UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

HELGA V. BONNEY; HVB

INTERNATIONAL, LIMITED; DIRECT

MARKETING CONSULTANTS

INTERNATIONAL, LIMITED,

Plaintiffs-Appellees,

v.

WOLFGANG ROELLE; SAZ MARKETING

SERVICES GMBH, Germany; SAZ

No. 96-1664

DIALOG MARKETING AGENTUR

GMBH,

Defendants-Appellants,

WERNER ZEDNICEK; SAZ MARKETING

SERVICES GMBH, Austria; SAZ

MARKETING SERVICES AG; ADRIAN

RUESCH, Doctor,

Defendants.

Appeal from the United States District Court

for the Eastern District of Virginia, at Alexandria.

Albert V. Bryan, Jr., Senior District Judge.

(CA-94-417-A)

Argued: March 3, 1997

Decided: July 21, 1997

Before RUSSELL, WILKINS, and HAMILTON, Circuit Judges.

_________________________________________________________________

Vacated and remanded with instructions by unpublished per curiam

opinion.

_________________________________________________________________
COUNSEL

ARGUED: Ralph Arthur Taylor, Jr., SHAW, PITTMAN, POTTS &

TROWBRIDGE, Washington, D.C., for Appellants. Karen Mary

Kennedy, JAMES P. CAMPBELL & ASSOCIATES, P.C., Leesburg,

Virginia, for Appellees. ON BRIEF: Thomas W. Mitchell, SHAW,

PITTMAN, POTTS & TROWBRIDGE, Washington, D.C., for

Appellants.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

This case arises out of a now terminated joint venture between

HVB International, Limited (HVB) and its related company Direct

Marketing Consultants International, Limited (DMCI) on the one

hand and SAZ Marketing Services GMBH (SAZ) and its related company SAZ Dialog Marketing Agentur GMBH (SAZ Dialog) on the

other. At all times relevant to this case, HVB, DMCI, SAZ, and SAZ

Dialog were in the business of organizing and executing direct mail

campaigns for individual clients, primarily charitable organizations

seeking donations. HVB, DMCI, and Helga Bonney (Bonney), the

sole stockholder and president of HVB and sole stockholder of DMCI

(collectively the plaintiffs), filed suit against SAZ, SAZ Dialog, and

Wolfgang Roelle (Roelle), the sole stockholder and president of SAZ

and SAZ Dialog (collectively the defendants), in the United States

District Court for the Eastern District of Virginia. Based on allegations that the defendants wrongfully and maliciously destroyed the

direct mail business of the plaintiffs by illegally luring away its three

best clients and breached fiduciary duties owed the joint venture, the

suit alleged causes of action for breach of contract, tortious interference with contract, defamation, statutory conspiracy, breach of fiduciary duty and intentional infliction of emotional distress. The district

 2
court entered a multi-million dollar default judgment against each

defendant on various claims. The defendants moved to vacate the

default judgment on the alternative grounds of mistake or excusable

neglect and the judgment being void for lack of personal jurisdiction,

see Fed. R. Civ. P. 60(b)(1) and (b)(4), which the district court

denied. The defendants noted a timely appeal of the district court's

order denying their motion. Because the district court abused its discretion in denying the defendants' Rule 60(b) motion, we vacate the

district court's order to that effect and remand with instructions to

enter an order granting the motion. We further instruct the district

court on remand to enter an order awarding the plaintiffs an amount

equal to their reasonable attorney's fees in seeking the default judgment and attempting to collect on it through collection procedures.

Moreover, we instruct the district court to dismiss this action with

respect to Roelle for lack of personal jurisdiction. Finally, we instruct

the district court to conduct further proceedings not inconsistent with

this opinion, including allowing SAZ and SAZ Dialog to answer the

complaint.

I.

The district court relied on the complaint and affidavits alone in

deciding the jurisdictional question, without holding an evidentiary

hearing. Therefore, we set forth the facts in the light most favorable

to the plaintiffs, resolving any factual disputes bearing on the existence of jurisdiction in favor of the plaintiffs. See Combs v. Bakker,

886 F.2d 673, 676 (4th Cir. 1989).

HVB was incorporated in Maryland by Bonney in 1980. Until its

apparent dissolution some time after 1992, HVB organized and executed direct mail campaigns in the United States and Europe. In 1984,

Bonney incorporated DMCI under the laws of Bermuda. DMCI operated as the billing and accounting entity for any direct mail services

performed by HVB in Europe.

By late 1986, HVB and DMCI had so many accounts requiring the

distribution of direct mail in Europe that it sought to enter a joint venture with a European based direct marketing company in order to

share the workload. As a consequence, in August 1987, HVB and

DMCI entered into a joint venture agreement (the Joint Venture

 3
Agreement) with SAZ. SAZ is a German company that organizes and

executes direct mail campaigns in Europe.

The Joint Venture Agreement called for SAZ, upon consultation

with HVB, to organize and execute direct mail campaigns in Europe

for HVB's American clients. It also contained a non-compete provision whereby SAZ was prohibited from competing with HVB and

DMCI outside of Germany. Likewise, HVB and DMCI were prohibited from competing with SAZ in Germany. Bonney and Roelle, a

German citizen, executed the Joint Venture Agreement on behalf of

their respective companies. Bonney signed it in Maryland, and Roelle

signed it in Germany.

Pursuant to the Joint Venture Agreement, Roelle obtained fifty percent of DMCI's stock and formed a Swiss subsidiary corporation of

DMCI known as Direct Marketing Consultants International AG. The

sole role of this company was to bill HVB's clients for their European

direct mail marketing campaigns, deposit the funds in Swiss bank

accounts, pay suppliers, pay European staff and other overhead

related to joint venture clients, and distribute the net profits through

DMCI.

In 1988, Roelle formed the corporation SAZ Dialog to act as the

creative arm of SAZ. SAZ Dialog drafted text and designed layouts

for the direct mailings of joint venture clients, while SAZ performed

more physically laborious tasks for joint venture clients such as

addressing and stuffing envelopes.

For the most part, the joint venture ran smoothly for the first few

years, with HVB moving its principal place of business to Bonney's

new home in Upperville, Virginia in January 1989. After January

1989, SAZ Dialog mailed its direct mail campaign proposals to HVB

in Virginia. HVB staff would then consult with the clients and return

the proposals with suggested changes. HVB had final approval as to

the form and content of any mailings.

In April 1989, Roelle attended the wedding of Bonney's daughter

at Bonney's home in Upperville, Virginia. Hours before the wedding,

Bonney and Roelle held a meeting with a joint venture client regarding the client's mailings for the next three years. In August 1989,

 4
Roelle and almost the entire staffs of SAZ and SAZ Dialog who were

involved with joint venture clients attended a meeting regarding joint

venture business with Bonney and HVB staff in Upperville, Virginia.

The meeting lasted several days. The same group attended a similar

meeting in Virginia the following August.

By the summer of 1990, Bonney, on behalf of HVB and DMCI,

had become dissatisfied with the manner in which Roelle, on behalf

of SAZ and SAZ Dialog, was handling the payments received from

joint venture clients. Bonney did not believe that HVB and DMCI

received proper accountings of joint venture expenses and profits. As

a consequence, Bonney and Roelle, on behalf of their respective companies, agreed to terminate the split of profits and losses through

DMCI. The parties agreed to maintain their joint venture relationship

as to joint venture clients for the near future, but at least through the

end of 1991 as to the data processing services. Roelle agreed to divest

himself of his stock in DMCI at this time.

In light of the impending termination of the joint venture, in the fall

of 1991, HVB began exploring competitive bids for all post joint venture production services for the European direct mail campaigns of its

clients. Several companies bid on the services, including SAZ and

SAZ Dialog. Concluding that SAZ and SAZ Dialog's bids were not

competitive, HVB awarded service contracts to other companies.

Shortly thereafter, at the end of 1991, the joint venture dissolved.

Despite this dissolution, by March 1992, a substantial dispute arose

between HVB and DMCI on the one hand and SAZ and SAZ Dialog

on the other regarding unpaid invoices for services provided by SAZ

and SAZ Dialog on behalf of the joint venture. To resolve this dispute

and any disputes or claims that may have existed between them at the

time, all parties, including Bonney and Roelle, entered into a settlement agreement on May 31, 1992 (the Settlement Agreement). Of

particular relevance to the issues before us, the Settlement Agreement

specifically obligated SAZ and SAZ Dialog to "behave" in a manner

loyal to HVB when dealing with HVB clients. (J.A. 193). In particular, the Settlement Agreement provided that SAZ and SAZ Dialog

would refrain from directly dealing with those clients in the future in

any form to the extent not required to implement the Settlement

Agreement. Finally, the Settlement Agreement provided that any dis-

 5
putes arising under its terms must be litigated in St. Gallen, Switzerland under Swiss law.

Also in March 1992, Roelle, on behalf of SAZ and SAZ Dialog,

began calling on three of HVB's best clients in alleged violation of

the non-compete provisions of the Joint Venture Agreement. Specifically, Roelle, who was outside of Virginia at the time, contacted by

letter and telephone the International Fund for Animal Welfare

(IFAW), Our Little Brothers and Sisters (OLBS), and the World

Mercy Fund, Limited (WMF). These organizations had been HVB

clients for four, nine and ten years, respectively, with the average

length of each service agreement being two years. OLBS was headquartered in Virginia, while the other two organizations were headquartered outside Virginia. Roelle allegedly encouraged these

organizations to do business with SAZ and SAZ Dialog instead of

HVB and DMCI by falsely claiming that HVB and DMCI owed SAZ

and SAZ Dialog over one million dollars; that HVB and DMCI overcharged clients for its product and services; and that other clients of

HVB and DMCI were unhappy with it and, therefore, were threatening to sue.

Between March 31 and April 28, 1992, IFAW, OLBS, and WMF

all terminated their business relationships with HVB and DMCI. Prior

to Roelle's actions, there were no indications that any of these clients

intended to terminate their business relationships with HVB and

DMCI. As a result of HVB and DMCI losing IFAW, OLBS, and

WMF as clients, HVB and DMCI began having financial difficulties

resulting in Bonney being unable since that time to collect any of her

$180,000 annual salary. Bonney, in turn, personally filed for bankruptcy. Although the record is unclear, it appears that HVB and

DMCI are no longer in business.

On March 30, 1994, the plaintiffs filed a complaint against the

defendants in the United States District Court for the Eastern District

of Virginia, alleging six counts. Count One alleged tortious interference with contractual relations. Count II alleged defamation. Count

III alleged that the defendants unlawfully conspired to secure gain for

themselves and to bring about ruin and loss of profit to the plaintiffs.

See Va. Code Ann. § 18.2-499. Count IV alleged breach of fiduciary

duties and sought a complete accounting. Count V alleged breach of

 6
the non-compete provision of the Joint Venture Agreement, and

Count VI alleged intentional infliction of emotional distress with

respect to Bonney. The plaintiffs prayed for a minimum of twenty

million dollars in compensatory damages and five million dollars in

punitive damages. The defendants subsequently received service of

process in Germany.

Upon receipt of process, Roelle, on behalf of himself, SAZ, and

SAZ Dialog, referred the matter to an attorney in Switzerland. The

attorney advised them not to respond in any way, explaining that a

response was not required because the Settlement Agreement required

the plaintiffs to litigate their claims in Switzerland. According to the

attorney, the Settlement Agreement prevented any judgment from

being entered against them. Relying on this professional advice, the

defendants did not respond to the respective summonses and complaints.

Because the defendants failed to file timely answers, the plaintiffs

moved for default judgment on April 7, 1995. The clerk of court

noted an entry of default at the plaintiffs' request on April 11, 1995.

The district court then referred the motion to a magistrate judge for

a report and recommendation on the following issues: (1) whether the

defendants received valid service of process; (2) whether the plaintiffs

presented a prima facie case as to liability on the various counts in

the complaint; and (3) the quantum of damages.

The magistrate judge conducted two hearings, at which he received

evidence in support of the allegations of the complaint, including evidence in support of damages. The record before the magistrate judge

also contained certification by a German judicial officer that each

defendant had been served in accordance with German law by

December 27, 1994. After reviewing the record before him, the magistrate judge issued his report and recommendation on August 25,

1995. According to the magistrate judge, the defendants received

valid service of process and the plaintiffs presented prima facie proof

of liability as to all counts in the complaint except Count VI, alleging

intentional infliction of emotional distress. The magistrate judge also

determined damages. The magistrate judge ultimately recommended

that the district court grant the plaintiffs' motion for default judgment

as to Counts I through V as follows:

 7
1. As to Count I, judgment against all three defendants,

jointly and severally, in favor of DMCI in the amount

of $1,062,000.00; in favor of HVB in the amount of

$480,000.00; and in favor of Bonney in the amount of

$720,000.

2. As to Count II, judgment against defendant Roelle in

favor of HVB in the amount of $480,000.00; and in

favor of Bonney in the amount of $720,000.

3. As to Count III, judgment against all three defendants,

jointly and severally, trebled pursuant to Va. Code

§ 18.2-500, to result in the following amounts: in favor

of DMCI for $3,186,000.00; in favor of HVB in the

amount of $1,440,000.00; and in favor of Bonney in the

amount of $2,160,000. In addition, the statute provides

for a reasonable fee to plaintiffs' counsel, which the

magistrate judge recommends be not less then (sic)

$15,000.

4. As to count IV, a declaratory judgment that all three

defendants owed fiduciary duties to all three plaintiffs

which entitle the plaintiffs to account[ings].

5. As to Count V, judgment against all three defendants,

jointly and severally, in favor of DMCI in the amount

of $1,062,000.00; and in favor of HVB in the amount

of $480,000.00.

(J.A. 126-27). Finally, the magistrate judge recommended denying the

default judgment motion as to Count VI and dismissing that count.

After ten days and the defendants' failure to file any objections, see

Fed. R. Civ. P. 72(b), the plaintiffs moved the district court to

approve the magistrate judge's report and recommendation. On September 15, 1995, upon consideration of the magistrate judge's report

and recommendation and upon an independent review of the record,

 8
the district court adopted the magistrate judge's findings of fact and

accepted in toto his recommendations as to disposition and damages.1

The defendants received notice of the default judgment in Germany

on or about February 22, 1996. Shortly thereafter, the defendants contacted an American law firm regarding the matter. This contact

resulted in the defendants filing a motion on March 25, 1996 to set

aside the default judgment, see Fed. R. Civ. P. 55(c); 60(b), on the

following alternative grounds: (1) the judgment was void for lack of

personal jurisdiction and (2) the defendants' failure to answer the

complaint was due to erroneous legal advice which amounted to mistake and/or excusable neglect. The motion also challenged whether

SAZ received service of process in accordance with Federal Rule of

Civil Procedure 4(f), which sets forth the methods of service available

upon parties in a foreign country.

The district court entered an order denying the motion on the

record before it. The defendants noted a timely appeal from that

order, but have not appealed from the default judgment itself. Accordingly, our review only involves inquiry into the propriety of the district court's denial of post judgment relief--not inquiry into the merits

of the predicate default judgment. See Swaim v. Molton Co., 73 F.3d

711, 717 (7th Cir. 1996), cert. denied sub nom. , 116 S. Ct. 2499

(1996).

II.

Federal Rule of Civil Procedure 60(b) provides as follows:

On motion and upon such terms as are just, the court may

relieve a party or a party's legal representative from a final

judgment, order, or proceeding for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect; (2)

newly discovered evidence which by due diligence could

not have been discovered in time to move for a new trial

under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other mis-

_________________________________________________________________

1 With respect to Count III, the district court awarded $15,000 in attorney's fees.

 9
conduct of an adverse party; (4) the judgment is void; (5)

the judgment has been satisfied, released, or discharged, or

a prior judgment upon which it is based has been reversed

or otherwise vacated, or it is no longer equitable that the

judgment should have prospective application; or (6) any

other reason justifying relief from the operation of the judgment.

In the case of a default judgment, Rule 60(b) must be read with due

regard for Rule 55(c), which provides that "for good cause shown, the

court may set aside an entry of default, and, if a judgment by default

has been entered, may likewise set it aside in accordance with Rule

60(b)."

A movant seeking relief from a judgment under Rule 60(b) must

make a threshold showing of "`timeliness, a meritorious defense, a

lack of unfair prejudice to the opposing party, and exceptional circumstances.'" Dowell v. State Farm & Cas. Auto. Ins. Co., 993 F.2d

46, 48 (4th Cir. 1993) (quoting Werner v. Carbo , 731 F.2d 204, 207

(4th Cir. 1984) (footnote omitted)). After a party seeking relief under

Rule 60(b) makes this threshold showing, such party must satisfy one

of the six enumerated sections of Rule 60(b). See Dowell, 993 F.2d

at 48. In the case of a Rule 60(b) motion seeking to set aside a default

judgment, our judicial preference for trials on the merits demands that

courts resolve any doubt as to the propriety of giving relief in favor

of the moving party. See Augusta Fiberglass Coatings, Inc. v. Fodor

Contracting, 843 F.2d 808, 811-12 (4th Cir. 1988); United States v.

Moradi, 673 F.2d 725, 728 (4th Cir. 1982).

Concluding the defendants did not satisfy one of the six sections

of Rule 60(b), the district court denied the defendants' Rule 60(b)

motion without addressing whether they had made the required

threshold showing. On appeal, the defendants seek vacatur of the district court's decision and our instruction that the district court enter

an order granting the motion. The defendants contend the district

court erroneously concluded that they had sufficient contacts with

Virginia to subject them to personal jurisdiction in Virginia under the

Virginia long-arm statute and the Due Process Clause of the Fourteenth Amendment. Alternatively, they contend the district court erroneously concluded that they failed to establish mistake and/or

 10
excusable neglect.2 Finally, they contend they have made the threshold showing necessary to obtain relief under Rule 60(b). We address

these contentions in turn.

A.

This court will reverse a district court's denial of a Rule 60(b)

motion only upon finding an abuse of discretion. See Werner, 731

F.2d at 206. However, when such denial depends upon an underlying

legal conclusion that personal jurisdiction existed over the defendants,

review of that conclusion must be de novo. See Ahmed v. United

States, 30 F.3d 514, 516 (4th Cir. 1994).

In order for a court to validly exercise personal jurisdiction over a

non-resident defendant: (1) a statute must authorize service of process

on the non-resident defendant, and (2) the exercise must comport with

the Due Process Clause of the Fourteenth Amendment (the Due Process Clause). See Mylan Labs, Inc. v. Azko, N.V. , 2 F.3d 56, 60 (4th

Cir. 1993). The district court concluded that the Virginia long-arm

statute, Va. Code Ann. § 8.01-328.1, authorized service of process on

the defendants and that exercising personal jurisdiction over them

would not violate the Due Process Clause of the Fourteenth Amendment. Because the Virginia long-arm statute extends Virginia's jurisdiction over a non-resident "to the extent permissible under the due

process clause," English & Smith v. Metzger , 901 F.2d 36, 38 (4th

Cir. 1990), it is unnecessary in this case to go through the normal

two-step formula for determining the existence of personal jurisdiction, see, e.g., Stover v. O'Connell Assocs., Inc., 84 F.3d 132, 135-36

(4th Cir. 1996), cert. denied, 117 S. Ct. 437 (1996) (Maryland forum

state); Rossman v. State Farm Mut. Auto. Ins. Co., 832 F.2d 282, 286

(4th Cir. 1987) (Virginia forum state); Columbia Briargate Co. v.

First Nat'l Bank of Dallas, 713 F.2d 1052, 1057 (4th Cir. 1983)

(South Carolina forum state). Rather, the statutory inquiry necessarily

merges with the Constitutional inquiry. Accordingly, our inquiry centers on whether exercising personal jurisdiction over the defendants

is consistent with the Due Process Clause. See Stover, 84 F.3d at 136.

_________________________________________________________________

2 The defendants do not attack the district court's finding that SAZ

received service of process in accordance with Federal Rule of Civil Procedure 4(f).

 11
A court's exercise of personal jurisdiction over a non-resident

defendant is consistent with the Due Process Clause if the defendant

has had sufficient "minimum contacts" with the forum state that

requiring the defendant to defend his interests in the forum state does

not "offend `traditional notions of fair play and substantial justice.'"

International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)

(quoting Miliken v. Meyer, 311 U.S. 457, 463 (1940)). Later cases

have clarified that the minimum contacts must be"purposeful."

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). This

"purposeful" requirement rests on the basic premise that traditional

notions of fair play and substantial justice are offended by requiring

a non-resident to defend himself in a forum state when the non resident never purposefully availed himself of the privilege of conducting

activities within the forum state, thus never invoking the benefits and

protections of its laws. See Hanson v. Denckla , 357 U.S. 235, 253

(1958); Stover, 84 F.3d at 136. Moreover, this "purposeful" requirement "helps ensure that non-residents have fair warning that a particular activity may subject them to litigation within the forum." Plant

Genetic Systems, N.V. v. Ciba Seeds, 933 F. Supp. 519, 523

(M.D.N.C. 1996) (citing Burger King, 471 U.S. at 472, and WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).

As a conceptual matter, a court's exercise of personal jurisdiction

may be specific or general. Specific jurisdiction involves the exercise

of personal jurisdiction over a defendant in an action arising out of

the defendant's contacts with the forum state. See Helicopteros

Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 414 n.8 (1983).

Where a court seeks to assert specific jurisdiction over a non-resident

defendant, the fair warning requirement inherent in due process still

demands that the non-resident defendant have purposefully availed

himself of the privilege of conducting activities within the forum

state, thus invoking its benefits and protections. Cf. Federal Ins. Co.

v. Lake Shore, Inc., 886 F.2d 654, 660 (4th Cir. 1989). Even when an

action does not arise out of the non-resident defendant's contact with

the forum state, the exercise of personal jurisdiction is proper if the

non-resident defendant has had continuous and systematic contact

with the forum state. See Helicopteros, 466 U.S. at 414-15. This is

known as general jurisdiction. See id. at 414 n.9.

Applying these principles with respect to SAZ and SAZ Dialog, we

conclude the district court possessed at least general jurisdiction over

 12
them. HVB had continuous and systematic contact with Virginia by

virtue of its being headquartered in Virginia during the last year of the

joint venture. Under our circuit precedent and common law principles

governing joint ventures, such contact is attributable to SAZ and SAZ

Dialog by virtue of SAZ and SAZ Dialog being joint venturers with

HVB. Cf. English & Smith, 901 F.2d at 38-39; Roark v. Hicks, 362

S.E.2d 711, 714 (Va. 1987). Thus, regardless of whether this action

actually arose out of SAZ and SAZ Dialog's contacts with Virginia,

they had sufficient "minimum contacts" with Virginia such that

requiring them to defend their interests in Virginia does not "offend

`traditional notions of fair play and substantial justice.'" International

Shoe Co. v. Washington, 326 U.S. at 316 (quoting Miliken, 311 U.S.

at 463). Accordingly, we hold the district court properly concluded

that the default judgment against SAZ and SAZ Dialog was not void

for lack of personal jurisdiction.

Applying these same principles with respect to Roelle individually,

we conclude the district court lacked either specific or general jurisdiction over him. Specific jurisdiction does not exist because Roelle

never purposefully availed himself personally of the privileges of

conducting activities within Virginia,3 see Hanson, 357 U.S. at 253,

and any allegedly injurious acts that he committed occurred outside

of Virginia. See Columbia Briargate Co., 713 F.2d at 1064-65 (if

claim against corporate agent rests on nothing more than that he is an

officer or employee of the non-resident corporation and if any connection he had with the commission of the tort occurred outside the

forum state, sound due process principles compel the conclusion that

the nexus between the corporate agent and the forum state is too tenuous to support jurisdiction over the agent personally). Likewise, general jurisdiction does not exist because the record is clear that Roelle

did not have continuous and systematic contact with Virginia in his

individual capacity. Without having purposefully availed himself of

the privilege of conducting business activity in Virginia, due process

protects Roelle from being involuntarily subjected to litigation in Vir-

_________________________________________________________________

3 Except for his attendance at Bonney's daughter's wedding, all of

Roelle's contacts with Virginia were made on behalf of SAZ or SAZ

Dialog or both. The plaintiffs do not even suggest that Roelle's attendance at the wedding should subject him to personal jurisdiction in Virginia.

 13
ginia. See Hanson, 357 U.S. at 253. Accordingly, we conclude the

district court erred in concluding that the default judgment against

Roelle was not void for lack of personal jurisdiction.

B.

We now turn to consider whether the district court erred in concluding that the default judgment was not entered as the result of a

mistake and/or excusable neglect. See Fed. R. Civ. P. 60(b)(1). The

defendants proffered evidence in the form of an affidavit by Roelle

that their failure to respond to the respective summonses and complaints resulted from their good faith reliance on the obviously erroneous advice of their legal counsel. This evidence stands undisputed in

the record.

Our decision in Augusta Fiberglass Coating v. Fodor Contracting,

843 F.2d 808 (4th Cir. 1988), controls our decision on this issue. In

Augusta Fiberglass, we reversed a district court's denial of a defendant's Rule 60(b) motion to set aside a default judgment made on the

ground that its failure to respond timely resulted solely from the negligence of its attorney. See id. at 812-13. We remanded the case with

instructions to allow the defendant to file its answer promptly and to

consider the propriety of other sanctions against the defendant's attorney. See id. Our decision was premised on the rule that "when the

party is blameless, his attorney's negligence qualifies as a `mistake'

or as `excusable neglect' under Rule 60(b)(1)." Id. at 811. "This focus

on the source of the default represents an equitable balance between

our preference for trials on the merits and the judicial system's need

for finality and efficiency in litigation." Id. We noted that the impact

of the rule on the non-movant may be tempered by imposing sanctions against the offending attorney, such as awarding the nonmovant's costs and attorney's fees incident to the Rule 60(b) motion.

See id.

The present case is on all fours with Augusta Fiberglass. The

record is undisputed that the defendants' failure to respond timely to

the respective summonses and complaints resulted solely from the

erroneous advice of their attorney. The blameless nature of the defendants' actions here, therefore, compels our conclusion that the district

 14
court erred in concluding that the defendants failed to demonstrate

mistake and/or excusable neglect under Rule 60(b)(1).

C.

Finally, we must consider whether the defendants met the requirements of the threshold showing necessary to obtain Rule 60(b) relief.

Accordingly, we must consider: (1) whether the defendants filed their

joint motion in a timely fashion; (2) whether the defendants have

proffered a meritorious defense; (3) whether granting the motion

would unfairly prejudice the plaintiffs; and (4) whether exceptional

circumstances are present. See Dowell, 993 F.2d at 48; Augusta

Fiberglass, 843 F.2d at 812.

There is little doubt that all the defendants satisfy the first, second

and fourth requirements. Shortly after receiving notice in Germany of

the default judgment, the defendants obtained the services of an

American law firm that resulted in their filing the present Rule 60(b)

motion only four weeks after their receipt of notice. Under the circumstances of this case, we discern no undue delay in the filing of the

Rule 60(b) motion. As to prejudice, given that the defendants

expressly consent in their brief to pay the plaintiffs' reasonable legal

fees and costs associated with obtaining the default judgment and collection efforts, we perceive no disadvantage to the plaintiffs "beyond

that suffered by any party which loses a quick victory." Augusta

Fiberglass, 843 F.2d at 812. Furthermore, exceptional circumstances

are present by virtue of the defendants' understandable unfamiliarity

with the American legal system.

There is also little doubt that Roelle has shown a meritorious

defense--the district court's lack of personal jurisdiction over him.

Whether SAZ and SAZ Dialog have shown a meritorious defense is

a more difficult issue, but one that must be resolved in their favor. In

requiring the proffer of a meritorious defense, "`[t]he underlying concern is . . . whether there is some possibility that the outcome . . . after

a full trial will be contrary to the result achieved by the default.'" Id.

(quoting 10 C. Wright, A. Miller & M. Kane, Federal Practice and

Procedure, § 2967, p. 531 (2d ed. 1983)). The terms of the Settlement

Agreement establish just such a possibility. To the extent that any of

plaintiffs' claims against SAZ and SAZ Dialog existed prior to the

 15
execution of the Settlement Agreement, according to the terms of that

agreement, they very well may not have survived its execution. As for

plaintiffs' claims against SAZ and SAZ Dialog that allege these companies "behav[ed]" in a disloyal fashion toward HVB when dealing

with HVB clients after execution of the Settlement Agreement, the

Settlement Agreement contains a forum selection clause that requires

the plaintiffs to litigate those claims in St. Gallen, Switzerland under

Swiss law. (J.A. 193). In sum, we conclude that SAZ and SAZ Dialog

have, at least, proffered a meritorious defense. This conclusion is bolstered by our admonition in Moradi that any doubts as to the propriety

of granting relief to a party in the position of SAZ and SAZ Dialog

should be resolved in the movant's favor. Moradi , 673 F.2d at 728.

III.

Because the defendants made the threshold showing for obtaining

relief under Rule 60(b) and have each satisfied one of the six sections

thereunder, we hold that the district court abused its discretion in

denying the defendants' joint motion to vacate the default judgment.

Accordingly, we vacate the district court's order denying the defendants' joint Rule 60(b) motion and remand with instructions to: (1)

enter an order granting such motion; (2) enter an order awarding the

plaintiffs an amount equal to their reasonable attorney's fees in seeking the default judgment and attempting to collect on them through

collection procedures, see Rule 60(b) (allowing the granting of relief

from a judgment on terms that are just); (3) dismiss this action with

respect to Roelle for lack of personal jurisdiction; and (4) conduct further proceedings not inconsistent with this opinion, including allowing SAZ and SAZ Dialog to answer the complaint.

VACATED AND REMANDED WITH INSTRUCTIONS

 16