Mink v. Masters

204 Mich. App. 242 (1994) 514 N.W.2d 235 MINK v. MASTERS Docket No. 146044. Michigan Court of Appeals. Submitted November 18, 1993, at Detroit. Decided March 21, 1994, at 9:35 A.M. Hardy, Lewis, Pollard & Page, P.C. (by James R. Hand and Ann L. Vanderlaan), for Robert E. Mink. Pentiuk, Miller & Waterman, P.C. (by Dennis H. Miller), for Richard Masters, Albert Rogers, Richard Hartzell, All Pro Corporation, and Cooksey Group, Inc. Before: DOCTOROFF, C.J., and SAWYER and C.J. SINDT,[*] JJ. SAWYER, J. Defendants appeal from a default judgment entered in favor of plaintiff in the amount of $240,000 plus interest following defendants' *244 failure to comply with court orders compelling discovery. We affirm in part and reverse in part. Defendants first argue that the trial court abused its discretion by entering a default judgment against them for failure to comply with discovery requests. We disagree. We review this issue to determine whether the trial court abused its discretion in entering the default judgment. Frankenmuth Mutual Ins Co v ACO, Inc, 193 Mich App 389, 396; 484 NW2d 718 (1992). The court rules specifically authorize default judgment as a sanction for discovery abuses. MCR 2.313(B)(2)(c). However, it is a drastic measure and should be used with caution. Frankenmuth, supra at 396. Before imposing the sanction of default judgment, the trial court should consider whether the failure to respond to discovery requests extends over a substantial period, whether there was a court order directing discovery that was not complied with, the amount of time that elapsed between the violation and the motion for default judgment, and whether willfulness has been shown. Id. at 396-397. The court should also evaluate other options before concluding that a drastic sanction is warranted. Id. at 397. The sanction of default judgment should be employed only when there has been a flagrant and wanton refusal to facilitate discovery and not when failure to comply with a discovery request is accidental or involuntary. Id. In the case at bar, plaintiff requested certain financial records of Cooksey Group, Inc., which request defendants failed to honor. Plaintiff filed a motion to compel production of the documents and, approximately two months after the initial request, the court held a hearing on the motion and granted the motion to compel and ordered *245 defendants to supply the documents and to answer interrogatories within thirty days. Defendants failed to comply with the order and, almost four weeks after the deadline, plaintiff filed a second motion to enforce the court's earlier order compelling defendants to produce the documents. Another hearing was held, and defendants were given an additional seven days after that hearing to supply the requested information. Defendants again failed to comply with the court's order and another motion was brought, the hearing on that motion being held two weeks after the deadline set in the second order. Following that hearing, the trial court granted the default judgment. Approximately 3 1/2 months later, the court heard defendants' motion for reconsideration to set aside the default judgment, at which time defendants had still not complied with the discovery orders. Finally, we note that the court had specifically warned defendants in its second order that a failure to comply with the discovery request would result in the entry of a default judgment. Under the facts of this case, we are not persuaded that the trial court abused its discretion in granting a default judgment as a sanction for failure to comply with discovery. Defendants were afforded a number of opportunities to comply with the discovery request and failed to do so and had even been warned that a failure to comply with the discovery request would result in a default judgment, yet they still chose not to comply with the discovery request. Under these facts, it was within the trial court's discretion to grant a default judgment for defendants' blatant refusal to comply with the discovery request and the court orders compelling compliance. Next, defendants argue that the trial court erred in denying their right to a jury trial on the issue *246 of damages. We agree. A default does not constitute a waiver of a jury trial in a civil action. Wood v DAIIE, 413 Mich 573, 583-584; 321 NW2d 653 (1982). Thus, where it is necessary for the trial court to hold a hearing on the issue of damages, the defendant has a right to a jury trial if that right has been preserved even though the defendant has defaulted. Id. It is not suggested in this case that the trial court could determine damages without holding a hearing and, in fact, the trial court did hold a hearing on the issue of damages on October 11, 1991. The question is whether defendants properly preserved their right to a jury trial so as to afford them that right at the October 11 hearing. In this case, plaintiff filed a demand for a jury trial and defendants filed a document entitled "Reliance on Plaintiffs' Jury Demand," but did not file their own separate jury demand. We believe that defendants' right to a jury trial was adequately preserved. MCR 2.508(D)(3) provides as follows: A demand for trial by jury may not be withdrawn without the consent, expressed in writing or on the record, of the parties or their attorneys. This rule clearly requires that a withdrawal of a jury demand must be with the consent of all parties or their attorneys, not just by those parties that filed a jury demand. That is, once one party has filed a jury demand, all other parties may rely on that jury demand and need not independently file their own demand for a jury trial. This interpretation of the court rule is consistent with the authors' comment in 3 Martin, Dean & Webster, Michigan Court Rules Practice, p 148: b. Withdrawal. If a timely demand for trial by *247 jury is filed by one of the parties, all of the parties who are interested in the issues for which jury trial has been demanded may rely on that demand and need not make an additional demand of their own. This point is emphasized by MCR 2.508 which provides that a demand for trial by jury may not be withdrawn without the consent, expressed in writing or on the record, of all the parties to the action interested in that issue. Thus, where a plaintiff has filed a jury demand, the defendant need do nothing further to preserve its right to a trial by jury. Rather, any future waiver of a jury trial by the plaintiff can only be done with the defendant's consent.[1] Therefore, we conclude that because defendants had a right to rely upon plaintiff's demand for a jury trial, their right to a jury trial was preserved absent their own waiver of the right to a jury trial. Because, as the Court explained in Wood, supra, a default judgment does not constitute a waiver of the right to a jury trial, defendants' default in the case at bar did not constitute a waiver of that right. Accordingly, absent an express waiver by defendants of the right to a jury trial, the trial court was obligated to honor defendants' right to a jury trial on the issue of damages. The trial court, therefore, erred in conducting a hearing instead of a jury trial on the issue of damages. Therefore, we set aside the trial court's judgment and remand the matter to the trial court to conduct a jury trial on the issue of damages. The trial court's entry of a default judgment in favor of plaintiff is affirmed, but the trial court's *248 determination of damages is reversed and the matter is remanded to the trial court for further proceedings on the issue of damages consistent with this opinion. We do not retain jurisdiction. No costs, no party having prevailed in full. C.J. SINDT, J., concurred. DOCTOROFF, C.J. (concurring). Although I agree with the majority that, under the facts of this case, defendants adequately protected their right to a jury trial with respect to the issue of damages, I write separately because I believe it is both unnecessary and imprudent to extend the rule of law cited beyond the facts of this case. The majority concludes that our Supreme Court's decision in Wood v DAIIE, 413 Mich 573; 321 NW2d 653 (1982), stands for the proposition that a default judgment does not constitute a waiver of the right to a jury trial. See ante, pp 246, 247. While I agree that Wood provides persuasive precedent for the conclusion reached in this case, I think the majority overstates the holding by concluding that Wood offers support for the broader conclusion that a defendant need do nothing to preserve a jury trial once the plaintiff demands a jury. See ante, p 247. The majority overlooks the important fact that in Wood, the defendant filed a jury demand of its own before the default. See Wood, supra, p 576. In fact, the Court made reference to the demand in concluding that DAIIE had preserved its right to a jury trial independent of the plaintiff's demand. Id., p 582. The Court in Wood carefully limited its holding when it stated: We need not decide in this case whether a defaulting party who has failed to properly invoke *249 its right to a jury trial may do so on the issue of damages after a default has been entered. We hold only that a defaulting party who has properly invoked his right to jury trial retains that right if a hearing is held to determine the amount of recovery. [Id. at 583-584; emphasis added.] I do not believe it is necessary to decide, as a matter of law, that a defendant may rely upon the jury demand of an opposing party (or any other party for that matter) without taking some affirmative action indicating that the defendant wishes to have a jury trial. Rather, under the circumstances of this case, I believe that defendants have sufficiently preserved their right to a jury trial regarding the issue of damages by filing the "Reliance on Plaintiffs' Jury Demand." The majority also places substantial reliance upon the court rule governing withdrawal of a jury demand. MCR 2.508(D)(3). However, we are not faced with a withdrawal in this case. More to the point is MCR 2.508(B)(1), which states that a party may demand a jury by filing a "written demand" within the time prescribed. I would conclude that defendants' filing of the "Reliance on Plaintiffs' Jury Demand" was tantamount to a written jury demand and that the defendants thereby adequately preserved their right to a jury trial with regard to the issue of damages. I further believe that the majority's interpretation of the court rule renders MCR 2.508(D)(1) meaningless. That section states: A party who fails to file a demand or pay the jury fee as required by this rule waives trial by jury. The rule does not make an exception for those *250 situations where a party presumes to rely upon another's demand, but fails to file a demand of its own or take any affirmative action to otherwise preserve the right to a jury trial. I believe it is unnecessary for the majority to go beyond the facts at issue here. Rather, as did our Supreme Court in Wood, supra, I would limit the holding to the facts of this case. NOTES [*] Circuit judge, sitting on the Court of Appeals by assignment. [1] We note that although it appears to be a common procedure for a defendant to file a "Reliance on Plaintiff's Jury Demand" as did the defendants in the case at bar, that procedure is not required by the court rules. Rather, under MCR 2.508, a defendant is entitled to rely upon the plaintiff's demand for a jury trial without taking any affirmative steps of its own.