____________________________________________________________________________________________________________________________ 

________________________________ 

C hief Justice Justices 

Maura D. Corrigan	 Michael F. Cavanagh 

Elizabeth A. Weaver 

Marilyn Kelly 

Clifford W. Taylor Opinion Robert P. Young, Jr. 

Stephen J. Markman 

FILED JANUARY 18, 2001
 

MARCY ZAITER, 


Plaintiff-Appellee,
 

v	 No. 116357
 

RIVERFRONT COMPLEX, LTD., AND


VIRGIL D. RILEY,
 

Defendants-Appellants.
 

PER CURIAM
 

After the defendants failed to participate in discovery,
 

the circuit court entered a $50,000 default judgment. The
 

Court of Appeals affirmed. We affirm in part and reverse in
 

part. The circuit court did not err when it entered a default
 

judgment with regard to liability. However, we remand this
 

case to the circuit court to allow the defendants the
 

opportunity to have a jury decide the question of damages.
 

I
 

Plaintiff Marcy J. Zaiter worked for defendant Riverfront
 

Complex, Ltd., as an x-ray technician. She says she was fired
 

because she was pregnant. Riverfront says she was discharged
 
as an economic move, because her salary was greater than the
 

x-ray billings that were being generated from her work.
 

On October 8, 1996, Ms. Zaiter filed a complaint in which
 

she alleged that Riverfront had discharged her in violation of
 

the Civil Rights Act. MCL 37.2202; MSA 3.548(202). The
 

complaint included a demand for a jury trial, and was
 

accompanied by interrogatories and a request for the
 

production of documents.1
 

Riverfront answered the complaint, and stated its
 

reliance on Ms. Zaiter's demand for a jury trial. Signing the
 

answer, counsel for Riverfront provided a business address on
 

Edward Avenue in Madison Heights. 


By spring of the following year, Riverfront had not
 

answered the interrogatories or the request for the production
 

of documents. Ms. Zaiter's attorney wrote to Riverfront's
 

lawyer on February 4, 1997, demanding answers by February 14.
 

This and all other correspondence mentioned in this opinion
 

were sent to Riverfront's lawyer at her Edward Avenue address
 

in Madison Heights.
 

Ms. Zaiter's attorney wrote again on March 7 to confirm
 

a March 6 telephone conversation in which answers had been
 

promised by March 14. The letter also included a request for
 

production of two Riverfront employees for deposition.
 

1
 Ms. Zaiter also sued Virgil D. Riley, the sole


shareholder of Riverfront. For the balance of this opinion,


we will refer to the two defendants as “Riverfront.”
 

2
 
On April 2, Ms. Zaiter’s attorney filed a motion to
 

compel answers to the interrogatories and document requests.
 

A notice of hearing was sent to defense counsel. Like the
 

correspondence from Ms. Zaiter's lawyer, each notice of
 

hearing mentioned in this opinion bore defense counsel's
 

Edward Avenue address in Madison Heights.
 

The circuit court's ruling was an April 14 order that
 

required answers by April 24. Since defense counsel did not
 

appear for the hearing, Ms. Zaiter's lawyer mailed a copy of
 

the order to her on April 14, and enclosed a notice that the
 

two employees would be deposed on April 23.
 

An April 23 letter to defense counsel recites that the
 

depositions were adjourned to May 9 at “your request" and
 

confirms a telephone conversation in which defense counsel
 

promised Ms. Zaiter's lawyer that she would provide answers to
 

the discovery requests before the May 9 depositions.
 

On May 9, Ms. Zaiter's lawyer faxed a letter to defense
 

counsel. Pursuant to a May 8 conversation, the depositions
 

again had been adjourned. The letter also confirmed defense
 

counsel’s promise to provide the overdue answers by May 12.
 

Ms. Zaiter’s attorney filed a motion for default on June
 

24, mailing notice of the hearing to defense counsel. The
 

attorney recited the broken promises regarding discovery and
 

noted the court's April 14 order, and also explained that
 

June 10 had been the third notice date for depositions, but
 

3
 
that defense counsel and her client’s employees had not
 

appeared. Ms. Zaiter’s counsel asked for default judgment and
 

for an award of $2,5000 in costs.
 

The circuit court considered the motion on June 30. Its
 

conclusion was reflected in an order that was not entered
 

until July 15, because entry was delayed so that Ms. Zaiter’s
 

lawyer could mail to defense counsel the seven-day notice that
 

is part of the procedure set forth in MCR 2.602(B)(3). The
 

July 15 order required Riverfront to respond to the
 

interrogatories and the request to produce by July 11.2
 

Failing that, a default judgment would be entered. The court
 

also ordered Riverfront to pay $250 in sanctions by July 29.
 

When no answers were provided, Ms. Zaiter’s attorney
 

filed a July 25 motion for default judgment. Two notices of
 

hearing were mailed to defense counsel.
 

The circuit court heard the motion on September 8.
 

Defense counsel did not appear and thus did not assert
 

Riverfront’s right to a jury trial on damages. At a short
 

hearing on damages, Ms. Zaiter testified that she had suffered
 

$18,000 in economic damages, and emotional stress as well.
 

She had been diagnosed with depression, and her pregnancy
 

“almost led to a miscarriage.” Counsel asked for judgment in
 

2 Because of the delay in entry, the July 15 order did


require the impossible----answers by July 11. This obvious
 

error was of little significance, since Riverfront continued


not to comply with the discovery requests that had been made


the previous October.
 

4
 
the amount of $50,000, a figure that the court later
 

attributed, inaccurately, to a mediation evaluation.
 

At the conclusion of the hearing, the circuit court
 

granted the request orally, but asked that entry of the
 

written judgment be deferred until the seven-day entry
 

procedure was followed again. Thus, Ms. Zaiter’s lawyer sent
 

defense counsel notice of the pending entry of the default
 

judgment. No objection was received, and the court entered
 

the $50,000 default judgment on September 22.3 Ms. Zaiter's
 

attorney faxed a copy of the judgment to defense counsel.
 

On October 9, Riverfront moved to set aside the default
 

and the default judgment. In the motion, defense counsel
 

stated that she had received no correspondence from Ms.
 

Zaiter's attorney since the May 9 fax; nor had she received
 

any of the motions or orders. Counsel suggested that the
 

problem might lie in the court's records, which showed a
 

former business address. Counsel did not explain why
 

correspondence mailed to her Edward Avenue address in Madison
 

Heights would go unanswered. She said that there was good
 

cause to set aside the default judgment and that Ms. Zaiter's
 

suit---“a case of questionable liability”---should be heard on
 

its merits.
 

The circuit court heard Riverfront's motion on October
 

3
 The judgment was against Riverfront and Mr. Riley,


jointly and severally.
 

5
 
27. Defense counsel said she could not explain her failure to
 

receive mail at her current address, though she thought
 

perhaps the problem was that the mail had been misdirected to
 

another business on the same premises. She said that,
 

throughout the same period, she had been providing diligent
 

representation of Riverfront in an unrelated matter, and that
 

there would have been no reason for her to neglect the present
 

suit. 


Defense counsel also stated to the court her "belief"
 

that she had answered the October 1996 discovery requests at
 

some prior point, though she could not produce copies of
 

answers or a proof of service. She promised to look when she
 

returned to her office.
 

The court ruled on October 29, 1997. Before the court
 

delivered its opinion, defense counsel told the court that a
 

search of her files revealed that she had sent the answers
 

back on May 12. Unfortunately, she had sent them to an
 

attorney who had no role in this case---counsel for a party
 

involved in unrelated litigation with Riverfront in district
 

court. She also had sent the answers to the district court.
 

So far as she knew, neither set of misdirected answers had
 

ever been returned to her.4
 

The court thanked defense counsel for that information,
 

4 The record does not indicate that defense counsel has
 

ever tendered a copy of the answers, or a copy of the proof of


service showing the erroneous mailing.
 

6
 
and then delivered its opinion, concluding:
 

Now, it has been five months since defense


counsel last made contact with the plaintiff,[5] and
 

they have stated that the lack of mail failed to


give them notice of events or her need to contact


plaintiff’s counsel. However, as the Court has


gone through the file and received oral argument


Monday, plaintiff appears to have sent all of the


mail to the Edwards Road address, which defendant


claims is counsel’s correct address. It’s exactly


this long period of time without contact which


should have at least put defendant’s counsel on


notice of a need to update itself with the status


of the case, even---or---either through placing a


phone call to plaintiff’s counsel or to this court.
 

An attorney certainly has an ethical duty to


act with reasonable diligence and promptness in


representing a client according to Michigan Rules


of Professional Conduct. Defendant’s attorney


allowed five months to pass without an attempt to


contact plaintiff or this court.
 

Defendant offers as an explanation for her


lack of contact, that control over this case, as


nonreceipt of mail. She asserts that this is good


cause and that a meritorious defense exists.
 

However, this Court is convinced that the receipt


of mail should not be the only method whereby an


attorney should be prompted to keep abreast of the


progress and status of a case. The purpose of a


default judgment is to discourage attorneys from


failing to represent their clients in a reasonably


diligent and prompt manner. Unfortunately, it has


the effect of adjudicating matters not on the


merits alone. However, it is appropriate in


specific circumstances and, unfortunately, the
 

Court believes that this is one of them.
 

This Court makes---takes no pleasure in denying


a motion to set aside a default judgment, and
 

5 The dissenting judge in the Court of Appeals pointed


out that it is four months, not five, from May 9 (the fax that


defense counsel acknowledges having received) to September 8


(the hearing on the motion to enter default judgment). That
 

error plainly is not the foundation of the circuit court's


opinion.
 

7
 
counsel has appeared here today and she has been


candid enough to indicate that the interrogatories


appear to have been prepared and they may have


inadvertently been sent to another court and they


may very well have been sent to another attorney.


Now why those things didn’t come back to her


office, or this court, or the other attorney, I am


not sure. It’s an unfortunate situation, and
 

counsel has been respectful each time she has
 

appeared here.
 

It’s a difficult measure to be taken, but it


is the ruling of the Court that the Motion to Set


Aside the Default Judgment should be denied.
 

On November 18, the circuit court entered an order denying the
 

motion to set aside the default judgment.
 

Riverfront next filed a December 1 motion, asking the
 

circuit court to “reconsider its prior denial of Defendants’
 

Motion, insofar as the Court must preserve Defendants’ right
 

to a trial by jury on the issue of damages.” Riverfront's
 

motion was based on Wood v DAIIE, 413 Mich 573; 321 NW2d 653
 

(1992).
 

Reconsideration was denied by the circuit court in a
 

January 15, 1998 opinion/order.6
 

The Court of Appeals affirmed the $50,000 default
 

6 MCR 2.119(F)(3) states the standard for deciding a


circuit court motion for rehearing or reconsideration:
 

Generally, and without restricting the
 

discretion of the court, a motion for rehearing or


reconsideration which merely presents the same


issues ruled on by the court, either expressly or


by reasonable implication, will not be granted.


The moving party must demonstrate a palpable error


by which the court and the parties have been misled


and show that a different disposition of the motion


must result from correction of the error.
 

8
 
judgment.7
 

Riverfront has applied to this Court for leave to appeal.
 

II
 

The setting aside of a default or a default judgment is
 

governed by MCR 2.603(D)(1), which provides:
 

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.
 

In the present case, the circuit court and the Court of
 

Appeals found no good cause. For example, in denying
 

Riverfront's motion for reconsideration, the circuit court
 

said that the lengthy period without contact from opposing
 

counsel should have put defense counsel on notice that
 

something was awry. Likewise, the Court of Appeals majority
 

concluded that good cause had not been shown:
 

Under these circumstances we conclude that the
 

circuit court did not abuse its discretion in
 

finding that defense counsel unjustifiably


neglected the instant case when she failed over a


five-month period to make contact with plaintiff's


counsel of any kind, or otherwise investigate the


status of the case.
 

The dissenting judge said that "[w]ithout some specific
 

information or record support of docket management procedures,
 

local rules, and prevailing time frames in the Genesee Circuit
 

Court, I would say that the lack of contact between an
 

7
 Unpublished opinion per curiam, issued January 25,


2000, amended January 31, 2000 (Docket NO. 209212).
 

9
 
attorney and the opposite side or the court for a period of
 

four or five months is not sufficient ground for entry of a
 

default against the attorney for failure ‘to diligently pursue
 

and defend a case.’"
 

We will not pause long on this aspect of the case. Our
 

review is for clear abuse of discretion,8 and we find no such
 

abuse in this case. While we are not unsympathetic to the
 

plight of an attorney betrayed by glitches in mail delivery,
 

this case involves more than the occasional misdelivery of a
 

piece of mail. 


Various letters and notices of hearing were mailed to
 

defense counsel at her correct address in Madison Heights, all
 

to no effect. This bundle of mail was necessitated by
 

counsel's year-long failure to provide Ms. Zaiter's lawyer
 

with answers to discovery requests that had been tendered with
 

the complaint. The eventual explanation that the answers had
 

been mailed five months earlier to an attorney in an unrelated
 

case provides little help---counsel herself acknowledged at the
 

October 29 proceedings that this disclosure "I suppose in many
 

senses increases my culpability in this matter."
 

We have no doubt that real problems can arise as
 

documents are transmitted by mail. On this record, however,
 

the prolonged and repeated failure to receive mail, together
 

8 Alken-Ziegler, Inc v Waterbury Headers Corp, 461 Mich


219, 227-229; 600 NW2d 638 (1999).
 

10
 
 

with the other circumstances of this case, led the circuit
 

court to conclude that Riverfront had failed to demonstrate
 

good cause for setting aside the default judgment.9 In that
 

conclusion, we can find no abuse of discretion.
 

III
 

This case also presents the issue whether the Riverfront
 

can obtain a jury trial on damages. As the parties and the
 

lower courts have observed, this question was treated at
 

length in our 1992 decision in Wood.
 

The defendant in Wood was DAIIE. It failed to respond
 

timely to proper discovery requests, resulting in a default
 

and, after a further hearing, a default judgment. DAIIE did
 

appear for the default judgment hearing, but the court refused
 

to allow it to participate. 413 Mich 577. 


With regard to whether DAIIE had a right to a jury trial
 

in Wood, this Court noted that DAIIE had requested a jury and
 

had not waived that right. Thus, the issue was whether the
 

default functioned as a waiver. This Court held that it did
 

not: 


We hold only that a defaulting party who has


properly invoked his right to jury trial retains


that right if a hearing is held to determine the


amount of recovery. It is important, therefore, to


ascertain when such a hearing is required. [413
 

9 It is important that the “good cause” and “meritorious


defense” elements of a motion to set aside be considered
 

separately. Alken-Ziegler, 461 Mich 229-234. There being no


good cause in this case, we do not reach the question of


meritorious defense.
 

11
 
Mich 583-584 (emphasis in original).]
 

This Court then examined GCR 1963, 520 to determine when
 

such a hearing is necessary. That rule is the predecessor of
 

MCR 2.603(B)(3)(b),10 which provides:
 

If, in order for the court to enter judgment


or to carry it into effect, it is necessary to
 

(i) take an account,
 

(ii) determine the amount of damages,
 

(iii) establish the truth of an allegation by


evidence, or
 

(iv) investigate any other matter,
 

the court may conduct hearings or order references


it deems necessary and proper, and shall accord a


right of trial by jury to the parties to the extent


required by the constitution.
 

From there, this Court moved to the principal holding of Wood:
 

However, once the trial court determines that
 

a further proceeding is necessary, the rule
 

mandates "a right of trial by jury to the parties


when and as required by the Constitution".[11] As
 

noted above, the constitutional requirement is but


a circular reference to the court rules. The
 

constitutional provision is repeated here: "The


right of trial by jury shall remain, but shall be


waived in all civil cases unless demanded by one of


the parties in the manner prescribed by law."


Const 1963, art 1, § 14.
 

Thus, the trial court in the case at bar,


having determined that a hearing was necessary on


the question of damages, was obliged to accord
 

10 In pertinent part, the differences are only stylistic.
 

11 The emphasized phrase from GCR 1963, 520.2(2) has been


replaced by the words, “to the extent required by the


constitution.” No substantive change was intended by that


rephrasing.
 

12
 
 

defendant its properly preserved right to jury


trial. [413 Mich 585 (emphasis in original).]
 

When it denied reconsideration in the present case, the
 

circuit court explained that it had exercised discretion to
 

determine whether a hearing was necessary to determine
 

damages. There being no such necessity, there was no need for
 

a trial by jury.
 

The Court of Appeals majority noted that the circuit
 

court had conducted a hearing on damages,12 and therefore
 

Riverfront’s “properly preserved right to a jury determination
 

on the issue of damages must be recognized.” The majority
 

affirmed nonetheless. It relied on the failure of Riverfront
 

to appear at the hearing to assert the right to a jury trial,
 

and Riverfront’s failure to raise this issue in its motion to
 

set aside the default judgment.
 

Noting the similarities between this case and Wood, the
 

dissenting judge characterized Riverfront’s Wood-based
 

argument as “compelling.”
 

On this point, we agree with the dissent in the Court of
 

Appeals. With its answer, Riverfront stated its reliance on
 

Ms. Zaiter’s demand for a jury. At no time has Riverfront
 

ever said or done anything to waive its right to a jury. Wood
 

teaches that Riverfront’s default does not constitute such a
 

12 The majority also said that there had been no


mediation, which prompted the dissent to describe the $50,000


figure as “a rabbit from a hat.”
 

13
 
waiver. 413 Mich 583. Thus, we know that it had the right to
 

trial by jury on damages if a hearing were held, as did occur
 

in this case. MCR 2.603(B)(3)(b). 


All that remains is Riverfront’s failure to participate
 

in the default judgment hearing. In light of the court rule,
 

the analysis offered in Wood, and the circumstances of this
 

case, we are satisfied that Riverfront’s failure to appear for
 

the default judgment hearing did not constitute a waiver of
 

its right to a jury trial. The failure to appear was simply
 

another element of the continuing problem that gave rise to
 

the present dispute. Whatever reasons caused the default also
 

caused defense counsel not to appear for the default judgment
 

hearing. 


As the Court of Appeals noted, Riverfront did not raise
 

this issue in its motion to set aside the default judgment.
 

Rather, this question was first raised in Riverfront’s motion
 

for reconsideration of the court’s order denying the motion to
 

set aside the default judgment. While that presentation may
 

appear to be tardy, the constitutional nature of the right to
 

trial by jury----a right never waived by Riverfront----compels us
 

to grant partial relief in the circumstances of this case.
 

The principles elaborated in Wood are the basis of this
 

result.
 

IV
 

For the reasons stated in this opinion, we affirm in part
 

14
 
and reverse in part the judgments of the circuit court and the
 

Court of Appeals. We remand this case to the circuit court
 

for a hearing before a jury on the amount of damages. MCR
 

7.302(F)(1).
 

CORRIGAN, C.J., and CAVANAGH, WEAVER, KELLY, TAYLOR, YOUNG, and
 

MARKMAN, JJ., concurred.
 

15