Foreman v. Foreman

• Court: Court of Appeal of Michigan
• Writing for the Court: PER CURIAM.
• Citation: Foreman v. Foreman, 701 N.W.2d 167, 266 Mich. App. 132 (Mich. App. 2005)
• Decision Date: 03 May 2005
• Docket Number: Docket No. 250412.
• Parties: Renelle FOREMAN, Plaintiff-Appellee, v. Dennis Walter FOREMAN, Defendant-Appellant.

701 N.W.2d 167

266 Mich. App. 132

Renelle FOREMAN, Plaintiff-Appellee, v. Dennis Walter FOREMAN, Defendant-Appellant.

Docket No. 250412.

Court of Appeals of Michigan.

Submitted January 12, 2005, at Detroit.

Decided May 3, 2005, at 9:00 a.m.

Released for Publication July 5, 2005.

Bruce T. Leitman, Bloomfield Hills, for the plaintiff.

Meyer, Kirk, Snyder & Lynch, PLLC (by George E. Snyder and Patrick K. Rode), Bloomfield Hills, for the defendant.

Before: GAGE, P.J., and METER and FORT HOOD, JJ.

PER CURIAM.

Defendant appeals as of right a jury verdict awarding plaintiff $1,417,000. Plaintiff alleged that defendant committed fraud in connection with certain representations he made during discussions and mediation leading to the property settlement in the parties' underlying divorce action. Defendant asserts that the elements of fraud were not established, and that the trial court erred in submitting the case to the jury and allowing the verdict to stand. We affirm.

Based on a judgment entered in July 2000, plaintiff and defendant were divorced after nearly twenty-two years of marriage. As a result of mediation, the parties reached a property settlement in December 1999, which settlement was incorporated, but not merged, into this judgment. The primary marital assets were a Ford dealership owned and operated by defendant, the marital home, and a vacation home in northern Michigan referred to as the "Indian River" property. The property settlement was structured around defendant's expressed intention to keep, and not sell, his dealership, as well as on the $1.7 million value attributed to the dealership by the mediator. Very shortly after the property settlement was reached, plaintiff learned from her son that defendant was going to "sell the dealership and move to the islands." She then filed a motion challenging the agreement. At the hearing on that motion, defendant testified that the dealership was worth no more than $1.1 million and that he intended to continue operating it until he retired, which was at least eleven years. The court denied plaintiff's motion and ordered the parties to enter into the settlement agreement. Defendant undertook efforts to sell his dealership in August 2000, reaching agreement to sell it in the fall of 2000 for $6.6 million.

The Indian River property had been appraised in the early spring of 1999 for $1.25 million. After defendant represented through his lawyer that he wanted to keep this property for himself, that he loved every "nook and cranny" of the house, and that he could not bear to part with it, plaintiff agreed to let defendant buy out her share of the property. Defendant did so in October 2000, listed the property for sale within a matter of weeks, and sold it in June 2001 for $1.775 million, including contents.

Plaintiff filed this action on December 7, 2002, alleging that defendant fraudulently induced her to enter into the property settlement and the amendment relating to the buyout of the Indian River property. Although plaintiff learned through a friend that the dealership had changed ownership, she did not file this litigation at that time. Rather, plaintiff testified that defendant provided the impetus for this litigation by moving to reduce his spousal support obligation. She testified that that action caused the trial judge in the divorce case to permit discovery of the financial details of defendant's transactions involving marital property. The jury rendered a verdict in favor of plaintiff on her claim of fraud.

Defendant filed motions for summary disposition, directed verdict, and for judgment notwithstanding the verdict (JNOV), all of which were denied by the trial court. This Court reviews de novo the trial court's denial of each of these motions, viewing the record and evidence presented at trial in the light most favorable to plaintiff. Dressel v. Ameribank, 468 Mich. 557, 561, 664 N.W.2d 151 (2003); Wiley v. Henry Ford Cottage Hosp., 257 Mich.App. 488, 491, 668 N.W.2d 402 (2003). Summary disposition is suspect where motive and intent are at issue or where the credibility of a witness is crucial. Vanguard Ins. Co. v. Bolt, 204 Mich.App. 271, 276, 514 N.W.2d 525 (1994). Furthermore, where the truth of a material factual assertion of a moving party is contingent upon credibility, summary disposition should not be granted. Id.

When reviewing a trial court's decision on a motion for a directed verdict, "this Court recognizes the unique opportunity of the jury and the trial judge to observe witnesses and the fact-finder's responsibility to determine the credibility and weight of the testimony." Wiley, supra. Similarly, the trial court should grant a JNOV motion only if, reviewing the evidence and all legitimate inferences in favor of the nonmoving party, "the evidence fails to establish a claim as a matter of law." Id. at 492, 668 N.W.2d 402. When the evidence presented could lead reasonable jurors to disagree, the trial court may not substitute its judgment for that of the jury. Id. at 491, 668 N.W.2d 402.

Defendant also moved for a new trial below. This Court reviews the trial court's denial of that motion for an abuse of discretion. Kelly v. Builders Square, Inc., 465 Mich. 29, 34, 632 N.W.2d 912 (2001). "An abuse of discretion exists where an unprejudiced person, considering the facts on which the trial court made its decision, would conclude that there was no justification for the ruling made." Szymanski v. Brown, 221 Mich.App. 423, 431, 562 N.W.2d 212 (1997).

On appeal, defendant first argues that the trial court erred in denying his motions because Michigan law does not recognize an independent cause of action for fraud arising from the divorce proceedings. We disagree.

Michigan law recognizes an independent cause of action for fraud where the fraud induced entry into a settlement agreement that was incorporated, but not merged, into the final judgment of divorce. Grace v. Grace, 253 Mich.App. 357, 364-365, 655 N.W.2d 595 (2002). To avoid application of the Grace holding to this case, defendant alleges that the Grace decision is nonbinding obiter dictum. We disagree.

As in this case, Grace involved a claim by the plaintiff that the defendant had committed fraud in connection with their property settlement, which was incorporated, but not merged, into the final judgment of divorce. The plaintiff filed her complaint alleging fraud in the inducement of the separation agreement. Id. at 361, 655 N.W.2d 595. Relying on Nederlander v. Nederlander, 205 Mich.App. 123, 517 N.W.2d 768 (1994), the trial court granted the defendant's motion for summary disposition, determining that there was no recognized cause of action for damages arising from a fraudulently induced settlement agreement. This Court, in an unpublished order, entered June 14, 1996 (Docket No. 183202), vacated the trial court's order, concluding that Nederlander was distinguishable because the settlement agreement in Grace was incorporated, but not merged, into the judgment. Therefore, the settlement agreement was a contract enforceable by ordinary contract remedies; the fraud claim related to a contract, and not to the judgment into which it was incorporated but not merged. This Court remanded the matter to the trial court and, ultimately, the case proceeded to trial, with the jury finding in favor of the plaintiff. Grace, supra at 361-362, 655 N.W.2d 595. The defendant sought leave to appeal to this Court. In the order granting leave, this Court instructed the parties to brief the issue whether the action was barred under Nederlander. Grace, supra at 362, 655 N.W.2d 595. In its decision on that appeal, this Court explained:

We agree with plaintiff's contention that the law of the case doctrine applies and, consequently, we follow the prior panel's holding that plaintiff's fraud claim is not barred under Nederlander.

* * *

The law of the case doctrine is discretionary and expresses the practice of the courts generally; it is not a limit on their power. The doctrine will not be applied if the facts do not remain materially or substantially the same or if there has been a change in the law.

We conclude that the law of the case doctrine requires us to follow the ruling of the prior panel that Nederlander is distinguishable from the present action and that plaintiff could, therefore, maintain her fraud claim. The prior panel ruled on a legal issue and there has been no change in the law or a material change of the facts to dispense with the law of the case doctrine. Further, defendant availed himself of his right to appeal the prior panel's decision by seeking leave to appeal in the Supreme Court, and that application was denied. Even if we concluded that the prior panel's legal ruling was incorrect, the law of the case doctrine applies without regard to the correctness of the prior ruling. Accordingly, we hold that the law of the case doctrine applies here and we follow the prior panel's determination that plaintiff's fraud claim is not barred by Nederlander. [Id. at 362-364, 517 N.W.2d 768 (citations deleted).]

Because the parties in Grace were directed by the order granting leave to address whether the plaintiff's claim was precluded by Nederlander, "while acknowledging that the law of the case doctrine is discretionary and does not operate as a limitation on our power as an appellate court," the Grace Court proceeded to address the merits of the issue. The Court explained:

We agree with the prior panel's decision that the rule of Nederlander does not bar plaintiff's fraud claim. In Nederlander, this Court held that if a party suspects that the other party has committed fraud during a divorce proceeding, MCR 2.612(C)(1)(c) and (2) (relief from judgment or order) allows the party to seek redress within one year after the judgment is entered, but the party is not permitted to maintain a separate action for fraud. Nederlander, supra at 126-127, 517 N.W.2d 768.

The prior panel dis

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