Case Title: Media General v. Smith

Citation: 

Docket Number: 992609

State: virginia

Court: Virginia Supreme Court

Date: 2000-09-15T00:00:00Z

Document:
Present:  All the Justices 
 
MEDIA GENERAL, INC. 
 
v.  Record No. 992609     OPINION BY JUSTICE ELIZABETH B. LACY 
 
 
 
September 15, 2000 
WILLIAM F. SMITH, JR. 
 
FROM THE CIRCUIT COURT OF GLOUCESTER COUNTY 
William H. Shaw, III, Judge 
 
 
In this appeal, we consider whether the trial court 
properly dismissed a bill of complaint filed by Media General, 
Inc., pursuant to Code § 8.01-428(D), seeking to set aside a 
default judgment entered against it. 
 
On August 28, 1995, William F. Smith, Jr., was injured 
when the vehicle he was driving collided with a vehicle driven 
by Gale A. Aldrich.  In April 1997, Smith filed suit against 
Aldrich alleging that he was injured as a result of Aldrich's 
negligent operation of a motor vehicle.  Smith filed an 
amended motion for judgment adding Media General as a 
defendant, asserting that at the time of the accident Aldrich 
was acting in the scope of his employment as a newspaper 
carrier for Media General, the parent corporation of Richmond 
Newspapers, Inc.  Smith served George L. Mahoney, the General 
Counsel and Registered Agent for Media General.  Media General 
did not file any pleadings in response to Smith's motion for 
judgment. 
On March 24, 1998, the trial court entered a default 
judgment against Media General.  At a subsequent hearing, the 
court awarded damages of $405,246.50 against Media General. 
On October 13, 1998, Media General filed a bill of 
complaint pursuant to Code § 8.01-428(D) seeking to set aside 
the default judgment entered against it.  The trial court 
denied Media General the relief sought and dismissed the bill 
of complaint, finding that Media General was "not free from 
fault or negligence" in failing to respond to Smith's motion 
for judgment. 
 
On appeal, Media General assigns eight errors to the 
judgment of the trial court.  These assignments of error 
address four general issues:  (1) whether the trial court 
erred in finding that Media General was "not free from fault 
or negligence"; (2) whether the trial court erred in failing 
to adopt "excusable neglect" as an alternative standard for 
determining negligence under Code § 8.01-428(D); (3) whether 
the trial court erred in concluding that Media General was a 
proper party; and (4) whether the trial court erred in 
refusing to admit evidence regarding the effectiveness of 
Media General's system of accepting documents served on it.  
We consider these questions in order. 
I. 
 
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The evidence is not in dispute.  In April 1996, Smith's 
attorney notified the Richmond Times Dispatch, by letter, of 
Smith's claim against Aldrich.  This letter was forwarded to 
Mahoney, and a file was established at Media General for 
Smith's claim.  In September 1996, D. Page Cooper, Media 
General's Risk Manager, responded to an inquiry from Smith's 
uninsured motorist liability insurance carrier regarding 
Aldrich's employment status and the applicability of certain 
automobile liability insurance carried by Media General.  In 
April 1997, Media General received a subpoena duces tecum 
requesting information regarding Cooper's response to Smith's 
1996 inquiry.  The request was forwarded to Media General's 
counsel, who prepared and forwarded a response.  Media 
General's file on Smith's claim was sent to storage in July 
1997. 
On August 18, 1997, Mahoney received Smith's amended 
motion for judgment and dictated a memorandum referring the 
matter to Cooper with instructions that the case be forwarded 
to Media General's insurance carrier.  Neither the memorandum 
nor the amended motion for judgment was received by Cooper or 
the insurance carrier.  There is no evidence showing what 
happened to these documents.  The record also reflects that 
Smith's attorney mailed various notices to Mahoney, such as 
the notice for hearing on the default judgment motion, but 
 
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Mahoney testified that he did not recall receiving any of 
them.  Following the entry of the default judgment against 
Media General, Smith's counsel informed Media General by 
certified letter that he intended to proceed with the 
collection of the judgment, and that, in the absence of a 
response, Smith would proceed with collection of this debt. 
II. 
Code § 8.01-428(D) allows a court to "entertain at any 
time an independent action to relieve a party from any 
judgment or proceeding."  To prevail in an action filed under 
this provision, the applicant for such relief has the burden 
to prove:  (1) that the default judgment should not, in equity 
and good conscience, be enforced; (2) that it had a good 
defense to the alleged cause of action on which the judgment 
is founded; (3) that fraud, accident, or mistake prevented it 
from obtaining the benefit of its defense; (4) that there was 
an absence of fault or negligence by the defendant; and (5) 
that the applicant for relief under this Code section was 
without an adequate remedy at law.  Charles v. Precision Tune, 
Inc., 243 Va. 313, 317-18, 414 S.E.2d 831, 833 (1992). 
At issue in this case is whether Media General produced 
sufficient evidence to satisfy the fourth element of the cause 
of action, i.e., that it was free from fault or negligence.  
Media General argues that it met its burden of proof in this 
 
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case with its evidence that it had a system in place for 
receiving and responding to service of process, that the 
system was reasonable, had operated well in the past, and 
"appears to have been triggered appropriately" when Smith's 
motion for judgment was received.  Media General argues that, 
although it does not know what happened to the amended motion 
for judgment, it had a system for handling such matters in 
place, and, consequently, its lack of knowledge as to why its 
system apparently did not work properly does not rise to the 
level of negligence or fault on its part.  Therefore, Media 
General concludes, the trial court erred in finding that Media 
General was not "free from fault or negligence." 
 
We reject Media General's argument.  Media General had 
the burden to produce evidence showing that it was neither at 
fault nor negligent.  The evidence recited above shows only 
that a system failed.  It does not provide any showing as to 
how or why the system failed and thus provides no evidence 
that Media General was free from fault or negligence when it 
did not respond to Smith's motion for judgment. 
 
Media General next argues that in determining whether it 
was negligent, the trial court should have applied the broader 
standard of "excusable neglect," a standard utilized under 
Rule 60(b) of the Federal Rules of Civil Procedure and a 
number of other jurisdictions, in considering whether to set 
 
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aside default judgments.  See, e.g., Paige v. City of 
Chariton, 252 N.W.2d 433, 437 (Iowa 1977); White v. Berryman, 
418 S.E.2d 917, 925 (W. Va. 1992); Jackson Hole Community 
Hous. Trust v. Scarlett, 979 P.2d 500, 502 (Wyo. 1999). 
 
The General Assembly has not incorporated the excusable 
neglect standard into Code § 8.01-428, and we decline Media 
General's invitation to do so here.  As we have stated on 
previous occasions, principles of certainty and finality of 
judicial proceedings require that the provisions of subsection 
(D) of Code § 8.01-428 be narrowly construed.  See Precision 
Tune, 243 Va. at 317, 414 S.E.2d at 833, and cases cited 
therein.  Accordingly, we conclude that the trial court did 
not err in refusing to apply a standard of excusable neglect 
and did not err in finding that Media General was not free 
from negligence or fault in failing to respond to Smith's 
amended motion for judgment. 
 
Media General also assigns error to the trial court's 
finding that it was a proper party to Smith's action.  This 
assertion is raised in the context of establishing the first 
element of an independent action under Code § 8.01-428(D) 
recited above.  Media General's argument on this point can be 
summarized as asserting that the default judgment should not 
be enforced "in equity and good conscience" because Media 
General was named as a defendant "under the incorrect 
 
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assumption that Aldrich was a Media General employee."  Media 
General contends that there was "no basis for holding Media 
General liable for any act of Aldrich." 
 
To prevail in an action under Code § 8.01-428(D), all 
five elements of the independent action must be established.  
Because we have already concluded that Media General did not 
meet its burden of proving that it was without fault or 
negligence in failing to respond to Smith's amended motion for 
judgment, we need not address the question whether Media 
General met its burden of proving that enforcing the judgment 
against Media General was inequitable or unconscionable. 
 
Finally, Media General asserts that it should have been 
allowed to introduce evidence regarding the "good track 
record" of its system for receiving and referring documents 
served on it.  Specifically, Media General sought to introduce 
testimony that "there had never been a default judgment taken 
against Media General."  The trial court refused to admit this 
statement, finding it irrelevant.  We agree.  Such evidence 
does not indicate what happened to the documents in this case, 
nor does the evidence show whether Media General was free from 
fault or negligence in failing to respond to Smith's amended 
motion for judgment.∗
                     
∗ On brief before this Court, Media General argues that 
the evidence in question should have been admitted to show 
 
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For the reasons stated, we will affirm the judgment of 
the trial court. 
Affirmed. 
                                                                
that Media General's reliance on its system was reasonable.  
That argument was not made before the trial court, and we do 
not consider it here.  Rule 5:25. 
 
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