The opinion of the court was delivered by: Judge Smith
This matter is before the Court on Defendants' Motion for Relief from Judgment (Doc. 26). Plaintiff has filed both a Response in Opposition to the Motion for Relief from Judgment (Doc. 28), and an Objection to the Motion for Relief from Judgment (Doc.31). For the reasons that follow, the Court grants Defendants' Motion for Relief from Judgment.
On March 15, 2002, Plaintiff initiated this case against Defendants Earl and Betty Van Pemberton. There was some difficulty serving the complaint upon Defendants, however, on August 20, 2002, service was returned executed.*fn1 Then on December 27, 2002, Plaintiff moved for default judgment. On September 11, 2003, the Court granted Plaintiff's motion for default judgment and referred this matter to the United States Magistrate Judge to conduct a hearing and to issue a report and recommendation addressing the amount of damages to which Plaintiff was entitled. Fed. R. Civ. P. 55(b)(2); 28 U.S.C. § 636(b)(1)(B). The Magistrate Judge conducted a hearing on October 9, 2003, and issued a report and recommendation the same day. The Magistrate Judge recommended that Plaintiff be awarded judgment against Defendants in the amount of $350,000. The Court adopted the Magistrate Judge's October 9, 2003 report and recommendation in its entirety on October 20, 2003 and final judgment was entered. 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b).
On July 20, 2006, close to three years after the default judgment was entered, Defendants filed a Motion for Relief from Judgment (Doc. 26). Defendants move pursuant to Rules 55(c) and 60(b) of the Federal Rules of Civil Procedure that the default judgment be set aside. Defendants also seek attorneys' fees and costs, damages arising from the judgment, and any other relief deemed by this Court to be just and equitable.
Defendants, the Pembertons, set forth additional facts in their Motion that this Court was not made aware of at the time the Complaint was filed. On March 25, 2002, Earl Pemberton filed an action against Dr. Senu-oke in the Boyle County, Kentucky Circuit Court. Mr. Pemberton perfected service upon Dr. Senu-oke and both parties appeared for the proceedings in that court. In February 2003, the parties settled all claims and the Kentucky case was dismissed. Therefore, while Dr. Senu-oke filed his claim in this Court first, on March 15, 2002, he did not perfect service until five months later. During the time he was attempting to perfect service he was in contact with the Pembertons through the Kentucky litigation. The Pembertons assert that both cases arose out of the same transactions and occurrences and involved the same causes of action.
Plaintiff Dr. Senu-oke's Complaint in this case asserts that he entered into an agreement with the Defendants, the Pembertons, to put his three horses in their care and in return he would pay them $300 a month, $100 for each horse. Plaintiff claims that Defendants have prevented him from taking possession of his horses to prepare them for breeding. Plaintiff seeks immediate release of his three horses and also requested compensatory and punitive damages. No where in the pleadings does Dr. Senu-oke state that he has paid the Pembertons for their services.
Defendant Earl Pemberton asserted in his complaint in the Kentucky litigation essentially the same issues presented before this Court. Specifically, that there was an agreement for the Pembertons to board Dr. Senu-oke's three horses for $300 per month, plus expenses incurred for feed, veterinarian services and other out-of-pocket expenses. Mr. Pemberton initiated the suit asserting that Dr. Senu-oke was refusing to pay them. The Pembertons obtained a lien on the horses and sought to enforce that lien pursuant to KRS 37.410. The complaint also asserted claims of breach of contract and unjust enrichment.
In January 2003, the parties entered into an agreement whereby Dr. Senu-oke would pay the Pembertons the money he owed for boarding his horses, $3750, and the Pembertons would then release the horses to Dr. Senu-oke. The final order dismissing the case as settled was entered September 8, 2003, and specifically provided that: all claims between the Parties, regardless of whether said claims arose from the events giving rise to or were asserted in the Complaint and the Counterclaim and whether known or unknown, which arose or occurred on or before the date of settlement, specifically February 25, 2003, have been settled and, therefore, said claims be, and hereby are, released, satisfied and waived by this settlement and dismissal. (Ex. D to Defs' Mot.).
At no time during the course of the Kentucky litigation or the settlement was the subject of this pending case raised. The Pembertons were therefore unaware of this litigation until they attempted to refinance their house recently and were advised that a lien had been put on their house as a result of a judgment.*fn2 (See Exs. E & F to Defs' Mot.).
Rule 55(c) of the Federal Rules of Civil Procedure provides that: "[f]or good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 60(b)." The sections of Rule 60(b) of the Federal Rules of Civil ...