Media General v. Smith

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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