News & Events

Reversal on Default Judgment on Liability

Members of the firm’s Product Liability Group and Appellate and Written Advocacy Group recently obtained a reversal of a default judgment on liability in a products liability action in which plaintiffs sought over $15 million in damages.  BB Buggies, Inc. v. Leon, 2014 Miss. LEXIS 372 (Miss. July 31, 2014).  Members of the Butler Snow team included Robert A. Miller,  William P. (Will) ThomasKyle V. Miller and LeAnn W. Nealey.

BB Buggies and Textron, among other Bad Boy entities, were sued by the parents of a 14-year old minor who was seriously injured when the Bad Boy Buggies electric vehicle she was operating over-turned. Butler Snow was called when Textron and BB Buggies learned a default judgment had been entered against them on an amended complaint.

A motion to set aside the default judgment was quickly filed, raising, among other arguments, the argument that the default judgment was void because the amended complaint was improperly served.  Alternatively the defendants argued the judgment should be set aside because Textron and BB Buggies had numerous defenses to the underlying action; no prejudice would result to plaintiffs because defendants acted quickly in moving to set aside the default judgment; and the loss of rights gained solely by default is not “prejudice” under the test applied in deciding whether a default judgment should be set aside.  The trial court disagreed and refused to set aside the default.

On interlocutory appeal, the Mississippi Supreme Court, after oral argument, issued an en banc decision reversing the trial court, finding it abused its discretion in failing to set the judgment aside.  The Court recognized, in particular, defendants’ numerous defenses to the underlying action and quick action in moving to set the default judgment aside. As to the “prejudice” factor, the Court held that the fact that plaintiffs would be required to go to trial and prove their case is not sufficient reason, alone, to find prejudice, and the trial court abused its discretion in so holding.

Three justices concurred in result only, believing that the default judgment was void because the amended complaint, which raised new claims, should have been served under the heightened, formal requirements of Rule 4. Because it was never properly served, the trial court was without jurisdiction to enter the default judgment on the amended complaint, and thus the judgment was void.