Default Entered Against the Employee, Not the Employer

Q: Does a California employer have to pay for a lawsuit brought against an employee over something that happened at work?

Often, but not in the way employees expect. Cal. Lab. Code § 2802(a) requires an employer to indemnify an employee for necessary expenditures or losses incurred as a direct consequence of discharging the employee's duties. In Douglas v. Los Angeles Herald-Examiner, 50 Cal. App. 3d 449 (1975), the court read the section to require indemnification of an employee sued over on-the-job conduct. But in Cassady v. Morgan, Lewis & Bockius LLP, 145 Cal. App. 4th 220 (2006), the court held that § 2802 requires indemnification without creating an independent duty on the employer to defend the employee in the lawsuit. The practical consequence is that an employee who is personally named still has to see that a response is filed for them, whatever the employer eventually owes.

Q: What does it mean when a default is entered against one defendant but not the others?

A default is entered against a named party who did not respond to the lawsuit within the time allowed. It is specific to that party. Other defendants who did respond stay in the case and litigate normally, and their participation does not preserve the defaulted party's defenses. Once a default is entered, the case can proceed toward a judgment against that party without their side being heard. California law provides a way to ask the court to set a default aside, on a deadline fixed by statute that is measured from events in the case, and the application is usually stronger the sooner it is made.

Q: Is giving lawsuit papers to an employer the same as responding to the lawsuit?

No. A response has to be filed with the court on behalf of each named defendant. An employer, a supervisor or an insurer may take the case over in practice, but nothing about handing papers along creates a filed response, and a defendant who assumed someone else was handling it is still the one who ends up in default. Anyone served with a summons and complaint should confirm, in writing and from the person actually doing it, that a response has been filed for them by name — or have their own attorney file one.

Question

Auto, 2 years. I was involved in an auto accident during work hours in a company vehicle. But at the time the said company, I found out that same day, did not have current car insurance, and had to give an old insurance information knowing that, at least I thought I knew, was the same car insurance company that my boss uses. However, due to COVID, I had forgotten about it because I was too busy trying to find ways to survive. Since there wasn't much work, every penny I could get had to go to rent, gas, electric, etc. Until I received a letter saying I am being sued along with the company I work for as the defendant. I took pictures and made a copy for myself, let the boss know and gave him the letter, thinking he would take care of it. And today I received another letter saying that it has now gone into default, with me, my boss and my boss's company named as the defendant on the "plaintiff and defendant" box. But on the "enter default of defendant" just below it, it only has my name as the defendant and does not include my boss's name or his company's name.

A. Jason Velez · Accepted Answer

A default entered against you alone means the case is moving forward as though you have no answer to it — and undoing that is the one item on your list that cannot wait. Handing the papers to your boss did not protect you. That is the hard part of the law here, so take it first. Cal. Lab. Code § 2802(a) requires an employer to indemnify an employee for necessary expenditures or losses the employee incurs as a direct consequence of doing the job. In Douglas v. Los Angeles Herald-Examiner, 50 Cal. App. 3d 449 (1975), the court read that section to require an employer to indemnify an employee sued over conduct in the course of the job. But indemnity is not a defense. In Cassady v. Morgan, Lewis & Bockius LLP, 145 Cal. App. 4th 220 (2006), the court held that § 2802 requires indemnification and does not create an independent duty on the employer to defend the employee in the lawsuit. So the section may put the eventual cost on your employer. It did not put a response on file for you, and a court does not treat your boss's silence as your answer. That is what the second letter reflects. A default is entered against a named defendant who did not respond in time. All three of you were named as defendants, but the default was requested only against you — which usually means the others responded and you did not. Their continued participation does not carry your defense, and a default left alone can turn into a judgment against you personally. There is a second thread worth raising with the same lawyer, not with anyone else. Under Cal. Veh. Code § 16070(a), the Department of Motor Vehicles is directed to suspend driving privileges where a driver involved in a reportable accident did not have evidence of financial responsibility at the time. What insurance information was given at the scene, and what you understood about it, is a question to answer with a lawyer beside you rather than in a conversation with an adjuster, an investigator or the other side's lawyer. And if police, the DMV or an investigator suggests the evidence of insurance you gave was false or had lapsed, speak with a local criminal-defense attorney before you answer anything, because that question is no longer only a civil one. What you can do 1. Take everything to a local attorney now — the summons and complaint, both letters, the envelopes, and anything showing when and how you were served. Asking a court to set aside a default is a court application with a deadline fixed by statute, and it gets harder to win the longer it sits. 2. Preserve the record you already have rather than creating a new one. Keep the photographs and the copies you made, and do not write out or send anyone your own account of the accident or of the insurance information. 3. Ask the attorney about putting your employer on written notice of a claim for indemnity under Cal. Lab. Code § 2802, including the cost of defending you in this suit. 4. Ask the attorney which policy, if any, responds — the company's, a policy on the vehicle, or a personal policy — and who is obliged to tender the claim to it. 5. Do not talk to the plaintiff's attorney, an adjuster or an investigator before you have counsel — and if police or an investigator asks about the insurance information given at the scene, speak with a local criminal-defense attorney first. A defaulted defendant is in the weakest possible position in exactly those conversations. 6. If the DMV writes to you about financial responsibility, answer within the time its own notice gives and keep a copy. That is an agency process, separate from the lawsuit, with its own deadlines. Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts is worth more than any general guidance, including this page. ⏱ Time limits apply. The deadline that matters most here is not the one for the accident claim itself — it is the period for asking the court to set aside the default, which is fixed by statute, is short, and runs from events inside the case rather than from the crash. This page will not name a date, because yours depends on how and when you were served and on what the file shows. Take the papers to a local attorney immediately and have the deadline read off the file itself.

Default Entered Against the Employee, Not the Employer

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