No doubt about it, Jordan Mirch or someone representing him should have appeared at a scheduled status conference in Oakland County Circuit Court Judge Denise Langford-Morris’ courtroom.
But summarily clobbering him with a $2 million default judgment isn’t right either, according to a per curiam Court of Appeals panel in RDI of Michigan v. Michigan Coin-Op Vending, et al.
Langford-Morris granted the motion of Mirch’s counsel to withdraw from the case on Aug. 27, 2008. She stated on the record:
So, what I will do is I will stay the case for 21 days and we’ll have you appear with or without counsel, and all trial counsel must appear on that status date.
My clerk will give you the date in approximately 21 days. Failure to appear could result in sanctions and/or finding of liability.
A 21-day stay would have lasted until Sept. 17. But the judge’s written order called for a Sept. 16 status conference, at which “all counsel and parties” must appear.
Mirch didn’t show, later explaining that the written order’s scheduled date clashed with what Langford-Morris told him in court.
Wrong, COA judges Henry William Saad, Joel P. Hoekstra and Deborah A. Servitto collectively said. Even if the date was incorrect, Mirch still had an obligation to appear, the panel said, citing Porter v. Porter, 285 Mich. App. 450 (2009).
Langford-Morris’ response to Mirch’s non-appearance wasn’t right either, the panel ruled. After noting that no one representing Mirch had appeared, the judge, “without any analysis, consideration, or weighing of options,” entered an on-the-spot default and a $2 million default judgment against him.
That’s not the way it’s supposed to go under MCR 2.401(G)(1). The COA panel explained:
[U]nder MCR 2.401(G), the trial court was required to excuse defendant’s failure to attend the pre-trial conference and not enter a default if it found that the entry of default would cause manifest injustice or if defendant’s failure to attend was not a result of his or his attorney’s culpable negligence. Here the trial court did not make any findings pursuant to MCR 2.401(G).
When defendant’s counsel argued at the hearing on his motion to vacate the order finding liability that permitting the default judgment of more than $2,000,000 to remain in place would result in manifest injustice, the trial court simply replied that there was no excuse for failing to appear at the status conference. Therefore, the trial court appears to have disregarded MCR 2.401(G). …
Accordingly, the trial court abused its discretion when it failed to evaluate any other available options on the record. On remand, the trial court is to evaluate less drastic sanctions … .
What’s more, because Mirch had previously appeared in the case, under MCR 2.603(B)(1), he was entitled to seven day’s notice before the default judgment was entered. The lack of notice was “plain error,” the COA panel said.
And, despite plaintiff’s protests, Mirch should have been allowed to contest damages, the panel ruled:
Plaintiff argues that, regardless of any notice violation, the end result will remain unchanged because the damages were all enumerated in the complaint and lease agreement. While this may be true, this Court cannot assume it will be the case – that is the very reason to allow defaulted parties an opportunity to participate in any damages determinations.
The parties, and Langford-Morris, will have another go at it on remand.