TROYS CONSTRUCTION CORP V RANDY REAGAN
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STATE OF MICHIGAN
COURT OF APPEALS
TROY’S CONSTRUCTION CORPORATION,
UNPUBLISHED
December 14, 2001
Plaintiff/CounterdefendantAppellant,
v
No. 221100
Montcalm Circuit Court
LC No. 97-000357-CK
RANDY REAGAN and MARCIA REAGAN,
Defendants/Counterplaintiffs-
Appellees.
Before: Holbrook, Jr., P.J., and Cavanagh and Meter, JJ.
PER CURIAM.
Plaintiff, which failed to appear for a mandatory settlement conference, appeals by right
from a default and resulting default judgment entered by the trial court. We affirm.
Plaintiff contends that the trial court erred in several respects by granting the default and
default judgment. We review for an abuse of discretion a trial court’s decision to grant a default
and default judgment for failure to appear at a scheduled settlement conference. McGee v
Mocambo Lounge, Inc, 158 Mich App 282, 285; 404 NW2d 242 (1987); see also Schell v Baker
Furniture Co, 232 Mich App 470, 474; 591 NW2d 349 (1998), aff’d and remanded on other
grounds 461 Mich 502 (2000). As stated by the Supreme Court in Alken-Ziegler, Inc v
Waterbury Headers Corp, 461 Mich 219, 227-228; 600 NW2d 638 (1999):
An abuse of discretion involves far more than a difference in judicial
opinion. Williams v Hofly Mfg Co, 430 Mich 603, 619; 424 NW2d 278 (1988). It
has been said that such abuse occurs only when the result is “‘so palpably and
grossly violative of fact and logic that it evidences not the exercise of will but
perversity of will, not the exercise of judgment but defiance thereof, not the
exercise of reason but rather of passion or bias.’” Marrs v Bd of Medicine, 422
Mich 688, 694; 375 NW2d 321 (1985), quoting Spalding v Spalding, 355 Mich
382, 384-385; 94 NW2d 810 (1959), and noting that, although the Spalding
standard has been often discussed and frequently paraphrased, it has remained
essentially intact.
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MCR 2.401(G) states, in relevant part:
(1) Failure of a party or the party’s attorney to attend a scheduled conference, as
directed by the court, constitutes a default to which MCR 2.603 is applicable or
grounds for dismissal under MCR 2.504(B).
(2) The court shall excuse the failure of a party or the party’s attorney to attend a
conference, and enter an order other than one of default or dismissal, if the court
finds that
(a) entry of an order of default or dismissal would cause manifest injustice;
or
(b) the failure to attend was not due to the culpable negligence of the party
or the attorney.
Plaintiff first argues that the trial court should not have entered a default or default
judgment because after the scheduled settlement conference, plaintiff did not receive a copy of
the document entitled “Default, Application, Entry, Affidavit,” on which the entry of default
eventually occurred. We do not find plaintiff’s argument persuasive. Indeed, under Deeb v
Berri, 118 Mich App 556, 562; 325 NW2d 493 (1982), the entry of a statement of default (as
opposed to the entry of a default judgment) can occur without notice to the defaulted party.
Moreover, plaintiff was given notice of defendants’ “motion for default judgment,” which clearly
indicated that defendants were seeking “entry of a default judgment,” dismissal of plaintiff’s
complaint, and judgment for defendants on their counter-claim. No error occurred with respect
to notice.
Next, plaintiff argues that the trial court should not have entered a default or default
judgment because plaintiff’s failure to appear did not constitute culpable conduct under MCR
2.401(G)(2)(b). Plaintiff contends that because it did not know about the settlement conference
and was attempting to seek new counsel, no culpable conduct occurred. Plaintiff’s purported
excuse is unpersuasive. Indeed, notice of the January 15, 1999 settlement conference was sent to
plaintiff’s attorney on or around October 6, 1998. Plaintiff admitted that it found a letter in its
attorney’s file notifying it of the date of the settlement conference. Moreover, the amended trial
notice sent directly to plaintiff (after its attorney withdrew from the case) contained a reminder of
the settlement conference in boldface type. Accordingly, we conclude that an application of
MCR 2.401(G)(2)(b) provides no basis for appellate relief.
Next, plaintiff argues that the trial court should not have entered a default or default
judgment because manifest injustice under MCR 2.401(G)(2)(a) was apparent. Case law does
not provide direct guidance with regard to the meaning of the phrase “manifest injustice” in
MCR 2.401(G)(2)(a). We cannot agree with plaintiff’s implication, however, that merely if a
valid claim existed, it would constitute “manifest injustice” under MCR 2.401(G)(2)(a) to grant a
default and default judgment to a defendant. Indeed, such an interpretation of the phrase
“manifest injustice” often would render MCR 2.401(G) an ineffectual rule, because a valid claim
could survive regardless of its proponent’s failure to attend scheduled conferences.
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Here, at a June 4, 1999 hearing, the trial court determined that no “manifest injustice”
was apparent under MCR 2.401(G). Given the circumstances of the case and plaintiff’s failure to
appear for the settlement conference despite the notice provided, we discern no abuse of
discretion with regard to that determination. See Alken-Ziegler, supra at 227-228.
We note that case law does discuss the phrase “manifest injustice” in the context of MCR
2.603(D)(1), which governs the setting aside of default judgments and which states:
A motion to set aside a default or a default judgment, except when
grounded on 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.
The Supreme Court, in discussing this rule, stated that “manifest injustice is the result that would
occur if a default were to be allowed to stand where a party has satisfied the ‘meritorious
defense’ and ‘good cause’ requirements of the court rule.” Alken-Ziegler, supra at 233. Here,
plaintiff did not demonstrate good cause and therefore has not established manifest injustice.
This conclusion is supported by First Bank of Cadillac v Benson, 81 Mich App 550, 553-554;
265 NW2d 413 (1978), a case in which the defendant was defaulted for failing to comply with a
discovery order. The defendant argued “that he had a reasonable excuse for his failure to comply
with the production order because he was unable to obtain counsel,” id. at 554, and that
“manifest injustice would result if the default is not set aside.” Id. at 555. This Court stated:
In determining whether manifest injustice would occur, each case should be
examined on its own facts.
***
In the present case, only because he failed to secure counsel for himself,
when he had sufficient time to do so, is defendant being denied his day in court.
[Defendant] placed himself in the situation and should not be heard to complain of
manifest injustice. The problem was of his own making.
Similarly, the problem in the instant case was of plaintiff’s own making. Again, no manifest
injustice occurred.
Finally, plaintiff argues that the trial court should not have entered a default under MCR
2.401(G) without first holding a hearing and making findings with regard to the issues of
culpable negligence and manifest injustice. However, there is nothing in the court rule
mandating a hearing or specific findings on the record at the time the default is entered.
Moreover, and significantly, the court later made the relevant findings and specifically referenced
MCR 2.401(G) on June 4, 1999, in ruling on plaintiff’s motion to set aside the default judgment.
Under these circumstances, no abuse of discretion requiring reversal occurred.
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Affirmed.
/s/ Donald E. Holbrook, Jr.
/s/ Mark J. Cavanagh
/s/ Patrick M. Meter
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