Asmus v. Barrett
| Decision Date | 17 February 1971 |
| Docket Number | No. 3,Docket No. 8031,3 |
| Citation | 30 Mich.App. 570,186 N.W.2d 819 |
| Parties | Elaine H. ASMUS and Harold K. Asmus, Plaintiffs-Appellees, v. Edward D. BARRETT, d/b/a Barrett Advertising Company and Bruce J. Wieland, jointly and severally, Defendants-Appellants |
| Court | Court of Appeal of Michigan — District of US |
William D. Booth, Plunkett, Cooney, Rutt & Peacock, Detroit, for defendants-appellants.
Peter F. Cicinelli, Saginaw, for plaintiffs-appellees.
Before FITZGERALD, P.J., and QUINN and McINTYRE, * JJ.
On March 14, 1969, plaintiffs' automobile collided with a trailer owned by the Barrett Advertising Company. The trailer had broken loose from a tractor driven by Bruce J. Wieland, an employee of the company, crossed the centerline and struck plaintiffs' car. Mrs. Asmus, a passenger in the car driven by her husband, suffered a fracture of the first lumbar vertebra. Mr. Asmus was not injured.
Plaintiffs filed suit on April 29, 1969; a default judgment was entered and plaintiffs were awarded damages.
Defendants raise four points on appeal:
First, defendants claim that the trial court's refusal to set aside the default was an abuse of discretion. Second, the trial court erred in taking testimony as to damages without defendants' counsel present to cross-examine plaintiffs' witnesses. Third, the trial court erred in refusing to impanel a jury to determine damages. Fourth, the damages awarded to plaintiffs are excessive.
Defendants were duly served on May 1st. Defendants forwarded the suit papers to their insurance company. On June 9, 1969, a default was entered. On June 19th, attorneys for defendants filed a motion to set aside the default. That motion was argued on June 23rd and denied on July 29th for failure to establish a meritorious defense.
In support of their motion to set aside the default defendants submitted an affidavit by Mr. James Eaker, new claims manager for defendants' insurance company. In that affidavit Mr. Eaker stated that, because of the resignation of the Detroit office's claims manager, claims representative and the only two typists in the claims department, the company's office was manned with temporary help at the time the suit papers arrived. Because of the temporary help's unfamiliarity with office procedure, the suit papers, received from the Flint office on May 5th, were not cleared by the Detroit office and forwarded to the company's attorneys until June 9th. An answer was filed on June 16th, and a set of interrogatories was sent to plaintiffs.
A second affidavit was submitted by defendants' attorneys. That affidavit attempted to establish a meritorious defense. It was stated: (1) that the truck was being driven 'within the legal speed limit;' (2) that 'the flatbed trailer was attached to the truck by defendants' employees, and that said trailer was properly hooked, fastened, and secured by said employees;' (3) that the truck and trailer had been used for a period of several years without any previous difficulty; (4) that defendants had no reason to believe the trailer hitch was defective due to imperfections in the manufacturing process; and (5) that further examination and testing 'could possibly reveal that such trailer hitch was defective due to imperfections in the manufacturing process.'
Defendants claim that for four reasons the trial judge abused his discretion when he refused to set aside the default: (1) the personnel problems in the insurance company's local office constituted good cause for failure to make a timely response to plaintiffs' complaint; (2) defendants did present to the court an affidavit setting forth a meritorious defense; (3) the negligence of defendants' insurance company should not be imputed to defendants; and (4) the default was entered only 40 days after the complaint was filed.
We assume, but do not decide, that the personnel problems in the insurance company's office did constitute good cause for defendants' failure to make timely response to plaintiffs' complaint. However, a default 'may' be set aside only when three conditions are all fulfilled. First, good cause for failure to make timely response must be shown. Second, a meritorious defense must be established. Third, the showing of a meritorious defense must be based on an 'affidavit of facts.' GCR 1963, 520.4. Whether these three conditions are fulfilled is a matter within the discretion of the trial judge. Walters v. Arenac Circuit Judge (1966), 377 Mich. 37, 47, 138 N.W.2d 751; Freeman v. Remley (1970), 23 Mich.App. 441, 178 N.W.2d 816.
In this case the affidavit submitted by defendants' attorneys concerning a meritorious defense does not satisfy GCR 1963, 520.4. Since that affidavit was not based on the affiant's personal knowledge of the facts and did not state the basis or source of his information, the trial judge did not abuse his discretion when he refused to find that defendants had properly presented a meritorious defense. Hartman v. Roberts-Walby Enterprises, Inc. (1969), 17 Mich.App. 724, 170 N.W.2d 292. We further hold that the allegations of the affidavit, even if accepted and believed, did not establish a meritorious defense. The statement that further examination and testing 'could possibly reveal that such trailer hitch was defective due to imperfections in the manufacturing process' certainly cannot be considered an allegation of fact. The other relevant allegations are merely conclusions.
In Freeman v. Remley, Supra, this Court ruled by implication that the negligence of an insurer can and would be imputed to the insured. To hold otherwise would be to grant insurance companies an automatic right to vacation of all default judgments.
The trial judge's refusal to vacate the default judgment was not an abuse of discretion.
On June 9th, attorneys for plaintiffs sent notice to defendants that a hearing to enter default judgment would be held on June 30th. On June 19th, defendants filed a motion to set aside the default. Because of the pendency of that motion, the hearing scheduled for June 30th was postponed without date. Defendant motion was denied on July 29th. On July 30th, counsel for plaintiffs gave notice that the postponed hearing had been rescheduled for August 4th. Defendants and their counsel failed to appear on August 4th. After attempting to locate defendants' attorney, the trial court proceeded to receive testimony from Mr. and Mrs. Asmus and to receive various exhibits into evidence.
On August 7th, plaintiffs notified defendants that the hearing as to damages would resume on August 18th. Between the two hearings defendants changed attorneys. Because no formal substitution of attorneys. had been received, the August 7th notice was to both the old and new attorneys. On August 18th defendants' new attorney notified the court he would be fifteen minutes late. When he failed to appear for half an hour, the court proceeded to receive medical testimony. Sometime during the direct examination of the plaintiffs' physician, defendants' attorney entered the courtroom. He did not identify himself. His presence was called to the court's attention by the plaintiffs' attorney. Defendants' attorney did not request permission to cross-examine the physician, who was still on the witness stand, nor did he make any effort to cross-examine. In fact, defendants' attorney refused to cross-examine, when offered the opportunity to do so by the court. He stated:
'I'm not sure that I do have a standing to cross-examine the doctor; however, I do appreciate the court's comment.'
An August 12th, defendants petitioned this Court to stay the proceedings in circuit court. That motion was denied on August 25th.
Defendants claim on this appeal that the hearings of August 4 and 18th should be declared null and void for three reasons: (1) it was an abuse of discretion for the court to receive testimony and evidence as to damages without the presence of defendants' counsel; (2) defendants did not have the...
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