Michael T Zambricki v. Christine S Zambricki ( 2018 )

STATE OF MICHIGAN
COURT OF APPEALS
MICHAEL ZAMBRICKI, UNPUBLISHED
January 30, 2018
Plaintiff-Appellee/Cross-Appellant,
v No. 334502
Oakland Circuit Court
CHRISTINE ZAMBRICKI, LC No. 2014-825089-DO
Defendant-Appellant/Cross-
Appellee.
MICHAEL ZAMBRICKI,
Plaintiff-Appellee,
v Nos. 334503; 336782
Oakland Circuit Court
CHRISTINE ZAMBRICKI, LC No. 2014-825089-DO
Defendant-Appellant.
Before: STEPHENS, P.J., and CAVANAGH and K. F. KELLY, JJ.
PER CURIAM.
In this divorce action, the parties engaged in protracted private negotiations without
formal discovery and signed a Mediated Settlement Agreement (settlement agreement) that was
later incorporated into the parties’ March 30, 2015 Consent Judgment of Divorce (the Judgment).
These consolidated appeals are largely from the circuit court’s decisions on post-judgment
motions. 1 In docket number 334502, defendant appeals as of right the circuit court’s August 5,
1
Zambricki v Zambricki, unpublished order of the Court of Appeals, entered September 8, 2016
(Docket Nos. 334502, 334503); Zambricki v Zambricki, unpublished order of the Court of
Appeals, entered May 10, 2017 (Docket No. 336782).
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2016 opinion and order denying her attorney fees related to plaintiff’s nondisclosure of assets.
Also in docket number 334502, plaintiff cross-appeals as of right the circuit court’s August 5
decision to deny him attorney fee sanctions for the filing of a frivolous action. In docket number
334503, defendant appeals as of right the circuit court’s August 12, 2016 opinion and order
denying her attorney fees related to filing a September 30, 2015 motion to enforce the Judgment.
In docket number 336782, defendant appeals by delayed leave granted the circuit court’s August
5, 2016 opinion and order finding that plaintiff fully disclosed the extent of his inheritance
monies to defendant. We affirm in all three appeals.
I. DISCLOSURE OF INHERITANCE ASSETS
A. STANDARD OF REVIEW
The appellate court must first review the trial court's findings of fact under
the clearly erroneous standard. If the findings of fact are upheld, the appellate
court must decide whether the dispositive ruling was fair and equitable in light of
those facts. But because we recognize that the dispositional ruling is an exercise
of discretion and that appellate courts are often reluctant to reverse such rulings,
we hold that the ruling should be affirmed unless the appellate court is left with
the firm conviction that the division was inequitable. [Sparks v Sparks, 440 Mich.
141, 151–52; 485 NW2d 893 (1992)].
B. ANALYSIS
Both the settlement agreement and Judgment contained provisions calling for the full
disclosure of assets. The settlement agreement provided:
VI.
CONCLUDING PROVISIONS
26. Full Disclosure.
By their signatures on this Agreement, Michael and Christine state that each has
disclosed to the other all income, debts and assets that each owns or has any
interest in - whether held by him or her individually, by both of them jointly, or
with any other person or entity for Michael or Christine or for his or her benefit.
The property division provisions set forth in this Agreement are intended to be a
distribution and allocation of all the property of the parties at the time of entry of
the Judgment of Divorce.
Similarly, the Judgment provided:
FULL DISCLOSURE
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Each party has represented that they have made a full disclosure of their
assets to the other party. If either party should discover undisclosed assets that
were owned by the other party prior to the entry of this Judgment of Divorce, then
that party owning such undisclosed assets may be sanctioned and liable to forfeit
the same to the other party and be responsible for any attorney fees, investigation
fees, incurred by the party who discovers the existence of undisclosed assets.
Defendant argues in docket number 336782, that because plaintiff failed to disclose all of
his inheritance property, all of that non-disclosed property should be forfeited to her. Defendant
relies on Sands v Sands, 192 Mich. App. 698; 482 NW2d 203 (1992), to support her position. In
Sands, the circuit court ordered the defendant husband “to pay seventy percent of the plaintiff’s
attorney fees, on the basis of its finding that the bulk of plaintiff's attorney fees were incurred
because of ‘defendant’s devious and deceptive conduct.’ ” Id. at 701. The Sands defendant
removed documents establishing ownership of assets from his attorney’s file, transferred money
to relatives, lied to the court regarding stock ownership, and was held in contempt four times. Id.
at 701-702. On appeal this Court found that the circuit court abused its discretion in failing to
impose more extensive sanctions against the defendant. In its opinion, this Court described the
defendant’s behavior as “reprehensible” not only against “the wronged spouse, but also against
the court system.” Id. at 704. The matter was remanded to the trial court for the determination
of the amount of concealed assets and for entry of an order forfeiting all of those assets to the
plaintiff. Id. at 704-705. The Michigan Supreme Court affirmed the decision regarding forfeiture
in defendant Sands’ case based upon the facts of that case, but specifically declined to adopt a
rule requiring automatic forfeiture of non-disclosed assets. It instead pronounced that forfeiture
was a remedy to be considered on a case-by-case basis. Sands v Sands, 442 Mich. 30, 31; 497
NW2d 493 (1993).
Neither the nature nor the extent of the alleged non-disclosure in this case is similar to
Sands, 192 Mich. App. 698.2 More importantly, after an extensive evidentiary hearing the trial
court made a finding that there was no non-disclosure. This finding has significant evidentiary
support.
A two-day evidentiary hearing was held on the issue of whether plaintiff violated the
disclosure provisions of the settlement agreement and the Judgment. The assets defendant
claimed were undisclosed were monies inherited by plaintiff at the end of the marriage.
Defendant claimed she did no investigation, engaged in no discovery and merely relied on
2
Defendant also argues that the circuit court added an element of “deliberate concealment” to
the determination of whether plaintiff to failed to disclose assets. We reject this contention. The
court did not rely on a presumption of deliberate concealment in this case, but rather used the
term in stating an alternate conclusion. (“Even if, arguendo, the court concluded that Plaintiff
failed to disclose his remaining inherited funds it would find-based upon its analysis-Plaintiff
rebutted the presumption of deliberate concealment.”). In this instance, we find that the court
made the statement in reference to the level of conduct in Sands and what would be required to
find the same persistent and reprehensible attempts to conceal assets and warrant forfeiture here.
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figures dictated to her by plaintiff during their negotiations prior to the retention of counsel. She
draws the court’s attention to a list of assets and argues that that list includes all of the assets
disclosed to her by plaintiff. Plaintiff asserted, however, that the disclosures between the parties
were not all recorded on the list. During the evidentiary hearing, plaintiff acknowledged the
existence of Fidelity accounts defendant claimed he failed to disclose and that they were
inherited during the marriage. It is undisputed that those accounts were not on the property
disclosure form the parties created. There was a significant dispute as to whether the accounts
were orally disclosed or otherwise known to the defendant. Plaintiff testified that the parties
decided which accounts would be included in the disclosure. Defendant refuted the assertion
that she knew of the undisclosed accounts, but admitted in reference to the items listed on the
disclosure form that, “[t]hese are the accounts that we had disclosed for the sake of mediating
our agreement.” The parties agree that plaintiff deposited $200,000 of his inherited funds into
the marital estate. Plaintiff testified that these funds were from his inheritances and were
intended to match those inherited funds defendant claimed she contributed. Other than testifying
that the $200,000 “seemed like a reasonable amount” and “similar to what [she] would expect,”
defendant had no explanation for why plaintiff had contributed that amount.
In addition to denying that plaintiff orally disclosed the accounts to her, defendant
testified that she did not in fact learn about plaintiff’s inheritance because she was denied access
to the parties’ financial files. In contrast, plaintiff testified that defendant had a key to the
marital home many months after the parties’ divorce and entered the house when he was away.
Defendant admitted she was able to enter the home on one occasion and retrieve account files
regarding DTE stocks, and on another occasion, destroy a file plaintiff kept that documented her
affair that led to the parties’ divorce. The circuit court, as do we, found it significant that the file
defendant destroyed was directly next to all plaintiffs’ inheritance files.
We defer to the circuit court’s determination that plaintiff was the more credible witness
regarding the issue of disclosure. Shann v Shann, 293 Mich. App. 302, 305; 809 NW2d 435
(2011) (“We defer to the trial court’s credibility determinations given its superior position to
make these judgments.”). The circuit court presided over a two-day hearing devoted to the issue
of disclosure and was in a better position to view the demeanor of the parties and make
credibility findings in relation to their testimonies. There was considerable discussion and
testimony regarding the source of the Fidelity funds. The source of the funds was certainly
relevant to the parties’ private discussions, deliberations and ultimate settlement of their property
distribution. However, since the trial court was only called upon to enforce the agreement of the
parties instead of dividing the marital estate, the source of the funds was irrelevant. At no point
was the trial court called upon to decide if the parties intended inherited funds to become a part
of the marital estate. Defendant’s argument for distribution of plaintiff’s inheritance is based
entirely on the provisions allowing for forfeiture of undisclosed assets in the settlement
agreement and Judgment. According to Sands, however, “[t]here is no automatic rule of
forfeiture.” Id. at 31. Neither does the language of either the settlement agreement or the
Judgment provide for the mandatory forfeiture of undisclosed assets to the other party. Instead,
each document provides that the non-disclosing party may be sanctioned by having to forfeit
undisclosed assets to the discovering party. Because we cannot find that the trial court’s fact
finding, that there was disclosure and knowledge of the assets, was clearly erroneous, without
factual support, or inequitable or unjust, we affirm the decision to deny a Sands’ forfeiture here.
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II. EVIDENCE ADMISSIBILITY
A. STANDARD OF REVIEW
“We review for an abuse of discretion a trial court’s decision to admit evidence. An abuse
of discretion occurs when the decision results in an outcome falling outside the range of
principled outcomes.” Lockridge v Oakwood Hosp, 285 Mich. App. 678, 689; 777 NW2d 511
(2009) (internal citation omitted).
“Consent judgments of divorce are contracts and treated as such. We review de novo as a
question of law the proper interpretation of a contract, including a trial court's determination
whether contract language is ambiguous.” Andrusz v Andrusz, 320 Mich. App. 445, ___; ___
NW2d ___ (2017) (internal citation omitted).
B. ANALYSIS
In docket number 336782, defendant additionally argues that the circuit court abused its
discretion by admitting plaintiff’s testimony regarding their negotiation discussions to contribute
matching amounts of inheritance money and in expanding the scope of the evidentiary hearing to
include testimony regarding her inherited assets. Defendant contends that plaintiff’s testimony
was improper parol evidence.
Parol evidence of contract negotiations, or of prior or contemporaneous
agreements that contradict or vary the written contract, is not admissible to vary
the terms of a contract which is clear and unambiguous. Central Transport, Inc. v.
Fruehauf Corp., 139 Mich.App. 536, 544, 362 N.W.2d 823 (1984). A prerequisite
to the application of this rule, however, is a finding that the parties intended the
written instrument to be a complete expression of their agreement. Thus, extrinsic
evidence of prior or contemporaneous agreements or negotiations is admissible as
it bears on the threshold question of whether the written instrument is such an
integrated instrument. [Schmude Oil Co v Omar Operating Co, 184 Mich. App.
574, 580; 458 NW2d 659 (1990)].
The court did not vary the written contract. The goal of the lengthy evidentiary hearing
was to determine if the disclosure terms of the settlement agreement and Judgment were
violated. Since a central issue was what was disclosed outside of the presence of counsel or the
court, it was necessary to delve into the nature of the parties oral representations to one another
during the process. Nothing in either document states that the property distribution list was itself
exhaustive of the marital property. The issue of whether plaintiff listed all of his inherited
property on the list was probative of whether the parties’ written list was the full record of all
property disclosed or known to parties. In other words, defendant’s inherited property, and the
myriad discussions over the protracted pre-settlement phase of the case was relevant evidence. “
‘Relevant evidence’ means evidence having any tendency to make the existence of any fact that
is of consequence to the determination of the action more probable or less probable than it would
be without the evidence.” MRE 401.
Additionally, we emphasize the non-mandatory nature of the Sands’ forfeiture principles.
Even if the court there had found non-disclosure, it would have been required to determine what
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level of sanction, if any, was appropriate. Certainly, if both parties in Sands failed to disclose
assets, a determination that neither should be sanctioned would have been appropriate. It was the
fact that the Sands’ defendant engaged in a pattern of non-disclosure and took affirmative acts to
divert and conceal funds that led to the decisions to forfeit the asset. To that end, it was
incumbent on the trial court to allow a fulsome factual development so that an equitable remedy
could be fashioned for any violation of the non-disclosure provisions.
III. ATTORNEY FEES
A. STANDARD OF REVIEW
We review for an abuse of discretion a court’s decision to grant or deny attorney fees and
its related findings of fact for clear error. Reed v Reed, 265 Mich. App. 131, 164; 693 NW2d 825
(2005). We also review for an abuse of discretion the trial court’s decision to hold an evidentiary
hearing. People v Franklin, 500 Mich. 92; 894 NW2d 561 reh den 500 Mich. 1025; 897 NW2d
168 (2017). “An abuse of discretion occurs when the result falls outside the range of principled
outcomes. Cassidy v Cassidy, 318 Mich. App. 463, 479; 899 NW2d 65 app den 902 NW2d 623
(Mich 2017), and app den 902 NW2d 623 (Mich 2017).
B. ANALYSIS
Defendant argues in docket number 334503, that the court abused its discretion in
denying her an evidentiary hearing to determine the amount of attorney fees due to her for
having to file multiple motions to enforce the Judgment. Our review of the record does not
support defendant’s contention that she was promised an attorney fee evidentiary hearing. There
is no order entered or ruling by the court that attorney fees were granted. Defendant requested
attorney fees under MCR 3.206(C)(2)(b) for the September 30, 2015 enforcement motion. The
circuit court’s September 30 order ordered defendant to send plaintiff an itemization of her
attorney fees and that if plaintiff objected to the reasonableness of the fees, the matter would be
“referred to the court.” This language merely allowed for final disposition by the court and did
not promise a hearing on attorney fees. Thereafter, the court consistently reserved the issue of
attorney fees until after resolution of the inherited property issue. There is no court rule or case
that requires the court to hold an evidentiary hearing in this instance. “Generally, a trial court
should hold an evidentiary hearing when a party is challenging the reasonableness of the attorney
fees claimed.” Kernen v Homestead Dev Co, 252 Mich. App. 689, 691; 653 NW2d 634 (2002).
Had the court found that fees were warranted due to plaintiff’s willful non-compliance, a hearing
would have been presumptively required on the preserved challenge to their reasonableness. In
this case, however, the court determined that no fees were to be awarded, thereby eliminating the
need to review any item for reasonableness.
IV. SANCTIONS
A. STANDARD OF REVIEW
“We review the trial court’s decision to impose sanctions for an abuse of discretion.”
Richardson v Ryder Truck Rental, Inc, 213 Mich. App. 447, 450; 540 NW2d 696 (1995). “An
abuse of discretion occurs when the result falls outside the range of principled outcomes.”
Cassidy, 318 Mich. App. at 479.
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B. ANALYSIS
Also relevant to the issue of nondisclosure is defendant’s argument in docket numbers
334502 and 336782 that the circuit court abused its discretion when it denied her attorney fee
sanctions for plaintiff’s failure to disclose the full extent of his inherited assets.
As discussed above, and in relation to docket number 334502, we agree with the circuit
court’s determination that plaintiff disclosed and therefore disagree that defendant would be
entitled to sanctions based on nondisclosure. We lack jurisdiction to address defendant’s
additional argument presented in docket number 336782, that plaintiff failed to disclose, because
under MCR 7.202(6)(a)(iv), when the appeal is from a postjudgment order regarding attorney
fees or costs, the appeal “is limited to the portion of the order with respect to which there is an
appeal of right,” MCR 7.203(A)(1), and defendant’s appeal of the propriety of the court’s August
5, 2016 decision involving plaintiff’s disclosure in docket number 336782 was by delayed leave
granted.
In docket number 334502, plaintiff cross-appeals the circuit court’s decision to deny him
sanctions when, he argues, defendant’s motion claiming non-disclosure was frivolous under
MCL 600.2591. Under the statute, attorney fees may be awarded in a civil action when either:
(i) The party’s primary purpose in initiating the action or asserting the defense
was to harass, embarrass, or injure the prevailing party.
(ii) The party had no reasonable basis to believe that the facts underlying that
party's legal position were in fact true.
(iii) The party's legal position was devoid of arguable legal merit. [MCL
600.2591(3)(a)].
Plaintiff argues that defendant’s only intention in bringing the motion to disclose assets was to
harass him and that because defendant knew the extent of his assets, she could not have believed
that the facts supported that plaintiff failed to disclose. The court held that while it “may
question Defendant’s motives, and the timing of her action, it cannot find -- as a matter of law --
that Defendant’s position and use of judicial process meets any of the statutory requirements.”
The record supports that the court’s decision was within the range of principled outcomes. In
this case, defendant’s failure to prevail on the merits of her motion did not render her motion
frivolous. From the record, it does not appear that defendant brought the motion to disclose for
the purposes of harassing, embarrassing or injuring plaintiff, but rather to learn the full extent of
plaintiff’s inheritance and as an attempt to enlarge the marital estate. Defendant had a reasonable
basis to believe that plaintiff had inherited funds that he had not yet disclosed. Plaintiff testified
that while defendant knew he was receiving inheritance distributions, he told defendant the sum
of his inheritance was “none of her business.” It would have been prudent for defendant to file
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the motion sooner; however, the timing does not establish anything other than a belated attempt
to learn all of plaintiff’s assets.
Affirmed.
/s/ Cynthia Diane Stephens
/s/ Mark J. Cavanagh
/s/ Kirsten Frank Kelly
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