Anthony Watts v. R.E. Michel Co., LLC and State of WV v. Honorable James W. Courier, Jr.
18-0407 & 19-0024
W. Va.May 20, 2019Background
- Anthony Watts signed (disputed) an undated guaranty purporting to personally guarantee debts of Anthony Watts HVACR LLC to R.E. Michel Co., including a confession-of-judgment clause delegating power to an attorney to confess judgment and a Maryland venue/jurisdiction clause.
- R.E. Michel sued in Maryland and obtained a judgment by confession in June 2016 for $72,583.83 (plus costs and interest); Watts moved to vacate in Maryland but the motion was denied and his attempted appeal was dismissed for failure to perfect.
- The Maryland judgment was registered in Mineral County, West Virginia (Civil Action No. 16-C-78); Watts unsuccessfully moved in West Virginia to vacate the registered judgment.
- R.E. Michel filed a separate action in Mineral County (17-C-78) to enforce the registered judgment and to sell Watts’s real property; the circuit court upheld the registration and appointed a special commissioner to sell the property.
- Watts filed a Rule 60(b) motion in West Virginia alleging forgery of his signature on the guaranty and other defects (timing, guaranty ambiguity, confessed-judgment impropriety, and West Virginia public policy); the circuit court denied relief and the West Virginia Supreme Court affirmed and refused mandamus.
Issues
| Issue | Plaintiff's Argument (Watts) | Defendant's Argument (R.E. Michel) | Held |
|---|---|---|---|
| Validity of Maryland confessed judgment given alleged forgery | Signature is forged; judgment invalid and not entitled to full faith and credit | Forgery claim raised too late; judgment is final and registered; res judicata bars relitigation | Court: For Michel — Watts’s forgery defense was not timely and elements of res judicata met; no merit to claim |
| Guaranty invalid for failing to identify principal obligation | Guaranty does not sufficiently reference the primary debt; invalid under Maryland law | Guaranty language and credit invoices reasonably identify the obligation; Maryland court implicitly found sufficiency | Court: For Michel — guaranty sufficiently referenced amounts due and supported judgment |
| Confessed-judgment provision invalid under Maryland law/statute | Confessions of judgment are disfavored and statutes/procedure render the provision invalid here | Maryland law permits confessed judgments if procedures (Rule 2-611) followed; courts are liberal in allowing attacks but procedures exist | Court: For Michel — confessed judgment procedures applied; Watts had opportunity to challenge under Maryland Rule 2-611 but failed to perfect appeal |
| West Virginia public policy bars enforcement of out-of-state confessed judgment | West Virginia hostility to confession clauses means forum should refuse enforcement | No West Virginia prohibition on enforcing valid out-of-state confessed judgments; parties chose Maryland law; no showing of fraud or non‑occurrence of charges | Court: For Michel — enforcing the registered Maryland judgment does not violate West Virginia public policy |
Key Cases Cited
- Toler v. Shelton, 157 W. Va. 778, 204 S.E.2d 85 (W. Va. 1974) (standard for appellate review of Rule 60(b) denial and scope of appeal)
- Blake v. Charleston Area Med. Ctr., Inc., 201 W. Va. 469, 498 S.E.2d 41 (W. Va. 1997) (elements for applying res judicata)
- Gen. Electric Co. v. Keyser, 166 W. Va. 456, 275 S.E.2d 289 (W. Va. 1981) (choice-of-law rule for guaranty contracts)
- Spacesaver Sys., Inc. v. Adam, 98 A.3d 264 (Md. 2014) (objective interpretation of contract meaning)
- Calomiris v. Woods, 727 A.2d 358 (Md. 1999) (contract ambiguity may be resolved considering circumstances)
- NILS, LLC v. Antezana, 912 A.2d 45 (Md. App. 2006) (discussion of confessed-judgment function and Rule 2-611 procedures)
- Schlossberg v. Citizens Bank, 672 A.2d 625 (Md. 1996) (analysis of confessed-judgment clauses and leniency to permit defenses)
- McGinley v. Massey, 525 A.2d 1076 (Md. App. 1987) (guaranty must refer to the obligation it secures)