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Charles v. Precision Tune Inc.2/28/1992
Opinion BY JUSTICE LEROY R. HASSELL
In this appeal, we consider the application of Code § 8.01-428(C) which permits a party to file an independent action to set aside a default judgment.
In March 1990, Mary E. Charles filed a motion for judgment against Precision Tune, Inc. She alleged that she had incurred personal injuries and property damage as a result of Precision Tune's negligence and breach of warranties related to work performed on her car.
The motion for judgment was served upon Anita K. Blair, the registered agent and vice president of Precision Tune. Ms. Blair forwarded the motion for judgment to Precision Automotive, Inc., which is a franchisee of Precision Tune. Ms. Blair informed an employee of Precision Automotive that "you should look into this matter immediately and contact us in order that we can coordinate responses." Jerry M. Veltmann, Precision Automotive's corporate counsel, replied to Ms. Blair by letter stating that Precision Automotive "will be retaining a lawyer... to defend on this action and to substitute Precision Automotive for Precision Tune."
In March 1990, a lawyer trying to solicit Precision Tune's business, informed Mr. Veltmann by letter, "I note that one of the matters in question may require action to vacate a judgment, and the time within which you must act to do so under Virginia law is limited." In April 1990, the lawyer again wrote a letter to Mr. Veltmann and informed him that no action had been taken to defend Ms. Charles' motion for judgment.
Counsel was not hired to defend the action. Responsive pleadings were not filed, nor was Precision Automotive substituted as a defendant for Precision Tune.
Ms. Charles filed a motion for default judgment, and the court held a hearing on the motion and heard evidence. The court entered a judgment in favor of Ms. Charles for $1,809.35 for property damage to her car, and $10,931.00 for her personal injuries, plus costs.
In August 1990, Ms. Charles filed a garnishment summons in which she sought to garnish $13,182.68 from a bank account owned by Precision Tune. Precision Tune then filed a "Motion to Set Aside Default Judgment and to Quash Execution." Precision Tune also filed a bill in chancery "seeking to set aside the default judgment on grounds of equity and fairness under Virginia Code § 8.01-428(A) and (C)."
The trial court entered an order which consolidated the original proceeding, the garnishment proceeding, and the bill in equity. Precision Tune argued that it was not a proper party to Ms. Charles' personal injury action because its franchisee, Precision Automotive, which is a separate corporation, committed the acts which Ms. Charles alleged constituted negligence and breaches of warranties. The court held that Code § 8.01-428(C) conferred upon it the power to set aside a default judgment in an independent action "under the circumstances where equity requires it." The court set aside the default judgment and ordered an award of attorney's fees to Ms. Charles' counsel. We awarded Ms. Charles an appeal.
Ms. Charles argues that Code § 8.01-428(C) does not confer a general grant of power upon a trial court to set aside a default judgment. Precision Tune argues, however, that Code § 8.01-428(C) grants the trial court broad discretion to exercise its equity powers and permits "a court of equity to relieve a party from any judgment in an independent action."
Code § 8.01
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