By D. Andrew Rawlings
The situation is familiar. Your client has filed a claim in a lawsuit. The other party has been served. The time to respond has passed. But the other party has not responded. Reflexively, legal practitioners seek default. To refine this legal reflex, this article is intended to clarify the terminology and delve into some common trouble spots in the analysis of both default and default judgment. Precise vocabulary leads to better analytical understanding and, together with clear applications, provides a simpler path to obtaining default judgment.
From the outset, it is important to bear in mind that “judgments by default are not favored.”[i] While this is frequently applied ex post facto to support granting relief from a judgment “in doubtful cases in order to decide the case on the merits,”[ii] it also places a gatekeeping function on the court. For this reason, compliance with all of the requirements for default and default judgment is essential. The better a party’s submissions in pursuit of default judgment are, the more likely they are to be granted the desired default judgment.
Distinguishing Default from Default Judgment
Frequently in lawyers’ parlance “default” includes the default entered against a party and the resulting judgment. While this can be a convenient shorthand, the rules of civil procedure use these terms more specifically. “Courts distinguish a judgment by default from the mere entry of default. … An entry of default and an entry of default judgment are two separate events or steps.”[iii] As a result, entry of default can occur simultaneously with default judgment or the two can occur at different times.
The entry of default is the first step and does not constitute a judgment.[iv] The entry of default, by itself, is interlocutory and not an appealable order.[v] The effect of default being entered against a party is that the defaulted party is no longer entitled to be served with orders, pleadings (except as to new claims against the defaulted party), motions, memoranda, notices, etc.[vi] In short, a defaulted party is not usually entitled to further notice of the proceedings.[vii]
In contrast, default judgment is—above all—a judgment. It must comport with all of the requirements of judgments in Idaho Rule of Civil Procedure 54(a). Thus, it must be titled a “Judgment”; “begin with the words ‘JUDGMENT IS ENTERED AS FOLLOWS:…”; “state the relief to which a party is entitled on one or more claims for relief in the action”; and “must not contain a recital of pleadings, the report of a master, the record of prior proceedings, the court’s legal reasoning, findings of fact, or conclusions of law.”[viii] Once signed by the court, it can be enforced like any other judgment.
Entry of Default
The entry of default is governed by Rule 55(a). Generally, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the court must order entry of the party’s default.”[ix] For this reason, entry of default is not an area of discretion for the trial court but is mandatory when the underlying conditions are satisfied.[x] There are three underlying conditions that require the court to enter default against a party: (1) proper service on the party (2) who has failed to plead or otherwise defend (3) within the time for doing so.
First, a party must be served with the claim. Service of an original complaint, third-party claim, or a new claim for relief against an already-defaulted party must comply with Rule 4. Once completed, the written proof of service must be filed unless the defendant files an appearance.[xi] When the claim is not in an original pleading (e.g., a counterclaim, crossclaim, or an amended claim), service must comply with Rule 5 and the Rule on Electronic Filing and Service. After appropriate service is completed, the served party has the obligation to “plead or otherwise defend.”[xii]
Second, to plead or otherwise defend usually means filing a responsive pleading[xiii] or a Rule 12(b) motion.[xiv] A defendant may instead file a notice of appearance, but doing so will not prevent the entry of default, though it does create an additional procedural hurdle. “If a party has appeared in the action, that party must be served with three days’ written notice of the application for entry of default before default may be entered.”[xv]
But this notice can also be necessary even without a formal notice of appearance being filed with the Court. The term “appearance” is “broadly defined” and comes down to whether there are sufficient indications of a defendant’s “intent to defend against the action.”[xvi] Thus, “[s]ufficient contacts between attorneys” can constitute an appearance.[xvii] Even engaging with a plaintiff’s attorney and attending a deposition has been considered an appearance,[xviii] though that “probably marks the outer bounds of activity that can be considered an appearance.”[xix]
Accordingly, an appearance is not completed by a single letter to plaintiff’s attorney,[xx] a single phone message proposing a settlement,[xxi] “participating in preliminary settlement negotiations,”[xxii] or “[t]estifying as a witness at a deposition.”[xxiii] Ultimately, “[t]o amount to an appearance, the defendant’s actions must be responsive to plaintiff’s formal court action, so it is insufficient to simply be interested in the dispute or to communicate to the plaintiff an unwillingness to comply with the requested relief.”[xxiv] The key action is an indication of acknowledged representation of defendant—either by an attorney or self-representation—in response to the lawsuit.[xxv]
Third, the timeframe for pleading or defending (or appearing, to trigger the additional notice) depends on the procedural posture. A party must respond “21 days after being served with” a summons and complaint, counterclaim/crossclaim, or an order to reply.[xxvi] Alternatively, the timeframe to respond is 14 days after an amendment is filed,[xxvii] the trial court decides a Rule 12(b) motion,[xxviii] or a more definite statement (resulting from a successful Rule 12(e) motion) is filed.[xxix] Finally, a shorter time can be set with the consent of the defaulting party and a court order shortening the time for a response made upon a showing of good cause by the non-defaulting party.[xxx]
Mechanically, the non-defaulting party must seek the entry of default against a party that has failed to timely appear. After establishing adequate service (under Rule 4(g) or 5(e)), the non-defaulting party must submit an application and an affidavit (or a declaration, per Rule 2.7) showing that the defaulting party (1) failed to plead or otherwise defend (2) within the time for doing so, and (3)if the defaulting party “appeared,” whether the required additional notice was provided. Upon a satisfactory showing, the court must enter default against the defaulting party.
Default judgment is governed by Idaho Rule of Civil Procedure 55(b). The procedures are somewhat different depending on whether the claim is for a “sum certain” or not. Each of these situations warrants separate consideration.
Default Judgment for a Sum Certain
When the “claim is for a sum certain or a sum that can be made certain by computation, the court, [once all the requirements are met], must order judgment for that amount and costs against the party who has been default.”[xxxi] Note that default judgment is also a mandatory action, but only once the requirements for it are satisfied. The requirements are spelled out in the rules. Just as with the entry of default, default judgment requires an application and an affidavit (or declaration). When a “sum certain” or calculable is sought, the non-defaulting party must submit an application and a supporting affidavit (or declaration).
At a minimum, the application must certify: (1) the name of the party against whom default judgment should be entered,[xxxii] and (2) the address most likely to give notice of the default judgment to that party.[xxxiii] The supporting affidavit (or declaration) must show: (1) the amount due and the method of calculation,[xxxiv] (2) an original instrument evidencing the claim (unless otherwise permitted by the court),[xxxv] and (3) that the party against whom default judgment should be entered: (a) Was personally served (“other than by publication or personal service outside of this state”),[xxxvi] (b) has been defaulted,[xxxvii] (c) is not a minor or incompetent,[xxxviii] and (d) is not protected by the Servicemembers Civil Relief Act (“SCRA”), 50 U.S.C. §§ 3901–4043. In submitting these materials, some points are common trouble spots in obtaining default judgment and bear further description.
First, the amount due and the method of calculation must be clear. Thus, if interest is being claimed, the calculation needs to be understandable. Except in very limited circumstances, “courts in Idaho are averse to awards of compound interest.”[xxxix] And specifically, practitioners must be aware that “[p]rejudgment interest is not compounded” in Idaho.[xl] Thus, for purposes of default judgment, a claimant is only entitled to simple interest.[xli] To show the calculation of simple interest, the affidavit or declaration should show: (a) the principal amount due, (b) the due date, (c) the number of days from the due date to the date of the application for default judgment, and (d) the interest per diem. The first and second items are factual allegations that should already be in the pleading. The third is readily counted. The fourth requires some accounting acumen.
Unless otherwise specified in a contract, statute, or rule, Idaho’s prejudgment interest rate in most cases is 12% per annum.[xlii] Divided by 365 days per year, this yields an effective rate of approximately 0.0329% per day (using a spreadsheet program will diminish rounding errors but, in any event, the use or disuse of rounding must be explained so the court can understand the calculation). Multiplying that per day interest rate by the principal results in the interest per diem. With that, the total interest due is calculated by multiplying the interest per diem by the number of days from the due date to the date of the application for default judgment.
Second, it is worth noting that the default rule is that a party seeking default judgment must provide “any original instrument evidencing the claim,” and can only be relieved of that obligation if the court permits otherwise.[xliii] None of the local rules of any of the judicial districts discuss this requirement to provide an original instrument.[xliv] Thus, without a specific court order providing otherwise in the pending action, a non-defaulting party is required to submit “any original instrument evidencing the claim.”[xlv] As most default judgments for a sum certain arise from a contract, the contract at issue is the original instrument.
From an evidentiary point of view, this original instrument must be properly authenticated.[xlvi] While the term “original” is used in this rule, and is the best evidence,[xlvii] the rules of evidence provide that a “duplicate is admissible to the same extent as the original unless a genuine question is raised about the original’s authenticity, or the circumstances make it unfair to admit the duplicate.”[xlviii]
Third, while a detailed discussion of the SCRA, codified at 50 U.S.C. §§ 3901–4043, would be lengthy, compliance with the SCRA is usually straightforward. Generally speaking, the SCRA is “a federal law that provides protections for military members as they enter active duty.”[xlix] If the defaulted party is a business entity, it cannot be protected by the SCRA since it cannot be a “servicemember” protected by these federal statutes.[l] If the defaulted party is an individual, there are means of obtaining a report showing whether that person is a “servicemember.”[li]
Default Judgment in Other Cases
In “other cases,” including where a “sum certain” is not sought or where the defendant is a “minor or incompetent person,” the non-defaulting party must submit an application.[lii] But because this category of default judgment definitionally encompasses all of the claims that cannot “be made certain by computation,” the rule provides some additional explicit protections and more adaptable procedures the court can use.
One protection in Rule 55(b)(2) is that default judgment can only “be entered against a minor or incompetent person only if represented by a general guardian, conservator, or other like fiduciary who has appeared.”[liii] Another protection provides for three days’ notice prior to a hearing for any party that has appeared.[liv] When default is sought at the same time as default judgment in this case, the three days’ notice for both can be combined, although a hearing is required to obtain a default judgment.[lv]
Beyond that, the issues depend on the case. To accommodate all of the variances possible in these cases, the rule provides that the “court may conduct hearings or make referrals when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter.”[lvi]
Costs and Attorney Fees Upon Default Judgment
A party prevailing by means of a default judgment is, like any other prevailing party, entitled to an award of costs pursuant to Rule 54(d) and, perhaps, attorney fees per Rule 54(e). This requires a memorandum of costs, which can be combined into the application and affidavit/declaration filed to seek default judgment.
Along with costs, attorney fees may be awarded to a prevailing party, even in a default judgment, “when provided for by any statute or contract.”[lvii] However, “[n]o attorney fees may be awarded pursuant to Idaho Code section 12-121 on a default judgment.”[lviii] Thus, under whatever basis the attorney fees are claimed as part of the default judgment, “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.”[lix]
Further, when fees are claimed in a default judgment under Idaho Code § 12-120, the “award of attorney fees … must not exceed the amount of the judgment for the claim, exclusive of costs.”[lx] Consequently, when fees are claimed under a contract or another statute, the same restriction does not apply, and the fees can exceed the amount of the claim.[lxi] In any event, the fees must be reasonable, and the court must have a basis to analyze the factors listed under Rule 54(e)(3).
Obtaining default and default judgment against a non-responsive party requires compliance with the applicable rules of civil procedure. Understanding the analysis and presenting the requisite information clearly will make the process—for the Court and your client—more streamlined, effective, and efficient.
D. Andrew Rawlings is a member of Holden, Kidwell, Hahn & Crapo, P.L.L.C. in Idaho Falls, practicing in litigation, business law, estate planning, administrative law, and appeals. He graduated from the University of Idaho in 2014 with a J.D. and M.Acct. He can be reached at firstname.lastname@example.org.
[i] Maynard v. Nguyen, 152 Idaho 724, 733, 274 P.3d 589, 598 (2011) (quoting Idaho State Police ex rel. Russell v. Real Prop. Situated in the Cnty. of Cassia, 144 Idaho 60, 62, 156 P.3d 561, 563 (2007), and citing Suitts v. Nix, 141 Idaho 706, 708, 117 P.3d 120, 122 (2005)).
[ii] Maynard, 152 Idaho at 733, 274 P.3d at 598 (citations omitted).
[iii] Martinez (Portillo) v. Carrasco (Mendoza), 162 Idaho 336, 340-41, 396 P.3d 1218, 1222-23 (2017) (quoting 46 Am. Jur. 2d Judgments § 233 (2006) (omitting footnotes therein)).
[iv] See Martinez, 162 Idaho at 340–41, 396 P.3d at 1222–23.
[v] See id.
[vi] Idaho R. Civ. P. 5(a)(2).
[viii] Idaho R. Civ. P. 54(a)(1).
[ix] Idaho R. Civ. P. 55(a)(1) (emphasis added).
[x] See Rife v. Long, 127 Idaho 841, 848, 908 P.2d 143, 150 (1995) (“This Court has interpreted the meaning of the word ‘may’ appearing in legislation, as having the meaning or expressing the right to exercise discretion. When used in a statute, the word ‘may’ is permissive rather than the imperative or mandatory meaning of ‘must’ or ‘shall’” (citation omitted)); see also Kimbrough v. Idaho Bd. of Tax Appeals, 150 Idaho 417, 420, 247 P.3d 644, 647 (2011) (“Administrative rules are interpreted the same way as statutes”).
[xi] Idaho R. Civ. P. 4(g)(1).
[xii] Idaho R. Civ. P. 55(a)(1).
[xiii] See Idaho R. Civ. P. 7(a).
[xiv] See Idaho R. Civ. P. 12(b).
[xv] Idaho R. Civ. P. 55(a)(1).
[xvi] Newbold v. Arvidson, 105 Idaho 663, 665, 672 P.2d 231, 233 (1983), abrogated on other grounds by Shelton v. Diamond Int’l Corp., 108 Idaho 935, 703 P.2d 699 (1985).
[xvii] Newbold, 105 Idaho at 665, 672 P.2d at 233 (citations omitted).
[xix] Meyers v. Hansen, 148 Idaho 283, 289, 221 P.3d 81, 87 (2009) (citations omitted).
[xx] Marano v. Dial, 108 Idaho 680, 683, 701 P.2d 300, 303 (Ct. App. 1985).
[xxi] Secured Inv. Corp v. Myers Exec. Bldg., LLC, 162 Idaho 105, 111, 394 P.3d 807, 813 (Ct. App. 2016).
[xxii] Olson v. Kirkham, 111 Idaho 34, 36, 720 P.2d 217, 219 (Ct. App. 1986).
[xxiii] Meyers, 148 Idaho at 289, 221 P.3d at 87.
[xxiv] Id. 148 Idaho at 288, 221 P.3d at 86 (internal brackets, quotation marks, and citation omitted; emphasis added).
[xxv] See Secured Inv. Corp., 162 Idaho at 111, 394 P.3d at 813.
[xxvi] Idaho R. Civ. P. 12(a)(1).
[xxvii] Idaho R. Civ. P. 15(a)(3).
[xxviii] Idaho R. Civ. P. 12(a)(2).
[xxx] Idaho R. Civ. P. 55(a)(2)(B).
[xxxi] Idaho R. Civ. P. 55(b)(1) (emphasis added).
[xxxii] Idaho R. Civ. P. 55(b)(1) and –(3)
[xxxiii] Idaho R. Civ. P. 55(b)(1) and –(3) (which is the address the clerk “must use … in giving the party notice of judgment”).
[xxxiv] Idaho R. Civ. P. 55(b)(1).
[xxxix] N. Idaho Bldg. Contractors Ass’n v. City of Hayden, 164 Idaho 530, 432 P.3d 976, 990 (2018) (citing Holladay v. Lindsay, 143 Idaho 767, 770, 152 P.3d 638, 641 (Ct. App. 2006); Doolittle By & Through Doolittle v. Meridian Joint Sch. Dist. No. 2, 128 Idaho 805, 814, 919 P.2d 334, 343 (1996)).
[xl] Doolittle, 128 Idaho at 814, 919 P.2d at 343.
[xli] See id.
[xlii] Idaho Code § 28-22-104.
[xliii] Idaho R. Civ. P. 55(b)(1).
[xlv] Idaho R. Civ. P. 55(b)(1).
[xlvi] See Idaho R. Evid. 901.
[xlvii] Idaho R. Evid. 1002.
[xlviii] Idaho R. Evid. 1003.
[xlix] United States Dept. of Justice, The Servicemembers Civil Relief Act (SCRA) (June 12, 2019), https://www.justice.gov/servicemembers/servicemembers-civil-relief-act-scra (citations omitted).
[l] See 50 U.S.C. § 3911(1) (“The term ‘servicemember’ means a member of the uniformed services, as that term is defined in section 101(a)(5) of title 10”).
[li] See, e.g., United States Dept. of Defense, Defense Manpower Data Center, Servicemembers Civil Relief Act (SCRA) Website (June 12, 2019), https://scra.dmdc.osd.mil/scra/#/home (which allows users, without an account or fee, to conduct a single record request to search a person’s social security number, date of birth, and name for purposes of showing SCRA compliance).
[lii] Idaho R. Civ. P. 55(b)(2).
[lv] Compare id. with Idaho R. Civ. P. 55(a)(1).
[lvi] Idaho R. Civ. P. 55(b)(2) (paragraphing modified).
[lvii] Idaho R. Civ. P. 54(e)(1).
[lviii] Idaho R. Civ. P. 54(e)(2).
[lix] Idaho R. Civ. P. 54(e)(4)(B).
[lxi] See id.