Willie McCormick and Associates, Incorporated v. Lakeshore Engineering Services, Incorporated et al
Filing
166
OPINION and ORDER Denying Ferguson's Motion to Set Aside the Default Judgment 161 . Signed by District Judge Laurie J. Michelson. (EPar)
Case 2:12-cv-15460-LJM-MKM ECF No. 166, PageID.4302 Filed 09/08/22 Page 1 of 20
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
WILLIE MCCORMICK AND
ASSOCIATES, INCORPORATED,
Plaintiff,
Case No. 12-15460
Honorable Laurie J. Michelson
v.
LAKESHORE ENGINEERING
SERVICES, INCORPORATED,
BOBBY W. FERGUSON, et al.,
Defendants.
OPINION AND ORDER DENYING FERGUSON’S MOTION TO
SET ASIDE THE DEFAULT JUDGMENT [161]
Before Kwame Kilpatrick became Mayor of Detroit in 2002, Willie
McCormick and Associates did underground water and sewer line work for the
Detroit Water and Sewerage Department. But, according to McCormick, after
Kilpatrick became mayor and was appointed special administrator for DWSD, he
began ensuring that his longtime friend, Bobby Ferguson, and Ferguson’s
companies were awarded the underground water and sewer line work for DWSD. So
in 2012, McCormick filed this lawsuit against Kilpatrick, Ferguson, and a host of
other entities and individuals alleging violations of the federal antitrust laws and
the Racketeer Influenced and Corrupt Organizations Act.
As this case is nearing 10 years old, it has a very long procedural history.
Suffice it to say that Ferguson never appeared to defend this suit, and in time, a
default judgment of over $7 million was entered against Ferguson and in favor of
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McCormick. Recently, Ferguson has moved to set aside that default judgment. For
the reasons that follow, the Court will deny Ferguson’s motion.
Through the first 10 years of its operation, McCormick often won bids to
perform underground water and sewer line work for the Detroit Water and
Sewerage Department. (ECF No. 33, PageID.326–327.) But, says McCormick,
things changed when Kwame Kilpatrick became Mayor of Detroit in 2002. (ECF No.
33, PageID.328.) At that time, the DWSD was under a federal consent decree, and
the federal court appointed Kilpatrick as the Special Administrator of DWSD. (ECF
No. 33, PageID.328.) According to McCormick, as both Mayor and Special
Administrator, Kilpatrick wielded great power over DWSD and “had authority to
approve, deny and amend DWSD contracts.” (ECF No. 33, PageID.329.)
McCormick says that Kilpatrick abused this power to aid his longtime friend
Bobby Ferguson, which, in turn, caused McCormick to lose valuable contracts. As
just one example, McCormick points to the CS-1368 contract. (ECF No. 33,
PageID.340.) McCormick explains that in November 2001, the DWSD Board
approved Inland Waters as the CS-1368 contractor and McCormick as one of the
subcontractors. (ECF No. 33, PageID.341.) In fact, “McCormick was the only
underground water and sewer line subcontractor who was both a Detroit Based and
Minority Business Enterprise.” (Id.) But after Kilpatrick came to power, he
allegedly refused to approve or held up the process of moving forward with CS-1368,
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“because a Ferguson company was not one of the approved minority underground
water and sewer subcontractors.” (ECF No. 33, PageID.343.) According to
McCormick, Kilpatrick and others engaged in secret meetings with Inland Waters
representatives where it was decided that Kilpatrick would allow CS-1368 to go
forward if Inland Waters agreed to remove McCormick in favor of Ferguson
Enterprises and to pay bribes to Ferguson and Kilpatrick. (ECF No. 33,
PageID.343.) With add-on work, $138 million was paid under the CS-1368 contract;
Ferguson’s company received almost $25 million. (ECF No. 33, PageID.347.)
McCormick says that but for Kilpatrick and Ferguson’s unlawful scheme, it would
have received the work performed by Ferguson Enterprises under CS-1368 (and
other contracts).
At some point, federal prosecutors got wind of the bid-rigging scheme. And in
2010, a federal grand jury indicted Kilpatrick, Ferguson, and others for RICO
conspiracy, extortion, and other crimes. (ECF No. 33, PageID.330.) In 2013,
Ferguson was convicted of RICO conspiracy, extortion, and bribery, and sentenced
to 21 years in prison. See United States v. Ferguson, No. 10-20403, 2018 WL
1071743, at *1 (E.D. Mich. Feb. 27, 2018).
In late 2012, McCormick initiated this civil suit against Kilpatrick, Ferguson,
Ferguson’s companies, and a host of other companies and individuals. (See ECF
No. 1.) McCormick alleged that Ferguson committed RICO and federal antitrust
violations. (ECF Nos. 1, 33.) At the time the suit was filed, Ferguson was in pretrial
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detention on the criminal charges. He was being held at a federal institution in
Milan, Michigan.
In March 2013, Steven Coykendall, a process server, attempted to serve
McCormick’s complaint on Ferguson. According to Coykendall’s sworn affidavit, he
called “the Federal Correctional Institution located in Milan, MI.” (ECF No. 28,
PageID.268.) Coykendall stated that an “Assistant Warden” “confirmed that Bobby
Ferguson was currently incarcerated at their facility.” (Id.) Coykendall told the
assistant warden that he was acting as a process server to serve Ferguson with
legal documents, and she scheduled Coykendall to meet with Ferguson the following
day. (Id.)
In his affidavit, Coykendall further averred that the next morning, March 19,
2013, he arrived at the “Federal Correctional Institution located at 4004 E. Arkona,
Milan, MI 48160.” (ECF No. 28, PageID.268.) He recalled, “Mr. Ferguson was
presented to me by the correctional institution staff. I engaged in a brief
conversation with Mr. Ferguson through a closed, glass security door. I identified
myself to Mr. Ferguson as a Process Server and advised him that I had Summonses
and Complaints to serve upon him.” (Id.) Coykendall continued, “[Ferguson]
verbally refused to accept service and then backed away from the security door as I
attempted to hand the documents to him through the provided mail slot in the
door.” (Id.) And said Coykendall, “He requested that his attorney accept the
documents and then he walked away. At that time the documents were retrieved by
the correctional institution staff and handed back to me.” (Id.)
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The next month, April 2013, McCormick filed an amended complaint. (ECF
No. 33.) A certificate of service indicates that McCormick sent the amended
complaint to Ferguson at a post-office box for FCI Milan. (ECF No. 35, PageID.614.)
The amended complaint was sent by certified mail. The accompanying green card
was accepted and signed for by someone at the prison, although not Ferguson. (See
ECF No. 35-1, PageID.616.)
Shortly before filing its amended complaint, McCormick filed a motion
relating to service of two sets of defendants: Ferguson (and his companies) and
Derrick Miller. (ECF No. 31.) McCormick indicated that it was tracking Miller in
Virginia but had, to date, been unable to personally serve him. McCormick thus
sought an order permitting service on Miller by alternate means (e.g., mail and
publication in a newspaper). (ECF No. 31, PageID.291, 294.)
As to Ferguson, McCormick’s motion sought different relief. McCormick
argued that while Rule 4 required personal service, personal service did not mean
“in hand” service. (ECF No. 31, PageID.289.) In McCormick’s view, Coykendall’s
affidavit showed that he had offered the summons and complaint to Ferguson and
left it in an area that Ferguson physically controlled, which, according to
McCormick, counted as personal service under the law. (Id.) McCormick thus asked
the Court to issue an order “confirming” that it had effectuated personal service on
Ferguson. (ECF No. 31, PageID.291.) In the alternative, McCormick asked the
Court for leave to serve Ferguson by alternate means (similar to the relief it
requested for Miller). (ECF No. 31, PageID.292–293.)
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In November 2013, Judge Robert H. Cleland, to whom this case was then
assigned, entered an order on McCormick’s motion. (ECF No. 90.) As to Miller,
Judge Cleland permitted McCormick to serve him by alternate means. (ECF No. 90,
PageID.3307.) As to Ferguson, Judge Cleland explained, “According to an affidavit
provided by the process server, the process server attempted to pass the summons
and complaint to Ferguson through a mail slot, but Ferguson refused service and
told the process server to serve his attorney without identifying who his attorney
is.” (ECF No. 90, PageID.3306.) Judge Cleland continued, “Plaintiff sent an email to
Gerald Evelyn, an attorney who represented the Ferguson Entities in litigation
brought by the City of Detroit, but Evelyn did not respond to confirm whether or not
he was authorized to accept service on behalf of the Ferguson Entities.” (Id.)
Referring to a certificate of service of a host of filings (see ECF No. 89), Judge
Cleland noted that while McCormick’s motion was pending, it had “filed a certificate
of service, reporting that . . . it effected service on Ferguson by certified mail at the
Federal Correctional Institution in Milan.” (ECF No. 90, PageID.3307). Then citing
case law that a defendant cannot avoid service by physically refusing to accept the
summons and that service can be effected by leaving papers near the defendant,
Judge Cleland indicated that he was “inclined” to find that Coykendall’s “service
was valid, despite Ferguson’s attempt to refuse or evade service.” (ECF No. 90,
PageID.3307.) “At a minimum,” Judge Cleland explained, “[Ferguson’s] refusal
constitutes a valid basis to extend the summons. And given that service was
eventually effected by certified mail, the court finds that Ferguson is on proper
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notice of this lawsuit and will be deemed served.” (ECF No. 90, PageID.3307.) Thus,
Judge Cleland ordered “that service is deemed to have been properly effected on the
Ferguson Entities.” (ECF No. 90, PageID.3307–3308.)
Skip ahead to 2014; Ferguson still had not filed an appearance in this suit. So
McCormick requested a default, and in February 2014, the Clerk of Court entered a
default against Ferguson and his companies. (ECF Nos. 102, 103, 104.) McCormick
followed up with a motion for default judgment. (ECF No. 114.)
McCormick twice tried to give Ferguson notice of its efforts to obtain a
default judgment. McCormick initially sent copies of the Clerk’s entry of default and
its motion for default judgment to Ferguson using the FCI Milan post-office-box
address. But these were returned marked “Return to Sender[.] Refused[.] Unable to
Forward” or “Not at Institution.” (ECF No. 112, PageID.3404; ECF No. 118,
PageID.3730, 3735.) So McCormick tried again: it sent copies of the default, motion
for default judgment, and the notice of hearing on that motion to Ferguson at the
Wayne County Jail. (ECF No. 121, PageID.3751.) These were returned with a
“Refused” sticker on the envelope. (ECF No. 121, PageID.3756, 3762.)
As it turned out, Judge Cleland never decided whether a default judgment
against Ferguson was warranted. (See ECF No. 137.) Fairly early on in this case,
Judge Cleland had dismissed the RICO and antitrust claims against the nondefaulted defendants because, in his view, McCormick lacked standing to pursue
those claims. See Willie McCormick & Assocs., Inc. v. Lakeshore Eng’g Servs., Inc.,
No. 12-15460, 2013 WL 6713999, at *7, 10 (E.D. Mich. Dec. 20, 2013). Consistent
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with that ruling, at the hearing on McCormick’s motion for default judgment, Judge
Cleland expressed reluctance about entering a default judgment on the RICO and
antitrust claims. (ECF No. 129, PageID.3844, 3848.) But before Judge Cleland
finally decided one way or the other, the case was reassigned to Judge Arthur J.
Tarnow. (ECF No. 138.) Judge Tarnow did not share Judge Cleland’s concerns
about standing and entered an order vacating in part Judge Cleland’s order
dismissing the RICO and antitrust claims. Willie McCormick & Assocs., Inc. v.
Lakeshore Eng’g Servs., Inc., No. 12-15460, 2015 WL 5093785, at *1 (E.D. Mich.
Aug. 28, 2015). An interlocutory appeal was taken on this issue, but it appears that
the appeal was ultimately dismissed. (See ECF Nos. 148, 150, 151.)
Following the appeal, in November 2016, McCormick was finally able to circle
back to seeking a default judgment against Ferguson. (ECF No. 152.) For
Ferguson’s alleged violations of RICO and the antitrust laws, McCormick sought
actual damages of about $2.5 million and trebled damages of about $7.5 million.
(ECF No. 152, PageID.4128.) The docket does not reflect what efforts, if any,
McCormick took to provide a copy of this motion to Ferguson.
In December 2016, Judge Tarnow entered a short order providing that he
would “enter default judgment against all Defendants after a hearing has been held
to determine the amount of damages.” (ECF No. 154, PageID.4238.) Judge Tarnow
referred the hearing on damages to a magistrate judge.
In April 2018, Judge Tarnow accepted the magistrate judge’s damages
recommendation. In particular, he “ORDERED that default judgment be entered in
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favor of Plaintiff and against Defendants Kwame Kilpatrick, Bobby W. Ferguson,
Ferguson’s Enterprises, Inc., Xcel Construction Services, Inc., and Derrick A. Miller,
in the amount of $7,477,873.83.” Willie McCormick & Assocs., Inc. v. Lakeshore
Eng’g Servs., Inc., No. 12-15460, 2018 WL 1875628, at *1 (E.D. Mich. Apr. 19, 2018).
In 2021, Kilpatrick and Ferguson were released from prison. In particular,
then-President Donald Trump commuted Kilpatrick’s 28-year sentence. United
States v. Ferguson, 536 F. Supp. 3d 139, 141 (E.D. Mich. 2021). And Judge Nancy G.
Edmunds, who had presided over the criminal proceedings against Kilpatrick and
Ferguson, granted Ferguson compassionate release. See id. at 145. She reasoned in
part, “[i]t would be inequitable to require [Ferguson] to complete the lengthy
sentence originally imposed while the more culpable co-defendant [Kilpatrick], who
initially received an even lengthier sentence, has been released.” Id.
Having been released from prison, Ferguson finally turned his attention to
this case. In February 2022—almost four years after Judge Tarnow ordered entry of
a default judgment—Ferguson filed a motion to vacate and set aside the default
judgment. (ECF No. 161.) That motion triggered a series of case reassignments,
eventually ending with this case being recently assigned to the undersigned.
In seeking to set aside the default judgment, Ferguson primarily relies on
Federal Rule of Civil Procedure 60(b)(4). (ECF No. 161, PageID.4270.) Rule 60(b)(4)
states, “On motion and just terms, the court may relieve a party or its legal
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representative from a final judgment, order, or proceeding for the following
reasons . . . the judgment is void.” A judgment is void if the court lacks jurisdiction
over the defendant. Antoine v. Atlas Turner, Inc., 66 F.3d 105, 108 (6th Cir. 1995).
And a court lacks jurisdiction over the defendant if service was not effectuated. See
King v. Taylor, 694 F.3d 650, 655 (6th Cir. 2012); O.J. Distrib., Inc. v. Hornell
Brewing Co., 340 F.3d 345, 353 (6th Cir. 2003), other aspects abrogated by Morgan
v. Sundance, Inc., 142 S. Ct. 1708 (2022). Ferguson says that is the case here: “[I]
was never personally or otherwise served a copy of the Summons and Complaint
under Rule 4(e) of the Federal Rules of Civil Procedure.” (ECF No. 161,
PageID.4271.)
Before examining Ferguson’s challenge to service, the Court briefly comments
on a threshold issue—the timeliness of Ferguson’s motion. In responding to
Ferguson’s motion to set aside the default judgment, McCormick claims that the
motion comes too late. (ECF No. 163, PageID.4293.) That is a fair point given that
Ferguson’s motion comes almost five years after Judge Tarnow ordered that a
default judgment be entered and even longer since Judge Cleland ruled service was
effectuated.
Rule 60(c) provides that for motions brought pursuant to Rule 60(b)(1), (2), or
(3), the motion must be filed within a year after entry of judgment; but for motions
brought pursuant to (b)(4), (5), and (6), Rule 60(c) only prescribes a “reasonable
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time.” In accordance with this language, the Sixth Circuit has stated that a Rule
60(b)(4) motion must be “brought within a reasonable time.” United States v.
Dailide, 316 F.3d 611, 617–18 (6th Cir. 2003); see also Days Inns Worldwide, Inc. v.
Patel, 445 F.3d 899, 906 (6th Cir. 2006).
The Court recognizes that there is authority to the contrary. For instance, the
oft-cited Wright & Miller treatise states, “the requirement that the motion be made
within a ‘reasonable time,’ which seems literally to apply to motions under Rule
60(b)(4), cannot be enforced with regard to this class of motion. A void judgment
cannot acquire validity because of laches on the part of the judgment debtor.” Mary
Kay Kane, 11 Fed. Prac. & Proc. Civ. § 2862 (3d ed.). Many of the federal appellate
courts have followed this reasoning. See Norris v. Causey, 869 F.3d 360, 365 (5th
Cir. 2017) (citing Wright & Miller); Hertz Corp. v. Alamo Rent-A-Car, Inc., 16 F.3d
1126, 1130 (11th Cir. 1994) (citing Wright & Miller and noting that the First, Fifth,
Seventh, Tenth, and D.C. Circuits have taken the position that “the time within
which
a
Rule
60(b)(4)
motion
may
be
brought
is
not
constrained
by
reasonableness”).
But this Court is bound by Sixth Circuit authority. And “[t]he Sixth Circuit
has held in various cases that periods of anywhere between three and five years
between the judgment and the filing of a 60(b)(4) motion were too long to permit the
filing of such a motion for relief from judgment.” Williams-El v. Bouchard, No. 05CV-70616, 2016 U.S. Dist. LEXIS 60735, at *4 (E.D. Mich. May 9, 2016) (citing
Dailide, 316 F.3d at 617). Ferguson has provided no viable reason for the lengthy
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delay in seeking relief from judgment. And, as explained below, even if his motion is
timely, Ferguson has not shown that he was not served in a manner contemplated
by the Federal Rules.
In the main, Ferguson argues that the default judgment is void under Rule
60(b)(4) because the statements in the process server’s affidavit are false.
To start, Ferguson contests Coykendall’s statements about contacting and
visiting FCI Milan. In his affidavit, Coykendall stated, “I contacted the Federal
Correctional Institution located in Milan” and “I arrived at the Federal Correctional
Institution located at 4004 E. Arkona, Milan.” (ECF No. 28, PageID.268.) Ferguson
says there are two federal facilities in Milan: FCI Milan, which is a correctional
institution, and FDC Milan, which is a detention center—the two are across the
street from each other. (ECF No. 161, PageID.4271, 4276.) Ferguson also says that
on the date of service, he was at FDC Milan. (ECF No. 161, PageID.4271.) Further,
Ferguson claims that if Coykendall had actually called FCI Milan to arrange a visit,
they would have directed him to arrange a “special visit” with FDC Milan. (ECF No.
161, PageID.4276.)
Ferguson also claims that additional statements in Coykendall’s affidavit are
false. As noted, Ferguson believes that if Coykendall had in fact arranged a visit, it
would have been a special visit. (ECF No. 161, PageID.4276.) But, says Ferguson,
special visits do not happen in the way Coykendall averred. For one, when special
visits are arranged, the detainee is informed of both the visitor and the reason for
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the visit; so, says Ferguson, if Coykendall had in fact arranged a special visit, he
“could have declined the visit without even coming into [contact] with Mr.
Coykendall.” (ECF No. 161, PageID.4277.) Ferguson also points out that Coykendall
stated that he had a “brief conversation with Mr. Ferguson through a closed, glass
security door.” (ECF No. 28, PageID.268.) But, according to Ferguson, special visits
are not behind a glass door; instead they are conducted in a contact visiting area.
(ECF No. 161, PageID.4276.) As for Coykendall’s assertion that he attempted to
hand Ferguson service documents “through the provided mail slot in the [glass
security] door,” Ferguson states that those doors have no mail slots and instead
have wickets that must be opened by a guard with a key. (Id.)
Ferguson has not shown that the key statements of Coykendall’s affidavit are
false.
First, none of Ferguson’s statements are sworn. Ferguson has submitted no
affidavit setting out the facts alleged in his motion. He has not sworn that a “special
visit” was the only manner in which Coykendall could have met with him or that
the way special visits are conducted differs from the meeting Coykendall described.
In contrast, Coykendall made his statements after being “first duly sworn”
and the notary indicated, “[s]ubscribed and sworn to before me on this _____ date of
March, 2013.” (ECF No. 28, PageID.268.) (More on the “_____ date” in a moment.)
Although Coykendall did not state that his statements were made “under penalty of
perjury,” courts have recognized that a notarized, “duly sworn” statement is
comparable. See Porter v. Quarantillo, No. 12-CV-0590 DLI VMS, 2012 WL
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6102875, at *5 (E.D.N.Y. Dec. 7, 2012) (“[G]iven that both affidavits were ‘duly
sworn’ before a notary public, the Court will consider them in connection with the
pending motions.”); Quiles v. Sikorsky Aircraft, 84 F. Supp. 2d 154, 160 (D. Mass.
1999) (“While the affidavits do not explicitly say that they were signed ‘under the
pains and penalties of perjury,’ that standard is implied in the fact that the
witnesses were ‘duly sworn.’”); Chrzaszcz v. United States, No. CR 09-1381-PHXJAT, 2015 WL 2193713, at *7 (D. Ariz. May 11, 2015) (similar); Lambert v. First
Fed. Mortg., 47 F. Supp. 3d 1310, 1313 (N.D. Ala. 2014) (similar); Lakeview Outlets,
Inc. v. Uram, No. 95-0136, 1996 WL 571520, at *2 (N.D.N.Y. Oct. 2, 1996) (similar).
The Court recognizes that Team Kasa v. Humphrey is to the contrary, but having
reviewed the cases the Team Kasa court relied upon, it appears that the use of “duly
sworn” was not the sole reason that the affidavits were not credited. See No.
CV171074JSAKT, 2018 WL 1867117, at *4 (E.D.N.Y. Jan. 24, 2018) (citing cases).
Ferguson points out that the notary did not include the date of notarization
(i.e., “this _____ date of March, 2013”). But he cites no law indicating that a
notarization is invalid absent the notary dating the document. Cf. Peters v. Lincoln
Elec. Co., 285 F.3d 456, 475 (6th Cir. 2002) (noting that “courts have held that the
absence of a date” on a statement with § 1746’s penalty-of-perjury language “does
not render [it] invalid if extrinsic evidence could demonstrate the period when the
document was signed”). The affidavit bears the notary’s signature, her stamp, her
commission expiration date, and the date of Coykendall’s signature (March 19,
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2013). It was also docketed shortly after Coykendall signed it. In other words, it
appears legitimate.
In short, on one side of the scale there are contemporaneous, sworn
statements, and on the other side of the scale, unsworn statements made many
years later. The direction that the scale tips is obvious. Cf. Pollock v. Pollock, 154
F.3d 601, 612 (6th Cir. 1998) (“An unsworn affidavit cannot be used to support or
oppose a motion for summary judgment.”); Tate v. Riegert, 380 F. App’x 550, 552
(7th Cir. 2010) (“Tate’s unsworn letter was entitled to no weight as substantive
evidence.”).
And even supposing that Ferguson’s unsworn statements were entitled to the
same weight as Coykendall’s sworn statements, Ferguson’s account is not very
convincing. Many of Ferguson’s attacks on Coykendall’s affidavit are to this effect:
“if the proper policy or practice had been followed, then the events would not have
occurred as Coykendall says they did.” Noticeably absent is any direct statement by
Ferguson that he never met Coykendall in March 2013. True, Ferguson does say
that he “did not verbally or otherwise communicat[e] with Mr. Coykendall” but that
sentence is completed by “as he was housed at FDC Milan, not FCI Milan, the
facility Mr. Coykendall refers to in his affidavit.” (ECF No. 161, PageID.4271.)
Arguably, this too is merely an indirect denial of Coykendall’s statements, i.e.,
“Coykendall says he went to FCI Milan, so I could not have spoken with him
because I was at FDC Milan.” That is much less convincing than directly stating, “I
have never met Coykendall.”
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In short, on the record as it stands now, Ferguson has not persuaded the
Court that the key facts in Coykendall’s affidavit are false. Cf. O’Brien v. R.J.
O’Brien & Assocs., Inc., 998 F.2d 1394, 1398 (7th Cir. 1993) (“A signed return of
service constitutes prima facie evidence of valid service.”). And if the facts are as
Coykendall has stated them, then the Court sees no reason to revisit Judge
Cleland’s order. After all, Judge Cleland relied on Coykendall’s affidavit as part of
the factual basis for finding that Ferguson was served. (See ECF No. 90,
PageID.3307.) And Ferguson has identified no erroneous law in Judge Cleland’s
opinion. See Sparton Engineered Prod., Inc. v. Cable Control Techs., Inc., 178 F.3d
1296 (Table), 1999 WL 115472, at *2 & n.6 (6th Cir. 1999) (noting that district court
had stated that “one cannot avoid service by refusing physically to accept the
summons” and agreeing “with the district court that by refusing the . . . service of
process, Cable acted at its own peril”); Novak v. World Bank, 703 F.2d 1305, 1310
n.14 (D.C. Cir. 1983) (“When a person refuses to accept service, service may be
effected by leaving the papers at a location, such as on a table or on the floor, near
that person.”).
Ferguson makes three other points worth expressly addressing.
For one, Ferguson relies on two of the United Coin factors in an effort to set
aside the default judgment. In the Sixth Circuit, courts apply the three factors set
out in United Coin Meter Co. v. Seaboard Coastline RR., 705 F.2d 839 (6th Cir.
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1983), in deciding whether to set aside a clerk’s entry of default under Rule 55(c).
These factors are (1) “[w]hether culpable conduct of the defendant led to the
default,” (2) “whether the defendant has a meritorious defense,” and (3) “whether
the plaintiff will be prejudiced.” United Coin, 705 F.2d at 845. Although applied
more stringently once a default ripens into a default judgment, the United Coin
factors also apply to Rule 60(b) motions to set aside a default judgment. See id.
(“[T]he three factors which control the decision of a Rule 55(c) motion to set aside
entry of default also apply to a Rule 60(b) motion to set aside entry of a judgment by
default.”). Here, Ferguson argues that McCormick will not suffer prejudice if the
default judgment is set aside. He also asserts that he has a meritorious defense to
McCormick’s claims.
Although the United Coin factors apply to Rule 60(b) motions, the Court
believes that when, as here, a defendant relies on Rule 60(b)(4) but fails to show
that “judgment is void” because service was not effectuated, the other United Coin
factors need not be addressed. See Mary Kay Kane, 11 Fed. Prac. & Proc. Civ.
§ 2862 (3d ed.) (“[A] motion under [(b)(4)] differs markedly from motions under the
other clauses of Rule 60(b).”).
To start, Rule 60(b)(4) asks the Court to decide a yes-or-no question: is the
judgment void? As the Wright & Miller treatise explains, “There is no question of
discretion on the part of the court when a motion is under Rule 60(b)(4). Nor is
there any requirement, as there usually is when default judgments are attacked
under Rule 60(b), that the moving party show a meritorious defense. Either a
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judgment is void or it is valid.” Mary Kay Kane, 11 Fed. Prac. & Proc. Civ. § 2862
(3d ed.); see also Shank/Balfour Beatty v. Int’l Bhd. Of Elec. Workers Loc. 99, 497
F.3d 83, 94 (1st Cir. 2007) (“[A] district court has no discretion when deciding a
motion brought under Rule 60(b)(4) because a judgment is either void or it is not.”).
Indeed, where a defendant is successful in showing that “the judgment is void,”
there is no need to consider the other two United Coin factors. See Antoine v. Atlas
Turner, Inc., 66 F.3d 105, 108 (6th Cir. 1995).
And at least in the context of a Rule 60(b)(1) motion, the reverse is also true.
The Sixth Circuit has explained, “because [Rule 60(b)(1)] mandates that a defendant
cannot be relieved of a default judgment unless he can demonstrate that his default
was the product of mistake, inadvertence, surprise, or excusable neglect,” “it is only
when the defendant can carry this burden that he will be permitted to demonstrate
that he also can satisfy the other two [United Coin] factors.” Waifersong, 976 F.2d at
292 (emphasis added); accord Williams v. Meyer, 346 F.3d 607, 613 (6th Cir. 2003);
Weiss v. St. Paul Fire & Marine Ins. Co., 283 F.3d 790, 794 (6th Cir. 2002).
All that rings true for Rule 60(b)(4) too. If the idea is that when a defendant
fails to satisfy Rule 60(b)(1)’s “mandate[],” Waifersong, 976 F.2d at 292, the other
two United Coin factors need not be addressed, then the same can be said of a
defendant’s failure to satisfy Rule 60(b)(4)’s mandate. Or perhaps the idea is that
when a defendant fails to show “mistake, inadvertence, surprise, or excusable
neglect” under Rule 60(b)(1), an inference arises that he is culpable for the default
judgment and the other two United Coin factors cannot carry the day. The same can
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be said on the facts of this case. By failing to show that service was improper, the
implication is that Ferguson was served, and so it is fair to say that Ferguson is
culpable for the default judgment such that the other two United Coin factors
cannot carry the day.
In short, because Ferguson has failed to show that the “judgment is void,” the
Court declines to analyze whether McCormick would be prejudiced if the default
judgment were set aside or if Ferguson has a meritorious defense to McCormick’s
claims. See Thompson v. Am. Home Assur. Co., 95 F.3d 429, 433 (6th Cir. 1996)
(indicating that to prevail on a Rule 60(b) motion, a defendant must show “that one
of the specific requirements of Rule 60(b) is met”).
Ferguson also points out that when McCormick mailed him court documents
in this case, they were returned undeliverable. Thus, Ferguson implies that when
McCormick mailed court documents, it knew he was not at the addressed location.
(ECF No. 161, PageID.4278.) Ferguson also points out that McCormick had his
prison registration number. (ECF No. 161, PageID.4272.) The implication,
apparently, is that McCormick should have looked up his actual location instead of
continuing to send documents to FCI Milan.
These arguments do not justify setting aside the default judgment. As an
initial matter, not all the filings that McCormick mailed were returned, nor were
they all returned as undeliverable. When McCormick sent the entry of default, its
motion for default judgment, and the notice of the hearing on the motion to
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Ferguson at the Wayne County Jail, it was returned “Refused.” (ECF No. 121,
PageID.3756.) That suggests that Ferguson was at the jail when McCormick’s
mailing arrived and refused it. But even if Ferguson is correct that McCormick
knew it was sending documents to the wrong location, once service was effectuated,
it was Ferguson’s responsibility to appear in this lawsuit and defend it. See Fed. R.
Civ. P. 55; E.D. Mich. LR 11.2 (2009). Ferguson cites no legal authority requiring
McCormick to track his whereabouts after it effectuated service.
Ferguson states that he “has also satisfied the [United Coin] factors for
equitable relief under . . . Rule 60(b)(1) and (3).”
But a motion pursuant to Rule 60(b)(1) or (3) must be brought within a year
of “the entry of the judgment or order or the date of the proceeding.” Fed. R. Civ. P.
60(c)(1). Judge Tarnow ordered that a default judgment be entered against
Ferguson almost four years before Ferguson moved to set it aside, making relief
under Rule 60(b)(1) or (b)(3) untimely.
For the reasons given, Ferguson’s motion to vacate and set aside the default
judgment (ECF No. 161) is DENIED.
SO ORDERED.
Dated: September 8, 2022
s/Laurie J. Michelson
LAURIE J. MICHELSON
UNITED STATES DISTRICT JUDGE
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