United States District Court, D. Connecticut
ORDER GRANTING RELIEF FROM DEFAULT JUDGMENT
JEFFREY ALKER MEYER, UNITED STATES DISTRICT JUDGE
years ago defendant Prayer Tabernacle Church of Love, Inc.
(“the Church”) took out a series of mortgage
loans from plaintiff Foundation Capital Resources, Inc.
(“Foundation”) in order to build a church in
Bridgeport, Connecticut. The Church stopped making its loan
payments in 2009, and ever since the parties have been
struggling to resolve their dispute. The question before me
is whether a default judgment that the Court entered against
the Church should be the end of that dispute, or whether the
case should be reopened and proceed to a resolution on the
merits. Because I now conclude that the Church's default
was not willful, that the Church may possibly have a
meritorious defense, and that any prejudice to Foundation is
primarily the result of its own decision to withdraw its
prior foreclosure action in state court, I will grant the
Church's motion for relief from judgment under Rule 60(b)
of the Federal Rules of Civil Procedure.
originally filed this foreclosure action against the Church
in Connecticut Superior Court on July 10, 2013. Doc. #65-1 at
6. Foundation alleged that it made a series of three loans to
the Church totaling $8, 148, 000 between 2007 and 2009 to
finance the construction of a new church, secured by
mortgages on several properties. Doc. #65-3 at 4-12. The
Church defaulted on two of these loans in 2009, after which
the parties entered into four separate forbearance
agreements. The Church nonetheless failed to make its
required payments. See Doc. #65-5 at 3.
case was litigated in state court for more than three years,
during which time Foundation ultimately filed two amended
complaints, one on July 16, 2013, and one on September 8,
2016, and the Church filed answers to both amended
complaints, each of which contained special defenses and
counterclaims. On September 29, 2016, the Superior Court
issued a ruling on Foundation's motion to strike the
Church's special defenses and counterclaims, denying the
motion to strike as to everything except one counterclaim.
November 18, 2016, just four days before the foreclosure
action was set for trial, the parties reached a
“Withdrawal and Tolling Agreement.” Doc. #65-1 at
13-20. Under this agreement, both sides pledged to withdraw
their respective claims without prejudice, in contemplation
that those claims might be raised again in a “New
Action.” Id. at 14.
then filed this action here in federal court on January 30,
2017. Doc. #1. The Church filed an answer on February 22,
2017, Doc. #11, but Foundation moved to strike the answer on
the ground that the answer had been signed and filed by the
Church's pastor (Kenneth Moales) who was not an attorney
authorized to represent a corporate party in court. Doc. #12.
This motion was granted at a hearing before Magistrate Judge
Fitzsimmons on March 30, 2017. See Doc. #24.
hearing before Judge Fitzsimmons, attorney Dennis Bradley
appeared on behalf of the Church, having entered an
appearance on the docket earlier that day, Doc. #22, and he
made an oral motion for a one-week extension of time until
April 7, 2017, to file a responsive pleading. Judge
Fitzsimmons granted this motion. Doc. #23, #24.
new deadline came and went without the Church filing an
answer. On April 10, 2017, Foundation promptly moved for
default entry pursuant to Fed.R.Civ.P. 55(a). Doc. #26. The
Court granted this motion on April 27, 2017, and Foundation
then moved for default judgment on May 15, 2017. Docs. #27,
days later, another attorney-Andre Cayo-filed a motion for
extension of time to plead until June 16, 2017. Doc. #33.
Attorney Cayo filed this and subsequent motions without ever
filing a notice of appearance in this action. The motion
claimed that Attorney Bradley had been “unable to get
ahold of previous counsel . . . who represented the Defendant
in the State court for the same matter which is being
re-litigated in this court.” Id. at 1. It also
stated that Attorney Bradley had told Attorney Cayo that
“he was unable to access his ECF account and had
difficulties logging into the system to file papers.”
Ibid. The motion stated that “new counsel has
just been retained by Attorney Dennis Bradley to assist in
this complicated litigation, ” that Attorney Cayo met
with the Church and “explained the urgency of filing
appropriate pleading immediately; even if he was not
retained.” Id. at 1-2. Attorney Cayo then
advanced several reasons why he had not been able to file a
timely responsive pleading, including the Church's
inability to fund the litigation and Attorney Cayo's lack
of opportunity to review “the state court docket and
papers, the evidence in possession of the Defendant and the
discovery in possession of prior counsel ‘Attorney
Crumbie' in the State case.” Id. at 2.
opposed this motion for a number of reasons, Doc. #34, and
the motion was denied on May 24, 2017. Doc. #35. The
following day, Attorney Cayo filed an answer to the
complaint. Doc. #36. Foundation moved to strike this answer,
because the Church's default had already been entered,
and therefore the Church was no longer in a position to file
an answer. Doc. #37.
13, 2017, the Church moved to set aside the entry of default.
Doc. #45. This motion was filed by Attorney Cayo and included
an affidavit from Attorney Bradley, claiming without
elaboration that he had had a “dire and severe family
medical issue” to deal with, that when he requested the
one-week extension of time on March 30 he “did not
expect my family member[']s condition to become severe,
” and that he “was forced to drop everything and
come to their [sic] aid.” Doc. #45-1 at 1. The motion
also argued that the Church had a meritorious defense, as
shown by the answer that Pastor Moales had filed on February
22, and that Foundation had violated Connecticut law
requiring mediation in foreclosure cases. Doc. #45 at 1-2.
Court granted Foundation's motion to strike on July 17,
2017, and it denied the Church's motion to set aside the
entry of default on September 11, 2017, at the same time
granting Foundation's motion for default judgment. Docs.
#46, #52. Judgment entered on September 19, 2017, along with
an order of strict foreclosure. Doc. #56.
October 6, 2017, attorney John Williams filed a notice of
appearance on the Church's behalf, along with a motion
for relief from judgment under Rule 60(b), a motion for
extension of time to file an appeal, and a motion to stay the
execution of judgment. Docs. #65, #66, #67. The Court granted
the motion for extension of time to file an appeal on October
17, 2017, Doc. #72, and at a motion hearing on October 27,
2017, the Court granted the Church's motion for stay of
execution of the judgment, and also of the ...