Ronald Hubbard v. Frankenmuth Mutual Insurance Co ( 2020 )

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
RONALD HUBBARD and LISA HUBBARD, UNPUBLISHED
February 20, 2020
Plaintiffs-Appellants,
v No. 346076
Tuscola Circuit Court
FRANKENMUTH MUTUAL INSURANCE LC No. 17-030086-NI
COMPANY and CAROL ALEXANDER,
Defendants-Appellees.
Before: SHAPIRO, P.J., and JANSEN and M. J. KELLY, JJ.
PER CURIAM.
Plaintiffs appeal by leave granted the dismissal of their first-party claim against their no-
fault carrier, defendant Frankenmuth Mutual Insurance Company. The trial court dismissed
plaintiffs’ claim with prejudice after they failed to respond to discovery and failed to appear at a
hearing on Frankenmuth’s motion to compel discovery or in the alternative to dismiss. For the
reasons stated in this opinion, we reverse and remand for further proceedings.
In December 2016, plaintiffs’ car collided with a car driven by Carol Alexander. Plaintiffs
alleged that they sustained injuries in the collision, including serious impairment of body function.
In December 2017, plaintiffs filed a lawsuit asserting claims related to the collision. Count I of
the lawsuit alleged that Frankenmuth failed to timely pay personal protection insurance benefits.
Count II presented a third-party claim against Alexander.
On May 17, 2018, Frankenmuth served plaintiffs with interrogatories, requests for
production of documents, and requests for admission. On July 13, 2018, plaintiffs responded to
the requests for admission, but failed to respond to the interrogatories or to the requests for
production.
On August 24, 2018, Frankenmuth filed a motion seeking an “entry of default,” or
alternatively to compel responses to the outstanding discovery requests and impose sanctions. The
motion hearing was noticed for September 4, 2018, which was the day after Labor Day. Plaintiffs
did not file a response to the motion, and they, as well as their counsel, failed to appear for the
-1-
hearing. The trial court found that plaintiffs received proper notice of the motion hearing, and then
granted a dismissal for “plaintiffs’ inability or refusal to comply with discovery.”
On September 12, 2018, the trial court entered an order dismissing plaintiffs’ claims against
Frankenmuth with prejudice. Five days later, plaintiffs filed a motion for reconsideration of the
dismissal order and for relief from judgment. They argued that dismissal was an inappropriate
remedy when the court had not entered an order compelling discovery. They also argued that a
lesser sanction would better serve the interests of justice. In addition, plaintiffs explained that their
counsel’s failure to appear for the motion hearing was due to his staff’s scheduled vacation around
the Labor Day holiday and that counsel did not became aware of the motion until the hearing date.
On October 3, 2018, the trial court issued an opinion and order denying plaintiffs’ motion.
The court determined that it could order a dismissal for failure to respond to discovery even in the
absence of an order compelling discovery, citing MCR 2.313(D). The trial court also found that
counsel’s purported reason for missing the hearing was not an adequate reason to set aside the
dismissal.1 We granted plaintiffs’ interlocutory application for leave to appeal. Hubbard v
Frankenmuth Mut Ins Co, unpublished order of the Court of Appeals, issued March 25, 2019
(Docket No. 346076).
On appeal, plaintiffs argue that the trial court erred in dismissing their first-party claim.
We agree.2
A trial court has authority to sanction a party or a party’s counsel for failure to respond to
discovery.3 However, dismissal is a drastic and disfavored sanction. Vicencio v Ramirez, 211
Mich. App. 501, 506; 536 NW2d 280 (1995); Frankenmuth Mut Ins Co v ACO, Inc, 193 Mich. App.
389, 396-397; 484 NW2d 718 (1992). “Our legal system favors disposition of litigation on the
merits.” Vicencio, 211 Mich. App. at 507. Before imposing such a drastic remedy, the trial court
must evaluate all available options on the record. Id. at 506; Draggoo v Draggoo, 223 Mich. App.
415, 423-424; 566 NW2d 642 (1997).
Here, the trial court abused its discretion in dismissing plaintiffs’ first-party claim without
evaluating other available sanctions on the record. See Vicencio, 211 Mich. App. at 506-507;
1
The trial court also rejected plaintiffs’ argument that their claim should not have been dismissed
because Frankenmuth’s motion sought a default rather than a dismissal. Plaintiffs repeat this
argument on appeal, and we agree with the trial court that it lacks merit. The trial court entered a
dismissal, not a default, and so Frankenmuth’s failure to identify the correct form of relief is
irrelevant.
2
We review a trial court’s decision to dismiss an action for an abuse of discretion. Donkers v
Kovach, 277 Mich. App. 366, 368; 745 NW2d 154 (2007).
3
At the time the trial court dismissed the case, the court rule allowing for sanctions for failure to
respond to discovery was found in MCR 2.313(D). However, MCR 2.313 was substantially
amended effective January 1, 2020. The pertinent subrule is now MCR 2.313(A)(6), which allows
a trial court to order sanctions in connection with a motion to compel discovery.
-2-
Thorne v Bell, 206 Mich. App. 625, 635; 522 NW2d 711 (1994). We also conclude that dismissal
was not warranted in this case. When assessing discovery sanctions, a court should consider
(1) whether the violation was wilful or accidental, (2) the party’s history of refusing
to comply with discovery requests (or refusal to disclose witnesses), (3) the
prejudice to the defendant, (4) actual notice to the defendant of the witness and the
length of time prior to trial that the defendant received such actual notice, (5)
whether there exists a history of plaintiff engaging in deliberate delay, (6) the
degree of compliance by the plaintiff with other provisions of the court’s order, (7)
an attempt by the plaintiff to timely cure the defect, and (8) whether a lesser
sanction would better serve the interests of justice. [Dean v Tucker, 182 Mich. App.
27, 32–33; 451 NW2d 571 (1990).]
The trial court had not previously entered any order regarding discovery, plaintiffs had not
violated any other court order, and there is no indication that plaintiffs had a history of deliberate
delay. While a court is not precluded from granting a dismissal for failure to respond to discovery,
in the absence of a court order compelling discovery that is a particularly harsh result. See Thorne,
206 Mich. App. at 634 (“The record does not disclose a history of recalcitrance or deliberate
noncompliance with discovery orders, which typically precedes the imposition of such a harsh
sanction.”). We recognize that plaintiffs’ failure to respond to the motion or appear for the hearing
contributed to the trial court’s ruling. However, even under those circumstances, a court may not
ignore the well-established caselaw governing dismissals for discovery misconduct. Given that
there had not been a court order compelling discovery and that this was the first time that
Frankenmuth sought court intervention regarding discovery, we conclude that the trial court
abused its discretion in dismissing plaintiffs’ first-party claim.
On remand, the trial court shall hold a hearing after which it may enter an order compelling
discovery. The court may also consider imposing a sanction less than dismissal after it addresses
the pertinent discovery-sanction factors on the record. See Duray Dev, LLC v Perrin, 288 Mich
App 143, 165; 792 NW2d 749 (2010) (“[T]he record should reflect that the trial court gave careful
consideration to the factors involved and considered all of its options in determining what sanction
was just and proper in the context of the case before it.”).
Reversed and remanded. We do not retain jurisdiction.
/s/ Douglas B. Shapiro
/s/ Kathleen Jansen
/s/ Michael J. Kelly
-3-