The opinion
IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA
FILED
June 13, 2024
HP, INC.,
ASHLEY N. DEEM, DEPUTY CLERK
Defendant Below, Petitioner INTERMEDIATE COURT OF APPEALS
OF WEST VIRGINIA
v.) No. 23-ICA-203 (Cir. Ct. Putnam Cnty. No. CC-40-2021-C-142)
JUDITH THOMAS,
Plaintiff Below, Respondent
MEMORANDUM DECISION
Petitioner HP, Inc. (“HP”) appeals the Circuit Court of Putnam County’s April 26,
2023, “Order Denying HP Motion to Set Aside Default Judgment.” Judith Thomas filed a
response. HP timely filed a reply.1 The issue on appeal is whether the circuit court erred
when it granted Ms. Thomas’ motion for default judgment and awarded her $43,638.25 in
damages.
This Court has jurisdiction over this appeal pursuant to West Virginia Code § 51-
11-4 (2022). After considering the parties’ oral and written arguments, the record on
appeal, and the applicable law, this Court finds that there is error in the circuit court’s order,
but no substantial question of law. Therefore, this case satisfies the “limited circumstances”
requirement of Rule 21 of the Rules of Appellate Procedure. For the reasons set forth
below, the circuit court’s order in this case is affirmed, in part, reversed, in part, vacated,
in part, and remanded.
Ms. Thomas purchased an HP laptop on July 15, 2019. A little over a year later,
upon Ms. Thomas’ request, HP replaced the laptop when it began malfunctioning. Soon
thereafter, the replacement laptop also became inoperable. On May 10, 2021, Ms. Thomas
made a warranty claim on the laptop and requested a purchase price refund. 2 She alleges
that HP denied her request for a refund and instead offered to diagnose and/or repair the
replacement laptop or provide Ms. Thomas with an HP gift card of equal or lesser value.
On September 2, 2021, Ms. Thomas filed a complaint against HP in circuit court alleging
breach of warranty and misrepresentation regarding her purchase of an HP laptop and
1
HP is represented by Patrick Timony, Esq., Gabriele Wohl, Esq., and J. Tyler
Barton, Esq. Judith Thomas is self-represented.
2
Ms. Thomas purchased a 3-year extended warranty from HP following her
purchase of the first laptop in 2019. The coverage was available from June 26, 2020, to
June 26, 2023.
1
extended warranty. Ms. Thomas sought “judgment against [HP] in the amount of $10,000,
plus costs, attorney fees, and such other relief as the Court or jury deems proper.”
Importantly, although not actively practicing, Ms. Thomas is a licensed attorney in the state
of West Virginia but was self-represented in the underlying matter.
HP was served through the West Virginia Secretary of State but did not respond to
the summons. HP maintains it did not timely respond because the complaint, after receipt
at HP, was mistakenly misrouted to the wrong division, and the HP employee who handled
the forwarding of such matters was on medical leave for cancer treatments, resulting in the
complaint and summons not being delivered to HP’s legal department.
On February 28, 2022, Ms. Thomas filed a motion for default judgment based upon
HP’s failure to respond. In her prayer for relief, Ms. Thomas stated:
WHEREFORE, for the foregoing reasons, those later assigned, and for those
this Court may deem appropriate, Plaintiff Judith P. Thomas respectfully
requests this Court enter default judgment against Defendant HP Inc., and
award her $15,000 for compensatory, consequential, and incidental damages,
including loss of use, annoyance and inconvenience, attorney fees and costs,
and $25,000 in punitive damages for HP’s material misrepresentations,
willful and reckless conduct.
On July 29, 2022, the circuit court held a hearing on the issue of damages. 3 The
transcript reflects that Ms. Thomas provided brief testimony as to damages with her
compensatory and punitive damages totaling $50,156.95. As part of her compensatory
damages, she sought attorney fees of $8,020.00, which she based on the 24.9 hours she had
spent on the case at $300.00 per hour—the rate she last charged when in private practice.
On October 21, 2022, the circuit court entered its original default judgment order,
awarding Ms. Thomas “$14,507.92 in compensatory damages, $20,000 in punitive
damages, and costs of [$]9,130.33, together with 4% post-judgment interest.” This
included an $8,800.00 award of attorney fees. On November 27, 2022, the circuit court
entered the amended default judgment order, adding additional analysis to its decision and
awarding Ms. Thomas the same damages from its prior order.4
3
HP did not appear at the damages hearing, and the parties dispute whether HP was
given notice of the hearing.
4
In this order, the circuit court itemized the compensatory damages award and
calculated the total as $15,507.92. However, in the concluding paragraphs of the order, the
circuit court listed the compensatory damages award as $14,507.92. As this clerical
discrepancy has no bearing on this Court’s decision, the Court will not address it further.
2
On January 19, 2023, HP, by counsel, made its first appearance below and filed a
Rule 60(b) motion to vacate and/or set aside the amended default judgment order. The
circuit court denied the motion on April 26, 2023. In the order, the circuit court found that
HP had not established good cause for setting aside the judgment under Syllabus Points 3-
5 of Hardwood Group v. LaRocco, 219 W. Va. 56, 631 S.E.2d 614 (2006). The court also
found that HP had not appeared in this case for one and a half years, and that the illness of
an employee did not make its nonappearance excusable; the court and Ms. Thomas had
expended considerable time and effort in the case during that time; and that HP failed to
establish issues of material fact or meritorious defenses. The circuit court also found it had
subject matter jurisdiction because the damages limitations of its agreements were not
permitted by the Uniform Commercial Code (“UCC”) and that Ms. Thomas was entitled
to seek compensatory, consequential, incidental, and punitive damages. The court also
found that the UCC entitled Ms. Thomas to attorney fees. This appeal followed.5
This case requires that we utilize several different standards of review. First, “an
appeal of the denial of a Rule 60(b) motion brings to consideration for review only the
order of denial itself and not the substance supporting the underlying judgment nor the final
judgment order.” Syl. Pt. 2, Builders’ Serv. & Supply Co. v. Dempsey, 224 W. Va. 80, 680
S.E.2d 95, 96 (2009) (quoting Syl. Pt. 3, Toler v. Shelton, 157 W. Va. 778, 204 S.E.2d 85
(1974)).
Second, we review default judgments under an abuse of discretion standard. See
Groves v. Roy G. Hildreth & Son, Inc., 222 W. Va. 309, 314, 664 S.E.2d 531, 536 (2008)
(per curiam) (citations omitted). Our Supreme Court has held that “[a] motion to vacate a
default judgment is addressed to the sound discretion of the court and the court’s ruling on
such motion will not be disturbed on appeal unless there is a showing of an abuse of such
discretion.” Id. (citation omitted). Moreover, the burden of proof is on the appellant to show
that there was error in the proceeding below, with all presumptions being in favor of the
trial court. See id. (citation omitted).
Third, we review an award of attorney fees under an abuse of discretion standard.
See Sanson v. Brandywine Homes, Inc., 215 W. Va. 307, 310, 599 S.E.2d 730, 733 (2004)
(per curiam). Finally, we apply a de novo standard of review to the punitive damages award.
Quicken Loans, Inc. v. Brown, 236 W. Va. 12, 34, 777 S.E.2d 581, 603 (2014).
HP asserts four assignments of error. First, HP argues that the default judgment is
void pursuant to Rule 60(b)(4) of the West Virginia Rules of Civil Procedure because the
amount of Ms. Thomas’ damages falls below the circuit court’s jurisdictional threshold
within West Virginia Code § 51-2-2(b) (2017). Second, HP argues that the factors set forth
in Hardwood Group v. LaRocco, 219 W. Va. 56, 631 S.E.2d 614 (2006) support setting
aside the default judgment and that HP’s actions fall under “excusable neglect” pursuant
5
Rule 19 Oral Argument was held on May 21, 2024.
3
to Rule 60(b) of the West Virginia Rules of Civil Procedure. Third, HP argues that the
default judgment is void pursuant to Rule 60(b)(4) of the West Virginia Rules of Civil
Procedure because the circuit court lacked subject matter jurisdiction to consider Ms.
Thomas’ claims. Fourth, HP argues that the circuit court abused its discretion in denying
HP’s motion to set aside judgment because it was error to award Ms. Thomas, as a self-
represented litigant, $8,800.00 in attorney fees. Finally, HP argues that the circuit court
abused its discretion in awarding Ms. Thomas $20,000.00 in punitive damages without the
requisite analysis of the factors set forth in Syllabus Points 3 and 4 of Garnes v. Fleming
Landfill, Inc., 186 W. Va. 656, 413 S.E.2d 897 (1991) and Syllabus Point 7 of Perrine v.
E.I. du Pont Nemours and Co., 225 W. Va. 482, 694 S.E.2d 815 (2010) (clarifying the
Garnes factors).6
First, HP argues that the default judgment is void pursuant to Rule 60(b)(4) of the
West Virginia Rules of Civil Procedure because the circuit court lacked subject matter
jurisdiction to consider Ms. Thomas’ claims. HP argues that, even assuming the truth of
the allegations set forth in her complaint, the sum of her claims falls below the jurisdictional
threshold in West Virginia Code § 51-2-2(b) (“[T]he circuit court shall have original and
general jurisdiction of all matters at law where the amount in controversy, excluding
interest, exceeds $7,500”). We disagree. A complaint should be construed in the light most
favorable to the plaintiff. See Pierson v. Miles, No. 22-0501, 2023 WL 6012535, at *2 (W.
Va. Sept. 15, 2023) (memorandum decision). The circuit court retains jurisdiction if the
complaint contains sufficient allegations that could support the amount in controversy. See
id. Here, Ms. Thomas alleged $10,000.00 in damages, which arose from her alleged loss
of use, loss of data, business interruption, annoyance, inconvenience, as well as the cost of
the laptop and ink cartridges. In construing the allegations in the complaint in the light
most favorable to Ms. Thomas, we find that the jurisdictional amount in controversy
requirement was satisfied here.
Second, HP argues that the circuit court erred when it failed to set aside the default
judgment because the Hardwood Group v. LaRocco, 219 W. Va. 56, 631 S.E.2d 614 (2006)
factors weigh in its favor. We agree that the factors weigh in HP’s favor but disagree to the
extent to which 60(b) has been satisfied. Our Supreme Court has spoken on how a trial
court should consider Rule 55(c) motions to set aside a default judgment:
In determining whether a default judgment should be entered in the face of a
Rule 6(b) motion or vacated upon a Rule 60(b) motion, the trial court should
consider: (1) The degree of prejudice suffered by the plaintiff from the delay
in answering; (2) the presence of material issues of fact and meritorious
defenses; (3) the significance of the interests at stake; and (4) the degree of
intransigence on the part of the defaulting party.
6
We have reordered HP’s assignments of error to accord with our analysis.
4
Syl. Pt. 3, Parsons v. Consolidated Gas Supply Corp., 163 W. Va. 464, 256 S.E.2d 758
(1979). Then, the trial court must consider whether one of the grounds set forth in Rule
60(b) of the West Virginia Rules of Civil Procedure7 has been satisfied. See Syl. Pt. 5,
Hardwood Group v. LaRocco, 219 W. Va. 56, 631 S.E.2d 614 (2006).
First, we consider the degree of prejudice suffered by Ms. Thomas caused by HP’s
delay in answering her complaint. HP argues that Ms. Thomas can still pursue her claims
against HP and that she has not lost any evidence caused from the delay. We agree. Any
financial losses claimed by Ms. Thomas could be recovered pursuing her claims against
HP.
Second, we consider the presence of material issues of fact and meritorious
defenses. Ms. Thomas seeks relief under two HP agreements: (1) HP Service Agreement
and (2) HP Instant Ink Terms of Service, both of which contain limitation of damages
provisions.8 HP argues that the agreements and West Virginia Code § 46-2-7199 provide
HP with meritorious defenses. Further, albeit separately, HP asserts that the circuit court’s
7
Rule 60(b) of the West Virginia Rules of Civil Procedure states, in part:
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, excusable neglect,
or unavoidable cause; (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 misconduct 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.
8
The HP Service Agreement limits damages to the recovery of either the cost of
repair or replacement cost of the laptop and expressly excludes all other consequential and
special damages. The HP Instant Ink Terms of Service limit damages to the recovery of the
subscription charge and excludes the recovery of all consequential and special damages.
Per Ms. Thomas’ Memorandum in Support of Motion for Default Judgment, Ms. Thomas
stated that the value of her laptop was $1,527.98 and the HP Instant Ink services for eight
months totaled $213.92.
9
This section of the Uniform Commercial Code details the limitations on remedies
for contracts.
5
award of attorney fees and punitive damages was contrary to law, qualifying as a
meritorious defense. We agree. When faced with a question of whether a meritorious
defense exists, we are instructed to determine whether “there is ... reason to believe that a
result different from the one obtained would have followed from a full trial.” Cales v. Wills,
212 W. Va. 232, 242, 569 S.E.2d 479, 489 (2002) (citation omitted). Although we make
no finding as to whether HP could have ultimately prevailed on these defenses, we find
that the presence of the defenses is enough to satisfy this factor.
Third, we consider the significance of the interests at stake. HP argues that
significant stakes exist in this case due to the high amount of punitive damages and attorney
fees awarded in this case. We agree. The circuit court awarded $43,638.25 to Ms. Thomas,
which included $8,800.00 in attorney fees and $20,000.00 in punitive damages. When
considering that the laptop at the center of this case was valued at approximately $1,500.00,
we find the stakes in this case to be relatively significant.
Fourth, we consider the degree of intransigence on the part of the defaulting party.
HP asserts that it failed to respond to Ms. Thomas’ complaint due to an internal routing
mistake, which caused the complaint to be delivered to HP’s customer relations division
instead of its small claims division. HP claims it only became aware of the allegations when
the amended default judgment order was served fifteen months later. As discussed below,
HP’s failure to respond was a result of circumstances well within its control. Accordingly,
we find HP moderately, but not severely, intransigent.
In light of our analysis of the Parsons factors, we find HP to have successfully
demonstrated good cause.
Finding Rule 55(c) good cause satisfied, we next consider whether HP satisfied one
of the grounds set forth under Rule 60(b) to set aside the default judgment. HP argues that
“excusable neglect” is applicable in this case because Ms. Thomas’ complaint was
mistakenly misrouted to the wrong department, and the employee responsible for small
claims was on a leave of absence. See W. Va. R. Civ. P. 60(b)(1). We disagree. Our
Supreme Court has held that excusable neglect requires “a demonstration of good faith on
the part of the party seeking an enlargement and some reasonable basis for noncompliance
within the time specified in the rules.” Delapp v. Delapp, 213 W. Va. 757, 762, 584 S.E.2d
899, 904 (2003) (per curiam) (citations omitted). HP is a large business equipped with the
financial resources to have sufficient staff and policies and procedures in place to handle
important documents. HP has failed to demonstrate that it had a sufficient reason for not
responding to Ms. Thomas’ complaint in a timely manner. We find that excusable neglect
is not applicable here. Accordingly, the circuit court did not err when it refused set aside
the default judgment on this basis.
We now turn to HP’s arguments regarding attorney fees and punitive damages. As
set forth more fully below, we conclude that, solely on the issues of attorney fees and
6
punitive damages, we set aside part of the damage award contained in the default judgment
order entered by the court pursuant to Rule 60(b)(6). HP argues that the circuit court abused
its discretion in denying HP’s motion to set aside judgment because it was error to award
Ms. Thomas, a self-represented litigant, $8,800.00 in attorney fees. We agree. West
Virginia law clearly precludes the recovery of attorney fees for a self-represented litigant.
See Smith v. Bradley, 223 W. Va. 286, 292, 673 S.E.2d 500, 506 (holding that a pro se
litigant is not entitled to attorney fees because pro se litigants have not paid attorney fees
and, therefore, cannot collect them). Accordingly, we find that the circuit court abused its
discretion by not setting aside the default judgment regarding the award for attorney fees.
HP also argues that the circuit court abused its discretion in awarding Ms. Thomas
$20,000.00 in punitive damages, which she did not expressly seek in her complaint (which
she never sought to amend), without the requisite analysis of the factors set forth in
Syllabus Points 3 and 4 of Garnes v. Fleming Landfill, Inc., 186 W. Va. 656, 413 S.E.2d
897 (1991) and Syllabus Point 7 of Perrine v. E.I. du Pont Nemours & Co., 225 W. Va.
482, 694 S.E.2d 815 (2010) (clarifying the Garnes factors). Again, we agree. Pursuant to
Perrine:
When this Court, or a trial court, reviews an award of punitive damages, the
court must first evaluate whether the conduct of the defendant toward the
plaintiff entitled the plaintiff to a punitive damage award under Mayer v.
Frobe, 40 W.Va. 246, 22 S.E. 58 (1895), and its progeny. If a punitive
damage award was justified, the court must then examine the amount of the
award pursuant to the aggravating and mitigating criteria set out in Garnes
v. Fleming Landfill, Inc., 186 W.Va. 656, 413 S.E.2d 897 (1991), and the
compensatory/punitive damage ratio established in TXO Production Corp. v.
Alliance Resources Corp., 187 W.Va. 457, 419 S.E.2d 870 (1992).
Perrine, at Syl. Pt. 6. Under Mayer, a petitioner may be entitled to punitive damages:
In actions of tort, where gross fraud, malice, oppression, or wanton, willful,
or reckless conduct or criminal indifference to civil obligations affecting the
rights of others appear, or where legislative enactment authorizes it, the jury
may assess exemplary, punitive, or vindictive damages; these terms being
synonymous.
Syl. Pt. 4, Mayer v. Frobe, 40 W. Va. 246, 22 S.E. 58 (1895). Next, the circuit court is
required to assess whether the punitive damages are justified by aggravating evidence
including, but not limited to:
(1) the reprehensibility of the defendant’s conduct; (2) whether the defendant
profited from the wrongful conduct; (3) the financial position of the
defendant; (4) the appropriateness of punitive damages to encourage fair and
7
reasonable settlements when a clear wrong has been committed; and (5) the
cost of litigation to the plaintiff. The court should then consider whether a
reduction in the amount of the punitive damages should be permitted due to
mitigating evidence including, but not limited to: (1) whether the punitive
damages bear a reasonable relationship to the harm that is likely to occur
and/or has occurred as a result of the defendant’s conduct; (2) whether
punitive damages bear a reasonable relationship to compensatory damages;
(3) the cost of litigation to the defendant; (4) any criminal sanctions imposed
on the defendant for his conduct; (5) any other civil actions against the same
defendant based upon the same conduct; (6) relevant information that was
not available to the jury because it was unduly prejudicial to the defendant;
and (7) additional relevant evidence.
Perrine, at Syl. Pt. 7, in part.
Here, the circuit court failed to conduct the required analysis regarding its punitive
damages award; accordingly, the circuit court abused its discretion when it refused to set
aside its punitive damages award. See Quicken Loans, Inc. v. Brown, 236 W. Va. 12, 16,
777 S.E.2d 581, 585 (2014). As to punitive damages, we vacate the circuit court’s award
of punitive damages and remand this matter for further proceedings, as necessary.
In sum, we affirm and do not disturb the circuit court’s default judgment or award
of $15,507.92 in compensatory damages, $330.33 in costs, and 4% post-judgment interest.
However, pursuant to Rule 60(b)(6), we reverse and set aside the circuit court’s award of
$8,800 in attorney fees, and we vacate the punitive damages award of $20,000 and remand
for further proceedings as necessary to consider punitive damages.
Accordingly, we affirm, in part, reverse, in part, and vacate, in part, the Circuit Court
of Putnam County’s April 26, 2023, “Order Denying HP Motion to Set Aside Default
Judgment” and remand for further proceedings consistent with this decision.
Affirmed, in part, Reversed, in part,
Vacated, in part, and Remanded.
8
ISSUED: June 13, 2024
CONCURRED IN BY:
Chief Judge Thomas E. Scarr
Judge Charles O. Lorensen
Judge Daniel W. Greear
9