Midwest Mental Health Clinic, P.C. v. Blue Cross and Blue Shield of Michigan, Docket Nos. 60493

• Decision Date: 03 December 1982
• Docket Number: 61017 and 61018,Docket Nos. 60493
• Citation: 119 Mich.App. 671,326 N.W.2d 599
• Parties: MIDWEST MENTAL HEALTH CLINIC, P.C., Plaintiff-Appellee, v. BLUE CROSS AND BLUE SHIELD OF MICHIGAN, a Michigan non-profit medical care corporation, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 599

326 N.W.2d 599

119 Mich.App. 671

MIDWEST MENTAL HEALTH CLINIC, P.C., Plaintiff-Appellee, v. BLUE CROSS AND BLUE SHIELD OF MICHIGAN, a Michigan non-profit medical care corporation, Defendant-Appellant.

Docket Nos. 60493, 61017 and 61018.

Court of Appeals of Michigan.

Submitted June 29, 1982.

Decided Sept. 22, 1982.

Released for Publication Dec. 3, 1982.

Bushnell, Gage, Doctoroff & Reizen by Noel A. Gage and Thomas A. Heller, Southfield, for plaintiff-appellee.

Foster, Swift, Collins & Coey, P.C., by Theodore W. Swift and William K. Fahey, Lansing and Beier, Howlett, McConnell, Googasian & McCann by Kenneth B. McConnell, Bloomfield Hills, for defendant-appellant.

Before R.B. BURNS, P.J., and WALSH and MARUTIAK ^*, JJ.

R.B. BURNS, Presiding Judge.

Defendant, Blue Cross and Blue Shield of Michigan (hereinafter BCBSM), brings this appeal from the trial court's September 16, 1981, order, denying defendant's motion to set aside a default judgment entered against defendant on July 20, 1981.

Plaintiff, a psychiatric out-patient clinic, filed a complaint against defendant, dated June 2, 1981, alleging that BCBSM unlawfully and tortiously advised its subscribers that its participation contract with plaintiff would be terminated on June 1, 1981.

On July 8, 1981, after defendant failed to answer the complaint or otherwise defend within 20 days, plaintiff entered a default against BCBSM.

At a July 20, 1981, hearing on the damages, BCBSM's counsel appeared but was not allowed to present testimony or cross-examine any witnesses. Following this hearing, the circuit court entered a default judgment against BCBSM in the amount of $446,470. Subsequent motions brought by defendant for rehearing and to set aside the default were denied.

On October 29, 1981, we granted defendant's emergency application for leave to appeal and motion to stay the circuit court's order.

Defendant first claims that the trial court erred in failing to set aside the default judgment. However, a trial court's decision not to set aside a default judgment will not be reversed absent a clear abuse of discretion. Glasner v. Griffin, 102 Mich.App. 445, 301 N.W.2d 889 (1980). The policy of this state's courts is against setting aside regularly entered default judgments. Griffin, supra, Zinn v. Fischer Distributing Co., 27 Mich.App. 591, 183 N.W.2d 859 (1970), lv. den. 384 Mich. 796 (1971).

Under GCR 1963, 520.4, in order for defendant to have the default set aside, defendant must either show lack of jurisdiction or demonstrate good cause and submit an affidavit of facts showing a meritorious defense. In the instant case, jurisdiction is undisputed. However, defendant claims that good cause and a meritorious defense were established. We disagree.

In Glasner v. Griffin, supra, 102 Mich.App. p. 448, 301 N.W.2d 889, this Court stated:

" 'Good cause' sufficient to set aside an entry of default under the above cited court rule includes such matters as '(1) a substantial defect or irregularity in proceedings upon which the default was based, (2) a reasonable excuse for failure to comply with the requirements which created the default, or (3) some other reason showing that manifest injustice would result from permitting the default to stand'. Harrison v. VMC Building Corp, 71 Mich App 458, 460; 248 N.W.2d 584 (1976) (quoting 2 Honigman & Hawkins, Michigan Court Rules Annotated [2d ed], Comments, p 662)."

Defendant's explanation for BCBSM's counsel's failure to comply with the requirement which created the default is that "the press of the circumstances" caused him to fail to file a timely answer to plaintiff's complaint. However, "the press of the circumstances" involved only defendant's counsel's attention and preparation in a related case, matters in other circuit courts, and drafting a brief to be submitted to this Court on an unrelated matter.

As this Court stated in Badalow v. Evenson, 62 Mich.App. 750, 754, 233 N.W.2d 708 (1975):

"That the neglect or omission of a defendant's attorney does not constitute adequate ground for setting aside a default judgment is virtually axiomatic."

Defendant's counsel's excuse is simply inadequate to excuse his failure to timely interpose an answer to plaintiff's complaint. Our statement in Mission Investment Co. v. Perfect Totalisator Corp., 51 Mich.App. 376, 380, 214 N.W.2d 898 (1974), is applicable here:

"As for counsel's assertion that he was involved in a...