Biscayne Contractors, Inc. v. Redding
219 F. Supp. 3d 41
| D.D.C. | 2016Background
- Biscayne Contractors registered a Virginia final judgment against James Redding in D.D.C. and obtained a Charging Order (May 5, 2014) attaching Redding's interest in TBM Holdings, LLC.
- On March 31, 2014 Redding transferred 49% of TBM to Mohammed Abu‑El‑Hawa and Ahmad Ayyad in exchange for a $350,000 promissory note (Redding retained 51%).
- Plaintiff served a writ to garnish payments due under the Note; Abu‑El‑Hawa (pro se) did not timely respond and the court entered a Judgment of Condemnation against him for $350,000 (Clerk’s judgment Aug. 3, 2015).
- Abu‑El‑Hawa later retained counsel and moved to set aside the judgment under Fed. R. Civ. P. 60(b), asserting he already paid the Note (through payments by related businesses and to Redding’s creditors) and that his default was inadvertent/excusable.
- Plaintiff argued the Note could only be satisfied by direct payment to Redding (personal check), that some payments violated the Charging Order, and sought clarification to make the charging lien cover 100% of TBM.
- The court found Abu‑El‑Hawa presented a potentially meritorious defense (payments/novation), that some noncompliant payments were willful after actual notice, and therefore vacated much of the judgment but preserved a portion; it denied the request to amend the Charging Order without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 60(b) relief is warranted because Abu‑El‑Hawa already satisfied the Note | Payments did not satisfy the Note unless made by Abu‑El‑Hawa personally to Redding; therefore judgment should stand | Payments by Abu‑El‑Hawa’s businesses and payments to creditors were accepted by Redding and/or constitute novation or satisfaction | Partial relief granted: court found some payments satisfied the Note (or might have via novation); judgment reduced accordingly |
| Whether the default was willful | Abu‑El‑Hawa willfully ignored filings and made payments in violation of the Charging Order, so relief is unwarranted | Failure to respond was not deliberate; he cooperated informally and only acted willfully after actual notice | Court found non‑willful conduct before actual notice; willful conduct after notice limited relief. Judgment remains for payments made after notice |
| Whether plaintiff is prejudiced by setting aside judgment | Setting aside harms plaintiff by reducing an available collection source | Setting aside avoids double recovery where Abu‑El‑Hawa already paid debt | Court found little substantive prejudice; setting aside in part does not unduly prejudice plaintiff and prevents windfall recovery |
| Whether Charging Order should be amended to cover 100% of TBM Holdings | The charging lien should extend to the 49% transferred until Note satisfied | Transferred interest preceded the Charging Order; lien should attach only to Redding’s interest | Request to amend denied without prejudice for lack of clear record; plaintiff may renew as separate motion |
Key Cases Cited
- Jackson v. Beech, 636 F.2d 831 (D.C. Cir. 1980) (default judgments disfavored; penalty for delay may be unfair)
- Keegel v. Key West & Caribbean Trading Co., 627 F.2d 372 (D.C. Cir. 1980) (factors to consider in setting aside defaults: meritorious defense, willfulness, prejudice)
- Wrecking Corp. of Am. v. Jersey Welding Supply, Inc., 463 A.2d 678 (D.C. 1983) (vacating condemnation where garnishee showed lack of indebtedness/property of debtor)
- Int'l Painters & Allied Trades Union v. H.W. Ellis Painting Co., 288 F. Supp. 2d 22 (D.D.C. 2003) (applying Keegel factors to Rule 60(b) motions)
- Jarvis v. Parker, 13 F. Supp. 3d 74 (D.D.C. 2014) (Rule 60(b) allocation of burden and standards)