Bye v. Ferguson

• Decision Date: 07 January 1985
• Docket Number: Docket No. 74372
• Citation: 360 N.W.2d 175,138 Mich.App. 196
• Parties: William BYE, Plaintiff-Appellee, v. Gary FERGUSON, Defendant-Appellant. 138 Mich.App. 196, 360 N.W.2d 175
• Court: Court of Appeal of Michigan — District of US

Page 175

360 N.W.2d 175

William BYE, Plaintiff-Appellee, v. Gary FERGUSON, Defendant-Appellant.

Docket No. 74372.

138 Mich.App. 196, 360 N.W.2d 175

Court of Appeals of Michigan.

Submitted May 8, 1984.

Decided Aug. 23, 1984.

Released for Publication Jan. 7, 1985.

[138 MICHAPP 198] Schneider & Handlon by Richard M. Handlon, Midland, for plaintiff-appellee.

Winegarden, Shedd, Haley & Lindholm by Dennis M. Haley, Flint, for defendant-appellant.

Before V.J. BRENNAN, P.J., and R.B. BURNS and COLEMAN, ^* JJ.

PER CURIAM.

Defendant, Gary Ferguson, appeals [138 MICHAPP 199] as of right from an order denying Ferguson's motion to set aside a judgment rendered against him in the amount of $14,077.72. This appeal involves Ferguson's failure to appear for trial and his attorney's subsequent withdrawal from the case immediately prior to trial.

I

Plaintiff, William Bye, filed suit on February 19, 1982, alleging that Ferguson was a holdover tenant. Bye requested damages for the nonpayment of rent during the holdover period, plus expenses incurred in returning the property to its original condition. Bye and Ferguson were represented in the circuit court by attorneys Richard M. Handlon and Herbert H. Edwards, respectively.

The case was originally set for trial on December 8, 1982. This was adjourned due to schedule conflicts of both attorneys. On December 7, 1982, the assignment clerk sent a "standby" trial notice to attorneys Handlon and Edwards stating that the trial was tentatively scheduled for January 21, 1983. This trial date was postponed by the court. On January 25, 1983, the clerk sent a new notice of trial scheduled for May 2 1983. Also on January 25, 1983, Handlon, plaintiff's attorney, wrote the assignment clerk (with copies to Edwards and Bye) and requested that the trial be scheduled some time after June 1, 1983. Apparently Ferguson received copies of both these letters at the same time. No written stipulations or motions for adjournment were signed.

On Monday, May 2, 1983, the date set for trial, Handlon and Edwards appeared before Judge DeWitt. Edwards informed the court that he had notified his client, Ferguson, of the trial date through several letters, and that he had unsuccessfully[138 MICHAPP 200] attempted to communicate with Ferguson on the previous Friday afternoon. Evidently Edwards's office received a call on Friday, April 29, 1983, which Edwards attempted to return late Friday afternoon without success. On that Friday night, Ferguson's associate, Susan Layman, informed Edwards that she would attempt to reach Ferguson. On the Sunday night before the trial, Ms. Layman informed Edwards that Ferguson would not be able to appear at the trial.

On Monday morning, Edwards recounted this story to the court, and added that Ferguson had not paid his legal bills. Edwards requested that he be allowed to withdraw as counsel. Judge DeWitt orally granted this motion on May 2, 1983, and signed an appropriate order the next day. Handlon did not object to Edwards's withdrawal.

Judge DeWitt allowed Bye to present his proofs immediately after Edwards's withdrawal. Bye's allegations were placed on the record and a judgment was entered in the amount of $14,077.72. Ferguson was later served with a subpoena for a "debtor's examination". A writ of garnishment was served on Ferguson's employer. This evidently prompted Ferguson to retain new counsel, who filed a motion to set aside the judgment under GCR 1963, 528.3. Ferguson's affidavit in support of this motion attempted to explain his failure to appear for trial.

Ferguson also testified at the hearing on the motion, explaining that during February, March, and April of 1983, he closed a business, finalized his divorce, moved three times, and started a new job. Ferguson first learned of the trial in January, 1983, but thought that it had been postponed at plaintiff's attorney's request until after June 1, 1983. On the Friday before the trial, Ferguson explained, he was on business in Indiana and he asked Susan Layman to contact Edwards and inform[138 MICHAPP 201] him that Ferguson could not appear at the trial. Ferguson had a business meeting in Canada on the day of the trial and was fearful of losing his new job. He also said that he thought the fee dispute had been resolved by their respective office managers. Apparently, Edwards's office also owed some money to Ferguson's office, although Ferguson admitted that, regardless of this setoff, Ferguson still owed Edwards legal fees. Ferguson also admitted on cross-examination that he never gave Edwards any forwarding addresses. Ferguson did not know that a judgment had been entered against him until he received the subpoena for the debtor's examination.

At the end of the hearing, the court rendered a bench opinion, stating:

"THE COURT: Well, the problem here is entirely attributable to the neglect of the defendant. He moved without keeping his attorney current on where his mail should be routed.

"Even under all the circumstances, the defendant received notice of this case in time to be here at the time of the hearing, or in time to contact either the court or Mr. Edwards and explain the circumstances which prevented his attending; but he left his attorney high and dry on the trial date without sufficient information for the attorney to make an intelligent application of the court for an adjournment.

"You know that I'm not going to grant an adjournment on the trial date when the plaintiff is in court with his witnesses prepared to proceed and the attorney says: I want an adjournment because I got a call from my former--or, my client's former business associate that he would not be able to attend. If I didn't fall off the bench laughing at an application on the trial date under those circumstances, it would surprise me.

"So he didn't take any reasonable steps to secure an adjournment or to prevent the entry of this judgment at the time. Therefore, I'm going to deny the motion to [138 MICHAPP 202] set aside the judgment and dissolve the stay of proceedings which I entered on August 19."

The judge accordingly entered an order denying defendant's motion to set aside or vacate the judgment.

II

Ferguson appeals the denial of his motion to set aside the judgment pursuant to GCR 1963, 528.3. It is apparent from both oral argument and the appellate brief that Ferguson's claims rest on either subsection (1) or (6) of that rule. Denial of a motion for relief from a judgment brought under Rule 528.3 will not be disturbed on appeal absent a clear showing of an abuse of discretion. Lark v. The Detroit Edison Co., 99 Mich.App. 280, 282, 297 N.W.2d 653 (1980), lv. den. 410 Mich. 906 (1981).

"Relief may be granted under GCR 1963, 528.3(6) for 'any other reason justifying relief from the operation of the judgment' if subsections (1) through (5) are inapplicable, extraordinary circumstances exist which warrant setting aside the judgment in order to achieve justice, and substantial rights of the opposing party will not be detrimentally affected by setting aside the judgment." Coates v. Drake, 131 Mich.App. 687, 691, 346 N.W.2d 858 (1984).

Ferguson's only argument on appeal, that attorney Edwards failed to notify him of his intention to withdraw from the case, is being raised for the first time on appeal. However, in light of the possible denial of the defendant's constitutional rights, this Court believes that manifest injustice would result if the merits of the appeal were not addressed. Deeb v. Berri, 118 Mich.App. 556, 325 N.W.2d 493 (1982).

[138 MICHAPP 203] The Michigan Constitution provides:

"A suitor in any court of this state has the right to prosecute or defend his suit, either in his own proper person or by an attorney." Const.1963, art. 1, Sec. 13.

The Code of Professional Responsibility and Canons require the attorneys practicing law in this state to maintain very high standards of conduct. This is necessary and important to gain and maintain public acceptance of the special status given the profession. DR 2-110(A)(2) of that code provides:

"In any event, a lawyer shall not withdraw from employment until he has taken reasonable steps to avoid foreseeable prejudice to the rights of his client, including giving due notice to his client, allowing time for employment of other counsel, delivering to the client all papers and property to which the client is entitled, and complying with applicable laws and rules."

A lawyer is permitted to withdraw only under certain circumstances specified in DR 2-110(C), such as if the client's "conduct renders it unreasonably difficult for the lawyer to carry out his employment effectively", or the "client knowingly and freely assents to termination of his employment". DR 2-110(C)(1)(d), 2-110(C)(5). However, even withdrawal under those circumstances must be prefaced by reasonable and adequate notice, as provided in paragraph (A), quoted above.

Although there are no Michigan cases confronting the situation presented by this case, courts in other jurisdictions have addressed similar problems. See generally, 7 Am Jur 2d, Attorneys at Law, Secs. 173-175, pp. 224-228; 48 A.L.R.2d 1155. Both parties cite Smith v. Bryant, 264 N.C. 208, 141 S.E.2d [138 MICHAPP 204] 303 (1965). There, the attorney withdrew in his client's presence, and the court scheduled trial for the following morning. The defendant attempted to defend his own case. The court first noted that an attorney might be justified in withdrawing from a case where the client has refused to pay proper fees upon reasonable demand by the attorney, then continued:

"Nevertheless, this does not mean that an attorney of record can walk out of the case by announcing to the court on the day of the trial that he has withdrawn because he has not been paid. An attorney not only is an employee of his client but also is an officer of the court. This dual relation imposes a dual obligation.

To the client who refuses to pay a fee the...