Safeguarding a default judgment from claims of insurer neglect

The defendant wants to set aside your default judgment, claiming they tendered to their insurance carrier and the insurer failed to file a responsive pleading. Now what?

Matthew Clark
2015 December

It is not uncommon to face the situation where, after going through the necessary steps to obtain a default judgment against a non-responding defendant, the defendant will later challenge the default and attempt to set it aside to litigate the matter. This article will explore the basics of obtaining a default judgment and then move into tips and strategies for opposing efforts to set aside that default – particularly when a defendant claims they tendered to their insurance carrier and the insurer failed to file a responsive pleading.

The basics of obtaining a default judgment

Defendants are “in default” as soon as they fail to file a responsive pleading within the statutory time limit, but this has little impact until the court “enters a default” against the offending defendant. To make an application for a default judgment, a plaintiff must meet the following requirements: (1) serve the defendant with the summons and complaint, and file Proof of Service of Summons and Complaint with the court (Code Civ. Proc., § 585); (2) the time for a responsive pleading has passed (30 days after service is complete, see Code Civ. Proc., § 412.20(a)(3)), and the defendant failed to file a response pleading to the Complaint; and (3) in a personal injury action, the defendant was served with a Statement of Damages (see Judicial Council form CIV-050, though service must be accomplished in the same manner as the summons/complaint). (Code Civ. Proc., § 425.11(c).)

Should the defendant fail to file a responsive pleading in the time permitted, a plaintiff has 10 days in which to file an application for entry of default. (Cal. Rules of Court, rule. 3.110(g).) If the plaintiff fails to timely file the request, the court can issue an order to show cause as to why sanctions should not be imposed. (Ibid.) The request for default should contain three things: (1) Judicial Council form CIV-100, with a declaration of mailing copies (and any necessary exhibits, calculations, or other documents for a court judgment); (2) Proof of Service of Summons (unless already filed); and (3) the statement of damages (CIV- 050) and the proof of service of the statement of damages.

In certain cases, a plaintiff can request the court clerk directly enter judgment after submitting the required materials. But this only applies if the action is: (1) “arising upon a contract or judgment”; (2) the lawsuit seeks recovery of “money or damages only” in a fixed or determinable amount; and (3) the defendant was not served by publication. (Code Civ. Proc., § 585(a).) In all other cases, and in all personal injury or wrongful death actions, the plaintiff must request a default judgment hearing by the court – requiring the plaintiff to “prove up” their case. (Code Civ. Proc., § 585, Cal. Rules of Court, rule 3.1800.)

For court judgments, a plaintiff must submit with their CIV-100 form, the following documents in advance of the “prove up” hearing: (1) Except in unlawful detainer cases, a brief summary of the case identifying the parties and the nature of plaintiff’s claim; (2) Declarations or other admissible evidence in support of the judgment requested; (3) Interest computations as necessary; (4) A memorandum of costs and disbursements; (5) A declaration of nonmilitary status for each defendant against whom judgment is sought; (6) A proposed form of judgment; (7) A dismissal of all parties against whom judgment is not sought or an application for separate judgment against specified parties under Code of Civil Procedure section 579, supported by a showing of grounds for each judgment; (8) Exhibits as necessary; and (9) A request for attorney fees if allowed by statute or by the agreement of the parties (note that many courts have established their own schedule of attorney’s fees to be used for default judgments). (Cal. Rules of Court, rule 3.1800.)

The court clerk will then set a hearing, allowing the plaintiff to “prove up” their damages by submitting evidence, with the court acting as a gatekeeper to make sure a reasonable judgment is entered. (Code Civ. Proc., § 585.) Note that some courts prefer live testimony, while others prefer declarations/affidavits. Also, note that defendants have no right to participate in the “prove up” hearing before the court or file any papers, motions, or argue any affirmative defenses: “[t]he entry of a default terminates a defendant’s rights to take any further affirmative steps in the litigation until either its default is set aside or a default judgment is entered.” (Devlin v. Kearny Mesa AMC/Jeep/Renault Inc. (1984) 155 Cal.App.3d 381, 385.) A defendant’s only remedies to a default judgment are to either request the court set aside the default, or appeal the default judgment.

General requirements for setting aside a default judgment

“Although a trial court has discretion to vacate the entry of a default or subsequent judgment, this discretion may be exercised only after the party seeking relief has shown that there is a proper ground for relief, and that the party has raised that ground in a procedurally proper manner, within any applicable time limits.” (Cruz v. Fagor America, Inc. (2007) 146 Cal.App.4th 488, 495.) Generally a defendant has six months after the entry of default to move to set it aside on grounds of “mistake, inadvertence, surprise or excusable neglect.” (Code Civ. Proc., § 473(b).) There is also an additional six-month period from the date of the default judgment, though, if the time limit after the default has expired, the court can set aside the judgment, leaving the default itself undisturbed. (D.R.S. Trading Company, Inc. v. Barnes (2009) 180 Cal.App.4th 815, 820.) Outside of those time periods, defendants can generally only move to set aside default judgments: (1) within 2 years of judgment if the defendant can show a lack of notice of the proceedings under Code Civ. Proc., § 473.5; or (2) if the default was procured through extrinsic fraud or mistake, a defendant can move to set it aside at any time under equitable principles.

By far the most common attempt is made under the auspices of Code of Civil Procedure section 473(b) – requiring a defendant to demonstrate “mistake, inadvertence, surprise, or excusable neglect.” A motion under § 473(b) can be made in one of two ways: (1) by an “attorney affidavit of fault” attesting to the attorney’s misconduct by way of a sworn affidavit; or (2) by declarations and other evidence sufficient to meet the required showing. Procedurally, the motion to set aside a default judgment has specific requirements, including the timeliness issue discussed above. First, if based on an attorney affidavit of fault, the motion must state that it seeks mandatory relief under Code Civ. Proc., § 473. If it refers only to discretionary relief, the court is not obligated to set aside the default. Second, the motion “shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted.” (Code Civ. Proc., § 473(b).)

If a party uses the attorney affidavit of fault to set aside a default judgment, relief is mandatory, even for an attorney’s inexcusable neglect (such as legally unsupported decisions). (Standard Microsystems Corp. v. Winbond Electronics Corp. (2009) 179 Cal.App.4th 868, 897.) A plaintiff should note though that the offending attorney must “pay reasonable compensatory legal fees and costs to opposing counsel or parties” and the court may award additional sanctions. (Code Civ. Proc., § 473(b).) There is also one major caveat to mandatory relief – if the court feels the attorney affidavit is an attempt to “cover” for the client, it can disregard the affidavit and maintain the default. (Beeman v. Burling (1990) 216 Cal.App.3d 1586, 1604 [the attorney “exception should be narrowly applied, lest negligent attorneys find that the simplest way to gain the twin goals of rescuing clients from defaults and themselves from malpractice liability, is to rise to ever greater heights of incompetence and professional irresponsibility”].)

If the application uses the second option (basing it only on client declarations or other evidence of mistake, surprise, inadvertence, or excusable neglect) relief is discretionary. (Code Civ. Proc., § 473(b).) It is the defendant’s burden to demonstrate the necessary showing. By far the most common ground is based on neglect. Although a trial court is authorized to grant relief from a default caused by a party’s neglect, that neglect must be excusable. And “what constitutes excusable neglect depends upon the facts of each case.” (Pearson v. Continental Airlines (1970) 11 Cal.App.3d 613, 617.) In addition to filing a timely motion, a defendant asking for the set aside must present sufficient evidence for the trial court to find that the inadvertence or neglect was excusable – i.e., a legitimate excuse for the failure to take the proper steps at the proper time. The delay cannot be from the party’s own carelessness, inattention, or willful disregard of the court’s process, but instead must be caused by some unexpected or unavoidable hindrance or accident or due to reliance on the care and vigilance of the party’s counsel. For example, it is not enough simply to show that the client was “busy” and “forgot” about the lawsuit, as such neglect would be inexcusable. (Andrews v. Jacoby (1919) 39 Cal.App. 382, 383-384.) The same is true for defendants who were indigent and couldn’t afford a lawyer or were preoccupied by criminal proceedings pending against them. (Davis v. Thayer (1980) 113 Cal.App.3d 892, 905-906.)

When claims of “excusable neglect” are based on tendering to an insurer

One common attempt to avoid a default is for a defendant to claim they tendered to their insurer and the insurer failed to appoint counsel or file a responsive pleading. But to successfully do so, defendants generally must provide sufficient evidence not only of their own excusable neglect, but also that of their insurer. For example, in Don v. Cruz (1982) 131 Cal.App.3d 695, the Court of Appeal upheld a trial court’s denial of relief from default where the defendant alleged he reasonably relied on an insurance carrier to defend a personal injury action, but made no showing that his carrier’s inaction was excusable. The court held that the defendant, in order to obtain relief from default, must also establish justification for the inaction of the carrier. (Id. at 702.)

Don reasoned that a rule requiring only that the insured demonstrate reasonable reliance on its insurer “would permit the insurer to willfully or recklessly ignore filing deadlines with impunity, shielding itself behind the blamelessness of its insured while it makes a shambles of orderly procedure.” “When inexcusable neglect is condoned even tacitly by the courts, they themselves unwittingly become instruments undermining the orderly process of the law.” (Id. at 701.)

Similarly, in Scognamillo v. Herrick (2003) 106 Cal.App.4th 1139, affirming a trial court’s refusal to vacate the default judgment, the defendant had promptly delivered the summons and complaint to his insurance broker and was told the matter was being handled by his broker. (Scognamillo, 106 Cal.App.4th at 1148.) But in denying the motion to set aside the default, there was “no explanation why, having apparently been informed by the insurance broker and its insured that an active lawsuit was pending, the insurance carrier utterly failed to take action.” (Id. at 1149.) By the failure to provide any explanation, the neglect was inexcusable – nothing was presented to the court to justify or explain the carrier’s actions. (Ibid.) Without evidence of both the defendant’s excusable neglect and that of the insurer, plaintiffs are on solid ground to argue the default should not be set aside.

In response, defendants may argue for a “split of authority” among the Courts of Appeal by citing to Fasuyi v. Permatex, Inc. (2008) 167 Cal.App.4th 681; Rogalski v. Nabers Cadillac (1992) 11 Cal.App.4th 816; and Pearson v. Continental Airlines (1970) 11 Cal.App.3d 613. But any supposed “split” is manufactured – the decisions were made based upon the facts in each instance, and based upon what was actually presented to the trial court.

In Fasuyi, a case where appellate review relieved the defendant from a default judgment, the appellate court relied on several crucial facts to reach its holding. First, the defendant in Fasuyi had never been served with a proper statement of damages before the entry of default – with the appellate court even finding that “The Default Judgment Was Highly Irregular.” (Fasuyi, 167 Cal.App.4th at 689, 692.) The motion to set aside the default – filed a mere 16 days after the defendant learned of it – was supported by the declaration of a paralegal employed by the defendant (setting forth the history of the tender of defense), the declaration of the defendant’s attorney, and the required proposed answer. (Id. at 689-690.)

Because of the facts before it, the appellate court found that the defendant “demonstrated that its broker did what it was supposed to do, promptly forwarding the process to the insurers and instructing the claims managers to contact [the defendant] directly; and that the broker received written confirmation of that, and was under the expectation that the insurer would retain counsel and appear on [the defendant’s] behalf.” (Id. at 694 (emphasis added).) The factual showing of both the defendant’s and the broker’s actions, in conjunction with the written confirmation of the insurer, justified relieving the defendant from a default judgment. Fasuyi even agreed with the sentiment embodied in Scognamillo – that a rule requiring an insured need only demonstrate reasonable reliance on its insurer would permit insurers to ignore filing deadlines with impunity, making a shambles of orderly procedure – but found it inapplicable under the factual circumstances at issue. (Id. at 700.)

In Rogalski, the insurance broker repeatedly told the defendant that the insurer would provide coverage and would make sure the insurer “handled the matter”– by filing a responsive pleading. (Rogalski, 11 Cal.App.4th at 818-819.) It was not until the morning of July 3 – the same day that the plaintiff in that matter warned he would be filing the default papers – that the insurer advised it would not provide coverage and would not file a responsive pleading. (Id. at 819.) That same day, the defendant contacted the plaintiff’s attorney, requested an extension, and requested the default be set aside. The plaintiff refused. (Ibid.) Weeks later, while the default was still pending, the defendant filed its motion to set aside the default papers. (Ibid.) That request included an affidavit from the defendant’s attorney, “stating that the defaults were the result of surprise and neglect,” which Rogalski analogized to the provisions in Code Civ. Proc., § 473(b), which make relief from default mandatory when accompanied by an attorney affidavit attesting to surprise/mistake/neglect. (Id. at 821, see also fn. 5.) This combined with two other salient facts to justify relief from default: (1) the insurer’s conduct – in repeatedly leading its insured to believe it would respond to the complaint and then abandoning them without taking any steps for their protection – would constitute a form of positive misconduct toward the insured, negating any imputation of the insurer’s delay; and (2) the promptness of seeking relief, where within hours the defendant advised the plaintiff of the situation and asked to set aside the default. Again, the factual circumstances dictated the court’s decision.

Finally, in Pearson, the appellate court affirmed the trial court’s discretion in vacating the default judgment, finding “no clear abuse of discretion warranting appellate intervention.” (Pearson, 11 Cal.App.3d at 620.) Relevantly, the trial court, in setting aside the default, discussed the “implied understanding” between the plaintiff and the court that the plaintiff would “merely use this judgment to force them to negotiate with you and get a good settlement . . . I wouldn’t have given you $108,000 if I thought for one moment you would oppose a motion to set aside . . . .” (Id. at 615-616.) The defendant’s motion to set aside the default also included three declarations: from the insurer’s claims representative, from an assistant secretary of the defendant’s corporation regarding corporate procedures; and from one of the defendant’s present counsel. (Id. at 616-617.) The appellate court even held that “whether an erroneous filing of process papers in the office of the defendant corporation constitute excusable neglect was primarily for the trial court’s discretion.” (Id. at 616.)

In conclusion, the general sentiment of Scognamillo and Don – requiring a defendant to present sufficient evidence of both their own excusable neglect and that of their insurer – is still alive and well. When defendants move to set aside a default without showing the excusable neglect of their insurer, unless they have extraordinary or unusual circumstances such as in Fasuyi, Rogalski, or Pearson, the trial court will be well within its discretion to refuse such a request.

A final note on renewed requests to set aside a default judgment

For many years, there was a tension between the fairly loose requirements to set aside a default judgment under Code of Civil Procedure section 473(b) and whether a renewed request under that section was subject to the “new or different facts, circumstances, or law” requirement inherent in Code of Civil Procedure section 1008. Essentially, if a defendant fails to set aside a default judgment on their first try, are they permitted on the renewed attempt to introduce a slew of evidence and facts they could have presented – but failed to introduce – the first time?

The California Supreme Court answered this question on July 20, 2015 in the case of Even Zohar Const. & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830. There, the defendant had originally filed a motion to set aside default with only a single affidavit by the defendants’ attorney, which the trial court found was “not credible.” Upon filing a renewed request for relief, the same attorney offered a different explanation for his failure to file a responsive pleading, as well as additional evidence that was not offered at the first motion. Although the trial court felt “bound to follow” precedent to grant the application, both the appellate court and the Supreme Court found that the defendants’ failure to comply with section 1008 required the trial court to reject their renewed application for relief from default. Even Zohar expressly found that section 1008 requires “a party filing an application for reconsideration or a renewed application to show diligence with a satisfactory explanation for not having presented the new or different information earlier” and that “Section 1008 expressly applies to all renewed applications for orders the court has previously refused.” (Id. at 839, 840.)

Thus, take care when a defendant submits a renewed request for relief from default. If they fail to provide an explanation for not providing the evidence earlier, the trial court is within its discretion – and indeed required – to reject the renewed request.


Defendants routinely attempt to claim “excusable neglect” on behalf of their insurer to escape the import of a default judgment. But under California law, they must also present evidence of the insurer’s excusable neglect, must timely file a motion, and must include a proposed responsive pleading to proceed with the trial court. Failure to do so will rightly result in the denial of the motion – and allow plaintiffs to safeguard their default judgment.

Matthew Clark Matthew Clark

Matthew Clark is a partner with the Irvine-based law firm of Bentley & More LLP, where he handles complex, law-and-motion, and appellate matters in fields ranging from insurance bad faith, to catastrophic personal injury and public-entity liability. He was recognized as a Rising Star by Super Lawyers magazine in 2015, 2016, and 2017 and attended the University of Michigan and Notre Dame Law School.

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