Blair v. Ford Motor Credit
Annotate this Case
January 1995 Term
___________
No. 22228
___________
VERLIE BLAIR, JR.,
Plaintiff Below, Appellant
v.
FORD MOTOR CREDIT COMPANY
AND TOWN AND COUNTRY FORD,
Defendants Below, Appellees
___________________________________________________
Appeal from the Circuit Court of Raleigh County
Honorable Thomas Canterbury, Judge
Civil Action No. 93-C-1026-C
AFFIRMED
___________________________________________________
Submitted: January 17, 1995
Filed: February 21, 1995
William D. Stover
Beckley, West Virginia
Attorney for the Appellant
Robert L. Brandfass
Bethann R. Lloyd
Crystal S. Stump
Kay, Casto, Chaney, Love & Wise
Charleston, West Virginia
Attorneys for Appellee, Ford Motor Credit Company
Laura L. Gray
Campbell, Woods, Bagley, Emerson, McNeer & Herndon
Huntington, West Virginia
John S. Arrowood
James, McElroy & Diehl, P.A.
Charlotte, North Carolina
Attorneys for Appellee, Town & Country Ford
This Opinion was delivered PER CURIAM.
Justice Brotherton did not participate.
Judge Fox sitting by temporary assignment.
SYLLABUS BY THE COURT
1. "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).
2. "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, 163 W. Va. 464, 256 S.E.2d 758 (1979).
3. "A court must use a two-step approach when analyzing
whether personal jurisdiction exists over a foreign corporation or
other nonresident. The first step involves determining whether the
defendant's actions satisfy our personal jurisdiction statutes set
forth in W. Va. Code, 31-1-15 [1984] and W. Va. Code, 56-3-33
[1984]. The second step involves determining whether the
defendant's contacts with the forum state satisfy federal due
process." Syl. pt. 5, Abbott v. Owens-Corning Fiberglas, 191
W. Va. 198, 444 S.E.2d 285 (1994).
Per Curiam:
This action is before this Court upon an appeal from the
final order of the Circuit Court of Raleigh County, West Virginia,
entered on October 12, 1993. The appellant, Verlie Blair, Jr.,
contends that the Circuit Court committed error in entering a
default judgment against him upon the counterclaim of the appellee,
Ford Motor Credit Company. The appellant also contends that the
Circuit Court committed error in dismissing the complaint against
the appellee, Town and County Ford, for lack of jurisdiction. For
the reasons set forth below, the final order of the circuit court
is affirmed.
I
In March 1989, Melissa Ann Blair, the appellant's
daughter, purchased a 1989 Ford Escort automobile. The automobile
was purchased from Town and Country Ford, a North Carolina
business, and financed by Ms. Blair through Ford Motor Credit
Company. It is undisputed that the appellant agreed to guarantee
the purchase. The complaint, in fact, states that the guaranty was
delivered to the appellant by an employee of Town and County Ford,
who drove to West Virginia and met the appellant in Beckley, West
Virginia, for execution of the document.
The Escort was wrecked in 1990, and Ms. Blair purchased
a 1989 Hyundi Excel from Town and Country Ford. The purchase price
for the Hyundi Excel was approximately $6,000, whereas the purchase
price for the Escort was approximately $10,000. According to the
complaint, Town and Country Ford then proffered to the appellant, by mail, a "Substitution Agreement" transferring the collateral for
the debt from the Escort to the Hyundi Excel. The language of the
Substitution Agreement includes a statement that "all provisions of
the Contract that apply to the Property now apply to the
Substituted Property."
The appellant asserts that he refused to sign and return
the Substitution Agreement. He further asserts that an employee or
agent of Town and County Ford forged the appellant's name upon
documents purporting to guarantee the debt of Ms. Blair for the
Hyundi Excel. The appellees indicate that the appellant executed
the Substitution Agreement and that no forgery took place.
II
Upon various communications to the appellant, by Ford
Motor Credit Company, to the effect that the account relating to
the above transactions, No. CHA1718QKO, was delinquent and that an
unfavorable report concerning the appellant had been made to
national credit bureaus, the appellant, in January 1993, instituted
the Raleigh County action. Alleging that he had no obligation with
regard to the purchase by Ms. Blair of the Hyundi Excel and/or no
obligation with regard to account no. CHA1718QKO, the appellant
sought recovery for annoyance, inconvenience, emotional distress
and damage to his credit reputation.
On February 17, 1993, Ford Motor Credit Company filed an
answer which included a counterclaim against the appellant in the
amount of $3,967.70, plus interest and costs, concerning the
appellant's obligations upon the debt. Also on February 17, 1993, Ford Motor Credit Company and Town and Country Ford filed a joint
notice of removal of the action to the United States District Court
for the Southern District of West Virginia. 28 U.S.C. § 1446.
Actual removal to federal court, however, was never consummated.
Finally, in February 1993, Town and Country Ford moved to dismiss
the appellant's complaint for lack of personal jurisdiction and
insufficiency of service of process.
On June 30, 1993, Ford Motor Credit Company filed a
motion for default judgment, and affidavit in support, with regard
to its counterclaim. On July 7, 1993, the appellant filed an
answer to the counterclaim. The appellant's answer essentially
denied the allegations of Ford Motor Credit Company and asked that
the counterclaim be dismissed.
Following a hearing, the circuit court, on October 12,
1993, entered an order granting a default judgment in favor of Ford
Motor Credit Company in the amount of $3,967.70, plus interest.
The order also dismissed the appellant's complaint against Town and
Country Ford for lack of jurisdiction. That order was entered
following a letter memorandum of opinion from the circuit court
indicating that Ford Motor Credit Company was entitled to judgment
upon its counterclaim and, further, that the appellant failed to
establish that Town and Country Ford "can be sued in this
jurisdiction under the facts presented."
III
As reflected in the order of October 12, 1993, the manner
in which the circuit court entered judgment for Ford Motor Credit Company was in the denial to the appellant of relief under W. Va.
R. Civ. P. 60(b). That rule provides that, upon motion, a circuit
court may relieve a party from a final judgment for, inter alia,
"[m]istake, inadvertence, surprise, excusable neglect, or
unavoidable cause . . . ." The circuit court stated that the
appellant "failed to demonstrate any legitimate reason or
justification for his failure to timely respond" to the
counterclaim and, thereby, failed to establish grounds for relief
under W. Va. R. Civ. P. 60(b).
In Toler v. Shelton, 157 W. Va. 778, 204 S.E.2d 85
(1974), this Court stated in syllabus point 5: "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." That principle, as stated in Toler,
has been cited often by this Court and recently in Ross v. Ross,
187 W. Va. 68, 70, 415 S.E.2d 614, 616 (1992). In similar
language, this Court commented in Intercity Realty v. Gibson, 154
W. Va. 369, 377, 175 S.E.2d 452, 457 (1970) that "it has been
widely held that a motion to vacate a judgment under Rule 60(b) is
addressed to the sound discretion of the court and that an abuse of
such discretion must be shown before denial of the motion will be
overturned on appeal."
A default judgment is authorized under W. Va. R. Civ. P.
55(b), when a party to litigation "against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend . . . ." Rule 55 expressly applies to counterclaims, as
well as other claims. Moreover, Rule 55(c) provides that relief
from a default judgment may be sought "in accordance with Rule
60(b)." As this Court stated in syllabus point 1 of Intercity
Realty, supra, a default judgment obtained in accordance with the
provisions of W. Va. R. Civ. P. 55(b) "is a valid and enforceable
judgment and a motion to set aside such judgment will not be
granted unless the movant shows good cause therefor as prescribed
in Rule 60(b) of the aforesaid Rules of Civil Procedure."
One of our more important cases concerning default
judgments is Parsons v. Consolidated Gas Supply, 163 W. Va. 464,
256 S.E.2d 758 (1979), where this Court announced in syllabus point
3:
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.
We reaffirmed that statement recently in syllabus point
2 of Monterre v. Occoquan Land Development, 189 W. Va. 183, 429 S.E.2d 70 (1993).
Importantly, the above concepts have been applied by this
Court to default judgments arising from counterclaims. Wirt County
Bank v. Smith, 188 W. Va. 671, 425 S.E.2d 626 (1992); J. D. Hinkle
& Sons v. Hatley, 185 W. Va. 26, 404 S.E.2d 418 (1991); Parker v. Knowlton Construction Company, 158 W. Va. 314, 210 S.E.2d 918
(1975); Hamilton Watch Company v. Atlas Container, 156 W. Va. 52,
190 S.E.2d 779 (1972).
In Hamilton Watch Company, the circuit court ordered that
the time within which the plaintiff, Hamilton, may "answer or
otherwise plead to the counterclaims be extended to March 1, 1969."
Hamilton did not file a timely answer, and, instead, filed a motion
to stay, upon the grounds that related litigation between the
parties was pending in the United States District Court for the
Northern District of West Virginia. The motion for a stay was
never ruled upon by the circuit court, and on April 1, 1969, the
defendant, Atlas, moved for default judgment. The circuit court
entered default judgment for Atlas.
This Court, in Hamilton Watch Company, vacated the
default judgment. Specifically, noting that it "may not have been
most prudent" to neglect to answer the counterclaim, Hamilton's
attorney, even if mistaken in his judgment, had "reasonable grounds
to have believed that the court would stay the proceedings or at
least that he would not be required to answer until the court ruled
on such motion for a stay." 156 W. Va. at 58, 190 S.E.2d at 783.
However, this Court, in Hamilton Watch Company, recognized that
there was no "total omission to act" upon the part of Hamilton's
attorney, and the rules were not "completely ignored." 156 W. Va.
at 58, 190 S.E.2d at 783.
The circumstances before this Court lack the compelling
quality which in Hamilton Watch Company resulted in the reversal of the circuit court. In Hamilton Watch Company, an answer to the
counterclaim was to be filed by March 1, 1969, and on April 1,
1969, a motion for default judgment was made. In this action, the
counterclaim of Ford Motor Credit Company was filed on February 17,
1993, and the appellant's answer thereto was not filed until
July 7, 1993, and after a motion for default judgment was made.
Thus, the delay in this action was much longer than in Hamilton
Watch Company.
Moreover, unlike the circumstances in Hamilton Watch
Company, no federal litigation was pending in this action. Here,
no removal to federal court occurred. A joint notice of removal
was filed by Ford Motor Credit Company and Town and Country Ford on
February 17, 1993. Thereafter, on February 23, 1993, Town and
Country Ford filed a motion to dismiss for lack of jurisdiction.
The motion to dismiss, stating that the Clerk of the United States
District Court for the Southern District of West Virginia was
"unable to locate any information regarding removal of this case,"
was filed with the Raleigh County Circuit Court and served upon the
appellant. That event, however, did not prompt the appellant to
file an answer to the counterclaim of Ford Motor Credit Company.
Even if the action had been removed, the appellant was
obligated to file an answer. As Fed. R. Civ. P. 81(c) provides, in
part:
In a removed action in which the defendant has
not answered, the defendant shall answer or
present the other defenses or objections
available under these rules within 20 days
after the receipt through service or otherwise
of a copy of the initial pleading setting forth the claim for relief upon which the
action or proceeding is based, or within 20
days after the service of summons upon such
initial pleading, then filed, or within 5 days
after the filing of the petition for removal,
whichever period is longest.
See also 32B Am. Jur. 2d Federal Practice and Procedure 2520
(1982).
The record in this action demonstrates that no answer to
the counterclaim of Ford Motor Credit Company was ever filed in
federal court, nor was an answer to the counterclaim filed in the
Raleigh County Circuit Court prior to July 7, 1993. See W. Va. R.
Civ. P. 7(a) and 12(a).
As set forth above, the circuit court stated that the
appellant "failed to demonstrate any legitimate reason or
justification for his failure to timely respond" to the
counterclaim. Unlike the facts in Hamilton Watch Company, there
was a "total omission to act" from the time of the filing of the
counterclaim until after a motion for default judgment was filed
several months later. Considering all the circumstances of this
action, we cannot say that the circuit court abused its discretion
under the Parsons case, or other authority, in refusing to grant
relief to the appellant under Rule 60(b). Rather, we believe that
the ruling of the circuit court is "protected by the parameters of
sound discretion," Parker, supra, and, accordingly, the ruling of
the circuit court is affirmed.
Nor would it be appropriate for this Court to conclude
that the circuit court committed error in dismissing the
appellant's complaint against Town and Country Ford for lack of jurisdiction. Relevant to the ruling of the circuit court upon
that issue are this State's long-arm statutes, W. Va. Code, 31-1-15
[1984], and W. Va. Code, 56-3-33 [1984].
In syllabus point 5 of Abbott v. Owens-Corning Fiberglas,
191 W. Va. 198, 444 S.E.2d 285 (1994), we held:
A court must use a two-step approach when
analyzing whether personal jurisdiction exists
over a foreign corporation or other
nonresident. The first step involves
determining whether the defendant's actions
satisfy our personal jurisdiction statutes set
forth in W. Va. Code, 31-1-15 [1984] and
W. Va. Code, 56-3-33 [1984]. The second step
involves determining whether the defendant's
contacts with the forum state satisfy federal
due process.
In this action, the circuit court determined that the
appellant failed to establish that Town and Country Ford "can be
sued in this jurisdiction under the facts presented." Although
Town and Country Ford filed a motion to dismiss the appellant's
complaint, the brief of the appellant before this Court states that
"[t]he effect of the ruling of the trial court was a summary
judgment . . ." in favor of both Ford Motor Credit Company and Town
and Country Ford. A hearing in this action was conducted by the
circuit court in August 1993. No transcript or recapitulation of
that hearing is part of the record before this Court, and,
specifically, this Court does not have the guaranty agreement
allegedly signed by the appellant in West Virginia. Nor is the
Substitution Agreement, containing the alleged forged signatures,
before this Court. Upon an examination of the record, this Court
is of the opinion that the appellant has not met the requirements set forth in Abbott, and, in that regard, the ruling of the circuit
court is affirmed.
Therefore, for the reasons set forth above, the final
order of the Circuit Court of Raleigh County, entered on October 12, 1993, is affirmed.
Affirmed.
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