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Biscayne Contractors, Inc. v. Redding

United States District Court, District of Columbia

November 29, 2016

BISCAYNE CONTRACTORS, INC., Plaintiff,
v.
JAMES REDDING, Defendant.

          MEMORANDUM OPINION

          Gladys Keller United States District Judge

         This case concerns the ongoing efforts of Plaintiff Biscayne Contractors, Inc. ("Plaintiff") to collect on a Final Judgment entered against Defendant James Redding ("Defendant" or "Redding") in the District Court for the Eastern District of Virginia in Case No. 13-765, Biscayne Contractors, Inc. v. James Redding. See Registration of Foreign Judgment [Dkt. No. 1]. As part of Plaintiff's collection efforts, on July 30, 2015, it obtained a Judgment of Condemnation against Garnishee Mohammed Abu-El-Hawa ("Garnishee" or "Abu-El-Hawa"). See Order Granting Plaintiff's Motion for Judgment of Condemnation [Dkt. No. 13].

         On September 2, 2015, Abu-El-Hawa filed a Motion to Set Aside the Judgment entered against him. Motion to Set Aside -Judgment Entered Against Garnishee Mohammed Abu-El-Hawa ("Garnishee's Mot." or "Motion to Set Aside") [Dkt. No. 16]. On September 28, 2015, Plaintiff filed its Opposition to Garnishee's Motion ("Opp.") [Dkt. No. 19], and on October 15, 2015, Abu-El-Hawa filed his Reply ("Reply") [Dkt. No. 24] .

         On October 22, 2015, Plaintiff filed a Motion for Leave to File Surreply ("Surreply")[Dkt. No. 26]. On December 1, 2015, the Court granted Plaintiff's Motion to file a Surreply and ordered the parties to file responses to questions the Court posed in the Order of December 1, 2015 Order [Dkt. No. 27]. On December 1, 2015, Plaintiff filed a Surreply [Dkt. No. 28]. On January 14, 2016, Plaintiff and Abu-El-Hawa both filed responses to the Court's December 1, 2016 Order. Plaintiff's Supplemental Brief in Opposition to Garnishee's Mot. To Set Aside Judgment ("Pl's Supp. Br.") [Dkt. No. 29]; Garnishee's Response to Questions Posed in Court's December 1, 2015 Order ("Garnishee's Resp.") [Dkt. No. 30].

         Upon consideration of the Motion, Opposition, Reply, and Surreply, and the entire confusing record herein, and for the reasons that follow, Abu-El-Hawa's Motion to set Aside Judgment shall be granted in. part.[1]

         I. BACKGROUND

         On March 18, 2014, Plaintiff Biscayne Contractors, Inc. filed with the Clerk of this Court a Final Judgment entered against Defendant James Redding in the District Court for the Eastern District of Virginia in Case No. 13-765, Biscayne Contractors, Inc. v. James Redding. See Registration of Foreign Judgment.

         On March 31, 2014, Garnishee Mohammed Abu-El-Hawa, along with Ahmad Ayyad, entered into an agreement with Defendant Redding to purchase an interest in Defendant's company, TMB Holdings, LLC. Under the agreement, Defendant transferred to Abu-El-Hawa and Mr. Ayyad a 49% interest in TBM Holdings, LLC in exchange for a Promissory Note ("the Note") with a principal amount of $350, 000 (i.e., Defendant gave Abu-El-Hawa and Mr. Ayyad a 4 9% interest in TBM Holdings, LLC in exchange for their promise to pay him $350, 000 at a future date). According to Attachment A appended to the Note, Defendant Redding retained a 51% interest in TBM Holdings. Garnishee's Aff. at 10 [Dkt. No. 16-2].

         On April 10, 2014, Plaintiff filed a Motion for a Charging Order as to Defendant's interests in several companies, including TBM Holdings, LLC. Motion for a Charging Order [Dkt. No. 2]. On May 5, 2014, the Court granted Plaintiff's Motion for a Charging Order. Charging Order of May 5, 2014 ("the Charging Order") [Dkt. No. 3] . Among other things, the Charging Order states that "TBM Holdings, LLC shall pay and/or deliver over to Plaintiff all present and future proceeds, distributions, drawings, payments, and property to which Defendant may be entitled as a result of this interest in . . . TBM Holdings, LLC[.]" Charging Order at 2. On May 6, 2014, Plaintiff filed the Charging Order with the D.C. Department of Regulatory and Consumer Affairs, and on August 9, 2014, Plaintiff finally delivered a copy of the Charging Order to Abu-El-Hawa.

         On June 16, 2015, Plaintiff served on Abu-El-Hawa a Writ of Attachment on Judgment Other Than Wages, Salary and Commissions, by which Plaintiff sought to garnish the stream of payments due under the Note in order to satisfy its Judgment against Defendant. See Affidavit of Service [Dkt. No. 11]. Abu-El-Hawa, who was an experienced business man, did not retain an attorney and, acting pro se, failed to respond to the Writ.

         On July 9, 2015, Plaintiff filed a Motion for Judgment of Condemnation Pursuant to Title 16, § 526(b) D.C. Code [Dkt. No. 12], seeking a Judgment against Abu-El-Hawa in the amount of $350, 000, i.e., the value of the Note Abu-El-Hawa and his partner had executed payable to Defendant. Because Abu-El-Hawa, still proceeding pro se, did not respond to Plaintiff's Motion for Judgment, on July 30, 2015, the Court entered an Order granting the Motion. Order of July 30, 2015 [Dkt. No. 13].

         On August 3, 2015, the Clerk of the Court entered a Judgment against Abu-El-Hawa in the amount of $350, 000. Clerk's Judgment of August 3, 2015 ("the Judgment") [Dkt. No. 14]. Slightly less than a month later, on September 2, 2015, Abu-El-Hawa, having finally retained counsel, filed his Motion to Set Aside the Judgment, contending that the Judgment should be vacated under Federal Rule of Civil Procedure 60(b) because Abu-El-Hawa had already paid the $350, 000 due on the Note and that his failure to respond to the Writ was due to "mistake, inadvertence, surprise, or excusable neglect." Garnishee's Mot. at 4 (quoting Fed.R.Civ.P. 60(b)). After requesting an extension of time, which was granted on September 28, 2015, Plaintiff filed its Opposition, arguing that the Court should not vacate the Judgment because Abu-El-Hawa did not, in fact, pay off the Note; Abu-El-Hawa's default was willful; and Abu-El-Hawa made payments in violation of the Charging Order. Pl.'s Opp'n at 3.

         After requesting an extension of time, which was granted on October 15, 2015, Abu-El-Hawa filed his Reply. On October 22, 2015, Plaintiff filed his Motion for Leave to File Surreply along with a copy of the Surreply itself, which was granted on December 1, 2015 [Dkt. No. 27], and the Surreply was filed the same day.

         II. STANDARD OF REVIEW

         "Pursuant to Rule 60(b) of the Federal Rules of Civil Procedure a district court is permitted to 'relieve a party or its legal representative from a final judgment, order, or proceeding' on one of six enumerated grounds." Jarvis v. Parker, 13 F.Supp.3d 74, 77 (D.D.C. 2014) (quoting Fed.R.Civ.P. 60(b)). What is relevant in this case is that Rule 60(b) permits a Court to vacate a judgment for "mistake, inadvertence, surprise, or excusable neglect" or "any other reason that justifies relief." Fed.R.Civ.P. 60(b). "The party seeking relief under Rule 60(b) bears the burden of showing that he or she is entitled to the relief." Jarvis, 13 F.Supp.3d at 77 (citing Norris v. Salazar, 277 F.R.D. 22, 25 (D.D.C. 2011).

         III. ANALYSIS

         A. Garnishee's ...


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