United States District Court, W.D. Michigan, Southern Division
ORDER ADOPTING REPORT AND RECOMMENDATION, DENYING
MOTION TO SET ASIDE CONSENT JUDGMENT AND DENYING MOTION TO
L. Maloney United States District Judge.
Tammy Church filed a motion to set aside a consent judgment.
(ECF No. 53.) The matter was referred to the magistrate
judge, who held an evidentiary hearing. (ECF No. 82.) The
magistrate judge issued a report recommending the motion be
denied. (ECF No. 84.) Two parties filed objections.
being served with a report and recommendation (R&R)
issued by a magistrate judge, a party has fourteen days to
file written objections to the proposed findings and
recommendations. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P.
72(b)(2). A district court judge reviews de novo the portions
of the R&R to which objections have been filed. 28 U.S.C.
§ 636(b)(1); Fed.R.Civ.P. 72(b)(3). Only those
objections that are specific are entitled to a de novo review
under the statute. Mira v. Marshall, 806 F.2d 636,
637 (6th Cir. 1986) (per curiam).
Republic Title Insurance (ECF No. 85)
Republic objects to footnote 4 in the report and
recommendation. Specifically, Old Republic objects to the
magistrate judge's statement that a proposed consent
order filed with the Court would be moot should the Court
deny the motion to set aside the Agreed Final Order.
Republic's objection is AFFIRMED and the footnote R&R
will be modified to omit the footnote. Given the amount of
taxes owed to the IRS and the outstanding mortgage, Church
will likely not receive any proceeds from the sale of her
home beyond what the Agreed Final Order specifies. On that
assumption, the portion of the Consent Order that transfers
additional proceeds from Church to Old Republic would be an
event that would never occur. But, there are other provisions
in the Consent Order and those would not be rendered moot
were this Court to deny Church's motion to set aside the
Agreed Final Order.
Tammy Church (ECF No. 90)
has not objected to the portion of the Report and
Recommendation outlining the relevant legal standard and
burden of proof. A presumption exists that Church's
attorney acted with her authority. Accordingly, Church bears
the burden of proving that her attorney did not have the
authority to settle the case and to consent to the entry of
has objected to various proposed findings of fact. The Court
has reviewed her objections de novo. In addition to the
documents submitted by the parties, the Court has reviewed
the transcript of the evidentiary hearing. Church's
objections are overruled.
1 - Retainer Agreement. The retainer agreement speaks for
itself. The stated "goal of our representation" was
to reach an agreement with the IRS so that Church could sell
the house, excuse or eliminate the remaining tax obligation,
and stay in the home until it sold. Nothing in the retainer
agreement supports Church's assertion that the goals
outlined in the agreement would be pursued only after
discovery established that she was obligated to pay her
creditors the amount that they were demanding. In fact, one
of the phrases in the retainer on which Church relies
(Objection at 2 PageID.597)-"we will vigorously defend
your rights"-is followed immediately by language
undermining her assertion.
however, conceding your ultimate liability on taxes, there is
little to no likelihood that you will be able to defeat the
lien of the IRS or retain your home. You also understand that
in addition to the IRS, several other creditors have either
an unsecured interest or a secured interest in your home,
which would, regardless of our success with the IRS lien and
claim, have to be satisfied also, before you could retain
(ECF No. 61-1 PageID.324.)
purpose of Attorney Gezon's representation was to
negotiate a settlement. This makes intuitive sense. Between
the IRS and Old Republic, the allegation is that Church owes
approximately $1, 200, 000. (R&R at 11 PageID.565.) For
discovery to be useful in this situation, Church would have
to find evidence that would bring her obligations down by
more than half in order to simply satisfy her debts by
selling her house, which was worth approximately $500, 000.
answer to the complaint and Mediation Letter do not establish
that Church and her attorney reached any agreement about
discovery as a prerequisite to the authority to settle. The
fact that the attorney investigated the validity of the tax
liens (ECF No. 58-5 Mediation Letter PageID.294), albeit not
to Church's satisfaction, is not ...