Preliminary injunction; Mootness; Entry of default judgment on the basis of discovery violations; MCR 2.313(B)(2) & (C)(1); Frankenmuth Mut Ins Co v ACO, Inc; Lack of an evidentiary hearing

The court concluded that the propriety of the trial court’s grant of a preliminary injunction was “of no consequence to the outcome of this appeal.” Also, it found that “the trial court did not abuse its discretion by entering the default judgment” based on discovery violations. Finally, it rejected defendants’ claim “that the trial court found them in contempt without first holding a required evidentiary hearing” where the record did not show they were found in contempt. As to their challenge to the preliminary injunction, the court held that “even if the trial court abused its discretion in entering the preliminary injunction, defendants were obligated to follow that order until it was overturned or vacated.” Further, it found that “any error in entering the preliminary injunction does not appear to have had an effect on the trial court proceedings.” In addition, it held that “challenges to the propriety of the preliminary injunction have been rendered moot.” The parties agreed “that defendants no longer have any boats with the subject features for sale, and the preliminary injunction terminated after the trial court concluded the case with the default judgment (which did not incorporate the terms of the preliminary injunction).” Defendants also argued “that the trial court abused its discretion by entering a default judgment on the basis of discovery violations.” The court concluded that each “of the Frankenmuth Mut Ins Co factors favored the trial court’s decision.” Among other things, defendants’ “failures at every stage of the discovery process continued for” months, and the trial court did not err in finding that they did not comply with discovery orders. The trial court also attempted, “and later considered, options other than default, and it did not appear to overlook any that would have been better suited to the occasion.” As to defendants’ contempt claim, the court concluded “the trial court resorted to default without needing or intending to resort to contempt.” Defendants’ claim that it “effectively found them guilty of criminal contempt is unconvincing.” They characterized “the default as punishing them for past behavior instead of attempting to nudge them into compliance, which suggests criminal instead of civil contempt.” Defendants were “correct that the trial court took that action in response to [their] past behavior, but that is always the case when sanctioning a party for prior discovery violations.”