Foster v. Foster

• Decision Date: 18 May 2023
• Docket Number: 355654
• Parties: DEBORAH LYNN FOSTER, Plaintiff/Counterdefendant-Appellant/Cross-Appellee, v. RAY JAMES FOSTER, Defendant/Counterplaintiff-Appellee/Cross-Appellant.
• Court: Court of Appeal of Michigan — District of US

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DEBORAH LYNN FOSTER, Plaintiff/Counterdefendant-Appellant/Cross-Appellee, v. RAY JAMES FOSTER, Defendant/Counterplaintiff-Appellee/Cross-Appellant.

No. 355654

Court of Appeals of Michigan

May 18, 2023

UNPUBLISHED

Dickinson Circuit Court Family Division LC No. 07-015064-DM

Before: LETICA, P.J., and BORRELLO and RIORDAN, JJ.

PER CURIAM

In this divorce case, defendant, Ray James Foster, cross-appeals by right^[1] the trial court's order denying an award of attorney fees and costs from plaintiff, Deborah Lynn Foster. We affirm.

I. BACKGROUND

The dispute between the parties spans more than a decade and has been before both this Court and our Supreme Court on many occasions to address the division of military benefits as set forth in the parties' 2008 consent judgment of divorce. The underlying facts and procedural history, which are not in dispute for purposes of this appeal, have already been set forth by prior opinions of this Court and by our Supreme Court:

The parties' consent judgment of divorce was entered in December 2008. At the time of the divorce, defendant was receiving both military retirement pay and military disability benefits for injuries he sustained during the Iraq War. Pursuant to their property settlement, plaintiff was awarded 50% of defendant's retirement pay, also known as "disposable military retired pay." She was not awarded any of defendant's military disability benefits. To protect plaintiff in the event that defendant became entitled to (and accepted) more disability benefits than he currently received, consequently diminishing the retirement benefits that were divided and awarded to plaintiff, the parties agreed to include a provision in the consent judgment of divorce that has become known as the "offset provision." In the offset provision, if defendant elected to receive an increase in disability pay, he agreed to pay plaintiff an amount equal to what she would have received had defendant not elected to do so. [Foster v Foster, 509 Mich. 109, 115; 983 N.W.2d 373 (2022), amended 509 Mich. 988 (2022) (Foster III).]

This "offset provision" has been the centerpiece of the dispute between the parties. The parties disputed whether federal law preempted the offset provision and voided the consent judgment of divorce. Plaintiff brought her petition in 2010

seeking to hold defendant in contempt for failing to comply with the consent judgment. A few months later, defendant argued, for the first time, that under federal law, [Combat-Related Special Compensation (CRSC)] benefits are not subject to division in a divorce action. In an opinion and order dated October 8, 2010, the trial court denied plaintiff's request to hold defendant in contempt but ordered defendant to comply with the provisions of the judgment. The trial court acknowledged that it did not have the power to divide military disability pay but noted that the parties here had agreed upon the division and neither party had moved to set aside the judgment on the ground of mutual mistake. The trial court warned that if defendant failed to comply with the order that he would be held in contempt.

On March 25, 2011, plaintiff filed a petition to hold defendant in contempt, alleging that he had not made any payments as ordered. Although he did not appear at the hearing, defendant filed a response, arguing that he was not in contempt and, for the first time, arguing that the issue was within the jurisdiction of the federal courts. On May 10, 2011, the trial court entered an order holding defendant in contempt, granting a money judgment to plaintiff, and issuing a bench warrant for defendant's arrest because he did not appear at the hearing.

At a show-cause hearing on June 27, 2014, defendant, relying on 10 USC 1408 and 38 USC 5301, argued that he could not assign his disability benefits and that the trial court had erred by not complying with federal law. The trial court observed, "[W]e have litigated this issue and re-litigated this issue and it has not been properly appealed." The trial court ordered plaintiff to pay the arrearage.

On September 22, 2014, the trial court entered an order holding defendant in contempt and ordering him to pay the arrearage and attorney fees. Defendant appealed that order in the Court of Appeals. [Foster III, 509 Mich. at 116-118 (alteration in original).]

We initially affirmed the trial court's order, Foster v Foster, unpublished per curiam opinion of the Court of Appeals, issued October 13, 2016 (Docket No. 324853), but our Supreme Court reversed and remanded for reconsideration in light of Howell v Howell, 581 U.S. 214; 137 S.Ct. 1400; 197 L.Ed.2d 781 (2017). Foster v Foster, 501 Mich. 917; 903 N.W.2d 189 (2017) (Foster I).

We again affirmed, Foster v Foster (On Remand), unpublished per curiam opinion of the Court of Appeals, issued March 22, 2018 (Docket No. 324853), and defendant sought review from our Supreme Court a second time. Our Supreme Court held "that federal law preempts state law such that the consent judgment is unenforceable to the extent that it required defendant to reimburse plaintiff for the reduction in the amount payable to her due to his election to receive CRSC." Foster v Foster, 505 Mich. 151, 156; 949 N.W.2d 102 (2020) (Foster II). The Foster II Court remanded for us to "address the effect of our holdings on defendant's ability to challenge the terms of the consent judgment." Id.

On remand a second time, we "reverse[d] the trial court's order requiring defendant, under the offset provision in the consent judgment, to make payments to plaintiff to cover the reduction in his retirement pay." Foster v Foster (On Second Remand), unpublished per curiam opinion of the Court of Appeals, issued June 30, 2020 (Docket No. 324853), p 1. Additionally, regarding the subject-matter jurisdiction question, we held that "defendant did not engage in an improper collateral attack on the consent judgment and the trial court lacked subject-matter jurisdiction to enforce the consent judgment with respect to the offset provision due to the principle of federal preemption." Id. at 2. Our Supreme Court again reversed, holding "that federal preemption under 10 USC 1408 and 38 USC 5301 does not deprive our state courts of subject-matter jurisdiction over a divorce action involving the division of marital property." Foster III, 509 Mich. at 130. As a result, although "the offset provision in the parties' consent judgment of divorce was 'a mistake in the exercise of undoubted jurisdiction,' that judgment is not subject to collateral attack." Id. (citation omitted).

When plaintiff's application for leave to appeal our June 30, 2020 decision was still pending before our Supreme Court, defendant brought in the trial court a motion for restitution and for attorney fees and costs. Defendant argued that, under Foster II, the consent judgment of divorce had illegally required him to pay his CRSC pay to plaintiff in violation of federal law. He sought more than $74,000 in restitution and interest for the payments made to plaintiff between June 2014 and May 2020. Defendant further argued that attorney fees and costs were proper because of the extensive litigation in this case. Defendant set forth documentation, which plaintiff did not dispute, showing that he had incurred $4,038.06 in court costs and $145,650 in attorney fees.

The trial court, relying on Foster II and Howell, granted defendant $72,000 in restitution but denied his request for attorney fees and costs. The trial court found

that the Defendant's attachments are supportive of the amount he has expended pursuing his appeals. The Court does not believe that the amounts have been embellished or exaggerated or that the attorney fees are in any way unreasonable. The Court acknowledges it has absolutely no idea how much the plaintiff has expended in this legal nightmare.

However, the trial court denied defendant's request for attorney fees and costs because "[c]osts and attorney fees are different and this Court is of the opinion there is no wrong doing by the Plaintiff to suggest that equity requires her to pay [Defendant's] attorney fees in this action in addition to her own."

Plaintiff filed her appeal in this Court challenging the trial court's award of restitution. We held our decision in abeyance pending our Supreme Court's decision in Foster III. See Foster v Foster, unpublished order of the Court of Appeals, entered February 10, 2021 (Docket No. 355654). Our Supreme Court rendered its decision on April 5, 2022. See Foster III, 509 Mich. 109. Plaintiff filed a motion for peremptory reversal, which we denied. Foster v Foster, unpublished order of the Court of Appeals, entered May 23, 2022 (Docket No. 355654). After failing to submit a brief, plaintiff's appeal was involuntarily dismissed, Foster v Foster, unpublished order of the Court of Appeals, entered June 29, 2022 (Docket No. 355654), which leaves pending only defendant's cross-appeal for attorney fees and costs.

II. STANDARD OF REVIEW

In a divorce action, this Court reviews for an abuse of discretion an award of attorney fees. Reed v Reed, 265 Mich.App. 131, 164; 693 N.W.2d 825 (2005). The trial court abuses its discretion when its "decision falls outside the range of reasonable and principled outcomes." Woodington v Shokoohi, 288 Mich.App. 352, 355; 792 N.W.2d 63 (2010).

III. ANALYSIS

Defendant alleges that the trial court abused its discretion by failing to award him attorney fees and costs. We disagree.

At the outset, we note that the issue before us is a narrow one, the payment of attorney fees and costs.^[2] Michigan follows the "American Rule," which states that "attorney fees are not recoverable as an element of costs or damages unless expressly allowed by statute, court ru...