Three Michigan Business Court Cases Weighing Covid-19 as a Factor in Reaching their Decisions

  1.  Covid-19 Caused Failure to have Affidavit Notarized and Discovery Delays

In this Michigan Business Court case, there is an issue whether an affidavit was defective because it was not notarized, and therefore could not be considered in opposing summary disposition.  The court states: “While the Affidavit … is not notarized, [defendant] explains that the ability to have the Affidavit notarized has been hindered by the COVID-19 restrictions. The Court observes that [plaintiff] initiated this lawsuit on February 12, 2020 and approximately one month later, the pandemic effectively shut down the country and significantly delayed the discovery process in litigation. As such, the Court finds that summary disposition is not appropriate at this time in light of the need for discovery to ascertain whether or not the subject contracts are valid and to answer the outstanding question of whether” the sum at issue actually benefitted the defendant in connection with the unjust enrichment claim.

A copy of Oakland County Business Court Judge James M. Alexander’s decision in Liberty Plus, LLC v. Village Crest Condominium Association can be found here.

  1. Covid-19 a Factor in Deciding Forum Non Conveniens Motion

In another opinion issued the same day, July 28, 2020, Judge Alexander considered the Covid-19 crisis in addressing a motion to dismiss for forum non conveniens.  The defendant argued for dismissal in favor of Illinois’ courts. The court found an enforceable Michigan forum selection clause present, and carried out the analysis from that premise.

In evaluating the factors relevant to a forum non conveniens motion, Judge Alexander states: “Based upon the forum-selection clause of the parties’ contract, the Court finds that it has the authority as the Business Court to entertain this action. The Court further finds that Michigan is a reasonably convenient place for trial of the action in consideration of the proximity of Michigan to Illinois. The Court agrees with Plaintiff that any discoverable electronic documents can be easily accessed and distributed among the parties. In reality, COVID-19 has severely limited any in-person litigation and so proceeding with this litigation in Michigan will not result in any greater burden than a scenario where both parties are in Michigan.”

The decision in Morrell, LLC v. Hoist Liftruck Manufacturing can be found here.

  1. Covid-19 a Factor in Setting Aside Default Judgment

In this Ottawa County, Michigan Business Court case, the court set aside a default judgment.

The defendant, a limited liability company, had responded timely to the complaint via its principal, without counsel.  Michigan law, however, requires an entity defendant to be represented by an attorney. The court set a deadline for a Michigan attorney to enter an appearance, which the defendant failed to meet.  Its pro se response was stricken, and a default was entered.

The defendant LLC obtained Michigan counsel shortly thereafter, and successfully moved to vacate the default.  The court found there was a potentially meritorious defense, and good cause shown regarding Michigan counsel’s belated appointment.

The court held: “(1) defendant’s failure to obtain Michigan counsel in a timely manner was not knowing or intentional, and was hindered by the ongoing COVID-19 pandemic; (2) the [Circuit Court’s general online] announcement titled “20th Circuit Court response to COVID-19” on the Court’s website is potentially misleading [as to when the original scheduling conference was to be rescheduled]; (3) the defendant missed the deadline to obtain Michigan counsel and failed to respond to the Court’s order of March 10, 2020, a delay which the Court concludes is not inexcusable in light of the disruptions caused by the ongoing COVID-19 pandemic; and (4) the time period between the entry of the default judgment and the filing of the motion to set aside the judgment was brief.”

A copy of Ottawa County Business Court Judge Jon A. Van Allsburg’s decision in Cusack Music, LLC v. Proanalog Devices, LLC can be found here.