Amoruso v. Commerce and Industry Insurance Company

• Decision Date: 27 March 2019
• Docket Number: No. 17-1106,17-1106
• Citation: 826 S.E.2d 642,241 W.Va. 517
• Parties: Samuel R. AMORUSO, Jr. d/b/a Quality Supplier Trucking, Inc., a West Virginia Corporation, Defendant Below, Petitioner v. COMMERCE AND INDUSTRY INSURANCE COMPANY, Plaintiff Below, Respondent
• Court: West Virginia Supreme Court

241 W.Va. 517

826 S.E.2d 642

Samuel R. AMORUSO, Jr. d/b/a Quality Supplier Trucking, Inc., a West Virginia Corporation, Defendant Below, Petitioner

v.COMMERCE AND INDUSTRY INSURANCE COMPANY, Plaintiff Below, Respondent

No. 17-1106

Supreme Court of Appeals of West Virginia.

Submitted: January 29, 2019

Filed: March 27, 2019

James E. Smith II, Esq., Keyser, West Virginia, Counsel for Petitioner

Richard F. Shearer, Esq., Shook, Hardy & Bacon L.L.P, Kansas City, Missouri, Clinton W. Smith, Esq., Law Office of Clinton W. Smith, Charleston, West Virginia, Counsel for Respondent

WALKER, Chief Justice:

Commerce and Industry Insurance (Commerce and Industry) filed a breach of contract claim against Petitioner Samuel L. Amoruso, Jr. d/b/a Quality Supplier Trucking, Inc. (Amoruso) for breach of contract by failing to pay insurance premiums. Although Amoruso answered the original complaint and responded to discovery in the case, he did not respond to Commerce and Industry’s properly served amended complaint. Nearly sixteen months after Commerce and Industry obtained a default judgment against Amoruso, he filed a motion to set aside the default judgment, arguing that he was not a proper party to the action. Because the grounds on which Amoruso sought to have the judgment set aside are subject to a one-year time limitation under Rule 60(b) of the West Virginia Rules of Civil Procedure, the circuit court denied Amoruso’s motion as untimely.

On appeal, Amoruso raises these same grounds to set aside the judgment as those made below, which we agree were untimely under Rule 60(b). And, although not raised below, Amoruso argues that the judgment is void for lack of personal jurisdiction because Commerce and Industry did not sue the proper entity. While void judgments are not subject to the strict one-year time frame set forth in Rule 60(b), the circuit court did not lack personal jurisdiction over Amoruso so as to render the judgment void. So, we find that the circuit court did not abuse its discretion in denying Amoruso’s motion to set aside the default judgment.

I. FACTUAL AND PROCEDURAL BACKGROUND

In June 2014, Commerce and Industry Insurance filed a complaint in the Circuit Court of Mineral County for breach of contract against "Samuel L. Amoruso, Jr., d/b/a Quality Supplier Trucking, Inc." for failure to pay premiums under a workers’ compensation insurance policy. The summons and complaint were served upon Amoruso. Amoruso, appearing pro se, filed an answer generally denying the allegations; he did not assert any affirmative defenses. Commerce and Industry then filed discovery requests to which Amoruso did not respond. Commerce and Industry filed a motion to compel, which was set for hearing. Amoruso did not attend the hearing and the circuit court entered an order compelling Amoruso to respond to the discovery requests. Amoruso responded to the discovery requests, again generally denying that he owed the amount due. Amoruso alleges that he had been in discussions with Commerce and Industry during this time and believed the matter would ultimately be settled.

In June 2015, Commerce and Industry filed a motion to amend its complaint. Amoruso received proper notice of the hearing conducted by the circuit court on the motion, but he did not appear to contest. Given leave to file an amended complaint by the circuit court, Commerce and Industry alleged that Amoruso owed premiums under an additional workers’ compensation policy. On August 19, 2015, Amoruso was served with the amended complaint and summons in person. The summons contained the requisite language "[i]f you fail [to serve an answer to the Amended Complaint within 20 days of service], judgment by default will be taken against you for the relief demanded in the complaint[.]"¹ Amoruso did not respond to the amended complaint.

In January 2016, Commerce and Industry filed a motion for default judgment. The circuit court granted the motion and entered judgment in favor of Commerce and Industry on January 28, 2016. After attempting to collect the judgment, Commerce and Industry filed a writ of execution in April 2017, which it amended in May 2017. On May 19, 2017, Amoruso, now represented by counsel, filed a motion to set aside the default judgment under Rule 60(b) of the West Virginia Rules of Civil Procedure.

Amoruso’s motion contended that Commerce and Industry’s workers’ compensation policy was in the name of "Q.S.I., Inc." of which Commerce and Industry was aware and they instead chose to pursue the unpaid amounts from Amoruso in his personal capacity d/b/a Quality Supplier Trucking, Inc. The motion included a print-out from the West Virginia Secretary of State’s website identifying Amoruso as the Treasurer and Vice-President of Q.S.I., Inc., as well as the workers’ compensation policy issued to Q.S.I., Inc., and past-due notices sent to Q.S.I., Inc. Because Commerce and Industry allegedly sued the wrong entity by suing him in his personal capacity rather than suing Q.S.I., Inc., Amoruso alleged in his motion that Commerce and Industry had either made a mistake, or negligently or intentionally perpetrated a fraud on the court by misrepresenting salient facts. Amoruso also sought relief from the judgment under excusable neglect, arguing that he had appeared pro se at the time the judgment was entered and had been communicating with Commerce and Industry regarding settlement of the dispute.²

During the hearing on Amoruso’s motion, his counsel argued the same points raised in his written motion and additionally asserted that Commerce and Industry’s counsel was "going around the State trying to ram judgments wherever he wants." The circuit court responded that Amoruso’s counsel was out of line and that it was out of line for Amoruso to "ha[ve] spen[t] his whole entire career creating these damn companies so he can hide behind money that he owes people."

In response, Commerce and Industry argued that under Rule 60(b), those seeking to set aside a default judgment on the grounds of mistake, fraud, or excusable neglect must do so within one year of the judgment, which had passed nearly four months prior. Alternatively, Commerce and Industry argued that the circuit court should not grant the motion to set aside the default judgment because Amoruso had never explained why he failed to answer the amended complaint and he was apparently under the impression that the matter would go away if he ignored it. The circuit court denied Amoruso’s motion to set aside the default judgment on the grounds that it was untimely. It is from that order that Amoruso now appeals, arguing, in addition to the grounds raised to the circuit court below, that the circuit court lacked personal jurisdiction over him and was prejudiced against him as evidenced by the comments made by the court relating to his business practices.

II. STANDARD OF REVIEW

With respect to motions made under Rule 60(b) of the Rules of Civil Procedure to set aside a default judgment rendered under Rule 55 of the Rules of Civil Procedure, we have 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."³ However, we are mindful that there is a presumption in favor of adjudication of cases upon their merits.⁴

III. DISCUSSION

We begin by discussing the Rules of Civil Procedure involved in the proceedings below. First, Rule 55(c) provides that "[f]or good cause shown the court may set aside an entry of default and, if a judgment of default has been entered, may likewise set it aside in accordance with Rule 60(b)." And, Rule 60(b) outlines the grounds for relief and timing of a motion to set aside a judgment, providing in relevant part:

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. ...

In Parsons v. Consolidated Gas Supply Corp. ,⁵ we identified four factors a trial court should consider under Rule 60(b) specific to the context of a motion to set aside a default judgment:

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.^{[6 ]}

Subsequently, we clarified the interplay between "good cause" under Rule 55(c) and the requisite showing of a grounds for relief from a default judgment⁷ under Rule 60(b) as follows:

[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

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