Order Granting Motion to Set Aside Entry of Default and Default Judgment. After the Plaintiff-Trustee executed on a default judgment by withdrawing $188,977.54 from its bank account, the Defendant moved to set aside the judgment under Rule 60(b)(4). The Defendant argued the judgment was void due to a lack of personal jurisdiction resulting from improper service.
     When seeking “relief from a judgment under Rule 60(b), a moving party must first show (1) that the motion is timely, (2) that he has a meritorious claim or defense, and (3) that the opposing party will not suffer unfair prejudice if the judgment is set aside." United States v. Welsh, 879 F.3d 530, 533 (4th Cir. 2018); see also Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987). However, motions filed under Rule 60(b)(4), which argue the judgment is void for lack of personal jurisdiction, are generally exempt from the timeliness and meritorious defense requirements. See, e.g., Heckert v. Dotson (In re Heckert), 272 F.3d 253, 256-57 (4th Cir. 2001); Garcia Fin. Group, Inc. v. Va. Accelerators Corp., 3 Fed. Appx. 86, 88 (4th Cir. 2001) (unpublished); but see In re Vista-Pro Auto., LLC, 109 F.4th 438, 444 (6th Cir. 2024), cert. granted sub nom. Coney Island Auto Parts Unlimited, Inc. v. Burton, 145 S. Ct. 2775 (2025). The Court determined the Defendant satisfied the remaining threshold condition, finding that the Plaintiff's argument of unfair prejudice—based on a "negatively impacted" distribution to creditors—was too general and did not constitute the type of prejudice that would support denying an otherwise valid Rule 60(b)(4) motion.
     After meeting the threshold conditions, a movant seeking relief from a judgment "must then satisfy one or more of the six grounds for relief set forth in Rule 60(b)." Park, 812 F.2d at 896. The Court considered the allegedly deficient service of the summons and complaint, noting the rebuttable presumption—under both existing Fourth Circuit jurisprudence and Rule 9006(e)—that an addressee receives an item when it is properly addressed and placed in the mail with sufficient postage. Rosenthal v. Walker, 111 U.S. 185, 193 (1884); Federal Deposit Ins. Corp. v. Schaffer, 731 F.2d 1134, 1137 n.6 (4th Cir. 1984). However, for the presumption of receipt to arise, the mailing must be "properly directed" or "correctly addressed;” the presumption is inapplicable if an incorrect address is used, even if the mail is not returned as undeliverable. See Rosenthal, 111 U.S. at 193; Schaffer, 731 F.2d at 1137. Finding the contract’s notice provision did not govern service of process, the Court held that the Trustee's service to the contract address (Suite 1971) was not "properly directed" compared to the Defendant's registered address (Suite 125), and thus the presumption of receipt did not apply. As such, and because the Trustee offered no other evidence that the Defendant received the summons and complaint at Suite 1971, the Court concluded that the Plaintiff failed to satisfy the service requirements of Bankruptcy Rule 7004, thereby depriving the Court of personal jurisdiction and rendering the default judgment void under Rule 60(b)(4).