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Kennedy v. City First Bank of D.C., N.A.

Court of Appeals of Columbia District

April 3, 2014

KARL KENNEDY AND LISA KENNEDY, APPELLANTS,
v.
CITY FIRST BANK OF D.C., N.A., APPELLEE

Submitted January 23, 2014.

Appeal from the Superior Court of the District of Columbia. (CAB-9965-11). (Hon. Laura A. Cordero, Trial Judge).

Richard J. Bianco was on the brief for appellants.

Kenneth M. Misken was on the brief for appellee.

Before WASHINGTON, Chief Judge, BLACKBURNE-RIGSBY, Associate Judge, and FARRELL, Senior Judge.

OPINION

Page 143

Farrell, Senior Judge :

Appellants Karl Kennedy and Lisa Kennedy appeal from the trial court's denial of their motion to vacate the default judgment the court had entered in favor of appellee, City First Bank of D.C., N.A. (" City First" ). Appellants claim error by the court in concluding that City First could properly bring its underlying suit against appellants in Superior Court because the restriction on the right to sue contained in D.C. Code § 29-105.02 (2012 Repl.) is preempted by The National Bank Act, 12 U.S.C. § 24 (2008) (the " NBA" ). Appellants cite additional error in the trial court's application of the factors listed in Walker v. Smith, 499 A.2d 446, 449 (D.C. 1985), to be considered in ruling on a request to vacate a default judgment. We affirm.

I.

On December 20, 2011, City First filed a complaint in Superior Court to enforce appellants' guaranty obligations that required them to assume responsibility for any debt owned under a loan made by City First to Wines & Spirits Expo, LLC (" Wines & Spirits" ), a D.C. limited liability company owned by appellants' Delaware limited liability company, The Kennedy Group, LLC. Wines & Spirits had defaulted on the loan and filed a bankruptcy petition, leading to the sale of its assets from which City First had received $475,000. On December 20, 2011, City First filed a complaint in Superior Court to recover the deficiency from appellants. On May 16, 2012, City First was granted a default judgment when appellants failed to file any responsive pleadings. More than five months later, on November 2, 2012, appellants filed a motion to vacate the default judgment, which the trial court denied.

II.

City First is a national banking association organized and existing under federal law. It is not registered to do business in the District of Columbia. Appellants therefore claim that the trial court erred in ruling that City First could lawfully bring suit in Superior Court, because D.C. Code § 29-105.02 bars a " foreign filing

Page 144

entity" from maintaining an action in the District of Columbia " unless it is registered to do business in the District." D.C. Code § 29-105.02 (b).[1] The trial court ruled that the NBA preempts the application of § 29-105.02 to an entity such as City First that exists under the auspices of the federal statute.[2] Although the trial court was plainly right, the issue is one of first impression in this jurisdiction, and as a ...


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