United States v. 2007 Jeep Wrangler

Filing 23

OPINION AND ORDER denying 21 Motion to Set Aside Default Judgment. Signed by Judge Juan M. Perez-Gimenez on 12/23/2015. (NNR)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
UNITES STATES OF AMERICA
PLAINTIFF,
CIVIL NO. 15-1019 (PG)
v.
2007 JEEP WRANGLER, VEHICLE ID NO.
IJ4GA39127LI07563,
WITH
AN
ESTIMATED VALUE OF $26,458.00,
DEFENDANT.
OPINION AND ORDER
Before

the

Court

is

Scotiabank

of

Puerto

Rico’s

(hereinafter

“Scotiabank”) motion to set aside entry of default and default judgment
pursuant to Federal Rules of Civil Procedure 55 and 60(b), respectively.
See Docket No. 21. For the reasons set forth below, the Court DENIES
Scotiabank’s motion.
I.
On

January

12,

2105,

BACKGROUND
the

United

States

(or

the

“plaintiff”)

commenced this civil forfeiture action against the defendant property, a
2007 Jeep Wrangler (the “defendant vehicle”). See Docket No. 1. A warrant
of arrest in rem for the defendant vehicle was issued thereafter. See
Docket Nos. 6 and 7. Beginning on April 8, 2015, the United States posted
notice of civil forfeiture on an official government website for thirty
(30) consecutive days, as required by Rule G of the Supplemental Rules
for

Admiralty

and

Maritime

Claims

and

Asset

Forfeiture

Actions

(hereinafter, the “Supplemental Rules”). See Docket No. 9. The plaintiff
also executed service of process to all potential claimants, including
Scotiabank.1

Because

no

timely

claims

and

answers

to

the

verified

complaint were filed, the Court granted plaintiff’s motion for default
entry, as well as the motion for default judgment. See Docket No. 15. On
August

19,

2015,

default

and

judgment

by

default

were

entered

accordingly. See Docket Nos. 16 and 17. The plaintiff served notice of
the default judgment to Scotiabank on August 26, 2015. See Docket No. 18.
1
Scotiabank was served with notice of the verified complaint, order and warrant
of arrest in rem on April 10, 2015. Docket No. 12.

Civil No. 15-1019 (PG)

Page 2

Scotiabank now urges the Court to vacate final default judgment,
claiming to be a lienholder and innocent owner of the 2007 Jeep Wrangler
pursuant to 18 U.S.C. § 983(d). See Docket No. 21.
II.

STANDARD

Rule 55(c) applies different standards for setting aside an entry
of default under Rule 55(a) and a default judgment under Rule 55(b). An
entry of default may be set aside for “good cause.” See Fed.R.Civ.P.
55(c). This standard is “a liberal one,” Coon v. Grenier, 867 F.2d 73, 76
(1st Cir. 1989), and permits the court to consider panoply of relevant
equitable factors, including: (1) whether the default was willful; (2)
whether setting it aside would prejudice the adversary; (3) whether a
meritorious

defense

exists;

and

(4)

the

timing

of

the

motion.

See

McKinnon v. Kwong Wah Rest., 83 F.3d 498, 503 (1st Cir. 1996)(citing
Coon, 867 F.2d at 76); see also Conetta v. National Hair Care Centers,
Inc., 236 F.3d 67, 75 (1st Cir. 2001).
Conversely, a court may set aside a final judgment by default
pursuant to Rule 60(b). See Fed.R.Civ.P. 55(c). Rule 60(b) provides, in
pertinent

part,

proceeding

may

that
be

a

motion

grounded

for

on

relief

mistake,

of

a

judgment,

or

surprise,

inadvertence,

order,

or

excusable neglect. See Fed.R.Civ.P. 60(b)(1). “Deciding what constitutes
excusable
account

neglect...requires

the

entire

facts

an

and

equitable

determination,

circumstances

surrounding

taking
the

into

party's

omission.” Id. (citing Dávila–Álvarez v. Escuela de Medicina Universidad
Central del Caribe, 257 F.3d 58, 64 (1st Cir. 2001)) (internal quotation
marks

omitted).

The

court

considers

factors

such

as

the

danger

of

prejudice to the non-movant, the length of the delay, and the reason for
the delay. Id. (citing Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd.
P'ship, 507 U.S. 380, 395, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993)).
The party seeking relief under Rule 60(b) bears a heavy burden to
demonstrate “that his motion is timely; that exceptional circumstances
exist, favoring extraordinary relief; that if the judgment is set aside,
he

has

the

right

stuff

to

mount

a

potentially

meritorious

claim

or

defense; and that no unfair prejudice will accrue to the opposing parties
should the motion be granted.” Fisher v. Kadant, Inc., 589 F.3d 505, 512
(1st Cir. 2009)(citations omitted). Ultimately, action upon a request for

Civil No. 15-1019 (PG)

Page 3

relief from default and default judgment lies within the sound discretion
of the court. See McKinnon, 83 F.3d at 502; Maine National Bank v. F/V
Explorer, 833 F.3d 375, 378 (1st Cir. 1987).
III.

DISCUSSION

Because Scotiabank failed to make an appearance before the Court
prior to the entry of final judgment by default, the Court will examine
the motion to set aside under the less generous rubric of Rule 60(b). See
U.S.

v.

$23,000

in

U.S.

Currency,

356

F.3d

157,

165

(1st

Cir.

2004)(affirming the district court’s use of the excusable neglect standard
where party seeking relief submitted only an unverified answer to the
complaint prior to entry of default, and a sworn claim of interest only
after the court entered judgment by default); Federal Deposit Ins. Corp.
v. Francisco Inv. Corp., 873 F.2d 474, 478 (1st Cir. 1989)(noting that the
more rigorous standards of Rule 60(b) were tailored for setting aside
final judgments).2
Reason for the delay
The Court begins by considering the most important factor in the
excusable neglect analysis: the reason for the delay. See Nansamba v.
North Shore Medical Center, Inc., 727 F.3d 33, 39 (1st Cir. 2013)(noting
that “within the constellation of relevant factors, the most important is
the reason for the particular oversight.”) (citation omitted). To explain
its failure to respond or otherwise plead, Scotiabank alleges it was
unaware

of

attributes

this
its

Specifically,

proceeding.

lack

of

Scotiabank

Scotiabank

knowledge
contends

to
that

goes

improper
the

a

step
service

summons

and

further,
of
copy

and

process.
of

the

verified complaint were delivered at Scotiabank’s offices at 280 Ave.
Jesús T. Piñero, instead of 290 Ave. Jesús T. Piñero, where Scotiabank’s
legal division is located. See Docket No. 21 at page 4. Scotiabank also
argues that process was served on its Chief of Legal Division, Mr. Ricardo
Colón, instead of Scotiabank’s named resident agent, Mr. Roberto Bustillo
Formoso. The Court finds Scotiabank’s proffered reasons unsatisfactory.
First, as the plaintiff correctly points out, service of process in
2
By the explicit terms of Rule 55(c), relief from final judgment may be obtained
in accordance with Rule 60(b), particularly in light of Scotiabank’s procedural missteps.
In any event, the explanation for failing to appear would not overcome the “good cause”
threshold as Scotiabank would have the Court believe.

Civil No. 15-1019 (PG)

Page 4

a civil forfeiture action is governed by Supplemental Rule G(4)(b), which
only requires that the government send notice of the action and a copy of
the complaint “by means reasonably calculated to reach the potential
claimant.” See SUPP. R. FOR CERTAIN ADM. MAR. CLAIMS R. G(4)(b).3 The
process receipt filed with the Court shows that a U.S. Marshal personally
delivered copy of the verified complaint, order, and warrant of arrest in
rem on April 10, 2015, to the address specified in said document, and
before the expiration of the deadline for filing a claim.4 See Docket No.
12. This not only complies with the instructions provided to the process
server, but also with the language of Supplemental Rule G(4)(b).
Scotiabank further alleges that no one at the legal division recalls
being served with the complaint, not even Mr. Ricardo Colón, whose name
appears in the process receipt. Docket No. 12. Such bare assertions,
however, have not been properly supported with evidence indicating that
Scotiabank did not have actual notice of the action. See U.S. v. 29
Robinson Blvd., Medway, Me., No. 10-cv-11236-MLW, 2012 WL 3947628, at *2
(D. Mass. Sept. 7. 2012) (holding that “whether the potential claimant
actually received notice is not decisive. Rather, the court must determine
whether the notice the government attempted to provide to [the potential
claimant]...was reasonably calculated to reach him.”). Moreover, notice of
the action was also published on www.forfeiture.gov for 30 consecutive
days, for at least 18 hours daily, between April and May of 2015.
Accordingly, the Court finds that proper notice was provided in this
case.
There is yet another flaw in Scotiabank’s explanation. Notice of the
final default judgment –which Scotiabank readily accepts receiving- was
personally delivered to the same, albeit allegedly incorrect address: 280
Ave. Jesús T. Piñero. And notice was received by a representative of the
legal division. See Docket No. 18. These circumstances fall short of
extraordinary.

Thus,

the

Court

finds

that

Scotiabank’s

action

(or

3
The Supreme Court has explained that to comport with due process considerations,
notice in a civil forfeiture action must be reasonably calculated “to apprise interested
parties of the pendency of the action and afford them an opportunity to present its
objections.” See Jones v. Flowers, 547 U.S. 220, 226, 126 S.Ct. 1708 (2006) (citation
omitted).
4
A person who asserts an interest over the defendant property must file a claim
within a deadline of at least thirty-five (35) days after notice is sent. See SUPP. R.
FOR CERTAIN ADM. MAR. CLAIMS R. G(4)(b)(ii)(B). Thereafter, a claimant must submit an
answer to the complaint within twenty-one (21) days. SUPP. R. FOR CERTAIN ADM. MAR.
CLAIMS R. G(5)(b).

Civil No. 15-1019 (PG)

Page 5

inaction) amounts to extreme negligence “com[ing] perilously close to
willfulness.” See General Contracting & Trading Co., LLC v. Interpole,
Inc., 899 F.3d 109, 112 (1st Cir. 1990)(finding no abuse of discretion by
the district court in denying motion to set aside default pursuant to
Rule

55(c)

where

party

seeking

relief

was

properly

served

and

“did

nothing, the vice-president having simply ‘misplaced’ the suit papers.”).
Based on the foregoing, the Court finds that the reason-for-thedelay factor weighs heavily against Scotiabank.
Danger of prejudice
Turning to the danger of prejudice factor, the Court notes that the
defendant vehicle was forfeited and disposed of on October 5, 2015, before
Scotiabank’s

motion was filed.

See

Docket

No. 22.

Setting

aside

the

default judgment against a property that was sold in accordance to law
would

force

the

government

to

spend

additional

time

and

resources

litigating a matter with a potential claimant that has altogether failed
to comply with proper procedure. Indeed, Scotiabank’s only attempt to cure
these shortcomings is a request for an extension of time to file a claim,
found

at

the

prayer

for

judgment.

See

Docket

relief

No.

21

at

of

its

page

motion

6.

to

set

Accordingly,

aside
the

default

danger

of

prejudice cautions against vacating the final judgment.
Length of the delay
Lastly, Scotiabank contends that it filed the instant motion “a few
days”

after

becoming

aware

of

the

default

judgment.

Id.

at

page

5.

However, as previously stated, notice of the default judgment was served
on August 26, 2015. Yet, Scotiabank waited forty three (43) days –until
October 8, 2015– to request relief from final judgment by default. The
movant’s characterization of a 43-day delay is perplexing, particularly in
light of the fact that it had actual notice since at least April 10, 2015.
Moreover, that the defendant vehicle had been forfeited at

the

time

Scotiabank filed its motion makes the delay a significant one.5 Simply
put, Scotiabank’s little efforts came in a little too late. Accordingly,
this factor also weighs against Scotiabank.
The Court is mindful of the desirability of deciding disputes on
5

See Wayne Rosa Constr. v. Hugo Key & Son, 153 F.R.D. 481 (D. Me. 1994)(finding
that defendant had failed to show good cause under Fed.R.Ci.P. 55(c) as to why it let three
weeks pass after receiving notice of default judgment before filing the Rule 60(b) motion).
Scotiabank does not establish good cause for purposes of its request for extension of time
to file the verified statement, either. Id. at page 6.

Civil No. 15-1019 (PG)

Page 6

their merits, but the facts surrounding this action tip the scale in favor
of the “countervailing goals of timeliness and finality of judgments."
$23,000 in U.S. Currency, 356 F.3d at 169. Negligence and inadvertence
may, at times, be excusable. However, that no one at Scotiabank’s legal
division remembers receiving service of the complaint, and that such
documents “were probably misplaced,” without more, are the kind of gardenvariety inattentions that that demonstrate extreme neglect. See Brand
Scaffold

Builders,

Inc.

v.

Puerto

Rico

Elec.

Power

Authority,

364

F.Supp.2d 50, 54 (D.P.R. 2005) (holding that the authority’s assertion
that one of its divisions handled enormous amount of documents on a daily
basis, and that accidents happen despite efforts employed to properly
handle the documents received, did not establish good cause under Rule
55(c) or Rule 60(b)(1)). Having addressed the relevant factors to the
excusable neglect analysis, the Court finds that Scotiabank has failed to
make

a

showing

of

exceptional

circumstances

warranting

extraordinary

relief pursuant to Rule 60(b). See Fisher, 589 F.3d at 512. Thus, the
motion to set aside is DENIED.
IT IS SO ORDERED.
In San Juan, Puerto Rico, December 23, 2015.

S/ JUAN M. PÉREZ-GIMÉNEZ
JUAN M. PEREZ-GIMENEZ
SENIOR U.S. DISTRICT JUDGE