Default Judgments Explained
To gain any judgment against an individual, a plaintiff must first file a complaint. Normally, the defendant will file an answer, the parties will file applicable motions, attend settlements, and eventually the judge will issue a judgment in favor of one of the parties. If the judgment is in favor of the plaintiff, this will allow a plaintiff to begin the collections process. If in favor of the defendant, usually a judgment will dismiss the case and prevent the plaintiff from bringing the same suit against the defendant.
A default judgment is a legal ruling made by a judge in favor of one party in a lawsuit because the other party has failed to take appropriate legal action, such as failing to respond to a complaint or appearing at court when demanded.
How is Default Judgment Obtained?
In legal proceedings, when a plaintiff files a complaint against a defendant, the defendant has a certain amount of time to respond to the complaint. In New Jersey, that time is 35 days. In federal cases, that time is 21 days. This response is typically in the form of an answer to the complaint or a motion to dismiss. If the defendant fails to respond within the given timeframe, the plaintiff may request the court place an entry of default against the defendant. While often misunderstood, this is not the final judgment by default.
Once the default is entered, the plaintiff must again give notice of the entry of default, and the subsequent motion for judgment by default. This motion for judgment by default needs to show the defendant was properly served notice of the proceedings, the defendant failed to answer, and that the defendant is not an active member of the military. If all of these can be shown, the court will enter final judgment by default, and will often require a proof hearing.
How are Damages Determined in Default Judgments?
A proof hearing, or often called a default judgment hearing, is exactly what it sounds like. The plaintiff must present their case in front of the court to show the damages that were actually sustained by the plaintiff. The defendant must be given proper notice of this, as the defendant is presented with the opportunity to defend themselves solely as to the actual damages to be awarded to plaintiff. This means that, while rare, the defendant can actually attend the proof hearing to show the damages alleged by plaintiff were either not as serious or exaggerated.
Often though, the defendant will not appear at this stage. This allows the plaintiff to bring all evidence to the court unopposed, and be granted a default judgment often in the full amount demanded in the complaint. At this point, the plaintiff becomes a judgment creditor and the defendant becomes the debtor.
What Happens After a Default Judgment?
While receiving any judgment is the first major step in a plaintiff becoming whole, the next step is collections. A default judgment can have serious consequences for the debtor. Because the defendants will often fail to present their side of the case, they may be ordered to pay damages, fines, or other penalties. The plaintiff now has multiple avenues open to begin collections on their judgment.
First, plaintiffs will want to docket their judgment with the New Jersey Superior Court in Trenton. This will immediately place a lien against all real estate owned by the defendant in New Jersey, and these judgment liens must be satisfied before the property can be sold or refinanced.
Next, plaintiffs can levy upon the defendant’s personal property or bank accounts. To determine this information, plaintiffs will often send out information subpoenas to defendants. Should the defendant ignore this information subpoena, the plaintiff can actually contact the sheriff’s office and have the defendant arrested to comply with the subpoena.
Next, the plaintiff can garnish the wages of the defendant. This means the court orders your employer to pay a portion of your wages directly to the judgment creditor.
Finally, the plaintiff, as the holder of a lien against the property of the defendant, can motion to sell any real estate owned by the defendant. This is often a final step in the process, as courts may be reluctant to deprive a party of their personal property.
Any Relief to Final Judgments?
Under Rule 4:50-1, a court may relieve a defendant from a final judgment for the following reasons:
(a) mistake, inadvertence, surprise, or excusable neglect;
(b) newly discovered evidence under specified circumstances;
(c) fraud, misrepresentation or misconduct of an adverse party;
(d) the judgment or order is void;
(e) the judgment or order has been satisfied, released or discharged, or a prior order or judgment supporting it is reversed or vacated, or that it is no longer equitable for the judgment or order to have prospective effect; or
(f) any other reason justifying relief.
Motions for relief are generally very favorable amongst the courts, as judges prefer all cases are heard on the merits of the action itself. However, these motions need to be made within a reasonable time and, for (a), (b) and (c), not more than one year after the entry of judgment.
We Can Help Defend Civil Lawsuits
The experienced attorneys at Scura, Wigfield, Heyer, Stevens & Cammarota LLP have experience vacating judgments, defending civil lawsuits and negotiating favorable settlements. Simply ignoring a civil lawsuit almost always results in the entry of a default final judgment. It is always the best strategy to assert your defenses at the onset. However, situations arise where the opportunity to answer has expired and a default final judgment has been entered. R. 4:50 may be your weapon against an invalid judgment in these scenarios.
Whether you have just been served with a complaint or a judgment has already been entered against you, the attorneys at Scura, Wigfield, Heyer, Stevens & Cammarota LLP can help. Please call our offices to schedule a free consultation and hear your options.