A Default Judgment Is Not Always the End.

Far too often in our line of business, we are informed of litigation after a default has already been entered against our client or insured. Ideally, and in most cases, we are able to negotiate for the default to be set aside or vacated. However, in some cases, due to a variety of reasons, the court will refuse to vacate the default, and then you are left with a question of what to do next. However, it is a mistake to believe we are stuck and there is nothing that can be done after a standing default. We still must address the issue of damages.

In Tormax USA, LLC v. Kennedy Contractors, Inc., there was a dispute relating to the delivery of garage doors by Tormax, which Kennedy Contractors had paid for in full. After Tormax’s failure to deliver the garage doors, Kennedy Contractors filed suit and obtained a default against Tormax. Despite attempts by Tormax to set aside the default, the court rejected the efforts. Thereafter, Kennedy Contractors sought summary judgment as to the amount of damages to be awarded. Despite the default judgment, Tormax continued to oppose the summary judgment efforts and the amount of damages sought. The trial court rejected Tormax’s arguments; but on appeal, the District Court of Appeal reversed and remanded the case to the trial court on the issue of damages.

This matter serves as a reminder that a default is not always the end for carriers and clients. We must continue to be vigilant on issues of damages and use our defenses and legal arguments to limit damages as much as possible. 

_{Case Law Alerts, 4th Quarter, October 2024 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2024 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.}