Court Opinion

ID: 4417321
Source: CourtListenerOpinion
Date Created: 2019-07-17 09:05:44.30827+00
Date Added: 2024-06-11T12:52:45.657636
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                          STATE OF MICHIGAN

                           COURT OF APPEALS

AGNES M. LANCZAK-MITRZYK,                                          UNPUBLISHED
                                                                   July 16, 2019
              Plaintiff/Counterdefendant-
              Appellee,

v                                                                  Nos. 343177; 344685
                                                                   Arenac Circuit Court
GREGORY J. MITRZYK,                                                Family Division
                                                                   LC No. 11-011530-DZ
              Defendant/Counterplaintiff-
              Appellant.

Before: M. J. KELLY, P.J., and MARKEY and GLEICHER, JJ.

PER CURIAM.

       In these consolidated appeals stemming from the parties’ 2012 judgment of separate
maintenance, defendant, Gregory J. Mitrzyk, challenges postjudgment orders entered by the trial
court. In Docket No. 343177, defendant appeals by right the trial court’s award of $2,500 in
attorney fees to plaintiff, Agnes M. Lanczak-Mitrzyk. In Docket No. 344685, defendant appeals
by delayed leave granted1 the trial court’s order dividing marital property and modifying spousal
support. We affirm.

                                      I. BACKGROUND

       Plaintiff and defendant were married for approximately 25 years before obtaining a
judgment of separate maintenance (“JOSM”) in 2012, pursuant to which plaintiff was awarded
spousal support of $7,000 per month. In 2017, plaintiff filed a motion seeking enforcement or
reformation of the JOSM, discovery regarding an alleged concealed transfer of property prior to
entry of the JOSM, an increase in spousal support, and seeking recoupment of attorney fees in

1
  Lanczak-Mitrzyk v Mitrzyk, unpublished order of the Court of Appeals, entered October 10,
2018 (Docket No. 344685). In the same order, on the Court’s own motion, the two appeals were
consolidated. Id.

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connection with the motion. Defendant filed his own motion, asking the trial court to reduce
spousal support to $2,500 per month in light of his “semi-retirement,” which had reduced his
annual income from approximately $340,000 to $150,000.

        Relevant to these appeals, the trial court entered an order: (1) awarding plaintiff one-half
of the value of certain real property (“the Lots”)2 that the court determined defendant had
concealed; (2) dividing an Edward Jones investment account (“the Account”)3 that had never
been divided as required by the JOSM;4 (3) reducing spousal support to $6,000; and (4) awarding
plaintiff $2,500 in attorney fees.

                                          II. ANALYSIS

                                 A. STANDARDS OF REVIEW

       In a domestic relations action, this Court reviews for an abuse of discretion an award of
attorney fees. Loutts v Loutts (After Remand), 309 Mich. App. 203, 215-216; 871 NW2d 298
(2015). The trial court’s underlying factual findings are reviewed for clear error, and issues of
law are reviewed de novo. Id. at 216.

        Similarly, the trial court’s factual findings related to the division of marital property are
reviewed for clear error. Hodge v Parks, 303 Mich. App. 552, 554-555; 844 NW2d 189 (2014).
Clear error occurs “when this Court is left with the definite and firm conviction that a mistake
has been made.” Id. at 555 (quotation marks). “If the trial court’s findings of fact are upheld,
the appellate court must decide whether the dispositive ruling was fair and equitable in light of
those facts.” Woodington v Shokoohi, 288 Mich. App. 352, 355; 792 NW2d 63 (2010); see also
Sparks v Sparks, 440 Mich. 141, 151-152; 485 NW2d 893 (1992). Given that the trial court’s
“dispositional ruling is an exercise of discretion[,] . . . the ruling should be affirmed unless the
appellate court is left with the firm conviction that the division was inequitable.” Sparks, 440
Mich. at 152; see also Woodington, 288 Mich. App. at 355.

        This Court reviews for an abuse of discretion a trial court’s award of spousal support.
Woodington, 288 Mich. App. at 355. The trial court abuses its discretion when its “decision falls
outside the range of reasonable and principled outcomes.” Id. We review for clear error the trial
court’s factual findings associated with an award of spousal support. Id.

2
  The Lots were comprised of two separate addresses located in Omer, Michigan. Plaintiff
alleged that defendant utilized a “strawman,” Dennis Berlin, to purchase the Lots during the
JOSM proceedings in order to avoid dividing it with plaintiff as marital property.
3
 Simultaneously, the trial court entered a supplemental order specifically delineating how the
Account was to be divided.
4
  The Account was made up of various assets, including cash and liquid assets. The JOSM
required the Account to be divided by March 2012; however, the parties never divided the
Account, and each retained joint access and made withdrawals and trades.

                                                -2-
        Finally, “[a] trial court’s decision on a motion to set aside a prior judgment is
discretionary and will not be reversed on appeal absent an abuse of discretion.” Heugel v
Heugel, 237 Mich. App. 471, 478; 603 NW2d 121 (1999).

                                       B. ATTORNEY FEES

       Defendant argues that the trial court abused its discretion in awarding $2,500 in attorney
fees because this award was not based on MCL 552.13 or MCR 3.206. We disagree.

       “[A]ttorney fees are not recoverable as an element of costs or damages unless expressly
allowed by statute, court rule, common-law exception, or contract.” Reed v Reed, 265 Mich. App.
131, 164; 693 NW2d 825 (2005). In a domestic relations action, an award of attorney fees is
authorized by statute and court rule. Id. MCR 3.206(D)(1) permits a party to request attorney
fees:

               A party may, at any time, request that the court order the other party to
       pay all or part of the attorney fees and expenses related to the action or a specific
       proceeding, including a post-judgment proceeding.

MCR 3.206(D)(2), which lists two independent bases for awarding attorney fees in a domestic
relations action, provides:

               A party who requests attorney fees and expenses must allege facts
       sufficient to show that

               (a) the party is unable to bear the expense of the action, and that the other
       party is able to pay, or

              (b) the attorney fees and expenses were incurred because the other party
       refused to comply with a previous court order, despite having the ability to
       comply.

The language in MCR 3.206(D)(2)(a) has been interpreted to require an award of attorney fees in
a domestic relations action only as necessary to enable a party to prosecute or defend a suit.
Loutts, 309 Mich. App. at 216. The language in MCR 3.206(D)(2)(b) does not contemplate a
party’s ability to pay; rather, its focus is on a party’s behavior. Richards v Richards, 310 Mich
App 683, 701; 874 NW2d 704 (2015). MCR 3.206(D)(2)(b) authorizes an award of attorney fees
in a domestic relations action when a requesting party has been forced to incur expenses
resulting from the other party’s unreasonable conduct during the course of litigation. Cassidy v
Cassidy, 318 Mich. App. 463, 480; 899 NW2d 65 (2017); Richards, 310 Mich. App. at 700.

         Although the trial court did not specify the basis for the award of attorney fees, it is clear
from our review of the record that MCR 3.206(D)(2)(b) was applied. The trial court found, and
both parties conceded, that the Account had not been divided despite the JOSM’s instructions to
do so. Plaintiff testified that the failure to divide the Account was the fault of both parties. The
JOSM was a previous court order, but plaintiff and defendant failed to comply despite having the
ability to do so. Defendant, accordingly, was partially at fault. Furthermore, as will be discussed

                                                 -3-
more fully below, the trial court found that defendant had engaged in a strawman scheme to hide
the Lots from plaintiff and from the trial court. Defendant’s actions in concealing the Lots
constituted unreasonable conduct that required plaintiff to incur legal expenses over the course of
the trial court proceedings. See Cassidy, 318 Mich. App. at 480; Richards, 310 Mich. App. at 700.

         Plaintiff claimed that she had incurred more than $4,500 in attorney fees, but the trial
court awarded her only $2,500. The trial court presumably determined that it was improper to
award the entirety of plaintiff’s attorney fees given her partial fault in necessitating further
litigation. We discern no abuse of discretion.

                                C. STRAWMAN TRANSACTION

       Defendant argues that the trial court clearly erred in its determination that defendant
engaged in a strawman transaction and, accordingly, that the trial court’s award to plaintiff of
one-half of the value of the profits derived from the Lots was inequitable. We disagree.

        “[A] party’s attempt to conceal assets” is “relevant in considering an equitable division of
marital property . . . .” Hanaway v Hanaway, 208 Mich. App. 278, 298; 527 NW2d 792 (1995).
Furthermore, “when a party has dissipated marital assets without the fault of the other spouse,
the value of the dissipated assets may be included in the marital estate.” Woodington, 288 Mich
App at 368. See also Everett v Everett, 195 Mich. App. 50, 55-56; 489 NW2d 111 (1992)
(holding that the trial court did not clearly err in including the plaintiff’s house in its valuation of
the marital estate when the plaintiff utilized stock options without the defendant’s knowledge as
part of the house’s down payment). “The overarching goal of a trial court’s property distribution
in a divorce action is equity.” Elahham v Al-Jabban, 319 Mich. App. 112, 121; 899 NW2d 768
(2017).

        In the present case, defendant testified that he used $40,000 from the Account to purchase
the Lots in 2013. Defendant conceded that these funds were still marital assets when he
withdrew them because the Account remained undivided. Defendant has thus waived his
argument on appeal that these same funds were not marital property. 5 Therefore, it was not
inequitable for the trial court to award plaintiff a portion of the value of, and the profits derived
from, the Lots because defendant utilized undivided marital funds to purchase the Lots.

       Furthermore, there was ample evidence supporting the trial court’s determination that
defendant had engaged in a strawman transaction with Dennis Berlin in order to conceal
defendant’s interest in the Lots. Defendant claimed the Lots on his 2012 federal tax returns,
including depreciation and amortization, and a witness employed within the tax industry testified
that defendant would likely not have placed the Lots on his tax returns unless he had owned

5
  “A defendant may not waive objection to an issue before the trial court and then raise it as an
error before this Court. To hold otherwise would allow defendant to harbor error as an appellate
parachute.” People v Fetterley, 229 Mich. App. 511, 520; 583 NW2d 199 (1998) (citation
omitted).

                                                  -4-
them. Additionally, there was a discrepancy between the price that Berlin paid for the Lots6 and
the price that defendant paid Berlin for them in 2013. Berlin paid approximately $46,000 in
2011 for the Lots. But as reflected in the 2013 deed executed by defendant and Berlin, defendant
paid only $22,500. This was approximately one-half of the purchase price that Berlin paid for
the Lots, which supported plaintiff’s theory that, at the time of the 2013 conveyance, defendant
already held a one-half interest in the Lots and was simply buying out Berlin’s one-half interest.
Finally, plaintiff introduced into evidence handwritten notes that indicated the existence of a
business relationship between defendant and Berlin as early as the end of 2011 relating to the
Lots’ maintenance, cost, taxes, and other services.7

                            D. SPOUSAL SUPPORT MODIFICATION

       Defendant next argues that the trial court clearly erred in its evaluation of several spousal
support factors and that its decision to reduce spousal support by only $1,000 constituted an
abuse of discretion. We disagree.

         MCL 552.28 provides in pertinent part:

                 On petition of either party, after a judgment for alimony . . . and subject to
         [MCL 552.17], the court may revise and alter the judgment, respecting the
         amount or payment of the alimony or allowance . . . and may make any judgment
         respecting any of the matters that the court might have made in the original
         action.

“In general, a trial court may modify child or spousal support after the judgment has entered if
there is a change in circumstances.” Lemmen v Lemmen, 481 Mich. 164, 166; 749 NW2d 255
(2008). Such a modification “must be based on new facts or changed circumstances arising since
the judgment of divorce.” Moore v Moore, 242 Mich. App. 652, 654; 619 NW2d 723 (2000). In
Woodington, 288 Mich. App. at 356, this Court discussed the factors associated with determining
spousal support, stating:

6
    Berlin had previously purchased the Lots from a third party in 2011.
7
  Alternatively, defendant argues that plaintiff’s motion to modify, amend, or set aside the JOSM
was untimely under MCR 2.612(C). This argument was not raised in the trial court, and
arguments raised for the first time on appeal are unpreserved and “are not ordinarily subject to
review.” Booth Newspapers, Inc v Univ of Mich Bd of Regents, 444 Mich. 211, 234; 507 NW2d
422 (1993). Furthermore, under the circumstances presented, we are not convinced that the
motion was untimely. See MCR 2.612(C)(1)(f) and (2); Heugel, 237 Mich. App. at 481 (“we
believe that a trial court may properly grant relief from a judgment under MCR 2.612[C][1][f],
even where one or more of the bases for setting aside a judgment under subsections a through e
are present, when additional factors exist that persuade the court that injustice will result if the
judgment is allowed to stand”).

                                                  -5-
               Among the factors that a court should consider are (1) the past relations
       and conduct of the parties; (2) the length of the marriage; (3) the abilities of the
       parties to work; (4) the source and the amount of property awarded to the parties;
       (5) the parties’ ages; (6) the abilities of the parties to pay support; (7) the present
       situation of the parties; (8) the needs of the parties; (9) the parties’ health; (10) the
       parties’ prior standard of living and whether either is responsible for the support
       of others; (11) the contributions of the parties to the joint estate; (12) a party’s
       fault in causing the divorce; (13) the effect of cohabitation on a party’s financial
       status; and (14) general principles of equity.

“The objective of spousal support is to balance the incomes and needs of the parties in a way that
will not impoverish either party, and support is to be based on what is just and reasonable under
the circumstances of the case.” Id.

        Here, defendant challenges the trial court’s findings concerning the past relations and
conduct of the parties, the parties’ ability to work, the parties’ needs, and the parties’ prior
standard of living. We discern no clear error in the trial court’s findings. Regarding the past
relations and conduct of the parties, we note defendant had attempted to conceal marital property
from plaintiff and the trial court. Accordingly, this factor could weigh against defendant.
Regarding the parties’ ability to work, the trial court did not, contrary to defendant’s assertions,
fail to make a determination as to plaintiff’s ability to work. The trial court explicitly found that
both parties possessed the ability to work and that, to the extent that either had decided not to
work, this was the parties’ choice. Regarding the parties’ needs, the parties presented extensive
evidence of their expenses and income. The trial court found that defendant was in a superior
financial position, and it stated that it found this factor to be significant. Although the trial court
did not articulate every expense testified to by the parties, its decision demonstrates that it had
considered the expenses. Our review of the evidence shows no error in the determination that
defendant was in a superior financial position given his annual income and extensive assets.
Finally, regarding the parties’ prior standard of living, the trial court did not, contrary to
defendant’s argument, determine that plaintiff was entitled to the same standard of living as
defendant. Rather, it merely stated that the parties had lived “pretty well and comfortably.”

        Additionally, defendant challenges the trial court’s spousal support decision as being in
conflict with provisions in the JOSM. Defendant appears to argue that, because the JOSM
explicitly stated that it contemplated defendant’s retirement and would treat it as a change of
circumstances rather than a voluntary reduction of income, he was entitled to a significant
reduction in spousal support. Defendant, however, did not fully retire; he was merely “semi-
retired.” Accordingly, this portion of the JOSM was not implicated. Furthermore, nothing in the
JOSM required the trial court to reduce spousal support by a specific percentage; rather, it
merely stated that retirement would constitute a change of circumstances. As evidenced by its
decision to reduce spousal support, the trial court found that defendant’s semi-retirement
constituted a change of circumstances. However, nothing required it to reduce spousal support to

                                                 -6-
the $2,500 proposed by defendant.8 The amount was left to the trial court’s discretion. Given
defendant’s superior financial status as evidenced by his various bank accounts, retirement
accounts, and investments, the trial court’s decision to reduce spousal support by $1,000 was not
outside the range of principled outcomes. Woodington, 288 Mich. App. at 355.

                              E. THE EDWARD JONES ACCOUNT

        Finally, defendant argues that the trial court’s method of dividing the Account was
inequitable. We disagree.

         Once again, “[t]he overarching goal of a trial court’s property distribution in a divorce
action is equity.” Elahham, 319 Mich. App. at 121. Although the trial court is not required to
divide the marital property equally, the property must be equitably divided upon a court’s
evaluation of the parties’ contributions, faults, and needs. Id. When relevant to the case, a trial
court must consider: (1) the duration of the marriage; (2) the parties’ contributions to the marital
estate; (3) the age of the parties; (4) the parties’ health; (5) the life status of the parties; (6) the
parties’ necessities and circumstances; (7) the earning abilities of the parties; (8) the past conduct
and relations of the parties; and (9) general principles of equity. Id. Furthermore, a trial court
may consider any additional relevant factors. Id. Although the trial court is required to consider
all relevant factors, it is prohibited from giving disproportionate weight to any one of the factors.
Id. at 122.

         In the present case, the trial court found that the parties had treated the Account as if they
were still married, had shared the assets, and had made trades and withdrawals that affected the
Account. The trial court further determined that both parties had assumed the risk of treating the
Account in this manner. And both parties had possessed the opportunity to invest, which could
result in gains or losses. The evidence supported these determinations. Both parties agreed that
the Account had never been divided, and plaintiff testified that this was due to both parties’ fault.
Defendant conceded that he withdrew $40,000 in 2013 and $26,405.86 in 2015. Plaintiff
testified that the parties treated the Account as a joint asset and that there was no demarcation
between the assets in the Account. Defendant argues that he should not be responsible for the
losses incurred by plaintiff. Yet he failed to take the necessary steps for dividing the account,
and he continued to treat the Account as one held jointly by the parties. He may not now take
issue with the losses incurred through trades executed by plaintiff when he himself treated the
Account as a jointly held asset.

        The trial court ordered that defendant pay to plaintiff the $66,405.86 that he removed
from the Account, placing the parties back in their original positions. The Account would then
be divided equally between the parties, subject to gains or losses from the order’s date to the date

8
  We find equally meritless defendant’s contentions that the trial court’s decision infringed on his
right to retire. By his own testimony, defendant’s decision to only partially retire was based on
his desire to pay for his adult daughter’s school tuition and expenses.

                                                  -7-
of division. We are not left with a firm conviction that the trial court’s division of the Account
was inequitable. Sparks, 440 Mich. at 152.

     We affirm. Having fully prevailed on appeal, plaintiff is awarded taxable costs under
MCR 7.219.

                                                            /s/ Michael J. Kelly
                                                            /s/ Jane E. Markey
                                                            /s/ Elizabeth L. Gleicher

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