Zen Capital A/S et al v. Lund Trading, LLC

Filing 27

MEMORANDUM. Signed by Judge J. Frederick Motz on 8/12/14. (jnls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

ZEN CAPITAL, ET AL.

v.
LUND TRADING, LLC

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Civil No. – JFM-13-780

MEMORANDUM

Respondent has filed a motion to vacate default judgment. The motion has been fully
briefed. It will be denied for the following reasons.
1. The motion is untimely. It was not filed until one year after the entry of the default
judgment. Moreover, it was filed ten months after it is unquestionable that Respondent had
knowledge of the entry of the judgment. During those ten months Respondent actively defended
against garnishment proceedings instituted by Petitioners. Under these circumstances the motion
was not “made within a reasonable time” as required by Rule 60(c)(1). To the contrary, it is
evident that Respondent has engaged in dilatory tactics designed to avoid payment of the
arbitration award entered against it.
2. Respondent does not have a meritorious defense. The Novo Settlement Agreement
upon which Respondent relies was entered into before the arbitration award was made. Yet
Respondent did not raise the release as a defense in the arbitration proceeding. Moreover,
Respondent did not raise the release it as a defense when litigating the garnishment proceedings
in this case. Indeed, it is clear that reliance upon the release was a defense thought up by
Respondent’s present lawyer after the fact. In its motion Respondent’s lawyer states: “In
reviewing the claims advanced by Petitioner in that State Court fraudulent conveyance suit, the
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undersigned counsel first discovered the existence and importance of the below-described
Settlement Agreement that it supports the meritorious defense herein.” Under these
circumstances Respondent clearly did not believe that it was a party of the Settlement
Agreement. Likewise, obviously, by virtue of the actions that it has taken in this litigation,
Petitioners did not consider Respondent to be a party of the Agreement.
3. The judgment entered against Respondent is not “void.” Respondent was properly served
through the Maryland State Department of Assessments and Taxation. To the extent that service
was difficult, it was because Respondent was avoiding service.
4. An alleged release entered into prior to the termination of the arbitration proceedings does
not provide a basis for setting aside the arbitration award. If Respondent believed that Petitioner
had released its claims against it, it should have raised the release as a defense in the arbitration
proceeding.
5. Petitioners would be highly prejudiced by vacation of the default judgment. The judgment
was entered long ago, and in the interim Petitioners have expended substantial sums in attorneys’
fees attempting to collect upon it.1
A separate order will be issued.

Date: August 12, 2014

___/s/_____________________
J. Frederick Motz
United States District Judge

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Petitioner requests an award against Respondent for the attorneys’ fees expended by Petitioners
in defending against the motion to vacate default judgment. Although Petitioner’s position
certainly is not frivolous, in light of the dominance of the American rule against the award of
attorneys’ fees absent a statute to the contrary, Petitioner’s request will be denied.
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