Union Music Company Inc v. Allbco Inc
327339
| Mich. Ct. App. | Oct 18, 2016Background
- Plaintiff Union Music Company, Inc. obtained a default judgment against Allbco, Inc., with Daniel J. Gretka as resident agent, in Wayne Circuit Court.
- Daniel J. and Daniel W. Gretka appeal, challenging the entry of the default judgment and asserting improper representations of hearing dates by plaintiff's counsel.
- Appellants contend there was improper consolidation with a prior action and seek piercing of the corporate veil to impose personal liability on Daniel J.
- The court reviews preservation, default procedures, and consolidation under MCR 2.603 and MCR 2.505, and notes the appellant’s burden to present a complete record.
- The court finds no plain error in the default judgment, rejects arguments of improper consolidation, and upholds piercing the corporate veil based on Daniel J.’s control of Allbco, Inc.
- The court also holds that relitigation of contract issues is improper after a default judgment and finds no unethical conduct by plaintiff’s counsel.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was the default judgment properly entered? | Union Music asserts proper entry following notice and service; no error in lower court record. | Gretkas claim misstatements about hearing dates and potential errors in notice. | No plain error; default judgment properly entered. |
| Was there improper consolidation with a prior action? | No consolidation occurred; orders tracked separate proceedings. | Consolidation occurred without a formal order. | No merit; no indication of consolidation. |
| Should the corporate veil be pierced to impose personal liability on Daniel J.? | Daniel J. used Allbco, Inc. as an alter ego; veil piercing warranted. | Evidence insufficient to treat Allbco as alter ego or to justify piercing. | Veil piercing upheld; Daniel J. personally liable. |
| Was it improper to relitigate contract issues after default? | Default settles liability; further litigation on contract terms is improper. | Contracts at issue were paid; issues should be relitigated. | Properly barred; default resolution controls. |
Key Cases Cited
- Huntington Nat'l Bank v Ristich, 292 Mich App 376 (2011) (policy against setting aside properly entered defaults)
- Maiden v Rozwood, 461 Mich 109 (1999) (de novo review of summary disposition; record-wide considerations)
- Quinto v Cross & Peters Co, 451 Mich 358 (1996) (corporate veil and related equitable principles)
- Wells v Firestone Tire and Rubber Co, 421 Mich 641 (1984) (separate corporate entities generally respected; piercing allowed in limited circumstances)
- Florence Cement Co v Vettraino, 292 Mich App 461 (2011) (criteria for piercing the corporate veil; equitable remedy)
- Green v Ziegelman, 310 Mich App 436 (2015) (totality of evidence; alter ego factors; owner control and injustices)