Piaquadio v. American Legal Funding, LLC et al

Filing 33

ORDER denying 27 Motion to Set Aside Judgment. Signed by Honorable Robert T. Dawson on March 27, 2012. (lw)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
FORT SMITH DIVISION
ADAM PIAQUADIO
v.

PLAINTIFF
Case No: 10-2066

AMERICAN LEGAL FUNDING, LLC
ALFUND AZ1, LLC, M.B.T. ASSOCIATES,
INC., THE LAW FUNDER, LLC AND
GLOBAL FINANCIAL CREDIT, LLC.

DEFENDANTS

ORDER
On April 16, 2010, Plaintiff, Adam Piaquadio, filed a
Complaint (doc. 2) against Defendants in the Circuit Court of
Crawford County.

Defendants The Law Funder (“Funder”) and

Global Financial Credit (“Global”) filed a Notice of Removal
(doc. 1) from the Circuit Court of Crawford County, Arkansas to
this Court on May 14, 2010.
Currently before the Court are Separate Defendant American
Legal Funding LLC (“ALF”) and ALFund AZ1, LLC’s Motion to Set
Aside Default Judgment (Doc. 27) and supporting documents (docs.
28-30), and Plaintiff’s Response and supporting documents (docs.
31-32).

The Court invited the parties to present additional

evidence either by pleadings or a hearing, and all parties
declined the opportunity.

For the reasons discussed below,

Separate Defendants’ Motion (Doc. 27) is DENIED.
I. BACKGROUND
On December 22, 2004, Plaintiff was severely injured in a

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vehicular

collision.

During

the

lengthy

litigation

that

followed, Plaintiff alleged he received funds from Defendants
characterized as investments that were actually usurious loans.
According to Plaintiff, the loans were made while he suffered
from a head injury.
Plaintiff
Deceptive

Trade

alleged

these

Practices

Act

loans
and

violated
sought

the

recission

Arkansas
of

the

contracts based upon his lack of capacity to contract at the
time as well as the usurious nature of the loans.
Plaintiff filed a motion to remand contending removal was
defective due to lack of unanimity among the Defendants.

On

October 29, 2010, the Court denied Plaintiff’s Motion finding
Separate Defendants AZ1 and ALF were not required to consent
because service was not perfected at the time of removal (doc.
14).

The Court further found service was perfected on AZ1 and

ALF on June 18, 2010, as evidenced by the affidavit of service
filed by Plaintiff on August 4, 2010 (doc. 9) and attached
exhibits, including but not limited to, the certified receipt
reflecting refusal of service of AZ1 and ALF on April 30, 2010;
the Affidavit Sheet from the Maricopa County Sheriff’s Office
showing attempted service of AZ1 and ALF at 8912 East Pinnacle
Road #451, Scottsdale, Arizona 82555 (the “Pinnacle address”),
on May 20, 2010; and the certified receipt reflecting service by
the Arizona Corporation Commission pursuant to statute on June

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18, 2010.
The U.S. District Clerk entered a default against both
defendants on September 3, 2010, for their failure to plead or
otherwise defend (doc. 13).

Plaintiff filed a motion for

default judgment as to AZ1 and ALF (docs 17-18), and on May 17,
2011, the U.S. District Clerk mailed a notice of hearing to AZ1
and ALF to two different addresses, including the Pinnacle
address, scheduling a hearing for June 30, 2011 and advising
Separate Defendants damages would be determined and awarded to
Plaintiff (doc. 19).
On June 30, 2011, Plaintiff appeared with his attorney.
Separate Defendants failed to appear or otherwise communicate
with the Court.

After receiving evidence from Plaintiff, the

Court granted Plaintiff’s Motion and entered a default judgment
against ALF and AZ1 in the amount of $452,940.00 (doc. 22).

On

August 29, 2011, ALF and AZ1 filed a motion to set aside the
default judgment.
II. DISCUSSION
Separate Defendants move pursuant to Rule 60(b) of the
Federal Rules of Civil Procedure to set aside the default
judgment

against

them

on

the

grounds

of

surprise,

misrepresentation, lack of personal jurisdiction and/or manifest
unfairness or unjustness.

The rule provides for extraordinary

relief which may be granted only upon an adequate showing of

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exceptional circumstances.

Jones v. Swanson, 512 F.3d 1045,

1048 (8th Cir. 2008)(citation omitted).
Separate

Defendants

contend

there

was

no

mistake,

inadvertence or neglect that may be attributed to them and to
permit the default judgment to stand would be manifestly unjust
and unfair as they were never served with process.

Yet,

according to Separate Defendants they have received mail at the
Pinnacle address since 2003, and ALF’s President regularly
checks

the

mail

where

Plaintiff’s

counsel,

the

Arizona

Corporation Commission (mailed on June 18, 2010) and this Court
all sent mail at different times throughout this litigation.
See (doc. 9-5, p. 2 & 4).
Defendants

AZ1

and

The Court previously found service on

ALF

was

perfected

on

June

18,

2010.

Additionally, Plaintiff complied with the Arizona statute by
serving Separate Defendants through the Arizona Corporation
Commission.
According to Mr. Huff he eventually received the service of
process from the Arizona Corporation Commission but makes no
mention of the notice of hearing from the Court.

The fact that

the summons and complaint were mailed to the correct address and
not returned creates a presumption that they reached their
destination and were received by the person to whom they were
addressed.

See Arkansas Motor Coaches v. Commissioner, 198 F.2d

189, 191 (8th Cir. 1952).

Separate Defendants’ blame of UPS

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employees for withholding certain mail from their mailbox but
not others without an affidavit from these employees and after
an opportunity to present these witnesses is not enough to
overcome this presumption.
Separate Defendants contend the judgment should be set
aside as void pursuant to 60(b)(4).

In this regard, Separate

Defendants contend the Court lacks personal jurisdiction over
them as they never received actual notice of the lawsuit or
default judgment hearing.

For the reasons previously stated,

the Court finds this argument without merit.
III. CONCLUSION
For the reasons stated above, the Court concludes that
Separate Defendants’ Motion (doc. 27) should be and hereby is
DENIED.
IT IS SO ORDERED this 27th day of March 2012.
/s/ Robert T. Dawson
Honorable Robert T. Dawson
United States District Judge

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