United States of America v. Latourell
ORDER Denying 51 Defendant's Motion to Set Aside Default Judgment. Signed by District Judge Denise Page Hood. (LSau)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
UNITED STATES OF AMERICA,
CASE NO. 07-14339
HON. DENISE PAGE HOOD
ORDER DENYING DEFENDANT’S MOTION
TO SET ASIDE DEFAULT JUDGMENT [DKT. NO. 51]
Now before the Court is Defendant Francis Latourell’s Motion to Set Aside
Default Judgment [Dkt. No. 51]. The Government has filed a response, and no reply
was filed. The Court, having concluded that the decision process would not be
significantly aided by oral argument, previously ordered that the motion be resolved
on the motion and briefs submitted by the parties. E.D. Mich. L.R. 7.1(f)(2). [Dkt. No.
54 ] For the reasons that follow, the Court denies Defendant’s Motion to Set Aside
Defendant obtained student loans totaling $5,000.00 between 1978 and 1982,
at an interest rate of 7% per annum. Defendant defaulted on the loans in 1984, after
he failed to make any payments. As a result, the balances on the loans were
accelerated. Defendant did not make any payments before the Government filed suit
against him in 2007. Defendant was properly served, but he did not respond, and
default judgment was entered against him on December 3, 2007 in the amount of
$10,708.41 (the “2007 judgment”). Defendant did not contact the Government about
the 2007 judgment or making payments on it.
The Government was able to garnish Defendant’s wages from February 2015
through March 2016, and it recovered more than $9,000 through garnished funds.
After Defendant became unemployed in March 2016, the Government was unable to
continue wage garnishment. On August 12, 2016, the Government served a Writ of
Garnishment on Guaranty Bank. As Garnishee, Guaranty Bank filed an Answer on
August 29, 2016, advising that Defendant maintained a checking account with
Guaranty Bank that had a balance of $2,408.94. On September 2, 2016, this Court
entered a Garnishee Order directing Guaranty Bank to pay $2,408.94 to the
Government. A levy on Defendant’s Guaranty Bank account has remained in effect
since the garnishment of $2,408.94 occurred. Any funds deposited into that account,
including unemployment compensation, have effectively been frozen since that date.
Following the levy and application of that $2,408.94 to the 2007 judgment,
Defendant’s remaining obligation on the 2007 judgment is $4,768.88.
On the same day the Court entered the Garnishee Order for Guaranty Bank,
Defendant filed two Requests for Hearing, citing exemptions for personal property
and unemployment compensation. Defendant also stated, “I dispute the validity of the
debt.” Because Guaranty Bank had paid the $2,408.94 from Defendant’s account to
the Government and any additional funds in his Guaranty Bank account had been
frozen, Defendant later filed a Motion for Release of Bank Levy.
After a telephonic hearing and a review of the parties’ briefs on the two
Requests for Hearing and the Motion for Release of Bank Levy, the Court concluded
that: (a) Defendant had not satisfactorily challenged the 2007 judgment; (b) it cannot
quash the Writ of Garnishment issued to Guaranty Bank, as Defendant had not shown
that the funds deposited into Guaranty Bank were exempt; (c) the lack of equity in
Defendant’s residence did not afford Defendant any relief, as that exemption stems
from the U.S. Bankruptcy Code, which is not applicable in this non-bankruptcy
proceeding. For those reasons, the Court: (1) granted Defendants’ Request for
Hearing About the Garnishment and Claim for Exemptions and Request for Hearing
About the Answer Filed by the Garnishee, to the extent that Defendant asked for
hearings; but (2) denied the substantive relief requested by Defendant in both the
Request for Hearing About the Garnishment and Claim for Exemptions and for
Hearing About the Answer Filed by the Garnishee. The Court also held that the
Government validly garnished the $2,408.94 from Defendant’s Guaranty Bank
account, and Defendant was not entitled to reimbursement or return of that amount.
As to Defendant’s Motion for Immediate Release of Bank Levy, the parties had
discussed the matter of the outstanding balance owed by Defendant on the 2007
judgment against him ($4,768.88), and the Government agreed to work with
Defendant regarding a payment plan for the remaining $4,768.88 owed by Defendant.
In furtherance of that, the Government agreed not to levy or garnish additional funds
in Defendant’s Guaranty Bank account pending the establishment of a payment plan
for Defendant to repay the remaining $4,768.88 owed on the 2007 judgment.
The Court ordered that Defendant would have 30 days from the date of its
Order during which to establish a payment plan satisfactory to the Government with
respect to the remaining $4,768.88 owed on the 2007 judgment. The Court’s Order
also provided that, if Defendant did not establish a satisfactory payment plan on or
before 30 days after the date of this Order, the Government would have the right to
levy and garnish Defendant’s account. According to the Government (and Defendant
has not disagreed), despite the passage of more than 30 days, Defendant never
contacted the Government about setting up payment arrangements before filing the
instant Motion to Set Aside Default Judgment.
In his Motion to Set Aside Default Judgment, Defendant: (1) denies effective
service; (2) denies receiving notification of default judgment; (3) denies an event of
default occurred in 1984; (4) believes that adjudication of the case based on its merits
will result in an outcome different from the outcome of default; and (5) contends that
Plaintiff will not suffer prejudice if the entry of default is set aside. Defendant did not
file a brief in support of his assertions, nor has he offered any argument or evidence
to support any of his assertions. The Government’s arguments, and the evidence in
the record, demonstrate that there is no merit to any of Defendant’s assertions.
First, on November 6, 2007, the Government filed a Certificate of Service that
reflects that Defendant was personally served with the Summons and Complaint at
3119 Sandoval Dr., Lake Orion, Michigan on October 31, 2007. Dkt. No. 3. The
Court finds it significant that Defendant never raised the issue of defective service in
any previous filing with the Court and only made an assertion of ineffective service
when filing the current motion. Defendant also has not denied that the Lake Orion
address set forth above was his address on October 31, 2007 or that he did not actually
receive the Summons and Complaint. Additional uncontested argument and evidence
submitted by Defendant reflect that Defendant utilized the Lake Orion address set
forth above until at least February 2008.
Second, on December 3, 2007, after Defendant failed to file an answer to the
Complaint or otherwise appear in this matter, the Government applied for, and was
granted, a Clerk’s Entry of Default and Clerk’s Entry of Judgment by Default. Dkt.
Nos. 6 and 7. On December 11, 2007, the Government filed a Certificate of Service
with the Court that reflects it mailed copies of the Clerk’s Entry of Default and Clerk’s
Entry of Judgment by Default to Defendant at the Lake Orion address set forth above,
which the record suggests Defendant utilized until a later date. In addition, as the
Government notes, Defendant had his wages garnished for over a year, totaling nearly
$9,000, without objecting to the garnishment. The absence of any objection to such
a garnishment suggests that Defendant was aware of the judgment against him.
Third, Defendant has offered no evidence that an event of default did not occur
in 1984. He has not submitted any evidence that his loan balance was paid off or that
he was making payments at that time. He has not even alleged or argued that he made
scheduled payments or paid off the loan balance.
Fourth, Defendant has proffered no argument or evidence, in his Motion to Set
Aside Default Judgment or any other filing, that would support a finding that any
outcome other than a judgment against him for the balance of the loan, together with
fines and interest, is appropriate. Defendant has not submitted argument or evidence
that would support setting aside the default judgment, as a default judgment may be
set aside only upon the showing of: (1) mistake, inadvertence, or excusable neglect;
(2) newly discovered evidence; (3) fraud, misrepresentation or other misconduct of
the adverse party; (4) the judgment is void; (5) the judgment has been satisfied,
released, or discharged; or (6) any other reason justifying relief from judgment. See,
e.g., Burrell v. Henderson, 434 F.3d 826 (6th Cir. 2006); United Coin Meter Co. v.
Seaboard Coastline R.R., 705 F.2d 839 (6th Cir. 1983).
Fifth, the Court finds that the Government has, and will continue, to suffer
prejudice if the default judgment is set aside. The debt involved in this matter is
nearly 40 years old, and the Government is still trying to collect on it. If the default
judgment is set aside, and if judgment is entered in favor of the Government again,
Defendant’s past and current conduct strongly suggest the Government would be
faced with the same challenges to recover amounts already secured and collect on the
current loan balance.
The Court denies Defendant’s Motion to Set Aside Default Judgment.
For the reasons stated above, IT IS ORDERED that Defendant’s Motion to Set
Aside Default Judgment [Dkt. No. 51] is DENIED.
IT IS ORDERED.
S/Denise Page Hood
Denise Page Hood
Chief Judge, United States District Court
Dated: February 7, 2017
I hereby certify that a copy of the foregoing document was served upon counsel of
record on February 7, 2017, by electronic and/or ordinary mail.
S/LaShawn R. Saulsberry
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