This is a Genesee County/ Flint Family Law, post Divorce child support collection case. Terry Bankert is a Flint Divorce Lawyer here sharing a review of a case that raised important family law issues.
Issues:
Whether the trial court properly granted the defendants' motion for summary disposition; in a post divorce case. Res judicata; Adair v. Michigan;
Fraudulent transfer of assets affecting child support; Foodland Distrib. v. Al-Naimi; Coleman-Nichols v. Tixon Corp.; MCL 566.31(1)
See;Court: Michigan Court of Appeals (Unpublished),Case Name: (W) v. (W)
e-Journal Number: 43964, Judge(s): Per Curiam - Murray, Markey, and Borrello
UNPUBLISHED, 6, 2009, v No. 287513,Genesee Circuit Court, LC No. 06-084474-CZ.
[For the purpose of presentation this case has been modified. Do not rely on its contents without assistance of an attorney. trb]
EX HUSBAND WINS
Since all the issues which could have been litigated were decided by a family court hearing referee and if the fraudulent transfer of assets issue had been raised by defendant-EX HUSBAND (as it could have been) he would have been in privity with defendant-GIRL FRIEND and res judicata would have applied, the court held the trial court correctly held plaintiff presented no evidence of a fraudulent transfer and properly granted defendants' motion for summary disposition.
The PARTIES were married, had two children, and there was a divorce in 1991.
By 2006, the children had reached majority and THE EX HUSBAND owed over $70,000 in child support.
Under the divorce judgment, he was ordered to pay half of all uninsured medical, dental, optical, and pharmaceutical expenses.
In 2003, he met and became romantically involved with (T), who was also interested in THE SAME BUSINESS, she had a business background.
She opened a BUSINESS and THE EX HUSBAND agreed to teach there two days a week. Her business flourished, but his continued to struggle financially. (T) loaned him money for his business, but his vehicle was repossessed and he closed his business with many outstanding debts.
He worked at (T) studio as an independent contractor. She did not pay him much money, but bought a car he could use and paid for other "perks." In 2006, plaintiff began to pursue THE EX HUSBAND for reimbursement of child care medical expenses she had paid. In July 2006, the referee found THE EX HUSBAND owed some money, but only for bills incurred after January 2004.
The referee found making him pay older bills would be "inequitable due to the age of the bills and the prejudice to Defendant." The order was not appealed. Plaintiff then filed this case seeking unpaid child support, "delinquent medical expenses," and rescission of "fraudulent conveyance of business and personal assets."
The trial court granted defendants' motion for summary disposition holding the request for medical expenses was barred by res judicata because it was decided by the referee and not appealed, the fraudulent transfer claim relied on a repealed statute, plaintiff failed to present any documentary evidence establishing a genuine issue of material fact, and awarded defendants $5,800 in attorney fees.
The Michigan Court of Appeals agreed and upheld the lower court decision.
I. Facts and Proceedings1
The court thought the record was not properly brought before them.
Our recitation of the facts is based upon our independent review of the deposition and other evidence. Neither parties’ brief adequately cites to the record as required by MCR 6.212(C)(7).
OFTEN WE HEAR OF EX SPOUSES THAT TRANSER THEIR ASSETS SO PARTNER CANNOT GAIN ACCESS TO THEM FOR COLLLECTION OF CHILD SUPPORT.
The ex wife complains that her ex husband has his business in the name of his partner and is hiding assets.
VIOLATION OF MCL 55.19
To move assets for the purpose of evading child support obligations, is a violation of MCL 566.19.
SUMMARY DISPOSITION, EARLIER JUDGEMENT AND RES JUDICATA
Defendants moved for summary disposition, arguing that plaintiff was collaterally attacking the earlier judgment concerning the children’s medical expenses, and that the claim for medical expenses was barred by res judicata.
WRONG STATUTE PLED, AND NO PROOF OFFERED
As for the allegation of fraudulent transfer, defendants argued that even if the correct statute had been pleaded, plaintiff presented no evidence that any transfer ever took place between THE PARTNERS.
TRIAL COURT GRANTED SUMMARY DISPOSITION.
The trial court granted defendants’ motion for summary disposition, concluding that the
request for medical expenses was barred by res judicata because it had been previously decided and not appealed.
EX WIFE STATUTE RELIED UPON HAD BEEN REPEALED
As for the fraudulent transfer allegations, the trial court held that plaintiff
relied on a repealed statute and that plaintiff failed to present any documentary evidence
establishing a genuine issue of material fact.
NO GENUINE ISSUES OF MATERIAL FACT
The trial court also granted defendants’ motion for
attorney fees, awarding $5,800.
II. Analysis
HIGHER COURT REVIEW OF LOWER COURTS GRANTING OF SUMMARY DISPOSITION.
This Court reviews de novo a trial court’s decision to grant or deny a motion for
summary disposition. Spiek v Dep’t of Transportation, 456 Mich 331, 337; 572 NW2d 201 (1998).
THE EX WIFE COULD NOT MET THE REQUIREMENT TO BRING FORTH MORE INFORMATION
Although substantively admissible evidence submitted at the time of the motion must be
viewed in the light most favorable to the party opposing the motion, the non-moving party must come forward with at least some evidentiary proof, some statement of specific fact upon which to base his case. Maiden v Rozwood, 461 Mich 109, 120-121; 597 NW2d 817 (1999); Skinner v Square D Co, 445 Mich 153, 161; 516 NW2d 475 (1994).
RES JUDICATA
The doctrine of res judicata is employed to prevent multiple suits litigating the
same cause of action. The doctrine bars a second, subsequent action when (1) the
prior action was decided on the merits, (2) both actions involve the same parties
or their privies, and (3) the matter in the second case was, or could have been,
resolved in the first.
WHEN A CASE IS DECIDED UNLESS APPEALED YOU CANNOT REDO IT AND YOU HAVE TO RAISE ALL THE ISSUES AT ONCE, YOU CANNOT GO BACK.
This Court has taken a broad approach to the doctrine of res judicata, holding that it bars not only claims already litigated, but also every claim arising from the same transaction that the parties, exercising reasonable diligence, could have raised but did not.
LATCHES, WAITED TOO LONG
The hearing referee upheld the original provision that THE EX HUSBAND pay half of the medical expenses, excluding only those bills she determined were so old it would be inequitable to require him to pay at this point.
THE GIRLE FRIEND BUSINESS PARTNER HAD NO OBLIGATION TO HIS KIDS
She had no obligation to pay medical expenses incurred by plaintiff’s children. Thus, all the issues that could be litigated in this matter were decided by the hearing referee; adding a party to the claim seems to be merely an attempt to avoid res judicata.
NO IMPROPER TRANSFER WAS PROVEN
The trial court also correctly held that plaintiff presented no evidence establishing a
fraudulent transfer of assets.
CLEAR AND CONVINCING EVIDENCE NEEDED
This Fraud must be proven by clear and convincing evidence and must never be presumed, although it may be established by circumstantial evidence. Foodland Distributors v Al-Naimi, 220 Mich App 453, 457-458; 559 NW2d 379 (1996).
NO FRAUDULENT INTENT PROVEN
The plaintiff must show both a transfer of assets and a fraudulent intent.
Coleman-Nichols v Tixon Corp, 203 Mich App 645, 659; 513 NW2d 441 (1994). Under the UFTA, a “‘[t]ransfer’ means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease and creation of a lien or other encumbrance.” MCL 566.31(l).
TRANSFER OF NAME AND REPUTATION
The court found the partner may be using THE EX HUSBANDS name and reputation, but he cannot very well “transfer” it in the way of being able to walk away.
EX WIFE DID NOT PRESENT EVIDENCE OF FRAUDULENT INTENT
Even if he had allowed his name to be used the plaintiff has no evidence of fraudulent intent or that there were any improper transfers.
ATTORNEY FEES AWARDED WITH THE PLAINTIFF EX WIFE PAYING THE EX HUSBAND
Tax costs to defendant having prevailed in full. MCR 7.219 and awarded defendants $5,800 in attorney fees.
Posted here by
Terry Bankert
10/19/09
www.attorneybankert.com
Sunday, October 18, 2009
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