A New Attorney's Guide to Answering a Complaint

by Barry D. Malone

nswering a complaint is a routin legal task. A new attorney's first instinct may be to immediately jump into answeting the allega tions. Howevet; a system-

atic approach to answering the complaint may get a better result. Creating a step-by-step plan to handle this task helps a new practitioner better manage his Or her time and improve work quali ty. A systematic plan is a constant work in progress, but also a valuable tool. A major benefit is that every time an answer is drafted, the attorney benefits from previous wo rk and tweaks the current model. It helps a new attorney see the bigger picture and keep track of an answer's many component parts.

When and How the Client was Seroed The first step should be to determine the complaint's

response time. Under MCR 2.108(B), the time frame for responding to a complaint is spelled out depend ing on the manner of service. Be sure to calendar the due date with enough advance time to fi le and serve the answer. If time has nearly run, the defendant may mOve for an exten-sion of time under MCR 2.108(E). Also, a routine practice is to contact opposing counsel and request a stipulated time extension. When reviewing MCR 2.108 for calendar­ing purposes, make note of how the client was served. As explained below, service of process should be examined for possible defects.

Gather Facts and Make Preliminanj Assessments Before jumping into the legal aspects of answering a

complaint, gather all available documents and support­ing evidence. If possible, ex tensively interview the client. Knowing the facts w ill help draft a strategically advanta­geous answer. After familiarizing yourself with the mate­ri als, begin to analyze the facts against the allegations in the complaint.

In the August 2010 issue of LACHES, the Honorable Rudy J. Nichols wrote an ar ticle on the legal trade's tools. Judge Nichols recommends reviewing the relevant jury instructions before filing a compla in t. He also recommends reviewing the jury instructions for any potential defenses. This is great adVice for reviewing the complaint's claims. The jury instructions spell out the necessary elements of

any claim raised in the complaints. If lacts do not meet the plaintiff's evidel1tiary burden, moving for summary dispo­sition may be wise. Motiq';s lor summary disposition are discussed in detail below.

At this point, it is good to review the complaint again and make preliminary assessments about the allegations. After revieWi ng the facts and evidence available, the allega­tions may raise differel1t questions. In-depth analySiS at this point may pay strategic diVidends in the future.

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Under MCR 2,111(C), only foul' responses to an allega­tion are allowed, The responses are explicitly admitting or denying the allegation, pleading no contest, Or stating that the pleader lacks knowledge or information sufficient to form a belief as to the truth of an allegation, The last option has the effect of a denial. Under the court rules, a denial must incl ude a factual Or substantive basis for the denia!. ' It is common to see a response such as "neither admit nor deny," Howevel~ MCR 2,111(E) states that failure to deny an allegation is an admission, Since MCR 2,11l(C) allows only four responses to an allegation, any other response may be an admission,

Standing and Capacif:Jj to Sue The nex t analytical step in preparing the answer is

considering who is making the cl aim, Is the party an individ ual,'a corporate en tity, or some other form of as­sociation? Depending on the subject matter and plain tiff' s identity, the plaintiff's status to sue may be in questi on, Similarly, a plaintiff may lack standing to bring the matteI' before court.

In July 2010, the Michigan Supreme Cour t changed its approach to standing, In Lansing Schools Education As­sociation v, Lansing Board of Education,' the Court held that "Michigan standing jurisprud nce should be restored to a limited, prudential doctrine that is consistent with Michi­gan's long-standing historical approach to standing,"

The Court stated that a party has standing, first, "when­ever there is a legal cause of action,'" Second, if a party "meets the requirements of MCR 2.605, it is suffi cient to establish standing to seek a declaratory judgment,'" Third, if the law does not provide for standing, then the court should uSe its discretion to determine a party's standing,S To guide the lower courts the Michigan Supreme Court stated that a party "may have standing in this context if the litigant has a special injury or right, 0 1' substantial inter­est, that will be detrimentally affected in a manner differ­ent from the citizenry at large or if the statutory scheme implies that the Legislature intended to confer standing on the [party). '"

Similal'ly, if your investigation raises a question about the plain tiff's capacity to sue, a summaty d isposition motion may be appropriate. For example, a corporation's capacity to sue is tied to its status as an organization under Michigan law, Reviewing a corporation's status with the Depart-ment of Labor and Economic Growth is a quick and simple process, This will determine if the corporation is up-to-date On its corporate fi lings, Under Michigan's Business Corpora­tion Act, a Michigan corporate en tity is charged with filing its annual reports to maintain its active corporation status.' MCL 450.1922 states that failing to file annual reports may resul t in a corporation losing its active status, This means that the corporation is automatically dissolved, A d issolved corporalion may only engage in limited activities,

Under MCL 450,1833 and 450,1834, a dissolved COl'pO­ration may only engage in limited activities related to its

winding-up process' A dissolved corporation that contin­u s to act as a going concern may encounter obstacles in suing on its contract rights. Consider George Morris Cruises v. En"i" Yacht & Mari11e Corporation,' where a dissolved corpora tion could not enforce its contra t rights while it remained dissolved. By analyzing the standing and capac­ity of the plaintiff, a matter may resolve quickly or give the defenda nt a bargaining advantage.

Jurisdiction and Venue Next, review the matter 's jurisdiction. Personal jurisdic­

tion over individua Is Or corpOrations is determined under M L 600.701 et seq. For both individuals and corporations, the court can assert jurisdiction either through general jurisdi ction Or limited jurisdiction. Limited jurisdiction is commonly referred to as Michigan's long-ann statute. When representing an out-of-state client, persona l jurisd ic­tion may be an issue. It is important to determine whether th cl ient has consented to jurisdiction, as is possible under MCL 600.701(3).

If the court lacks personal jurisdiction over your client under MCL 600.701, the court may asse!."t jurisdiction under MCL 600.705. Of particular note is MCL 600.705(1), which states that ju risdiction may be asserted over an individual that has It'ansacted any business within the state." The

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The next consideration is subject matter jurisdiction. In analyzing the court's subject matter jurisdiction, it is necessary to note, among other things, the amount in con­troversy, whether equitable relief is sought, and whether the claim is statutory or common law. Some actions may only be brought in certain courts. For exarople, under MeR 4.200 landlord-tenant cases are specifically within the juris­diction of the district courts, while MCL 125.3407 allows a municipality to seek equitable relief for zoning violations. This gives a municipality a choice between a code enforce­ment action ilJ the distric.t COLlrt or an equitable action in the circuit court. The claim's basis may make a significant impact on the court's subject matter jurisdiction.

Then, consider the proper venue. Venue is determined by the facts. Under MCL 600.1621(a), venue is appropriate in the county wher the defendant resides, has a place of business, conducts business 01; if a defendant corporation, has its registered office. After analyzing these prongs, you may find that the client does not meet any of the require-

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ments. The next step is to look at M L 600.1621(b). Here, the plaintiff's location controls. Venue is proper where the plaintiff resides, has a place of business or where it locates its corporate offices.

If venue is improper or a change of venue is desired, it is necessary to raise this at the first available opportunity. Under M R 2.221(A) "[al motion for change of venue must be filed before Or at the time the defendant files an answer." This time requirement is cri tically important because MCR 2.221(C) states that a party waives an objection to venue if it is not filed at that time. A change of venue may be sought where the venue is proper or where the venue is improper. Where venue is impropel; under M R 2.223, the plaintiff bars the defendant's costs and fees, including reasonable attorney fees, for attending the wrong court.

If venue and jurisdiction are teclutically proper but nonetheless inconvenient, a motion to dismiss wlder the doctrine offorum non conveniens may be appropriate. Under this motion, the moving party asks the court to relinquish jurisdiction for practical reasons. In Cray v. General Motors Corporation,12 the Michigan Supreme Court announced a balancing test to determine when to apply forum lion co/we­niens. The comt ",Ulounced three main factors with several sub-factors: the litigants' private interests, the public intel"­est and the movant's tinleliness.13

When analyzing the litigants' private intel"est, courts COn­sider several factors including (1) the court's ability to com­pel witness altendance and the costs of obtaining witnesses, (2) the enforcea bility of a judgment, (3) the access to sources of proof, and (4) possible harassment of either party.'"

Under the public-interest prong, courts consider two factors: (1) adm inistrative difficulties may arise that would be present in another court and (2) w hich state's law should govern the case."

The final fa ctor is the reasonable promptness of raising the plea of forum 11011 conveniens." While not stated in the court rules, as wHh venue and personal jurisdiction it is best to raiseforwH 11.011 conveniens before Or with the answer.

An example applyingforum /101l conveniens is found in Holl/le D. jasoll 's LO/ll1ge." In Holme, a Michigan plaintiff sued a Canadian bUSiness in Michigan court Over an injury that occurred at the defendant's property. I' There, the Court of Appea ls conSidered the Cmy factors and noted that out-of­state witnesses would increase litigation costs and bring the possibility that the trial would be conducted by depositions, if even that. I' The Holme cou.rt also noted that adding further burden to an already busy court docket was a c0l1sidcl'ation,20

Motioll for Summary Disposition At this point, the analysis should give insight into any

existing issues beyond merely answering the complaint. These considerations should be reviewed for a possible mo­tion for summary disposition. Such a motion may provide a strategiC advantage, but also gives a chance to double­check the anal ysis thus far.

A defendant may file a motion for summary disposition in place of or conclifrelltly with his Or her anSwer. MeR

2.116(C) states the 10 groUl1ds for a motion for summary disposition. Each of these grounds is governed by a specific time frame that is stated in MCR 2.116(0). Again, consider how the client was served. Under MCR 2.1l6(C)(2) and (3), the suffiCiency of the process and service of process in the action is at issue. Under MeR 2.116(0)(1), these two claims must be raised either concurrently or before your first re­sponsive pleading or they are waived.

Similarly, a motion for summary disposition disputing jurisdiction ovel" the person or property at issue must be raised before 01" at the same time as the answer'l As with venue, failure to timely raise a personal jurisdiction chal­lenge results in waiver.

As discussed above, if the complaint fails to allege the lmderlying claim's necessary elements, a summary dis­position motion is appropriate. Under MCR 2.116(C)(8), a motion for .summary disposition may be filed if the plaintiff has not made a claim upon which relief Can be granted. This motion may be raised at any time."

Under MeR 2.116(C)(5), a motion of swnmary disposi­tion may be granted where a party lacks capacity to sue. Above, a situation where a corporate plaintiff had been dis­solved was discussed. The plaintiff could correct this defect, but a motion under MCR 2.116(C)(5) puts the plajntiff on the defense immediately to correct its capacity to sue. A motion

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attacking the p laintiff's capacity to sue should be raised be­fore or concurrently with the complaint's answer." Careful revi w of the grounds for a motion for summary disposition is warranted, as well as the time fl."anleS required to file, in order to place the clien t in the most advantageous position.

Other Considemtions The above considerations for responding to complaints

are not exhaustive; many other considerations exist. They include motions for a mOre definitive statement, res judi­cata Or third-party claims. The responding party should carefully consider countercla.ims Or cross-claims. Under M R 2.203(E), it is best to file a counterclaim Or cross-claim concurrently with the anSwer to ensure that the claim will be heard during the present litigation.

Answer the Complaint Now that you have accomplished a detailed review of

the allegations and issues presented by a complaint, it is time to answer the complaint. Returning to the options sta ted in M R 2.111(C), a careful review of the allegations will determine the appropriate response. If an allegation is tme, then admit it. However, careful attention to the allega­tion's phrasing avoids admitting more than intended.

For example, note the complexity of this allegation: "Plaintiff and Defendant were in the process of negotiating a resolution to this matter and in good faith, and to avoid further cluttering the court with needless litigation, Plain­tiff agreed to wait to fi le suit until Defendant had time to review settlement proposal"

It may be Ime Ihat the parties were in the process of negotiating a resolution and that the defendant asked the plaintiff to wait to file suit so that it could review a proposal. Howevel, the p laintiff included language abou t its motivations for doing so, which the defendant may not have known. The motivations are not necessarily untrue, but the defendant likely lacks the knowledge necessary to determine the statement's veracity. Therefore, the defen­dant is best served responding that it lacks knowledge ox information sufficient to form a belief as to the truth of the allegation.

If an allega tion is denied, recall that MeR 2.111(0) requiTes that the factual or substantive basis for the denial be included. Pleading no contest has the effect of an ad­mission for the purposes of the pending action only. It also rel ieves the complaining party of its burden of proof for that specific allegation. If nOne of the other th ree options are appropriate, it is best to include the catch-all provision that the pleader lacks suffiCient knowledge and informa­tion, which has the effect of a denial, and let the COm­plaining party proceed with its proofs. Above all, when answering a complaint, remember that a party is bound by their pleadings."

Affirmative Defenses A final consideration - and a critically important one

- is affirmative defenses. Under MCR 2.111(F)(3), affirma-

tive defenses must be stated Or they will be waived. MCR 2.111(F)(3) includes a Jist of affirmative defenses that must be pleaded with the first responsive pleading. This list is relatively comprehensive and it is fairly COmmon practice to include all of the affirmative defenses listed. However, Jud ge Nichols advises that including only relevant affirma­tive defenses is best. Judge Nichols is correct, but it takes a little courage for new attorneys to heed his advice. New attomeys often fear that failing to include everything will later cost them an important defense. This tempts new at­tomeys to include every affirmative defense. That concern demonstrates the need of a thorough, methodical plan of attack when answering a complaint.

Barry D. Malon. is an associate attorney with Adkison, Need & A ll", P.L.L.c. in Bloo)iljield Hills. He is the 2010-2011 chair of the.OCBA Municipal Law Committee and a director on the OCBA New Lawyers Cou ncil. His practice areas inc/ude rnuniciptll nnd land use law, business and real estate, condo­minium and homeowner associations, and landlord-tenant. He thanks Hon. Rudy Nichols for sharing his insights; Allysoll Cold, E";n Rhinehart, and Mark Cooney for their editing bril­liance; and Karish",a Cuha, his beautiful bride,jor being end­lessly supportive. Barry ",ay be reached at bmaiol1e@anajir11l. com or 248-540-7400.

Footnotes I MCR 2.111 (0). 2 LtIllS;lIg 5ch Ed Assoc v. l.allsing Bd 0/ Ed, 4S7 Mich 349, 372; 792 NW2d 686

(2010). 3 Id. 4 Id. S ld . 6 ld . 7 MCL450.1911. 8 See Flint Cold Stornge v. Del,'j oj'lh:nsllry. 285 Mich App 483, "95·~96i 776 NW2d 387

(2009). 9 Gtarge Morris C(uists v. Enuill Ynclrt & MarinI! Corporatioll, 191 Mich App 409, 419;

478 NW2d 693 (1991). 10 Fot corporo'1te defend'lOts see MeL 600.71) 8r\d 600.715. 11 Anro"S(UI v. U"dsay & Hmltr /lIlemati(lIIa/ Ltd., 235 Mich App 259, 263; 597 NW2d

227 (1999). 12 Cray t/. Gentral Motors Corp, 389 Mlch 382, 395-396; 207 NW2d 393 (1973). 13 ld. 14 'd. lS rd. 16 rd. 17 Holme v. JaSOIl'S Lallllge, 168 MichApp 132, 135; 423 NW2d 585 (1988), 18 Id. 19 Id. at 135. 20 ld. 21 See MCR 2. 116(C)(I), (0)(1). 22 See MCR 2.116(0)(4). 23 See MCR 2.116(0)(2). 24 Sec Liclmovsk'Y v. Ziebnrt /tile", Corp, 123 Mich App 605, 608; 332 NW2d 628

(1983).

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