Trial News

The California Supreme Court held that a default judgment lacking fundamental jurisdiction for insufficient service of process is void and must be vacated. The court reversed an appellate court’s decision upholding the trial court’s ruling that the defendant’s motion to set aside the default judgment was time-barred. It also abrogated the two-year time limit for motions to vacate. (Cal. Capital Ins. Co. v. Hoehn, 558 P.3d 590 (Cal. Nov. 18, 2024).)

When a fire destroyed the apartment building where Cory Hoehn lived, an insurance investigator determined that “careless smoking” was to blame. Although the investigator did not conclude Hoehn was at fault, the insurer sued Hoehn for negligence, seeking more than $470,000 in damages. It attempted to serve Hoehn in person but was only able to leave the complaint with someone else at the residence. It also mailed a copy of the summons and complaint to Hoehn’s address. Approximately one year later, the insurer obtained a default judgment against Hoehn, who did not learn of the judgment until almost a decade later when his employer informed him that a lien had been placed on his wages.

Hoehn promptly filed a motion to set aside the default judgment on the basis that he had never received the summons and complaint. The trial court denied the motion as time-barred because it was not filed within two years after the default judgment. An appellate court affirmed, citing the rule set out in Rogers v. Silverman, 216 Cal. App. 3d 1114 (1989), that a motion for relief from a default judgment that is valid on its face but void for improper service must be made within two years. AAJ and Consumer Attorneys of California filed a letter brief urging the California Supreme Court to take the appeal. After it granted the petition for review, AAJ and Consumer Attorneys of California filed an amicus brief in support of Hoehn.

Reversing, the state high court noted that the right of civil defendants to proper service is essential to their basic due process right to notice and their ability to defend against liability claims that may lead to unwarranted financial hardship. Procedural hurdles—such as the two-year limitation here—that are unnecessary to the fair adjudication of default judgments should not stand in the way of vindicating a defendant’s due process rights, including the right to proper service of process. Because Rogers created such a hurdle, the court abrogated the rule.

The court noted it does not part ways with longstanding Court of Appeal precedent lightly but concluded it was appropriate to do so here. Accordingly, it remanded the case to the Court of Appeal, holding that a motion to vacate a judgment that is void for lack of proper service is not subject to the judicially imposed two-year limitation.

“This is a landmark opinion that restores due process for California citizens,” said Oakland, Calif., attorney Denyse F. Clancy, who represented Hoehn. “As the multiple amici briefs showed, the unscrupulous practice of ‘sewer service’ by debt collectors has disproportionately affected the poor and minorities, who often don’t learn there has been a judgment against them until years after the fact. The Hoehn opinion ensures that they will be able to move to vacate the judgment where there has not been lawful service.”