Title: AMCO BUILDERS & DEVELOPERS INC V TEAM ACE JOINT VENTURE
Citation: N/A
Docket Number: 120459
State: Michigan
Issuer: Michigan Supreme Court
Date: July 17, 2003

____________________________________________________________________________________________ 
____________________________________________________________________________________________________________________________ 
Michigan Supreme Court
Lansing, Michigan 48909 
Chief Justice 
Justices 
Maura D. Corrigan 
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Opinion 
Stephen J. Markman 
FILED JULY 17, 2003  
AMCO BUILDERS & DEVELOPERS, INC.,  
Plaintiff/Counter- 
Defendant-Appellant,  
v 
No. 120459  
TEAM ACE JOINT VENTURE,  
Defendant/Counter­
Plaintiff/Cross- 
Defendant,  
and  
HARTFORD FIRE INSURANCE CO.,  
Defendant/Cross- 
Defendant,  
and  
ACME DEMOLITION/INTERVALE 
JOINT VENTURE,  
Defendant-Appellee,  
and  
__________________________________
LEROY LOVE doing business 
as ACME DEMOLITION CO.,  
Defendant/Counter­
Plaintiff/Cross- 
Plaintiff,  
and  
INTERVALE EXCAVATING &  
DEMOLITION, INC,  
Defendant/Appellee/ 
Cross-Defendant,  
and  
TEAM CONTRACTING, INC. 
AMERICAN CONSTRUCTION & ENERGY, 
AND JARVIS PAINTING, INC.,  
Defendants.  
BEFORE THE ENTIRE BENCH  
CAVANAGH, J.  
This case requires us to decide whether the trial court’s  
refusal to set aside a default judgment was an abuse of  
discretion.  Because we find that the trial judge did not  
abuse his discretion in refusing to set aside the default  
judgment, we reverse the judgment of the Court of Appeals.  
I  
This case involves claims for breach of contract and  
tortious interference with a contractual relationship arising  
from a construction project of the city of Detroit housing  
commission.  
On November 23, 1998, the circuit court directed  
2  
 
defendants, 
Acme 
Demolition/Intervale 
Joint 
Venture  
(Acme/Intervale Joint Venture) and Intervale Excavating &  
Demolition, Inc. (Intervale), to produce Clarence Carson, the  
principal of Intervale, for deposition within thirty days.  
This order was entered only after the trial judge “bent over  
backwards” for defendants, even providing defense counsel an  
opportunity to contact Mr. Carson to ensure that he could  
appear within thirty days.  The order provided that “[f]ailure  
to produce Clarence Carson in conformity with this Order shall  
subject Defendant to a motion for default judgment.”  
When defendants Intervale and Acme/Intervale Joint  
Venture failed to comply with the order, plaintiff filed a  
motion for default judgment against defendants.  At the  
January 15, 1999, hearing on the motion, defense counsel  
stated that he had been unable to reach Mr. Carson because of  
the holidays and the illness of defense counsel’s son.  He  
acknowledged that he had “not participated” in discovery and  
admitted “not having been available to properly represent”  
defendants.  
However, he assured the court that communications  
with his clients had been restored.  The court granted the  
motion for default and the order of default was entered  
against both defendants on January 27, 1999, for failure to  
comply with the November 23, 1998, order.  
Both defendants moved to set aside the default on  
3  
 
February 12, 1999.  Although defendants’ attorney assumed  
responsibility for the delay, the motion was denied on March  
12, 1999, because the court found that neither defendant  
demonstrated good cause to set aside the default.  
Default 
judgment in the amount of $595,606.15 was entered  
against only Intervale when defense counsel did not appear for  
the March 18, 1999, hearing on the issue of damages.1  
New counsel for defendant moved to set aside the default  
entry 
against 
both 
Intervale 
and 
Acme/Intervale 
Joint 
Venture,  
as well as the default judgment against Intervale, claiming  
that Mr. Carson was not aware that the court had ordered his  
production for deposition. The court denied the motion at a  
hearing on April 30, 1999, because it had “bent over backwards  
. . . making sure that . . . [prior defense counsel] had the  
okay from his clients that they would be produced for  
deposition within the period of time.”  The circuit court was  
not satisfied that good cause for setting aside the default  
and the default judgment was presented.  The order denying the  
motion was entered on May 5, 1999.  
1 Apparently, there was some confusion whether defense 
counsel 
was 
representing 
both 
Acme/Intervale 
Joint 
Venture 
and 
Intervale.
 At the March 18, 1999, hearing, counsel for 
plaintiff stated that although default had been entered 
against both Acme/Intervale Joint Venture and Intervale she 
was proceeding only against Intervale. For the remainder of  
this opinion, “defendant” refers to defendant Intervale 
Excavating & Demolition, Inc.  
4  
 
 
Defendant 
appealed both the entry of default judgment and  
the denial of the motion to set aside the default and the  
default judgment.  The Court of Appeals reversed in a two-to­
one unpublished opinion per curiam.2  Finding that the actions  
of defense counsel constituted abandonment, the majority  
opined that there was good cause for setting aside the default  
and the default judgment.  The Court of Appeals majority held  
that the trial court abused its discretion in refusing to set  
aside the default judgment.  The dissenting judge concluded  
that the level of deference precludes reversal in this case;  
he found that the refusal to set aside the default and the  
default judgment was not an abuse of discretion.  
Plaintiff appealed the Court of Appeals reversal of the  
trial court’s denial of defendant’s motion to set aside the  
default judgment.  This Court granted plaintiff’s application  
for leave to appeal. 467 Mich 896 (2002).  
II  
This Court reviews a trial court’s refusal to set aside  
a default or default judgment for an abuse of discretion.  
Zaiter v Riverfront Complex, Ltd, 463 Mich 544, 552; 620 NW2d  
646 (2001); Alken-Ziegler, Inc v Waterbury Headers Corp, 461  
Mich 219, 227; 600 NW2d 638 (1999).  As we recently reiterated  
2Unpublished opinion per curiam, issued November 2, 2001 
(Docket No. 221513).  
5  
in Alken-Ziegler:  
The ruling on a motion to set aside a default 
or a default judgment is entrusted to the  
discretion of the trial court.  Where there has  
been a valid exercise of discretion, appellate 
review is sharply limited.  Unless there has been a  
clear abuse of discretion, a trial court’s ruling 
will not be set aside.  
* * *  
This 
Court 
historically 
has 
cautioned  
appellate courts not to substitute their judgment 
in matters falling within the discretion of the 
trial court, and has insisted upon deference to the 
trial court in such matters.  For example, the 
Court stated in Scripps v Reilly, 35 Mich 371, 387 
(1877):  
“It can never be intended that a trial judge 
has purposely gone astray in dealing with matters 
within the category of discretionary proceedings, 
and unless it turns out that he has not merely 
misstepped, 
but 
has 
departed 
widely 
and  
injuriously, an appellate court will not re­
examine.  It will not do it when there is no better  
reason than its own opinion that the course  
actually taken was not as wise or sensible or  
orderly as another would have been.”  
* * *  
Moreover, 
although 
the 
law 
favors 
the  
determination of claims on the merits, it has also 
been said that the policy of this state is  
generally against setting aside defaults and  
default judgments that have been properly entered. 
[Alken-Ziegler at 227-229 (citations omitted).]  
III  
The setting aside of a default or 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  
6  
  
jurisdiction over the defendant, shall be granted 
only if good cause is shown and an affidavit of 
facts showing a meritorious defense is filed.  
Plaintiff has not challenged defendant’s affidavit of  
meritorious defense; therefore, the trial court only examined  
whether there was good cause to set aside the default and  
default judgment.  To show “good cause,” a party may establish  
“‘(1) a substantial defect or irregularity in the proceeding  
upon which the default was based,’” or “‘(2) a reasonable  
excuse for failure to comply with the requirements which  
created the default . . . .’” Alken-Ziegler at 230 (citation  
omitted).  
Defendant asserts that there is good cause for setting  
aside the default and the default judgment because the actions  
of  prior defense counsel constituted abandonment. 
While,  
generally, an attorney’s negligence is attributable to that  
attorney’s client, abandonment by counsel has been held to  
constitute good cause for setting aside a default or default  
judgment. White v Sadler, 350 Mich 511, 523-524; 87 NW2d 192  
(1957).
 In White, this Court recognized that a default  
judgment may be set aside on the basis of abandonment or  
withdrawal by an attorney:  
We find no ALR annotation squarely on the 
point of the negligence of an attorney as a ground 
for opening or vacating a default judgment, but we 
do find one on the abandonment of or withdrawal  
from a case by an attorney as such a ground (114 
ALR 279).
 That annotation has this revealing  
7  
passage on page 280:  
“An attorney’s negligence or mistake is  
distinguishable, as regards the right to reopen a 
default judgment, from his abandonment of the case, 
which may be in effect a fraud on his client.  So  
that from the mere fact that the attorney’s 
negligence may be imputable to his client and 
prevent the latter from relying on that ground for 
vacating or opening a default judgment, it does not 
necessarily follow that the same rule will apply in 
the event of the attorney’s abandonment of the 
case.
 It is said in 15 RCL (Perm Supp ed), 
Judgments, § 161, p 711: ‘In some jurisdictions the 
negligence or mistake of an attorney is not  
imputable to his client, and does not debar him 
from obtaining relief from a judgment due thereto, 
but the decisions in most of the States are to the  
effect that the neglect or mistake of an attorney 
or agent must be treated as that of his principal, 
and hence whenever the mistake, negligence or 
inadvertence relied upon is of so gross a character 
that it would not have entitled the party to relief 
had it been his own, it is equally unavailable to 
procure him relief when attributable to his  
attorney.’” [Id.]  
In this case, the circuit court examined the actions of  
the prior defense counsel and refused to set aside the default  
and the default judgment.  
Defendant argued that the default and the default  
judgment should be set aside because Mr. Carson did not have  
knowledge that the trial court ordered him to appear for  
deposition, nor did he have knowledge that default had been  
entered.  Defendant asserts Mr. Carson’s lack of knowledge was  
the result of prior counsel’s abandonment.  Mr. Carson signed  
an affidavit dated April 22, 1999. The affidavit stated, in  
part, that before April 14, 1999, Mr. Carson was not advised  
8  
that any party was attempting to depose him, nor was he  
advised that the court had entered an order compelling his  
appearance 
for 
deposition or that default and default judgment  
had been entered.  
The Court of Appeals majority relied, in part, on this  
affidavit to conclude that the trial judge abused his  
discretion in refusing to set aside the default judgment.  The  
affidavit and statements by prior counsel that he failed to  
properly represent his clients convinced the Court of Appeals  
majority that prior counsel abandoned the representation.  
However, the Court of Appeals is obliged to review a  
trial court’s ruling on a motion to set aside a default or  
default judgment for an abuse of discretion. Zaiter at 552;  
Alken-Ziegler at 227.  Although the Court of Appeals majority  
correctly identified this as the standard of review, it  
impermissibly substituted its own judgment for that of the  
trial court.  
There is significant evidence in the record from which  
the trial judge could conclude that defendant was not  
abandoned by prior counsel. At the April 30, 1999, hearing,  
the trial judge stated that despite prior counsel’s son’s  
medical problems, prior counsel continued to represent  
defendants and “was here most of the time with regard to this  
case.”
 The trial judge also stated that he “bent over  
9  
backwards” to assure that prior counsel “had the okay from his  
clients that they would be produced for deposition within the  
period of time.”  Before entering the order compelling  
production of Mr. Carson, the trial judge apparently provided  
prior counsel with an opportunity to contact Mr. Carson to  
ensure that he could appear for a deposition within thirty  
days.  Prior counsel assured the court that the order was  
“okay.”  
Further, on February 3, 1999, Mr. Carson signed an  
affidavit entitled "Affidavit of Intervale Excavating &  
Demolition, Inc, in Support of Motion to Set Aside Default  
Entry." At the least, this proves that Mr. Carson and prior  
counsel had contact regarding the case after the default was  
entered, but before the date Mr. Carson claims he became aware  
that the default had been entered. Moreover, in response to  
defendants' 
argument 
below that Mr. Carson lacked knowledge of  
significant aspects of the case, the trial court stated that  
it recalled being told by prior counsel that he was in  
communication with his clients.  
The 
trial 
judge 
examined all the evidence regarding prior  
counsel’s 
representation 
and 
determined 
that 
prior 
counsel 
did  
not abandon the representation; therefore, defendant had not  
presented good cause for setting aside the default and the  
default judgment.  In light of the evidence in the record and  
10  
the trial judge’s reasoned decision based on that evidence we  
cannot conclude that the trial court’s refusal to set aside  
the default judgment was an abuse of discretion.  
IV  
We agree with plaintiff and the dissenting Court of  
Appeals judge that the Court of Appeals majority failed to  
accord the circuit court’s ruling the deference it was due  
and, thus, we reverse the ruling of the Court of Appeals.  
Michael F. Cavanagh 
Elizabeth A. Weaver  
Marilyn Kelly 
Stephen J. Markman  
11  
  
  
v 
S T A T E 
O F 
M I C H I G A N  
SUPREME COURT  
AMCO BUILDERS & DEVELOPERS, INC,  
Plaintiff/Counter- 
Defendant-Appellant,  
No. 120459  
TEAM ACE JOINT VENTURE,  
Defendant/Counter­
Plaintiff/Cross- 
Defendant,  
and  
HARTFORD FIRE INSURANCE CO,  
Defendant/Cross- 
Defendant,  
and  
ACME DEMOLITION/INTERVALE 
JOINT VENTURE,  
Defendant-Appellee,  
and  
LEROY LOVE doing business as ACME 
DEMOLITION CO,  
Defendant/Counter­
Plaintiff/Cross 
Plaintiff,  
 
 
________________________________ 
 
and  
INTERVALE EXCAVATING & DEMOLITION, INC,  
Defendant-Appellee/ 
Cross-Defendant,  
and  
TEAM CONTRACTING, INC, et al,  
Defendants  
YOUNG, J. (concurring).  
I agree with the majority that the trial court’s decision  
to deny defendant’s motion to set aside the default judgment  
was not an abuse of discretion and, thus, the judgment of the  
Court of Appeals should be reversed.  However, I conclude  
that, in civil cases, abandonment satisfies the “good cause”  
requirement to set aside a default judgment only when  
principles of agency would avoid imputation of the attorney’s  
negligent omissions to the client.3  
3Because 
criminal 
representations 
implicate 
constitutional 
concerns 
regarding 
the 
adequacy 
of 
a  
defendant’s representation, my analysis is confined to civil 
representations only.  See Const 1963, art 1, § 20 (“In every 
criminal prosecution, the accused shall have the right  . . .  
to have the assistance of counsel for his or her defense . .  
. .”). See also People v Pickens, 446 Mich 298, 338; 521 NW2d 
797 
(1994)(setting 
forth 
the 
standard 
for 
effective 
assistance 
of counsel); People v Pubrat, 451 Mich 589, 594; 548 NW2d 595 
(1996)(“The right to counsel also encompasses the right to the 
effective assistance of counsel.”).  
2  
 
 
I  
As an initial matter, I do not believe that White v  
Sadler, 350 Mich 511; 87 NW2d 192 (1957), recognized  
abandonment, in and of itself, as a ground for setting aside  
a default judgment.  Citing a singular authority, and in  
dicta, the White Court recognized a potential difference  
between 
neglect 
and 
abandonment, 
and 
suggested 
the 
possibility  
that abandonment may be a basis for setting aside a default  
judgment:  
“An attorney’s negligence or mistake is  
distinguishable, as regards the right to reopen a 
default judgment, from his abandonment of the case, 
which may be in effect a fraud on his client.  So  
that from the mere fact that the attorney’s 
negligence may be imputable to his client and 
prevent the latter from relying on that ground for 
vacating or opening a default judgment, it does not 
necessarily follow that the same rule will apply in 
the event of the attorney’s abandonment of the 
case.” [Id. at 523, quoting anno: Abandonment of or  
withdrawal from case by attorney as ground for  
opening or setting aside judgment by default, 114 
ALR 279, 280.]  
On the basis of this brief, shallowly rooted suggestion that  
abandonment may be a ground for setting aside a default  
judgment, subsequent courts cited White for the proposition  
that  there is, in fact, a dispositive distinction between  
neglect and abandonment. See, e.g., Pascoe v Sova, 209 Mich  
App 297, 300; 530 NW2d 781 (1995)(“Similarly, in White, supra,  
the Supreme Court recognized a distinction between negligent  
3  
 
 
legal representation and abandonment of representation  
altogether.”).  As a result, post-White courts have concluded  
that abandonment is not to be imputed to the client, whereas  
ordinary neglect is to be imputed.  See, e.g., Coburn v  
Coburn, 230 Mich App 118, 128; 583 NW2d 490 (1998)(“Because  
the client properly may be burdened with the consequences of  
counsel’s 
improprieties 
short 
of 
abandoning 
the  
representation, [White, supra at 522-523], adversely affected  
parties and their attorneys have no one to blame but  
themselves if an appeal is dismissed on this basis.”).  
Although 
White 
recognized 
a 
potential 
distinction 
between  
neglect and abandonment, it did not adopt the distinction, nor  
did it conclude that abandonment per se is a proper basis on  
which to set aside a default judgment.  To the contrary,  
White, in dicta, and in reliance on a single ALR citation,4  
4I note that the ALR to which White cites, 114 ALR 279, 
suggests that abandonment can be tantamount to fraud on the 
client.  
“Fraud” 
is 
generally defined as “all acts, omissions, and 
concealments involving a breach of legal or equitable duty and 
resulting in damage to another, or the taking of undue or 
unconscientious advantage of another . . . .”  General  
Electric Credit Corp v Wolverine Ins Co, 420 Mich 176, 189; 
362 NW2d 595 (1984)(quoting 37 CJS, Fraud, § 1, p 204). 
“Fraud” 
encompasses 
both 
actual 
fraud–an 
intentional  
perversion of the truth–and constructive fraud–an act of 
deception or a misrepresentation without an evil intent. 
General Electric Credit Corp, supra at 188-189.  Furthermore, 
“fraud” may be committed by open false assertions or by 
suppressing facts, i.e., silent fraud. Hord v Environmental  
(continued...)  
4  
  
  
 
merely notes that if the offending attorney’s conduct  
constituted abandonment, the distinction may be important.  
White, supra at 523. 
The White Court offered no further  
discussion, nor did it decide whether abandonment is an  
appropriate ground for setting aside a default judgment.  
Accordingly, in light of the limited value of White’s  
discussion of a potential distinction between neglect and  
abandonment, I am unpersuaded that White stands for the  
proposition that abandonment automatically satisfies the “good  
cause” element required to set aside a default or default  
judgment under MCR 2.603(D)(1).  
That said, in Loree v Reeves, 2 Mich 133 (1851), this  
4(...continued) 
Research Institute of Michigan (After Remand), 463 Mich 399, 
412; 617 NW2d 543 (2000), quoting United States Fidelity &  
Guaranty Co v Black, 412 Mich 99, 125; 313 NW2d 77 (1981). In 
the case of silent fraud, mere nondisclosure of facts is 
insufficient. 
Hord, supra at 412. 
Rather, there must be 
circumstances that establish a legal duty to make the  
disclosure. 
Id.  In the case of agency, “[a]n agent who 
acquires information relevant to matters within his province 
and of which he should know the principal would want to know, 
has 
a 
duty 
to 
reveal 
it, 
unless 
it 
was 
received  
confidentially.”  Seavy, Agency (1964), Duties of Care and 
Obedience, § 143, p 238.  
Accordingly, it is not enough to say that “abandonment” 
constitutes a fraud on the client.  Rather, consistent with 
the definition of fraud and the principles of agency, the 
court must identify a specific circumstance, such as an 
intentional perversion of the truth or the failure to reveal 
information in accordance with the agent’s duty, to conclude 
that the attorney’s misconduct constitutes a fraud on the 
client.  
5  
 
 
Court considered whether to set aside a default charged  
against 
a 
client 
whose 
attorney 
had 
abandoned 
the  
representation. The defendant, a New York resident who was the  
object of a suit in Michigan for indebtedness, retained an  
attorney to represent him.  The attorney, however, neither  
appeared on the defendant’s behalf nor interposed a defense.  
Rather, the attorney completely abandoned the defendant’s  
representation.  Consequently, the trial court entered a  
default judgment against the defendant.  
This Court set aside the default and ordered a new trial  
in Loree.5  The Court reasoned:  
“[The client] was prompt in taking the  
necessary steps to employ an attorney, and he had no 
right to suppose that the attorney he did retain, 
and in time to have attended to the suit, and to 
whom he confidently confided the preparation and 
management of his defense, would abandon his case 
and suffer judgment to be taken against him by 
default . . . [the client] was authorized to believe 
that his attorney would appear and plead for him, 
and apprise him of the nature of the issue joined in  
5In doing so, the Court exercised its general authority 
to grant a new trial in the interest of justice:  
Courts of record are vested with general 
discretionary power, on the subject of granting new 
trials; yet this discretionary power is judicial, 
and not arbitrary, and should always be exercised 
by Courts with great care in moulding their  
decisions on applications for new trials, in view 
of the peculiar circumstances connected with each 
case, so as to subserve the purposes of substantial 
justice, and in protecting at the same time, the 
just and equitable rights of both parties. [Id. at  
134.]  
6  
 
 
  
the cause, and the time when the same would be 
brought to trial.” [Id. at 136.]  
The Court further reasoned:  
“It is contended on the part of the plaintiff, 
that if the defendant has lost his defense to the  
suit by the negligence or improper conduct of his 
attorney, he should be compelled to seek redress by 
action against the attorney.  But he should not be  
required to pursue this course, if the remedy in the  
end, would be either doubtful or inadequate.” [Id.  
at 137 (emphasis added).]  
Loree arguably supports the proposition that abandonment  
can be a ground to set aside a default judgment.  Notably,  
however, the Loree Court failed to explain why the rules of  
agency, which traditionally govern much of the attorney-client  
relationship, should not govern even in the case of  
abandonment. 
In my opinion, this is a weakness in the  
analysis in Loree. Additionally, although legal-malpractice  
actions in civil cases were thought to provide an inadequate  
remedy in the mid-nineteenth century, surely no twenty-first  
century court would so conclude.  Accordingly, I would limit  
Loree to those cases in which there is no legal remedy against  
the offending attorney.  
II  
I believe that abandonment satisfies the “good cause”  
requirement to set aside a default judgment only when the  
principles of agency would avoid imputation of the attorney’s  
negligence to the client.  
7  
 
 
 
 
 
The attorney-client relationship is generally governed by  
principles of agency. Detroit v Whittemore, 27 Mich 281, 286  
(1873)(“The employment of counsel does not differ in its  
incidents, or in the rules which govern it, from the  
employment of an agent in any other capacity or business.”);  
Katz v Kowalsky, 296 Mich 164, 174; 295 NW 600 (1941)(applying  
principles of agency to the attorney-client relationship);  
Olitkowski v St Casimir’s S&L Ass’n, 302 Mich 303, 309-310; 4  
NW2d 664 (1942)(applying principles of agency to the attorney­
client relationship); Friedman v Dozorc, 412 Mich 1, 75; 312  
NW2d 585 (1981)(“Attorneys are the agents who provide the  
necessary expertise for clients who wish to litigate their  
rightful claims.”); Fletcher v Fractional No 5 School Dist Bd  
of Ed, 323 Mich 343, 348; 35 NW2d 177 (1948)(“In a legal  
sense, an attorney at law often acts as an agent or  
representative.”).  
Accordingly, in civil cases, a client is bound by an  
attorney’s actions and inactions as long as the attorney’s  
conduct was within the scope of the attorney’s authority. See  
Everett v Everett, 319 Mich 475, 482; 29 NW2d 919 (1947),  
quoting Jones v Leech, 46 Iowa 186, 187 (1877)(“‘The law  
regards the neglect of an attorney as the client’s own neglect  
and will give no relief from the consequences thereof.’”);  
White, supra at 522 (in Michigan, an attorney’s neglect is  
8  
 
 
generally attributable to his client); Alken-Ziegler, Inc v  
Waterbury Headers Corp, 461 Mich 219, 224; 600 NW2d 638  
(1999)(“A party is responsible for any action or inaction by  
the party or the party’s agent.”). See also Prate v Freedman,  
583 F2d 42, 48 (CA 2, 1978)(“In our legal system, an attorney  
is his client’s agent and representative . . . . Like any  
other principal, a client may be bound by the acts of his  
agent, acting within the scope of his authority.”).  
Applying 
this 
principle, 
I 
believe 
that 
whether  
“abandonment” relieves the client of liability is properly  
resolved by determining whether the attorney was acting within  
the scope of the attorney’s authority.  If the attorney was  
acting within the scope of the authority granted by the  
client, the client remains liable for the attorney’s  
inactions, and “abandonment” is not a sufficient ground to set  
aside the default or default judgment under MCR 2.603(D)(1).  
III  
This conclusion is consistent with the analysis employed  
in several foreign jurisdictions. In Bailey v Algonquin Gas  
Transmission Co, 788 A2d 478, 483-485 (RI, 2002), the Rhode  
Island Supreme Court concluded that an attorney’s failure to  
respond to discovery requests was an insufficient basis on  
which to set aside a default judgment. The court reasoned:  
In this case . . . there is no evidence that  
[the client] attempted to terminate its agency  
9  
 
 
relationship with [the offending attorney] before 
the entry of the default judgment.  Indeed, it was 
not until [the client] received an execution on the 
judgment 
that 
it 
took 
any 
action 
in 
this  
regard. . . .  
* * *  
[The client] contends that the motion justice 
overlooked the stipulation that it was not negligent 
in this case, and that, through no fault of its own, 
it was misled by its grossly negligent attorney. 
This argument, however, fails to recognize the 
“fundamental of agency law which imputes the neglect 
of an attorney in professional matters to his client 
and considers the omissions of the attorney as 
though they were the neglect of the client himself.” 
That fundamental law of agency does not mutate 
merely because the viral strain of legal misconduct 
in a particular case has become so virulent as to 
constitute “gross” negligence. [Id. (citations 
omitted).]  
See also Panzino v Phoenix, 196 Ariz 442; 999 P2d 198 (2000).  
I find Rhode Island’s analysis persuasive, and would  
similarly conclude that abandonment, standing alone, is an  
insufficient reason to deviate from the principles of agency.  
Regarding the “injustice” of allowing a client to suffer the  
consequences of the attorney’s actions, I find the United  
States Supreme Court’s statement in Link v Wabash R Co, 370 US  
626, 633-634; 82 S Ct 1386; 8 L Ed 2d 734 (1962), compelling:  
There is certainly no merit in the contention 
that dismissal of petitioner’s claim because of his 
counsel’s unexcused conduct imposes an unjust 
penalty on the client.  Petitioner voluntarily chose 
this attorney as his representative in the action, 
and he cannot now avoid the consequences of the acts 
or omissions of this freely selected agent.  Any 
other notion would be wholly inconsistent with our 
system of representative litigation, in which each 
party is deemed bound by the acts of his lawyer­
agent . . . .”  
10  
 
Accordingly, I would conclude that abandonment is not a  
proper ground on which to set aside a default or a default  
judgment in the absence of a circumstance that would release  
the client from liability for the attorney’s actions under  
agency principles.  
I am empathetic to clients who must suffer the  
consequences of a default judgment as a result of their  
attorneys’ failure to act with diligence and promptness.  
However, these clients are not without a remedy. Clients who  
suffer damages as a result of attorneys’ misconduct may also  
pursue claims of legal malpractice, through which they can be  
made whole again.  In addition, attorneys who fail to act with  
reasonable 
diligence 
and 
promptness 
are 
subject 
to  
disciplinary action for violating the Rules of Professional  
Conduct.  MRPC 1.3. Attorneys are also subject to discipline  
for failing to keep a client reasonably informed. MRPC 1.4.  
IV  
In sum, I believe that abandonment satisfies the “good  
cause” requirement to set aside a default or default judgment  
under MCR 2.603(D)(1) only when principles of agency would not  
impute the attorney’s negligent omissions to the client.  
Robert P. Young, Jr. 
Maura D. Corrigan 
Clifford W. Taylor  
11