Present: All the Justices
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY
v. Record No. 042411
CHRISTINE B. REMLEY
OPINION BY CHIEF JUSTICE LEROY R. HASSELL, SR.
September 16, 2005
CRAIG GRIFFIN
v. Record No. 042445
CHRISTINE B. REMLEY
FROM THE CIRCUIT COURT OF THE CITY OF PORTSMOUTH
Dean W. Sword, Jr., Judge
I.
In this appeal, we consider whether the circuit court
erred when it denied defendants' motion to set aside a default
judgment that had been entered in favor of the plaintiff.
II.
Plaintiff, Christine B. Remley, filed a motion for
judgment against Craig Griffin and State Farm Mutual
Automobile Insurance Company, which had provided
uninsured/underinsured motorist coverage to her. Remley
alleged in her motion that she was injured in an automobile
accident as a result of Griffin's negligence.
Plaintiff served a copy of the notice of motion for
judgment on Griffin personally on March 30, 2004. Plaintiff
also served a copy of the notice of motion for judgment upon
State Farm's registered agent on April 5, 2004. Neither
Griffin nor State Farm filed timely responsive pleadings to
plaintiff's motion for judgment.
On May 3, 2004, plaintiff's counsel, Morris H. Fine,
appeared in the circuit court, presented evidence, and
obtained a default judgment in the amount of $150,000 with
interest and costs against Griffin. The circuit court
erroneously stated in its order: "ADJUDGED, ORDERED, and
DECREED that judgment be and hereby is granted to the
plaintiff, Craig Griffin, against the defendant," even though
Remley was the plaintiff and Griffin was the defendant. Also
on May 3, State Farm hand-delivered a grounds of defense to
the clerk of the circuit court. That same day, counsel for
State Farm propounded interrogatories and requests for
production of documents to plaintiff by forwarding the
discovery to Fine. On June 2, 2004, counsel for State Farm
forwarded four attorney-issued subpoenas duces tecum to
various custodians of plaintiff's medical records. Counsel
for State Farm forwarded copies of this discovery to Fine.
On June 8, 2004, counsel for State Farm forwarded a
motion to compel plaintiff to respond to the interrogatories
and requests for production of documents because plaintiff had
not done so. Counsel for State Farm certified in his motion
to compel that he had "in good faith conferred or attempted to
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confer with counsel [Fine] in an effort to resolve this
dispute without court action." Also on June 8, 2004, Fine
sent the following letter to counsel for State Farm:
"Dear [Mr. Dawson]:
"On May 3, 2004, a default order was entered by
Judge Sword. Since 21 days has [sic] gone by during
which the Court could set aside and 30 days have
gone by without an appeal, demand is hereby made to
pay in accordance with the contract. I enclose a
certified copy of the Order entered.
"Very truly yours,
"[Signed]
"Morris H. Fine"
Relying upon Code § 8.01-428, State Farm filed a motion
to set aside the default judgment on June 10, 2004. The court
conducted an evidentiary hearing, and the following evidence
was adduced. Griffin testified that he was personally served
a copy of the notice of motion for judgment on March 30, 2004.
When the accident occurred that is the subject of the default
judgment, Griffin was operating his daughter's car. He knew
the name of his daughter's automobile insurance broker.
After Griffin received the notice of motion for judgment,
he placed five or six telephone calls to Fine's office.
Griffin stated:
"Five to six times I called. Someone would
just answer. Messages were left, not like with an
answering service but like a voice mail; and on one
or two occasions I spoke with somebody. I guess the
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secretary, receptionist or somebody, and they
explained to me that this was something that was
going to be dealt with due to insurance, so I in
turn said okay, what should I do. They said well,
there's nothing you can do. What you need to do is
contact the insurance people if you know them and I
said I don't know, but I knew that I knew the
information to be given to an insurance person and I
did call Mr. Halloran, which at the time after the
accident was the representation that I had."
Griffin also spoke to his own lawyer whom he identified
as Mr. Halloran. Halloran represented Griffin for traffic
offenses related to the accident. Describing his conversation
with Halloran, Griffin stated:
"Mr. Halloran . . . said well, it is not really
something that I'm involved in because after we were
not given any settlement of any kind and they had
received a letter he said well, pertaining to that
letter that I received from the insurance company or
State Farm that you're not to get any payment. I
thought well, if I'm not receiving any, then that
was really the end of it."
Griffin described another conversation that he had with
an employee of Fine's office:
"I called over to Mr. Fine's office and
explained to the lady who answered the phone that
she can contact Mr. Halloran who was representing
me. He would give her any information that she
would need. And, again, I was just told the same as
I was before, the insurance company will take care
of it as well as -- I'll be honest. State Farm's
lady, Ms. Donovan, told me the same thing. This is
not my issue of what I need to do. If it was
insurance involved then they will handle it. So as
far as to what my understanding right now is that
it's something different. That's really all I can
say in reference to it. I did try to find out what
was going on, but I didn't come because it was my
assumption that it was going to be dealt with by the
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insurance people because, like I said, I thought it
was all over with."
Griffin spoke with Ms. Donovan, State Farm's
representative, after the accident. Griffin stated:
"I explained to her that I received some papers
for a lawsuit. I didn't give no dollar amount or
anything like that. I explained to her where it
came from. I gave her this case number that I had
gotten on a letter from State Farm who had sent me
the letter when they had denied my claim for any
type of judgment or funds, and I gave her that and
she pulled the file up and when she pulled it up she
said well, this is an insurance matter really. I
don't know why you're being, you know, brought up on
judgment. She said to me also, as I stated, this
will be handled by the insurance people."
Griffin testified that he relied upon Donovan's statement that
"the insurance people will deal with this."
Upon consideration of the evidence and argument of
counsel, the circuit court found that even though State Farm
and Griffin were properly served with notice of the motion for
judgment, they did not file responsive pleadings timely. The
court stated that it had entered the default judgment on May
3, 2004, and the court ruled that it lost jurisdiction on May
24, 2004, pursuant to Rule 1:1.
Relying upon Code § 8.01-428, the circuit court corrected
the default judgment order to reflect "a scrivener's error."
The corrected order identified Remley as the plaintiff. The
court concluded that its act of entering the corrected
judgment order did not extend the court's jurisdiction to
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either grant the defendants leave to file a late grounds of
defense or their motion to set aside the default judgment on
grounds other than those contained in Code § 8.01-428. State
Farm and Griffin appeal.
III.
A.
Code § 8.01-428 states in relevant part:
"§ 8.01-428. Setting aside default judgments;
clerical mistakes; independent actions to relieve
party from judgment or proceedings; grounds and time
limitations. –
"A. Default judgments and decrees pro
confesso; summary procedure. – Upon motion of the
plaintiff or judgment debtor and after reasonable
notice to the opposite party, his attorney of record
or other agent, the court may set aside a judgment
by default or a decree pro confesso upon the
following grounds: (i) fraud on the court, (ii) a
void judgment, (iii) on proof of an accord and
satisfaction. Such motion on the ground of fraud on
the court shall be made within two years from the
date of the judgment or decree.
"B. Clerical mistakes. – Clerical mistakes in
all judgments or other parts of the record and
errors therein arising from oversight or from an
inadvertent omission may be corrected by the court
at any time on its own initiative or upon the motion
of any party and after such notice, as the court may
order. During the pendency of an appeal, such
mistakes may be corrected before the appeal is
docketed in the appellate court, and thereafter
while the appeal is pending such mistakes may be
corrected with leave of the appellate court.
"C. Failure to notify party or counsel of
final order. – If counsel, or a party not
represented by counsel, who is not in default in a
circuit court is not notified by any means of the
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entry of a final order and the circuit court is
satisfied that such lack of notice (i) did not
result from a failure to exercise due diligence on
the part of that party and (ii) denied that party an
opportunity to file an appeal therefrom, the circuit
court may, within sixty days of the entry of such
order, grant the party leave to appeal. The
computation of time for noting and perfecting an
appeal shall run from the entry of such order, and
such order shall have no other effect.
Relying upon Code § 8.01-428 and our decision in National
Airlines v. Shea, 223 Va. 578, 292 S.E.2d 308 (1982), State
Farm and Griffin contend that plaintiff's counsel committed a
fraud upon the court and, therefore, the circuit court should
have set aside the default judgment. We disagree.
In National Airlines, two passengers who lost their
luggage during a trip filed an action against National
Airlines, Inc., which was represented by counsel. National
Airlines' counsel spoke with plaintiffs' counsel by telephone,
and they agreed to a continuance of the trial date.
During a subsequent conversation, counsel for National
Airlines informed plaintiffs' counsel that National Airlines
was exempt from liability. Counsel for National Airlines
requested another extension of the trial date and plaintiffs'
counsel agreed. Subsequently, National Airlines' counsel
submitted a letter to plaintiffs' counsel and reasserted
National Airlines' defense: "I hope that this letter and the
Warsaw Convention provide you with sufficient grounds to drop
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your suit against National. If so, please let me know. If
not, I understand that you will grant me a further two-week
extension in which to respond to your Motion for Judgment."
223 Va. at 581, 292 S.E.2d at 309.
Six days later, plaintiffs' counsel obtained a default
judgment against National Airlines in the general district
court. The general district court judge asked plaintiffs'
counsel about the defendant's "position" in the litigation,
and plaintiffs' counsel did not inform the court about the
substance of National Airlines' letter. Furthermore,
plaintiffs' counsel waited until the expiration of the 10-day
period for appeal, Code § 16.1-97, and the 30-day period for a
new trial, former Code § 16.1-97, to expire. Then, plaintiffs
sought execution by levy on National Airlines' property in
Virginia.
We set aside the default judgment that had been entered
in favor of the plaintiffs because we concluded that their
counsel had committed a fraud upon the court. We stated:
"On July 26, 1979, when the district court
judge asked Mr. McNamara [plaintiffs' counsel] about
the defendant, [the judge] was entitled to a full,
fair, and truthful answer. Mr. McNamara, although
he may not have actually agreed to a continuance,
knew that [National Airlines] thought that he had.
His response was a disingenuous half-truth. He had
a duty to be aboveboard with the court and fair with
opposing counsel. Further, Mr. McNamara failed to
call the court's attention to the applicability of
8
the Warsaw Convention, which he knew to be adverse
to his clients' position."
223 Va. at 582-83, 292 S.E.2d at 310.
Additionally, we have stated that "[f]ew courts have
discussed the factors that must be proven when deciding
whether a fraud has been committed upon a court. However, a
controlling factor is 'whether the misconduct tampers with the
judicial machinery and subverts the integrity of the court
itself.' " Owens-Corning Fiberglas Corp. v. Watson, 243 Va.
128, 142, 413 S.E.2d 630, 638 (1992).
In Jones v. Willard, 224 Va. 602, 607, 299 S.E.2d 504,
508 (1983), we stated that, "[t]he judgment of a court,
procured by intrinsic fraud, i.e., by perjury, forged
documents, or other incidents of trial related to issues
material to the judgment, is voidable by direct attack at any
time before the judgment becomes final; the judgment of a
court, procured by extrinsic fraud, i.e., by conduct which
prevents a fair submission of the controversy to the court, is
void and subject to attack, direct or collateral, at any
time." Accord Rowe v. Coal Corp., 197 Va. 136, 143, 87 S.E.2d
763, 767-68 (1955); O'Neill v. Cole, 194 Va. 50, 56-57, 72
S.E.2d 382, 385-86 (1952); McClung v. Folks, 126 Va. 259, 268-
74, 101 S.E. 345, 347-49 (1919).
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In the present appeal, unlike the facts in National
Airlines, plaintiff's counsel, Fine, did not commit a fraud
upon the court. Fine's acts, which we do not approve or
condone, did not hinder, affect, or impair the ability of
State Farm or Griffin to respond timely to the notice of
motion for judgment. State Farm was served with the notice of
motion for judgment and simply failed to respond timely. And,
we note that Griffin actually spoke to State Farm's
representative and informed her that he had been served with a
notice of motion for judgment.
Even though Griffin made numerous telephone calls to
Fine's office, and a receptionist "explained to [him] that
this was something that was going to be dealt with due to
insurance," these acts do not constitute a fraud upon a court.
Whatever inferences might arise from the conversation between
Griffin and Fine's employee do not constitute misconduct that
tampered with the judiciary's machinery and subverted the
integrity of the court itself. And, we note that the circuit
court found that Fine had not perpetrated a fraud upon that
court.
B.
We also reject the defendants' contention that plaintiff
committed acts of actual or constructive fraud upon them. We
have held that "a litigant who prosecutes a cause of action
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for actual fraud must prove by clear and convincing evidence:
(1) a false representation, (2) of a material fact, (3) made
intentionally and knowingly, (4) with intent to mislead, (5)
reliance by the party misled, and (6) resulting damage to the
party misled." Prospect Development Co. v. Bershader, 258 Va.
75, 85, 515 S.E.2d 291, 297 (1999) (emphasis added) (quoting
Bryant v. Peckinpaugh, 241 Va. 172, 175, 400 S.E.2d 201, 203
(1991)); Cohn v. Knowledge Connections, Inc., 266 Va. 362,
367, 585 S.E.2d 578, 581 (2003); Davis v. Marshall Homes,
Inc., 265 Va. 159, 165, 576 S.E.2d 504, 506 (2003); Winn v.
Aleda Construction Co., 227 Va. 304, 308, 315 S.E.2d 193, 195
(1984).
Plaintiff's counsel did not commit an act of actual fraud
because Griffin did not rely upon any statement made by Fine's
receptionist. Griffin testified that Fine's receptionist told
him that what he needed to do was to "contact the insurance
people if you know them." Griffin also testified that he knew
the name of his daughter's insurance broker who was involved
in the issuance of the automobile liability policy for the
vehicle that Griffin operated when the accident occurred.
And, just as significant, after Griffin spoke to someone in
Fine's office, Griffin also spoke to an employee of State
Farm. As we have already noted, Griffin testified as follows:
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"I called over to Mr. Fine's office and
explained to the lady who answered the phone that
she can contact Mr. Halloran who was representing
me. He would give her any information that she
would need. And, again, I was just told the same as
I was before, the insurance company will take care
of it as well as – I'll be honest. State Farm's
lady, Ms. Donovan, told me the same thing."
Griffin also stated:
"I explained [to Donovan, State Farm's employee],
that I received some papers for a lawsuit. I didn't
give no dollar amount or anything like that. I
explained to her where it came from. I gave her
this case number that I had gotten on a letter from
State Farm who had sent me the letter when they had
denied my claim for any type of judgment or funds,
and I gave her that and she pulled the file up and
when she pulled it up she said well, this is an
insurance matter really. I don't know why you're
being, you know, brought up on judgment. She said
to me also, as I stated, this will be handled by the
insurance people."
And, Griffin testified that he relied upon Donovan's
statements.
In Prospect Development Co., we also discussed the
elements of a cause of action for constructive fraud. We
stated:
" 'The elements of a cause of action for
constructive fraud are a showing by clear and
convincing evidence that a false representation of a
material fact was made innocently or negligently,
and the injured party was damaged as a result of his
reliance upon the misrepresentation.' Evaluation
Research Corp. v. Alequin, 247 Va. 143, 148, 439
S.E.2d 387, 390 (1994); accord Nationwide Mut. Ins.
Co. v. Hargraves, 242 Va. 88, 92, 405 S.E.2d 848,
851 (1991); Kitchen v. Throckmorton, 223 Va. 164,
171, 286 S.E.2d 673, 676 (1982). Additionally, '[a]
finding of . . . constructive fraud requires clear
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and convincing evidence that one has represented as
true what is really false, in such a way as to
induce a reasonable person to believe it, with the
intent that the person will act upon this
representation. Alequin, 247 Va. at 148, 439 S.E.2d
at 390.' Mortarino v. Consultant Eng. Services, 251
Va. 289, 295, 467 S.E.2d 778, 782 (1996)."
258 Va. at 86, 515 S.E.2d at 297 (quoting Blair Construction,
Inc. v. Weatherford, 253 Va. 343, 346-47, 485 S.E.2d 137, 138-
39 (1997)).
State Farm and Griffin cannot establish the elements of a
cause of action for constructive fraud. The record is simply
devoid of clear and convincing evidence that would permit a
finder of fact to conclude that Griffin relied upon statements
of Fine's receptionist.
C.
The judgment that the circuit court entered on May 3,
2004 contained an error because the order stated that
"judgment be and hereby is granted to the plaintiff, Craig
Griffin, against the defendant, in the sum of . . .
$150,000.00" even though the plaintiff was Remley. The
circuit court, relying upon Code § 8.01-428, entered a
corrected judgment order dated June 16, 2004 that granted
judgment "to the plaintiff, Christine B. Remley, against the
defendant, Craig Griffin, in the sum of . . . $150,000.00."
State Farm and Griffin argue that even though Code
§ 8.01-428(B) authorizes a court to correct a clerical error
13
in a judgment order at any time on its own initiative or upon
motion of any party and after such notice as the court may
order, the error in the default judgment dated May 3, 2004
actually rendered that order a nullity. Continuing, State
Farm and Griffin assert that as "a result of the corrected
judgment order, the [circuit court] retained jurisdiction over
this [case] for at least an additional 21 days from June 16,
2004." Thus, State Farm and Griffin contend that the circuit
court had jurisdiction to consider their motions to set aside
the default judgment. We disagree.
The error contained in the default judgment dated May 3,
2004 is clearly a clerical error. We have stated that
"[s]crivener's or similar errors in the record, which are
demonstrably contradicted by all other documents, are clerical
mistakes." Wellmore Coal Corp. v. Harman Mining Corp., 264
Va. 279, 283, 568 S.E.2d 671, 673 (2002) (quoting Zhou v.
Zhou, 38 Va. App. 126, 133, 562 S.E.2d 336, 339 (2002)).
Clerical errors cause the court's record to fail to "speak the
truth," Id.; School Board of the City of Lynchburg v. Caudill
Rowlett Scott, Inc., 237 Va. 550, 555, 379 S.E.2d 319, 322
(1989).
A review of the default judgment order in this case
compels the reader to conclude that plaintiff in the case is
Christine Remley, and the defendant is Craig Griffin. The
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order also informs the reader that the defendant failed to
respond to the motion for judgment in the time required by
statute and that the judgment is granted to the plaintiff
against the defendant. A clerical error exists in the order
because the defendant's name mistakenly modified the word
"plaintiff."
D.
We disagree with State Farm's contention that the circuit
court reacquired jurisdiction over all issues relating to
plaintiff's motion for judgment when the circuit court entered
the order of correction dated June 16, 2004. We hold that
when a circuit court exercises jurisdiction pursuant to Code
§ 8.01-428, such jurisdiction is limited to the specific
subjects set forth in paragraphs (A), (B), (C), or (D) of Code
§ 8.01-428. Once a court obtains jurisdiction pursuant to
Code § 8.01-428, the court is not authorized to consider any
issues that are not specifically set forth in this statute.
There are specific policy reasons that favor certainty of
results in judicial proceedings, and we attach a high degree
of finality to judgments, whether obtained by default or
otherwise. See McEwen Lumber v. Lipscomb Bros. Lumber, 234
Va. 243, 247, 360 S.E.2d 845, 848 (1987). And, "we have
consistently construed Code § 8.01-428 and its predecessors,
which create exceptions to the finality of judgments,
15
narrowly." Id.; see Basile v. American Filter Service, Inc.,
231 Va. 34, 37, 340 S.E.2d 800, 802 (1986). Simply stated,
Code § 8.01-428, which provides certain narrow grants of power
to courts, does not confer upon a court unlimited authority to
reconsider final judgments.
Contrary to State Farm's argument, Rule 1:9* of this
Court, which allows a court to extend the time in which
certain pleadings may be filed, does not authorize a circuit
court to reacquire jurisdiction once that jurisdiction has
been lost.
IV.
Finding no merit in the defendants' contentions, we will
affirm the judgment of the circuit court.
Affirmed.
*
Rule 1:9 states:
"Discretion of Court.
"All steps and procedures in the clerk's office
touching the filing of pleadings and the maturing of
suits or actions may be reviewed and corrected by
the court.
"The time allowed for filing pleadings may be
extended by the court in its discretion and such
extension may be granted although the time fixed
already has expired; but the time fixed for the
filing of a motion challenging the venue shall in no
case be extended except to the extent permitted by
§ 8.01-264."
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