Kristine K Ahles v. Philip J Ahles ( 2019 )

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
KRISTINE K. AHLES, UNPUBLISHED
March 28, 2019
Plaintiff-Appellee,
v No. 340483
St. Clair Circuit Court
PHILIP J. AHLES, LC No. 17-000366-DM
Defendant-Appellant.
Before: MURRAY, C.J., and GADOLA and TUKEL, JJ.
PER CURIAM.
Defendant appeals as of right a default judgment of divorce. We affirm in part, reverse in
part, and remand.
On appeal, defendant argues that the trial court erred when it refused to set aside an order
of default on the basis that there is no excuse for violating a court rule and erred when the court
made insufficient factual findings on the issues of the equitable division of the marital property
and child custody. We disagree regarding defendant’s argument pertaining to the setting aside of
the default, but we agree that the trial court’s factual findings were insufficient.
I. SETTING ASIDE OF DEFAULT
Defendant argues that the trial court abused its discretion when it denied defendant’s
motion to set aside the June 29, 2017 order of default. “The ruling on a motion to set aside a
default . . . is entrusted to the discretion of the trial court. Where there has been a valid exercise
of discretion, appellate review is sharply limited. Unless there has been a clear abuse of
discretion, a trial court’s ruling will not be set aside.” Alken-Ziegler, Inc v Waterbury Headers
Corp, 461 Mich. 219, 227; 600 NW2d 638 (1999) (citations omitted).
In this case, the trial court entered two defaults against defendant. The first default was
entered on March 8, 2017, “for failure to plead or otherwise defend.” The second default was
entered on June 29, 2017, because defendant failed to appear at a scheduled pretrial hearing. On
August 31, 2017, defendant filed a motion to set aside a default, but his motion discussed only
the second default, and defendant did not provide an affidavit of meritorious defense. The trial
court denied defendant’s motion to set aside the June 29, 2017 default.
“[A]lthough the law favors the determination of claims on the merits, it also has been said
that the policy of this state is generally against setting aside defaults and default judgments that
have been properly entered.” Id. at 229 (citations omitted). The setting aside of a default is
governed by MCR 2.603(D)(1), which states, “A motion to set aside a default or default
judgment, except when grounded on lack of jurisdiction over the defendant, shall be granted only
if good cause is shown and an affidavit of facts showing a meritorious defense is filed.”
(Emphasis added.)
Notably, defendant does not argue that the defaults were improperly entered. Instead, he
asserts that he has shown good cause for setting aside the defaults. A party can show good cause
by “(1) a substantial defect or irregularity in the proceedings upon which the default was based,
(2) a reasonable excuse for failure to comply with the requirements which created the default, or
(3) some other reason showing that manifest injustice would result from permitting the default to
stand.” Shawl v Spence Bros, Inc, 280 Mich. App. 213, 221; 760 NW2d 674 (2008).
Both on appeal and in the trial court, defendant argued that the trial court abused its
discretion when it denied defendant’s motion to set aside the June 29, 2017 default because
defendant was representing himself at the time the defaults were entered and never received
notice of the June 29, 2017 pretrial hearing, as defendant did not know that he needed to update
his address with the court clerk. Defendant had not one, but two defaults entered in this case.
Defendant essentially argues that the trial court should have excused his noncompliance with the
court rules and his failure to update his address with the court clerk because he was
unrepresented by counsel when those errors occurred. However, this Court has said “that a
person acting in propria persona should be held to the same standards as members of the bar.”
Totman v Sch Dist of Royal Oak, 135 Mich. App. 121, 126; 352 NW2d 364 (1984). Accordingly,
defendant’s argument is not persuasive.
Furthermore, good cause alone is not sufficient to set aside a default under MCR
2.603(D)(1). In addition to good cause, a party must also file “an affidavit of facts showing a
meritorious defense.” MCR 2.603(D)(1). “Our Supreme Court has recognized that good cause
and a meritorious defense are separate requirements that may not be blurred and that a party must
have both . . . .” Huntington Nat’l Bank v Ristich, 292 Mich. App. 376, 390; 808 NW2d 511
(2011) (quotation marks and citation omitted). Defendant did not file an affidavit of meritorious
defense in the trial court. Therefore, defendant failed to comply with the requirements of MCR
2.603(D)(1), and the trial court did not abuse its discretion when it denied defendant’s motion to
set aside the June 29, 2017 default.
Defendant also argues that the trial court should have considered a lesser sanction before
entering a default against defendant. However, defendant’s argument is based on caselaw
concerning dismissal. He offers no support for his assertion that a trial court must consider a
lesser sanction before entering an order of default. “A party cannot simply assert an error or
announce a position and then leave it to this Court to discover and rationalize the basis for his
claims, or unravel and elaborate for him his arguments, and then search for authority either to
sustain or reject his position.” Mitchell v Mitchell, 296 Mich. App. 513, 524; 823 NW2d 153
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(2012) (quotation marks and citation omitted). Accordingly, we will not consider defendant’s
argument regarding the necessity of considering a lesser sanction before entering an order of
default.
II. FACTUAL FINDINGS
Defendant also argues that the trial court made insufficient factual findings on the issues
of the division of the martial property and child custody.
This Court has explained the standard of review for distribution of marital property as
follows:
In deciding issues on appeal involving division of marital property, this Court first
reviews the trial court’s findings of fact. Findings of fact, such as a trial court’s
valuations of particular marital assets, will not be reversed unless clearly
erroneous. A finding is clearly erroneous if, after a review of the entire record,
the reviewing court is left with the definite and firm conviction that a mistake was
made. If the trial court’s findings of fact are upheld, this Court must decide
whether the dispositive ruling was fair and equitable in light of those facts. The
dispositional ruling is discretionary and will be affirmed unless this Court is left
with a firm conviction that the division was inequitable. [Cassidy v Cassidy, 318
Mich. App. 463, 476-477; 899 NW2d 65 (2017).]
And this Court will “affirm a custody order unless the trial court’s findings of fact were against
the great weight of the evidence, the court committed a palpable abuse of discretion, or the court
made a clear legal error on a major issue.” Kessler v Kessler, 295 Mich. App. 54, 58; 811 NW2d
39 (2011). “[A]n abuse of discretion occurs only when the trial court’s decision is outside the
range of reasonable and principled outcomes.” Saffian v Simmons, 477 Mich. 8, 12; 727 NW2d
132 (2007).
The trial court did not allow defendant to participate in the hearing resolving the issues of
child custody and the division of the marital property because defendant was in default.
Plaintiff’s testimony was the only evidence introduced at the hearing. “This Court has held that
allowing a defaulted party to participate in the adjudication of the property division in a divorce
case would effectively undermine the court’s inherent authority to enforce its own directives and
to mold its relief according to the character of the case.” Koy v Koy, 274 Mich. App. 653, 659;
735 NW2d 665 (2007) (quotation marks, citation, and brackets omitted). Accordingly, the trial
court did not err when it refused to allow defendant to participate in the hearing.
Defendant also argues that the trial court’s factual findings were insufficient. “[E]ven
though defendant was properly precluded from participating in the proceedings, the trial court
was still required to equitably divide the marital property and to make findings of fact to support
that decision.” Id.
A trial court must make specific findings of fact regarding the value of
each disputed piece of marital property awarded to each party in the judgment. A
trial court’s findings of fact are inadequate if they are not sufficiently specific to
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enable the parties to determine the approximate values of their individual awards
by consulting the verdict along with the valuations to which they stipulated.
[Woodington v Shokoohi, 288 Mich. App. 352, 364-365; 792 NW2d 63 (2010)
(citation omitted).]
The trial court did not make any findings related to the value of any portion of the disputed
marital property except to broadly state, “The value of the marital home is exceeded by its debt.”
The court did not otherwise address the value of any of the personal property that was impacted
by entry of the default judgment of divorce, nor did the court make any specific findings related
to the parties’ debts or retirement funds. The personal property included televisions, motor
vehicles, a pontoon boat, photographs, and tools. This Court cannot determine whether the
division of the marital property was equitable because of the trial court’s failure to make findings
of fact regarding the value of the property on the record. The proper remedy for a trial court’s
failure to make factual findings to support a property division is remand. See Koy, 274 Mich
App at 660. Accordingly, this case must be remanded so the trial court can make adequate
findings of fact to support its division of property.
Defendant also argues that the trial court made insufficient findings of fact regarding
custody of the couple’s minor child, JA. Defendant claims that the court needed to determine
whether a custodial environment existed and then consider the best-interest factors enumerated in
MCL 722.23. Plaintiff, however, claims that the court did not need to make such findings
because the default judgment of divorce granted plaintiff sole legal and physical custody, which,
she argues, maintained the custodial arrangement already put in place by the temporary custody
orders entered by the trial court.
This Court in Thompson v Thompson, 261 Mich. App. 353; 683 NW2d 250 (2004),
declined to accept an argument similar to plaintiff’s argument here. In Thompson, this Court
rejected the plaintiff’s argument “that when a party stipulates [to] a temporary custody order, the
party is no longer entitled to a full evidentiary hearing on the best interest factors.” Id. at 357.
We explained:
Plaintiff’s argument is without merit, as it would preclude the trial court, on the
basis of a temporary custody agreement, from hearing all relevant evidence from
which to make factual findings regarding the best interest factors. By definition, a
temporary custody agreement is only a temporary order pending further
proceedings. Defendant may not be denied a full evidentiary hearing just because
she stipulates with regard to “temporary custody.” [Id.]
While the temporary custody orders at issue here were not stipulated orders like the order at issue
in Thompson, the Court’s rationale, that a temporary custody order does not preclude a full
evidentiary hearing prior to the entry of a new custody order, is nonetheless applicable.
Accordingly, plaintiff’s argument that the trial court did not need to make findings regarding the
existence of an established custodial environment and best-interest factors is incorrect.
“[A] trial court is required to determine whether there is an established custodial
environment with one or both parents before making any custody determination.” Kessler, 295
Mich. App. at 61. The trial court did not determine whether there was an established custodial
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environment before awarding sole legal and physical custody to plaintiff, and the trial court’s
failure to do so was a clear error. Id. “The failure to determine whether there is an established
custodial environment is not harmless because the trial court’s determination regarding whether
an established custodial environment exists determines the proper burden of proof in regard to
the best interests of the children.”1 Id. at 62. Thus, this case must be remanded because “the
trial court must determine whether an established custodial environment existed with plaintiff,
defendant, or both parties before it determines the custody arrangement that serves the best
interests of the [child].” Id.
Before entering the new custody order, the trial court similarly failed to make any
findings regarding the best-interest factors found in MCL 722.23. Additionally, the court never
made any best-interest findings prior to entering either temporary custody order. This Court has
“consistently held that when deciding a custody matter[,] the trial court must evaluate each of the
factors contained in [MCL 722.23] and state a conclusion on each, thereby determining the best
interests of the child.” Thompson, 261 Mich. App. at 363 (quotation marks and citations omitted).
Furthermore, “[w]hen a trial court does not make such findings on the best-interest factors, the
proper remedy is reversal and a remand for a new child-custody hearing.” Rivette v Rose-
Molina, 278 Mich. App. 327, 330; 750 NW2d 603 (2008). Hence, the trial court erred when it
failed to consider the best-interest factors, and on remand the court must make findings and
conclusions for each of the statutory best-interest factors.
Therefore, we remand for the trial court to make sufficient factual findings on the issues
of child custody and the division of the marital property.
III. CONCLUSION
We affirm the trial court’s denial of the motion to aside the default; but we reverse the
trial court’s order on the issues of child custody and the division of marital property and remand
for proceedings consistent with this opinion. We do not retain jurisdiction. No taxable costs,
neither party having prevailed in full. MCR 7.219.
/s/ Christopher M. Murray
/s/ Michael F. Gadola
/s/ Jonathan Tukel
1
When a change of custody would alter the established custodial environment, the evidence
must show—by a clear and convincing standard—that the change is in the children’s best
interests. Kessler, 295 Mich. App. at 61.
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