Tudor's Biscuit World of Am. v. Critchley

• Decision Date: 13 June 2012
• Docket Number: No. 11–0543.,11–0543.
• Citation: 729 S.E.2d 231,229 W.Va. 396
• Court: West Virginia Supreme Court
• Parties: TUDOR'S BISCUIT WORLD OF AMERICA, Defendant Below, Petitioner v. Della M. CRITCHLEY, Plaintiff Below, Respondent.

229 W.Va. 396

729 S.E.2d 231

TUDOR'S BISCUIT WORLD OF AMERICA, Defendant Below, Petitioner

v.Della M. CRITCHLEY, Plaintiff Below, Respondent.

No. 11–0543.

Supreme Court of Appeals of West Virginia.

Submitted May 22, 2012.

Decided June 13, 2012.

Syllabus by the Court

1. “The standard of review applicable to an appeal from a motion to alter or amend a judgment, made pursuant to W. Va. R. Civ. P. 59(e), is the same standard that would apply to the underlying judgment upon which the motion is based and from which the appeal to this Court is filed.” Syl. Pt. 1, Wickland v. American Travellers Life Ins. Co., 204 W.Va. 430, 513 S.E.2d 657 (1998).

2. “ ‘ “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).” Syl. Pt. 1, Hardwood Group v. LaRocco, 219 W.Va. 56, 631 S.E.2d 614 (2006).

3. “A movant seeking relief under Rule 60(b)(4) of the West Virginia Rules of Civil Procedure must show that the judgment sought to be vacated is void and that the motion to vacate the judgment was filed within a reasonable period of time.” Syl. Pt. 5, Leslie Equipment Co. v. Wood Resources, Co., L.L.C., 224 W.Va. 530, 687 S.E.2d 109 (2009).

4. “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.” Syl. Pt. 5, Hardwood Group v. LaRocco, 219 W.Va. 56, 631 S.E.2d 614 (2006).

5. “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.” Syl. Pt. 3, Parsons v. Consolidated Gas Supply Corp., 163 W.Va. 464, 256 S.E.2d 758 (1979).

6. “Although 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.” Syl. Pt. 2, McDaniel v. Romano, 155 W.Va. 875, 190 S.E.2d 8 (1972).

7. “ ‘To enable a court to hear and determine an action, suit or other proceeding it must have jurisdiction of the subject matter and jurisdiction of the parties; both are necessary and the absence of either is fatal to its jurisdiction.’ Syl. Pt. 3, State ex rel. Smith v. Bosworth, 145 W.Va. 753, 117 S.E.2d 610 (1960).” Syl. Pt. 1, Leslie Equipment Co. v. Wood Resources, Co., L.L.C., 224 W.Va. 530, 687 S.E.2d 109 (2009).

8. “For purposes of the requirement for notice to a defaulting party prior to a hearing on the default [judgment], pursuant to Rule 55(b)(2) of the West Virginia Rules of Civil Procedure, an ‘appearance’ by an otherwise defaulting party may consist of any communication to an opposing party that demonstrates either an interest in the pending litigation, or actual notice of the litigation. The communication may be made in written or oral form.” Syl. Pt. 5, Cales v. Wills, 212 W.Va. 232, 569 S.E.2d 479 (2002).

J. Nicholas Barth, Esq., J. David Cecil, Esq., Barth & Thompson, Charleston, WV, for Petitioner.

Ralph C. Young, Esq., Hamilton, Burgess, Young & Pollard, PLLC, Fayetteville, WV, for Respondent.

PER CURIAM:

The petitioner herein and defendant below, Tudor's Biscuit World of America [hereinafter “Tudor's”], appeals the circuit court's March 1, 2011, order denying its motion pursuant to West Virginia Rule of Civil Procedure 59(e). In its W.V.R.C.P. 59(e) motion, Tudor's moved the circuit court to alter or amend its December 4, 2009, order denying its motion pursuant to West Virginia Rule of Civil Procedure 60(b)(4) to set aside the default judgment rendered against it. Tudor's asserts that the circuit court erred in its application of the “reasonable time” requirement set forth in W.V.R.C.P. 60(b) to its motion to set aside the default judgment, arguing that such timeliness requirement is inapplicable to void judgments. Tudor's further argues that the circuit court improperly applied and weighed the factors set forth in Parsons v. Consolidated Gas Supply Corporation, 163 W.Va. 464, 256 S.E.2d 758 (1979), in denying its motion for relief from judgment. For the reasons set forth below, we agree and reverse and remand this case for further proceedings below.

I. FACTS AND PROCEDURAL HISTORY

On September 2, 2002, respondent herein and plaintiff below, Della Critchley [hereinafter “Critchley”], fell while descending a set of stairs at her place of employment, Tudor's Biscuit World, in Fayette County, West Virginia. Based upon the record before us, it appears undisputed that Critchley was an employee of KOR, Inc., a franchisee of Tudor's Biscuit World of America, which owns and operates the Fayette County restaurant where the alleged injury occurred. Subsequent to her fall, Critchley filed a workers' compensation claim against KOR, Inc.¹ Thereafter, on June 10, 2003, Critchley filed a complaint in the Circuit Court of Raleigh County against Tudor's alleging that she was “employed by the Defendant, Tudor's” and asserting a “deliberate intent” claim against it pursuant to W. Va.Code § 23–4–2(c)(2) (2003).² Her actual employer, KOR, Inc., was not named in the lawsuit.

On June 12, 2003, the summons and complaint was served on the West Virginia Secretary of State as attorney-in-fact for Tudor's. The Secretary of State twice attempted delivery of the summons and complaint on Tudor's, but each attempt was returned as “unclaimed.” The returns of service reflecting the summons and complaint as “unclaimed” were filed with the Raleigh County Circuit Clerk on July 11, 2003. Notwithstanding, on August 8, 2003, Critchley filed a motion for default; in support of her motion, Critchley submitted the affidavit of her attorney which averred that Tudor's had been “duly served with process.” An order granting default was entered the same day. Over one year and one month later, on September 29, 2004, Critchley's counsel allegedly wrote to the president of Tudor's, John Tudor [hereinafter “Mr. Tudor”], at his home address, providing a copy of the default order and inquiring if he had any interest in settling the case. The letter was signed for by Lydia Tudor. The next day, on September 30, 2004, Critchley's counsel allegedly sent the same letter to Mr. Tudor at Tudor's corporate address, which letter was signed for by James Heighton, a corporate accountant [hereinafter “Mr. Heighton”]. According to the circuit court's order, the letter received by Mr. Heighton was returned with an unsigned note dated October 4, 2004, stating “[t]his is not an employee of Tudor's Biscuit World of America. Please notify the Nitro WV office. Mr. John Tudor has left voicemail with your office and also the Nitro office. Thank you.” ³

Approximately one year and four months later on February 23, 2006, a hearing on damages was conducted; the record contains no evidence that a notice of the damages hearing was filed, nor any evidence that Tudor's was given notice of the hearing. Tudor's did not appear at the hearing. The circuit court awarded judgment in the amount of $264,776.00. For reasons that are unclear from the record, a judgment order was not entered until almost two years and seven months later on September 2, 2008. For approximately the next year, respondent's counsel initiated activity designed to execute on the judgment, which activity culminated in a “Summons in Aid of Execution” being issued on September 30, 2009, commanding Mr. Tudor to appear and answer inquiries in aid of execution. The summons was personally served on Mr. Tudor on October 2, 2009—a little over three and a half years after the judgment was awarded and just over five years after receipt of the letter from Critchley's counsel advising of the default.

Just under two weeks later on October 16, 2009, making its first appearance in the action, Tudor's filed a “Motion to Set Aside Default Judgment” pursuant to W.V.R.C.P. 60(b)(4). Tudor's argued that Critchley failed to effectuate proper service of process and, as a result, the default judgment was void. The circuit court denied Tudor's motion by order dated December 4, 2009. In its order, the circuit court found, as a matter of law, that service on Tudor's had been ineffective and therefore the judgment was void.⁴ However, the court then noted the language of W.V.R.C.P. 60(b) requiring motions pursuant to the Rule to be filed “within a reasonable time,” as well as caselaw applying a timeliness requirement to such motions. The circuit court found that “the defendant was charged with the knowledge of the subject default judgment on September 30, 2004 [the date the letter from Critchley's counsel to the corporate address was received by James Heighton]. On that date, the defendant corporation knew, or reasonably should have known, that the plaintiff had obtained a judgment by default against Tudor's Biscuit World of America, Inc.” (second emphasis added). Accordingly, the circuit court found that over five years elapsed between notice of the existence of the “default judgment” and Tudor's motion to set aside the default judgment; as a result, the circuit court found that Tudor's did not file its motion within a reasonable period of time. In addition, the court...