Quantcast
Home / Opinion Digests / Motion for Default Judgment – Filing of a Late Answer – Good Cause

Motion for Default Judgment – Filing of a Late Answer – Good Cause

Henson v. DDG II, Inc. (VLW No. 017-8-107, 10pp.) (Lannetti, J.) Norfolk Cir.Ct. Case No. CL17007123-00.

Holding: Where the defendant-owner filed a notice of hearing the day before a scheduled default judgment hearing but failed to file a related motion or an accompanying proposed amended answer, because the owner has not previously sought to amend his answer, he timely filed his motion, and the litigation is in its infancy and the plaintiffs would not be prejudiced by allowing the owner to file an amended answer, good cause exists and granting leave to file an amended answer furthers the ends of justice. Where the owner filed an answer pro se on behalf of the defendant-business in his representative capacity without realizing it needed to be signed by an attorney, based on the totality of the circumstances—including the lack of prejudice to the plaintiffs, the good faith of the business owner in hiring counsel, and the promptness with which the business responded—the business has demonstrated the good cause necessary to justify the filing of a late answer under Rule 3:19(b).

We therefore deny the plaintiffs’ motion for default judgment.

Facts: The plaintiffs filed a complaint June 26, 2017, and served it on the defendants July 13. Defendant-owner filed an answer August 2, but apparently did not serve it or send it to the plaintiffs. He signed the answer, pro se, in both his personal and corporate capacity. Apparently unaware of the defendants’ answer, the plaintiffs filed a motion for default judgment Aug. 10. Defendants retained counsel who, on the day before the scheduled default judgment hearing, filed a notice of hearing—without an associated motion or proposed amended pleading—indicating that they would move to file an amended answer and other responsive pleadings. The court heard the motions and took the matter under advisement, granting the parties leave to file post-hearing briefs. The plaintiffs argue the court should “find defendant [business] in default for failure to timely file a response to the Complaint” because, as a nonattorney, the owner was not authorized to file on behalf of the business and that “no legally valid answer has been filed” on behalf of the business. The defendants request leave to file an amended answer on behalf of the owner and a later answer on behalf of the business, claiming that the owner had a good-faith belief that he was filing a proper answer on behalf of the business and that the plaintiffs will not be prejudiced by late and amended answers.

Analysis: As an initial matter, the court notes that, contrary to the requirement of rule 1:8, the owner failed to file a motion—or an accompanying proposed amended answer—related to the “Notice of Hearing” he filed the day before the scheduled default judgment hearing. The court nevertheless elected to hear his motion for leave to amend his answer while recognizing that the plaintiffs did not have the benefit of reviewing a proposed amended answer. At the hearing, the plaintiffs objected to the owner being granted leave to amend his answer to the extent such amendment involved the owner changing his position on any issue.

The Supreme Court of Virginia has pursued several inquiries to determine whether it is appropriate to allow a party to amend its pleading. These include whether the moving party previously sought to amend its pleading, whether the motion was timely filed, and whether the opposing party would be prejudiced by the amendment. Based on the facts here, these inquiries support granting the owner leave to amend his complaint. He timely filed his motion, as the litigation is in its infancy and the motion was filed shortly after the owner retained counsel. Regarding potential prejudice, the court notes that the parties are not yet fully at issue, a scheduling order has not yet been filed, and a trial date has not been set. There also is no element of unfair surprise, as the parties have ample time to respond through discovery to any amended responses. Because the court finds that good cause exists and that granting leave to file an amended answer furthers the ends of justice, the owner is granted leave to file an amended answer within fourteen days. Because the owner has not filed a proposed amended answer prior to the default judgment hearing, the court’s ruling does not alter any rights the plaintiffs might have to argue at trial or elsewhere that responses in the owner’s amended answer are inconsistent with those in his original answer.

The parties in their written briefs appear to agree that because the owner—a nonattorney—signed the answer in a representative capacity on behalf of the business, the answer as to the business is a nullity. We agree. Further, because the business’s alleged answer was not signed promptly by an attorney after the omission was called to the attention of the business, the alleged answer is stricken. The remaining question is whether the business should be granted leave to file a late answer under Rule 3:19(b). Plaintiff’s state that “[t]he only remedial measures [sic] that [the business] could have taken was to get a licensed attorney to sign on its behalf once the omission was brought to its attention,” and “Va. Code § 8.01-271.1 only allows such a remedy if the pleadings were promptly signed after the omission was brought to [the business’s] attention.” (First emphasis added.) Thus, the plaintiffs essentially argue that because the business’s alleged answer is a nullity, a dismissal with prejudice is the sole remedy.  We agree that the business’s alleged answer is a nullity and therefore must be stricken.  We disagree, however, with the plaintiff’s conclusion regarding available remedies. Rather, we hold that we have discretion to grant the business the relief it seeks. The Supreme Court of Virginia outlined factors a court should review prior to exercising its discretion, and we find the following factors relevant here: the lack of prejudice to the opposing party, the good faith of the moving party, and the promptness of the moving party in responding to the opposing parties’ decision to move forward with the suit. As discussed supra, amended pleadings—like new pleadings—will not prejudice the plaintiffs under the circumstances present here. There is no indication that the owner knew the business’s answer needed to be signed by a Virginia-licensed attorney; rather, he apparently had signed pleadings on behalf of the business previously, albeit in general district court. Under the circumstances, we find that the business’s alleged answer—signed by the owner—was filed in good faith. When the requirement for the business to have counsel was brought to the owner’s attention, the business apparently retained counsel within a relatively brief time frame. Additionally, no evidence was offered to indicate that the owner has any history of filing untimely responses or not appearing at court proceedings to participate in litigation. We therefore find that the business promptly responded to the plaintiff’s intent to move forward with default judgment by obtaining counsel. Based on the totality of the circumstances, we find that the business has demonstrated the good cause necessary to justify the filing of a late answer under Rule 3:19(b).

Motion for default judgment denied. The owner’s motion for leave to amend his answer granted. The business’s motion for leave to file a late answer is granted.

VLW 017-8-107

Fulltext Opinions