From the desk of Kyle Riley: Can a party obtain a default judgment without serving notice when the defaulted party has not given written notice of appearance?
Claims Pointer: Washington courts generally disfavor default judgments. A party seeking a default judgment must give proper notice to the opposing party if the party has failed to “appear.” Normally, a notice of appearance satisfies this requirement. Written notice, however, is not necessary to “appear” for purposes of default. In this case, the Washington Court of Appeals considered whether a California attorney’s settlement negotiations after receiving the complaint were sufficient to constitute “appearance.”
Servatron, Inc. v. Intelligent Wireless Products, Inc., Case No. 32251-3-III, 2015 WL 1452672, Court of Appeals of Washington, Division 3.
Servatron, Inc. (Servatron) sued Intelligent Wireless Products, Inc. (IWP) and its owners, the Kovacs for various claims arising out of a failed business deal. In January or February 2012, Servatron timely served all involved parties. The Kovacs were served in California, their domicile. The Kovacs hired an attorney who was not a member of the Washington State bar. In April 2012, the Kovacs’ attorney sent an email to Servatron’s attorney notifying him of his involvement, that he intended to file an answer but did not have the case number, and asking Servatron’s attorney to call him. The same day, Servatron’s attorney responded with the case number and told him he would request his client allow 30 more days for the Kovacs to file an answer.
The parties had a settlement conference by phone at the end of April 2012. Servatron’s attorney followed up on April 30, 2012 with a proposed settlement offer but heard no response. He made another request, and stated that if he did not hear back, that he would that he would “go into litigation mode—including moving for default.” In June there were further settlement discussions, but ultimately no settlement was reached.
On July 11, 2012, Servatron moved for a default judgment without serving the motion on any of the defendants or their attorneys. In his affidavit in support of the motion, Servatron’s attorney stated that he had warned the Kovacs that he would seek default if the settlement terms were not acceptable. On October 31, 2013, Servatron served a collection action on the Kovacs in California. On December 20, 2013, the Kovacs moved to set aside the default judgment through a Washington attorney. Servatron argued that it did not need to serve the Kovacs with notice prior to default because they had never gave notice of appearance. The trial court denied the motion to vacate, citing in part the Kovacs’ neglect. The Kovacs appealed.
The Court of Appeals first considered whether the Kovacs had “appeared” for purposes of CR 55. The court ruled that while normally a notice of appearance must be written, appearance is much more broadly defined because default judgments are disfavored. The court held that the Kovacs appeared “informally” because their attorney had discussed settlement and evidentiary issues after the service of a complaint. Servatron argued that the Kovacs could not appear through their attorney because the Kovacs’ attorney was not licensed to practice in Washington. The court rejected that argument because the attorney’s informal appearance was an appearance of the party, even if it would have been a violation of court rules for the attorney to file the appearance.
Lastly, Servatron argued that failure to give notice makes a default judgment voidable, not void. In other words, Servatron attempted to argue that the court should consider the Kovacs’ negligence in delaying action after receiving notice of the default. The court stated that the law was clear on this point—a default judgment is void when the party seeking default fails to give notice of intent to take default after the opposing party has appeared.
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.