Purported ‘Clarification’ Of Divorce Judgment Vacated Because Trial Court ‘Changed’ Its Prior Ruling

The Michigan Court of Appeals has ruled the Oakland County trial court improperly granted an ex-husband’s motion to “clarify” the parties’ judgment of divorce because, in doing so, the trial court actually modified the judgment, thereby affecting the parties’ substantive rights.

In Johnson v Johnson (Docket No. 365352), the trial court “did not merely clarify the terms of the judgment of divorce but changed its previous ruling …,” the Court of Appeals said, emphasizing this impacted the parties’ substantive rights.

“Because the court erred in granting defendant’s motion for clarification, the trial court’s … order is vacated,” the Court of Appeals said. “The trial court could only grant the substantive relief requested by defendant if defendant established his entitlement to that relief under MCR 2.612(C)(1)(f). This matter is accordingly remanded for the trial court to consider defendant’s motion under MCR 2.612(C)(1)(f).”

Judge Christopher P. Yates, Judge Colleen A. O’Brien and Judge Kathleen A. Feeney were on the panel that issued the unpublished opinion.

Background

The parties were divorced in 2021. At the time, the defendant had a personal injury lawsuit pending and the judgment of divorce provided the parties would equally divide any lawsuit proceeds. The defendant obtained a favorable jury verdict but ultimately agreed to accept a settlement that was “substantially smaller” than the verdict “to avoid the uncertainty of further litigation.”

Thereafter, the plaintiff filed a show-cause motion in Oakland County Circuit Court to have the defendant explain why she had not yet received her share of the lawsuit proceeds. In response, the defendant asked the trial court to “clarify” the terms of the judgment of divorce – specifically, how the proceeds should be divided because the judgment “seemed to award plaintiff a share of all of the proceeds that defendant received from the settlement, including the amount awarded to defendant for his pain and suffering, which would normally not be treated as a marital asset.” Alternatively, the defendant asked the trial court to grant him relief from judgment under MCR 2.612(C)(1)(f).

In July 2022, the trial court “clarified” that the plaintiff was to receive “only 50 percent of the amount compensating defendant for past lost wages through the date the divorce judgment was entered, not 50 percent of the entire amount of defendant’s settlement.”

The plaintiff appealed.

‘Substantive Rights’ Impacted

On appeal, the plaintiff argued the trial court erroneously granted the defendant’s motion for clarification of the judgment of divorce.

“We agree,” the Court of Appeals said.

In its analysis, the Court of Appeals closely examined the trial court proceedings. “Before the judgment of divorce was entered, the trial court held a trial over six days …. [T]he trial court issued a 23-page opinion of its findings of fact and conclusions of law. At that time, the court noted that plaintiff was asking for 50 percent of the proceeds of a pending lawsuit stemming from defendant’s automobile accident because plaintiff believed that the proceeds were marital property when the accident occurred during the marriage, plaintiff worked double shifts to make up for defendant’s loss of income, and plaintiff lost sleep in order to support her family. In dividing the parties’ assets, the trial court found ‘that it is fair and equitable under the circumstances for the parties to split 50/50 the proceeds of any personal injury lawsuit that were [sic] filed during the parties’ marriage and are [sic] currently still pending in the Wayne County Circuit Court.’ The … judgment of divorce reflected this ruling, stating, ‘Plaintiff is awarded fifty (50%) of the proceeds from the personal injury lawsuit of Defendant stemming from a motor vehicle accident.’”

The Court of Appeals noted that, when the plaintiff learned the defendant’s lawsuit was successful, she filed a motion for the defendant to explain why she had not yet received her share of the proceeds. “The facts later showed that defendant received a jury verdict of over $12 million for the personal injuries he suffered in the accident, but he accepted a settlement to resolve the matter for $4.8 million to avoid further litigation.”

Thereafter, the defendant filed a motion to “clarify” the judgment of divorce, claiming the plaintiff “was entitled to only an amount that was based on defendant’s past lost wages because the remainder of the proceeds were defendant’s separate asset, not a marital asset,” the Court of Appeals explained. “Alternatively, defendant asked that the trial court grant him relief from the judgment if the trial court ruled that the terms were intended to grant plaintiff 50 percent of the entire amount defendant recovered. Defendant argued that the largest portion of the settlement was intended to compensate him for his severe injuries, including pain and suffering, and support him for the remainder of his life because he is unable to work.”

The Court of Appeals noted that, in turn, the plaintiff asserted various procedural arguments, including that 1) the defendant failed to exhaust his remedies and waited too long to seek relief from the judgment, and 2) grounds did not exist to grant relief under MCR 2.612(C)(1)(f). The appeals court said the plaintiff also argued that, if the trial court found the recovery for pain and suffering was the defendant’s personal asset, a portion of that asset should be awarded to her pursuant to MCL 552.23(1) and MCL 552.401, “given her demonstrated need or because she contributed to the ultimate settlement obtained in the personal injury case.”

The trial court, in an opinion and order, “purported to grant defendant’s motion to clarify the divorce judgment, ruling that the parties intended that plaintiff would receive only 50 percent of any marital assets obtained from defendant’s personal injury lawsuit, which was limited to past lost wages up to the time the divorce judgment was entered,” the Court of Appeals observed. “The trial court ruled that its decision to grant defendant’s motion to clarify the terms of the divorce judgment mooted defendant’s motion for relief from judgment under MCR 2.612(C)(1)(f).”

Next, the Court of Appeals examined the trial court’s reasoning. “Trial courts have the authority to clarify the provisions of their judgments when necessary, particularly when there is an ambiguity,” the appeals court said. “But courts may only clarify a judgment if doing so ‘does not change the parties’ substantive rights as reflected in the’ judgment.”

In this case, the trial court “did not merely clarify the terms of the judgment of divorce but changed its previous ruling, which impacted the parties’ substantive rights,” the Court of Appeals said. “There was no ambiguity in the judgment of divorce – it plainly provides that ‘Plaintiff is awarded fifty (50%) of the proceeds from the personal injury lawsuit of Defendant stemming from a motor vehicle accident.’ Rather than clarifying this provision, the trial court substantively modified it by limiting it to only past lost wages up to the date the judgment of divorce was entered.”

Moreover, “this issue was not fully litigated at the time of trial,” the Court of Appeals explained. “The result of this failure, though, was that the trial court could not look to its previous findings of fact and conclusions of law to determine how the court’s judgment intended to address this issue. … This in turn supports that the court was not merely clarifying its judgment but substantively modifying it. For these reasons, the trial court could not consider defendant’s request to modify the judgment of divorce as a request for clarification, and the court erred by purporting to ‘clarify’ the judgment of divorce by modifying it in a way that changed the substantive rights of the parties.”

Therefore, because the trial court wrongly granted the defendant’s motion for clarification, “the trial court’s … order is vacated,” the Court of Appeals held, remanding the case for the trial court to consider the defendant’s motion under MCR 2.612(C)(1)(f).