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Jan 4, 2016

"Excusable neglect" is a real standard requiring real evidence (Updated 01.04.2016)

ABSTRACT: While a Kansas court may grant relief from a final judgment based on excusable neglect, it is an abuse of discretion to grant that relief when the party seeking that relief has failed either to explain what facts constituted excusable neglect or to provide any evidence to support that claim.

UPDATE (January 4, 2016): The Kansas Supreme Court reversed the Court of Appeals and held that K.S.A. 60-260(b)(6), which allows the court to set aside a default judgment for “any other reason justifying relief,” applies when the court explicitly finds that the other provisions of K.S.A. § 60-260(b) do not apply. Therefore, the district court did not abuse its discretion in granting Defendant Ball's motion to set aside the default judgment pursuant. Thus, when moving to set aside a default judgment in Kansas, remember to cite to all applicable provisions under K.S.A. § 60-260(b). The full opinion may be found here.

ORIGINAL POST (April 25, 2014): In Garcia v. Ball, Plaintiff Garcia obtained a $522,400 default judgment against Defendant Ball. Plaintiff filed his petition for damages in excess of $75,000[1] on May 5, 2011 and served defendant on May 17. On July 7, plaintiff sent notice [2] that in the event of default, plaintiff would seek judgment in the amount of $522,400. On July 18, plaintiff filed and served a motion for default judgment. On October 14, since defendant had still not filed an answer, the court granted the default judgment for $522,400.

Thirty days after the default judgment and 160 days after the original answer date, defendant filed a motion to set aside the default judgment under K.S.A. § 60-260(b)(1) [3], which allows relief for “mistake, inadvertence, surprise, or excusable neglect.”

The court held a hearing on that motion, but the defendant failed to appear in person to offer any testimony. Defendant’s attorney offered his “guess” as to why defendant failed to respond, stating that “he was busy with his practice, and that he overlooked this particular matter.” Plaintiff’s attorney argued that since defendant had failed to provide any evidence supporting his claim of excusable neglect, the motion to set aside the default judgment should be denied. The district court granted the motion to set aside the default judgment, then dismissed plaintiff’s lawsuit based on the pleadings. Plaintiff appealed both rulings.

The court of appeals held that the district court abused its discretion in overturning the default judgment, because the defendant provided no reason—let alone evidence—to support his claim of excusable neglect. The court explained that defendant’s attorney offered no factual statements about what actually happened (aside from his “guess”), defendant himself offered no affidavit, and defendant did not to attend the district court hearing on his motion to set aside the default. Given the only “minimal showing of excusable neglect” necessary in Kansas to set aside a default judgment, the lack of any evidence on the record was not enough.

The court eloquently explained its rationale:

For a legal system to function, rules must be followed. We not only have a rule telling us when a default judgment may be entered, we also have one telling us when a default judgment may be set aside.

Ball filed his motion under K.S.A. 60-260(b) claiming excusable neglect, and he had the burden to plead and prove that claim. We cannot allow a defendant to obtain relief based on excusable neglect without either stating what the neglect was or providing any evidentiary basis to support the claim. Ball failed to make that showing. Even if we assume his attorney's "guess" was correct—that Ball "was just busy with his practice"—that would not constitute excusable neglect.

Hopefully, you never find yourself in a situation where you must move to set aside a default judgment. However, if you must file such a motion, factually support the motion and get your client to the hearing in support. The full opinion may be found here.

[1] K.S.A. § 60-208(a) does not allow a petition to state a specific amount above $75,000.

[2] K.S.A. § 60-254(c) allows the plaintiff to send notice to the defendant of the mount sought by default judgment.

[3] Defendant also moved for relief under the K.S.A. § 60-260(b)(6), which allows relief for “any other reason,” however this “catch-all” provision is only available when no other specific exception under §60-260 may apply.