Legal Question in Business Law in California
if a defendant doesn't show up in small claims court, does the plaintiff automatically win? and if a company takes money for COBRA health insurance but doesn't buy the insurance, are they committing fraud?
2 Answers from Attorneys
If the defendant fails to appear the plaintiff will still have to prove her case. The court will not simply enter a judgment in her favor without considering her evidence.
The scenario you describe might or might not involve fraud. I would need to know more about what happened before I could say whether it did.
Code of Civil Procedure section 116.520, subpart (b) (part of the law setting up and governing the Small Claims system) says, "If the defendant fails to appear, the court shall still require the plaintiff to present evidence to prove his or her claim."
As to the COBRA question, the facts given certainly point in the direction of fraud, or a species thereof, but do not, in themselves, show all the elements of a cause of action for fraud. In particular, a complaint would have to allege the defendant company's knowledge that what it was doing was wrong and without substantial justification (a factor or element sometimes known as "scienter") and that the plaintiff has suffered harm (damage) as a proximate result of defendant's inaction. In addition to making sure that all the elements of a prima facie case were present, a lawyer preparing a suit for the alleged fraud would want to see whether the company had any defenses (bankruptcy, plaintiff ineligible, or whatever).