Gavulic v. Boyer, Docket No. 134535
| Decision Date | 07 July 1992 |
| Docket Number | Docket No. 134535 |
| Citation | 489 N.W.2d 124,195 Mich.App. 20 |
| Parties | Diane GAVULIC, Plaintiff-Appellee, v. Wayne BOYER and Boyer & Associates, Jointly and Severally, Defendants-Appellants. |
| Court | Court of Appeal of Michigan — District of US |
Daguanno, Nemes & Accettura by Robert F. Harrington, Farmington Hills, for plaintiff-appellee.
Eric J. McCann, P.C. by Eric J. McCann, Bloomfield Hills, for defendants-appellants.
Before GRIBBS, P.J., and HOOD and SIMON, * JJ.
Defendant Wayne Boyer 1 appeals as of right from the June 21, 1990, order of the Oakland Circuit Court denying his motion to set aside a default judgment entered on November 30, 1989, in favor of the plaintiff. We reverse.
Plaintiff's complaint alleged that she had entrusted Boyer, a financial advisor doing business as Boyer & Associates, with $84,000 to invest on her behalf. The complaint further alleged that, through Boyer's negligence and fraudulent actions, plaintiff had suffered damages at least to the extent of her initial investment. Plaintiff requested judgment in an amount equal to "all damages recognized by Michigan law, well in excess of Ten Thousand ($10,000.00) Dollars," as well as her costs, interest, and attorney fees. Boyer was served with the complaint by personal service on September 14, 1989.
Shortly thereafter, Boyer's attorney contacted plaintiff's attorney to acknowledge service and to make an offer of settlement. Although the parties disagree concerning whether the offer of settlement was ever formally rejected and whether there was further contact between the attorneys, it is undisputed that Boyer took no further action to defend against plaintiff's complaint.
On November 14, 1989, a default was entered against Boyer for his failure to appear, plead, or otherwise defend. Plaintiff admits that notice of the entry of the default was not served on Boyer, nor was any service attempted. On November 30, 1989, the trial court entered a default judgment in the amount of $84,000 in favor of plaintiff and against Boyer. Pursuant to MCR 2.603(B)(4), the Oakland Circuit Court Clerk mailed notice of the entry of the default judgment to Boyer on December 7, 1989. Boyer denies ever receiving notice of the entry of the default or the default judgment.
On February 13, 1990, apparently after receipt of a subpoena directing him to appear at a creditor's examination, Boyer filed a motion seeking to set aside the default judgment. In support of his motion, Boyer argued that his attorney's calls to plaintiff's attorney constituted an appearance, entitling him to notice of plaintiff's intention to enter a default judgment at least seven days before entry of the judgment, and that plaintiff's failure to notify him of the entry of default violated the applicable court rule. Boyer asserted that these facts constituted good cause, which, in conjunction with his affidavit of meritorious defense, required that the default judgment be set aside in accordance with MCR 2.603(D).
Plaintiff's answer denied that Boyer's attorney had ever expressed an intent to represent him. While plaintiff admitted that no notice of the entry of the default had been given and stipulated setting aside the entry of the default, she also argued that Boyer's motion failed to show either good cause or a meritorious defense sufficient to set aside the default judgment.
The trial court, after a hearing, denied Boyer's motion to set aside the default by its order of June 21, 1990. On July 12, 1990, Boyer filed a motion for rehearing, reasserting his earlier arguments. Following an adjournment because of the trial court's unavailability and a hearing held on September 12, 1990, the trial court denied Boyer's motion for reconsideration by its order entered on October 25, 1990. Boyer then filed a claim of appeal with this Court on November 1, 1990.
We first note that our consideration of the trial court's denial of Boyer's motion to set aside the default judgment is appropriate. Although plaintiff asserts that our review is limited to a review of the trial court's exercise of discretion in denying Boyer's motion for reconsideration, she does not consider MCR 7.204(A)(1)(b), which allows an appeal within twenty-one days after the entry of an order denying a motion for rehearing or reconsideration filed within the original appeal period. Because Boyer's motion for reconsideration was filed within the appeal period after the denial of the motion to set aside the default judgment and his appeal from the order denying his motion for reconsideration was timely, appellate review of the original order denying relief from the default judgment is appropriate. 2
We now turn to the merits of this case. Essentially, Boyer argues that plaintiff's failure to provide notice of the default renders the default invalid, that a default judgment may not be entered if based upon an invalid default, and that because of these defects and his showing of good cause and a meritorious defense, the trial court abused its discretion in denying the motion to set aside the default. We agree with Boyer's ultimate conclusion and, accordingly, reverse the decision of the trial court.
While the policy of this state generally favors the meritorious determination of issues and, therefore, encourages the setting aside of defaults, the trial court's decision regarding whether to set aside a default will not be disturbed on appeal absent an abuse of discretion. Marposs Corp. v. Autocam Corp., 183 Mich.App. 166, 170-171, 454 N.W.2d 194 (1990). Pursuant to MCR 2.603(D)(1), a "motion to set aside a default or default judgment, except when grounded on a lack of jurisdiction over the defendant, shall be granted only if good cause is shown and an affidavit of facts showing a meritorious defense is filed."
Good cause sufficient to warrant the setting aside of a default or default judgment includes (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 that created the default, or (3) some other reason showing that manifest injustice would result if the default and the resulting default judgment were allowed to stand. Lindsley v. Burke, 189 Mich.App. 700, 702, 474 N.W.2d 158 (1991).
The entry of a default is generally a ministerial act. Alycekay Co. v. Hasko...
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