Opinion
356792
01-13-2022
8 MILE WOODLAND LLC, Plaintiff-Appellant, v. CHARLES WALKER, CHARLES WALKER & ASSOCIATES, WALKER GROUP, WALKER INSURANCE AGENCY, R-T SPECIALTY, LLC, and SWETT & CRAWFORD, Defendants, and CIBA INSURANCE SERVICES, ASPEN SPECIALTY INSURANCE, CLAIMS ADJUSTING GROUP INC, Defendants-Appellees.
UNPUBLISHED
Oakland Circuit Court LC No. 2019-173382-CB
Before: Boonstra, P.J., and Cavanagh and Riordan, JJ.
Per Curiam.
Plaintiff, 8 Mile Woodland LLC, appeals as of right from a consent judgment entered in its favor against defendants, Charles Walker; Charles Walker & Associates; Walker Group; and Walker Insurance Agency. However, plaintiff challenges an order denying plaintiff's motion to modify the scheduling order and dismissing plaintiff's claims against defendants, CIBA Insurance Services and Claims Adjusting Group Inc (collectively "CIBA"), as well as Aspen Specialty Insurance (Aspen). We affirm.
In the interest of simplicity, we will treat CIBA and Claims Adjusting Group Inc (CAG) as if they were one entity.
I. FACTS
This case arises from the cancellation of plaintiff's insurance policy, and CIBA and Aspen's subsequent failure to defend plaintiff in a civil lawsuit. Plaintiff was the owner and landlord of two apartment buildings. In the winter of 2014, plaintiff asked Charles Walker, owner of insurance agency Walker and Associates, to help plaintiff find a commercial general liability policy to cover general liability and property damage. Walker secured plaintiff a policy with Aspen issued by CIBA. This policy was to be effective from May 28, 2014 through May 28, 2015 at 12:01 a.m.
Hereinafter, we will use "Walker" when referring specifically to Charles Walker the individual.
CIBA issues policies and adjusts claims on behalf of Aspen. But when CIBA issues a policy, it is Aspen providing coverage.
On September 4, 2014, without plaintiff's permission, Walker cancelled plaintiff's general liability coverage under the policy. Though Walker actually cancelled the policy on September 4, 2014, in his cancellation request Walker asked that the coverage be cancelled retroactively as of September 1, 2014 at 12:01 a.m. Before cancelling the general liability portion of plaintiff's policy, Walker had not secured new liability coverage for plaintiff.
About 2:00 a.m. on September 1, 2014, two hours after the time plaintiff's general liability coverage was retroactively cancelled, two people were injured at plaintiff's apartment complex. They each sued plaintiff for their injuries. Neither Aspen nor CIBA defended plaintiff in the lawsuits that followed. Plaintiff claims it was unaware that Aspen and CIBA had not defended the lawsuits and learned of this failure only after receiving notices of default judgment.
On the basis of Aspen and CIBA's failure to defend, plaintiff sued CIBA and Aspen for breach of contract; failure to defend and indemnify; negligence; and bad faith. Plaintiff also requested a declaratory judgment finding defendants were obligated to indemnify plaintiff under the Aspen insurance policy.
Plaintiff also sued R-T Specialty, Walker, and Swett & Crawford, but these parties are not involved in this appeal.
After discovery closed, in January of 2020, plaintiff, Aspen, and CIBA all filed motions for summary disposition. Unlike Aspen and CIBA, plaintiff did not file a brief in support of its motion. Also, plaintiff failed to present any argument supported by legal authority in the motion it filed. The trial court issued a scheduling order providing deadlines, with responses due by March 18, 2020, and optional reply briefs due by March 25, 2020.
About a week later, it came to the trial court's attention that Walker had not appeared for a deposition. So the trial court issued an order requiring Walker to appear for a deposition at the beginning of February of 2020. On March 9, 2020, the trial court granted leave for the parties to supplement their motions using Walker's deposition testimony and amended its scheduling order. Supplemental briefs were due March 18, 2020, response briefs were due by April 29, 2020, and optional reply briefs were due by May 6, 2020. Only Aspen filed a supplemental motion for summary disposition. About a week after Aspen filed its motion, on March 26, 2020, the trial court again amended its scheduling order. This order stated that response briefs were due by May 20, 2020, and optional reply briefs by May 27, 2020.
Plaintiff failed to respond to either CIBA's or Aspen's motions before the May 20, 2020 deadline. Instead, the day of the May 20, 2020 deadline, plaintiff moved the trial court to amend its scheduling order, asking the trial court to give plaintiff 35 days to file responses to Aspen and CIBA. Citing "increased educational obligations pertaining to a minor child" and difficulty communicating with plaintiff's owner, who resided overseas, plaintiff's counsel explained she could not meet the deadline.
CIBA and Aspen filed responses opposing plaintiff's motion to amend the court's scheduling order and arguing that plaintiff's motion for summary disposition should be denied because plaintiff provided no supporting evidence or legal arguments.
In a written opinion and order, the trial court denied plaintiff's motion to modify the scheduling order. Citing MCR 2.503(D)(1), the trial court noted that it had discretion whether to grant an adjournment and determined that an adjournment would not promote the cause of justice. The trial court noted that Aspen's and CIBA's motions for summary disposition had been pending for five months, which gave plaintiff ample time to respond. Further, the trial court noted it allowed for supplemental briefing and had amended its scheduling order twice. Finally, the trial court found plaintiff's motion was untimely, and that granting plaintiff's request would be highly prejudicial to opposing counsel.
In the same written order, the trial court denied plaintiff's motion for summary disposition and granted Aspen's and CIBA's motions. The trial court found plaintiff failed to provide any law or evidence in support of its motion or to identify the issue on which it believed there to be no genuine issue of fact. Next, the trial court granted CIBA's and Aspen's motions for summary disposition because plaintiff failed to come forward with any evidence to establish a genuine issue of material fact. Subsequently, the trial court denied plaintiff's motion for reconsideration.
After the trial court had dismissed plaintiff's claims against Aspen and CIBA, plaintiff and Walker settled. The trial court entered a consent judgment in favor of plaintiff against Walker, and this appeal followed.
II. ANALYSIS
Plaintiff characterizes the trial court's dismissal of its claims against CIBA and Aspen as a sanction and argues that the trial court abused its discretion by not considering lesser sanctions. Further, plaintiff argues, the trial court abused its discretion by denying plaintiff's request to modify the scheduling order. Plaintiff's arguments are unpersuasive.
"This Court reviews for an abuse of discretion a trial court's decision to decline to entertain motions filed after the deadline set forth in its scheduling order." Kemerko Clawson LLC v RXIV Inc, 269 Mich.App. 347, 349; 711 N.W.2d 801 (2005). Similarly, this Court reviews a trial court's decision on a motion for an adjournment or continuance for an abuse of discretion. Charter Twp of Ypsilanti v Dahabra, Mich. App, ; N.W.2d (2021) (Docket No. 354427); slip op at 3, citing Soumis v Soumis, 218 Mich.App. 27, 32; 553 N.W.2d 619 (1996). An abuse of discretion occurs when the trial court's decision falls outside the range of reasonable and principled outcomes. Maldonado v Ford Motor Co, 476 Mich. 372, 388; 719 N.W.2d 809 (2006).
Before dismissing a case as a sanction, "the trial court is required to carefully evaluate all available options on the record and conclude that the sanction of dismissal is just and proper." Vicencio v Ramirez, 211 Mich.App. 501, 506; 536 N.W.2d 280 (1995). In deciding whether dismissal would be just and proper, a trial court should consider the following nonexhaustive list of factors:
(1) whether the violation was wilful or accidental; (2) the party's history of refusing to comply with previous court orders; (3) the prejudice to the opposing party; (4) whether there exists a history of deliberate delay; (5) the degree of compliance with other parts of the court's orders; (6) attempts to cure the defect; and (7) whether a lesser sanction would better serve the interests of justice. [Swain v Morse, 332 Mich.App. 510, 524; 957 N.W.2d 396 (2020), quoting Vicencio, 211 Mich.App. at 507; see also Dean v Tucker, 182 Mich.App. 27, 32-33; 451 N.W.2d 571 (1990)].
Plaintiff argues that the trial court did not consider these factors before dismissing its case as a sanction, and thus, the court abused its discretion. But the trial court did not dismiss plaintiff's case as a sanction; the trial court dismissed plaintiff's case on the merits. Citing to McCormic v Auto Club Ins Ass'n, 202 Mich.App. 233, 237; 507 N.W.2d 741 (1993), the trial court noted plaintiff's burden in responding to motions brought under MCR 2.116(C)(10). See, also, MCR 2.116(G)(4). And the trial court concluded that plaintiff "failed to come forward with any evidence to establish the existence of a material factual dispute as it relates to its Complaint against Aspen, CIBA, or CAG." Accordingly, these defendants were entitled to summary disposition of plaintiff's claims. The court did not hold that plaintiff violated any court rules or orders. And even though the trial court's denial of plaintiff's request to modify its scheduling order resulted in the dismissal of plaintiff's case, that decision was not a sanction. See Kemerko Clawson, 269 Mich.App. at 352-353. In Kemerko Clawson, this Court explicitly rejected the same argument that plaintiff in this case makes on appeal. Id. Simply stated, the trial court had no reason or obligation to consider the Vicencio and Dean factors.
And the trial court did not abuse its discretion by declining plaintiff's request to modify the scheduling order. "MCR 2.401 implicitly permits trial courts to decline to entertain motions beyond the deadlines established in scheduling orders." Id. at 350; see also Edi Holdings LLC v Lear Corp, 469 Mich. 1021 (2004) (summarily reversing this Court's holding that the trial court abused its discretion by refusing to accept a brief filed after the deadline established by the trial court's summary disposition scheduling order). Construing MCR 2.401 in this way "promotes the efficient management of the trial court's docket . . . ." Kemerko Clawson, 269 Mich.App. at 350.
The trial court characterized its denial of plaintiff's request to modify its scheduling order as an adjournment under MCR 2.503(D)(1). In relevant part, MCR 2.503(D)(1) states that "[i]n its discretion the court may grant an adjournment to promote the cause of justice." Hence below, the trial court considered whether granting plaintiff's request would promote the cause of justice when ruling on plaintiff's motion. On appeal, Aspen and CIBA agree that MCR 2.503(D)(1) is the applicable rule here. However, MCR 2.401 is more applicable. MCR 2.503(A) states: "This rule applies to adjournments of trials, alternative dispute resolution processes, pretrial conferences, and all motion hearings." The trial court was deciding whether to modify its scheduling order, and not whether to push back a trial or motion hearing. MCR 2.401 is better tailored to this situation because it deals specifically with scheduling orders. For that reason, we analyze the trial court's decision as an exercise of discretion under MCR 2.401, and not MCR 2.503(D)(1). Assuming without deciding that the trial court's reliance on MCR 2.503(D)(1) was error, it was harmless. The trial court's decision still falls within the range of reasonable and principled outcomes. "We may affirm the trial court when it reached the right result, even if we differ on the reasoning underlying that result." Bronson Health Care Group, Inc v State Auto Prop & Cas Ins Co, 330 Mich.App. 338, 342 n 3; 948 N.W.2d 115 (2019).
Plaintiff presents several reasons in support of its argument that the trial court abused its discretion. First and foremost, plaintiff contends the trial court offered only one reason for denying plaintiff's motion: that amending the scheduling order would prejudice the opposing parties. According to plaintiff, this was an invalid reason to deny plaintiff's request. Plaintiff argues that extending the deadline would not have prejudiced Aspen or CIBA because the trial was set for August of 2020, which would have left plenty of time for plaintiff to respond, and for Aspen and CIBA to reply.
Contrary to plaintiff's assertion, the trial court did not deny plaintiff's motion merely because it would be prejudicial to opposing counsel. While this was one of the reasons the trial court provided, it was not the trial court's only reason. The trial court also noted: (a) it amended the scheduling order twice previously, (b) plaintiff already had five months to respond, and (c) plaintiff's request to modify the scheduling order was untimely.
Even so, plaintiff contends, the trial court should have granted its motion. According to plaintiff: (1) there were valid obstacles in the way of plaintiff's counsel's being able to timely respond to Aspen and CIBA, i.e., increased childcare obligations and difficulty communicating with plaintiff's owner; (2) plaintiff's counsel acted with due diligence to try and meet the deadline; and (3) the trial court had not made any prior adjournments at the request of plaintiff.
Plaintiff's arguments are unpersuasive. Pandemic issues aside, plaintiff had two months before lockdown orders went into effect to start developing responses to Aspen and CIBA. Plus, the trial court accounted for difficulties encountered because of the pandemic. On March 26, 2020, the trial court amended its scheduling order, moving the deadline for responses from April 29, 2020 to May 20, 2020. Even if plaintiff wanted to wait until after supplemental briefs were filed to respond, this still left plaintiff with two additional months to do so. Finally, plaintiff's arguments about obstacles hindering plaintiff's counsel from responding are undercut by plaintiff's counsel waiting until May 20, 2020, the day responses were due, to ask for an extension. This is not to discount any of the difficulties plaintiff's counsel may have faced because of the pandemic. But the trial court had a legitimate reason to decline her request, despite those difficulties. Because the trial court's denial of plaintiff's motion to modify the scheduling order fell within the range of reasonable and principled outcomes, there was no abuse its discretion.
Affirmed.