CASE NOTES

Analysis

• I. General Consideration
• II. Particular Costs
  • A. Attorneys’ Fees
  • B. Witness Fees
  • C. Other Costs

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 N.C. LEXIS 449 (1914); Grimes v. Andrews, 171 N.C. 367 , 88 S.E. 513, 1916 N.C. LEXIS 84 (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 N.C. LEXIS 449 (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 N.C. LEXIS 449 (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 N.C. LEXIS 261 (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 N.C. LEXIS 315 (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 N.C. LEXIS 449 (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 N.C. LEXIS 449 (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, 116 N.C. 871 , 21 S.E. 696, 1895 N.C. LEXIS 294 (1895).

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 N.C. LEXIS 38 (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 N.C. App. LEXIS 1174 (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 N.C. LEXIS 1905 (1986).

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 N.C. App. LEXIS 3859 (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, 1978 N.C. App. LEXIS 2751 , cert. denied, 295 N.C. 653 , 248 S.E.2d 257, 1978 N.C. LEXIS 1120 (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 N.C. LEXIS 425 (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.”

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 N.C. LEXIS 227 (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. Blount v. Simmons, 120 N.C. 19 , 26 S.E. 649, 1897 N.C. LEXIS 6 (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 N.C. LEXIS 52 (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 N.C. LEXIS 4 (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. Blount v. Simmons, 120 N.C. 19 , 26 S.E. 649, 1897 N.C. LEXIS 6 (1897).

CASE NOTES

Analysis

• I. General Consideration
• II. Actions for Recovery of Real Property, etc
• III. Recovery of Personalty
• IV. Costs When Damages Are Less than $50.00

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 N.C. App. LEXIS 1568 (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 N.C. App. LEXIS 644 (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 N.C. LEXIS 13 (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 N.C. LEXIS 266 (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 N.C. App. LEXIS 136 (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, 1997 N.C. App. LEXIS 767 (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 N.C. App. LEXIS 1822 (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 N.C. App. LEXIS 868 (2001).

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 N.C. LEXIS 131 (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 N.C. App. LEXIS 547 (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 N.C. App. LEXIS 1513 (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 N.C. App. LEXIS 946 (1996).

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 N.C. App. LEXIS 946 (1996).

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 N.C. App. LEXIS 1788 (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 N.C. App. LEXIS 805 (2018), aff'd, modified, 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 N.C. App. LEXIS 805 (2018), aff'd, modified, 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 N.C. App. LEXIS 805 (2018), aff'd, modified, 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 N.C. App. LEXIS 805 (2018), aff'd, modified, 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 N.C. App. LEXIS 805 (2018), aff'd, modified, 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 N.C. App. LEXIS 805 (2018), aff'd, modified, 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 N.C. App. LEXIS 805 (2018), aff'd, modified, 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 N.C. LEXIS 493 (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 N.C. LEXIS 493 (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 N.C. App. LEXIS 599 (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 N.C. App. LEXIS 996 (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 N.C. App. LEXIS 941 (1993); Whiteco Indus., Inc. v. Harrington, 111 N.C. App. 839, 434 S.E.2d 234, 1993 N.C. App. LEXIS 943 (1993).

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 N.C. App. LEXIS 2276 (2003).

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 N.C. App. LEXIS 52 (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 N.C. App. LEXIS 880 (1995), aff'd, 344 N.C. 625 , 476 S.E.2d 105, 1996 N.C. LEXIS 509 (1996).

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 N.C. App. LEXIS 1544 (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 N.C. App. LEXIS 262 (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 N.C. LEXIS 387 (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 N.C. App. LEXIS 294 (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 N.C. App. LEXIS 294 (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 N.C. LEXIS 131 (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 N.C. LEXIS 131 (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 N.C. App. LEXIS 1545 (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 N.C. App. LEXIS 627 (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 N.C. App. LEXIS 1323 (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 N.C. App. LEXIS 294 (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 N.C. App. LEXIS 1616 (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 N.C. App. LEXIS 670 (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 N.C. App. LEXIS 1818 (2008).

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 N.C. App. LEXIS 967 (2014).

Landowners’ attorney fee award against the N.C. Coastal Resources Commission was proper because they challenged a final agency decision, sought judicial review, and the trial court rejected the Commission’s ruling, so under the merits test, the landowners were the prevailing parties and entitled to attorney fees. Batson v. Coastal Res. Comm'n, 2022-NCCOA-122, 871 S.E.2d 120, 2022- NCCOA-122, 2022 N.C. App. LEXIS 144 (N.C. Ct. App. 2022).

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 N.C. App. LEXIS 870 (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 N.C. App. LEXIS 540 (2010).

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 N.C. App. LEXIS 814 (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 N.C. App. LEXIS 961 (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 N.C. App. LEXIS 805 (2018), aff'd, modified, 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 N.C. App. LEXIS 663 (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 N.C. App. LEXIS 1178 (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 N.C. App. LEXIS 961 (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 N.C. App. LEXIS 663 (2017).

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 N.C. LEXIS 244 (1883); Parton v. Boyd, 104 N.C. 422 , 10 S.E. 490, 1889 N.C. LEXIS 217 (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, 1997 N.C. App. LEXIS 767 (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 N.C. App. LEXIS 1822 (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 N.C. App. LEXIS 1822 (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, 1973 N.C. App. LEXIS 1812 , cert. denied, 283 N.C. 666 , 197 S.E.2d 880, 1973 N.C. LEXIS 1037 (1973); Green v. Crane, 96 N.C. App. 654, 386 S.E.2d 757, 1990 N.C. App. LEXIS 7 (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 N.C. App. LEXIS 7 (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 N.C. App. LEXIS 2246 (2006).

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 N.C. App. LEXIS 14 (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 N.C. App. LEXIS 228 , aff'd, 354 N.C. 565 , 556 S.E.2d 293, 2001 N.C. LEXIS 1233 (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 N.C. App. LEXIS 1825 (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 N.C. App. LEXIS 1216 (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 N.C. App. LEXIS 1822 (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 N.C. App. LEXIS 392 (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 N.C. App. LEXIS 1624 (2011).

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 N.C. App. LEXIS 1830 (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 N.C. App. LEXIS 1568 (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 N.C. App. LEXIS 22 (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 N.C. LEXIS 244 (1883); Wooten v. Walters, 110 N.C. 251 , 14 S.E. 734, 1892 N.C. LEXIS 40 (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 N.C. App. LEXIS 2451 (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 N.C. LEXIS 354 (1938); Chriscoe v. Chriscoe, 268 N.C. 554 , 151 S.E.2d 33, 1966 N.C. LEXIS 1254 (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 N.C. LEXIS 601 (1963); Dixon, Odom & Co. v. Sledge, 59 N.C. App. 280, 296 S.E.2d 512, 1982 N.C. App. LEXIS 3105 (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 N.C. App. LEXIS 1092 (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 N.C. App. LEXIS 821 (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 N.C. App. LEXIS 604 , aff'd, 360 N.C. 57 , 620 S.E.2d 674, 2005 N.C. LEXIS 1111 (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 N.C. LEXIS 98 (1885); Hooper v. Davies, 166 N.C. 236 , 81 S.E. 1063, 1914 N.C. LEXIS 384 (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 N.C. LEXIS 286 (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 N.C. LEXIS 447 (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 N.C. LEXIS 601 (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 N.C. App. LEXIS 868 (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 N.C. App. LEXIS 120 (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 N.C. App. LEXIS 2100 (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 N.C. LEXIS 603 (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, 2018 Bankr. LEXIS 181 (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 N.C. LEXIS 20 (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, 166 N.C. 20 , 81 S.E. 936, 1914 N.C. LEXIS 341 (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 N.C. LEXIS 217 (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 N.C. LEXIS 214 (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, 1948 N.C. LEXIS 413 (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 N.C. LEXIS 244 (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 N.C. App. LEXIS 3105 (1982); Alsup v. Pitman, 98 N.C. App. 389, 390 S.E.2d 750, 1990 N.C. App. LEXIS 392 (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 N.C. App. LEXIS 392 (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 N.C. App. LEXIS 392 (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 N.C. App. LEXIS 148 (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 N.C. App. LEXIS 2105 (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 N.C. App. LEXIS 2169 (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 N.C. App. LEXIS 1628 (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 N.C. App. LEXIS 497 (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 N.C. App. LEXIS 136 (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 N.C. App. LEXIS 1822 (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 N.C. App. LEXIS 451 (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, 1987 N.C. App. LEXIS 2509 , aff'd, 321 N.C. 260 , 362 S.E.2d 273, 1987 N.C. LEXIS 2565 (1987).

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 N.C. App. LEXIS 160 , rev'd, 349 N.C. 520 , 507 S.E.2d 894, 1998 N.C. LEXIS 845 (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 N.C. App. LEXIS 1609 (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 N.C. App. LEXIS 554 (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 N.C. App. LEXIS 1568 (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 N.C. App. LEXIS 1216 (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 N.C. App. LEXIS 1822 (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, 1986 N.C. App. LEXIS 2192 , cert. denied, 318 N.C. 414 , 349 S.E.2d 594, 1986 N.C. LEXIS 2597 (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 N.C. App. LEXIS 554 (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 N.C. App. LEXIS 900 (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 N.C. App. LEXIS 660 (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 N.C. App. LEXIS 398 (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 N.C. App. LEXIS 136 (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, 2005 N.C. App. LEXIS 511 (N.C. Ct. App. Mar. 15, 2005), op. withdrawn, 2005 N.C. App. LEXIS 569 (N.C. Ct. App. Mar. 17, 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. 6-1 9.1, G.S. 7A-314 , and G.S. 143-318.16 B 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 N.C. App. LEXIS 1814 (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 N.C. App. LEXIS 722 (2013).

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

Analysis

• I. General Consideration
• II. Costs In Particular Actions
  • A. Caveats to Wills
  • B. Construction of Will or Trust
  • C. Habeas Corpus
  • D. Divorce or Alimony
  • E. Compensation of Referees
  • F. Partition or Sale of Property
  • G. Actions Not Covered by This Section
  • H. Illegitimate Children
• III. Procedure

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

Analysis

• I. General Consideration
• II. Who May Make Award
• III. Procedure
• IV. Settlement

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 N.C. LEXIS 1071 (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, 1984 N.C. App. LEXIS 3646 (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, 2015 Bankr. LEXIS 4012 (Bankr. E.D.N.C. 2015), aff'd, 877 F.3d 188, 2017 U.S. App. LEXIS 24627 (4th Cir. 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 N.C. LEXIS 1071 (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, 1995 U.S. Dist. LEXIS 14836 (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 N.C. LEXIS 669 (1992).

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 N.C. App. LEXIS 761 (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 N.C. LEXIS 1071 (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 N.C. LEXIS 602 (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 N.C. LEXIS 669 (1992).

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 N.C. LEXIS 27 (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. Baker v. Independent Fire Ins. Co., 103 N.C. App. 424, 405 S.E.2d 779, 1991 N.C. App. LEXIS 809 , cert. denied, 330 N.C. 116 , 409 S.E.2d 590, 1991 N.C. LEXIS 685 (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 N.C. App. LEXIS 707 (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, 1989 N.C. App. LEXIS 54 (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 N.C. App. LEXIS 1520 (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 N.C. App. LEXIS 2239 (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 N.C. App. LEXIS 2620 (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 N.C. App. LEXIS 2239 (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 N.C. App. LEXIS 2620 (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 N.C. App. LEXIS 2649 (1987).

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 N.C. App. LEXIS 2620 (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, 1981 N.C. App. LEXIS 2268 , cert. denied, 303 N.C. 319 , 281 S.E.2d 659, 1981 N.C. LEXIS 1319 (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 N.C. App. LEXIS 1570 (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, 2013 Bankr. LEXIS 221 (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 S.E.2d 812, 1980 N.C. LEXIS 1071 (1980); Four Seasons Homeowners Ass'n v. Sellers, 72 N.C. App. 189, 323 S.E.2d 735, 1984 N.C. App. LEXIS 3998 (1984); G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., 85 N.C. App. 684, 355 S.E.2d 815, 1987 N.C. App. LEXIS 2649 (1987).

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 N.C. App. LEXIS 2239 (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 N.C. App. LEXIS 1039 (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, 1976 N.C. App. LEXIS 2637 , cert. denied, 290 N.C. 660 , 228 S.E.2d 459, 1976 N.C. LEXIS 1132 (1976). But see Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286 , 266 S.E.2d 812, 1980 N.C. LEXIS 1071 (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 N.C. App. LEXIS 2239 (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 N.C. App. LEXIS 2239 (1976). But see Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286 , 266 S.E.2d 812, 1980 N.C. LEXIS 1071 (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 N.C. App. LEXIS 2239 (1976); W.S. Clark & Sons v. Ruiz, 87 N.C. App. 420, 360 S.E.2d 814, 1987 N.C. App. LEXIS 3196 (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 N.C. LEXIS 1071 (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 Corp. v. Myers, 46 N.C. App. 162, 265 S.E.2d 240, 1980 N.C. App. LEXIS 2811 , dismissed, Leasing Corp. v. Myers, 301 N.C. 92 , 1980 N.C. LEXIS 1271 (1980). But see Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286 , 266 S.E.2d 812, 1980 N.C. LEXIS 1071 (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 N.C. App. LEXIS 790 (1991), rev'd, 333 N.C. 148 , 423 S.E.2d 747, 1992 N.C. LEXIS 669 (1992).

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 N.C. LEXIS 1016 (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 N.C. LEXIS 1016 (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 N.C. LEXIS 1016 (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 N.C. LEXIS 1016 (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, 1977 N.C. App. LEXIS 2033 , cert. denied, 292 N.C. 734 , 235 S.E.2d 788, 1977 N.C. LEXIS 1207 (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 N.C. App. LEXIS 1407 (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, 2019 Bankr. LEXIS 145 (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 N.C. App. LEXIS 1407 (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, 1984 N.C. App. LEXIS 3646 (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 N.C. App. LEXIS 231 (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, 2011 Bankr. LEXIS 4633 (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 N.C. App. LEXIS 509 (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 N.C. App. LEXIS 790 (1991), rev'd, 333 N.C. 148 , 423 S.E.2d 747, 1992 N.C. LEXIS 669 (1992).

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, 1994 N.C. App. LEXIS 446 (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 N.C. App. LEXIS 1242 (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 N.C. App. LEXIS 3601 (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, 1987 N.C. App. LEXIS 2649 (1987).

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, 1986 N.C. App. LEXIS 2059 (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, 1992 N.C. App. LEXIS 251 (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 N.C. App. LEXIS 598 (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, 2012 U.S. Dist. LEXIS 45843 (W.D.N.C. Apr. 2, 2012), aff'd, 720 F.3d 169, 2013 U.S. App. LEXIS 12474 (4th Cir. 2013).

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 N.C. App. LEXIS 509 (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, 2015 Bankr. LEXIS 2861 (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, 1974 N.C. App. LEXIS 2338 , cert. denied, 286 N.C. 214 , 209 S.E.2d 315, 1974 N.C. LEXIS 1217 (1974); Gillespie v. DeWitt, 53 N.C. App. 252, 280 S.E.2d 736, 1981 N.C. App. LEXIS 2609 , cert. denied, 304 N.C. 390 , 285 S.E.2d 832, 1981 N.C. LEXIS 1490 (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 N.C. App. LEXIS 1242 (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, 1984 N.C. App. LEXIS 3646 (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 N.C. App. LEXIS 788 (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, 2015 Bankr. LEXIS 653 (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, 2020 Bankr. LEXIS 1332 (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 N.C. App. LEXIS 2695 (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 N.C. App. LEXIS 788 (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 N.C. App. LEXIS 3196 (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, 1987 N.C. App. LEXIS 2649 (1987).

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 N.C. App. LEXIS 11 (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, 1999 U.S. App. LEXIS 594 (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 N.C. App. LEXIS 807 (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 N.C. App. LEXIS 584 (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 N.C. App. LEXIS 251 (1989), aff'd in part and rev'd in part, 326 N.C. 470 , 389 S.E.2d 803, 1990 N.C. LEXIS 155 (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 N.C. App. LEXIS 598 (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 N.C. App. LEXIS 761 (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, 1987 N.C. App. LEXIS 2649 (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, 1984 N.C. App. LEXIS 3646 (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 N.C. App. LEXIS 1825 (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 N.C. App. LEXIS 1733 (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, 2011 Bankr. LEXIS 4633 (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, 2007 Bankr. LEXIS 1786 (Bankr. E.D.N.C. 2007), vacated, 381 B.R. 650, 2008 U.S. Dist. LEXIS 8478 (E.D.N.C. 2008).

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, 2012 U.S. Dist. LEXIS 29017 (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 N.C. App. LEXIS 1825 (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 N.C. App. LEXIS 536 (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, 1984 N.C. App. LEXIS 3646 (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, 2010 U.S. Dist. LEXIS 119192 (M.D.N.C. 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, 2013 Bankr. LEXIS 1720 (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, 2015 Bankr. LEXIS 3133 (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 N.C. App. LEXIS 1150 (1996), aff'd in part, 347 N.C. 262 , 490 S.E.2d 238, 1997 N.C. LEXIS 657 (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 N.C. App. LEXIS 1765 (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 N.C. App. LEXIS 1821 (2003).

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., 2008 Bankr. LEXIS 4390 (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, 2011 Bankr. LEXIS 4518 (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 N.C. App. LEXIS 322 (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., 2012 U.S. Dist. LEXIS 88994 (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 N.C. App. LEXIS 1150 (1996), aff'd in part, 347 N.C. 262 , 490 S.E.2d 238, 1997 N.C. LEXIS 657 (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 N.C. App. LEXIS 1077 (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 N.C. App. LEXIS 228 , aff'd, 354 N.C. 565 , 556 S.E.2d 293, 2001 N.C. LEXIS 1233 (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 N.C. App. LEXIS 1425 (2007).

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.

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, 1984 N.C. App. LEXIS 3646 (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 N.C. App. LEXIS 3646 (1984).

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 N.C. App. LEXIS 917 (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 N.C. LEXIS 106 (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., 2015 U.S. Dist. LEXIS 144270 (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 N.C. App. LEXIS 1016 , op. withdrawn, sub. op., 224 N.C. App. 60, 735 S.E.2d 615, 2012 N.C. App. LEXIS 1369 (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 N.C. App. LEXIS 205 (1991), aff'd in part and rev'd in part, 330 N.C. 644 , 412 S.E.2d 327, 1992 N.C. LEXIS 58 (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 N.C. LEXIS 106 (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 N.C. LEXIS 106 (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 N.C. App. LEXIS 1981 (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 N.C. App. LEXIS 367 (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 N.C. App. LEXIS 1481 (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 N.C. App. LEXIS 77 (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 N.C. App. LEXIS 439 (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 N.C. App. LEXIS 905 (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 N.C. LEXIS 106 (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 N.C. App. LEXIS 64 (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 N.C. App. LEXIS 917 (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, 1987 N.C. App. LEXIS 2471 (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 N.C. App. LEXIS 205 (1991), aff'd in part and rev'd in part, 330 N.C. 644 , 412 S.E.2d 327, 1992 N.C. LEXIS 58 (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 N.C. App. LEXIS 92 (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 N.C. App. LEXIS 1218 (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 N.C. App. LEXIS 308 (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 N.C. LEXIS 106 (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 N.C. App. LEXIS 2335 (1986), aff'd in part and rev'd in part, 320 N.C. 669 , 360 S.E.2d 772, 1987 N.C. LEXIS 2405 (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, 1986 N.C. App. LEXIS 2313 , writ denied, 347 S.E.2d 33, 1986 N.C. LEXIS 2439 (N.C. 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, 1986 N.C. App. LEXIS 2313 , writ denied, 347 S.E.2d 33, 1986 N.C. LEXIS 2439 (N.C. 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 N.C. App. LEXIS 847 (1993), cert. denied, 339 N.C. 736 , 454 S.E.2d 646, 1995 N.C. LEXIS 122 (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 N.C. App. LEXIS 1159 (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, 2004 U.S. Dist. LEXIS 19181 (M.D.N.C. 2004), aff'd, 154 Fed. Appx. 378, 2005 U.S. App. LEXIS 24763 (4th Cir. 2005).

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 N.C. App. LEXIS 981 (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 N.C. App. LEXIS 1614 (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., 396 B.R. 146, 2008 Bankr. LEXIS 3119 (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 N.C. App. LEXIS 1439 (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 N.C. App. LEXIS 954 (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 N.C. App. LEXIS 928 (2013).

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 N.C. App. LEXIS 1282 (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, 2007 N.C. App. LEXIS 595 (2007), aff'd in part, modified, 362 N.C. 497 , 666 S.E.2d 752, 2008 N.C. LEXIS 806 (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, 1987 N.C. App. LEXIS 2471 (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 N.C. App. LEXIS 652 (2002), rev'd, 357 N.C. 133 , 579 S.E.2d 379, 2003 N.C. LEXIS 418 (2003).

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 N.C. LEXIS 343 (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 N.C. App. LEXIS 61 (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 N.C. App. LEXIS 61 (2009).

Trial court erred in denying defendants’ motion for attorney fees under G.S. 143-318.16 B 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. 143-318.16 B 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 N.C. App. LEXIS 1439 (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, 277 N.C. App. 405, 861 S.E.2d 343, 2021- NCCOA-208, 2021 N.C. App. LEXIS 222 (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 N.C. App. LEXIS 561 (1992), aff'd, 334 N.C. 303 , 432 S.E.2d 339, 1993 N.C. LEXIS 343 (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 N.C. App. LEXIS 1369 (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 N.C. App. LEXIS 722 (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 N.C. App. LEXIS 439 (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 N.C. App. LEXIS 1156 (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, 1986 N.C. App. LEXIS 2313 , writ denied, 347 S.E.2d 33, 1986 N.C. LEXIS 2439 (N.C. 1986); Clark v. Williamson, 91 N.C. App. 668, 373 S.E.2d 317, 1988 N.C. App. LEXIS 917 (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 N.C. LEXIS 343 (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 N.C. App. LEXIS 77 (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, 1987 N.C. App. LEXIS 2964 (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 N.C. App. LEXIS 654 (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 N.C. App. LEXIS 2026 (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 N.C. App. LEXIS 1402 (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 N.C. App. LEXIS 1402 (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 N.C. App. LEXIS 1402 (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 N.C. App. LEXIS 205 (1991), aff'd in part and rev'd in part, 330 N.C. 644 , 412 S.E.2d 327, 1992 N.C. LEXIS 58 (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 N.C. App. LEXIS 205 (1991), aff'd in part and rev'd in part, 330 N.C. 644 , 412 S.E.2d 327, 1992 N.C. LEXIS 58 (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 N.C. App. LEXIS 1218 (1996).

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, 2018 U.S. App. LEXIS 11501 (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, 2021 Bankr. LEXIS 1804 (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 N.C. App. LEXIS 564 (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, 2021 Bankr. LEXIS 1804 (Bankr. W.D.N.C. July 7, 2021).

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 N.C. App. LEXIS 1142 (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, 2015 U.S. App. LEXIS 20807 (4th Cir. 2015).

Because a town violated a statute or case law setting forth unambiguous limits on its authority, the trial court did not err in awarding attorneys’ fees to a developer. TAC Stafford, LLC v. Town of Mooresville, 2022-NCCOA-217, 2022 N.C. App. LEXIS 235 (April 5, 2022).

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 N.C. LEXIS 388 (1912).

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 N.C. LEXIS 290 (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 N.C. LEXIS 208 (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 N.C. LEXIS 209 (1881); Hall v. Younts, 87 N.C. 285 , 1882 N.C. LEXIS 62 (1882); Draper v. J.A. Buxton & Co., 90 N.C. 182 , 1884 N.C. LEXIS 192 (1884).

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 N.C. LEXIS 12 (1918).

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 N.C. App. LEXIS 278 (2013).

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 N.C. LEXIS 51 (1890); Sugg v. Bernard, 122 N.C. 155 , 29 S.E. 221, 1898 N.C. LEXIS 213 (1898); Lance v. Russell, 165 N.C. 626 , 81 S.E. 922, 1914 N.C. LEXIS 325 (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 N.C. LEXIS 180 (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 N.C. LEXIS 39 (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 N.C. App. LEXIS 278 (2013).

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 N.C. LEXIS 183 (1885).

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 N.C. LEXIS 85 (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 N.C. LEXIS 61 (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 N.C. LEXIS 445 (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 N.C. LEXIS 601 (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 N.C. LEXIS 21 (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 N.C. LEXIS 267 (1896); Hawkins v. Richmond Cedar Works, 122 N.C. 87 , 30 S.E. 13, 1898 N.C. LEXIS 197 (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 N.C. LEXIS 192 (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 N.C. LEXIS 220 (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 N.C. LEXIS 360 (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 N.C. LEXIS 261 (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 N.C. LEXIS 293 (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 N.C. LEXIS 559 (1952).

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 N.C. LEXIS 345 (1909).

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 N.C. LEXIS 180 (1881).

Enactment of this section was within the power of the legislature. State v. Cannady, 78 N.C. 539 , 1878 N.C. LEXIS 272 (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, 1973 U.S. App. LEXIS 10058 (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, 1973 U.S. App. LEXIS 10058 (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, 1972 U.S. Dist. LEXIS 14553 (M.D.N.C. 1972), aff'd, 478 F.2d 694, 1973 U.S. App. LEXIS 10058 (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, 1972 U.S. Dist. LEXIS 14553 (M.D.N.C. 1972), aff'd, 478 F.2d 694, 1973 U.S. App. LEXIS 10058 (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 N.C. LEXIS 148 (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 N.C. LEXIS 148 (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 N.C. LEXIS 218 (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 N.C. LEXIS 122 (1882); State v. Roberts, 106 N.C. 662 , 10 S.E. 900, 1890 N.C. LEXIS 363 (1890); State v. Jones, 117 N.C. 768 , 23 S.E. 247, 1895 N.C. LEXIS 148 (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 N.C. LEXIS 180 (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 N.C. LEXIS 147 (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 N.C. LEXIS 362 (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 N.C. LEXIS 309 (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 N.C. LEXIS 218 (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 N.C. LEXIS 219 (1876).

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. Op. Att'y Gen. 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. Op. Att'y Gen. 142 (1980).

CASE NOTES

Constitutionality. —

This section is constitutional. State v. Cannady, 78 N.C. 539 , 1878 N.C. LEXIS 272 (1878); State v. Hamilton, 106 N.C. 660 , 10 S.E. 854, 1890 N.C. LEXIS 362 (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, 1973 U.S. App. LEXIS 10058 (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, 1973 U.S. App. LEXIS 10058 (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, 1973 U.S. App. LEXIS 10058 (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, 1972 U.S. Dist. LEXIS 14553 (M.D.N.C. 1972), aff'd, 478 F.2d 694, 1973 U.S. App. LEXIS 10058 (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, 1972 U.S. Dist. LEXIS 14553 (M.D.N.C. 1972), aff'd, 478 F.2d 694, 1973 U.S. App. LEXIS 10058 (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 N.C. LEXIS 298 (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 N.C. LEXIS 79 (1841); State v. Horton, 89 N.C. 581 , 1883 N.C. LEXIS 299 (1883); State v. Gates, 107 N.C. 832 , 12 S.E. 319, 1890 N.C. LEXIS 154 (1890).

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 N.C. LEXIS 291 (1889). See State v. Wheeler, 141 N.C. 773 , 53 S.E. 358, 1906 N.C. LEXIS 160 (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 N.C. LEXIS 9 (1929).

A pauper is not excused from liability for his witnesses. Bailey v. Brown, 105 N.C. 127 , 10 S.E. 1054, 1890 N.C. LEXIS 208 (1890).

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 N.C. LEXIS 1884 (1986).