Robert Lewis v. Taranvir Singh ( 2024 )

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
ROBERT LEWIS, UNPUBLISHED
October 08, 2024
Plaintiff-Appellee, 9:54 AM
v No. 365251
Wayne Circuit Court
TARANVIR SINGH, LC No. 19-009497-NI
Defendant-Appellant.
Before: BOONSTRA, P.J., and JANSEN and N. P. HOOD, JJ.
PER CURIAM.
In this negligence action arising from a motor-vehicle collision, defendant appeals by leave
granted1 the trial court’s order denying his motion to set aside a default judgment under MCR
2.603(D)(1) and MCR 2.612(C)(1). We reverse.
Plaintiff was involved in a motor-vehicle collision on July 20, 2016. Plaintiff’s vehicle
collided with a trailer pulled by a tractor. The driver of the tractor provided an insurance binder
to plaintiff containing the vehicle identification number (VIN) for the trailer. A VIN search was
conducted through the Secretary of State to identify the owner of the trailer. The search revealed
that, on the date of the collision, the trailer was owned and registered to defendant. Plaintiff then
contacted the United States Postal Service (USPS) to determine defendant’s address. The USPS
verified that defendant’s current address was in Canton. Accordingly, plaintiff served defendant
with the summons and complaint at the Canton address. The proof of service indicated that the
complaint was served via certified mail and required restricted delivery and a return receipt. The
proof of service stated that “an individual” signed the return receipt, but did not specify who signed
it. The signature on the return receipt was illegible.
Defendant did not respond to the complaint or otherwise engage in the lawsuit. Plaintiff
contacted Great American Insurance Group because Great American was the insurance company
1
Lewis v Singh, unpublished order of the Court of Appeals, entered September 11, 2023 (Docket
No. 365251).
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listed in the binder that the driver of the trailer gave to plaintiff at the scene of the collision. Great
American stated that it did not have any policies in effect for the trailer or defendant at the time of
the accident. Great American also sent its response to defendant at the Canton address and a
Westland address. Defendant still did not engage in the lawsuit.
The trial court eventually entered a default judgment against defendant in the amount of
$150,000. Approximately six weeks after defendant’s bank account was depleted by a writ of
garnishment, defendant moved to set aside the default judgment, arguing that he did not learn of
the lawsuit until after his bank account was garnished. Specifically, defendant argued that the trial
court should set aside the default judgment because defendant’s motion was timely filed, defendant
did not receive proper service of process, and the trial court lacked personal jurisdiction over
defendant. The trial court denied defendant’s motion after finding that defendant received proper
service of process, defendant failed to demonstrate good cause for his failure to engage in the
lawsuit because he had notice of the lawsuit via the letter from Great American, and defendant
failed to establish a meritorious defense because the title to the trailer was registered in his name
at the time of the collision.
On appeal, defendant first argues that his motion to set aside the default judgment was
timely. We agree. “This Court reviews a trial court’s ruling on a motion to set aside a default
judgment for an abuse of discretion.” Brooks Williamson & Assoc, Inc v Mayflower Constr Co,
308 Mich App 18, 24; 863 NW2d 333 (2014). “An abuse of discretion occurs when the trial court’s
decision falls outside the range of reasonable and principled outcomes.” Reed-Pratt v Detroit City
Clerk, 339 Mich App 510, 516; 984 NW2d 794 (2021). “[A]lthough the law favors the
determination of claims on the merits, it also has been said that the policy of this state is generally
against setting aside defaults and default judgments that have been properly entered.” Brooks, 308
Mich App at 25 (quotation marks and citation omitted).
Plaintiff argues that defendant’s motion was barred by the one-year time limit in MCR
2.612(B). However, MCR 2.612(B) only applies to defendants over whom the trial court acquired
personal jurisdiction. As discussed later, the trial court did not acquire personal jurisdiction over
defendant. Therefore, this court rule is inapplicable in this case.
The parties also dispute whether the one-year limitation in MCR 2.612(C)(2) applies to
defendant’s motion to set aside the default judgment. MCR 2.612(C)(2) provides that a motion
for relief from judgment “must be made within a reasonable time, and, for the grounds stated in
subrules (C)(1)(a), (b), and (c), within one year after the judgment, order, or proceeding was
entered or taken.” In his motion, defendant did not specify which subpart of MCR 2.612(C)(1) he
believed entitled him to relief. Therefore, we look at the substance of defendant’s arguments to
determine under which subrules of MCR 2.612(C)(1) defendant’s arguments fall.
MCR 2.612(C)(1) provides that a trial court may grant relief from judgment on the
following grounds:
(a) Mistake, inadvertence, surprise, or excusable neglect.
(b) Newly discovered evidence which by due diligence could not have been
discovered in time to move for a new trial under MCR 2.611(B).
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(c) Fraud (intrinsic or extrinsic), misrepresentation, or other misconduct of
an adverse party.
(d) The judgment is void.
(e) The judgment has been satisfied, released, or discharged; a prior
judgment on which it is based has been reversed or otherwise vacated; or it is no
longer equitable that the judgment should have prospective application.
(f) Any other reason justifying relief from the operation of the judgment.
Defendant argues that he was entitled to relief from judgment because the trial court lacked
personal jurisdiction over him and because plaintiff failed to notify defendant that the default was
entered. Though defendant did not raise the latter argument in the trial court, we will still analyze
that issue as though it were raised in defendant’s motion for purposes of assessing the timeliness
of defendant’s motion. Defendant’s personal-jurisdiction argument falls under MCR
2.612(C)(1)(d) because a trial court’s judgment concerning a party over which it lacks personal
jurisdiction is void. See Brooks, 308 Mich App at 26 (“A court cannot adjudicate an in personam
controversy without first having obtained jurisdiction over the defendant by service of process.”)
(quotation marks, brackets, and citation omitted).
Defendant’s other argument does not fall under MCR 2.612(C)(1)(a) through (e).
However, a plaintiff’s failure to notify a defendant about the entry of a default independently
establishes good cause to set aside a default judgment. See ISB Sales Co v Dave’s Cakes, 258
Mich App 520, 533-534; 672 NW2d 181 (2003) (explaining that a party’s failure to comply with
the notice requirements of MCR 2.603(A)(2) constitutes good cause to set aside a default
judgment). Accordingly, defendant’s notice argument falls under MCR 2.612(C)(1)(f) because it
provides a reason to justify relief from a default judgment that does not fall under MCR
2.612(C)(1)(a) through (e). See Heugel v Heugel, 237 Mich App 471, 482-483; 603 NW2d 121(1999) (stating that MCR 2.612(C)(1)(f) is applicable when the subject argument presents a ground
for relief that does not fall under MCR 2.612(C)(1)(a) through (e)). Therefore, because neither of
defendant’s arguments fell under MCR 2.612(C)(1)(a) through (c), they were not subject to the
one-year requirement in MCR 2.612(C)(2).
Though both of defendant’s arguments were exempt from the one-year requirement in
MCR 2.612(C)(2), they were subject to the reasonable-time requirement in MCR 2.612(C)(2).
Defendant filed his motion for relief from judgment roughly 17 months after the trial court entered
the default judgment. Whether a motion was filed within a reasonable time depends on the
circumstances of the case. Laffin v Laffin, 280 Mich App 513, 521 n 1; 760 NW2d 738 (2008).
When a defendant learned of a default judgment is relevant to whether a motion to set aside the
default judgment was filed within a reasonable amount of time. See Wolf v Mahar, 308 Mich App
120, 129; 862 NW2d 668 (2014) (considering the date when the defendant learned of the default
judgment in determining whether his motion to set aside the default judgment was filed within a
reasonable amount of time).
As discussed later, defendant did not receive proper service of process for the summons
and complaint. Accordingly, it appears defendant did not know about the complaint when it was
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filed. Defendant claims that he first learned of this lawsuit after his bank account was garnished
in June 2022. Taking as true defendant’s claim that he lived in Westland during the pendency of
this case—necessitating the assumption that defendant failed to update his address with the
USPS—the only piece of mail discussing this lawsuit that was sent to defendant’s proper address
before the garnishment was Great American’s letter. It is possible that defendant discarded that
letter without reading it because Great American was not defendant’s insurer.
Because nothing in the lower court record appears to contradict defendant’s claim that he
first learned about the lawsuit when the garnishment occurred, in the interest of justice, we
conclude for purposes of this issue that defendant resided in Westland during the times relevant to
this case, as stated in his affidavit, and that he first learned about the lawsuit when his bank account
was garnished. In this scenario, it is evident that defendant’s motion to set aside the default
judgment was filed within a reasonable amount of time because it came roughly six weeks after
he received notice of the lawsuit. That six weeks was a reasonable amount of time in this case is
evident because defendant needed to obtain legal representation, discuss the case for the first time
with counsel, and then wait for counsel to draft and file the motion. Accordingly, defendant’s
motion to set aside the default judgment was timely under MCR 2.612(C)(2).
Defendant next argues that the trial court abused its discretion by denying his motion to set
aside the default judgment because the trial court lacked personal jurisdiction over defendant to
enter the default judgment. We agree. The trial court’s order of default judgment was void because
it lacked personal jurisdiction over defendant. Therefore, the trial court abused its discretion by
denying defendant’s motion to set aside the default judgment on this jurisdictional basis.
“This Court reviews a trial court’s ruling on a motion to set aside a default judgment for an
abuse of discretion.” Brooks, 308 Mich App at 24. “An abuse of discretion occurs when the trial
court’s decision falls outside the range of reasonable and principled outcomes.” Reed-Pratt, 339
Mich App at 516. This Court reviews de novo whether a court had personal jurisdiction over a
party. City of Fraser v Almeda Univ, 314 Mich App 79, 86; 886 NW2d 730 (2016).
Defendant argues that the trial court lacked personal jurisdiction over him because he did
not receive proper service of process of the summons and complaint, and this resulted in the default
judgment being void. “A court cannot adjudicate an in personam controversy without first having
obtained jurisdiction over the defendant by service of process.” Brooks, 308 Mich App at 26
(quotation marks, brackets, and citation omitted).
MCR 2.105(A) provides the following rules for service on individuals:
Process may be served on a resident or nonresident individual by
(1) delivering a summons and a copy of the complaint to the defendant
personally; or
(2) sending a summons and a copy of the complaint by registered or certified
mail, return receipt requested, and delivery restricted to the addressee. Service is
made when the defendant acknowledges receipt of the mail. A copy of the return
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receipt signed by the defendant must be attached to proof showing service under
subrule (A)(2).
It is undisputed that a copy of the summons and complaint was sent to defendant at the
Canton address by certified mail with restricted delivery and a return receipt requirement. The
summons and complaint were delivered at the Canton address on July 17, 2019. The USPS
verified that the Canton address was defendant’s registered address at the time the summons and
complaint were served. The parties dispute whether defendant acknowledged receipt of the mail
and signed the return receipt. The illegibility of the signature on the receipt makes it difficult to
determine what name the signature represents. However, the signature does not appear to begin
with a “T” and seems to have either an “l” or “d” in the signature, neither of which appear in
defendant’s name. Moreover, the signature on the return receipt does not resemble defendant’s
signature on his affidavit.
The only evidence in the lower court record purporting to establish that defendant
acknowledged receipt of the summons and complaint and signed the return receipt is the illegible
signature on the return receipt. Defendant did not engage in the lawsuit or otherwise demonstrate
he acknowledged receipt of the summons and complaint per MCR 2.105(A)(2). Because the
signature appears to be inconsistent with defendant’s name and defendant did not otherwise
acknowledge receipt of the summons and complaint, we conclude that plaintiff failed to render
proper service of process on defendant by acquiring a return receipt that was signed by defendant
and demonstrating that defendant acknowledged receipt of the mail.
Defendant was not required to demonstrate good cause or a meritorious defense for the
trial court to grant his motion to set aside the default judgment on the basis that the trial court did
not have personal jurisdictional over defendant. See MCR 2.603(D)(1) (explaining that the good-
cause and meritorious-defense requirements do not apply when a motion to set aside a default
judgment is premised on a “lack of jurisdiction over the defendant”). The default judgment was
void because the trial court lacked personal jurisdiction over defendant when it entered the default
judgment. See Lawrence M Clarke, Inc v Richco Constr, Inc, 489 Mich 265, 274; 803 NW2d 151(2011) (explaining that courts must have personal jurisdiction over a defendant to adjudicate an in
personam controversy). A decision to honor a void judgment falls outside the range of reasonable
and principled outcomes. See Denton v Dep’t of Treasury, 317 Mich App 303, 314; 894 NW2d
694 (2016) (“An error of law necessarily constitutes an abuse of discretion.”). Accordingly, the
trial court abused its discretion when it denied defendant’s motion to set aside the default judgment
under MCR 2.612(C)(1)(d).
Finally, defendant argues that the trial court abused its discretion by denying defendant’s
motion to set aside the default judgment because plaintiff failed to notify defendant of the entry of
the default. Michigan follows the raise or waive rule which requires litigants to preserve an issue
in order to have an appellate court review the issue. Tolas Oil & Gas Exploration Co v Bach Servs
& Mfg, LLC, ___ Mich App ___, ___; ___ NW3d ___ (2023) (Docket No. 359090); slip op at 2.
“However, this Court may overlook preservation requirements if the failure to consider the issue
would result in manifest injustice, if consideration is necessary for a proper determination of the
case, or if the issue involves a question of law and the facts necessary for its resolution have been
presented.” Id. at ___; slip op at 3 (quotation marks and citations omitted).
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Manifest injustice would not result if we refuse to consider this issue because defendant
has already demonstrated that the trial court’s order denying his motion to set aside the default
judgment should be reversed for lack of personal jurisdiction. For the same reason, consideration
of this issue is not necessary for a proper determination of the case because the lack of personal
jurisdiction is sufficient to warrant reversal. Finally, this issue does not present a question of law.
Rather, it presents a question of fact regarding whether defendant received notice of the default.
Accordingly, none of the grounds for overlooking the preservation requirement apply to this issue.
Therefore, we decline to consider this unpreserved issue.
The trial court order denying defendant’s motion to set aside the default judgment is
reversed. We remand this matter to the trial court to enter an order setting aside the default
judgment. We do not retain jurisdiction.
/s/ Mark T. Boonstra
/s/ Kathleen Jansen
/s/ Noah P. Hood
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