United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER DENYING DEFENDANT'S MOTION TO
SET ASIDE JUDGMENT [ECF NO. 36]
V. PARKER U.S. DISTRICT JUDGE
December 11, 2012, the government filed a Complaint against
Defendant Dennis I. Brown (“Defendant”) for
failure to pay his student loan debt with the Department of
Education. (ECF No. 1.) On March 5, 2013, the clerk entered a
default judgment against Defendant, and the government began
collection efforts. (ECF Nos. 9, 15.) Defendant contends his
student loan debt was discharged pursuant to the school
closing exception as authorized in 34 C.F.R. §§
674.33, 682.402, and 685.214.
before the Court is Defendant's Motion to Set Aside the
Judgment, filed April 25, 2017. (ECF No. 36.) The Government
filed a response on May 19, 2017. (ECF No. 40.)
December 1988, Defendant was enrolled at the National
Technical Institute in Detroit, MI. (ECF No. 40 at Pg ID
140.) On December 15, 1988, Defendant took out two student
loans: $3, 095.00 from Bank of America, guaranteed by North
Star Guarantee, Inc., and $2, 625.00 from Aetna Bank,
guaranteed by Great Lakes Higher Education Corporation.
(Id.) Both loans were ultimately reinsured by the
Department of Education. (Id.) According to a loan
officer at Great Lakes Higher Education Corporation,
Defendant withdrew from the school on April 15, 1990. (ECF
No. 40 at Pg ID 172; ECF No. 36 at Pg ID 111.) The school was
closed on August 15, 1991. (ECF No. 40 at Pg ID 138; ECF No.
36 at Pg ID 104.)
government filed a Complaint based on Defendant's failure
to pay his student loan obligations on December 11, 2012.
(ECF No. 1.) At the time of the filing of the Complaint,
Defendant owed a total of $17, 277.09 in student loan debt.
(Id. at Pg ID 1-2.) The Clerk entered default and
default judgment against Defendant on March 5, 2013. (ECF No.
request of the government, on July 29, 2013, the Court issued
a writ of continuing garnishment to Oakland Stamping, LLC,
Defendant's employer at the time. (ECF No. 15.) On August
19, 2013, Judge Gerald E. Rosen ordered Oakland Stamping, LLC
to remit twenty-five percent of Defendant's income to the
government. (ECF No. 18 at Pg ID 52.) Also on August 19,
2013, Defendant filed an objection to the garnishment,
claiming he was not liable for the student loan debt because
the school had closed. (ECF No. 19.) On August 27, 2013, the
matter was referred to Magistrate Judge David R. Grand. (ECF
September 27, 2013, Magistrate Judge Grand held a hearing on
the garnishment and stayed the garnishment for thirty days
based on Defendant's claim that he was exempt from
replaying the student loan debt. The hearing was finally held
on February 14, 2014, and Magistrate Judge Grand denied
Defendant's motion as moot because Defendant was no
longer employed by Oakland Stamping, LLC. (ECF No. 29 at 70.)
In light of the objection to the garnishment being moot and
because Defendant had not contested the judgment, Magistrate
Judge Grand declined to address the school closing exception.
(ECF No. 38 at 126-27.)
request of the government, on July 15, 2014, the Court issued
a writ of continuing garnishment to the State of Michigan.
(ECF No. 33.) Defendant filed a motion to set aside the
judgment on April 25, 2017, and the government filed a
response on May 19, 2017. (ECF Nos. 36, 40.)
Applicable Law & Analysis
Civ. P. 60(b) provides relief from a judgment under the
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable
diligence, could not have been discovered in time to move for
a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic),
misrepresentation, or misconduct ...