MoneyForLawsuits V LP v. Tammy Rowe

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 14a0449n.06
No. 12-2319
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
MONEY FOR LAWSUITS V LP, et al., ) FILED
) Jun 19, 2014
Plaintiffs-Appellees, ) DEBORAH S. HUNT, Clerk
)
v. )
ON APPEAL FROM THE UNITED
)
STATES DISTRICT COURT FOR THE
TAMMY ROWE, et al., )
EASTERN DISTRICT OF MICHIGAN
)
Defendants-Appellants. )
)
)
BEFORE: DAUGHTREY, KETHLEDGE, and DONALD, Circuit Judges.
PER CURIAM. MoneyForLawsuits V LP, doing business as MFL CaseFunding, and
Guardian Advisors LP II, doing business as MFL Case-Funding (collectively, CaseFunding), are
engaged in the business of investing in lawsuits by purchasing a contingent right to receive a
portion of a plaintiff=s settlement or judgment proceeds. CaseFunding invested in a class-action
lawsuit that the defendants in this action — Tammy Rowe, also known as Tammy Lacross; Carrie
Flemion; Lura L. Gipson; Roxanne Lofton; Delores Madison; Wendy Garagiola; Pamela Moffit;
and Vivian Arousell — brought against the Michigan Department of Corrections by entering into
“contingent proceeds purchase agreements,” through which the defendants assigned to
CaseFunding their rights to potential proceeds from their lawsuit. The class action settled for
$100 million, but the class members who had contracted with CaseFunding refused to pay in
accordance with the parties’ agreement. CaseFunding filed suit for breach of contract in federal
district court and successfully pursued a motion for summary judgment. The defendants now
appeal that ruling, and defendant Rowe also appeals the district court’s entry of default judgment
against her.
No. 12-2319
Money for Lawsuits v. Rowe
The defendants’ arguments are unavailing. They contend, first, that the district court
should have applied Michigan law instead of New York law, in spite of the agreement in the
contract that New York law would control. After making the appropriate analysis, the district
court applied New York law, finding that it was not in conflict with fundamental Michigan public
policy and that Michigan did not have a materially greater interest in the outcome of this case than
did New York. See Chrysler Corp. v. Skyline Indus. Servs., Inc., 528 N.W.2d 698, 703-04 (Mich.
1995). Because New York law controlled, we need not address the defendants’ argument that the
contracts were void as usurious under Michigan law. Thus, for the reasons given by the district
judge, we affirm the grant of summary judgment to CaseFunding.
We also affirm the district court’s entry of default judgment against Rowe for failure to
defend. In denying Rowe’s motion to set aside the default judgment, the district court recognized
that the Federal Rules of Civil Procedure permit a court to set aside a default judgment under the
limited circumstances set out in Rule 60(b). In this case, only the first — permitting relief when
there has been “mistake, inadvertence, surprise, or excusable neglect,” Fed. R. Civ. P. 60(b)(1) —
is relevant. But, Rowe made no attempt to make the required showing under Rule 60(b)(1) in the
district court, nor has she done so on appeal. Although Rowe offers various justifications for
setting aside the default judgment, “factors such as whether a defendant has a meritorious defense
and prejudice to the plaintiff” are not relevant under Rule 60(b)(1) unless the party first
demonstrates excusable neglect, mistake, surprise, or inadvertence. United States v. Reyes,
307 F.3d 451, 456 (6th Cir. 2002). Rowe has failed to do so.
The magistrate judge’s report ably set out the facts and relevant legal principles at length
and recommended that judgment should be entered in favor of the plaintiffs. After ruling on the
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No. 12-2319
Money for Lawsuits v. Rowe
defendants’ objections to the report and recommendation, the district court adopted it. Having
studied the briefs and the record on appeal, we conclude that the issuance of another detailed
opinion by this court would be duplicative and would serve no useful purpose. Accordingly,
we AFFIRM the judgment of the district court based upon the reasoning set out by that court in
its opinion and order dated March 29, 2012, as well as the supplemental orders of judgment
dated March 16, April 16, and August 20, 2012.
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