Opinion ID: 1205830
Heading Depth: 1
Heading Rank: 1

Heading: The trial court's authority to consider the sufficiency of the pleadings after a default order has been entered.

Text: Defendant argues that the effect of the default order was to admit not only the truth of the facts alleged in the counterclaims, but also that the alleged actions were illegal and caused injury. She argues that the only issue properly before the trial court judge was the measure of damages, and that the trial court erred in considering plaintiffs' motion to dismiss after the order of default had been entered. We disagree. According to the great weight of authority, a default establishes only the truth of the factual allegations contained in the complaint and does not admit that the facts alleged constitute a valid claim for relief. Under this view, the trial court has no authority to award damages against a defaulting defendant if the complaint fails to state a cause of action. See Southern Arizona School for Boys, Inc. v. Chery, 119 Ariz. 277, 580 P.2d 738 (1978) (default judgment cannot be based on a complaint that fails to state a claim for relief; defaulting party is entitled to contest the sufficiency of the complaint on appeal); Kohlenberger, Inc. v. Tyson's Foods, Inc., 256 Ark. 584, 510 S.W.2d 555 (1974) (default admits only those facts alleged in the complaint, and if they are insufficient to support a judgment, the judgment will be reversed); Morehouse v. Wanzo, 266 Cal. App.2d 846, 72 Cal. Rptr. 607 (1968) (it is erroneous to grant a default judgment if the complaint fails to state a cause of action); Bay Prod. Corp. v. Winters, 341 So.2d 240 (Fla.App. 1976) (trial court erred in entering default judgment when the complaint failed to state claims for specific performance, fraud and deceit); Olson v. Kirkham, 111 Idaho 34, 720 P.2d 217, 220 (App. 1986) (On appeal, a defaulted defendant may not challenge the sufficiency of the evidence in a default judgment, he may only contest the sufficiency of the complaint and its allegations to support the judgment.); Productora E Importadora de Papel v. Fleming, 376 Mass. 826, 383 N.E.2d 1129 (1978) (in order to support default judgment, complaint must state a claim for relief); Lindsey v. Drs. Keenan, Andrews & Allred, 118 Mont. 312, 165 P.2d 804 (1946) (judgment for damages upon a default is not justified where the complaint fails to state a cause of action); American Credit Co. v. Stuyvesant Ins. Co., 7 N.C. App. 663, 173 S.E.2d 523 (1970) (complaint which failed to state a cause of action against insurance agent could not support default judgment against him, despite absence of excusable neglect); Pennsylvania Dep't of Environmental Resources v. Allias, 20 Pa.Commw. 222, 341 A.2d 226 (1975) (default judgment does not admit the sufficiency of the pleading to sustain the judgment, nor does it admit that the facts alleged constitute a cause of action). Under Oregon law, a default judgment establishes all material facts alleged in the complaint. State ex rel Nilsen v. Cushing, 253 Or. 262, 265, 453 P.2d 945 (1969). Other Oregon caselaw suggests that a default judgment does not admit legal conclusions and that a pleading must state facts showing an entitlement to relief before a default judgment can be granted. See Bailey v. Malheur Irrigation Co., 36 Or. 54, 60, 57 P. 910 (1899); Carlson v. Bankers Discount Corp., 107 Or. 686, 215 P. 986 (1923). Defendant cites two Oregon cases for the proposition that a trial court may not entertain a motion to dismiss for failure to state a claim for relief after an order of default has been entered. Walling v. Lebb, 140 Or. 691, 15 P.2d 370 (1932), is distinguishable because it involved a collateral attack rather than a direct appeal. See n. 3, infra. Askren v. Squire, 29 Or. 228, 232, 45 P. 779 (1896), suggests that even if the cause of action is imperfectly stated, a default judgment still is enforceable. That case involved a suit to foreclose at least eight miners' liens. The judgment was upheld even though some of the jurats on the miners' lien claim verification forms were not signed. These were technical defects and did not bar recovery. The case does not strike us as being inconsistent with a rule requiring the complaint to state a claim to support a default judgment. The case appears to hold that, after default, the pleadings should not be read narrowly, and the pleader should have the benefit of every inference in deciding whether the complaint states a claim for relief. The rule suggested by defendant would allow her to recover damages even if it is apparent on the face of her pleading that she has suffered no legally cognizable injury. A default judgment, no less than any other judgment, must have a basis in the pleadings. The trial court acted within its authority in considering the legal sufficiency of defendant's counterclaims. We emphasize that, following an order of default, the pleadings are not to be read technically. If the pleadings against the defaulting party imply or reasonably require an inference of facts constituting a claim for relief, they are sufficient to support a default judgment. However, if the complaint patently fails to state a valid claim for relief, a trial court may properly entertain an objection on that ground even after an order of default has been entered. [3]