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United States v. Brown

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

December 7, 2017

UNITED STATES OF AMERICA, Plaintiff,
v.
DENNIS I. BROWN, A.K.A DENNIS BROWN, A.K.A DENNIS IVERY BROWN, Defendant.

          OPINION AND ORDER DENYING DEFENDANT'S MOTION TO SET ASIDE JUDGMENT [ECF NO. 36]

          LINDA V. PARKER U.S. DISTRICT JUDGE

         On 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.

         Presently 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.)

         I. Background

         In 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.)

         The 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. 9.)

         At the 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 No. 20.)

         On 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.)

         At the 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.)

         II. Applicable Law & Analysis

         Fed. R. Civ. P. 60(b) provides relief from a judgment under the following circumstances:

(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 ...

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