So you’ve won a default judgment after your Defendant failed to file an Answer or responsive pleading, and now you want to begin collection. Under the law, judgments entered by default are potentially subject to attack by the debtor. But under what grounds? Let’s assume you did everything right (a big assumption): service of process was 100% proper and valid, your debtor received notice of the lawsuit and an opportunity to be heard, but simply didn’t show up or file an Answer (*Ignoring a lawsuit or a default judgment is never a good idea*). So there’s no way for the Defendant to get out from under the judgment, right? Not necessarily. We deal with situations all the time where the Debtor retains counsel, challenges the judgment and asks for the case to be “opened” so they can defend the lawsuit on the merits. In order to appropriately respond, a judgment creditor must apply the facts to the law, and make the best possible argument to the Judge: “these are the reasons why my judgment should stand”. Courts typically disfavor defaults, and prefer decisions on the merits, but they also don’t like parties who blow off the Court and ignore the proceeding.
This brings us to an interesting story... We were recently enforcing a Pennsylvania default judgment for $85,000. While this was technically a “default judgment”, it was unlike a typical default judgment where the Defendant simply fails to appear or otherwise defend the lawsuit. Here, the Defendants had filed “Answers” with the Court, pro se and without the assistance of counsel, basically in letter format, denying everything. Unfortunately for the Defendants, their “Answers” were stricken by the Court for noncompliance with the Rules by failing to actually address each of the Plaintiff’s allegations paragraph-by-paragraph, and Defendants were given thirty (30) days to file a conforming Answer. Instead of responding, or better yet, hiring a local attorney to represent them, these Defendants decided to ghost the Court and filed nothing. And as the title here suggests, litigation is not like Tinder: ghosting is not an acceptable option in a court of law. The penalty for ghosting here was an $85,000 default judgment.
After we got involved and enforcement was moving forward full steam ahead, the Debtors suddenly came out of the woodwork nearly a year later, retained counsel, and filed a Petition to Open Judgment. Defendants claimed they hadn’t received any documents from the Plaintiff or the Court after they were originally served with the Complaint, and that’s why they failed to comply with the Judge’s order to file an amended, conforming Answer to the Plaintiff’s Complaint. In response, we argued that the Defendants were not claiming they’d just missed one or two pieces of crucial mail – they insisted they didn’t receive some THIRTY documents!! We took the position that none of the mailings were returned as undeliverable by the post office, and were all sent to the correct address. Therefore, the documents were presumed to be delivered properly under the “mailbox rule”. It all comes down to an issue of credibility – was the Debtors’ story that they didn’t receive any of the mailing credible or believable in the face of the record before the Court?
While the Defendants claimed they were experiencing issues with delivery of their mail, and that mail addressed to them was frequently not delivered, they failed to provide any evidence supporting their claims. Big mistake. In its order, the Trial Court found “Petitioners offered no deposition testimony or documentary evidence in explanation of how documents placed in ordinary first-class mail would not otherwise be properly delivered or returned as undeliverable. We agree with Respondents that such an allegation of nonreceipt is not credible.”
Applying the facts to the law, the Trial Court found that Defendants hadn’t come close to meeting their burden to obtain relief from the default judgment. In PA, a Defendant must meet three requirements to open a judgment. They must (1) Promptly file a Petition to Open upon learning of the judgment against them, (2) Provide a reasonable excuse or explanation for failing to file a responsive pleading, and (3) State a meritorious defense to the allegations contained in the Complaint. Schultz v. Erie Insurance Exchange. 477 A.2d 471 (Pa. 1984).
Here, the Debtors failed to meet the requisite criteria, and so their Petition to Open was denied. After they waited nearly a year from the date of entry of judgment to file their Petition to Open, the Court found Defendants had sat on their rights and did not timely act. They also failed to provide any type of credible or believable explanation for not filing the appropriate responsive pleading within the required time – “the dog ate my homework” or more appropriately, “the mail got lost!” didn’t cut it here when the Court record reflected Defendants were sent over 30 documents.
On appeal to the Pennsylvania Superior Court, the debtors tried to convince an appellate panel that the Trial Court abused its discretion in refusing to open the default judgment. This too, failed, because appellate courts “cannot re-examine findings of credibility” (or lack of credibility). Based on the Trial Court’s determination that the Defendants were not credible, the Superior Court found the Trial Court did not abuse its discretion in its denial order.
What’s the lesson here? If you get sued, take the matter seriously!! Retain competent counsel to defend your interests, and never disregard your obligations as a litigant.
