Its a big deal not to respond to a complaint.
Tenant rents a house from Landlord for six months for $8,000/month. Tenant thereafter alleged finds some mold in the place, so Landlord gives 'em a $8,000 credit. When Tenant moves out, Landlord doesn't give back their security deposit, or the $8,000 credit, so Tenant sues.
Now, most likely, Landlord's maybe going to be liable for the security deposit and the $8,000 credit, but probably not the mold. Regardless, it's a tiny lawsuit; maybe $20,000 or so.
But the Landlord does not appear, even after being personally served. So Tenant gets a default judgment for $59,000. Which is a lot, and probably a fair piece more than Landlord was going to get spanked with were she to have responded to the lawsuit.
But it doesn't end there.
The $59,000 default judgment included $1,000 in attorney's fees. Which is the cap on attorney fee awards under the contract, and probably about what you'd get for a default judgment -- which doesn't involve much attorney work -- anyway.
But Tenant doesn't pay the judgment, and affirmatively fights it, which results in Tenant running up more attorney's fees to enforce the thing. Because the contract allows the prevailing party attorney's fees, those enforcement efforts also allow the prevailing party to get those fees as well. Tenant says such fees are also capped at $1,000, but both the trial court and the Court of Appeal disagree.
So now, in addition to the initial $59,000, the trial court adds on an additional $27,000 in fees to enforce the initial judgment.
But it doesn't end there.
Because Landlord appealed the additional $27,000, and lost, at the end of the Court of Appeal's opinion, it says: "[Tenants] are to recover their costs on appeal."
So that's more money. A fair piece, I'd expect.
Virtually all of which, I suspect, could have been avoided had Landlord adopted an alternative strategy at the outset to the one she did.
