Simon PLC Attorneys & Counselors – April 2023 Memorandum
Time Limit on Substitution of Parties – When is it too Late to Step in for a Late Litigant?
While certainly tragic for family and unfortunate for counsel, the death of a party mid-litigation is not an uncommon occurrence. In instances where a deceased party’s claim survives his or her passing, the Michigan Court Rules at first appear to grant wide discretion to a trial court to permit substitution of parties in order to allow the action to continue: MCR 2.202(A)(1)(b) freely permits a court to order substitution, provided the substitute party has standing to continue the claim. MCR 2.202(D) further provides that such substitution may be ordered at any stage of the litigation, either before or after judgment, or by the Court of Appeals or Supreme Court. This wide-open latitude is, however, tempered by MCR 2.202(A)(1)(b) which limits the court’s discretion to order substitution of parties by providing that the action “must be dismissed” if a motion for substitution is not made “within 91 days after filing and service of a statement of the fact of the death” (emphasis supplied) unless the party seeking substitution demonstrates there would be no prejudice to any other party occasioned by the late substitution.
It is clear that in order to get around the hard and fast deadline of MCR 2.202(A)(1)(b), the moving party must show a lack of prejudice to the other side. If, however, the party seeking substitution makes such a showing, does it necessarily guarantee a favorable outcome and have the effect of eliminating the dismissal mandate? Does the trial court’s dismissal for untimely substitution in the face of compelling facts which would seem to justify the delay constitute an abuse of discretion? For the answers, we turn to the recently issued for publication Court of Appeals opinion, Lisa Bradley v. Progressive Marathon Insurance Company and Nationwide Mutual Fire Insurance Company, COA No. 358796, Wayne County Circuit Court LC No. 20-006927-NF (For Publication, December 29, 2022).
Plaintiff Lisa Bradley filed an action for no-fault personal protection benefits against Defendants, Progressive Marathon Insurance Company, and Nationwide Mutual Fire Insurance Company, in June 2020, alleging that she was owed benefits for injuries sustained in a motor vehicle accident. In March 2021, while Progressive’s multiple motions for summary disposition were pending, Plaintiff’s counsel filed a Suggestion of Death, giving notice that Bradley had passed away on February 11, 2021. The notice included the statement that a personal representative would be appointed for her estate. On April 13, 2021, the trial court entered an order continuing the hearing on defendants’ motions until May 26, 2021, to allow a Personal Representative to be appointed.
In July 2021, Progressive filed a motion to dismiss under MCR 2.202(A)(1)(b) for plaintiff’s failure to file a motion to substitute a personal representative for Bradley within 91 days after the Suggestion of Death, in which Nationwide subsequently concurred. The motion alleged Progressive has been, and will continue to be, prejudiced by Plaintiff’s failure to file the necessary statement and motion as Defendant cannot participate in meaningful litigation and/or settlement negotiations with Plaintiff’s counsel as they have no party to represent in this matter.
Plaintiff’s counsel responded to the motion to dismiss, noting that an estate had been opened and arguing that dismissal was not appropriate where “the estate is simply awaiting a hearing date with the court so that the Letters of Authority can be issued.” The answer noted that the Plaintiff’s family had retained a probate attorney and had taken all necessary steps to open a decedent’s estate. Plaintiff did not state when the attorney was retained or otherwise explain the delay in opening the estate.
After several re-notices and following brief oral argument, the trial court granted the motion to dismiss in September 2021, finding that, under MCR 2.202(A)(l)(b), the action must be dismissed as to the deceased party unless motion for substitution is made within ninety-one (91) days after the filing and service of the statement of fact of the death. This finding was made despite Plaintiff’s protestations that dismissal would be inappropriate as a hearing to issue the letters of authority was to be held in the probate court later that same month. Plaintiff timely appealed the dismissal, arguing that though prejudice may have been alleged by the Defendants, no evidence of prejudice was actually proffered. Defendants countered that it was Plaintiff’s burden to demonstrate the absence of prejudice, which she did not, therefore the trial court’s dismissal was not an abuse of discretion.
In deciding Bradley, The Court of Appeals noted a dearth of caselaw on the subject and cited only Mather Investors, LLC v Larson, 271 Mich App 254; 720 NW2d 575 (2006) wherein the deceased party was one of two defendants; the case against the deceased defendant was dismissed because she died before she was served with the complaint. The other defendant moved for summary disposition, arguing that the deceased defendant was a necessary party, without whom the case could not properly proceed. The trial court allowed the plaintiff to substitute the decedent’s estate if it could show the other defendant was not prejudiced, but ultimately found that the defendant was prejudiced and dismissed the case which decision was upheld on appeal.
In upholding the trial court’s dismissal of the Plaintiff’s case, the Court of Appeals held that, under Larson, a plaintiff is indeed required to show a lack of prejudice as a prerequisite to have an untimely motion for substitution granted, however the holding of Larson does not answer the question posed in Bradley, to wit: whether the court’s dismissal premised upon an untimely motion for substitution of parties, notwithstanding a showing of no prejudice to the party opposing substitution, constitutes an abuse of discretion. To answer, the Court of Appeals looked to the plain language of MCR 2.202(A)(1)(b) and held that while the rule does indeed require dismissal unless there is a showing of no prejudice to the non-moving parties, it does not, however, divest the trial court of its inherent discretion to nevertheless dismiss a case for untimely substitution despite the requisite showing having been made:
In our view, the more logical interpretation of the qualifying language that follows the rule’s mandate “unless the party seeking substitution shows that there would be no prejudice to any other party from allowing later substitution” is that the mandatory limitation on the trial court’s discretion no longer applies if, as is arguably the case before us, the plaintiff makes a showing as to a lack of prejudice. In other words, if the party seeking substitution shows the absence of prejudice despite filing a motion for substitution beyond the 91-day period, the mandatory requirement that the trial court dismiss the case is extinguished. In such a situation, the general rule set forth in MCR 2.202(A) and (D) governs the trial court’s discretion. Bradley, Id. at 5.
The Court of Appeals, given the scarcity of caselaw, also relied upon the staff comments to the Court Rule in rendering its decision:
The staff comment addressing the 1985 adoption of MCR 2.202 states as follows: “Subrule (A)(1)(b) sets a 91-day time limit for moving to substitute following the death of a party. This makes the rule consistent with FR Civ P 25. However, later substitution is allowed if the party seeking it shows that no other party will be prejudiced because of the late motion.” (MCR 2.202, 1985 Staff Comment) (emphasis added). The word “allowed” suggests that untimely substitution is permitted but not required. Thus, the staff comment reinforces our conclusion regarding the mandatory language contained in the rule. Bradley, Id. at 6.
MCR 2.202(A)(1)(b) therefore does not prohibit dismissal of the case where the party seeking an untimely substitution has made a showing of no prejudice to the opposing side. Rather, even after the movant has made the requisite showing of no prejudice, the trial court nevertheless still retains discretion to either dismiss or continue the case.
It is abundantly clear that a motion for substitution of parties should be filed well within the 91 day period following the death of the original party in order to preserve the claim. Even if a proper showing of no prejudice to the opposing parties is made, there is no guaranty that the court will allow an untimely substitution of parties. We at Simon PLC Attorneys and Counselors have a full understanding of the intricacies of the Michigan Court Rules as pertains to the procedural aspects of litigation and are standing by ready to steer your claim through the maze of litigation to help ensure a favorable outcome regardless of unusual circumstances.
N.B. Not Legal Advice: Please contact us if you would like to discuss the facts and circumstances of your specific matter. Simon PLC Attorneys & Counselors expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this memorandum. The information contained herein may not reflect current legal developments and is provided without any knowledge as to the recipient’s location, industry, identity or specific circumstances. No recipients of this content, clients or otherwise, should act, or refrain from acting, on the basis of any content included in this memorandum without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the jurisdiction for which the recipient’s legal issue(s) involve. The application and impact of relevant laws varies from jurisdiction to jurisdiction, and our attorneys do not seek to practice law in states, territories and foreign countries where they are not properly authorized to do so.
