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United States v. Derrico

United States District Court, E.D. Michigan, Southern Division

February 23, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
DERRICK DERRICO, Defendant, and MICHIGAN DEPARTMENT OF TREASURY, Garnishee.

OPINION AND ORDER

SEAN F. COX, District Judge.

I. INTRODUCTION

This matter is before the Court on Defendant's Motion to Set Aside Default Judgment/Garnishment [dkt. 13]. Plaintiff responded to the motion. Defendant failed to file a reply. The Court finds that the facts and legal arguments are adequately presented in the parties' papers such that the decision process would not be significantly aided by oral argument. Therefore, pursuant to E.D. Mich. L.R. 7.1(f)(2), it is hereby ORDERED that the motion be resolved on the briefs submitted, without oral argument. For the following reasons, Defendant's motion is DENIED.

II. BACKGROUND

On December 18, 2013, the United States Government ("Plaintiff") filed a complaint against Defendant Derrick Derrico ("Defendant"), alleging Defendant owed $2, 461.37 [dkt. 1]. On March 4, 2014, Plaintiff filed a motion for alternate service, indicating that service of process had been attempted but had not been provided to Defendant pursuant to Rule 5(b) of the Federal Rules of Civil Procedure and Michigan Court Rule 2.105 [dkt. 3]. Plaintiff requested that the Court allow alternative service of the summons and complaint at Defendant's last known address: 16216 Whitcomb Street, Detroit, Michigan 48235 (the "Whitcomb Address"). See Dkt. # 3, p. 1. Plaintiff submitted evidence that the Michigan Driver License Records and Wayne County Assessment Records indicated that the Whitcomb Address was Defendant's last known address. See Id. at Ex. C-D.

On March 6, 2014, the Court granted Plaintiff's motion for alternate service (the "Alternate Service Order") [dkt. 4]. In the Alternate Service Order, the Court instructed Plaintiff that service of process of the summons and complaint - along with a copy of the Alternate Service Order - could be made by any of the following methods: 1) First class mail sent to the Whitcomb Address; 2) Certified Mail with return receipt requested sent to the Whitcomb Address; and 3) Tacking or firmly affixing to the door at the Whitcomb Address. The Court additionally required that, for each method used, proof of service must be filed with the Court. On March 27, 2014, Plaintiff filed a certificate of service with the Court, indicating that copies of the summons, complaint and the Alternate Service Order had been posted on the door of the Whitcomb Address [dkt. 5].

On May 19, 2014, Plaintiff filed a request for clerk's entry of default [dkt. 6] and a request for clerk's entry of judgment by default with affidavit of sum certain [dkt. 7]. The same day the Clerk entered default and judgment by default [dkts. 8-9]. On June 6, 2014, Plaintiff submitted an application for writ of continuing garnishment [dkt. 10]. The same day, the Clerk entered a writ of continuing garnishment [dkt. 11]. On July 2, 2014, Plaintiff filed a certificate of service, indicating Plaintiff had been served with the application for writ of garnishment, the Clerk's notice of garnishment, the writ of continuing garnishment and the request for hearing forms by first class mail sent to the Whitcomb Address [dkt. 12].

On July 23, 2014, Defendant filed the instant motion [dkt. 13]. In Defendant's one-page motion, he states that he received a "letter of intent to lien/and garnish my wages" on July 17, 2014. See Dkt. # 13, p. 1. Defendant argues that this letter was sent to the wrong address, "a home that I no longer reside in and I haven't lived in for over 10 years." Id. Defendant asserts that he did not know he had "a debt of this nature." Id. Defendant then asks that the default judgment and garnishment be set aside. Defendant also insists that the matter should be sent to his "local jurisdiction City of North Las Vegas, NV." Id. Defendant makes no request for a hearing, and does not include any further argument as to why the default judgment and continuing writ of garnishment should be set aside or why the venue should be changed.

Plaintiff asserts that Defendant's motion must be denied. Plaintiff first contends that it served Defendant pursuant to the Order for Alternate Service. Additionally, Plaintiff states that Defendant reached out to Plaintiff by telephone in early 2013 after Plaintiff sent a demand notice to the Whitcomb Address. See Dkt. # 14, p. 2 n.1. In this telephone conversation, Plaintiff contends Defendant stated he was living in California but refused to give Plaintiff his California address. Id. Additionally, Plaintiff alleges that Defendant stated the Whitcomb Address belonged to his grandmother and that a family member lived there. Id. Plaintiff argues therefore that service at the Whitcomb Address was both in line with the Court's Order for Alternate Service and provided actual notice to Defendant.

Additionally, Plaintiff insists the writ of continuing garnishment should not be set aside and a change of venue should not be granted. Plaintiff contends that this garnishment will have no effect on Defendant's State of Michigan income tax refunds if he has truly lived in Nevada for the past 10 years. Further, Plaintiff asserts that Defendant has provided no valid objection to the garnishment, and has provided no evidence to support a change of venue. Accordingly, Plaintiff asserts the Court's default judgment and writ of continuing garnishment should not be set aside, and that venue should not be changed.

III. LEGAL STANDARD

A. FEDERAL RULES OF CIVIL PROCEDURE 55(c) AND 60(b)

Rule 55(c) of the Federal Rules of Civil Procedure indicates that the Court may set aside a default judgment using the factors contained in Rule 60(b). The Sixth Circuit recently specified that Rule 55(c) "permits a court to set aside a default or default judgment for good cause, versus the application of Rule 60(b), which grants relief from final judgments." Dassault Systemes, SA v. Childress, 663 F.3d 832, 838-9 (6th Cir. 2011). In Dassault, the Sixth Circuit also provided that, "[u]nder either [Rule 55(c) or Rule 60(b)], our review invokes the well-established factors set forth in United Coin Meter Co. v. Seaboard Coastline Railroad, which assess whether[:]

1) the default was willful,
2) a set-aside would prejudice ...

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