Ex parte Family Dollar Stores of Alabama, Inc.

• Decision Date: 07 January 2005
• Citation: 906 So.2d 892
• Parties: Ex parte FAMILY DOLLAR STORES OF ALABAMA, INC., d/b/a Family Dollar, and Regina Nichols. (In re Toni Natasha Holloway; and Jeshaylin Ware and Takory Ware, minors, by and through their mother and next friend, Toni Natasha Holloway v. Family Dollar and Regina Nichols).
• Court: Alabama Supreme Court

906 So.2d 892

Ex parte FAMILY DOLLAR STORES OF ALABAMA, INC., d/b/a Family Dollar, and Regina Nichols.

(In re Toni Natasha Holloway; and Jeshaylin Ware and Takory Ware, minors, by and through their mother and next friend, Toni Natasha Holloway v. Family Dollar and Regina Nichols).

1031699.

Supreme Court of Alabama.

January 7, 2005.

William C. McGowin of Bradley Arant Rose & White, LLP, Montgomery, for petitioners.

Peter A. Dumbuya, Phenix City, for respondents.

HARWOOD, Justice.

Family Dollar Stores of Alabama, Inc., d/b/a Family Dollar ("Family Dollar"), and Regina Nichols petitioned this Court for a writ of mandamus directing the Russell Circuit Court to vacate its July 19, 2004, order denying their "Motion to Set Aside Default Judgment." That motion had been filed by Family Dollar and Nichols with respect to the default entered against them in the action brought by Toni Natasha Holloway, individually and on behalf of her minor children Jeshaylin Ware and Takory Ware (hereinafter collectively "the respondents"). For the reasons hereinafter explained, we grant the petition and issue the writ.

After Family Dollar and Nichols (hereinafter collectively "the petitioners") filed their petition, we ordered the respondents to file an answer and supporting brief, and we ordered the petitioners to file a brief in reply. (See Rule 21(b), Ala. R.App. P.) The trial judge was likewise afforded the option of filing an answer and brief, pursuant to Rule 21(b). The respondents filed their answer and brief on September 20, 2004, and the petitioners filed their reply brief on September 27, 2004. The matter was submitted on petition, answer, and briefs on October 19, 2004. There being no "record on appeal" in a mandamus proceeding in this Court, we rely upon the "statement of the facts necessary to an understanding of the issues presented" contained in the petition, the copies submitted of "any order or opinion or parts of the record that would be essential to an understanding of the matters set forth in the petition," and such additional facts as are supplied in the respondents' answer. Rule 21(a) and (b), Ala. R.App. P.

The complaint filed by the respondents to initiate their action asserted that on March 17, 2002, while the respondents were departing the premises of the Family Dollar store in Phenix City, Nichols, the manager of the store, accosted Holloway and accused her of taking certain clothing merchandise without paying for it. The complaint alleged that "Phenix City police officers arrived on the scene and interrogated Nichols[,] who denied that she had accused Holloway of shoplifting"; it further alleged that Nichols had in fact accused Holloway of shoplifting "willfully and maliciously and with intent to defame, embarrass, and humiliate Holloway and her minor children." The respondents alleged that the incident caused them irreparable damage, including "physical stress, mental anguish, humiliation, embarrassment and injury to their reputation." The respondents asserted defamation, tort-of-outrage, and invasion-of-privacy claims, and sought compensatory and punitive damages. Family Dollar and Nichols were served by certified mail on March 16 and 17, 2004, respectively; they do not challenge the legal efficacy of that service. On April 21, 2004, the respondents asked the clerk of the circuit court to "enter a default against the Defendant, Family Dollar," based on its failure to answer or otherwise defend in the case.

On April 22, 2004, the circuit judge entered the following order, which was filed the following day:

"This action came on the motion of the Plaintiff[s] for a default judgment pursuant to Rule 55(b)(2) of the Alabama Rules of Civil Procedure, and the defendant having been duly served with the summons and complaint and not being an infant or an unrepresented incompetent person and having failed to plead or otherwise defend, and his default having been duly entered and the Defendant having taken no proceedings since such default was entered.

"It is ORDERED, ADJUDGED, AND DECREED:

"That judgment is entered in favor of Plaintiff[s], Toni Natasha Holloway, Jeshaylin Ware and Takory Ware, minors by and through their mother, guardian and best friend, Toni Natasha Holloway, and against Defendant, Regina Nichols, individually and in her capacity as Manager of Family Dollar, as to liability. That hearing to determine damages in this cause is set for jury trial on the 2nd day of August 2004 at 9:00 AM, EDST/8:00 CDST in Courtroom II of the Russell County Courthouse, Phenix City, Alabama. That notice shall issue to the parties."

The petitioners characterize this order as "a default judgment against Family Dollar." Although it would appear that it represents a default judgment against only Nichols, albeit "individually and in her capacity as Manager of Family Dollar," we accept the petitioners' statement of the facts and proceed on the assumption that a default judgment was thus entered against both Nichols and Family Dollar. Nonetheless, it is clear that the default judgment was entered only "as to liability" and that a hearing was to be conducted later before a jury to determine damages. On June 1, 2004, the petitioners served on the respondents a motion to set aside the default judgment and filed the motion the following day in the Russell Circuit Court. The motion stated that it was filed "pursuant to Rule 60(b) of the Alabama Rules of Civil Procedure." The petitioners asserted in the motion that "Family Dollar's claim department received notice of the default judgment on Thursday, May 27, 2004" and immediately made contact with the Phenix City store; the assistant store manager advised the claim department that the manager, Regina Nichols Richardson (formerly Regina Nichols) was "out" but that she would be available the following day. The affidavit of Regina Nichols Richardson accompanying the motion explained that she had been the manager of the Family Dollar store in Phenix City for 10 years and contained the following pertinent information:

"I am the store manager for Family Dollar Store in Russell County, Alabama and have been for 10 years. On or about March 17, 2002, Belen Praught and I were working at the Family Store located on 280 Bypass in Phenix City, Alabama in our regular duties. As now, I was the store manager at that time while Belen Praught was an employee of the store. I went outside the store to clean up a clothing rack located just outside the entrance. While cleaning up the rack, I saw Ms. Holloway but said nothing to her. I then noticed that she backed her van up to where I was cleaning up the rack of clothes and started screaming at me and asking me what my problem was. She then said, `You think I'm stealing,' and I replied `I didn't say anything.' She proceeded to use vulgar language directed to my attention. She then left. Approximately an hour and a half later, the police came to the store. No one at Family Dollar called the police. The police questioned me about what had occurred and I told them that I did not say anything or accuse Ms. Holloway of shoplifting. On or about March 16, 2004, employee Belen Praught received and signed for a Summons and Complaint directed at Family Dollar. The next day, on March 17, 2004, I received a Summons and Complaint against me, personally. I immediately sent both the Summons and Complaint directed at Family Dollar and the Summons and Complaint against me to the home office in Charlotte, North Carolina. I heard nothing about the Summonses and Complaints until I received a call from Attorney William C. McGowin on Friday, May 28, 2004."

The circuit judge entered an order on June 3 instructing the respondents to file a reply within 30 days; they did so on June 30. Their reply asserted the following facts, supported by an attached copy of the "police report" prepared concerning the incident and copies of letters written by their attorney on September 13 and October 14, 2002, to the Family Dollar "store manager" and November 13, 14, and 19, 2002, to Roger Bolling of Travelers Insurance in Charlotte, North Carolina.¹ The facts asserted concerning the incident and its aftermath were that "[i]n light of the ensuing commotion caused by Nichols's accusations outside the store, Holloway, who had two minor children with her in her automobile, summoned the police to the scene in order to prevent a breach of the peace." The police accident report, which referred to Holloway as "Ms. Toni Lockhart," stated that she advised the investigating officer

"that as she was walking to her car after she had been shopping in the store, manager Regina Nichols walked outside and accused her of stealing some clothing. Ms. Lockhart advised Ms. Nichols was shaking a coat hanger at her and implied that the clothing that was on the coat hanger was gone. I spoke with Ms. Nichols who advised she never told Ms. Lockhart that she stole something. She stated that Ms. Lockhart stated that."

On July 19, 2004, the trial court entered an order denying the motion to set aside the default judgment, and on August 3 denied the petitioners' motion asking it to reconsider that denial.

At the threshold of our analysis, it is important to clarify the terminology appropriate to, and the implications of, some of the procedural events below. Rule 55, Ala. R. Civ. P., "Default," provides, in pertinent part, as follows:

"(a) Entry. When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, the clerk shall enter the party's default.

"(b) Judgment. Judgment by default may be entered as follows:

"(1) By the Clerk. When the plaintiff's claim against a defendant is for a sum certain or for a sum which can by computation be made certain, the clerk upon request of the plaintiff and upon affidavit of the amount due shall enter judgment for that amount and

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