Florida’s 4th District Court of Appeal recently weighed the issue of whether it was proper to grant default judgment against the owner of a vehicle in a car accident lawsuit when there had not yet been a determination on the liability of the alleged negligent driver.
The court’s answer: No.
Beyond that, the court determined the insurance company seeking subrogation in this action, Kotlyer v. Metro Casualty Insurance Co., had wrongly characterized the damages as “liquidated” when in fact they were “unliquidated.” The reason that matters is that courts can’t issue a default judgment without a hearing on unliquidated damages because a hearing is required to determine the exact amount. No hearing had been granted in this case before the judgment was rendered.
A default judgment is a binding judgment in favor of one party on the basis of some failure to take action by the other party. In most cases, default judgment is issued when one party fails to respond or appear before a court of law.
Courts generally frown on default judgments, preferring instead to litigate cases with both parties present and active, which generally results in the fairest outcome. However, where one party’s absence is inexcusable, courts will impose default judgments.
In this case, an auto insurance company took subrogation action against an allegedly at-fault driver and her husband, vehicle owner, after the insurer paid $50,000 in uninsured motorist coverage to its client. The insurance company alleged that as a direct and proximate result of the negligence of the driver and the vicarious liability of her husband (vehicle owner), its insured suffered personal injury, pain and suffering, mental anguish, loss of wages and earning capacity, aggravation of pre-existing condition and loss of life enjoyment. The insurer also paid roughly $5,000 for property damage of insured’s vehicle.
When the insurer paid that $50,000 in UM coverage, it retained the right of subrogation against relevant third parties. It subsequently took action against defendant and his wife.
The wife filed a pro se response, denying negligence or liability. However, the husband did not file a response. Insurer filed a motion for summary judgment by default, arguing husband’s failure to respond was akin to admission of liability and that damages in this case were liquidated in nature.
Liquidated damages are those for which a specific sum has been expressly stipulated by both parties or is easily calculable by an arithmetical equation or by application of definite rules of law. Unliquidated damages, on the other hand, are those that require additional testimony or evidence for the court to determine facts upon which to base a value judgment. Courts have previously ruled that a plaintiff’s assertion of a fixed sum is not enough to make damages liquidated.
Insurer alleged these were liquidated damages. The 4th DCA disagreed, finding, “These damages are the very types of unliquidated damages for which a hearing must be held to determine the proper amount to be awarded.”
The court then looked at the issue of whether default judgment was proper. Defendant argued he had established excusable neglect for why he did not offer a timely response to the lawsuit. However, the court didn’t reach a conclusion. What it did find was that it was improper for the trial court to issue a judgment against defendant for vicarious liability for mere ownership of the vehicle when a judgment had not been rendered against his wife for direct negligence. That is, husband’s liability depended on a finding that his wife was liable. That had not yet happened in this case, so the court’s judgment on this matter was premature.
The good news for the car accident victim in this case is that she was already paid by the insurer. This is a battle she will not have to continue fighting. It underscores yet again the value of UM/ UIM coverage.
Call Associates and Bruce L. Scheiner, Attorneys for the Injured, at 1-800-646-1210.
Kotlyer v. Metro Casualty Insurance Co., May 18, 2016, Florida’s Fourth District Court of Appeal
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Study: Distracted Driving a Big and Growing Problem in South Florida, April 27, 2016, Fort Myers Car Accident Lawyer Blog