Estate of Lisa Collins v. Allstate Insurance Company ( 2022 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
CORTNEY COLLINS, as Personal Representative of UNPUBLISHED
the ESTATE OF LISA COLLINS, September 29, 2022
Plaintiff-Appellant,
v No. 358264
Wayne Circuit Court
ALLSTATE INSURANCE COMPANY, LC No. 20-011111-NF
Defendant-Appellee,
and
JOHN DOE,
Defendant.
Before: CAVANAGH, P.J., and GARRETT and YATES, JJ.
PER CURIAM.
Plaintiff Cortney Collins, in his capacity as personal representative of the estate of decedent
Lisa Collins, sued defendant, Allstate Insurance Company, alleging breach of contract for refusing
to pay benefits under the Michigan no-fault act, MCL 500.3101 et seq. After Collins repeatedly
violated trial court orders compelling the production of letters of authority for Collins to act on
behalf of the estate, the trial court dismissed the case with prejudice. However, the trial court did
not provide reasoning to support its order of dismissal. Accordingly, we vacate the trial court’s
order and remand for further consideration of the appropriate sanction for violating the court’s
orders.
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I. BACKGROUND
This case arises out of an automobile accident that occurred in December 2018 involving
decedent and defendant John Doe.1 Decedent died in July 2019 for reasons unrelated to the
accident. Collins filed suit against Allstate on August 27, 2020, seeking insurance benefits under
the no-fault act for expenses stemming from decedent’s injuries. Between December 2020 and
February 2021, Allstate requested and followed up on the status of letters of authority from Collins
several times. After receiving no response, Allstate moved the trial court to compel letters of
authority from Collins on March 2, 2021, arguing that Collins’s failure to provide letters of
authority prejudiced Allstate by hampering its ability to obtain discovery. The trial court granted
the motion to compel and entered an order requiring Collins to provide letters of authority within
14 days.
Collins did not comply with the motion to compel, and at the end of April 2021, Allstate
moved the trial court to dismiss Collins’s case under MCR 2.313 for failure to comply with the
trial court’s order to provide letters of authority. The trial court denied Allstate’s motion to dismiss
without explanation a few weeks later. Allstate moved to compel letters of authority for a second
time in June 2021. The trial court granted Allstate’s motion on July 9, 2021, stating that Collins
had 14 days to provide letters of authority “or case dismissed.” On July 26, 2021, after Collins
still failed to provide letters of authority, Allstate filed a proposed order dismissing Collins’s case.
Collins filed an objection, arguing that the trial court should not dismiss his case because he was
working to produce the letters of authority and because Allstate was not prejudiced while discovery
remained open. One week later, the trial court entered an order dismissing Collins’s case with
prejudice for failure to provide the requested letters of authority. This appeal followed by delayed
leave granted.2
II. ANALYSIS
Collins argues that the trial court erred by dismissing his case for failure to produce letters
of authority without providing reasoning or evaluating lesser sanctions.
We review the trial court’s decision to impose discovery sanctions for an abuse of
discretion. KBD & Assoc, Inc v Great Lakes Foam Technologies, Inc, 295 Mich App 666, 677;
816 NW2d 464 (2012). The trial court abuses its discretion when it chooses an outcome outside
the range of principled outcomes. Id. Any factual findings underlying the trial court’s decision
are reviewed for clear error. Hardrick v Auto Club Ins Ass’n, 294 Mich App 651, 660; 819 NW2d
28 (2011). “A finding is clearly erroneous when this Court is left with a definite and firm
conviction that a mistake has been made.” Id. (quotation marks and citation omitted).
1
Collins also brought a negligence claim against John Doe, the unknown driver who struck
decedent while she was crossing the street.
2
Estate of Collins v Allstate Ins Co, unpublished order of the Court of Appeals, entered November
16, 2021 (Docket No. 358264).
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Once a fiduciary, including a personal representative, is qualified to serve in that capacity,
letters of authority can be issued to that fiduciary. MCR 5.202(A). Letters of authority set forth
the powers of the personal representative, including the right to act on behalf of the estate. MCL
600.5852(1); Lentini v Urbancic (On Remand), 267 Mich App 579, 580-581; 705 NW2d 701(2005). The trial court dismissed Collins’s lawsuit against Allstate after Collins violated court
orders to provide letters of authority to act on decedent’s behalf.
“Trial courts possess the inherent authority to sanction litigants and their counsel, including
the right to dismiss an action.” Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809(2006). “MCR 2.313(B)(2)(c) explicitly authorize[s] a trial court to enter an order dismissing a
proceeding or rendering a judgment by default against a party who fails to obey an order to provide
discovery.”3 Kalamazoo Oil Co v Boerman, 242 Mich App 75, 86; 618 NW2d 66 (2000)
(quotation marks and citation omitted). But “[o]ur legal system is also committed to a
countervailing policy favoring disposition [of] litigation on the merits.” North v Dep’t of Mental
Health, 427 Mich 659, 662; 397 NW2d 793 (1986). Thus, dismissal is considered a “drastic” step
that should be done with caution. Swain v Morse, 332 Mich App 510, 518; 957 NW2d 396 (2020).
“Mindful of the fact that dismissal is a harsh remedy to be invoked cautiously, the trial
court should evaluate the length, circumstances, and reasons for delay in light of the need for
administrative efficiency and the policy favoring the decisions of cases on their merits . . . .”
North, 427 Mich at 662. Trial courts should also consider the following nonexhaustive factors
(Dean factors) before imposing the severe sanction of dismissal:
(1) whether the violation was wilful or accidental; (2) the party’s history of refusing
to comply with previous court orders; (3) the prejudice to the opposing party; (4)
whether there exists a history of deliberate delay; (5) the degree of compliance with
other parts of the court’s orders; (6) attempts to cure the defect; and (7) whether a
lesser sanction would better serve the interests of justice. [Vicencio v Ramirez, 211
Mich App 501, 507; 536 NW2d 280 (1995), citing Dean v Tucker, 182 Mich App
27, 32-33; 451 NW2d 571 (1990).]
The trial court must explain its reasons for dismissal on the record “in order to allow for meaningful
appellate review,” Kalamazoo Oil Co, 242 Mich App at 88, and “must also evaluate on the record
other available options before concluding that a drastic sanction is warranted,” Frankenmuth Mut
Ins Co v ACO, Inc, 193 Mich App 389, 397; 484 NW2d 718 (1992).
The trial court’s order of dismissal with prejudice merely stated that the case was dismissed
for “failure to provide Letters of Authority pursuant to the Court’s July 9, 2021 Order.” It is
undisputed that Collins did not comply with the trial court’s order granting Allstate’s second
3
MCR 2.313(B)(2)(c) provides that a trial court may sanction a party who fails to obey an order
to provide discovery with “such sanctions as are just,” including “an order striking pleadings or
parts of pleadings, staying further proceedings until the order is obeyed, dismissing the action or
proceeding or a part of it, or rendering a judgment by default against the disobedient party.” The
trial court’s order of dismissal did not specify whether it relied on MCR 2.313(B)(2)(c), but
Allstate’s motion to dismiss cited this court rule.
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motion to compel letters of authority. But in dismissing Collins’s case with prejudice, the trial
court never “explain[ed] its reasons for imposing such a grave sanction in order to allow for
meaningful appellate review.” Kalamazoo Oil Co, 242 Mich App at 88. For instance, the trial
court did not explain why dismissal with prejudice was a more just sanction than the less severe
sanction of dismissal without prejudice. The trial court also made no factual findings about
whether Collins’s conduct was willful and deliberate, or whether Collins’s noncompliance with
discovery orders prejudiced Allstate—findings that could have supported the drastic sanction of
dismissal with prejudice.
Allstate asserts that although the trial court analyzed none of the Dean factors before
dismissing the case, dismissal was clearly appropriate if the trial court had considered the factors.
Allstate then goes on to, itself, analyze the Dean factors and explain why, having considered the
factors, the “only appropriate sanction was dismissal with prejudice.” While we appreciate
Allstate’s well-reasoned analysis, our duty is to review the trial court’s reasoning, not a litigant’s
view of what the trial court might have found had the court provided any record of its decision.
The trial court abused its discretion by failing to provide any reasoning or consideration of lesser
sanctions on the record. On remand, “[t]he record should reflect that that the trial court gave
careful consideration to the factors involved and considered all its options in determining what
sanction was just and proper in the context of the case before it.” Kalamazoo Oil Co, 242 Mich
App at 86 (quotation marks and citation omitted).4
We vacate the trial court’s order of dismissal and remand this case for further proceedings
consistent with this opinion. We do not retain jurisdiction.
/s/ Mark J. Cavanagh
/s/ Kristina Robinson Garrett
/s/ Christopher P. Yates
4
Allstate also cites MCR 2.504(B) on appeal, seemingly as another basis for affirming the trial
court’s decision. MCR 2.504(B) concerns involuntary dismissals, and Allstate asserts that Collins
failed to prosecute his lawsuit. But there is no evidence that the trial court dismissed the case
under MCR 2.504(B), nor did Allstate make this argument below. Accordingly, we decline to
consider it.
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