Hodges v. Carter

Supreme Court of North Carolina · 1954 · Torts

239 N.C. 517 (1954)

Updated July 23, 2026

TortsAttorney malpracticeprofessional negligencegood faitherror of judgmentunsettled lawreasonable care and diligencebest judgment

Facts

Defendants were attorneys employed to prosecute plaintiff's actions against his insurers. In those actions, they mailed process to the Commissioner of Insurance for acceptance of service on foreign insurance companies doing business in North Carolina. That method followed a custom prevailing in the state for more than two decades, and foreign insurers had uniformly ratified such service, appeared, answered, and defended; moreover, defendants had obtained a Superior Court judge's declaration that such acceptance subjected the insurers to the court's jurisdiction. Plaintiff later claimed defendants were negligent in using that method of service.

Issue

Whether attorneys are liable in damages for using a customary method of serving foreign insurance companies when the validity of that service had not been settled by the state's highest court, and there was no evidence of bad faith, lack of skill, or lack of reasonable care.

Rule

When an attorney undertakes representation, he impliedly represents that he possesses the learning, skill, and ability ordinarily possessed by similarly situated attorneys, that he will exercise his best judgment, and that he will use reasonable and ordinary care and diligence. But an attorney who acts in good faith and in an honest belief that his advice and acts are well founded and in the client's best interest is not liable for a mere error of judgment or for a mistake on an unsettled point of law on which reasonable doubt may be entertained by well-informed lawyers. He is liable only for loss proximately resulting from lack of ordinary professional knowledge and skill, failure to use reasonable care and diligence, or failure to exercise in good faith his best judgment.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Raleigh, attorney Nina Porter represented Elias Green in a contract suit against an out-of-state manufacturer. She used a method of serving process that many North Carolina litigators had long treated as valid, although the state's highest court had never ruled on the statute. The trial court later dismissed for lack of jurisdiction, and Elias sued Nina for malpractice.

Which is the strongest reason Nina should not be held liable?

Explanation. The governing rule is that a lawyer impliedly undertakes to possess ordinary professional learning and skill, use reasonable care and diligence, and exercise best judgment. But a lawyer who acts in good faith and in an honest belief that the chosen course is well founded is not answerable for a mere error of judgment or a mistake on an unsettled point of law reasonably debatable among well-informed lawyers. The other choices go too far: the rule does not immunize all service mistakes, custom is not absolute if there is bad faith or want of care, and jurisdictional dismissal does not itself negate causation.