How a Father Who Never Signed a Contract Won $11,548 on a Three-Day Calendaring Error

In the Kalamazoo-based case of Joseph v Entertainment Managers LLC, a default judgment of $11,388 plus costs was entered against a local event management company and in favor of a plaintiff who, according to sworn testimony and business records, never signed the underlying contract and never made a single payment toward the event. The judgment rested on a default triggered by a three-day calendaring error—and it was granted without a hearing. When the case reached the Michigan Court of Appeals, the panel split 2-1, with the dissenting judge characterizing the defendant’s proposed defenses as “very strong, if not absolute.” The case now sits before the Michigan Supreme Court on an application for leave to appeal, raising fundamental questions about standing, due process, and the proper operation of Michigan’s default judgment framework.

The Parties and the Contract

The contract at the center of this dispute was executed between Hannah Joseph and J. David Combs III on one side and Entertainment Managers LLC on the other. The company operated The Entertainment District, a multi-venue event business in downtown Kalamazoo that Ryan Reedy managed for over a decade. The agreement governed the provision of wedding event services.

Critically, James Joseph—the plaintiff who ultimately obtained the default judgment—was not a signatory to the contract. His name does not appear on the agreement. Nor, according to company records, did he make any of the payments required under it. All payments were submitted by Deborah Joseph, identified in event records as the mother of the bride, under contract terms that specified payments were “transferable, but non-refundable.”

This distinction—between the person who signed and paid under the contract and the person who filed the lawsuit and obtained the judgment—is not a technicality. It goes to the foundational question of standing: whether James Joseph had a legally cognizable right to bring suit under a contract to which he was not a party and for which he had not provided consideration.

In a sworn affidavit submitted by Ryan Reedy as part of the motion to set aside the default, the company stated unequivocally: “Defendants do not have any records showing any payments submitted by or in the name of Plaintiff James Joseph to Defendant at any time.” This assertion was not rebutted by any evidence in the record.

The Three-Day Error

The default judgment originated from a narrow calendaring miscalculation. The deadline for Entertainment Managers to file its answer was March 29. The default was entered on April 1. The company’s answer was filed on April 5 or April 8 (records reflect both dates), and the default was not served on the defendant until April 11—after the answer had already been filed.

The chronology is significant. Under Michigan court procedure, a party against whom a default has been entered may move to set it aside. The strength of the motion depends on a constellation of factors, including the length of the delay, the reason for the default, and the existence of a meritorious defense. In this case, the delay was measured in days, not weeks or months. The answer was filed before the defendant even received notice that a default had been entered. And the proposed defenses, as the dissenting judge later observed, were formidable.

Yet the default judgment proceeded. It was entered without a hearing—a point worth emphasizing. The trial court awarded $11,388 plus costs to a plaintiff who had not signed the contract and had not made any documented payment, based on a default that the defendant attempted to cure within days and before receiving service of the default itself.

The Trial Court: “A Stickler for Following the Court Rules”

When Entertainment Managers moved to set aside the default under MCR 2.603(D)(1), the district court judge declined. In doing so, the judge offered a notable self-characterization: “I’m kind of a stickler for following the Court Rules.”

The irony of this statement, as developed in the subsequent MSC application, is that the court never applied the governing Supreme Court precedent on default judgments. Under Alken-Ziegler, Inc v Waterbury Headers Corp, 461 Mich 219 (1999), a trial court evaluating a motion to set aside a default must employ a sliding scale: if the proposed defense is strong—particularly if it would be “absolute if proven”—a lesser showing of good cause for the default is required. The trial court in Joseph never mentioned Alken-Ziegler. It never engaged with the sliding-scale analysis. It treated the procedural default as effectively dispositive without weighing the substance of the proposed defenses.

Plaintiff’s counsel reinforced this approach, reportedly stating: “We don’t even need to get into the meritorious defense argument.” The court apparently agreed, declining to examine whether the defenses Entertainment Managers proposed—including the standing challenge and the nonrefundable contract terms—had merit sufficient to satisfy the Alken-Ziegler framework.

The Defenses the Court Never Examined

The defenses that Entertainment Managers sought to present, had the default been set aside, were substantial. They included at minimum the following:

Standing. James Joseph was not a party to the contract and made no payments. The contract was between Hannah Joseph, J. David Combs III, and Entertainment Managers LLC. Under basic contract law principles, a non-signatory who has not provided consideration generally lacks standing to enforce or recover under the agreement.

Nonrefundable Terms. The contract expressly provided that payments were “transferable, but non-refundable.” Even assuming James Joseph had standing to sue, the contractual terms appeared to foreclose the refund he sought. The lower court never addressed whether these terms were enforceable.

Performance and Good Faith. Entertainment Managers presented evidence that it had rescheduled the Joseph event twice, providing 100 percent credit at no additional cost. According to Ryan Reedy’s affidavit, the company committed staff and resources to the rescheduled dates and turned away other clients to accommodate the Josephs. These actions, if proven, would demonstrate substantial performance and good faith—relevant both as affirmative defenses and as factors weighing against equitable relief.

No Payment by Plaintiff. The unrebutted affidavit established that James Joseph made no payments to Entertainment Managers at any time. A refund claim by a party who never paid raises obvious logical and legal difficulties. One cannot be refunded what one never spent.

The Court of Appeals: A Split Decision

On appeal, the Court of Appeals affirmed the default judgment in a 2-1 decision. The majority found that the trial court had not abused its discretion in declining to set aside the default, and it upheld the judgment in favor of James Joseph.

The “Marital Funds” Exchange

The standing question produced a remarkable moment during oral argument. When the issue of James Joseph’s lack of payment was raised, a panel member introduced the concept of “marital funds”—the theory that because James Joseph was married to Deborah Joseph (who did make the payments), the funds could be attributed to him through the marital estate.

When asked whether this was an assumption, the panel member reportedly acknowledged: “Of course.” Despite this concession that the “marital funds” theory was an assumption rather than a finding supported by evidence, the majority adopted it as a basis for sustaining James Joseph’s standing. No evidence in the record established that the payments came from marital funds as opposed to Deborah Joseph’s separate assets. No testimony, documentary evidence, or stipulation addressed the source of the funds. The majority transformed a candid judicial assumption into an operative factual finding.

This approach stands in stark contrast to the framework applied in Stallworth v Entertainment Managers LLC, where a different panel of the same court unanimously reversed because the lower courts had “ma[de] factual determinations, weigh[ed] conflicting facts, and decide[d] the Stallworths’ claims on the merits by considering evidence attached to the pleadings.” The Joseph majority engaged in precisely the kind of untethered fact-finding that the Stallworth panel identified as reversible error.

Judge Garrett’s Dissent

Judge Garrett filed a dissent that went directly to the substance of the proposed defenses. After reviewing the record, including the contract, the payment history, and Ryan Reedy’s sworn affidavit, Judge Garrett concluded that the defenses were “very strong, if not absolute.”

The word “absolute” carries specific legal meaning in this context. Under the Alken-Ziegler sliding scale, a defense that would be “absolute if proven” requires only a minimal showing of good cause for the default. A three-day calendaring error, followed by the filing of an answer before service of the default, would appear to satisfy any reasonable definition of minimal good cause. Judge Garrett’s analysis thus implies that both elements of the Alken-Ziegler test were met: the defense was potentially absolute, and the good cause showing was more than sufficient for the reduced threshold.

The dissent effectively argued that the trial court applied the wrong legal framework. By refusing to weigh the strength of the defenses against the minimal delay, the court converted a procedural default into an irrevocable forfeiture of substantive rights—a result that Alken-Ziegler was specifically designed to prevent.

The Stallworth Shadow

The Joseph case cannot be properly understood without reference to Stallworth v Entertainment Managers LLC, decided by a unanimous Court of Appeals panel on August 29, 2024—approximately fifteen months before the Joseph decision. In Stallworth, the same defendant, proceeding through the same Kalamazoo district and circuit courts, obtained a complete reversal after the Michigan Supreme Court intervened via MCR 7.305(H)(1).

The Stallworth panel identified six categories of error, including the lower courts’ failure to consider the defendant’s responsive pleadings, premature factual findings, and misapplication of the summary disposition standard. The parallels to Joseph are extensive. In both cases, the defendant raised substantive defenses. In both cases, the Kalamazoo courts declined to engage with those defenses. In both cases, the defendant was denied a factual hearing on its substantive claims.

The critical difference is the outcome. The Stallworth panel reversed unanimously. The Joseph majority affirmed over a dissent. The same courts, the same defendant, the same type of dispute, and the same species of procedural error produced opposite results.

What Happens Next

Entertainment Managers has filed an application for leave to appeal to the Michigan Supreme Court, requesting the same MCR 7.305(H)(1) remedy that proved successful in Stallworth. The application argues that the Joseph majority departed from established precedent on the Alken-Ziegler sliding scale, the treatment of categorical denials, and the requirement of evidentiary support for factual findings. It further contends that the conflicting outcomes in Stallworth and Joseph create the kind of inter-panel inconsistency that the Supreme Court has a responsibility to resolve.

The Supreme Court’s response will be closely watched. A grant of leave or a peremptory reversal would signal that the principles articulated in Stallworth apply with equal force to default judgment proceedings. A denial would leave standing a judgment that a dissenting appellate judge found rested on defenses that were “very strong, if not absolute”—and that was obtained by a plaintiff who, on the uncontested record, never signed the contract and never paid.