Grace v. Grace, Docket No. 225843.
| Decision Date | 09 January 2003 |
| Docket Number | Docket No. 225843. |
| Citation | 655 N.W.2d 595,253 Mich. App. 357 |
| Parties | Brooke GRACE, Plaintiff-Appellee/Cross-Appellant, v. Harvey GRACE, Defendant-Appellant/Cross-Appellee. |
| Court | Court of Appeal of Michigan — District of US |
Lawrence J. Acker, P.C. (by Lawrence J. Acker) and David D. Patton & Associates (by Ellen Bartman Jannette), Bloomfield Hills, for the plaintiff.
Law Offices of Bruce T. Leitman, P.C. (by Bruce T. Leitman) (Plunkett & Cooney, P.C., by Christine D. Oldani and Patrick M. Barrett, of counsel), Bloomfield Hills, Detroit, for the defendant.
Before: NEFF, P.J., and JANSEN and KIRSTEN FRANK KELLY, JJ.
Defendant appeals by delayed leave granted from a judgment, following a jury trial, of $3,113,342 in favor of plaintiff in this fraud action. Plaintiff cross appeals from an order entered after the judgment that set off a settlement award she had obtained in her separate, but related, legal malpractice action. We affirm in all respects.
This action has its origin in the parties' divorce, which was entered pursuant to a default judgment on October 10, 1990, by Oakland Circuit Judge David F. Breck. The parties married in March 1972 and had one son. In the fall of 1989, the parties mutually sought a divorce. The parties entered into a separation agreement, dated September 17, 1990, that was incorporated, but not merged, into the divorce judgment. This case involves plaintiff's allegation that defendant defrauded her by hiding certain substantial marital assets and undervaluing other disclosed assets before the parties entered into the separation agreement.
The separation agreement provided that plaintiff's share of the marital estate was $750,000 and that payment would be deferred, with the understanding that this amount represented half the value of the marital estate. In the meantime, defendant would pay plaintiff a monthly stipend while their son remained in the marital home with defendant until the son completed high school. Plaintiff acknowledged that defendant always paid the monthly stipends, which totaled $150,000 tax free over the four-year period that the payments were made.
After the divorce judgment was entered, plaintiff stated that she began to feel that she had not been treated fairly regarding the property settlement and she consulted a new attorney. Plaintiff moved for clarification of the divorce judgment because she had not received $250,000 pursuant to the terms of the separation agreement upon the sale of defendant's interest in his business, Grace and Wild Studios. The trial court ruled that the separation agreement required sale within a reasonable time and ordered defendant to sell his interest by June 17, 1993. Because the business had not sold by that time, the trial court appointed a receiver following plaintiff's request, and defendant appealed the ruling to this Court. This Court ultimately affirmed the trial court's ruling,1 and defendant subsequently paid $250,000 that was owing to plaintiff.
In addition to moving for clarification of the divorce judgment, plaintiff also filed suit against her divorce attorney on September 21, 1992, alleging legal malpractice. The legal malpractice suit ultimately was settled. While the legal malpractice action was pending, plaintiff filed the present suit against defendant, alleging fraud in the inducement of the separation agreement on September 15, 1993. In May 1994, defendant moved for summary disposition under MCR 2.116(C)(8), contending that there is no recognized cause of action for damages arising out of an allegedly fraudulently induced settlement agreement. The trial court ultimately granted the motion on the authority of Nederlander v. Nederlander, 205 Mich.App. 123, 517 N.W.2d 768 (1994), where this Court held that a party who believes that the other has committed fraud during the divorce proceedings may seek relief from judgment under MCR 2.612(C)(1)(c), but may not pursue a separate cause of action for fraud. Plaintiff appealed the trial court's ruling to this Court, which, in an unpublished order entered on June 14, 1996 (Docket No. 183202), vacated the trial court's order and remanded the case for further proceedings. This Court distinguished Nederlander, finding that the separation agreement was a separate contract that was enforceable or subject to relief under ordinary contract remedies and, thus, the claim of fraud related to a contract and not to the divorce judgment. Defendant's delayed application for leave to appeal in the Supreme Court was later denied.2
Trial in the present action ensued in December 1998 and focused on plaintiff's allegation of fraud in the inducement of the separation agreement. The jury unanimously found in favor of plaintiff in the amount of $3.1 million. Defendant first moved to set off the settlement amount that plaintiff had received from her legal malpractice suit against her divorce attorney. The trial court granted the motion to set off the settlement amount, and plaintiff's cross-appeal challenges this ruling. Defendant later moved for judgment notwithstanding the verdict (JNOV), a new trial, or remittitur. The trial court denied this motion. After attempting an appeal as of right, which this Court dismissed for lack of jurisdiction, defendant sought leave to appeal in this Court, which was granted on July 27, 2000.
In the order granting leave, this Court further ordered:
In addition to the issues raised in the application for delayed appeal, the Court orders the parties to brief the issue of whether plaintiff's action was barred under Nederlander v. Nederlander, 205 Mich.App. 123, 517 N.W.2d 768 (1994), which holds that a party may not bring an independent action for fraud perpetrated during a divorce proceeding.
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 provides that if an appellate court has decided a legal issue and remanded the case for further proceedings, the legal issue determined by the appellate court will not be differently decided on a subsequent appeal in the same case where the facts remain materially the same. Grievance Administrator v. Lopatin, 462 Mich. 235, 259, 612 N.W.2d 120 (2000). Therefore, generally, an appellate court's determination of an issue in a case binds lower tribunals on remand and the appellate court in subsequent appeals. Id. at 260, 612 N.W.2d 120. The rationale behind the doctrine includes the need for finality of judgments and the lack of jurisdiction of an appellate court to modify its judgments except on rehearing. South Macomb Disposal Authority v. American Ins. Co., 243 Mich.App. 647, 654-655, 625 N.W.2d 40 (2000). Further, the law of the case doctrine applies without regard to the correctness of the prior determination, so that a conclusion that a prior appellate decision was erroneous is not sufficient in itself to justify ignoring the law of the case doctrine. Booker v. Detroit, 251 Mich.App. 167, 182, 650 N.W.2d 680 (2002).
The law of the case doctrine is discretionary and expresses the practice of the courts generally; it is not a limit on their power. Id. at 183, 650 N.W.2d 680, quoting Freeman v. DEC Int'l, Inc., 212 Mich.App. 34, 37, 536 N.W.2d 815 (1995). 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. South Macomb, supra at 654, 625 N.W.2d 40.
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.
Because the parties were directed to address whether Nederlander precludes plaintiff's fraud claim in the order granting the application for leave to appeal, we address the merits of the issue 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. Booker, supra at 183, 650 N.W.2d 680. 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) () 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 distinguished Nederlander in its June 14, 1996, order. In the present case, the separation agreement was incorporated, but not merged, into the divorce judgment. The significance of this is explained in Marshall v. Marshall, 135 Mich.App. 702, 712-713, 355 N.W.2d 661 (1984), relied on by the prior panel in its order:
When a property settlement agreement is incorporated and merged in a divorce judgment, it becomes a disposition by the court of the property. But, when not merged in the divorce judgment, the property settlement agreement may only be enforced by resort to the...
To continue reading
Request your trial
-
Reed v. Reed
...court rule, common-law exception, or contract. Dessart v. Burak, 470 Mich. 37, 42, 678 N.W.2d 615 (2004); Grace v. Grace, 253 Mich.App. 357, 370-371, 655 N.W.2d 595 (2002). In domestic relations cases, attorney fees are authorized by both statute, M.C.L. § 552.13, and court rule, MCR 3.206(......
-
Haliw v. City of Sterling Heights
...either as an element of costs or damages unless recovery is expressly authorized by statute or court rule. Grace v. Grace, 253 Mich.App. 357, 370-371, 655 N.W.2d 595 (2002). However, when the plain language of the amended version of MCR 2.403(O)(1), which eliminated the term "trial," is rea......
-
Hill v. City of Warren, 266426.
...not be differently decided on a subsequent appeal in the same case where the facts remain materially the same." Grace v. Grace, 253 Mich.App. 357, 362, 655 N.W.2d 595 (2002). This doctrine is sufficiently important that it applies without regard to whether the decision was actually correct,......
-
Pena v. Ingham County Road Com'n
...court. We do note, however, that "[g]enerally, under Michigan law, only one recovery is allowed for an injury." Grace v. Grace, 253 Mich.App. 357, 368, 655 N.W.2d 595 (2002). Defendant asserts that plaintiff has filed another lawsuit against defendant asserting that he has suffered from ret......
-
Relevant vs. Unfair Prejudice: Federal Rules 401 and 403
...because there was plenty of other evidence considered by the jury that could have resulted in the same verdict. In Grace v. Grace , 253 Mich. App. 357, 365 (2000), the wife was not to mention or testify in “any manner whatsoever, to any facts regarding (husband)’s business entities, his per......