Articles Tagged with default judgment

What do you do when a party to a lawsuit intentionally refuses to follow the rules?  One judge in Washington State knew what to do: the judge struck the defendant’s answer, entered judgment for $8,000,000, and awarded attorneys’ fees.  Last week the Washington Supreme Court had upheld the award.

The facts are almost impossible to summarize and readers are urged to review the opinion to learn the details.  The bottom line:

The court found (1) there was no agreement between the parties to limit discovery, (2) Hyundai falsely responded to Magaña’s request for production and interrogatories, (3) Magaña was substantially prejudiced in preparing for trial, and (4) evidence was spoiled and forever lost. The trial court considered lesser sanctions but found that the only suitable remedy under the circumstances was a default judgment. Hyundai then appealed.

Not in the Seventh Circuit, it doesn’t.   In Bakery Machinery & Fabrication, Inc. v. Traditional Baking, Inc.,  No 08-1967 (7th Cir. June 29, 2009) the Court of Appeals for the Seventh Circuit refused to vacate a default judgment under Rule 60(b)(6).

The Court ruled as follows:

[W]e drew a clear line in United States v. 7108 West Grand Avenue, 15 F.3d 632, 634 (7th Cir. 1994) when we said that “[t]he clients are principals, the attorney is an agent, and under the law of agency the principal is bound by his chosen agent’s deeds.” The rule is that all of the attorney’s misconduct (except in the cases where the act is outside the scope of employment or in cases of excusable neglect) becomes the problem of the client. See id. A lawyer who inexcusably neglects his client’s obligations does not present exceptional circumstances. See Williams, 890 F.2d at 996. Hinterlong’s actions, even with BMF’s purported diligence, do not fall within the exceptions to the rule and do not rise to the level of  ‘exceptional’ to warrant such ‘extraordinary’ relief.