Motion to set aside a default; MCR 2.603(D); “Good cause” & a “meritorious defense”; Shawl v Spence Bros, Inc; An “account stated” claim distinguished from a breach of contract claim; Adequacy of an affidavit offered to establish a meritorious defense; Effect of a lay defendant’s lack of knowledge of the law & its consequences; Reed v Walsh

Holding that defendant-Smith failed to show either a meritorious defense or good cause, the court affirmed both the denial of his motion to set aside a default and the subsequent default judgment. Plaintiff-John Deere Financial (JDF) sued him “seeking to collect on a purported debt” under a Credit Agreement. The debt related to the repair of a piece of farm equipment. Smith asserted that it appeared from the complaint that JDF “‘pled sufficient facts to support a claim for account stated, which requires mutual assent of the parties to an account.’” He contended that his affidavit, which “averred that he had objected to and challenged the charges” giving rise to the debt, established “there was no mutual assent; therefore, a cause of action for an account stated would fail.” Thus, he argued his affidavit showed a meritorious defense. But the court’s review of the complaint revealed “there were no allegations of an assent, express or inferred, to an agreed balance or sum due. Rather, JDF fairly clearly alleged a cause of action for breach of contract, indicating that Smith had committed ‘a material breach of the [a]ccount.’” Thus, his contention “that his mere objections to and challenge of the charges at issue constituted a ‘meritorious defense’ necessarily fails.” The court also found that his “affidavit was deficient with respect to his objections.” The affidavit did not indicate “he objected to the monthly statements directly to JDF; defense counsel’s assertion at the hearing about Smith speaking to ‘Allie’ at JDF is meaningless because it was not contained in the affidavit. Furthermore, neither the affidavit nor defense counsel’s statements reflected that Smith had submitted a writing to JDF challenging the charges per the JDF process outlined in its statements.” As to JDF’s breach of contract claim, Smith stated in his affidavit that the nonparty (G) that made the equipment repair “had ‘billed twice the amount’ that was ‘originally quoted’ and that Smith was ‘never satisfied with the work that was done.’ Although these averments might constitute a ‘meritorious defense’ in an action brought by [G] against Smith, they do not form a defense, meritorious or otherwise, against JDF for breach of the Agreement.” As to good cause, the court found that the “gist of Smith’s position was lack of knowledge of the law and its consequences, which simply do not suffice to establish ‘good cause.’”