DEFAULT JUDGMENT IS NOT NECESSARILY THE END OF THE STORY

December, 2017

A lawsuit is filed against a business owner. The business owner attempts to send a copy of the complaint to his attorney. Due to an inadvertent miscommunication, the complaint never reaches its intended destination and the business owner’s attorney is never notified of the lawsuit. Consequently, a default judgment is entered against the business owner and he or she is ordered to pay tens of thousands of dollars, despite the fact that the business owner has meritorious defenses to present.

End of the story?

Not necessarily.

Recently, we had a case involving this situation between a business owner and another law firm. We successfully challenged the default judgment and obtained a favorable outcome for the business owner.

The Ohio Rules of Civil Procedure allow a party to file a motion for relief from default judgment. If successful, the default judgment is overturned and the party against whom judgment was taken can dispute the allegations and file any counter-claims that may apply.

To prevail on a motion for relief, one must demonstrate that (a) there is a meritorious defense or claim to present if relief is granted; (b) the moving party is entitled to relief for excusable neglect or any other reason set forth in the Rules; and (c) the motion is made within a reasonable time.  

Ohio courts may grant a motion for relief from judgment if one demonstrates that the failure to answer a complaint was because the complaint never reached the appropriate person.  Ohio courts have found excusable neglect when a party or its attorney demonstrates that the failure to respond to a filed complaint is due to a lack of notification of the proper person and that such occurrences are rare, isolated events. 
  
The most important thing to do if an adverse default judgment has been taken against you is to consult with an attorney as soon as possible. The longer a default judgment is left unopposed, the more difficult it becomes to set it aside.