United States District Court, E.D. Michigan, Southern Division
Stephen Whalen Magistrate Judge.
ORDER DENYING DEFENDANT’S MOTION TO SET ASIDE
DEFAULT JUDGMENT 
J. Tarnow Senior United States District Judge.
April 8, 2008, Plaintiff, the United States, brought this
student loan case against Defendant, Darryl Miller, to
collect funds owed from a 1982 student loan reinsured by a
Department of Education loan guaranty program. [Dkt. #1]. A
Clerk’s Entry of Judgment by Default was entered
against Mr. Miller on May 27, 2008 , but it was vacated
[8, 9] on July 30, 2008. The United States filed a Motion for
Summary Judgment  on November 21, 2018. Mr. Miller never
responded, even after the Court issued an Order for him to
Show Cause Why He Should Not be Held in Default for Failure
to Respond to Plaintiff’s Motion for Summary Judgment
 on February 26, 2009. On May 21, 2009, the Court granted
 Plaintiff’s Motion for Summary Judgment, and, on
May 22, 2009, it issued a Judgment  against Mr. Miller in
the amount of $30, 248.87.
Miller appealed  the judgment against him, but while the
appeal was pending he negotiated a settlement with the United
States at an objection to a garnishment hearing on March 25,
2010. He dismissed  his appeal on May 11, 2010. Though
the executed terms of the settlement do not appear on the
record, the parties’ recent briefing have made clear
that Mr. Miller paid a lump sum in 2009 and then was to pay
$150.00 per month thereafter in consideration of the
reduction of his debt to $20, 863.68. (Dkt. 87-1). Both
parties agree that Mr. Miller ceased to make his monthly
payment following his bankruptcy. (See Dkt. 84 & 86).
Plaintiff claims that it last received a payment of $22.52 in
July 2017. (Dkt. 86, pg. 3).
6, 2019 Plaintiff filed a Request  for the issuance of a
continuing writ of garnishment against Mr. Miller and the
garnishee. Mr. Miller objected  to the writ, and the
Magistrate Judge held a hearing on the objection on February
28, 2019. The Magistrate Judge then issued a Report and
Recommendation (“R&R”)  advising the
Court to deny the Objection. Mr. Miller objected  to the
R&R, but the Court overruled the objection and adopted
the R&R on April 19, 2019 . It denied a petition for
rehearing on May 6, 2019 .
the February 28, 2019 Motion to Set Aside Default Judgment
 was originally referred to the Magistrate Judge, the
Court rescinded its Order of Referral on September 13, 2019
. In this motion, Mr. Miller argues that the United
States, through the actions of the IRS, prevented him from
making his monthly payments on his debt. He asks for the
default judgment, presumably the Court’s May 22, 2009
Judgment, to be set aside, and the settlement agreement to be
reinstated. The United States has expressed a willingness to
settle with Plaintiff again if it receives updated financial
information, which the Court suggested Mr. Miller provide in
its May 19, 2019 Order. (See Dkt. 92, pg. 3). Mr.
Miller argues that since the United States was responsible
for the breach of the settlement agreement, it should be
estopped from proceeding against Mr. Miller under that
breach. Nevertheless, this is not the proper forum for Mr.
Miller to litigate problems arising from his bankruptcy or
his relationship with the IRS.
the May 22, 2009 Judgment against Mr. Miller was entered
before the parties entered into their settlement agreement.
The reinstatement of that agreement would therefore do
nothing to set aside that judgment. Mr. Miller has not
demonstrated how Plaintiff is responsible for his failure to
make his monthly payments. He provides no evidence that any
of the creditors in his bankruptcy case had a duty to ensure
he had sufficient funds to make his monthly payments to
Plaintiff, and he does not explain what the legal
significance of that duty would be in this case had it
existed. In short, Mr. Miller has provided no legal grounds
under Fed.R.Civ.P. 60 to set aside the judgment against him.
March 20, 2018, Defendant filed an Addendum  in support
of his motion. In addition to the arguments summarized above,
Defendant petitioned the Court to allow a payment plan with a
smaller monthly payment amount. The Court will allow whatever
payment plan Mr. Miller negotiates with Plaintiff, but it
cannot force Plaintiff to enter into a new settlement
agreement. Nor can it force Plaintiff to waive its
requirement that Mr. Miller file a financial statement, a
requirement that Plaintiff asserts is rooted in 31 C.F.R.
902.2 & 903.2. (See Dkt. 87, pg. 4).
IT IS ORDERED that Mr. Miller’s Motion
to Set Aside Default Judgment, Improperly and Fraudulently
Entered, and to Reinstate Settlement Agreement  is