James Wilson Douglas, L.C. v. Morton

• Decision Date: 08 January 2018
• Docket Number: No. 16-1144,16-1144
• Court: Supreme Court of West Virginia
• Parties: James Wilson Douglas, L.C., Plaintiff Below, Petitioner v. Jennifer S. Morton, Defendant Below, Respondent

James Wilson Douglas, L.C., Plaintiff Below, Petitioner v. Jennifer S. Morton, Defendant Below, Respondent

No. 16-1144

STATE OF WEST VIRGINIA SUPREME COURT OF APPEALS

January 8, 2018

(Braxton County 15-C-17)

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,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, "[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...