Discovery sanction; MCR 2.313(A)(6); Dean v Tucker; Striking an affirmative defense; MCR 2.313(B)(2)(b); Citizens United Reciprocal Exchange (CURE)

Holding that the trial court abused its discretion in striking defendant-CURE’s rescission defense as a sanction for violating its discovery order, the court vacated and remanded. The suit was filed by a now deceased insured for unpaid benefits under an auto insurance policy obtained from CURE. During discovery, plaintiff filed a motion to compel CURE to produce two adjusters and an underwriter for deposition. The trial court ordered that an underwriter and one of the adjusters be deposed. A dispute then arose as to one of the individuals produced (S) because he was not the underwriter who “actually made the decision to rescind” the policy. The trial court granted plaintiff’s sanction motion. On appeal, the court disagreed with CURE’s position “that the trial court was required to consider each Dean factor because striking the rescission defense was akin to dismissal or an entry of default.” It determined that, under the “circumstances, striking just one defense as a sanction was not a functional equivalent to entering a default judgment against CURE. Therefore, the trial court did not abuse its discretion just because it failed to make specific findings under each Dean factor. It was only required to consider the totality of the circumstances to determine whether the sanction was appropriate.” But the court concluded that in doing so, “the trial court reached a decision that fell outside the range of reasonable and principled outcomes because it was based on several clearly erroneous findings of fact.” The court held “that the trial court’s finding that [S] was unable to sufficiently answer plaintiff’s questions was clearly erroneous.” It also found “there was little evidence to support the trial court’s finding that CURE was ‘playing hide the ball’ in this matter.” In addition, the trial court “overlooked CURE’s history of compliance with plaintiff’s other discovery requests.” The court further found that the decision to produce S “for the underwriter deposition had no prejudicial effect on plaintiff and did not deprive him of notice about CURE’s intent to introduce evidence of a material misrepresentation at trial.” Reviewing the totality of the circumstances, the court concluded “a less severe sanction would have been more appropriate.”