The facts of this case are a bit unusual. Respondent issued an insurance policy providing coverage for workers compensation. The policy was issued to Quality Supplier Trucking, Inc. (“QST”), a company in which Petitioner is a principal. Petitioner’s exact role in the business of QST is not fully addressed in the briefs. Nevertheless, when premiums for the workers compensation policy fell in arrears, Respondent sued Petitioner directly, not QST.
Petitioner appeared pro se and aggressively defended the case. Eventually, Respondent amended its complaint to allege that additional premiums were due and owing. Petitioner did not answer the amended complaint and effectively ceased participating in the litigation. In January, 2016, Respondent requested and obtained a default judgment.
More than a year later, Petitioner retained an attorney who filed a motion seeking relief from the default judgment under Rule 60(b). The trial court entered a short order finding that the motion asserted mistake or excusable neglect under Rule 60(b)(1) and/or fraud under Rule 60(b)(3). In either event, the language of Rule 60(b) required the motion to be filed within one year. Because Petitioner’s motion was filed more than one year after entry of the default judgment, it was untimely. Petitioner timely appealed.
Where a default judgment was allegedly entered against a party who was not liable for the debt, is the judgment void? Can a party obtain relief from that judgment under Rule 60(b)(4)?
In a 3-2 opinion, the Supreme Court affirmed and left the default judgment intact.
The first inquiry in any case arising under Rule 60(b) is to determine which of the specific grounds for relief is implicated. This is a threshold question because the grounds under Rule 60(b)(1), (2) and (3) are all subject to a one-year time limitation. In his Rule 60(b) motion, Petitioner referred to mistake, fraud, misrepresentation and excusable neglect--all of which are subject to the one-year time limitation. Because the motion was made more than a year after judgment, and because Rule 60(b) does not provide any mechanism for extending the time, the trial court did not err in denying Petitioner’s motion.
According to Chief Justice Walker, writing for the majority, Petitioner attempted to “repackage” his arguments for appeal by arguing that the underlying judgment was, in fact, void for lack of personal jurisdiction. This was done to come within Rule 60(b)(4), a ground for relief that is not subject to the one-year time limitation. The Court, however, rejected Petitioner’s argument, finding that it “fundamentally misapprehends the concept of personal jurisdiction.”
It is, of course, true that a court cannot legally enter a judgment without having both subject matter and personal jurisdiction. However, Petitioner’s argument that default was entered against the “wrong” party answers the wrong question. It is undisputed that Petitioner was named in the complaint and was properly served with process. Furthermore, having filed an answer to the complaint that did not raise any jurisdictional issues, Petitioner consented to the circuit court’s jurisdiction. Even if Petitioner was correct in his assertion--i.e., that he, personally, is not liable for this debt but his corporation is--it still has no impact on the validity of the underlying judgment. For a judgment to be void, the court must have been powerless to enter it in the first place. The Court summarized these principles in a new syllabus:
"An erroneous application of the law does not render a judgment void and, therefore, does not provide a basis for relief from void judgments under Rule 60(b)(4) of the West Virginia Rules of Civil Procedure."
Justice Workman would have invoked the plain error doctrine to reverse the default judgment. Petitioner was acting pro se throughout most of the litigation. Petitioner’s pro se answer to the complaint stated that he did not personally owe any money for the debt. Petitioner also communicated regularly with Respondent and its attorney, advising that he was not personally liable. This was repeated in Petitioner’s answers to discovery. Eventually, Respondent amended its complaint to increase the amount prayed for. When Petitioner failed to answer the amended complaint, Respondent moved for default. Justice Workman points out a series of procedural irregularities in Respondent’s motion for default and the supporting affidavit. It also appears that Respondent may have delayed enforcing the judgment to take advantage of the one-year limiting language in Rule 60(b). Justice Workman concluded: “I firmly believe that the combination of these plain errors and obstreperous misrepresentations has seriously [undermined] the fairness of the judicial process and [Petitioner’s] substantial rights in this action.”
Justice Hutchinson’s dissent also expressed frustration with how a pro se litigant was treated and how Respondent’s attorney took advantage of the situation. The affidavit was plainly wrong in stating that Petitioner had never appeared in the case. The record did not even show that Petitioner was formally served with the default judgment motion. Instead, “[t]he plaintiff insurer just snuck the motion into the circuit judge’s office and promptly got a default judgment in return.” From the record as a whole, Judge Hutchinson concluded that Petitioner’s due process rights were violated, and, as a result of that violation, the default judgment should have been reversed.
It is difficult to gauge the impact of this case. It is troubling that the Court did not apply its usual, more lenient standards that are routinely applied in cases involving pro se litigants. It may be that the Court was effected by Petitioner’s reputation for avoiding debt--something that was clearly on the circuit court’s mind. In any event, we hope this does not signal a broader change in how pro se litigants are treated.
The dissents make points that seriously call this default judgment into question. How could the circuit court enter a default judgment on the strength of an affidavit that contains clear falsehoods? How could it enter a default judgment when the record does not even show that Petitioner was served with notice of the default judgment motion? And what about the accusation that Respondent’s attorney intentionally delayed in forcing the judgment to block Petitioner--still participating pro se--from obtaining any effective relief under Rule 60(b)? Unfortunately, the Court’s affirmance amounts to an endorsement of this highly questionable conduct.