Iowa Supreme Court Addresses Notice Requirements for Default Judgment Procedure

Posted on: March 6th, 2023

Lincoln Savings Bank served a foreclosure lawsuit on the attorney for Debra Emmert after her loan payments failed to arrive. After the deadline for a responsive pleading had passed, the bank mailed a notice of intent to file an application for default judgment to Emmert’s attorney. The notice of intent was not separately mailed to Emmert. A few months later, the bank filed its application for default judgment and the district court entered default judgment against Emmert.

Emmert appealed the ruling and the Court of Appeals determined the bank satisfied the notice rule by mailing the notice of intent to Emmert’s attorney. The Iowa Supreme Court granted Emmert’s application for further review. The question on appeal was whether a plaintiff must send a copy of the notice of intent to the defendant in addition to the defendant’s lawyer. The bank argued, in part, that the ethics rules forbid a lawyer to communicate with a person that lawyer knows to be represented by another lawyer. Therefore, the bank argued, its mailing of the notice of intent to Emmert’s lawyer satisfied Iowa Rule of Civil Procedure 1.972(3).

The Supreme Court found that the exception to the aforementioned ethics rule – “unless the lawyer … is authorized to do so by law” – permits notice to both the party and their lawyer because the lawyer is authorized to do so by rule 1.972. Ultimately, the Supreme Court ruled that the district court did not have authority to enter a default judgment against Emmert because the bank failed to comply with the notice rule. Rule 1.972(3) was interpreted to require the bank to send notice to both Emmert and her lawyer. The Court reasoned that requiring a plaintiff to send the notice of intent to file an application for default to both the party and, if known, the party’s attorney, provides greater protection against default judgments entered based on oversight rather than on the merits.

Lincoln Savings Bank v. Debra D. Emmert, No. 20-1663 (Iowa Feb. 24, 2023).

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