Opinion
Docket No. 22294.
Decided September 11, 1975.
Appeal from Oakland. William J. Beer, J. Submitted June 11, 1975, at Lansing. (Docket No. 22294.) Decided September 11, 1975.
Complaint by Richard Frey against Gilberto Islas for damages arising out of an automobile accident. Default judgment for plaintiff. The Secretary of State intervened as a defendant, representing the motor vehicle accident claims fund. Motion to set aside default judgment denied. Intervening defendant appeals. Reversed and remanded.
Bernard P. Paige, P.C., for plaintiff.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and Joseph B. Bilitzke and Carl K. Carlsen, Assistants Attorney General, for intervening defendant.
The Secretary of State appeals from the lower court's denial of a motion to set aside a default judgment in this action involving the motor vehicle accident claims fund. MCLA 257.1101; MSA 9.2801, et seq. The following chronological sequence aptly exposes the pertinent facts:
May 20, 1970 — Plaintiff was injured while riding in a motor vehicle that collided with an automobile owned and operated by defendant, an uninsured motorist;
December 2, 1970 — Plaintiff notified the Secretary of State of his intention to file a claim against the motor vehicle accident claims fund;
May 22, 1973 — Plaintiff filed suit against defendant;
July 12, 1973 — Plaintiff forwarded copies of the summons and complaint to the Secretary of State;
August 11, 1973 — An affidavit and default was entered against the defendant;
June 17, 1974 — Plaintiff gave written notice of the default to the Secretary of State;
June 26, 1974 — The lower court entered a default judgment against the defendant;
July 5, 1974 — The Secretary of State appeared and filed an answer;
July 29, 1974 — The Secretary of State moved to set aside the default judgment;
November 6, 1974 — The court entered its order denying the motion.
The gravamen of this cause centers around the construction of § 8 of the Motor Vehicle Accident Claims Act:
"(1) Section 7 does not apply in the case of a judgment entered in an action in which the defendant did not enter an appearance, did not file an answer, or did not appear in person or by counsel at the trial, or judgment was entered upon the consent or with the agreement of the defendant, unless the secretary has been given notice in writing of the failure, consent or agreement and has been afforded an opportunity to take such action as he may deem advisable under subsection (2).
Section 7 of the Motor Vehicle Accident Claims Act provides for payment by the Secretary of State of a judgment against an uninsured motorist.
"(2) Where the secretary is served with notice in writing under this section, he may enter an appearance within 30 days, file an answer, make payment into court, appear by counsel at the trial or take such other action as he may deem appropriate on behalf and in the name of the defendant, and thereupon, on behalf and in the name of the defendant, may conduct his defense, and may consent to judgment in such amount as he may deem proper in all the circumstances, and all acts done in accordance therewith shall be deemed to be the acts of the defendants.
"(3) Where pleadings have been closed, the secretary, upon giving notice to the court and to all proper parties to the action that he intends to defend the action on behalf and in the name of the defendant, may reopen the pleadings upon praecipe." MCLA 257.1108; MSA 9.2808.
The Secretary of State takes the position that subsection 2, supra, requires a lapse of 30 days between written notice of default and entry of default judgment so as to afford the Secretary an opportunity to appear and answer. It follows that entry of the default judgment nine days after notice is contrary to § 8(2); the Secretary appeared within 30 days, and is not liable to compensate plaintiff.
Plaintiff views § 8 in a different light. He maintains that where pleadings have been closed § 8(3) requires the Secretary to reopen the pleading via praecipe within 30 days of the default judgment. Since the Secretary of State failed to file a praecipe within 30 days of the default judgment, the lower court correctly denied the motion to set the judgment aside.
The Court is convinced that neither position accurately reflects the substance of § 8 as applied to the instant case. Under § 8(1) a claimant against the "fund" must give written notice of an uninsured motorist's default to the Secretary of State. June 17, 1974, plaintiff notified the Secretary of State in writing of the defendant's default. Section 8(2) affords the Secretary of State 30 days from receipt of notice to appear and take whatever action he deems advisable. The Secretary of State made an appearance and filed an answer on July 5, 1974. Between the notice and appearance — June 26, 1974 — a default judgment was entered. Since one can hardly intervene in a suit where pleadings are closed, we look to § 8(3) for guidance.
Where pleadings are closed, § 8(3) requires the Secretary of State to notify the court and proper parties of his intent to defend. No time deadline is found in § 8(3); it is reasonable that the same 30-day limitation in § 8(2) is applicable as well. In the instant case, although the default judgment rendered the subsequent appearance and answer by the Secretary of State ineffective under § 8(2), this Court opines the Secretary of State's action sufficed to apprise the court and plaintiff of his intent to defend under § 8(3). Moreover, since the action taken by the Secretary on July 5, 1974, came within 30 days of the initial notice of default, such action effectively nullified the default judgment as to the Secretary of State, and his subsequent motion to set aside the default judgment on July 29, 1974, was unnecessary.
Thyne v Beggs, 62 Mich. App. 353; 233 N.W.2d 278 (1975). In Thyne, the Secretary of State received notice of default on May 7, 1974. Default judgment was entered on May 20, 1974, and the Secretary of State "chose to become a party" to the action by moving to set aside the judgment on June 5, 1974. The lower court denied the motion, and a panel of this Court reversed: "Without affecting its validity as to defendant * * * we hold that the default judgment is a nullity as to the Secretary of State." 62 Mich App at 354.
Nonetheless, the pleadings must be reopened in order for the Secretary of State to defend the action. The mechanism for reopening under § 8(3) is by praecipe. Whether vel non the praecipe is filed within the 30 days is of no consequence here, since the Secretary of State's action on July 5, 1974, satisfied the time limitation of § 8, and nullified the judgment as to him. As to the Secretary of State, the case is ready for trial.
The motion to set aside the default judgment on July 29, 1974 sufficed in lieu of praecipe as a mechanism for reopening the pleadings.
The language in Forsee v Kohari, 16 Mich. App. 505, 510; 168 N.W.2d 455 (1969), lends credence to this Court's position: "We find no limitation in § 8 as to times when the Secretary may not reopen the pleadings * * * provided he acts within 30 days * * *." (Emphasis supplied.) Cf. Seffens v Muradian, 17 Mich. App. 455; 169 N.W.2d 657 (1969), held: the trial court erred in not allowing Secretary of State to reopen pleadings once judgment was entered, where first notice as required by § 8 was not given until after the consent judgment.
Reversed and remanded for futher proceedings not inconsistent with this opinion. No cost, a public question.