Kramer v. Traditional EscrowAnnotate this Case
Plaintiff Michelle Kramer filed a wage and hour lawsuit against her employer, defendants Traditional Escrow, Inc. (Traditional), and its alleged alter ego, Annette Scherrer-Cosner. A few months after defendants answered the initial complaint, their counsel withdrew, and defendants subsequently chose not to participate in this case. Plaintiff continued to serve defendants with all case documents, including an amended complaint, at their address of record. But, in violation of the California Rules of Court, defendants changed their mailing address without giving notice to plaintiff or the trial court. As a result, they did not receive any of the documents that plaintiff served on them after their counsel withdrew. Eventually, default and default judgment were entered against them due to their failure to answer the amended complaint. Defendants moved to set aside the default and vacate the judgment, arguing they were entitled to equitable relief because they had been prevented from responding to the amended complaint due to extrinsic fraud and extrinsic mistake. The trial court granted the motion, finding that defendants were unaware the complaint had been amended. It also found that after filing the amended complaint, plaintiff’s counsel misrepresented to Cosner’s divorce attorney, who was unaffiliated with this matter, that defendants were in default and could not file an answer. Plaintiff appealed the trial court’s ruling, arguing equitable relief was unwarranted. To this, the Court of Appeal agreed: "Defendants cannot deliberately neglect this lawsuit and go off-grid, so to speak, and then complain that they lacked notice of the proceedings." The trial court's order was reversed and the matter remanded for further proceedings.