A default judgment against the defendants in a $10 million product liability case was recently set aside by the Mississippi Supreme Court, after evidence was submitted indicated a “colorable defense,” indicating the defense did not design, manufacture or distribute the product in question.
Our Anderson personal injury lawyers know that default judgments are regarded by appellate courts with scrutiny because, essentially, the defense has not presented their side of the case. Default judgments in favor of the plaintiff are typically entered when the defense fails to file an answer to the complaint within a set amount of time. Notice of the default judgment is issued, the defense has another opportunity to respond, and if they still do not, a separate hearing may be held to determine damages.
Default judgments can be set aside for a number of reasons, including newly-discovered evidence, fraud or a judicial mistake.
In this case, the claim stemmed from the serious injury sustained by a 14-year-old boy who was operating an off-road vehicle known as a “Bad Boy Buggy.” It looks like something of a mix between a four-wheeler and a golf cart. The details of the accident aren’t spelled out in the state supreme court case, but we do know the resulting injuries are long-term.
The plaintiffs sued the owner of the company, as well as the owner’s insurer, as well as several others, in Louisiana, which was where the company is headquartered. However, the parents soon dismissed that lawsuit and filed another in Mississippi. When the complaint was amended soon after to include new claims for gross negligence and punitive damages, the plaintiffs reportedly did not issue a new summons, but instead sent copies of the complaint to the insurer’s headquarters by certified mail. A copy was also emailed to the firm’s attorney.
The defendants failed to file an answer to the complaint within the required 30-day window. As a result, the plaintiffs moved for a default judgment, which was granted. The entry of default and default judgment were entered on the same day.
When the defendants received notice of the default judgment, they moved to void it, arguing they did not receive proper service of the amended complaint, weren’t given notice of the default judgment prior to its entry and further, the three-pronged balancing test for relief from default judgments required it beset aside because they had a colorable defense (i.e., they did not design, make or distribute the product in question).
The state supreme court found the judgment wasn’t void on the grounds of improper servicing. The defendants had received notice of the pending case against them, and had not responded even to the original complaint. They had no defense for this.
However, the court did find the judgment should be set aside because there was “good cause” to set it aside. The fact is, default judgments are not preferred by the court. Here, the court found there was a “meritous defense” that could be presented at trial. Specifically, the defendant had purchased the company and certain assets in 2010 – one year after the buggy involved in this injury claim was made. At the time of the purchase, the firm indicated in the agreement that the prior owners would retain any liability for claims arising out of products it manufactured. That would include this one.
That agreement would not be binding on the plaintiffs in this case, but it could be the grounds for the defense to claim it wasn’t responsible for the boy’s injuries.
Now, unless the parties decide to settle out of court, the matter will be decided by a jury.
Contact our South Carolina personal injury lawyers at Lee Law Offices today by calling 800-887-1965.
BB Buggies Inc. v. Leon, July 31, 2014, Mississippi Supreme Court
More Blog Entries:
NC Court of Appeals Halts Case for Finding of Contributory Negligence, Aug. 5, 2014, Anderson Personal Injury Lawyer Blog