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United States v. Barrow

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

March 30, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
THOMAS J. BARROW, Defendant.

          MEMORANDUM AND ORDER DENYING DEFENDANTS' MOTION TO SET ASIDE CLERK'S ENTRY OF DEFAULT (DOC. 9) [1]

          AVERN COHN UNITED STATES DISTRICT JUDGE.

         I.

         This is a debt collection case. Plaintiff, the United States of America (the government) sued to collect on a tax debt owed by defendant Thomas J. Barrow. As will be explained, defendant did not appear or otherwise defended the case. Accordingly, the Clerk entered a default against defendant and eventually, a default judgments.

         Before the Court is defendant's motion to set aside the Clerk's entry of default (Doc. 9). For the reasons that follow, the motion is DENIED.

         II.

         In 2016, the government brought this action to reduce to judgment defendant's joint federal income tax liabilities for 2004-12 and 2014, as well as his individual federal income tax liabilities for 1987-88.[2]

         On November 25, 2016, the government filed its complaint. (Doc. 1). On November 28, 2016, the government's counsel mailed defendant copies of the Complaint, FRCP 4, the standard form Notice of a Lawsuit and Request to Waive Service of a Summons (AO 398) (Notice of Waiver), two copies of the standard form Waiver of the Service of Summons (AO 399) (Waiver Form), a stamped, self-addressed envelope, and a cover letter. The cover letter requested that the defendant return the signed Waiver Form by December 28, 2016. See Exhibits 2, 3 to defendant's motion.

         On January 11, 2017, the government's counsel filed the signed Waiver Form that he received in the mail from defendant. (Doc. 3). The Waiver Form, which is signed by Defendant, states that “I also understand that I, or the entity I represent, must file and serve an answer or a motion under Rule 12 within 60 days from 11/28/16, the date when this request was sent….If I fail to do so, a default judgment will be entered against me or the entity I represent.” See Exhibit 2 to defendant's motion. Thus, defendant had 60 days from November 28, 2016, or January 27, 2017 in which to file an answer or other response to the complaint. Similarly, the Notice of Waiver states that “you will have 60 days from the date this notice is sent (see the date below) [November 28, 2016] to answer the complaint.” See Exhibit 2 to defendant's motion. Defendant did not file an answer or otherwise appear in the case by January 27, 2017.

         Accordingly, on February 2, 2017, the government filed a Request for Clerk's Entry of Default. (Doc. 4). The request was served on defendant by U.S. Mail sent to the address shown on the signed Waiver Form. The Clerk entered default the next day, on February 3, 2017. (Doc. 5).

         On February 13, 2017, the government then filed a Request for Clerk's Entry of Default Judgment. (Doc. 6). A copy of the request was served on defendant by U.S. Mail sent to the address shown on the signed Waiver Form. The Clerk entered default judgment the same day, on February 13, 2017. The judgment is in the amount of $385, 056.09 plus applicable interest for unpaid joint federal income tax liabilities for 2004-2012 and 2014 and $653, 984.93 plus applicable interest for unpaid individual federal income tax liabilities and civil fraud penalties for 1987 and 1988. (Doc. 8).

         Eleven days after entry of default judgment, on February 24, 2017, defendant filed the instant motion. (Doc. 9). The government, at the Court's request, filed a response. (Doc. 11).

         III.

         At the outset, defendant incorrectly treats his motion as seeking relief from Clerk's entry of default, when in fact default judgment has already been entered. Thus, the standard applicable to setting aside ...


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