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Tactical Strategies for Reconsideration and Vacation of Judgments

By Patrick C. Burpee

In the debt collection industry, default judgments are commonplace. Default judgments occur when a party fails to timely answer a complaint that has been served on them. In Washington, the response period is twenty calendar days (excluding the date of service) from the date of service.

The hope of collection agencies and debt buyers is that a defendant will fail answer the Complaint. This permits the plaintiff to provide the Court with a Judgment (that they have prepared - not the court or judge), that is simply signed by the Judge, awarding them exactly what they asked for, even if they may not legally entitled to it.

After a default judgment is entered, the plaintiff becomes a judgment creditor and can begin post judgment collection efforts. Typically, large debt buyers such as CACH LLC, UNIFUND CCR, LLC, Cavalry SPV I, LLC, and Portfolio Recovery Associates, LLC, garnish bank accounts or wages. They employ debt collection law firms such as Suttell, Hammer & White, P.S. (formerly "Suttell & Hammer, P.S.) and the Mandarich Law Group, LLP. Aside from garnishment, they have other avenues they can pursue for compensation. They can execute on automobiles, vessels, aircraft and other items of personal property. Although the default judgment legally permits these drastic collection practices, they can be stopped if the default judgment is vacated by the court.

Motions to vacate default judgments are most-commonly based on 60(b). However, certain fact patterns warrant the use of other rules. The rules have different timelines. Some rules have no deadlines. For example, if the defendant was never properly served, the judgment is void, regardless of how much time has passed. In short, this article explores the various rules and methods available to vacate a judgment in Washington.

Motions under CR 60(b)

This rule allows a court, upon motion and upon terms that are just, to relieve a party from a final judgment, order, or proceeding for the following reasons:

1) Mistakes, inadvertence, surprise, excusable neglect or irregularity in obtaining a judgment or order;

2) For erroneous proceedings against a minor or person of unsound mind, when the condition of the such defendant does not appear in the record, nor the error in the proceeding; and

3) Newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under CR 59(b).

If the facts of a case fall into one of the reasons listed in Nos. 1-3 above, the motion to vacate must generally be brought within a reasonably time and not more than one year after the judgment or order was entered. However, if the facts warrant combining CR 60(b) with another rule, such as CR 54(b) discussed below, even the grounds spelled out in Nos. 1-3 can be brought outside the one-year limitation.

The other grounds to vacate a judgment or order under CR 60(b) do not have the general "reasonable time" and "within one year time limitation." Cases with fact patterns that fall into any one of the following grounds can be brought at any time:

4) Fraud (whether denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party;

5) The judgment is void;

6) The judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application;

7) If the defendant was served by publication, relief may be granted as prescribed in RCW 4.28.200;

8) Death of one of the parties before the judgment in the action;

9) Unavoidable casualty or misfortune preventing the party from prosecuting or defending;

10) Error in judgment shown by a minor, within 12 months after arriving at full age; or

11) Any other reason justifying relief from the operation of the judgment.

As noted above, the catch-all No. 11 "any other reason justifying relief from the operation of judgment" is not constrained by time. It can be brought at any time.

However, as with all motions to vacate under this particular rule, the moving party must first obtain an order to show cause in order to comply with CR 60(e). The order to show cause rule is in place for state superior as well as district courts. Further, the rules require that the order to show cause be personally served on the plaintiff, in the same manner as service of a summons and complaint. Service on the plaintiff/judgment creditor's attorney, rather than the plaintiff, would be considered defective service.

Motions under CR 54(b)

This rule provides another avenue for vacating a judgment. The rule provides that when more than one claim is presented in a lawsuit, whether as a claim, counterclaim, cross claim, or third party claim, or when multiple parties are involved, the court may direct the entry of final judgment as to one or more but fewer than all of the claims of the parties only upon a express determination in the judgment, supported by written findings, that there is no just reason for delay and upon an express direction for entry of judgment.

In the absence of such findings, determination and direction, any order or judgment, however designated, which determines fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties. Further, as the Washington Supreme Court has recognized, for any case to come within the provisions of CR 54(b), there must in fact be no just reason for delaying entry of final judgment, not simply pro forma language to that effect in the trial court's order. Fox v. Sunmaster Products, Inc., 115 Wn.2d 498, 798 P.2d 808 (1990). The order or judgment is subject to revision at any time before entry of judgment adjudicating all the claims, and the rights and liabilities of all the parties.

In other words, if the facts fall within the parameters of this rule, the time limitations of CR 60(b)(1) through (3) and CR 59(a) (discussed below) do not apply. The court has the discretion at any time, without regard to CR 59 and CR 60 time limitations, to vacate or revise the judgment. This particular rule is not only helpful for vacating a default judgment, it can also help vacate a partial summary judgment order. This author has successful vacated a default judgment more than three years old when the facts supported a counterclaim for the defendant (i.e., a claim of a party remaining to be adjudicated).

Motions under CR 59(a)

Although many practitioners view CR 59(a) as a method for obtaining a new trial following an unfavorable verdict, the rule has broader implications. Indeed, the rule applies not only to new trials, but to reconsideration of "any other decision or order." However, motions under CR 59(a) should generally be brought within ten days after the judgment or order is entered.

The grounds for vacating a judgment under this rule should fall into at least one of following nine causes:

(1) Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion, by which such party was prevented from having a fair trial;

(2) Misconduct of the prevailing party or jury;

(3) Accident or surprise which ordinary prudence could not have guarded against;

(4) Newly discovered evidence, material for the party making the application, which he could not with reasonable diligence have discovered and produced at the trial;

(5) Damages so excessive or inadequate as unmistakably to indicate that the verdict must have been the result of passion or prejudice;

(6) Error in the assessment of the amount of recovery whether too large or too small, when the action is upon a contract, or for the injury or detention of property;

(7) That there is no evidence or reasonable inference from the evidence to justify the verdict or the decision, or that it is contrary to law;

(8) Error in law occurring at the trial and objected to at the time by the party making the application; and

(9) That substantial justice has not been done.

If new evidence has been discovered that is material and determinative, you will have grounds to vacate under CR 59(a)(4). However, often times the newly-discovered evidence is found more than ten days after the judgment or order is entered. If so, generally CR 59 would not apply.

However, how about the scenario where all claims of the parties have yet to be determined? In other words, what if the defendant has a counterclaim that can be raised? This author has successfully vacated a default judgment based on grounds spelled out in CR 59(a), years after entry of judgment, when the facts supported a motion to vacate in part under CR 54(b) and in part under CR 59(a).

In sum, there are several rules available to practitioners to overcome a judgment. Sometimes a fact pattern clearly falls into one specific rule. Sometimes a case requires the application of multiple rules. Keep in mind that default judgments are generally disfavored by courts. Disputes should be resolved on the facts at hand, not because a party failed to timely answer a complaint. Also, don't forget the old adage, "When the law is on your side, pound the law. When the facts are on your side, pound the facts. When neither are on your side, pound the podium" (and hope for inexperienced opposing counsel).

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