*1 BROTHERS, SHAWLv SPENCE INC 7, 2008, Lansing. August May Docket 275271. Submitted at Decided No. 19, 2008, appeal sought. at 9:00 a.m. Leave to Mary brought against Spence an action James R. and B. Shawl Brothers, Inc., Electric, Inc., seeking damages and J. Ranck for injuries panel an electrical James Shawl suffered when under the working fell on his back while he control of J. Ranck Electric Spence Spence for a subcontractor of Brothers. Brothers for- insurer, Amerisure, complaint warded the Shawls’ to its but timely despite having complaint, Amerisure failed to answer the granted 30-day attorney. As a been extension Shawls’ result, court, Crane, J., against entered a default William A. Spence Spence Brothers. Brothers moved to set aside the default ground parties agreed on the that the extension to had which 14, 2006, changed August August 8, the deadline to rather than 2006; however, by August because no answer had been filed motion, trial court denied the and also denied a motion for Spence appealed. reconsideration. held,'. Appeals The Court of 1. The trial court’s decision on the motion to set aside the discretion, novo,because, default an is reviewed for abuse of not de although initially good-faith the court referred to a standard requiring good rather than the standard cause and a meritorious rule, ultimately defense that is set forth in the court the court applied Accordingly, the correct standard. there are no issues of regarding application presented law of the rule in this case. negligence 2. The of an insurer or its intermediaries should not presumptively insured, imputed procedurally nonnegli- to an gent preclude finding defendant to cause and excusable neglect in connection with a motion to set aside a default. A diligently ultimately defendant who turns over a case to an court, negligent day in insurer should not be denied his or her obligated inquire should not be whether the insurer did what it Accordingly, accepted premium had contracted and to do. Ameri- failing complaint sure’s to answer the should not be Brothers, imputed and it constitutes a reasonable excuse, test, good-cause under the to set aside the default. only general 3. A contractor is liable for a subcontractor’s general negligence in situations where the contractor failed to take steps supervisory coordinating authority its reasonable within observable, protect readily dangers workers from avoidable high degree common work areas that create a of risk to a *2 significant Accordingly, Spence number of workers. Brothers es- by asserting the tablished existence of a meritorious defense any faulty danger allegedly panel created the electrical was not readily only observable and affected a small number of workers. requirements 4. Because has satisfied the showing good defense, permitting cause and a meritorious the stand, by following perfunctorily default to a rule that would impute negligence Spence Brothers, to Amerisure’s would result in injustice. manifest determining party good 5. In whether a has established cause to justify setting judgment, aside a default the trial court should totality circumstances, including following consider the of the the (1) party completely respond simply factors: whether the failed to or (2) file; party simply missed the deadline if to the missed the deadline (3) file, occurred; long filing how after the deadline the entry judgment filing duration between of the default and the of the (4) judgment; motion to set aside the whether there was defective (5) notice; process or the circumstances behind the failure to file or (6) (7) timely; knowing intentional; file whether the failure was or judgment size of the and the amount of costs due under MCR (8) 2.603(D)(4); judgment ongoing whether the default results in an (as (9) liability paternity support); or child if an insurer is involved, policies company whether internal of the were followed. exclusive, This list is not exhaustive or and the trial court has the discretion weigh to determine which factors to consider and how to them. determining 6. In a whether defendant has a meritorious de- fense, the trial court should consider whether the affidavit contains (1) plaintiff prove, evidence that cannot or defendant can dis- (2) prove, statutory requirement; an element of the claim or a ground summary disposition 2.116(C)(2), (3), for exists under MCR (3) (5), (7), (6), (8); plaintiffs or or claim rests on evidence that is exclusive, inadmissible. This list is not exhaustive or and the trial court has the discretion to determine which factors to consider weigh how to them. Reversed and remanded. J., concurring, separately that, wrote to advocate O’CONNELL, gamesmanship legal process,
order to reduce the element of in the totality courts consider deciding of the circumstances when grant judgment, whether to a motion to set aside a default and to emphasize “procedural tightrope” that the court rules are not a on litigant perfectly being which must balance to avoid thrown out of court. Judgments Judgments - — — 1. Default Motion to Set Aside Insurer’s Negligence.
The of an insurer or its intermediaries should not be insured, presumptively imputed procedurally nonnegligent to an preclude finding good defendant cause and excusable neglect judgment in connection with a motion to set aside a default (MCR 2.603[D][1]). Judgments Judgments — — — 2. Default Motion to Set Aside Good Cause. determining party justify whether a has established cause to setting judgment, aside a default the trial court should consider circumstances, totality may following which include the party completely respond simply factors: whether the failed to or file; party simply missed the deadline to if the missed the deadline file, long filing occurred; how after the deadline the the duration entry judgment filing between of the default and the of the motion judgment; process to set aside the whether there was defective notice; timely; the circumstances behind the failure to file or file *3 intentional; knowing whether the failure was or the size of the judgment 2.603(D)(4); and the amount of costs due under MCR judgment and, ongoing liability; whether the default results in an involved, policies if an insurer company is whether internal (MCR 2.603[D][1]). were followed Judgments Judgments — — — 3. Default Motion to Set Aside Meritorious Defense. determining whether a defendant has meritorious defense in judgment, connection with a motion to set aside a default the trial court should consider whether the affidavit contains evidence that plaintiff prove, disprove, cannot or defendant can an element of statutory requirement; ground summary dispo- the claim or a for 2.116(C)(2), (3), (5), (6), (7), (8); sition under exists MCR or or the (MCR plaintiff’s claim rests on evidence that is inadmissible 2.603[D][1]).
Hurlburt, Allweil, Tsiros & PC (by Lawrence A. Hurlburt), the plaintiffs. for
Cardelli, Buikema, & PC (by Anthony F. Lanfear III), Caffrey, for the defendant. 280 MICH APP 213 EJ., Before: and O’CONNELL WILDER, WHITBECK,
JJ. Brothers, Inc., Spence appeals Defendant Per Curiam. by leave granted denying the trial court’s order its motion to set aside a default in favor of plaintiffs James Shawl (Shawl) Mary On appeal, Spence Shawl. Brothers argues the trial court erred as a matter of law applying wrong standard its motion to set denying In addition, aside the default. argues the trial court abused refusing its discretion in to set aside the default. We reverse and remand.
I. BASIC FACTS AND PROCEDURAL HISTORY Sons, Inc., Boice Bird and employed Shawl as journeyman painter. Spence Brothers hired Boice as a subcontractor to perform painting on Saginaw work County Center, Event and in late June Boice assigned Shawl to work at the Event Center. While painting lobby Center, area of the Event was Shawl injured. Shawl, Specifically, according while he was painting a wall in the lobby, a electrical temporary panel fell toward him and him result, struck in the back. aAs according Shawl, three screws projecting from the rear of panel punctured his “lumbar spine.” accident,
After the Shawl sued Spence Brothers and Electric, J. Ranck Inc. Shawl’s suit alleged that Ranck Electric negligent was by failing safely to brace attach the electrical panel to the wall and that Spence Brothers, general contractor, as the negligent for failing to ensure that reasonable were steps taken to guard against danger that Ranck Electric created. *4 being
After served with Shawl’s complaint, Spence Brothers forwarded complaint insurer, to its Ameri- began sure. Amerisure processing complaint, but examining coverage part process, issues as while it time Amerisure determined needed more 2006, complaint. Accordingly, early July answer the an senior claims Rigdins, represen- Annette Amerisure tative, and asked for a attorney contacted Shawl’s to the exten- 30-day attorney agreed extension. Shawl’s writing.” Rigdins it in Rigdins “put sion and asked attorney then wrote a letter to Shawl’s that stated that answering complaint the new due date for 8, 2006. August Brothers failed to Shawl’s
Spence complaint answer 8, result, by August 2006. As a the trial court entered a 16, 2006, against Spence August default Brothers on 2.603(A)(1). pursuant to MCR Spence Brothers moved to set aside the default under 2.603(D)(1). MCR Spence argued Brothers 30-day original extension was from the due date of the answer, 14, 2006, which, July according Spence Brothers, would have allowed it to through answer However, day August end of the on 2006. no answer Therefore, was filed on that date either. the trial court denied Spence the motion. Brothers moved for recon- sideration, but the trial court also denied that motion. Spence Brothers now appeals.
II. “GOOD FAITH” VERSUS “GOOD CAUSE”
A. STANDARD OF REVIEW Spence argues Brothers that the trial court did not 2.603(D)(1) apply the MCR criteria when it considered whether to set aside the default. More specifically, argues that the trial court erroneously analyze refused to the matter to determine whether there was cause and a meritorious defense as MCR 2.603(D)(1) requires. *5 App 280 Mich 213 Opinion the Court of argument, Spence of this respect
With
to our review
its
support
Brothers relies on Colista v Thomas1 to
apply
should
a de novo standard of
assertion
we
to determine whether the trial court used the
review
2.603(D)(1).
MCR
In
appropriate
standard
under
Colista,
“interpretation
Court stated that the
this
rules,
interpretation
of the court
like the
application
statutes,
that is
de
question
is a
law
reviewed
novo on
However, because the trial court here ulti
appeal.”2
2.603(D)(1)
mately
and, thus,
its use MCR
explained
standard,
applied the
proper
interpretation
application
truly
of the rule are not
at issue in this case.
Therefore, the
standard of
proper
review is
abuse of
standard,
discretion
applies
which
to review of a trial
court’s decision on a motion to set aside a default.3 We
deny
also review a
court’s decision to
trial
motion for
for an
reconsideration
abuse of discretion.4
B. THE
THE
WORDING OF
COURT RULE
2.603(D)(1),
governs
MCR
which
motions to set aside
default,
provides: “Amotion to set aside a default or a
default judgment, except
grounded
when
on lack of
jurisdiction
defendant,
over the
granted only
shall be
if
good cause is shown and an affidavit
showing
of facts
added.)
meritorious
is filed.” (Emphasis
defense
THE
C.
TRIAL COURT’S DECISION
Spence
argues
the trial
applied
court
2.603(D)(1)
the wrong legal standard under MCR
be-
Thomas,
(2000).
529;
Colista v
App
241 Mich
In the trial court stated: important rights your they
[Ilt’s to the clients that certainly hearing, my full were not as have a words required by they get the to court rules and were entitled response why little more definitive I think as to I ruled to deny the motion.
The trial then on to deny Spence court went Brothers’ motion to reconsider and stated: deny I’ll the motion for reconsideration under MCR
2.603(D)(1) good on the basis that the cause has not been primarily why easy, I shown. That’s think this case is—is plaintiffs’ correctly and I think authorities cite that setting public policy of the state is in favor of not aside only good defaults indeed not cause but a merito- without rious defense. to regard, essentially sought this the trial court any ruling deny in its to
remedy ambiguity prior addition, motion to set aside the default. In the trial court “good the reference to faith” from explained did not act original hearing merely say that Shawl regard, in bad faith. In this the trial court stated: case, quite contrary. requested In this [Shawl] adjuster] any possi- [from letter the insurance to foreclose bility regard 30-day [in confusion or mistake to the extension].
Thus, the trial court was simply stating that Shawl acted in good faith and that Spence Brothers did not good show cause set aside the default.
Even though may the trial court originally have re- standard, ferred to a ultimately faith the trial court 2.603(D)(1). used the correct standard under MCR Ac- cordingly, Spence Brothers has not shown an abuse of discretion with regard court, this issue because the trial fact, used proper standard. 2.603(D)(1)
III. APPLYING MCR
A. STANDARD OF REVIEW Spence Brothers argues that it demonstrated good cause based on procedural irregularities and genuine confusion in the proceedings below. Spence Brothers further argues it has a meritorious defense that extinguish will liability and that a lesser showing of good cause will suffice where a meritorious defense is strong. *7 noted,
As we review a trial court’s decision on a motion to set aside a default for an abuse of discretion.5 Indeed, a trial court’s decision in regard this should only be reversed on appeal when there is a clear abuse of that “An discretion.6 abuse of discretion involves far more than a injudicial difference opinion.”7 “Rather, an
5 Koy, supra at 657.
6
Developers,
Venture,
Amco Builders &
v
Inc Team Ace Joint
469 Mich
(2003).
90, 94-95;
B. GOOD CAUSE ‘“ “ (1) a substan- by: cause” can be shown “Good upon in the irregularity proceedings tial defect or (2) based, excuse the default was reasonable which requirements with the which comply for failure to (3) default, showing some other reason created the result from injustice permitting that manifest would ’ ”10 argues Spence the default to stand.” ultimately matter led to the nature of this complex confusion between it and Amerisure that caused late, to be constituted cause. We answer which disagree.
(1)
DEFECT OR IRREGULARITY
PROCEDURAL
was,
is,
dispute
There
considerable
about
Under
complaint
exact date the answer to the
was due.
2.108(A)(1),
days
MCR
Brothers had
after
on June
being
complaint
answer
served with
earlier,
23,
However,
attorney
as noted
2006.
Shawl’s
extension,
agreed
30-day
and Amerisure
on a
which Shawl
asked for
contends ran from the date on which Amerisure
(2007).
Simmons,
8,
12;
477 Mich
222 Opinion of the Court the extension. points Shawl to the written confirmation stating that the August 8,2006. new deadline was Despite letter, Spence Brothers contends that the new dead- line was intended days from the original deadline answer, 14, July which was 2006.
We conclude that 8, the letter stating August 2006, date unequivocally set forth the intended expi- ration of the agreed-upon However, extension. even assuming the 30-day extension ran from the original answer, deadline to Spence Brothers failed to answer in the Thirty time allowed. days July 14, from 2006, Sunday, 13, was August 2006. August Because a Sunday, Spence actually would have had until the end of Monday, August 14, 2006, to complaint.11 answer Regardless, Spence Brothers still failed to file an answer within the time allocated. Thus, we conclude that no procedural irregu- defect or larity was present to support finding of good cause.
(2) REASONABLE EXCUSE We next turn to the second factor “good of the cause” “ ‘ test: “a reasonable excuse for failure to comply with ’ ”12 the requirements which created the default.” With respect factor, to this we initially conclude Brothers’ default was clearly caused Amerisure’s 1.108(1) MCR states: day act, event, The of the designated or default after which the
period begins of time day to run is not included. The last period included, Saturday, Sunday, is it legal holiday, unless is a or holiday pursuant order; on which the court is closed to court period day that event the runs until the end of the next that is not Saturday, Sunday, legal holiday, holiday on which the court is pursuant closed to court order. 12 Levitt, supra quoting Bigelow, supra, quoting Honigman, at supra. There complaint. failing to answer *9 of, Amerisure’s and agent knew that dispute is no 2006, 8, deadline. established, August the indeed some confusion assuming there was And, again, even until it had Amerisure to believe may have led that no answer, it has offered 14 file the August to to ultimate failure explain to its reasonable excuse however, is whether question, salient respond. The imputed to should be negligence Amerisure’s Brothers.
(a) CASES CONFLICTING is, believe, pre-November a conflict the There we regarding Court of this opinions13 1990 published of an insurance negligence the impute whether a defendant. company to
(i) WALTERS There, Judge. v Arenac Circuit with Walters We start KELLY, DETHMERSand O’Hara, by Justices joined Justice of either stated, negligence that the “It is well settled for normally grounds is not attorney litigant or the the However, in entered.”14 setting regularly aside a default plaintiff nor the was Walters, attorney neither that of rather, negligence was negligent; culpable circumstances, Justice O’HARA the insurer. Under should not be negligence that the insurer’s reasoned 13 7.215(J)(1) that, subsequent (stating reversal or modi absent MCR by fication, precedent Court established this Court is bound to follow 1990). Appeals or after November decisions issued on 14 37, 46; Judge, NW2d 751 Mich Circuit Walters Arenac JJ.). (1966) J., joined by See by Dethmers and (opinion Kelly, O’Hara, Inc, supra an Developers, (“[Generally, at 96 & also Amco Builders client[.]”). attorney’s attorney’s negligence to that is attributable Mich insured, doctor, the circuit
imputed setting court did not abuse its discretion in aside the Justice specifically, explained: default. More O’HARA any reasonably pru- The averred did doctor he what person dent would do under the when he circumstances personally “papers” served. He turned the over to company. obligated his do not him insurance We consider daily to to call see whether the insurer what it did had accepted premium contracted to We find do. no neglect part his on before disclosed record us. culpable negligence
The was that of the involved in- question surer. The is then whether that insurer, liability imputed unnamed defendant should upon and be conclusive the defendant doctor. recognize situation,
We in the this realities of *10 defendant, irrespective defendant, of the named the real policy of provisions, the extent the was the insurer. This by record-supported conclusion is the fact that when coun- showing sel the term received calendar the named doctor- default, be in defendant to he communicated not with the doctor It inescapable but his insurer. seems an con- the communicating clusion that insurer directed the coun- appear sel to and answer. case,
On the merits of the main the doctor-defendant may beyond question. may have been blameless He have legal been in question dimension answerable. The is not meritoriously before It has not litigated us. been under our system of determination of issue.
The of jurisprudence trend our is toward meritorious complexities determination of issues. The our of economic system placed the position named defendant-doctor in the having way no to reach trial on the merits because his negligent. money insurer judgment, The if such re- sulted, might paid part by have to be in full or in the doing insurer. jurispru- Absent violence to the the rules of game, dential we think the doctor should be entitled to his day in court. Shawl Opinion Court to dilute the understood holding would not be
By
we
this
neglect of a
jurisdiction that
of this
law
well-settled
counsel, may
defendant,
that of his
nor
served
personally
not
larly entered.
ordinarily
[15]
grounds for
setting
aside a
default
regu
affirmed
in Walters
opinion
lead
Accordingly, the
judgment.
the default
to set aside
court’s decision
trial
However,
noted, only Justices
as
ÜETHMERS,
O’HARA,
Justices BLACK
lead opinion.
in the
part
KELLY took
and
providing
in the result without
and SMITH concurred
and Chief Justice
any supporting rationale,16
KAVANAGH,
Thus,
SOURIS and
by Justices
joined
ADAMS, dissented.17
no ma-
because
binding precedent
created no
Walters
the lead
signed
justices
jority
opinion.18
Hi) FREEMAN
in an automo-
the defendant
Remley,
Freeman v
In
complaint
the summons
suit sent
bile accident
nothing else about
heard
The defendant
his
insurer.19
judg-
of the default
he received notice
case until
knowledge of the
denied all
The insurer
ment.
claim.20
to set aside
motion
the defendant’s
denying
that the defen-
court noted
the trial
judgment,
default
defense,”
and valid
but
had a
“might have
dant
an
at least notice to
that “there was
significant
it
found
properly
were
insurer,
pleadings
agent
15 Id.,
KELLY,
O’Hara, J., joined by
(opinion
Dethmers
at 46-47
omitted).
JJ.) (citations
*11
16
(Black
JJ.,
Smith,
concurring).
and
Id.
at 48
17
JJ.,
Adams,
dissenting).
(Kavanagh, C.J., and Souris and
Id. at
48-56
18
Co,
244, 248;
App
Hosp Farm Bureau Ins
225 Mich
Butterworth
See
(1997)
Michigan
opinion
(recognizing
that a lead
226 Opinion op the Court notifying served that an additional letter was sent the insurer of commencement of suit.”21 appeal, defendant
On the contended that the case at from Walters22 “virtually indistinguishable” hand was However, directly commenting without on the defendant’s argument, noting while that Justice opinion O’Hara’s Walters in “capture[d] law,” the trend in current the the Freeman panel concluded without further elucidation that, “given the facts and presented,” circumstances here the trial court did not clearly abuse its discretion in refusing to set aside default judgment.23 analysis,
From what we can ascertain from its brief panel essentially Freeman employ chose to a strict adher ence to the abuse of discretion standard of review rather than follow the provided by rationale the lead in opinion that, We note concluding Walters. further trial did not discretion, court abuse its the Freeman cited panel Hartman v Roberts-Walby However, Inc.24 Enterprises, significance of that citation questionable is in that the Hartman Court declined to reverse trial denial court’s of the defendant’s motion to set aside default because the defendant Yet, failed show a meritorious defense. Freeman, the trial recognized court that the defendant have “might had a and valid defense[.]”
(Hi)ASMUS Barrett, In Asmus v this stated Court that Freeman had “ruled implication that of an 21id. 446. Id. at 446, 448, citing Walters, supra (stating at Id. at 47 that a trial court’s judgment on a
decision motion to set aside a should not disturbed he discretion). clear absent a instance of abuse of Roberts-Walby Inc, Enterprises, 726; Hartman v (1969). NW2d *12 227 v Shawl imputed insured,” to the can and insurer would grant “[t]o opined would be to hold otherwise right companies to vacation an automatic insurance judgments.”25 all default analyzing to set aside the trial court’s refusal panel decide, did assumed, but not
default, the Asmus problems personnel at the defendants’ that certain company cause for the de- constituted insurance Ultimately, timely how- to answer.26 fendants’ failure panel trial on the affirmed the court ever, the Asmus support ground did a affidavits not that the defendants’ defense. meritorious
(iv) LEVITT panel a of this Court took Co, In Levitt v a Mfg Kacy regard slightly approach the issue different with imputed should be the insurer’s whether Kacy Manufacturing The Levitts sued the defendant. theory.27Kacy liability Company product then a under complaint apparently to its the summons and sent passed broker, them on to an insurance which turn management company. However, insurance insur- relationship management company’s the in- ance year. had The Levitts surer been severed earlier Shortly thereafter, filed a the insurance then default. attorney management company notified the Levitts’ receivership and that no work that the insurer was completed on the for another month.28 would be case Approximately later, the Levitts moved for a week Kacy judgment. then moved set aside default 25 (1971). 574-575; App 570, Barrett, 819 Mich NW2d Asmus 26Id. at 574. 27Levitt, supra at 605. at 606. Id. Opinion op the Court
default, but trial court denied the motion be- cause, although the affidavit of facts showed meri- defense, Kacy torious not had shown excusable ne- glect. The trial court then awarded Levitts default judgment.
On appeal, panel Levitt cited Asmus and stated *13 negligence an resulting “[t]he of insurer in a and imputed Yet, default can will be to the insured.”29 the panel recognized that “the mere existence of negli- gence not prevent finding does a of good cause.”30 The Levitt then panel as reasoned follows: judge]
[The did specific negligence trial not address the in problem that occurred this case but focused on the of companies insulating procedures themselves from default by engaging multiple personnel levels insurance who papers. judge] must handle suit [The trial would seem to require litigation that a papers defendant send which are directly served proceed on him to his insurer or else “at peril”. their own do specific We not believe the facts of this justify application case the generalized policy of such a employment practice. towards this defendant’s Apparently, when defendant’s insurer went into receiv ership, relationship management [the its with insurance company] adequate was severed without notice to defen management dant or company. Thus, the insurance the erroneously papers suit were [an sent to insurance man agement company representative], who, before the insurer placed was receivership, in had during handled claims the prelitigation stage. the provid Webelievethat the errors in ing in handling papers, arising notice and suit the out theof problems unusual associated with being the insurer’s in provide receivership, a reasonable excuse for defendant’s delay filing plaintiff’s in an answer complaint,[31] 29 Id. at 609.
30 Id., Walters, supra, Asmus, supra citing and at 574. 31 Id. at 609-610. v Shawl Opinion the Court rule that general a adopting sum, although In imputed to answer will failing insurer’s found nevertheless defendant, panel the Levitt ato special of certain default because to set aside cause for excuse reasonable that constituted circumstances answering. Kacy’s delay
(v) FEDERSPIEL injured Bourassa, was Larry Federspiel Federspiel his automobile.32 him with hit Gerald Bourassa when against alleging negligence complaint filed Federspiel Holland, served employee whose and Marcia Bourassa Bourassa settled the accident. before alcohol Bourassa and summons Holland forwarded Federspiel. forwarded insurer, who then her complaint The insurance broker.33 to an complaint summons bro the insurance however, unaware that insurer, months before couple out of business gone ker had during Apparently complaint were summons sent.34 being moved records the insurance broker’s process There misplaced. claim was agency, Holland’s to another *14 the timely answer assigned to fore, was never counsel entered a and, result, the trial court as a complaint, Holland judgment against and default default Holland.35 default, court and the trial aside the to set moved neglect basis of excusable motion on the the granted disputing Federspiel appealed, good cause.36 insurer failure of Holland’s finding that the court’s trial constituted representation her with provide the default.37 aside cause to set 32 (1986). 656, 658; Bourassa, App 431 391 NW2d Federspiel 151 Mich 33 658-659, at 661. Id. 34 Id. at 661. 35 659, at 661. Id. 658, at 659. Id. 37 Id. at 660. “Michigan
The first noted that Federspiel panel lacks definitive case on the issue whether law an insurer’s negligence ought its intermediaries’ to be imputed to preclude finding the insured to neglect’ ‘excusable ”38 and ‘good cause.’ The then panel adopted the rea soning employed in The Federspiel panel Walters.39 recognized split decision Walters was not controlling precedent and that Court of Appeals cases issued impact,” after Walters “diluted yet panel its stated that it was nevertheless “impressed with the logic” of Walters approach “well-reasoned to the problem at hand.”40 The Federspiel panel therefore concluded that “[t]he insured defendant in the present should day situation not denied her in court because of the insurer’s negligence in her processing claim.”41 The panel also concluded that the insurer’s “failure to answer for or defend was the [Holland] culmination of events which amounted to neglect.”42 excusable Finally, the Federspiel panel found that injustice manifest would result if the default judgment permitted were stand, noting supported that evidence a meritorious defense that actually Bourassa was not intoxicated at Accordingly, time accident. panel affirmed the trial court’s decision to set aside the default judgm ent.43
Notably, the Federspiel panel distinguished the facts presented from other cases where this Court affirmed denials of motions to set aside default judgments:
38Id. at 661.
39 Id. at 663. Id. 41Id.
42Id. Id. at 664. *15 Spence Bros, Shawl Opinion the Court ignoring notice Freeman, reckless in the insurer
In
exercise
upheld the trial court’s
[CJourt
suit and this
the default.
to set aside
denying the motion
of discretion
Co, 54
[v Miller-Davis
Van
Asmus and
In both
Haaften
(1974)], the defendants
186;
who “might good have had a and valid defense”48 a chance at the. meritorious determination of the issues. “[T]he law favors the determination of claims on the merits . . . .”49
We further believe that employing an analysis like Levitt, that in in which the panel found that “unusual problems associated with the insurer’s being receiv- ership” provided a reasonable excuse for the defen- delay, dant’s merely serves to complicate the issue. Whether the insurer’s negligence was a oversight mere in failing to meet the filing deadline or whether it is the result of some other complication, the end result is that the nonculpable defendant is unfairly punished for trusting that his or her insurer doing its job. cognizant
We are panel’s Asmus concern that not to apply a blanket rule imputing the insurer’s negligence to the might defendant be viewed as grant- ing “insurance companies an automatic right to vaca- tion of all default judgments.”50 However, our conclu- sion here that an insurance company’s negligence in failing to answer complaint constitutes a reasonable excuse under the good cause test for setting aside a default does not dilute a duty defendant’s to neverthe- less show a meritorious defense supported by an affida- vit of facts.51 Indeed, in Asmus, despite ostensibly imputing the insurer’s negligence to the defendant, the panel nevertheless decided the case on the ground that the defendant did not demonstrate a meritorious de- fense.
In keeping Walters, with we conclude that Ameri- sure’s negligence should not be imputed to Spence
48 Freeman, supra at 444.
49 Alken-Ziegler, supra at 229.
50 Asmus, supra at 574-575. 2.603(D)(1). See MCR Shawl failing Amerisure’s and that reasonable constituted complaint to answer test, to set aside cause excuse, under default.
(b) BETWEEN ATTORNEY COMMUNICATION REPRESENTATIVE INSURANCE AND argument Brothers’ acknowledge We with not have communicated attorney should Shawl’s However, as “non-lawyer.” because she was Rigdins stated, problem “I no see trial court contractually charged *17 person the agent, insurance in engage the defendant to on behalf of with —to act a Indeed, Rigdins was agreements.” of time extension Therefore, for Amerisure. representative senior claims in determin- its discretion did not abuse the trial court Rigdins between communication that ing excuse not a reasonable attorney was Shawl’s aside the default. cause to set good showed DEFENSE MERITORIOUS C. meritori it a argues presented
Spence 2.603(D)(1). party a states “[I]f MCR defense under ous if proven, be absolute defense that would a meritorious if than required cause’ will showing ‘good a lesser a manifest weaker, in prevent order to defense were clear, the However, makes Alken-Ziegler as injustice.”52 MCR defense elements of meritorious cause and 2.603(D)(1) blurred; “separate are they to be are not show a Brothers must Thus, Spence requirements.”53 under default set aside to have the defense meritorious 2.603(D)(1). MCR
[52] Alken-Ziegler, supra at 233-234.
[53] Id. at 230-231. as Michigan, public a matter the subcon- policy, joba a duty
tractors on site have to ensure the worksite Further, is safe for their employees.54 general a contrac- tor is not liable for a negligence.55 subcontractor’s a However, general may contractor be found liable if it failed to take steps “reasonable within its supervisory authority” and coordinating protect to workers from observable, “readily dangers avoidable common work areas create a high degree which of risk a significant number of what workmen.”56 In is often referred to as the Funk four-part test, (1) plaintiff defendant, must show that either the
property
general contractor,
owner or
failed to take reason
steps
supervisory
able
within
coordinating
its
author
(2)
ity
guard against readily
observable and avoidable
(3)
dangers
high degree
signifi
that created
of risk
(4)
area.[57]
cant number of
workmen
a common work
Spence Brothers argues that
it
impossible
is
for
Shawl to recover under the Funk
test.
four-part
Spence
Brothers asserts that its affidavit demonstrates that at
least one
the elements under the
four-part
Funk
test
and,
is missing
thus,
has presented
it
a meritorious
In its affidavit, Spence
defense.
Brothers stated that
“[a]ny danger created
by
allegedly faulty electrical
panel
readily
was not
by
observable
Spence Brothers.”
stated,
“Any
Brothers also
danger
created
*18
allegedly faulty
panel presented
electrical
a danger to
54
Inc,
Hughes
Bldg,
v
PMG
1, 6;
See
App
227 Mich
The Court Supreme test as follows: “good cause” factor of the tice “good Honigman & Hawkins prongs of the first two The accurately reflect our and unremarkable cause” test are factor, injustice,” that “manifest It is the third decisions. because, difficulty The has arisen problematic. has been viewed, injustice” discrete is not a properly “manifest tardy filing or a procedural defect occurrence such as Rather, injustice is independently. manifest can be assessed if a default were to be allowed would occur the result that “meritorious party has satisfied the where a to stand court rule. “good requirements of the cause” defense” defense and then party puts forth a meritorious aWhen (1) by showing proce satisfy “good cause” attempts to (2) defect, excuse for irregularity or a reasonable dural requirements that created comply failure default, obviously affect the strength of the defense will words, if a showing necessary. In other “good that is cause” if that would be absolute party meritorious defense states a required showing “good cause” will he proven, a lesser weaker, prevent a in order to if the defense were than injustice.[58] manifest reiterate, negli- that Amerisure’s we conclude
To
imputed
gence should not
to answer the
failing
that Amerisure’s
under the
reasonable excuse
constituted a
complaint
Inc,
Alken-Ziegler,
supra at 233-234.
*19
236
280 Mich
213
Opinion of the Court
test
to
good-cause
set aside
default. We further
Spence
conclude that
Brothers has met its burden
an affidavit of facts
meritorious
filing
showing a
de-
Therefore,
fense.
we conclude that
the de-
permitting
stand, by following
fault to
a rule
would perfunc-
torily
impute
Amerisure’s
injustice.
Brothers, would result in manifest
E. TOTALITY THE
OF
CIRCUMSTANCES
In light
previously
of the
unsettled
of the
state
law on
an
issue whether
insurer’s or its intermediaries’
negligence ought
imputed
to be
to the insured to
preclude
finding
a
of “excusable
and
neglect”
“good
cause,”
offer
guidance
we
additional
for future cases.
cases,
There
multiple types
are
both civil and crimi-
nal,
provides
where caselaw
factors
the trial
courts to
weigh and balance before
reaching
decision based on
of the
totality
grant
circumstances.59 Because the
denial of motion
aside
judgment
to set
a default
is
under
examined
the same standard of review and is
fact-intensive,
similarly
we
it
believe that
would be
the trial
if
helpful
courts
provided
we
additional
them
factors for
to use in their
“good
evaluations of
cause”
“meritorious
defense”
under MCR
59
(1992)
Sparks Sparks,
158-160;
See
v
440 Mich
NW2d
(determining alimony is
trial
within the
court’s
discretion
involves
factors); People Cipriano,
certain
consideration of
enumerated
v
431 Mich
(whether
(1988)
315, 334;
voluntary
NW2d
a confession is
requires reviewing
making
factors and
on
determination
the basis of
totality
circumstances); People Colon,
App 295,
v
233 Mich
(1998) (a
304-305;
suggestive
procedure
Webase *20 part in the elements considered in on the broad test Michigan part earlier and on cases discussed Supreme “good recognition although Court’s separate re- defense” are cause” and a “meritorious party may quirements and that a not be blurred interplay both,60 there is some between must have party “[I]f defense that a states a meritorious two: ‘good proven, showing a absolute if lesser would be required weaker, if than the defense were cause’ will prevent injustice.”61 an a manifest With order already existing relationship require- the two between balancing ments, these factors to come we believe that totality up an assessment under the overall easily provides applied better, more circumstances flexibility supplies into rule because it that takes variable, de- fact-intensive nature of consideration avoidingbright-line cases, that fail to fault distinctions having dueling public policyissues of cases balance the setting properly the merits and not aside decided on present judgments. respect to the entered default With facts, the two extremes of automati- such a test avoids cally imputing an insurer’s to a defendant or pass any automatically giving the insurer a free to void judgment. default following pro- reiterate, the lists are intended to
To determining guidance courts in vide to the trial “good party has cause” and a “meri- whether a shown 2.603(D)(1) such that defense” under MCR torious setting judgment proper is under the aside a default totality of the circumstances. Inc, Alken-Ziegler, supra at 230-231, 233-234. Id. at 233-234. cause, determining party has shown whether consider the factors: following
the trial court should (1) failed to or party completely respond whether the file; simply missed the deadline to (2) file, if party simply missed the deadline to how filing occurred; after the deadline the long (3) entry the duration between of the default judg- ment and the of the motion to set aside the filing judgment;
(4) notice; whether there was or process defective (5) the behind the file circumstances failure to or file timely;
(6) intentional; the failure knowing whether (7) judgment the size of the and the amount of costs 2.603(D)(4);62 due under MCR *21 (8) judgment whether the default results in an ongo- (as ing liability child paternity support); or and (9) involved, if an insurer is whether internal policies of the company were followed.
In determining whether a defendant has a meritori- defense, ous the trial court should consider whether the affidavit contains evidence that:
(1) plaintiff cannot or prove disprove defendant can statutoxy an element of the claim or a requirement; (2) a ground summary disposition for exists under (7) 2.116(C)(2), (3), (5), (6), MCR (8); or or (3) the claim plaintiffs rests on evidence that is inadmissible. example, illogical judgment For it seems to set aside a default where 2.603(D)(4) the amount of fees and costs to be awarded under MCR will greater roughly equal judgment, than or to the amount of the default amount, pay as the defendant will the same in if whether costs
judgment judgment is set aside or under the if it is not. Concurring Opinion by O’Connell, J. these lists is intended to be exhaustive or Neither of in Additionally, as with the factors provided exclusive. contexts, only other the trial court should consider factors, and it is the trial court’s discre- relevant within weight any determine how much factor single tion to receive.63 should proceedings
We reverse and remand for consistent jurisdiction. with this We do not retain opinion. I (concurring). major J. concur with the
O’CONNELL, court, ity opinion deciding that the trial when whether to grant deny a motion to set aside a default judgment, totality must examine the of the circum stances. I also join majority’s conclusion to reverse the trial court’s I separately decision. write totality advocate the of the circumstances test and to emphasize Michigan Court Rules are not “a procedural tightrope upon litigant which a must bal carefully perfectly” ance or be out court. thrown Villas, Gering LLC, v Anderson unpublished opinion curiam per Appeals, of the Court of issued May (Docket 275940), No. at 3. outset,
At the
I stress that
this
is not in-
opinion
tended as an analysis or criticism of either the trial
court or
majority’s
methodology
resolving this
case,
an opportunity
but as
to address and reduce the
gamesmanship that creates hostile
attitudes
fric-
(in
Sparks, supra
alimony,
determining
See
at 159-160
the trial court
significant
weight
assign
determines what factors are
and how much
factor;
exclusive); Cipriano, supra
each
are
factors listed
not
at
(no single
issue);
Kachar,
People
334-335
factor is
conclusive
*22
(1977) (factors
78, 93-94, 97;
Mich
tion and the bench. Some attorneys maintain that is a fundamen- gamesmanship and that ingrained aspect legal process, tal and of the outdo their attempts compete opponents with or are not only appropriate required but also for zealous contend, however, advocacy. I that this gamesmanship attitude, prevalent today’s which is all too law is more destructive than practice, helpful, because it law, brings disrespect upon litigants, and our justice. shared of I concept Although have no illusions game eliminated, that the theory practice of law will be I hopeful remain this gamesmanship can be re- through duced the application totality of the circumstances test to the process administering jus- Indeed, tice. purpose one of this is opinion ignite topic. discussion on the
I begin proposition litigation with the that the pro- cess is best described as “conflict within a set rules.” Stated way, generally another lawsuits involve a dis- agreement conflicting parties, between and the Michi- gan provide Court Rules a set of rules designed help resolve this conflict. Consequently, judge’s role is to resolve the conflict within the strictures of the Michi- gan Court Rules. These rules are designed to create consistency and a playing level field for all participants in the dispute process. resolution
The law favors the determination of claims on their
merits.
Inc v
Alken-Ziegler,
Waterbury Headers Corp,
(1999).
219, 229;
Every case is with factual nuances identified, evaluated, must be and balanced to reach a proper Only result. an experienced judge with common sense, wisdom, justice and a sense of is empowered by our constitution to make the It is decision. the correct judge patience generally who also exercises uses However, process. judge the correct who focuses solely a single process, else, on to the exclusion of all some- experiences methodological times tunnel vision.1 The process perfunctory then becomes and often results in unjust, illogical, incongruous outcomes. where,
I case, find this occurs most often as in this “procedure is substance.” The merits of case are the left procedural the wake created the In such rules. may interpret The reader this statement as a criticism of textualism. my opinion, good judges begin It is not. In all the resolution of a controversy principled with the text of the statute or court rule. A principled goal any decision-making decision with a outcome is the process. language only practical I use this in the sense that con drafting impose may occasionally straints involved court rules what methodological judges resemble tunnel Good vision. will have com rules, integrate, necessary, mon sense and wisdom to where rules, fully comments to the and caselaw into a articulated and intellec tual framework. Concurring Opinion by O’Connell, J.
cases, procedural the manner in which the rules are than implemented important can be more the sub- journey stance of the The impor- case. becomes more totality tant than the destination. The of the circum- distinguish stances test is an those occasions attempt when bright-line application appro- rules is (such priate as dismissal for failure to file within limitations) statute of with situations where the rules (as themselves involve abstract concepts justice *24 “good the use of the term cause” in the default judg- context). case, ment In the latter the art of judging cannot become a mechanical or computer-like process.
Indeed,
Supreme
both this Court and our
Court have
dismissed the
judging
notion of
as a mechanical process.
“
practice
procedure]
‘[Rules of
and
must be followed
but they
thought
guides
must also be
of as
and stan-
dards to the means
achieving justice,
of
not the end of
”
justice
Higgins
itself.’
v
Ford
384 Mich
Henry
Hosp,
633, 637;
(1971),2
Accordingly, conclude that a decision to set aside a default judgment must be based on totality circumstances and an individualized assessment of the facts and conditions of specific case. Because the majority opinion takes this position and, into account because under the totality the circumstances test the trial court erred in failing to set aside the default judgment, I concur the result reached the majority opinion.