June 15, 2004


ADM File No. 2004-09

Proposed Amendment of 
Rule 2.603 of the 
Michigan Court Rules
                 

     On order of the Court, this is to advise that the Court is considering an amendment
of Rule 2.603 of the Michigan Court Rules.  Before determining whether the proposal
should be adopted, changed before adoption, or rejected, this notice is given to afford
interested persons the opportunity to comment on the form or the merits of the proposal or
to suggest alternatives.  The Court welcomes the views of all.  This matter also will be
considered at a public hearing.  The notices and agendas for public hearings are posted at
www.courts.michigan.gov/supremecourt. 
     Publication of this proposal does not mean that the Court will issue an order on the
subject, nor does it imply probable adoption of the proposal in its present form.

           

                                

Rule 2.603  Default and Default Judgment

(A) Entry of Default; Notice; Effect.

     (1)  If a party against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend as provided by these rules, and that fact is made to
appear by affidavit or otherwise, the clerk must enter the default of that party.
     
     (2)  Notice that the default has been entered [of the entry]
must be sent to all parties who have appeared and to the defaulted party. If the defaulted
party has not appeared, the notice to the defaulted party may be served by personal
service, by ordinary first-class mail at his or her last known address or the place of
service, or as otherwise directed by the court.
     
          (a)  In the district court, the court clerk shall send the notice.
     
          (b)  In all other courts, the notice must be sent by the party who sought
entry of the default. Proof of service and a copy of the notice must be filed with the
court.
     
     (3)  Once the default of a party has been entered, that party may not proceed
with the action until the default has been set aside by the court in accordance with
subrule (D) or MCR 2.612.
     
(B) Default Judgment.

     (1)  Notice of Request for Default Judgment.
     
          (a)  A party [seeking]requesting a default judgment
must give notice of the request [for judgment ]to the defaulted party, if
     
               (i)  [if ]the party against whom the default
judgment is sought has appeared in the action;
     
               (ii) [if ]the request for entry of a default
judgment seeks relief different in kind from, or greater in amount than, that stated in
the pleadings; or
     
               (iii)     [if ]the pleadings do not state a specific amount
demanded.
     
          (b)  The notice required by this subrule must be served at least 7 days
before entry of the requested default judgment.
     
          (c)  If the defaulted party has appeared, the notice may be given in the
manner provided by MCR 2.107. If the defaulted party has not appeared, the notice may
be served by personal service, by ordinary first-class mail at the defaulted party's last
known address or the place of service, or as otherwise directed by the court.
     
          (d)  If the default is entered for failure to appear for a scheduled trial,
notice under this subrule is not required.
     
     (2)  Default Judgment Entered by Clerk. On request of the plaintiff supported
by an affidavit as to the amount due, the clerk may sign and enter a default
judgment for that amount and costs against the defendant, if
     
          (a)  the plaintiff's claim against a defendant is for a sum certain or for a
sum that can by computation be made certain[,];
     
          (b)  the default was entered because the defendant failed to
appear[,]; and
     
          (c)  the defaulted defendant is not an infant or incompetent person.
     
          The clerk may not enter or record a default judgment based on a
note or other written evidence of indebtedness until the note or writing is filed with the
clerk for cancellation, except by special order of the court.

     (3)  Default Judgment Entered by Court. In all other cases the party entitled to a
default judgment [by default ]must [apply to ] petition
the court [for] to enter the default judgment.
     
          (a)  A default judgment [by default ]may not be entered
against a minor or an incompetent person unless the person is represented in the action
by a conservator, guardian ad litem, or other representative.
     
          (b)  If, in order for the court to enter a default judgment or to
carry it into effect, it is necessary to
     
               (i)  take an account,
     
               (ii) determine the amount of damages,
     
               (iii)     establish the truth of an allegation by evidence, or
     
               (iv) investigate any other matter,
     
               the court may conduct hearings or order references it deems
necessary and proper, and shall accord a right of trial by jury to the parties to the extent
required by the constitution.
     
     (4)  Notice of Entry of Default Judgment. The court clerk must
promptly mail notice of entry of a default judgment to all parties. The notice to the
defendant shall be mailed to the defendant's last known address or the address of the
place of service. The clerk must keep a record that notice was given.
     
(C)  Nonmilitary Affidavit. Nonmilitary affidavits required by law must be filed before
judgment is entered in actions in which the defendant has failed to appear.

(D)  Setting Aside Default or Default Judgment.

     (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 an affidavit of facts showing a meritorious defense is filed.
     
     (2)  Except as provided in MCR 2.612, if personal service was made on the
party against whom the default was taken, the default, and default judgment if one has
been entered, may [only ]be set aside only if the motion is filed
     
          (a)  before entry of a default judgment, or
     
          (b)  if a default judgment has been entered, within 21 days after
the default judgment was entered.
     
     (3)  In addition, the court may set aside [an entry of] a default
and a default judgment [by default ]in accordance with MCR 2.612.
     
     (4)  An order setting aside the default or default judgment must be
conditioned on the defaulted party [against whom the default was taken
]paying the taxable costs incurred by the other party in reliance on the default or
default judgment, except as prescribed in MCR 2.625(D). The order may also
impose other conditions the court deems proper, including a reasonable attorney fee.
     
(E)  Application to Parties Other Than Plaintiff. The provisions of this rule apply
whether the party entitled to the default judgment [by default ]is a
plaintiff or a party who pleaded a cross-claim or counterclaim. In all cases a default
judgment [by default ]is subject to the limitations of MCR 2.601(B).
                                
          Staff Comment:  The proposed amendment of MCR 2.603 would
clarify some ambiguities created by the current rule's inconsistent use of "default,"
"judgment by default," and similar terms.  See, e.g., ISB Sales v Dave's Cakes, 258 Mich
App 520 (2003), lv den 469 Mich 1012 (Part 6, 2004).
     
The staff comment is not an authoritative construction by the Court.
                                
A copy of this order will be given to the Secretary of the State Bar and to the State Court
Administrator so that they can make the notifications specified in MCR 1.201. 
Comments on this proposal may be sent to the Supreme Court Clerk in writing or
electronically by October 1, 2004, at P.O. Box 30052, Lansing, MI  48909, or 
MSC_clerk@courts.mi.gov.  When filing a comment, please refer to ADM File No.
2004-09.  Your comments and the comments of others will be posted at
www.courts.mi.gov/supremecourt/resources/administrative/index.htm.