Washington Case Law Update: When Will Courts Set Aside a Default Judgment?

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Washington Case Law Update: When Will Courts Set Aside a Default Judgment?

From the desk of Kyle D. Riley: If a defendant notifies their insurance company of a lawsuit, but the insurance company fails to arrange a defense for the defendant, will the court set aside the default judgment? Read on to find out.

Claims Pointer: In this case arising out of a car accident, the Washington Court of Appeals held that when considering whether to set aside a default judgment, two important factors are whether the defendant has a prima facie defense to the judgment and whether the defendant’s failure to appear was due to mistake, inadvertence, surprise, or excusable conduct. This case serves as a reminder on the importance of due diligence in arranging for a defense when insureds report a served lawsuit.

VanderStoep v. Guthrie, No. 49597-0-II, Washington Court of Appeals Div. II (September 19, 2017)

Howie Guthrie (“Howie”), the son of Gary and Kathleen Guthrie (collectively “the Guthries”), was involved in a collision with Terry VanderStoep (“Terry”). Howie turned across oncoming traffic without yielding and crashed into Terry’s car. Terry suffered a herniated disc in his lower back and injuries to his right knee and left shoulder. Following surgery, Terry was relieved of almost all symptoms, aside from minor aches and pains.

The Guthries reported the accident and claim to their insurer, American Family Insurance (“American Family”). American Family’s adjuster reached out to Terry’s attorney to discuss settlement possibilities. Because the settlement negotiations were unsuccessful, Terry and his wife, Celeste (collectively “the VanderStoeps”), filed a complaint. After the Guthries received the complaint, they called American Family and informed the staff at the general claims department of the lawsuit. The Guthries followed up with two more phone calls and voicemails.

American Family failed to obtain representation, and the Guthries did not...

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