Federated Financial Reserve Corporation v. Judy Wang ( 2017 )

STATE OF MICHIGAN
COURT OF APPEALS
FEDERATED FINANCIAL RESERVE UNPUBLISHED
CORPORATION, December 26, 2017
Plaintiff-Appellant,
v No. 334117
Oakland Circuit Court
JUDY WANG, also known as JUDY WONG, LC No. 2015-150134-AV
Defendant-Appellee,
and
W.Y. ENTERPRISES,
Defendant.
Before: MURRAY, P.J., and K.F. KELLY, and FORT HOOD, JJ.
PER CURIAM.
Plaintiff Federated Financial Reserve Corporation appeals by delayed leave granted the
Oakland Circuit Court’s June 28, 2016 order denying its application for leave to appeal the
district court’s order granting defendant Judy Wang’s motion for relief from judgment.1 For the
reasons set forth in this opinion, we reverse the circuit court’s order and remand to the district
court for entry of an order denying defendant’s motion for relief from judgment.
The procedural history of this collection action is largely undisputed. On August 6, 1999
plaintiff filed a three-count complaint alleging a breach of lease agreement, breach of guaranty
and account stated. Specifically, plaintiff alleged that on or about July 18, 1996, defendant W.Y.
Enterprises had entered into an equipment lease with plaintiff, and that Wang had agreed to
guarantee the liability of W.Y. Enterprises pursuant to the terms of the lease. After W.Y.
Enterprises breached the terms of the lease, plaintiff alleged damages in the amount of
$11,190.70. A copy of the lease agreement at issue confirms that Wang signed the lease as an
officer of W.Y. Enterprises, and also in her individual capacity to personally guarantee W.Y.
1
Defendant Judy Wang is proceeding in propria persona in this appeal and resides out of state in
Texas.
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Enterprises’s liability pursuant to the terms of the lease. An affidavit of service provides that
Wang was personally served in both her individual capacity and on behalf of W.Y. Enterprises
on October 18, 1999 while residing in New Orleans, Louisiana. On December 3, 1999, both
W.Y. Enterprises and Wang were defaulted, and following plaintiff’s motion for entry of default
judgment, the district court entered a default judgment in the amount of $11,996.78 against W.Y.
Enterprises on May 30, 2000. However, complicating matters and giving rise to the issue on
appeal, the judgment also named Judy Wong, rather than Judy Wang.
For reasons unclear from the record, plaintiff did not move to collect against the
judgment for 10 years, and on May 26, 2010, plaintiff moved to renew the judgment for an
additional 10 year period. The district court entered an order renewing the judgment on May 26,
2010 listing Judy Wang as a defendant. On July 16, 2015, plaintiff filed a request and writ for
garnishment directed to JP Morgan Chase Bank, and the writ reflects that the amount owing on
the judgment, including interest and costs, was at that point $76,091.85. On August 25, 2016,
Wang filed objections to the garnishment on the basis that the writ “was legally barred. Order
renewing judgment incorrectly lists Defendant Judy Wang when default judgment was for Judy
Wong.” Wang also moved for relief from the order renewing the judgment. In her motion,
Wang pointed out that the original judgment entered on May 30, 2000 named Judy Wong. Wang
also alleged that plaintiff, “without notifying the Court, changed the case caption [on the May 30,
2000 order of judgment] to indicate that the named individual Defendant was Judy Wang.”
Wang also asserted that plaintiff “expressly misrepresented to the Court that [plaintiff] obtained
a judgment against . . . Judy Wang[.]” Wang also noted that the complaint listed Judy Wong as a
defendant, rather than Judy Wang, as did the affidavit of account stated attached to the
complaint, the entry of default, and the default judgment. Pointing out that Wang had holds
placed on her bank accounts as a result of the writ of garnishment, she moved for relief from
judgment on the basis of MCR 2.612(C)(1)(c), (d) and (f). Specifically, Wang contended that
the order renewing the judgment in this case was based on fraudulent and misleading information
where plaintiff altered the case caption without following the appropriate procedure under the
Michigan court rules, and that the order was void as a result. Wang also requested that the order
renewing the judgment be stricken, and that any monies withheld by the garnishee be returned to
Wang. Wang also argued that “the name Judy Wang should be stricken from any pleadings as
she is not a defendant in this matter.”
Plaintiff filed a response to Wang’s motion, asserting that “[d]efendant fails to grasp or
even address the core issue-that she, whether called Judy Wang or Judy Wong, is without
question the correct Defendant who was properly sued and served with the complaint in this
action, and the proper party responsible to Plaintiff under the judgment.” Plaintiff also noted that
Wang signed the lease on behalf of W.Y. Enterprises and in her personal capacity, and that when
the lease was first signed, a deposit check in the amount of $650 was given to plaintiff, drawn on
an account from a business entity that had the same address as W.Y. Enterprises, and was signed
by “Judy C. Wang.” According to plaintiff, when it moved to renew the May 30, 2000 judgment
in 2010, plaintiff’s counsel observed that his file contained a copy of the May 30, 2000 judgment
with the name Wong crossed out, and Wang handwritten in its place. According to plaintiff, the
handwriting was not that of plaintiff’s counsel, and plaintiff’s counsel “can only speculate as to
the purpose or who made the handwritten change on the copy used in connection with the
renewal[ ]” of the May 30, 2000 judgment. Plaintiff further stated that “over the past seven
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years, [plaintiff’s counsel] has filed hundreds, if not thousands, of similar motions, and has found
that it is not uncommon for judgments to have handwritten corrections within them.”
Specifically, plaintiff’s counsel, Gregory S. Pierce, averred in a September 23, 2015
affidavit that in his experience filing hundreds of motions to renew judgments, “[i]t has been my
practice that judgments often have hand written changes contained within them.” Counsel for
plaintiff stated that the handwriting on the copy of the May 30, 2000 judgment was not his, that
he did not have any knowledge of the error until Wang’s counsel brought it to his attention, “let
alone any fraudulent intent or purpose in filing the motion [to renew judgment].” Plaintiff’s
counsel only became aware of the issue in August of 2015 when Wang’s counsel pointed it out,
and denied any “fraudulent intent.” Relying on MCL 600.2311, plaintiff argued that any clerical
errors in the May 30, 2000 judgment or any other documents in the lower court file ought not to
thwart plaintiff’s ability to collect against its judgment.
In her reply brief, Wang asserted that plaintiff did not adhere to the procedure set forth in
MCR 2.611 allowing for amendment of a judgment, particularly where plaintiff sought to amend
the judgment outside of the 21-day period allowed by that court rule. Wang also noted that when
filing the motion to renew the May 30, 2000 judgment, plaintiff did not inform the district court
that an alteration had been made to the caption on the original May 30, 2000 judgment.
The district court held a hearing on Wang’s motion on October 1, 2015, and Wang’s
counsel pointed out to the trial court that the Michigan court rules provide for a specific
procedure where a judgment requires amendment. Wang’s counsel also expressed concern that
the judgment had been amended by handwriting, and that a motion to renew the May 30, 2000
judgment was not filed until 10 years after the judgment was originally entered and that the
amount of the judgment had grown exponentially as a consequence. According to Wang’s
counsel, “[m]y client is now on the hook for $55,000.00 of interest pursuant to an order that
should never have been issued.” While plaintiff’s counsel acknowledged the clerical error, he
argued that “this is clearly the right person. It’s just a matter of there was a couple of mistakes in
naming her Wong versus Wang and then it got changed and I explained that.” Plaintiff’s counsel
also pointed out that Wang was not disputing that she was not properly served with the initial
complaint. Ruling from the bench, the district court stated, in pertinent part, as follows:
Thank you. The record should reflect that I’ve had an opportunity to
review the motion, the response, and the reply. I’ve heard the arguments of
counsel. And obviously, it appears what happened back in 1999 there was a
default judgment entered against a Judy Wong W-o-n-g.
And then within 10 years later that motion came to be renewed and for
some reasons or [sic] the judgment was renewed and on the renewal it said Wang
W-a-n-g and I don’t know if those are pronounce[d] the same way or whatever.
But anyway the judgment said Wang and that is the judgment that is being
collected against the defendant who is W-a—who brings the motion before the
Court is W-a-n-g.
I’ll indicate that obviously there are procedures to amend a judgment.
There’s also [MCR] 2.612 which talks about clerical errors and the Court
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basically, [MCR] 2.612(a) basically says, “Clerical mistakes in judgments, orders,
or other parts of the record and errors arising from oversight or omission may be
corrected by the court at any time on its own initiative or on motion of a party and
after notice.”
And what I don’t like here is that there was no notice to the Court. There
was no notice to the other party. There was nothing, and counsel, I have to say I
took a look at the judgment that you attached and I see that, you know, you may
not have written another name, someone might have done that along the way but
the Court’s judgment did not say W-a-n-g. From looking through the file it looks
like even the service when it was served [was] W-o-n-g. The response on a return
of service says, no one by that name is at that address. So that if the suit against
that person was W-o-n-g and I think that’s what everyone was relying on.
Now, obviously, there’s a question of whether this clerical error could or
should be corrected. At this point, [the] Court’s not in the position to make that
determination with what I have here.
But I’ll say this, what you have because of that period is all this interest,
that frankly, if there’d been the correct name in the first place or even when this
was first amended maybe this collection would have happened or this issue would
have come up before there was all this interest. So, I’m going to grant the motion
for relief.
The district court entered an order granting Wang’s motion for relief from judgment on
October 1, 2015. Specifically, the district court’s order stated that “[t]he [o]rder [r]enewing
[j]udgment dated May 26, 2010 is hereby vacated nunc pro tunc.” On October 1, 2015, the
district court also entered an order holding Wang’s objections to the garnishment to be valid, and
directing that all withheld funds be released to Wang. Plaintiff filed a motion for reconsideration
on October 8, 2015, and in its motion noted that the funds at issue had been tendered to plaintiff
by Wang’s bank on August 25, 2015, and that the funds “had, in fact been sent to Plaintiff’s
accounting department where upon they were deposited into its general account and used to pay
company debts.” Plaintiff also argued that Wang had 28 days following the issuance of the writ
of garnishment to object, and because Wang did not do so in a timely manner, she forfeited her
right to object and the garnishee properly tendered the funds to plaintiff to satisfy the judgment
against Wang. On October 21, 2015, the district court entered an order denying plaintiff’s
motion for reconsideration.
Plaintiff subsequently filed an application for leave to appeal with the Oakland Circuit
Court, raising the same issues raised in the appeal to this Court, which the circuit court denied in
an order entered June 23, 2016 “for lack of merit in the grounds presented.” Plaintiff filed a
delayed application for leave to appeal to this Court on August 2, 2016, and this Court granted
the delayed application for leave to appeal on December 13, 2016. Federated Financial Reserve
Corp v Wang, unpublished order of the Court of Appeals, issued December 13, 2016 (Docket
No. 334117).
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On appeal, plaintiff argues that the district court abused its discretion in granting Wang’s
motion for relief from judgment. We agree.
We review for an abuse of discretion the district court’s decision regarding a motion to
set aside a judgment pursuant to MCR 2.612. Rental Properties Owners Ass’n of Kent Co v Kent
Co Treasurer, 308 Mich. App. 498, 531; 866 NW2d 817 (2014). “An abuse of discretion occurs
when the trial court’s decision is outside the range of reasonable and principled outcomes.”
Smith v Khouri, 481 Mich. 519, 526; 751 NW2d 472 (2008) (citation omitted) (opinion of
TAYLOR, C.J.).
As a preliminary matter, we reject plaintiff’s assertion that all issues in this case were
moot at the time the district court decided the motion to grant relief from judgment. Plaintiff
advances this assertion on the basis of the fact that the funds garnished from Wang’s bank
accounts had already been tendered to plaintiff at the time the motion was decided, although
apparently unbeknownst to the parties, their counsel and the district court. “An issue is moot if
an event has occurred that renders it impossible for the court, if it should decide in favor of the
party, to grant relief.” City of Jackson v Thompson McCully Co, LLC, 239 Mich. App. 482, 493;
608 NW2d 531 (2000) (citation and quotation marks omitted). Generally a satisfaction of a
judgment will mark the end of legal proceedings. Becker v Halliday, 218 Mich. App. 576, 578;
554 NW2d 67 (1996). However, while the apparent satisfaction of the judgment in this case may
have extinguished plaintiff’s claims against Wang, we do not agree that Wang’s ability to
challenge the judgment was foreclosed. Moreover, the issue whether the judgment ought to have
been set aside was not moot, given that no circumstances existed that would render it impossible
for the district court to grant relief to Wang if a ruling was made in her favor. Accordingly,
plaintiff’s assertion that the issues in this case were rendered moot is without merit.
Turning to the substantive issue in this case, as plaintiff points out, the public policy of
this state is to allow for the correction of clerical errors in judgments otherwise properly entered.
For example, MCL 600.2315 provides, in pertinent part, as follows:
When a verdict has been rendered in a cause, the judgment thereon shall not be
stayed, nor shall any judgment upon confession, or default, be reversed, impaired,
or in any way affected, by reason of the following imperfections, omissions,
defects, matters or things, or any of them, in the pleadings, process, record or
proceedings, namely:
* * *
(8) For a mistake in the name of a party or person, or in a sum of money; or in the
description of property; or in reciting or stating a day, month or year, when the
correct name, time, sum or description shall have been once rightly alleged in any
of the pleadings or proceedings. [Emphasis added.]
Likewise, the court rules provide a clear and specific procedure for correcting clerical
errors “in judgments . . . or other parts of the record[,]” as well as errors arising from oversight,
or omission[.]” MCR 2.612(A)(1). Specifically, MCR 2.612(A)(1) provides that such clerical
mistakes and errors are to be corrected by the court “at any time on its initiative or on motion of
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a party and after notice, if the court orders it.” For reasons unclear from the record, this
procedure was not adhered to with respect to the May 30, 2000 judgment and the issue was not
raised when the order renewing judgment was entered on May 26, 2010.
Defendant moved for relief from judgment pursuant to MCR 2.612(C), which provides,
in pertinent part, as follows:
(1) On motion and on just terms, the court may relieve a party or the legal
representative of a party from a final judgment, order, or proceeding on the
following grounds:
(a) Mistake, inadvertence, surprise, or excusable neglect.
* * *
(c) Fraud (intrinsic or extrinsic), misrepresentation, or other misconduct of an
adverse party.
(d) The judgment is void.
* * *
(f) Any other reason justifying relief from the operation of the judgment.
In the instant case, it is not disputed that the guaranty signed by defendant Judy Wang
was attached to the complaint, and that her name was properly spelled in the guaranty. And,
because the guaranty was attached to the complaint, it is considered to be part of the pleadings
“for all purposes.” MCR 2.113(F)(2). Accordingly, MCL 600.2315(8) is applicable under the
facts of this case and the clerical mistake in the spelling of defendant’s name in the caption of the
judgment was not a basis upon which to grant relief from judgment.
Additionally, in her motion seeking relief from judgment, Wang asserted that the order
renewing the May 30, 2000 judgment should be set aside on the basis of MCR 2.612(C)(1)(c),
(d) and (f). In her reply brief, and during the hearing on her motion, Wang primarily asserted
that relief from judgment was warranted pursuant to MCR 2.612(C)(1)(a). This Court,
construing the predecessor version of this subsection of the court rule, has recognized that “[i]ts
application should be limited to extraordinary circumstances where the failure to set aside the
court’s final determination will result in substantial injustice.” Lark v Detroit Edison Co, 99
Mich. App. 280, 283; 297 NW2d 653 (1980). In our view, this case does not present such unique
circumstances. Put another way, a substantial injustice would certainly not result from
upholding the judgment against Wang, particularly where the record reflects that Wang was
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personally served with a copy of the complaint, and the guaranty attached to the complaint, as
well as the proof of service, clearly set forth the correct spelling of defendant’s surname.2
We also note that this case does not present “extraordinary circumstances” that warrant
the granting of relief from judgment pursuant to MCR 2.612(C)(1)(f). Limbach v Oakland Co
Bd of Co Rd Comm’rs, 226 Mich. App. 389, 393; 573 NW2d 336 (1997).3 Relief from judgment
is appropriate pursuant to MCR 2.612(C)(1)(f) under the following circumstances:
(1) the reason for setting aside the judgment must not fall under sub-sections a
through e, (2) the substantial rights of the opposing party must not be
detrimentally affected if the judgment is set aside, and (3) extraordinary
circumstances must exist that mandate setting aside the judgment in order to
achieve justice. Generally, relief is granted under subsection f only when the
judgment was obtained by the improper conduct of the party in whose favor it was
rendered. [Adler v Dormio, 309 Mich. App. 702, 708; 872 NW2d 721 (2015),
quoting Heugel v Heugel, 237 Mich. App. 471, 478-479; 603 NW2d 121 (footnote
omitted).]
Even if we were to conclude that the first two criteria were satisfied, we again acknowledge that
the record does not reflect any misconduct on the part of plaintiff with respect to the clerical
error at issue in this case, and we are not persuaded that the circumstances of this particular case
are such that justice is best achieved by the application of MCR 2.612(C)(1)(f). See Lark, 99
Mich. App. at 284 (recognizing in the context of the predecessor court rule that when determining
whether MCR 2.612(C)(1)(f) is applicable, each case “must be examined on its facts[.]”).4
2
Relief from judgment was also not warranted pursuant to MCR 2.612(C)(1)(c) or (d) where the
record does not contain evidence of fraud or misconduct on the part of plaintiff, and where the
clerical error in the default judgment did not render it void. MCL 600.2315(8).
3
While defendant asserts that she has been denied substantive and procedural due process and
that she incurred prejudice where the judgment was entered with the incorrect spelling of her last
name, she has not supported these bare assertions with facts of record or citations to legal
authority. “The appellant may not merely announce his or her position and leave it to this Court
to discover and rationalize the basis for those claims.” DeGeorge v Warheit, 276 Mich. App. 587,
596; 741 NW2d 384 (2007). “An appellant’s failure to properly address the merits of [the]
assertion of error constitutes abandonment of the issue.” Houghton v Keller, 256 Mich. App. 336,
339-340; 662 NW2d 854 (2003).
4
We also agree with plaintiff’s contention that the district court erred in sustaining defendant’s
objections to the request and writ for garnishment where defendant did not timely file her
objections in compliance with the applicable court rule. MCR 3.101(K)(1).
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We reverse the circuit court’s order denying plaintiff’s application for leave to appeal and
remand to the district court for entry of an order denying defendant’s motion for relief from
judgment. We do not retain jurisdiction.
/s/ Christopher M. Murray
/s/ Kirsten Frank Kelly
/s/ Karen M. Fort Hood
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