City of Mobile v. J. Preston's, Inc.

683 F. Supp. 246, 1988 U.S. Dist. LEXIS 3086
CourtDistrict Court, S.D. Alabama
DecidedJanuary 29, 1988
DocketBankruptcy Nos. 87-01573, 87-00013; Civ. A. No. 87-1174-BH-C
StatusPublished
Cited by1 cases

This text of 683 F. Supp. 246 (City of Mobile v. J. Preston's, Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Mobile v. J. Preston's, Inc., 683 F. Supp. 246, 1988 U.S. Dist. LEXIS 3086 (S.D. Ala. 1988).

Opinion

ORDER

HAND, Chief Judge.

This cause is before the Court on a motion for judgment on the pleadings filed by defendant Federal Savings and Loan Insurance Corporation (FSLIC), as receiver for Crescent Federal Savings Bank (Crescent), and on the motions of FSLIC and the Bre-land defendants, Charles K. Breland, Jr. and Breland Investments, Inc., to set aside the default judgment entered in this action by the Circuit Court of Mobile County, Alabama. Upon careful consideration of these motions, together with the entire record in this action, the Court concludes that the motions are due to be granted.

This action was commenced on or about November 6,1986, by the plaintiff, the City of Mobile, in the Circuit Court of Mobile County. The complaint filed by the plaintiff named eight identified defendants and an unknown number of unidentified defendants. The eight named defendants include James Preston House, Sr., Weldon Ernst, Mobile Properties One and Christine James (the Mobile Properties defendants); Charles K. Breland, Jr. and Breland Investments, Inc. (the Breland defendants); J. Preston’s, Inc. (J. Preston’s) and Crescent Federal Savings Bank (Crescent). The complaint alleges that all of the defendants were operating a restaurant on property located at 6700 Airport Boulevard, Mobile, Alabama, and that, consequently, all of the defendants are liable for the failure to pay certain gross receipts licenses due to the plaintiff based on the operation of the restaurant.

No responsive pleadings were filed in the state court on behalf of the Mobile Properties defendants. Consequently, the state court, upon plaintiff’s application, entered a default judgment against the Mobile Properties defendants on February 12, 1987.1 By its terms, the default judgment enters judgment, individually and severally, against each of the Mobile Properties defendants in the amount of $40,507.50 plus any additional amount that an audit for the months of February through September, 1986, may show is due and owing for gross receipts business licenses over that amount. In addition, the default judgment declares and enters a lien, as provided by Ala. Code § 11-51-96 (1975), on and against the property at 6700 Airport Boulevard.2

FSLIC/Receiver also has a lien on the property in question by virtue of a $500,-000.00 mortgage in favor of Crescent. Crescent was a federally-chartered mutual savings bank, the accounts of which were insured by FSLIC in its capacity as a corporate instrumentality of the United States of America. Crescent was subject to the regulatory authority of the FSLIC and the Federal Home Loan Bank Board (FHLBB). On June 19, 1986, the FSLIC was appointed receiver for Crescent by the FHLBB and, on June 20, 1986, took possession of Crescent. As receiver, the FSLIC succeeded to all of the rights, title, powers and privileges of Crescent, subject to the applicable provisions of law and regulations and orders of the FHLBB. See e.g., 12 U.S.C. [248]*248§§ 1464(d) and 1729;3 12 C.F.R. Parts 547 and 549 (1986).

Under federal law, upon the appointment of FSLIC as receiver for Crescent, subject matter jurisdiction over all claims against Crescent and any other claim which would affect or restrain the functions of FSLIC as receiver for Crescent (FSLIC/Receiver) vested exclusively with FSLIC/Receiver and the FHLBB. Federal law establishes a comprehensive administrative claims procedure under which claimants against Crescent and its assets are directed to submit their claims to FSLIC/Receiver. FSLIC/Receiver is empowered to grant the claims in whole or in part, or deny such claims, subject in the first instance to review by the FHLBB. Judicial review of these administrative decisions is provided solely under the Administrative Procedure Act, 5 U.S.C. §§ 701-706. Based upon the congressionally-mandated exclusivity of this procedure, it is apparent that this Court lacks subject matter jurisdiction to adjudicate plaintiffs claims to the extent that the plaintiff seeks a judgment against FSLIC/Receiver and to the extent that plaintiff seeks relief which would adversely affect FSLIC/Receiver’s mortgage interest in the property at 6700 Airport Boulevard by establishing a prior lien. See, North Mississippi Savings and Loan Ass’n v. Hudspeth, 756 F.2d 1096 (5th Cir.1985), cert. denied, 474 U.S. 1054, 106 S.Ct. 790, 88 L.Ed.2d 768 (1986) (12 U.S.C. §§ 1464(d)(6)(C) and 1729(d) held to deprive courts of jurisdiction to adjudicate claims against a savings and loan association where the FSLIC has been appointed receiver); Chupik Corp. v. FSLIC, 790 F.2d 1269 (5th Cir.1986) (12 U.S.C. § 1464 held to deprive courts of jurisdiction to adjudicate claims which would interfere with the FSLIC’s duties as receiver when liquidating a failed institution). It is also abundantly clear that, for the reasons stated above, the Circuit Court of Mobile County lacked jurisdiction to enter a default judgment to the extent such judgment declares and enters a lien on and against the property at 6700 Airport Boulevard.

It should be noted at this juncture that both FSLIC and the Breland defendants argue, apparently in the alternative, that the state court’s default judgment should be set aside on the ground that the plaintiff failed to serve, in compliance with Rule 5(a) of the Alabama Rules of Civil Procedure, a copy of the application or motion for default judgment upon the non-defaulting defendants and that no notice of the hearing at which the default judgment was entered and no copy of the default judgment was provided to the non-defaulting defendants. The position of FSLIC and the Breland defendants on this point has not been contested by the plaintiff. The Court, however, need not rely on this ground to set aside in pertinent part the default judgment.4 The state court’s lack of jurisdiction over the property alone supports the setting aside of that portion of the default [249]*249judgment by which a lien against the property was declared and entered.5

It is, therefore, ORDERED that the motions filed by FSLIC and the Breland defendants to set aside the default judgment entered in this action on February 12, 1987 by the Circuit Court of Mobile County, Alabama, be and are hereby GRANTED, pursuant to Rule 60(b)(4) of the Federal Rules of Civil Procedure, to the extent the default judgment, attached as Appendix I, declares and enters a lien against “the property ... on which the business at 6700 Airport Boulevard is conducted”6 and that, to the extent the default judgment declares and enters such a lien, it be and is hereby SET ASIDE and DECLARED NULL and VOID.

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Cite This Page — Counsel Stack

Bluebook (online)
683 F. Supp. 246, 1988 U.S. Dist. LEXIS 3086, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-mobile-v-j-prestons-inc-alsd-1988.