## Facts

- Hodges owned a drugstore that burned, and four fire insurers denied coverage.
- Hodges retained attorneys Carter and Topping to sue the out-of-state insurers in North Carolina superior court.
- The attorneys attempted service by mailing summonses and complaints to the North Carolina Commissioner of Insurance, who accepted service and forwarded the papers to the insurers by registered mail.
- This service method reflected a long-standing practice used by North Carolina lawyers and accepted by the Commissioner for many years.
- In the insurance actions, a superior court judge ruled service valid, but the North Carolina Supreme Court later held service ineffective and the actions barred by the statute of limitations.
- Hodges then sued Carter and Topping for legal malpractice, alleging negligent failure to effect proper service and to obtain alias summonses.
- The trial court entered a judgment of involuntary nonsuit for the attorneys at the close of Hodges’s evidence.

## Issues

1. Whether the attorneys breached the standard of care by using the Commissioner-of-Insurance service method and failing to obtain alias summonses, thereby causing the loss of Hodges’s insurance claims.

## Decision

- The Supreme Court of North Carolina affirmed the judgment of involuntary nonsuit for the defendant attorneys.
- The court held Hodges’s evidence did not show negligence because the attorneys acted in good faith, relied on an established professional custom, and exercised professional judgment on an unsettled question of North Carolina law.
- The court treated the adverse outcome in the underlying insurance cases as resulting from a later authoritative determination of invalid service, not from a lack of reasonable care and diligence by counsel.

## Legal Principles

- By undertaking representation, an attorney impliedly represents that the attorney:
  - possesses the learning, skill, and ability ordinarily possessed by similarly situated attorneys,
  - will use best judgment in prosecuting the matter, and
  - will exercise reasonable and ordinary care and diligence in applying professional knowledge and skill.
- An attorney is liable for client loss proximately caused by:
  - insufficient professional knowledge or skill compared with similarly situated attorneys,
  - failure to use reasonable care and diligence, or
  - failure to exercise best judgment in good faith.
- An attorney acting in good faith is not liable for a mere error of judgment or a mistake on an unsettled point of law on which reasonable doubt may exist among well-informed lawyers.
- Long-standing professional practice and contemporaneous trial-court approval are relevant to whether counsel exercised reasonable care and good-faith professional judgment.

## Conclusion

The court held that legal malpractice was not shown where attorneys, acting in good faith and with reasonable care, followed an established local service practice and made a judgment call on an unsettled legal issue, even though the client’s underlying claims were later lost when the service method was declared invalid and the actions became time-barred.


Hodges v. Carter, 239 N.C. 517, 80 S.E.2d 144 (N.C. 1954)