Albro Leasing, Inc v. Sylvester

198 N.W.2d 437, 40 Mich. App. 227, 1972 Mich. App. LEXIS 1202

Opinion

R. B. Burns, P. J.

Plaintiff obtained a $1,463.30 judgment against defendant Sylvester and caused a writ of garnishment to be served upon Squire Hall Real Estate Company, the garnishee defendant. By court rule the garnishee defendant was required to file within 15 days a disclosure, which would reveal the garnishee’s liability, if any, to Sylvester, the principal defendant. GCR 1963, 738.6.

The garnishee defendant failed to respond within the 15-day period. Plaintiff, by the authority of GCR 1963, 738.8, obtained a default judgment against the garnishee "as in other civil actions”. 1

The plaintiff took a default judgment, pursuant to GCR 1963, 520, for $1,499.80. Plaintiff then served garnishment writs upon the garnishee defendant’s bank.

Approximately two months after the default judgment had been entered against it, the garnishee defendant was successful in having the entry of default and judgment set aside; the writ of garnishment was quashed one month later.

Plaintiff appeals the trial court’s orders setting aside the default judgment and quashing the garnishment.

GCR 1963, 520.4 and 528 permit default judgments to be set aside for the various reasons and under the conditions set forth in those rules. The decision of whether or not to set aside a default judgment is a discretionary one and will not be reversed on appeal unless clear abuse of discretion is shown. Seifert v Keating, 344 Mich 456 (1955); Rhodes v Rhodes, 3 Mich App 396 (1966); Lada v Lada, 34 Mich App 137 (1971).

GCR 1963, 520.4 requires "good cause shown” and "meritorious defense” for a default or a default judgment to be set aside. Garnishee defendant has without doubt satisfied the "meritorious defense” requirement. Plaintiff does not dispute the contention that the principal defendant was not employed by the garnishee defendant at the time the garnishment writ was served and that the garnishee defendant owed nothing to the principal defendant.

The trial court found that the garnishment writ was misfiled during the process of moving from one office to another and that such action was "excusable neglect” and "good cause”.

In several cases our Court has indicated that "unconscionable results” flowing from a default judgment would or might satisfy the "good cause shown” requirement. McDonald v Kersten, 24 Mich App 681 (1970); McDonough v General Motors Corp, 6 Mich App 239 (1967); Penney v Protective National Insurance Co, 24 Mich App 218 (1970).

In the McDonough case the reason for the default was a misplaced file, much as in the instant case.

The trial judge did not abuse his discretion.

Affirmed. Costs to defendant.

All concurred.

1 This quoted language refers to GCR 1963, 520, the court rule on default judgments for civil actions. 4 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 632.