*1
Mary WHITE, E. Plaintiff
Below, Appellee,
v. Virgi- BERRYMAN West
Everett and the Department Transportation, Di-
nia Highways, West
vision Entity, Defendants Be-
Governmental
low, Appellants.
No. 20088.
Supreme Court of Appeals Virginia.
Submitted Jan.
Decided May *3 Fitzsimmons,
Rоbert P. William E. Par- II, sons, Parsons, L.C., Fitzsimmons & Jo- John, seph John, John, J. Louis J. John & Wheeling, for appellee. Wilson,
John M. Cooper, Daniel Step- C. Johnson, toe & Clarksburg, appellants. for BROTHERTON, Justice: appellants, The Berryman Everett Virginia Department Transpor- West tation, Highways, appeal Division of from a 13, 1990, December order of the Circuit Court County denying of Brooke mo- their tion to set judgments aside default which were entered them that court on 6, July June 21 and September appellee, On White, Mary injured was when her automo- large a bile was struck steam roller by Berryman. being driven The roller was Highways a Division of unloaded crew appellee when brakes failed.1 The suf- its disc, ruptured fered re- eventually quired surgery.
Attorneys appellee initially for the sub- settlement mitted a brochure State’s insurer, Company, CNA propos- Insurance $95,000 ing appellee settlement to the in the injuries she suffered accident. with the settlement was Included brochure copy of the appеllee which the to file in circuit if intended a settle- ment not reached. There were was several subsequent CNA conversations between adjusters appellee’s one attor- John, neys, Joseph requesting J. additional However, the claim information. insurance company made no settlement offer until adjuster May Nancy CNA inopera- appellee of the steam roller’s 1. The that in acci- occurred because indicates the official report, Berryman ble dent stated collision brakes. that the $3,600. Documents,” “Legal and the sum- marked responded with an offer Moses large mons marked “ORIGINAL” inadequate this an appellee The considered print. boldface black summons offer, in the Circuit Court and filed suit judgment would be warned that a default May demand- County Brooke pleading taken if no answer or other and the against Bеrryman ing judgment thirty days. filed within Transporta- Virginia Department 21, 1990, 6, 1990, July de- On June tion, Highways, in an amount Division of sums uncertain were $200,000 dam- compensatory excess of as against Berryman entered and the West ages. Transportation, Di- Department of personal service via Berryman received Highways, respectively.4 In vision sheriff, affidavit, that, served County deputy Berryman who Brooke later claimed *4 his turn, upon advice he received from She, based delivered Berryman’s wife. Tucker, represent- attorney, Ron who was evening the Berryman on the documents matter, ing him in “he believed another appellee 15, Initially, the May 1990. of not that the documents he had received did Virginia Depart- requested that the West require response part on his since he High- of Transportation, Division ment by an assumed that he would be defended Secretary of through the ways, served bе Depart- attorney representing the State 18, However, May by letter dated State. Transportation.” appellants’ The ment of 1990, County Circuit Clerk’s the Brooke categorizes Berryman’s inaction as counsel that the appellee’s counsel office advised “misunderstanding, mis- being the result of longer no autho- Secretary of State was note, inadequate advice.” We how- take or of state accept service on behalf rized to ever, appellants not introduce that the did Thereafter, Ka- agencies.3 the Sheriff of testimony from an affidavit or Ron either to serve the County was directed nawha Berryman as to ex- Tucker to corroborate summons, interrogatories, and complaint, by Tucker. actly what advice was offered on requests production of documents explain respond to the To its fаilure Gleason, Jr., Supersecretary of Arthur L. complaint, Department the summons and dep- Transportation. A Department of the Transportation Super- states that when legal these documents uty secretary sheriff delivered first noticed the Gleason 5, 1990, he 4, on his desk on June Miller, documents secretary, on June Kim Gleason’s simply copies they were sum- believed them to the Miller forwarded 1990. Ms. complaint which had been direct- mons and Depart- Administrative Assistant purposes, for informational ed to his office Holmes, Transportation, Phyllis ment of normally the he did not receive because Supersecretary placed them on Glea- who original pleadings Department the son’s desk. process. served with Transportation was previ- The documents examined Glea- appellants were state that on the two The newly formed Dе- envelope ous occasions when son on June 1990. municipal corporation [u]pon or representative a state Nancy claims 2. Moses was the governmental organization thereof sub- other Mary assigned White’s claim to handle who was suit, by delivering copy ject of the sum- Transportation from Department of complaint to the chief execu- mons and of the 20, 1989, until June November by serving the sum- tive officer thereof prescribed mons and in the manner Civil Rules of of the West 3. Rule 4 by the law that state the service specifically address the ser- does not Procedure any process upon such summons or other like agency. West Vir- a State vice of added.) (Emphasis defendant 56-3-13, explain only ginia and 15 §§ Code process may do- be made how service of judgment orders contained notice 4.Both default foreign corporations and other com- mestic and hearing inquiry to determine that a on a writ mon carriers. damages plain- amount of sustained 4(d)(6) be held at 9:00 a.m. on Rules of Civil tiff was scheduled to July of the Federal made: provides service shall be Procedure partment of Transportation had been entered and hearing that a the writ process, originals served with inquiry were di- would be scheduled.
rected to Department’s legal appellee division: states that County Brooke “Consequently, Secretary Gleason mistak- Courthouse file contained not only the de enly assumed that the being judgment order, matter was fault but also an order legal department handled and did scheduling hearing on the writ of in nothing to appropriate assure the action quiry, originally which had been set for would taken 25,1990, be to defend the suit. July Secre- August continued to tary notify Gleason did not CNA that a suit 1990.6
had been filed.” 17, 1990, August On Mr. Tucker contact-
Unaware that a suit had been filed and ed Mr. Mellott and advised him of the de- entered, that default had been orders and hearing “that a representative, CNA claims R. Alan Mel- on Inquiry Writ of would be scheduled in lott,5 sent a letter July to Mr. John on the matter.” Mr. Mellott subsequently de- 1990, in inquired which he about the out- livered the claim file to Tucker so that he standing By settlement offer. letter represent dated could appellants. However, 20,1990, July and received CNA on July according appellee, “no notice of 24, 1990, Mr. John informed Mr. appearance Mellott as any type other of notice *5 $3,600 follows: “Please be indicating advised that the attorney’s representation was offer of rejected per settlement was the ever filed and/or served and/or mentioned telephone conferenсe with Ms. Moses appellants and until the filed a motion to set was proceed CNA advised that we judgments would aside the default almost two accordingly.” added.) (Emphasis later, Mr. months on October 1990. entry
John did not mention the of the de- inquiry writ of jury was tried to on a judgment hearing orders or the on August 23, 1990. representing No one inquiry the writ of damages to determine appellants present, was and jury re- July which was scheduled for 1990. $500,000 turned a plaintiff. verdict for the However, Mr. Mellott contacted affidavit, Mr. John In an Mr. Mellott stated that he again August once on 1990. At $500,000 this did not become aware of the ver- time, Mr. John told him appellee later, that the nearly dict until a month Septem- $75,000, would settle the claim for September 25, 1990, and he ber 1990. On also told judgments Mellott that default appellants counsel, retained new and a mo- had in According been entered the case. judgment tiоn to set aside the default was appellants, this the first time filed on a October 1990. representative CNA was notified about the hearing, After a full the court below lawsuit and the judgments, default appellants’ denied the motion to set aside they pending were still unaware of the the default in a memorandum of hearing inquiry, on the had writ of which opinion 15, 1990, dated November and in a been rescheduled and now set for Au- subsequent 13,1990. order dated December gust 23, 1990. The court concluded that under the circum- 16, 1990, August presented On Mr. Mellott contact stances appellants in their affidavit, Wheeling attorney Paul T. Tucker ed this case did not fall within the investigate provisions asked him to matter fur Virgi- Rule of the West Procedure, ther. Mr. Tucker claims that he was nia able Rules of Civil which allows through to confirm circuit clerk’s office a court the discretion to set aside a default only judgment. orders had been assigned Mary hearing Mr. Mellott was to handle
5. the record whether the was on the July White’s claim on actually court’s schedule or if the order was in inquiry the file when Mr. Tucker made his argue appellants 6. The that because the order the clerk’s office. 23, 1990, scheduling hearing August 23, 1990, August also dated it is not clear from (D)Upon any public case is other domestic question in this The critical (A) delivering copy corporation, em- a on a secretarial service made whether adequate complaint any constitute summons and of the ployee is sufficient to thereof, agency officer, director, is the governor state or or service Encompassed within defendant.7 (B) by delivering copies named thereof to an inquiry of how the further question agent or in fact authorized made on a should be service or apрointment statute to receive ques- this latter agency. We address state accept service in its behalf. first. tion development this rule is The historical Silverstein, Lugar in M. & L. mentioned Virginia 4(d)(6) Rule of the West (1960): Rules ser specifies how of Civil Procedure Rules public cor can made domestic vice be 4(d)(6) Virginia Rules of the West provides: It porations. (5) generally paragraphs corresponds Rule, (6) in the Federal but the West Corporations.— (6) Public Domestic Virginia provision is much more detailed. town, village, by (A) city, Upon a not to alter the This Rule is intended and of delivering copy of the summons 56- practice former as set forth Code city manager, complaint mayor, to its except the addition clame 3-13 treasurer, recorder, clerk, any mem- (B) (D). phrase In clause ‘or other of commission- of its council or board ber county busi- created to transact tribunal ers; conform ness’ is added to the Code to county (B) any Upon county Constitution, VIII, art. with the State created to transact or other tribunal added). (Emphasis sec. business, by delivering copy county any adoption and of the the summons Prior to the of the Rules Civil or, if Procedure, (1931) thereof or the clerk commissioner 56-3-13 *6 W.Va.Code § absent, attor- they prosecuting to the serving be procedures for outlined the various ney county; of the county, of education and city, a or board serving a procedure also included the education,
(C) by de- Upon a board of spe- corporation.8 There was no domestic of livering copy of the summons and a statutory provision regard with to ser- cific any president or complaint to the agency. This absent, process of on a state or, to vice they if be member thеreof county; probably due to the fact that under the attorney of the prosecuting absent, attorney prosecuting on the of the paragraph motion to be 10 of the defendant's In judgment, county; claim is this set aside the (c) any asserted: education of district or If a board of district, attempt process president W.Va. independent to serve on the school [The] by delivering Transportation thereof, a Department they of any or if be or absent, commissioner copy of a summons prosecuting of the on the Transporta- Department receptionist of in county; it failed was insufficient in that tion’s Office (d) any corporation, on the auditor If other agency put insurance carri- the state and its corpora- statutory attorney in fact of such as tion, (hereinafter er, Companies CNA Insurance seventy-one, provided arti- as in section "CNA"), they made a had been on notice one, thirty-one chapter of this [§ 31-1-71] cle party civil action[.] to a Code, by any person appointed it to or on behalf, provided: Virginia accept process § Code 56-3-13 8. West of in its or on service officer, provided, process specially president or other chief or its vice its Unless otherwise treasurer, to, cashier, cashier, by corporation against, a created president, or notice assistant may treasurer, State be served secretary, any of the laws of this virtue or member assistant directors, or, as follows: if no such officer its board of of village, mayor, (a) city, its town or or If a found, any agent on of such be or director clerk, treasurer, recorder, or city manager, including corporation, in the case of a rail- any missioners; or board of com- of its council member agent depot company or station in the road a company. employment actual county, any (b) any county on court of If a thereof, they or if the clerk commissioner or
329 in immunity constitutional Article other than those State’s mentioned in Rule 4(d)(6)(A) Constitution,9 through (C). VI, it This Section 35 of our made conclusion is by buttressed all fact provide process sense to the enti- little for service 4(d)(6) ties mentioned in Rule public are agency. a state with the corporations.12 1957, adoption of 29-12-5 in W.Va.Code § foreclosed an carrier insurance It cannot be doubted that the Di asserting a agency insured state from public of Highways vision is corporation defense, sovereign right immunity a limited in as stated W.Va.Code 17-2-1: “The § See being.10 the State into sue came road state Virginia, commission West
gеnerally Pittsburgh Elevator Co. v.
existing
heretofore created and
corpo
as a
Virginia
Regents, 172 W.Va.
Bd. of
ration,
shall
is hereby
be and
contin
(1983).
and in owned State inter- rized attomey-in-fact accept service est, supported by public funds, gov- process and public on corporations agencies by managers deriving authority pursuant erned their provisions to the of Rule ” 4(d)(6)(D) from the State.’ also v. See Meisel Tri- of the Rules of Civil Procedure. Airport Authority, 135 State Having (1951). procedure established the S.E.2d process service of public corpora on a Thus, we conclude that the service of tion, we address the service in this case. process provisions 4(d)(6)(D), of Rule can be Here the service attempted by serving public corporations, used on domestic Gleason, Mr. who was the Secretary of the agencies, which include state are that not Department of Transportation, which in 4(d)(6)(A) otherwise covered in Rule cludes the Highways. Division of There is (C).
through
dispute
no
that this
proper
was a
official
4(d)(6)(D).
service under Rule
How
4(d)(6)(D)
It is to be noted that Rule
ever,
service was not made
Mr. Glea
provides
process.
two methods of service of
Rather,
son.
deputy
sheriff served the
officer,
It can
upon “any
be served
di
papers upon Mr.
secretary,
Gleason’s
who
rector,
governor
or
thereof” or
“an
Holmes,
forwarded them to Ms.
his admin
agent
or
in
by
fact authorized
assistant,
placed
istrative
who
them on Mr.
appointment
statute to receive or
Gleason’s desk. Mr. Gleason’s
in
affidavit
accept
in
service
its behalf.” We believe
dicates that he was
legal
unaware of their
language
provisions
under this
and the
purport
thought
copies
had been
31-1-15,
of W.Va.Code
service on a do
§
given
legal
division.
public corporation
mestic
can be accom
plished by serving the Secretary of State. We have found cases where the courts
language
The
of W.Va.Code
31-1-15
have considered
whether
a suit
§
secretary
states that
public
of state is here
corporation
official,
“[t]he
service of
by constituted the attomey-in-fact for
process upon
secretary
is adequate.
every corporation
on
behalf
created
These courts conclude that service on a
virtue of the laws of this
employee
secretarial
is insufficient to
State[.]”
con
phrase “every corporation
created
vir
stitute valid
showing
service absent a
tue of the laws of this
person
State” W.Va.Code
such
accept
was authorized to
ser
sufficiently comprehensive
31-1-15 is
See,
e.g.,
vice.
§
Franz v. Board of Educ. of
public corporation
include a
agency
Dist.,
au
Elwood Union Free
112 A.D.2d
We,
legislature.15
thorized
(1985);
there
331
(1986);
brought by Mary
nection with a lawsuit
E.
Neigh
P.2d 296
Meadowdale
712
Edmonds,
Berryman
goes
City
then
on to state
v.
borhood Committee
White[.]”
of
(1980).16
261,
Wash.App.
sought
the summons and
just,
upon such terms as are
motion and
15,
question that
May
1990. There is no
legal
may
party
relieve a
or his
the court
4(d)(1)(A),
under Rule
service
or
judgment,
from a final
representative
incompetent
is not
upon an individual who
der,
following rea
proceeding
for the
“by
disability can be made
deliv
or under a
Mistake, inadvertence,
(1)
surprise,
sons:
ering copy
of the summons
cause;
neglect, or unavoidable
excusable
delivering
personally,
him
...
[the
_”
to ana
court undertakes
“When a
dwelling
place
his
house or usual
at
same]
(1), (2),
grounds
lyze a Rule
motion on
family
his
to a member of
above
abode
Rule,
(3),
(6)
must determine
it
(16)
age
years[.]”
of sixteen
filed within
motion has been
first if the
en
judgment was
eight months after the
Berryman’s affidavit
states
determine, under all the
tered and then
May
upon his return from work
circumstances,
filed within a rea
if it was
papers.
him
suit
his
showed
wife
Savas,
v.
Syl. pt.
Savas
examining
sonable time.”
“upon
affidavit states that
His
(1989).
documents,
382 S.E.2d
they
he determined that
Berryman filed
naming
question
him in con- There is no
legal documents
were
(1990).
jurisdictions
Other
regard
private corporations and their
his
motion within
months of the
a
judgment
default
focuses on
the issue
entry
judgment
of the default
whether the
orders.
trial court abused its discre-
However, given
present
entering
circumstances
tion in
the
judgment.”
the
default
“
case,
in
‘A
this
not find that his
motion to
we do
motion
vacate default
addressed
was filed within
reasonable time.
to the sound discretion of
the
ruling
and the court’s
on such motion
In
v.
Parsons
Consolidated will not be
appeal
disturbed on
unless there
464,
Co.,
Supply
Gas
163 W.Va.
256
showing
S.E.2d is a
of an abuse of such discre-
758,
(1979),
Court
3,
762
“established аs
tion.’ Syl. pt.
Intercity Realty
v.Co.
policy
Gibson,
369,
should
basic
that cases
be decided on
154 W.Va.
both the West
and Federal Rules
papers.
the
generally
suit
It is
held that
Procedure,
of Civil
there
necessity
is the
attorney’s
an
negligence will not serve as
show some
excusable
unavoidable cause
setting
the basis for
aside
judg
a default
explain
delay
in answering.
the
Obvi
grounds
ment on
neglect.”
“excusable
ously,
the
stronger
neglect
excusable
Evenson,
In
Mich.App.
Badalow v.
62
shown,
good
cause
the more appropriate
(1975),
233 N.W.2d
710
Michigan
give
it is to
judg
relief
the default
Appeals
“virtually
Court of
stated that it is
ment.”
factors
Id. The
that should be
“neglect
axiomatic” that the
or omission of
neglect
considered in
inquiry
an excusable
attorney
a defendant’s
does not constitute
expanded by
were
this Court in Parsons.
adequate grounds
setting
for
aside a de
syllabus point
In
we stated that:
judgment.”
Tribble,
In DeClerk v.
In determining
judg-
whether a default
276
(1982),
Ark.
still We find that the default hearing, the date of the which ascertained against Berryman is valid. he 23, 1990, August nor did he was held on employee of the De was put appellee on notice that he was partment Transportation, Division of representing parties by filing notice of Highways, Department’s and the insurance having it appearance with representation carrier had undertaken part record. made of the him, negoti as evidenced the settlement attorneys employment ations and the Certainly, Berryman first learned when appellants. file motions both judgment had been entered that default gravamen of this case is the size him, against he have moved immedi- should light In of the amount of the verdict. aside, set or at least ately to have the order provable special settlement offers and the appearance. This would filed a notice damages, obviously verdict re this sizeable rational, response, have been reasonable appellants’ from the failure of the sulted indicating appellant had some de- attorneys immediately appear make an proceedings interest in the gree of record, enti ance on the which would have going forward without him. It would were inquiry. to notice of the writ of tled them him de- very at the least enabled have least, very they contest At the could have Instead, against inquiry. fend the writ Therefore, appellee’s ed the evidence. we however, aрpellant un- counsel for the was Highways’ the Division of conclude responsive. responsible for the insurance carrier he knew that a spite In of the fact that against Berryman. judgment pending hearing inquiry on the writ reasons, foregoing the December For the held, actually it at least a week before was of the Circuit Court of order not appellant maintains that he did County part is affirmed in and re- Brooke $500,000 verdict become aware of part, in and this case is remanded versed Thus, against him for over a month.18 this entry of an order consistent with aside the default motion to set opinion. in appellant first action the took was the case, and it was not filed until October part, part, Affirmed reversed 8, 1990, appel- nearly two months after the remanded. first aware that the default lant became had entered
judgment order been NEELY, Justice, dissеnting: him, order over three months after the actually entered. good sport stick it to an always It days it is Hinerman, company, but these supra, insurance stated In this Court distinguish harder to getting harder and “quite willing are to re- although we They do not indicate tember Actually, appellants state that the CNA Tucker, Mellott, attorney, learned about their Paul representative, Mr. did not be- claims $500,000 resulting Sep- hearing verdict. or the verdict until come aware *11 334
the stickor from the stickee.
cy
government
This case
but to satisfy
require-
some
$100,000,1
would have settled for less than
another,
ment
general
clarity
lack of
(and
plaintiff
lawyers)
her
now
will
in lines of responsibility and lines of com-
$400,000
receive a windfall of over
words,
because munication.3 In other
there needs
of what
is best described as
to be a more reasonable rule to sanction
colórate
screw-up. The defendant
this case is the
corporate
(as
screw-up
well, probably, as
Virginia,
which is insured
State West
screw-up.)
other
CNA,
large
Chicago.
insurer
based
Even in
procedures
cases where the
for
way
merge
that stickors and stickees
clear,
service of
are
courts around
seamlessly
compa-
of late is that insurance
country
developed
have
predicta
never
premiums
experi-
nies base their
on loss
ble standards for
neglect.”
“excusable
In
$400,000
Today’s
gift
plaintiff
ence.
one case in which the failure to file an
is a
with no more and no
loss
less statisti-
unintentional,
answer was
the defendant
premium
cal effect on CNA’s
calculations
defense,
had a meritorious
and no harm
Who, then,
any
than
other loss.
is the real was
opposing party,
caused to the
a court
$400,000 penalty
failing
stickee? The
аpplied the test of whether there was some
relationship
answer
bears no
excuse,
excuse,
necessarily good
not even
whatsoever
the seriousness of the of-
for the failure to file.
Dorsey
See
v.
fense,
public purpose
serves no
that cannot Aguirre, 552
(Tex.Civ.App.
S.W.2d 576
means,
temperate
better be served more
1977). However another court held that
and exalts form over substance.
neglect equal to mere carelessness would
not suffice as
neglect.
excusable
See In
governing
Rule
de-
W.Va.R.Civ.P.
Corporate
ternational
Enterprises,
Inc.
stems from the federal
Ltd.,
(N.D.Tex.
v. Toshoku
my the defaulter must offer the
$5,000 by tendering a check to the clerk at same time he files the motion. course, plaintiff, undoubtedly will
prefer judgment, the default but an adven- judge might
turous trial offer to find ex-