TRANSAMERICA CONSTRUCTION CO V KEVIN KULYK
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STATE OF MICHIGAN
COURT OF APPEALS
TRANSAMERICA CONSTRUCTION
COMPANY and PETE STANAJ,
UNPUBLISHED
February 11, 2000
Plaintiffs/CounterdefendantsAppellees,
v
No. 211943
Wayne Circuit Court
LC No. 97-704817 CK
KEVIN KULYK and CHERYL KULYK,
Defendants/CounterplaintiffsAppellants.
Before: Hood, P.J., and Smolenski and Talbot, JJ.
PER CURIAM.
Defendants appeal as of right from an order of default judgment and dismissal of their
counterclaim. We reverse and remand for further proceedings before a different judge.
Defendants’ home was destroyed by fire. Consequently, defendants entered into a fire repair
agreement with plaintiff, Transamerica Construction Company (hereinafter “Transamerica”), to make all
necessary repairs. This agreement provided that plaintiff Transamerica would receive insurance
proceeds in exchange for all services rendered. On February 18, 1997, plaintiff Transamerica filed a
complaint alleging that defendants breached the contract after the repairs had been substantially
completed and that defendants were unjustly enriched as a result of their conduct. On March 7, 1997,
defendants filed a counterclaim which added plaintiff Pete Stanaj, a corporate officer of plaintiff
Transamerica. The counterclaim alleged breach of contract, breach of express warranty, breach of
implied warranty, negligence, and violation of the Michigan Consumer Protection Act.
On December 18, 1997, a settlement conference was held before Judge John Gillis, Jr. While
the substance of the settlement conference was not preserved in the record on appeal, the parties allege
that Judge Gillis ordered that plaintiffs would complete the repairs to the defendants’ home, and
defendants were to allow plaintiffs access to the home to perform the necessary work.1
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On May 6, 1998, the parties appeared before the trial court for a settlement conference and
show cause hearing requested by plaintiffs.2 Plaintiffs asserted that defendants refused to allow
“corrections” to the property. Defendants responded that they gave plaintiffs continuous access to the
property for a three-month period. During that time, the property failed inspection on seven different
occasions, with the most recent failure occurring on May 5, 1998. Defendants asserted that plaintiff
Stanaj had recently threatened defendant Cheryl Kulyk as well as the City of Detroit Inspector. The
threat was allegedly preserved on tape and delineated in the inspector’s report. Consequently,
defendant Cheryl Kulyk obtained a personal protection order which precluded plaintiff Stanaj from
returning to the property. Despite the threat, defendants allowed plaintiffs on the property until the
middle of April and on May 5, 1998, to allow the most recent inspection. Based on those facts,
defendants asserted that they had substantially complied with the contract while plaintiffs were unwilling
or unable to complete the project in a timely or workmanlike manner. Defendants requested a trial on
the merits.
Judge Gillis did not address the factual allegations raised by defendants, but merely inquired
how long it would take plaintiffs to complete the job. Plaintiffs’ counsel represented that it would take
one week of forty-hour access to complete the work. Judge Gillis stated that defendants had been
cooperating and would have to allow plaintiffs to complete the work. Defendant Kevin Kulyk
responded that he would not allow plaintiff Stanaj into the home. Judge Gillis stated that defendants had
to comply with the order within ninety days or they would be found in contempt and sent to jail.
Counsel for defendants asked Judge Gillis to provide a factual finding or legal basis for his conclusion
that defendants had to allow plaintiff Stanaj access to their property following a threat to their safety.
Judge Gillis responded that if the court’s order was not complied with, a default judgment would enter.
A written order evidencing the trial court’s ruling was not filed in the lower court record.
Although Judge Gillis had ruled that defendants had ninety-days to comply on May 6, 1998, the
parties appeared before Judge Gillis on May 13, 1998, for what plaintiffs deemed an “adjourned
motion” to hold defendants in contempt. Defendants requested that Judge Gillis make findings of fact
and conclusions of law on the record to justify a default judgment and dismissal of the counterclaim.
Judge Gillis did not respond to defense counsel’s request, and the following exchange took place
between Judge Gillis and defense counsel:
[JUDGE GILLIS]: You admit your clients violated the [c]ourt’s order and would not
allow Transamerica [sic] to come in to complete four hours of work which the [c]ourt
ordered one week ago? Answer my question? Did you allow them in or not?
[DEFENDANTS’ COUNSEL]: We did not allow them in.
[JUDGE GILLIS]: Then it’s a direct violation of this [c]ourt’s order of one week ago.
The motion for default judgment is granted as to Transamerica [sic]. The motion to
dismiss [d]efendant’s [sic] counterclaim is granted. The [c]ourt will order the money in
escrow to be transferred to Transamerica [sic].
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[DEFENDANTS’ COUNSEL]: Judge, I want to make a record on this for appeal.
What are your findings of fact and conclusions of law? We need to make a record on
that.
[JUDGE GILLIS]: We’ve made a record. The [d]efendants violated the [c]ourt’s
order. I’ve granted default judgment to the [p]laintiffs, Transamerica. I’ve made my
ruling, counsel.
Judge Gillis later denied motions for relief from judgment, reconsideration, and stay pending appeal.
Defendants argue that their due process rights were violated and the trial court abused its
discretion in granting a default judgment without considering other available sanctions. We agree.
Although the trial court stated that it was granting the motion for default judgment and motion to dismiss,
there were no such motions pending. Rather, the issue before the trial court was whether defendants
should be held in contempt. Contempt which is committed in the immediate view and presence of the
court may be summarily punished by fine or imprisonment or both. MCL 600.1711(1); MSA
27A.1711(1). When contempt is committed outside the immediate view and presence of the court, it
may be punished by fine or imprisonment or both, after proof of the facts charged have been made by
affidavit or other method and an opportunity to defend. MCL 600.1711(2); MSA 27A.1711(2). In
the present case, the alleged contempt did not occur in the immediate presence of the trial court.
Accordingly, the initiation of the contempt proceeding should have been initiated through an ex parte
motion supported by an affidavit of facts showing the alleged contemptuous conduct. MCR 3.606(A);
In re Contempt of Barnett, 233 Mich App 188, 192-193; 592 NW2d 431 (1998). Once accused of
contempt, defendants were entitled to be informed of the nature of the offense, entitled to secure time to
prepare a defense including the production of witnesses, and entitled to secure the assistance of counsel.
In re Collins, 329 Mich 192, 196; 45 NW 31 (1950). Here, the trial court did not advise defendants
of the nature of the contempt proceeding, that is, whether it was a civil or criminal contempt proceeding,
and did not allow defendants the opportunity to prepare a defense. Although defendants indicated that
they had documentary evidence to justify their conduct in excluding plaintiffs from their home, the trial
court did not address or hear any defense. Accordingly, the trial court’s entry of a default judgment and
dismissal of the counterclaim as contempt sanctions for violation of the “court’s order” is reversed.
Furthermore, the trial court’s conclusion that defendants were in violation of its orders is without
merit. An order does not become effective until it is reduced to writing and signed. Tiedman v
Tiedman, 400 Mich 571, 576; 255 NW2d 632 (1977). Irrespective of whether defendants agreed to
any compromise to allow plaintiffs into their home, an order evidencing any agreement was not filed in
the lower court record. Additionally, an order that defendants had to continue to allow plaintiffs access
to the home was not reduced to writing. Accordingly, the trial court erroneously held defendants in
contempt of orders which were not reduced to writing. Even assuming that the trial court’s oral rulings
were effective when rendered, the trial court did not properly enforce the oral ruling because it allowed
defendants ninety days to comply. A mere seven days had passed when defendants were held in
contempt.
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The trial court’s orders are vacated. After a review of the record, we find that the case should
be assigned to a different trial judge on remand. MCR 7.216(A)(7); DeRush v DeRush, 218 Mich
App 638, 643; 554 NW2d 322 (1996).
Reversed and remanded for proceedings consistent with this opinion before a different trial
judge. We do not retain jurisdiction.
/s/ Harold Hood
/s/ Michael R. Smolenski
/s/ Michael J. Talbot
1
The parties dispute what transpired at the settlement conference. Defendants contend that Judge Gillis
sua sponte ordered plaintiffs to complete the repairs and that defendants would allow them to do so.
Defendants contend that they initially objected to this arrangement, but relented. Plaintiffs contend that
Judge Gillis proposed that work would be completed as an interim compromise to which neither party
objected. Plaintiffs contend that this compromise was placed on the record, but were advised that no
record existed for that date. There is no transcript of the settlement conference in the record on appeal,
and there is no written order to evidence any ruling which resulted at the settlement conference.
2
On April 22, 1998, plaintiffs filed a document entitled “Plaintiff’s [sic] petition for order to show cause
for willful violation of Judge Gillis’ instructions.”
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