How to get rid of a wrongful default judgment ?

Do you have a default judgment entered against you without your knowledge?

How to get rid of a wrongful default judgment ?

There are times that one finds out about a court judgment lien entered against them after the fact. If the person would have known that a default judgment was sought against them they could have defended it. But because they were unaware of the lawsuit, a Judgment was entered. Recently, I was advised of a CPA who found out that a Judgment had been entered against him simply because he was listed as his client’s corporate agent. The CPA had no dealings with his client’s company other than being an agent and preparing returns. The CPA certainly had no dealing with his client’s creditor and it was not right that a Judgment was entered against the CPA. Clearly a case where the Judgment should be removed. To remove a Judgment a Motion to Set Aside a Judgment must be filed with the Court.

The Court has the discretion to remove a Judgment. But there must be a good reason. The authoritative code section in California is Code of Civil Procedure Section 473, which states, “The court may, on terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Request for relief shall be accompanied by a copy of the answer or other pleading proposed to be filed, and shall be made no later than six months after the judgment, dismissal, order or proceeding was taken.”

It is the policy of the law, that lawsuits should be heard and disposed of on their merits. A trial court has a wide discretion to grant relief under Code of Civil Procedure Section 473. Code of Civil Procedure Section 473(b) is a remedial measure to be liberally construed, and any doubts existing as to the propriety of setting aside a default will be resolved in favor of a hearing on the merits. Berman v. Klassman (1971) 17 Cal.App.3d 900, 909-910.

Relief from default judgment may be granted under Code of Civil Procedure Section 473(b) on the ground of inadvertence if it was caused by a misunderstanding or a failure to follow proper procedures without any culpable carelessness, rather than by mere forgetfulness. Pearson v. Continental Airlines(1970) 11 Cal.App.3d 613, 618-619.

Excusable neglect, within the meaning of Code of Civil Procedure Section 473(b), is that neglect which might have been the act of a reasonably prudent person under the same circumstances. Hodge Sheet Metal Products v. Palm Springs Rivera Hotel (1961) 189 Cal.App.2d 653, 657.

The issue boils down to whether the moving party shows a reasonable excuse for the default [judgment against them]. Davis v. Thayer (1980) 113 Cal.App.3d 892, 905. Courts have often held that just ignoring the notice of the lawsuit or not simply getting around to answer the lawsuit is not a reasonable mistake. Doubtful cases are usually resolved in favor of granting relief because the law strongly favors trial and disposition on the merits, and any doubts in applying Code of Civil Procedure Section 473 must be resolved in favor of the party seeking relief from default. Elston v. City of Turlock (1985) 38 Cal.3d 227, 233.

Where the party with the Judgment moves promptly to seek relief, and no prejudice to the opposing party will result from setting aside the default and letting the case go to trial on the merits, very slight evidence will be required to justify a court setting aside the default. Elston v. City of Turlock, 38 Cal.3d 227, 233; The burden of proof is on the opposing party to show prejudice. Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725, 740.

Examples of relief granted are: misfiled or lost papers, illness, attorney mistake, secretary mistake in not sending the papers to the attorney.

Examples where relief not granted: just too busy, forgot about it, could not afford to defend, represented himself/herself.

It is also helpful to point out to the Court, that if the Court sets aside the Judgment there will be opportunity to hear the matter on its merits because there are no missing witnesses or evidence. Consequently no prejudice will be incurred by Plaintiff other than having to properly proceed to trial or resolve this case if the Judgment is set aside.

 






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