Court Opinion

ID: 9656248
Source: CourtListenerOpinion
Date Created: 2023-08-23 19:44:27.720025+00
Date Added: 2024-06-11T18:13:30.798835
License: Public Domain

Per Curiam.
In a previous lawsuit, plaintiff, Karen Courtney, and defendant James Courtney (hereafter defendant) were divorced. One of the major issues in the divorce proceedings was the value of James Courtney’s property, including his interest in two corporations, Century 21 of Michigan, Inc., and Century 21-Hartford West, Inc. Based on the information Mr. Courtney supplied, the parties reached a property settlement in which Mr. Courtney’s interest in the two corporations was valued at $115,000. This property settlement was incorporated in the judgment of divorce. Plaintiff subsequently learned that approximately one year after the judgment of divorce was entered Mr. Courtney sold his interest in the two corporations for $1,266,963. Ms. Courtney also learned that during the divorce proceedings Mr. Courtney was negotiating for the sale of his interest in these corporations and was offered $712,670. Ms. Courtney then brought this lawsuit alleging, inter alia, that Mr. Courtney fraudulently concealed the value of his interest in the two corporations during the divorce proceedings which induced her to enter into the unfavorable property settlement. The trial court denied defendant’s motion for accelerated judgment on Count II which alleged that res judicata bars this action and defendant now appeals by leave granted.
The trial court properly found that plaintiffs *74cause of action for fraud, Count II, is not barred by res judicata. As a general proposition, the principles of res judicata may not be invoked to sustain fraud. 37 Am Jur 2d, Fraud and Deceit, §488, p 676. Defendant’s reliance on Rogoski v Muskegon, 107 Mich App 730; 309 NW2d 718 (1981), is misplaced. In Rogoski, this Court noted that there were no previous Michigan cases which allowed an independent action for fraud which occurred during a prior lawsuit. The Court then assumed for the sake of argument that the plaintiff could bring such an action, but found that she had no claim for damages for the defendant’s alleged conspiracy to commit perjury. 107 Mich App 735-736. The Court in Rogoski therefore did not hold that actions to recover damages for fraud are not permitted. This Court in Rogoski did consider whether a claim of extrinsic fraud is sufficient to seek relief from an earlier judgment. 107 Mich App 736. Since, in the instant case, Count I of plaintiffs complaint, which was based on fraud and sought equitable relief from the earlier divorce judgment, was dismissed pursuant to defendant’s motion for accelerated judgment on Count I, this issue is not before us and this portion of Rogoski is inapplicable.
Plaintiff may maintain an independent claim for damages resulting from defendant’s alleged fraudulent conduct. To hold otherwise is contrary to the general rule that the principles of res judicata may not be invoked to sustain fraud. As stated in 37 Am Jur 2d, Fraud and Deceit, § 488, p 676:
"It has been held that a judgment or decree entered in accordance with the settlement of a claim does not bar an action for damages resulting from fraud where the wrongdoer fraudulently conceals his wrong from the injured person, who agrees, in ignorance of the *75wrong, to the settlement and entry of the judgment or decree.16”
In light of this rule, we are unable to distinguish this case from Gorman v Soble, 120 Mich App 831; 328 NW2d 119 (1982). In that case, this Court recognized a claim for damages based on fraudulent inducement to enter a consent judgment. The fact that Mr. Courtney, the defendant in this fraud action, also was the defendant in the divorce proceedings does not make him immune from a civil action for damages for alleged fraudulent conduct which partly occurred during the divorce proceedings. Michigan follows a broad rule of res judicata which bars not only claims actually litigated in the prior action, but every claim arising out of the same transaction which the parties, exercising reasonable diligence, could have raised but did not. Gose v Monroe Auto Equipment Co, 409 Mich 147, 160; 294 NW2d 165 (1980); Curry v Detroit, 394 Mich 327, 332; 231 NW2d 57 (1975); Gursten v Kenney, 375 Mich 330, 333-335; 134 NW2d 764 (1965). In order for actionable fraud to exist, the plaintiff must have suffered damage. Mazzola v Vineyard Homes,Inc, 54 Mich App 608; 221 NW2d 406 (1974). In the instant case, plaintiff did not suffer damage until the unfavorable property settlement was incorporated in the judgment of divorce. Plaintiff therefore did not have a claim of fraud against defendant while the divorce proceedings were pending. While the value of defendant’s *76interest in the two corporations was an issue in the divorce proceedings, the plaintiff has a separate and independant claim of fraud which could not have been raised during the divorce proceedings since it did not accrue until the judgment of divorce was entered. The trial court therefore properly denied defendant’s motion for accelerated judgment on Count II of plaintiff’s complaint.
Affirmed.

"16 Ross v Preston, 292 NY 433; 55 NE2d 490 (1944) (the court saying that in such a case the entry of a judgment is merely an incident of the fraud which has been perpetrated outside the action, and the reason that the judgment settling the claim does not preclude proof of the antecedent fraud is that the trial and judgment are only a step in the consummation of the antecedent fraud), reh den 293 NY 664; 56 NE2d 258 (1944); Gould v Cayuga Co Bank, 99 NY 333; 2 NE 16 (1885); Verplanck v Van Buren, 76 NY 247 (1879).”