STATE OF MICHIGAN COURT OF APPEALS

Transcription

1 STATE OF MICHIGAN COURT OF APPEALS GWYN DAVIDSON, Plaintiff-Appellee, UNPUBLISHED July 30, 2002 v No Wayne Circuit Court DENNIS BELLEHUMEUR, LC No CZ and Defendant-Appellant, GARY SHULTE, PERSONAL THERAPISTS, INC., STAFFCO SERVICES, INC., and MEDI STAFF, INC., Defendants. Before: Whitbeck, C.J., and O Connell and Meter, JJ. PER CURIAM. Defendant Dennis Bellehumeur ( defendant ) appeals by leave granted 1 from an order denying his motion to set aside a default judgment. We affirm. Plaintiff sued defendants for failing to pay her for unused sick and vacation time after allegedly assuring her that she would be paid for this time. Plaintiff s claims against Staffco Services, Inc., and Medi Staff, Inc., were dismissed by stipulation. Plaintiff and the remaining defendants then executed a settlement agreement in which plaintiff agreed to dismiss her claims against them in exchange for $7,500, paid in four monthly payments of $1,875. The trial court subsequently entered a stipulated order dismissing plaintiff s claims with prejudice. However, plaintiff failed to receive the third and fourth monthly payments under the settlement agreement, so she filed a motion to set aside the order of dismissal under MCR 2.612, the rule governing relief from judgment. The trial court granted plaintiff s motion. 1 Although defendant filed a claim of appeal, this Court treated defendant s claim of appeal as an application for leave to appeal and granted the application. Davidson v Bellehumeur, unpublished order of the Court of Appeals, entered December 21, 2001 (Docket No ). -1-

2 When defendant failed to respond to interrogatories and other requests for information and did not sign for mail sent by plaintiff, plaintiff filed a motion for default against him. 2 The trial court granted plaintiff s motion for default and set a date for a hearing on plaintiff s motion for default judgment. It appears from the record that defendant then filed a motion for a protective order or a continuance, arguing that he had only learned of the default and impending default judgment approximately one week before the scheduled hearing. Defendant contended that he was unaware of any legal proceedings that occurred after the case was dismissed with prejudice under the settlement agreement. Nonetheless, the trial court entered a default judgment against defendant for $33,000. Defendant then moved for relief from judgment under MCR 2.612, arguing that the trial court should not have set aside the order of dismissal and reopened the case on the basis of defendant s failure to proffer the required consideration. Without articulating its reasoning, the trial court denied defendant s motion. Defendant argues on appeal that the trial court should not have reinstated plaintiff s claims because the settlement agreement and the dismissal with prejudice were final and binding. Defendant contends that plaintiff s only remedy was to sue for breach of the settlement agreement. He contends that the court had no basis under MCR 2.612, the relief-from-judgment court rule, to reinstate the case. We review a trial court s ruling on a motion for relief from judgment for an abuse of discretion. Heugel v Heugel, 237 Mich App 471, 478; 603 NW2d 121 (1999). We first note that defendant s appellate brief lacks a meaningful discussion of Michigan law with regard to this issue. As noted in Palo Group Foster Care, Inc v Dep t of Social Services, 228 Mich App 140, 152; 577 NW2d 200 (1998), quoting Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959): It is not enough for an appellant in his brief simply to announce a position or assert an error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and elaborate for him his arguments, and then search for authority either to sustain or reject his position. An issue that has been given cursory treatment with little or no citation to relevant supporting authority is not properly presented for review. Silver Creek Twp v Corso, 246 Mich App 94, 99; 631 NW2d 346 (2001). Because defendant has not properly presented this issue for appeal, he has essentially waived it. In any event, we find no merit to defendant s argument. MCR 2.612(C) states, in part: (1) On motion and on just terms, the court may relieve a party or the legal representative of a party from a final judgment, order, or proceeding on the following grounds: (a) Mistake, inadvertence, surprise, or excusable neglect. 2 Plaintiff did not move for default against the two remaining defendants. -2-

3 (b) Newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under MCR 2.611(B). (c) Fraud (intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party. (d) The judgment is void. (e) The judgment has been satisfied, released, or discharged; a prior judgment on which it is based has been reversed or otherwise vacated; or it is no longer equitable that the judgment should have prospective application. (f) Any other reason justifying relief from the operation of the judgment. In Heugel, supra at , this Court noted that for relief to be granted under MCR 2.612(C)(1)(f), the following three requirements must be met: (1) the reason for setting aside the judgment must not fall under subsections a through e, [3] (2) the substantial rights of the opposing party must not be detrimentally affected if the judgment is set aside, and (3) extraordinary circumstances must exist that mandate setting aside the judgment in order to achieve justice. Moreover, relief is usually granted under subsection f only if the judgment was obtained by the improper conduct of the party in whose favor it was rendered. Heugel, supra at 479. We conclude that there were extraordinary circumstances here. Indeed, by failing to honor the settlement agreement defendant vitiated the reason for the lawsuit s dismissal, and it would be a waste of judicial resources to require plaintiff to file a new action for breach of contract in order to recoup her damages. Moreover, although the judgment of dismissal was not initially obtained by defendant s improper conduct, it was defendant s subsequent improper conduct in failing to pay the settlement amount that caused the dismissal to be unfair to plaintiff. Under these circumstances, we cannot say that the trial court overstepped the stringent abuse of discretion standard by reinstating plaintiff s claims. See Alken-Ziegler, Inc v Waterbury Headers Corp, 461 Mich 219, ; 600 NW2d 638 (1999) (setting forth the abuse of discretion standard and noting its stringent nature). Defendant also contends that the trial court erroneously awarded damages of $33,000 when the unsatisfied settlement amount was only $3,750. Plaintiff contends that the amount was based on her expenses and fees to have the dismissal set aside and the risk that all litigation brings once suit was reinstated. Defendant does not cite any relevant law in support of his argument and has therefore waived it. See Silver Creek Twp, supra at 99, and Palo Group, supra at 152. Moreover, defendant has failed to provide us with the transcript of the relevant hearing with regard to damages. See MCR 7.210(B)(1)(a) (appellant responsible for providing 3 However, the Heugel panel went on to conclude that relief under subsection f is appropriate even where one or more of the bases for setting aside a judgment under subsections a through e are present, when additional factors exist that persuade the court that injustice will result if the judgment is allowed to stand. Heugel, supra at

4 transcripts) and MCR 7.212(C)(7) (appellant must make specific references to filed transcripts in making his arguments). Given the lack of evidence that the trial court acted impermissibly in awarding the damages, we discern no basis for appellate relief. Next, defendant argues that the trial court erred by failing to set aside the default judgment because plaintiff did not notify him that a default had been entered or that she was seeking a default judgment until approximately one week before the hearing on plaintiff s motion for a default judgment. Although defendant refers to the default and default judgment court rule, MCR 2.603, in making this argument on appeal, below he referred to only MCR We therefore address this issue as a denial of relief from judgment. Under MCR 2.612(B), a trial court may grant relief from a judgment if the defendant did not have notice of the pendency of the action. Defendant contends that he in fact did not have such notice. However, plaintiff filed two letters, purportedly sent to defendant s home address in Florida and his work address at Personal Therapists, Inc., in Livonia, Michigan, informing him that a default had been entered against him. Defendant never alleged below and does not allege on appeal that the Florida address used by plaintiff was incorrect. Moreover, plaintiff filed a notice of hearing on June 11, 1999, indicating that she mailed defendant a notice of the June 25, 1999, default judgment hearing to defendant s address in Florida and to Personal Therapists, Inc., in Livonia. Plaintiff also filed a proof of service stating that she mailed her motion for default judgment to defendant in Florida and to Personal Therapists, Inc, in Livonia on May 21, Under these circumstances, the trial court did not abuse its discretion in rejecting defendant s argument regarding a lack of notice. Moreover, in National Car Rental v S & D Leasing, Inc, 89 Mich App 364, 368; 280 NW2d 529 (1979), this Court explained that relief under former GCR 1963, (substantially similar to current MCR 2.612[B]), was warranted only if the defendant did not have actual notice of the proceedings. Here, defendant admits that he had actual notice of the impending default judgment approximately one week before the default judgment was entered. Because defendant had actual notice of the pendency of the default judgment hearing, no error under MCR 2.612(B) occurred. Even if we were to address this issue with reference to MCR 2.603, despite defendant s failure to cite this court rule below, we would find no basis for appellate relief. Indeed, plaintiff substantially complied with the notice requirements of MCR 2.603(A)(2) and (B)(1). Again, defendant did not and does not allege that the Florida address to which plaintiff addressed the relevant notices was incorrect. A trial court does not abuse its discretion in concluding that there is not good cause to set aside a default judgment if the defaulting party alleges that it did not receive multiple notices of proceedings sent to the correct address. See Zaiter v Riverfront Complex, Ltd, 463 Mich 544, ; 620 NW2d 646 (2001). Moreover, this Court has considered a defendant s failure to assert that a notice was sent to the wrong address in determining whether he was on notice of the proceedings. See Dittenber v Rettelle, 162 Mich 4 It is unclear why, in the trial court, defendant did not seek to set aside the default judgment under MCR 2.603(D). -4-

5 App 430, 436; 413 NW2d 70 (1987). No error under MCR occurred, and no manifest injustice resulted from the trial court s refusal to vacate the judgment. 5 Finally, defendant argues that the trial court erred by granting a default judgment against defendant individually because he, as an officer of a corporation, was not personally liable for the damages claimed by plaintiff. However, defendant cites no Michigan law in support of his argument and has therefore waived it. See Silver Creek Twp, supra at 99, and Palo Group, supra at 152. Nonetheless, we discern no basis for relief. Indeed, plaintiff made allegations of fraud against defendant individually, and defendant signed the settlement agreement in his individual capacity. Under these circumstances, no error occurred. Affirmed. /s/ William C. Whitbeck /s/ Patrick M. Meter 5 We note that plaintiff s failure to file a proof of service regarding the notice of entry of default, while being a violation of MCR 2.603(A)(2)(b), was not, in our opinion, a substantial defect or irregularity in the proceedings warranting the setting aside of the default judgment. -5-

6 STATE OF MICHIGAN COURT OF APPEALS GWYN DAVIDSON, Plaintiff-Appellee, UNPUBLISHED July 30, 2002 v No Wayne Circuit Court DENNIS BELLEHUMEUR, LC No CZ and Defendant-Appellant, GARY SHULTE, PERSONAL THERAPISTS, INC., STAFFCO SERVICES, INC., and MEDI STAFF, INC., Defendants. Before: Whitbeck, C.J., and O Connell and Meter, JJ. O CONNELL, J. (dissenting). I respectfully dissent. Plaintiff and defendant entered into a settlement agreement where plaintiff agreed to dismiss her claims against defendant. As a result, the trial court entered a stipulated order of dismissal with prejudice. In my opinion, the trial court abused its discretion when it decided to set aside the order of dismissal. An agreement to settle a pending lawsuit is a contract. The present record is devoid of any extraordinary circumstances that would allow the trial court to set aside the settlement agreement. The plaintiff and defendant should be required to adhere to the terms and conditions of their settlement agreement. Plaintiff filed suit against defendants in December 1995 in Wayne Circuit Court alleging that defendants breached their contract with plaintiff promising to pay her for unused sick and vacation days. Plaintiff s claims against Staffco Services, Inc., and Medi Staff, Inc., were dismissed without prejudice in an order entered by the trial court on September 17, 1996 with the parties stipulation. Plaintiff and the remaining defendants then entered into a settlement agreement where plaintiff agreed to dismiss her claims against defendants in consideration for $7,500, paid in four monthly payments of $1,875. As a result, the trial court entered a stipulated order dismissing, with prejudice, plaintiff s claims against the remaining defendants. However, when defendant failed to make a payment pursuant to the settlement agreement, plaintiff moved -1-

7 to set aside the order of dismissal in May For reasons unclear from the record, the trial court did not address the motion. When defendant failed to make the third and fourth payments under the settlement agreement, plaintiff filed a motion to set aside the order of dismissal in November 1997 on the basis of MCR Following a hearing the trial court granted plaintiff s motion without explanation. 1 On December 22, 1998, after defendant failed to respond to interrogatories and other requests for information, plaintiff filed a motion for default. The trial court granted plaintiff s motion for default in an order entered January 8, 1999, and scheduled a hearing on plaintiff s motion for default judgment. It appears from the record that before the hearing, defendant filed a motion for protective order or continuance, arguing that he had only learned of the default and impending default judgment approximately one week before the hearing on the default judgment. Defendant further contended that he was unaware of any legal proceedings that had occurred after the case was initially dismissed with prejudice pursuant to the settlement agreement. Nonetheless, on July 9, 1999, the trial court entered a default judgment against defendant in the amount of $33, Defendant moved for relief from judgment pursuant to MCR on July 26, During the hearing on the motion, defense counsel questioned the trial court s decision to set aside the order of dismissal and reopen the case on the basis of defendant s failure to proffer the required consideration. Without articulating its reasoning, the trial court subsequently denied defendant s motion in an order entered August 20, On appeal, defendant argues that the trial court abused its discretion in denying his motion for relief from judgment. [A]lthough the law favors the determination of claims on the merits, it also has been said that the policy of this state is generally against setting aside defaults and default judgments that have been properly entered. Alken-Ziegler, Inc v Waterbury Headers Corp, 461 Mich 219, 229; 600 NW2d 638 (1999) (footnote and citations omitted). In the instant case, defendant framed his motion in a manner that implicated only MCR 2.612, the court rule governing relief from judgment. 4 We review for an abuse of discretion a trial court s ruling on a motion for relief from judgment. Heugel v Heugel, 237 Mich App 471, 478; 603 NW2d 121 (1999). The court rule at issue in the present case, MCR 2.612(C)(1), provides in pertinent part: On motion and on just terms, the court may relieve a party or the legal representative of a party from a final judgment, order, or proceeding on the following grounds: 1 The initial order setting aside the dismissal was entered December 12, The trial court later entered another order setting aside the dismissal on July 9, The July 9, 1999, order also denied defendant s motion to appear pro hac vice, for a protective order, and for a continuance of the June 25, 1999, hearing. 3 For reasons unclear from the record, the trial court also entered an order denying defendant s motion to set aside the default judgment on September 21, It is unclear why defendant did not seek to set aside the default judgment on the basis of MCR 2.603(D). -2-

8 (a) Mistake, inadvertence, surprise, or excusable neglect. (b) Newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under MCR 2.611(B). (c) Fraud (intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party. (d) The judgment is void. (e) The judgment has been satisfied, released, or discharged; a prior judgment on which it is based has been reversed or otherwise vacated; or it is no longer equitable that the judgment should have prospective application. (f) Any other reason justifying relief from the operation of the judgment. In his brief on appeal, defendant maintains that the trial court improperly refused to grant relief from the default judgment. Specifically, defendant argues that he was entitled to such relief given that the default judgment followed from the trial court s erroneous decision to set aside the voluntary order of dismissal with prejudice. In this vein, defendant contends that after the order of dismissal was entered, plaintiff should have pursued other procedural remedies to enforce the terms of the settlement agreement rather than seeking to have the order of dismissal set aside. I agree. As noted above, the trial court entered the stipulated order of dismissal with prejudice on January 2, In her May 13, 1997, motion to set aside the order of dismissal, plaintiff solely argued that the court should set aside the order of dismissal to allow [plaintiff] to collect[ ] [the]... settlement amount reflected in the parties agreement. Plaintiff also argued that her motion was supported by MCR 2.612, but did not specify under what subsection of the rule she relied. Plaintiff later moved again to set aside the order of dismissal on November 20, 1997, advancing the same grounds for the motion. During the December 12, 1997, hearing on the motion, plaintiff s attorney advised the court that defendant had not tendered the consideration supporting the contract, and that plaintiff was seeking to set aside the order of dismissal on that basis. Although the trial court granted plaintiff s motion for relief from judgment, it did not specify what subsection guided its judgment. However, in her brief on appeal, plaintiff asserts that the trial court s judgment was supported by MCR 2.612(C)(1)(f), which provides that relief from judgment may be granted for [a]ny other reason justifying relief from the operation of the judgment. Specifically, plaintiff maintains that the trial court s initial decision to reopen the litigation was proper to ensure that justice [was] served. I disagree with plaintiff that the trial court correctly decided to set aside the order of dismissal and reopen the litigation where the consideration supporting the settlement agreement was not paid in full. [A]n agreement to settle a pending lawsuit is a contract and is to be governed by the legal principles applicable to the construction and interpretation of contracts. Michigan Mutual Ins Co v Indiana Ins Co, 247 Mich App 480, 484; 637 NW2d 232 (2001). Michigan law favors settlements and a party who proffers adequate consideration to support a settlement agreement is entitled to rely on its terms. Stefanac v Cranbrook Educational Community (After Remand), 435 Mich 155, 163; 458 NW2d 56 (1990); see also Faith Reformed -3-

9 Church of Traverse City, Michigan v Thompson, 248 Mich App 487, 497; 639 NW2d 831 (2001). As plaintiff recognizes in her brief on appeal, an essential element of a contract is legal consideration. Yerkovich v AAA, 461 Mich 732, 740; 610 NW2d 542 (2000); see also Thomas v Leja, 187 Mich App 418, 422; 468 NW2d 58 (1991) ( It is a fundamental principle of contract law that a [contractual] promise... is not binding if made without adequate consideration. ). However, even if the contract between the parties to settle the pending lawsuit was rendered unenforceable by defendants failure to tender the requisite consideration, 5 I am not persuaded that plaintiff s proper recourse was relief from judgment under MCR 2.612(C)(1)(f). As this Court recognized in Heugel, supra at , for relief to be granted under MCR 2.612(C)(1)(f), the following three requirements must be met: (1) the reason for setting aside the judgment must not fall under subsections a through e, 6 (2) the substantial rights of the opposing party must not be detrimentally affected if the judgment is set aside, and (3) extraordinary circumstances must exist that mandate setting aside the judgment in order to achieve justice. Further, relief is usually granted under subsection f only where the judgment was obtained as a result of the improper conduct of the party in whose favor it was rendered. Heugel, supra at 479. Likewise, subsection f was not drafted with the intention that it would relieve a party of the necessity for protecting his interest by normally prescribed procedures. Stallworth v Hazel, 167 Mich App 345, 356; 421 NW2d 685 (1988), quoting Kaleal v Kaleal, 73 Mich App 181, 189; 250 NW2d 799 (1977). Under the circumstances of this case, I am of the view that the trial court abused its discretion in setting aside the order of dismissal on the basis of MCR 2.612, given that the record is devoid of extraordinary circumstances warranting the trial court s action, Limbach v Oakland Co Bd of Co Rd Comm rs, 226 Mich App 389, 393; 573 NW2d 336 (1997); Tomblinson v Tomblinson, 183 Mich App 589, 595; 455 NW2d 346 (1990), or evidence of improper conduct on the part of defendant that resulted in obtaining the initial judgment of dismissal. Heugel, supra; Kaleal, supra. Indeed, the parties do not dispute that the order of dismissal was the result of a settlement agreement reached through a fair and equitable bargaining process. 7 Further, although plaintiff intimates in her brief on appeal that the settlement that formed the basis for the order of dismissal was derived from defendant s fraudulent conduct, there is no record support for her otherwise unsubstantiated claim. 8 As this Court concluded in Marshall v Marshall, A contract is rendered void by lack of consideration. See, e.g., Yerkovich, supra at 741; Reed v Citizens Ins Co of America, 198 Mich App 443, 449; 499 NW2d 22 (1993). 6 However, in Heugel, supra at 481, this Court concluded that relief under subsection f is appropriate even where one or more of the bases for setting aside a judgment under subsections a through e are present, when additional factors exist that persuade the court that injustice will result if the judgment is allowed to stand. 7 Notably, the settlement agreement does not contain a provision providing for the reopening of the litigation in the event consideration was not tendered. 8 The present case is therefore distinguishable from our Court s decision in Coates v Drake, 131 Mich App 687; 346 NW2d 858 (1984), where extraordinary circumstances were found to exist where the plaintiffs attorney negotiated and accepted a settlement on their behalf without their consent or knowledge, and further stipulated to an order of dismissal regarding the plaintiffs claims. -4-

10 Mich App 702, 712; 355 NW2d 661 (1984), in considering the predecessor to subsection f, a contract bargained for by two equally positioned parties is well outside the reach of this provision of the court rule. Further, where the moving party does not allege improper conduct by the nonmoving party in obtaining the judgment, relief is inappropriate under subsection f. Id. The thrust of [MCR 2.612(C)(1)(f)] is clearly to free courts from the fetters of a set of specifically delineated bases for relieving from default whenever manifest injustice or an unconscionable result flows from the [judgment]. McDonough v General Motors Corp, 6 Mich App 239, 246; 148 NW2d 911 (1967) (emphasis supplied).] I am not persuaded that plaintiff demonstrated manifest injustice or an unconscionable result to the extent that the trial court was warranted in granting relief from judgment and reopening the litigation once the voluntary order of dismissal was entered. Therefore, I agree with defendant that because the trial court s July 9, 1999, default judgment necessarily followed its earlier decision to set aside the voluntary order of dismissal with prejudice, the order should be reversed. 9 I would reverse and remand for proceedings consistent with this opinion. /s/ Peter D. O Connell 9 Given the resolution of this issue, I need not address defendant s alternate arguments on appeal. -5-