Opinion
No. 341411
03-21-2019
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Livingston Circuit Court Family Division
LC No. 12-005416-DO Before: STEPHENS, P.J., and GLEICHER and BOONSTRA, JJ. PER CURIAM.
Defendant appeals by right the trial court's order granting plaintiff's motion to compel property division pursuant to the parties' judgment of divorce. We affirm.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
The parties' consent judgment of divorce ("JOD") entered on September 28, 2012. There were no minor children. The JOD divided the parties' personal property, including various bank and investments accounts. The JOD provided that the parties' IRA accounts were to be equalized. The JOD also contained a provision entitled "Mediator as Binding Arbitrator," which read:
The parties agree that the mediator, Attorney Timothy L. Hensick, shall act as the binding arbitrator for any disputes arising over the division of the bank accounts or cash, division of the personal property, or the collection of the Tim Sicher account. [Emphasis in original.]
In August 2017, plaintiff filed a motion with the trial court to compel the division of the marital property, alleging that the parties' IRAs had not been equalized according to the JOD's terms and that defendant still needed to transfer $38,078.37 to plaintiff in order to equalize the accounts. Additionally, plaintiff requested that the trial court order defendant to transfer any earnings on that amount, although plaintiff did not specify a precise time period in which to compute those earnings. Defendant responded that he had attempted without success to work with plaintiff to equalize the IRA accounts. Moreover, he claimed that plaintiff had refused to submit to arbitration despite the JOD's arbitration clause. Defendant asserted that the trial court should submit the matter to arbitration and bar plaintiff's claim on the basis of the doctrine of laches. Defendant also argued that the amount owed to plaintiff to equalize the IRAs should be reduced by approximately $6,000 that he believed plaintiff owed to him.
After a motion hearing, the trial court held that the amount necessary to equalize the IRAs was determined at the time of the JOD, and stated that "if it took longer than expected logically one would assume that whatever amount it would have taken to equalize it then any interest that was earned by one person keeping it longer should go into the other person's account. Makes sense to me." The trial court thus agreed with plaintiff that defendant should pay interest on the $38,078.37 because it was "not right" to permit a party to collect interest on an amount of money improperly withheld, stating: "[I]f someone kept fifty thousand more than they should have to equalize it and had the benefit of earning interest well that's not right. That's not clean hands." The trial court denied defendant's request for an evidentiary hearing to develop the basis for his claimed entitlement to the $6,000 from plaintiff, but did take testimony on the issue from defendant and heard arguments from defendant's counsel. Ultimately, the trial court found that defendant's claims regarding amount owed to him lacked merit, and denied his request to offset the amount transferred by $6,000. Regarding the arbitration provision, defendant acknowledged that the named arbitrator in the JOD was no longer able to perform his duties due to a conflict of interest. The trial court held that, because no successor arbitrator was named in the agreement, the dispute was appropriately before the trial court. The trial court entered an order granting plaintiff's motion and directing defendant to transfer $38,078.37 from his IRA to plaintiff's, "plus or minus gains or losses" on that amount since the entry of the JOD.
We note that plaintiff sought "the earnings attributable to the $38,078.37," that the trial court orally referred to "interest" on that amount, and the trial court's written order provided for payment of "$38,078.37, plus or minus gains or losses." The precise nature and amount of the "earnings," "interest," or "gains or losses" is not before us. For convenience, we will refer to the award as "interest." --------
The trial court denied defendant's motion for reconsideration. This appeal followed.
II. STANDARD OF REVIEW
We review for an abuse of discretion a trial court's discretionary decision to award interest under equitable principles. Reigle v Reigle, 189 Mich App 386, 393-394; 474 NW2d 297 (1991). "[Q]uestions involving the proper interpretation of a contract or the legal effect of a contractual clause are . . . reviewed de novo." Rory v Continental Ins Co, 473 Mich 457, 464; 703 NW2d 23 (2005). Likewise, we review de novo questions of statutory interpretation. Dextrom v Wexford Co, 287 Mich App 406, 416; 789 NW2d 211 (2010). We review for clear error the trial court's findings of fact supporting its decision to apply an equitable doctrine such as laches, but review de novo the trial court's ultimate decision to apply that doctrine. Charter Twp of Shelby v Papesh, 267 Mich App 92, 108; 704 NW2d 92 (2005).
III. ANALYSIS
Defendant argues that the trial court erred by awarding plaintiff any interest, gains or losses on the $38,078.37 accrued since the date of the JOD, by refusing to order the issue to arbitration, and by declining to hold that plaintiff's claim was barred by the doctrine of laches. We disagree.
The trial court possesses equitable powers to grant "interest on the amounts granted in the divorce judgment." Lawrence v Lawrence, 150 Mich App 29, 34; 388 NW2d 291 (1986). Such power is within the trial court's discretion. Id. "This discretion also applies to awards of interest on amounts to be paid pursuant to a property division when such amounts are overdue." Id. The purpose of awarding interest is not to compensate the party for lost use of such entitled to payments; rather, it is to "prevent[] the delinquent party from realizing a windfall and assures prompt compliance with court orders." Olson v Olson (On Remand), 273 Mich App 347, 354-355; 729 NW2d 908 (2006).
In this case, the trial court's award of interest did not modify the JOD, as defendant contends; rather, it was clearly an exercise of the court's equitable powers. See Lawrence, 150 Mich App at 32. The trial court indicated that it was awarding interest because to permit defendant to retain the interest on the money held in his IRA account (and allocated to plaintiff under the JOD) would constitute a windfall. See Olson, 273 Mich App at 355. Moreover, to permit defendant to retain the interest would reward defendant for failing to promptly comply with the JOD. In essence, the trial court did nothing more than place the parties in the position they would have been in had defendant promptly transferred the funds in question. We conclude the trial court did not abuse its discretion by doing so. Reigle, 189 Mich App at 393-394.
We further conclude that the trial court did not err by refusing to appoint a successor arbitrator. Arbitration agreements are "generally recognized as a matter of contract" and "are generally interpreted in the same manner as ordinary contracts." Bayati v Bayati, 264 Mich App 595, 598-599; 691 NW2d 812 (2004). Arbitration agreements in domestic relations matters also are governed by the Domestic Relations Arbitration Act (DRAA), MCL 600.5070 et seq.
MCL 600.5075 of the DRAA addresses the disqualification of an arbitrator:
(1) An arbitrator, attorney, or party in an arbitration proceeding under this chapter shall disclose any circumstance that may affect an arbitrator's impartiality, including, but not limited to, bias, a financial or personal interest in the outcome of the arbitration, or a past or present business or professional relationship with a party or attorney. Upon disclosure of such a circumstance, a party may request disqualification of the arbitrator and shall make that request as soon as practicable after the disclosure. If the arbitrator does not withdraw within 14 days after a request for disqualification, the party may file a motion for disqualification with the circuit court.
(2) The circuit court shall hear a motion under subsection (1) within 21 days after the motion is filed. If the court finds that the arbitrator is disqualified, the court may appoint another arbitrator agreed to by the parties or may void the
arbitration agreement and proceed as if arbitration had not been ordered. [MCL 600.5075(1) and (2) (emphasis added).]
In this case, the arbitration clause of the JOD named only Hensick as the agreed-upon arbitrator and did not provide for any alternate, substitute, or successor arbitrators. As defendant acknowledged before the trial court, Hensick became disqualified due to a conflict of interest. MCL 600.5075(1). Because the court was presented with no evidence that the parties had agreed upon a new arbitrator to be appointed, the trial court was permitted to "void the arbitration agreement and proceed as if arbitration had not been ordered." MCL 600.5075(2). And because the parties had agreed only for Hensick to arbitrate their property division disputes, the trial court's refusal to appoint a different arbitrator was not only permitted by the DRAA, but preserved the parties' freedom to contract. See Miller v Miller, 474 Mich 27, 32-33; 707 NW2d 341 (2005).
Defendant also argues that the doctrine of laches should have applied, because plaintiff's action was filed approximately five years after entry of the JOD. We disagree. A party seeking equity from the trial court "must come to the court with a clean conscience, in good faith, and after acting with reasonable diligence . . . ." Knight v Northpointe Bank, 300 Mich App 109, 114; 832 NW2d 439 (2013). However, if the party "has not exercised reasonable diligence in vindicating his or her rights, a court sitting in equity may withhold relief on the ground that the plaintiff is chargeable with laches." Id. If the trial court finds that laches applies, then it "leaves the parties where it finds them." Id. (quotation marks and citation omitted). The doctrine of laches applies where "there is an unexcused or unexplained delay in commencing an action and a corresponding change of material condition that results in prejudice to a party." Pub Health Dep't v Rivergate Manor, 452 Mich 495, 507; 550 NW2d 515 (1996). The timing of an action or claim is an important factor in determining whether laches applies; nonetheless, the mere passage of time alone will not trigger laches. Knight, 300 Mich App at 114. Instead, the party seeking relief in equity must show that this delay caused prejudice such that it would be inequitable to enforce the action or claim. Id. at 115. A party advancing the doctrine of laches has the burden of proving that the doctrine applies. Yankee Springs Twp v Fox, 264 Mich App 604, 612; 692 NW2d 728 (2004).
In this case, defendant failed to meet that burden. Defendant's arguments at the trial court and on appeal concern only the passage of time. However, although the timing of an action or claim is an important factor in determining whether laches applies, the mere passage of time is alone insufficient. Knight, 300 Mich App at 114. Defendant has not demonstrated that plaintiff's delay was unexcused or unexplained, or that there was a corresponding change of material condition resulting in prejudice. Id. at 115. In fact, defendant concedes on appeal that after the JOD was entered, negotiations between the parties "were ongoing for quite some time." Correspondence attached to defendant's answer to plaintiff's motion to compel indicate that much of the delay in this matter was caused by negotiations between the parties, which included defendant's insistence that plaintiff reimburse him for certain other sums of money he claimed plaintiff owed to him. Because defendant did not demonstrate that the delay in resolution of this matter was "unexcused or unexplained" and failed to demonstrate prejudice, we conclude the trial court did not err by refusing to apply the doctrine of laches. Charter Twp of Shelby, 267 Mich App at 108.
Finally, defendant offers a cursory argument concerning the trial court's refusal to offset the amount awarded by $6,000. Defendant claims that he was entitled to an evidentiary hearing to fully develop the issue. However, other than his conclusory argument, defendant fails to cite any legal authority to support his entitlement to an evidentiary hearing. Moreover, he fails to discuss why or how the motion hearing was inadequate to address his concerns. "Generally, 'where a party fails to brief the merits of an allegation of error, the issue is deemed abandoned by this Court.' " Yee v Shiawassee Co Bd of Comm'rs, 251 Mich App 379, 406; 651 NW2d 756 (2002) (citation omitted).
It is not enough for an appellant in his brief simply to announce a position or assert an error and then leave it up 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. The appellant himself must first adequately prime the pump; only then does the appellate well begin to flow. [Id. (quotation marks and citations omitted).]Defendant has abandoned this argument on appeal, and we decline to address it. Moreover, even if we were to address his claims, the trial court adequately developed the record at the motion hearing by taking testimony from defendant, and entertaining argument from defendant's counsel, making a further evidentiary hearing unnecessary. See MCR 2.119(E)(2); see also Williams v Williams, 214 Mich App 391, 399; 542 NW2d 892 (1995).
Affirmed.
/s/ Cynthia Diane Stephens
/s/ Elizabeth L. Gleicher
/s/ Mark T. Boonstra