Kalamazoo Oil Co. v. Boerman

• Decision Date: 03 October 2000
• Docket Number: Docket No. 213943.
• Parties: KALAMAZOO OIL COMPANY, Plaintiff-Appellee, v. John BOERMAN, Defendant-Appellant, and Edward A. Higuera and Task Management, Inc., Defendants.
• Court: Court of Appeal of Michigan — District of US

618 N.W.2d 66

242 Mich. App. 75

KALAMAZOO OIL COMPANY, Plaintiff-Appellee, v. John BOERMAN, Defendant-Appellant, and Edward A. Higuera and Task Management, Inc., Defendants.

Docket No. 213943.

Court of Appeals of Michigan.

Submitted February 10, 2000, at Grand Rapids.

Decided July 28, 2000, at 9:05 a.m.

Released for Publication October 3, 2000.

George T. Schumacher and Gemrich, Moser, Bowser, Murphy & Graham LLP (by William K. Murphy), Kalamazoo, for the plaintiff.

Russell A. DeMott, Allegan, for the defendant.

Before ZAHRA, P.J., and WHITE and HOEKSTRA, JJ.

HOEKSTRA, J.

John Boerman (hereafter defendant) appeals as of right from an order entered by the trial court based on a jury's finding that he owed damages to plaintiff.¹ Before the jury trial, the trial court, as a discovery sanction, entered a default against defendant with respect to liability. On appeal, defendant claims that the trial court erred in denying him the opportunity to present to the jury evidence of plaintiff's alleged comparative negligence, in entering the default as a discovery sanction, and in prohibiting him from testifying and from calling other witnesses during the jury trial. We affirm.

I

In a complaint alleging negligence, breach of contract, and violation of Michigan's Environmental Protection Act (MEPA), M.C.L. § 691.1201 et seq.; MSA 14.528(201) et seq.,² plaintiff claimed that it suffered damages as a result of defendant's negligent removal of underground storage tanks from plaintiff's premises. Specifically, plaintiff claimed that defendant, an environmental excavator, failed to remove or properly cap a fuel-oil pipe attached to an active petroleum loading dock, and thus fuel oil flowed through the pipe and into the soil and groundwater, causing environmental damage. Initially, a default was entered against defendant for failure to answer, but the trial court set aside the default pursuant to the parties' stipulation. Later, the trial court entered a default against defendant because he refused to comply with discovery pursuant to the Michigan Court Rules and he failed to comply with court orders by refusing to submit to deposition. Specifically, defendant failed to appear for a deposition that the court, in response to plaintiff's motion for an order compelling discovery, ordered that he attend and that defendant told the court that he would appear for if scheduled. The trial court denied defendant's motion to set aside or vacate the entry of default and his motion for rehearing. Thereafter, a jury trial proceeded with regard to damages; however, the trial court did not allow defendant to present evidence of plaintiff's comparative negligence. The jury returned a verdict in plaintiff's favor in an amount exceeding $337,000, plus interest and costs.

II

Defendant presents on appeal an issue of first impression in Michigan. Defendant argues that the trial court erred in prohibiting him from introducing at trial evidence of plaintiff's comparative negligence so that the jury could apportion the damages that defendant may owe in relation to his degree of fault.

The admission of evidence is within the trial court's sound discretion, and we will not disturb those decisions absent an abuse of discretion. People v. Lukity, 460 Mich. 484, 488, 596 N.W.2d 607 (1999); Hottmann v. Hottmann, 226 Mich.App. 171, 177, 572 N.W.2d 259 (1997). However, decisions regarding the admission of evidence often involve preliminary questions of law, which we review de novo. Lukity, supra at 488, 596 N.W.2d 607.

III

Before reaching the issue presented, we note the legal context that gives rise to the question. In Michigan, it is an established principle that "a default settles the question of liability as to well-pleaded allegations and precludes the defaulting party from litigating that issue." Wood v. DAIIE, 413 Mich. 573, 578, 321 N.W.2d 653 (1982); see also American Central Corp. v. Stevens Van Lines, Inc., 103 Mich. App. 507, 512, 303 N.W.2d 234 (1981) ("Entry of a default is equivalent to an admission by the defaulting party as to all well-pleaded allegations."). In other words, where a trial court has entered a default judgment against a defendant, the defendant's liability is admitted and the defendant is estopped from litigating issues of liability. However, a default judgment is not an admission regarding damages. See Midwest Mental Health Clinic, PC v. Blue Cross & Blue Shield of Michigan, 119 Mich.App. 671, 675, 326 N.W.2d 599 (1982) ("While the question of a defendant's liability is cemented by a default, a defendant has a right to participate where further proceedings are necessary to determine the amount of damages.").

Here, the trial court entered a default against defendant as a sanction for discovery abuses because defendant had failed to comply with discovery pursuant to the Michigan Court Rules and with court orders requiring him to submit to deposition. Thus, the entry of the default resolved the issue of defendant's liability, but the issue of damages remained and the trial court properly proceeded with a jury trial to determine what, if any, damages plaintiff was entitled to as compensation.

At the trial on damages, defendant sought to present to the jury evidence to establish that plaintiff was comparatively negligent and, thus, that defendant's damages ought to be reduced. Comparative negligence is an affirmative defense. Riddle v. McLouth Steel Products Corp., 440 Mich. 85, 98, 485 N.W.2d 676 (1992). In Placek v. Sterling Heights, 405 Mich. 638, 275 N.W.2d 511 (1979), our Supreme Court adopted a pure form of comparative negligence, under which a plaintiff's recovery of damages is reduced to the extent that plaintiff's negligence contributed to the injury. Pontiac School Dist. v. Miller, Canfield, Paddock & Stone, 221 Mich.App. 602, 623, 563 N.W.2d 693 (1997); Vining v. Detroit, 162 Mich.App. 720, 722-723, 413 N.W.2d 486 (1987). Our Supreme Court stated that the pure form of comparative negligence "most nearly accomplishes the goal of a fair system of apportionment of damages." Placek, supra at 660, 275 N.W.2d 511. If the trier of fact finds comparative negligence, then damages are apportioned in conjunction with the extent of liability. Jennings v. Southwood, 446 Mich. 125, 131, 521 N.W.2d 230 (1994); Placek, supra;

see Hickey v. Zezulka (On Resubmission), 439 Mich. 408, 443, 487 N.W.2d 106 (1992) (opinion by Brickley, J.), amended 439 Mich. 408,

487 N.W.2d 106 (1992).

Here, the trial court precluded defendant from presenting evidence of plaintiff's alleged comparative negligence. The trial court, citing Thomas v. Duquesne Light Co., 376 Pa.Super. 1, 545 A.2d 289 (1988), ruled that allowing comparative negligence to be raised would, in effect, result in relitigation of liability, requiring the jury to determine the negligence of each party, which the default has already decided, and thus rendering the default meaningless. Defendant argues on appeal that the trial court's decision is error requiring reversal. In this circumstance, where entry of default establishes liability, a question arises with respect to the availability and the role of comparative negligence in the damages phase of the proceedings.

IV

Comparative negligence encompasses aspects of both liability and damages. See Jennings, supra (explaining that under the doctrine of pure comparative negligence "a plaintiff's negligence does not bar the plaintiff's recovery; instead, it reduces the amount of the plaintiff's recovery, allocating liability in proportion to fault"). Consequently, we begin by recognizing that we are faced with the difficult task of balancing the liability aspect of comparative negligence and the damages aspect of comparative negligence. Because comparative negligence embraces attributes of both liability and damages, assigning its proper role in a trial addressing only damages is a task for which there is no obvious or ready answer.

Indeed, other jurisdictions are divided in their analysis of the availability and role of comparative negligence when a default is entered against a party. For example, some jurisdictions allow evidence of comparative negligence during the damages phase of the proceedings. In Burge v. Mid-Continent Casualty Co., 123 N.M. 1, 8, 933 P.2d 210 (1996), the New Mexico Supreme Court confronted the issue "whether comparative negligence of another party or non-party is a question of liability admitted by a default or a question of damages subject to a hearing on damages after the default."³ Reasoning that comparative negligence in that state requires negligence to be determined proportionately and that a tortfeasor be held liable for damages only to the extent of his percentage of negligence, the Burge court held "that a defaulting party admits only to the liability aspect of the complaint, thus reserving for the damages hearing a determination of damages in accordance with the application of comparative negligence and apportionment of damages...." Id.; see also Jordan v. Elex, Inc., 82 Ohio App.3d 222, 227, 611 N.E.2d 852 (1992) (where the defendant failed to answer the complaint or otherwise defend, the trial court entered a default judgment, but allowed the defendant to assert the defenses of comparative negligence, failure to mitigate, proximate causation, and related issues).

In Olsten Staffing Services, Inc. v. D A Stinger Services, Inc., 921 P.2d 596, 601 (Wy., 1996), the Wyoming Supreme Court explained that "[i]f the entry of default is upheld, that does not abrogate their rights to participate in the proceedings with respect to issues of proximate cause and damage pursuant to our comparative negligence rules." Likewise, in McGarvin-Moberly Const. Co. v. Welden, 897 P.2d 1310 (Wy., 1995), the Wyoming Supreme Court held that the defendant against whom a default was entered for failure to file a timely answer could appear and defend with respect to the question of damages because,

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