Pleznac v. Griva , 86 Mich. App. 528 ( 1978 )

86 Mich. App. 528 (1978) 272 N.W.2d 712

PLEZNAC
v.
GRIVA

Docket No. 77-3420.

Michigan Court of Appeals.

Decided October 17, 1978.

Maile & Leach (by Randall Winston), for plaintiffs.

Vandeveer, Garzia, Tonkin, Kerr & Heaphy, P.C., for defendant Peoples Community Hospital Authority.

Before: D.E. HOLBROOK, P.J., and V.J. BRENNAN and M.F. CAVANAGH, JJ.

D.E. HOLBROOK, P.J.

Plaintiffs appeal the trial court's order denying a motion to set aside a stipulation and order of dismissal as to defendant Peoples Community Hospital Authority. Plaintiffs' original complaint in this medical malpractice action was filed August 15, 1968. It is alleged that Peoples Hospital and the individual defendants negligently administered excessive quantities of oxygen to the minor plaintiff postnatally for a period of approximately one month following his premature birth October 11, 1967, resulting in a condition diagnosed as retrolental fibroplasia which rendered said minor plaintiff totally and permanently blind.

On December 8, 1968, defendant Peoples Hospital filed a motion for dismissal, improperly denominated a motion for summary judgment, alleging governmental immunity.^[1] This motion was never acted upon, however, on March 7, 1969, a stipulation of dismissal as to defendant Peoples Hospital only, signed by all parties, was filed. In pursuance thereof, the circuit court filed an order dismissing the action as to Peoples Hospital, with prejudice.

Early in 1973, plaintiffs filed a motion to set aside the above stipulation and to add Peoples Hospital as a party defendant. Plaintiffs alleged that "there was no inquiry at the time of the Order of Dismissal as to the best interests of the Plaintiff minor". This motion was granted, only to be set aside for lack of notice to defendant Peoples and by entry of accelerated judgment based upon the stipulation and order of dismissal. As the order setting aside plaintiffs' motion was without prejudice, plaintiffs filed an identical motion in December of 1973. On January 31, 1975, the trial judge filed an order denying plaintiffs' motion.

Plaintiffs' attempted appeal of this denial in February of 1975 was not allowed as the trial court's decision was not a final judgment. Plaintiffs thereupon renewed their motion to set aside the stipulation and dismissal of Peoples Hospital on April 28, 1977. This motion was denied on July 7, 1977, rendering it a final judgment as to Peoples Hospital, which the plaintiffs now appeal.

The plaintiffs' tenacity in seeking to have the 1969 stipulation and resulting dismissal of Peoples Hospital set aside stems from several more recent Michigan Supreme Court decisions which have considerably narrowed the doctrine of governmental immunity. As noted in defendant-appellee's brief:

"The motion [for summary judgment filed in 1969] asked for a judgment of dismissal in favor of Peoples and against Pleznac for the reason that at all times material thereto, Peoples, pursuant to statutes of the State of Michigan and specific decisions of the Michigan Supreme Court, had been determined to be a State agency, and thereby entitled to avail itself of the governmental immunity defense."

* * *

"[A]pparently counsel [for each of the parties] were of the opinion that the Motion for Summary Judgment was well-founded, and a Stipulation of Dismissal * * * was executed."

* * *

"[This stipulation was] a stipulation and an order wherein all parties to the lawsuit represented by counsel agreed that as a matter of law Peoples could not be sued for the injuries sustained by the plaintiff". (Emphasis added.)

Plaintiffs seek to set aside the stipulation and order of dismissal on the claim that the subsequent abrogation of governmental immunity retroactively rendered Peoples Hospital amenable to suit.

On appeal, plaintiffs suggest that the line of cases requiring that the trial court determine whether a proposed compromise or settlement is in the best interests of a minor plaintiff, should be extended to include the instant stipulation to dismiss. See Dudex v Sterling Brick Co, 237 Mich. 470; 212 N.W. 92 (1927), Palazzolo v Judge of Superior Court of Grand Rapids, 234 Mich. 547, 549; 208 N.W. 677 (1926), and Centala v Navrude, 30 Mich. App. 30, 32-33; 186 NW2d 35 (1971). In such case, the court's dismissal in reliance upon the stipulation but without a hearing to determine whether it is in the best interests of the minor would be error. Centala, supra, Centala v Navrude, 45 Mich. App. 282, 284-285; 206 NW2d 544 (1973), and Moebius v McCracken, 261 Mich. 409, 414; 246 N.W. 163 (1933).

Defendant's brief cites 3 Callaghan's Michigan Pleading & Practice (2d ed), § 32.33, pp 93-94, to the effect that:

"Where there is a stipulation to dismiss, followed by an order dismissing the cause pursuant to the stipulation, the disposition of the case is final and binding in the absence of demonstrative fraud of a serious character in obtaining the stipulation." (Footnotes omitted.)

Neither the line of cases cited by plaintiffs, nor this general statement of the law put forth by the defendant, is determinative in the instant case.

Mr. Justice COOLEY correctly stated the applicable law a century ago in Detroit v Beckman, 34 Mich. 125, 126 (1876): "[T]he admission of a rule of law could not obligate the court to accept and act upon it". In a unanimous decision, the Michigan Supreme Court recently reaffirmed Beckman in Magreta v Ambassador Steel Co, 378 Mich. 689, 705; 148 NW2d 767 (1967). According to the Court: "The stipulations of the parties before the referee, reflecting as they do misinterpretation of the applicable law, do not preclude our disposition of this controversy in accordance with the law as we construe it". See also Anno: Stipulation of Parties as to the Law, 92 A.L.R. 663, 674-675, § m.

The passages excerpted from defendant's brief clearly indicate that the parties entered into the stipulation agreement as a result of their (reasonable) misapprehension of the efficacy of Peoples Hospital's cloak of governmental immunity. The authorities cited above clearly indicate that such a "misinterpretation of the applicable law" need not bind the court.

Even if we were to construe the stipulation of the parties to have been merely the result of a mistake of fact, it would not necessarily have been binding in this case. The minor plaintiff's next friend did not have the power to surrender the minor's rights against the defendant. 83 CJS, Stipulations, § 15, pp 36-37:

"While it has been broadly stated that no person has any authority to stipulate in behalf of a minor, and that infant defendants are not bound by a stipulation as to facts, the general rule is that the next friend or guardian ad litem of an infant may give a binding assent to such arrangements as will facilitate the determination of the case in which the rights of the infant are involved, this rule being subject to the limitation that the stipulation be approved and ratified by the court, on a showing that it is for the interest, or, at least, not prejudicial to the interest, of the infant. However, a guardian ad litem or next friend cannot, in any event, by stipulations, surrender substantial rights of the infant; and stipulations and admissions of fact which are adverse and disadvantageous to the interests of infant defendants are not authoritative with respect to the determination of their rights." (Footnotes omitted, emphasis added.)

See also 13 Callaghan's Michigan Civil Jurisprudence (2d ed), § 99, p 457 and 3 Callaghan's Michigan Pleading & Practice (2d ed), §§ 28.17, 28.18, 32.35, pp 19-21, 97-98.

In light of the recent Michigan Supreme Court decisions substantially abrogating the doctrine of governmental immunity during the time period in question, including Maki v East Tawas, 385 Mich. 151; 188 NW2d 593 (1971), and Pittman v City of Taylor, 398 Mich. 41; 247 NW2d 512 (1976), a substantial likelihood exists that the stipulation served to foreclose significant rights of the plaintiff.^[2] Ordinarily such a stipulation and dismissal under GCR 1963, 504 would be binding upon the plaintiff. Where, as here, the next friend plaintiff lacked the capacity to enter such a binding agreement, however, the court, with its traditional concern for the protection of the rights of minors, may look beyond the stipulation to the substance of the parties' agreement:^[3] where that agreement purports to decide the law of the case it is clearly not binding on the court. (See Beckman, supra, and Magreta, supra.)

Under the unique facts of this case, it was a clear abuse of the trial court's discretion to allow the minor plaintiff's next friend to stipulate a matter of law which operated to foreclose substantive rights of the minor. Such a stipulation clearly exceeded the next friend's authority and is of no binding force or effect.

Reversed and remanded for actions consistent with this opinion. Costs to plaintiffs.

M.F. CAVANAGH, J. (dissenting).

There was no error in the trial court's refusal to set aside the stipulation. It is true that where the next friend of a minor plaintiff enters into a compromise or settlement of the minor's claims, the settlement is without effect unless, after a hearing, Centala v Navrude, 45 Mich. App. 282, 284-285; 206 NW2d 544 (1973), the trial court determines that it is in the best interests of the minor plaintiff. Palazzolo v Judge of Superior Court of Grand Rapids, 234 Mich. 547, 549; 208 N.W. 677 (1926), Dudex v Sterling Brick Co, 237 Mich. 470; 212 N.W. 92 (1927). Here, however, there was no compromise or settlement based on the merits of the case whose fairness the court could evaluate, for the trial court would have had to dismiss the action in any event as to Peoples. There was simply a stipulation, entered into in accordance with the applicable court rule, GCR 1963, 504.1(1), based on defendant Peoples' perceived immunity from suit. This conclusion disposes of the sole issue raised by plaintiffs.

However, the majority has seen fit to prolong this ten-year old phase of the instant case by injecting, sua sponte, the argument that the parties "misapprehended" the state of the law relative to governmental immunity at the time the stipulation was entered into. My brothers further believe that the minor plaintiff's next friend was without authority to bind the minor by the stipulation involved because it surrendered the minor's rights against defendant hospital — even though these rights weren't recognized by judicial pronouncement until years following the entry of the stipulation. I cannot agree. There was no misapprehension as to the status of defendant's immunity at the time. A hearing to determine the best interests of this minor, held at that time, would have produced no different results and plaintiff's next friend could effectively bind the minor. I do not view the facts of this case to be as unique as my brothers view them. Their decision today invites the reopening of much long-settled litigation and greatly undermines the intended finality of GCR 1963, 504.1(1).

For these reasons, I would affirm the trial court's refusal to set aside the stipulation.

NOTES

[1] This motion was properly termed a motion for accelerated judgment. See GCR 1963, 116, 117, Drouillard v City of Roseville, 9 Mich. App. 239; 156 NW2d 628 (1967), Pompey v General Motors Corp, 385 Mich. 537; 189 NW2d 243 (1971).

[2] On November 23, 1976, the Michigan Supreme Court in Pittman v City of Taylor, 398 Mich. 41; 247 NW2d 512 (1976), held that any claim arising prior to August 1, 1970, effective date of the enactment of the first constitutional governmental immunity act, must be governed by common-law principles of government tort liability. The Court then abolished common-law immunity with respect to all pending and future case challenging this defense.

[3] Courts are charged with the protection of rights of infants and incompetents and should always give due regard to those rights. Centala v Navrude, 30 Mich. App. 30, 32-33; 186 NW2d 35 (1971), cites 3 Callaghan's Michigan Pleading & Practice, § 32.35, p 97.