Marshall v. Marshall, Docket No. 68295

• Decision Date: 19 October 1984
• Docket Number: Docket No. 68295
• Citation: 355 N.W.2d 661,135 Mich.App. 702
• Parties: Neil M. MARSHALL, Plaintiff-Appellee, Cross-Appellant, v. Helean MARSHALL, Defendant-Appellant, Cross-Appellee. 135 Mich.App. 702, 355 N.W.2d 661
• Court: Court of Appeal of Michigan — District of US

Page 661

355 N.W.2d 661

Neil M. MARSHALL, Plaintiff-Appellee, Cross-Appellant, v. Helean MARSHALL, Defendant-Appellant, Cross-Appellee.

Docket No. 68295.

135 Mich.App. 702, 355 N.W.2d 661

Court of Appeals of Michigan.

Submitted Feb. 8, 1984.

Decided June 28, 1984.

Released for Publication Oct. 19, 1984.

[135 MICHAPP 704] Williams, Schaefer, Ruby & Williams by James P. Cunningham, Bloomfield Hills, for plaintiff-appellee, cross-appellant.

Kenneth F. Martin, Roseville, for defendant-appellant, cross-appellee.

Before BEASLEY, P.J., and GRIBBS and ERNST, ^* JJ.

BEASLEY, Judge.

Defendant-appellant, Helean Marshall, appeals as of right from an order dated November 15, 1982, modifying the property settlement provisions of her 1980 divorce. Plaintiff-appellee, Neil M. Marshall, cross appeals by leave granted.

The parties were divorced in a judgment dated October 29, 1980. With respect to property settlement, the divorce judgment provided as follows:

"IT IS FURTHER ORDERED AND ADJUDGED THAT a certain Property Settlement Agreement dated Oct. 29, 1980, is incorporated by reference as if fully recited herein, but is specifically declared not to be merged into this judgment, but is declared to be a contractual agreement between the parties hereto."

Arrived at after protracted negotiations, the nine page written property settlement agreement was signed by the parties and their respective attorneys on October 29, 1980, in anticipation of and on the same date as the divorce.

The major marital asset of the parties consisted of stock of Ogden & Moffett Company, which was awarded to plaintiff husband under the property settlement agreement. To offset this award, defendant wife was awarded substantial amounts of [135 MICHAPP 705] cash payable by plaintiff husband over a period of time.

Plaintiff had owned 28% of Ogden's stock, which share was valued by him at approximately $1,403,000 at the time of the divorce. ¹ Prior to the divorce, R-W Service Systems entered into a stock purchase agreement with Ogden's stockholders for $5.3 million, less any operating losses by Ogden between the proposed date and the time the Interstate Commerce Commission allowed the parties to consummate the transaction. The purchase price was to be adjusted further by any other items that lessened the value of the stock. During this period, the federal government deregulated the trucking industry, resulting in a claimed devaluation of the worth of plaintiff's Ogden stock from $1,403,000 to $1,184,000, which reduction occurred after the divorce judgment.

In the parties' extensive property settlement agreement, among other things, plaintiff agreed to pay defendant $25,000 within 30 days of plaintiff's receipt of R-W's downpayment under the stock purchase agreement and to pay defendant $202,000 in semiannual installments of $10,000 or more, plus interest on the unpaid balance at 7% per annum. The latter indebtedness was evidenced by a promissory note and interest was to accrue commencing with the receipt by plaintiff of R-W's downpayment under the stock purchase agreement. The semiannual payments were to be made within 30 days of R-W's semiannual payments to plaintiff under the stock purchase agreement. Both obligations, that is, the $25,000 in lump sum and the $202,000 in periodic payments, were conditioned upon R-W's performance of its obligations [135 MICHAPP 706] under the stock purchase agreement under the following language of the property settlement agreement:

"It is further agreed by the parties that the payment of principal and interest is conditional upon performance by R-W of the obligations imposed by the Stock Purchase Agreement of September 10, 1979 and as amended December 17, 1979."

As a result of the reduction in the purchase price that R-W paid for the stock, plaintiff filed a motion on July 20, 1981, under GCR 1963, 528.3 for modification of the judgment of divorce, alleging that he did not receive from R-W as much as anticipated under the stock purchase agreement. This motion was denied on August 17, 1981.

On September 4, 1981, plaintiff moved for rehearing of the earlier motion, requesting that the judgment of divorce be modified for reasons of fairness and equity as well as mutual mistake in the determination of the property settlement agreement. This motion for rehearing was denied on September 14, 1981. No appeal was taken from either of these orders denying plaintiff relief.

On April 23, 1982, plaintiff filed a further motion for modification of the judgment of divorce, raising the same general reasons as in the previous motion for rehearing, but emphasizing the language making the plaintiff's obligation conditional upon "performance" by R-W under the property settlement agreement. On May 10, 1982, the trial court reduced the larger amount plaintiff had to pay under the property settlement agreement by $50,000, that is, from $202,000 to $152,000. Defendant moved for rehearing, which motion was denied by the trial court in an opinion filed September 7, 1982. On November 15, 1982, an [135 MICHAPP 707] order was entered pursuant to the opinion. Defendant has now appealed as of right.

GCR 1963, 528.3 requires motions brought under subsection (1) to be brought within one year of the entry of the judgment. Subsection (1) provides as follows:

"On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; * * *."

Plaintiff's motion was made pursuant to GCR 1963, 528.3 under subsection (1) for reasons of mutual mistake and under subsections (5) and (6) for reasons of fairness and equity. Subsections (5) and (6) provide:

" * * * (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment."

In granting the modification, the trial court did not specify which subsection gave it jurisdiction to make such modification, holding rather that the motion of July 20, 1981, and the motion for rehearing of September 4, 1981, served to meet GCR 1963, 528.3's requirement that the motion be brought within one year of entry of judgment.

The language of the court rule gives no indication that such a motion which is brought within the year and denied serves to toll the one year period for subsequent motions. Therefore, if plaintiff disagreed with the trial court's order of August [135 MICHAPP 708] 17, 1981, denying the motion, and the order of September 14, 1981, denying a rehearing on the motion, then plaintiff's remedy was to appeal such orders. Since plaintiff failed to do so within a year, we hold that the trial court had no jurisdiction to modify the judgment of divorce on the basis of mutual mistake after expiration of the one year period from the entry of the divorce judgment.

In spite of this, motions under subsections (5) and (6) are only required to be brought within a reasonable time. Thus, the trial court could have justifiably found that the motion of April 23, 1982, was brought within a reasonable time and, thus, modified the judgment of divorce for the reasons enumerated in Subsections (5) and (6).

The term property settlement, as used in divorce parlance, is used interchangeably in describing the two different bases for division of marital property: (1) based upon agreement of the parties and approval by the court, and (2) based upon an award by the court after trial on the merits.

In the within case, the parties negotiated and entered into a written property settlement agreement which the trial court incorporated into the judgment of divorce. Traditionally, once the parties enter into a property settlement and obtain approval of it, the trial court may not modify the settlement in the absence of fraud, duress or mutual mistake, or for such other causes as any other final judgment may be modified. ²

[135 MICHAPP 709] In their property settlement agreement, the parties said that payment was conditional upon performance by R-W of the stock purchase agreement with Ogden & Moffett. Plaintiff interprets that provision to mean that, if the amount paid by R-W to Ogden & Moffett turned out to be less than the parties contemplated (and thus plaintiff would receive less for his Ogden & Moffett stock than contemplated by the parties), then the amount ($25,000 cash within 30 days of receipt of the downpayment under the stock purchase agreement and $202,000 in installments) payable by plaintiff to defendant should be proportionately reduced. Defendant says that the parties both knew that the price to be paid by R-W to Ogden & Moffett was subject to change and that neither a reduction nor an increase in price was intended to modify the amount of plaintiff's obligation to defendant under the property settlement agreement.

The parties' property settlement agreement referred to "a certain Stock Purchase Agreement dated September 10, 1979, as amended December 17, 1979". The price under the stock purchase agreement was subject to revision in the event of certain specified happenings. There is no claim that R-W defaulted under the stock purchase agreement. The parties' property settlement agreement simply does not spell out what was to happen if the price paid by R-W to Ogden & Moffett was changed.

Plaintiff wants the trial court to make a property settlement for him that he did not make for himself. This is not a case where either R-W defaulted in its obligation to purchase the Ogden & Moffett stock or Ogden & Moffett defaulted in acquiring plaintiff's stock. Admittedly, if either of those defaults had occurred, we would be confronted[135 MICHAPP 710] by a different case. But defaults did not occur.

Under the circumstances of...