Default judgments

A defendant in a civil suit has thirty days after service of a complaint to respond by serving an answer or other response as required by law as required by Rule 12 of the NC Rules of Civil Procedure.  If not. the plaintiff may obtain what is referred to as a default judgment.

Obtaining a default judgment involves a two-step process. First, the plaintiff must obtain what is referred to as an entry of default pursuant to Rule 55 of the NC Rules of Civil Procedure.  An entry of default is obtained by filing a motion, which will be ruled upon not by a judge but by the clerk of court.  An entry of default results in the allegations of the complaint being deemed admitted by the defendant.  Second, after obtaining an entry of default, the plaintiff must file a motion for default judgment.  A motion for default judgment, unlike a motion for entry of default, will typically be ruled upon by a judge.

Having an entry of default reversed is governed by the “good cause” standard set forth in Rule 55(d) of the NC Rules of Civil Procedure.  A motion to set asde an entry of default must be made before a default judgment is obtained.

Obtaining relief from a default judgment is governed by the more rigorous standards set forth in Rule 60(b) of the N.C. Rules of Civil Procedure. Under this rule, a judge may set aside a default judgment where it was obtained as a result of mistake, inadvertence, surprise, misrepresentation, fraud, or excusable neglect, where it is void, or for “any other reason justifying relief from the operation of the judgment.” Despite the broad language of the third ground, the courts have interpreted it to be limited to certain specific situations.

There are time limits for seeking relief from a default judgment.  A motion to set aside pursuant to the first standard must be made within one year after the judgment is entered. A motion pursuant to the second and third standards must be made “within a reasonable time,” as determined by the judge based on the particular circumstances of the case.

While motions to set aside an entry of default or a default judgment are not always successful, they can be a relatively inexpensive option for defendants seeking to avoid a costly judgment.