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Court overturns hand amputation judgment against Corporation because CEO's participation in lawsuit didn't constitute an "appearance" by the corporation

Eric Alcorn sued several corporations after a machine malfunctioned and mangled his hand.   The Defendants pointed a finger at other companies, including a Taiwanese manufacturing company, Tien Chi Yu Machinery Manufacturing Company, Ltd.  The CEO of TCY appeared in the lawsuit, and filed an Answer to the Complaint, blaming one of the original defendants, and arguing that he was victimized by a former manager who "illegally take away design charts" of TCY.  He acknowledged that his company probably made the machine, but suggested he could not be certain.  The Plaintiff sought to strike the answer because it did not come from an attorney, but TCY objected, arguing that under Taiwanese law the CEO could file TCY's answer.  The Plaintiff's motion to dismiss was denied. 

The action continued for several months with the Chairman, Hsiao, filing discovery responses but not attending court dates.  He didn't hire a licensed Michigan attorney.  After several issues of non-compliance with the Court's Scheduling Order, his company was defaulted and a judgment of $1.5 million dollars was entered against it.  After hiring lawyers, TCY moved to set aside the default, now arguing that the Court lacked jurisdiction over TCY and that the CEO's appearance and participation in the case did not constitute a waiver of jurisdictional objections.  The trial judge rejected this argument and maintained the default.  TCY then appealed to the Court of Appeals, which last month overturned the default.

The Court held that since TCY is a corporation, the CEO's appearance was inappropriate and should have been "struck."  Therefore, it did not constitute a waiver of any issue or consent to jurisdiction.   The judges then held that it was an abuse of discretion for the trial judge to fail to set aside the default, and returned the case to the lower court to start over--with lawyers representing the Taiwanese Corporation.

So, it turns out that Corporations aren't just people, they are more than people:  if you operate in corporate form, you can "have your cake and eat it, too."  Try things on the cheap, and if they don't work, go back and start all over.

Thompson O’Neil, P.C.
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