771 S.E.2d 664
Va.2015Background
- Sauder sued Ferguson for injuries from a 2009 car accident; a separate declaratory-judgment action had previously found Ferguson uninsured and Rockingham Casualty liable under UM coverage up to $100,000.
- Ferguson had testified in deposition and at trial in the declaratory action that he lived at 2210 John Wayland Highway and gave contact numbers; Sauder’s counsel was present for those proceedings.
- Sauder filed a new complaint against Ferguson in June 2011 but attempted initial service at an earlier address (1460 W. Market St.) listed on the police report, not the 2210 John Wayland address.
- After failing to obtain a responsive pleading, Sauder obtained default judgment against Ferguson; later a bench trial awarded Sauder $300,000 and the court directed that Rockingham Mutual (named/served) was liable for UM coverage.
- Sauder moved to set aside the default judgment under Code § 8.01-428(A), arguing service was deficient and the judgment void ab initio; Rockingham Mutual opposed and the circuit court denied the motion, finding Sauder had knowledge of Ferguson’s correct address, failed to serve the complaint/summons there, and nevertheless pursued default relief.
Issues
| Issue | Plaintiff's Argument (Sauder) | Defendant/Other Response (Rockingham/Facts) | Held |
|---|---|---|---|
| Whether the trial court had discretion to deny a motion to set aside a default judgment under Code § 8.01-428(A) | Sauder argued court lacked discretion because the default judgment was void ab initio for lack of service | Statute uses "may" so court retains discretion; case law supports discretionary relief | Court: "may" imports discretion; trial court had discretion and did not err |
| Whether the default judgment was void for lack of proper service such that it must be set aside | Sauder argued service was invalid and the judgment therefore void, requiring vacatur | Rockingham and trial court pointed to Sauder's knowledge of Ferguson's correct address and her failure to serve complaint/summons there; she nonetheless sought and accepted default judgment | Court: Even if service was deficient, equitable considerations and Sauder’s conduct justified denial; no abuse of discretion |
| Whether Sauder could obtain relief to then nonsuit and refile (i.e., re-start against Ferguson) | Sauder sought to set aside to nonsuit and refile within six months | Opponents argued Sauder sought a second bite and had not been deprived of opportunity to litigate; Ferguson made no formal appearance to contest enforcement | Court: Denied relief; final judgment given high degree of finality and Sauder’s conduct excluded equitable relief |
| Whether Rockingham Mutual had standing to oppose the motion to set aside | Sauder argued Rockingham Mutual lacked stake because it was not the actual UM carrier | Rockingham Mutual had been served as the UM carrier and court had ordered it liable for its contractual portion | Court: Rockingham Mutual had standing to participate and oppose |
Key Cases Cited
- Masters v. Hart, 189 Va. 969 (construing "may" as permissive/discretionary)
- McEwen Lumber Co. v. Lipscomb Brothers Lumber Co., 234 Va. 243 (high degree of finality for judgments; narrow construction of relief statutes)
- Specialty Hosps. of Washington, LLC v. Rappahannock Goodwill Indus., 283 Va. 348 (relief from default under court rules rests in trial court discretion)
- Yamada v. McLeod, 243 Va. 426 (knowledge acquired by attorney imputed to client)
- Eubank & Caldwell, Inc. v. Fuller, 156 Va. 635 (judicial estoppel: party who treats a judgment as valid cannot later attack it)