From the desk of Kyle Riley: Surprise! A default judgment was issued by an ex parte commissioner when the insurer had no notice that its insured had been served or that a default order had been entered. Read on to learn why the Washington Court of Appeals affirmed the trial court’s order to vacate the default judgment.
Claims Pointer: A quick referral to an attorney after learning of a default order prevented a sizable default judgment.
Choi v. Young, in the Washington Court of Appeals, Case No. 711661-I filed December 29, (2014) (unpublished).
On March 25, 2010, Ashley Young rear-ended Wanna Choi. In 2012, Choi submitted a claim to Young’s insurer, USAA, relating to her injuries and USAA responded with a letter asking Choi’s attorney to advise of the demand status. Without any other communication, Choi electronically filed a summons and complaint against Young in King County Superior Court, asking for damages for injuries sustained in the 2010 accident. On March 26, Choi’s attorney faxed USAA stating that she would delay service of process on Young for thirty days and would notify USAA before serving process on Young. On May 2, USAA sent a letter to Choi, asking for income tax records and requesting a counteroffer “so we may continue to move this claim forward to an amicable settlement.” Choi’s attorney responded by letter on May 17, offering the tax documents and stating “unless we can resolve this claim quickly, we will serve your insured with the Summons and Complaint.” Nonetheless, Choi directed service on Young on May 27.
Without notice to USAA, Choi’s attorney obtained an ex parte order of default against Young on June 27. The order stated that Young was properly served on May 30 and that the order was based on Plaintiff’s Amended Motion for Order of Default and other supporting documents. None of the documents the ex parte commissioner considered had been filed with the King County Superior Court Clerk. On June 28, 2013, USAA sent a settlement offer to Choi’s attorney. Choi’s attorney rejected and countered the offer on July 11, notified USAA that she had obtained service on Young on May 30, and that Choi would pursue “all her legal remedies” if the parties could not reach a settlement by July 19; the letter made no mention of the order of default. On July 16, USAA independently discovered the order of default and asked Choi’s attorney to vacate, who refused. The following day an attorney filed a notice of appearance for Young.
Again, without notice to USAA or Young’s attorney, Choi obtained an ex parte default judgment against Young on July 30, 2013 in the amount of $134,744 including $1,822 in medical bills and $32,000 in lost wages ; again, the entry of judgment was based on documents not filed with the Court Clerk. On September 12, 2013, Young’s attorney filed a motion to show cause why the default should not be vacated because she was not properly served. Young explained on May 30, the day she was supposedly served, she was moving out of her apartment and that the service processor delivered the summons and complaint to her friend who was in the apartment helping her move while Young was outside. When Young returned inside, her friend gave her the documents, saying that the messenger said something about insurance, but Young did not understand that they involved a lawsuit.
Choi opposed Young’s motion, arguing that Young did not present evidence of a prima facie defense, excusable neglect, or due diligence sufficient to vacate a default judgment. Young’s attorney countered that he gave due diligence to defend the claim because he had no indication that a default had been filed because the documents were not filed with the Court Clerk and Choi’s attorney told him that no default judgment had been entered as of July 16. Young’s attorney also pointed out that the order was entered after he had filed a notice to appear on July 16. Young filed an answer on September 19, 2013, asserting a lack of personal jurisdiction among other defenses. On October 8, Young filed a motion to vacate the default judgment. On October 22, 2013 the court granted Young’s motion, stating that Young had established a prima facie case of lack of personal jurisdiction and that the default judgment had been obtained without notice to Young. Choi finally filed her various motions and supporting documents that she used to obtain her default on January 10, 2014.
On review, the Washington Court of Appeals held in favor of Young. First, the court ruled that the default judgment was improper because Choi failed to give notice to Young before entering the order of default. Choi unsuccessfully argued that she did not have to give notice to Young because Young failed to appear or file a notice of intent to appear prior to the default. The court rejected that argument because Choi was required by court rule and ex parte rules to file all of her motions and supporting documents before presenting them to an ex parte commissioner, which Choi did not.
Second, the court determined that Young’s motion to vacate was proper because Young established a prima facie defense of lack of personal jurisdiction. Young’s affidavit regarding the service of the complaint on her friend was sufficient to establish a prima facie case that the court lacked jurisdiction because she was not served properly. The court also found that Young had exerted due diligence because her attorney responded within three weeks of discovering the order of default. Finally, the court found that there were inconsistencies between the medical records and Choi’s claim which provided a prima facie defense.
Note: This opinion has not been published. It is provided to demonstrate how the court approaches the issues involved in the case. It cannot be cited as authority to a court of law.
Case updates are intended to inform our clients and others about legal matters of current interest. They are not intended as legal advice. Readers should not act upon the information contained in this article without seeking professional counsel.