Marposs Corp. v. Autocam Corp., Docket No. 112407
| Decision Date | 09 May 1990 |
| Docket Number | Docket No. 112407 |
| Citation | 454 N.W.2d 194,183 Mich.App. 166 |
| Parties | MARPOSS CORPORATION, Plaintiff-Appellee, v. AUTOCAM CORPORATION, Defendant-Appellant. 183 Mich.App. 166, 454 N.W.2d 194 |
| Court | Court of Appeal of Michigan — District of US |
[183 MICHAPP 168] Butzel, Long, Gust, Klein & Van Zile (by James C. Bruno and Susan Carino Nystrom), Detroit, for plaintiff-appellee.
Gruel, Mills, Nims & Pylman (by Scott R. Melton), Grand Rapids, for defendant-appellant.
Before MURPHY, P.J., and HOOD and NEFF, JJ.
Defendant appeals as of right from a default judgment entered by the circuit court. We reverse and remand for further proceedings consistent with this opinion.
Defendant first contends that the trial court erred in finding that a default had been properly entered. We agree.
Defendant filed a motion for summary disposition pursuant to MCR 2.116 and a motion for change of venue pursuant to MCR 2.223. Both motions were denied. Defendant filed an application for leave to appeal the denial of its motion for change of venue. However, defendant did not file an application for leave to appeal from the trial court's denial of its motion for summary disposition.
Because of the failure to appeal the denial of the motion for summary disposition, defendant was required to serve and file a responsive pleading within twenty-one days after denial. This defendant did not do.
MCR 2.108 provides in pertinent part:
(A) Time for Service and Filing of Pleadings.
[183 MICHAPP 169] (1) A defendant must serve and file an answer or take other action permitted by law or these rules within 21 days after being served with the summons and a copy of the complaint in Michigan in the manner provided in MCR 2.105(A)(1). [Emphasis added.]
Defendant does not state, and we could not find, any Michigan case law authority specifically defining what "other action" is "permitted by law or these rules" in lieu of filing an answer within twenty-one days of being served with a summons and complaint. However, MCR 2.108(C) is instructive in this regard and alters the time for pleading contained in subsection (A) for particular motions and amendments, including motions for summary disposition pursuant to MCR 2.116. No mention is made of the effect of a motion for a change of venue or the effect of an application for leave to appeal from a denial of a motion for change of venue on the time limits for pleading.
Had defendant filed an application for leave to appeal from the order denying its motion for summary disposition within twenty-one days after denial of that motion, defendant would not have had to serve and file its responsive pleading until twenty-one days after denial of the application. MCR 2.108(C)(1). Defendant, however, elected not to apply for leave to appeal from the denial of its motion for summary disposition but, rather, sought leave to appeal only from the denial of its motion for change of venue. Accordingly, under a hypertechnical construction of the above court rules, we cannot conclude that the filing of an application for leave to appeal from the denial of a motion for change of venue tolled the time for filing a responsive pleading pursuant to MCR 2.108.
We do, however, conclude that the trial court erred in finding that a default was properly entered. MCR 2.603(A) states in pertinent part:
(1) If a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules, and that fact is made to appear by affidavit or otherwise, the clerk must enter the default of that party.
MCR 1.105 states the rules of construction for the Michigan Court Rules, and provides:
These rules are to be construed to secure the just, speedy, and economical determination of every action and to avoid the consequences of error that does not affect the substantial rights of the parties.
Under the circumstances of this case, we believe that a hypertechnical construction of the court rules would not result in a just determination of this action because, in our view, defendant has not failed to "otherwise defend," as provided in MCR 2.603(A).
Even assuming that the trial court did not err in finding that the default was properly entered, it abused its discretion in refusing to set aside the default and in granting plaintiff's motion for a default judgment.
The policy of this state favors the meritorious determination of issues and encourages the setting aside of defaults. Levitt v. Kacy Manufacturing Co., 142 Mich.App. 603, 607, 370 N.W.2d 4 (1985). The [183 MICHAPP 171] trial court's decision on whether to set aside a default judgment will not be disturbed on appeal absent an abuse of discretion. Hood v. Hood, 154 Mich.App. 430, 438, 397 N.W.2d 557 (1986).
Except when grounded on lack of jurisdiction over the defendant, a motion to set aside a default or default judgment shall be granted only if good cause is shown and an affidavit of fact showing a meritorious defense is filed. MCR 2.603(D).
In Perry v. Perry, 176 Mich.App. 762, 769, 440 N.W.2d 93 (1989), this Court stated:
Good cause sufficient to warrant setting aside a default judgment includes (1) a substantial defect or irregularity in the proceeding 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 judgment were allowed to stand.... An affidavit of facts showing a meritorious defense must be filed before a default judgment may be set aside for good cause. [Citations omitted.]
In Daugherty v. Michigan (After Remand), 133 Mich.App. 593, 598-599, 350 N.W.2d 291 (1984), a panel of this Court determined that the trial court erred in refusing to set aside a default under factor (3) where the defendants established the existence of a meritorious defense and raised questions that should be determined at a trial on the merits, where there was no evidence that the defendants intentionally attempted to delay the adjudication of the plaintiff's claims by failing to file their answer in a timely manner, where the plaintiff was not prejudiced by the defendants' default, and where the period in which the defendants were inactive in pursuing their defense was not unreasonably long.
[183 MICHAPP 172] In this case, defendant has established good cause under factor (3) in that it will suffer manifest injustice if the default is not set aside. Defendant's affidavit of facts has also established a meritorious defense. The trial court abused its discretion in refusing to set aside the default.
Because of our determination that the trial court abused its discretion in...
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