Insight The Default Judgement Tool Kit

This article was originally published in the February 2017 Edition of The Advocate – the official publication of the Idaho State Bar. Online access to the original version of this article can be found via the Idaho State Bar’s website or via HeinOnline (login required).

The concept of a default judgment is simple: one party filed a complaint, and the other side didn’t file an answer or otherwise defend the case.¹ Thus, the plaintiff wins by default. With this description, it seems like a simple process. However, defaults are not without their difficulties, and petitions for default can be rejected by the Court for a variety of reasons. The goal of this article is to provide some thoughts about the default process, and give some recommendations to help practitioners avoid common mistakes. Though an order of default and a default judgment are different,² throughout this article they are referred to together as a default unless specificity is required.

A default checklist

At the outset, it is important to remember that Idaho public policy disfavors default judgments as a method of resolving a case.³ Even though the defendant has failed to defend, it is not recommended that a practitioner rely on the Court to rubber stamp the petition for default, and the practitioner should comply with the rules in the initial petition. Further, as the Idaho Rules of Civil Procedure have recently changed regarding defaults, a review of the rules may be helpful.⁴

A majority of the rules for defaults are contained in I.R.C.P. 55. However, other rules apply. Most judges have a checklist they use in determining whether to grant default, and practitioners should too. The checklist provided here, while not covering every issue, is designed to include the information needed in a default petition. The checklist is based on the Idaho rules as modified in July and September, 2016. A few of the checklist issues are discussed in detail below.

SERVICE

• Form of summons complies with I.R.C.P. 4(a)(3) and I.R.C.P. App. B forms
• Defaulting party has been served; service complies with I.R.C.P. 4(d)
• Proof of Service provided to Court in compliance with I.R.C.P. 4(g)
• If served by publication or outside the state, affidavit of service for publication or service outside state complies with statute (I.C. §§ 5-508, 5-509, 5-515)

APPEARANCE OR NONAPPEARANCE OF DEFAULTING PARTY

• No appearance or answer by defaulting party (I.R.C.P. 12(a)(1)(A), 55(a)(1), 55(a)(2)(A))
• Time for appearance/answer by defaulting party (21 days) has expired. (I.R.C.P. 12(a)(1)(A), 55(a)(2)(A))
• If defaulting party has appeared, 3 days written notice of application for default has been served. (I.R.C.P. 55(a)(1), 55(b)(2))

PLEADINGS, EVIDENCE, AND OTHER PAPERS:

• Default for Sum Certain:
• Affidavit shows amount due. (I.R.C.P. 55(b)(1)).
• Defaulting party is neither a minor nor incompetent. (I.R.C.P. 55(b)(1)).
• Submission of original instrument evidencing claim. (I.R.E. 1002; I.R.C.P. 55(b)(1)).
• Default for Other Cases:
• Defaulting party is neither a minor nor incompetent (exception – if a guardian, conservator, or other fiduciary has appeared). (I.R.C.P. 55(b)(2)).
• Hearing needed to determine damages, take evidence, etc.? (I.R.C.P. 55(b)(2); Idaho Code § 5-336), or
• Evidence of damages provided by affidavit or declaration, signed by proper parties?
• Affidavit shows compliance with 50 U.S.C. § 3901, et seq.
• Written certification of defaulting party’s name and address. (I.R.C.P. 55(b)(3)).
• Proof of assignment if debt pursued by assignee.
• Proposed Default Judgment submitted to the Court.
• Default judgment may not differ in kind or amount from what is demanded in pleadings. (I.R.C.P. 54(c); Idaho Code § 5-336).
• Judgment supported by the allegations in the Complaint.
• Judgment complies with I.R.C.P. 54(a).

COURT COSTS AND ATTORNEY FEES:

• Affidavit of court costs is filed; complies with I.R.C.P. 54(d)(1,4).
• Complaint includes prayer for attorney fees, including amount of fees. (I.R.C.P. 54(e)(4)(B)).
• Affidavit of attorney fees is filed, shows basis for fees and method of computation. (I.R.C.P. 54(e)(5)).
• Attorney fees sought do not exceed amount of judgment for claim. (I.R.C.P. 54(e)(4)(B)).
• Attorney fees sought do not exceed the amount stated in Complaint. (I.R.C.P. 54(e)(4)(B)).

OTHER

• All pleadings and other papers filed must be signed by attorney. I.R.C.P. 11(a).

Plan your pleadings

Defaults need to be planned for at the time the Complaint is written. It is essential that all the relief sought through a default judgment must be requested in the Complaint. As the Idaho Supreme Court has stated, “It is fundamental that where a defendant fails to appear or answer the trial court is without power or jurisdiction to grant relief not demanded in the complaint.”⁵ Not only must the Complaint specify what relief is sought, the allegations in the Complaint must support the relief sought.⁶ Whatever relief is sought in the judgment must be stated in the Complaint – the Judgment may not provide for money damages if the Complaint asks for an order of foreclosure.⁷ Thus, while Idaho is a notice pleading jurisdiction,⁸ some level of specificity will be helpful in obtaining a default.

In addition, every complaint should have the amount of attorney fees sought in case of default. “When attorney fees are requested pursuant to contract or a statute . .. in a judgment by default, the amount of attorney fees in the event of default must be included in the prayer for relief in the complaint and the award must not exceed the amount in the prayer.”⁹ This language is substantially different from the old rule – where the old rule only required the prayer to contain the amount of attorney fees sought,¹⁰ the new rule bars an award of attorney fees above the amount stated in the prayer.

This can create difficulties where the fees are to be based on a contingency fee arrangement. An hourly rate, or flat default rate, can be determined fairly easily and placed in the prayer, but contingency fee amounts based on incalculable general damages (such as pain and suffering or loss of consortium) are less easily determined in advance. How do you calculate what to ask for in the Complaint when you don’t know what the judge will award on default? Therefore, while it may seem absurd to demand an estimated contingency fee amount at the outset of a case, the rule may require it. Alternately, the prayer could specify that there is a contingency fee agreement and state that attorney fees could not be calculated in advance, but also contain a “no less than” amount of fees sought. Regardless, whatever amount of fees is included in the Complaint does not deprive the Court of the opportunity to determine whether such amount is reasonable.

Service and appearance

In order to get a default, a defendant must be properly served. This requires two steps. First, the summons must be in the proper form, which is provided in the I.R.C.P. Appendix.¹¹ Second, it must be served as required by the rules.¹² Therefore the plaintiff should ensure compliance with whatever service is required under I.R.C.P 4(d). This is true whether the person is a resident of Idaho, or is outside of the state.¹³ If it is unclear as to who is the appropriate person to serve (such as heirs of an unprobated estate), service by publication may be appropriate.¹⁴ A plaintiff generally does not need permission from the Court to serve outside the state.¹⁵

Once process is properly served, “Unless the party served files an appearance, proof of service must be filed with the court.”¹⁶ So what constitutes an appearance? “The appearance required to trigger the three-day notice requirement has been broadly defined, and is not limited to a formal court appearance.”¹⁷ This can include sufficient contacts between attorneys to indicate an intent to defend,¹⁸ or attending a deposition.¹⁹ In contrast, a single letter from one attorney to another does not constitute an appearance.²⁰ Special appearances for purposes of moving to dismiss and failing to plead after filing motions to dismiss may be sufficient to constitute a non-appearance.²¹

Assuming there is no appearance, the rules for providing proof of service are set out in I.R.C.P. 4(g)(1)(A- F). If no appearance is made within 21 days (as opposed to the 20 days under the old rule), default may be requested. No particular form is required (whether by motion, petition, etc.), except where information must be provided by affidavit or declaration.

Two types of default

The new rule specifies two types of default, both of which must be addressed by the Court (there is no longer a provision for a clerk of the court to enter a default).²² First, there are defaults “For Sum Certain.”²³ These are unlikely to be appropriate for any case involving general damages. Thus, they are more appropriate for contract, open account/collection, or property based cases. In these types of cases, a hearing is not generally needed to determine damages, as damages can be proven by affidavit.

Every other type of case falls under the “Other Case” rubric. These likely include most tort based cases. In these cases, hearings may be required by the Court to determine the amount of damages on default.²⁴

Evidence for defaults

It should be noted that under the old rules, granting a default was within the discretion of the court.²⁵ This was true, despite the use of the mandatory phrase, “shall enter judgment” in the old rule. The new rule uses the phrase, “must order judgment,” but as both phrases are mandatory in nature, it would seem that this has not necessarily altered the meaning of the rule nor altered the applicable legal standard. Thus, the Court has some discretion to determine whether to enter default. Even though the new rule only provides for a hearing for one type of default, both types require some evidence before a default may be awarded.

Under the old rules, the party seeking default had to submit, “an affidavit of the amount due showing the method of computation, together with any original instrument evidencing the claim unless otherwise permitted by the court.”²⁶ This rule changed on July 1, 2016, but changed back on September 9, 2016. Thus, for a period of two months or so, there was no requirement that a default for sum certain be accompanied by the original instrument evidencing the claim.²⁷ Under the old (and now current) rule it was not uncommon for a default to be denied or returned for failure to provide a copy of the original contract in breach or collection type cases, or because the Court could not figure out how the Plaintiff was calculating the amount owed.

Regardless of whether the “original instrument” language was included (or excluded) from I.R.C.P. 55(b)(1), it is still wise to provide as much information as possible. If there is an alleged breach of contract or failure to pay on a debt, I.R.E. 1002 mandates that the best evidence to establish the terms of the debt/contract is the original document creating the debt/contract. Further, documentary evidence must be authenticated before it is admissible.²⁸ The Court has discretion to determine whether additional evidence is necessary.²⁹ Thus, best practice would indicate that a party should supply the contracts or originating documents to the Court, attached to an affidavit or declaration of someone who can authenticate such documents.

In debt collection situations, the best practice for the party who has been assigned the right to collect is to provide as much information as possible regarding the assignment.³⁰ Debt collectors who are assigned contract rights should obtain, where possible, copies of all contracts assigned to them, along with affidavits from the assignors authenticating the contract documents, as well as attempting to address hearsay issues by complying with I.R.E. 803(6) and 902(11). If such documents are obtained at each stage of assignment and provided to the Court with the petition for default, this will alleviate trouble in establishing that the Plaintiff actually has the right to collect on the contract.

It could be argued that the Idaho Supreme Court may be moving away from requiring strict compliance with evidentiary rules in default situations. Evidentiary objections, if not raised, are waived.³¹ Further, as the Supreme Court indicated in Pierce v. McMullen, “Averments in a complaint to which a responsive pleading is required are admitted when not denied in the responsive pleading.”³² Thus, if a responsive pleading is required but not provided, then the allegations in the Complaint are deemed admitted.³³ Under the Pierce case then, there may be sufficient admissions just based on the Complaint (if it is sufficiently detailed)³⁴ to provide all the evidence necessary to justify a default.³⁵ Despite this, it is still recommended that as much evidence as possible is provided to substantiate the damages sought, particularly in light of the fact that the “original instrument” language has been added back to I.R.C.P. 55(b)(1). While this may seem overkill, it is better than having to redo the default petition.

With regard to evidence for “Other Cases,” if there are general damages involved, does this mean that a hearing will automatically happen? Not necessarily. If a party wants to avoid a hearing, they may explain their pain and suffering, loss of consortium, etc., in an affidavit or declaration. While this may not be as effective as having a client emote on the stand, it does save time and expenses, and may convince the Court that a damages hearing is unnecessary. As with all evidentiary issues, the affidavit should be prepared by the proper person (usually the client).

Military service affidavit

A default cannot be had against a person in active military service. This is a requirement of federal law.³⁶ Meeting this requirement can be as simple as providing an affidavit or declaration stating that the defaulting party is not in military service (with supporting facts).³⁷ Many practitioners also add to their affidavit that they have searched various online databases to establish that the defaulting party is not in active military service, though this is not strictly required.³⁸

Attorney fees and costs

Often, a major hold up on defaults is attorney fees and costs. Even though it is, “just a default,” there is no rule that allows a party to submit any less information on an attorney fee or costs request than they would if they had won the case at trial. Though the rules do not specifically require it,³⁹ parties tend to submit their fees and costs request at the same time they submit their default petition to save time.⁴⁰

When a party requests costs, such request must be itemized.⁴¹ There is no requirement that a party provide receipts of certain costs in a memo of costs,⁴² but providing such receipts can help the Court verify that the costs were “actually paid.”⁴³ If discretionary costs are sought, then the party should substantiate why, “the costs asserted were necessary, reasonable, and exceptional, and whether the costs should be awarded to promote the interests of justice.”⁴⁴

With regard to fees, the Court is mandated to determine whether the fees sought are reasonable.⁴⁵ Any time fees are awarded, the Court must consider the elements of I.R.C.P. 54(e)(3).⁴⁶ A party seeking fees on default must provide, “an affidavit of the attorney stating the basis and method of computation [of the fees].”⁴⁷ Thus, if the fees are sought under a statute (except Idaho Code § 12-121, which currently cannot be used for fees on default⁴⁸) or contract, the party needs to direct the Court to the statute or contract and explain how it applies. A party also should explain why, under the I.R.C.P. 54(e)(3) factors, the amount requested is reasonable. The method of computation is also important; if you would normally provide an hourly breakdown on a fees and costs motion, it should probably be done on default as well. However fees are calculated, an explanation must be in the affidavit.

Historically, attorney fees on default cases have been disallowed under Idaho Code § 12-121 due to I.R.C.P. 54(e)(2). Beginning March 1, 2017, I.R.C.P. 54(e)(2) will be repealed.⁴⁹ Thus, until March 1, 2017, parties cannot obtain attorney fees under Idaho Code § 12-121 in default cases. After that date, attorney fees on default may be sought under that statute.

Explaining how fees are calculated may create difficulty in contingency fee cases, as it may not be easy to convince a judge that attorney fees of 1/3 of a $100,000 judgment are reasonable when the only thing the attorney did was file a complaint. This is why, when there is a contingency fee arrangement, it may be best to state fees of a lesser amount in the Complaint than what could be obtained through trial. Further, if the fee is based on a contingency fee arrangement, it may be necessary to provide a copy of the arrangement (redacted as necessary to preserve any privilege) to the Court, as the best evidence of the terms of the arrangement is the written contract.⁵⁰

As a general rule, a party who wants attorney fees on default should put as much effort into the memorandum of fees and costs as they would if they had won the case on motion or at trial.

Documents to submit to the Court

Finally, a party should not expect the Court to prepare all documents to enter default; it is advised that the party seeking default provide all appropriate orders, and sufficient copies (along with stamped envelopes) to allow the Court to enter and serve the orders.⁵¹ Because default and default judgment are different (and because a judgment generally must be separate from any other document⁵²), this means providing the Court with multiple copies of at least two documents. The judgment must comply with I.R.C.P 54(a). Where a default includes a foreclosure or some other type of writ, copies of these documents should be provided as well.

It is worth noting that as the state Courts convert to electronic filing, parties will be required to follow the electronic filing rules regarding proposed orders and judgments. This may mean that instead of providing envelopes and multiple copies, a party may utilize (or may be required to utilize) the Court’s mailing service, and pay related fees.

Finally, as noted above, once a party has failed to appear and is defaulted, there is no requirement for service upon such party.⁵³ This arguably means that once a party is served the Complaint and Summons as required by I.R.C.P. 4, if they fail to appear and a default is entered, no further service under I.R.C.P. 5 need be made on that party. The party will receive notice of the default judgment as outlined under I.R.C.P. 2.3(a), 55(b)(3), and the applicable electronic mailing rules.

Conclusion

Though a petition for a default seems like it should be exceedingly simple, it is recommended that a party pursuing default and default judgment provide as much information as possible to the Court. Doing this the first time around will lessen the chance that a default petition will be returned, and will save time and costs.

Endnotes

1. I.R.C.P. 55(a)(1).
2. “Under Rule 55, I.R.C.P., entry of default by the clerk and entry of judgment by default by the district court are two distinctly different acts.” Olson v. Kirkham, 111 Idaho 34, 36, 720 P.2d 217, 219 (Ct. App. 1986).
3. Bach v. Miller, 148 Idaho 549, 552, 224 P.3d 1138, 1141 (2010); Tyler v. Keeney, 128 Idaho 524, 527, 915 P.2d 1382, 1385 (Ct. App. 1996); Kingsbury v. Brown, 60 Idaho 464, 92 P.2d 1053, 1054 (1939).
4. See Supreme Court Order, In Re: Adoption of Newly Formatted Idaho Rules of Civil Procedure and Idaho Rules on Small Claim Actions, dated Mar. 1, 2016; Supreme Court Amended Order, In Re: Amendments to Idaho Rules of Civil Procedure (I.R.C.P.), dated Sept. 21, 2016 (nunc pro tunc September 9, 2016); Supreme Court Order, In Re: Amendments to Idaho Rules of Civil Procedure (I.R.C.P.), dated Oct. 6, 2016.
5. Cobb v. Cobb, 71 Idaho 388, 390, 233 P.2d 423, 424 (1951).
6. Id. at 391, 233 P.2d at 424.
7. I.R.C.P. 54(c).
8. Youngblood v. Higbee, 145 Idaho 665, 668, 182 P.3d 1199, 1202 (2008).
9. I.R.C.P. 54(e)(4).
10. See I.R.C.P. 54(e)(4) (2014).
11. See I.R.C.P. 4(a)(3) and I.R.C.P. App. B 4(a)(3)(A – C).
12. Call v. Rocky Mountain Bell Tel. Co., 16 Idaho 551, 102 P. 146, 147 (1909) (“[I]t is the fact of service which gives the court jurisdiction. . .”). See also Workman v. Brown, 103 Idaho 945, 946, 655 P.2d 462, 463 (Ct. App. 1982) (“it is the fact, not the proof, of service which gives the court jurisdiction.”).
13. Idaho Code § 5-515.
14. See I.R.C.P. 17(d); Idaho Code §§ 5-508 and -509.
15. I.R.C.P. 4(e). See also Idaho Code § 5-515.
16. I.R.C.P. 4(g)(1).
17. Newbold v. Arvidson, 105 Idaho 663, 665, 672 P.2d 231, 233 (1983), disapproved of by Shelton v. Diamond Int’l Corp., 108 Idaho 935, 703 P.2d 699 (1985).
18. Id. But see Olson v. Kirkham, 111 Idaho 34, 36, 720 P.2d 217, 219 (Ct. App. 1986) (settlement negotiations between attorneys not sufficient to constitute an appearance).
19. Newbold v. Arvidson, 105 Idaho 663, 665-66, 672 P.2d 231, 233-34 (1983).
20. Marano v. Dial, 108 Idaho 680, 682-83, 701 P.2d 300, 302-03 (Ct. App. 1985).
21. See Bach v. Miller, 148 Idaho 549, 552, 224 P.3d 1138, 1141 (2010); Rhino Metals, Inc. v. Craft, 146 Idaho 319, 321, 193 P.3d 866, 868 (2008).
22. I.R.C.P. 55(b)(1 – 2).
23. I.R.C.P. 55(b)(1).
24. I.R.C.P. 55(b)(2).
25. Johnson v. State, 112 Idaho 1112, 1114, 739 P.2d 411, 413 (Ct. App.1987).
26. I.R.C.P. 55(b)(1) (2014).
27. I.R.C.P. 55(b)(1) (July 1, 2016).
28. Shea v. Kevic Corp., 156 Idaho 540, 546, 328 P.3d 520, 526 (2014); I.R.E. 901.
29. Olson v. Kirkham, 111 Idaho 34, 37, 720 P.2d 217, 220 (Ct. App. 1986). While this language addresses the old I.R.C.P. 55(b)(2), an argument could be made that if the affidavit “showing the amount due” required under the new I.R.C.P. 55(b)(1) is not sufficiently clear, additional evidence could be taken.
30. A party may be required to show that they have standing to enforce a contractual right, or that they have, “step[ped] into the shoes of [the assignor] to assert that entity’s contractual rights.” Med. Recovery Servs., LLC v. Strawn, 156 Idaho 153, 158, 321 P.3d 703, 708 (2014).
31. Camp v. Jiminez, 107 Idaho 878, 881, 693 P.2d 1080, 1083 (Ct. App. 1984); Naccarato v. Vill. of Priest River, 68 Idaho 368, 372, 195 P.2d 370, 373 (1948). Tolmie Farms, Inc. v. J.R. Simplot Co., 124 Idaho 613, 617, 862 P.2d 305, 309 (Ct. App. 1992) aff’d in part, rev’d in part, 124 Idaho 607, 862 P.2d 299 (1993).
32. Pierce v. McMullen, 156 Idaho 465, 471, 328 P.3d 445, 451 (2014).
33. I.R.C.P. 8(b)(6).
34. “While I.R.C.P. 55(b)(2) vests the court with discretion to conduct such hearings, or order such references as are necessary in order to determine the amount of damages for which a party is liable, that Rule does not permit the court to ignore the long-established precept that on default all well-pleaded factual allegations in the complaint are deemed admitted.” Cement Masons’-Employers’ Trust v. Davis, 107 Idaho 1131, 1132, 695 P.2d 1270, 1271 (Ct. App. 1985) (emphasis added).
35. See, e.g. Olson v. Kirkham, 111 Idaho 34, 37, 720 P.2d 217, 220 (Ct. App. 1986) (“All that is required to support a default judgment is that the complaint contain a plain and concise statement of the cause of action and the defendant is given fair notice of the allegations as a whole. Upon default, the allegations of the complaint are taken as true.”).
36. 50 U.S.C. § 3901, et seq.
37. 50 U.S.C. § 3931 (b)(1)(A).
38. One example to check military service is https://scra.dmdc.osd.mil/ (last checked Aug. 26, 2016).
39. Generally, memoranda of costs and requests for attorney fees must be submitted no later than 14 days after entry of judgment. I.R.C.P. 54(d)(4) and (e)(5).
40. But see I.R.C.P. 54(d)(1)(F) (“All costs and attorney fees approved by the court and fees for the service of the writ of execution upon a judgment are automatically added to the judgment as costs and collected by the sheriff in addition to the amount of the judgment and other allowed costs.”).
41. I.R.C.P. 54(d)(4).
42. Certain costs, such as filing fees, can be verified by the Court checking such sources as the Appendix A to the Idaho Civil Rules. However, items such as service fees, charged by private entities, cannot be verified by the Court without a receipt being provided.
43. I.R.C.P. 54(d)(1)(C).
44. Fish v. Smith, 131 Idaho 492, 493, 960 P.2d 175, 176 (1998).
45. Lettunich v. Lettunich, 145 Idaho 746, 750, 185 P.3d 258, 262 (2008).
46. Hines v. Hines, 129 Idaho 847, 855, 934 P.2d 20, 28 (1997).
47. I.R.C.P. 54(e)(5).
48. I.R.C.P. 54(e)(2). While this is a situation where a court rule arguably conflicts with a legislative statute, the Idaho Supreme Court has determined that its constitutional rulemaking authority can supersede legislative enactments. Idaho Sch. For Equal Educ. Opportunity v. State, 140 Idaho 586, 593, 97 P.3d 453, 460 (2004).
49. See Supreme Court Order, In Re: Amendments to Idaho Rules of Civil Procedure (I.R.C.P.), dated Oct. 6, 2016. See also Hoffer v. Shappard, _ Idaho , P.3d_ (Idaho S. Ct. 2016 Opinion No. 105, Docket No. 42087, filed Sep. 28, 2016).
50. I.R.E. 1002. Contingency fee arrangements must be in writing in Idaho. Idaho R. Prof. Cond. 1.5(c). Thus, the best evidence of what the terms of that arrangement are is the actual written document itself.
51. I.R.C.P. 2.3(a).
52. I.R.C.P. 54(a).
53. I.R.C.P. 5(a)(2).

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