AMCO BUILDERS & DEVELOPERS INC V TEAM ACE JOINT VENTURE
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Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________
C h i e f J u s ti c e
Maura D. Corrigan
J u s t ic e s
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman
Opinion
____________________________________________________________________________________________________________________________
FILED JULY 17, 2003
AMCO BUILDERS & DEVELOPERS, INC.,
Plaintiff/Counter-
Defendant-Appellant,
v
No. 120459
TEAM ACE JOINT VENTURE,
Defendant/Counter
Plaintiff/Cross-
Defendant,
and
HARTFORD FIRE INSURANCE CO.,
Defendant/Cross-
Defendant,
and
ACME DEMOLITION/INTERVALE
JOINT VENTURE,
Defendant-Appellee,
and
LEROY LOVE doing business
as ACME DEMOLITION CO.,
Defendant/Counter
Plaintiff/Cross-
Plaintiff,
and
INTERVALE EXCAVATING &
DEMOLITION, INC,
Defendant/Appellee/
Cross-Defendant,
and
TEAM CONTRACTING, INC.
AMERICAN CONSTRUCTION & ENERGY,
AND JARVIS PAINTING, INC.,
Defendants.
__________________________________
BEFORE THE ENTIRE BENCH
CAVANAGH, J.
This case requires us to decide whether the trial court’s
refusal to set aside a default judgment was an abuse of
discretion.
Because we find that the trial judge did not
abuse his discretion in refusing to set aside the default
judgment, we reverse the judgment of the Court of Appeals.
I
This case involves claims for breach of contract and
tortious interference with a contractual relationship arising
from a construction project of the city of Detroit housing
commission.
On
November
23,
1998,
the
2
circuit
court
directed
defendants,
Acme
Demolition/Intervale
Joint
Venture
(Acme/Intervale Joint Venture) and Intervale Excavating &
Demolition, Inc. (Intervale), to produce Clarence Carson, the
principal of Intervale, for deposition within thirty days.
This order was entered only after the trial judge “bent over
backwards” for defendants, even providing defense counsel an
opportunity to contact Mr. Carson to ensure that he could
appear within thirty days. The order provided that “[f]ailure
to produce Clarence Carson in conformity with this Order shall
subject Defendant to a motion for default judgment.”
When
defendants
Intervale
and
Acme/Intervale
Joint
Venture failed to comply with the order, plaintiff filed a
motion for default judgment against defendants.
At the
January 15, 1999, hearing on the motion, defense counsel
stated that he had been unable to reach Mr. Carson because of
the holidays and the illness of defense counsel’s son.
He
acknowledged that he had “not participated” in discovery and
admitted “not having been available to properly represent”
defendants. However, he assured the court that communications
with his clients had been restored.
The court granted the
motion for default and the order of default was entered
against both defendants on January 27, 1999, for failure to
comply with the November 23, 1998, order.
Both
defendants
moved
to
3
set
aside
the
default
on
February 12, 1999.
Although defendants’ attorney assumed
responsibility for the delay, the motion was denied on March
12, 1999, because the court found that neither defendant
demonstrated good cause to set aside the default.
Default judgment in the amount of $595,606.15 was entered
against only Intervale when defense counsel did not appear for
the March 18, 1999, hearing on the issue of damages.1
New counsel for defendant moved to set aside the default
entry against both Intervale and Acme/Intervale Joint Venture,
as well as the default judgment against Intervale, claiming
that Mr. Carson was not aware that the court had ordered his
production for deposition.
The court denied the motion at a
hearing on April 30, 1999, because it had “bent over backwards
. . . making sure that . . . [prior defense counsel] had the
okay
from
his
clients
that
they
would
deposition within the period of time.”
be
produced
for
The circuit court was
not satisfied that good cause for setting aside the default
and the default judgment was presented. The order denying the
motion was entered on May 5, 1999.
1
Apparently, there was some confusion whether defense
counsel was representing both Acme/Intervale Joint Venture and
Intervale.
At the March 18, 1999, hearing, counsel for
plaintiff stated that although default had been entered
against both Acme/Intervale Joint Venture and Intervale she
was proceeding only against Intervale. For the remainder of
this opinion, “defendant” refers to defendant Intervale
Excavating & Demolition, Inc.
4
Defendant appealed both the entry of default judgment and
the denial of the motion to set aside the default and the
default judgment.
The Court of Appeals reversed in a two-to
one unpublished opinion per curiam.2 Finding that the actions
of
defense
counsel
constituted
abandonment,
the
majority
opined that there was good cause for setting aside the default
and the default judgment.
The Court of Appeals majority held
that the trial court abused its discretion in refusing to set
aside the default judgment.
The dissenting judge concluded
that the level of deference precludes reversal in this case;
he found that the refusal to set aside the default and the
default judgment was not an abuse of discretion.
Plaintiff appealed the Court of Appeals reversal of the
trial court’s denial of defendant’s motion to set aside the
default judgment.
This Court granted plaintiff’s application
for leave to appeal.
467 Mich 896 (2002).
II
This Court reviews a trial court’s refusal to set aside
a default or default judgment for an abuse of discretion.
Zaiter v Riverfront Complex, Ltd, 463 Mich 544, 552; 620 NW2d
646 (2001); Alken-Ziegler, Inc v Waterbury Headers Corp, 461
Mich 219, 227; 600 NW2d 638 (1999). As we recently reiterated
2
Unpublished opinion per curiam, issued November 2, 2001
(Docket No. 221513).
5
in Alken-Ziegler:
The ruling on a motion to set aside a default
or a default judgment is entrusted to the
discretion of the trial court.
Where there has
been a valid exercise of discretion, appellate
review is sharply limited. Unless there has been a
clear abuse of discretion, a trial court’s ruling
will not be set aside.
* * *
This
Court
historically
has
cautioned
appellate courts not to substitute their judgment
in matters falling within the discretion of the
trial court, and has insisted upon deference to the
trial court in such matters.
For example, the
Court stated in Scripps v Reilly, 35 Mich 371, 387
(1877):
“It can never be intended that a trial judge
has purposely gone astray in dealing with matters
within the category of discretionary proceedings,
and unless it turns out that he has not merely
misstepped,
but
has
departed
widely
and
injuriously, an appellate court will not re
examine. It will not do it when there is no better
reason than its own opinion that the course
actually taken was not as wise or sensible or
orderly as another would have been.”
* * *
Moreover,
although
the
law
favors
the
determination of claims on the merits, it has also
been said that the policy of this state is
generally against setting aside defaults and
default judgments that have been properly entered.
[Alken-Ziegler at 227-229 (citations omitted).]
III
The setting aside of a default or default judgment is
governed by MCR 2.603(D)(1), which provides:
A motion to set aside a default or a default
judgment,
except
when
grounded
on
lack
of
6
jurisdiction over the defendant, shall be granted
only if good cause is shown and an affidavit of
facts showing a meritorious defense is filed.
Plaintiff has not challenged defendant’s affidavit of
meritorious defense; therefore, the trial court only examined
whether there was good cause to set aside the default and
default judgment. To show “good cause,” a party may establish
“‘(1) a substantial defect or irregularity in the proceeding
upon which the default was based,’” or “‘(2) a reasonable
excuse for failure to comply with the requirements which
created the default . . . .’”
Alken-Ziegler at 230 (citation
omitted).
Defendant asserts that there is good cause for setting
aside the default and the default judgment because the actions
of
prior defense counsel constituted abandonment.
While,
generally, an attorney’s negligence is attributable to that
attorney’s client, abandonment by counsel has been held to
constitute good cause for setting aside a default or default
judgment.
(1957).
White v Sadler, 350 Mich 511, 523-524; 87 NW2d 192
In White, this Court recognized that a default
judgment may be set aside on the basis of abandonment or
withdrawal by an attorney:
We find no ALR annotation squarely on the
point of the negligence of an attorney as a ground
for opening or vacating a default judgment, but we
do find one on the abandonment of or withdrawal
from a case by an attorney as such a ground (114
ALR 279).
That annotation has this revealing
7
passage on page 280:
“An attorney’s negligence or mistake is
distinguishable, as regards the right to reopen a
default judgment, from his abandonment of the case,
which may be in effect a fraud on his client. So
that from the mere fact that the attorney’s
negligence may be imputable to his client and
prevent the latter from relying on that ground for
vacating or opening a default judgment, it does not
necessarily follow that the same rule will apply in
the event of the attorney’s abandonment of the
case.
It is said in 15 RCL (Perm Supp ed),
Judgments, § 161, p 711: ‘In some jurisdictions the
negligence or mistake of an attorney is not
imputable to his client, and does not debar him
from obtaining relief from a judgment due thereto,
but the decisions in most of the States are to the
effect that the neglect or mistake of an attorney
or agent must be treated as that of his principal,
and hence whenever the mistake, negligence or
inadvertence relied upon is of so gross a character
that it would not have entitled the party to relief
had it been his own, it is equally unavailable to
procure him relief when attributable to his
attorney.’” [Id.]
In this case, the circuit court examined the actions of
the prior defense counsel and refused to set aside the default
and the default judgment.
Defendant
argued
that
the
default
and
the
default
judgment should be set aside because Mr. Carson did not have
knowledge that the trial court ordered him to appear for
deposition, nor did he have knowledge that default had been
entered. Defendant asserts Mr. Carson’s lack of knowledge was
the result of prior counsel’s abandonment.
an affidavit dated April 22, 1999.
Mr. Carson signed
The affidavit stated, in
part, that before April 14, 1999, Mr. Carson was not advised
8
that any party was attempting to depose him, nor was he
advised that the court had entered an order compelling his
appearance for deposition or that default and default judgment
had been entered.
The Court of Appeals majority relied, in part, on this
affidavit
to
conclude
that
the
trial
judge
abused
his
discretion in refusing to set aside the default judgment. The
affidavit and statements by prior counsel that he failed to
properly represent his clients convinced the Court of Appeals
majority that prior counsel abandoned the representation.
However, the Court of Appeals is obliged to review a
trial court’s ruling on a motion to set aside a default or
default judgment for an abuse of discretion.
Alken-Ziegler at 227.
Zaiter at 552;
Although the Court of Appeals majority
correctly identified this as the standard of review, it
impermissibly substituted its own judgment for that of the
trial court.
There is significant evidence in the record from which
the
trial
judge
could
conclude
abandoned by prior counsel.
that
defendant
was
not
At the April 30, 1999, hearing,
the trial judge stated that despite prior counsel’s son’s
medical
problems,
prior
counsel
continued
to
represent
defendants and “was here most of the time with regard to this
case.”
The trial judge also stated that he “bent over
9
backwards” to assure that prior counsel “had the okay from his
clients that they would be produced for deposition within the
period
of
time.”
Before
entering
the
order
compelling
production of Mr. Carson, the trial judge apparently provided
prior counsel with an opportunity to contact Mr. Carson to
ensure that he could appear for a deposition within thirty
days.
Prior counsel assured the court that the order was
“okay.”
Further, on February 3, 1999, Mr. Carson signed an
affidavit
entitled
"Affidavit
of
Intervale
Excavating
&
Demolition, Inc, in Support of Motion to Set Aside Default
Entry."
At the least, this proves that Mr. Carson and prior
counsel had contact regarding the case after the default was
entered, but before the date Mr. Carson claims he became aware
that the default had been entered.
Moreover, in response to
defendants' argument below that Mr. Carson lacked knowledge of
significant aspects of the case, the trial court stated that
it recalled being told by prior counsel that he was in
communication with his clients.
The trial judge examined all the evidence regarding prior
counsel’s representation and determined that prior counsel did
not abandon the representation; therefore, defendant had not
presented good cause for setting aside the default and the
default judgment.
In light of the evidence in the record and
10
the trial judge’s reasoned decision based on that evidence we
cannot conclude that the trial court’s refusal to set aside
the default judgment was an abuse of discretion.
IV
We agree with plaintiff and the dissenting Court of
Appeals judge that the Court of Appeals majority failed to
accord the circuit court’s ruling the deference it was due
and, thus, we reverse the ruling of the Court of Appeals.
Michael F. Cavanagh
Elizabeth A. Weaver
Marilyn Kelly
Stephen J. Markman
11
S T A T E
O F
M I C H I G A N
SUPREME COURT
AMCO BUILDERS & DEVELOPERS, INC,
Plaintiff/Counter-
Defendant-Appellant,
v
No. 120459
TEAM ACE JOINT VENTURE,
Defendant/Counter
Plaintiff/Cross-
Defendant,
and
HARTFORD FIRE INSURANCE CO,
Defendant/Cross-
Defendant,
and
ACME DEMOLITION/INTERVALE
JOINT VENTURE,
Defendant-Appellee,
and
LEROY LOVE doing business as ACME
DEMOLITION CO,
Defendant/Counter
Plaintiff/Cross
Plaintiff,
and
INTERVALE EXCAVATING & DEMOLITION, INC,
Defendant-Appellee/
Cross-Defendant,
and
TEAM CONTRACTING, INC, et al,
Defendants
________________________________
YOUNG, J. (concurring).
I agree with the majority that the trial court’s decision
to deny defendant’s motion to set aside the default judgment
was not an abuse of discretion and, thus, the judgment of the
Court of Appeals should be reversed.
However, I conclude
that, in civil cases, abandonment satisfies the “good cause”
requirement
to
set
aside
a
default
judgment
only
when
principles of agency would avoid imputation of the attorney’s
negligent omissions to the client.3
3
Because
criminal
representations
implicate
constitutional
concerns
regarding
the
adequacy
of
a
defendant’s representation, my analysis is confined to civil
representations only. See Const 1963, art 1, § 20 (“In every
criminal prosecution, the accused shall have the right . . .
to have the assistance of counsel for his or her defense . .
. .”). See also People v Pickens, 446 Mich 298, 338; 521 NW2d
797 (1994)(setting forth the standard for effective assistance
of counsel); People v Pubrat, 451 Mich 589, 594; 548 NW2d 595
(1996)(“The right to counsel also encompasses the right to the
effective assistance of counsel.”).
2
I
As an initial matter, I do not believe that White v
Sadler,
350
Mich
511;
87
NW2d
192
(1957),
recognized
abandonment, in and of itself, as a ground for setting aside
a default judgment.
Citing a singular authority, and in
dicta, the White Court recognized a potential difference
between neglect and abandonment, and suggested the possibility
that abandonment may be a basis for setting aside a default
judgment:
“An attorney’s negligence or mistake is
distinguishable, as regards the right to reopen a
default judgment, from his abandonment of the case,
which may be in effect a fraud on his client. So
that from the mere fact that the attorney’s
negligence may be imputable to his client and
prevent the latter from relying on that ground for
vacating or opening a default judgment, it does not
necessarily follow that the same rule will apply in
the event of the attorney’s abandonment of the
case.” [Id. at 523, quoting anno: Abandonment of or
withdrawal from case by attorney as ground for
opening or setting aside judgment by default, 114
ALR 279, 280.]
On the basis of this brief, shallowly rooted suggestion that
abandonment may be a ground for setting aside a default
judgment, subsequent courts cited White for the proposition
that
there is, in fact, a dispositive distinction between
neglect and abandonment.
See, e.g., Pascoe v Sova, 209 Mich
App 297, 300; 530 NW2d 781 (1995)(“Similarly, in White, supra,
the Supreme Court recognized a distinction between negligent
3
legal
representation
altogether.”).
and
abandonment
of
representation
As a result, post-White courts have concluded
that abandonment is not to be imputed to the client, whereas
ordinary neglect is to be imputed.
See, e.g., Coburn v
Coburn, 230 Mich App 118, 128; 583 NW2d 490 (1998)(“Because
the client properly may be burdened with the consequences of
counsel’s
improprieties
short
of
abandoning
the
representation, [White, supra at 522-523], adversely affected
parties
and
their
attorneys
have
no
one
to
blame
but
themselves if an appeal is dismissed on this basis.”).
Although White recognized a potential distinction between
neglect and abandonment, it did not adopt the distinction, nor
did it conclude that abandonment per se is a proper basis on
which to set aside a default judgment.
To the contrary,
White, in dicta, and in reliance on a single ALR citation,4
4
I note that the ALR to which White cites, 114 ALR 279,
suggests that abandonment can be tantamount to fraud on the
client.
“Fraud” is generally defined as “all acts, omissions, and
concealments involving a breach of legal or equitable duty and
resulting in damage to another, or the taking of undue or
unconscientious advantage of another . . . .”
General
Electric Credit Corp v Wolverine Ins Co, 420 Mich 176, 189;
362 NW2d 595 (1984)(quoting 37 CJS, Fraud, § 1, p 204).
“Fraud”
encompasses
both
actual
fraud–an
intentional
perversion of the truth–and constructive fraud–an act of
deception or a misrepresentation without an evil intent.
General Electric Credit Corp, supra at 188-189. Furthermore,
“fraud” may be committed by open false assertions or by
suppressing facts, i.e., silent fraud. Hord v Environmental
(continued...)
4
merely
notes
that
if
the
offending
attorney’s
conduct
constituted abandonment, the distinction may be important.
White, supra at 523.
The White Court offered no further
discussion, nor did it decide whether abandonment is an
appropriate ground for setting aside a default judgment.
Accordingly, in light of the limited value of White’s
discussion of a potential distinction between neglect and
abandonment,
I
am
unpersuaded
that
White
stands
for
the
proposition that abandonment automatically satisfies the “good
cause” element required to set aside a default or default
judgment under MCR 2.603(D)(1).
That said, in Loree v Reeves, 2 Mich 133 (1851), this
4
(...continued)
Research Institute of Michigan (After Remand), 463 Mich 399,
412; 617 NW2d 543 (2000), quoting United States Fidelity &
Guaranty Co v Black, 412 Mich 99, 125; 313 NW2d 77 (1981). In
the case of silent fraud, mere nondisclosure of facts is
insufficient.
Hord, supra at 412.
Rather, there must be
circumstances that establish a legal duty to make the
disclosure.
Id.
In the case of agency, “[a]n agent who
acquires information relevant to matters within his province
and of which he should know the principal would want to know,
has a duty to reveal it, unless it was received
confidentially.”
Seavy, Agency (1964), Duties of Care and
Obedience, § 143, p 238.
Accordingly, it is not enough to say that “abandonment”
constitutes a fraud on the client. Rather, consistent with
the definition of fraud and the principles of agency, the
court must identify a specific circumstance, such as an
intentional perversion of the truth or the failure to reveal
information in accordance with the agent’s duty, to conclude
that the attorney’s misconduct constitutes a fraud on the
client.
5
Court
considered
against
a
whether
client
whose
to
set
aside
attorney
a
had
default
charged
abandoned
the
representation. The defendant, a New York resident who was the
object of a suit in Michigan for indebtedness, retained an
attorney to represent him.
The attorney, however, neither
appeared on the defendant’s behalf nor interposed a defense.
Rather, the attorney completely abandoned the defendant’s
representation.
Consequently, the trial court
entered a
default judgment against the defendant.
This Court set aside the default and ordered a new trial
in Loree.5
The Court reasoned:
“[The client] was prompt in taking the
necessary steps to employ an attorney, and he had no
right to suppose that the attorney he did retain,
and in time to have attended to the suit, and to
whom he confidently confided the preparation and
management of his defense, would abandon his case
and suffer judgment to be taken against him by
default . . . [the client] was authorized to believe
that his attorney would appear and plead for him,
and apprise him of the nature of the issue joined in
5
In doing so, the Court exercised its general authority
to grant a new trial in the interest of justice:
Courts of record are vested with general
discretionary power, on the subject of granting new
trials; yet this discretionary power is judicial,
and not arbitrary, and should always be exercised
by Courts with great care in moulding their
decisions on applications for new trials, in view
of the peculiar circumstances connected with each
case, so as to subserve the purposes of substantial
justice, and in protecting at the same time, the
just and equitable rights of both parties. [Id. at
134.]
6
the cause, and the time when the same would be
brought to trial.” [Id. at 136.]
The Court further reasoned:
“It is contended on the part of the plaintiff,
that if the defendant has lost his defense to the
suit by the negligence or improper conduct of his
attorney, he should be compelled to seek redress by
action against the attorney. But he should not be
required to pursue this course, if the remedy in the
end, would be either doubtful or inadequate.” [Id.
at 137 (emphasis added).]
Loree arguably supports the proposition that abandonment
can be a ground to set aside a default judgment.
Notably,
however, the Loree Court failed to explain why the rules of
agency, which traditionally govern much of the attorney-client
relationship,
should
abandonment.
In my opinion, this is a weakness in the
analysis in Loree.
not
govern
even
in
the
case
of
Additionally, although legal-malpractice
actions in civil cases were thought to provide an inadequate
remedy in the mid-nineteenth century, surely no twenty-first
century court would so conclude.
Accordingly, I would limit
Loree to those cases in which there is no legal remedy against
the offending attorney.
II
I believe that abandonment satisfies the “good cause”
requirement to set aside a default judgment only when the
principles of agency would avoid imputation of the attorney’s
negligence to the client.
7
The attorney-client relationship is generally governed by
principles of agency. Detroit v Whittemore, 27 Mich 281, 286
(1873)(“The employment of counsel does not differ in its
incidents,
or
in
the
rules
which
govern
it,
from
the
employment of an agent in any other capacity or business.”);
Katz v Kowalsky, 296 Mich 164, 174; 295 NW 600 (1941)(applying
principles of agency to the attorney-client relationship);
Olitkowski v St Casimir’s S&L Ass’n, 302 Mich 303, 309-310; 4
NW2d 664 (1942)(applying principles of agency to the attorney
client relationship); Friedman v Dozorc, 412 Mich 1, 75; 312
NW2d 585 (1981)(“Attorneys are the agents who provide the
necessary expertise for clients who wish to litigate their
rightful claims.”); Fletcher v Fractional No 5 School Dist Bd
of Ed, 323 Mich 343, 348; 35 NW2d 177 (1948)(“In a legal
sense,
an
attorney
at
law
often
acts
as
an
agent
or
representative.”).
Accordingly, in civil cases, a client is bound by an
attorney’s actions and inactions as long as the attorney’s
conduct was within the scope of the attorney’s authority. See
Everett v Everett, 319 Mich 475, 482; 29 NW2d 919 (1947),
quoting Jones v Leech, 46 Iowa 186, 187 (1877)(“‘The law
regards the neglect of an attorney as the client’s own neglect
and will give no relief from the consequences thereof.’”);
White, supra at 522 (in Michigan, an attorney’s neglect is
8
generally attributable to his client); Alken-Ziegler, Inc v
Waterbury Headers Corp, 461 Mich 219, 224; 600 NW2d 638
(1999)(“A party is responsible for any action or inaction by
the party or the party’s agent.”). See also Prate v Freedman,
583 F2d 42, 48 (CA 2, 1978)(“In our legal system, an attorney
is his client’s agent and representative . . . . Like any
other principal, a client may be bound by the acts of his
agent, acting within the scope of his authority.”).
Applying
this
principle,
I
believe
that
whether
“abandonment” relieves the client of liability is properly
resolved by determining whether the attorney was acting within
the scope of the attorney’s authority.
If the attorney was
acting within the scope of the authority granted by the
client,
the
client
remains
liable
for
the
attorney’s
inactions, and “abandonment” is not a sufficient ground to set
aside the default or default judgment under MCR 2.603(D)(1).
III
This conclusion is consistent with the analysis employed
in several foreign jurisdictions. In Bailey v Algonquin Gas
Transmission Co, 788 A2d 478, 483-485 (RI, 2002), the Rhode
Island Supreme Court concluded that an attorney’s failure to
respond to discovery requests was an insufficient basis on
which to set aside a default judgment. The court reasoned:
[the
In this case . . . there is no evidence that
client] attempted to terminate its agency
9
relationship with [the offending attorney] before
the entry of the default judgment. Indeed, it was
not until [the client] received an execution on the
judgment
that
it
took
any
action
in
this
regard. . . .
* * *
[The client] contends that the motion justice
overlooked the stipulation that it was not negligent
in this case, and that, through no fault of its own,
it was misled by its grossly negligent attorney.
This argument, however, fails to recognize the
“fundamental of agency law which imputes the neglect
of an attorney in professional matters to his client
and considers the omissions of the attorney as
though they were the neglect of the client himself.”
That fundamental law of agency does not mutate
merely because the viral strain of legal misconduct
in a particular case has become so virulent as to
constitute “gross” negligence. [Id. (citations
omitted).]
See also Panzino v Phoenix, 196 Ariz 442; 999 P2d 198 (2000).
I find Rhode Island’s analysis persuasive, and would
similarly conclude that abandonment, standing alone, is an
insufficient reason to deviate from the principles of agency.
Regarding the “injustice” of allowing a client to suffer the
consequences of the attorney’s actions, I find the United
States Supreme Court’s statement in Link v Wabash R Co, 370 US
626, 633-634; 82 S Ct 1386; 8 L Ed 2d 734 (1962), compelling:
There is certainly no merit in the contention
that dismissal of petitioner’s claim because of his
counsel’s unexcused conduct imposes an unjust
penalty on the client. Petitioner voluntarily chose
this attorney as his representative in the action,
and he cannot now avoid the consequences of the acts
or omissions of this freely selected agent.
Any
other notion would be wholly inconsistent with our
system of representative litigation, in which each
party is deemed bound by the acts of his lawyer
agent . . . .”
10
Accordingly, I would conclude that abandonment is not a
proper ground on which to set aside a default or a default
judgment in the absence of a circumstance that would release
the client from liability for the attorney’s actions under
agency principles.
I
am
empathetic
to
clients
who
must
suffer
the
consequences of a default judgment as a result of their
attorneys’ failure to act with diligence and
promptness.
However, these clients are not without a remedy.
Clients who
suffer damages as a result of attorneys’ misconduct may also
pursue claims of legal malpractice, through which they can be
made whole again.
reasonable
In addition, attorneys who fail to act with
diligence
and
promptness
are
subject
to
disciplinary action for violating the Rules of Professional
Conduct.
MRPC 1.3.
Attorneys are also subject to discipline
for failing to keep a client reasonably informed.
MRPC 1.4.
IV
In sum, I believe that abandonment satisfies the “good
cause” requirement to set aside a default or default judgment
under MCR 2.603(D)(1) only when principles of agency would not
impute the attorney’s negligent omissions to the client.
Robert P. Young, Jr.
Maura D. Corrigan
Clifford W. Taylor
11
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