Background
In February 2021, the City of Detroit sued Jason Gross and others to recover unpaid property taxes and demolition costs arising from 2014–2016. Detroit alleged that Gross had been the winning bidder on properties auctioned by the Wayne County Treasurer and that restrictive covenants in the auction contract obligated him to keep taxes current for two years after the deed’s conveyance and to either demolish or secure the properties within specified timeframes.
After three failed personal service attempts at Gross’s Franklin, Michigan address — on each occasion someone was observed inside but refused to answer the door — the trial court authorized alternate service in February 2022. The summons and complaint were sent by first-class mail and posted at Gross’s residence pursuant to the court’s order. Gross nonetheless failed to answer, and a default was entered against him in February 2023. Detroit subsequently moved for a default judgment of $962,101.37, covering unpaid taxes, demolition costs, fees, interest, and taxable costs.
Gross moved twice to set aside the default and ultimately the default judgment, arguing that service was defective because the deputy sheriff’s use of the word “posted” was ambiguous, and that he had meritorious defenses including that he was not the record owner of most of the properties at the relevant times and was not in privity with the City. The Wayne Circuit Court denied both motions, finding that proper notice had been given and that Gross’s arguments had already been rejected. Gross appealed by delayed leave granted.
The Court’s Holding
The Michigan Court of Appeals affirmed, holding that the trial court did not abuse its discretion in denying Gross’s motion to set aside the default and default judgment. The court found that the deputy sheriff’s return of service — stating that he “posted per court order by attaching a true copy” of the relevant documents — plainly confirmed compliance with the trial court’s order requiring the documents to be tacked or firmly affixed to the door. Gross’s contention that the word “posted” was too ambiguous to establish proper service was unsupported by the record.
The court further held that Gross failed to support his claimed meritorious defenses with the particularity required by Michigan law. His affidavit did not state his residential address, confirm or deny whether he lived there during the three service attempts, or acknowledge whether he received the first-class mailing. Crucially, while he disputed ownership of “most” of the properties, he did not identify which specific properties were transferred, to whom, or provide documentation of his lack of ownership interest. Because mere conclusory allegations devoid of detail are insufficient to establish a meritorious defense, the denial of the motion stood.
On the damages issue, the court rejected Gross’s argument that the trial court was required to hold an evidentiary hearing. It noted that plaintiff had submitted an itemized chart identifying each property, outstanding taxes, auction proceeds applied, and demolition offsets, and that Gross’s response focused primarily on disputing liability rather than the damage calculation itself. The court found no clear error in the damage award.
Key Takeaways
- A defaulting party’s affidavit in support of a motion to set aside a default must state admissible facts with particularity — conclusory denials of ownership or service are insufficient under Michigan law.
- A deputy sheriff’s return of service stating he acted “per court order” is sufficient to establish compliance with an alternate-service order requiring physical posting; vague ambiguity arguments about the word “posted” will not overcome that record.
- A defaulted party retains the right to contest the amount of damages but loses the right to challenge liability; where the defendant’s response to the default judgment motion continued to contest liability rather than the damages calculation, no evidentiary hearing was required.
- A motion to set aside a default and default judgment that simply rehashes previously rejected arguments functions as an untimely motion for reconsideration and will be denied on that basis as well.
Why It Matters
This decision reinforces how demanding Michigan’s standard is for defendants seeking to escape properly entered defaults. Courts will scrutinize affidavits supporting a “meritorious defense” claim and will reject those that lack specific, admissible facts — particularly where the defendant had multiple opportunities to respond and the record suggests deliberate avoidance of service. Attorneys advising clients who have been defaulted must move quickly and marshal concrete evidence, not general denials.
The case also clarifies the limited procedural foothold a defaulted party retains at the damages stage. Unless the defendant mounts a genuine challenge to the plaintiff’s damages calculation, a trial court is not obligated to hold an evidentiary hearing merely because the defendant continues to dispute underlying liability — a question already resolved by the default itself.