2007), mot. dismissed, 361 N.C. 357, 644 S.E.2d 234 (2007).

But Attorney's Fees Permissible. - Although neither the provisions of G.S. 6-18 or this section are applicable to an action for civil contempt a trial court may properly award attorney's fees to a plaintiff who prevails in a civil contempt action. The Appellate Court has approved the allowance of attorney's fees in contempt actions where such fees were expressly authorized by statute as in the case of child support. Smith v. Smith, 121 N.C. App. 334, 465 S.E.2d 52 (1996).

Attorney's Fees Must Be Permitted by Another Section. - This section does not authorize a trial court to include attorney's fees as a part of the costs awarded unless specifically permitted by another statute. Lee Cycle Ctr., Inc. v. Wilson Cycle Ctr., Inc., 143 N.C. App. 1, 545 S.E.2d 745 (2001).

In a suit for the breach of a commercial lease, the trial court did not err in not awarding attorney fees under G.S. 6-20; G.S. 6-20 did not authorize a trial court to include attorney fees as a part of the costs awarded under that section, unless specifically permitted by another statute, and plaintiff had not pointed to any statute that allowed an award of attorney fees in breach of contract cases. N.C. Indus. Capital, LLC v. Clayton, 185 N.C. App. 356, 649 S.E.2d 14 (2007).

Construction with Other Law. - The trial court did not abuse its discretion and violate G.S. 7A-305 in taxing the expert witness fees to appellant patient pursuant to this section after he voluntarily dismissed his negligence suit pursuant to G.S. 1A-1, Rule 41 on the day of trial; costs which are to be taxed under Rule 41(d) include those costs enumerated in G.S. 7A-305(d), and that section does not preclude liability for other costs such as those outlined in this section. Lewis v. Setty, 140 N.C. App. 536, 537 S.E.2d 505 (2000).

Trial court's decision finding that it did not have the authority to award a successful litigant in a condemnation case the appraisal fees incurred by the litigant as costs taxable against the non-prevailing condemning authority was consistent with precedent of the North Carolina Supreme Court, as well as G.S. 6-20. DOT v. Charlotte Area Manufactured Hous., Inc., 160 N.C. App. 461, 586 S.E.2d 780 (2003).

G.S. 7A-320 Does Not Abrogate Court's Authority Under This Section. - Under G.S. 7A-305, which specifies in subsection (d) the costs recoverable in civil actions, and also provides in subsection (e) that nothing in this section shall affect the liability of the respective parties for costs as provided by law, the authority of trial courts to tax deposition expenses as costs pursuant to G.S. 6-20 remains undisturbed, regardless of the language of G.S. 7A-320. Alsup v. Pitman, 98 N.C. App. 389, 390 S.E.2d 750 (1990).

Award of Costs Mandatory. - As a trial court was required, pursuant to controlling precedents, to award certain costs to prevailing defendants under G.S. 7A-305(d) without exercising discretion under G.S. 6-20, a determination as to the reasonableness and necessity of expenses for experts and deposition assistance under G.S. 7A-305(d)(10), (11), and G.S. 7A-314 was mandated. Khomyak v. Meek, 214 N.C. App. 54, 715 S.E.2d 218 (2011), review denied, 720 S.E.2d 392, 2012 N.C. LEXIS 31 (2012).

Award of Costs Discretionary, Not Mandatory. - Where plaintiff took voluntary dismissal, and then refiled, defendants were not entitled to expert witness fees, deposition transcripts, court reporter fees, or attorney travel costs under G.S. 1A-1, Rule 41(a); assuming, arguendo, that all the expenses denied by the trial court were recoverable as common law costs under G.S. 6-20, such an award was permissive, not mandatory. Cosentino v. Weeks, 160 N.C. App. 511, 586 S.E.2d 787 (2003).

Negligence cases were not listed among the types of actions in which costs had to be awarded to a prevailing party pursuant to either G.S. 6-18 or G.S. 6-19; therefore, the trial court's costs ruling was governed by G.S. 6-20, and costs could be allowed or not, in the discretion of the court. Smith v. Cregan, 178 N.C. App. 519, 632 S.E.2d 206 (2006).

Previously under G.S. 6-20 (prior to its amendment by Session Laws 2007-212, s. 2), an award of costs was left to the discretion of the court; although deposition costs were not specifically enumerated, they were common law costs that could be awarded under G.S. 6-20. While there was divergent case law with respect to whether deposition costs were recoverable, an employee had not shown that the trial court abused its discretion in awarding deposition costs to the prevailing party. McDonnell v. Tradewind Airlines, Inc., 194 N.C. App. 674, 670 S.E.2d 302 (2009), review denied, 363 N.C. 128, 675 S.E.2d 657 (2009).

Exercise of Discretion Presumed. - Nothing to the contrary appearing, it will be taken that the court gave judgment in the exercise of its discretion as provided in this section. Gulley v. Macy, 89 N.C. 343 (1883); Wooten v. Walters, 110 N.C. 251, 14 S.E. 734 (1892).

Standard of Review on Appeal. - Appellate court, pursuant to G.S. 6-20, used an abuse of discretion standard to review a trial court's cost assessments under G.S. 7A-305(d). Vaden v. Dombrowski, 187 N.C. App. 433, 653 S.E.2d 543 (2007).

Discretion Not Reviewable. - By this section the taxing of costs is placed in the discretion of the trial judge, which discretion is not reviewable. Kluttz v. Allison, 214 N.C. 379, 199 S.E. 395 (1938); Chriscoe v. Chriscoe, 268 N.C. 554, 151 S.E.2d 33 (1966).

The exercise of the court's discretionary authority is not reviewable. Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963); Dixon, Odom & Co. v. Sledge, 59 N.C. App. 280, 296 S.E.2d 512 (1982).

Taxation of costs against the plaintiff is within the court's discretion and is not reviewable on appeal, the action being equitable in nature. Bumgarner & Bowman Bldrs. v. Hollar, 7 N.C. App. 14, 171 S.E.2d 60 (1969).

Trial court's taxing costs of costs to an injured party under G.S. 6-20 was not reviewable on appeal as the trial court specifically stated that the costs were awarded in the trial court's discretion. Griffis v. Lazarovich, 164 N.C. App. 329, 595 S.E.2d 797 (2004).

Appellate court did not review a trial court's decision to award costs as that award was made in the trial court's discretion. Castle McCulloch, Inc. v. Freedman, 169 N.C. App. 497, 610 S.E.2d 416 (2005), aff'd, 360 N.C. 57, 620 S.E.2d 674 (2005).

Costs Discretionary in Actions of An Equitable Nature. - In equity there was a broad discretion on the subject of costs, Little v. Lockman, 50 N.C. 433 (1858), and the allowance rested with the court. Worthy v. Brower, 93 N.C. 492 (1885); Hooper v. Davies, 166 N.C. 236, 81 S.E. 1063 (1914).

Even since the abolition of the courts of equity in this State, it is held that where the case partakes of an equitable nature, the question of costs is in the court's discretion. Thus where the jury found that each party was entitled to an undivided half in land, and the appeal was from taxing the defendant with costs, there being no element of an action in ejectment, neither party was permitted to recover costs from the other, especially as the question was of an equitable nature, and the taxing of costs was, under this section, in the sound discretion of the court. Hare v. Hare, 183 N.C. 419, 111 S.E. 620 (1922).

In actions of an equitable nature the costs are in the discretion of the court. Yates v. Yates, 170 N.C. 533, 87 S.E. 317 (1915).

If an action is equitable in nature the taxing of the costs is within the discretion of the court, and the court may allow costs in favor of one party or the other or require the parties to share the costs. Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963).

Taxing Costs in Personal Injury Cases. - Trial court did not err in taxing costs of defendant bakery company and its defendant driver to mother and minor son personal injury plaintiffs, as the bakery company and its driver were found not liable to the mother and minor son and taxing the costs to them was done within the court's discretion under G.S. 6-20. Sterling v. Gil Soucy Trucking, Ltd., 146 N.C. App. 173, 552 S.E.2d 674 (2001).

Although the trial court did not err when it awarded a pedestrian who was awarded $7,000 in damages after he was struck by a truck over $32,000 in attorneys' fees, it did err when it granted the pedestrian's request for reimbursement of costs he incurred to make photocopies, telephone calls, photographs, trial diagrams and exhibits, and to obtain medical reports and records, because those expenses were not recoverable as costs, pursuant to G.S. 7A-305. Overton v. Purvis, 162 N.C. App. 241, 591 S.E.2d 18 (2004).

Trial court erred in awarding numerous costs not authorized for medical reports, deposition costs, filing fees, travel costs, trial exhibits, color copies, and photocopies; there was statutory authority, however, for the following awards: mediation fees pursuant to G.S. 7A-305(d)(7); expert witness fees pursuant to G.S. 7A-305(d)(1); and service of process fees pursuant to G.S. 7A-305(d)(6). Oakes v. Wooten, 173 N.C. App. 506, 620 S.E.2d 39 (2005).

Apportionment of Costs. - Where a jury found that the allegations of the complaint with respect to the maintenance of the nuisance were true, the trial court, when it ordered the personal property sold, had discretionary power with respect to the apportionment of the costs. State ex rel. Morris v. Shinn, 262 N.C. 88, 136 S.E.2d 244 (1964).

Because plaintiff's legal fees and other costs were not recoverable as independent damages on a fraud claim, and he did not allege that he suffered any other damage, he failed to prove that he suffered legally cognizable damages as a result of a misrepresentation by defendant. Under North Carolina law, a successful litigant could not recover attorneys' fees, whether as costs or as an item of damages, unless such a recovery was expressly authorized by statute, and costs were recoverable only in certain listed types of cases, none of which applied, or at the discretion of the court to a prevailing party, which necessarily meant establishing a prima facie case that, in the context of fraud, had to include independent damages aside from costs. Hoch v. Hoch (In re Hoch), - Bankr. - (Bankr. E.D.N.C. Jan. 25, 2018).

A consolidated action, tried before the referee, in which judgments are rendered, is not an equitable proceeding, in which costs may be allowed or not, in the discretion of the court under this section. Highland Cotton Mills v. Ragan Knitting Co., 194 N.C. 80, 138 S.E. 428 (1927).

Creditor's Bill. - It is within the discretion of the trial court to tax the costs accruing upon either of the parties litigant, in an action in the nature of a creditor's bill, brought by materialmen, claiming under the statutory lien, the unpaid balance due by the owner of a dwelling, etc., to his contractor for its erection; and the action of the judge in taxing the trust funds in the owner's hands with the cost is commended in this suit. Bond v. Pickett Cotton Mills, Inc., 166 N.C. 20, 81 S.E. 936 (1914).

Specific Performance Generally. - Where the purpose of an action was simply to compel the specific performance of an executory contract, and to adjust certain rights involved in an account of moneys collected and certain indebtedness incident to that contract, it was clearly within this section. Parton v. Boyd, 104 N.C. 422, 10 S.E. 490 (1889).

In a class action for injunctive and declaratory relief against the collection of taxes on retirement benefits of certain state and local government retirees, creation of a "common fund" for the payment of attorney's fees and other costs incurred by the class representatives was proper. Bailey v. State, 348 N.C. 130, 500 S.E.2d 54 (1998).

Where one of the defendants in an injunction suit seeks affirmative relief by way of specific performance, the taxing of costs is in the discretion of the trial court, since the controversy is of an equitable nature. Consequently the order of the court apportioning the costs will not ordinarily be disturbed on appeal upon affirmance of the judgment. Chandler v. Cameron, 229 N.C. 62, 47 S.E.2d 528, 3 A.L.R.2d 571 (1948).

Setting Aside Proceedings of Probate Court. - Where the action is to set aside certain proceedings in the probate court, the court is vested with discretion in the matter of allowing costs, under this section; each party is ordered to pay his own and each to pay one half of the allowance to the referee. Gulley v. Macy, 89 N.C. 343 (1883).

Deposition Expenses. - As a general rule, recoverable costs may include deposition expenses unless it appears that the depositions were unnecessary. Even though deposition expenses do not appear expressly in the statutes they may be considered as part of "costs" and taxed in the trial court's discretion. Dixon, Odom & Co. v. Sledge, 59 N.C. App. 280, 296 S.E.2d 512 (1982); Alsup v. Pitman, 98 N.C. App. 389, 390 S.E.2d 750 (1990).

This section authorizes trial courts to tax deposition expenses as costs. Alsup v. Pitman, 98 N.C. App. 389, 390 S.E.2d 750 (1990).

Trial court had full authority to tax, in its discretion, deposition expenses as costs pursuant to G.S. 1A-1, Rule 41(d) and 6-20. Alsup v. Pitman, 98 N.C. App. 389, 390 S.E.2d 750 (1990).

Award of costs made to an engineering firm, after a trial court granted the firm a directed verdict, was modified to remove the award of deposition costs because, while G.S. 7A-305 permitted the court to award the firm costs for mediation fees, expert witness fees, and service of process fees for trial subpoenas, it did not grant the court statutory authority to award the deposition costs. Handex of the Carolinas, Inc. v. County of Haywood, 168 N.C. App. 1, 607 S.E.2d 25 (2005).

In a negligence case, deposition costs were recoverable as trial expenses under G.S. 6-20 because they were established by case law prior to the enactment of G.S. 7A-320 in 1983. Morgan v. Steiner, 173 N.C. App. 577, 619 S.E.2d 516 (2005).

When, in a personal injury case, a trial court ruled that it did not have discretion to tax a landowner's deposition costs against alleged injured parties, this was error, as the trial court had such discretion under G.S. 6-20, so the trial court's judgment was reversed to allow it to exercise this discretion. Walden v. Morgan, 179 N.C. App. 673, 635 S.E.2d 616 (2006).

Costs were properly allowed to a successful driver even though the driver's insurer paid all of his costs, as: (1) the judgment was entered for the driver and the costs award did not violate G.S. 6-1; (2) the driver incurred the expenses; (3) the award of an arbitration fee was specifically allowed in G.S. 7A-305(d)(7); (4) it was not an abuse of discretion under G.S. 6-20 to award the deposition fee; and (5) the preparation time fees of a driver's reconstruct expert were properly allowed. Hoffman v. Oakley, 184 N.C. App. 677, 647 S.E.2d 117 (2007).

Cost of an Independent Appraiser's Valuation Report - The trial court acted within its discretion when it taxed the entire cost of an independent appraiser's valuation report to the defendants/majority stockholders of a closely-held corporation, as allowed under G.S. 7A-305(d), and ignored or effectually amended the court's pre-trial case management order, in which the court stated that appraisal costs would be shared by both parties. Royals v. Piedmont Elec. Repair Co., 137 N.C. App. 700, 529 S.E.2d 515 (2000).

Other Reasonable and Necessary Costs. - While case law has found that deposition costs are allowable under this section, it has in no way precluded the trial court from taxing other costs that may be reasonable and necessary. Minton v. Lowe's Food Stores, 121 N.C. App. 675, 468 S.E.2d 513 (1996).

Line of decisions from the North Carolina Court of Appeals holding that trial courts have broad authority under G.S. 6-20 to tax any expenses deemed "reasonable and necessary" were not consistent with the context and plain meaning of G.S. 6-20 or with controlling precedent of the North Carolina Supreme Court. DOT v. Charlotte Area Manufactured Hous., Inc., 160 N.C. App. 461, 586 S.E.2d 780 (2003).

Trial court did not err in citing G.S. 6-20 as well as G.S. 7A-305(d) as the basis for its award of costs because there was not dispute that the trial court only taxed costs permitted by G.S. 7A-305(d) in its order; the inclusion of G.S. 6-20 in the order did not prejudice plaintiffs. Perry v. GRP Fin. Servs. Corp., 196 N.C. App. 41, 674 S.E.2d 780 (2009).

Award of Costs for Expert Witnesses. - For case upholding award to plaintiffs as costs of charges of expert witnesses for time spent outside trial and expenses for expert witnesses who testified about the standard of care applicable to nurses in similar communities, see Campbell ex rel. McMillan v. Pitt County Mem. Hosp., 84 N.C. App. 314, 352 S.E.2d 902, aff'd, 321 N.C. 260, 362 S.E.2d 273 (1987), overruled on other grounds, Johnson v. Ruark Ob. & Gyn. Assocs., 327 N.C. 283, 395 S.E.2d 85 (1990), rehearing denied, 327 N.C. 644, 399 S.E.2d 133 (1990).

Trial court did not exceed its discretionary authority in assessing expert witness fees for the testimony of three physicians, even though they all were used to prove identical facts in issue. Brown v. Flowe, 128 N.C. App. 668, 496 S.E.2d 830 (1998), rev'd on other grounds, 349 N.C. 520, 507 S.E.2d 894 (1998).

Even though about $170,000 was requested, a partial award of $1,726.25 for expert witness costs was not an abuse of discretion under G.S. 6-20 as expert witness fees were discretionary, "common law" costs that were not provided for in G.S. 7A-305(d); the trial judge, who presided over 20 days of trial, was in the best position to assess whether the costs were justified under G.S. 1A-1, N.C. R. Civ. P. 41(d). Bennett v. Equity Residential, 192 N.C. App. 512, 665 S.E.2d 514 (2008).

Although the expert's work was relied upon by the trial court in its alimony order, and although the husband provided no expert of his own, there did not appear to be a basis upon which the expert could have been considered a court-appointed expert; thus, the trial court erred in awarding expert fees as costs, except inasmuch as those fees encompassed fees for testimony only. Slaughter v. Slaughter, 254 N.C. App. 430, 803 S.E.2d 419 (2017), review dismissed, as moot, 806 S.E.2d 41, 2017 N.C. LEXIS 906 (N.C. 2017).

Denial of Costs for Expert Witnesses. - Since the trial court's costs ruling was governed by G.S. 6-20, and thus could be allowed at the discretion of the court, and the doctors had not alleged, and there appeared to the appellate court to be no abuse of discretion in the denial of their request to be reimbursed for the expert witness fees where the verdict was in their favor, the judgment was affirmed. Smith v. Cregan, 178 N.C. App. 519, 632 S.E.2d 206 (2006).

Costs for Trial Exhibits in a Negligence Action. - The trial court rightly exercised its discretion and allowed costs for trial exhibits to be taxed to the appellant patient where the appellee doctor did not receive notice of his voluntary dismissal until the day of trial; the costs were reasonable and necessary pursuant to this section although trial exhibit costs are not enumerated in G.S. 7A-305(d). Lewis v. Setty, 140 N.C. App. 536, 537 S.E.2d 505 (2000).

While decisions of the North Carolina Court of Appeals had found a trial court had the discretion, under G.S. 6-20, to order the reimbursement of a party for trial expenses, this was contrary to precedent of the North Carolina Supreme Court, limiting a trial court's authority concerning tax costs to those expenses specifically statutorily authorized, and the North Carolina General Statutes did not explicitly authorize a trial court to tax expenses related to trial exhibits. DOT v. Charlotte Area Manufactured Hous., Inc., 160 N.C. App. 461, 586 S.E.2d 780 (2003).

The authority of the court to tax costs in an action to recover under uninsured motorist provisions of an insurance policy is not dependent on either the insurance policy or G.S. 20-279.21(b)(3). Ensley v. Nationwide Mut. Ins. Co., 80 N.C. App. 512, 342 S.E.2d 567, cert. denied, 318 N.C. 414, 349 S.E.2d 594 (1986).

Court-Appointed Experts. - While ordinarily the costs of an expert may only be awarded for testimony given, the costs of a court-appointed expert are not subject to such limitation. Slaughter v. Slaughter, 254 N.C. App. 430, 803 S.E.2d 419 (2017), review dismissed, as moot, 806 S.E.2d 41, 2017 N.C. LEXIS 906 (N.C. 2017).

Experts Must Be Subpoenaed. - Where one expert was not served with a subpoena and another was unsure as to what a subpoena was, the trial court did not have the authority to order defendants to pay expert witness expenses as costs. Rogers v. Sportsworld of Rocky Mount, Inc., 134 N.C. App. 709, 518 S.E.2d 551 (1999).

Travel expenses of a party are not an assessable cost. Crist v. Crist, 145 N.C. App. 418, 550 S.E.2d 260 (2001).

Estates. - Where questions regarding inheritance arise concerning the estate of the deceased, a court may award attorney's fees if legitimate claims exist. Batcheldor v. Boyd, 119 N.C. App. 204, 458 S.E.2d 1 (1995).

Bond Premium Tax. - This section, which vests the trial judge with discretionary authority to allow costs as justice may require, provided statutory authority for judge's decision to tax defendant's bond premiums, paid pursuant to G.S. 1-111, against plaintiff. Minton v. Lowe's Food Stores, 121 N.C. App. 675, 468 S.E.2d 513 (1996).

Unable to Recover Litigation Costs or Attorney's Fees. - Inmate, who had obtained a verdict against a deputy sheriff with regard to an assault and battery suit, was unable to recover litigation costs or attorney's fees, because no statutory authority existed allowing such recovery to a prevailing party in a civil assault case. Cunningham v. Riley, - N.C. App. - , - S.E.2d - (Mar. 15, 2005).

Jurisdiction of Trial Court to Award. - Pursuant to G.S. 1-294, a trial court did not have jurisdiction to decide the issue of attorney fees after a county and its board of commissioners had filed their notice of appeal from the judgment in favor of a chairman of a county airport authority who had been improperly removed from his position; an exception did not apply, as the award of attorney fees under G.S. 6-1, G.S. 6-20, G.S. 6-19.1, G.S. 7A-314, and G.S. 143-318.16B was based upon the chairman being the prevailing party. McClure v. County of Jackson, 185 N.C. App. 462, 648 S.E.2d 546 (2007).

Mathematical Miscalculation Required Remand. - In a former employee's action, arising from disputed benefits under his severance agreement, an award of costs to the employer, as the prevailing party, was within the trial court's discretion, but a mathematical error in the calculations thereof warranted a remand. McKinnon v. CV Indus., 228 N.C. App. 190, 745 S.E.2d 343 (2013).

Applied in Wade v. Wade, 72 N.C. App. 372, 325 S.E.2d 260 (1985); True v. T & W Textile Mach., Inc., 112 N.C. App. 358, 435 S.E.2d 551 (1993), cert. granted, 335 N.C. 555, 441 S.E.2d 134, aff'd per curiam, 337 N.C. 798, 448 S.E.2d 514 (1994); Delta Envtl. Consultants of N.C. Inc. v. Wysong & Miles Co., 132 N.C. App. 160, 510 S.E.2d 690 (1999); Coffman v. Roberson, 153 N.C. App. 618, 571 S.E.2d 255 (2002), cert. denied, 356 N.C. 668, 577 S.E.2d 111 (2003); Lord v. Customized Consulting Specialty, Inc., 164 N.C. App. 730, 596 S.E.2d 891 (2004); Miller v. Forsyth Mem'l Hosp., Inc., 173 N.C. App. 385, 618 S.E.2d 838 (2005); Priest v. Safety-Kleen Sys., 191 N.C. App. 341, 663 S.E.2d 351 (2008); Justus v. Rosner, 254 N.C. App. 55, 802 S.E.2d 142 (2017), aff'd, in part, remanded, 2018 N.C. LEXIS 1136 (2018).

Cited in Ward v. Taylor, 68 N.C. App. 74, 314 S.E.2d 814 (1984); Brown v. Rhyne Floral Supply Mfg. Co., 89 N.C. App. 717, 366 S.E.2d 894 (1988); Powers v. Powers, 103 N.C. App. 697, 407 S.E.2d 269 (1991); Brandenburg Land Co. v. Champion Int'l Corp., 107 N.C. App. 102, 418 S.E.2d 526 (1992); Wachovia Bank v. Bob Dunn Jaguar, Inc., 117 N.C. App. 165, 450 S.E.2d 527 (1994); Tate Terrace Realty Investors, Inc. v. Currituck County, 127 N.C. App. 212, 488 S.E.2d 845 (1997), cert. denied, 347 N.C. 409, 496 S.E.2d 394 (1997); Sara Lee Corp. v. Carter, 129 N.C. App. 464, 500 S.E.2d 732 (1998), rev'd on other grounds, 351 N.C. 27, 519 S.E.2d 308 (1999); Harborgate Prop. Owners Ass'n v. Mt. Lake Shores Dev. Corp., 145 N.C. App. 290, 551 S.E.2d 207 (2001); Murphy Family Farms v. N.C. Dep't of Env't & Natural Res., 160 N.C. App. 338, 585 S.E.2d 446 (2003), cert. granted, 358 N.C. 155, 592 S.E.2d 690 (2004); House v. Stone, 163 N.C. App. 520, 594 S.E.2d 130 (2004); Lord v. Customized Consulting Specialty, Inc., 182 N.C. App. 635, 643 S.E.2d 28 (2007); Kelly v. N.C. Dep't of Env't & Natural Res., 192 N.C. App. 129, 664 S.E.2d 625 (2008); Jarrell v. Charlotte-Mecklenburg Hosp. Auth., 206 N.C. App. 559, 698 S.E.2d 190 (2010); Springs v. City of Charlotte, - N.C. App. - , 701 S.E.2d 700 (Nov. 16, 2010); Springs v. City of Charlotte, 209 N.C. App. 271, 704 S.E.2d 319 (2011); Peters v. Pennington, 210 N.C. App. 1, 707 S.E.2d 724 (2011); Khomyak v. Meek, 214 N.C. App. 54, 715 S.E.2d 218 (2011), review denied, 720 S.E.2d 392, 2012 N.C. LEXIS 31 (2012); Lake Toxaway Cmty. Ass'n v. RYF Enters., LLC, 226 N.C. App. 483, 742 S.E.2d 555 (2013), review dismissed, as moot, 747 S.E.2d 545, 2013 N.C. LEXIS 827 (2013), review denied, 747 S.E.2d 545, 2013 N.C. LEXIS 831 (2013); Tyll v. Berry, 234 N.C. App. 96, 758 S.E.2d 411 (2014); Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014); Lassiter v. N.C. Baptist Hosps., Inc., 368 N.C. 367, 778 S.E.2d 68 (2015).


§ 6-21. Costs allowed either party or apportioned in discretion of court.

Costs in the following matters shall be taxed against either party, or apportioned among the parties, in the discretion of the court:

  1. Application for years' support, for surviving spouse or children.
  2. Caveats to wills and any action or proceeding that may require the construction of any will or trust agreement, or fix the rights and duties of parties under any will or trust agreement. In any caveat proceeding under this subdivision, the court shall allow attorneys' fees for the attorneys of the caveators only if it finds that the proceeding has substantial merit.
  3. Habeas corpus. The court shall direct which officer shall tax the costs of the proceeding.
  4. In actions for divorce or alimony. The court may, both before and after judgment, make any order respecting the payment of costs incurred by either spouse from the sole and separate estate of either spouse, as may be just.
  5. Application for the establishment, alteration, or discontinuance of a public road, cartway, or ferry. The board of county commissioners in its discretion may assess the costs incurred before the board.
  6. The compensation of referees and commissioners to take depositions.
  7. All costs and expenses incurred in special proceedings for the partition of real or personal property under Chapter 46A of the General Statutes, except that attorneys' fees shall be assessed in accordance with G.S. 46A-3.
  8. In all proceedings under Chapter 156 of the General Statutes relating to drainage, except as otherwise provided in that Chapter.
  9. Repealed by Session Laws 2020-23, s. 10, effective October 1, 2020.
  10. In proceedings under Article 3 of Chapter 49 of the General Statutes regarding children born out of wedlock.
  11. In custody proceedings under Chapter 50A of the General Statutes.
  12. In actions brought for misappropriation of a trade secret under Article 24 of Chapter 66 of the General Statutes.

The word "costs" as used in this section includes reasonable attorneys' fees in whatever amounts the court in its discretion determines and allows. Attorneys' fees in actions for alimony, however, shall not be included in the costs as provided in this section but shall be determined and provided for in accordance with G.S. 50-16.4.

History

(Code, ss. 533, 1294, 1323, 1422, 1660, 2039, 2056, 2134, 2161; 1889, c. 37; 1893, c. 149, s. 6; Rev., s. 1268; C.S., s. 1244; 1937, c. 143; 1955, c. 1364; 1965, c. 633; 1967, c. 993, s. 2; c. 1152, s. 5; 1977, c. 576; 1979, c. 110, s. 3; 1981, c. 809, s. 1; c. 890, s. 2; 2013-198, s. 1; 2020-23, ss. 7, 10.)

Local Modification. - Edgecombe: 1953, c. 737; Johnston: 1967, c. 835; Nash: 1939, c. 46; 1941, c. 18; 1953, c. 737.

Editor's Note. - The reference in subdivision (12) of this section to Article 24 of Chapter 66 is as directed by the Revisor of Statutes. The reference in Session Laws 1981, c. 890 had been to Article 22 of Chapter 66, which was recodified as Article 24 thereof.

Session Laws 2020-23, s. 18, made the substitution of "partition of real or personal property under Chapter 46A of the General Statutes, except that attorneys' fees shall be assessed in accordance with G.S. 46A-3" for "division or sale of either real estate or personal property under the Chapter entitled Partition" in subdivision (7) of this section by Session Laws 2020-23, s. 7, effective October 1, 2020, and applicable to partition proceedings commenced on or after that date.

Effect of Amendments. - Session Laws 2013-198, s. 1, effective June 26, 2013, rewrote subsection (10), which formerly read "In proceedings regarding illegitimate children under Article 3, Chapter 49 of the General Statutes."

Session Laws 2020-23, s. 7, substituted "partition of real or personal property under Chapter 46A of the General Statutes, except that attorneys' fees shall be assessed in accordance with G.S. 46A-3" for "division or sale of either real estate or personal property under the Chapter entitled Partition" in subdivision (7). For effective date and applicability, see editor's note.

Session Laws 2020-23, s. 10, effective October 1, 2020, rewrote the section.

Legal Periodicals. - For article discussing the effect of the 1937 amendment to this section and the history of attorneys' fees as costs in this State, see 15 N.C.L. Rev. 333 (1937).

For discussion as to attorneys' fees being awarded a successful litigant, see 38 N.C.L. Rev. 156 (1960).

For survey of 1976 case law on wills, trusts and estates, see 55 N.C.L. Rev. 1109 (1977).

For survey of 1977 law on wills, trusts and estates, see 56 N.C.L. Rev. 1152 (1978).

For survey of 1981 property law, see 60 N.C.L. Rev. 1420 (1982).

For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

For note, "A Public Goods Approach to Calculating Reasonable Fees under Attorney Fee Shifting Statutes," see 1989 Duke L.J. 438.

CASE NOTES

I. GENERAL CONSIDERATION.

Attorneys' Fees Generally. - Ordinarily attorneys' fees are taxable as costs only when expressly authorized by statute. Horner v. Chamber of Commerce, 236 N.C. 96, 72 S.E.2d 21 (1952). For note commenting on this case see 31 N.C.L. Rev. 115 (1952).

Except as otherwise provided by this section, attorneys' fees are not now regarded as part of the court costs in North Carolina. Wachovia Bank & Trust Co. v. Schneider, 235 N.C. 446, 70 S.E.2d 578 (1952); Horner v. Chamber of Commerce, 236 N.C. 96, 72 S.E.2d 21 (1952); Rider v. Lenoir County, 238 N.C. 632, 78 S.E.2d 745 (1953); Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963); Perkins v. American Mut. Fire Ins. Co., 4 N.C. App. 466, 167 S.E.2d 93 (1969).

This section authorizes attorneys' fees in certain enumerated actions to be taxed as a part of the costs, to be paid out of the fund which is the subject matter of the action. Rider v. Lenoir County, 238 N.C. 632, 78 S.E.2d 745 (1953).

In the types of cases enumerated in this section, attorneys' fees may be included as a part of the costs in such amounts as the court in its discretion determines and allows. Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963).

Fees for Services Pursuant to Void Contract. - A trial court has no discretion to award statutory legal fees for services rendered in a child custody and support action pursuant to a contract void as against public policy. Davis v. Taylor, 81 N.C. App. 42, 344 S.E.2d 19, cert. denied, 318 N.C. 414, 349 S.E.2d 593 (1986).

Attorneys' Fees and Costs in Drainage Law. - Assuming that G.S. 105-374(i) is incorporated by reference into Chapter 156, because the section provides for attorneys' fees for taxing authorities does not mean that it prohibits attorneys' fees being taxed as part of the costs for members of drainage districts. Northampton County Drainage Dist. Number One v. Bailey, 326 N.C. 742, 392 S.E.2d 352 (1990).

This section provides for an award of costs in all actions under the drainage chapter and authorizes award of attorneys' fees to members of drainage district in action brought by district seeking to collect unpaid assessments and G.S. 105-374(i) even if incorporated by reference into Chapter 156 does not prohibit attorneys' fees from being taxed as part of the costs for members of drainage districts. Northampton County Drainage Dist. Number One v. Bailey, 326 N.C. 742, 392 S.E.2d 352 (1990).

Jurisdiction to Award Fees After Appeal Filed. - The trial court lacked jurisdiction to award attorney fees to the trust settlor's adopted grandchildren after the settlor's natural grandchildren filed an appeal of the judgment deciding that the adopted grandchildren were entitled to share in distribution of the trust. Gibbons v. Cole, 132 N.C. App. 777, 513 S.E.2d 834 (1999).

As to award of attorneys' fees in particular actions, see annotations under analysis lines II (A)-(F).

As to the difference between including attorneys' fees in the costs taxed against a party to a lawsuit and in ordering the payment of attorneys' fees, see Smith v. Price, 315 N.C. 523, 340 S.E.2d 408 (1986).

Application in Trade Secrets Cases. - Trial court's denial of defendants' motion for attorney fees was proper in a trade secrets case because attorney fees may have been awarded to the prevailing party if a claim of misappropriation was made in bad faith or if willful and malicious misappropriation existed regardless of the language of G.S. 6-21. Bruning & Federle Mfg. Co. v. Mills, 185 N.C. App. 153, 647 S.E.2d 672 (2007), cert. denied, 362 N.C. 86, 655 S.E.2d 837 (2007).

Appropriate Under the UTMA. - In a judgment removing the father as custodian of all accounts created under the North Carolina Uniform Transfers to Minors Act, G.S. 33A-1 et seq., an award of attorney fees was proper because the legislative history of the uniform UTMA statute indicated that custodial accounts under UTMA were to be regarded as a form of statutory trust. Thus, there existed statutory authority under G.S. 6-21(2) for an award of attorney's fees in an action for the removal of a custodian and for an accounting and determination of personal liability under UTMA. Belk v. Belk, 221 N.C. App. 1, 728 S.E.2d 356 (2012).

Judicial Review. - The exercise of the court's discretionary authority is not reviewable. Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1962); Davis v. Davis, 58 N.C. App. 25, 293 S.E.2d 268, cert. denied, 307 N.C. 127, 297 S.E.2d 399 (1982).

The decision to award counsel fees is within the discretion of the trial court, and the Court of Appeals will not disturb what it deems to be a sound exercise of that discretion.

If the findings of the superior court regarding an award of attorney's fees in a caveat proceeding are supported by the evidence the reviewing court cannot disturb them. Dyer v. State, 331 N.C. 374, 416 S.E.2d 1 (1992).

Costs Properly Denied. - Trial court did not err in failing to assess costs against the daughters because nothing of record in the appeal gave rise to an inference that the trial court abused its discretion in refusing to tax the costs of the action against the daughters, who were the prevailing parties; the daughters' success on the merits belied the assertion that maintenance of their claims was improper. Harris v. Gilchrist, 246 N.C. App. 67, 785 S.E.2d 119 (2016), review denied, 793 S.E.2d 223, 2016 N.C. LEXIS 846 (2016).

Applied in Field v. Wheeler, 120 N.C. 264, 26 S.E. 812 (1897); Tyser v. Sears, 252 N.C. 65, 112 S.E.2d 750 (1960); Dillon v. North Carolina Nat'l Bank, 6 N.C. App. 584, 170 S.E.2d 571 (1969); Citizens Nat'l Bank v. Grandfather Home for Children, Inc., 280 N.C. 354, 185 S.E.2d 836 (1972); Keener v. Korn, 46 N.C. App. 214, 264 S.E.2d 829 (1980); Wake County ex rel. Denning v. Ferrell, 71 N.C. App. 185, 321 S.E.2d 913 (1984); National Medical Enters., Inc. v. Sandrock, 72 N.C. App. 245, 324 S.E.2d 268 (1985); Lash ex rel. Wilson v. Lash, 107 N.C. App. 755, 421 S.E.2d 615 (1992); Beau Rivage Plantation, Inc. v. Melex USA, Inc., 112 N.C. App. 446, 436 S.E.2d 152 (1993).

Cited in Perry v. Pulley, 206 N.C. 701, 175 S.E. 89 (1934); Hinkle v. Hinkle, 266 N.C. 189, 146 S.E.2d 73 (1966); In re King, 281 N.C. 533, 189 S.E.2d 158 (1972); City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972); Norman v. Royal Crown Bottling Co., 49 N.C. App. 656, 272 S.E.2d 355 (1980); In re North Carolina Nat'l Bank, 52 N.C. App. 353, 278 S.E.2d 330 (1981); Dorsey v. Dorsey, 53 N.C. App. 622, 281 S.E.2d 429 (1981); In re Cooper, 81 N.C. App. 27, 344 S.E.2d 27 (1986); Casstevens v. Wagoner, 99 N.C. App. 337, 392 S.E.2d 776 (1990); Tew v. West, 143 N.C. App. 534, 546 S.E.2d 183 (2001); Handex of the Carolinas, Inc. v. County of Haywood, 168 N.C. App. 1, 607 S.E.2d 25 (2005); Pritchett & Burch, PLLC v. Boyd, 169 N.C. App. 118, 609 S.E.2d 439 (2005); Bennett v. Equity Residential, 192 N.C. App. 512, 665 S.E.2d 514 (2008); In re T.R.T., 225 N.C. App. 567, 737 S.E.2d 823 (2013); Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

II. COSTS IN PARTICULAR ACTIONS.
A. CAVEATS TO WILLS.

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Editor's Note. - Most of the cases below were decided prior to the amendment to subdivision (2) of this section by Session Law 1981, c. 809, s. 1.

Discretion of Court. - It is within the discretionary power of the court before which an issue of devisavit vel non is tried to direct the payment of the costs out of the estate. Mayo v. Jones, 78 N.C. 406 (1878). See In re Will of Hargrove, 206 N.C. 307, 173 S.E. 577 (1934), for dicta on this point.

Subdivision (2) of this section leaves the taxing of court costs and the apportionment thereof to be made in the discretion of the court. Moreover, the fixing of reasonable attorneys' fees in applicable cases is likewise a matter within the sound discretion of the trial court. Godwin v. Wachovia Bank & Trust Co., 259 N.C. 520, 131 S.E.2d 456 (1963).

Where appellant did not contend that the fees allowed counsel were unreasonable and nothing to the contrary appeared in the record, it was taken that the court taxed the costs and attorneys' fees in the exercise of its discretion and that there was no abuse of this discretion. Wachovia Bank & Trust Co. v. Dodson, 260 N.C. 22, 131 S.E.2d 875 (1963).

When an executor's right to qualify is contested and judicially denied, whether the court will exercise its discretion to award costs, including attorneys' fees, incurred in his unsuccessful litigation, will depend in each case upon the grounds for the opposition and the reasonableness of his resistance to it, his good faith in pressing his appointment and whether his efforts were in the interest of the estate. In re Estate of Moore, 292 N.C. 58, 231 S.E.2d 849 (1977).

Albeit subdivision (2) authorizes the trial judge in his discretion to award costs, including attorneys' fees, in the instances specified therein, it is quite clear (1) that he should not award costs and attorneys' fees to an executor-designate whose claim for appointment is rejected unless the claim was reasonable, made in good faith and prima facie in the interest of the estate; and (2) that the judge has no discretion to tax costs against an estate when the nominated executor was disqualified to act as a matter of law. Estate of Moore, 292 N.C. 58, 231 S.E.2d 849 (1977).

Where a surviving spouse is forced to engage in litigation to determine whether a right of dissent from the will of the deceased spouse exists, the discretionary power given the trial judge under this section includes the power to award attorney's fees for the surviving spouse when, in the opinion of the trial court, the proceeding was one of substantial merit. In re Kirkman, 302 N.C. 164, 273 S.E.2d 712 (1981).

Taxing of Costs Where Caveat Is Unsuccessful. - Under this section, even though judgment is entered in favor of propounders, the trial court may tax the costs, including an allowance to counsel representing caveators, against the estate upon finding that the filing of the caveat was apt and proper and done in good faith. In re Will of Slade, 214 N.C. 361, 199 S.E. 290 (1938).

Allowance of Attorneys' Fees. - The allowance of attorneys' fees to counsel for the propounders is in the sound discretion of the trial court. In re Will of Coffield, 216 N.C. 285, 4 S.E.2d 870 (1939).

Same - Where Caveat Is Unsuccessful. - This statute authorizes the trial court in its discretion to allow attorneys' fees to counsel for unsuccessful caveators to a will. In re Will of Ridge, 47 N.C. App. 183, 266 S.E.2d 766 (1980), rev'd on other grounds, 302 N.C. 375, 275 S.E.2d 424 (1981).

It is a matter in the discretion of the court, both as to whether to allow attorneys' fees to counsel for unsuccessful caveators to a will and the amount of such fees. In re Will of Ridge, 47 N.C. App. 183, 266 S.E.2d 766 (1980), rev'd on other grounds, 302 N.C. 375, 275 S.E.2d 424 (1981).

This section does not require the court to award attorneys' fees to counsel for unsuccessful caveators to a will, but clearly authorizes the court to do so; thus, it is a matter in the discretion of the court, both as to whether to allow fees and the amount of such fees. In re Ridge, 302 N.C. 375, 275 S.E.2d 424 (1981).

As long as a dissent has substantial merit, the court may exercise its discretion in awarding reasonable attorneys' fees. In re Estate of Tucci, 104 N.C. App. 142, 408 S.E.2d 859 (1991), cert. dismissed, 331 N.C. 748, 417 S.E.2d 236 (1992).

The substantial merit requirement under subdivision (2) of this section does not mean success on the merits; in its sound discretion, the trial court may award attorneys' fees even to unsuccessful caveators. In re Estate of Tucci, 104 N.C. App. 142, 408 S.E.2d 859 (1991), cert. dismissed, 331 N.C. 748, 417 S.E.2d 236 (1992).

Attorneys' Fees as Costs Paid by Executor. - The language of subdivision (2) of this section is sufficient to vest in the trial court the discretionary authority to tax reasonable attorneys' fees as a part of the costs to be paid by the executor. McWhirter v. Downs, 8 N.C. App. 50, 173 S.E.2d 587 (1970).

Attorneys' Fees Fixed by Mutual Agreement Not Taxable Costs. - Fees for services rendered by attorneys to the parties in a caveat to a will do not automatically become costs of the proceeding merely because they are incurred and paid. This section commits the allowance and apportionment of the fees and the determination of the amounts thereof to the discretion of the court. Where the court had made no determination of the matter, but the amounts were fixed by contingent agreement between attorneys and clients prior to suit and the allowance of the fees as part of the costs of the proceeding was intentionally excluded from the judgment of the court, the amounts paid to the attorneys did not and could not become part of the taxable costs of the suit under this section. Commercial Nat'l Bank v. United States, 196 F.2d 182 (4th Cir. 1952).

Expense of Caveat Not Cost of Administration. - Costs of administration, as used in G.S. 29-2(5), means those ordinary, usual, and necessary expenses of administering a decedent's estate; a will caveat and its expense is neither of these, for a will caveat is a claim that the will involved is invalid, and its expense is a cost of court taxable against either party, or apportioned among the parties, in the discretion of the court. In re Estate of Ward, 97 N.C. App. 660, 389 S.E.2d 441 (1990).

"Common Fund" Not Prerequisite to Award of Costs. - There is no requirement in subdivision (2) of this section that a "common fund be available before costs may be awarded." McNaull v. McNaull, 94 N.C. App. 547, 380 S.E.2d 590, cert. denied, 325 N.C. 546, 385 S.E.2d 498 (1989).

No Authority to Award Fees Which Were Postponed Pending Retrial After Judgment Erroneously Set Aside. - Where the court's refusal to award attorneys' fees was based on its decision to postpone any award until the matter was retried, and the court erred when it set aside the judgment and ordered a new trial, and since the appellate court directed that the consent judgment be reinstated, the trial court was without authority to order the payment of attorneys' fees as a part of the costs of the caveat proceedings. In re Baity, 65 N.C. App. 364, 309 S.E.2d 515 (1983), cert. denied, 311 N.C. 401, 319 S.E.2d 266 (1984).

Standing to Stipulate to Payment of Attorneys' Fees. - Where estate was taxed with the payment of attorneys' fees pursuant to subdivision (2) of this section, the attorneys' fees were considered to be an item of costs, and since the clerk's order indicated that the attorneys' fees should be paid directly to the law firm involved, and not to the dissenter, only the law firm could stipulate that the clerk's order had been satisfied. In re Estate of Tucci, 104 N.C. App. 142, 408 S.E.2d 859 (1991), cert. dismissed, 331 N.C. 748, 417 S.E.2d 236 (1992).

Award of Fees in Constructive Fraud and Breach of Fiduciary Duty Case. - Award of attorney's fees and trustee commissions upon the removal of a trustee for constructive fraud and breach of fiduciary duty was proper because the award was designed to restore the trust to the same position it would have been in had no breach occurred and the awards fit the nature and gravity of the breach and the consequences to the beneficiaries and the trustee. Babb v. Graham, 190 N.C. App. 463, 660 S.E.2d 626 (2008).

Caveators Should Have Been Apprised of Court's Determination Regarding Fees. - Where the trial court permitted an attorney for all the named caveators to withdraw as counsel of record for certain caveators, implicit in that decision was permission for these caveators to retain their own counsel; therefore, if at the outset of the trial, the court determined that there was duplicity on the part of all counsel in its representation of the caveators, then the caveators should have been apprised that such a determination by the trial court might result in the denial of attorney fees pursuant to subsection (2) of this section, rather than for the trial court to summarily deny a successor law firm's request for fees at the conclusion of the matter. Hill v. Cox, 108 N.C. App. 454, 424 S.E.2d 201 (1993).

Trial court did not err in denying a propounder's motion for attorney's fees and costs, because the court was not required to enter findings of fact on whether the propounder's position, although unsuccessful, was supported by substantial merit, under G.S. 6-21; the statute required that prior to awarding attorney's fees to a caveator, the trial court had to make a finding of fact that the proceeding had substantial merit, under G.S. 6-21(2), but the statute did not require the trial court make any such findings in the case of a propounder. In re Will of McDonald, 156 N.C. App. 220, 577 S.E.2d 131 (2003).

Trial Court Abused Its Discretion. - The trial court abused its discretion by denying a petition of a law firm for approval and award of legal expenses where the trial court implicitly found that the caveat proceeding had substantial merit and where there was evidence that the law firm performed substantial services on behalf of the caveators it represented. Hill v. Cox, 108 N.C. App. 454, 424 S.E.2d 201 (1993).

Trial Court Did Not Abuse Its Discretion. - Caveators failed to show that the court abused its discretion when it awarded costs, including attorneys' fees, to propounders. In re Will of Sechrest, 140 N.C. App. 464, 537 S.E.2d 511 (2000).

B. CONSTRUCTION OF WILL OR TRUST.

.

Sale of Trust Property. - The trial court had authority to tax a reasonable attorneys' fee as part of the costs and to apportion it among the parties in an action for a declaratory judgment and for instructions to the trustees in connection with the sale of certain trust property. Tripp v. Tripp, 17 N.C. App. 64, 193 S.E.2d 366 (1972).

Testamentary Trusts. - In an action pursuant to the Uniform Declaratory Judgment Act for construction of certain trust provisions of a will, the taxing of costs, the inclusion therein of attorneys' fees, and the fixing of reasonable counsel fees, are matters within the sound discretion of the trial court. Little v. Wachovia Bank & Trust Co., 252 N.C. 229, 113 S.E.2d 689 (1960).

Basis for Award of Attorneys' Fees. - It was no error to affirm a clerk's award of attorneys' fees against a former co-trustee because (1) G.S. 36C-10-1004 and G.S. 6-21(2) did not limit a court's discretion to award fees to cases of egregious conduct, and, (2) if egregious conduct were required, there was sufficient evidence of such conduct when the former co-trustee jeopardized the health of the trust by refusing to cooperate with efforts to sell or lease the trust property, which was deteriorating while remaining vacant. Bullard v. Hoffman (In re Mayette E. Hoffman Living Trust U/A Dated August 4, 1997), 258 N.C. App. 255, 812 S.E.2d 401 (2018).

C. HABEAS CORPUS.

.

A reasonable allowance for attorneys' fees may be made as a part of the costs in habeas corpus proceedings, but not until there is a proper hearing or an opportunity for defendant to be heard. Murphy v. Murphy, 261 N.C. 95, 134 S.E.2d 148 (1964).

D. DIVORCE OR ALIMONY.

.

Husband Formerly Always Liable for His Own Costs. - Prior to the 1977 amendment to this section, in actions for divorce the husband, whether successful or unsuccessful, was liable for his own costs, and whether he should pay the wife's costs was in all cases in the discretion of the court. Broom v. Broom, 130 N.C. 562, 41 S.E. 673 (1902).

Guardian Ad Litem Fees. - Having properly appointed guardian ad litem, the trial court was within its discretion to assess as an item of costs the fees of the guardian ad litem and to tax those fees to either party or apportion them between the parties. Van Every v. McGuire, 125 N.C. App. 578, 481 S.E.2d 377 (1997), aff'd, 348 N.C. 58, 497 S.E.2d 689 (1998).

E. COMPENSATION OF REFEREES.

.

Subdivision (6) must be considered in pari materia with at least two other statutes, G.S. 1-7 and 1A-1, Rule 41(d). Thigpen v. Piver, 37 N.C. App. 382, 246 S.E.2d 67, cert. denied, 295 N.C. 653, 248 S.E.2d 257 (1978).

Referees' Fees - May Be Apportioned. - Originally, under the Code of 1883, § 533, referees' fees were taxed, like other costs, against the losing party, but by amendment (Laws 1889, ch. 37) the court was authorized to apportion them in its discretion. Cobb v. Rhea, 137 N.C. 295, 49 S.E. 161 (1904).

Where, in a suit to obtain advice and instruction of the court for the proper distribution of the assets of the estate, the cause is referred to a referee, the taxing of the referee's fee is within the discretion of the court, and order of the court prorating the referee's fee between the funds derived from sale of realty to make assets and the personal property of the estate will not be disturbed. Williams v. Johnson, 230 N.C. 338, 53 S.E.2d 277 (1949).

The apportionment of the compensation for a referee and the court reporter employed by him is within the discretionary power given the court by this section. Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963).

Same - Analogy to Allowance to Receiver. - The allowance to the receiver is a part of the costs of the action, and usually taxable against the losing party. Whether the receiver's fees should be divided is a matter in the discretion of the presiding judge, as is now the case also with referees' fees. Simmons v. Allison, 119 N.C. 556, 26 S.E. 171 (1896).

Apportionment Not Precluded by Former Judgment. - A former judgment, Homer v. Oxford Water & Elec. Co., 153 N.C. 535, 65 S.E. 607, 138 Am. St. R. 681 (1910), appealed from and affirmed by the Supreme Court, "that the defendants do recover against the plaintiff and the surety on his prosecution bond the costs of this action," did not preclude a subsequent trial judge from taxing the cost of reference against either party or apportioning it among the parties in his discretion under this section. Horner v. Oxford Water & Elec. Co., 156 N.C. 494, 72 S.E. 624 (1911).

Award of Costs on Appeal Does Not Include Referee's Fee. - Where, upon the trial in the superior court upon appeal from the referee, judgment is entered in the superior court in favor of plaintiffs, entitling plaintiffs to recover costs in the trial, such recovery does not include compensation of the referee. Cody v. England, 221 N.C. 40, 19 S.E.2d 10 (1942).

Fee Ordered Paid by Estate Not to Be Taxed Against Executor. - Ordinarily, in litigation over a fund in the nature of an in rem proceeding, such items of costs as referee's allowances and stenographic reporter's bills are paid out of the fund, although taxable in the discretion of the court, but in Lighter v. Boone, 222 N.C. 421, 23 S.E.2d 313 (1942), it was held that when such costs have been ordered paid from the estate, they cannot afterwards be taxed against an executor personally.

Authority of Assistant Clerk to Tax Cost of Deposition. - An assistant clerk of the superior court had the authority to tax the cost of a deposition against a plaintiff who took a voluntary dismissal of his case before it reached the trial calendar. Thigpen v. Piver, 37 N.C. App. 382, 246 S.E.2d 67, cert. denied, 295 N.C. 653, 248 S.E.2d 257 (1978).

F. PARTITION OR SALE OF PROPERTY.

.

Costs in Partition. - The taxing of costs among the parties to proceedings to partition land is left in the discretion of the court, and will not be reviewed on appeal. Fortune v. Hunt, 152 N.C. 715, 68 S.E. 213 (1910).

Where, in a petition for partition, defendant pleads sole seizin, and the trial of such issue results in a verdict for plaintiffs, and in judgment that the parties are tenants in common and appointing a commissioner to make sale, plaintiff is entitled to all costs from the filing of the answer through the final judgment below, that is, while the case is pending on the civil issue docket. This does not include costs of reference, which may be taxed in the discretion of the court. Costs of the partition proceeding, exclusive of the issue of sole seizin, may be apportioned. Bailey v. Hayman, 222 N.C. 58, 22 S.E.2d 6 (1943).

G. ACTIONS NOT COVERED BY THIS SECTION.

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A civil action to enjoin the issuance of county bonds and to restrain the disbursement of county funds is not one of the actions enumerated by this section in which attorneys' fees may be taxed as part of the costs. Rider v. Lenoir County, 238 N.C. 632, 78 S.E.2d 745 (1953).

Defense of Tort Action. - The expense of employing attorneys in the successful defense of a suit for damages for tort is not allowable as part of the costs or recoverable in the absence of an express agreement therefor. Queen City Coach Co. v. Lumberton Coach Co., 229 N.C. 534, 50 S.E.2d 288 (1948).

Specific Performance of Property Agreement. - An action between husband and wife seeking specific performance of an agreement between them to "pool" their property and assets, to declare a resulting trust, and for an accounting, did not involve construction of a trust agreement, and the attorneys' fees of the respective parties did not come within the statutory exceptions to the general rule and could not be taxed as a part of the costs. Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963).

Writing Insufficient as Trust Instrument. - In a declaratory judgment action in which the paper writing in question was insufficient as a trust instrument and was not executed as a will, the trial judge erred in ordering that plaintiff's counsel fees should be taxed against decedent's estate, since the action did not involve a caveat or the construction of a trust instrument within the purview of this section. Baxter v. Jones, 283 N.C. 327, 196 S.E.2d 193 (1973).

Court's order that defendant pay legal fees incurred by executor after defendant's default at judicial sale of estate's real and personal property held unauthorized. Parker v. Lippard, 87 N.C. App. 43, 359 S.E.2d 492, modified, 87 N.C. App. 487, 361 S.E.2d 395 (1987).

In declaratory judgment action in which plaintiff sought division of a federal income tax refund pursuant to G.S. 28A-15-6 and 28A-15-9, plaintiff was not entitled to attorney's fees under this section. Brantley v. Watson, 115 N.C. App. 393, 445 S.E.2d 53 (1994).

H. ILLEGITIMATE CHILDREN.

.

Attorneys' fees incurred in prosecuting paternity actions may not be awarded under G.S. 50-13.6, but may only be assessed as costs under subdivision (10) of this section. Napowsa v. Langston, 95 N.C. App. 14, 381 S.E.2d 882, cert. denied, 325 N.C. 709, 388 S.E.2d 460 (1989).

Trial court abused the court's discretion by ordering a mother to pay a portion of a putative father's attorney's fees, once the putative father was proven not to be the biological father of the mother's child because, while costs, including attorney's fees, were awardable under G.S. 6-21(10), the mother did not file the action to establish paternity and recover child support payments by an administrative agency, was not the real party in interest, and was compelled to participate fully in the agency's action pursuant to G.S. 110-131, including naming the individual the mother believed was the child's biological father. Further, there was no showing that the mother named the putative father as the biological father maliciously, fraudulently, or in bad faith. Guilford County ex rel. Holt v. Puckett, 191 N.C. App. 693, 664 S.E.2d 362 (2008).

III. PROCEDURE.

.

Caveat Proceeding. - A caveat proceeding has substantial merit if there is substantial evidence to support the claim. Dyer v. State, 102 N.C. App. 480, 402 S.E.2d 464, rev'd on other grounds, Dyer v. State, 331 N.C. 374, 416 S.E.2d 1 (1992).

Whether a caveat proceeding has substantial merit is a legal question reviewable by the appellate courts de novo. Dyer v. State, 102 N.C. App. 480, 402 S.E.2d 464, rev'd on other grounds, Dyer v. State, 331 N.C. 374, 416 S.E.2d 1 (1992).


§ 6-21.1. Allowance of counsel fees as part of costs in certain cases.

  1. In any personal injury or property damage suit, or suit against an insurance company under a policy issued by the defendant insurance company in which the insured or beneficiary is the plaintiff, instituted in a court of record, upon findings by the court (i) that there was an unwarranted refusal by the defendant to negotiate or pay the claim which constitutes the basis of such suit, (ii) that the amount of damages recovered is twenty-five thousand dollars ($25,000) or less, and (iii) that the amount of damages recovered exceeded the highest offer made by the defendant no later than 90 days before the commencement of trial, the presiding judge may, in the judge's discretion, allow a reasonable attorneys' fees to the duly licensed attorneys representing the litigant obtaining a judgment for damages in said suit, said attorneys' fees to be taxed as a part of the court costs. The attorneys' fees so awarded shall not exceed ten thousand dollars ($10,000).
  2. When the presiding judge determines that an award of attorneys' fees is to be made under this statute, the judge shall issue a written order including findings of fact detailing the factual basis for the finding of an unwarranted refusal to negotiate or pay the claim, and setting forth the amount of the highest offer made 90 days or more before the commencement of trial, and the amount of damages recovered, as well as the factual basis and amount of any such attorneys' fees to be awarded.

History

(1959, c. 688; 1963, c. 1193; 1967, c. 927; 1969, c. 786; 1979, c. 401; 1985 (Reg. Sess., 1986), c. 976; 2011-283, s. 3.1; 2011-317, s. 1.1; 2013-159, s. 5.)

Cross References. - As to costs where offer of judgment is made, see G.S. 1A-1, Rule 68.

Editor's Note. - Session Laws 2013-159, s. 6, made the substitution of "twenty-five thousand dollars ($25,000)" for "twenty thousand dollars ($20,000)" in subsection (a) by Session Laws 2013-159, s. 5, applicable to actions filed on or after August 1, 2013.

Effect of Amendments. - Session Laws 2011-283, s. 3.1, as amended by Session Laws 2011-317, s. 1.1, effective October 1, 2011, and applicable to actions arising on or after that date, added the subsection (a) designation, and therein rewrote the first sentence, and added the last sentence; and added subsection (b).

Session Laws 2013-159, s. 5, effective August 1, 2013, substituted "twenty-five thousand dollars ($25,000)" for "twenty thousand dollars ($20,000)" in subsection (a). For applicability, see editor's note.

Legal Periodicals. - For note on the availability of general and punitive damages for an insurer's unjustified failure to pay policy benefits, see 13 Wake Forest L. Rev. 685 (1977).

For survey of 1979 administrative law, see 58 N.C.L. Rev. 1185 (1980).

For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

For note, "Bad Faith Refusal to Pay First-Party Insurance Claims: A Growing Recognition of Extra-Contract Damages," see 64 N.C.L. Rev. 1421 (1986).

For article, "North Carolina's Cautious Approach Toward the Imposition of Extracontract Liability on Insurers for Bad Faith," see 21 Wake Forest L. Rev. 957 (1986).

For note, "A Public Goods Approach to Calculating Reasonable Fees Under Attorney Fee Shifting Statutes," see 1989 Duke L.J. 438.

For article, "Court-Ordered Arbitration in North Carolina: Selected Issues of Practice and Procedure," see 21 Campbell L. Rev. 191 (1999).

CASE NOTES

I. GENERAL CONSIDERATION.

The obvious purpose of this section is to provide relief for a person who has sustained injury or property damage in an amount so small that, if he must pay his attorney out of his recovery, he may well conclude that it is not economically feasible to bring suit on his claim. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973); Hubbard v. Lumbermen's Mut. Cas. Co., 24 N.C. App. 493, 211 S.E.2d 544, cert. denied, 286 N.C. 723, 213 S.E.2d 721 (1975); In re Kirkman, 302 N.C. 164, 273 S.E.2d 712 (1981); Purdy v. Brown, 307 N.C. 93, 296 S.E.2d 459 (1982); Hillman v. United States Liab. Ins. Co., 59 N.C. App. 145, 296 S.E.2d 302, cert. denied, 307 N.C. 468, 299 S.E.2d 221 (1982); McDaniel v. North Carolina Mut. Life Ins. Co., 70 N.C. App. 480, 319 S.E.2d 676, cert. denied, 312 N.C. 84, 321 S.E.2d 897 (1984); Boykin v. Morrison, 148 N.C. App. 98, 557 S.E.2d 583 (2001).

In such a situation the legislature apparently concluded that the defendant, though at fault, would have an unjustly superior bargaining power in settlement negotiations. A great majority of such claims arise out of automobile accidents in which the alleged wrongdoer is insured and his insurance carrier controls the litigation. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973).

The policy behind this section is to provide relief for an injured party where it might not be feasible to bring suit if that party had to pay an attorney out of the proceeds. Martin v. Hartford Accident & Indem. Co., 68 N.C. App. 534, 316 S.E.2d 126, cert. denied, 311 N.C. 760, 321 S.E.2d 140, 321 S.E.2d 141 (1984).

The purpose of G.S. 6-21.1 is to provide relief for a person who has sustained injury or property damage in an amount so small that, if he must pay his attorney out of his recovery, he may well conclude that it is not economically feasible to bring suit on his claim, but the discretion accorded the trial court in awarding attorney fees pursuant to G.S. 6-21.1 is not unbridled. Phillips v. Warren, 152 N.C. App. 619, 568 S.E.2d 230 (2002).

This section, being remedial, should be construed liberally to accomplish the purpose of the legislature and to bring within it all cases fairly falling within its intended scope. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973); Hubbard v. Lumbermen's Mut. Cas. Co., 24 N.C. App. 493, 211 S.E.2d 544, cert. denied, 286 N.C. 723, 213 S.E.2d 721 (1975); In re Kirkman, 302 N.C. 164, 273 S.E.2d 712 (1981); Hillman v. United States Liab. Ins. Co., 59 N.C. App. 145, 296 S.E.2d 302, cert. denied, 307 N.C. 468, 299 S.E.2d 221 (1982); McDaniel v. North Carolina Mut. Life Ins. Co., 70 N.C. App. 480, 319 S.E.2d 676, cert. denied, 312 N.C. 84, 321 S.E.2d 897 (1984); West ex rel. Farris v. Tilley, 120 N.C. App. 145, 461 S.E.2d 1 (1995).

This section should be construed liberally by the presiding judge to accomplish the obvious purpose to provide relief for a person who has a claim so small that, if he must pay an attorney out of his recovery, it may not be economically feasible to bring suit. DeBerry v. American Motorists Ins. Co., 33 N.C. App. 639, 236 S.E.2d 380 (1977).

Bankruptcy Stay. - Where debtor's alleged conduct giving rise to claim for attorneys' fees under state statute largely occurred pre-petition, fact that respondents incurred additional fees post-petition, or that debtor rejected appellate mediation post-petition, did not transform pre-petition claim into post-petition obligation, and therefore respondents' filing and prosecution of fee request constituted attempt to collect pre-petition claim in violation of stay. In re Bowden, - Bankr. - (Bankr. M.D.N.C. Aug. 5, 2015).

This section refers only to the amount of the judgment, not to the amount of the verdict. Wells v. Jackson, 85 N.C. App. 718, 355 S.E.2d 837 (1987).

Applicability Governed by Amount Obtained. - The amount of the judgment obtained, not the amount of the judgment sought, governs applicability of this section. Purdy v. Brown, 56 N.C. App. 792, 290 S.E.2d 397, rev'd on other grounds, 307 N.C. 93, 296 S.E.2d 459 (1982).

It was the amount of the judgment obtained, not the amount sought, that governed the applicability G.S. 6-21.1; an attorney's fees award was affirmed where judgment was rendered for $3,829.98, and the trial court considered the factors listed in Washington v. Horton, 132 N.C. App. 347, 513 S.E.2d 331 (1999), in making the award. Phillips v. Brackett, 156 N.C. App. 76, 575 S.E.2d 805 (2003).

G.S. 6-21.1 applies when a plaintiff recovers a judgment for zero dollars or less than zero dollars becase the precise amount of damages awarded is of no consequence as long as it is less than $10,000. Reinhold v. Lucas, 167 N.C. App. 735, 606 S.E.2d 412 (2005).

Amount Obtained Means Compensatory Damages. - "Damages" as used in G.S. 6-21.1 applied only to the compensatory damage amounts when determining whether the judgment amount was equal to or less than $10,000. Boykin v. Morrison, 148 N.C. App. 98, 557 S.E.2d 583 (2001).

Trial court erred in including costs and prejudgment interest in a calculation of a "judgment obtained" by plaintiff in a personal injury suit for purposes of determining whether plaintiff was entitled to attorney's fees for a judgment not to exceed $10,000. Brown v. Millsap, 161 N.C. App. 282, 588 S.E.2d 71 (2003).

Construing the phrase "judgment for recovery of damages" to include punitive damage award would decrease the number of cases to which G.S. 6-21.1 would apply. Boykin v. Morrison, 148 N.C. App. 98, 557 S.E.2d 583 (2001).

Attorneys' Fees Not Recoverable as Costs in Absence of Statute. - Attorneys' fees are not now regarded as part of court costs in this jurisdiction, except as otherwise provided by statute. Perkins v. American Mut. Fire Ins. Co., 4 N.C. App. 466, 167 S.E.2d 93 (1969).

Ordinarily, attorneys' fees are not recoverable as an item of damages or part of the costs in litigation. U.S. Piping, Inc. v. Travelers Indem. Co., 9 N.C. App. 561, 176 S.E.2d 835 (1970); Hicks v. Albertson, 18 N.C. App. 599, 197 S.E.2d 624, aff'd, 284 N.C. 236, 200 S.E.2d 40 (1973).

In the absence of statutory authority therefor, a court may not include an allowance of attorneys' fees as part of the costs recoverable by the successful party to an action or proceeding. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973).

Inmate, who had obtained a verdict against a deputy sheriff with regard to an assault and battery suit, was unable to recover litigation costs or attorney's fees, because no statutory authority existed allowing such recovery to a prevailing party in a civil assault case. Cunningham v. Riley, - N.C. App. - , - S.E.2d - (Mar. 15, 2005).

But the legislature has enacted an exception to this general rule and allows the trial judge to award attorneys' fees in certain situations under this section. U.S. Piping, Inc. v. Travelers Indem. Co., 9 N.C. App. 561, 176 S.E.2d 835 (1970).

This section creates an exception to the general rule that attorneys' fees are not allowable as part of the costs in civil actions. Hill v. Jones, 26 N.C. App. 168, 215 S.E.2d 168, cert. denied, 288 N.C. 240, 217 S.E.2d 664 (1975).

This statute is an exception to the general rule that counsel fees may not be included in costs recoverable to a successful party in an action or proceeding. West ex rel. Farris v. Tilley, 120 N.C. App. 145, 461 S.E.2d 1 (1995).

Section Does Not Guarantee Compensation in All Cases. - While this section is aimed at encouraging injured parties to press their meritorious but pecuniarily small claims, it was not intended to encourage parties to refuse reasonable settlement offers and give rise to needless litigation by guaranteeing that counsel will, in all cases, be compensated. Harrison v. Herbin, 35 N.C. App. 259, 241 S.E.2d 108, cert. denied, 295 N.C. 90, 244 S.E.2d 258 (1978).

Discretion of Judge. - The allowance of counsel fees under the authority of this section is, by express language of this section, in the discretion of the presiding judge. Callicutt v. Hawkins, 11 N.C. App. 546, 181 S.E.2d 725 (1971); Hubbard v. Lumbermen's Mut. Cas. Co., 24 N.C. App. 493, 211 S.E.2d 544, cert. denied, 286 N.C. 723, 213 S.E.2d 721 (1975); Black v. Standard Guar. Ins. Co., 42 N.C. App. 50, 255 S.E.2d 782, cert. denied, 298 N.C. 293, 259 S.E.2d 910 (1979); Yates Motor Co. v. Simmons, 51 N.C. App. 339, 276 S.E.2d 496, cert. denied, 303 N.C. 320, 281 S.E.2d 660 (1981).

Without a showing of any abuse of the trial judge's discretion, an assignment of error to a denial of a motion for allowance of attorneys' fees will be overruled. Callicutt v. Hawkins, 11 N.C. App. 546, 181 S.E.2d 725 (1971).

Because this section provides for the award of "a reasonable attorney fee," the court has a large measure of discretion in fixing or recommending the amount to be paid. Hill v. Jones, 26 N.C. App. 168, 215 S.E.2d 168, cert. denied, 288 N.C. 240, 217 S.E.2d 664 (1975).

Decision to award attorney's fees pursuant to G.S. 6-21.1 is discretionary, but the trial court's discretion is not unbridled; if the trial court is shown to have abused its discretion, its decision will be overturned. House v. Stone, 163 N.C. App. 520, 594 S.E.2d 130 (2004).

To overturn trial judge's determination, defendant must show abuse of discretion. Hillman v. United States Liab. Ins. Co., 59 N.C. App. 145, 296 S.E.2d 302 (1982), cert. denied, 307 N.C. 468, 299 S.E.2d 221 (1983).

Without a showing of abuse of trial judge's discretion, trial judge's determination to award counsel fees will not be overturned. Whitfield v. Nationwide Mut. Ins. Co., 86 N.C. App. 466, 358 S.E.2d 92 (1987).

Trial Court's Award of Attorney's Fees Supported by the Whole Record - Absence from a trial court's findings regarding an award of attorney's fees, under G.S. 6-21.1, of a finding regarding unjust exercise of superior bargaining power did not require reversal when the trial court made adequate findings on the whole record to support an award of attorney's fees. Messina v. Bell, 158 N.C. App. 111, 581 S.E.2d 80 (2003).

Section Contemplates Inquiry Before Awarding Fee to Counsel. - The wording of this section contemplates some type of inquiry by the presiding judge before the court may exercise its discretion in awarding a fee to plaintiff's counsel. Hillman v. United States Liab. Ins. Co., 59 N.C. App. 145, 296 S.E.2d 302 (1982), cert. denied, 307 N.C. 468, 299 S.E.2d 221 (1983).

Reasonableness as Key Factor. - Reasonableness, not arbitrary classification of attorney activity, is the key factor under all the attorneys' fees statutes. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650, cert. denied, 312 N.C. 621, 323 S.E.2d 922 (1984).

With respect to bank's claim for attorneys' fees associated with sale of abandoned property, fee amount sought by bank, which represented maximum amount of attorney's fees available under North Carolina law of 15 percent of final sale price, could not be approved without more information for court to determine whether requested amount was reasonable; percentage allowed by state law was not enough for reasonableness determination. In re Ormond, - Bankr. - (Bankr. E.D.N.C. Feb. 20, 2015).

Order denying motion pending remand to arbitrator was error. - Judge's order denying plaintiff's motion for attorney's fees "pending remand to the Arbitrator for a further determination" was error. This section requires the judge upon motion made to award attorney's fees as a part of the costs. Bass v. Goss, 105 N.C. App. 242, 412 S.E.2d 145 (1992).

This section permits the judge to allow the successful plaintiff a reasonable attorneys' fee in a suit against an insurance company upon a finding by the court that there was an unwarranted refusal by the insurer to pay the claim of plaintiff-insured which constitutes the basis of the suit, where the judgment is $5,000 or less. Martin v. Hartford Accident & Indem. Co., 68 N.C. App. 534, 316 S.E.2d 126, cert. denied, 311 N.C. 760, 321 S.E.2d 140, 321 S.E.2d 141 (1984).

Insurer's Refusal Unwarranted. - The automobile insurer's refusal to pay at least the undisputed amount of loss to the plaintiff was unwarranted, and the trial court properly awarded attorneys' fees. PHC, Inc. v. North Carolina Farm Bureau Mut. Ins. Co., 129 N.C. App. 801, 501 S.E.2d 701 (1998), cert. denied, 348 N.C. 694, 511 S.E.2d 648 (1998).

Insurer's Refusal Not "Unwarranted". - Insurer's refusal to pay the claim of an insured covered by a group medical insurance policy incident to an in-vitro fertilization procedure until approximately two months after insured filed suit was not "unwarranted" so as to authorize the imposition of attorneys' fees against the insurer under this section. Michael v. Metropolitan Life Ins. Co., 631 F. Supp. 451 (W.D.N.C. 1986).

Trial Court Need Not Make a Finding of Insurance Company's Refusal to Pay Policy - Trial court's finding, when awarding attorney's fees, under G.S. 6-21.1, of an insurance company's unwarranted refusal to pay an insurance policy was not necessary in a suit involving an automobile accident which was not a suit directly against an insurance policy. Messina v. Bell, 158 N.C. App. 111, 581 S.E.2d 80 (2003).

Merit Bonus. - It is true that the quality of services rendered is properly considered in awarding fees, as well as the nature of the services required, and hence the scope and complexity of the case. However, there is no North Carolina authority for an award of a "merit bonus." Even assuming such bonuses are allowed, as under federal practice, that should occur only in the "rare case" where the applicant specifically shows superior quality representation and exceptional success. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650, cert. denied, 312 N.C. 621, 323 S.E.2d 922 (1984).

Additional Attorneys' Fees on Appeal. - Authority to award additional attorneys' fees for an appeal falls within the purview of this section. Heins Tel. Co. v. Grain Dealers Mut. Ins. Co., 57 N.C. App. 695, 292 S.E.2d 281 (1982).

Trial court, in its discretion and upon appropriate findings of fact, could award reasonable attorney's fees for service performed during an appeal, under G.S. 6-21.1. Messina v. Bell, 158 N.C. App. 111, 581 S.E.2d 80 (2003).

Additional Attorneys' Fees on Reward - Trial court's award of attorney fees to injured party in personal injury case was not an abuse of discretion as the trial court considered all the relevant factors, including the Washington factors, in making its decision; and the trial court had the discretion, after the case was remanded, to award appellate attorney fees, if it found such fees were warranted. Furmick v. Miner, 154 N.C. App. 460, 573 S.E.2d 172 (2002).

Former G.S. 25-8 Became Part of Contracts. - Provisions in notes executed prior to the repeal in 1965 of former G.S. 25-8 that required the debtors to pay reasonable attorneys' fees for collection of the notes were rendered unenforceable by that section, notwithstanding the enactment in 1967 of this section permitting such provisions, since the former section became a part of the contracts between the parties and this section could not vary the terms of those contracts. Register v. Griffin, 10 N.C. App. 191, 178 S.E.2d 95 (1970).

When Insurance Company Not Required to Defend. - Where an insurance company utilized G.S. 20-279.21 (b)(3)a to provide a defense to the insured party, it was a party in the tort actions, although unnamed; therefore, although it was not required to defend the lawsuit, but chose to do so, by so doing it became a defendant and liable for attorney's fees and costs. Turnage ex rel. Turnage v. Nationwide Mut. Ins. Co., 109 N.C. App. 300, 426 S.E.2d 433, aff'd per curiam, 335 N.C. 168, 435 S.E.2d 772 (1993).

Section Not Applicable to Workers' Compensation Cases. - This section refers to personal injury damage suits and property damage suits tried in a court where there is a presiding trial judge and is not applicable in workers' compensation cases. Bowman v. Comfort Chair Co., 271 N.C. 702, 157 S.E.2d 378 (1967).

Action Heard Before Arbitrator. - In a civil action heard before an arbitrator where the plaintiff was awarded less than $10,000, a judge had discretion whether to and in what amount to award attorney's fees. Bass v. Goss, 105 N.C. App. 242, 412 S.E.2d 145 (1992).

The Uniform Arbitration Act does not forbid an award of attorney's fees for services provided by an attorney before the case is referred to binding arbitration. Lucas v. City of Charlotte, 123 N.C. App. 140, 472 S.E.2d 203 (1996).

Since former G.S. 1-567.11 has no application to work performed by an attorney before a case is referred to arbitration, the award of attorney's fees under this section was proper. Lucas v. City of Charlotte, 123 N.C. App. 140, 472 S.E.2d 203 (1996).

Attorney's Fees in Personal Injury Suit - Trial court's findings supported its award of attorney's fees, in a personal injury suit, when those findings included (1) offers of settlement by both parties before and after suit was filed, (2) the defending motorist's offer of judgment, which was less than the judgment finally obtained, (3) no findings of an unjust exercise of superior bargaining power, which did not require reversal in light of adequate findings on the whole record supporting the award, (4) no findings of an unwarranted refusal to pay an insurance policy, which were not required as the suit involved an automobile accident and was not directly against an insurance policy, (5) the dates of either party's offers to settle before suit, in arbitration and mediation, in offers of judgment, and during trial, and (6) the amounts of the jury verdict, the judgment finally obtained, and the motorist's offers to settle. Messina v. Bell, 158 N.C. App. 111, 581 S.E.2d 80 (2003).

Attorneys' Fees in Actions Under Tort Claims Act. - The Industrial Commission has jurisdiction and authority to award attorneys' fees pursuant to this section for actions brought under the Tort Claims Act. Karp v. University of N.C. 88 N.C. App. 282, 362 S.E.2d 825 (1987), aff'd, 323 N.C. 473, 373 S.E.2d 430 (1988).

Costs and attorney fees were awarded to a property owner in error as, when read by themselves, G.S. 143-291 and G.S. 143-291.1 did not grant the North Carolina Industrial Commission the authority to award attorney fees; when read together with G.S. 6-21.1, the Commission had jurisdiction and authority to award attorney fees in a North Carolina Tort Claims Act case, but the owner's damages far exceeded the statutory maximum of $10,000. Watts v. N.C. Dep't of Env't & Natural Res., 182 N.C. App. 178, 641 S.E.2d 811, review denied, 361 N.C. 704, 653 S.E.2d 878 (2007), aff'd in part, modified in part, 362 N.C. 487, 666 S.E.2d 752 (2008).

Defendants Prevailing on Counterclaim for Less Than Amount Sought. - Plaintiff's contention that the legislature did not intend for defendants to be able to collect attorneys' fees when they have prevailed on counterclaims for less than the stated amount was without merit. Mickens v. Robinson, 103 N.C. App. 52, 404 S.E.2d 359 (1991).

Abuse of Discretion. - Because defendant was not entitled to recover attorney's fees for defending against plaintiff's claim and because the amount of attorney's fees sought by defendant represented the cost for defending against plaintiff's claim as well as prosecuting defendant's counterclaim, the trial court necessarily abused its discretion in awarding defendant the full amount sought. Mishoe v. Sikes, 115 N.C. App. 697, 446 S.E.2d 114 (1994), aff'd, 340 N.C. 256, 456 S.E.2d 308 (1995).

To Receive Fees Party Must Be Litigant. - Although the court's amended judgment provided separately for recovery by plaintiff of $9,000.00 and by plaintiff's mother of $1,301.00, as the record reflected no formal motion by either plaintiff or defendant to add the mother as a party she did not function as a "litigant" therein and her recovery was not considered with daughter's for purposes of awarding attorney fees. West ex rel. Farris v. Tilley, 120 N.C. App. 145, 461 S.E.2d 1 (1995).

Section Not Applicable to Breach of Contract Case. - Attorney fees were not awardable in breach of contract case where homeowners received money damages from an exterminating firm for failure to detect termites. Hicks v. Clegg's Termite & Pest Control, Inc., 132 N.C. App. 383, 512 S.E.2d 85 (1999).

In taxpayers' suit against county commissioners for entering into a contract that benefitted one of the commissioners, it was within the trial court's discretion to allow or deny attorney's fees after hearing the taxpayers' evidence. Gibbs v. Mayo, 162 N.C. App. 549, 591 S.E.2d 905, cert. denied, 358 N.C. 543, 599 S.E.2d 45 (2004).

Denial of Attorney's Fee Held Proper - Doctor who sued insurer for settlement proceeds owed to him under a valid medical lien was not entitled to attorney's fees, pursuant to this section, where he was not the "beneficiary" under the insurer's policy, and he did not bring his suit under the policy issued, but instead alleged that the insurer breached its duty to him by failing to retain sufficient funds from the settlement proceeds to satisfy his lien. Smith v. State Farm Mut. Auto. Ins. Co., 157 N.C. App. 596, 580 S.E.2d 46, cert. denied, 357 N.C. 507, 587 S.E.2d 674 (2003).

Denial of Attorney's Fee Held Improper - In a case alleging negligent misrepresentation by a real estate agent regarding a home's connection to the city sewer system, the home purchasers were improperly precluded from recovering attorney's fees under G.S. 6-21.1 because the plain language gave the trial court discretion to award fees in negligence cases resulting in property damage where the award was $10,000 or less; the purchasers were awarded about $7,000 for servicing the septic system and connecting the property to the city sewer system. Crawford v. Mintz, 195 N.C. App. 713, 673 S.E.2d 746 (2009), review denied, 363 N.C. 372, 678 S.E.2d 236 (2009).

Grant of Attorneys' Fee Held Proper. - Trial court properly considered the factors required by North Carolina case law before it awarded over $32,000 in attorneys' fees to a pedestrian who recovered $7,000 in damages after he was struck by a truck, and the appellate court found that the award was not excessive. Overton v. Purvis, 162 N.C. App. 241, 591 S.E.2d 18 (2004).

Attorney's fees award was proper under G.S. 6-21.1, although the operator's attorney's fees exceeded the actual damages, as the judgment entered for an operator, including prejudgment interest under G.S. 24-5(b), was below the $10,000 threshold; unlike G.S. 6-21.5, did not require that there be an absence of a justiciable issue of law or fact. Bryson v. Cort, 193 N.C. App. 532, 668 S.E.2d 84 (2008).

Attorney's fees awarded under G.S. 6-21.1 were reasonable as an operator's counsel submitted detailed time and billing statements, some fees were eliminated, and counsel's hourly rate was reduced; further, the fees were directly attributable to the failure of a driver's insurer to make a good faith effort to resolve the matter. Bryson v. Cort, 193 N.C. App. 532, 668 S.E.2d 84 (2008).

Award of Attorney's Fees Held Proper. - In an action for damages for personal injuries and medical expenses by the injured party and her parents, the trial court had the discretion to award attorney's fees since the damages awarded to the injured party and her parents were separate and each was less than $10,000. Moquin v. Hedrick, 163 N.C. App. 345, 593 S.E.2d 435 (2004).

Trial court did not err in awarding attorney's fees to a passenger pursuant to G.S. 6-21.1 in her action for personal injuries sustained in an automobile collision because she obtained a judgment against defendant for damages and was the prevailing party, notwithstanding the subsequent reduction of her judgment pursuant to G.S. 1B-4 by the amount of her settlement with a third-party defendant. Reinhold v. Lucas, 167 N.C. App. 735, 606 S.E.2d 412 (2005).

Judgment awarding attorney fees pursuant to G.S. 6-21.1 following a verdict in a negligence action arising from a motor vehicle accident was affirmed. The trial court's order had specific findings as to the majority of the Washington factors, and the trial court directly observed the attorneys, including their demeanor and characteristics. Wright v. Murray, 187 N.C. App. 155, 651 S.E.2d 913 (2007).

Trial court's denial of attorney fees was affirmed where the trial court made sufficient findings on the record, where it properly considered whether the judgment awarded was more favorable than offers of judgment made prior to trial, and where it properly considered the entire record before making a decision. House v. Stone, 163 N.C. App. 520, 594 S.E.2d 130 (2004).

Applied in Smith v. Whisenhunt, 259 N.C. 234, 130 S.E.2d 334 (1963); Brady v. Smith, 18 N.C. App. 293, 196 S.E.2d 580 (1973); First Union Nat'l Bank v. Richards, 90 N.C. App. 650, 369 S.E.2d 620 (1988); Phillips v. Warren, 152 N.C. App. 619, 568 S.E.2d 230 (2002); Perry v. GRP Fin. Servs. Corp., 196 N.C. App. 41, 674 S.E.2d 780 (2009).

Cited in Whitley v. City of Durham, 256 N.C. 106, 122 S.E.2d 784 (1961); Foster v. Foster, 264 N.C. 694, 142 S.E.2d 638 (1965); Mims v. Dixon, 272 N.C. 256, 158 S.E.2d 91 (1967); In re King, 281 N.C. 533, 189 S.E.2d 158 (1972); City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972); Caison v. Nationwide Ins. Co., 36 N.C. App. 173, 243 S.E.2d 429 (1978); Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 S.E.2d 812 (1980); Plow v. Bug Man Exterminators, Inc., 57 N.C. App. 159, 290 S.E.2d 787 (1982); City Fin. Co. v. Boykin, 86 N.C. App. 466, 358 S.E.2d 83 (1987); Tay v. Flaherty, 100 N.C. App. 51, 394 S.E.2d 217 (1990); Davis v. Sellers, 115 N.C. App. 1, 443 S.E.2d 879 (1994), cert. denied, 339 N.C. 610, 454 S.E.2d 248 (1995); Benton v. Thomerson, 339 N.C. 598, 453 S.E.2d 161 (1995); Boykin v. Morrison, 148 N.C. App. 98, 557 S.E.2d 583 (2001); Phillips v. Warren, 152 N.C. App. 619, 568 S.E.2d 230 (2002); Overton v. Purvis, 154 N.C. App. 543, 573 S.E.2d 219 (2002), cert. denied, 357 N.C. 63, 579 S.E.2d 391 (2003); Martin Architectural Prods. v. Meridian Constr. Co., 155 N.C. App. 176, 574 S.E.2d 189 (2002); Johnson v. Piggly Wiggly of Pinetops, Inc., 156 N.C. App. 42, 575 S.E.2d 797 (2003), cert. denied, 357 N.C. 251, 582 S.E.2d 271 (2003); Guess v. Parrott, 160 N.C. App. 325, 585 S.E.2d 464 (2003); Jane Doe 1 v. Swannanoa Valley Youth Dev. Ctr., 163 N.C. App. 136, 592 S.E.2d 715 (2004); House v. Stone, 163 N.C. App. 520, 594 S.E.2d 130 (2004); Calhoun v. WHA Med. Clinic, PLLC, 178 N.C. App. 585, 632 S.E.2d 563 (2006), review denied, review dismissed, 361 N.C. 350, 644 S.E.2d 5 (2007); Kessler v. Shimp, 181 N.C. App. 753, 640 S.E.2d 822 (2007), review denied, 361 N.C. 568, 650 S.E.2d 605 (2007); Willow Bend Homeowners Ass'n v. Robinson, 192 N.C. App. 405, 665 S.E.2d 570 (2008); Brown's Builders Supply, Inc. v. Johnson, 240 N.C. App. 8, 769 S.E.2d 653 (2015); Savage v. Zelent, 243 N.C. App. 535, 777 S.E.2d 801 (2015); Murray v. Moody, 252 N.C. App. 141, 797 S.E.2d 365 (2017).

II. WHO MAY MAKE AWARD.

"Presiding Judge" Means Judge Presiding over Court in Which Action Is Instituted. - The term "presiding judge" means the judge presiding over the court in which the action is instituted. Such judge can, without danger of injustice, fix a reasonable fee for the attorney of the party recovering damages by settlement prior to trial. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973).

The legislature contemplated that the judge who presided at the trial would determine whether a fee for the attorney of the party recovering damages should be allowed and, if so, the amount. Such judge would be in a better position than any other to make this determination. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973).

When Judge Other Than Trial Judge May Make Allowance. - While it is proper that the trial judge in an action which proceeds to trial may allow a reasonable attorney fee to the successful litigant under this section, the presiding judge of the court in which the suit is instituted may allow such fee when judgment is obtained without the necessity for trial. In cases where the judge who presided at the trial is unable because of death, disability, or other valid reason to make such allowance, the presiding judge of the court in which the suit is instituted would have such authority. Hicks v. Albertson, 18 N.C. App. 599, 197 S.E.2d 624, aff'd, 284 N.C. 236, 200 S.E.2d 40 (1973).

Presiding judge may award compensation for legal services rendered on appeal. Hill v. Jones, 26 N.C. App. 168, 215 S.E.2d 168, cert. denied, 288 N.C. 240, 217 S.E.2d 664 (1975).

The clerk has no authority to determine whether a fee should be allowed as part of the costs or to fix the amount of such fee. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973).

State Tort Claim. - Under G.S. 6-21.1, both the determination of whether to award attorney's fees and the amount of the attorney's fees is in the considerable discretion of a presiding judge; in the case of a state tort claim, the same discretion lies in the North Carolina Industrial Commission. Sprinkle v. N.C. Wildlife Res. Comm'n, 165 N.C. App. 721, 600 S.E.2d 473 (2004).

III. PROCEDURE.

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Plaintiff Need Not Plead for Award in Complaint. - This section does not require that a plaintiff seeking attorneys' fees under the statute affirmatively plead for such an award as a separate claim in the complaint. Black v. Standard Guar. Ins. Co., 42 N.C. App. 50, 255 S.E.2d 782, cert. denied, 298 N.C. 293, 259 S.E.2d 910 (1979).

Findings of Fact Required. - In awarding reasonable counsel fees under this section, the judge presiding must make some findings of fact to support the award. Hill v. Jones, 26 N.C. App. 168, 215 S.E.2d 168, cert. denied, 288 N.C. 240, 217 S.E.2d 664 (1975).

Findings Regarding the Allocation of Time. - Although a trial court is not necessarily required to make specific findings as to the allocation of time for attorney's fees in its award of attorney's fees under this section, the court must still carefully review the attorney's hours and determine the amount of fees to be awarded that represents, in the court's opinion, the legal fees to be awarded for obtaining a judgment whether from a complaint or a counterclaim. Mishoe v. Sikes, 115 N.C. App. 697, 446 S.E.2d 114 (1994), aff'd, 340 N.C. 256, 456 S.E.2d 308 (1995).

And Such Findings May Be Limited. - Since this section determines the nature of an action and limits the amount involved, the findings of fact may be limited to the quantity and quality of all the services rendered by the attorney for his client until the final determination of the action for which the judge presiding, in his discretion, allows an attorneys' fee. Hill v. Jones, 26 N.C. App. 168, 215 S.E.2d 168, cert. denied, 288 N.C. 240, 217 S.E.2d 664 (1975).

Because this statute defines the circumstances under which attorneys' fees may be awarded, the trial court is not required to make specific findings as to the plaintiff's entitlement to such an award. Epps v. Ewers, 90 N.C. App. 597, 369 S.E.2d 104 (1988).

Trial court was not required to make findings of fact allocating the time spent on a case between work required to defend against plaintiff's claim and that required to forward defendant's counterclaim when awarding attorneys' fees to defendant. Mickens v. Robinson, 103 N.C. App. 52, 404 S.E.2d 359 (1991).

But Separate Findings Under G.S. 1A-1, Rule 52(a) Not Required. - This section does not require the trial judge to make separate findings and conclusions to support an award of attorney fees in accordance with G.S. 1A-1, Rule 52(a). Black v. Standard Guar. Ins. Co., 42 N.C. App. 50, 255 S.E.2d 782, cert. denied, 298 N.C. 293, 259 S.E.2d 910 (1979).

When Finding of Unwarranted Refusal to Pay Claim Required. - It is only when suit is brought against an insurance company by the insured or beneficiary, as plaintiff, under a policy issued by such insurance company, that there must be a finding by the court that there was an unwarranted refusal by the defendant insurance company to pay the claim before attorneys' fees may be allowed as a part of the costs when the judgment for recovery of damages is for $1,000 or less (now $5,000 or less). Rogers v. Rogers, 2 N.C. App. 668, 163 S.E.2d 645 (1968).

A trial court improperly awarded attorneys' fees to a judgment holder in the latter's action against an automobile liability insurer, where it made no finding that there was an unwarranted refusal by the insurer to pay the claim constituting the basis of the judgment holder's suit against the insured. U.S. Piping, Inc. v. Travelers Indem. Co., 9 N.C. App. 561, 176 S.E.2d 835 (1970).

Under this section, to support an award for an attorneys' fee from an insurance company the presiding judge must first find "an unwarranted refusal" to pay the claim. DeBerry v. American Motorists Ins. Co., 33 N.C. App. 639, 236 S.E.2d 380 (1977).

A finding of an unwarranted refusal by defendants to pay plaintiff's claim is required only in suits by an insured or beneficiary against an insurance company. Yates Motor Co. v. Simmons, 51 N.C. App. 339, 276 S.E.2d 496, cert. denied, 303 N.C. 320, 281 S.E.2d 660 (1981).

Where an insurance company is not a named defendant, there is no requirement that the trial court make a finding that there was an unwarranted refusal to pay by the insurer in order to award attorneys' fees under G.S. 6-21.1. McDaniel v. McBrayer, 164 N.C. App. 379, 595 S.E.2d 784 (2004).

When Finding of Unwarranted Refusal to Pay Not Required. - In a damage action arising out of a motor vehicle collision, since the suit was not on an insurance policy, a finding that refusal to pay was unwarranted was not required. Crisp v. Cobb, 75 N.C. App. 652, 331 S.E.2d 255 (1985).

The trial court was not required to make an "unwarranted refusal" finding to award attorney fees in an automobile accident case, since such a finding is required only in suits brought by an insured or a beneficiary against an insurance company defendant. Washington v. Horton, 132 N.C. App. 347, 513 S.E.2d 331 (1999).

When Finding of Unfair Bargaining Power Not Required. - Trial court's failure to make a finding as to a defendant's exercise of unfair bargaining power in awarding attorneys' fees under G.S. 6-21.1 was not grounds for reversal. McDaniel v. McBrayer, 164 N.C. App. 379, 595 S.E.2d 784 (2004).

The trial court is to consider the entire record in properly exercising its discretion under this section, including but not limited to the following factors: (1) settlement offers made before institution of the action; (2) offers of judgment and whether the judgment finally obtained was more favorable than such offers; (3) whether defendant unjustly exercised superior bargaining power; (4) in the case of an unwarranted refusal by an insurance company, the context in which the dispute arose; (5) the timing of settlement offers; and (6) the amounts of the settlement offers as compared to the jury verdict. Washington v. Horton, 132 N.C. App. 347, 513 S.E.2d 331 (1999).

Trial court property excluded $6,180 in costs and attorney fees which plaintiff incurred to obtain judgment awarding her damages in the amount of $4,950 in a personal injury action, and trial court did not err by ordering the defendant to pay the plaintiff's attorney's fee. Sowell v. Clark, 151 N.C. App. 723, 567 S.E.2d 200 (2002).

When deciding whether to award attorneys' fees under G.S. 6-21.1, a trial court must examine the entire record, including but not limited to: (1) settlement offers made prior to institution of the action; (2) offers of judgment made pursuant to G.S. 1A-1, N.C. R. Civ. P. 68 and whether the judgment finally obtained was more favorable than such offers; (3) whether defendant unjustly exercised superior bargaining power; (4) in the case of an unwarranted refusal by an insurance company, the context in which the dispute arose; (5) the timing of settlement offers; and (6) the amounts of settlement offers as compared to the jury verdict. Phillips v. Warren, 152 N.C. App. 619, 568 S.E.2d 230 (2002).

In determining whether to award attorneys' fees, the trial court must consider the entire record, including: (1) settlement offers made prior to the institution of the action; (2) offers of judgment pursuant to N.C. R. Civ. P. 68, and whether the judgment finally obtained was more favorable than such offers; (3) whether the defendant unjustly exercised superior bargaining power;(4) in the case of an unwarranted refusal by an insurance company, the context in which the dispute arose; (5) the timing of settlement offers; and (6) the amounts of the settlement offers as compared to the jury verdict. McDaniel v. McBrayer, 164 N.C. App. 379, 595 S.E.2d 784 (2004).

Trial Court Failed to Appreciate the Significance of Settlement Offers. - The trial court abused its discretion in awarding attorney's fees to counsel for plaintiff without considering the guidelines established by Horton; the trial court is required to make additional findings of fact regarding the timing and amount of any settlement offers, the bargaining position of the parties, and the amount of the settlement offers as compared to the jury verdict. Culler v. Hardy, 137 N.C. App. 155, 526 S.E.2d 698 (2000).

Trial Court's Discretion. - Trial court's decision to award attorneys' fees under G.S. 6-21.1 is discretionary and will not be overturned absent a showing of abuse of discretion. McDaniel v. McBrayer, 164 N.C. App. 379, 595 S.E.2d 784 (2004).

The plaintiff may properly move for an award of attorneys' fees after a verdict has been returned in its favor. Black v. Standard Guar. Inc., 42 N.C. App. 50, 255 S.E.2d 782, cert. denied, 298 N.C. 293, 259 S.E.2d 910 (1979).

No Fees Where Plaintiff Awarded New Trial. - Under this section, attorneys' fees are taxed as a part of the court costs, and where plaintiff was awarded a new trial by the appellate court, no judgment for damages was obtained, and, consequently, no attorneys' fees would be awarded as part of the cost. Craven v. Chambers, 56 N.C. App. 151, 287 S.E.2d 905 (1982).

Factors to Be Considered. - Several factors exist, denominated the "Washington factors," that a trial court must examine when determining whether to award attorney's fees. The trial court must consider the entire record in properly exercising its discretion, including but not limited to the following factors: (1) settlement offers made prior to the institution of the action; (2) offers of judgment pursuant to G.S. 1A-1, N.C. R. Civ. P. 68, and whether the judgment finally obtained was more favorable than such offers; (3) whether defendant unjustly exercised superior bargaining power; (4) in the case of an unwarranted refusal by an insurance company, the context in which the dispute arose; (5) the timing of settlement offers; (6) the amounts of the settlement offers as compared to the jury verdict; and (7) the whole record. House v. Stone, 163 N.C. App. 520, 594 S.E.2d 130 (2004).

Finding Insufficient to Award Attorneys' Fees. - Where the only findings of fact in support of the amount of the award for attorneys' fees were that plaintiff's attorney "provided good and valuable services"; that the reasonable value of the services provided by plaintiff's attorney was $2,000.00; and that plaintiff's fee contract with her attorney provided for a contingent fee of one-third of the damage award, those findings were not sufficient to support an award of $2,000. Epps v. Ewers, 90 N.C. App. 597, 369 S.E.2d 104 (1988).

The court abused its discretion in failing to make the required findings of fact to support the fee award pursuant to this section where no findings appear in the written judgment, and the hearing transcript reveals, at most, findings that a settlement offer "right prior to trial" was rejected and no meaningful negotiations were held due to the parties' intransigence. Porterfield v. Goldkuhle, 137 N.C. App. 376, 528 S.E.2d 71 (2000).

Award Upheld. - Where defendant's attorneys presented evidence tending to show that they were entitled to a fee of $8000 for their work, and the trial court, after having carefully reviewed petitioner's hours, awarded $5000, there was no abuse of discretion in the award. Mickens v. Robinson, 103 N.C. App. 52, 404 S.E.2d 359 (1991).

Attorney's fee award in a suit arising from an automobile accident was proper; although the jury's verdict was less than an offer of judgment, the offer did not exceed the amount of the judgment finally obtained, which included costs and attorney's fees. Robinson v. Shue, 145 N.C. App. 60, 550 S.E.2d 830 (2001).

Award Reversed. - The trial court erred in awarding $5,000 in attorney's fees to counsel for plaintiff after the jury returned a verdict for plaintiff in the amount of $62; the court failed to consider the guidelines established by Washington v. Horton, 132 N.C. App. 347, 513 S.E.2d 331 (1999). Williams v. Manus, 142 N.C. App. 384, 542 S.E.2d 680 (2001).

Interest Not Allowed on Attorney Fee Awards. - There is no provision for interest on court costs, and since attorney fees are taxed as part of court costs under this section, the trial court erred in awarding prejudgment and postjudgment interest on an award of attorney fees. Washington v. Horton, 132 N.C. App. 347, 513 S.E.2d 331 (1999).

IV. SETTLEMENT.

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Effect of Settlement or Offer. - To hold that use of the adjective "presiding" shows that the legislature intended that no fee be allowed in any case settled without actual trial is to give this word an unreasonably strict construction and would defeat its purpose. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973).

This section refers specifically to the "institution" of a suit, not its trial, and allows an attorneys' fee to be awarded without regard to how that judgment is obtained. To permit an offer of judgment, or indeed any settlement prior to a completed trial, to avoid the payment of a reasonable attorneys' fee in the discretion of the court would defeat in large measure the purpose of the statute. Hicks v. Albertson, 18 N.C. App. 599, 197 S.E.2d 624, aff'd, 284 N.C. 236, 200 S.E.2d 40 (1973).

In referring to the "presiding" judge in this section as the official to assess attorneys' fees, the General Assembly did not contemplate that attorneys' fees would be properly allowed only if the case could not be settled prior to trial. Yates Motor Co. v. Simmons, 51 N.C. App. 339, 276 S.E.2d 496, cert. denied, 303 N.C. 320, 281 S.E.2d 660 (1981).

Attorneys' Fees Where Settlement Offer Made. - Attorneys' fees which were incurred prior to the time the offer of judgment was made are recoverable. The G.S. 1A-1, Rule 68 sanctions only provide protection against the costs incurred after the offer has been made. Purdy v. Brown, 307 N.C. 93, 296 S.E.2d 459 (1982).

Attorneys' fees may be awarded pursuant to this statute even when damages are recovered by settlement prior to trial. Epps v. Ewers, 90 N.C. App. 597, 369 S.E.2d 104 (1988); Benton v. Thomerson, 113 N.C. App. 293, 438 S.E.2d 434 (1994), rev'd on other grounds, 339 N.C. 598, 453 S.E.2d 161 (1995).

Attorneys' fees and costs were properly awarded to the plaintiff, notwithstanding that the defendant twice offered to settle the action for $5,000, where the jury awarded the plaintiff $5,000, plus $555 in costs, and attorneys' fees were also taxed as costs. Tew v. West, 143 N.C. App. 534, 546 S.E.2d 183 (2001).

Attorney's fees award was proper even though the tortfeasor made an offer of judgment which exceeded the jury's verdict because the jury's verdict was properly modified by adding the injured party's attorney's fees and costs in arriving at the "judgment finally obtained," which exceeded the tortfeasor's judgment offer. Thorpe v. Perry-Riddick, 144 N.C. App. 567, 551 S.E.2d 852 (2001).

Attorney fees upheld where a settlement offer was made but refused in personal injury case brought by an injured driver. Davis v. Kelly, 147 N.C. App. 102, 554 S.E.2d 402 (2001).

Award of attorneys' fees and costs of $5,937 under G.S. 6-21.1 was upheld in favor of a personal injury plaintiff who was awarded $800 by a jury, although defendant made two offers of judgment for $5,000. McDaniel v. McBrayer, 164 N.C. App. 379, 595 S.E.2d 784 (2004).

Amount of Settlement Irrelevant to Determination to Award Attorneys' Fees. - The amount of the final settlements in a civil suit was irrelevant in determining whether to award attorneys' fees. Epps v. Ewers, 90 N.C. App. 597, 369 S.E.2d 104 (1988).

Offer of Judgment Exceeding $5,000. - An offer of judgment for more than $5,000, together with costs then accrued, but excluding attorneys' fees, is valid. This section would not apply in this case and "costs then accrued" would therefore not include attorneys' fees incurred after the offer of judgment was made. The mere fact that judgment for less than $5,000 is later obtained should have no bearing on costs accrued at the time the offer was made. The trial judge would have had no discretion to award an attorneys' fee, even if the defendant had not inserted language excluding them in his offer of judgment. Purdy v. Brown, 307 N.C. 93, 296 S.E.2d 459 (1982).

Refusal of Reasonable Settlement Offer May Affect Award of Attorney's Fees. - Where a substantial settlement offer was made well before trial, and that offer was increased through negotiations to an amount more than four times that recovered by plaintiff at trial, the trial court did not abuse its discretion in denying plaintiff's request for attorney's fees under this section. Blackmon v. Bumgardner, 135 N.C. App. 125, 519 S.E.2d 335 (1999).

The fact that third party plaintiff ultimately agreed to accept a judgment for less than the amount offered her by third party defendants' insurance carrier before plaintiff's suit and her cross-claim were filed did not ipso facto deny her the benefit of this section, and the trial judge did not abuse his discretion in awarding a reasonable attorneys' fee to third party plaintiff in her action against third party defendant. Yates Motor Co. v. Simmons, 51 N.C. App. 339, 276 S.E.2d 496, cert. denied, 303 N.C. 320, 281 S.E.2d 660 (1981).

Attorneys' Fees Allowed. - Where there is a clear indication in the record that an application for attorneys' fees as a part of the costs was to be considered by the court, and the settlement was effected with knowledge of this proposed application, allowance should be made for fees. Hicks v. Albertson, 18 N.C. App. 599, 197 S.E.2d 624, aff'd, 284 N.C. 236, 200 S.E.2d 40 (1973).

Fee Is Allowed as Part of Costs. - This section does not provide for the recovery of a reasonable attorneys' fee in addition to the court costs but "as a part of the court costs." Where the acceptance by the plaintiff of an offer of judgment for a specified sum plus "costs" proceeded from a reasonable interpretation by the plaintiff that "costs" included attorneys' fees, then if such interpretation was not intended by the defendant, the misunderstanding was due to ambiguous language used by the defendant in making his offer and the defendant must bear any loss resulting therefrom. Hicks v. Albertson, 284 N.C. 236, 200 S.E.2d 40 (1973).

If a party wishes to avoid payment of attorneys' fees in cases in which this section may be applicable, he should make his offer of settlement before the suit is instituted. Hicks v. Albertson, 18 N.C. App. 599, 197 S.E.2d 624, aff'd, 284 N.C. 236, 200 S.E.2d 40 (1973).

There was no unwarranted refusal to settle where insurance company settled within four months of the accident and for a reasonable amount, as evidenced by the similarity between the jury verdict and the settlement amount. Benton v. Thomerson, 113 N.C. App. 293, 438 S.E.2d 434 (1994), rev'd on other grounds, 339 N.C. 598, 453 S.E.2d 161 (1995).

Opinions of Attorney General

Section is applicable to actions against hospital service corporation organized under G.S. 57-1 (now G.S. 58-65-1). See opinion of Attorney General to Mr. Bobby H. Griffin, Union County Attorney, 43 N.C.A.G. 357 (1974).

§ 6-21.2. Attorneys' fees in notes, etc., in addition to interest.

Obligations to pay attorneys' fees upon any note, conditional sale contract or other evidence of indebtedness, in addition to the legal rate of interest or finance charges specified therein, shall be valid and enforceable, and collectible as part of such debt, if such note, contract or other evidence of indebtedness be collected by or through an attorney at law after maturity, subject to the following provisions:

  1. If such note, conditional sale contract or other evidence of indebtedness provides for attorneys' fees in some specific percentage of the "outstanding balance" as herein defined, such provision and obligation shall be valid and enforceable up to but not in excess of fifteen percent (15%) of said "outstanding balance" owing on said note, contract or other evidence of indebtedness.
  2. If such note, conditional sale contract or other evidence of indebtedness provides for the payment of reasonable attorneys' fees by the debtor, without specifying any specific percentage, such provision shall be construed to mean fifteen percent (15%) of the "outstanding balance" owing on said note, contract or other evidence of indebtedness.
  3. As to notes and other writing(s) evidencing an indebtedness arising out of a loan of money to the debtor, the "outstanding balance" shall mean the principal and interest owing at the time suit is instituted to enforce any security agreement securing payment of the debt and/or to collect said debt.
  4. As to conditional sale contracts and other such security agreements which evidence both a monetary obligation and a security interest in or a lease of specific goods, the "outstanding balance" shall mean the "time price balance" owing as of the time suit is instituted by the secured party to enforce the said security agreement and/or to collect said debt.
  5. The holder of an unsecured note or other writing(s) evidencing an unsecured debt, and/or the holder of a note and chattel mortgage or other security agreement and/or the holder of a conditional sale contract or any other such security agreement which evidences both a monetary obligation and a security interest in or a lease of specific goods, or his attorney at law, shall, after maturity of the obligation by default or otherwise, notify the maker, debtor, account debtor, endorser or party sought to be held on said obligation that the provisions relative to payment of attorneys' fees in addition to the "outstanding balance" shall be enforced and that such maker, debtor, account debtor, endorser or party sought to be held on said obligation has five days from the mailing of such notice to pay the "outstanding balance" without the attorneys' fees. If such party shall pay the "outstanding balance" in full before the expiration of such time, then the obligation to pay the attorneys' fees shall be void, and no court shall enforce such provisions.
  6. If the attorneys' fees are for services rendered to an assignee or a debt buyer, as defined in G.S. 58-70-15, all of the following materials setting forth a party's obligation to pay attorneys' fees shall be provided to the court before a court may enforce those provisions:
    1. A copy of the contract or other writing evidencing the original debt, which must contain a signature of the defendant. If a claim is based on credit card debt and no such signed writing evidencing the original debt ever existed, then copies of documents generated when the credit card was actually used must be attached.
    2. A copy of the assignment or other writing establishing that the plaintiff is the owner of the debt. If the debt has been assigned more than once, then each assignment or other writing evidencing transfer of ownership must be attached to establish an unbroken chain of ownership. Each assignment or other writing evidencing transfer of ownership must contain the original account number of the debt purchased and must clearly show the debtor's name associated with that account number.

Notwithstanding the foregoing, however, if debtor has defaulted or violated the terms of the security agreement and has refused, on demand, to surrender possession of the collateral to the secured party as authorized by G.S. 25-9-609, with the result that said secured party is required to institute an ancillary claim and delivery proceeding to secure possession of said collateral; no such written notice shall be required before enforcement of the provisions relative to payment of attorneys' fees in addition to the outstanding balance.

History

(1967, c. 562, s. 4; 2000-169, s. 27; 2009-573, s. 7.)

Legal Periodicals. - For survey of 1976 case law on commercial law, see 55 N.C.L. Rev. 943 (1977).

For note on contractual allocation of attorneys' fees as costs of litigation, see 17 Wake Forest L. Rev. 457 (1981).

For survey of 1981 property law, see 60 N.C.L. Rev. 1420 (1982).

For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

For note, "Preemption of State Law Notice Provisions Governing the Recovery of Attorneys' Fees by Section 506(b) of the Bankruptcy Code," see 1 Duke L.J. 176 (1986).

For note, "A Public Goods Approach to Calculating Reasonable Fees Under Attorney Fee Shifting Statutes," see 1989 Duke L.J. 438.

For survey on the award of attorneys' fees for breach of a separation agreement, see 70 N.C.L. Rev. 2016 (1992).

CASE NOTES

Purpose. - Some of the purposes underlying the enactment of this section are to simplify, clarify, and modernize the law governing commercial transactions among the various jurisdictions, and to permit the continued expansion of commercial practices through custom, usage, and agreement of the parties. Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 S.E.2d 812 (1980).

The purpose of this section is to allow the debtor a last chance to pay the outstanding balance without attorneys' fees. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650, cert. denied, 312 N.C. 621, 323 S.E.2d 922 (1984).

Applicability. - Because over-secured creditor was not required to comply with G.S. 6-21.2, any failure to do so was not fatal to its application for post-petition attorneys' fees under the bankruptcy code. In re Bate Land & Timber, LLC, 541 B.R. 601 (Bankr. E.D.N.C. 2015), aff'd, 877 F.3d 188, 2017 U.S. App. LEXIS 24627 (4th Cir. N.C. 2017).

Liberal Construction. - This section, being remedial, should be construed liberally to accomplish the purpose of the legislature and to bring within it all cases fairly falling within its intended scope. Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 S.E.2d 812 (1980).

Written Agreement Required. - This section does not apply in the absence of a written agreement. Jacobs v. Central Transp., Inc., 891 F. Supp. 1120 (E.D.N.C. 1995).

This Section Compared to former G.S. 1-567.11. - This section generally relates to and concerns the subject of attorneys' fees for legal work performed in the collection of indebtedness under various contractual arrangements and, unlike former G.S. 1-567.11, does not specifically address or relate to the subject of arbitration or attorneys' fees through arbitration. Nucor Corp. v. General Bearing Corp., 333 N.C. 148, 423 S.E.2d 747 (1992), reh'g denied, 333 N.C. 349, 426 S.E.2d 708 (1993).

Reasonableness is the key factor under all attorney's fees statutes. Institution Food House, Inc. v. Circus Hall of Cream, Inc., 107 N.C. App. 552, 421 S.E.2d 370 (1992).

Supplements Principles Applicable to Commercial Transactions. - Although this section was not itself codified as a constituent section of Chapter 25 (the Uniform Commercial Code), its legislative history clearly demonstrates that it was intended to supplement those principles of law generally applicable to commercial transactions. Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 S.E.2d 812 (1980).

Section Not Applicable for Recovery upon Default of Purchase Money Deed of Trust. - This section deals in general and comprehensive terms with the propriety of attorneys' fees arising from the collection of indebtedness and, therefore, was not controlling in a case in which a seller of real property had accepted a purchase money deed of trust from his buyer and then sought recovery upon default; G.S. 45-21.38 deals with just such a particular situation. Merritt v. Ridge, 323 N.C. 330, 372 S.E.2d 559 (1988).

This section does not apply to arbitration proceedings; thus, in arbitration proceedings, both the arbitrator or arbitration panel and the superior courts upon confirmation are limited to applying only former G.S. 1-567.11 in determining whether attorneys' fees should be or were properly awarded. Nucor Corp. v. General Bearing Corp., 333 N.C. 148, 423 S.E.2d 747 (1992), reh'g denied, 333 N.C. 349, 426 S.E.2d 708 (1993).

Statute Inapplicable To Trustee's Attorney's Fees. - G.S. 6-21.2 is inapplicable to trustee's attorney's fees because the trustee is an agent of both the debtor and the creditor, and G.S. 6-21.2 governs only attorney's fees for the creditor's attorney; accordingly, if the deed of trust calls for "reasonable" attorney's fees then the trustee should distribute a reasonable amount under the circumstances. In re Foreclosure of the Deed of Trust of Vogler Realty, Inc., 365 N.C. 389, 722 S.E.2d 459 (2012).

Attorneys' Fees of Purchase Money Creditor Not Secured Obligation. - Where a promissory note states on its face that it is "given as purchase money, and is secured by a purchase money deed of trust," and the note is incorporated by reference into the deed of trust, attorneys' fees are not part of the purchase price. Hence, even if the trustee were to foreclose on the purchase money deed of trust, the purchase money creditor's attorneys' fees would not be a secured obligation. Colson & Colson Constr. Co. v. Maultsby, 103 N.C. App. 424, 405 S.E.2d 779 (1991).

Attorneys' fees provided for in an agreement to settle litigation already underway were not "obligations to pay attorneys' fees upon any note . . . or other evidence of indebtedness" under this section. Without undermining the intent or force of this section, parties may, in settling disputes, agree to the payment of attorneys' fees; such a case is not controlled by this section. Carter v. Foster, 103 N.C. App. 110, 404 S.E.2d 484 (1991).

Choice of Law. - The issue of a party's entitlement to attorneys' fees is a question of substantive law. Tolaram Fibers, Inc. v. Tandy Corp., 92 N.C. App. 713, 375 S.E.2d 673, cert. denied, 324 N.C. 436, 379 S.E.2d 249 (1989).

Attorneys' fees are not now regarded as part of court costs in this jurisdiction, except as otherwise provided by statute. Perkins v. American Mut. Fire Ins. Co., 4 N.C. App. 466, 167 S.E.2d 93 (1969).

This section represents a far reaching exception to the well-established rule against attorneys' fees obligations. State Whsle. Supply, Inc. v. Allen, 30 N.C. App. 272, 227 S.E.2d 120 (1976).

This section represents a far-reaching exception to the well-established rule against attorneys' fees obligations, and approves specifically an obligation to pay reasonable attorneys' fees found in any note or other evidence of indebtedness. Reavis v. Ecological Dev., Inc., 53 N.C. App. 496, 281 S.E.2d 78 (1981).

But this section only validates attorneys' fees obligations in certain carefully defined instances and imposes a ceiling on the amount of attorneys' fees a party can obtain. State Whsle. Supply, Inc. v. Allen, 30 N.C. App. 272, 227 S.E.2d 120 (1976).

Attorneys' Fees Provisions Enforceable When Specifically Authorized. - Although provisions calling for a debtor to pay attorneys' fees incurred by a creditor in the collection of a debt have long been considered against public policy, such provisions are enforceable when specifically authorized by statute. Reavis v. Ecological Dev., Inc., 53 N.C. App. 496, 281 S.E.2d 78 (1981).

Counsel fees are not a subject of arbitration, even where the contract provides that the owner will pay reasonable attorneys' fees incurred by the contractor for the collection of any defaulted payment due to the contractor by the owner as a result of the contract. In North Carolina, such attorneys' fees are collectible only under this section. G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815 (1987), cert. denied, 320 N.C. 798, 361 S.E.2d 75 (1987), aff 'd, 94 N.C. App. 769, 381 S.E.2d 718 (1989).

Recovery of Attorneys' Fees Pursuant to Promissory Note Not a Deficiency. - Where a provision for attorneys' fees in a promissory note given by defendant to plaintiffs and incorporated in deeds of trust is properly authorized by this section, recovery of the fees does not represent a deficiency in violation of G.S. 45-21.38. Reavis v. Ecological Dev., Inc., 53 N.C. App. 496, 281 S.E.2d 78 (1981).

Award in Proceeding Under G.S. 105-374 Unaffected. - The amount of an attorneys' fee awarded in a tax foreclosure proceeding under G.S. 105-374 is to be determined pursuant to subsection (i) of that section in the discretion of the trial court and is not limited by the provisions of this section. Town of Sylva v. Gibson, 51 N.C. App. 545, 277 S.E.2d 115, appeal dismissed and cert. denied, 303 N.C. 319, 281 S.E.2d 659 (1981).

Fees in Amount Less than 15 Percent of Damages Award Proper. - Trial court did not err in granting attorney fees in an amount less than 15 percent of the damages award under a stock sales contract; attorney testimony, affidavits, and billing statements supported the attorney fees award. Bombardier Capital, Inc. v. Lake Hickory Watercraft, Inc., 178 N.C. App. 535, 632 S.E.2d 192 (2006).

Provision in agreement between Chapter 11 debtors and a bank requiring debtors to pay the bank's "reasonable attorneys fees" caused by debtors' default was governed by the provision in G.S. 6-21.2(1), which capped such fees at 15% of the outstanding balance rather than G.S. 6-21.2(2), which authorized an award of such fees equal to 15% of the outstanding balance of the indebtedness at default notwithstanding actual cost on which the bank had relied because the parties' agreement indicated the intent that the fees be "reasonable," a criterion that was not satisfied by an award based solely on a percentage of the outstanding balance. In re Brier Creek Corporate Ctr. Assocs. Ltd. Partnership, - Bankr. - (Bankr. E.D.N.C. Jan. 18, 2013).

Meaning of "Evidence of Indebtedness". - The term "evidence of indebtedness," as used in this section, has reference to any printed or written instrument, signed or otherwise executed by the obligor(s), which evidences on its face a legally enforceable obligation to pay money. Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 N.E.2d 812; Four Seasons Homeowners Ass'n v. Sellers, 72 N.C. App. 189, 323 S.E.2d 735 (1984); G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, cert. denied, 320 N.C. 798, 361 S.E.2d 75 (1987), aff'd, 94 N.C. App. 769, 381 S.E.2d 718 (1989).

Evidence of indebtedness within the meaning of this section signifies a written agreement or acknowledgment of debt, such as a promissory note or conditional sales contract, which is executed and signed by the party obligated under the terms of the instrument. State Whsle. Supply, Inc. v. Allen, 30 N.C. App. 272, 227 S.E.2d 120 (1976).

Landlord was properly awarded attorney fees as a lease was evidence of indebtedness under G.S. 6-21.2 since "evidence of indebtedness" as used in G.S. 6-21.2 referred to any printed or written instrument, signed or otherwise executed by the obligors, which evidenced on its face a legally enforceable obligation to pay money, and the appellate court had applied G.S. 6-21.2 to disputes regarding the lease of real property. WRI/Raleigh, L.P. v. Shaikh, 183 N.C. App. 249, 644 S.E.2d 245 (2007).

Same - Paragraph of a construction contract providing for a 10 percent attorneys' fee in the event of litigation was held not to be "other evidence of indebtedness" within the meaning of this section. Yeargin Constr. Co. v. Futren Dev. Corp., 29 N.C. App. 731, 225 S.E.2d 623, cert. denied, 290 N.C. 660, 228 S.E.2d 459 (1976). But see Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 S.E.2d 812 (1980).

Same - "Note" and "conditional sales contract" are the primary types of "evidence of indebtedness" contemplated by this section. State Whsle. Supply, Inc. v. Allen, 30 N.C. App. 272, 227 S.E.2d 120 (1976).

Same - Sales receipt and three-day invoice containing provision for attorneys' fees is not an "evidence of indebtedness" within the meaning of this section. State Whsle. Supply, Inc. v. Allen, 30 N.C. App. 272, 227 S.E.2d 120 (1976). But see Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 S.E.2d 812 (1980).

Same - Formal credit agreement executed by the parties prior to the establishment of the open account would suffice as an evidence of indebtedness; and if such an agreement contains a provision for attorneys' fees, it will be valid and enforceable pursuant to this section. State Whsle. Supply, Inc. v. Allen, 30 N.C. App. 272, 227 S.E.2d 120 (1976); W.S. Clark & Sons v. Ruiz, 87 N.C. App. 420, 360 S.E.2d 814 (1987).

Same - Lease Contract. - A contract for the lease of personalty constitutes an "evidence of indebtedness" within the meaning of this section, since the contract acknowledges a legally enforceable obligation by the lessee to remit rental payments to the lessor as they become due in exchange for the use of the property which is the subject of the lease. Therefore, a provision of the lease allowing the lessor reasonable attorneys' fees should the lease obligation be collected by an attorney after maturity is enforceable under this section. Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 S.E.2d 812 (1980).

A lease does not constitute evidence of indebtedness within the meaning of this section, and attorneys' fees may not be allowed, even though they were expressly provided for in the contract. Equitable Leasing Co. v. Myers, 46 N.C. App. 162, 265 S.E.2d 240 (1980). But see Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 266 S.E.2d 812 (1980).

Same - Stock Purchase Agreement. - A stock purchase agreement was an "evidence of indebtedness" within the contemplation of this section. Nucor Corp. v. General Bearing Corp., 103 N.C. App. 518, 405 S.E.2d 776 (1991), rev'd on other grounds, 333 N.C. 148, 423 S.E.2d 747 (1992), reh'g denied, 333 N.C. 349, 426 S.E.2d 708 (1993).

Meaning of "Security Agreement". - As used in the Commercial Code, the general term "security agreement" is ordinarily understood to embrace chattel mortgages, conditional sales contracts, assignments of accounts receivable, trust receipts, etc. The term has a similar connotation in subdivision (5) of this section. EAC Credit Corp. v. Wilson, 281 N.C. 140, 187 S.E.2d 752 (1972).

A guaranty contract is not a "security agreement" within the language of subdivision (5) of this section. EAC Credit Corp. v. Wilson, 281 N.C. 140, 187 S.E.2d 752 (1972).

Guaranty of Payment Alone Does Not Render Guarantors Liable for Attorneys' Fees. - This section does not authorize collection of attorneys' fees if the guaranty contract sued upon does not so provide. Guaranty of payment alone does not render the guarantors liable for attorneys' fees which the principal debtor, by the terms of the note, is bound to pay. EAC Credit Corp. v. Wilson, 281 N.C. 140, 187 S.E.2d 752 (1972).

Nor Does Provision in Promissory Note Requiring Debtor to Pay Attorneys' Fees. - Where a promissory note contained a provision requiring the debtor to pay reasonable attorneys' fees of the creditor in collection of the note, but a guaranty of payment of the note contained no such provision, the guarantors were not liable under this section for attorneys' fees incurred by the creditor in an action on the guaranty contract. EAC Credit Corp. v. Wilson, 281 N.C. 140, 187 S.E.2d 752 (1972).

This section contemplates liability on the part of endorsers of a note since it provides for the giving of notice to endorsers by the holder or his attorney that the provision for attorneys' fees, in addition to the outstanding balance, shall be enforced. Wachovia Bank & Trust Co. v. Peace Broadcasting Corp., 32 N.C. App. 655, 233 S.E.2d 687, cert. denied, 292 N.C. 734, 235 S.E.2d 788 (1977).

Specific Percentage Not Specified in Unsecured Promissory Note. - Where an unsecured promissory note provided for the payment of reasonable attorneys' fees upon default by the debtor, without specifying any specific percentage, the trial court properly allowed the plaintiff to recover as reasonable attorneys' fees 15% of the balance due on the note, as provided by this section. Binning's, Inc. v. Roberts Constr. Co., 9 N.C. App. 569, 177 S.E.2d 1 (1970).

In looking to whether creditor's claim for prepetition attorneys' fees as part of an unsecured claim would be disallowed pursuant to any agreement or applicable law, the court interpreted a provision of North Carolina law governing fee awards where there was a contractual agreement to pay reasonable fees that did not specify any percentage to require looking at evidence of reasonableness, up to a statutory cap of 15 percent. However, even assuming arguendo that the language "reasonable attorneys' fees" entitled creditor to a statutory award of 15 percent, the allowance of claims in bankruptcy was controlled by federal law, and the court exercised its equitable power to disallow a per se award of 15 percent in this case as unreasonable. In re Yow, - Bankr. - (Bankr. E.D.N.C. Jan. 18, 2019).

Notice Need Not Be Given Prior to Institution of Action. - The only requirement in this section as to when notice is to be given is that it be given "after maturity of the obligation by default or otherwise." This does not mean that the notice must be given prior to the institution of an action. Binning's, Inc. v. Roberts Constr. Co., 9 N.C. App. 569, 177 S.E.2d 1 (1970).

Construction of Subdivision (2). - The General Assembly apparently intended subdivision (2) of this section as a fall-back only in case the agreement contained nothing regarding the parties' intent as to what constituted a reasonable percentage. It apparently did not intend it as a means of legislating a total end to hearings on attorneys' fees. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650, cert. denied, 312 N.C. 621, 323 S.E.2d 922 (1984).

Limits on Attorney's Fees. - The trial court exceeded its statutory authority in awarding plaintiff an attorneys' fee which exceeded 32% of the recovery allowed and was clearly excessive and not permissible under this statute. Southland Amusements & Vending, Inc. v. Rourk, 143 N.C. App. 88, 545 S.E.2d 254 (2001).

Creditor was not entitled to a portion of its attorney fees from a sale of bankruptcy debtors' real property since the amount of the debt to the creditor exceeded the maximum amount of advances allowable under the security interest in the real property which was granted by the debtors; thus, the creditor was only secured by the real property to the maximum amount of allowed advances and could only recover fees from the sale of the property in proportion to the extent of its security interest. In re Winslow, - Bankr. - (Bankr. E.D.N.C. June 22, 2011).

Trial court's award of attorney's fees of more than 15% of the outstanding balance was in violation of G.S. 6-21.2(2). There was no indication in the transcript or communications between the trial court and counsel in the record that G.S. 1-263 was argued as a basis for the award of attorney's fees. Finch v. Campus Habitat, L.L.C., 220 N.C. App. 146, 724 S.E.2d 174 (2012).

Award of Percentage Specified in Subdivision (2). - Subdivision (2) of section expressly provides that when a contract authorizing attorneys' fees does not specify the fee percentage, that it shall be construed to mean 15% of the "outstanding balance" owed on the obligation involved. A court which, in setting the fee, merely followed the statutory mandate would not be reversed. Nucor Corp. v. General Bearing Corp., 103 N.C. App. 518, 405 S.E.2d 776 (1991), rev'd on other grounds, 333 N.C. 148, 423 S.E.2d 747 (1992), reh'g denied, 333 N.C. 349, 426 S.E.2d 708 (1993).

If a lease refers to "reasonable attorney's fees" and does not stipulate a specific percentage, subdivision (2) applies and the amount of attorneys' fees is 15% of the outstanding balance. Devereux Properties, Inc. v. BBM & W, Inc., 114 N.C. App. 621, 442 S.E.2d 555, cert. denied, 337 N.C. 690, 448 S.E.2d 519 (1994).

When reasonable attorneys' fees are authorized in property owners' association's bylaws without specifying a certain percentage, the provision shall be construed to mean 15% of the balance outstanding on the assessments. McGinnis Point Owners Ass'n v. Joyner, 135 N.C. App. 752, 522 S.E.2d 317 (1999).

Subdivision (5) Is Mandatory. - The statutory use of "shall" renders the provision in subdivision (5) of this section requiring notice mandatory. Although the form of notice required is not specified by the statute, it is clear that the notice must be written and that such notice must advise the debtor of his right under subdivision (5) to pay the outstanding balance on the note without incurring attorneys' fees. Blanton v. Sisk, 70 N.C. App. 70, 318 S.E.2d 560 (1984).

Construction of Subdivision (5). - The notice provision of subdivision (5) of this section simply provides that the obligor will have five days' notice to pay any outstanding balance on the debt before the claimant goes to the expense of employing counsel to collect the balance due. G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, cert. denied, 320 N.C. 458, 356 S.E.2d 75 (1987), aff 'd, 94 N.C. App. 769, 381 S.E.2d 718 (1989).

Notice Prerequisite to Collection of Attorneys' Fees Under Subdivision (5). - Subdivision (5) of this section allows recovery of attorneys' fees incurred in the collection of a note, provided written notice is sent to the debtor advising him of his right under the statute to pay the outstanding balance on the note without incurring the attorneys' fees; but where the record failed to contain any evidence of such notice to the debtor, attorneys' fees were improperly granted. Northwestern Bank v. Barber, 79 N.C. App. 425, 339 S.E.2d 452, cert. denied, 316 N.C. 733, 345 S.E.2d 391 (1986).

The case law is clear that a party seeking to collect attorneys' fees incurred in the enforcement of a note must notify in writing the opposing party of this intent. Thomas v. Miller, 105 N.C. App. 589, 414 S.E.2d 58, cert. denied, 331 N.C. 557, 417 S.E.2d 807 (1992).

Summary judgment was inappropriate where there were genuine issues of material fact with respect to plaintiff's claim for attorney's fees, specifically, the forecast of evidence produced by both parties did not establish whether plaintiff complied with the statutory notice requirement in G.S. 6-21.2(5). Davis Lake Community Ass'n v. Feldmann, 138 N.C. App. 292, 530 S.E.2d 865 (2000).

Although summary judgment was granted in favor of the receiver, its request for an award of attorney's fees pursuant to G.S. 6-21.2(5) was denied because it failed to satisfy the notice requirement of G.S. 6-21.2. FDIC v. Cashion, - F. Supp. 2d - (W.D.N.C. Apr. 2, 2012).

Trial court did not err in awarding attorney's fees to defendant in plaintiff's suit as defendant properly notified plaintiff that it was seeking attorney's fees when it filed its response to plaintiff's complaint and its own claim for the balance due on the contract; thus, G.S. 6-21.2(5) was inapplicable to the situation. Finch v. Campus Habitat, L.L.C., 220 N.C. App. 146, 724 S.E.2d 174 (2012).

Although documents Chapter 11 debtors signed when they borrowed money from an LLC allowed the LLC to recover attorneys' fees it incurred to collect the debt once the debtors defaulted, the LLC was precluded under G.S. 6-21.2 from recovering pre-petition fees under 11 U.S.C.S. § 502 because notice it provided to the male debtor did not explicitly inform the debtors that it intended to enforce the attorneys' fee provision. In re Parker, - Bankr. - (Bankr. E.D.N.C. Aug. 27, 2015).

Subdivision (5) of this section sets no time limit on the giving of the notice required. First Citizens Bank & Trust Co. v. Larson, 22 N.C. App. 371, 206 S.E.2d 775, cert. denied, 286 N.C. 214, 209 S.E.2d 315 (1974); Gillespie v. DeWitt, 53 N.C. App. 252, 280 S.E.2d 736, cert. denied, 304 N.C. 390, 285 S.E.2d 832 (1981).

Findings on Notice Requirements. - Where nothing in the record indicated that plaintiffs/property owners' association did or did not provide defendants/property owners written notice in accord with this section, the trial court was unauthorized to award attorneys' fees and case was remanded for findings on the issue of notice. McGinnis Point Owners Ass'n v. Joyner, 135 N.C. App. 752, 522 S.E.2d 317 (1999).

Reasonableness as Key Factor. - Reasonableness, not arbitrary classification of attorney activity, is the key factor under all the attorneys' fees statutes. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650, cert. denied, 312 N.C. 621, 323 S.E.2d 922 (1984).

Where a lease agreement provided for the payment of "reasonable attorney's fees" should the landlord have needed to employ an attorney to collect rent or enforce its other rights and remedies under the lease, but did not refer to any specific percentage, subdivision (2) of this section predetermined that fifteen percent (15%) was a reasonable amount. RC Assocs. v. Regency Ventures, Inc., 111 N.C. App. 367, 432 S.E.2d 394 (1993).

Although a creditor secured by bankruptcy debtors' real property was entitled by contract to recover attorney fees incurred in foreclosing against the property, a statutory percentage of the foreclosure sale price did not establish reasonable attorney fees under federal law, and the creditor was required to establish the reasonableness of attorney fees. In re Ormond, - Bankr. - (Bankr. E.D.N.C. Mar. 3, 2015).

Creditor's motion to reconsider and application for compensation were granted because creditor submitted timesheets that aided court in determining reasonableness of its fees and counsel for creditor dedicated substantial amount of time to this case subsequent to June 19, 2019 and would continue to spend time on this case in future. In re Shore, - Bankr. - (Bankr. M.D.N.C. May 19, 2020).

Notice Held Sufficient. - Notice of intent to enforce attorneys' fees provision of note held sufficient. Federal Land Bank v. Lieben, 86 N.C. App. 342, 357 S.E.2d 700 (1987).

Language in a guaranty contract was sufficient to put a guarantor on notice that he would be liable for attorney's fees if he failed to make the guaranteed payment before the creditor found it necessary to employ an attorney to collect the debt. RC Assocs. v. Regency Ventures, Inc., 111 N.C. App. 367, 432 S.E.2d 394 (1993).

Where an agreement only mentioned reasonable attorneys' fees and did not specify an exact amount to be paid, this section governed, and the trial court properly allowed the plaintiff to recover reasonable fees amounting to 15% of the outstanding balance owed on defendants' account. W.S. Clark & Sons v. Ruiz, 87 N.C. App. 420, 360 S.E.2d 814 (1987).

Demand by Obligor for Arbitration. - The notice provisions of subdivision (5) of this section have no application in a situation where the obligor has refused to pay obligee's claim and demanded arbitration pursuant to the terms of the contract. Moreover, when obligee filed its response to obligor's demand for arbitration, and its own claim for the balance due on the contract, it clearly notified obligor that it was demanding attorneys' fees under the terms of the contract. G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, cert. denied, 320 N.C. 798, 361 S.E.2d 75 (1987), aff 'd, 94 N.C. App. 769, 381 S.E.2d 718 (1989).

Evidence of Indebtedness Held Sufficient. - Credit application signed by partner was sufficient evidence of indebtedness under this section to obligate partnership to pay attorneys' fees. Hedgecock Bldrs. Supply Co. v. White, 92 N.C. App. 535, 375 S.E.2d 164 (1989).

Notice in Bankruptcy Case. - Where the notice issue was first raised on appeal it was not too late for the creditor to give notice that it was seeking attorneys' fees for involvement in bankruptcy case. Three Sisters Partners v. Harden (In re Shangra-La, Inc.), 167 F.3d 843 (4th Cir. 1999).

No Award of Attorneys' Fees Where Plaintiff Failed to Notify. - Where provision in note provided for payment of note holder's costs and expenses in enforcing note if makers failed to pay as required, and these costs and expenses specifically included "reasonable" attorneys' fees, but there was no evidence that plaintiff notified defendants of its intention to collect attorneys' fees pursuant to this section, award of attorneys' fees was in error. Raleigh Fed. Sav. Bank v. Godwin, 99 N.C. App. 761, 394 S.E.2d 294 (1990).

Failure To Make Findings Of Fact To Support Award. - Trial court erred in awarding plaintiff attorney's fees and costs under G.S. 6-21.2 because the trial court failed to make the necessary findings of fact to support such award. Rink & Robinson, PLLC v. Catawba Valley Enters., LLC, 220 N.C. App. 360, 725 S.E.2d 426 (2012).

There was sufficient evidence to support award of attorneys' fee of $24,308.00 where the award was supported by the affidavit of plaintiff's attorney, and billing statements showing the actual work performed and the attorneys' hourly rates, and the trial court made findings of fact as to the reasonable amount of time required for the services and the reasonableness of the hourly rates. Barker v. Agee, 93 N.C. App. 537, 378 S.E.2d 566 (1989), rev'd on other grounds, 326 N.C. 470, 389 S.E.2d 803 (1990).

The defendants/homeowners pled a valid state law counter-claim of unfair debt collector's practices, and a violation of this section, against the plaintiff/homeowners' association where the defendants were consumers who incurred a debt which the homeowners' association was trying to collect, where the defendants claimed that the amount collected included an excessive attorneys' fee, and where the plaintiffs' dues collecting activities affected commerce. Davis Lake Community Ass'n v. Feldmann, 138 N.C. App. 292, 530 S.E.2d 865 (2000).

Attorney's Fees Provision in Credit Agreement Held Enforceable. - Where, although no supporting affidavit was presented, there was a formal credit agreement which provided for reasonable attorney's fees for the collection of past due debts, and the trial court had before it the pleadings, depositions, and interrogatories, enabling it to make a determination as to the extent of work performed by counsel and the reasonableness of the fees assessed, the attorney's fees provision was legally enforceable. Institution Food House, Inc. v. Circus Hall of Cream, Inc., 107 N.C. App. 552, 421 S.E.2d 370 (1992).

Recovery of Percentage of Outstanding Balance. - Where contract provided that owner would pay reasonable attorneys' fees incurred by the contractor for the collection of any defaulted payment, under the provisions of this section, contractor could recover as attorneys' fees 15% of the "outstanding balance" due on the contract. G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, cert. denied, 320 N.C. 798, 361 S.E.2d 75 (1987).

Fees in Related Actions. - Since attorneys may engage in an infinite variety of activities to bring a case to successful settlement or verdict, when other actions are reasonably related to the collection of the underlying note sued upon, attorneys' fees incurred therein may properly be awarded under this section. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650, cert. denied, 312 N.C. 621, 323 S.E.2d 922 (1984).

When the trial court awarded a lessee attorney fees for the breach of a commercial lease, it was not required to award attorney fees for an underlying summary ejectment action; a reasonable relationship between actions did not require an award of fees. N.C. Indus. Capital, LLC v. Clayton, 185 N.C. App. 356, 649 S.E.2d 14 (2007).

In a lessor's deficiency suit for breach of three commercial leases, the lessor was properly awarded attorneys' fees and costs because the lessor was required to pursue multiple actions in multiple venues to recover, and its filing in the lessee's bankruptcy proceeding was reasonably related to collection of the lease deficiency. Telerent Leasing Corp. v. Boaziz, 200 N.C. App. 761, 686 S.E.2d 520 (2009).

Where notes provided for attorney fees incurred in connection with collection of a debt from bankruptcy debtors, the creditor was entitled to attorney fees for services in connection with postpetition financing, supervision of the debtors' farming operations, involvement in crop sale issues, and other ancillary matters which were all efforts taken to expedite collection and preserve assets, and thus the fees incurred in such actions were sufficiently related to collection of the debt. In re Winslow, - Bankr. - (Bankr. E.D.N.C. June 22, 2011).

Fee Where Percentage Not Specified. - Where a credit agreement between the creditor and the grocery store and an indemnity agreement between the creditor and the debtor did not specify the percentage of the outstanding balance that would be allowable as reasonable attorney fees for the enforcement of the agreements, reasonable attorney fees would be construed to mean 15 percent of the outstanding balance under the agreement. MEMO Money Order Co. v. Davis (In re Davis), 371 B.R. 127 (Bankr. E.D.N.C. 2007), vacated, on other grounds, 381 B.R. 650 (Bankr. E.D.N.C. 2008), MEMO Money Order Co. v. Davis (In re Davis), 371 B.R. 127 (Bankr. E.D.N.C. 2007).

Motion for summary judgment was granted because the provision in the note regarding payment of attorneys' fees did not specify an amount of fees to be awarded, the receiver was entitled to recover from the borrower its attorneys' fees in an amount equal to 15 percent of the outstanding balance of the note. FDIC v. Hager, - F. Supp. 2d - (W.D.N.C. Mar. 6, 2012).

No Error in Fee Calculation. - In a suit for the breach of a commercial lease, the trial court did not err in calculating the amount of attorney fees owed to the lessor; because the lessee presented testimonial and documentary evidence that raised doubts about the extent of the lessor's damages under the contract, the "outstanding balance" due under the lease was a question for the jury. N.C. Indus. Capital, LLC v. Clayton, 185 N.C. App. 356, 649 S.E.2d 14 (2007).

Third Party Must Be Transactionally Related. - This section does not authorize attorneys' fees against a third party who is not transactionally related to the document containing the fees provision. Mountain Farm Credit Serv. v. Purina Mills, Inc., 119 N.C. App. 508, 459 S.E.2d 75 (1995).

Merit Bonus. - It is true that the quality of services rendered is properly considered in awarding fees, as well as the nature of the services required, and hence the scope and complexity of the case. However, there is no North Carolina authority for an award of a "merit bonus." Even assuming such bonuses are allowed, as under federal practice, that should occur only in the "rare case" where the applicant specifically shows superior quality representation and exceptional success. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650, cert. denied, 312 N.C. 621, 323 S.E.2d 922 (1984).

Attorney Fees as Part of Subcontract. - Under G.S. 6-21.2, the subcontract was evidence of indebtedness and as such the subcontractor was entitled to recover attorney fees from the other subcontractor that hired it; subcontractor was also entitled to collect its attorney fees from the prime contractor because the subcontract was part of the contract for the federal project. United States ex rel. SCCB, Inc. v. P. Browne & Assoc., 751 F. Supp. 2d 813 (M.D.N.C. Nov. 9, 2010).

Attorney Fees Permitted in Bankruptcy. - Creditor's claims for post-petition attorneys' fees on underlying unsecured claims were allowed pursuant to 11 U.S.C.S. § 502 because the debtor did not suggest the contract for attorney's fees, which was consistent with G.S. 6-21.2(2) (2013), was unenforceable other than to rely on the fact that the underlying claims were unsecured. No provision under § 502 expressly disallowed attorney's fees on unsecured claims and the purpose of 11 U.S.C.S. § 506 was to determine what amounts may be recovered from the value of the collateral, not to determine the validity of a claim. In re Holden, 491 B.R. 728 (Bankr. E.D.N.C. 2013).

Bank that held a secured claim against real property that was owned by an attorney ("debtor") who declared Chapter 13 bankruptcy was allowed under 11 U.S.C.S. § 506 to recover $7,612 in attorneys' fees and a $1,500 appraisal fee it incurred to protect its interest because its claim against the debtor was oversecured; although there was merit to the debtor's claim that an attorney the bank hired should have billed the bank at a reduced hourly rate for travel time, the bank was entitled to recover the full amount of fees it requested because it had limited its claim for attorneys' fees to fifteen percent of the balance the debtor owed on the note, pursuant to G.S. 6-21.2, and showed that fees it incurred exceeded $8,225. In re Badgett, - Bankr. - (Bankr. M.D.N.C. Aug. 31, 2015).

Attorney Fees Permitted. - Fees incurred by bank's attorneys in prior foreclosure proceeding or in any action "connected" with the collection of debt owed by plaintiff were permissible under this section. Trull v. Central Carolina Bank & Trust, 124 N.C. App. 486, 478 S.E.2d 39 (1996), aff'd in part and discretionary review improvidently allowed in part, 347 N.C. 262, 490 S.E.2d 238 (1997).

In an action regarding the purchase and sale of a business, when the sellers counterclaimed on the promissory note executed by the buyer, the sellers were entitled to attorney's fees under the provisions of that note, and G.S. 6-21.2(1), as the amount of the note was clear, the buyer defaulted, and the mandatory notice requirement of G.S. 6-21.2(5) was satisfied. Kindred of N.C. Inc. v. Bond, 160 N.C. App. 90, 584 S.E.2d 846 (2003).

Guaranty agreement was written, signed by the trustee, and, in the event of the principal obligor's default, was a legally enforceable obligation to pay money; therefore, the agreement constituted evidence of indebtedness under G.S. 6-21.2, and the award of attorneys fees was appropriate. FNB Southeast v. Lane, 160 N.C. App. 535, 586 S.E.2d 530 (2003), cert. denied, 358 N.C. 153, 592 S.E.2d 558 (2004).

Oversecured creditor in a Chapter 11 won full reimbursement of legal fees incurred in connection with its $1,961,585 claim on a promissory note, a loan agreement and a guaranty per 11 U.S.C.S. § 506(b) because the provisions in the underlying agreements under which the creditor was seeking to collect those fees were enforceable under G.S. 6-21.2 and because the total amount sought was less than 15% of the entire debt. In re Pak-a-Sak Food Stores, Inc., - Bankr. - (Bankr. E.D.N.C. Jan. 9, 2008).

In a Chapter 11 case, an oversecured creditor was entitled to attorneys' fees in the amount sought under 11 U.S.C.S. § 506(b) and G.S. 6-21.2. Based on the broad language of the attorneys' fees provision in the note and keeping in line with the liberal construction of G.S. 6-21.2, all of the services described in the creditor's application were reasonable. In re F & G Leonard, LLC, - Bankr. - (Bankr. E.D.N.C. Oct. 21, 2011).

Trial court properly awarded attorneys' fees in the amount of fifteen percent of the outstanding balance to a bank, as provided in the promissory note and deed of trust the borrowers agreed to and signed, because the bank's pleading contained the required statutory notice; the borrowers received the bank's notice of intent to collect attorneys' fees, as evidenced by their answer to the bank's pleading; and the borrowers failed to release and pay the escrowed funds to the bank within five days. In re Dispute over the Sum of $375,757.47, 240 N.C. App. 505, 771 S.E.2d 800 (2015).

Attorney Fees Not Permitted. - Attorney fees under G.S. 6-21.2 were not warranted because even if the asset purchase agreement and the escrow agreement were evidence of plaintiff's indebtedness to defendant, the documents did not impose an independent obligation on plaintiff to pay defendant's attorney's fees in the event that the debt was collected through an attorney. Hexion Specialty Chems., Inc. v. Oak-Bark Corp., - F. Supp. 2d - (E.D.N.C. June 26, 2012).

Qualification As Prevailing Party Not Required. - This section does not require that a party seeking attorneys' fees under this section qualify as a "prevailing party" in litigation. Trull v. Central Carolina Bank & Trust, 124 N.C. App. 486, 478 S.E.2d 39 (1996), aff'd in part and discretionary review improvidently allowed in part, 347 N.C. 262, 490 S.E.2d 238 (1997).

Not Applicable to Condominium Act. - Had the General Assembly wished that the recovery of attorney's fees under the Condominium Act be governed by this section, they could have included language to that effect. Brookwood Unit Ownership Ass'n v. Delon, 124 N.C. App. 446, 477 S.E.2d 225 (1996).

This section could not form the statutory basis to award plaintiffs attorneys' fees, where the defendants, the parties owed the debt, were not seeking to recover attorneys' fees and where the debt had not matured. Lee Cycle Ctr., Inc. v. Wilson Cycle Ctr., Inc., 143 N.C. App. 1, 545 S.E.2d 745 (2001).

Citing Provision Did Not Waive Parties' Choice of Law Election. - National bank did not elect to apply North Carolina law by citing G.S. 6-21.2 in its complaint, as the parties clearly intended federal law and South Dakota law to govern, the bank charged the customer interest and fees in accordance with federal and South Dakota law, and the presumption of lex loci contractus was not rebutted; further, the bank did not waive its right to apply federal or South Dakota law. Citibank, S.D., N.A. v. Palma, 184 N.C. App. 504, 646 S.E.2d 635 (2007).

Applied in Armel Mgt. Corp. v. Stanhagen, 35 N.C. App. 571, 241 S.E.2d 713 (1978); Independence Nat'l Bank v. Dye Master Realty, Inc., 15 Bankr. 932 (Bankr. W.D.N.C. 1981); Colonial Lincoln-Mercury, Inc. v. Musgrave, 749 F.2d 1092 (4th Cir. 1984); L. Harvey & Son Co. v. Jarman, 76 N.C. App. 191, 333 S.E.2d 47 (1985); Unsecured Creditors' Comm. 82-00261c-11A v. Walter E. Heller & Co. S.E., Inc., 768 F.2d 580 (4th Cir. 1985); Lawrence v. Wetherington, 108 N.C. App. 543, 423 S.E.2d 829 (1993); Jennings Communications Corp. v. PCG of Golden Strand, Inc., 126 N.C. App. 637, 486 S.E.2d 229 (1997); First-Citizens Bank & Trust Co. v. 4325 Park Rd. Assocs., 133 N.C. App. 153, 515 S.E.2d 51 (1999); Bank of Am., N.A. v. Rice, 244 N.C. App. 358, 780 S.E.2d 873 (2015).

Cited in International Harvester Credit Corp. v. Ricks, 16 N.C. App. 491, 192 S.E.2d 707 (1972); Phil Mechanic Constr. Co. v. Gibson, 30 N.C. App. 385, 226 S.E.2d 837 (1976); Nytco Leasing, Inc. v. Dan-Cleve Corp., 31 N.C. App. 634, 230 S.E.2d 559 (1976); North Carolina Nat'l Bank v. Burnette, 38 N.C. App. 120, 247 S.E.2d 648 (1978); American Foods, Inc. v. Goodson Farms, Inc., 50 N.C. App. 591, 275 S.E.2d 184 (1981); In re Will of Parker, 76 N.C. App. 594, 334 S.E.2d 97 (1985); Coe v. Thermasol, Ltd., 615 F. Supp. 316 (W.D.N.C. 1985); Bryant v. Pitt, 78 N.C. App. 801, 338 S.E.2d 588 (1986); Merritt v. Knox, 94 N.C. App. 340, 380 S.E.2d 160 (1989); Thorneburg Hosiery Co. v. G.L. Wilson Bldg. Co., 94 N.C. App. 769, 381 S.E.2d 718 (1989); First Am. Bank v. Carley Capital Group, 99 N.C. App. 667, 394 S.E.2d 237 (1990); West End III Ltd. Partners v. Lamb, 102 N.C. App. 458, 402 S.E.2d 472 (1991); Pinnacle Group, Inc. v. Shrader, 105 N.C. App. 168, 412 S.E.2d 117 (1992); Wachovia Bank v. Bob Dunn Jaguar, Inc., 117 N.C. App. 165, 450 S.E.2d 527 (1994); Smith v. Martin, 124 N.C. App. 592, 478 S.E.2d 228 (1996); Reid v. Ayers, 138 N.C. App. 261, 531 S.E.2d 231 (2000); Harborgate Prop. Owners Ass'n v. Mt. Lake Shores Dev. Corp., 145 N.C. App. 290, 551 S.E.2d 207 (2001); Branch Banking & Trust Co. v. Morrison, 191 N.C. App. 173, 661 S.E.2d 784 (2008); Belk v. Belk, 221 N.C. App. 1, 728 S.E.2d 356 (2012).


§ 6-21.3. Remedies for returned check.

  1. Notwithstanding any criminal sanctions that may apply, a person, firm, or corporation who knowingly draws, makes, utters, or issues and delivers to another any check or draft drawn on any bank or depository that refuses to honor the same because the maker or drawer does not have sufficient funds on deposit in or credit with the bank or depository with which to pay the check or draft upon presentation or because the check has previously been presented and honored for the payment of money or its equivalent, and who fails to pay the same amount, any service charges imposed on the payee by a bank or depository for processing the dishonored check, and any processing fees imposed by the payee pursuant to G.S. 25-3-506 in cash to the payee within 30 days following written demand therefor, shall be liable to the payee (i) for the amount owing on the check, the service charges, and processing fees and (ii) for additional damages of three times the amount owing on the check, not to exceed five hundred dollars ($500.00) or to be less than one hundred dollars ($100.00). If the amount claimed in the first demand letter is not paid, the claim for the amount of the check, the service charges and processing fees, and the treble damages provided for in this subsection may be made by a subsequent letter of demand prior to filing an action. In an action under this section the court or jury may, however, waive all or part of the additional damages upon a finding that the defendant's failure to satisfy the dishonored check or draft was due to economic hardship.
  2. The first notification letter shall be substantially in the following form:
  3. If the total amount due in subsection (a1) has not been paid within 30 days after the mailing of the notification letter, a subsequent demand letter may be sent and shall be substantially in the following form:
  4. In an action under subsection (a) of this section, the presiding judge or magistrate may award the prevailing party, as part of the court costs payable, a reasonable attorney's fee to the duly licensed attorney representing the prevailing party in such suit.
  5. It shall be an affirmative defense, in addition to other defenses, to an action under this section if it is found that: (i) full satisfaction of the amount of the check or draft was made prior to the commencement of the action, or (ii) that the bank or depository erred in dishonoring the check or draft, or (iii) that the acceptor of the check knew at the time of acceptance that there were insufficient funds on deposit in the bank or depository with which to cause the check to be honored.
  6. The remedy provided for herein shall apply only if the check was drawn, made, uttered or issued with knowledge there were insufficient funds in the account, that no credit existed with the bank or depository with which to pay the check or draft upon presentation, or that the check was presented with the knowledge that the check had previously been presented and honored for the payment of money or its equivalent.
  7. A check or draft refused by a bank or depository, or the image of that check or draft, may be submitted as evidence for the remedy provided by this section if the bank or depository has returned it in the regular course of business stamped, marked, or with an attachment indicating the reason for the dishonor with terms that include, but are not limited to, the following: "insufficient funds," "no account," "account closed," "NSF," "uncollected," "unable to locate," "stale dated," "postdated," "endorsement irregular," "signature irregular," "nonnegotiable," "altered," "unable to process," "refer to maker," "duplicate presentment," "forgery," "noncompliant," or "UCD noncompliant."

The initial written demand for the amount of the check, the service charges, and processing fees shall be mailed by certified mail to the defendant at the defendant's last known address and shall be in the form set out in subsection (a1) of this section. The subsequent demand letter demanding the amount of the check, the service charges, the processing fees, and treble damages shall be mailed by certified mail to the defendant at the defendant's last known address and shall be in the form set out in subsection (a2) of this section. If the payee chooses to send the demand letter set out in subsection (a2) of this section, then the payee may not file an action to collect the amount of the check, the service charges, the processing fees, or treble damages until 30 days following the written demand set out in subsection (a2) of this section.

This letter is written pursuant to G.S. 6-21.3 to inform you that on ______________________________, you made and delivered to the business listed above a check payable to this business containing your name and address in the sum of $__________, drawn upon __________________ (bank or institution), account #__________. [If the check was received in a face-to-face transaction insert this sentence: This check contained a drivers license identification number from a card with your photograph and mailing address, which was used to identify you at the time the check was accepted.] [If the check was delivered by mail insert this sentence: We have compared your name, address, and signature on the check with the name, address, and signature on file in the account previously established by you or on your behalf, and the signature on the check appears to be genuine.] Also, we have received no information that this was a stolen check, if that is the circumstance. The check has been dishonored by the bank for the following reasons: _________________________________________________________________________

As acceptor of the check, we give you notice to rectify any bank error or other error in connection with the transaction, and to pay the face value of the check, plus the fees as authorized under G.S. 25-3-506 and G.S. 6-21.3(a) as follows:

Face value of the check # $ __________________ Processing fee authorized under G.S. 25-3-506 $ __________________ Bank service fees authorized under G.S. 6-21.3 $ __________________ Total amount due: $ __________________

If the total amount due listed above is not paid within 30 days of the mailing of this letter, thereafter we may file a civil action to seek civil damages of three times the amount of the check (with a minimum damage of one hundred dollars ($100.00) and a maximum damage of five hundred dollars ($500.00)) for allegedly giving a worthless check in violation of law (G.S. 6-21.3), in addition to the amount of the check and the fees specified above.

Appropriate relief will then be sought before a court of proper jurisdiction for full payment of the check plus all costs, treble damages, and witness fees.

If you do not believe you are liable for these amounts, you will have a right to present your defense in court. To pay the check or obtain information, contact the undersigned at the above business location. Cash or a bank official check will be the only acceptable means of redeeming the dishonored check.

If you do not believe that you owe the amount claimed in this letter or if you believe you have received this letter in error, please notify the undersigned at the above business location as soon as possible.

On __________________, we informed you that we received a check payable to this business containing your name and address in the sum of $__________, drawn upon __________________ (bank or institution), account #______________________________. This check contained identification information which was used to identify you as the maker of the check. Also, we have received no information that this was a stolen check, if that is the circumstance. The check has been dishonored by the bank for the following reasons: __________________________________________________________________________ We notified you that you were responsible for the face value of the check ($__________) plus the fees authorized under G.S. 25-3-506 ($__________) and G.S. 6-21.3(a) ($__________) for a total amount due of $__________. Thirty days have passed since the mailing of that notification letter, and you have not made payment to us for that total amount due.

Under G.S. 6-21.3, we claim you are now liable for the face value of the check, the fees, and treble damages. The damages we claim are three times the amount of the check or one hundred dollars ($100.00), whichever is greater, but cannot exceed five hundred dollars ($500.00). The total amount we claim now due is:

Face value of the check $ __________________ Processing fee authorized under G.S. 25-3-506 $ __________________ Bank service fees authorized under G.S. 6-21.3 $ __________________ Three times the face value of the check, with a minimum of $100.00 and a maximum of $500.00 $ __________________ Total amount due: $ __________________

Payment of the total amount claimed above within 30 days of the mailing of this letter shall satisfy this civil remedy for the returned check.

If payment has not been received within this 30-day period, we will seek appropriate relief before a court of proper jurisdiction for full payment of the check plus all costs, treble damages, and witness fees.

If you do not believe you are liable for these amounts, you will have a right to present your defense in court. To pay the check or obtain information, contact the undersigned at the above business location. Cash or a bank official check will be the only acceptable means of redeeming the dishonored check.

If you do not believe that you owe the amount claimed in this letter or if you believe you have received this letter in error, please notify the undersigned at the above business location as soon as possible.

History

(1975, c. 129, s. 1; 1981, c. 781, s. 2; 1985, c. 643; 1993, c. 374, s. 1; 1995, c. 356, s. 1; 1995 (Reg. Sess., 1996), c. 742, s. 5; 2013-244, ss. 1-3.)

Editor's Note. - Session Laws 2013-244, s. 6, made the amendment to this section by Session Laws 2013-244, ss. 1-3, applicable to offenses committed on or after December 1, 2013.

Effect of Amendments. - Session Laws 2013-244, ss. 1, 2, and 3, effective December 1, 2013, in the first paragraph of subsection (a), added "or because the check has previously been presented and honored for the payment of money or its equivalent" and made a minor punctuation change; in subsection (d), deleted "or" following "funds in the account," added "or that the check was presented with the knowledge that the check had previously been presented and honored for the payment of money or its equivalent," and made minor punctuation changes; and added subsection (e). For applicability, see editor's note.

§ 6-21.4. Allowance of counsel fees and costs in certain cases involving principals or teachers.

In any civil action brought against a public school principal or teacher as defined in G.S. 115C-390 arising or resulting from the use of corporal punishment, upon a determination that the principal or teacher has prevailed and that the plaintiff's action was frivolous or without substantial merit, the presiding judge may, in his discretion, allow a reasonable attorney fee to the duly licensed attorney representing the principal or teacher. The attorney's fee shall be taxed as part of the court costs.

History

(1981, c. 381, s. 1; c. 682, s. 22.)

Legal Periodicals. - For article, "The Legal Theory of Attorney Fee Shifting: A Critical Overview," see 1982 Duke L.J. 651.

For note, "A Public Goods Approach to Calculating Reasonable Fees Under Attorney Fee Shifting Statutes," see 1989 Duke L.J. 438.

CASE NOTES

Reasonableness as Key Factor. - Reasonableness, not arbitrary classification of attorney activity, is the key factor under all the attorneys' fees statutes. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650, cert. denied, 312 N.C. 621, 323 S.E.2d 922 (1984).

Merit Bonus. - It is true that the quality of services rendered is properly considered in awarding fees, as well as the nature of the services required, and hence the scope and complexity of the case. However, there is no North Carolina authority for an award of a "merit bonus." Even assuming such bonuses are allowed, as under federal practice, that should occur only in the "rare case" where the applicant specifically shows superior quality representation and exceptional success. Coastal Prod. Credit Ass'n v. Goodson Farms, Inc., 70 N.C. App. 221, 319 S.E.2d 650 (1984).


§ 6-21.5. Attorney's fees in nonjusticiable cases.

In any civil action, special proceeding, or estate or trust proceeding, the court, upon motion of the prevailing party, may award a reasonable attorney's fee to the prevailing party if the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the losing party in any pleading. The filing of a general denial or the granting of any preliminary motion, such as a motion for judgment on the pleadings pursuant to G.S. 1A-1, Rule 12, a motion to dismiss pursuant to G.S. 1A-1, Rule 12(b)(6), a motion for a directed verdict pursuant to G.S. 1A-1, Rule 50, or a motion for summary judgment pursuant to G.S. 1A-1, Rule 56, is not in itself a sufficient reason for the court to award attorney's fees, but may be evidence to support the court's decision to make such an award. A party who advances a claim or defense supported by a good faith argument for an extension, modification, or reversal of law may not be required under this section to pay attorney's fees. The court shall make findings of fact and conclusions of law to support its award of attorney's fees under this section.

History

(1983 (Reg. Sess., 1984), c. 1039, s. 1; 2006-259, s. 13( l ).)

Effect of Amendments. - Session Laws 2006-259, s. 13( l ), effective October 1, 2006, substituted "civil action, special proceeding, or estate or trust proceeding," for "civil action or special proceeding" in the first sentence. For applicability provisions, see Editor's note.

Legal Periodicals. - For note, "A Public Goods Approach to Calculating Reasonable Fees Under Attorney Fee Shifting Statutes," see 1989 Duke L.J. 438.

For article, "Defining North Carolina's Public Records and Open Meetings Feeshifting Provisions in the Larger National Context,” see 96 N.C.L. Rev. 1725 (2018).

CASE NOTES

The purpose of this statute is not served by treating those who bring frivolous suits against indigent parties differently from those who bring frivolous suits against parties who can afford to retain their own counsel; therefore, the trial court's limitation of the attorneys' fee award to the court-appointed rate of $35.00 per hour was error. Clark v. Williamson, 91 N.C. App. 668, 373 S.E.2d 317 (1988).

Strict Construction of This Section. - Because statutes awarding an attorneys' fee to the prevailing party are in derogation of the common law, this section must be strictly construed. Sunamerica Fin. Corp. v. Bonham, 328 N.C. 254, 400 S.E.2d 435 (1991).

Construction With Other Laws. - When a patient filed a state suit against a hospital, and, in response to a dismissal motion, moved to voluntarily dismiss and remand to federal court due to ERISA claims, the hospital's motion for attorney fees failed because it was not a prevailing party due to the voluntary dismissal; unlike this section, which allowed fees at any stage to discourage frivolous litigation, G.S. 75-16.1 encouraged private enforcement of the Unfair and Deceptive Practices Act. Jenkins v. Moses H. Cone Mem'l Health Servs. Corp., - F. Supp. 2d - (E.D.N.C. Oct. 23, 2015).

Lack of Jurisdiction to Award Fees and Costs. - Award of attorneys' fees to the county was error, as the notice of appeal divested the trial court of jurisdiction pursuant to G.S. 1-294. Morgan v. Nash County, 222 N.C. App. 481, 731 S.E.2d 228 (2012).

Absence of Justiciable Issue. - To recover attorneys' fees under G.S. 6-21.5, the party claiming attorney fees must be the "prevailing party," and there must be "a complete absence of a justiciable issue of either law or fact raised by the losing party in any pleading." Bryson v. Sullivan, 102 N.C. App. 1, 401 S.E.2d 645 (1991), modified on other grounds, 330 N.C. 644, 412 S.E.2d 327 (1992).

The mere filing of an affirmative defense without more is not sufficient to establish the absence of a justiciable issue, nor is the grant of a G.S. 1A-1, Rule 12(b)(6) motion, nor the entry of summary judgment. These events may only be evidence of the absence of a justiciable issue. However, action by the losing party which perpetuated litigation in the face of events substantially establishing that the pleadings no longer presented a justiciable controversy may also serve as evidence for purposes of G.S. 6-21.5. Sunamerica Fin. Corp. v. Bonham, 328 N.C. 254, 400 S.E.2d 435 (1991).

When defendant's answer raising the statute of limitations defense was filed and served, it should have become apparent to plaintiff that, barring circumstances permitting the statute of limitations to be tolled, the complaint no longer contained a justiciable issue. Sunamerica Fin. Corp. v. Bonham, 328 N.C. 254, 400 S.E.2d 435 (1991).

Attorney's fees award was proper under G.S. 6-21.1, although the operator's attorney's fees exceeded the actual damages, as the judgment entered for an operator, including prejudgment interest under G.S. 24-5(b), was below the $ 10,000 threshold; unlike G.S. 6-21.5, did not require that there be an absence of a justiciable issue of law or fact. Bryson v. Cort, 193 N.C. App. 532, 668 S.E.2d 84 (2008).

Attorneys' fees were properly awarded because an assignee of a default judgment for a credit card debt lacked standing to enforce the default judgment against a debtor, the supporting pleadings presented no justiciable issue, and the assignee reasonably should have known that it was pursuing a nonjusticiable claim. Credigy Receivables, Inc. v. Whittington, 202 N.C. App. 646, 689 S.E.2d 889 (2010), review denied, 364 N.C. 324, 700 S.E.2d 748 (2010), review denied 364 N.C. 324, 700 S.E.2d 748, 2010 N.C. LEXIS 617 (2010).

Water customer who was charged late fees failed to state a claim against the sanitary district for overcharging under N.C. Admin. Code tit. 4, r. 11.R12-9 (June 2010) because the sanitary district was a quasi-municipal corporation and therefore not a "utility" within the North Carolina Public Utilities Commission's purview under G.S. 62-3(19) and (23). There was a complete absence of justiciable fact, justifying the trial court's award of attorney's fees against the customers under G.S. 6-21.5. Wayne St. Mobile Home Park, LLC v. N. Brunswick Sanitary Dist., 213 N.C. App. 554, 713 S.E.2d 748 (2011).

Record simply did not support the business's argument that its claims were meritorious, and the trial court did not err in imposing sanctions based on its determination that the claims raised no justiciable issues. ACC Constr. v. SunTrust Mortg., Inc., 239 N.C. App. 252, 769 S.E.2d 200 (2015).

Trial court did not abuse its discretion in awarding plaintiffs attorneys fees because defendants' counterclaim contained no justiciable issue at the time it was filed, and the trial court's order contained the necessary findings to support its award of attorneys fees; it was in furtherance of the policy of the statute to discourage frivolous litigation, and as the prevailing party, plaintiffs were entitled to attorneys fees at the discretion of the trial court. McLennan v. Josey, 247 N.C. App. 95, 785 S.E.2d 144 (2016).

Review of the record established, at a minimum, that plaintiffs persisted in litigating the case after the point where they should have reasonably been aware that the pleadings no longer contained a justiciable issue. Based upon the record before it, the appellate court concluded the trial court did not abuse its discretion by awarding attorney fees and costs to defendants. Burton Constr. Cleanup & Landscaping, Inc. v. Outlawed Diesel Performance, LLC, 261 N.C. App. 317, 820 S.E.2d 123 (2018).

Absence of Justiciable Controversy. - It is possible that a pleading which, when read alone set forth a justiciable controversy, may, when read with a responsive pleading, no longer present a justiciable controversy. Sunamerica Fin. Corp. v. Bonham, 328 N.C. 254, 400 S.E.2d 435 (1991).

Section Not Limited to Initial Pleadings. - The legislative purpose of this section is to discourage frivolous legal action, and that purpose may not be circumvented by limiting the section's application to initial pleadings. Short v. Bryant, 97 N.C. App. 327, 388 S.E.2d 205 (1990).

Reasonable Attorneys' Fee. - Since this section authorizes the court to award "a reasonable attorney's fee," the trial court was not limited to the amount fixed by the district court in its payment of counsel appointed to indigent parties. Clark v. Williamson, 91 N.C. App. 668, 373 S.E.2d 317 (1988).

The only basis for the award of attorneys' fees under this section is the complete absence of a justiciable issue. Bryant v. Short, 84 N.C. App. 285, 352 S.E.2d 245, cert. denied, 319 N.C. 458, 356 S.E.2d 2 (1987), upholding order awarding attorneys' fees.

Before a court may tax attorneys' fees against a losing party under G.S. 6-21.5 based upon the complete absence of a justiciable legal issue, the prevailing party must provide proof that the losing party should reasonably have been aware of the complaint's legal deficiencies. Bryson v. Sullivan, 102 N.C. App. 1, 401 S.E.2d 645 (1991), modified on other grounds, 330 N.C. 644, 412 S.E.2d 327 (1992).

Limiting Damages Pursuant to This Section. - The case was remanded to the trial court for findings as to when plaintiffs should have reasonably determined that their claim against the employer of defendant driver was not justiciable so as to limit an award of attorneys' fees pursuant to this section from that point forward. Fox-Kirk v. Hannon, 142 N.C. App. 267, 542 S.E.2d 346 (2001), review denied, 353 N.C. 725, 551 S.E.2d 437 (2001), review dismissed, 353 N.C. 725, 551 S.E.2d 437 (2001).

A motion for attorney's fees pursuant to pursuant to G.S. 1A-1-11(a) or this section is not a continuation of adversary proceedings. VSD Communications, Inc. v. Lone Wolf Publishing Group, Inc., 124 N.C. App. 642, 478 S.E.2d 214 (1996).

With regard to determining whether attorneys' fees may be awarded under this section, the first issue is whether the pleading, when read in conjunction with all the responsive pleadings, facially presents a justiciable issue of law. If not, the second issue is whether the losing party should reasonably have been aware that the pleading he filed contained no justiciable issue of law. dePasquale v. O'Rahilly, 102 N.C. App. 240, 401 S.E.2d 827 (1991).

Instead of acknowledging that the defendant's answer raised a virtually unassailable defense which foreclosed any reasonable expectation of an affirmative recovery by plaintiff, plaintiff forged on frivolously attempting to create a controversy. Under these facts the trial court could have found that such frivolous litigation constitutes a reckless waste of judicial resources as well as the time and money of the prevailing litigants. Sunamerica Fin. Corp. v. Bonham, 328 N.C. 254, 400 S.E.2d 435 (1991).

This section appears to be based on deterring frivolous and bad faith lawsuits by the use of attorneys' fees. Daniels v. Montgomery Mut. Ins. Co., 81 N.C. App. 600, 344 S.E.2d 847 (1986), rev'd in part, aff'd in part, 320 N.C. 669, 360 S.E.2d 772 (1987).

"Justiciable issues" are those which are real and present, as opposed to imagined or fanciful. Sprouse v. North River Ins. Co., 81 N.C. App. 311, 344 S.E.2d 555, cert. denied, 318 N.C. 284, 348 S.E.2d 344 (1986).

"Complete absence of a justiciable issue" suggests that it must conclusively appear that such issues are absent, even giving the losing party's pleadings the indulgent treatment which they receive on motions for summary judgment or to dismiss. Sprouse v. North River Ins. Co., 81 N.C. App. 311, 344 S.E.2d 555, cert. denied, 318 N.C. 284, 348 S.E.2d 344 (1986).

Justiciable Issue Found. - Defendants were not entitled to attorney's fees because there was not a complete absence of a justiciable issue of either law or fact raised by plaintiffs' complaint even though the action was dismissed. Brittain v. Cinnoca, 111 N.C. App. 656, 433 S.E.2d 244 (1993), cert. denied, 339 N.C. 736, 454 S.E.2d 646 (1995).

Where plaintiffs' complaint contained a justiciable issue, the court erred in granting defendants' motions for attorneys' fees pursuant to this section. Village Creek Prop. Owners Ass'n v. Town of Edenton, 135 N.C. App. 482, 520 S.E.2d 793 (1999).

Where a contractor unsuccessfully asserted claims against a surety for bad faith and deceptive trade practices based on the surety's status as an insurer, the contractor's claims, although weak, were not frivolous, and the surety was not entitled to an award of attorney fees; the distinction between a relationship of insurance and a relationship of suretyship was an unsettled area of state law, and a finding that the one state case on point was determined to be controlling did not render the contractor's claims contrary to settled law. Cincinnati Ins. Co. v. Dynamic Dev. Group, LLC, 336 F. Supp. 2d 552 (M.D.N.C. 2004).

Denial of attorney fees to a former employee after the employer voluntarily dismissed its action for breach of a non-competition agreement against him with prejudice was not an abuse of discretion; the employee did not establish the lack of any justiciable issues of law and fact in the action. Kohler Co. v. McIvor, 177 N.C. App. 396, 628 S.E.2d 817 (2006).

Homeowners association could not recover attorney's fees under G.S. 6-21.5 as the homeowners raised an appropriate challenge to the validity of a restrictive covenant underlying a special assessment for attorneys fees incurred in a dispute with the homeowners, and a good-faith argument regarding the invalidity of the restrictive covenant. Willow Bend Homeowners Ass'n v. Robinson, 192 N.C. App. 405, 665 S.E.2d 570 (2008).

Where a former officer of a corporation alleged that the corporation breached an employment contract, breached a contract to convey real property, breached obligations under a note, but the agreements were found to be invalid and the officer was found liable for fraud and breach of fiduciary duty, an award of attorney fees to the corporation was not warranted since the officer's reasonable belief that the agreements were valid precluded a finding that there was no justiciable issue. Anderson v. Brokers, Inc. (In re Brokers, Inc.), 396 B.R. 146 (Bankr. M.D.N.C. 2008).

Trial court did not err in denying an airport authority and its members attorney fees under G.S. 6-21.5 because a corporation and its owner did not unreasonably continue to litigate some of their claims through trial, and although the trial court ultimately granted the authority and its members a directed verdict, there was nothing until that point indicating to the corporation and owner that no justiciable issue existed; denial of a motion to dismiss addressing only whether the complaint's allegations state a claim for relief does not preclude a determination that the actual facts, as opposed to the allegations, are not sufficient to raise a justiciable issue, and in contrast at the summary judgment stage the question is whether the non-movant has presented sufficient evidence to give rise to a genuine issue of fact on the material issues in the case and keep the case moving forward to the fact finder. Free Spirit Aviation, Inc. v. Rutherford Airport Auth., 206 N.C. App. 192, 696 S.E.2d 559 (2010).

Trial court did not abuse its discretion in denying defendants' motion for attorney's fees pursuant to G.S. 6-21.5 because plaintiff did not persist in litigating the case after a point where she should reasonably have become aware that the pleading she filed no longer contained a justiciable issue; although the trial court granted defendants' motion for summary judgment, there was not a complete absence of a justiciable issue of either law or fact, and because the trial court denied defendants' motion for judgment on the pleadings after receiving an amended complaint and answer, it necessarily did not find plaintiff's claims to lacked merit. Runnels v. Robinson, 212 N.C. App. 198, 711 S.E.2d 486 (2011).

Award of attorney's fees to a subcontractor was improper since the trial court erred in concluding that there was a complete absence of a justiciable issue and that the subcontractor was the prevailing party at the summary judgment phase. Bost Constr. Co. v. Blondy, 229 N.C. App. 491, 750 S.E.2d 917 (2013), review denied 367 N.C. 292, 753 S.E.2d 780, 2014 N.C. LEXIS 45 (2014), review denied 755 S.E.2d 612, 2014 N.C. LEXIS 195 (N.C. 2014).

Court Required to Make Findings. - Trial court was required to evaluate whether the losing party persisted in litigating the case after a point where he should reasonably have become aware that the pleading he filed no longer contained a justiciable issue. Winston-Salem Wrecker Ass'n v. Barker, 148 N.C. App. 114, 557 S.E.2d 614 (2001).

Costs and attorney fees were awarded to a property owner in error as the North Carolina Industrial Commission made no findings to support a conclusion that the North Carolina Department of Environment and Natural Resources presented no justiciable issue; G.S. 6-21.5 was inapplicable. Watts v. N.C. Dep't of Env't & Natural Res., 182 N.C. App. 178, 641 S.E.2d 811, review denied, 361 N.C. 704, 653 S.E.2d 878 (2007), aff'd in part, modified in part, 362 N.C. 487, 666 S.E.2d 752 (2008).

Specific Findings Not Required Absent Justiciable Issue. - The sufficiency of a pleading is a question of law for the court, and the trial court need not make its findings more detailed if it states that the pleading raised no justiciable issue of law or fact. Bryant v. Short, 84 N.C. App. 285, 352 S.E.2d 245, cert. denied, 319 N.C. 458, 356 S.E.2d 2 (1987).

Failure to Participate in Arbitration in Good Faith. - Failure of defendant in auto accident case to appear at arbitration hearing, and lack of evidence regarding attorney's authority, resulted in conclusion that defendant failed to participate in arbitration hearing in good faith and meaningful manner; the failure or refusal to participate in an arbitration proceeding in good faith and meaningful manner was subject to sanctions by the court on motion of a party, or report of the arbitrator. Bledsole v. Johnson, 150 N.C. App. 619, 564 S.E.2d 902 (2002), cert. granted, 356 N.C. 297, 570 S.E.2d 498 (2002).

The granting of defendants' motion for summary judgment was not in itself a sufficient reason for the court's decision to award attorney's fees under this section; it could be evidence to support the court's decision to make such an award. Brooks v. Giesey, 334 N.C. 303, 432 S.E.2d 339 (1993).

Prevailing Party. - Trial court erred in denying buyers' motion for attorney's fees on the ground that the buyers were not prevailing parties because the buyers' prevailed on a contractor's claims, and the contractor prevailed on their counterclaim; a "prevailing party" under G.S. 6-21.5 was a party who prevailed on a claim or issue in an action, not a party who prevailed in the action, and attorney's fees are available under G.S. 6-21.5 against any party who raises an issue in which there is a complete absence of a justiciable issue of either law or fact. Persis Nova Constr. v. Edwards, 195 N.C. App. 55, 671 S.E.2d 23 (2009).

Because G.S. 6-21.5 is unambiguous in providing that attorney's fees may be awarded against the "losing party in any pleading," by the plain language of the statute, attorney's fees may be awarded against more than one party in an action; in other words, a "prevailing party," as used in G.S. 6-21.5, is a party who prevails on a claim or issue in an action, not a party who prevails in the action. Persis Nova Constr. v. Edwards, 195 N.C. App. 55, 671 S.E.2d 23 (2009).

Trial court erred in denying defendants' motion for attorney fees under G.S. 143-318.16B because it mistakenly believed that it was required to designate either plaintiffs or defendants as the prevailing party and that it was not possible for both to be prevailing parties, and even though the trial court had discretion whether to award fees, since it was acting under a misapprehension of law, it could not properly exercise that discretion; interpreting the phrase "prevailing party" in G.S. 143-318.16B consistently with G.S. 6-21.5 requires the holding that more than one party, including both a plaintiff and a defendant in the same action, can be the prevailing party entitled to fees, and when the trial court exercises its discretion under a misapprehension of the law it is appropriate to remand for reconsideration in light of the correct law. Free Spirit Aviation, Inc. v. Rutherford Airport Auth., 206 N.C. App. 192, 696 S.E.2d 559 (2010).

Trial court erred in granting the defendants and the developers their costs and attorney's fees because nothing in the case or the arguments of counsel could be considered frivolous or not supported by a good faith argument. Benson v. Prevost, - N.C. App. - , 861 S.E.2d 343 (May 18, 2021).

Appeals. - Under a statute such as this section, which contains "prevailing party" requirement, the parties should not be required to litigate fees when the appeal could moot the issue. Furthermore, upon filing of a notice of appeal, a trial court in North Carolina is divested of jurisdiction with regard to all matters embraced within or affected by the judgment which is the subject of the appeal. Brooks v. Giesey, 106 N.C. App. 586, 418 S.E.2d 236 (1992), aff'd, 334 N.C. 303, 432 S.E.2d 339 (1993).

As plaintiffs had filed a notice of appeal, pursuant to G.S. 1-294, the trial court did not have jurisdiction to enter an order under G.S. 6-21.5 awarding defendant the attorneys' fees and expenses it incurred in replying to plaintiffs' motion for relief from judgment. Morgan v. Nash County, 224 N.C. App. 60, 735 S.E.2d 615 (2012).

In a former employee's action, arising from the failure of the employer to pay him benefits under his severance agreement, an award to the employer of attorney's fees was not proper under a statute that limited the fees to those incurred at the trial court level, as the fees awarded to the employer were incurred through the appellate process of the employee's former appeal. McKinnon v. CV Indus., 228 N.C. App. 190, 745 S.E.2d 343 (2013).

Because attorneys fees related to an appeal were not recoverable under the statute, any fees connected with the appeal were awarded in error. McLennan v. Josey, 247 N.C. App. 95, 785 S.E.2d 144 (2016).

Attorney's fee award was vacated because the asserted bases for the award were unclear, as were the court's bases for the award. In re Foreclosure of Real Prop. Under Deed of Trust from Garrett, 250 N.C. App. 358, 795 S.E.2d 1 (2016).

Award of attorneys' fees under this section held proper. Sprouse v. North River Ins. Co., 81 N.C. App. 311, 344 S.E.2d 555, cert. denied, 318 N.C. 284, 348 S.E.2d 344 (1986); Clark v. Williamson, 91 N.C. App. 668, 373 S.E.2d 317 (1988).

Trial court's findings of fact and conclusions of law, which established that from the initiation of this suit, there was never any factual or legal basis for finding defendants liable for any alleged injury suffered by plaintiffs from purchase of real property, were sufficient to uphold order awarding defendants costs (including reasonable attorney's fees) under this section. Brooks v. Giesey, 334 N.C. 303, 432 S.E.2d 339 (1993).

Award of Fees Supported by Findings. - Award of fees was well supported by extensive factual findings based on affidavits regarding the amount of work performed, the degree of skill required, and the reasonableness of the rates charged, and the trial court did not err or abuse its discretion in calculating the amount of sanctions it awarded as attorney fees in conjunction with the business's frivolous lawsuit. ACC Constr. v. SunTrust Mortg., Inc., 239 N.C. App. 252, 769 S.E.2d 200 (2015).

Court's order that defendant pay legal fees incurred by executor after defendant's default at judicial sale of estate's real and personal property held unauthorized. Parker v. Lippard, 87 N.C. App. 43, 359 S.E.2d 492, modified, 87 N.C. App. 487, 361 S.E.2d 395 (1987).

Fees Not Authorized Where Case Settled by Arbitration. - Where, although building owner filed complaint in civil court, case had already been submitted for arbitration and was settled by the award of the arbitrators, this section did not apply to authorize the trial court to award attorneys' fees incurred in the arbitration hearing; in order for the trial court to make such an award, the "civil action" or "special proceeding" providing the basis for the award must have been held before that tribunal or pursuant to its authority, and no order other than the order which placed the case in inactive status had been entered, nor had any action been taken in the superior court. Thorneburg Hosiery Co. v. G.L. Wilson Bldg. Co., 94 N.C. App. 769, 381 S.E.2d 718 (1989).

Request for Fees and Expenses Properly Denied. - Because the shareholders failed to show that the trial court manifestly abused its discretion and because sanctions were appropriate based on the complaint, the trial court properly denied their motion for attorney's fees and expenses under G.S. 6-21.5 and G.S. 1A-1, N.C. R. Civ. P. 11. Egelhof v. Szulik, 193 N.C. App. 612, 668 S.E.2d 367 (2008).

Abuse of Discretion to Reduce Attorneys' Fees Based on Punitive Damages Award. - Trial court abused its discretion to the extent that it reduced the amount of attorneys' fees that it would have otherwise awarded to beneficiaries based solely on the fact that the beneficiaries received a large punitive damages award because the fact that they received a large punitive damages award was not relevant to a proper attorneys' fee calculation. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

As a result of the different purposes sought to be achieved by punitive damages and attorneys' fee awards, a decision to reduce an attorneys' fee award based on the fact that a party received a large punitive damages award would necessarily serve to thwart the purposes sought to be achieved by allowing the recovery of punitive damages without serving any purpose sought to be achieved by an award of attorneys' fees. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

Although attorneys' fee jurisprudence gives trial judges substantial discretion in determining what amount of attorneys' fees to award in any particular case, the use of a substantial punitive damages award as the sole reason for reducing an otherwise reasonable attorneys' fee award involves reliance upon a factor that has no reasonable bearing on the making of a proper attorneys' fee award and, for that reason, constitutes an abuse of the trial court's discretion. Lacey v. Kirk, 238 N.C. App. 376, 767 S.E.2d 632 (2014).

Collateral Issues. - Attorneys' fee requests under G.S. 1A-1, Rule 11 and G.S. 6-21.5 raise collateral issues which often require consideration by the trial court after the action has been terminated, and a voluntary dismissal under G.S. 1A-1, Rule 41(a) does not deprive the trial court of jurisdiction to determine these collateral issues. To hold otherwise would allow a litigant or attorney to purge his violation of Rule 11 or G.S. 6-211.5 merely by taking a dismissal, and thereby lose all incentive to stop, think and investigate more carefully before serving and filing papers. Bryson v. Sullivan, 102 N.C. App. 1, 401 S.E.2d 645 (1991), modified on other grounds, 330 N.C. 644, 412 S.E.2d 327 (1992).

Voluntary Dismissal. - Where the plaintiffs filed a voluntary dismissal with prejudice pursuant to G.S. 1A-1, Rule 41(a)(1), the trial court was not deprived of jurisdiction to determine the appropriateness of attorneys' fees under G.S. 1A-1, Rule 11 or G.S. 6-21.5. Bryson v. Sullivan, 102 N.C. App. 1, 401 S.E.2d 645 (1991), modified on other grounds, 330 N.C. 644, 412 S.E.2d 327 (1992).

After a voluntary dismissal the broad limitation on the trial court's power to enter orders does not extend so far as to bar the trial court from awarding attorney's fees pursuant to 1A-1-11(a) or this section. VSD Communications, Inc. v. Lone Wolf Publishing Group, Inc., 124 N.C. App. 642, 478 S.E.2d 214 (1996).

Applied in Harris v. Harris, 93 N.C. App. 67, 376 S.E.2d 502 (1989); Barnes v. Ford Motor Co., 95 N.C. App. 367, 382 S.E.2d 842 (1989); K & K Dev. Corp. v. Columbia Banking Fed. Sav. & Loan Ass'n, 96 N.C. App. 474, 386 S.E.2d 226 (1989); Swink v. Weintraub, 195 N.C. App. 133, 672 S.E.2d 53 (2009), review denied, 363 N.C. 812, 693 S.E.2d 144, N.C. LEXIS 78 (2010); Reo Props. Corp. v. Smith, 227 N.C. App. 298, 743 S.E.2d 230 (2013), review denied 748 S.E.2d 327, 367 N.C. 239, 2013 N.C. LEXIS 1041 (2013).

Cited in T'ai Co. v. Market Square Ltd. Partnership, 92 N.C. App. 234, 373 S.E.2d 885 (1988); Nichols v. Carolina Tel. & Tel. Co., 93 N.C. App. 503, 378 S.E.2d 230 (1989); Tay v. Flaherty, 100 N.C. App. 51, 394 S.E.2d 217 (1990); Tittle v. Case, 101 N.C. App. 346, 399 S.E.2d 373 (1991); Smith v. McDonald, 767 F. Supp. 732 (M.D.N.C. 1991); Freese v. Smith, 110 N.C. App. 28, 428 S.E.2d 841 (1993); DeMent v. Nationwide Mut. Ins. Co., 142 N.C. App. 598, 544 S.E.2d 797 (2001); Chandak v. Elec. Interconnect Corp., 144 N.C. App. 258, 550 S.E.2d 25 (2001); Martin Architectural Prods. v. Meridian Constr. Co., 155 N.C. App. 176, 574 S.E.2d 189 (2002); Area Landscaping, L.L.C. v. Glaxo-Wellcome, Inc., 160 N.C. App. 520, 586 S.E.2d 507 (2003); N.C. State Bar v. Rossabi, 183 N.C. App. 564, 645 S.E.2d 387 (2007); McClure v. County of Jackson, 185 N.C. App. 462, 648 S.E.2d 546 (2007); Craven v. SEIU COPE, 188 N.C. App. 814, 656 S.E.2d 729 (2008); Barris v. Town of Long Beach, 208 N.C. App. 718, 704 S.E.2d 285 (2010); Dafford v. JP Steakhouse LLC, 210 N.C. App. 678, 709 S.E.2d 402 (2011); In re Proposed Foreclosure of Claim of Lien Filed Against Johnson, 212 N.C. App. 535, 714 S.E.2d 169 (2011); Hexion Specialty Chems., Inc. v. Oak-Bark Corp., - F. Supp. 2d - (E.D.N.C. June 26, 2012); Bissette v. Harrod, 226 N.C. App. 1, 738 S.E.2d 792 (2013), review denied, 747 S.E.2d 251, 2013 N.C. LEXIS 762 (2013); Ge Betz, Inc. v. Conrad, 231 N.C. App. 214, 752 S.E.2d 634 (2013); McMillan v. Ryan Jackson Props., LLC, 232 N.C. App. 35, 753 S.E.2d 373 (2014).


§ 6-21.6. Reciprocal attorneys' fees provisions in business contracts.

  1. As used in this section, the following definitions apply:
    1. Business contract. - A contract entered into primarily for business or commercial purposes. The term does not include a consumer contract, an employment contract, or a contract to which a government or a governmental agency of this State is a party.
    2. Consumer contract. - A contract entered into by one or more individuals primarily for personal, family, or household purposes.
    3. Employment contract. - A contract between an individual and another party to provide personal services by that individual to the other party, whether the relationship is in the nature of employee-employer or principal-independent contractor.
    4. Reciprocal attorneys' fees provisions. - Provisions in any written business contract by which each party to the contract agrees, in the manner set out in subsection (b) of this section, upon the terms and subject to the conditions set forth in the contract that are made applicable to all parties, to pay or reimburse the other parties for attorneys' fees and expenses incurred by reason of any suit, action, proceeding, or arbitration involving the business contract.
  2. Reciprocal attorneys' fees provisions in business contracts are valid and enforceable for the recovery of reasonable attorneys' fees and expenses only if all of the parties to the business contract sign by hand the business contract. Signature "by hand" is not intended to prevent the application of this section to a business contract executed by either of the following:
    1. A party's electronic signature, as defined in G.S. 66-312, if the party's electronic signature originates from an affirmative action on the part of the party to evidence acceptance and execution such as typing the party's signature or writing the party's signature with a finger or stylus on a touchscreen to indicate acceptance and execution.
    2. A party's manual signature that is delivered by an electronic reproductive image thereof.
  3. If a business contract governed by the laws of this State contains a reciprocal attorneys' fees provision, the court or arbitrator in any suit, action, proceeding, or arbitration involving the business contract may award reasonable attorneys' fees in accordance with the terms of the business contract. In determining reasonable attorneys' fees and expenses under this section, the court or arbitrator may consider all relevant facts and circumstances, including, but not limited to, the following:
    1. The amount in controversy and the results obtained.
    2. The reasonableness of the time and labor expended, and the billing rates charged, by the attorneys.
    3. The novelty and difficulty of the questions raised in the action.
    4. The skill required to perform properly the legal services rendered.
    5. The relative economic circumstances of the parties.
    6. Settlement offers made prior to the institution of the action.
    7. Offers of judgment pursuant to Rule 68 of the North Carolina Rules of Civil Procedure and whether judgment finally obtained was more favorable than such offers.
    8. Whether a party unjustly exercised superior economic bargaining power in the conduct of the action.
    9. The timing of settlement offers.
    10. The amounts of settlement offers as compared to the verdict.
    11. The extent to which the party seeking attorneys' fees prevailed in the action.
    12. The amount of attorneys' fees awarded in similar cases.
    13. The terms of the business contract.
  4. Reasonable attorneys' fees and expenses shall not be governed by (i) any statutory presumption or provision in the business contract providing for a stated percentage of the amount of such attorneys' fees or (ii) the amount recovered in other cases in which the business contract contains reciprocal attorneys' fees provisions.
  5. Nothing in this section shall in any way make valid or invalid attorneys' fees provisions in consumer contracts or in any note, conditional sale contract, or other evidence of indebtedness that is otherwise governed by G.S. 6-21.2. If the business contract is also a note, conditional sale contract, or other evidence of indebtedness that is otherwise governed by G.S. 6-21.2, then the parties that are entitled to recover attorneys' fees and expenses may elect to recover attorneys' fees and expenses either under this section or G.S. 6-21.2 but may recover only once for the same attorneys' fees and expenses.
  6. In any suit, action, proceeding, or arbitration primarily for the recovery of monetary damages, the award of reasonable attorneys' fees may not exceed the amount in controversy.
  7. Nothing in this section shall in any way make valid or invalid attorneys' fees provisions in a contract of insurance governed by Chapter 58 of the General Statutes.

History

(2011-341, s. 2; 2015-264, s. 32.5.)

Editor's Note. - Session Laws 2011-341, s. 1, provides: "The purpose of this act is to validate reciprocal attorneys' fees provisions in business contracts."

Session Laws 2011-299, s. 1, also enacted a section designated as G.S. 6-21.6. That section has been renumbered as G.S. 6-21.7 at the direction of the Revisor of Statutes.

Session Laws 2012-194, s. 44, provides: "The Revisor of Statutes may cause to be printed all explanatory comments of the drafters of S.L. 2011-339 and S.L. 2011-344 as the Revisor deems appropriate."

Effect of Amendments. - Session Laws 2015-264, s. 32.5, effective October 1, 2015, rewrote the second sentence in subsection (b), which read "In any suit, action, proceeding, or arbitration primarily for the recovery of monetary damages, the award of reasonable attorneys' fees may not exceed the monetary damages awarded"; and added subdivisions (b)(1) and (2).

Legal Periodicals. - For comment, "Finality and Clarity Regarding Pending Claims for Attorney's Fees: Duncan and the Superfluous 54(b) Certification," see 36 Campbell L. Rev. 339 (2014).

CASE NOTES

Grant of Attorneys' Fees. - In an action for breach of contract and conversion, the grant of attorneys' fees was remanded for reassessment because the extent to which the sellers prevailed might have substantially changed where the court reversed on a conversion claim and remanded for a new trial on contract damages. Legacy Data Access, Inc. v. Cadrillion, LLC, 889 F.3d 158 (4th Cir. 2018).

Objections to attorneys' fees portion of claim were overruled because the plain language of this statute did not limit the amount of recoverable fees to the judgment amount from state court litigation and the fees were otherwise reasonable after consideration of relevant factors, including those under 11 U.S.C.S. § 506(b). In re VR King Constr., LLC, - Bankr. - (Bankr. W.D.N.C. July 7, 2021).

Fees Proper. - Lease was executed after the effective date of the statute, the signatory to the lease was subject to statutory attorneys' fees and the reciprocal fees provision of the lease, and the guarantors, pursuant to a guaranty that explicitly noted liability for such fees, were likewise jointly and severally liable with the signatory for them. WFC Lynnwood I LLC v. Lee of Raleigh, Inc., 259 N.C. App. 925, 817 S.E.2d 437 (2018).


§ 6-21.7. Attorneys' fees; cities or counties acting outside the scope of their authority.

In any action in which a city or county is a party, upon a finding by the court that the city or county violated a statute or case law setting forth unambiguous limits on its authority, the court shall award reasonable attorneys' fees and costs to the party who successfully challenged the city's or county's action. In any action in which a city or county is a party, upon finding by the court that the city or county took action inconsistent with, or in violation of, G.S. 160D-108(b) or G.S. 143-755, the court shall award reasonable attorneys' fees and costs to the party who successfully challenged the local government's failure to comply with any of those provisions. In all other matters, the court may award reasonable attorneys' fees and costs to the prevailing private litigant. For purposes of this section, "unambiguous" means that the limits of authority are not reasonably susceptible to multiple constructions.

History

(2011-299, s. 1; 2019-111, s. 1.11; 2020-25, s. 1.)

Editor's Note. - Session Laws 2011-299, s. 1, enacted this section as G.S. 6-21.6. It has been renumbered as G.S. 6-21.7 at the direction of the Revisor of Statutes.

Session Laws 2019-111, s. 3.1, made the rewriting of this section by Session Laws 2019-111, s. 1.11, effective July 11, 2019, and further provided that Section 1.11 clarifies and restates the intent of existing law and applies to ordinances adopted before, on, and after July 11, 2019.

Effect of Amendments. - Session Laws 2019-111, s. 1.11, rewrote the section. For effective date and applicability, see editor's note.

Session Laws 2020-25, s. 1, effective June 19, 2020, substituted "G.S. 160D-108(b) or G.S. 143-755" for "G.S. 160A-360.1, 153A-320.1, or 143-755" in the second sentence.

CASE NOTES

Award Proper. - In a dispute over the regulation of spray irrigation systems, a trial court did not abuse its discretion by awarding costs and attorney fees because it had been determined that a county agency was preempted from inspecting the systems by state law. It was not established that the decision to award costs and fees was so arbitrary that it could not have been the result of a reasoned decision. Phillips v. Orange County Health Dep't, 237 N.C. App. 249, 765 S.E.2d 811 (2014).

District court had authority to award a developer attorneys fees on its state law claims seeking a refund of impact fees where it found that the county acted outside the scope of its legal authority by requiring the developer to pay the invalid impact fees as a condition of receiving building permits and collecting those fees on behalf of a water and sewer district. Tommy Davis Constr., Inc. v. Cape Fear Pub. Util. Auth., 807 F.3d 62 (4th Cir. 2015).

Applied in Izydore v. City of Durham, 228 N.C. App. 397, 746 S.E.2d 324 (2013), review denied, 749 S.E.2d 851, 2013 N.C. LEXIS 1198 (2013).


§ 6-22. Petitioner to pay costs in certain cases.

The petitioner shall pay the costs in the following proceedings:

  1. In petitions for draining or damming lowlands where the petitioner alone is benefited.
  2. In petitions for condemnation of water millsites when the petitioner is allowed to erect the mill; but when he is not allowed to erect the mill, the costs shall be paid by the person who is allowed to do so.
  3. In petitions for condemnation of land for railroads, street railways, telegraph, telephone or electric power or light companies, or for water supplies for public institutions, or for the use of other quasi-public or municipal corporations; unless in the opinion of the superior court the defendant improperly refused the privilege, use or easement demanded, in which case the costs must be adjudged as to the court may appear equitable and just.
  4. When the petition is refused.

History

(Code, ss. 1299, 1855, 2013; 1893, c. 63; 1903, c. 562; Rev., s. 1269; C.S., s. 1245; 1945, c. 635.)

CASE NOTES

Condemnation Proceedings. - In proceedings brought by a railroad, where it was found by the jury on appeal that the defendant's benefit exceeded his damages and then found they were equal, it was held that the plaintiff was taxable with costs up to the time of appeal. Madison County Ry. v. Gahagan, 161 N.C. 190, 76 S.E. 696 (1912).


§ 6-23. Defendant unreasonably defending after notice of no personal claim to pay costs.

In case of a defendant, against whom no personal claim is made, the plaintiff may deliver to such defendant with the summons, a notice subscribed by the plaintiff or his attorney, setting forth the general object of the action, a brief description of the property affected by it, if it affects real or personal property, and that no personal claim is made against such defendant. If a defendant on whom such notice is served unreasonably defends the action, he shall pay costs to the plaintiff.

History

(Code, s. 216; Rev., s. 1270; C.S., s. 1246.)

CASE NOTES

Cited in City of Charlotte v. McNeely, 281 N.C. 684, 190 S.E.2d 179 (1972).


§ 6-24. Suits by an indigent; payment of costs by an indigent.

A person who sues as an indigent is not required to advance the required court costs and no officer shall require any fee of the person. If a court enters a judgment in favor of a person suing as an indigent and does not require another party to the suit to pay the costs of the suit, the court may require the indigent person to pay any costs of the suit that were not required to be paid because the person was indigent.

History

(1868-9, c. 96, s. 3; Code, s. 212; 1895, c. 149; Rev., s. 1265; C.S., s. 1247; 1993, c. 435, s. 5.)

Cross References. - As to when suits in forma pauperis may be permitted, see G.S. 1-110.

Legal Periodicals. - For comment on access of indigents into the civil courtroom, see 49 N.C.L. Rev. 683 (1971).

CASE NOTES

Right Not Extended Beyond Trial. - The leave to sue as a pauper does not extend in civil actions beyond the trial in the superior court. Speller v. Speller, 119 N.C. 356, 26 S.E. 160 (1896).

Costs of Witnesses Not to Be Recovered. - One suing in forma pauperis is not entitled to recover costs of his witnesses. Draper v. Buxton, 90 N.C. 182 (1884). This section does not excuse the pauper from liability for his witnesses. Bailey v. Brown, 105 N.C. 127, 10 S.E. 1054 (1890).

This provision deprives all officers of costs, and the last clause is very sweeping, and manifestly embraces the costs of witnesses. Compensation to witnesses is part of the cost of an action, as much so as any other statutory charges in and about the same. Booshee v. Surles, 85 N.C. 90 (1881); Hall v. Younts, 87 N.C. 285 (1882); Draper v. J.A. Buxton & Co., 90 N.C. 182 (1884).


§ 6-25. Party seeking recovery on usurious contracts; no costs.

No costs shall be recovered by any party, whether plaintiff or defendant, who may endeavor to recover upon any usurious contract.

History

(1895, c. 69; Rev., s. 1271; C.S., s. 1248.)

Cross References. - As to usury generally, see G.S. 24-1, 24-2.

§ 6-26. Costs in special proceedings.

The costs in special proceedings shall be as allowed in civil actions, unless otherwise specially provided.

History

(Code, s. 541; Rev., s. 1272; C.S., s. 1249.)

Cross References. - As to special proceedings generally, see G.S. 1-393 et seq.

CASE NOTES

Cited in Belk v. Belk, 221 N.C. App. 1, 728 S.E.2d 356 (2012).


§ 6-27: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-28. Costs of laying off homestead and exemption.

The costs and expenses of appraising and laying off the homestead or personal property exemptions, when the same is made under execution, shall be charged and included in the officer's bill of fees upon such execution or other final process; and when made upon the petition of the owner, they shall be paid by such owner, and the latter costs shall be a lien on said homestead.

History

(Code, s. 510; Rev., s. 1274; C.S., s. 1251.)

Local Modification. - Pitt: 1953, c. 1276.

Cross References. - As to exempt property and setting aside such property, see G.S. 1C-1601 et seq.

CASE NOTES

Payment of Fees as Condition. - Where the judgment debtor claims his personal property from execution, the sheriff is justified in refusing to proceed further till such exemptions are properly set apart, and the payment of his fees for the purpose by the plaintiff in the action, except when the suit is brought in forma pauperis. Whitmore-Ligon Co. v. Hyatt, 175 N.C. 117, 95 S.E. 38 (1918).

Applied in Beavans v. Goodrich, 98 N.C. 217, 3 S.E. 516 (1887); Long v. Walker, 105 N.C. 90, 10 S.E. 658 (1890).


§ 6-29. Costs of reassessment of homestead.

If the superior court at term shall confirm the appraisal or assessment, or shall increase the exemption allowed the debtor or claimant, the levy shall stand only upon the excess remaining, and the creditor shall pay all the costs of the proceeding in court. If the amount allowed the debtor or claimant is reduced, the costs of the proceeding in court shall be paid by the debtor or claimant, and the levy shall cover the excess then remaining.

History

(Code, s. 521; Rev., s. 1275; C.S., s. 1252.)

CASE NOTES

Applied in Beavans v. Goodrich, 98 N.C. 217, 3 S.E. 516 (1887).


§ 6-30. Costs against infant plaintiff; guardian responsible.

When costs are adjudged against an infant plaintiff, the guardian by whom he appeared in the action shall be responsible therefor.

History

(Code, s. 534; Rev., s. 1276; C.S., s. 1253.)

CASE NOTES

Limitation on Payment of Costs. - Trial court abused its discretion in taxing costs against plaintiffs' guardian ad litem because the trial court's order contained no finding of bad faith on the part of the guardian ad litem; G.S, 6-30 was not applicable to a guardian ad litem because G.S. 1A-1, N.C. R. Civ. P. 17(b)(1), distinguished a "guardian" and a guardian ad litem. Stark v. Ford Motor Co., 226 N.C. App. 80, 739 S.E.2d 172 (2013).


§ 6-31. Costs where executor, administrator, trustee of express trust, or person authorized by statute a party.

In an action prosecuted or defended by an executor, administrator, trustee of an express trust, or a person expressly authorized by statute, costs shall be recovered as in an action by and against a person prosecuting or defending in his own right; but such costs shall be chargeable only upon or collected out of the estate, fund or party represented, unless the court directs the same to be paid by the plaintiff or defendant, personally, for mismanagement or bad faith in such action or defense. And when any claim against a deceased person is referred, the prevailing party shall be entitled to recover the fees of referees and witnesses, and other necessary disbursements, to be taxed according to law.

History

(Code, s. 535; Rev., s. 1277; C.S., s. 1254.)

Cross References. - As to liability of personal representative for denial of claim, see G.S. 28A-13-10, 28A-19-18.

As to reference of disputed claim generally, see G.S. 28A-19-15, 28A-19-16.

As to when costs against representative are allowed, see G.S. 28A-19-18.

CASE NOTES

When Fiduciary Personally Liable. - By virtue of this section costs should be taxed against the estate in the hands of a trustee, and not against him personally, except when the court adjudges that the trustee has been guilty of mismanagement or bad faith in an action or defense. Smith v. King, 107 N.C. 273, 12 S.E. 57 (1890); Sugg v. Bernard, 122 N.C. 155, 29 S.E. 221 (1898); Lance v. Russell, 165 N.C. 626, 81 S.E. 922 (1914).

The same rule is applied to actions against administrators and executors, State v. Roberts, 106 N.C. 662, 10 S.E. 900 (1890); Varner v. Johnston, 112 N.C. 570, 17 S.E. 483 (1893), with the additional limitation prescribed by G.S. 28-115 (see now G.S. 28A-19-18), Whitaker v. Whitaker, 138 N.C. 205, 50 S.E.2d 630 (1905). See G.S. 28A-19-18 and note.

This Section Includes Next Friends. - While "next friends" may not be embraced in the strict letter of this section, they come within its purview. Smith v. Smith, 108 N.C. 365, 12 S.E. 1045, 13 S.E. 113 (1891). It is error to tax "next friends" who are not parties without a finding of mismanagement or bad faith. Hockoday v. Lawrence, 156 N.C. 319, 72 S.E. 387 (1911).

Limitation on Payment of Costs. - A trustee, as against those for whose benefit the trust is created, will be allowed to apply so much of the funds to the payment of costs and expenses, including counsel fees, as may be necessary to protect it, but he will not be allowed such disbursements against one who establishes an adverse title to the property. Chemical Co. v. Johnson, 101 N.C. 223, 7 S.E. 770 (1888).

Trial court abused its discretion in taxing costs against plaintiffs' guardian ad litem because the trial court's order contained no finding of bad faith on the part of the guardian ad litem; G.S. 6-30 was not applicable to a guardian ad litem because G.S. 1A-1, N.C. R. Civ. P. 17(b)(1), distinguished a "guardian" and a guardian ad litem. Stark v. Ford Motor Co., 226 N.C. App. 80, 739 S.E.2d 172 (2013).

Cited in Will of Hargrove, 206 N.C. 307, 173 S.E. 577 (1934).


§ 6-32. Costs against assignee after action brought.

In actions in which the cause of action becomes by assignment after the commencement of the action, or in any other manner, the property of a person not a party to the action, such person shall be liable for the costs in the same manner as if he were a party.

History

(Code, s. 539; Rev., s. 1278; C.S., s. 1255.)

CASE NOTES

Assignments Must Be Absolute and Complete. - The assignments contemplated by this section are only such as are absolute, and such as are intended to be a collateral security only for a continuing obligation or claim are not within the purview of the section. Nor does the section apply when the assignment is only of a part and not of the whole cause of action. Davis & Schenck v. Higgins, 92 N.C. 203 (1885).


ARTICLE 4. Costs on Appeal.

Sec.

§ 6-33. Costs on appeal generally.

On appeal from a magistrate or any court of the General Court of Justice, if the appellant recovers judgment, he shall recover the costs of the appeal and also those costs he ought to have recovered below had the judgment of that court been correct. If in any court of appeal there is judgment for a new trial, or for a new jury, or if the judgment appealed from is not wholly reversed, but partly affirmed and partly disaffirmed, the costs shall be in the discretion of the appellate court.

History

(Code, s. 540; Rev., s. 1279; C.S., s. 1256; 1969, c. 44, s. 19; 1971, c. 269, s. 7.)

CASE NOTES

Judgment Prerequisite to Awarding of Costs. - The first part of this section manifestly refers not only to a reversal of the judgment below, but to a judgment in favor of the appellant on the merits and not merely to an order for a new trial. The trial court cannot ordinarily tax the costs of an action in favor of either party unless there is a judgment, costs being an incident of the judgment. Williams v. Hughes, 139 N.C. 17, 51 S.E. 790 (1905).

Where the subject matter of the action is destroyed before the appeal is heard, the judgment below is presumed to be correct until reversed, and no part of the costs should be adjudged against the appellee. Taylor v. Vann, 127 N.C. 243, 37 S.E. 263 (1900).

Where Lower Court Judgment Modified. - In McLean v. Breece, 113 N.C. 390, 18 S.E. 694 (1893), where the judgment was modified in the Supreme Court, the costs were taxed against the appellee. And where the plaintiffs recovered a part judgment on their demand, by establishing a mechanic's lien, they were entitled to costs of appeal. See Hogsed v. Gloucester Lumber Co., 170 N.C. 529, 87 S.E. 337 (1915).

Where the judgment of the court below is modified and affirmed, the appellate division may apportion the costs on appeal between the parties in the exercise of its discretion. Hoskins v. Hoskins, 259 N.C. 704, 131 S.E.2d 326 (1963).

The superior court is without power to modify former orders of the appellate court taxing costs on former appeals, as costs thus incurred are no part of superior court costs, but are taxed by, and executions issue out of, the appellate court. Bailey v. Hayman, 222 N.C. 58, 22 S.E.2d 6 (1942).

Partial Affirmance and Partial Reversal. - Where the judgment appealed from is partly affirmed and partly reversed, in the exercise of the discretion permitted by this section, the costs in the appellate court may be divided so that each party pays his own costs. Smith v. Old Dominion Bldg. & Loan Ass'n, 119 N.C. 249, 26 S.E. 41 (1896); Hawkins v. Richmond Cedar Works, 122 N.C. 87, 30 S.E. 13 (1898).

Reversal Necessary to Tax Costs Against Appellee. - Unless the court upon the merits reverses the judgment below, it cannot adjudge any part of the costs against the appellee. Commissioners of Vance County v. Gill, 126 N.C. 86, 35 S.E. 228 (1900).

Case Remanded. - Where an appellant fails to show that he was prejudiced by the order appealed from, he may be taxed with the costs of the appeal, though the case be remanded. Harrington v. Rawls, 136 N.C. 65, 48 S.E. 571 (1904).

New Trial. - The taxing of the costs on appeal, by partial new trial being granted, is in the discretion of the court. Satterthwaite v. Goodyear, 137 N.C. 302, 49 S.E. 205 (1904).

Under this section, where the appellant was awarded a partial new trial only, as to one issue only out of several, the costs of the appeal are in the discretion of the court. Rayburn v. Casualty Co., 142 N.C. 376, 55 S.E. 296 (1906).

Where a new trial is granted, the awarding of costs is discretionary. Universal Metal Co. v. Durham & C.R.R., 145 N.C. 293, 59 S.E. 50 (1907).

Motion in Superior Court to Recover Costs of Appellate Transcript Prohibited. - The cost of preparing the transcription of the record is a part of the costs in the appellate division, and the judge of the superior court upon the subsequent trial is without jurisdiction to entertain a motion for the recovery of such costs. Ward v. Cruse, 236 N.C. 400, 72 S.E.2d 835 (1952).

Applied in Kincaid v. Graham, 92 N.C. 154 (1885); Ebert v. Disher, 216 N.C. 546, 5 S.E.2d 716 (1939).


§§ 6-34, 6-35: Repealed by Session Laws 1971, c. 269, s. 15.

ARTICLE 5. Liability of Counties in Criminal Actions.

Sec.

§§ 6-36 through 6-39: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-40. Liability of counties, where trial removed from one county to another.

When a prisoner is sent from one county to another to be held for trial, or for any other cause or purpose, the county from which he is sent shall pay his jail expenses, unless they are collected from the prisoner.

History

(1889, c. 354; 1901, c. 718; Rev., s. 1285; C.S., s. 1263; 1971, c. 269, s. 8.)

CASE NOTES

Cited in In re Dunlap, 66 N.C. App. 152, 310 S.E.2d 415 (1984).


§§ 6-41 through 6-44: Repealed by Session Laws 1971, c. 269, s. 15.

ARTICLE 6. Liability of Defendant in Criminal Actions.

Sec.

§§ 6-45, 6-46: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-47. Judgment confessed; bond given to secure fine and costs.

In cases where a court permits a defendant convicted of any criminal offense to give bond or confess judgment, with sureties to secure the fine and costs which may be imposed, the acceptance of such security shall be upon the condition that it shall not operate as a discharge of the original judgment against the defendant nor as a discharge of his person from the custody of the law until the fine and costs are paid.

History

(1879, c. 264; Code, s. 749; 1885, c. 364; Rev., s. 1293; C.S., s. 1269; 1971, c. 269, s. 9.)

CASE NOTES

The power of the courts to suspend judgment in criminal cases should only be upheld when sanctioned by usage, and where the consent of the defendant was expressly given or would be implied from the fact that the order was made in the defendant's presence without his objection and that its evident purpose was to save the defendant from a more grievous penalty permitted or required by law. State v. Hilton, 151 N.C. 687, 65 S.E. 1011 (1909).

Cited in State v. Smith, 196 N.C. 438, 146 S.E. 73 (1929); State v. Bryant, 251 N.C. 423, 111 S.E.2d 591 (1959).


§ 6-48. Arrest for nonpayment of fine and costs.

In default of payment of such fine and costs, it is the duty of the court at any subsequent term thereof, on motion of the solicitor of the State, to order a capias to issue to the end that such defendant may be again arrested and held for the fine and costs until discharged according to law.

History

(1879, c. 264; Code, s. 750; 1885, c. 364; Rev., s. 1294; C.S., s. 1270; 1971, c. 269, s. 10.)

CASE NOTES

Cited in State v. Smith, 196 N.C. 438, 146 S.E. 73 (1929).


ARTICLE 7. Liability of Prosecuting Witness for Costs.

Sec.

§ 6-49. Prosecuting witness liable for costs in certain cases; court determines prosecuting witness.

In all criminal actions in any court, if the defendant is acquitted, nolle prosequi entered, or judgment against him is arrested, or if the defendant is discharged from arrest for want of probable cause, the costs, including the fees of all witnesses whom the judge before whom the trial took place shall certify to have been proper for the defense and prosecution, shall be paid by the prosecuting witness, whether marked on the bill or warrant or not, whenever the judge is of the opinion that there was not reasonable ground for the prosecution, or that it was not required by the public interest. If a greater number of witnesses have been summoned than were, in the opinion of the court, necessary to support the charge, the court may, even though it is of the opinion that there was reasonable ground for the prosecution, order the prosecuting witness to pay the attendance fees of such witnesses, if it appear that they were summoned at the prosecuting witness's special request.

Every judge is authorized to determine who the prosecuting witness is at any stage of a criminal proceeding, whether before or after the bill of indictment has been found, or the defendant acquitted: Provided, that no person shall be made a prosecuting witness after the finding of the bill, unless he shall have been notified to show cause why he should not be made the prosecuting witness of record.

History

(1799, c. 4, s. 19, P.R.; 1880, c. 558, P.R.; R.C., c. 35, s. 37; 1868-9, c. 277; 1874-5, c. 151; 1879, c. 49; Code, s. 737; 1889, c. 34; Rev., s. 1295; C.S., s. 1271; 1947, c. 781; 1953, c. 675, s. 1; 1971, c. 269, s. 11.)

CASE NOTES

This section was intended to enlarge the power of the courts over the question of costs in criminal actions. State v. Norwood, 84 N.C. 794 (1881).

Enactment of this section was within the power of the legislature. State v. Cannady, 78 N.C. 539 (1878).

Standing to Challenge Constitutionality of Section. - The plaintiff lacks standing to put in issue the constitutionality of this section where he is under no present threat of prosecution under these statutes, the likelihood that he will run afoul of them in the future is remote and speculative in the extreme, and it can be safely assumed that he does not contemplate either presently or in the future the institution of a prosecution in this State. Fowler v. Alexander, 478 F.2d 694 (4th Cir. 1973).

The mere fact that earlier the plaintiff was caught in the net of the challenged statutes gives him no standing, where his earlier encounter with the statutes has become moot, the costs assessed have been paid, and he is no longer restrained. Fowler v. Alexander, 478 F.2d 694 (4th Cir. 1973).

Intervention by Federal Court in Operation of Section. - The taxing of costs to a prosecuting witness is a constituent part of the criminal procedure of North Carolina. Comity precludes not only the injunction of criminal proceedings in the state courts, but also any disruptive interference thereof. Therefore only when the whole proceeding may be enjoined does the federal district court have jurisdiction to intervene in any way in the operation of this section. Fowler v. Alexander, 340 F. Supp. 168 (M.D.N.C. 1972), aff'd, 478 F.2d 694 (4th Cir. 1973).

Declaratory Judgment as to Validity of Section Denied. - A grant of declaratory relief that this section was invalid and unconstitutional was held to be outside the equitable jurisdiction of the court, for the reasons that no bad faith had been alleged, nor any harassment, nor was there shown any impediment to the resolution of the constitutional validity of this section in the general district courts of North Carolina. Fowler v. Alexander, 340 F. Supp. 168 (M.D.N.C. 1972), aff'd, 478 F.2d 694 (4th Cir. 1973).

Certifying Witnesses as Proper for Defense. - Where the court below taxed the costs of an unsuccessful prosecution against the prosecutor without finding that the defendant's witnesses were proper for the defense, as required by this section, judgment would still be allowed to stand if the court below would make and certify the requisite finding that the said witnesses were proper for the defense. State v. Jones, 117 N.C. 768, 23 S.E. 247 (1895).

In State v. Owens, 87 N.C. 565 (1882), it was stated that this section included such witnesses for the defense as were certified by the counsel to have been proper for the defense, and the Supreme Court approved that judgment. But this was not the point in the appeal, and was only incidentally presented. See State v. Massey, 104 N.C. 877, 10 S.E. 608 (1889). In State v. Roberts, 106 N.C. 662, 10 S.E. 900 (1890), which was a judgment taxing the prosecutor with the costs, the judge did not find and certify that the prosecution was frivolous, malicious or was not for the public good. The Supreme Court held that this judgment was erroneous, and that the statute only allowed a party to be taxed as prosecutor with the costs upon the findings of these facts. State v. Jones, 117 N.C. 768, 23 S.E. 247 (1895).

Notice to Prosecutor Prior to Taxing Costs. - It is necessary for the trial court, in order to adjudge the prosecution of a criminal action to be frivolous and malicious and tax the costs against the prosecutors who have employed attorneys to assist the solicitor, to give the prosecutors notice of such action and hear the matter according to the "law of the land." State v. Collins, 169 N.C. 323, 84 S.E. 1049 (1915).

The object of notice is only to give the party a day in court, and it matters not how he gets the notice, if he appears and defends under it. This may be done on motion of the defendant's counsel or by the court of its own motion. State v. Hughes, 83 N.C. 665 (1880); State v. Hamilton, 106 N.C. 660, 10 S.E. 854 (1890). The court should find the facts, and when this is done the findings are not reviewable in the appellate court. State v. Owens, 87 N.C. 565 (1882); State v. Roberts, 106 N.C. 662, 10 S.E. 900 (1890); State v. Jones, 117 N.C. 768, 23 S.E. 247 (1895).

A notice to mark one as prosecutor under this section need not be in writing. Where it was announced in open court, upon the calling and continuance of a State case, that a motion would be made at the next term to mark a witness as prosecutor (all the witnesses being present), and on the argument of the motion it was announced that all the parties were present, it was held to be sufficient evidence that such notice was given, and warranted the court in ordering the witness to be marked as prosecutor. State v. Norwood, 84 N.C. 794 (1881).

Not Required by the Public Interest. - A finding by the trial judge that a prosecution of a criminal action "was not for the public interest" is equivalent to a finding that it "was not required by the public interest." State v. Baker, 114 N.C. 812, 19 S.E. 145 (1894).

Conclusiveness of Court Finding. - A judgment that a prosecution is frivolous and not required by the public interest, and that the prosecutor pay the costs, is conclusive and not appealable. State v. Hamilton, 106 N.C. 660, 10 S.E. 854 (1890).

The finding by the judge below that a criminal prosecution was frivolous and malicious is conclusive, and will support a judgment that the prosecutor pay costs, or in default thereof be imprisoned. State v. Lance, 109 N.C. 789, 14 S.E. 110 (1891).

Order Set Aside. - Where the trial judge has dismissed a criminal action as being frivolous and malicious, and taxed the prosecutors with costs, and it appears from his findings of record that he has done so without any proper consideration of their affidavits in support of their position and relevant to the issue, so as to deprive them of the benefits of due process of law, his order will be set aside on appeal, leaving the matter open for proper adjudication. State v. Collins, 169 N.C. 323, 84 S.E. 1049 (1915).

Liability of County When Prosecutor Is Insolvent. - When a judge below orders an insolvent prosecutor to pay costs, and he fails or is unable to pay, the county in which the offense was committed becomes liable to pay the same. Pegram v. Commissioners of Guilford County, 75 N.C. 120 (1876).

Applied in State v. Darr, 63 N.C. 516 (1869).

Opinions of Attorney General

Findings of Fact Required. - The presiding judge, prior to taxing costs against a prosecuting witness, is required to make specific findings of fact. See opinion of Attorney General to the Hon. Gary B. Tash, Judge, 21st Judicial District Court, 49 N.C.A.G. 142 (1980).

Mere Failure to Convict Not Ground for Assessment. - This section does not empower the court to assess costs against the prosecuting witness solely because prosecution does not result in a conviction of the accused. See opinion of Attorney General to the Hon. Gary B. Tash, Judge, 21st Judicial District Court, 49 N.C.A.G. 142 (1980).

§ 6-50. Imprisonment of prosecuting witness for willful nonpayment of costs if prosecution frivolous.

Every such prosecuting witness may be adjudged not only to pay the costs, but he shall also be imprisoned for the willful nonpayment thereof, when the judge before whom the case was tried shall adjudge that the prosecution was frivolous or malicious.

History

(1800, c. 558; R.C., c. 35, s. 37; 1879, c. 49; 1881, c. 176; Code, s. 738; Rev., s. 1297; C.S., s. 1272; 1971, c. 269, s. 11.1.)

CASE NOTES

Constitutionality. - This section is constitutional. State v. Cannady, 78 N.C. 539 (1878); State v. Hamilton, 106 N.C. 660, 10 S.E. 854 (1890).

Standing to Challenge Section. - The plaintiff lacked standing to put in issue the constitutionality of this section where he was under no present threat of prosecution under these statutes, the likelihood that he would run afoul of them in the future was remote and speculative in the extreme, and it could be safely assumed that he did not contemplate either presently or in the future the institution of a prosecution in North Carolina. Fowler v. Alexander, 478 F.2d 694 (4th Cir. 1973).

The mere fact that earlier the plaintiff was caught in the net of the challenged statutes gave him no standing, where his earlier encounter with the statutes had become moot, the costs assessed were paid, and he was no longer restrained. Fowler v. Alexander, 478 F.2d 694 (4th Cir. 1973).

The mere fact that the statutes may chill in some indefinable way the urge to prosecute is of no moment in the absence of any real likelihood that plaintiff has or will have reason to prosecute someone in North Carolina. Fowler v. Alexander, 478 F.2d 694 (4th Cir. 1973).

Jurisdiction of Federal Court. - A grant of a declaratory judgment that this section was invalid and unconstitutional was held to be outside the equitable jurisdiction of the federal court for the reasons that no bad faith had been alleged, nor any harassment, nor any impediment to the resolution of the constitutional validity in the General Court of Justice of North Carolina. Fowler v. Alexander, 340 F. Supp. 168 (M.D.N.C. 1972), aff'd, 478 F.2d 694 (4th Cir. 1973).

The taxing of costs to a prosecuting witness is a constituent part of the criminal procedure of North Carolina. Comity precludes not only the injunction of criminal proceedings in the state courts, but also any disruptive interference thereof. Therefore, only when the whole proceeding may be enjoined does the federal district court have jurisdiction to intervene in any way in the operation of this section. Fowler v. Alexander, 340 F. Supp. 168 (M.D.N.C. 1972), aff'd, 478 F.2d 694 (4th Cir. 1973).

Costs of Prosecution Not a Debt. - Costs of prosecution against a prosecutor (upon acquittal of the accused or nolle prosequi entered), or against the accused upon a verdict of guilty, or a fine imposed, do not constitute a debt within the meaning of N.C. Const., Art. I, § 16, (now N.C. Const., Art. 1, § 28) and hence the defendant may be imprisoned for nonpayment of the same. State v. Wallin, 89 N.C. 578 (1883).

Where Bill Ignored. - No power is conferred by this section to tax a prosecutor with costs when the bill is ignored. State v. Cockerham, 23 N.C. 381 (1841); State v. Horton, 89 N.C. 581 (1883); State v. Gates, 107 N.C. 832, 12 S.E. 319 (1890).


ARTICLE 8. Fees of Witnesses.

Sec.

§ 6-51. Not entitled to fees in advance.

Witnesses are not entitled to receive their fees in advance; but no witness in a civil action or special proceeding, unless summoned on behalf of the State or a municipal corporation, shall be compelled to attend more than one day, if the party by or for whom he was summoned shall, after one day's attendance, on request and presentation of a certificate, fail or refuse to pay what then may be due for traveling to the place of examination and for the number of days of attendance.

History

(1868-9, c. 279, subch. 11, s. 3; Code, s. 1368; Rev., s. 1298; C.S., s. 1273.)

Cross References. - As to attendance of witnesses, see G.S. 8-63.

§ 6-52: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-53. Witness to prove attendance; action for fees.

Every person summoned, who shall attend as a witness in any suit, shall, before the clerk of the court, or before the referee or officer taking the testimony, ascertain by his own oath or affirmation the sum due for traveling to and from court, attendance and ferriage, which shall be certified by the clerk; and on failure of the party, at whose instance such witness was summoned (witnesses for the State and municipal corporations excepted), to pay the same previous to the departure of the witness from court, such witness may at any time sue for and recover the same from the party summoning him; and the certificate of the clerk shall be sufficient evidence of the debt.

History

(1777, c. 115, s. 46, P.R.; 1796, c. 458, P.R.; R.C., c. 31, s. 73; 1868-9, c. 279, subch. 11, ss. 2, 4; Code, s. 1369; Rev., s. 1299; C.S., s. 1274; 1971, c. 269, s. 12.)

Cross References. - As to attendance of witnesses generally, see G.S. 8-59.

CASE NOTES

Right to Payment Statutory. - Payment of witnesses by the sovereign is neither given by common law nor is it an inherent right. It is granted at the discretion of the court and only within the limits authorized by statute. State v. Massey, 104 N.C. 877, 10 S.E. 608 (1889). See State v. Wheeler, 141 N.C. 773, 53 S.E. 358 (1906).

Assignment of Witness Tickets Not Necessary. - The party to an action summoning witnesses to testify in his behalf is liable for their witness fees which may be recovered in an action against him, and when it appears of record entry of the judgment by the clerk of the superior court that these fees have been taxed against the party recovering the judgment, and paid by him, such party is entitled to recover them against the losing party to the action without showing that the witnesses had transferred or assigned their tickets to him. McClure v. Fulbright, 196 N.C. 450, 146 S.E. 74 (1929).

A pauper is not excused from liability for his witnesses. Bailey v. Brown, 105 N.C. 127, 10 S.E. 1054 (1890).

Cited in Lassiter v. N.C. Baptist Hosps., Inc., 368 N.C. 367, 778 S.E.2d 68 (2015).


§§ 6-54 through 6-56: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-57: Repealed by Session Laws 1947, c. 781.

§§ 6-58, 6-59: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-60. No more than two witnesses may be subpoenaed to prove single material fact; liability for fees of such witnesses; one fee for day's attendance.

No district attorney shall direct that more than two witnesses be subpoenaed for the State to prove a single material fact, nor shall the State or defendant in any such prosecution be liable for the fees of more than two witnesses to prove a single material fact, unless the court, upon satisfactory reasons appearing, otherwise directs. And no witness subpoenaed in a criminal action shall be paid by the State for attendance in more than one case for any one day.

History

(1871-2, c. 186; 1879, c. 264; Code, s. 744; Rev., s. 1303; C.S., s. 1284; 1971, c. 269, s. 13; 1973, c. 47, s. 2.)

CASE NOTES

Discretion of Trial Judge. - The number of witnesses who may testify to a particular fact is a matter within the sound discretion of the trial judge. State v. McClintick, 315 N.C. 649, 340 S.E.2d 41 (1986).


§ 6-61: Repealed by Session Laws 1971, c. 269, s. 15.

§ 6-62. District attorney to announce discharge of State's witnesses.

It is the duty of all district attorneys prosecuting in the several courts, as each criminal prosecution is disposed of by trial, removal, continuance or otherwise, to call, in open court, and announce the discharge of witnesses for the State, either finally or otherwise as the disposition of the case may require.

History

(1879, c. 264; 1881, c. 312; Code, s. 746; Rev., s. 1305; C.S., s. 1286; 1935, c. 26; 1971, c. 269, s. 14; 1973, c. 47, s. 2.)

Cross References. - As to discharge of witnesses generally, see G.S. 8-63.

§ 6-63: Repealed by Session Laws 1971, c. 269, s. 15.

ARTICLE 9. Criminal Costs Before Justices, Mayors, County or Recorders' Courts.

§§ 6-64, 6-65: Repealed by Session Laws 1971, c. 269, s. 15.