440 F. App'x 452
6th Cir.2011Background
- Flynn sued multiple defendants (People’s Choice Home Loans, Wells Fargo, Ridele) in a Tennessee mortgage/foreclosure matter in federal court, asserting improprieties and seeking damages in a diversity action.
- After default judgments were entered against the defendants, the district court referred damages to a magistrate judge for determination.
- Flynn submitted two damage memos (one seeking $34.8 million, then $42 million) with no supporting documentation.
- Wells Fargo appeared and moved to set aside the default; the magistrate and district court ordered documentation of damages, but Flynn produced little credible evidence.
- The magistrate judge recommended no damages; the district court adopted, concluding Flynn failed to prove damages and time to prove damages had passed.
- On appeal, Flynn argues damages were proven, Wells Fargo could defend after default, and the district court abused its discretion on relief from judgment; the court affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Flynn proved damages after default | Flynn contends the record supports damages against Wells Fargo. | Wells Fargo contends Flynn failed to provide proof of damages. | No damages proven; district court did not abuse discretion. |
| Whether Wells Fargo could respond to damages after entry of default | Flynn argues Wells Fargo was barred from defending on damages. | Wells Fargo maintains it can respond to damages even after default on liability. | Wells Fargo may respond to damages; no abuse. |
| Whether the district court properly denied Flynn's Rule 60(b) motion for relief from judgment | Flynn claims relief due to purported medical condition affected understanding of procedures. | Wells Fargo argues no excusable neglect and lack of meritorious underlying claim. | No abuse of discretion; Rule 60(b) denied. |
| Whether the district court should have held a damages hearing or liberally construed pleadings | Flynn should have had a hearing to prove damages; pleadings should be liberally construed for pro se plaintiff. | Court properly managed damages with the record before it; no hearing required. | Court did not err; no damages proven; no hearing required. |
Key Cases Cited
- Antoine v. Atlas Turner, Inc., 66 F.3d 105 (6th Cir.1995) (default proves liability only; damages must be established)
- Burrell v. Henderson, 434 F.3d 826 (6th Cir.2006) (abuse of discretion standard for damages in default judgments)
- Steele v. Voyale Corp., 88 Fed.Appx. 916 (6th Cir.2004) (damages in default judgments require proof or evidence)
- Gumble v. Waterford Twp., 171 Fed.Appx. 502 (6th Cir.2006) (three-factor test for Rule 60(b) relief)
- Vesligaj v. Peterson, 331 Fed.Appx. 351 (6th Cir.2009) (hearing discretion in damages for default judgments)
- Frow v. De La Vega, 82 U.S. (15 Wall.) 552 (1872) (first-filed rule governs addressing counterclaims and damages)
- Smith v. Livingston Limestone Co., Inc., 547 S.W.2d 942 (Tenn.1977) (owner of real property competent to testify as to value)
- Airline Const. Inc. v. Barr, 807 S.W.2d 247 (Tenn.Ct.App.1990) (ownership testimony on property value admissible)
- Legg v. Chopra, 286 F.3d 286 (6th Cir.2002) (abuse of discretion standard for Rule 60(b) appeals)