Judge in CRHA fraud case agrees to set aside default

The Charlottesville Redevelopment and Housing Authority will have the opportunity to defend itself from an accusation that two federal payments during the COVID-era were obtained fraudulently.

Oregon-based lawyer filed suit against CRHA as well several other Virginia governmental entities arguing that they were not eligible for Payment Protection Program loans. J. Bryan Quesenberry specifically asked for $1.5 million in damages from CRHA.

CRHA did not initially respond to a February 17 summons seeking an answer to the charges and Quesenberry filed for a default judgment. The government entity hired the firm Holland & Knight this June after learning of its status.

On August 14, 2026, United States Magistrate Judge Joel C. Hoppe of the Western District of Virginia issued an opinion that CRHA could proceed with a defense.

“I find that CRHA has shown good cause to set aside its default,” Hoppe wrote in the opinion.

The court’s clerk entered the default into the record on March 24, but a notice to CRHA was returned as undeliverable. On June 10, Judge Robert S. Ballou ordered another notice to CRHA. Attorney Mark H. Churchill of Holland & Knight filed a motion to set aside default on June 18.

“This was a ‘reasonably prompt’ response to a default entered in the early stages of litigation,” Hoppe continued.

CRHA now has until August 28 to file a response to Quesenberry’s amended complaint. Judge Hoppe also ordered CRHA to pay attorney’s fees of $1,500 to Quesenberry’s legal team to recover the cost of their work to respond to the motion to set aside default.

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