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### STATE OF MICHIGAN

COURT OF APPEALS

CASA BELLA LANDSCAPING, LLC,

Plaintiff-Appellant, FOR PUBLICATION May 26, 2016 9:05 a.m.

v No. 326237 Wayne Circuit Court JAVIER E. LEE, LC No. 14-001806-CZ

Defendant-Appellee,

and

DEBTOR/CREDITOR RIGHTS COMMITTEE OF THE BUSINESS LAW SECTION OF THE STATE BAR OF MICHIGAN,

Amicus Curiae.

Before: G ADOLA , P.J., and S ERVITTO and S HAPIRO , JJ.

P ER C URIAM

. Plaintiff Casa Bella Landscaping, LLC, appeals by leave grante d 1 the trial court’s order appointing Steven E. Smith as receiver for defendant Javier E. Lee. Because we conclude that the trial court failed to follo w the mandates of MCR 2.622(B), we vacate the court’s order appointing Smith and remand for fu rther proceedings consistent with this opinion.

In conjunction with a motion fo r default judgment against Lee, plaintiff filed a motion for the appointment of a receiver, nominating David Findling and su bmitting a filing stating his qualifications to serve as receiver. Defendant did not object to the nomination within the timeframe provided by MCR 2.622(B)(1). The trial court granted the motion to appoint a receiver, but, instead of appoin ting plaintiff’s nominee, the c ourt appointed Smith. Plaintiff asserts on appeal that the tria l court’s appointment of Smith w as in error because the trial court failed to follow the mandates of MCR 2.622.

1 Casa Bella Landscaping, LLC v Lee , unpublished order of the Court of Appeals, entered August 11, 2015 (Docket No. 326237).-2- “ [C]onstruing and applying a court rule presents a legal issue s ubject to review de novo.” Wickings v Arctic Enterprises, Inc , 244 Mich App 125, 133; 624 NW2d 197 (2000). When considering a Michigan Court Rule, “[t]he principles of statuto ry construction apply[.]” Decker v Trux R Us, Inc , 307 Mich App 472, 479; 861 NW 2d 59 (2014). “We begin by cons idering the plain language of the court rule in order to ascertain its mean ing.” Henry v Dow Chem Co , 484 Mich 483, 495; 772 NW2d 301 (2009). “The intent of the rule mu st be determined from an examination of the court rule itself and its place within the s tructure of the Michigan Court Rules as a whole.” Id . at 495 (internal quo tations omitted).

Plaintiff filed its motion pursu ant to MCR 2.622(B)(1), which provides in pertinent part:

(1) Stipulated Receiver or No Objection Raised . The moving party may request, or the parties may stipul ate to, the selection of a re ceiver. The moving party shall describe how the nom inated receiver meets the requi rement in subsection (B) that a receiver selected by the court have suffi cient competence, qualifications, and experience to administer the receivership e state, considering the factors listed in subsection (B)(5). If the nonmoving part y does not file an objection to the moving party’s n ominated receiver within 14 da ys after the petition or motion is served, or if the parties stipulate to th e selection of a receiver, the court shall appoint the receiver nominated by the party or parties, unless the court finds that a different receiver should be appointed. [emphasis added.]

It is undisputed that plaintiff requested the selection of a r eceiver, nominated Findling, and provided information in suppor t of its belief that Findling had “sufficient competence, qualifications, and experience to administer the receivership e state.” It is also undisputed that defendant did not object to plain tiff’s nomination within 14 da ys after the motion was served.

The rule provides that if the nonmoving party does not object or the parties stipulate to the selection of a receiver, then “the court shall appoint the receiver nominated by the party or parties, unless the court finds t hat a different receiver shoul d be appointed.” MCR 2.622(B)(1) (emphasis added). In order to “ find” that a different receiver should be selected, the trial court must first find that the nomin ated receiver, as to whom there h as been no objection, is not qualified to serve as a receiver or should not be appointed for some other grounds articulated with specificity and supported by record evidence. A contrary interpretation would grant the trial court unfettered discretion to disregard a qualified nomi nated receiver, which is plainly inconsistent with the rule’s pr ovision that “the court shall ap point the receiver nominated by the party or parties.” Court rules, like statutes, must be read to give every word effect and to “avoid an interpretation that would re nder any part of the [court rule ] surplusage or nugatory.” Johnson v Recca , 492 Mich 169, 177; 821 NW2d 520 (2012) (quotations and citati ons omitted).

The trial court made no findings that Findling was not qualifi ed to serve as a receiver. Instead, when questioned as to its rationale for not appointing Findling, the court merely stated that it “won’t use them.” The court’s conclusory statement who lly fails to satisfy the requirement that the court appoint the nominated receiver unles s it finds that a different receiver should be appointed.-3- The trial court also failed to follow MCR 2.622(B)(5) which ap plies when the trial court appoints a receiver other than one nominated by a party under ( B)(1). The rule provides:

If . . . the court makes an initial determination that a differ ent receiver should be appointed than the receiver nom inated by a party under subsecti on (B)(1), the court shall state its rationale for selecting a particular rece iver after considering the following factors:

(a) experience in the operation and/or liquidation of the type of assets to be administered;

(b) relevant business, legal and receivership knowledge, if an y;
(c) ability to obtain the required bonding if more than a nomi nal bond is required;

(d) any objections to any receiver considered for appointment;

(e) whether the receiver considered for appointment is disqual ified under subrule (B)(6); and

(f) any other factor the c ourt deems appropriate.

Assuming arguendo that the trial court had prop erly found that Findling was unqu alified and that a different receiver should be appointed, the trial co urt made insufficient findings to support its selection of Smith as receiver. It made no referen ce to any of the factors set forth in (B)(5) and did not “state its ra tionale for selecting a particu lar receiver[.]” MCR 2.622(B)(5). The court merely stated in conclusory terms that Smith was in t he bar journal, had a sole receivership practice, and did a lot of work for banks. The tr ial court’s rationale for selecting Smith was insufficient and i nconsistent with the rule.

In sum, the trial court did not comply with MCR 2.622(B)(1) be cause it failed to make and support findings that Findling was unqualified. It also di d not comply with MCR 2.622(B)(5) because it failed to state its rationale for appoin ting Smith upon consideration of the enumerated factors. We therefore vacate the trial court’s orde r appointing Smith as receiver and remand to the trial court for further proceedings. Because Fin dling is representing plaintiff on appeal, he is no longer qualified to serve as receiver. See MC R 2.622(B)(6). Accordingly, on remand, the trial court shall permit plaintiff to nominate anot her receiver, who should be considered by the trial court consistent with the requirements of MCR 2.622(B). We do not retain jurisdiction.

/s/ Michael F. Gadola /s/ Deborah A. Servitto /s/ Douglas B. Shapiro