BIGELOW v WALRAVEN
Supreme Court of Michigan
September 6, 1974
392 Mich. 566 | 221 N.W.2d 328
Docket Nos. 54,920, 54,921
OPINION OF THE COURT
1. LIMITATION OF ACTIONS—DEFENSES—AFFIRMATIVE DEFENSES.
The statute of limitations is not a disfavored plea but a perfectly righteous defense, a meritorious defense, that may, like other affirmative defenses, be raised tardily.
2. PLEADING—AMENDMENTS—CONDITIONS—STATUTES.
The statute authorizing a trial court to allow prejudgment amendment of a pleading for the furtherance of justice, on such terms as shall be just, has been regarded as authorizing a judge to impose conditions when allowing an amendment (
3. PLEADING—DEFAULT—SETTING ASIDE DEFAULT—CONDITIONS—AMENDMENT.
A judge may properly attach as a condition for the setting aside of a defendant‘s default only those conditions necessary to prevent advantage to the tardy defendant and to relieve the plaintiff of prejudice attributable to defendant‘s delay in answering or in proferring his amended pleading; he may not attach a wholly irrelevant condition.
4. PLEADING—DEFAULT—SETTING ASIDE DEFAULT—CONDITIONS—DISCRETION—DEFENSES—LIMITATION OF ACTIONS.
A trial judge abused his discretion in establishing as the condition for the setting aside of a defendant‘s default that the defendant file an answer to an amended complaint excluding defenses based on the statute of limitations, where the condition he imposed bore no relationship to any adverse conse-
5. LIMITATION OF ACTIONS—PURPOSES—STATUTES.
Statutes of limitations are intended to compel the exercise of a right of action within a reasonable time so that the opposing party has a fair opportunity to defend; to relieve a court system from dealing with “stale” claims, where the facts in dispute occurred so long ago that evidence was either forgotten or manufactured; and to protect potential defendants from protracted fear of litigation.
6. JUDGMENT—DEFAULT JUDGMENT—DEFAULT PROCEDURES—PURPOSES.
Default procedures serve to keep the dockets current, to expedite the disposal of causes, thereby preventing a dilatory or procrastinating defendant from impeding the plaintiff in the establishment of his claim.
DISSENTING OPINION
T. G. KAVANAGH and WILLIAMS, JJ.
7. PLEADING—AMENDMENT—COURT RULES—DEFAULT—SETTING ASIDE DEFAULT—COSTS—CONDITIONS.
Court rule regarding amended and supplemental pleadings does not provide for the imposition of conditions but a subrule concerning setting aside a default does and this difference is deliberate; amendment of pleadings is for the most part intended to assure accuracy and completeness in the presentation of the whole controversy on its merits and no good purpose occurs to the Michigan Supreme Court to warrant imposing conditions for allowing it; default rules are intended to keep a case moving to conclusion and the rule provides for the imposition of costs and other conditions as sanctions to make the rules effective (
8. PLEADING—DEFAULT—SETTING ASIDE DEFAULT—COURT RULES—DISCRETION—APPEAL AND ERROR.
The true intent of a subrule regarding setting aside a default and
9. PLEADING—DEFAULT—SETTING ASIDE DEFAULT—CONDITIONS—DISCRETION—LIMITATION OF ACTIONS.
Trial judge did not abuse his discretion in establishing the condition for the setting aside of the defendant‘s default, that defendant file an answer to the amended complaint excluding defenses or affirmative defenses to plaintiffs’ amended complaints based on any statute of limitations where the trial judge concluded that since each of the parties in turn had failed to meet an arbitrarily established deadline for pleading neither should be entitled to take advantage of the other‘s delinquency, but rather both should try the case on its merits and the Michigan Supreme Court should not say that this is an arbitrary or unreasonable attitude.
Appeal from Court of Appeals, Division 3, Fitzgerald, P. J., and R. B. Burns and Holbrook, JJ., denying application for leave to appeal from Saginaw, Hazen R. Armstrong, J. Submitted May 8, 1974. (No. 5 May Term 1974, Docket Nos. 54,920, 54,921.) Decided September 6, 1974.
Complaints by Dorothy Bigelow and John Bigelow and by John Bigelow, individually, against William Walraven and others for damages for injuries sustained in an automobile accident and for medical expenses. Saginaw County Board of Road Commissioners added as a defendant. Default entered against the road commissioners for failure to plead. Default set aside on condition that road commissioners file their answer to the amended complaint excluding defenses or affirmative defenses to plaintiffs’ amended complaints based on any statute of limitations. Defendant road commissioners’ application for leave to appeal denied by
Derrick Eaton, for plaintiffs.
Collison & Fordney, P. C., for defendant Saginaw County Board of Road Commissioners.
LEVIN, J. My colleague, Mr. Justice THOMAS GILES KAVANAGH, would hold that a trial judge may condition an order setting asidе a default, entered following defendant‘s failure to answer a complaint, on defendant not pleading the statute of limitations.
He states that a condition depriving defendant of the defense of the statute of limitations is not “wholly arbitrary and unreasonable” because the statute of limitations itself establishes an arbitrary deadline; a trial judge does not act arbitrarily or unreasonably in relieving a plaintiff of a failure to meet an “arbitrarily established deadline” so that the case can be tried “on its merits“.
The issue before us would be clearer if the judge had instead conditioned the setting aside of the default on the elimination of some other affirmative defense, e.g., contributory negligence, payment, release, discharge, fraud, duress, estoppel, statute of frauds or illegality.
If, for example, defendant claimed that he had settled with the plaintiff and paid the agreed-upon amount and the judge had conditioned setting aside of the default on waiver of that defense, we would all probably agree that was “wholly arbitrary and unreasonable“. Why the difference here? It is beсause of misgivings about the statute of limitations. As one who has himself been led
My colleague says this is a matter of discretion. In a somewhat similar context, I wrote and others concurred:
“If we were to recognize a judge‘s personal view of a claim or defense as a valid reаson for rejecting an amendment, we would find it difficult to explain why his personal view should not also be relevant in assaying a claim or defense raised in the initial pleading.
“An individual judge may not properly substitute his personal view of justice and sound public policy for the statutory, or common-law or court rule meant to apply.” Ben P Fyke & Sons v Gunter Co, 390 Mich 649, 659-660; 213 NW2d 134 (1973).
Fyke is distinguished on the ground that it concerned amendment of a pleading and relevant Rule 118 does not expressly provide for the imposition of conditions, while Rule 520.4, concerning setting aside of defaults, does explicitly so provide. My colleague states, “[t]his difference is deliberate“:
“Amendment of pleadings is for the most part intended to assure accuracy and completeness in the presentation of the whole controversy on its merits. No good purpose occurs to us to warrant imposing conditions for allowing it.”
Yet he discusses, with seeming approval, an earlier opinion recognizing a judge‘s power to “impose just and reasonable terms as a condition precedent to the amendment“. Beecher v Wayne Circuit Judges, 70 Mich 363, 369; 38 NW 322 (1888).
FR Civ P, 15(a), the source of Rule 118,8 similarly contains no express authorization for a trial
II
My colleague sees rough or poetic justice in relieving the road commission of its default only on the condition that it not plead plaintiffs’ “default” in failing timely to file the сomplaint. His reasoning would permit a judge to refuse to allow the defense of the statute of limitations whenever a defendant fails timely to answer. The statute of limitations could then be raised, by amendment or
If it is sound public policy to allow the defense of statute of limitations only if it is raised in a timely-filed answer, we should not leave the matter to discretion. It would be better to amend the General Court Rules to provide that trial judge authority to allow pleading amendments and setting aside of a default does not extend to allowance of an amendment or late-filed answer which sets up the defense of statute of limitations. This unique exception to the general policy of encouraging the allowance of amendments and setting aside of defaults would be without viable precedent, but would be better than for allowance of the defense in such case to become a matter of judicial grace.
A judge may properly attach only those conditions necessary to prevent advantage to the tardy defendant and to relieve the plaintiff of prejudice attributable to defendant‘s delay in answering or in proferring his amended pleading. He may not attach a wholly irrelevant condition.
Strauss v Douglas Aircraft Co, 404 F2d 1152, 1158 (CA 2, 1968) illustrates both that whether a statute of limitations defense may be raised belatedly does not rest entirely in trial judge discretion and that the principle which should guide its exercise is avoidance of advantage to defendant and prejudice to plaintiff. There, had defendant timely raised this defense, plaintiff could have timely commenced his action elsewhere. The United States Court of Appeals held “that because of the substantial prejudice to Strauss caused by Douglas’ excessive delay in raising the Statute of Limitations defense, the court below abused its discretion in permitting Douglas to amend its answer“.
The trial judge abused his discretion in this case because the condition he imposed bore no relationship to any adverse consequence suffered by the plaintiffs as a result of the road commission‘s default.11 The condition does not restore the plaintiffs to the position they would have been in had the road commission timely answered, but, rathеr, places them in a vastly superior position. Default is not “a procedure intended to furnish an advantage to the plaintiff so that a defense may be defeated or a judgment obtained without the difficulty that arises from a contest by the defendant“.12
The question now before us was presented in Detroit v Wayne Circuit Judge, 112 Mich 317, 319; 70 NW 894 (1897). The trial court, in setting aside the city‘s default, struck a notice, accompanying the city‘s plea, that it would defend on the ground that it had not received timely notice of injury. This Court reversed because once the judge determined that the city had a right “to make defense to the action, * * * it was not within his disсretion to limit its defense in the manner set forth“.
In the instant case, the trial court erroneously equated the “default” of the plaintiffs to commence their action against the road commission until 8 years after the accident with the default of the road commission in failing to answer within 20 days, a lapse it sought to rectify 14 days after entry of the default.
Default procedures serve to “keep the dockets current“, “to expedite the disposal of causes, thereby preventing a dilatory or procrastinating defendant from impeding the plaintiff in the establishment of his claim“.14
The road commission‘s immediate effort to set aside the default fulfills the deterrent purpose of the default mechanism. After a short delay caused by inadvertence,15 the case can move toward dispo-
In contrast, conditioning the setting aside of the default on waiver of the statute of limitations defense defeats the purposes of the time limitation. The road commission will be required to defend against a “stale claim“, a claim of which it had no nоtice until eight years after the accident.
During this period, while the plaintiffs were presumably interviewing witnesses and gathering evidence for trial, the road commission may have passed up similar opportunities because it did not realize it had any exposure. Its ability to cross-examine the plaintiffs’ witnesses and to have “a fair opportunity to defend” may have been impaired.16
The order of the trial court is reversed to the extent it precludes the road commission from asserting a defense and the cause is remanded for trial.
T. M. KAVANAGH, C. J., and SWAINSON and M. S. COLEMAN, JJ., concurred with LEVIN, J.
T. G. KAVANAGH, J. (dissenting). On November
On September 9, 1966, plaintiffs instituted suit against the Saginaw County Drain Commissioner and the Walravens.
On June 26, 1972, an order was entered adding as a defendant, the Board of County Road Commissioners. On August 8, 1972, the first amended complaint was filed and served on defendant road commissioners on August 11, 1972. The default of defendant road commissioners was entered on September 5, 1972 for failure to pleаd within 20 days.
The road commissioners moved to set aside the default and after a hearing the trial court issued an order setting aside the default on the condition that the road commissioners plead to the merits and not plead the statute of limitations defenses.
The Court of Appeals denied leave to appeal, but we granted leave to consider the single question of the propriety of the trial court‘s conditional order.
“Any order setting aside such default shall be conditioned upon the party against whom the default was taken рaying the taxable costs incurred by the other party in reliance upon the default, except as prescribed in sub-rule 526.8. Other conditions may be imposed as the court deems proper.” (Emphasis added.)
The plaintiffs maintain that since the road commissioners did not present a reasonable excuse for the failure to comply with the requirements which created the default, they were not entitled to have the default set aside, and accordingly cannot complain about any reasonable condition the court might impose for granting their petition.
Of these cases, Detroit and Clark are concerned with setting aside defaults and Beecher is concerned with the amendment of pleadings.
In Detroit v Wayne Circuit Judge, supra, the Court said at 319:
“The court having determined that the city of Detroit had the right to make defense to the action, we think it was not within his discretion to limit its defense in the manner set forth.”
It cited neither authority nor reason for its holding, and no reason to support it appears to us. That holding has been cited only in Clark, supra, and even there, as we read Clark, was not followed.
While Beecher, supra, was concerned with attaching conditions to the allowance of a motion for permission to amend pleadings, and its positions as authority on that question has been greatly weakened if not destroyed by overrulement sub silentio in Ben P Fyke & Sons v Gunter Co, 390 Mich 649; 213 NW2d 134 (1973), it nevertheless set forth a standard to be used in determining the propriety of imposing conditions on the grant of a motion.
In Beecher, the Court said at 369:
“The inquiry for the court, when a motion for an
amendment is made, should be, is it in the furtherance of justice to allow it? Will it better permit the party to present his case or make his defense upon the merits? And ought he now to be permitted to make such a case or such a defense? And this statute in determining this question should be construed liberally. This being judicially determined, the court may impose just and reasonable terms as a condition precedent to the amendment.”
In an area where it is contemplated that conditions may be imposed, this establishes an appropriate standard for imposing them. It seems to be the standard used by the Federal courts in testing discretion exercised under Rules 55(c) and 60(b), Federal Rules of Civil Procedure, which were the model for our
This appears to be the standard used by the trial judge here. In his opinion explaining his ruling, after concluding the affidavit of facts was defective, Judge Armstrong said:
“The Board of Road Commissioners goes on to point out that it also wants to raise as meritorious defenses the two year and three year statutes of limitations pertaining to tort actions against the Board of Road Commissioners and to tort actions generally. The Board of Road Commissioners is saying that the Plaintiffs are in default of filing their action against the Board of Road Commissioners within the two year and three year statutes of limitations. The plaintiffs claim that had it not been for the now unconstitutional sixty day limitation for the giving of notice of intent to file suit against the Board of Road Commissioners and the plaintiffs’ ignorance of that requirement, that they would have filed their action against the Board of Road Commissioners before the expiration of the two year limitation statute for such actions.
“So now we have a situation where the plaintiffs were in default and where the defendant Board of Road Commissioners is now also in default. Both the plaintiffs and said defendants now are asking the Court to permit them to raise meritоrious defenses against each other. If the default of the Board of Road Commissioners is set aside without conditions imposed upon their defense, they will be in the unique position of now being able to raise the prior default of the plaintiffs in failing to file an action within the statutes of limitations and the plaintiffs will no longer have the advantage or the benefit of the defendant Board of Road Commissioners’ present default. In view of the defaults of both parties it would seem that such a result would be neither equitable nor just insofar as plaintiffs are concerned. Any old default through ignorance on the part of the plaintiffs is certainly no greater a default then [sic] the present default of the defendant Board of Road Commissioners, particularly in view of their inadequate affidavit of facts and affidavit of merits.”
We do not regard the considerations which moved the majority of us in Fyke, supra, as controlling here.
Amendment of pleadings is for the most part intended to assure accuracy and completeness in the presentation of the whole controversy on its merits. No good purpose occurs to us to warrant imposing conditions for allowing it.
Default rules are intended to keep a case moving to conclusion and the rule provides for the imposition of costs and other conditions as sanctions to make the rules effective.
We think the true intent of
In this case the trial judge concluded that since each of the parties in turn had failed to meet an arbitrarily established deadline for pleading neither should be entitled to take advantage of the other‘s delinquency, but rather both should try the case on its merits. We cannot say that this is an arbitrary or unreasonable attitude, and accordingly we hold that he did not abuse his discretion in establishing the condition for the setting aside of the defendant‘s default.
Affirmed with costs to plaintiffs.
WILLIAMS, J., concurred with T. G. KAVANAGH, J.
J. W. FITZGERALD, J., did not sit in this case.
Notes
“By the aid of such counsel the defense has gained in favor. It has been said that the statute of limitations should not be discriminated against but should be treated like any other defense. Thomas et al v Price, 33 Wash 459, 74 P 563, 99 Am St Rep 961 [1903]. This court has held it to be a meritorious defense and has affirmed a ruling allowing it to be set up by amendment. Houts et al v Bartle et al, 14 SD 322, 85 NW 591 [1901]. That ruling accords with the overwhelming weight of authority. 34 Am Jur 350; Walters v Webster, 52 Colo 549, 123 P 952, Ann Cas 1914A, 24 [1912]. See Wrightson v Dougherty, 5 Cal 2d 257, 54 P2d 13 [1936], and Davenport v Stratton, Cal Sup, [24 Cal 2d 232] 149 P2d 4 [1944].” FM Slagle & Co v Bushnell, 70 So Dak 250, 255-256; 16 NW2d 914, 916-917 (1944).
“In the exercise of its discretion, the court should also be able to prescribe conditions on which leave to amend will be granted, such as the time within which action must be taken, the method of trying issues interposed by the amendment, and the payment of expenses.” 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), Authors’ Comments, p 414.
“Unless otherwise provided by statute, it is ordinarily the rule that a court, in its discretion, may grant the right to amend on such terms and conditions as, in the circumstances, are reasonable, or it may grant leave to amend unconditionally and without terms.” 61 Am Jur 2d, Pleading, § 312, p 717.
“For good cause shown the court may set aside an entry of default and, if a judgment by default has been entered, may likewise set it aside in accordance with Rule 528.”
The rule further limits the setting aside оf a default, unless grounded on the absence of jurisdiction over the defendant, to instances where “good cause is shown and an affidavit of facts showing a meritorious defense is filed.”
Satisfaction of the “good cause” requirement is generally accomplished by showing “(1) a substantial defect or irregularity in the proceedings upon which the default was based, (2) a reasonable excuse for failure to comply with the requirements which created the default, or (3) some other reason showing that manifest injustice would result from permitting the default to stand“. Authors’ Comments, 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed) p 662.
The Clerk of the Board of Road Commissioners filed an affidavit asserting that the plaintiffs’ complaint was served on him together with another complaint in an unrelated matter. The process server made no mention that there were two separate complaints and the clerk believed that the plaintiffs’ complaint was just a duplicate of the other. He therefore “inadvertently failed” to forward plaintiffs’ complaint to the insurance carrier resulting in the road commissions’ failure timely to answer.
Plainly a judgment shоuld not be entered against the road commission in consequence of this inadvertent failure to answer. The road commission has advanced a “reasonable excuse for failure to comply with the requirements which created the default” and should be given an opportunity to defend. The affidavit shows a meritorious defense, including the statute of limitations.