e-Journal Summary

e-Journal Number : 78386
Opinion Date : 11/03/2022
e-Journal Date : 11/16/2022
Court : Michigan Court of Appeals
Case Name : TGINN Jets LLC v. Meathe
Practice Area(s) : Debtor/Creditor Litigation
Judge(s) : Per Curiam - Rick, O'Brien, and Patel
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Issues:

Action to enforce a judgment lien; Motion to strike the pleadings & enter a default judgment; MCR 2.313(B)(2)(c); Principle that the trial court must consider less drastic sanctions before opting for a default judgment; Distinguishing Thorne v Bell & Vicencio v Ramirez; Effect of a “flagrant & wanton” refusal to comply with discovery orders; Prejudice; Michigan Uniform Voidable Transactions Act (MUVTA)

Summary

The court held that the trial court did not err by entering a default judgment against defendants after striking their pleadings as a sanction in favor of plaintiffs. Plaintiffs sued defendants under the MUVTA, alleging fraud and intentional interference with the judgment liens they had obtained. The trial court granted plaintiffs’ motion to compel defendants to produce certain documents, and eventually entered the default judgment and struck their pleadings. On appeal, the court rejected defendants’ argument that the trial court was required to consider a less drastic sanction on the record, and that it abused its discretion by entering a default judgment. “Unlike Thorne and Vicencio, in the instant case, the trial court found defendants willfully and repeatedly disobeyed the trial court’s orders to produce documents—specifically, defendants violated” its order to compel. “Also contrary to Thorne, plaintiffs responded to defendants’ failure to produce documents with a motion to compel. The trial court’s order to compel gave defendants the opportunity to come into compliance with discovery obligations. Defendants failed to do so.” In response to plaintiffs’ motion to strike and enter a default, defendants “essentially asserted the discovery materials sought by plaintiffs would be submitted at a later date—yet defendants continued to thwart attempts at discovery.” As such, the trial court “did not abuse its discretion when it found that defendants’ dilatory actions, coupled with their bad faith responses to discovery requests, merited the entry of default.” In addition, defendants “failed to offer any dates for deposition before the discovery cutoff date. In its order, the trial court stated that it carefully considered the record, and concluded that defendants had willfully disobeyed its” order and other discovery obligations. Thus, “plaintiffs were prejudiced and no lesser sanction could suffice.” Affirmed.

Full PDF Opinion