Setting Aside Defaults

Generally, a Court will not set aside a default that has been properly entered, Alken- Ziegler, Inc v Waterbury Headers Corp, 461 Mich 219 (1999).

Pursuant to MCR 2.603(D)(1),  “[a] motion to set aside a default or a default judgment, except when grounded on lack of jurisdiction over the defendant, shall be granted only if good cause is shown and an affidavit of facts showing a meritorious defense is filed.” Thus, a default will not be set aside unless the defaulting party demonstrates both good cause and a meritorious defense. Barclay v Crown Bldg & Dev, Inc, 241 Mich App 639 (2000).

In determining whether a party has shown good cause, the trial court should consider the following factors:

(1) whether the party completely failed to respond or simply missed the deadline to file;

(2) if the party simply missed the deadline to file, how long after the deadline the filing occurred;

(3) the duration between entry of the default judgment and the filing of the motion to set aside the judgment;

(4) whether there was defective process or notice;

(5) the circumstances behind the failure to file or file timely;

(6) whether the failure was knowing or intentional;

(7) the size of the judgment and the amount of costs due under MCR 2.603(D)(4);

(8) whether the default judgment results in an ongoing liability (as with paternity or child support); and

(9) if an insurer is involved, whether internal policies of the company were followed.

* * *

This list is not intended to be exhaustive or exclusive. Additionally, as with the factors provided in other contexts, the trial court should consider only relevant factors, and it is within the trial court’s discretion to determine how much weight any single factor should receive.

Under MCR 2.603(A)(1), “[i]f a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules, and that fact is made to appear by affidavit or otherwise, the clerk must enter the default of that party.” (Emphasis added.) The Appellate Courts have made clear that the emphasized portion of MCR 2.603(A)(1) means that a party must not be defaulted if the party has otherwise defended the action by taking some defensive action in the case.

In Marposs Corp v Autocam Corp, 183 Mich App 166 (1990), the defendant filed motions for summary disposition and a change of venue. The trial court denied both motions. Id. The defendant sought leave to appeal the trial court’s denial of its motion for a change of venue but not the denial of its motion for summary disposition. Id. The defendant did not file an answer and was defaulted. Id. Although defendant should have timely filed a responsive pleading under MCR 2.108(A)(1), but had not done so, the Court held that the trial court erred by concluding that the defendant was properly defaulted because the defendant otherwise defended itself under MCR 2.603(A)(1). Id. At 170.

Generally speaking, any substantive activity evidencing an intent to affirmatively act would satisfy the “otherwise defend” requirement of the sub-rule.