Prompt Response is Key to Succeeding When Attempting to Set Aside Default Judgments
By: Katy Robertson
Georgia law requires an answer be filed 30 days after a complaint is served on the Defendant and, if unanswered, the case falls into default. While a default can be opened as matter of right within 15 days by payment of costs, a matter that remains in default for longer than that initial period would require a motion to the court to open the default. A default means that every allegation in the complaint is deemed admitted, but the defendant can still enter the case and challenge the damages if the amount of damages not specified in the complaint. However, once the case is in default and before the defendant makes an appearance, the plaintiff can then request and obtain a default judgment by introducing evidence of the plaintiff’s damages to the judge. A final judgment is usually entered for whatever damages the plaintiff requests. See generally, O.C.G.A. § 9-11-55. There are multiple circumstances where parties are served and their carrier is not promptly notified. No defendant wants to find themselves in a situation where they learn of a lawsuit after a default judgment has already been issued by the court, but the possibility exists. Thus, carriers – and their counsel – need to have a plan in place to act promptly when this occurs.
(1) All conditions of O.C.G.A. § 9-11-55 must be met in order to set aside a default judgment.
First, a motion to set aside default judgment must meet the same statutory requirements as a motion to open default. See O.C.G.A. § 9-11-55. To open default, a movant must, in addition to paying costs, meet the following statutory conditions: (1) a showing made under oath; (2) an offer to plead instanter; (3) announcement of ready to proceed with trial; and (4) setting up a meritorious defense. O.C.G.A. § 9-11-55; Powell v. Eskins, 193 Ga. App. 144, 145 (1989). If those conditions are met, default may be opened on one of three grounds: (1) providential cause; (2) excusable neglect; or (3) a proper case. Id.
Similar to motions to open default, a motion to set aside a default judgment must evidence that each and every condition is met and at least one of the three grounds exist allowing the default to be opened or set aside. An answer and payment of costs will also need to be provided when filing the motion.
(2) Default judgment can be set aside for meritorious reasons, per the court’s discretion.
Assuming these statutory conditions are met and the defendant can show one of the three permissible grounds, the court, in its sound discretion and for meritorious reasons, has the inherent authority to amend, revise, modify or set aside the judgment during the term of court in which it is entered. Dep't of Transp. v. Kenney, 238 Ga. 173, 174 (1977); Bridgestone/Firestone N. Am. Tire, LLC v. Jenkins, 261 Ga. App. 20, 21 (2003); Martin v. Gen. Motors Corp., Fisher Body Div., 226 Ga. 860, 862 (1970); Piggly Wiggly S., Inc. v. McCook, 216 Ga. App. 335, 337 (1995); Bank of Cumming v. Moseley, 243 Ga. 858, 858 (1979). “Under Georgia law, a trial court's power to set aside its own judgments during the same term of court is extensive.” Utilicom Supply Associates, LLC v. Terra Tech, Inc., 30 Ga. App. 509, 510 (2021).
When motioning the court to set aside its ruling on the plaintiff's motion for default judgment, counsel should emphasize the broad and extensive authority to modify or set aside that judgment for meritorious reasons, allowing matters to be heard on the merits and not merely won on timing technicalities.
(3) A motion to set aside must be filed immediately upon learning of the default judgment and must provide satisfactory explanation for a delay.
Finally, if all conditions of O.C.G.A. § 9-11-55 are met and meritorious reasons exist, the court can exercise its extensive power to set aside judgments when the parties act promptly and where there is a satisfactory reason for the delay. “Whenever possible, cases should be decided on their merits for default judgment is not favored in law. Generally, a default [judgment] should be set aside where the defendant acts with reasonable promptness and alleges a meritorious defense.” Sagnibene v. Budget Rent-A-Car Sys., Inc., 209 Ga. App. 44, 45 (1993) (citations omitted). The Georgia Court of Appeals has concluded reasonable promptness involves situations where the defendant communicates directly with the insurance company, including agents of the insurance company; where defendants file motions to open default immediately upon learning default judgment had been entered; and where defendants present a satisfactory explanation for the delay. See McBee v. Benjamin, 272 Ga. App. 567, 569 (2005) (emphasis supplied).
What should clients do if they receive the (often surprising) notification that a case involving one of their insureds has a default judgment? Act promptly, working with counsel and the insured to respond quickly with a motion and to determine the reason the complaint was not answered. In the motion, outline why the delay occurred and show you acted immediately to rectify the default upon discovery. A default judgment presents clients with an uphill battle but does not have to be a death sentence if handled promptly and properly.
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