When Can You Undo a Default Judgment You Never Knew About? California Capital Ins. Co. v. Hoehn (2024)

Imagine finding out your paycheck is being garnished for a lawsuit you never knew existed. That is what happened to Cory Hoehn. In 2024, the California Supreme Court used his case to change an important rule.

What Happened

In 2009, a fire destroyed the apartment building where Hoehn rented a unit. The building's insurance company blamed careless smoking and sued Hoehn in 2010. The process server said he left the papers with Hoehn's "girlfriend" and "co-occupant." Hoehn later said she did not live with him and never gave him anything.

Hoehn never responded to the lawsuit. In 2011, the court entered a default judgment against him for about $486,000. Nine years later, his employer told him his wages were being garnished. Within three months, he asked the court to cancel the judgment.

The Old Rule

For decades, California courts followed a rule from a 1989 case called Rogers v. Silverman. Under that rule, if you claimed you were never properly served, you had only two years to bring a motion to cancel the judgment. After two years, you had to file a whole new lawsuit. The trial court and the Court of Appeal both said Hoehn was too late.

What the Supreme Court Decided

The Supreme Court unanimously disagreed. It held that the two-year limit does not apply to a motion to cancel a judgment that is void because of improper service. The court said the rule had "no footing in the statute's text" and lacked any sound justification. It stressed that proper service is a basic due process right.

The court also repeated an older rule from the U.S. Supreme Court. A person who was never properly served does not have to prove a good defense to get the judgment cancelled.

Why It Matters

If you were never properly served, the clock does not run out on your right to challenge the judgment by motion. The court did leave one question open: whether you must act promptly once you learn about the judgment. The safest course is to act quickly.

California Capital Ins. Co. v. Hoehn (2024) 17 Cal.5th 207.

This post is general information, not legal advice.