Wiggins v. Nationstar Mortgage LLC et al

Filing 34

ORDER GRANTING DEFENDANT'S 25 MOTION to Set Aside Default and Brief in Support AND VACATING 16 CLERK'S ENTRY OF DEFAULT. Signed by Magistrate Judge R. Steven Whalen. (CCie)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

ROBERT L. WIGGINS,
Plaintiff,

No. 14-12680

v.

District Judge Matthew F. Leitman
Magistrate Judge R. Steven Whalen

NATIONSTAR MORTGAGE LLC,
ET AL.,
Defendants.
/
ORDER SETTING ASIDE CLERK’S ENTRY OF DEFAULT
On July 9, 2014, Plaintiff Robert L. Wiggins filed a pro se civil complaint alleging
numerous claims centering on a mortgage on real property that he gave as security for a
loan in March of 2005. Before the Court is a Motion to Set Aside Default [Doc. #25] filed
by Defendant Argent Mortgage Company LLC (“Argent”). Because Argent was not
properly served, the motion is GRANTED, and the Clerk’s entry of default is
VACATED.
I.

FACTS

In his complaint [Doc. #1], Plaintiff states that he refinanced a real estate loan on
March 28, 2005. Attached to his complaint is a copy of the mortgage given to Argent
(Exhibit 1) and an adjustable rate interest promissory note to Argent in the amount of

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$418,000.00 (Exhibit 2). Both documents were executed on March 28, 2005. He alleges
that the Defendants engaged in predatory lending practices, in violation of a number of
federal and Michigan statutes.
On December 12, 2014, Plaintiff filed what purported to be a Certificate of Service
on Defendant Argent [Doc. #7], and on February 4, 2015, Plaintiff requested a Clerk’s
entry of default against Argent [Doc. #15]. On February 11, 2015, the Clerk entered
Argent’s default [Doc. #16].
II.

STANDARD OF REVIEW

Fed.R.Civ.P. 55(a) provides:
“When a party against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend as provided by these rules...the clerk
shall enter the party’s default.”
Fed.R. Civ.P. 55(c) sets forth a relatively relaxed “good cause” standard for setting
aside a Clerk’s entry of default. U.S. v. $22,050.00 U.S. Currency, 595 F.3d 318, 324
(6th Cir. 2010). In O.J. Distrib., Inc. v. Hornell Brewing Co., 340 F.3d 345, 353 (6th
Cir.2003), the Sixth Circuit described the Rule 55(c) standard as follows:
“[T]he district court enjoys considerable latitude under the “good cause
shown” standard of Rule 55(c) to grant a defendant relief from a default
entry. The criteria used to determine whether “good cause” has been shown
for purposes of granting a motion under Rule 55(c) are whether (1) the
default was willful, (2) set-aside would prejudice plaintiff, and (3) the
alleged defense was meritorious. It has been found that a district court
abuses its discretion in denying a motion to set aside an entry of default
when two of the three factors have been demonstrated by the defendant: the
defendant had a meritorious defense and no prejudice would result to the
plaintiff if the matter were to go forward.” (internal quotation marks,
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citations, and footnote omitted.).
However, a default may not be entered against a defendant who has not been
properly served with a summons and complaint. In O.J. Distributing, Inc. v. Hornell
Brewing Co., Inc. 340 F.3d 345, 353 (6th Cir. 2003), the Court held:
“Due process requires proper service of process for a court to have
jurisdiction to adjudicate the rights of the parties. Amen v. City of Dearborn,
532 F.2d 554, 557 (6th Cir.1976). Therefore, if service of process was not
proper, the court must set aside an entry of default. Id.; see also Omni
Capital Int'l, Ltd. v. Rudolf Wolff & Co., Ltd., 484 U.S. 97, 104, 108 S.Ct.
404, 98 L.Ed.2d 415 (1987) (“Before a federal court may exercise personal
jurisdiction over a defendant, the procedural requirement of service of
summons must be satisfied.”); Bank One of Cleveland, N.A. v. Abbe, 916
F.2d 1067 (6th Cir.1990).”
O.J. Distributing also held that a court “need not weigh the three factors a court
considers when setting aside an entry of default when service of process has been
properly effected....” Id. at 355.
III. ANALYSIS
The Plaintiff claims to have served Argent by certified mail. However, his February
4, 2015 Certificate of Service [Doc. #7] does not comply with Fed.R.Civ.P. 4(e), which
incorporates Michigan service of process rules. Rule 4(e) provides that service may be
effected:

“(1) pursuant to the law of the state in which the district court is located, or in
which service is effected...; or
(2) by delivering a copy of the summons and of the complaint to the individual
personally or by leaving copies thereof at the individual’s dwelling house or
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usual place of abode with some person of suitable age and discretion then
residing therein or by delivering a copy of the summons and of the complaint
to an agent authorized by appointment or by law to receive service of process.”
Under Michigan law, specifically M.C.R. 2.105(A), service may be effected as
follows:
“(1) delivering a summons and a copy of the complaint to the defendant
personally; or
(2) sending a summons and a copy of the complaint by registered or certified
mail, return receipt requested, and delivery restricted to the addressee. Service
is made when the defendant acknowledges receipt of the mail. A copy of the
return receipt signed by the defendant must be attached to proof showing
service under subrule (A)(2).” (Emphasis added).
Plaintiff’s Certificate of Service contains no return receipt signed by an agent of
Argent. The tracking information attached to Plaintiff’s request for entry of default shows
that the mailing was refused, not that it was accepted.
In addition, where the defendant is a corporation or a partnership, service is governed
by Fed.R.Civ.P. 4(h):
“Unless federal law provides otherwise or the defendant's waiver has been
filed, a domestic or foreign corporation, or a partnership or other
unincorporated association that is subject to suit under a common name, must
be served:
(1) in a judicial district of the United States:
(A) in the manner prescribed by Rule 4(e)(1) for serving an individual; or

(B) by delivering a copy of the summons and of the complaint to an officer, a
managing or general agent, or any other agent authorized by appointment or
by law to receive service of process and--if the agent is one authorized by
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statute and the statute so requires--by also mailing a copy of each to the
defendant.”
According to Plaintiff’s request for entry of default [Doc. #15], he sent a copy of the
summons and complaint by certified mail to National Register in New Hudson, Michigan.
First, the mailing was not accepted, it was refused, and there is no return receipt, as required
by M.C.R. 2.105(A). Secondly, National Register, located in Michigan, is not the authorized
agent of Argent, which, as of July 10, 2014, does not do business in Michigan, and hence has
no resident agent in Michigan. Defendant’s Motion, Exhibit 2.
In attempting service on Argent, the Plaintiff has failed to comply with Rule 4(e),
Rule 4(h), and M.C.R. 2.105(A). Again, if service of process was not proper, the court must
set aside an entry of default. O.J. Distributing, supra.
IV.

CONCLUSION

Defendant Argent’s Motion to Set Aside Default [Doc. #25] is GRANTED, and the
Clerk’s entry of default [Doc. #16] is VACATED.
IT IS SO ORDERED.

s/R. Steven Whalen
R. STEVEN WHALEN
UNITED STATES MAGISTRATE JUDGE
Date: January 31, 2016

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CERTIFICATE OF SERVICE
I hereby certify that a copy of the foregoing document was sent to parties of record on
January 31, 2016, electronically and/or by U.S. mail.
s/C. Ciesla
Case Manager

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