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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2006 Term
No. 32781
THE HARDWOOD GROUP
d/b/a
PLYWOOD AND PLASTICS OF ROANOKE,
Plaintiff Below, Appellee,
V.
CLAIRE V. LAROCCO,
Defendant Below, Appellant.
Appeal from the Circuit Court of Greenbrier County
Honorable James J. Rowe, Judge
Civil Action No. 03-C-214
AFFIRMED
Submitted: January 10, 2006
Filed: February 17, 2006
James W. Lane, Jr.
Josef
A. Horter
Charleston, West Virginia Hendrickson & Long,
P.L.L.C.
Attorney for the Appellant, Charleston,
West Virginia
Claire V. LaRocco
Attorney
for the Appellee,
The
Hardwood Group
CHIEF JUSTICE DAVIS delivered the Opinion of the Court.
JUSTICE ALBRIGHT concurs and reserves the right to file a concurring opinion.
SYLLABUS BY THE COURT
1. “'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.' Syl. Pt. 3,
Intercity Realty
Co. v. Gibson, 154 W. Va. 369, 175 S.E.2d 452 (1970) [
overruled on
other grounds by Cales v. Wills, 212 W. Va. 232, 569 S.E.2d 479 (2002)].” Syllabus
point 6,
Games-Neely ex rel. West Virginia State Police v. Real Property,
211 W. Va. 236, 565 S.E.2d 358 (2002).
2. “'Appellate
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.' Syllabus
point 3,
Hinerman v. Levin, 172 W. Va. 777, 310 S.E.2d 843 (1983).” Syllabus
point 1,
Cales v. Wills, 212 W. Va. 232, 569 S.E.2d 479 (2002).
3. “In
determining whether a default judgment should be . . . 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.” Syllabus
point 3, in part,
Parsons v. Consolidated Gas Supply Corp., 163 W. Va.
464, 256 S.E.2d 758 (1979).
4. When
addressing a motion to set aside an entry of default, a trial court
must determine whether “good cause” under Rule 55(c) of the West
Virginia Rules of Civil Procedure has been met. In analyzing “good cause” for
purposes of motions to set aside a default, 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; (4) the degree of intransigence on
the part of the defaulting party; and (5) the reason for the defaulting party's
failure to timely file an answer.
5. In
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.
Davis, Chief Justice:
The appellant herein and defendant below,
Claire V. LaRocco (hereinafter referred to as “Ms. LaRocco”), appeals
from an order entered December 9, 2004, by the Circuit Court of Greenbrier County.
The circuit court had previously entered a judgment by default against Ms. LaRocco
in favor of the appellee herein and plaintiff below, The Hardwood Group (hereinafter
referred to as “Hardwood”). Ms. LaRocco then filed a Rule 60(b) motion
to set aside the default judgment for excusable neglect. By the terms of the
December 9, 2004, order, the circuit court found no good cause existed for Ms.
LaRocco's failure to act in a timely manner, and denied the motion to set aside
the default judgment. Based upon the parties' briefs, (See
footnote 1) the record designated for our consideration, and the
pertinent authorities, we affirm the rulings of the circuit court.
I.
FACTUAL AND PROCEDURAL HISTORY
The case before us follows the circuit court's
denial of Ms. LaRocco's motion to set aside a default judgment. The record reveals
that Ms. LaRocco was the president of a company, Greenbrier Architectural Woodworks,
and signed a promissory note with Hardwood guaranteeing repayment of a specific
sum of money. In exchange for the execution of the promissory note, Hardwood
was able to extend credit to Ms. LaRocco so
her company could continue running its business.
Hardwood filed a complaint against Ms. LaRocco
on September 19, 2003, alleging that Ms. LaRocco had defaulted on her personal
guarantee of a debt. Ms. LaRocco signed the restricted delivery notice on October
1, 2003, evidencing receipt of the summons and complaint.
(See
footnote 2) On December 3, 2003, Hardwood moved for default judgment
pursuant to Rule 55 of the West Virginia Rules of Civil Procedure based on Ms.
LaRocco's failure to file an answer or other responsive pleading to the complaint.
A copy of the letter requesting a ruling of default, the motion, and an accompanying
affidavit were sent to Ms. LaRocco. The circuit court entered an order granting
default judgment
(See footnote
3) on December 9, 2003, with a copy
of the order forwarded to Ms. LaRocco. Hardwood then sought execution of the
judgment.
Thereafter, on February 3, 2004, Ms. LaRocco
filed a motion to set aside the default judgment and to quash the suggestion
of execution. Ms. LaRocco argued that her failure to respond was justified based
on excusable neglect, and further, that meritorious defenses existed to the default
action commenced by Hardwood. A hearing was held on May 17, 2004, wherein the
trial court requested briefs regarding meritorious defenses. Subsequently, the
trial court entered an order on December 9, 2004, and found that Ms. LaRocco
had not shown good cause for her failure to respond to the complaint in a timely
manner, and therefore, denied her motion to aside the default judgment. It is
from this ruling that Ms. LaRocco now appeals.
II.
STANDARD OF REVIEW
This
case is before this Court on appeal from the circuit court's order denying Ms.
LaRocco's motion to set aside a default judgment under Rule 60(b) of the West
Virginia Rules of Civil Procedure. The standard of review is well-settled, and
we have previously held that “'[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.' Syl. Pt. 3,
Intercity Realty Co. v. Gibson, 154 W. Va.
369, 175 S.E.2d 452 (1970) [
overruled on other grounds by Cales v. Wills,
212 W. Va. 232,
569 S.E.2d 479 (2002)].” Syl. pt. 6,
Games-Neely ex rel. West Virginia
State Police v. Real Prop., 211 W. Va. 236, 565 S.E.2d 358 (2002). We have
further explained that “'[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.' Syllabus point 3,
Hinerman v. Levin,
172 W. Va. 777, 310 S.E.2d 843 (1983).” Syl. pt. 1,
Cales v. Wills,
212 W. Va. 232, 569 S.E.2d 479 (2002). Further guidance is obtained from
our previous holding that “[o]n an appeal to this Court the appellant
bears the burden of showing that there was error in the proceedings below resulting
in the judgment of which he complains, all presumptions being in favor of the
correctness of the proceedings and judgment in and of the trial court.” Syl.
pt. 2,
Perdue v. Coiner, 156 W. Va. 467, 194 S.E.2d 657 (1973).
Mindful of these applicable standards, we now consider the substantive issues
herein raised.
III.
DISCUSSION
On appeal to this Court, Ms. LaRocco assigns
error to the circuit court's failure to set aside the default judgment. In so
doing, Ms. LaRocco challenges the circuit court's conclusion that no good cause
was shown for her failure to timely respond to the summons and complaint. Before
this Court, Ms. LaRocco avers that the circuit court used the incorrect standard
in denying the Rule 60(b) motion to set aside the default judgment because she
alleges that she is not required to meet a “good cause” standard. Further,
Ms. LaRocco contends that under the factors set forth by this Court in
Parsons
v. Consolidated Gas Supply
Corp., 163 W. Va. 464, 256 S.E.2d 758 (1979), the trial court abused
its discretion in declining to set aside the default judgment. Hardwood argues
that the trial court was proper in its granting of the default judgment, and
was further correct in denying the motion to set aside the default judgment.
We will first look to the language of the applicable rules to determine the
correct standard to apply when considering a motion to set aside a default
judgment.
Ms. LaRocco first argues that the default
judgment entered against her should be set aside for “excusable neglect” pursuant
to Rule 60(b), and that there is no requirement that she meet a separate threshold
of “good cause” before she can prevail in her motion to set aside.
While we previously have articulated a difference between the issuance of a default
as opposed to a default judgment, we have yet to make a distinction between the
standard for setting aside a default and that for setting aside a default judgment.
See Syl.
pt. 2,
Cales, 212 W. Va. 232, 569 S.E.2d 479 (“A default relates
to the issue of liability and a default judgment occurs after damages have been
ascertained.”). The present case deals with a default judgment
(See
footnote 4) and the appropriate standard to be applied in setting
aside a default judgment; however, to properly understand the applicable standards,
we are compelled to discuss and clarify the standard for setting aside both a
default and a default judgment.
A. Standard for Setting Aside Defaults and Default
Judgments
To determine the proper
standard for setting aside defaults and default judgments, we turn first to
the applicable rule. Rule 55(c) of the West Virginia Rules of Civil Procedure
directs 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 likewise set
it aside in accordance with Rule 60(b).”
(See
footnote 5) Thus, at first glance, it appears that two different
standards have been created
under Rule 55(c): one of good cause to set aside an entry of default, and one
following Rule 60(b) to set aside an entry of default judgment. We will examine
each standard more closely below.
1. Default standard. Rule 55(c)
clearly states that “[f]or good cause shown the court may set aside an
entry of default[.]” Notably, Rule 55(c) of the West Virginia Rules of
Civil Procedure, which is modeled after Federal Rule 55(c),
(See
footnote 6) does not provide a definition of the term “good
cause.” It has been explained that:
A
default may be set aside for good cause under Rule 55(c). However, Rule 55(c)
does not define good cause. As a result of a lack of definition for good cause,
federal courts have imposed upon Rule 55(c) the factors that they use for reviewing
a default judgment under Rule 60(b). . . .
The
factors considered by federal courts under Rule 60(b), which they apply to Rule
55(c), are essentially the same factors adopted by the [West Virginia] Supreme
Court for circuit courts to consider in reviewing a default judgment under our
Rule 60(b). . . .
Franklin D. Cleckley, Robin J. Davis, Louis J. Palmer, Jr.,
Litigation Handbook
on West Virginia Rules of Civil Procedure § 55(c), at 143-44 (Cum.
Supp. 2005) (internal footnotes omitted). As the foregoing commentators have
observed, to overcome the lack of a definition for the phrase “good cause,” federal
courts have instructed “when considering a motion to set aside a default
entry, the parallels between granting relief from a default entry and a default
judgment encourage utilizing the list of grounds for relief provided in Rule
60(b)[.]”
Hawaii Carpenters' Trust Funds v. Stone, 794 F.2d 508,
513 (9
th Cir. 1986).
Cf. In the Matter of Dierschke,
975 F.2d 181, 184 (5
th Cir. 1992) (“Whatever factors are employed,
the imperative is that they be regarded simply as a means of identifying circumstances
which warrant the finding of 'good cause' to set aside a default.”). Moreover,
this Court has historically applied the standards of Rule 60(b) to motions
to set aside a default.
(See
footnote 7) See Coury v. Tsapis, 172 W. Va.
103, 304 S.E.2d 7 (1983).
Accord Parsons v. McCoy, 157 W. Va.
183,
202 S.E.2d 632 (1973);
Hamilton Watch Co. v. Atlas Container, Inc.,
156 W. Va. 52, 190 S.E.2d 779 (1972);
Intercity Realty Co. v. Gibson,
154 W. Va. 369, 175 S.E.2d 452 (1970),
overruled on other grounds by
Cales v. Wills, 212 W. Va. 232, 569 S.E.2d 479 (2002).
Following the guidance of the federal courts
and our own prior cases, when addressing a motion to set aside a default we look
to the factors that have been instituted for challenging a default judgment under
Rule 60(b) to establish the factors required to fulfill the “good cause” element
of Rule 55(c). In West Virginia, we have explained that “[i]n determining
whether a default judgment should be . . . 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, in part,
Parsons v. Consolidated Gas Supply Corp., 163 W. Va.
464, 256 S.E.2d 758 (1979). Moreover, as has been articulated by Justice Cleckley, “[w]hen
the issue is one of whether to set aside an entry of default so that the 'good
cause' standard of Rule 55(c) is applicable, it is not absolutely necessary that
the neglect or oversight offered as reason for the delay in filing a responsive
pleading be excusable.” Cleckley, Davis, & Palmer,
Litigation Handbook § 55(c),
at 144 (Cum. Supp. 2005) (internal footnotes omitted). Thus, while a factor under
Rule 60(b) can be a consideration, it is not a required finding prior to setting
aside an entry of default. To afford more guidance, a trial court may consider “the
reason for the defaulting party's failure to timely file an answer.”
Id. (citing
O.J.
Distrib. v.
Hornell Brewing Co., 340 F.3d 345 (6
th Cir. 2003) (“[I]f
service of process [on the defendant] was not proper, the court must set aside
an entry of default.”)).
Therefore, we now expressly hold that when
addressing a motion to set aside an entry of default, a trial court must determine
whether “good cause” under Rule 55(c) of the West Virginia Rules of
Civil Procedure has been met. In analyzing “good cause” for purposes
of motions to set aside a default, 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; (4) the degree of intransigence on the part of the defaulting
party; and (5) the reason for the defaulting party's failure to timely file an
answer.
Notwithstanding the similarities in the standard
used in deciding whether to set aside a default and a default judgment, we recognize
that due to the differences in the finality of the judgments,
(See
footnote 8) the standard is applied more leniently in the case of
a default. As Justice Cleckley has explained,
[a]lthough “the same considerations
exist when deciding whether to set aside either an entry of default or a default
judgment, . . . they are to be applied more liberally when reviewing an entry
of default.” In other words, “[a]lthough the factors examined in
deciding whether to set aside a default or a default judgment are the same,
courts apply the factors more rigorously in the case of a default judgment,
because the concepts of finality and litigation repose are more deeply implicated
in the latter action.”
Cleckley, Davis, & Palmer,
Litigation Handbook § 55(c), at
143-44 (Cum. Supp. 2005) (internal footnotes omitted). Now that we have clarified
the standard for setting aside a default, we examine the standard applicable
to the present case for setting aside a default judgment.
2. Default Judgment Standard. In
the present case, Ms. LaRocco argues that she was improperly required to meet
two standards: good cause and excusable neglect.
(See
footnote 9) Rule 55(c) states that “if a judgment by default
has been entered, [the court] may likewise set it aside in accordance with
Rule 60(b).” This language parallels a pre-1998 version of the rule.
(See
footnote 10) Our prior cases interpreting this language found it
to mean that “a motion to set
aside such judgment will not be granted unless the movant shows good cause
therefor as prescribed in Rule 60(b)[.]”
Jackson Gen. Hosp. v. Davis,
195 W. Va. 74, 76, 464 S.E.2d 593, 595 (1995) (citing
Blair v. Ford
Motor Credit Co., 193 W. Va. 250, 455 S.E.2d 809 (1995)). As we explained
in the preceding section of this opinion, and now expressly hold, in 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),
(See
footnote 11) 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.
See
Parsons, 163 W. Va. at 471, 256 S.E.2d at 762 (“Under . . . the
West Virginia . . . Rules of Civil Procedure, there is the necessity to show
some excusable or unavoidable cause[.]”). Thus, Ms. LaRocco misunderstands
our law when she argues that she was improperly required to satisfy two separate
standards. She was required to establish excusable neglect
as an
element of “good cause”
not in addition to “good
cause.” In summary, the
Parsons factors and excusable neglect,
or any other relevant factor under Rule 60(b), constitute “good cause” for
setting aside a default judgment.
(See
footnote 12)
B. Application of the Parsons factors and Rule 60(b)'s
Excusable Neglect
Having clarified that the
applicable standard for motions to set aside default judgments is that of “good
cause,” and recognizing that excusable neglect as a ground under Rule
60(b) is an element of “good cause,” we conclude that the circuit
court applied the appropriate standard. Consequently, we must now determine
whether the circuit court abused its discretion in the manner in which it applied
that standard. To do so, we review the
Parsons factors and the evidence
related to excusable neglect.
1. The degree of prejudice. The
initial inquiry is the degree of prejudice to Hardwood if the default judgment
is vacated. Ms. LaRocco argues that Hardwood is not prejudiced by the continuation
of the action. We agree. Hardwood has not argued that it would be prejudiced
from setting aside the judgment, and nothing in our independent review of the
record leads us to believe any prejudice to Hardwood would result if the default
judgment was set aside.
2. The presence of material issues
of fact and meritorious defenses. The second factor to be considered is
whether Ms. LaRocco has shown that material issues of fact and meritorious
defenses exist. We are guided by the explanation that this factor focuses on
whether “'there is . . . reason to believe that a result different from
the one obtained would have followed from a full trial.'
Hinerman v. Levin,
172 W. Va. 777, 783-84, 310 S.E.2d 843, 850 (1983).”
Cales,
212 W. Va. at 242, 569 S.E.2d at 489.
Ms. LaRocco insists that she has three meritorious
defenses: (1) she did not personally guarantee the note, (2) there was no consideration
for the alleged guarantee, and (3) the balance of the debt is in question. While
we cannot comment with certainty at this stage on the merits of these defenses,
we do find support in the record for the proposition that while defenses are
asserted, they are not necessarily meritorious defenses.
See, e.g., State
ex. rel. United Mine Workers of Am., Local Union 1938 v. Waters, 200 W. Va.
289, 299, 489 S.E.2d 266, 276 (1997) (“There is no reason to conclude at
this juncture that the petitioners' defenses are not meritorious.”).
First, Ms. LaRocco contends that she signed
the promissory note in her capacity as president of her company, and not in her
personal capacity. However, the record reveals that the promissory note was the
result of negotiated, meaningful discussions between
the parties, and that the note itself indicates Ms. LaRocco was signing as
the personal guarantor.
Second, Ms. LaRocco argues that there was
no consideration for her guarantee. A review of the principles of contract law
are helpful in our analysis of the guarantee issue. We have stated that “'[t]he
fundamentals of a legal 'contract' are competent parties, legal subject-matter,
valuable consideration, and mutual assent. There can be no contract, if there
is one of these essential elements upon which the minds of the parties are not
in agreement.' Syllabus Point 5,
Virginian Export Coal Co. v. Rowland Land
Co., 100 W. Va. 559, 131 S.E. 253 (1926).” Syl. pt. 9,
Ways
v. Imation Enters Corp., 214 W. Va. 305, 589 S.E.2d 36 (2003) (per curiam).
In this case, there is no dispute concerning the competency of the parties, legal
subject-matter, and mutual assent of the parties' agreement. The issue here involves
consideration and Ms. LaRocco's argument that there was no consideration for
her guarantee. “For the purposes of contract law, 'consideration consists
either in some right, interest or benefit accruing to one party or some forbearance,
detriment or responsibility given, suffered or undertaken by the other.'”
Verizon
West Virginia, Inc. v. West Virginia Bureau of Employment Programs, Workers'
Comp. Div., 214 W. Va. 95, 133, 586 S.E.2d 170, 208 (2003) (Davis, J.,
dissenting) (quoting
National Educ. Ass'n-Rhode Island by Scigulinsky v. Retirement
Bd. of Rhode Island Employees' Ret. Sys., 890 F. Supp. 1143, 1159 (D.R.I. 1995)).
Inspection of the record in the instant matter indicates that consideration for
the note was shown to exist in the fact that the note was the vehicle through
which Hardwood agreed to extend credit to Ms. LaRocco for her business to continue
its operation. Significantly, consideration was also found in the fact that
Hardwood consolidated past debts for Ms. LaRocco into the note and forbore
filing any suit based on the past-due accounts. Therefore, consideration is
satisfied for the purposes of our review.
Third, Ms. LaRocco alleges that the balance
of the debt is incorrect and that monies paid were inaccurately applied to the
wrong accounts. Ms. Larocco's final defense is easily handled. If the damages
were miscalculated, they can easily be ascertained by the promissory note and
recalculated. After Ms. LaRocco filed her motion to set aside the default judgment,
a hearing was held before the trial court and these defenses were presented.
The transcript of the hearing reveals that counsel for Hardwood explained how
the sum certain was calculated under the promissory note. Regardless, counsel
for Hardwood stated that if there was a miscalculation, the amount of damages
owed could be recalculated.
During this hearing, the trial court requested
briefs from the parties regarding the meritorious defenses prior to ruling. After
reviewing the briefs, the trial court then denied the motion to set aside. While
Ms. LaRocco has presented what she describes as three meritorious defenses, we
are not convinced that these defenses would have resulted in a different outcome
if there had been a trial.
3. The significance of the interests
at stake. The third consideration is the interests at stake in the litigation.
The damages in this case are for $15,435.98, based on the value set forth in
the promissory note, plus accrued interest of $1,888.86. We are not in a position
to affirmatively state that these damages are an insignificant amount. See,
e.g., Parsons, 163 W. Va. at 473, 256 S.E.2d at 763 (stating that “monetary
damages in the amount of $35,000 . . . is not an insignificant claim”).
4. The degree of intransigence by the
defaulting party. We must next review the degree of intransigence by Ms.
LaRocco in not responding to the complaint. We have previously stated that “any
evidence of intransigence on the part of a defaulting party should be weighed
heavily against him in determining the propriety of a default judgment.” Hinerman,
172 W. Va. at 782, 310 S.E.2d at 849. In the present case, the complaint
was filed on September 19, 2003, and Ms. LaRocco signed the restricted delivery
notice on October 1, 2003. On December 3, 2003, Hardwood moved for default
judgment and sent notice to Ms. LaRocco. The default judgment was granted on
December 9, 2003, and the order was sent to Ms. LaRocco. Hardwood then sought
execution of the judgment. It was not until this time that Ms. LaRocco responded
by filing her motion to set aside the default judgment. Because of the many
opportunities afforded to her for an earlier response, we find this intransigence
to be significant.
5. The existence of excusable neglect. The
final consideration under Parsons is whether Ms. LaRocco satisfied a
ground under Rule 60(b). In this case, the issue is whether she has shown some
excusable neglect. 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) (internal citations omitted). In the instant
case, Ms. LaRocco failed to distinguish the pleadings in the present case from
pleadings in a separate and unrelated bankruptcy case and did not afford the
documents the attention they required. However, the present case is styled
in Ms. LaRocco's name, whereas the bankruptcy case is styled in the company's
name; therefore, it is inexcusable for Ms. LaRocco to fail to distinguish between
the two suits. Moreover, even after the default judgment was entered, Ms. LaRocco
still did not respond until after Hardwood attempted to execute the judgment.
The failure to distinguish this case from a differently-styled case, coupled
with the complete lack of action even after the default judgment was entered,
does not constitute excusable neglect.
6. Weighing the Parsons factors
and Rule 60(b)'s excusable neglect. We have determined that no undue prejudice
would result against Hardwood by setting aside the default judgment. We have
also determined that the amount of damages is not insignificant. However, although
we have determined that Ms. LaRocco presented three defenses, they do not rise
to the level of meritorious defenses. Weighing these findings against Ms. LaRocco's
intransigence and her inability to present any excusable neglect for not filing
a timely answer, we believe the proper balance requires us to affirm the trial
court's denial of Ms. LaRocco's
motion to set aside the default judgment.
We have previously recognized the deference
afforded to trial courts in this regard when we stated: “[A]lthough this
court is quite willing to review default judgments and to overturn them in cases
where good cause is shown, a demonstration of such good cause is a necessary
predicate to our overruling a lower court's exercise of discretion.” Cales,
212 W. Va. at 243, 569 S.E.2d at 490 (quoting Hinerman, 172 W. Va.
at 782, 310 S.E.2d at 848). Thus, we find the circuit court did not abuse its
discretion when it denied Ms. LaRocco's Rule 60(b) motion to set aside the default
judgment.
IV.
CONCLUSION
For the foregoing reasons, we affirm the
December 9, 2004, order of the Circuit Court of Greenbrier County.
Affirmed.
The parties did not present
their case at oral argument, and instead, submitted their case on written briefs.
Footnote: 2 Ms. LaRocco first alleged
that she was away on a business trip during this time and could not possibly
have signed the delivery notice. However, upon further investigation, it was
learned that she was in town during this time, and it was conceded that the
signature reflected her own; therefore, this argument was retracted.
Footnote: 3 The motion for default
judgment was made pursuant to Rule 55(b)(1) of the West Virginia Rules of Civil
Procedure for a sum certain based on the terms of the signed promissory note.
Because the default judgment was entered on a sum certain, no hearing on damages
was required.
See Syl. pt. 3,
Farm Family Mut. Ins. Co. v. Thorn
Lumber Co., 202 W. Va. 69, 501 S.E.2d 786 (1998) (“The term 'sum
certain' under
West Virginia Rules of Civil Procedure Rule 55(b)(1)
[1959] contemplates a situation where the amount due cannot be reasonably disputed,
is settled with respect to amount, ascertained and agreed upon by the parties,
or fixed by operation of law. A claim is not for a 'sum certain' merely because
the claim is stated as a specific dollar amount in a complaint, verified complaint,
or affidavit.”).
See also Syl. pt. 3,
Cales v. Wills, 212
W. Va. 232, 569 S.E.2d 479 (2002) (“Generally, under Rule 55(b)(1)
of the West Virginia Rules of Civil Procedure, when the damages sought by a
plaintiff involve a sum certain or a sum which can by computation be made certain,
a judgement by default may be entered against a party who has defaulted as
to liability without prior notice to that party.”).
Footnote: 4 See note 3,
supra,
for the relevant facts regarding the default judgment.
Footnote: 5 The pertinent portion of
Rule 60 provides:
(b)
Mistakes;
inadvertence; excusable neglect; unavoidable cause; newly discovered evidence;
fraud, etc. _ 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. A motion
under this subdivision (b) does not affect the finality of a judgment or suspend
its operation. This rule does not limit the power of a court to entertain an
independent action to relieve a party from a judgment, order or proceeding, or
to grant statutory relief in the same action to a defendant not served with a
summons in that action, or to set aside a judgment for fraud upon the court.
Writs of coram nobis,
coram vobis, petitions for rehearing, bills of review and bills in the nature
of a bill of review, are abolished, and the procedure for obtaining any relief
from a judgment shall be by motion as prescribed in these rules or by an independent
action.
Footnote: 6 Because the West Virginia
Rules of Civil Procedure are patterned after the Federal Rules of Civil Procedure,
we often refer to interpretations of the Federal Rules when discussing our
own rules.
See Painter v. Peavy, 192 W. Va. 189, 192 n.6, 451
S.E.2d 755, 758 n.6 (1994) (“Because the West Virginia Rules of Civil
Procedure are practically identical to the Federal Rules, we give substantial
weight to federal cases . . . in determining the meaning and scope of our rules.” (citations
omitted)).
See, e.g., State v. Sutphin, 195 W. Va. 551, 563, 466 S.E.2d
402, 414 (1995) (“The West Virginia Rules of Evidence are patterned upon
the Federal Rules of Evidence, . . . and we have repeatedly recognized that
when codified procedural rules or rules of evidence of West Virginia are patterned
after the corresponding federal rules, federal decisions interpreting those
rules are persuasive guides in the interpretation of our rules.” (citations
omitted)).
Accord Keplinger v. Virginia Elec. & Power Co., 208 W.
Va. 11, 20 n.13, 537 S.E.2d 632, 641 n.13 (2000). We note, however, that “'[a]
federal case interpreting a federal counterpart to a West Virginia rule of
procedure may be persuasive, but it is not binding or controlling.' Syllabus
point 3,
Brooks v. Isinghood, 213 W. Va. 675, 584 S.E.2d 531 (2003).” Syl.
pt. 3,
In re West Virginia Rezulin Litigation, 214 W. Va. 52, 585 S.E.2d
52 (2003). Accordingly, we find it relevant to consider how federal courts
apply their rule in construing our own rule.
Footnote: 7 Further, we should point
out that, while all of our prior cases have focused upon the excusable neglect
factor listed in Rule 60(b), there are other factors under the rule that may
justify relief.
Footnote: 8 The entry of a default
is an interlocutory order and is not a final appealable order.
See Coury
v. Tsapis, 172 W. Va. 103, 106, 304 S.E.2d 7, 10 (1983) (“The
federal rule's distinction between a default and a default judgment has resulted
in a recognition that a default order is interlocutory. In reality, it represents
a default on liability and, until the amount of damages is ascertained, there
is no final judgment.”).
Footnote: 9 We should point out that “excusable
neglect” is one of the grounds enumerated in Rule 60(b) of the West Virginia
Rules of Civil Procedure. See note 5,
supra, for the relevant language
of Rule 60(b). While
Parsons requires a showing of excusable neglect
under Rule 60(b), the rule itself provides other grounds for granting relief.
Insofar as this opinion does not require examination of any other factor under
Rule 60(b), we will refrain from determining to what extent the other factors
under Rule 60(b) have application to a default judgment; however, we recognize
there are other factors under Rule 60(b) that may justify relief.
Footnote: 10 Prior to the 1998 amendment,
Rule 55(c) of the West Virginia Rules of Civil Procedure read as follows: “
Setting
aside default judgment. _ A judgment by default may be
set aside in accordance with Rule 60(b).”
Footnote: 11 Syllabus point 3 of
Parsons states
“In
determining whether a default judgment should be entered in the face of a Rule
6(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.”
163 W. Va. 464, 256 S.E.2d 758 (1979).
Accord Syl. pt. 2,
Jackson
Gen. Hosp. v. Davis, 195 W. Va. 74, 464 S.E.2d 593 (1995); Syl. pt.
2,
Monterre v. Occoquan Land Dev., 189 W. Va. 183, 429 S.E.2d 70
(1993).
Footnote: 12 While this opinion sets
forth the standards for setting aside defaults and default judgments, it does
not negate the preference that cases be adjudicated on their merits when appropriate. See Parsons,
163 W. Va. at 471, 256 S.E.2d at 762 (“In determining the discretion
issue, we have established as a basic policy that cases should be decided on
their merits, and consequently [defaults and] default judgments are not favored[.]”).