Church-El v. Bank of New York
OPINION re 23 Order. Signed by Judge Noel L. Hillman on 3/21/2013. (bkb) Modified on 3/21/2013 (bkb).
UNITED STATES DISTRICT COURT
DISTRICT OF DELAWARE
KHYON ERNEST CHURCH-EL,
Civil No. 11-877 (NLH/KMW)
BANK OF NEW YORK, as Trustee
for the holders of
Khyon Ernest Church-El
1725 West 2nd Street
Wilmington, Delaware 19805
Pro Se Plaintiff
Lisa Roberson Hatfield, Esquire
284 East Main Street
Newark, Delaware 19711
Attorney for Defendant
HILLMAN, District Judge
This matter comes before the Court by way of Defendant Bank
of New York’s motion [Doc. No. 14] to set aside the Clerk’s entry
of default entered against it in this matter on July 23, 2012.
Plaintiff Khyon Ernest Church-El opposes Defendant’s motion and
filed two separate motions [Doc. Nos. 11, 19] seeking the entry
of a default judgment against Defendant.
The Court has
considered the parties’ submissions, and decides this matter
pursuant to Federal Rule of Civil Procedure 78.
For the reasons expressed below, Defendant’s motion to set
aside the default is granted, and Plaintiff’s motions for default
judgment are denied.
Plaintiff brings this action alleging claims against
Defendant for purported violations of the Fair Credit Reporting
Act (hereinafter, “FCRA”), 15 U.S.C. § 1681 et seq., and the Fair
Debt Collection Practices Act (hereinafter, “FDCPA”), 15 U.S.C. §
1692 et seq.
The Court exercises jurisdiction over Plaintiff’s
federal law claims under FCRA and FDCPA pursuant to 28 U.S.C. §
See also 15 U.S.C. §§ 1681p, 1692k(d) (allowing FCRA and
FDCPA claims to “be brought in any appropriate United States
district court without regard to the amount in controversy”).
Plaintiff filed the complaint in this action on September
28, 2011 for a declaratory judgment, preliminary and permanent
injunctive relief, and damages against Defendant for alleged
violations of the Fair Credit Reporting Act and the Fair Debt
Collection Practices Act “in connection with a purported mortgage
appearing to be in foreclosure against the Plaintiff; the
defendants’ collection tactics in attempting to foreclose, and
the defendants’ refusal to remove or correct inaccuracies
regarding [the mortgage], despite written correspondence
specifying the inaccuracies and providing information that would
facilitate a reasonable reinvestigation of the matter.”
[Doc. No. 1] ¶ 4.)
Plaintiff requests that the Court “review the
lower Court’s Record, and the facts of the case recorded in the
Recorder of Deeds Office(s), as well as the Secretary of State’s
Office(s), to make a case comparison, and issue a compensatory
Judgment in his favor to equal at least 3 times the valuation of
the original mortgage note,” plus punitive damages and injunctive
(Id. ¶ 19.)
On February 14, 2012, the Court ordered Plaintiff to show
cause why the complaint should not be dismissed for failure to
serve process upon Defendant within 120 days of the filing of the
complaint pursuant to Federal Rule of Civil Procedure 4(m).
(Order to Show Cause [Doc. No. 3] 1, Feb. 15, 2012).
filed a response to the Order to Show Cause on March 6, 2012
indicating that Plaintiff sent a certified copy of the complaint
to “Wittstadt & Wittstadt 284 E. Main St. Newark, DE 19711 by
United States Postal Service on the 28th day of September 2011”
in care of Lisa Hatfield, Esquire,1 and that he received a
“Domestic Return Receipt with an Article Number of 7011 0470 0001
5071 6738 as proof of the delivery [along with] an accompanying
(Pl.’s Response [Doc. No. 4] ¶¶ 2-3.)
Lisa Hatfield, Esq. serves as counsel for Defendant in this
By Order dated March 13, 2012, the Court found that
“Plaintiff’s method did not properly effect service upon
Defendant” as required by Federal Rule of Civil Procedure 4 and
several provisions of the Delaware Code, including 8 DEL. C. §
10 DEL. C. § 3111.
(Order [Doc. No. 5] 1, Mar. 13,
Accordingly, the Court granted Plaintiff an additional
sixty (60) days from the date of the March 13, 2012 Order to
effect service upon Defendant.2
Approximately two months
later, on May 15, 2012, Plaintiff filed an executed summons
purporting to demonstrate service upon Defendant.
No. 8] 1.)
The attached proof of service indicated that Conner
D. O’Rourke, a special process server from O’Rourke Investigative
Associates, Inc., “served the rule to show cause ... [on] Scott
LaScala, operations manager, who is designated by law to accept
service of process on behalf of ... Bank of New York as Trustee
for the Holders of Asset-backed Certificate Series 2001-1F c/o
Wittstadt & Wittstadt, P.A., at c/o Corporation Trust Co., 1209
Orange Street, Wilmington, DE, 19801 on ... 5/10/2012 at 3:05
(Proof of Service [Doc. No. 8] 2.)
Pursuant to the executed summons and proof of service, the
Clerk of Court entered a docket notation indicating that Bank of
New York was served on May 10, 2012 and Defendant’s answer was
On May 10, 2012, Plaintiff filed a second response to the
Court’s February 14, 2012 Order to Show again relying on his
attempt to serve the complaint via certified mail, return receipt
Article Number 7011 0470 0001 5071 6738.
due by May 31, 2012.
(Text of May 15, 2012 Docket Entry by Clerk
After Defendant’s May 31, 2012 deadline expired
without the filing of an answer, Plaintiff, on July 18, 2012,
requested that the Clerk of Court enter default against Defendant
pursuant to Federal Rule of Civil Procedure 55(a).3
Default [Doc. No. 9] 1.)
Plaintiff submitted an affidavit in
support of his request swearing that a copy of the summons and
complaint were served on May 10, 2012, as demonstrated by the
proof of service filed on the docket, and that Defendant had
failed to appear, plead or otherwise defend within the time
(Aff. in Supp. of Entry of Default J. [Doc. No. 9] ¶¶
In accordance with Plaintiff’s affidavit and request, the
Clerk of Court entered default on July 23, 2012.
Default [Doc. No. 10] 1.)
The Clerk thereafter mailed a copy of
the entry of default to Defendant at the following two addresses:
(1) care of Wittstadt & Wittstadt, 284 E. Main Street, Newark,
Delaware 19711; and (2) care of Corporation Trust Co., 1209
Orange Street, Wilmington, Delaware 19801.
(Id. at 2.)
On July 26, 2012, Plaintiff filed his first motion [Doc. No.
11] for default judgment.
Defendant then filed the present
Rule 55(a) provides that “[w]hen a party against whom a
judgment for affirmative relief is sought has failed to plead or
otherwise defend, and that failure is shown by affidavit or
otherwise, the clerk must enter the party’s default.” FED . R.
CIV. P. 55(a).
motion to set aside the default on October 23, 2012.
filing a brief [Doc. No. 17] opposing Defendant’s motion,
Plaintiff also filed a second motion [Doc. No. 19] seeking
default judgment and a writ of execution.
filed an objection [Doc. No. 20] to Plaintiff’s second motion.
Federal Rule of Civil Procedure 55(c) provides that the
Court “may set aside an entry of default for good cause, and ...
may set aside a default judgment under Rule 60(b).”
FED. R. CIV .
Accordingly, pursuant to Rule 60(b), a defendant may
move to set aside a default judgment, and the Court may grant
such relief for any of the following reasons:
mistake, inadvertence, surprise, or excusable
newly discovered evidence that, with
reasonable diligence, could not have been
discovered in time to move for a new trial
under Rule 59(b);
fraud ..., misrepresentation, or misconduct
by an opposing party;
the judgment is void;
the judgment has been satisfied, released or
discharged; it is based on an earlier
judgment that has been reversed or vacated;
or applying it prospectively is no longer
any other reason that justifies relief.
FED. R. CIV. P. 60(b).
Generally, entries of default and default judgments are
disfavored by the courts, and when a defendant moves to set aside
the entry of default or a default judgment the law therefore
“require[s] doubtful cases to be resolved in favor of the party
moving to set aside the default judgment ‘so that cases may be
decided on their merits.’”
United States v. $55,518.55 in U.S.
Currency, 728 F.2d 192, 194-95 (3d Cir. 1984) (citation omitted).
Moreover, the “decision to set aside the entry of default
pursuant to Fed.R.Civ.P. 55(c) and a default judgment pursuant to
Fed.R.Civ.P. 60(b) is left primarily to the discretion of the
Id. at 194 (footnotes omitted).
A distinction exists, though, “between a default standing
alone and a default judgment.”
Feliciano v. Reliant Tooling Co.,
Ltd., 691 F.2d 653, 656 (3d Cir. 1982).
While a default judgment
may be set aside according to the provisions of Rule 60(b),
“[l]ess substantial grounds may be adequate for setting aside a
default than would be required for opening a judgment.”
Accordingly, “‘(a)ny of the reasons sufficient to justify the
vacation of a default judgment under Rule 60(b) normally will
justify relief from a default entry and in various situations a
default entry may be set aside for reasons that would not be
enough to open a default judgment.’”
Id. (citing 10 C. Wright &
A. Miller, Federal Practice and Procedure, § 2696 at 334 (1973)).
In the Third Circuit, “it is well established that a
district court ruling on a motion to set aside a default under
Rule 55(c) or a default judgment under Rule 60(b)(1), must
consider the following three factors: (1) whether the plaintiff
will be prejudiced; (2) whether the defendant has a meritorious
defense; and (3) whether the default was the result of the
defendant's culpable conduct.”
Gold Kist, Inc. v. Laurinburg Oil
Co., 756 F.2d 14, 19 (3d Cir. 1985) (citing Hritz v. Woma Corp.,
732 F.2d 1178, 1181 (3d Cir. 1984); $55,518.55 in U.S. Currency,
728 F.2d at 195).
However, a district court need not “resort to
an analysis of th[e]se factors in” every instance “because they
apply only when the default judgment was authorized and the only
question before the district court is whether to exercise its
discretion to set aside the default.”
Gold Kist, 756 F.2d at 19
(explaining that a district court errs as a matter of law in
refusing to set aside a default where the default judgment was
The Third Circuit and multiple district courts within the
Circuit have recognized that an entry of default or a default
judgment can be set aside if it was not properly entered at the
outset, including circumstances where proper service of the
complaint is lacking.
See, e.g., Petrucelli v. Bohringer and
Ratzinger, 46 F.3d 1298, 1304 (3d Cir. 1995) (noting that where
“a default judgment ... [is] entered when there [is] not ...
proper service, the judgment is, a fortiori, void, and should be
vacated.”); Gold Kist, 756 F.2d at 19; Perkins v. Delaware
DHSS/DSSC, No. 12-50, 2012 WL 4482801, at *1, 4, 7 (D. Del. Sept.
27, 2012) (recommending defendant’s motion to vacate entry of
default be granted and plaintiff’s motion for default judgment be
denied where service had “not yet been technically effectuated”);
Mettle v. First Union Nat’l Bank, 279 F. Supp. 2d 598, 603
(D.N.J. 2003) (concluding sufficient good cause existed for
setting aside default entered against a defendant where there was
not proper service of the summons and complaint); Shomide v. ILC
Dover LP, No. 03-1019, 2006 WL 2042969, at *5 (D. Del. (denying
plaintiff’s motion for default judgment because defendant was not
While Defendant’s motion addresses each of the factors
relevant for setting aside the July 23, 2012 entry of default –
prejudice to plaintiff, meritorious defenses, and culpable
conduct – the motion also argues that service was never properly
effected upon Defendant in this action.
Default [Doc. No. 14] ¶ 10.)
(Mot. to Set Aside
To the extent Defendant was not
properly served with the summons and complaint, good cause may
exist for setting aside the default without further consideration
of the Gold Kist factors.
Mettle, 279 F. Supp. 2d at 603.
as a threshold matter, the Court examines whether service was
properly effected in this case.
Federal Rule of Civil Procedure 4(h) proscribes the proper
methods for effecting service of process on a corporation, such
as Defendant Bank of New York.4
Rule 4(h) provides in pertinent
part that a domestic corporation subject to suit under a common
name must be served in a judicial district of the United States:
in the manner prescribed by Rule 4(e)(1) for
serving an individual; or
by delivering a copy of the summons and of the
complaint to an officer, a managing or general
agent, or any other agent authorized by
appointment or by law to receive service of
process and — if the agent is one authorized by
statute and the statute so requires — by also
mailing a copy of each to the defendant[.]
FED. R. CIV. P. 4(h).
Effecting service of process under Rule 4(h)(1)(B) requires
personal service of the summons and complaint to one of the
following: (1) an officer of the corporation; (2) a managing or
general agent; or (3) any other agent authorized to receive
service on behalf of the corporation.
Effecting service of
process under Rule 4(h)(1)(A) requires a plaintiff to serve the
summons and complaint consistent with the method proscribed in
Rule 4(e)(1) governs service of an individual
defendant and permits a plaintiff to serve by “following state
law for serving a summons in an action brought in courts of
general jurisdiction in the state where the district court is
located or where service is made[.]”
Although not made clear in the complaint, Defendant’s
motion affirmatively indicates that Bank of New York is a
Delaware corporation. (Mot. to Set Aside Default [Doc. No. 14] ¶
3.) Accordingly, Federal Rule 4(h) governs service of Defendant
in this case.
Under Delaware law, service of process on a corporation
shall be made by delivering a copy personally to
any officer or director of the corporation in this
State, or the registered agent of the corporation
in this State, or by leaving it at the dwelling
house or usual place of abode in this State of any
officer, director or registered agent (if the
registered agent be an individual), or at the
registered office or other place of business of the
corporation in this State.
8 Del. C. § 321(a).
Section 321(a) further provides that where
“the registered agent [ is] a corporation [as opposed to an
individual], service of process upon it as such agent may be made
by serving, in this State, a copy thereof on the president,
vice-president, secretary, assistant secretary or any director of
the corporate registered agent.”5
Id.; see also Thompson v.
Target Stores, 501 F. Supp. 2d 601, 603 (D. Del. 2007) (“Delaware
law allows for service of process upon a corporation by personal
delivery to any officer, director, or registered agent in the
State, leaving it at the dwelling house or usual place of abode
of any such officer, director, or registered agent, or leaving it
Section 321(c) further provides that service upon a
corporation “may also be made in accordance with § 3111 of Title
10 or any other statute or rule of court.” 8 Del. C. § 321(c).
Pursuant to 10 Del. C. § 3111, “[a]ctions may be brought against
any corporation, at law or in chancery, by summons. Process may
be served on the president, or head officer, if residing in the
State, and if not, on any officer, director, or manager of the
corporation.” Similarly, Delaware Superior Court Rule of Civil
Procedure 4(f)(1)(III) provides that service upon a corporation
shall be made by personally “delivering copies of the summons,
complaint and affidavit, if any, to an officer, a managing or
general agent or to any other agent authorized by law to receive
service of process[.]”
at the registered office or other place of business of the
corporation in Delaware.”); Bailey v. ACME/ASCO/Albertson's Inc.,
No. 05A-04-006-PLA, 2006 WL 496139, at *2 (Del. Super. Ct. Feb.
21, 2006) (“Methods for service of process against a corporation
are specified in both Rule 4(f)(III) and in 8 Del. C. § 321 (a)
and provide that service on a corporation may be accomplished by
delivering a copy of the summons and complaint to any officer,
managing or general agent, or by leaving the copy at the
registered office or other place of business of the
Pursuant to the Federal Rules of Civil Procedure, Delaware
state law, and Delaware court rules, Plaintiff was required to
personally serve Defendant by delivering a copy of the summons
and complaint in this action to either an officer, director, or
registered agent of Defendant in the state of Delaware.6
appears that Plaintiff engaged the services of O’Rourke
Investigative Associates, Inc. for this purpose, presumably at
great personal expense.
Plaintiff asserts that “[t]he
credibility of Mr. O’Rourke serves as effective testimony to the
To the extent Plaintiff continues to assert that Defendant
was properly served via copies of the summons and complaint sent
to Defense counsel via certified mail, the Court previously found
such service to be insufficient, and it remains so at this time.
(Order [Doc. No. 5] 1, Mar. 13, 2012) (finding Plaintiff’s
service method did not properly effect service under Federal Rule
of Civil Procedure 4 and several provisions of the Delaware Code,
including 8 DEL. C. § 321 and 10 DEL . C. § 3111).
plaintiff’s proper effectuation of service upon the defendant[.]”
(Pl.’s Mandatory Reply to Def.’s Mot. to Set Aside Default J.
[Doc. No. 17] (hereinafter, “Pl.’s Opp’n”), 8.)
The proof of
service signed by Connor O’Rourke indicates that service was made
upon Scott LaScala, operations manager at Corporation Trust
Company at 1209 Orange Street, Wilmington, Delaware, in care of
Wittstadt and Wittstadt, P.A.
(Proof of Service [Doc. No. 8] 2.)
Despite Plaintiff’s efforts, at this time the record
reflects that personal service was never made on Defendant as
required under the pertinent rules and statutes set forth above.
After the Clerk of Court entered default against Defendant, a
copy of the default was mailed to Defendant in care of
Corporation Trust Company at the 1209 Orange Street address on
July 23, 2012.
Approximately four days later, the Clerk of Court
received a notice from Scott LaScala informing the Court that he
was returning the Entry of Default in this action because “Bank
of New York is not listed on our records or on the records of the
State of DE.”
(Notice [Doc. No. 12] 1.)
It is apparent from the
face of LaScala’s letter that he is not any officer or director
for Defendant Bank of New York.
Accordingly, service upon
Corporation Trust Company through LaScala could only presumably
constitute an attempt by Plaintiff to serve Defendant’s
registered or general agent.
However, LaScala’s letter
demonstrates that Corporation Trust Company does not serve as
Defendant Bank of New York’s managing, general or registered
agent in any manner.
(Notice [Doc. No. 12] 1; Def.’s Objection
to Pl.’s Mot. for Default J. [Doc. No. 20] ¶ 9.)
serving Corporation Trust Company with the summons and the
complaint in this action was insufficient to effect service of
process on Defendant Bank of New York.
Consequently, as there has not yet been proper service of
the summons and complaint upon Defendant, the Court finds that
sufficient “good cause” exists for setting aside the default
entered on July 23, 2012, against Defendant Bank of New York.7
See Gold Kist, 756 F.2d at 19; Petrucelli, 46 F.3d at 1304;
Perkins, 2012 WL 4482801, at *7; Mettle, 279 F. Supp. 2d at 603;
Shomide, 2006 WL 2042969, at *5.
Having determined good cause
exists to set aside the default based on the absence of proper
service, the Court need not examine the Gold Kist factors
regarding prejudice to Plaintiff, meritorious defenses, and
culpable conduct of Defendant.
756 F.2d at 19.
Court grants Defendant’s motion to set aside the July 23, 2012
Entry of Default.
Furthermore, because default judgment cannot
To the extent Plaintiff’s opposition brief could be
construed to argue that Defendant’s actual notice of the present
suit obviates the need for proper service, the Third Circuit has
previously recognized that “notice cannot by itself validate an
otherwise defective service. Proper service is still a
prerequisite to personal jurisdiction.” Grand Entm’t Group, Ltd.
v. Star Media Sales, Inc., 988 F.2d 476, 492 (3d Cir. 1993).
Therefore, the fact that Defendant is aware of the present suit
does not excuse Plaintiff from properly effectuating service
pursuant to Federal Rule of Civil Procedure 4.
be entered where the summons and complaint has not properly been
served, Plaintiff’s motions for default judgment are denied.
Shomide, 2006 WL 2042969, at *5.
Having found that Plaintiff has not yet effected service of
the summons and the complaint, the Court notes that Plaintiff has
failed to comply with Federal Rule of Civil Procedure 4(m) which
requires service within 120 days of the filing of the complaint.
Here, Plaintiff’s complaint was filed on September 28, 2011.
is clear that Plaintiff’s failure to serve Defendant at this
point is well beyond the 120 day limit of Rule 4(m).
where a defendant has not been timely served, the Rule permits
the Court to dismiss the action without prejudice or order that
service be made within a specified time.
Petrucelli, 46 F.3d at
1305 (noting that under Rule 4(m) “the district court may, in its
discretion, extend time even absent a finding of good cause.”)
In light of Plaintiff’s diligent, although improper and
insufficient, attempts to serve Defendant up to this point, the
Court will extend Plaintiff’s time to effect service of process
for an additional sixty (60) days.
Plaintiff is on notice that
this is the final extension of time the Court will grant in order
to serve the summons and complaint in this action.
fails to properly and timely serve Defendant within sixty days
from the date of this Opinion and its accompanying Order,
Plaintiff’s complaint will be dismissed without prejudice
pursuant to Rule 4(m).
For the foregoing reasons, Defendant’s motion to set aside
the default [Doc. No. 14] is granted, and Plaintiff’s motions
[Doc. Nos. 11, 19] for default judgment are denied.
consistent with this Opinion will be entered.
Dated: March 21, 2013
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.