The following excerpt is from Nguyen v. Nguyen (In re Nguyen), Adv. No.: 8:12-ap-01334-MW, Case No.: 8:12-bk-16820-MW (Bankr. C.D. Cal. 2015):
Although it might be supposed that a default judgment can never satisfy the "actually litigated" requirement, California gives issue preclusion effect to default judgments in certain circumstances. The rationale behind finding that default judgments can be preclusive is that defendants who are served with a summons and complaint but fail to respond are presumed to admit not all allegations in the complaint but rather all well-pleaded allegations in the complaint. Kim v. Westmoore Partners, Inc., 201 Cal. App. 4th 267, 281-82 (4th Dist. 2011):
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