A Washington Appeals Court has affirmed a ruling in favor of a collection operation over a default judgment that a consumer had obtained, agreeing that the lower court did not abuse its discretion by vacating the judgment at the defendant’s request.
The background: The case stemmed from efforts to collect roughly $390 in unpaid medical debt. The plaintiff disputed the debt, pointing to a billing summary that showed a $0.00 balance, though another line indicated the amount had been written off and transferred to collections.
- The plaintiff eventually paid the disputed balance but later served the collection operation with a summons and complaint alleging violations of the Fair Debt Collection Practices Act.
- Although the company responded with a letter sent via certified mail explaining the billing summary and acknowledging the payment, the plaintiff maintained he never received it. When the company did not formally respond in court, the plaintiff obtained a default judgment for about $1,740.
- More than a year later, when the plaintiff sought to collect, the defendant moved to vacate the judgment, arguing the plaintiff misrepresented the facts to the court. The trial court agreed and vacated the judgment, finding that the plaintiff “didn’t have full candor” when he told the court the defendant had not responded to the complaint.
The ruling: On appeal, the court sided with the lower court, emphasizing that default judgments are disfavored and that cases should be resolved on their merits whenever possible.
- “A proceeding to vacate or set aside a default judgment is equitable in its character, and the relief sought or afforded is to be administered in accordance with equitable principles and terms,” the opinion stated, citing Washington precedent. The court noted that the trial court was within its discretion to vacate the judgment under rules allowing relief for misrepresentation or misconduct and for any reason justifying relief.
- The appellate judges further pointed out that their review was deferential because equitable relief focuses on fairness and credibility determinations. In this case, the trial court determined that the plaintiff was not credible when he told the court the defendant had not contacted him, given the certified mail record of delivery.
- The appeals court concluded, “Defaults are disfavored and our Supreme Court has endorsed a flexible approach… [the plaintiff] has not shown that the trial court abused its discretion in vacating the default judgment.”
