Default vacated due to ongoing negotiations with insurer

By Jeffrey P. Downer

Where a plaintiff’s lawyer continues to negotiate with defendant’s liability insurer, a default order taken against plaintiff may be vacated for lack of notice to the defense, the Washington Court of Appeals has held.

In Colacurcio v. Burger, no. 47155-4-I (Mar. 2002), cars driven by Colacurcio and Burger were involved in a collision. Colacurcio later sued Burger. Colacurcio moved for default, without giving notice of the motion to Burger or anyone representing her.

Before and after commencing the lawsuit and moving for default, Burger’s liability insurance company engaged in extended settlement negotiations with Colacurcio’s attorney. The accident occurred in early August 1997, and by August 9, the insurer had paid Colacurcio’s property damage. By August 12, Colacurcio had retained a lawyer. Over the next 10 months, a claim representative of Burger’s insurance company contacted Colacurcio’s lawyer 15 or more times to request records, inquire as to the status of the claim, or attempt to obtain a settlement demand. On July 19, 1998, the claim representative called counsel’s office and was told that he was not ready to make a settlement demand.

However, on June 28, 1998, plaintiff’s counsel had had a process server serve the summons and complaint at Burger’s address. The parties disputed whether Colacurcio had effected proper service of process. On August 3, as plaintiff’s attorney and the claim representative continued to communicate, plaintiff moved for default without notifying Burger or her insurer. Default was entered that day. Default judgment was entered September 18, 1998, again without notifying Burger or her insurer.

Burger and her insurer did not learn of the default judgment until mid-1999. They moved to vacate the judgment, and the trial court granted the motion. Colacurcio moved unsuccessfully for reconsideration and then appealed.

The Court of Appeals affirmed the order vacating the default judgment. The court noted that if Burger had "appeared" in the case, she was entitled to notice of the motion for default. Washington courts construe broadly what constitutes an "appearance." Default judgments are disfavored and are intended only to resolve claims where a party is unresponsive and has abandoned the action. Here, the continued efforts of the insurer, acting as Burger’s agent, to settle the case disproved any such abandonment.

The Colacurcio court held that whether a party’s agent has appeared does not depend on whether the agent knows that the lawsuit exists.

The Lee Smart Quarterly is a publication of the law offices of Lee, Smart, Cook, Martin & Patterson, P.S., Inc. for clients and others. It is intended as general information only and is not to be construed as legal advice. You should consult an attorney if you have any specific legal questions.

Editor: Jeffrey P. Downer	Eml: jpd@leesmart.com
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