Ramsay v. Sanibel & Lancaster Insurance, LLC et al, No. 2:2011cv00207 - Document 64 (E.D. Va. 2015)
Court Description: AMENDED OPINION AND ORDER - the Court DENIES IN PART and TAKES UNDER ADVISEMENT IN PART Defendants' Petition for Rehearing/Reopening of Case, ECF No. 32. To the extent Defendants seek relief in such motion under Federal Rules of Civil Procedure 60(b)(3) and 60(d)(3), the Court DENIES Defendants' motion. However, to the extent Defendants' motion contends that the judgment against them is void under Rule 60(b)(4), the Court TAKES UNDER ADVISEMENT such motion, pending an evidentiary hearing. The Court DIRECTS Defendants to confer with Plaintiff's counsel and then contact the Clerk of the Court to schedule an evidentiary hearing to address the parties' factual dispute over whether Defendants v/ere validly served with pr ocess. The Court ADVISES Defendants that they have fourteen (14) days after the entry of this Opinion and Order to schedule such a hearing and that, if they fail to do so, the Court will resolve their motion on the papers currently before it. The Cou rt TAKES UNDER ADVISEMENT Plaintiff's Motion for Execution Sale, pending the resolution of Defendants' Rule 60 (b) (4) motion. Signed by District Judge Mark S. Davis on 6/19/15. Nunc pro tunc to 12/15/14, the date the original Opinion and Order was signed and entered. (Copies distributed as directed 6/19/15)(afar)
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Ramsay v. Sanibel & Lancaster Insurance, LLC et al Doc. 64 FILED UNITED STATES DISTRICT COURT JUN 1 9 2015 EASTERN DISTRICT OF VIRGINIA Norfolk Division CLERK, US DISTRICT COURT NORFOLK, VA CHRISTOPHER RAMSAY, Plaintiff, v. Civil Action No. SANIBEL & 2:llcv207 LANCASTER INSURANCE, LLC, ROBERTA L. GARCIA-GUAJARDO, STEVEN GUAJARDO, and GARY J. HUNTER, Defendants. AMENDED OPINION AND ORDER1 This matter is before 2014 by Steven Roberta 32, Garcia-Guajardo Petition for filed on September 19, ("Garcia-Guajardo") ECF No. ("Plaintiff") .2 November 4, collectively and Guajardo, "Defendants") and a Motion for Execution Sale, on and, a Garcia- filed ("Guajardo" on with 37, Guajardo L. Court ECF No. Rehearing/Reopening of Case, the 2014 by Christopher Ramsay The Court will construe Defendants' pro se 'The instant "Amended Opinion and Order" replaces the Opinion and Order entered in this case on December 15, 2014. ECF No. 39. The Court's disposition of Defendants' Petition for Rehearing/Reopening of Case remains unchanged from the Court's prior Opinion and Order. Accordingly, this Amended Opinion and Order has no effect on such motion. The only substantive changes contained herein consist of revisions to the Court's discussion, contained in Part III.B, of the standard applicable to Plaintiff's Motion for Execution Sale. Defendants purported to file their motion on behalf of a third defendant in this action, Sanibel Lancaster Insurance, LLC ("S&L Insurance"). However, S&L Insurance, as a limited liability company, "cannot appear pro se, even if represented by one of its members," and Dockets.Justia.com Petition for Rehearing/Reopening from Judgment") Federal as Rules 60(d)(3). of a motion Civil of Case ("Motion for relief Procedure for Relief from judgment under 60(b)(3), 60(b)(4), and After examining the briefs and the record, the Court determines that oral argument on Defendants' Rule 60(b)(3) and Rule 60(d)(3) motions is unnecessary because the facts and legal contentions are adequately presented and oral argument would not aid in the decisional process. Fed. R. Civ. Loc. a R. 60(b)(4) and 7 (J) . The motion TAKES need for hearing is addressed below. UNDER ADVISEMENT IN The PART P. 78(b); E.D. Va. on Defendants' Court DENIES Defendants' Rule IN PART motion. The Plaintiff filed an action in this Court Court TAKES UNDER ADVISEMENT Plaintiff's motion. I. On April FACTUAL AND PROCEDURAL HISTORY 12, 2011, alleging causes of action against Defendants for unpaid overtime under the Fair Labor Standards Act, 29 U.S.C. §§ 201-19 ("FLSA"), wrongful discharge in violation of public policy under Virginia law, No. 1. and breach of contract under Virginia law. ECF Returns of service indicate that Guajardo and Garcia- Guajardo were served with process on May 4, 2011. ECF No. 3. On May 16, 2011, S&L Insurance was served with process through must be represented by an attorney. See Vick v. Wong, 263 F.R.D. 325, 328 n. 1 (E.D. Va. 2009) (citing United States v. Haqerman, 545 F.3d 579, 580-81 (7th Cir. 2008); Lattanzio v. Comm. on Massage Therapy Accreditation, 481 F.3d 137, 138, 140 (2d Cir. 2007)). Given that S&L Insurance is not represented by an attorney in this matter, the Court will not consider it as a movant with respect to this motion. its registered agent. ECF No. 4. On May 26, 2011, the Clerk of the Court entered default against Garcia-Guajardo and Guajardo. ECF No. 8. On May 31, 2011, default against S&L Insurance. the Clerk of the Court entered ECF No. 10. default judgment on August 1, 2011. No. Mot. Plaintiff moved for for Default J., ECF 11. On March 28, 2012, this Court entered default judgment in favor of Plaintiff: on his FLSA claim against Defendants, on his wrongful discharge claim against S&L Insurance, breach of contract claim against S&L Insurance. and on his Opinion and Order, ECF No. 17. In its March 28, 2012 Opinion and Order, the Court wrongful severed the discharge claim against Garcia- Guajardo and stayed such claim pending resolution of VanBuren v. Grubb, 733 S.E.2d 919 (Va. 2012). Following the Supreme Court of Virginia's decision in VanBuren, on March 27, 2013, the Court entered judgment against Garcia-Guajardo, Plaintiff's wrongful discharge claim. Plaintiff asserts at 2, ECF No. 33. well, on ECF No. 24. that he "has pursued collection on the judgment entered against resisted collection." as [Defendants]," but PL's Br. Opp'n Mot. that they "have for Relief from J. In support of such contention, Plaintiff has submitted two orders from the Circuit Court of the City of Suffolk that indicate that Garcia-Guajardo appear for debtor's interrogatories. See id. twice ex. failed 1 & 2, to ECF Nos. 33-1, 33-2. In one such order, the Circuit Court of the City of Suffolk found that Garcia-Guajardo had been properly served with both debtor's interrogatories and a motion to show cause as to why she failed to appear for such interrogatories. Order on Motion to Show Cause, Case No. CM13-1020 (Va. Cir. Nov. 20, 2013). In a subsequent order, the Circuit Court found that Garcia-Guajardo's failure to appear for debtor's interrogatories was "willful and without good cause" and that "she intentionally obstructed the proceedings to frustrate their purpose." on Motion Feb. 24, On for Order of Contempt, Case No. CM13-1020 Order (Va. Cir. 2014) . September 19, 2014, Defendants moved the Court "for injunction for relief of the judgment" and for rehearing, an as well as for sanctions against Plaintiff and Plaintiff's counsel. Mot. for Relief from J. at 3-4. From Defendants' appears that they seek relief from judgment Plaintiff committed fraud upon misrepresentations to the Court, See icl. at 3.3 the motion, it on the basis that Court by making presumably in his Complaint. Defendants also seek relief from judgment on the basis that they were not properly served with process. id. at In Defendants' motion, without explanation, they refer to Plaintiff's race. From the context of Defendants' motion, Defendants' reference to Plaintiff's race strikes the Court, at minimum, as tinged with a racially discriminatory undertone. The Court ADMONISHES Defendants that such reference to race is grossly inappropriate and will not be containing tolerated. such a If Defendants reference, appropriately sanction them. the file Court any future pleading will not hesitate to 3. Applying a liberal construction to Defendants' pleadings, required because Erickson v. of Pardus, Defendants' 551 U.S. 89, pro 94 se status, (2007), see, e.g., to the extent that Defendants seek to set aside this Court's judgment on the basis of fraud, the Court will construe their motion as a motion under Rule 60(b)(3) and Rule 60(d)(3). Given that Defendants argue that the Court's judgment is void due to insufficient service of process, the Court will also construe their motion as a motion under Rule 60(b)(4). On October 3, 2014, to Defendants' motion under Plaintiff filed his brief in opposition motion. Rule Plaintiff 60(b)(3) contends is untimely that because Defendants' Defendants did not seek relief from judgment within one year of the entry of such In judgment. response PL's Br. to Defendants' argues that Defendants' basis to warrant Finally, Plaintiff in that Rule for Relief from J. 60(d)(3) motion, from to judgment Defendants' Defendants were, under Rule October 27, Plaintiff's opposition. Plaintiff in 2014, Defendants Rule 60(d)(3). 60(b)(4) fact, process "at the address listed on their paper." On at 2. allegations do not present a sufficient relief response argues Opp'n Mot. motion, served with Id. at 3. filed a reply to Ans. to PL's Filing, ECF No. 36. In response to Plaintiff's argument that their motion is untimely, Defendants cite provisions of the Code of Virginia governing the tolling of the statute of limitations and contend that such provisions apply because Garcia-Guajardo was incapacitated. at 2. from Defendants also argue that they never received process the process server who attempted Garcia-Guajardo at her home. icL to at 3. request that the Court "give [Plaintiff] his attorney" and seek compensation. On November 4, special master and property Virginia" 37. Id. at 4301 for special Finally, on Defendants jail time along with Id. at 3-4. sale at public auction of Newport asserts process Plaintiff moved for appointment of a Ave, ("the property"). Plaintiff appoint a 2014, serve Maryland Ave, Mot. that master a/k/a "the for Execution sale, Rule 69 authorizes to conduct a real Norfolk, ECF No. this Court judicial sale of to the property because such Rule "directs that State procedure must be followed on execution procedures" and Virginia law authorizes sale of a debtor's real property through a creditor's bill in equity and court appointment of a commissioner in chancery to sell the debtor's property. See id. at 2. In his motion, Plaintiff alleges that the property is subject to: a March 28, 2005 deed of trust to secure a $220,000 promissory note, a $382,183.59 federal tax lien recorded on March 3, 2009, and a $13,533.81 federal tax lien recorded on February 3, 2010. Id. Other than such liens and encumbrances, Plaintiff asserts that Defendants own the property. Plaintiff requests that Id. at 3. the Court: "order David Weeks, Trustee, and New York Mortgage Company, LLC, Noteholder, to appear and respond to this Motion within twenty-one days of service of same or waive their right to participate herein;" "order the United States to appear and respond to this Motion within sixty days of service of the same upon it or waive its right to participate herein;" and appoint a special master to determine "[t]he identities of the owners of the property," "[t]he liens against the property and the order of their priority, including tax liens," "[t]he fee simple and annual rental value of the property," and "[w]hether all parties in interest are properly before the Court." Id. at 3. Finally, Plaintiff requests that the Court order the property sold to satisfy Plaintiff's judgment, if the rents from such property cannot satisfy such judgment within five years, or if such rents are sufficient years, to satisfy Plaintiff's judgment five order that those rents be applied to the satisfaction of Plaintiff's judgment. See id^ at 4.4 Defendants to respond to Plaintiff's motion The deadline for for execution has passed and Defendants have not responded thereto. under within Accordingly, Plaintiff's request appears to comport with the requirements Section 8.01-462 of the Code of Virginia, which provides: "Jurisdiction to enforce the lien of a judgment shall be in equity. If it appear [sic] to the court that the rents and profits of all real estate subject to the lien will not satisfy the judgment in five years, the court may decree such real estate, or any part thereof, to be sold, and the proceeds applied to the discharge of the judgment." Va. Code Ann. § 8.01-462. the motions currently before the Court are now ripe for disposition.5 II. STANDARD OF REVIEW A. Rule 60(b) Federal Rule of Civil Procedure 60(b) permits a party to seek relief "from a final judgment, order, or proceeding." R. Civ. proceeds P. 60(b). Fed. A court's analysis of a Rule 60(b) motion in two stages. First, a court considers whether the movant has met three threshold conditions: "'a moving party must show that his motion is timely, that he has a meritorious defense to the action, and that the opposing party would not be unfairly prejudiced by having the judgment set aside.'" Nat' 1 Credit Union Admin. Bd. v. Gray, 1 F.3d 262, 264 (4th Cir. 1993) (quoting Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987)); see also Aikens v. Ingram, 652 F.3d 496, 501 (4th Cir. 2011) (citing Nat'1 Credit Union, 1 F.3d at 264).6 Once a movant has demonstrated the three threshold requirements, Federal Rule of Civil Procedure 60(b) lists the grounds under which a court may grant relief from a final judgment. Credit Union, 1 F.3d at 266. Nat'l These grounds are: On December 1, 2014, Defendants moved for summary judgment, ECF No. 38, however, such motion is not ripe for disposition. 6 The Fourth Circuit has also noted a fourth threshold showing, "exceptional circumstances," in some instances. Nat'l Credit Union, 1 F.3d at 264 (quoting Werner v. Carbo, 1984)). 8 731 F.2d 204, 207 (4th Cir (1) mistake, neglect; (2) reasonable inadvertence, surprise, or excusable newly discovered evidence that, with diligence, could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, opposing party; (4) or the judgment judgment has been satisfied, misconduct is void; by (5) an the released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or (6) any other reason that justifies relief. Fed. R. 60(b) Civ. "must P. 60(b). clearly The party seeking relief under Rule establish the grounds therefor to the satisfaction of the district court . . . and such grounds must be clearly substantiated by adequate proof." F.2d 1, 3 (4th Cir. 1992) In re Burnley, 988 (internal citations omitted). Relief under Rule 60(b) is an "extraordinary remedy" that is to be used only in "exceptional circumstances." 608 F.2d 96, 102 Compton v. Alton S.S. Co., (4th Cir. 1979); see also Ebersole v. Perry, 292 F.R.D. 316, 320 (E.D. Va. 2013) F.2d at 102) . Kline- (quoting Compton, 608 To determine whether such exceptional relief is appropriate, the court "must engage in the delicate balancing of 'the sanctity of final judgments, res judicata, and the expressed in the doctrine of incessant command of the court's conscience that justice be done in light of [a]11 the facts." Compton, 608 F.2d at 102 (alteration in original) (quoting Bankers Mortg. Co. v. United States, 423 F.2d 73, 77 (5th Cir. 1970), cert, denied, 399 U.S. 927 (1970)). The Fourth Circuit has held that a motion under Rule 60(b) is addressed to the sound discretion of the trial judge and will not be disturbed on appeal save for a showing of abuse. Aikens, 652 F.3d at 501. at issue, over the "However, where default judgments are years [the Fourth Circuit] has taken an . . . ." Augusta Fodor Contracting Corp., 843 F.3d increasingly liberal view of Rule 60(b) Fiberglass Coatings, See Inc. v. 808, 811 (4th Cir. 1988); see also Charles Alan Wright & Arthur R. Miller, 11 Federal Practice & Procedure § 2857 (3d ed. 2012) (noting that "[t]he granting Rule 60(b) cases calling motions, for great for the most part, liberality in have involved default judgments. There is much more reason for liberality in reopening a judgment when the merits of the case never have been considered than there is when the judgment comes after a full trial on the merits."). pit the court's merits against This is so because "default judgments strong preference countervailing for deciding interests in cases finality preserving the court's ability to control its docket." v. M.L. Mktg. Co., 116 F.3d 91, Augusta, 843 F.3d at 811). 94 (4th Cir. 1997) on the and in Heyman (citing Nonetheless, in considering a Rule 60(b) motion to set aside a default judgment, "Mw]hen the party is at fault, the [court's interest in finality and efficiency] dominate[s] and the party must adequately defend its conduct in 10 order to original) show excusable neglect.'" Io\ (alterations in (quoting Augusta, 843 F.3d at 811). B. Rule 60(d) Federal Rule of Civil Procedure 60(d)(3) provides that Rule 60 "does not limit a court's power to . . . set aside a judgment for fraud on the court." exercise its inherent Thus, such clause "permits a court to equitable powers to obviate judgment after one year for 'fraud on the court.'" Fox v. Elk Run Coal Co., However, Co. v. (1944)). on plot the 60(d)(3). Fox ex rel. 135-36 (4th Cir. 2014). Id^ at Hartford-Empire "Thus, intentional touch final "ordinary cases of fraud" do not provide a basis for relief under Rule Glass 739 F.3d 131, a not to only must deceive public Co., 136 322 fraud the interest (citing Hazel-Atlas U.S. on the judiciary, in a way individual parties generally does not." 238, court but that Id. 244, 246 involve an it must fraud also between Rule 60(d) should be applied "only when parties attempt 'the more egregious forms of subversion of the legal process . . ., necessarily expect process.'" Id^ Bhd. of to be exposed by those that we cannot the normal (quoting Great Coastal Express, Teamsters, 675 F.2d 1349, 1357 (4th "Perjury and fabricated evidence . . . [are] permit relief as fraud on the court . . . ." Coastal, 675 F.2d at 1357). Rather, 11 Inc. Cir. adversary v. Int'l 1982)). not adequate to id. (citing Great "the doctrine is limited to situations such as 'bribery of a judge or juror, or improper influence exerted on the court by an attorney, in which the integrity of the court and its ability to function impartially is directly impinged.'" 1356). io\ (citing Great Coastal, 675 F.2d at Unsurprisingly, "[p]roving fraud on the presents ... a very high bar for any litigant." court thus IdL at 136- 37. C. Rule 69 Federal Rule of Civil Procedure 69 governs the enforcement of money judgments. Such Rule provides in relevant part: A money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution—and in proceedings supplementary to and in aid of judgment or execution—must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies. Fed. R. Civ. P. 69(a)(1). Accordingly, such Rule establishes that, as a general rule, Virginia law governs the procedure on execution in this Court. However, an applicable federal statute is controlling, notwithstanding Virginia law. See id.; see also 12 Wright & Miller, supra, § 3012 (3d ed. 2014). III. A. As motion stated appears above, to seek DISCUSSION Defendants' when Motion liberally relief under construed, Rule 60(b)(3) Defendants' and Rule 60(d)(3) based on Plaintiff's alleged fraud and Rule 60(b)(4) 12 based on allegations that Defendants were not properly served with process. The Court will first consider Defendants' motion with respect to the fraud grounds for relief. The Court will then turn to Defendants' Rule 60(b)(4) motion. As stated above, as a threshold to relief under Rule 60(b)(3), show that: defense, their motion is timely, they Defendants must have a meritorious and Plaintiff would not be unfairly prejudiced by having the judgment against Defendants set aside. Defendants' Rule 60(b)(3) motion fails because Defendants have not satisfied the threshold element of timeliness. Rule 60 imposes mandatory time restrictions on a Rule 60(b)(3) motion by providing that "[a] motion under Rule 60(b) must be made within a reasonable time-and for reasons (1), (2), and (3) no more than a year after the entry of the judgment or order or the date of the proceeding." this case, Fed. R. Civ. P. 60(c)(1) Defendants seek relief (emphasis added). from judgment based In on Plaintiff's alleged fraud and, therefore, Rule 60(c)(1) mandated that Defendants file any Rule 60 motion on that basis "no more than a year after entered judgment the entry of judgment." against Guajardo on Here, Plaintiff's the Court FLSA and wrongful discharge claims on March 28, 2012, ECF No. 18, against Garcia-Guajardo on March 28, 2012 with respect to Plaintiff's FLSA claim, ECF No. 18, and against Garcia-Guajardo on March 27, 2013 with respect to Plaintiff's wrongful discharge claim, ECF 13 No. 24. Thus, Rule 60(c)(1) required Guajardo and Garcia- Guajardo, with respect to Plaintiff's FLSA claims, to file their Rule 60(b)(3) motions no later than March 28, 2013. Similarly such rule mandated that Garcia-Guajardo file any Rule 60(b)(3) motion challenging the judgment against her on the wrongful discharge claim no later than March 27, 2014. the instant motion on September 19, Defendants' filed 2014. Thus, Defendants' motions under Rule 60(b) (3) are DENIED as untimely.7 Defendants' Rule 60(d)(3) motion fails because, assuming the truth of the allegations in Defendants' even motion, such allegations are not sufficient to demonstrate fraud on the court. At most, Defendants "blatantly lied" to the Court. However, have alleged Ans. that Plaintiff to PL's Filing at 3. the Fourth Circuit has underscored that "perjury and fabricated evidence," though reprehensible, fraud on the Court. Defendants do not qualify as Great Coastal, 675 F.2d at 1357. have not alleged that Plaintiff Moreover, committed acts of fraud that, like bribery of a judge, "directly impinge" on "the integrity of the court and its ability to function." 739 F.3d at 136. See Fox, Therefore, the Court concludes that Defendants have not demonstrated that relief from judgment is warranted The Court need not assess the remaining two threshold elements or the second stage of the Rule 60 analysis in light of determination that Defendants' Rule 60(b)(3) motions are untimely. 14 its based on fraud on the court under Rule 60(d)(3) and Defendants' Rule 60(d)(3) motion is DENIED. To the extent that Defendants contend that they were not properly served with process because the process server did not leave process with Garcia-Guajardo, the their motion as a Rule 60(b)(4) motion. Court has construed Such rule provides that the Court may "[o]n motion and just terms, . . . relieve a party . . . from a final judgment . . . for the following reaso[n]: the judgment is void." 60 is phrased in Fed. R. Civ. P. 60(b)(4). permissive terms, a court Although Rule does discretion to refuse to vacate a void judgment. not See, have e.g., Philos Techs., Inc. v. Philos & D, Inc., 645 F.3d 851, 855 (7th Cir. 2011) Domestic (citations Violence omitted); Coal., 542 Hukill F.3d 794, v. 797 Okla. Native (10th Cir. Am. 2008) (citation omitted); Harper Macleod Solicitors v. Keaty & Keaty, 260 F.3d 389, 394 (5th Cir. 2001) (citation omitted); see also 11 Wright & Miller, supra, § 2862 (3d ed. 2012) (stating that "[tjhere is no question of discretion on the part of the court when a motion is under Rule 60(b)(4)"). Moreover, unlike other motions under Rule 60(b), a party may seek to set aside a void judgment even years after the court has entered such judgment.8 See' e-q-/ Philos, 645 F.3d at 857 (citations omitted) (stating that a "collateral challenge to jurisdiction can be brought at any time"); Gschwind v. Cessna Aircraft Co., 232 F.3d 1342, 1345 (10th Cir. 2000) (holding that a Rule 60(b)(4) motion may be made at any time); Sea-Land Serv. Inc. v. Ceramica Europa II, Inc., 160 F.3d 849, 15 Similarly, to prevail on a Rule 60(b)(4) motion, the movant need not establish the existence of a meritorious defense. Bludworth Bond Shipyard Inc. v. M/V Caribbean Wind, 841 F.2d 646, 649 (5th Cir. 1988) (noting that a court must set aside a void judgment under Rule 60(b)(4) regardless whether the movant has a meritorious defense); 11 Moore et al., supra, § 60.44 [5] [b]; 11 Wright & Miller, supra, § 2862. For the purposes of Rule 60(b)(4), a judgment is void "only if the court rendering the decision lacked personal or subject matter jurisdiction or process of law." 2005) F.3d acted in a manner inconsistent with Wendt v. due Leonard, 431 F.3d 410, 412 (4th Cir. (citing Eberhart v. Integrated Design & Constr., Inc., 167 861, construe 871 the (4th Cir. concept of 1999)). a However, 'void' order courts under Rule "narrowly 60(b)(4) precisely because of the threat to finality of judgments and the risk that litigants . . . will use Rule 60(b)(4) to circumvent an appeal process id. at 412-13 they elected not to follow." (citations omitted). Nonetheless, court enters it without personal a judgment is void when a jurisdiction over a defendant 852 (1st Cir. 1998) (same); Meadows v. Dominican Republic, 817 F.2d. 517, 521 (9th Cir. 1987) (same); see also James Wm. Moore et al., 12 Moore's Federal Practice § 60.44[5][c]; 11 Wright & Miller, supra, § 2862 (stating that" there is no time limit on an attack on a judgment as void"); cL_ Foster v. Arletty 3 Sari, 278 F.3d 409, 414 (4th Cir. 2002) (citations omitted) (noting that "[o]ther circuit courts addressing the issue have concluded that a motion to vacate a void judgment pursuant to Rule 60(b)(4) limit."). 16 contains little, if any, time because such Armco v. (4th defendant was not validly Penrod-Stauffer Bldq. Sys., Cir. 1984) (holding that Inc., "[s]ince served with process. 733 F.2d 1087, there was no 1089 valid service of process, the district court was without jurisdiction of the defendant, and the default judgment was void."); see also 12 Moore et al., supra, § 60.44[3] maY ... be void theoretical power defendant, the because, to exercise defendant (stating that "[a] judgment although personal was not the court jurisdiction adequately had the over served a with process."). Although the Fourth Circuit has not addressed the issue, other courts of appeals have split on which party has the burden of proof of establishing, motion, that a court for the purposes of a Rule 60(b)(4) lacked personal jurisdiction to enter a default judgment. See Arpaio v. Dupre, 527 F. App'x 108, 113 n. 4 (3d Cir. 2013) (unpublished) issue) . Some courts (noting a circuit split on the of appeals have held that "a defendant moving to vacate a default judgment based on improper service of process, where the defendant had actual notice of the original proceeding but delayed in bringing the motion until after entry of default judgment, bears the burden of proving that service did not occur." SEC v. Internet Solutions for Bus. Inc., 509 F.3d 1161, 1163 (9th Cir. 2007); Burda Media, Inc. v. Viertel, 417 F.3d 292, 299 (2d Cir. 2005); Bally Exp. Corp. v. Balicar, 17 Ltd., 804 F.2d 398, 401 (7th Cir. 1986). On the other hand, at least one court of appeals has held that a plaintiff maintains the burden of proving that personal even under S.A., Rule 60(b)(4). 558 F.3d 1210, Oldfield jurisdiction is present, v. Pueblo De Bahia 1217 (11th Cir. 2009); cL_ Arpaio, Lora, 527 F. App'x at 113 & n.4 (placing burden on plaintiff but noting that the parties had not district court). return of service, the burden of proof constitutes prima facie of establish "'[a] signed Homer v. Jones-Bey, 415 F.3d 748, 752 to valid regardless whether demonstrating personal the plaintiff bears sufficient to Cir. 998 F.2d Therefore, in the context of Rule jurisdiction the defendant (7th Inc., over service a the burden of of defendant, plaintiff has submitted a signed return of service, shifts of which can be overcome only by strong and convincing 1394, 1398 (7th Cir. 1993)).9 proof in the evidence (quoting O'Brien v. R.J. O'Brien & Assocs., 60(b)(4), issue However, as a general principle, service evidence.'" 2005) raised demonstrate that it did process to once the the burden not receive valid service of process. 9 Accord Blair v. City of Worcester, 522 F.3d 105, 112 (1st Cir. 2008) (citations omitted); see also 1 Moore et al., supra, § 4.103 (stating that "[wjhether filed by a marshal or by the server, proof of service filed with the court establishes prima facie evidence that service was properly made."); 4B Wright & Miller, supra, § 1130 (3d ed. 2002 & Supp. 2014) (stating that "[a]lthough the return of service of the summons and the complaint is strong evidence of the facts stated therein, it is not conclusive and may be controverted upon a showing that the return is inaccurate."); 5B id. § 1353 (3d ed. 2004). 18 In this case, Plaintiff has submitted prima facie evidence that Defendants were properly served with process. Plaintiff has filed a return of service and affidavit of service that state that a private process server personally served GarciaGuajardo with process at the address listed in the summons on May 4, 2011. ECF No. 3 at 4-6. Similarly, Plaintiff has filed a return of service and affidavit of service that state that a private process server served Guajardo through leaving process with Garcia-Guajardo, sufficient process under Rule 4(e)(2)(B) § 8.01-296(2)(a). establish prima to establish valid or Rule 4(e)(1) Accordingly, facie evidence such service of and Va. Code Ann. returns that Defendants of service were properly served with process . In response, in their papers, Defendants have alleged that they were not validly served with process because the process server did not leave process with Defendants. Thus, it appears to the Court that a factual dispute exists between the parties regarding whether Defendants were validly served with process. In light of the prima facie showing of valid service of process that Plaintiff has made through submission of returns of service as to both Defendants, the Court notes that Defendants now have the burden of establishing "by strong and convincing evidence" that they were not properly served with process. F.3d at 752. Homer, 415 At this stage, Defendants have not presented any 19 evidence that service of process was improper. Defendants' best to pro se status, provide However, given the Court believes that Defendants with opportunity they whether an were properly it would be to present evidence regarding process. The Court proposes conducting an evidentiary hearing to resolve this issue.10 to present evidence process, the with As it is currently Defendants' burden that they were will Court served DIRECT not validly Defendants served with to confer with Plaintiff's counsel and then contact the Clerk of the Court to schedule an ADVISEMENT evidentiary evidentiary Defendants' hearing. hearing. Rule The The 60(b)(4) Court Court motion, will PROVIDE will TAKE UNDER pending such an Defendants with fourteen (14) days after the entry of this Opinion and Order to schedule such hearing. If Defendants fail to timely schedule such will hearing, the Court resolve this issue based on the evidence currently before the Court. B. Plaintiff's Motion The Court will hold Plaintiff's Motion for Execution Sale under advisement In pending the alternative, the resolution Defendants might of Defendants' Rule submit affidavits as evidence to support their contention that they were not properly served with process. However, such affidavits likely would simply confirm the factual dispute that the Court currently perceives on the basis of Plaintiff's evidence and Defendants' pleadings, and then require the Court to conduct an evidentiary hearing to determine the credibility and weight of such conflicting evidence. Accordingly, the Court believes that conducting an evidentiary hearing at this stage would promote the most efficient resolution of this issue. 20 60(b)(4) motion. However, assuming, for the sake of argument, that the Court denies Defendants' motion, the Court notes that Plaintiff's motion raises questions regarding the appropriate procedure that the Court should apply in resolving such motion. Federal Rule of Civil Procedure 69 governs execution of a money judgment. Such rule provides: A money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution-and in proceedings supplementary to and in aid of judgment or execution-must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies. Fed. R. Civ. P. 69(a). Thus, Rule 69 establishes a general rule that this Court will apply Virginia's procedure on execution, but, if a federal statute is applicable, it is controlling. See 13 Moore et al., supra, § 69.03[1]. In Chapter 127 of Title 28 of the United States Code, Congress has established a statutory scheme governing sales of realty "sold under United States." any order or decree 28 U.S.C. § 2001(a). among other things, the manner of notice such sales require, of any court of the Such statutes prescribe, such sales, id_;_ § 2002. icL, and the The Fourth Circuit has stated that "such statute very definitely announces the policy of the law that federal judicial sales should be made only in accordance with the requirements of the statute, and it is the duty of the courts to enforce the statutory mandate when 21 the point is Elliott, directly 94 and F.2d 55, properly 60 (4th presented Cir. 1938); Lumber Co. v. Tunis Lumber Co., 171 F. However, "[n]ot every minor . . see . ." also Read v, Cumberland 352, 359 (4th Cir. 1909). departure from strict compliance with the statute where no prejudice has thereby resulted to the objecting party, will require setting a sale aside . . . ." Id. (citing Bovay v. Townsend, 78 F.2d 343, 347 (8th Cir. 1935)). Importantly, however, courts have held that Rule 69(a) does not mandate the application of the Chapter 127 statutory scheme because they have judicial sales, are distinct as construed such scheme opposed to execution to apply sales. only Judicial to sales from execution sales: Execution sales are conducted by an officer of the law in pursuance of the directions of a statute, while judicial sales are made by the agent of a court in pursuance of the directions of the court; sales the sheriff is the vendor, in in execution judicial sales, the court. 30 Am. Jur. In light of Chapter 2d Executions and Enforcement of Judgments § 384. such 127, distinction-and "Executions and notwithstanding Judicial the title Sales"-courts concluded that: the language of [28 U.S.C. § 2001(a)] limits its application to judicial sales made under order or decree of the court and requiring confirmation by the court for their validity, and that it does not extend to sales under common-law executions which issue by mere praecipe of the judgment creditor on the judgment without order of the court, and in which the levy and sale of the marshal are ministerial, 22 do not need of have confirmation to give them effect, and only come under judicial supervision on complaint of either party. Yazoo & M.V.R. Co. v. City of Clarksdale, 257 U.S. 10, 20 (1921); Weir v. United States, 339 F. 2d 82, 85 (8th Cir. 1964); Prudential Ins. Co. of Am. v. Land Estates, Inc., 90 F.2d 457, 458 (2d Cir. 1937) (per curiam) . Thus, courts view Chapter 127 of Title 28 as establishing the procedure for judicial sales. And, given that Rule 69(a) provides that "a money judgment is enforced by a writ of execution," courts have determined that, under Rule 69(a), the federal statutes governing judicial sales do not apply. Weir, 339 F.2d at 85-86. procedures on writs of execution apply, of realty. Instead, state even to execution sales See id. That said, at least one court has interpreted Rule 69(a) as permitting a court to order a judicial sale under 28 U.S.C. 2001. In United States v. Branch Coal Corp., the Court § of Appeals for the Third Circuit upheld a judicial sale of realty following a default judgment. The Court noted that, "Rule 390 F.2d 7, 8, 10 (3d Cir. 1968). 69(a) has been interpreted as precluding the application of federal procedures, as outlined in 28 U.S.C. §§ 2001-2002 (1965), However, the Court then to execution sales." stated: "we are aware IcL at 9. of no decision that has construed Rule 69(a) as requiring an execution sale in every case where the United States is seeking to enforce a money 23 judgment. provides Indeed, for the first sentence of the Rule specifically alternate directs otherwise.'" means Id^ of enforcement when the 'court Accordingly, the Court concluded that the district court permissibly had conducted a judicial sale, rather than an execution sale, and upheld the sale. Id. at 9- 10. After thoroughly considering the issue, assuming, for the sake of argument, that the Court denies Defendants' motion, the Court concludes that it will conduct any sale of realty pursuant to Chapter 127 of Title 28 because Virginia law does not permit a plaintiff to enforce a judgment against realty by "writ of execution" general and rule, mandatory. Virginia's the Fourth Circuit the provisions Although procedure Rule judgment creditor of Chapter 69(a) regarding on a judgment of this Court, to has indicated that, as a 127 of Title 28 are directs the Court writs of execution to apply to execution Virginia law does not authorize a obtain satisfaction from a debtor's real property through a writ of execution. judgment At common law, a judgment creditor had no method for ordering the sale of realty through a writ of execution. Commentaries *417 (describing the See 2 William Blackstone, writ of fieri facias as a "species of execution . . . against the goods and chattels of the defendant"); W. Procedure § 18.02[8] Hamilton Bryson, Bryson on Virginia ("A judgment creditor could not by the 24 traditional common law reach his or her debtor's real estate."). Indeed, an entire branch of equity jurisdiction developed to allow a creditor because Norton 1941) of the Pomeroy, to recover narrowness Equity from of the a debtor's real common-law writs. § 1415, at 1065 Jurisprudence property 4 John (5th ed. (noting that "[t]he jurisdiction of equity to entertain suits in aid of creditors undoubtedly had its origin in the narrowness of the common-law remedies by writs of execution."). As at common law, in Virginia-unlike some states-a judgment creditor may not reach a judgment debtor's realty through a writ of execution. See Va. ("By a writ of fieri ma o facias, § 8.01-474 (emphasis added) the officer shall be commanded to ke the money therein mentioned out of the goods and chattels f the person against (emphasis added) we Code Ann. whom the judgment ("The writ of fieri is."); id. § 9.01-478 facias may be levied as 11 on the current money and bank notes, as on the goods and chattels of the judgment debtor, except such as are exempt from levy under Title 34, and shall bind what is capable of being levied on only from the time it is actually levied by the officer to whom it has been delivered to be executed."); Kent Sinclair & Leigh B. Middleditch, Jr., Virginia Civil Procedure § 14.10(A) (noting that it "is a well [-]established proposition[n] of law" that "in Virginia, the writ of fieri facias may not be levied upon the real estate of the judgment debtor except in the 25 case of judgments in favor of the Commonwealth.").11 General Assembly creditors can has enforce provided a a mechanism judgment lien to Rather, the by which obtain judgment satisfaction from a judgment debtor's realty. In Virginia, a judgment creditor may collect from a judgment debtor's realty through a creditor's bill to enforce a judgment lien. The General Assembly, as a general matter, has established that: Every judgment for money rendered in this Commonwealth by any state or federal court or by confession of judgment, as provided by law, shall be a lien on all the real estate of or to which the defendant in the judgment is or becomes possessed or entitled, from the time such judgment is recorded on the judgment lien docket of the clerk's office of the county or city where such land is situated. Va. Code Ann. § 8.01-458. judgment debtor's realty, Thus, to satisfy a judgment from a a judgment creditor must first docket his judgment in the clerk's office of the county or city where the land is situated. See id.; Doug Rendleman, Judgments and Liens in Virginia § 6.2 (3d ed. Enforcement of 2014) . Once a judgment creditor has obtained a judgment lien on the realty, the General Assembly has determined that: In Virginia, another species of writ of execution, the writ of possession, will lie to allow a plaintiff to obtain the return of his property. See Va. Code Ann. § 8.01-470; Middleditch & Sinclair, sup_ra, § 15.1. Plaintiff seeks a sale of a parcel of land owned by Defendants to satisfy a judgment unrelated to such parcel. Thus, the writ of possession provides no basis for Plaintiff to obtain the relief he seeks. 26 Jurisdiction to enforce the lien of a judgment shall be in equity. If it appear to the court that the rents and profits of all real estate subject to the lien will not satisfy the judgment in five years, the court may decree such real estate, or any part thereof, to be sold, and the proceeds applied to the discharge of the judgment. Va. Code Ann. § 8.01-462. If the court determines that rents and profits from the property will not satisfy the judgment in five years, "[t]he court will then appoint a special commissioner for the sale and the proceedings will be conducted as other judicial sales." 14.10[B]; Rendleman, supra, Middleditch § 6.3[A]. & Sinclair, supra, § "The court's confirmation of the special commissioner's sale is essential to the validity of the transaction." Rendleman, Zion v. Baptist S.E.2d 291, Church supra, Conservators 293 (Va. 2000) § 6.4; see also Trs. of of Estate of Peay, 525 ("In the course of a judicial sale, '[u]pon the entry of a decree of confirmation[,] the transaction becomes a completed contract of sale.'" (alteration in original) (quoting Staples v. Somers, Additionally, there are various "where judgment debtor, it 84 S.E.2d 523, 527 liens on (Va. the 1954))). lands of is erroneous to decree a sale of his to satisfy such liens without first ascertaining all liens delinquent binding thereon, including a lands of the taxes, and determining and fixing their respective amounts and priorities." Tackett v. omitted); Boiling, 1 S.E.2d see also Capitol 285, Bldg. 27 287 (Va. Supply v. 1939) Chang, (citations 84 Va. Cir. 267, 273 (Fairfax County 2012) (citing Tackett, 1 S.E.2d at 287) . To the extent that Virginia creditor to obtain satisfaction property through a only permits a judgment from a judgment debtor's real judicial sale, the Court finds that Rule 69 does not require it to apply Virginia's procedure for judicial sales. As noted above, Virginia's procedures Rule 69 requires "on execution." the Court to apply Fed. R. Civ P. 69(a). However, as the forgoing discussion indicates, Virginia does not permit "execution" against realty. judgment creditor to obtain enforcing a judgment lien. judgment creditor must Instead, satisfaction Given that, file a bill in Virginia permits a from realty only by under Virginia equity to law, a enforce a judgment lien and that such proceedings are conducted under the court's direction through a commissioner in chancery, any such sale undoubtedly is "made under order or decree of the court and requiring confirmation by the court for their validity," Yazoo & M.V.R. Co., 257 U.S. "judicial sale." at 20, and therefore should be considered a Indeed, nothing about such procedure suggests that it can be categorized as an execution sale, which results from "mere praecipe of the judgment creditor on the judgment without order of the court, and in which the levy and sale of the marshal are ministerial, do not need confirmation to give them effect, and only come under 28 judicial supervision on complaint of either party." See id. Thus, implicitly, to Virginia's judicial asks sales Virginia's anomalous to court because realty, for procedure held governs to apply of Court interpret have statute of procedure Virginia's courts the the execution sale. to the the even though execution Rule for that apply 69 to of 69 incorporates it would be of realty when that does federal statute between a federal federal require judicial judicial See Weir, 339 F.2d at 85-86. "a not governing distinction for application the statement it applies" at least procedure Yet, require 69's extent Rule sales. judicial sales Rule Plaintiff, sale a sales and an Put differently, if the federal statute governing judicial sales is inapplicable under Rule the same 69 because the statute concerns reasoning, Rule 69 would not a judicial sale, incorporate on Virginia's procedure for enforcing a judgment lien because it too requires a judicial, rather than execution, sale. Accordingly, the Court concludes that Rule 69 does not incorporate Virginia's procedure for enforcing a judgment lien on realty. To the extent that execution sale of realty, the provisions judicial sale of Chapter in this Virginia law the Court, 127 matter.12 of does not if necessary, Title 28 to As noted above, permit an will apply conduct the any Fourth 12 In the alternative, assuming Rule 69 incorporated Virginia's procedure for enforcing judgment liens, the Court finds it appropriate to "direc[t] otherwise" that any judicial sale 29 will occur under the Circuit has suggested that, as a general rule, the provisions of such chapter are mandatory and "federal judicial sales should be made only in accordance with the requirements of the statute . . . ." 764 Read, F.2d 1033, district pursuant such court's to 28 any an 60; 1035 cf. (4th ACLI Gov't Sec, Cir. 1985) confirmation U.S.C. guidance. motion, under 94 F.2d at §§ If sale order of 2001, the of sale a of The satisfy will v. Rhoades, curiam) ultimately to Court, (per 2002). Court realty this of Inc. (affirming real Court will denies follow Defendants' Plaintiff's accord with property judgment, the procedures outlined in Chapter 127 of Title 28 of the United States Code. IV. For the TAKES reasons UNDER Defendants Civil seek contends of relief Procedure Defendants' the IN Case, ECF such 60(b)(3) and However, judgment the Court DENIES IN PART and PART in motion. that stated above, ADVISEMENT Rehearing/Reopening CONCLUSION to Defendants' No. motion 32. the against To under 60(d)(3), is the Federal the extent them Petition Defendants' of DENIES motion under 60(b)(4), the Court TAKES UNDER ADVISEMENT such motion, an evidentiary hearing. extent Rules Court void for Rule pending The Court DIRECTS Defendants to confer with Plaintiff's counsel and then contact the Clerk of the Court procedure set forth in Chapter 127 of Title 28. 69(a); Branch Coal Corp., 390 F.2d at 9-10. 30 See Fed. R. Civ. P. to schedule an evidentiary hearing to address the parties' factual dispute over whether Defendants v/ere validly served with process. The Court ADVISES Defendants (14) days after the entry of such a hearing and that, if that they have fourteen this Opinion and Order to schedule they fail to do so, the Court will resolve their motion on the papers currently before it. The Court Execution 60 (b) (4) TAKES Sale, UNDER pending the their all counsel address IT Plaintiff's resolution of Motion Defendants' for Rule motion. The Clerk is REQUESTED Order to ADVISEMENT IS of to send a copy of of record and to this the pro se Opinion Defendants and at record. SO ORDERED. /s/ir^Sr Mark S. Davis United States District Judge Norfolk, Virginia June \c\ , 2015 Nunc pro tunc to December 15, 2014, the date the original Opinion and Order was signed and entered. 31
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