United States of America v. Wilkins et al

Filing 74

ORDER granting 69 Renewed Emergency Motion to Set Aside 22 Default judgment, directing Plaintiff to file Affidavit of costs and an Amended Complaint within seven days of this Order; upon payment of costs, Defendants shall file a Notice of Compliance and Defendants' Answers within fourteen days of the date of this Order; directing Plaintiff to cancel the sale scheduled for February 11, 2016. See Order for details. Signed by Judge Elizabeth A. Kovachevich on 2/10/2016. (JM)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
UNITED STATES OF AMERICA,
Plaintiff,

v.

CASE NO. 8:14-CV-993-T-17JSS

LAWRENCE N. WILKINS, et al.,
Defendants.

/
ORDER
This cause is before the Court on:

Dkt. 69
Dkt. 73

Emergency Renewed Motion to Vacate or Otherwise Set Aside the
Default Judgment Under Section 1655
Response

Defendants Lawrence N. Wilkins, Carol G. Wilkins, The Wilkins Foundation, Inc.
and Living Light Ministries, Inc., move to vacate or otherwise set aside the Default
Judgment (Dkt. 22), pursuant to 28 U.S.C. Sec. 1655. Defendants have entered a
general appearance in this case (Dkts. 49, 50, 51, 52). Defendants also request that
the Court enjoin or otherwise direct the United States to cancel the property sale
scheduled for Thursday, February 11, 2016 indefinitely pending further proceedings in
this case.
The Court previously denied the Motion to Set Aside Default Judgment without
prejudice for lack of jurisdiction, due to the pending appeal (Dkt. 58). The Eleventh
Circuit Court Appeals has granted a limited remand (Dkt. 70).

Case No. 8.14-CV-993-T-17JSS

Defendants assert that Defendants are entitled to have the Default Judgment set
aside, as Defendants have appeared in this case within one year of the entry of the
Default Judgment, citing Perez v Fernandez v. Fernandez v Perez. 220 U.S. 224
(1911 )(predecessor statute to 28 U.S.C. Sec. 1655; where service is by publication
rather than personal service, a defendant against whom default judgment is entered
has an absolute right to have the judgment set aside and to appear and defend within
one year after entry of the final judgment). The Supreme Court, reversing and
remanding with directions, explains:
“In order, however, that misconception may be avoided we think it well to
observe that in the cases to which the statute applies the right to appear
and have a cause reopened is not dependent upon terms to be fixed by
the court, except to the extent that the statute provides for terms as to
costs. This, we think, is clear, since, after providing for the entry in the
Circuit Court of his appearance by a defendant embraced within the
statute, it is said: "And thereupon the said court shall make an order
setting aside the judgment therein and permitting said defendant or
defendants to plead therein on payment by him or them of such costs as
the court shall deem just;. . . "
Perez at 232.

Plaintiff United States of America, in responding to Defendants’ first Motion to
Set Aside, acknowledged that 28 U.S.C. Sec. 1655 grants a defendant not served with
process the right to have default judgment vacated within one year (Dkt. 55, p. 7), but
argued that Defendants waived their right to challenge personal jurisdiction under Sec.
1655. Plaintiff United States again asserts that Defendants waived their right to
challenge personal jurisdiction under Sec. 1655.

28 U.S.C. Sec. 1655 provides:

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Case No. 8:14-CV-993-T-17JSS
In an action in a district court to enforce any lien upon or claim to, or to
remove any incumbrance or lien or cloud upon the title to, real or personal
property within the district, where any defendant can not be served within
the State, or does not voluntarily appear, the court may order the absent
defendant to appear or plead by a day certain.
Such order shall be served on the absent defendant personally if
practicable, wherever found, and also upon the person or persons in
possession or charge of such property, if any. Where personal service is
not practicable, the order shall be published as the court may direct, not
less than once a week for six consecutive weeks.
If an absent defendant does not appear or plead within the time allowed,
the court may proceed as if the absent defendant had been served with
process within the State, but any adjudication shall, as regards the absent
defendant without appearance, affect only the property which is the
subject of the action. When a part of the property is within another district,
but within the same state, such action may be brought in either district.
Any defendant not so personally notified may, at any time within one year
after final judgment, enter his appearance, and thereupon the court shall
set aside the judgment and permit such defendant to plead on payment of
such costs as the court deems just.

In making a general appearance, and requesting that the default judgment be set
aside pursuant to Sec. 1655, Defendants are asserting a statutory right, not necessarily
asserting a challenge to personal jurisdiction. Defendants are within the one-year limit
specified by Sec. 1655. By asserting their statutory right, Defendants are consenting to
personal jurisdiction for all further proceedings in this case.

28 U.S.C. Sec. 1655

unambiguously directs the Court to set aside the Default Judgment, and permit
Defendants to plead on payment of just costs. Plaintiff United States of America has
expended costs in connection with Plaintiff’s control of the properties pursuant to the
Final Decree of Foreclosure (Dkt. 24) and the pending sale of the properties.
Defendants have been represented by counsel since October 12, 2015 (Dkt. 43);
Defendants could have entered their appearances and moved to set aside the Default
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Case No. 8:14-CV-993-T-17JSS
Judgment based on Sec. 1655 at an earlier time. Although Defendants may have
engaged in tactical delay, this does not change the one-year deadline specified by Sec.
1255.
Plaintiff United States has requested that the Court impose conditions in
connection with this Order. The only condition that the Court can impose in connection
with setting aside the Default Judgment is the determination of just costs.

The Court

grants Plaintiff’s request to file an Amended Complaint to seek an in personam
judgment against Defendant Lawrence N. Wilkins for unpaid tax debts.

After consideration, the Court conditionally grants the Emergency Renewed
Motion to Vacate or Set Aside the Default Judgment, subject to Defendants’ payment of
costs to Plaintiff United States, and grants Plaintiff’s request for leave to file an
Amended Complaint. Accordingly, it is

ORDERED that Defendants’ Emergency Motion to Vacate or Set Aside the
Default Judgment (Dkt. 69) is conditionally granted, as follows: Plaintiff United States
shall file an Affidavit as to costs, and shall file the Amended Complaint within seven
days from the date of this Order. Upon payment of the costs to the United States,
Defendants shall file a Notice of Compliance and their Answers to this lawsuit within
fourteen days from the date of this Order. The Court directs Plaintiff United States to
cancel the sale of the properties scheduled for February 11, 2016, pending a further
Order. In the event that Defendants do not comply with this Order, Plaintiff United
States shall move to reinstate the Default Judgment and reschedule the sale of the
properties.

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Case No. 8:14-CV-993-T-17JSS
DONE and ORDERED in Chambers in Tampa, Florida on this 10th day
February, 2016.

Copies to:
All parties and counsel of record

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