Bigelow v. Walraven

• Decision Date: 06 September 1974
• Docket Number: No. 5,5
• Citation: 392 Mich. 566,221 N.W.2d 328
• Parties: Dorothy BIGELOW and John Bigelow, Plaintiffs-Appellees, v. William WALRAVEN, Individually and d/b/a Walraven Brothers, et al., Defendants, and Board of County Road Commissioners of the County of Saginaw, Defendant- Appellant. John BIGELOW, Plaintiff-Appellee, v. William WALRAVEN, Individually and d/b/a Walraven Brothers, et al., Defendants, and Board of County Road Commissioners of the County of Saginaw, Defendant- Appellant. 392 Mich. 566, 221 N.W.2d 328
• Court: Michigan Supreme Court

Page 328

221 N.W.2d 328

Dorothy BIGELOW and John Bigelow, Plaintiffs-Appellees, v. William WALRAVEN, Individually and d/b/a Walraven Brothers, et al., Defendants, and Board of County Road Commissioners of the County of Saginaw,

Defendant- Appellant.

John BIGELOW, Plaintiff-Appellee, v. William WALRAVEN, Individually and d/b/a Walraven Brothers, et al., Defendants, and Board of County Road Commissioners of the County of Saginaw,

Defendant- Appellant.

No. 5.

392 Mich. 566, 221 N.W.2d 328

Supreme Court of Michigan.

Sept. 6, 1974.

Collison & Fordney, P.C. by Charles C. Collison, Saginaw, for defendant-appellant.

Derrick C. Eaton, Saginaw, for plaintiffs-appellees.

Before the Entire Bench (Except FITZGERALD, J.).

LEVIN, Justice.

My colleague, Mr. Justice Thomas Giles Kavanagh, would hold that a trial judge may condition an order setting aside 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 because of misgivings about the statute of limitations. As one who has himself been led astray in that regard, ¹ I appreciate those sentiments. It has, however, come to be recognized that the statute of limitations is not a disfavored plea but a perfectly righteous defense, a meritorious defense, ² that may, like other affirmative defenses, be raised tardily. ³

I

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 reason 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 N.W.2d 134, 138 (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, 'This difference is deliberate':

'Amendment of pleadings is for the most part intended to assure accuracy and completness 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 N.W. 322, 325 (1888).

Section 1 of the statute of amendments, ⁴ first enacted in 1846 and carried forward without substantive change to the Revised Judicature Act, ⁵ authorizes a trial court to allow prejudement amendment of a pleading 'for the furtherance of justice, on such terms as shall be just.' This had been regarded as authorizing a judge to impose conditions when allowing an amendment. ⁶ The authorities are legion throughout the land that amendment of a pleading may be granted subject to conditions. ⁷

F.R.Civ.P. 15(a), the source of Rule 118, ⁸ similarly contains no express authorization for a trial judge to allow amendment of a pleading upon conditions, while, as Professors Wright and Miller write, 'Rule 15(d) authorizes the court to permit a supplemental pleading to be served 'upon such terms as are just * * *'. The absence of a comparable provision in Rule 15(a) has quite properly been ignored: it clearly should not be interpreted as preventing the court from imposing conditions on a grant of leave to amend tunder that subdivision. The statement in Rule 15(a) that 'leave shall be freely given when justice so requires' ⁹ presupposes that the court may use its discretion to impose conditions on the allowance of a proposed amendment as an appropriate means of balancing the interests of the party seeking the amendment and those of the party objecting to it. The imposition of terms often will further the rule's liberal amendment policy. If the party opposing the amendment can be protected by the use of conditions from any possible prejudice that might result from the ultimeliness of the amendment, there is no justifiable reason for not allowing it.' 6 Wright & Miller, Fed.Prac. and Proc., § 1486, pp. 423--424. ¹⁰

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 complaint. 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 in a late-filed answer, only as an indulgence of the judge.

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 proffering his amended pleading. He may not attach a wholly irrelevant condition.

Strauss v. Douglas Aircraft Co., 404 F.2d 1152, 1158 C.A.2d (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.'

III

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, rather, places them in a vastly superior position. Default is not 'a procedure 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 City of Detroit v. Wayne Circuit Judge, 112 Mich. 317, 319, 70 N.W. 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 discretion 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.

The statutes of limitations and procedures for default judgments serve different policies and purposes. 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.' ¹³

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 disposition. The plaintiffs do not...