New Colorado Caselaw on Default Judgments

You file a lawsuit four days before your statute of limitations runs on your claims. The defendant is served, but the never responds to the suit. You request default judgment from the court. However, the court denies your motion for default judgment saying you failed to follow the default judgment rules. You file another motion for default judgment attempting to correct any perceived error and the court again denies your request, except this time dismisses your case. Your case is over and you have no further recourse on your claims. These facts were at issue in the recent Colorado Court of Appeals decision dated January 16, 2020 entitled Spiremedia, Inc., d/b/a Spire Digital v. Wozniak, Case No. 18CA2098. Prior to Spiremedia, Colorado courts had never determined the issue of whether a trial court is required to tell a party when it denies a motion for default and dismisses a case for failure to comply with the rules. ¶ 2. The Colorado Court of Appeals held a trial court must tell the party what is wrong with a deficient motion for default so the party can take necessary steps to correct the deficiencies, especially when the trial court takes the extraordinary measure of dismissing the case. Id.

In Spiremedia, the trial court denied Spiremedia’s motion for default judgment stating that the motion failed to comply with the applicable motion for default rules, specifically Colorado’s Rules of Civil Procedure 121, § 1-14. However, the trial court did nothing further to explain how the motion failed to comply with that rule. ¶ 5. Spiremedia filed a second motion for default judgment, guessing that the trial court was alluding to Spiremedia’s failure to include an affidavit. Spiremedia attached an “affidavit equivalent” under the Uniform Unsworn Declarations Act, § 13-27-104(1), C.R.S. 2019 to its second motion for default judgment. The trial court again rejected the motion and dismissed the case for failure to comply with the court’s delay reduction order. ¶ 6.

The Court of Appeals found that both of Spiremedia’s motions for default judgment were deficient as determined by the trial court because they lacked necessary information regarding the request for attorney fees. Interestingly however, the Court of Appeals held that an affidavit under the Uniform Unsworn Declarations Act is sufficient and does satisfy the requirement for affidavits under the rules for default judgment. ¶ 27.

Ultimately, the Court of Appeals held that the trial court erred in dismissing the case. The Spiremedia Court relied on the Colorado Rules of Civil Procedure for default judgments stating that “[i]f further documentation, proof or hearing is required, the court shall so notify the moving party.” C.R.C.P. 121, § 1-14(2). Commentary for the adoption of this rule shows that its purpose was to minimize both court and attorney time by streamlining the motion for default process. The rule places obligations on both movants and judges and judges must explain their rationale especially when someone’s interests will be adversely affected without recourse. Thus, the Court of Appeals held that trial courts must “inform the parties of the defect that led it to deny the motion.” ¶ 33. Spiremedia must be permitted a reasonable opportunity to remedy any identified deficiencies before the trial court dismissed the case. Spiremedia represents the importance of knowing the rules defining the playing field before you jump in the game. It also highlights the importance and need for trial courts and parties to work together to prevent guessing games and, ultimately, injustice.

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