Cales v. Wills

• Citation: 569 S.E.2d 479,212 W.Va. 232
• Decision Date: 28 June 2002
• Docket Number: No. 30109.,30109.
• Parties: Bobby CALES, Plaintiff Below, Appellee, National Union Fire Insurance Company Of Pittsburgh, Pa., Appellant, v. Mark Steven WILLS, Defendant Below, Appellee.
• Court: Supreme Court of West Virginia

569 S.E.2d 479

212 W.Va. 232

Bobby CALES, Plaintiff Below, Appellee, National Union Fire Insurance Company Of Pittsburgh, Pa., Appellant, v. Mark Steven WILLS, Defendant Below, Appellee.

No. 30109.

Supreme Court of Appeals of West Virginia.

Submitted May 1, 2002.

Decided June 28, 2002.

Concurring Opinion of Justice Albright July 3, 2002.

Concurring and Dissenting Opinion of Justice McGraw July 11, 2002.

Ancil G. Ramey, Steptoe & Johnson, Charleston, for Appellant, National Union Fire Insurance Company.

E. Kent Hellems, Law Office of E. Kent Hellems, Hinton, Benny G. Jones, Law Office of Benny G. Jones, Beckley, for Appellee, Bobby Cales. DAVIS, Chief Justice.

National Union Fire Insurance Company, appellant/defendant below (hereinafter referred to as "National"), appeals from an order of the Circuit Court of Summers County denying National's motion to set aside a default and default judgment. The circuit court had awarded a default and default judgment in favor of Bobby Cales, appellee/plaintiff below (hereinafter referred to as "Mr. Cales"), and against National, in the amount of $113,734.19, plus post-judgment interest. National has assigned several errors to the circuit court's denial of its motion to set aside the default and default judgment. After reviewing the briefs and record in this case, we affirm the circuit court's entry of default as to liability. However, we reverse the entry of the default judgment awarding damages.

I.

FACTUAL AND PROCEDURAL HISTORY

On October 18, 1997, Mr. Cales sustained serious injuries, including a fractured left leg, when he was assaulted while performing his duties as a police officer for the City of Hinton. Specifically, Mr. Cales was assaulted by Mark Steven Wills, appellee/defendant below (hereinafter referred to as "Mr. Wills"), after he observed Mr. Wills run a stop sign and then executed a traffic stop of Mr. Wills' vehicle. As a result of the injuries he received, Mr. Cales filed a lawsuit against Mr. Wills on October 19, 1998.

Subsequently, Mr. Wills' insurance carrier, Dairyland Insurance Company (hereinafter referred to as "Dairyland"), filed a separate declaratory judgment action seeking a ruling as to whether the injuries sustained by Mr. Cales involved Mr. Wills' vehicle such that they would fall within the liability coverage provided under Mr. Wills' automobile insurance policy. The circuit court concluded that Mr. Cales' injuries did in fact arise from the operation of Mr. Wills' vehicle. As a result of this ruling, Dairyland offered to pay Mr. Cales the full policy limit of Mr. Wills' liability coverage, which equaled $20,000.00. Additionally, Dairyland sought a waiver of subrogation from the City of Hinton's underinsured motorist insurance carrier, National.

Although Dairyland paid to Mr. Cales the limits of Mr. Wills' policy, the case against Mr. Wills nevertheless proceeded to trial for a determination of both liability and damages. A bench trial was held on March 24, 2000,¹ but National was not represented. On September 14, 1999, a summons and a copy of the complaint filed against Mr. Wills had been served on the Secretary of State on behalf of National. National was served with process through the Secretary of State's office on September 23, 1999. However, National failed to answer the complaint. Also on September 14, 1999, Mr. Cales notified National's representative, AIG Claims, Inc., of the lawsuit against Mr. Wills and requested a waiver of subrogation against Mr. Wills' insurer. In a letter dated September 15, 1999, AIG responded to the waiver request by indicating that Mr. Cales could proceed to settle the claim against Mr. Wills under the terms deemed appropriate.

Prior to the calling of any witnesses at the trial, Mr. Cales specifically advised the court that National was in default as it had failed to file an answer to the complaint. Accordingly, the circuit court ruled that National was in default. Mr. Cales then called several witnesses to testify on the issues of liability and damages. After the evidence was presented, the circuit court returned a verdict in favor of Mr. Cales and assessed damages in the amount of $133,734.19. The circuit court then ruled that, because Mr. Wills' insurance carrier had tendered its policy limits of $20,000.00, National, as the underinsured motorist insurance provider, was liable to Mr. Cales for the balance of the damages. In accordance with this ruling, the circuit court imposed a default judgment against National in the amount of $113,734.19, plus post-judgment interest.

On September 13, 2000, National moved to set aside both the default and the default judgment. By order entered May 3, 2001, the circuit court denied National's motion. It is from this ruling that National now appeals.

II.

STANDARD OF REVIEW

In this case, we are asked to review the circuit court's ruling on National's motion, which was filed in accordance with Rule 60(b) of the West Virginia Rules of Civil Procedure,² to set aside the default and default judgment. It is well-settled that "[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. 5, Toler v. Shelton, 157 W.Va. 778, 204 S.E.2d 85 (1974). See also Syl. pt. 1, Jackson Gen. Hosp. v. Davis, 195 W.Va. 74, 464 S.E.2d 593 (1995) (same). Similarly, "[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." Syl. pt. 3, Hinerman v. Levin, 172 W.Va. 777, 310 S.E.2d 843 (1983). See also Syl. pt. 3, Intercity Realty Co. v. Gibson, 154 W.Va. 369, 175 S.E.2d 452 (1970) ("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 such discretion."). We have also held 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). With these considerations in mind, we proceed to address the issues before us.

III.

DISCUSSION

This appeal involves a default as to liability and a default judgment as to the issue of damages. In Coury v. Tsapis, 172 W.Va. 103, 304 S.E.2d 7 (1983), we recognized the distinction between a default and a default judgment. In Coury we observed, and we now hold, that "a default relates to the issue of liability and a default judgment occurs after damages have been ascertained." 172 W.Va. at 106, 304 S.E.2d at 10. Therefore, we will discuss the default judgment entered in this case separately from the default as to liability.

A. Default Judgment Awarding Damages

With respect to the default judgment awarding damages against National, we are asked to determine whether the circuit court erred in entering the judgment when National had not received notice of any proceedings related to the award of damages against it. National argues that the default judgment should be set aside due to the lack of notice. Mr. Cales, on the other hand, contends that (1) National was not entitled to notice as it failed to make an appearance in the civil action; and (2) due to the nature of the damages awarded, there was no requirement of notice to National.

The issues described above directly involve Rule 55(b) of the West Virginia Rules of Civil Procedure,³ which expressly addresses default judgments. Rule 55(b) contains different procedural requirements for default judgments awarding sum certain damages, see W. Va. R. Civ. P. Rule 55(b)(1), and those awarding other types of damages, see W. Va. R. Civ. P. Rule 55(b)(2). For the purposes of the instant proceeding, we are concerned with the differences in these two provisions as they relate to notice to a defaulting party. Consequently, we pause to briefly identify the different notice requirements of these two rules.

Rule 55(b)(1) addresses actions involving damages that are a "sum certain or ... a sum which can by computation be made certain," and instructs the court to "direct the entry of judgment by the clerk" in such circumstances.⁴ We have previously held, in syllabus point 1 of Coury v. Tsapis, 172 W.Va. 103, 304 S.E.2d 7 (1983), that

Rule 55(b)(1) of the West Virginia Rules of Civil Procedure relates to cases where the amount sued for is a sum certain or which can be rendered certain by computation. Upon a default in this category of cases, the court can enter a judgment not only as to liability but also to the amount due.

Because Rule 55(b)(1) applies only when the damages are a sum certain, or an amount which can be made certain by calculation, there clearly is no need for an evidentiary hearing to ascertain the amount of damages. We recognized this fact in Farm Family Mut. Ins. Co., 202 W.Va. at 73, 501 S.E.2d at 790 (1998), wherein we stated that

if the damages sought by the party moving for a default judgment are for a sum certain, or an amount which can be rendered certain by calculation, no evidentiary hearing on damages is necessary and the circuit court may proceed to enter a "default judgment" on all issues in the case.

(Emphasis added). See also Franklin D. Cleckley, Robin J. Davis & Louis J. Palmer, Litigation Handbook on West Virginia Rules of Civil Procedure 914 (2002) (discussing Rule 55(b)(1) and stating "[i]f the damages sought by the party moving for a default judgment are for a sum certain, or an amount which can be rendered certain by calculation, no evidentiary hearing on damages is necessary and the trial court may proceed to enter a default judgment on all...