Farleigh v. Amalgamated Transit Union, Local 1251

502 N.W.2d 371, 199 Mich. App. 631
Michigan Court of Appeals·Decided May 17, 1993·No. Docket 142305·Published·Cited by 13 cases

Opinions

Taylor, P.J.

Plaintiff appeals as of right a Calhoun Circuit Court order dismissing her complaint for her failure to comply with an order directing her to post a $15,000 surety bond as security for costs. We affirm.

Plaintiff filed suit alleging that defendant union excluded her from membership in retaliation for her filing a sexual harassment suit against a union leader. The case was mediated and evaluated at $10,000 in plaintiff’s favor, which plaintiff rejected and defendants accepted. Subsequently, the parties agreed- to a summary jury trial pursuant to Administrative Order No. 1988-2, 430 Mich xcv.1 When the jury returned an advisory verdict of no cause of action, defendants moved pursuant to MCR 2.109 for $45,000 security for costs and mediation sanctions for which plaintiff would become liable if a full-scale jury trial was conducted and the jury failed to return a verdict in the amount of [633] at least $11,000 in plaintiffs favor.2 The trial court ordered plaintiff to post a surety bond in the amount of $15,000,3 which reflected defendants’ attorney fees incurred after plaintiff’s rejection of mediation. However, plaintiff did not post the security, and her case was dismissed.

On appeal, plaintiff argues that the trial court abused its discretion in ordering her to post the $15,000 bond and in dismissing her case when she could not post it. We disagree with both parts of her claim for the following reasons.

MCR 2.109(A), concerning security for costs, provides in pertinent part:

On motion of a party against whom a claim has been asserted in a civil action, if it appears reasonable and proper, the court may order the opposing party to file with the court clerk a bond with surety as required by the court in an amount sufficient to cover all costs and other recoverable expenses that may be awarded by the trial court. . . . The court shall determine the amount in its discretion.

However, under MCR 2.109(C)(1), subrule A does not apply and the court may allow a party to proceed without furnishing security for costs

if the party’s pleading states a legitimate claim and the party shows by affidavit that he or she is financially unable to furnish a security bond.

It is within a trial court’s discretion to order security, and we will not reverse unless the imposition of security is an abuse of that discretion. [634] Dunn v Emergency Physicians Medical Group, PC, 189 Mich App 519, 522; 473 NW2d 762 (1991); Hall v Harmony Hills Recreation, Inc, 186 Mich App 265, 270; 463 NW2d 254 (1990). This Court has held that security should not be required unless there is a substantial reason for doing so. While a plaintiff’s poverty alone is not a substantial reason to order security, the assertion of a tenuous legal theory of liability may constitute a substantial reason. Hall, supra, p 270, and cases cited therein. Further,

[a]n order to post security for costs can also be appropriate where there is good reason to believe that a party’s allegations, although they cannot be summarily dismissed under MCR 2.116, are nonetheless groundless and unwarranted. [Wells v Fruehauf Corp, 170 Mich App 326, 335; 428 NW2d 1 (1988).]

There was substantial reason for requiring security for costs in this case. The expanded summary jury trial proceedings gave six impartial jurors the opportunity to hear plaintiff’s case, and those jurors lost no time in returning a no-cause verdict. Therefore, although it does not appear that plaintiff’s complaint is based on a tenuous legal theory of liability, a jury passed on the merits of plaintiff’s cause of action and specifically found that plaintiff’s suit was factually meritless.

In Hall, this Court adopted certain passages from Gaffier v St Johns Hosp, 68 Mich App 474; 243 NW2d 20 (1976), as "the correct statement of how discretion should be exercised under the present version of the rule.” Hall, supra, p 272. Those excerpted passages are:

If the trial court believes that a Rule 109 bond would be proper absent plaintiffs poverty, he must [635] then assess the indigent plaintiffs financial ability to post bond. In this regard, the rule attempts to balance the right of a poor plaintiff to seek justice with the need of a defendant to have an opportunity for security. In our view, the rule establishes a strong preference for waiver of the bond where the indigent plaintiffs pleadings show a "meritorious claim” — i.e., a legitimate cause of action. In cases where the indigent plaintiffs pleadings show a tenuous legal theory, the plaintiff’s interest in free access to the courts becomes less significant when weighed against the defendant’s greater need for security. In short, the fulcrum of the rule’s balance is the legitimacy of the indigent plaintiff’s theory of liability.
This is not to say that legitimacy of the claim will always be determinative. The rule clearly allows for sound trial court discretion. We can imagine few cases, however, where a discrete trial court will require an indigent plaintiff, pleading a valid theory of liability, to post security.
. . . The security provided to this one defendant was more than plaintiff’s yearly income. Defendant’s motion gave no explanation of the necessity of that sum, nor indicated any particular hardship that would result were the bond to be denied. We cannot bar this plaintiff from the courts because of her poverty. [Gaffer, supra, pp 478, 479, adopted in Hall, supra p 272. Emphasis supplied.]

From our review of the record, it appears that plaintiffs financial status had no bearing on the trial court’s decision to require security in the first instance, although it did play a part in the court’s evaluation of how much security to require. Rather, the trial court’s decision to require security rested primarily upon the lack of merit in plaintiff’s claim. In discussing its decision, the court stressed the leeway given both sides during the summary jury trial, the jury’s verdict and [636] subsequent comments, as well as the initial mediation evaluation. This case is unusual because, in the summary jury trial proceedings, the legitimacy of plaintiffs claim was tested far beyond that of most claims; the trial court, having presided over those proceedings, was in an advantageous position to assess the legitimacy of the claim.4

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Farleigh v. Amalgamated Transit Union, Local 1251, 502 N.W.2d 371, 199 Mich. App. 631 (Mich. Ct. App. 1993).

502 N.W.2d 371 (Farleigh v. Amalgamated Transit Union, Local 1251) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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Farleigh v. Amalgamated Transit Union, Local 1251
502 N.W.2d 371 (Michigan Court of Appeals, 1993)