Court Opinion

ID: 4104232
Source: CourtListenerOpinion
Date Created: 2016-12-02 21:10:43.207565+00
Date Added: 2024-06-11T14:26:51.168164
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

MATTHEW S. DEPERNO and DEPERNO LAW                                 UNPUBLISHED
OFFICE, PLLC,                                                      December 1, 2016

               Plaintiffs-Appellants,

v                                                                  No. 328739
                                                                   Kalamazoo Circuit Court
ALBERT W. LAAKSONEN II, SUSAN DURIAN                               LC No. 2015-000175-CZ
METZGER, and LAAKSONEN LAW OFFICES,
PC,

               Defendants-Appellees.

Before: SAWYER, P.J., and MARKEY and O’BRIEN, JJ.

PER CURIAM.

       Plaintiffs appeal as of right the circuit court’s orders granting defendants’ motion to set
aside defaults, granting defendants’ motion for summary disposition, and denying plaintiffs’
motion to strike documents from the court file. We affirm.

       This dispute arises out of a contentious history between Matthew S. DePerno, Albert W.
Laaksonen, II, and their law offices. In 2011, Cathleen and Ronald Moffit retained DePerno and
his law office to represent them in an insurance and tax dispute that resulted from a fire that
destroyed their home. During the course of that representation, the Moffits’ relationship with
DePerno deteriorated, and the Moffits ultimately retained Laaksonen and his law office to file a
lawsuit against DePerno. There were a variety of disputes between the Moffits and DePerno, but
the original complaint filed by Laaksonen on the Moffits’ behalf focused on a fee dispute.1
Specifically, DePerno sought attorney fees of more than $137,000 in relation to the underlying
representation, an amount the Moffits found unreasonable.2 Several months after filing their

1
 The Moffits’ complaint included breach of contract, debt dispute, statutory violations, and legal
malpractice counts against DePerno.
2
 According to the Moffits’ complaint, DePerno was retained “to resolve a tax debt to the IRS of
approximately $36,000.” DePerno apparently sought $137,779.38, an amount greater than the
$108,000 settlement reached between the Moffits and the insurance company. After the Moffits
objected to the $137,000 amount, DePerno commenced a foreclosure action against the Moffits.

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original complaint, the Moffits, still represented by Laaksonen, filed an amended complaint,
alleging counts of assault and battery and intentional infliction of emotional distress in addition
to those counts identified above. Eventually, the Moffits and DePerno settled. In the
memorandum of settlement filed by Laaksonen, Laaksonen indicated, in pertinent part, that he
and the Moffits “acknowledge that this case was solely a fee dispute” and that the “[a]llegations
made in the Complaint and Amended Complaints of malpractice, assault and battery and
intentional infliction of emotional distress were asserted in part to secure a restraining order
preventing a real estate foreclosure.”

        After settling that matter, DePerno and his law office, the plaintiffs in this matter, filed
the instant lawsuit against defendants, Laaksonen and his law office, alleging claims of libel,
slander, defamation, and intentional infliction of emotional distress.3 Plaintiffs’ claims were
based on their allegation that defendants “published and disseminated malicious, reckless, and
outrageous falsehoods about him, including, but not limited to, falsely asserting that DePerno
assaulted a client, committed malpractice, and caused his former clients to suffer emotional
distress.” In essence, plaintiff claimed that, because the matter between the Moffits and DePerno
was only a fee dispute, all the allegations included in the complaint or amended complaint that
were not limited to the fee dispute constituted a tort. Plaintiffs additionally alleged that
defendants distributed copies of the Moffits’ complaint against him to the community, which was
also allegedly libelous, slanderous, defamatory, and intended to inflict emotional distress. In
response, defendants moved for summary disposition, asserting, in pertinent part, that plaintiffs’
claims were barred by the judicial-proceedings privilege and the fair-reporting privilege pursuant
to MCL 600.2911(3). The circuit court eventually agreed, and plaintiffs’ lawsuit was dismissed.
This appeal followed.

        On appeal, plaintiffs raise four distinct arguments. First, plaintiffs claim that the circuit
court erroneously granted defendants’ motion to set aside a default judgment that was entered
against them. We disagree.

        A circuit court’s decision on a motion to set aside a default judgment is reviewed for an
abuse of discretion. Saffian v Simmons, 477 Mich. 8, 12; 727 NW2d 132 (2007). A circuit court
abuses its discretion when its decision falls beyond the range of principled outcomes. Epps v 4
Quarters Restoration LLC, 498 Mich. 518, 528; 872 NW2d 412 (2015). A defendant who has
been served with a summons and a copy of a complaint has 21 days to serve and file an answer
or take other action as permitted by law. MCR 2.108(A)(1). When a defendant chooses to file a
motion for summary disposition pursuant to MCR 2.116 in response to a complaint, the
responsive pleading is not due until 21 days after that motion for summary disposition is denied.
MCR 2.108(C)(1); see also Huntington Nat’l Bank v Ristich, 292 Mich. App. 376, 387; 808
NW2d 511 (2011). If a party fails to comply with the time requirements set forth in MCR

3
  Plaintiffs’ complaint identifies Susan Durian Metzger as a resident of Van Buren County who
conducts business in Kalamazoo County. It is unclear what her role is in this matter, and
plaintiffs complaint refers only to defendants collectively with respect to the allegations at issue
in this case.

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2.108(A)(1), the circuit court must enter a default. MCR 2.603(A)(1). Defaults may be set
aside, however, if good cause is shown, MCR 2.603(D)(1), or if they were entered based on
clerical errors, MCR 2.612(A)(1); MCR 2.603(D)(3).

        In this case, the circuit court apparently entered a default judgment against defendants
and in favor of plaintiffs on May 18, 2015, based on defendants’ failure to file a responsive
pleading. However, the record reflects, and the circuit court found, that defendants’ motion for
summary disposition was “court stamped May 14, 2015,” which was timely pursuant to MCR
2.108(A)(1). Based on the fact that defendants’ motion was timely, the circuit court set aside the
erroneously entered default judgment. On appeal, plaintiffs hypothesize a variety of reasons as
to why the motion may have been “court stamped” May 14, 2015, but actually filed on May 19,
2015; however, nothing in the record supports their hypotheses. The circuit court found the date
stamp to be the most persuasive indication of what day the pleading was filed, and we are
equally persuaded by the date stamp. See MCR 8.119(C) (requiring that the clerk of the court
“endorse on the first page of every document the date on which it is filed”); see also People v
Earls, 485 Mich. 859, 859-860; 771 NW2d 730 (2009) (providing that this Court may rely on a
date stamp to determine whether a pleading was timely filed). Accordingly, the circuit court
correctly granted defendants’ motion to set aside the default judgment.

        Second, plaintiffs claim that the circuit court erroneously denied their motion to strike
improper documents from the record. Relatedly, plaintiffs claim that the circuit court also erred
in failing to sanction defendants for including those improper documents with their pleadings.
We disagree in both respects.

        A circuit court’s decision regarding a motion to strike is reviewed for an abuse of
discretion. Belle Isle Grill Corp v City of Detroit, 256 Mich. App. 463, 469; 666 NW2d 271
(2003). It is true that a party is not permitted to interpose a document into a case for an improper
purpose. MCR 2.114(D)(3). It is equally true that discovery materials may be removed from the
court file and destroyed by order of the court upon a finding that they are no longer necessary.
MCR 2.316. However, files may only be destroyed 18 months after entry of judgment or
dismissal of the action if there was no appeal or 91 days after appellate proceedings have
concluded if there was an appeal that did not result in a remand for further proceedings. MCR
2.316(B)(3).

         In this case, plaintiffs take issue with defendants’ inclusion of a document entitled
“Interoffice Memorandum” with their motion for summary disposition. This memorandum
included discussions centering on DePerno’s timekeeping issues with another law office. These
issues included “time being entered without explanation,” “billable hours being ‘padded,’ ”
“excessive” write-offs, and manipulations “of the timekeeping/bill system to maintain . . . quota
hours on accounts that may not render payment.” Plaintiffs claim that this memorandum was
“privileged and confidential” because it was “related to prior litigation,” but plaintiffs do not
identify, and we are unaware of, any privilege that extends to this type of a memorandum. In
fact, plaintiff does not contest that it was already publically available as part of an unsealed court
file in another action. It is plaintiffs’ position that this memorandum was included to harass and
embarrass them in violation of MCR 2.114(D)(3), but, considering the fact that the Moffits’
lawsuit against DePerno focused on a fee dispute, DePerno’s history of billing irregularities was
obviously relevant. Finally, to the extent plaintiffs claim that this memorandum should have

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been struck from the record because it was inadmissible, we must first note that plaintiff did not
challenge the admissibility of the document below; thus, appellate review in this regard is
precluded. Walters v Nadell, 481 Mich. 377, 387; 751 NW2d 431 (2008). Furthermore, we are
unaware of, and defendant has not cited to, any authority that requires inadmissible exhibits in
the court file to be struck. Accordingly, the circuit court correctly denied plaintiffs’ motion to
strike improper documents and for sanctions.

       Third, plaintiffs claim that the circuit court erroneously granted defendants’ motion for
summary disposition. Specifically, plaintiffs claim that the statements at issue in this case are
not protected under the judicial-proceedings or fair-reporting privileges. We disagree.

        A circuit court’s decision to grant or deny a motion for summary disposition pursuant to
MCR 2.116(C)(8) is reviewed de novo. Veenstra v Washtenaw Country Club, 466 Mich. 155,
159; 645 NW2d 643 (2002). “A motion for summary disposition brought pursuant to MCR
2.116(C)(8) tests the legal sufficiency of the complaint on the allegations of the pleadings alone.”
Feyz v Mercy Mem Hosp, 475 Mich. 663, 672; 719 NW2d 1 (2006). That is, “the motion tests
whether the complaint states a claim as a matter of law, and the motion should be granted if no
factual development could possibly justify recovery.” Id. The existence of a privilege that
immunizes defendants from liability for defamation presents a question of law that is reviewed
de novo. Northland Wheels Roller Skating Ctr, Inc v Detroit Free Press, Inc, 213 Mich. App.
317, 324; 539 NW2d 774 (1995). Likewise, the interpretation of court rules and statutes present
questions of law that are also reviewed de novo. Feyz, 475 Mich. at 672.

        Here, whether or not summary disposition was appropriate rests largely on whether
plaintiffs could ultimately succeed in their defamation claim against defendants. The elements of
defamation are “(1) a false and defamatory statement concerning the plaintiff, (2) an
unprivileged communication to a third party, (3) fault amounting at least to negligence on the
party of the publisher, and (4) either actionability of the statement irrespective of special harm
(defamation per se) or the existence of special harm caused by publication.” Mitan v Campbell,
474 Mich. 21, 24; 706 NW2d 420 (2005). “A defamatory communication is one that tends to
harm the reputation of a person so as to lower him in the estimation of the community or deter
others from associating or dealing with him.” American Transmission, Inc v Channel 7 of
Detroit, Inc, 239 Mich. App. 695, 702; 609 NW2d 607 (2000). Even if a communication is
defamatory, however, it may be absolutely privileged; if so, there will be no remedy. Oesterle v
Wallace, 272 Mich. App. 260, 264 NW2d 725 NW2d 470 (2006). “If a statement is absolutely
privileged, it is not actionable even if it was false and maliciously published.” Id.

        At issue in this case are the judicial-proceedings and fair-reporting privileges. Under the
judicial-proceedings privilege, “[s]tatements made by judges, attorneys, and witnesses during the
course of judicial proceedings are absolutely privileged if they are relevant, material, or pertinent
to the issue being tried.” Oesterle, 272 Mich. App. at 264. “What a litigant considers to be
pertinent or relevant is given much freedom, and the privilege is liberally construed as a matter
of public policy ‘so that participants in judicial proceedings may have relative freedom to
express themselves without fear of retaliation.’ ” Lawrence v Burdi, __ Mich App ___, ___; ___
NW2d ___ (2016) (Docket No. 322041); slip op at 7, quoting Sanders v Leeson Air Conditioning
Corp, 362 Mich. 692, 695; 108 NW2d 761 (1961). Under the fair-reporting privilege,
“[d]amages shall not be awarded in a libel action for the publication or broadcast of a fair and

                                                -4-
true report of matters of public record . . . .” MCL 600.2911(3). The fair-reporting privilege
applies “not only [to] the publication of public and official proceedings but also [to] the
broadcast of matters of public record, of a governmental notice, announcement, written or
recorded report or record generally available to the public, or act of a public body.” Northland
Wheels, 213 Mich. App. at 326. “[T]he statute makes it clear that [a] defendant’s motivation is
irrelevant if a fair and true report is made of the proceeding.” Stablein v Schuster, 183 Mich. App.
477, 482; 455 NW2d 315 (1990); see also See also Bedford v Witte, ___ Mich App ___, ___; ___
NW2d ___ (2016) (Docket Nos. 327372, 327373); slip op at 5 (holding “that the plain language
of [MCL 600.2911(3)] of the statute simply does not provide an exception for cases involving
malice (however plaintiffs try to define it) or self-reporting.”).

        Applying those rules to the facts of this case, we conclude that the circuit court was
correct in holding that the assault and battery, intentional infliction of emotional distress, and
malpractice allegations made by Laaksonen on behalf of the Moffits in the amended complaint
were protected by the judicial-proceedings privilege. Plaintiffs’ claim that these allegations were
irrelevant because Laaksonen acknowledged that the Moffits’ lawsuit against DePerno “was
solely a fee dispute” is without merit. Stated simply, the settlement memorandum has no bearing
on what was or was not relevant to the issues identified in the Moffits’ complaint. The complaint
included allegations of assault and battery, intentional infliction of emotional distress, and
malpractice, and it is clear to us that those allegations were obviously at issue in that case. While
the Moffits may have elected not to further pursue those claims in hopes of facilitating
settlement, plaintiffs’ position that they were irrelevant to that case has no merit. Indeed, even if
we assume that the Moffits’ lawsuit against DePerno was limited solely to a fee dispute, the fact
that DePerno allegedly assaulted and battered the Moffits, intentionally inflicted emotional
distress on the Moffits, and committed malpractice in representing the Moffits certainly related
to whether he was entitled to the $137,000 in attorney fees that he sought. Accordingly, the
circuit court correctly concluded that the allegations at issue in the amended complaint were
protected under the judicial-proceedings privilege.

        Similarly, we also conclude that the circuit court was correct in holding that any
circulation of defendants’ amended complaint against plaintiffs to the community were protected
under the fair-reporting privilege. There is no allegation that the complaint was altered in any
manner before it was allegedly circulated to the community, and it is undisputed that the
complaint was a matter of public record available for public review. MCR 8.119(H); see also
Sawabini v Desenberg, 143 Mich. App. 373, 385; 372 NW2d 559 (1985). Thus, it cannot be
disputed that defendants’ circulation of the complaint to the community was the “publication or
broadcast of a fair and true report of matters of public record” pursuant to MCL 600.2911(3).
See also Stablein, 183 Mich. App. at 482. To the extent that defendant relies on cases interpreting
previous versions of MCL 600.2911(3), see, e.g., Park v The Detroit Free Press Co, 72 Mich.
560, 568; 40 N.W. 731 (1888), this Court is not compelled to follow decisions interpreting the
previous and more restrictive version of MCL 600.2911(3). See Northland Wheels, 213 Mich
App at 326. Accordingly, the circuit court correctly concluded that the circulation of the
amended complaint to the community was protected under the fair-reporting privilege. See also
Bedford, ___ Mich App at ___; slip op at 3, 5 (holding that “the publishing of an exact copy of
the complaint that initiated judicial proceedings constitutes a ‘fair and true’ report with respect
to those proceedings” regardless of whether “malice” or “self-reporting” are present).

                                                -5-
       Lastly, plaintiffs argue that the circuit court erroneously denied their motion for
reconsideration. To support his argument, however, plaintiffs rely on the arguments discussed
above, all of which we have rejected. Accordingly, the circuit court correctly denied plaintiffs’
motion for reconsideration for the same reasons as those articulated above.

       Affirmed. Defendants, as the prevailing parties, may tax costs pursuant to MCR 7.219.

                                                           /s/ David H. Sawyer
                                                           /s/ Jane E. Markey
                                                           /s/ Colleen A. O’Brien

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