What a Default in Court Means

Sometime ago, I blogged about the perils of ignoring a lawsuit.  The decision we received from the Appeals Court last week underscored the danger of failing to participate in the litigation process.  The appellant made a conscious decision to refrain from participating in the underlying litigation.  He failed to answer the Verified Complaint, he failed to attend his deposition, he failed to attend the assessment hearing personally to offer testimony to counter that of our client.  His counsel did not cross-examine our client at the assessment hearing, nor did he submit a brief regarding the legal issue raised during the assessment of damages.  The appellant also failed to participate in a number of related actions including two companion cases in Middlesex County.  

When a default is entered against a party, the factual allegations of the Verified Complaint are taken as true, and each of the claims against the defaulted party must be considered established as a matter of law.   Multi Technology, Inc. v. Mitchell Mgmt.Sys., Inc., 25 Mass.App.Ct. 333, 334-335 (1988).  "Such is the peril of a default. [Appellant's] failure to answer, or to respond to deposition notices and other discovery requests, deprived [Appellee] of any opportunity to supplement the factual record; the judge was permitted to take into account the fact that Appellant not only defaulted, but stonewalled discovery. See Multi Technology, Inc., supra at 335-336 ("In reaching [her] conclusions, [the judge] was allowed to hear any evidence material and relevant to the claims alleged in the complaint"). Cf. Mass.R.Civ.P.37(b), as amended, 423 Mass. 1406 (1996) (setting forth sanctions for discovery violations). [Appellant] cannot have it both ways."  Erez v. Batrin, 2015 Mass. App. Unpub. LEXIS 1046 (Mass.App.Ct. 2015).

Deciding whether to fight a lawsuit or let a default enter must be a calculated decision based  on the amount of money at stake, the amount of money you will have to spend to defend, whether the judgment could include an award of attorney's fees for or against you and, of course, the merits of your claim.  The Rules of Civil Procedure were amended in 2013 to require that plaintiffs provide defendants with notice of the damages sought prior to an assessment of damages.  However, by the time you receive this paperwork, a default has already been entered against you.  In other words, the only question is the amount of damages that will be awarded - not whether you are liable.  You should consult with an attorney to assist you in making that determination as these factors can be complicated.

Why Do People Ignore Lawsuits?

I have two clients who called after having judgments entered against them. Both were defendants in their respective cases. Neither defended the lawsuits for two completely different reasons, but nonetheless, each hired me to file a motion for relief from judgment. In other words, I must file a motion and ask the judge to remove the judgment and let these cases go forward on their merits. Each client has a good defense to the merits of the claims asserted by the plaintiff. But, because neither fought the lawsuit when it was active, they now must argue to the court that the court should reopen the case and that they should be given a chance to defend.

I have another client on the other side of the fence. The defendant ignored my clients offers to settle. She would have settled her claim initially for less than $1,000. Now, she has a judgment against the defendant for nearly $100,00 and accruing interest at a healthy one percent per month.

I counsel my clients regularly not to ignore lawsuits or even letters that arrive return receipt request. While it may not be pleasant to receive a demand letter or a lawsuit accusing you of all sorts of nasty stuff, ignoring it, will not make it go away! Ignoring it will only lead to liens on your house, garnishment of wages or the auctioning of your property.

Most of the time, people do not sue out of the blue. In all likelihood the dispute has been brewing for some time. While every case is different, often the best time to resolve the matter is prior to the lawsuit being filed. If you are served with a lawsuit or a demand letter, read it, respond to it, and resolve it if possible. Put emotion and pride aside and look at the case from all sides. Contact a lawyer, if you don't feel you can take a step back from the case. I frequently counsel my clients that settling a case, even though it is distasteful, is the right decision.

Whatever you decide to do, do not ignore it. I promise you. It will not go away by itself.