By John Barzo, Associate
Litigation is a process. Often the process follows a pre-determined script. Sometimes you have to think outside of the box.
I recently had a situation where a client found out about a judgment against him. He claimed not to have any knowledge of the lawsuit, let alone the judgment. More importantly, the judgment led to a writ being filed against his property. When trying to refinance, it stopped him in his tracks.
So run to the lawyer!
The usual script is that one has to show a reason why one did not defend, that once you found out, you moved quickly, and that you have at least an arguable defence. The reason for this test is that more often than not, someone is just trying to delay.
His reasons for not defending were a tad weak. He did move quickly. So we focused on the defence.
The claim against him was on the basis that he personally guaranteed a debt of his now defunct company. At least that was what the claim suggested. On being retained, we sought the information from the other lawyer. It turns out there was no guarantee. The only thing he signed was an authorization to have the payments processed on his credit card.
So I decided to try an aggressive move. Not only did I bring a motion to set aside the default judgment, to allow my client to defend, I also simultaneously brought a motion for summary judgment to dismiss the action as against him. Technically, one can’t bring such a motion until the defence is filed.
I successfully argued that the stronger the defence, the less important the first two factors were in determining whether the default should be set aside. I suspect that the fact that I also moved to summarily dismiss the action underscored the point to the Judge, and gave the Judge the ability to decide right there and then so the file was not languishing in the courts.
It worked. My client can now refinance.