What is a Default Judgment?
What is a "Default" and what is a "Default Judgment"?When a plaintiff files a complaint, the plaintiff asks the clerk to issue a summons. The summons orders defendants to file a response to the complaint within 30 days (5 days for unlawful detainer actions). After defendants are served with summons and complaint, if defendants do not file response within the time limit, they are "in default" and plaintiff can request the court clerk to enter the default on the court records. After the entry of default, the plaintiff may request that a default judgment be entered against the defendants. In order for a judgment to be entered, plaintiff has to "prove up" her case, which often is done by submitting declarations and exhibit, but for some cases the court will require live testimony. Once the court is satisfied with the evidence, the court will enter judgment against the defendants.
How is a Default Judgment different from a Judgment after Trial?Although default judgments are entered based on Plaintiff's one-sided evidence and trial judgments are based on evidence presented by both sides, there is little difference in their enforceability. Once a judgment is final, the judgment creditor may enforce it by garnishing judgment debtor's properties and wages, by recording liens against the judgment debtor's assets, or by conducting judgment debtor examinations. A judgment debtor may have up to 6 months to challenge entry of a default judgment, but the judgment debtor will have the burden to persuade the court to set aside the judgment.
A Recent Example from the News.A recent example in the news was the $1.26 Billion default judgment entered against PepsiCo. Apparently, two Wisonsin men sued PepsiCo for stealing their idea to bottle and sell purified water. Plaintiffs served the lawsuit on PepsiCo's registered agent in North Carolina, but when PepsiCo failed to defend itself, the court awarded plaintiff a default judgment. Now, PepsiCo's attorneys have brought a motion to vacate the default judgment, arguing the legal papers were improperly served and that after the papers were served they were mislaid by a PepsiCo employee due to her busy schedule. The motion is set to be heard October 13, 2009.
Do Not Ignore any Lawsuits or Default Judgments.In short, if you are served with a summons and complaint, or if you become aware a default judgment has been entered against you, you need to take immediate action to defend yourself. Unless you are well versed in law, you should retain an attorney to assist you in your defense.
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