Court holds that trial judge erred in entering judgment against party that could not pay sanction

North American Funding Group became involved in an investment dispute with Dumitru Sandulescu.  It sued.  Sandulescu's attorneys counter-sued for $850,000.00 and filed requests to admit certain facts.  The Plaintiff's lawyer wasn't signed up for the Oakland County Circuit Court's electronic filing system, so he did not get actual notice of the latter requests and did not respond within the deadline of 28 days.  The Judge then allowed him to file  late response, but only if he paid a sanction of $1,000.00.

The Plaintiff stated that he could not pay the sanction within 7 days and did not pay it; the Court then entered judgment against him in the amount of $850,000.00.  It also entered an order prohibiting him for transacting any business.  The Court of Appeals held that under these circumstances, the trial judge's order was far too harsh, particularly given there was no history of non-compliance with discovery; a genuine effort to comply had been demonstrated; and it appeared that the plaintiff was genuinely unable to comply.