NEW HANOVER COUNTY — A district court judge vacated an order granting a local attorney almost $15,000 in accrued interest from a client with an alleged debt of $830 from a decade-old inactive case. The defendant’s lawyer is concerned the suit may indicate broader issues with the justice system.
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Melissa Gott, managing partner and founder of Wilmington-based firm The Law Group, represented David Ingram III in a 2008 divorce case. She filed an action against him in 2011 for $830 in unpaid attorney fees, which was awarded to her in an arbitration hearing that year. Gott informed the court Ingram was making payments and the case was moved to inactive status.
Twelve years later in September 2023, Gott filed a motion in New Hanover County District Court seeking an alleged debt of $830 in addition to $14,624 in interest fees — accruing at 1.5% interest per month — and $1,212 in new attorney fees. The interest payment is a 1660% increase over the original figure.
The certificate for service was sent to Ingram’s previous residence, but he did not receive it because he moved in 2018. He did not appear at a December 2023 hearing for Gott’s motion because he was not informed of the action until February 2024. District Court Judge Lindsey McKee entered an order in Gott’s favor, believing the defendant had been properly notified.
Cory Reiss of Wilmington-based Reiss & Nutt — who is representing Ingram — told Port City Daily he’d never seen a similar case in 20 years working as an attorney.
“This isn’t something I think anyone would contemplate,” Reiss said Thursday. “That someone would just revive it suddenly and account for an accumulation of interest over 12 years as part of the damages.”
On July 3, McKee vacated the order granting summary judgment, due to finding the plaintiff did not properly inform the defendant, who was denied due process. McKee also found the court lacked jurisdiction to enter orders on the case because there was no order to reinstate the case to active.
Gott and her attorney L. Bryan Smith, also a partner with The Law Group, did not appear at the July hearing. PCD reached out to the firm Thursday and Friday to request interviews and ask if they would continue pursuing the case but didn’t receive a response.
In June 2011, Gott sent a message to court manager Lee Alexander requesting the case be moved to inactive status because Ingram was making payments. She noted she’d reactivate the case “at such time as Mr. Ingram fails to pay or pays in full.”
Her December 2023 affidavit states Ingram stopped making payments at an unspecified time despite repeated contacts and promises to pay; interest on the $830 fee began to accrue in August 2009.
Ingram disputed Gott’s claim in his March 2024 affidavit. He said he could not recall any contact about the suit since May 2011 — that is, until a New Hanover County Sheriff’s Deputy served legal documents at his home on Feb. 7 and a representative of Gott’s firm called to ask for his new address later that month.
“Ms. Gott patronizes the Costco where I work and I have seen her there,” he wrote in his affidavit. “She never talked to me or informed me that she planned to or had taken further action against me.”
Ingram wrote he would have appeared at the September 2023 hearing or hired counsel if he’d been notified of the reopened lawsuit. He provided a September 2023 $408 Duke Energy Progress fee for his current residence to prove legal documents had been sent to the wrong home.
McKee’s July order cited the right to due process under the 14th Amendment, as well as the “doctrine of equitable estoppel,” a legal principle requiring parties from using rights against each other in a misleading manner.
The judge stated it was “reasonable for the defendant to believe the case was permanently closed” due to the mutually agreed upon 2011 arbitration, as well as Gott’s failure to take action to reinstate the case for approximately 12 years.
North Carolina allows inactive cases to be reopened at any time for good cause, although General Statute 1-234 requires legal actions related to the payment of money to take place within 10 years of a judgment.
McKee wrote that the court’s previous order was void because there had not been a motion to reinstate the case from inactive status. PCD reached out to the court to ask who moved the case to the calendar, when it was made active again, and what rationale allowed it; the clerk of court sent the “audit trail” of the court files, which do not show any action between the June 2011 arbitration agreement and the December 2023 order approving Gott’s claims.
Reiss questioned how the case could be reopened from inactive to active without the defendant being involved or notified.
“This is not an intended outcome of a policy that was probably implemented for really good reasons,” he told PCD. “What I’m concerned about is that this may not be the only time. And if it has, who would know?”
PCD reached out to Chief District Court Judge Julius Corpening and the North Carolina and New Hanover County Bar Associations — Gott and Smith are members of both groups — to ask questions regarding attorneys’ ability to recoup interest for unpaid attorney fees. Also posed were questions about how often inactive cases are litigated without a motion for reinstatement; if statutes of limitations apply to inactive cases; and how often cases related to long-term attorney interest fees are litigated. A response was not received by press.
Tips or comments? Email journalist Peter Castagno at peter@localdailymedia.com.
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