FI L ED U.S. COURT OF A P P E A LS E LE V E N T H C IR C U IT APRI L17 , 2006 THOMAS K. KAH

N CL ERK [DO NOT PUBLISH] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ ____ _ N o. 04- 1614 4

____ ____ ____ ____ ____ ____ ____ _ D. C. Docket N o. 04-01026 -CV -W SD -1 TERMNET MERCHANT SERVICES, INC ., Pl ai nti ff -Appe llant, ve rs us YVONNE MARS ON, De fendant-Appellee.

____ ____ ____ ____ ____ ____ ____ ____ ____ ____ _ Appeal f rom the United State s District Court for the N orthern District of Ge orgia

____ ____ ____ ____ ____ ____ ____ ____ ____ ____ _ (A pr il 17, 200 6) Be fo re E D MO N D SO N , Ch ie f Judg e, BL A CK a nd F A Y , Ci rc uit

Jud ge s. PE R CU RIA M: This appeal involves th e full faith and cr edit clause of the feder al Co nst itu tio n and the r equir em en ts o f due pr oc es s a s ali m it on the appl ic at ionof fu ll fai th an d c red it .2

T he c as e ar ose f

ro m adis put e ab out

w he the r T er

m ne t M er ch an t S er

vic es , In c. w as obl igate d to pr oc es s A m er ic anE xpr es s c harg es f or abus ine ss o pe rate d by Y vonn e Mars on. I n 20 01, Mars on s ue d T er m ne t i n W es t V ir gin iastate c ourt f or da m ag es the n un ce rt ai n ina m ount . Mars on l at er appl ie d to that c ourt f

or de fa ult j udgm ent against Ter

m net, and the court entered a defa ult judgm ent for dam ages of $8,146.00, to cover the disputed credit charges and fee s Marson paid an accountant to audit her re cords, plus costs and in terest against Te rm net. T erm

net so ug ht un su cces sf

ul ly to h av e West Vi rg in ia co ur ts set asi de th e d efau lt jud gm en t. T er m ne t the n in iti at ed

the pr es en t a ct ionse ek ing ade cl ar at or y j udgm en t i n a G eo rg iaf ed er al c ourt tha t the W es t V ir gin iaj udgm en t w as not e nti tle d to f

ull f ai th and credit because the j udgm ent violated Term net’ s due process rights and , that the re fo re , T er

m ne t’ s su it in G eo rg iaw as not barr ed by r es j udi cata . T he c om

pla int al so all eg edbre ach of c on tra ctan d fr au d. Marson m oved for summ ary j udgm ent, and Term

net m oved for partial summ ary j udgm ent on the declaratory j udgm ent claim . The district court granted Marson’ s m otion and denied Ter m net’ s m otion . Te rm

net now appeals the district co urt’ s gr an t of

sum m ar y j udgm en t t o M ar son an d de nia l of T er m ne t’ s m oti on f

or part ia l sum

m ar y j udgm en t. W e co nc lud e that the state j udgm en t di d no t vi olate Term ne t’s due pro ces s ri gh ts an d a ffi rm th e jud gm en t o f th e d is tri ctco ur t.Notice is not require d befor e a trial court finds def ault on liability . Notice is only require d befor e 1 the cour t determines da

mag es and e nters def

ault judgme nt. Fa

rm Fa mily Mut. I ns. Co. v. Thorn Lumber Co., 501 S.E.2d 786, 790, 792 (W. Va. 1998). Although the West Virginia Supre me Court has said that “de fault judg ments entere d without 2 no tic e are vo ida

ble , b ut a re no t vo id, ” Ha

rt we ll v. Ma

rq ue z, 49 8 S. E. 2d

1, 11 (W. Va . 1 99 7) , We st Virg inia cannot insulate its judg ments from the re quirements of the due proce ss c lause. Kre mer v. Chemical Constr. Corp., 102 S.Ct . 1883, 1897-98 (1982) (“AState may not gr ant pre clusive ef

fec t in i ts o wn c ourt s to a

c on stitu ti on all y in fir

m ju dg me nt, and

. . . f e de ra l c ourt s are no t r e qu ir e d to acc ord full faith and credit to such a judg ment.”) About the pertinent de fault judg ment underlying this case, we are awa

re that the West Virginia Supre me Court has written, in the c ontextof an a ppeal about a state trial court’ s jurisdiction to i ssue contempt sanc tio n s ag ainst Termne t, that “the underlying judg ment in this case is valid and e nforc eable . When this C ourt ref u sed to hea

r 3 W e acc ept that, in a j urisdictio n which, by rule or statute, expressly requires not ic e to a

party be fo re e ntr

y of aj udgm en t f

or dam ag es ( if

the party ha s a lr ea dy

“ appeared” in the litigation), an entry of such a j udgm ent against such a party (at least when the party

is not represented by

legal counsel) without not ice is a denial of due pr oc es s w ith in the m eanin g of the f ed er al Co nst itu tio n. W es t V ir gin ia procedural rules entitle a party that has “ appeared” in a case to three day s wr itten notice before a default j udgm ent hearing. W . V a. R. Civ. P . 55(b)( 2). Te rm net 1 argues that it appeared in the case when its Chairm an of the Board tele phon ed Marson’ s attorney

after Te rm net rece ived the summ ons. Marson has adm itted that thi s c onve rs at ion , in fa ct , oc curr ed a nd tha t T er

m ne t’ s in te nti on t o op pose the law sui t w as dis cu sse d init . I f T er m ne t “ ap pe ar ed ” in the c as e an d di d no t r ec ei ve not ic e be fo re de fa

ult j udgm en t w as e nte re d, the n T er m ne t’ s pr oc ed

ur al due pr oc es s r igh ts w er e vio la te d. R oxf or d F oods , I nc . v. F or d, 12 F . 3d 8 75, 881 -8 2 2Petitioner’s appe al of that judg ment, it be came the law of the ca se.” West Virg inia ex rel. Termne t Merc hant Servs., Inc. v. Jordan, 619 S.E.2d 209, 215 (W. Va. 2005). In Bonne r v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en ba nc), this Court adopted 3 as bindingprec edent a ll Fifth Circuit decisions rende red pr ior to October 1, 1981. 4 (9 th C ir . 199 3) ( de te rm ini ng f ai lur e to p ro vid e not ic e to d ef en dant b ef

or e de fa ult j udgm en t he ar ing vio la te d du e pr oc es s, whe n de fe ndant h ad appe ar ed in the c as e an d thus w as e nti tle d to not ic e by F ed . R. Ci v. P . 55( b) , w hic h is ide nti ca l i n re le vant p ar

t t o th e W es t V ir gin iar

ule ); se e Ba ss v . H oa gland, 172 F . 2d 2 05, 210 (5th Cir. 1949 ) (determ ining failure to provide notice to defendant who had filed 3 an sw er , a nd who w as thu s e nti tle d to not ic e by F ed . R. Ci v. P . 55( b) , vio la te d du e pr oc es s) . T he que sti on i s w he the r, a t the ti m e de fa ult j udgm en t w as e nte re d, W es t V ir gin ialawc onsi de re d alay pe rs on’ s or al c om

m uni catio n an a

ppe ar an ce f

or Ru le 55( b) . A“ y es ” an sw er

is not obv iou s f

ro m the Ru le it se lf

. T er m ne t arg ue s th at

a 1998 W es t V ir gin iaS upr em e Co urt c as e, F ar m F am ily Mu tua l I nsur an ce Co . v. T hor n L um be r Co . , he ld tha t or al dis cu ssi ons co nst itu te appe ar an ce s f or Ru le 55(b). 501 S. E. 2d 78 6, 792 n.9 (W . V a. 1998 ). Afootnote in th e opinio n said that an ap pe aran ce fo r Ru le 55 (b ) “ m ay co ns is t o nl y

of l et te rs or c on ve rs at io ns .” No oth er W es t V ir gin iaS upr em e Co urt c as e pr ior to the pe rt ine nt d ef

au lt j udgm en t sugg ested that oral com

m unication wa s an appearance . Marson dispu tes that oralAb out si x mont hs a ft e r t he de fa ult jud g me nt pe rt ine nt t o th is c a se wa s e nte re d, the Wes t V ir g ini a 4 Supreme Court “disappr ove[d] of the langu age i n Interc ity Realty sug g estingthat oral communication does not satisfy the appea ranc e require ment of Rule 55(b)( 2).” Cales v. Wil ls, 569 S.E .2 d 4 79 , 4 86 n. 7, 48 7 ( W. V a . 20 02 ) (s aying “ an ‘a pp e ara nc e ’ by an o the rw ise de fa

ult ingpa rt y may consist of any

communication to an opposingparty that demonstrates e ither an inter est in the pendinglitigation, or a ctual notice of the litigation. The communication may be made in written or oral for m.”) The court de cided that the defa ulting party “appe are d” in C ales whe n its repre sentative sent a letter

to the plaintiff. I d. at 487. 5 dis cu ssi ons co nst itu te d a

ppe ar an ce s, a rg uin g th at

a n e ar lie r W es t V ir gin ia Su pr em e Co urt c as e, in w hic h th e co urt ha d de ci de d th at or al c om m uni catio ns be tw ee n law y er s di d no t c onst itu te a n a ppe ar an ce , c ontro lle d w he n th e de fa ult j udgm en t un de rl y ing thi s c as e w as e nte re d. S ee ge ne ra lly I nte rc ity Re al ty Co . v. Gibson, 175 S.E .2d 452 (W . V a. 1970 ). 4 The outcom e-deter

m inative issu e is whether Far m Fam ily held that oral co m m uni catio n c oul d be a n a

ppe ar an ce or

if the quo te d langua ge a lon g th at li ne w as dic ta . T he hol din g, that i s, the bin din g le ga l pr inc ipl e of ac as e, de pe nds on the specific m atter then being decided by the court rather than on every j udicial pr onounc em en t i n th e opi nio n. T he tr ue hol din g is inh er en tly

li m ite d to the f

ac ts tr eate d a s m at er ia l by

the pe rt ine nt c ourt and t o th e de ci sio n th e co urt r ea ch ed on th os e fac ts . Mos t of the F ar m F am ily opi nio n e xa m ine d th e ke y que sti on b ef

or e the co urt: w he the r the dam ag es sou ght in a co m pla int c onst itu te d asum

c er ta in f or the purpos e of apply ing W . V a. R. Civ. P . 55(b). T he Far m Fam ily court decided6

the dam ag es sou ght

w er e not asum c er ta in and tha t the tr ia l c ourt sh oul d have held an evidentiary

hearing to determ ine the proper am ount of dam ages before g r a n t i n g d e f

au l tj u d g me n tu n d e r

R u l e 5 5 ( b ) ( 2 ) . I ti s n o tma t e r i a l t o t h i s o u t c o me w he the r the de fa

ult ing party

ha d “ ap pe ar ed ” in F ar

m F am ily . S ee F ar le y

v. E co nom y G ar ag e, 294 S . E . 2d 2 79, 279 -8 0 ( W . V a. 198 2) ( de te rm ini ng R ule 55(b)(2) required the court to hold a hearing to ascertain plaintiffs’ dam ages when the dam ag es sou ght

w er e not asum c er ta in and n oti ng tha t de fe ndants ha d no t appeared in the case) . Ther efore, the Far m Fam ily opini on’s language abou t what would constit ute an appearance wa s dicta. T er m ne t ha d no r igh t t o e xpe ct not ic e unde r Ru le 55( b) (2 ) w he n no previous case had held that oral comm unication constitu ted an appearance under that R ule . B ec au se T er

m ne t ha d no r igh t t o e xpe ct not ic e, it s pr oc ed

ur al due pr oc es s r igh ts w er e not

vio la te d w he n T er

m ne t w as not

not if ie d a bout the de fa ult jud gm en t h eari ng . Fi na lly , T er

m ne t arg ue s th at

the state c ourt vi olate d it s su bst an tiv e due process rights byincorrectly apply ing W est Vir ginia law in ref using to (1) set as i d e t h e d ef

au l tju d g m en tan d(2 ) e n fo rc e t h e f o ru m s el ec t i o n cl au s e i n Te rmne t ’s contract w ith Marson. W e have re viewed the r ecord and agree with the district co ur t t ha t Termne t’s cl ai m s ar e m eri tl es s. AFFIRMED.