As an almost universal rule here in Virginia, failing to show up for court or respond to a lawsuit is a bad idea. Consequences include default judgment against you without the right to defend or make your case. Courts simply enter judgment and the consequences of that judgment will follow.
However, and as is often the case around here, there are small exceptions where the courts of Virginia allow the defaulting party off the hook. Sullivan Mechanical Contractors, Inc. v. KBE Building Corporation is just such a case. In Sullivan Mechanical, the Federal District Court for the Western District of Virginia was faced with a Motion to Vacate Default Judgment from KBE. The facts are laid out in the opinion, but basically come down to the usual subcontractor not paid by the general contractor and general contractor has reasons for non-payment. Subcontractor, Sullivan Mechanical, sued KBE and KBE failed to respond in a timely manner. One day after the deadline for response had passed, Sullivan moved for entry of default and the clerk entered the default that same day. KBE moved to vacate the default a mere 6 days after entry of default.
The Court granted the motion to vacate the default looking at several factors, including prejudice to Sullivan Mechanical, timeliness of the motion to vacate the default, the responsibleness or lack thereof of KBE’s actions, the availability of lesser sanctions, and, importantly, the availability of a meritorious defense to the claim. On this last point, the Court stated:
In the context of a defendant’s motion to set aside the entry of default or default judgment, a meritorious defense will be established if the defendant proffers evidence that, if believed, would permit the court to find for the prevailing party. The court finds that KBE has met the requisite showing for purposes of setting aside entry of default. KBE has identified Sullivan’s numerous specific breaches of the subcontract. Accordingly, the court finds this factor weighs in favor of vacating entry of default.
In short, the Court determined that KBE was not negligent, acted responsibly, and had a meritorious defense so the default would be vacated and the case could move forward. However, KBE did not get off scot-free. The Court awarded Sullivan Mechanical its fees and costs incurred in obtaining the default and defending the motion to vacate.
Regardless of the “good” outcome for KBE, its failure to timely reply to the lawsuit cost it attorney fees and required it to scramble to convince a court that it should be allowed to reply late. It would have been much easier to simply hire an experienced construction lawyer, respond on time, and avoid the risk.
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