Court Opinion

ID: 9353939
Source: CourtListenerOpinion
Date Created: 2023-01-13 05:10:25.962798+00
Date Added: 2024-06-11T17:10:32.744594
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

SHANA BRENDEL, formerly known as SHANA                                 FOR PUBLICATION
MORRIS,                                                                January 12, 2023
                                                                       9:00 a.m.
                 Plaintiff-Appellee,

v                                                                      No. 359226
                                                                       Livingston Circuit Court
BRIAN MORRIS,                                                          LC No. 19-054406-DM

                 Defendant-Appellant.

Before: GLEICHER, C.J., and K. F. KELLY and LETICA, JJ.

GLEICHER, C.J.

        Courts are permitted to modify child support orders whenever changed circumstances
demand, even if the child support award was negotiated as part of a consent judgment of divorce.
Here, the parties agreed to a one-time lump-sum child support payment in the consent judgment
of divorce. Before the payment could be made, the recipient stopped exercising most of his
parenting time. This change of circumstances warranted review of the child support award. The
circuit court agreed with this principle but cited other grounds for granting the relief requested.
We affirm for the reasons stated in this opinion.

                                         I. BACKGROUND

        Shana and Brian Morris entered a consent judgment of divorce in July 2020. At that time,
the parties’ two children were 16 and 14 years old.1 The consent judgment provided for equal
parenting time. Under the Michigan Child Support Formula (MCSF), Shana was required to pay
Brian $1,051 in monthly child support. In lieu of monthly payments, the parties agreed that Shana
would transfer $100,000 from one of her retirement accounts to Brian. Consistent with this
agreement, ¶ 6 in the “custody, parenting time, and support” section of the consent judgment states:

1
    The couple’s eldest child has since reached the age of majority.

                                                  -1-
          See attached Uniform Child Support Order [UCSO]. The parties acknowledge, and
          as reflected in the [UCSO] Deviation Addendum, and the Settlement Agreement
          between the parties dated March 20, 2020,[2] Wife has prepaid Husband $100,000
          from her 401K as outlined in paragraph 19 in lieu of any claim he may currently
          have or have in the future for child support from Wife to Husband.

         Paragraph 19 falls within the property division section of the consent judgment. It lists the
various pensions and retirement plans each party holds. It states, “Out of Wife’s Fidelity PepsiCo
Savings Plan, $100,000 shall be transferred to Husband by way of a Qualified Domestic Relations
Order (“QDRO”) as outlined in paragraph 6. Husband shall pay for the cost of drafting the
QDRO.” The UCSO deviation addendum attached to the judgment further provides, “Wife has
transferred $100,000 in retirement funds to Husband in full satisfaction of any claim he may have
to the receipt of child support,” and that “$100,000 in retirement funds were transferred to Husband
from Wife in full satisfaction of any claim to child support.”

        Although the documents indicated that Shana had already transferred $100,000 to Brian,
that transfer had not been completed.3 And it soon became clear that the equal parenting-time
arrangement would not go as planned. The children were living with their mother fulltime and
spent “maybe one overnight per month” with their father. Shana waited to seek any relief “to see
if the children would eventually visit with their father and if [Brian] would insist on enforcing the
parenting time schedule set forth in the Judgment.” Neither occurred.

         Seven months after entering into the consent judgment of divorce, Shana filed a “motion
for relief from judgment and child support.” Citing MCR 2.612(C)(1)(b), Shana characterized the
failed parenting-time arrangement as newly discovered evidence that negated her child support
obligation under the MCSF. “Had it been known at the time of entry of the Judgment of Divorce
that [Brian] would effectively have no parenting time, [Shana] would not only have not agreed to
a lump sum transfer of retirement funds in lieu of child support, but would have required [Brian]
to pay child support” to her. In addition to setting aside the $100,000 transfer provisions in the
divorce judgment, Shana requested that the court recalculate the child support award based on her
fulltime custody of the children.

        Brian challenged Shana’s request for relief, but did not claim that he had exercised his
parenting time and did not seek to enforce the parenting-time provision in the divorce judgment.
Rather, Brian contended that the $100,000 transfer was part of the property settlement. He asserted
that the court was bound by this division reached through fair negotiation. Supporting that the
one-time transfer was part of the property division and not in lieu of child support, Brian
contended, was that a parent cannot bargain away a child’s right to future financial support.
“Provisions that attempt to put a ceiling on child support available in the future are unenforceable
and misleading,” Brian argued. In any event, Brian asserted, a motion for relief from judgment
was the wrong tool for seeking modification of a child support order. But no motion to modify

2
    The settlement agreement is not part of the lower court record.
3
  At the Friend of the Court (FOC) hearing, Brian’s counsel stated that the pandemic “slow[ed]”
the QDRO process.

                                                  -2-
child support would eliminate Shana’s separate duty under the property settlement to transfer
$100,000 to him, he insisted.

        Shana responded that she was willing to stipulate that the challenged provision in the
judgment of divorce was unenforceable and void. The parties’ child support obligations would
then need to be recalculated based on the change in circumstances. If the court found the
challenged provision enforceable, Shana urged the court to exercise its power under MCL 552.17
to modify the order. Shana further challenged Brian’s characterization of the $100,000 transfer as
part of the property division, pointing out that the plain language of the consent judgment and
UCSO deviation addendum provided that the one-time transfer was in lieu of child support.

        A Friend of the Court (FOC) referee conducted a hearing. In the referee’s report and
recommendation, the referee noted that ¶ 6 of the consent judgment “does outline the transfer” and
referred to the deviation addendum to the UCSO. The referee continued, “MCR 3.211(D)(1)
provides that the terms of the UCSO shall govern if the terms of the judgment or order conflict
with the [UCSO].” The UCSO deviation addendum indicated that the $100,000 transfer had
already occurred. “While the deviation addendum indicates that the transfer occurred, [Shana’s]
counsel explained that the transfer has not occurred due to the time required to prepare a QDRO.”
The referee found “a sufficient change in circumstances to review child support,” as Shana claimed
the children were living almost exclusively with her. But pursuant to MCL 552.603, any
recommended change in the support order could be prospective only. The referee agreed with
Brian’s position that the parents could not bargain away the children’s future right to support, but
noted that they had reached a settlement to ensure adequate support into the future. The courts
were bound by that agreement. The proper method to attack that settlement provision was through
an appeal of the divorce judgment, not in a collateral attack to the child support order, the referee
ruled:

       By failing to appeal the original judgment of divorce, [Shana] has effectively
       stipulated her consent to its provisions, including the original determination of child
       support. [Shana’s] agreement to pay [Brian] is clear and documented both in the
       JOD and UCSO. Because the transfer has not occur[red] does not, in this Referee’s
       opinion, invalidate the agreement reached by the parties.

        Shana objected to the FOC recommendation. The crux of her argument was that Brian did
not follow the terms of the consent judgment as he failed to exercise parenting time. This justified
Shana’s request for relief from the child support terms, which required a one-time transfer of
$100,000. Shana argued that relief was warranted under MCR 2.612(C)(1)(c) because Brian
negotiated the child support award while not intending to exercise equal parenting time, thereby
defrauding the court. Alternatively, Shana contended that she was entitled to relief under MCR
2.612(C)(1)(f), a catch-all provision, as the change in parenting time rendered the child support
award unjust and inequitable.

        Not appreciating that the circuit court’s review would be de novo, Brian complained that
Shana merely “rehash[ed] the same arguments” considered and rejected by the FOC. Brian then
focused on language in the judgment and UCSO deviation addendum indicating that the $100,000
transfer had already been made. This, he claimed, prevented the court from granting prospective
relief. Further, Brian noted, the language of the judgment did not indicate that the transfer was

                                                -3-
contingent on Brian exercising equal parenting time. Shana’s only recourse was to transfer the
funds and then seek child support from Brian going forward.

        The circuit court conducted a de novo hearing to consider Shana’s objections. The court
agreed that consent divorce judgments are contractual in nature and must be enforced as
negotiated. “[I]n this situation, it is clear from the language [of the judgment] that that $100,000
was for child support,” the court ruled. Yet, Brian had not exercised his parenting time with the
children to warrant the award of any child support amount. Accordingly, the court found the
motion for relief from judgment supported. The court relied on MCR 2.612(C)(1)(c) and (f),
finding that at a minimum, extraordinary circumstances justified setting aside the judgment to
achieve justice. The court explained, “I don’t see how [Brian’s] substantial rights can be
detrimentally affected by him not receiving child support for the children that he didn’t care for.”
The court also referred the matter to the FOC to recalculate the child support award given the
actual custody arrangement.

        The circuit court subsequently entered an order providing that Shana was “not required to
transfer $100,000 to” Brian and referring the matter to the FOC for recalculation of the parties’
child support obligations retroactive to the date Shana filed her motion.

       Brian filed a delayed application for leave to appeal, which this Court granted. Brendel v
Morris, unpublished order of the Court of Appeals, entered March 23, 2022 (Docket No. 359226).

                                         II. DISCUSSION

        Brian continues to argue that the one-time $100,000 transfer is part of the property
settlement, not a child support award. A consent judgment is treated as a contract and is interpreted
as such. We interpret contracts according to their plain language and enforce them as written.
Laffin v Laffin, 280 Mich App 513, 517; 760 NW2d 738 (2008). Paragraph 6 is located in the
“custody, parenting time, and support” section of the consent judgment. It expressly provides that
Shana’s transfer of $100,000 is “in lieu of any claim [Brian] may currently have or have in the
future for child support from” Shana. Paragraph 6 refers the reader to the attached UCSO deviation
addendum, which twice states that the transfer is “in full satisfaction of any claim to child support.”
These provisions could not be clearer—the $100,000 transfer is child support.

        Paragraph 19 of the divorce judgment does not transform the transfer into a property
settlement. This provision is within the property division section of the judgment. It awards each
party their separate retirement accounts and lists those accounts for reference. This provision then
clarifies that Shana is required by ¶ 6 to transfer $100,000 from one of the listed accounts to Brian
using a QDRO. This language does not equate to a property settlement. It merely explains that
the child support transfer required by ¶ 6 will be effectuated through a transfer from Shana’s
property. Logically, the drafters of the agreement likely understood that because a QDRO was
going to be used to pay the child support, the funds had to come from a retirement account.
Because the parties’ retirement accounts were listed within the “property” section of the consent
judgment, it made sense for the judgment to reference the QDRO in that section, as well as within
the “custody, parenting time, and support provisions” section.

                                                 -4-
       Our legal determination that the $100,000 transfer is child support removes a leg of support
from many of Brian’s remaining challenges. Brian repeatedly relies on the principle that a court
may not modify an unambiguous contract reached after fair negotiation to support that the
$100,000 transfer requirement must be enforced. See Laffin, 280 Mich App at 517 (“[C]onsent
judgments are final and binding upon the court and the parties, and cannot be modified absent
fraud, mistake, or unconscionable advantage.”). However, “child support agreements entered in
divorce actions always remain modifiable, depending upon changed circumstances.” Crego v
Coleman, 463 Mich 248, 256; 615 NW2d 218 (2000) (emphasis added). See also MCL 552.17.
Accordingly, even if the parties to a divorce negotiate their own child support arrangement and
memorialize it in a consent judgment, that award remains modifiable.

        Brian claims that the consent judgment does not make the $100,000 transfer contingent on
his exercise of parenting time. However, the transfer requirement clearly was a child support
award, and the consent judgment provided for equal parenting time of alternating weeks. The
purpose of child support is to ensure that a child’s needs are met while in the recipient’s care. See
Milligan v Milligan, 197 Mich App 665, 667; 496 NW2d 394 (1993). The amount of child support
to be awarded must be calculated using the MCSF. MCL 552.605(2). The number of overnight
visits exercised by a parent is a critical factor in determining his or her child support obligation.
See 2021 MCSF 3.03. Where one parent exercises only 12 overnight visits in a year and the other
353, the distribution of financial obligation will be much different than if the parents share week
on/week off parenting time.

        Brian contends that the $100,000 award cannot be modified because the consent judgment
and UCSO deviation addendum state that the transfer already occurred and child support orders
cannot be modified retroactively absent very limited circumstances. MCL 552.603(2). Despite
the use of the past tense in the judgment and addendum, the referenced $100,000 transfer had not
yet occurred when the parties’ penned their signatures, and they both knew it. The delay appears
to be a result of the COVID-19 pandemic and was not the fault of either party. Both parties
understood at signing that the transfer would occur in the future. And as a future child support
payment, the award was modifiable.

         Brian also challenges the procedural method Shana employed to contest the $100,000
transfer provisions. Shana moved for relief from judgment pursuant to MCR 2.612(C)(1). She
initially cited subsection (b), characterizing Brian’s failure to exercise parenting time as newly
discovered evidence. Shana subsequently cited subsection (c) (fraud or misrepresentation) and (f)
(“Any other reason justifying relief from the operation of the judgment.”) as additional grounds
for relief. Shana also requested that the court refer the matter to the FOC for recalculation of the
parties’ child support obligations based on the correct number of overnights with each parent.
Although Shana did not label her pleading as a motion to modify child support, that was the relief
she sought. “Courts are not bound by the labels that parties attach to their claims,” Buhalis v
Trinity Continuing Care Servs, 296 Mich App 685, 691; 822 NW2d 254 (2012), “because this
would exalt form over substance.” Johnston v Livonia, 177 Mich App 200, 208; 441 NW2d 41
(1989). “Rather, courts must consider the gravamen of the complaint or motion based on a reading
of the document as a whole.” Lieberman v Orr, 319 Mich App 68, 77 n 4; 900 NW2d 130 (2017).
Ultimately, the trial court was not required to find any ground to grant relief from judgment under
MCR 2.612(C)(1) as Shana separately alleged and supported grounds to modify the child support
award.

                                                -5-
        Trial courts have discretionary authority to modify child support awards. Holmes v
Holmes, 281 Mich App 575, 586; 760 NW2d 300 (2008). MCL 552.17(1) permits the modification
of a child support order “as the circumstances of the parents and the benefit of the children require.”
MCL 552.517(1)(b) permits parents to make a written request for review of a child support order.
“Reasonable grounds to review” a child support order include “[t]emporary or permanent changes
in the physical custody of a child that the court has not ordered.” MCL 552.517(1)(f)(i). Shana
established that circumstances had changed since entry of the consent judgment and UCSO
deviation addendum. The parties had anticipated sharing equal parenting time, justifying an award
of child support from Shana to Brian to ensure the children’s needs were met in his care. In reality,
Brian exercised minimal parenting time. The existing child support order diverted funds away
from the primary custodian that should be available for the children’s care. Modification was
required to benefit the children following this change in circumstances.

       We affirm.

                                                               /s/ Elizabeth L. Gleicher
                                                               /s/ Kirsten Frank Kelly
                                                               /s/ Anica Letica

                                                 -6-