The Nebraska Court of Appeals has issued an important decision that clarifies the right to set aside default judgments, regardless of how old the judgment is, when the defendant had no actual service of the lawsuit papers. Well, the issue is now clear, except when it is not clear, which is to say I’m confused again.
In Capital One Bank vs. Lehmann, the defendant, Nelseena J. Lehman was sued in November of 2009 for $2,942.37 for an unpaid credit card account. The court summons was sent by Certified Mail and was signed by her estranged husband who did not inform her of the lawsuit. Since Lehmann did not respond to the lawsuit, a motion for default judgment was awarded in February 2010.
Lehmann claims that she had no actual notice of the lawsuit since she moved to Oklahoma in September of 2009 and did not return to Nebraska until June of 2011. Upon receiving a garnishment notice she motioned the court to set aside the default judgment in June 2014. That motion was denied and Lehmann filed her appeal.
The first half of the court ruling gives great assurance that default judgments obtained without notice to the defendant may be set aside at any time. “A judgment entered without personal jurisdiction is void.” The court cites the case of Ehlers vs. Grove, 147 Neb. 704 (1946) to underscore the basic rule that “every court possesses the inherent power to vacate void judgment, either during the term at which it was rendered or after its expiration.” The Ehlers case states declared that “. . . Nor is it necessary that a meritorious defense be shown on the part of the defendant . . .” The fact that no service was obtained is enough to set aside a default judgment at any time for any reason or no reason at all.
The second half of the opinion was not so great.
The Court of Appeals focused on Nebraska’s service of summons law, Neb. Rev. Stat. §25-505.01 which provides that “Certified mail service which shall be made by (i) within ten days of issuance, sending the summons to the defendant by certified mail with a return receipt requested showing to whom and where delivered and the date of delivery, and (ii) filing with the court proof of service with the signed receipt attached.”
Citing a prior case, the court declared that “due process requires notice to be reasonably calculated to apprise interested parties of the pendency of the action and to afford them the opportunity to present their objections.” Doe v. Board of Regents, 280 Neb. 492, 508 (2010).
The court noted that here was no record of Lehmann notifying the bank that she moved to Oklahoma or that she forwarded her mail. “It is unclear how Lehmann’s temporary marital or living status affects Capital Ones’ reasonable reliance on, presumably, an address provided to them by Lehmann for the purpose of her maintaining an account.” Unlike the Ehlers case where there was no service of summon at all, in this case due process was not violated because notice was reasonably calculated to apprise Lehmann of the lawsuit. So, the court ruled that Lehmann was properly served and her appeal was dismissed.
The court’s conclusion is difficult to comprehend. Why does it matter that Lehmann failed to provide a new address? Has it been determined that it was, in fact, her account? Was that fact admitted in the motion? Would it have made a difference if Lehmann was a battered spouse requiring an immediate exit from the family home? Would that make her failure to change the address more reasonable? If her estranged husband admitted that he purposely hid the lawsuit to get back at her would that have made a difference? If the certified mail receipt was signed by a subsequent tenant of the home instead of the estranged husband, would that make a difference? Of course it would. The court seems to be saying that it is Lehmann’s fault for not getting notice. The court talks about whether notice was reasonably calculated to apprise the interested parties, but then it goes on to attack Lehmann’s conduct as not being reasonable.
Is it the the plaintiff’s conduct that must be reasonable in serving notice or is it the defendant’s behavior that must be reasonable to be available for notice? Isn’t every notice sent by a creditor to the last know address of the customer reasonably calculated to provide notice?
The undisputed fact in this case is that the defendant never received notice until her paycheck was being garnished. That should have made a difference.
Image courtesy of Flickr and The U.S. National Archives.