James Wilson Douglas, L.C. v. Jennifer S. Morton ( 2018 )

STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
James Wilson Douglas, L.C., FILED
Plaintiff Below, Petitioner January 8, 2018
EDYTHE NASH GAISER, CLERK
vs) No. 16-1144 (Braxton County 15-C-17) SUPREME COURT OF APPEALS
OF WEST VIRGINIA
Jennifer S. Morton,
Defendant Below, Respondent
MEMORANDUM DECISION
Petitioner James Wilson Douglas, L.C., by counsel Jared S. Frame, appeals the Circuit
Court of Braxton County’s November 23, 2016, order denying petitioner’s motions for a stay of
judgment and reconsideration. Respondent Jennifer S. Morton, by counsel Gregory H. Schillace,
filed a response in support of the circuit court’s order and a supplemental appendix. On appeal,
petitioner argues that the circuit court abused its discretion in setting aside default judgment
against respondent.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, this Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21
of the Rules of Appellate Procedure.
In 2015, petitioner, an attorney, entered into a contract with respondent to represent her in
a divorce action. Petitioner withdrew from representing respondent sometime in 2015. On April
9, 2015, petitioner filed a complaint for unpaid attorney’s fees in the Circuit Court of Braxton
County. The summons and complaint were returned to petitioner for personal service at the time
of the complaint’s filing, and the return of service indicated that respondent was personally
served. Following the filing of the complaint, on May 8, 2015, petitioner filed a motion for
default judgment claiming that respondent failed to appear and/or file an answer. Petitioner was
awarded default judgment on or about May 14, 2015.
In July of 2015, respondent filed a motion to set aside the default judgment pursuant to
Rules 55 and 60 of the West Virginia Rules of Civil Procedure.1 In support of her motion,
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West Virginia Rule of Civil Procedure 55 provides, in part, that “[f]or good cause shown
the court may set aside an entry of default and, if a judgment by default has been entered, may
(continued . . .)
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respondent claimed that she had not been served with the summons and complaint and that her
first notice of the complaint was her receipt of the order granting default judgment against her. In
February of 2016, the circuit court held a hearing on the motion to set aside the default judgment.
At the hearing, the circuit court set aside the default judgment in favor of holding a trial on the
merits. Matz v. Corna and Co., Inc. 206 W.Va. 40, 521 S.E.2d 235 (1999) (holding that
“[a]lthough courts should not set aside default judgments or dismissals without good cause, it is
the policy of the law to favor the trial of all cases on their merits.”). That same day, petitioner
filed a motion for reconsideration and a motion to stay the judgment. Respondent filed a
response to petitioner’s motions and a counterclaim, in which she asserted that petitioner failed
to fulfill all “promises and obligations” of the parties’ contract.
In March of 2016, the circuit court held a hearing on petitioner’s motions and again set
aside the rulings made at the February 16, 2016, hearing and scheduled the matter for a “full
evidentiary hearing.” The circuit court held that evidentiary hearing in March of 2016 and heard
the testimony of petitioner, respondent, and the process server. Following the presentation of
evidence, the circuit court reaffirmed its prior decision to set aside the default judgment.
Petitioner then filed a second motion for a stay of judgment and a second motion for
reconsideration. Respondent filed a response to petitioner’s motions. On November 23, 2016, the
circuit court entered an order denying those motions. It is from this order that petitioner appeals.
The Court has previously established the following standard of review: “[a] motion to
vacate a default judgment is addressed to the sound discretion of the court and the court’s ruling
on such motion will not be disturbed on appeal unless there is a showing of an abuse of
discretion.” Lexon Ins. Co. v. Cnty Council of Berkeley Co., 235 W.Va. 47, 50, 770 S.E.2d 547,
550 (2015) (quoting Syl. pt. 1, Drumheller v. Fillinger, 230 W.Va. 26, 736 S.E.2d 26, 27 (2012).
In other words, “[a]ppellate review of the propriety of a default judgment focuses on the issue of
whether the trial court abused its discretion in entering the default judgment.” Lexon at 50, 770
S.E.2d at 550)(quoting Syl. pt. 3, Hinerman v. Levin, 172 W.Va. 777, 310 S.E.2d 843 (1983).
likewise set it aside in accordance with Rule 60(b).” West Virginia Rule of Civil Procedure 60(b)
provides, in part, that
On motion and upon such terms as are just, the court may relieve a party or a
party’s legal representative from a final judgment, order, or proceeding for the
following reasons: (1) Mistake, inadvertence, surprise, excusable neglect, or
unavoidable cause; (2) newly discovered evidence which by due diligence could
not have been discovered in time to move for a new trial under Rule 59(b); (3)
fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation,
or other misconduct of an adverse party; (4) the judgment is void; (5) the
judgment has been satisfied, released, or discharged, or a prior judgment upon
which it is based has been reversed or otherwise vacated, or it is no longer
equitable that the judgment should have prospective application; or (6) any other
reason justifying relief from the operation of the judgment. The motion shall be
made within a reasonable time, and for reasons (1), (2), and (3) not more than one
year after the judgment, order, or proceeding was entered or taken.
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Likewise, “[a] motion to vacate a judgment made pursuant to Rule 60(b), W.Va. R.C.P., is
addressed to the sound discretion of the court and the court’s ruling on such motion will not be
disturbed on appeal unless there is a showing of an abuse of such discretion.” Syl. Pt. 1, Builders
Service and Supply Co. v. Dempsey, 224 W.Va. 80, 680 S.E.2d 90 (2009).
Petitioner’s only argument on appeal is that the circuit court abused its discretion in
setting aside the default judgment against respondent. We disagree. We have previously held that
“[t]he Rules of Civil Procedure pertaining to the setting aside of default judgments should be
liberally construed in order to provide the relief from onerous consequences of default
judgments.” Syl. Pt. 2, Parsons v. McCoy, 157 W.Va. 183, 202 S.E.2d 632 (1973). We have also
held that “if any doubt exists as to whether relief should be granted such doubt should be
resolved in favor of setting aside the default judgment in order that the case may be heard on the
merits.” Syl. Pt.2 McDaniel v. Romano, 155 W.Va. 875, 190 S.E.2d 8 (1972). The circuit court is
to consider the following factors when deciding whether a default judgment should be vacated
pursuant to Rule 60(b) of the West Virginia Rules of Civil Procedure:
In determining whether a default judgment should be entered in the face of
a Rule 60(b) motion or vacated upon a Rule 60(b) motion, the trial court should
consider: (1) The degree of prejudice suffered by the plaintiff from the delay in
answering; (2) the presence of material issues of fact and meritorious defenses;
(3) the significance of the interests at stake; and (4) the degree of intransigence on
the part of the defaulting party.
Syl. Pt. 3, Parsons v. Consol. Gas Supply Corp., 163 W.Va. 464256 S.E.2d 758 (1979). Further,
[i]n addressing a motion to set aside a default judgment, “good cause”
requires not only considering the factors set out in Syllabus point 3 of Parsons v.
Consolidated Gas Supply Corp., 163 W.Va. 464, 256 S.E.2d 758 (1979), but also
requires a showing that a ground set out under Rule 60(b) of the West Virginia
Rules of Civil Procedure has been satisfied.
Syl. Pt. 5, Hardwood Group v. Larocco, 219 W.Va. 56, 631 S.E.2d 614 (2006).
It is clear from the record that, when applying these factors to the instant case, the circuit
court found that there was no evidence that petitioner had been unduly prejudiced by
respondent’s delay in answering and that the motion to set aside default judgment was filed
within a “reasonable time,” as required by Rule 60(b) of the West Virginia Rules of Civil
Procedure. The circuit court also found that respondent established a meritorious defense in her
counterclaim alleging that there were inaccuracies and/or fictitious billing items and that
petitioner did not adequately represent her in the underlying divorce action. The circuit court
further found that the amount of money at stake was over $14,000 and that the amount would be
significant to respondent “who is a mother of two children.” The circuit court further found that
there was “not substantial intransigence” on respondent’s part and she demonstrated a desire to
contest the case below.
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The final consideration in this case is whether respondent has shown some excusable
neglect under Rule 60(b). As we have previously recognized, “the stronger the excusable neglect
or good cause shown, the more appropriate it is to give relief against the default judgment.”
White v. Berryman, 187 W.Va. 323, 332, 418 S.E.2d 917, 926 (1992). In the instant case, the
circuit court correctly determined that it was proper to set aside default judgment due to the lack
of prejudice to petitioner, the significant amount of money in controversy, the existence of
meritorious defenses, respondent’s timely filing of her motion to set aside, and respondent’s
desire to contest the case below. Weighing these findings with respondent’s claim that she had
not been served with the summons and complaint, we find that the circuit court did not abuse its
discretion when it granted respondent’s Rule 60(b) motion to set aside default judgment.
Accordingly, for the foregoing reasons, we find no error in the decision of the circuit
court, and its November 23, 2016, order is hereby affirmed.
Affirmed.
ISSUED: January 8, 2018
CONCURRED IN BY:
Chief Justice Allen H. Loughry II
Justice Robin Jean Davis
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Elizabeth D. Walker
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