There is a loophole in the Massachusetts Rules of Civil Procedure that enables plaintiffs to sue individual defendants, and obtain default judgments without them knowing about it. Specifically, the problem is Rules 4 and 5. This gaping hole is causing problems for defendants and for the courts. Amending them will not only ensure that the rights of parties are protected, but it will also reinforce the integrity of out state court system.
First, The Basics
When a law suit is filed, the complaint is accepted by the clerk of the court, and issues a summons. The summons is then transmitted by the plaintiff – or plaintiff’s counsel – to a sheriff, deputy sheriff or other person “duly authorized by law” to be served on the defendant. Mass.R.Civ.P. 4 (a) - (c).
Individuals must be served with the summons “in hand” (i.e., personally); leaving copies at the “last and usual place of abode”; or by delivering the summons to an authorized agent. Rarely, is “in hand” or personal service practical. Most plaintiffs – and indeed most process servers – do not have the time and resources to essentially stalk defendants waiting for the right time to serve them (such as when they arrive home from work). Thus, in most cases, leaving the complaint at the “last and usual place of abode” is the most common form of serving a summons and complaint. However, if the deputy sheriff – after conducting a search cannot find a defendant, or an agent, plaintiff may petition the court for service by publication, or for some other form of notice allowed by law. Mass.R.Civ.P. 4(d)(1).
In practice, attorneys will complete the relevant portions of the summons (inserting the defendant’s name, address, etc.), and instruct the deputy sheriff to serve the complaint accordingly. The deputy sheriff will then return the summons to plaintiff or plaintiff’s counsel with a “return of service”, noting the date, time and method of service. Plaintiff’s counsel then files the return with the court (in some cases, the deputy will file the return directly with the court, providing a copy to the plaintiff or plaintiff’s counsel).
If the defendant does not appear (i.e., file an appearance and/or respond to the complaint), the plaintiff may move for a default. That process involves two steps. First, the plaintiff must ask the clerk for an entry of default under Rule 55(a). Once that default is entered, the plaintiff may then petition for a default judgment under Rule 55(b). The judgment is effectively a final decree, binding the defendant.
Both the 55(a) and 55(b) requests are sought through written pleadings. Generally, any pleading filed by a plaintiff must be served on any party. However, Rule 5 specifically excuses a plaintiff from serving any pleading on any party that has not filed an appearance or pleading. Mass.R.Civ.P. 5 (a). Thus, when a plaintiff seeks an entry of default and a default judgment, a non-appearing party, plaintiff is under no obligation to notify the non-appearing defendant.
From a practical perspective, many attorneys will serve the requests on the defendants. In doing so, they will serve it by certified mail, or other service that verifies that the document was received. This has two important fundamental purposes.
First, the defendant is made known that not only is there a lawsuit, but that there is the possibility of a default being entered against him or her for failing to appear and defend the allegations in the complaint. This could prod the defendant to ultimately file the appearance. But perhaps more importantly, by notifying the defendant and by having confirmation that the defendant received the default request notice (such as through a signed certified mail return receipt), the plaintiff has a stronger argument defending a motion to set aside the default judgment for faulty service which could be filed months, if not years later. See Mass.R.Civ.P. 60. Certainly, a defendant may retain the right to challenge the sufficiency of personal service, assuming some defect in the original service of the complaint, but a defendant may very well be estopped from setting aside a default when they were made aware at the time of the filing that a default judgment might enter.
Yet notwithstanding the benefits of going beyond the requirements of the rule and giving notice to a non-appearing party, there is no requirement to do so. Indeed, the “[b]asic rules of fairness governing litigation” that would otherwise “preclude a party from placing information before a judge…..without furnishing a copy of it to the other parties…” is simply done away with by the rule. Olsson v. Waite, 373 Mass 517, 368 N.E.2d 1194 (1977).
There also is no requirement that the court notify a defendant personally that a default judgment may enter. Indeed, the court relies exclusively on the information provided by plaintiff or plaintiff’s counsel.
And Now The Problem
The problem is discovered by re-reading the last sentence of the previous section, and then asking a very simple question: “what if the information provided by plaintiff or plaintiff’s counsel is wrong?”
As a bankruptcy attorney, I have lost count of the number of times a client has told me that they did not know that they were being sued. My colleagues have shared similar versions of their experiences, but with different sets of facts.
I have heard about process never being left at the house, or being stuffed in the wrong mail box. I have had heard of process being found in a muddy puddle in the drive way. I have heard and seen that process was served at an address the debtor has not lived in for over a year. And of course, most often, I have heard that process was never left at all. Sure, there is a return of service (the document completed by the deputy sheriff confirming how service was made) – and in many cases, the return will claim that the process was also mailed – by first class mail; hammering home the notion that “the defendant knows about the case.” Yet, despite those returns there are defendants who never get service, never know about the judgments entered against them, and learn about them months, and in many cases, years later.
Every Problem has a Source
How these issues seem to be creeping up with greater frequency is a question ripe for litigation. Someone is not doing something properly. The big question is: who?
This issue is seen with increasing frequency in consumer credit claims. I have become increasingly familiar with this problem with the bankruptcy debtors I have represented as well as consumers who find they are defending against a judgment they did not even know existed. Clearly, in those cases either plaintiff’s counsel or the process server is not doing something right.
In fairness, not all debt collection attorneys are breaking the rules. And in fairness, not all process servers and deputy sheriffs take a lackadaisical approach to their job responsibilities.
And again, in fairness, this problem is not evident in most civil cases. The reality is, this problem is prevalent with consumer debt collection matters, and the motivation to fudge service of process is purely economic.
First, debt collection lawyers are notoriously under paid. While personal injury lawyers can expect 1/3 or more of a recovery, debt collection lawyers can expect less than that. Indeed, some attorneys can expect a fee of only 10-15% of what they can collect.
Second, judgments – once entered – have value. A judgment accrues at the statutory rate of 12% per year. The judgment lasts for 20 years and can be renewed. A judgment may, in certain circumstances, be transferred or sold. A judgment can be recorded, or the judgment holder could put a lien on property to secure the judgment.
Third, the less work the better. Get a default judgment, and no discovery, no defenses to worry about, and no going back and forth to court. Thus, more bang for the buck.
A well-prepared motion to set aside default will contain an affidavit from the defendant setting forth how and why they did not know about the law suit. In many cases, I have filed those motions with affidavits that simply say “I have read the return of service submitted by the sheriff, and I state under the penalty of perjury that despite what that document says, I did not receive the summons at any time.” Debt collection lawyers have nothing factual to say in response.
But in a last ditch effort, debt collection lawyers rely on a tired argument: “debtors will say anything to avoid paying a debt.” If this is coming from a debt collection lawyer who has intentionally disregarded the obligations to ensure a complaint is served properly, the remark amounts to little more than crass bullying.
From a practical perspective, setting aside the default does not mean that the debtor will not have to pay the debt (assuming it is – in fact owed – which is a different issue and article all together). All it means is that the defendant will be able to defend him or herself against the allegations in the complaint. That’s all. Thus, if a defendant is coming forward and saying “I didn’t get service”, is there a practical reason for a debt collection lawyer to fight it? No. But not fighting it cuts against the “less work the better” motivation of debt collection lawyers.
If plaintiff’s counsel is not the person actually serving the complaint, why not just bring in the constable or deputy sheriff and sue them for violations of the Fair Debt Collection Practices Act? After all, under the FDCPA, a debt collector cannot break the law in trying to collect a debt.
Yet unfortunately, the FDCPA specifically excludes deputy sheriffs and constables from liability “….while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt.” 15 U.S.C. Section 1692a(6)(D). This exemption of process servers does not cover the debt collection lawyers that employ them.
A Proposed Solution
As a bankruptcy attorney, I have met with countless numbers of debtors who have reviewed their credit reports and learned then, for the first time, that they have a judgment against them. I have met with debtors who have told me that they have a lien on their house – and have no idea how it got there. Certainly, not all debtors claim that they did not know about – but the numbers of those that do are high enough to warrant a second look at how the Rules of Civil Procedure are being manipulated to ultimately deny procedural and substantive due process rights to consumer defendants. Here are my suggestions:
Amend Rule 4 to provide that service will also be provided by U.S. mail, Certified or Registered, return receipt requested. The cost for an average certified mail letter is only about $5. If the debtor does not live there, the post office can return it.
Rule 5 should be amended to require plaintiff or plaintiff’s counsel to serve a defendant with all requests for default via certified mail, return receipt requested.
Rule 55(a) should be amended to provide that the plaintiff must describe with particularity how it determined the address the defendant was served at. A further amendment should require the clerk to send a written notice to the defendant at the address provided by the plaintiff (which is routinely done in small claims actions). It should be sent certified mail, return receipt requested. The signature should be retained by the clerk. The notice would be a warning to the defendant that a default will enter against him or her. If the letter is returned as undeliverable, or with a forwarding address noted, the clerk will have cause to believe that service was not proper.
Moreover, if the defendant’s address cannot be verified, and if the notice to the defendant cannot be verified, the court should issue and order to show cause why the case should not be dismissed for violating the defendant’s procedural due process rights. This simply amendment should – arguably – provide ample deterrence for any plaintiff to skirt their obligations under the rules.
Amending the rules will also make setting aside a default harder for defendants. Absent good cause (i.e., sickness, military duty, or the like), a court would be disinclined to set aside a default if notice can be properly demonstrated under this proposal. This not only reinforces the responsibility of individuals who are served with process to comply with the notice, but is also reinforces the respect for the authority of the court in our society.
These amendments are only a suggestion, and I am not holding my breath. For the scope of this problem to be really determined, and thus the justification of amendments to be verified, these cases must be litigated more. And these cases need to be litigated more aggressively if for no other reason, than to ensure the integrity of our civil justice system.
