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Lawsuits and Default

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One of the most common triggering events that leads people to call me is when the received service of a Summons regarding a lawsuit. In Arizona if you are sued in state court, you will likely be served in person by a process server who will deliver at least two documents, sometimes three. If you are sued for an amount less of $10,000, or less, the case will be in one of the Justice Courts. You will receive both a Summons and a Complaint from the process server. If you are sued for an amount over $10,000, your case will be in Superior Court and in addition to the Summons and Complaint, you will receive a third document entitled “Certificate Regarding Compulsory Arbitration.”

The Summons will instruct you that you have 20 days to appear and defend the lawsuit. The important date is the date you were served, not the date the case was filed. If you do not file either an Answer or a Motion to Dismiss within 20 days, the plaintiff in the case will have the right to ask the Court to enter default against you. Default is a two step process. First, the plaintiff files an Application for Entry of Default. If no Answer is filed within 10 days after the plaintiff files the Application for Entry of Default, the Clerk of the Court will enter default. There is rarely an external signal that default has been entered so it is important to pay attention to the timing of the Application for Entry of Default. After default has been entered, the plaintiff may then request a Default Judgment.

It is possible to set aside both the Entry of Default and a Default Judgment upon a showing of excusable neglect pursuant to Rule 55(c) of the Arizona Rules of Civil Procedure. A Motion to Set Aside Default or to Set Aside a Default Judgment should discuss the law and show some facts demonstrating excusable neglect.

The legal arguments will have to cite the correct law. Here are some cases that may be of use:

The law favors resolution disputes on the merits of the case. See U-Totem Store v. Walker, 142 Ariz. 549, 553, 691 P.2d 319 (App. 1984). For this reason, the Court has wide discretion to set aside default judgment. See Daou v. Harris, 139 Ariz. 353, 359,  678 P.2d 934, 940 (1984). In order for a default to be set aside, the Defendant need only show excusable neglect for failing to timely answer the lawsuit, a meritorious defense to the lawsuit, and that the Defendant has promptly requested relief from the default judgment. If the Court has any doubt whether to vacate a default judgment, it should rule in the favor of the party requesting that the default be vacated. The law favors resolution of a case on its merits rather than mere technicalities and all doubts which shall be resolved in favor of the moving party. Hirsch v. National Van Lines, Inc., 136 Ariz. 304, 308, 666, P.2d 49, 53 (1983).

It is important not ignore a Summons or Complaint because, as noted above, excusable neglect requires a very specific showing. Simply ignoring a lawsuit is not excusable neglect. Filing a Bankruptcy petition under either Chapter 7 or Chapter 13 before the time to Answer has expired will prevent the default from being entered.

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Hamid Jabbar

Hamid Jabbar

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