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Reopening Default Judgments

Section 200(4)

(50 U.S.C. App. § 520)

If any judgment shall be rendered in any action or proceeding governed by this section against any person in military service during the period of such service or within thirty days thereafter, and it appears that such person was prejudiced by reason of his military service in making his defense thereto, such judgment may, upon application, made by such person or his legal representative, not later than ninety days after the termination of such service, be opened by the court rendering the same and such defendant or his legal representative let in to defend; provided it is made to appear that the defendant has a meritorious or legal defense to the action or some part thereof. Vacating, setting aside, or reversing any judgment because of any of the provisions of this Act shall not impair any right or title acquired by any bona fide purchaser for value under such judgment.

Requirements to apply for reopening. Subsection 200(4) of the Act provides a method whereby a defendant-service member may have a default judgment reopened. In attempting to have the judgment reopened, the defendant must apply to the same court that rendered the judgment. Since default judgments obtained in violation of the SSCRA are merely voidable, a judgment remains valid until properly reopened by the service member. Three conditions must exist before a service member can apply to have the court reopen a default judgment reopened.

Judgment during service or within 30 days thereafter. Subsection 200(4) refers only to default judgments rendered against the service member during his/her period of service or within thirty days thereafter. This excludes any judgments rendered before the defendant entered military service or more than thirty days after separation from service.

Application during service or within 90 days thereafter. The defendant or a legal representative must file an application to reopen not later than 90 days after termination of military service. Defendants discovering default judgments against them more than 90 days after termination of their military service are too late.

Must have made no appearance. This subsection, 200(4), refers to default judgments in any action or proceeding governed by section 200. The only judgment governed by section 200 is one in which there is a default of "any appearance" by the defendant. Therefore, to apply to reopen judgments, defendant-service members must not have made any appearance in an action. To preserve their right to apply for a reopening, they should notify plaintiff's attorney of their military service so that the proper affidavit is filed, then allow the court appointed attorney to move for a stay. It would be unnecessary to do more. The best policy for military legal assistance attorneys is to have the commander of the service member notify the court of the respondent’s military status and/or request for a stay action. Since the commander is not an attorney, his letter will not be construed to be an appearance by counsel. Another successful approach is for the military legal assistance attorney to write the plaintiff’s counsel, reminding him of his ethical obligation to present all material facts to the court, including the respondent’s military status. Additionally, the Supreme Court of Wisconsin held that the provision of the Soldiers' and Sailors' Civil Relief Act authorizing application within 90 days of termination of service to reopen a judgment is equally available to the soldier represented by a court appointed attorney and to the soldier without court appointed representation.

Criteria for reopening judgment. Service members must demonstrate that their military service prejudiced their ability to defend their cases and that they have meritorious defenses before they may reopen default judgments under section 200(4). Trial courts have a wide measure of discretion in deciding whether to reopen default judgments.

Prejudiced by military service. Defendants must show that at the time of judgment they were prejudiced in their ability to defend the suit because of their service. The courts have ruled that a voidable default judgment is subject to being vacated at the instance of a service member, but only upon proper showing that the service member's defense has been prejudiced by reason of military service. In Becknell v. D'Angelo, the court vacated an amended divorce decree of a service member who had left the continental United States before a hearing on his wife's motion to amend, even though he had appeared at the hearing on the initial decree. His military service prejudiced his ability to defend in the action. In Federal Home Loan Mortgage Corp. v. Taylor, the court held that the trial court was within its discretion in determining that acceleration of the entire mortgage debt due to default on one month's installment was unconscionable. Misunderstanding and lack of communications were attributable to the mortgagor husband's military service in the Philippines. In Hawkins v. Hawkins, a service member showed because he was unable to take leave to defend himself, he was subjected to a court judgment regarding paternity and child support of children that he was not the biological father, and improper division of his military pension, and the court found ample prejudice to the service member.

A New York court, however, refused to set aside a default separation decree against a service member when he was fully advised of pendency of the action, was always accessible to the court, and refused to accept notice by certified mail of the time and place of the trial. The court held that he was not prejudiced by reason of military service in defending the action. A California court ruled that if a service member against whom a default judgment was entered had no desire to assert a defense and had so demonstrated by his prior conduct, his military service did not prejudice him. It may, of course, be quite difficult for defendants to show that their military service prejudiced their ability to defend when they have been in close contact with a court appointed attorney and have cooperated fully in the conduct of the defense. A further discussion of prejudice is provided later in this chapter, regarding stay actions.

Meritorious or legal defense. In addition to showing they were prejudiced in their ability to defend, service members must show that they have a meritorious or legal defense to the original cause of action before a court will reopen a default judgment. For example, one court did not abuse its discretion when it set aside a default judgment when the defendant alleged a meritorious defense. Similarly, in the case of Flagg v. Sun Investment & Loan Corp., the petitioner was prevented from defending an action on a note as well as the foreclosure of his mortgage because of his military service. Petitioner's funds were on deposit with the military and were not available to him until his permanent change of station or discharge. He was therefore unable to pay the creditor the amount due. This situation was sufficient to constitute prejudice by reason of military service. The petitioner was entitled to have the foreclosure sale and confirmation reopened so he could defend the case. In contrast, when a wife obtained a decree in equity declaring a divorce obtained by husband after entry into armed forces void because of fraud, the husband could not reopen the case. His petition did not show a meritorious or legal defense to the original suit.

The requirement that petitioners have a meritorious defense is a useful provision. It avoids a waste of effort and resources in reopening judgments in cases in which service members have no defense.

When a default judgment is based on an affidavit that falsely states that defendant is not in military service, the service member has the right to have the judgment set aside without establishing a meritorious defense To ultimately succeed on the merits, however, the service member must still have a meritorious defense.

Rights of a bona fide purchaser. When a default judgment is vacated, set aside or reversed under this section, title to property held by a bona fide purchaser could theoretically be in jeopardy. Subsection 200(4) protects the bona fide purchaser, however, by stating that vacating, setting aside, or reversing any judgment under the Act shall not impair any right or title acquired by any bona fide purchaser for value under the judgment.

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Above Information Courtesy of United States Army JAG Corps