United States ex rel. Carmichael v. Gregory

• Decision Date: 27 September 2019
• Docket Number: Civil Case No. 14-1702 (RJL)
• Citation: United States ex rel. Carmichael v. Gregory, Civil Case No. 14-1702 (RJL) (D. D.C. Sep 27, 2019)
• Parties: UNITED STATES OF AMERICA, ex rel., BRIDGETTE CARMICHAEL, Plaintiff, v. RAYMOND GREGORY, Defendant.
• Court: U.S. District Court — District of Columbia

UNITED STATES OF AMERICA, ex rel., BRIDGETTE CARMICHAEL, Plaintiff, v. RAYMOND GREGORY, Defendant.

Civil Case No. 14-1702 (RJL)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

September 27, 2019

MEMORANDUM OPINION

[Dkt. # 23]

This Court entered default judgment against defendantRaymond Gregory("Gregory") in this case on September 6, 2017.One year later, Gregory filed a Motion for Relief from Default Judgment Pursuant to Federal Rule of Civil Procedure 60("Def.'s Mot.")[Dkt. # 23].For the reasons that follow, Gregory's motion must be DENIED.

BACKGROUND

On October 10, 2014, the relator, Bridgette Carmichael("Carmichael"), sued Gregory, alleging that he had unlawfully overcharged her for rent while she was living in a residential property he owned.SeeCompl.¶¶ 28-30, 47-63[Dkt. # 1].Carmichael and Gregory initially agreed to set her rent at $1,800 per month.SeeDef.'s Mot., Gregory Affidavit¶ 7.They submitted their proposed lease to the District of Columbia Housing Authority("DCHA"), whose approval was necessary because Carmichael received rent assistance through the Department of Housing and Urban Development's ("HUD's")Section 8 Housing Choice Voucher Program.Seeid.¶ 7; Compl.¶¶ 7-19.DCHA reviewed the lease, lowered the monthly rent to $1,603, and prescribed how much of the $1,603 Carmichael would be responsible for paying each month.SeeDef.'s Mot., Gregory Affidavit¶ 8; U.S. Opp. to Def.'s Mot. for Relief from Default J. ("Opp. to Def.'s Mot."), Ex.A [Dkt. # 26].Gregory and Carmichael expressly accepted DCHA's changes.They executed a contract that provided Gregory could not charge more than $1,603 in monthly rent without DCHA approval.SeeU.S. Compl. in Intervention¶ 38[Dkt. # 12].And DCHA never approved a rent increase during Carmichael's tenancy.SeeUnited States ex rel. Carmichael v. Gregory, 270 F. Supp. 3d 67, 69-70(D.D.C.2017)("Gregory I").

In her complaint, Carmichael alleged that, despite the express agreement, Gregory increased her rent to an amount that exceeded the DCHA-approved amount, and charged her excess rent every month from October 2008 through August 2013.SeeCompl.¶¶ 37-40.Her allegations are supported by two leases, signed by both Gregory and Carmichael, that reflect rents that were never approved by DCHA.The first lease, effective October 1, 2008, sets Carmichael's rent at $1700 per month.SeeMot. for Default J., Ex. 6[Dkt. # 17].The second, effective July 6, 2012, sets rent at $1653 per month.Seeid., Ex. 9.

Carmichael's complaint alleges that, by overcharging her for rent, Gregory violated the False Claims Act ("FCA"),31 U.S.C. § 3729 et seq., and thereby unjustly enriched himself.¹SeeCompl.¶¶ 47-63.The FCA, she contends, is implicated by the fact thatGregory, after overcharging Carmichael, endorsed housing assistance checks and then presented them for payment.Seeid.¶¶ 47-57.Presenting the housing assistance checks for payment constituted "requests to DCHA for payment of federal funds provided by HUD."Gregory I, 270 F. Supp. 3d at 71.Doing so after falsely certifying compliance with the terms of the housing assistance program violates the FCA.Seeid.;Doe v. Gormley, No. 15-2183, 2016 WL 4400301, at *5(D. Md.Aug. 17, 2016)(collecting cases).

Because Carmichael brought her suit under the FCA's qui tam provisions, the United States ("the Government") had a right to intervene as a party.SeeCompl.at 1;31 U.S.C. § 3730(b)(2).The Government elected to exercise that right on September 23, 2015, see U.S. Notice of Election to Intervene [Dkt. # 9], and filed its Complaint in Intervention on March 25, 2016.The Government's complaint alleged two claims against Gregory, both for violating the FCA.SeeU.S. Compl. in Intervention¶¶ 52-65.

Gregory did not answer either complaint.As a result, on May 18, 2016, the Clerk of Court declared him in default.SeeGregory I, 270 F. Supp. 3d at 70.On February 17, 2017, the Government and Carmichael moved for entry of default judgment on the first FCA claim in the Government's complaint.SeeMot. for Default J.at 1 & n.1, 18.And on September 5, 2017, I granted that motion.SeeGregory I, 270 F. Supp. 3d at 72.I found that "Gregory was served [with process] on January 26, 2016," and that "the well-pleaded facts in the United States' complaint are sufficient to establish liability for violations of the FCA."Id. at 70-71.I then "enter[ed] default judgment in favor of the United States in a total amount of $587,999.00."Id. at 72.Carmichael, in turn, was awarded "15 percent ofany sums collected by the United States," as she was entitled under the FCA's qui tam provisions.Id.

Exactly one year after default judgment was entered, Gregory appeared for the first time in this action by filing a motion to vacate the default judgment under Federal Rule of Civil Procedure 60.SeeDef's Mot.at 10.Gregory somehow claims to have not received actual notice of this proceeding until the Government served him with a Notice of Default in May of 2016.SeeDef.'s Mot., Gregory Affidavit¶ 19.After learning of his default, Gregory retained H. Caleb Griffin to represent him.SeeDef.'s Mot., Griffin Affidavit¶¶ 1-5.Griffin neither appeared in, nor filed any paper related to, this case until September 6, 2018—more than two years after he was retained—when he filed Gregory's motion to vacate the judgment.In an affidavit, Griffin provides several personal and professional reasons that delayed his appearance.Seeid.¶¶ 9-19.The reasons range from his need to seek admission to this Court's bar, to a lack of professional resources, to deaths in his family.Seeid.

In his motion, Gregory argues that the default judgment should be vacated under Rules 60(b)(1),60(b)(3), and60(b)(6) because his failure to answer was the result of excusable neglect, because the judgment is based on misrepresentations made by Carmichael, and because the judgment imposes harsh consequences.²See Def.'s Mot. at5-11.The Government opposes all three of Gregory's theories for relief.SeeOpp. to Def.'s Mot.at 12-21.And ultimately, I have similarly concluded that Gregory is not entitled to Rule 60 relief under any theory.How so?

ANALYSIS

I.Gregory Has Not Established a Potentially Meritorious Defense.

In our Circuit, "a potentially meritorious defense is a precondition for Rule 60(b) relief."FG Hemisphere Assocs., LLC v. Democratic Republic of Congo, 447 F.3d 835, 842(D.C. Cir.2006).This requirement ensures "that vacating the judgment will not be an empty exercise or a futile gesture."Id.(quotingMurray v. District of Columbia, 52 F.3d 353, 355-56(D.C. Cir.1995)).It does not impose "a high bar" on movants: "even a hint of a suggestion which, proven at trial, would constitute a complete defense" will suffice.Marino v. DEA, 685 F.3d 1076, 1080(D.C. Cir.2012)(quotation marks and citations omitted).But "the party seeking to invoke Rule 60(b), bears the burden of establishing that its prerequisites are satisfied."Owens v. Republic of Sudan, 864 F.3d 751, 819(D.C. Cir.2017)(quotation marks and citations omitted).And "proposed . . . defenses [that]'amount to nothing more than conclusory denials'" do not carry that burden.Nat'l Rest. Ass'n Educ. Found. v. Shain, 287 F.R.D. 83, 88(D.D.C.2012)(quotingGillespie v. Capitol Reprographics, LLC, 573 F. Supp. 2d 80, 87 n.11(D.D.C.2008)).The only evidence that Gregory attaches, however, to his Rule 60 motion is bank statements from 2012 and 2013, an affidavit reciting Gregory's side of the story, and correspondence regardingCarmichael's claims against him.See Def.'s Mot., Exs. A-F & Gregory Affidavit.This evidence, however, is either consistent with Carmichael's allegations or entirely conclusory.To say the least, it does not establish a potentially meritorious defense.

Gregory's bank statements, for example, are consistent with Carmichael's claims that she was overcharged for rent.The statements date back to June of 2012, when Carmichael's DCHA-approved share of the rent was $18 of the $1,603 total.See Opp. to Def.'s Mot., Ex. A.According to Gregory's submission, Carmichael paid him $140 that month, almost ten times what she owed for the month's rent.See Def.'s Mot., Ex. A.The next month, July 2012, Carmichael's approved share of the rent increased to $238 per month.See Opp. to Def.'s Mot., Ex. A.She also signed a new lease with Gregory in July 2012, setting the overall rent for the residence at $1,653 per month, $50 higher than what DCHA approved.SeeMot. for Default J., Ex. 9.Several of Carmichael's post-July-2012 rent payments are for $288—exactly $50 more than Carmichael's approved $238 share.See Def.'s Mot., Ex. A.Other post-July payments were even higher.Seeid.

Gregory's bank statements, not surprisingly, corroborate numerous rent payments from Carmichael that exceed the rent prescribed by DCHA—sometimes by amounts that clearly suggest Gregory's unapproved leases were being enforced.Just as conspicuously, the bank statements do not show a single payment from Carmichael that equals her approved share of the monthly rent at the time of the payment.Compare Def.'s Mot., Ex. A with Opp. to Def.'s Mot., Ex. A.

In his affidavit, Gregory contends that Carmichael did sometimes overpay her rent but only to catch up on past missed payments.SeeDef.'s Mot., Gregory Affidavit¶ 14.Gregory, however, provides no accounting of how much past due rent Carmichael owed at any given time, and he supplies no correspondence informing Carmichael that she missed a payment.He argues that his bank statements show a history of missed payments, but in fact, the sum of the rent payments reflected in the statements exceeds Carmichael's total rent obligation for the period covered by them.³"[T]o make a sufficient showing of a meritorious defense in connection with a motion to vacate a default judgment, the defendant need not establish his defense conclusively, but h...