Court Opinion

ID: 9388624
Source: CourtListenerOpinion
Date Created: 2023-04-21 05:04:56.179941+00
Date Added: 2024-06-11T17:18:21.466898
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                  revision until final publication in the Michigan Appeals Reports.

                           STATE OF MICHIGAN

                            COURT OF APPEALS

ROLAND TINDLE, D.O.,                                                   FOR PUBLICATION
                                                                       April 20, 2023
               Plaintiff-Appellee,

v                                                                      No. 360861
                                                                       Oakland Circuit Court
LEGEND HEALTH, PLLC, and                                               LC No. 2021-190848-CB
COMPLETE CARE CENTER, PC,

               Defendants-Appellants.

Before: CAVANAGH, P.J., and BOONSTRA and RIORDAN, JJ.

BOONSTRA, J. (concurring in part and dissenting in part).

        I concur with the majority in reversing the trial court’s denial of defendant Legend Health,
PLLC’s (Legend Health) motion to set aside the default judgment. I write separately (1) to offer
my alternative rationale, and (2) because I would go farther (than does the majority) and would
also reverse the trial court’s denial of defendant Complete Care Center, PC’s (Complete Care)
motion to set aside the default judgment.

        In short, the trial court never obtained personal jurisdiction over defendants; for that reason
alone, the default judgment should be set aside in its entirety. Moreover, and while I agree that
both defendants have established good cause to set aside the default judgment and that defendant
Legend Health established a meritorious defense to plaintiff’s allegations, so too did defendant
Complete Care Center, PC., (Complete Care). Consequently, even if the trial court obtained
personal jurisdiction over defendants, the default judgment should be set aside not only with
respect to Legend Health but additionally with respect to Complete Care.

                                 I. PERSONAL JURISDICTION

       As our Supreme Court has observed:

       A court “cannot adjudicate [an in personam] controversy without first having
       obtained jurisdiction [over the] defendant by service of process. . . .” Eisner v
       Williams, 298 Mich 215, 220, 298 NW 507 (1941). A court must obtain personal
       jurisdiction over a defendant in order to “satisfy the due process requirement that a

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       defendant be informed of an action by the best means available under the
       circumstances.” MCR 2.105(J)(1). “The fundamental requisite of due process of
       law is the opportunity to be heard. . . . This right to be heard has little reality or
       worth unless one is informed that the matter is pending. . . .” Mullane v Central
       Hanover Bank & Trust Co, 339 US 306, 314, 70 S Ct 652, 94 L Ed 865 (1950)
       (quotation marks and citation omitted). [Lawrence M Clark, Inc v Richco
       Construction, Inc, 489 Mich 265, 274; 803 NW2d 151 (2011).]

        I agree with the majority that plaintiff never properly served defendants with process.1
Consequently, the trial court never obtained personal jurisdiction over defendants. Id. And
because the trial court never obtained personal jurisdiction over defendants, the “good cause” and
“affidavit of meritorious defense” requirements of 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 a statement of facts showing a meritorious
defense . . . is filed”) (emphasis added) were simply inapplicable.2

         When, as here, personal jurisdiction was never obtained over defendants, the proper
remedy is to deem the judgment void under MCR 2.612(C)(1)(d) (“the court may relieve a
party . . . from a final judgment . . . on the following grounds: . . . (d) The judgment is void.”). See
3 Longhofer, Michigan Court Rules Practice (5th ed), § 2612.8, p 505 (“MCR 2.612(B) does not
apply to cases in which the court lacked personal jurisdiction over the defendant, but such
jurisdiction was required for entry of a valid judgment. In those cases the judgment is void and
relief may be obtained at any time under MCR 2.612(C)(1)(d).”)3. Consequently, because service

1
  Respectfully, in my view, the majority conflates “process” with “service of process” in evaluating
the “good cause requirement of MCR 2.603(D)(1). That is, the majority characterizes service of
process as one of the factors to consider in evaluating whether there is “good cause” to set aside a
default judgment, citing Shawl v Spence Bros, Inc, 280 Mich App 213, 238; 760 NW2d 674 (2008)
(listing as one of the “good cause” factors “whether there was defective process or notice.”) But
“process” is not the same as “service of process.” “Process” is this context is defined as “[a]
summons or writ, esp. to appear or respond in court.” Black’s Law Dictionary (7th ed), p 1222;
see also, Garner, A Dictionary of Modern Legal Usage (2d ed, 1995), p 698; People v Lawrence,
246 Mich App 260, 265-266 and n 3 (2001). By contrast, “service of process” refers to the act of
serving the summons on the defendant. As I will describe, and although defective process may be
a “good cause” factor under MCR 2.603(D)(1), when service of process is lacking, personal
jurisdiction is not obtained and any resulting judgment is void. MCR 2.612(C)(1)(d).
2
  Similarly, MCR 2.612(B)—which provides a mechanism for securing relief from a final
judgment under certain circumstances—was inapplicable because that rule also only applies with
respect to “[a] defendant over whom personal jurisdiction was necessary and acquired.”
MCR 2.612(B).
3
 The same should hold true with respect to MCR 2.603(D); that is, when personal jurisdiction is
not obtained, the judgment is void and relief from the judgment is properly granted under
MCR 2.612(C)(1)(d).

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of process was never properly effected, the trial court never obtained personal jurisdiction over
defendants and the resulting default judgment was void in its entirety under MCR 2.612(C)(1)(d).

                      II. MERITORIOUS DEFENSE – COMPLETE CARE

       Alternatively, even if personal jurisdiction were found or assumed to have been obtained,
I conclude that Complete Care (like Legend Health) established a meritorious defense under
MCR 2.603(D)(1), such that the default judgment against it should also be set aside.

        As the majority indicates, defendants submitted the affidavit of Syed Ali Karim in support
of their motion to set aside the default judgment. The affidavit attested, in part, that (1) “Legend
Health commenced discussions with Plaintiff regarding the purchase of a building and the business
of Complete Care”; and (2) “Plaintiff and Legend Health entered into a Stock Purchase and Sale
Agreement” (the Agreement). As the majority recognizes, the clear implication of these assertions
is that Complete Care was the subject of the Agreement, not a party with contractual obligations.
Yet, the majority concludes that the affidavit “lacks any particular facts about Complete Care’s
proffered defense,” and therefore upholds the trial court’s denial of Complete Care’s motion to set
aside the default judgment.

       In my judgment, the majority reads the affidavit far too narrowly. It also ignores the facile
nature of plaintiff’s argument on appeal in this respect. I quote plaintiff’s argument from its
appellate brief in its entirety:

       iii.    Appellant Complete Care’s Alleged Meritorious Defense

               Appellant Complete Care argues that it is not a party to the Agreement. This
       is not true. Appellant Complete Care is listed as a party in the first paragraph of
       the Agreement. (Appellants’ Appendix, Agreement, pg. 75).

Moreover, the majority ignores the indisputable reality as revealed in the Agreement itself—which
was appended to the affidavit filed in support of defendants’ motion to set aside the default
judgment. The Agreement:

       ● was entitled “Stock Purchase and Sale Agreement”;

       ● identified (in its preamble paragraph) plaintiff as the “Seller,” Legend Health as the
“Purchaser,” and Complete Care as “Company”;

       ● indicated that “the Seller and Purchaser wish to enter into an agreement pursuant to which
the Purchaser will acquire all of the stock of Company from the Seller”;

        ● set forth the terms and conditions of that transaction, including the duties and obligations
of the Seller and the Purchaser;

        ● provided that “this Agreement has been duly executed by the parties hereto as of the
Effective Date first above written”; and

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       ● was signed by (and only by) plaintiff as “Seller” and Legend Health as “Purchaser.

        A fair reading of the affidavit would permit its clear implication that Complete Care was
not a party with contractual obligations under the Agreement. And under no reading of the
Agreement itself did Complete Care (which until the execution of the Agreement was owned by
plaintiff) assume any contractual obligations to plaintiff.4 Yet the default judgment—which the
majority allows to stand—affords plaintiff a monetary judgment against Complete Care in the
amount of $25,501.26 plus interest.5

        I would hold, independent of the void nature of the default judgment due to lack of personal
jurisdiction, that Complete Care, like Legend Health, adequately established a meritorious defense,
and I would reverse the trial court’s order denying defendant’s motion to set aside the default
judgment as to both defendants.

                                                             /s/ Mark T. Boonstra

4
  Plaintiff’s complaint alleged that Complete Care breached the Agreement by failing to pay
plaintiff for his services as an employed physician for a period of three months after the Agreement
was signed, and that this breach had caused monetary damages in the amount of $25,501.26.
However, Complete Care had no such obligation under the Agreement. Rather, the Agreement
provided that Legend Health would provide, at closing, “[a]n Employment Agreement between
Purchaser and Seller, under which Purchaser shall employ Seller as medical director . . . for a
period of 90 days after Closing.” Plaintiff did not attach an employment agreement to its complaint
or allege a breach of any employment agreement. Moreover, under the terms of the Agreement,
any obligation to employ and pay plaintiff was Legend Health’s (as Purchaser) rather than
Complete Care’s.
5
  In my judgment, the totality of these circumstances overrides any ambiguity that arguably arose
from the language of the Agreement’s preamble, which described the Agreement as “by and
between” Legend Health, Complete Care, and plaintiff.

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