Peabody v. DiMeglio, Docket No. 315319.

• Decision Date: 12 August 2014
• Docket Number: Docket No. 315319.
• Citation: 856 N.W.2d 245,306 Mich.App. 397
• Parties: PEABODY v. DiMEGLIO.
• Court: Court of Appeal of Michigan — District of US

306 Mich.App. 397

856 N.W.2d 245

PEABODY

v.DiMEGLIO.

Docket No. 315319.

Court of Appeals of Michigan.

Submitted June 4, 2014, at Lansing.

Decided Aug. 12, 2014, at 9:10 a.m.

Ligon Law Office, (by M. Jean Ligon, Brighton and Paul S. Vaidya), for Dany Jo Peabody.

The Gallagher Law Firm, PLC, (by Craig S. Girard and Jennifer M. Tichelaar, Lansing), for Marta DiMeglio.

Before: CAVANAGH, P.J., and OWENS and STEPHENS, JJ.

Opinion

PER CURIAM.

Plaintiff, Dany Jo Peabody, appeals as of right the probate court's order granting summary disposition for defendant, Marta DiMeglio, in her individual and representative capacities, pursuant to MCR 2.116(C)(7), based on the expiration of the six-year statutory period of limitations for breach-of-contract claims. Defendant cross-appeals the probate court's order denying her motion for attorney fees. We reverse the probate court's grant of summary disposition and remand for further proceedings.

Plaintiff and Paul DiMeglio (the decedent) were married in 1989 and divorced in 1995. As part of the divorce, plaintiff and the decedent entered into a property settlement agreement, which was incorporated, but not merged, into a Virginia divorce judgment by express language to that effect on December 15, 1995. The portion of the agreement relevant to this appeal deals with a piece of real property located in Colorado (the Colorado property). Paragraph 16(B)(2) of the agreement states, “The Husband specifically agrees that he shall be responsible for and shall indemnify the Wife from any liability whatsoever arising out of the ... Colorado Mortgage....” Paragraph 19(B) of the agreement states:

The parties agree that Wife is the sole owner of a property located at 1222 Colorado Boulevard, Idaho Springs, Colorado, in which the Husband has an investment interest. The parties further agree that:

(1) Said Colorado residence shall remain as an investment property.

(2) Wife shall not sell, deed over or otherwise dispose of said property in any manner.

(3) Neither party shall encumber said property by subsequent mortgages, equity loans or any other means without the written agreement of the other.

(4) Husband shall be responsible for all mortgage payments on said property even though the mortgage loan on said property is in the name of the Wife.

* * *

(7) Husband has the sole and separate right and option to sell said property at any time of his choosing. Wife shall have the right of first refusal to purchase said property incident to any such sale.

(8) If said property is sold, all net proceeds of sale after customary costs of sale, such as the real estate commission, closing costs, mortgage pay-off and capital gains tax responsibilities, etc., shall be divided equally between the parties. The settlement attorney or other person conducting the settlement shall receive a copy of this Agreement as his or her instructions.

Sometime before 1997, the decedent missed several mortgage payments on the Colorado property. On November 27, 1997, plaintiff executed a quitclaim deed in favor of the decedent conveying her entire interest in the Colorado property. This was done to remove her from the mortgage to avoid financial responsibility for the property and to allow the decedent to refinance. Sometime around 2000, the decedent further encumbered the property with mortgage debt.

On November 12, 2003, the decedent conveyed his entire interest in the Colorado property to his new wife, defendant Marta DiMeglio, by quitclaim deed. He executed a second quitclaim deed in favor of Marta on August 30, 2004. On that same day, Marta conveyed the property to a third-party buyer by general warranty deed for consideration of $215,000. The proceeds from the sale were used in a § 1031 “like-kind” exchange¹ in which Marta purchased real property in Eaton Rapids, Michigan.

The decedent died on November 12, 2011. Plaintiff filed a claim against his estate that Marta, as personal representative, denied. Plaintiff then filed her eight-count complaint in the probate court against the decedent's estate and Marta as personal representative of the estate and individually. The complaint alleged breach of contract, breach of a covenant of good faith and fair dealing, conversion, statutory conversion, concert of action, fraud, enforcement of the divorce judgment, and unjust enrichment.

Marta moved for summary disposition under MCR 2.116(C)(7), (8), and (10). The probate court granted summary disposition under MCR 2.116(C)(8) and (10) to Marta in her individual capacity because she was not a party to the property settlement agreement and had no personal liability for any of the claims. The probate court further granted summary disposition under MCR 2.116(C)(7) to Marta in both capacities, finding that the six-year statutory period of limitations for contract claims had run. On appeal, plaintiff only contests the probate court's finding that the statute of limitations for contract claims barred all of plaintiff's claims, including, in particular, the claims for enforcement of the divorce judgment and unjust enrichment provided for in Counts VII and VIII of her complaint, respectively.

We review de novo a trial court's decision to grant or deny summary disposition. Maiden v. Rozwood, 461 Mich. 109, 118, 597 N.W.2d 817 (1999). Whether a defendant is entitled to governmental immunity is a question of law, which we also review de novo. Herman v. Detroit, 261 Mich.App. 141, 143, 680 N.W.2d 71 (2004). “A motion under MCR 2.116(C)(7) tests whether a claim is barred because of immunity granted by law, and requires consideration of all documentary evidence filed or submitted by the parties.” Diamond v. Witherspoon, 265 Mich.App. 673, 681, 696 N.W.2d 770 (2005) (quotation marks and citations omitted). “The contents of the complaint are accepted as true unless contradicted by documentation submitted by the movant.” Maiden, 461 Mich. at 119, 597 N.W.2d 817.

At the outset, with regard to plaintiff's claim for enforcement of the divorce judgment in Count VII of her complaint, plaintiff argues that Virginia substantive law regarding incorporation of property settlements should apply because the judgment is a Virginia divorce decree that provided for incorporation. Michigan has adopted the Uniform Enforcement of Foreign Judgments Act, MCL 691.1171 et seq., which provides in pertinent part,

A copy of a foreign judgment authenticated in accordance with an act of congress or the laws of this state may be filed in the office of the clerk of the circuit court, the district court, or a municipal court of this state. The clerk shall treat the foreign judgment in the same manner as a judgment of the circuit court, the district court, or a municipal court of this state. A judgment filed under this act has the same effect and is subject to the same procedures, defenses, and proceedings for reopening, vacating, or staying as a judgment of the circuit court, the district court, or a municipal court of this state and may be enforced or satisfied in like manner. [MCL 691.1173.]

Because the divorce judgment was filed in accordance with this act, the judgment is treated as a Michigan judgment and Michigan law applies to its enforcement.

Statutes of limitations are found at Chapter 58 of the Revised Judicature Act (RJA), MCL 600.5801 et seq. MCL 600.5807(8) provides a six-year statutory period of limitations for ordinary breach-of-contract claims. Plaintiff, however, argues that claims to enforce a judgment are classified as “noncontractual money obligations” that carry a 10–year statutory period of limitations pursuant to MCL 600.5809, which provides in pertinent part,

(1) A person shall not bring or maintain an action to enforce a noncontractual money obligation unless, after the claim first accrued to the person or to someone through whom he or she claims, the person commences the action within the applicable period of time prescribed by this section.

* * *

(3) Except as provided in subsection (4),^{[ 2 ]} the period of limitations is 10 years for an action founded upon a judgment or decree rendered in a court of record of this state, or in a court of record of the United States or of another state of the United States, from the time of the rendition of the judgment or decree.

In Gabler v. Woditsch, 143 Mich.App. 709, 372 N.W.2d 647 (1985), we directly addressed the issue of which statute of limitations applies in this context. The Court stated:

The present action is an action to enforce the provisions of the 1968 divorce judgment and is therefore an action founded upon a judgment within RJA § 5809(3). Plaintiff's claim is not converted into a breach of contract action merely because the specific payment provision which he seeks to enforce was contained in a property settlement agreement. That agreement was expressly incorporated by reference into the divorce judgment. The trial court correctly applied the ten-year period in RJA § 5809(3). [Id. at 711, 372 N.W.2d 647 (emphasis added).]

Thus, according to Gabler, because plaintiff and the decedent's property settlement, which plaintiff seeks to enforce, was expressly incorporated by reference into the divorce judgment, the action is “founded upon a judgment within” MCL 600.5809(3) and the 10–year period of limitations would apply.

Defendant, however, persists in arguing that the provisions of the property settlement can only be enforced in an action for breach of contract and not in an action to enforce a judgment. In support of this argument, defendant relies on the following language in Marshall v. Marshall, 135 Mich.App. 702, 712–713, 355 N.W.2d 661 (1984) :

In the within case, the divorce judgment incorporated the parties' property settlement agreement by reference, but specifically provided that the property settlement agreement was not merged in the divorce judgment. 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

...