Court of Appeals: Div. III – “Better Late Than Never” Does Not Apply to Default Order
Brooks worked for ICT Group and slipped and fell on a patch oil in their parking lot. The parking lot was leased from University City, Inc. Brooks sued both ICT and UCI for negligence for failing to properly maintain the parking lot.
On May 3, 2006, Ms. Brooks served ICT with a summons and complaint. ICT did not respond. On July 26, 2006, Ms. Brooks moved for an order of default. On August 10, 2006, the court entered an order of default against ICT. And Ms. Brooks mailed a copy of the order to ICT. On April 17, 2007, Ms. Brooks settled with and dismissed her claims against University City. She then moved for a default judgment against ICT. On November 9, 2007, the trial court entered default judgment against ICT for $313,000 and costs. Around November 17, 2008, Ms. Brooks mailed a copy of the judgment to ICT. Imagine the sinking feeling in someone’s stomach when they received a $313,000 judgment in the mail. Whoops!
On December 12, 2008, ICT appeared and moved to vacate the default order and judgment. It argued that the default order should be vacated because (1) it did not owe a duty to Ms. Brooks; and (2) it did not appear earlier only because its registered agent mistakenly forwarded the summons and default order to the wrong ICT employee. The trial court refused to vacate the default order because it determined that ICT's untimely appearance was inexcusable and prejudicial to Ms. Brooks.
The court also denied ICT's motion to vacate the default judgment. It reasoned that ICT was not entitled to notice of the default judgment because it was in default. And it concluded that ICT's failure to timely act on the summons and complaint was not an extraordinary circumstance justifying relief from judgment. Now you want to argue?! Where were you a year ago?
On appeal, ICT argues that pursuant to CR 55(f)(1), Brooks was required to give them notice of entry of the default judgment because more than one year had passed since service of the summons.
CR 55(f)(1) does provide:
When more than 1 year has elapsed after service of summons with no appearance being made, the court shall not . . . enter a judgment until a notice of the time and place of the application for . . . judgment is served on the party in default, not less than 10 days prior to the entry.
Under the plain language of the rule, the default judgment must be vacated. However, ICT also argued that the default order should also be set aside as there was excusable neglect: their registered agent just sat on the summons and complaint for a year and didn’t forward it to the legal department. Yeah, not feeling the “excusable” part here.
Division III agreed with the trial court, that this was not excusable neglect and refused to invade the court’s sound discretion. So the order of default was not reversed. So Brooks has a default order, but no judgment. I was trying to think this through as to the next procedural step. I guess if you have a default order, but no judgment AND the opposing party is now present, you could just present for judgment and the only thing the opposing party could argue is the amount of damages. Long way to get there, but I guess it’s better than fighting with some insurance company who is probably going to say your slip and fall in the oil in the parking lot is your own fault. It’s like punching the face of the tied up bully. I like!