2014 CO 79
Colo.2014Background
- Plaintiff Christopher Nickerson (Colorado resident) sued Network Solutions, LLC and Web.comGroup, Inc. for negligence after deletion of hosted business data; complaint filed April 30, 2014.
- Network Solutions was properly served May 19, 2014 but failed to answer; clerk entered default judgment for $65,000 plus costs under C.R.C.P. 55.
- Network Solutions moved to set aside the default judgment under C.R.C.P. 55(c) and 60(b), first arguing excusable neglect (calendaring error) and later contending the judgment was void because a service agreement contained a forum selection clause granting exclusive jurisdiction to Virginia.
- The trial court set aside the default judgment, concluding the forum selection clause deprived Colorado courts of jurisdiction and therefore the judgment was void.
- Colorado Supreme Court granted C.A.R. 21 relief; held forum selection clauses do not divest a state court of jurisdiction and directed reinstatement of the default entry but remanded for a damages hearing because claimed damages were not liquidated or self-calculating.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a forum selection clause renders a Colorado judgment void for lack of jurisdiction | Nickerson argued the Colorado court had jurisdiction and the forum clause did not nullify the default judgment | Network Solutions argued the clause conferred exclusive jurisdiction on Virginia courts, so the Colorado judgment was void | Held: Forum selection clauses do not divest a court of subject-matter or personal jurisdiction; they bear on whether the court should exercise jurisdiction, not whether it has it |
| Whether the trial court properly set aside the default judgment under C.R.C.P. 60(b) | Nickerson maintained the default was valid and the court erred to vacate it as void | Network Solutions asserted relief under 60(b)(1) (excusable neglect) and alternatively that the judgment was void under 60(b)(3) due to the forum clause | Held: Trial court erred to vacate as void; it rejected Network Solutions' excusable-neglect claim but nonetheless treated the judgment as void based on the forum clause—error because jurisdiction existed |
| Whether damages awarded by default could stand without an evidentiary hearing | Nickerson relied on his submitted damage calculations totaling $65,000 | Network Solutions asked for remand for a damages hearing if default was reinstated | Held: Damages were neither liquidated nor purely calculable; default damages vacated and remanded for an evidentiary hearing under C.R.C.P. 55(b) |
Key Cases Cited
- Goodman Associates, LLC v. WP Mountain Properties, LLC, 222 P.3d 310 (Colo. 2010) (C.A.R. 21 review appropriate where setting aside default could impair judgment creditor remedies)
- First Nat’l Bank of Telluride v. Fleisher, 2 P.3d 706 (Colo. 2000) (standard for relief under Rule 60 and final-judgment voidness)
- In re Marriage of Stroud, 631 P.2d 168 (Colo. 1981) (judgment void if court lacked personal or subject-matter jurisdiction)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts standard for personal jurisdiction)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (U.S. 1972) (forum-selection clauses presumptively enforceable unless unreasonable or invalid)
- Edge Telecom, Inc. v. Sterling Bank, 143 P.3d 1155 (Colo. App. 2006) (procedural mechanisms and effect of forum-selection clauses)
- Lane v. Urgitus, 145 P.3d 672 (Colo. 2006) (valid arbitration provisions can divest courts of jurisdiction under statute)
- Kwik Way Stores, Inc. v. Caldwell, 745 P.2d 672 (Colo. 1987) (default damages hearing required unless amount is liquidated or mathematically determinable)
- Johnston v. S.W. Devanney & Co., 719 P.2d 734 (Colo. App. 1986) (conclusory damage allegations insufficient to support compensatory award in default)