One of the brightest minds of our time once said, “Half the battle is just showing up.” While “showing up” and responding promptly to a lawsuit filed against you doesn’t necessarily give you an edge in winning the case, failing to respond gives you close to a 100% chance of losing and having a default judgment entered against you.
Whether in state court, federal court or arbitration forums, a defendant in a civil action who does not file a response to the complaint against them within the time set forth by law effectively forfeits their right to defend the action. The court will accept the allegations in the complaint as true, enter a default judgment against the wayward defendant, and allow the plaintiff to take all steps needed to collect on their judgment.
That is why you should never ignore a complaint served upon you or your business and contact legal counsel as soon as possible. We cannot wish a lawsuit away, and nothing is accomplished by putting a complaint in your junk drawer like some people crumble up parking tickets and shove them in their glove compartment. When that first wage garnishment hits, a lien is put on your home, or your assets are seized, it will likely be too late for a do-over.
Here is what you need to know about default judgments and their consequences.
What Is a Default Judgment?
To understand a default judgment, you need to understand the basics of how lawsuits work. They start with a plaintiff filing a complaint with the court that describes their claims against the defendant and the relief or amount of damages they want a judge to award. The complaint is then served on the defendant.
Once a defendant is properly served, the clock starts ticking on their time to respond. In New Jersey, that time is 35 days. It is either 20 or 30 days in New York, depending on how the complaint was served. In federal cases, defendants have 21 days to respond. Typically, that response will either be an answer to the complaint, a motion to dismiss the complaint, or a request for more time to respond. As long as the defendant “shows up” with a timely response and continues to participate in the case, the matter will proceed, and the defendant will be able to fight the allegations if they so choose.
When a defendant doesn’t respond promptly, the plaintiff can ask the court to enter a default judgment against the defendant. Unless the defendant has a legal basis for vacating that judgment, and seeks to vacate that judgment with the time set by court rules, the judgment will effectively close the door on any efforts to dispute the truth or accuracy of the complaint’s allegations.
How Does a Plaintiff Obtain a Default Judgment?
The procedures for requesting and requirements for obtaining a default judgment are slightly different in New York and New Jersey (and in federal court). In some New York cases, a plaintiff can receive a judgment for all the damages they requested in the complaint without proving they actually incurred those damages. In other cases, the plaintiff must present evidence regarding their damages before a judge will enter a final judgment in the requested amount.
In New Jersey, the first step after a defendant fails to respond to a complaint is to ask the court for an entry of default. The plaintiff must then provide the defendant with notice of the entry and again when they subsequently file a motion for judgment by default. In this motion, the plaintiff must show the defendant was properly served notice of the proceedings, the defendant failed to answer, and the defendant is not an active member of the military. If they do so, the court may enter a final judgment by default, which definitively establishes the defendant’s liability.
In some cases, the court will hold a “proof” hearing at which the plaintiff will present evidence supporting the amount of damages they seek. The defendant must be given notice of this hearing as well. If the defendant shows up, they can dispute the damages amount. At the end of the hearing, the judge may enter a final judgment for a set amount, and the plaintiff is free to begin efforts to collect on the judgment.
What Can a Defendant Do After Entry of a Default Judgment?
As much as courts – and the law – do not favor defendants who ignore properly served complaints, they also loathe default judgments. They prefer resolving lawsuits on the merits of the claims and defenses, as opposed to disposition on procedural bases.
That is why the court rules provide a way for a defendant to ask a court for relief from a default judgment. But that relief is far from automatic. There are specific and limited bases for having a default judgment vacated, most of which involve flaws with the judgment itself. But short of a problem with the judgment (other than the substance of the claims), a defendant in New Jersey can get relief from a judgment if they show their failure to respond was due to “mistake, inadvertence, surprise, or excusable neglect” and that they have a meritorious defense to the allegations in the complaint. Similarly, in New York, a defendant must show they had a “reasonable excuse” for their failure to appear and also show they have a meritorious defense.
What qualifies as “excusable neglect’ and a “reasonable excuse” is largely up to the judge’s discretion, but simply forgetting or ignoring a complaint will unlikely be sufficient to support an application to vacate a default judgment. Rather than digging yourself into a hole that may be impossible to escape, the best course of action after being served with a complaint is to take the matter seriously and meet with experienced counsel who can preserve your right to mount a defense.
If you have questions about a pending default judgment against you or your business, please contact Seth Rosenstein at Ansell.Law.