LSRCF Attorney Successfully Quashes Default

LSRCF Attorney Claudio Riedi Successfully Quashes Default Judgment.

August 21, 2015 – U.S. District judge Robert Scola vacated a $1.3 million default judgment entered against businessman Thomas Lustgraaf, finding that the defendant did not receive notice of the suit prior to entry of the default judgment.

Claudio Riedi, of LSRCF Law, who represents Lustgraaf, explains that “it is extremely rare for a judge to vacate a default judgment against a defendant. This was a hard-fought battle, but we are pleased that the U.S. Magistrate and the U.S. District Judge agreed with the merits of our position.”

Plaintiffs Michael Peter and David Sebag sued Lustgraaf for breach of contract in March 2012, along with Alamo Holdings S.A., Hotelera Amon S.A. and Randall Martinez, who rented the hotel to Lustgraaf.

The plaintiffs alleged they had signed a contract with the Landlord, saying that if the two men found a suitable buyer for the Hotel Amon in San Jose, Costa Rica, they would receive 10 percent of the sales price at closing.

Peter and Sebag alleged they linked up with Lustgraaf, but then he and the Landlords worked together directly, cutting them out of the deal. The plaintiffs also alleged that Lustgraaf signed an agreement to pay them $500,000.

Former U.S. District Judge Robin S. Rosenbaum awarded the plaintiffs $1.25 million in November 2012.

U.S. Magistrate Judge Alicia M. Otazo-Reyes found that while service was made at the hotel, the proof of service form for Lustgraaf was defective because it did not list the name of anyone who received the summons at the hotel. She also found that Lustgraaf never had an office at the hotel, and that he was living in Council Bluffs, Iowa, at the time of service. He visited Costa Rica once a month during the renovations, but he stayed at an apartment about a mile and a half away.

U.S. District Judge Robert N. Scola affirmed the magistrate’s findings that Lustgraaf did not receive proper notice. Plaintiffs have appealed the ruling.