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### STATE OF MICHIGAN

COURT OF APPEALS

ANN MARIE LANALA,

Plaintiff-Appellant, UNPUBLISHED October 16, 2014

v No. 315443 Baraga Circuit Court GERALD DOUGLAS TERVO LC No. 2010-006061-DM

Defendant-Appellee.

Before: M URPHY , C.J., and S AWYER and M. J. K ELLY , JJ.

P ER C URIAM

. In this dispute over the proper division of the parties’ marital estate, plaintiff, Ann Marie Lanala, appeals by right the trial court’s order ente red after remand from this Court. On appeal, she argues that the trial court failed to follow this Court’s order on remand. Because we agree, we vacate in part and again remand for further proceedings.

In our prior opinion, we expl ained that the primary disput e on appeal involved the trial court’s handling of Lanala’s settleme nt in an earlier lawsuit. See Lanala v Tervo , unpublished per curiam opinion of the Court of Appeals, issued October 23, 2012 (Docket No. 306197). Lanala had been injured in an automobile accide nt during her marriage. She sued for damages, but defendant, Gerald Douglas Te rvo, expressly declined any invol vement. Lanala settled the lawsuit and recovered “$117,000, after accounting for attorney’s fees, to compensate her for pain and suffering.” Id. She deposited the settlement funds in a separate bank account.

As this Court explained in its prior opinion, during the divorce proceedings, Tervo argued that he was entitled to a portion of the settlement:

[He] maintained that to th e extent the proceeds compensa ted [Lanala] for her lost earning capacity, those sums were mar ital property. [Tervo] also argued, alternatively, that if the settlement pro ceeds were separate assets the assets were subject to invasion because he contributed to the preservation of those proceeds by supporting [Lanala] while she could not work. The tria l court rejected [Tervo’s] claim . . . [and] held that th e settlement proceeds were [Lanala’s] separate asset and were not subject to i nvasion. In making its findings of fact from the bench, the trial court stated “t he accident settlement proceeds . . . are [Lanala’s] separate property.” The trial court reiterated this finding later, stating again that “[Lanala] has been awarded the full accident settlement proceeds-2- without being subject to invasion by [Tervo] .” Consistent with the trial court’s findings of fact, the judgment of divorce provides that [Lanala] is awarded her bank account “which holds [the] proceeds . . . recovered for injuries she suffered in an automobile accident. That account and the settlement proceeds it contains are [her] separate property.”

[Lanala’s] sole claim on appeal is that the trial court’s reliance on the settlement proceeds, which it found to be her separate property, to balance the award of [Tervo’s] retirement account a nd the marital home to [Tervo] was error and rendered the distribution inequitable. . . . [ Id. ]

This Court then concluded that the trial court erred when it considered Lanala’s separate property:
At trial, the evidence showed that [Tervo’s] retirement savings account and the marital home, which were awarded to [him], were valued at approximately $95,000. In contrast, the tria l court only awarded [Lanala] the real property located in Portage Township that was valued at most at approximately $9,500. The trial court stated that it belie ved that this distri bution was equitable because “[Lanala] has been awarded the fu ll accident settlement proceeds without being subject to invasion.” Thus, it is apparent that th e trial court used [Lanala’s] separate property to offset the obvious disparity in the dist ribution of marital property awarded by the trial court.

We conclude that the trial court’s reliance on [Lanala’s] separate property to balance the distribution was error and th at this error renders the division of the martial property inequitable. The trial court’s holding that the settlement money was [Lanala’s] separate property rende red that asset exclusively hers and precluded reliance on it to bala nce the distribution of the act ual marital assets. . . . Accordingly, we vacate th e portion of the trial cour t’s judgment dividing the parties’ property and remand for further proceedings. On remand, the trial court must redistribute the marital assets e quitably and without consideration of [Lanala’s] separate property. [ Id. ]

On remand, Lanala moved to enforce and amen d the judgment in accor d with this Court’s decision. At a hearing on the motion, Lanala noted the equity in the marital home was valued at $60,500, and Tervo’s retirement account was va lued at $34,866. She then asked for an equalization payment of $47,683.

Tervo asked the trial court to clarify its findings to reflect that [Lanala’s] accident settlement proceeds were separate property, but th at reason existed to jus tify the invasion of that property. He requested, in the alternative, that the court consider certai n post judgment facts in determining a new property settlement. The trial court concluded that it w ould not alter its prior division; instead, it clarified the basis for its deci sion to divide the estate in the way that it did:-3- [The] Court recognizes that the se ttlement proceeds were separate property. And this court meant to make clear that based upon the facts of the case, however, the separate property was s ubject to invasion for several reasons. After the auto accident, [] Tervo worked and supported the family solely; and that effort for a prolonged period of time did allo w [Lanala] to keep the settlement pot [intact]. Additionally, he drew down his retirement during the marriage to support the family. He also supported th e family through work and other efforts while [] Lanala got her college degree.

Overall, there’s a marital pot of se ttlement proceeds, house equity, vacant land and the retirement. The court found th at the retirement plan shouldn’t be drawn down twice and divided. Dividing what’s left, if you were to divide it fifty-fifty would give e ach party approximately a hundred and eight thousand dollars. That values the vacant land in por tage township at eighteen thousand five hundred.

[Lanala], indeed, was awarded approximately a hundred and eight thousand dollars, while [Tervo] was awar ded equity of approximately sixty thousand five hundred in the home. The re maining balance of his retirement plan at about thirty-eight thousand eight hundred and sixty dollars, as I recall. . . . In other words, he was awarded about nine ty-nine thousand three hundred and sixty dollars.

Overall, the court finds that it awarde d [] Lanala more assets than it did [] Tervo. If there had been a re hearing, I would have made that clear or clearer . . . .

On appeal, Lanala argues that the trial court erred by failing to comply with this Court’s order on remand and redistribute the marital assets without consideration of her separate property. Whether the law of th e case doctrine applies is a que stion of law that this Court reviews de novo. Ashker v Ford Motor Co , 245 Mich App 9, 13; 627 NW2d 1 (2001).

The law of the case doctrine provides that an appellate ruling on a pa rticular issue binds the appellate court and all lower tribuna ls with regard to that issue. Reeves v Cincinnati, Inc (After Remand) , 208 Mich App 556, 559; 528 NW2d 787 (1995). The doctrine applies to questions specifically deci ded in an earlier decisi on and to questions necessarily determined to arrive at that decision. Webb v Smith (After Second Remand) , 224 Mich App 203, 209; 568 NW2d 378 (1997). The doctrine app lies regardless whether the d ecision was actually correct. Hill v City of Warren , 276 Mich App 299, 308; 740 NW2d 706 (2007).

In the previous appeal, the sole issue was whether the trial court could rely on the existence of Lanala’s settlement proceeds to jus tify awarding her a smaller portion of the marital estate. In examining the issue, this Court no ted that the trial court had made two explicit findings: it found that the settlement proceeds were Lanala’s separate property and it found that there were no grounds for invading her separate property. Those findings were not disputed on appeal and this Court did not disturb those findings. This Court then held that it was error for the trial court—given those findings —to consider Lanala’s separa te property when dividing the marital estate. Because the error rendered the trial court’s division inequitable, this Court-4- vacated that portion of the trial court’s judgmen t dividing the marital property and remanded the case back to the trial court for further proceedings . Specifically, the Court ordered the trial court to divide the marital estate without taking in to consideration Lanala ’s separate property.

On remand, the trial court elect ed to clarify its belief th at the original division was equitable. In justifying its continued adherence to the original division, the trial court revisited its finding that there was no basis for invading Lanala ’s separate property. But this Court’s prior decision did not authorize the tria l court to revisit that finding. Reeves , 208 Mich App at 560 (characterizing the law of the cas e as a bright-line rule that should be app lied virtually without exception). Because this Court’s pr ior decision rested in part on th e validity of the trial court’s findings concerning the settlement, and those findings were not challenged on appeal, those findings became part of the law of the case a nd were not subject to review on remand. Webb

, 224 Mich App at 209. If Tervo felt this Court erred in its application of the law to the facts, his remedy was to seek a reheari ng or request leave to appeal to our Supreme Court. Bennett v Bennett , 197 Mich App 497, 501-502; 496 NW2d 353 (1992). He did not seek either remedy.

We also disagree with the trial court’s co ntention that this Cour t did not understand the court’s rationale for dividing th e property. The trial court was concerned that Tervo used his retirement to support the family, which allowed La nala to avoid using her settlement proceeds to support the family. However, the trial court did not find that the retirement account was Tervo’s separate property. Thus, the parties’ use of th ose funds benefited (and harmed) both parties to the same extent.

Because the trial court erred when it failed to divide the marital estate without taking into consideration Lanala’s separate property, as this Court specifically requi red it to do, we must again vacate that part of the judgment involving the division of th e marital estate and remand for a new division. On remand, the trial court shall di vide the marital proper ty between the parties and shall do so without considering La nala’s settlement proceeds in any way.

Vacated in part and remanded for further proc eedings consistent with this opinion. We do not retain jurisdicti on. As the prevailing party, Lanala may tax her costs. MCR 7.219(A).

/s/ William B. Murphy /s/ David H. Sawyer /s/ Michael J. Kelly