If this opinion indicates that it is “FOR PUBLICATION,” it is subject to

r evision until final publication in the Michigan Appeals Reports.

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### S T A T E O F M I C H I G A N

**C O U R T O F A P P E A L S**

SCHAFER AND WEINER

, PLLC,

Plaintiff

- Appellant, UNPUBLISHED June 25, 2019

v No. 343371

Oakland Circuit Court DONALD S. DREYFUSS, ELISA DREYFUSS, and L & L ASSOCIATES, INC., LC No. 2015

- 145121

- CK

Defendants,

and

OAKRIDGE MANOR NURSING &

REHABILITATION CENTER

, LLC,

Garnishee Defendant

- Appell ee

.

Before: S AWYER

, P .J., and O ’ B RIEN and L ETICA , JJ.

P ER C URIAM

.

Plaintiff appeals from an order of the circuit court granting summary disposition in favor of garnishee defendant Oakridge Manor Nursing & Rehabilitation Center ( “ Oakridge ” ) pursuant to MCR 2.116(C)(10) (no genuine issue of material fact). We reverse and remand.

The basic fac ts of this case are not in meaningful dispute for purposes of this appeal. Plaintiff is a law firm that primarily represents debtors. Defendants owned and operated a 64

- bed nursing home in Ferndale. In 2010, defendants became insolvent and retained plai ntiff to

address creditor claims from 2010 to 2012. The agreement for legal services included personal guarantees by the Dreyfuss defendants.

In 2012, Oakridge wished to operate the nursing home in Ferndale and commenced the process of transferring the C ertificate of Need (CON) from Elisa Dreyfuss. This required the approval of the Michigan Department of Community Health. Because of an existing indebtedness to the State of Michigan for a Quality Assurance Assessment Fee, a condition of

the transfer of t he CON was a payment to the state of $152,840.88 to clear the debt. Oakridge- 2

- made the payment on December 27, 2012. The following day, Community Health approved Oakridge ’ s CON application.

Subsequently, in 2015, plaintiff filed suit against defendants f or unpaid attorney fees.

Plaintiff obtained judgments against all three defendants . Unable to collect on the judgments, plaintiff made various attempts at garnishment directed to Oakridge. The essence of plaintiff ’ s argument is that Oakridge obtained th e CON for substantially less than its value and plaintiff seeks a remedy under the Uniform Fraudulent Transfer Act (UFTA) , MCL 566.31 et seq

.

Oakridge maintains that it paid consideration for the transaction and has no liability to plaintiff. In fact, Oakridge raises a number of arguments on appeal as to why it should prevail, including (1) that defendants received adequate consideration, (2) that a CON is nontransferable by statute, (3) that the CON issued to Oakridge is not property of the debtor whic h leaves plaintiff with no remedy

, and (4) that plaintiff has failed to establish a reasonable equivalent value of the CON. Oakridge ’ s various arguments may or may not have merit. But only one was relied upon by the trial court in granting summary disposition, that of adequate consideration. And the trial court erroneously decided that issue.

The trial court ’ s opinion states its reasoning for granting summary disposition as follows:

The Court has carefully reviewed all of the arguments and

docume ntation submitted by the parties. The Court finds that based on what has been presented, the dispositive issue in this case is whether the CON was

transferred without consideration. It is well accepted that a court should not

“ inquire into the sufficienc y of consideration, ” and a minimal amount of

consideration is sufficient. ” General Motors Corp v Depart of Treasury, 466 Mich 213, 239 [; 644 NW2d 734] (2002).

Oakridge Manor argues that Defendants received consideration in two

respects. First, payment of the $15 2,840.88 to the State of Michigan, as applied by the State of Michigan for the outstanding Assessment Fee, and, second, the $12,541.59 for the forgiveness of the “ penalty owed by Hilton. ” As to consideration, Plaintiff merely responds that Oakwo od Manor has admitted that it paid nothing to L & L in consideration for receiving L & L ’ s right to a CON for a 64 bed nursing home. However, this does not mean that

Defendants did not receive consideration.

Here, based on the evidence, Oakridge Manor pa id the State of Michigan for the issuance of the new CON and then the State of Michigan gave consideration to Defendants in an amount of at least $165,382.39, as

detailed above. Accordingly, there was consideration.

The trial court, as well as Oa kridge in its argument, confuses the common

- law principle of legally adequate consideration with the UFTA standard of “ reasonably equivalent value. ” See- 3

- MCL 566.35. That is, UFTA is not satisfied merely by establishing that a transaction was supported by consider ation, such as the traditional pepper corn. 1 Rather, under UFTA, a transfer is fraudulent if it is made, not without consideration, but without a “ reasonably equivalent

value ” :

A transfer made or obligation incurred by a debtor is voidable as to a

credit or whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation

and the debtor was insolv ent at that time or the debtor became insolvent as a result of the transfer or obligation. [MCL 566.35(1).]

Such a fraudulent transaction may then give rise to a remedy to the creditor. See, e.g., MCL 566.35(2) and MCL 566.37.

In short, the trial court addressed the wrong question. The trial court addressed the question whether there was legally adequate consideration to prevent the contract from failing

for a lack of consideration. But the trial court should have addressed th e question whether there was a genuine issue of material fact regarding whether there was “ reasonably equivalent value ” given and whether plaintiff could establish a right to a remedy under UFTA.

For these reasons, we reverse the trial court ’ s grant of summary disposition in favor of Oakridge and remand to the trial court for further proceedings consistent with this opinion. On remand, Oakridge is, of course, free to raise any of its additional arguments regarding whether plaintiff is able to establish a remedy under UFTA.

Reversed and remanded. We do not retain jurisdiction. Plaintiff may tax costs.

/s/ David H. Sawyer

/s/ Colleen A. O’Brien

/s/ Anica Letica

1 See General Motors Corp , 466 Mich at 239.