BayLegal Wins Significant Consumer Rights Appeal

Last week a BayLegal client won a significant appeal of an order denying our client’s motion to vacate a default judgment in a consumer debt collections case. In an opinion in Citibank N.A. v. Baljit K. Bajwa that could have significant implications for “unstacking the deck” against other collections defendants, the Appellate Division of the Superior Court of California for the County of Alameda held that the trial court erred when it refused to consider Ms. Bajwa’s evidence that she had never been served with the paperwork, erroneously relying on the process server’s proof of service. The Appellate Division vacated the decision against Ms. Bajwa and remanded the case to the trial court to conduct further proceedings to properly weigh the evidence using the correct legal standard. Ms. Bajwa is represented by BayLegal Consumer Attorney Renée Coe.

At issue in the appellate court’s opinion is a section in the California Evidence Code which states that a proof of service by a registered process server creates a presumption that the papers were indeed served. However, this does not mean any contrary evidence is disregarded. In the Appellate Division’s words, citing from a 2011 appellate case, “the effect [of the presumption] is to require the trier of evidence to assume the existence of the presumed fact unless and until evidence is produced which would support a finding of its nonexistence, in which case the trier of fact shall determine the existence or nonexistence of the presumed fact from the evidence and without regard to the presumption.” The Appellate Court found that the trial court had applied this Evidence Code section in error when it ruled that that Ms. Bajwa was required to overcome the process server presumption by a “preponderance of the evidence.”

In Ms. Bajwa’s case, Citibank claimed that their process server had served the defendant with legal papers, and her failure to respond resulted in a default judgment against her. Ms. Bajwa maintained that she had never received service, and filed a motion to vacate that default judgment, introducing into evidence records and statements from her employer showing she was at work when the papers were allegedly served. Erroneously applying the “preponderance of evidence” standard, the trial court found that the evidence produced by Ms. Bajwa was not sufficient to overcome the presumption of service established by the process server’s proof of service. What the appellate court’s opinion means is that Ms. Bajwa’s introduction of evidence that she was not served is, in itself, enough to require the trial court to disregard any presumption in favor of the proof of service and instead weigh all the evidence of service or lack of service neutrally.

Without proper service, defendants can and often do miss opportunities to defend themselves, leading to erroneous default judgments. This is particularly concerning in a California civil court system overwhelmed with debt collection cases. These cases—nearly a quarter million of them per year—make up close to 25% of all civil court filings in the state. In over half of these cases, the court rules in favor of the creditor by default, meaning the defendant did not respond or appear in court. We at BayLegal have seen in other recent cases that these widespread failures to respond or appear are often rooted in erroneous, improper or (in the most egregious cases) fraudulent proofs of service. Protecting defendants, many of whom are very low-income and without legal representation, from default judgments resulting from such erroneous or deceptive practices ensures access to justice for all litigants.

We applaud the Appellate Division’s opinion, and Renée Coe’s advocacy for her client. Renée is an Equal Justice Works Fellow sponsored by Intel Corporation and Munger, Tolles and Olson, LLP.