McDonough v. General Motors Corp.
| Decision Date | 14 March 1967 |
| Docket Number | Docket No. 1454,No. 2,2 |
| Citation | 148 N.W.2d 911,6 Mich.App. 239 |
| Court | Court of Appeal of Michigan — District of US |
| Parties | Joan Marie McDONOUGH, Administratrix of the Estate of Michael McDonough, Deceased, Plaintiff-Appellee, v. GENERAL MOTORS CORPORATION, a Delaware corporation, and Unit Crane & Shovel Corporation, a Michigan corporation, Defendants-Appellants |
Robert G. Russell, of Sweeny, Dodd, Kerr, Wattles & Russell, Detroit, for Unit Crane and Shovel.
Robert Abram, Leitson, Dean, Dean, Abram & Segar, Flint, for appellee.
Before QUINN, P.J., and FITZGERALD and T. G. KAVANAGH, JJ.
This appeal arises from a denial by the trial court of a motion for rehearing or, in the alternative, a motion, under GCR 1963, 528, to set aside a default judgment of $125,000 taken against appellant Unit Crane & Shovel Corporation.
The genesis of the action was on October 3, 1963, on the premises of the Chevrolet assembly plant of General Motors Corporation in Flint. Michael McDonough sustained injuries resulting in his death when a cable or chain of a stiff leg derrick became detached, causing the cable of the derrick to strike him. The deceased was 26 years old and left a wife and 2 sons surviving him. At the time of his death, he was earning $176 per week.
Action for damages under the wrongful death act was begun in November of 1964 by the deceased's widow against General Motors and Unit Crane & Shovel, hereinafter referred to as 'Unit Crane'.
At this juncture, we must add to the mixture the factors which complicate the fact situation and bring about the appeal. At the time of the accident, Unit Crane had a wholly-owned subsidiary, although it was a distinct corporate entity, known as Bay City Shovels Corporation, making cranes in Bay City. To further entangle matters, at the same time, a company known as American Hoist and Derrick Company of St. Paul, Minnesota, is said to have had an office and manufacturing plant in Bay City and made derricks.
Unit Crane was served with process on January 15, 1965, and believing that the accident referred to in the summons arose under a certain policy which had previously been issued to Bay City Shovels by Travelers' Insurance, forwarded the complaint and summons to the agent for Travelers'.
Travelers', upon receipt of the summons, denied coverage on the basis that although it insured Bay City Shovels when the accident happened, Unit Crane was a separate and distinct corporation and was insured by the Continental Insurance Company. As a result, the process was forwarded to the Chicago office of Continental.
At about the same time, Continental closed its Flint claims office. As a result, a number of files were transferred from Flint to Detroit. At approximately the same time, the employee in charge of receiving and processing files left Continental's employ without notice. C. E. Johnson, claims manager of Continental in Detroit, acknowledged receiving the file in February of 1965 from his Chicago office. The particular Contretemps which brought about this appeal was that Mr. Johnson, because of the help situation in his office, put this particular file together with other files on his desk for handling, it being subsequently taken therefrom and misfiled. No further action was taken on the case.
On June 9, 1965, plaintiff filed default in the Genesee County circuit court and on August 26 a default judgment was entered against Unit Crane in the amount of $125,000. Both Unit Crane and its insurance company learned of the default by reading of it in a Bay City newspaper.
Thereupon, Mr. Johnson, Continental claims manager, retained attorneys and investigators to look into the matter.
Transcripts of the proceedings had with respect to the default judgment indicate that no proofs were offered as to the manufacturer of the derrick involved, nor were any questions with respect to either manufacture or liability asked.
A motion to set aside the default judgment was filed within the required 4-month period on September 9, 1965, argued on September 20th and denied on October 8th on the basis that good cause was not shown.
Subsequent investigation showed that the particular derrick involved was an American Hoist and Derrick Company device known as a general purpose stiff-leg derrick. Efforts to secure photographs of the device were successful, ultimately demonstrating that the device involved was not manufactured by Unit Crane.
Based on this information, a motion for rehearing or, in the alternative, for relief from judgment under GCR 1963, 528, was filed, containing an affidavit of Mr. Johnson, indicating the circumstances under which the file was misfiled or lost. It also had attached an affidavit of George Frank, Unit Crane's sales manager, indicating from an examination of the transcript and an examination of the photograph that Unit Crane never manufactured a device such as was involved in this accident. Distinct construction features such as the utilization of U-bolts and the location of the hoist mechanism indicated that it was not a Unit Crane device. Mr. Frank's affidavit further said that he had received a letter from Richard Stryker, sales manager of American Hoist and Derrick, indicating that they made the particular derrick involved. The motion was presented to the court and again denied in the following language:
'For whatever it is worth to counsel and the appellate courts the real issue in this matter centers around the language in Rule 520.4, which states:
'A proceeding to set aside default or a default judgment * * * shall be granted only if good cause is shown and an affidavit of facts showing a meritorious defense is filed.'
The key word is And; it is not Or. Petitioner has failed to persuade the Court of either.
'Insofar as Unit Crane and Shovel Corporation's motion is for a rehearing on the Court's previous ruling, it will be denied.
'Insofar as it is a motion for relief under Rule 528.3, the Court will rule petitioner has failed to persuade the Court it has met any of the six reasons set forth therein, and the relief sought therein will be denied.'
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