Defendant Not at Fault in Default Judgment
If a default judgment is entered against a party and months, or perhaps years, go by before the judgment holder attempts to execute upon it, can the party subject to the judgment strike it after so much time had passed? The Commonwealth Court of Pennsylvania, in the recent case of City of Philadelphia v. David J. Lane Advertising, 33 A.3d 674, indicates that a default judgment, even as long as ten (10) years later, can be stricken from the record under the right circumstances.
In the Lane matter, in approximately May 1999, a complaint was filed by the City against David J. Lane Advertising (“Lane”) for alleged unpaid taxes dating from 1988 and 1989. Lane was promptly served but failed to file an answer to the aforesaid complaint. Accordingly, about six (6) months later, in or about November 1999, the City secured a default judgment against Lane after having issued Lane a 10-Day Notice per Pa.R.C.P. No.: 237.1. Ten (10) years later, in approximately July 2009, the City attempted to execute the judgment from November 1999, after which Lane, through his attorney, filed a motion to strike the default judgment.
The Court observed that default judgments are generally not favored and that the Court’s analysis of a motion to strike a default judgment is limited to the facts in the record at the time the judgment is entered and that it will not review the case on its merits. The focus of the Court is on potential defects in the judgment that affect the validity of the judgment; with this in mind, the Court’s inquiry was directed to the content and form of the 10-Day Notice per Pa.R.C.P. No.: 237.1 described above. The Court ruled that failure to comply with Pa.R.C.P. No.: 237.1 could create a defective record which, if it rises to the level of a “fatal” defect, could result in the default judgment being stricken, no matter how old it is.
In the Lane matter, the form for the 10-Day Notice per Pa.R.C.P. No.: 237.1 used by the City was very similar to the suggested form as laid out in the Rules of Civil Procedure, but it was not precisely the same. The form used by the City stated, inter alia, “[y]ou are in default because you have failed to take action required of you in this case.” The form suggested by the Rules of Civil Procedure is as follows: “[Y]OU ARE IN DEFAULT BECAUSE YOU HAVE FAILED TO ENTER A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILE IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU.”
The Court noted that the language used by the City was the suggested language in the Rules of Civil Procedure prior to 1994; however, in 1994, the Supreme Court of Pennsylvania changed the language, as described above, which is about five (5) years prior to the entrance of the default judgment. The Court further pointed out, after an analysis of the language itself and the explanatory comment for the new rule, that the precise purpose of the change in language from 1994 was to notify a defendant as to specifically what he failed to do and the specific reasons why the defendant is in default. To that end, the Court found that the form used by the City, though similar, lacked the new language in the 1994 updated rule which the Supreme Court purposefully added to ensure specificity in the notices issued.
Based on the above, the Court decided that it was not ruling as to whether Lane was deserving of having the judgment stricken, but whether he is entitled to it as a matter of law. The Court, citing prior decisions, noted both that default judgments are disfavored and that strict compliance with the Rules of Civil Procedure is required or else the default judgment is voided. As a result, the Court ruled that the language in the 10-Day Notice per Pa.R.C.P. No.: 237.1 used by the City is lacking so much critical language per the 1994 Rule revision, that it was fatally defective, and it ordered the ten (10) year old default judgment stricken, which served to reopen the underlying case.
The practical effect of the Lane decision is abundantly clear: when seeking a default judgment against an adverse party, follow the Rules of Civil Procedure precisely and simply use the language suggested in the Rules for the 10-Day Notice per Pa.R.C.P. No.: 237.1 exactly as written in the Rule.
Originally published on December 17, 2013 in Upon Further Review and can be viewed here.
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