Opinion
No. 353312
12-10-2020
VICTOR SIMON, Plaintiff-Appellant, v. FETLEWORK GEBREMARIAM, Defendant-Appellee, and MICHAEL SPRATT, Defendant.
If this opinion indicates that it is "FOR PUBLICATION," it is subject to revision until final publication in the Michigan Appeals Reports. UNPUBLISHED Washtenaw Circuit Court
LC No. 18-001053-CZ Before: JANSEN, P.J., and FORT HOOD and RONAYNE KRAUSE, JJ. RONAYNE KRAUSE, J. (concurring in part and dissenting in part)
I concur with the majority's recitation of the facts, to which I would only add that it was completely undisputed that defendant had no involvement in, or awareness of, Spratt's LLC or Spratt's dealings with plaintiff. I also concur with the majority's reasoning and conclusion that defendant cannot have any liability to plaintiff under the Michigan Limited Liability Company Act (MLLCA), MCL 450.4101 et seq., as a matter of law, and thus it is unnecessary to consider equity regarding that claim. I further concur with the majority's implicit conclusion that equitable relief is at least theoretically available to defendant as a defense to plaintiff's claim under the Michigan Uniform Voidable Transactions Act (MUVTA), MCL 566.31 et seq. I respectfully disagree with the majority's characterization of the trial court's equity analysis as "vague," "amorphous," "generalized," "unspecific," or otherwise inadequate or a mere circumvention of the law on the basis of a sense of fairness. I would affirm the trial court in its entirety.
I note again that there is no dispute defendant was totally innocent to any of Spratt's dealings, which in all fairness certainly appear to have been less than completely aboveboard. Furthermore, plaintiff actually has a judgment against Spratt. The trial court's equitable analysis is less detailed than the majority would prefer, and possibly less than would be ideal. However, Pursuant to MCR 2.517(A)(2), a trial court's findings and conclusions following a bench trial do not need to be extensive or heavily detailed, so long as "it appears that the trial court was aware of the issues in the case and correctly applied the law, and where appellate review would not be facilitated by requiring further explanation." Triple E Produce Corp v Mastronardi Produce Ltd, 209 Mich App 165, 176; 530 NW2d 772 (1995). It is clear to me that the trial court accurately found defendant innocent of any wrongdoing and an unsophisticated party who is relying on the proceeds of the divorce judgment for the support of herself and her children. In contrast, plaintiff had a number of other options available that could have been pursued with greater diligence, had every reason to be aware of defendant ahead of time, and can at least recoup most of its debt from Spratt's portion of the divorce proceeds. Again, as noted, plaintiff actually has a judgment against Spratt, who is not even a party to this appeal.
The majority discusses the concept of piercing the corporate veil. I do not disagree with the majority's recitation of the applicable law or the deficiencies in any analysis of that doctrine by the trial court. However, I do not find that doctrine necessary to consider. The concept of "clean hands" fundamentally underpins the application of equity without any need to specifically recite it. See Charles E Austin Inc v Kelly, 321 Mich 426, 435; 32 NW2d 694 (1948). A fair and obvious reading of the trial court's ruling is that defendant unambiguously does have clean hands, whereas plaintiff failed to exercise due diligence, to defendant's detriment. Thus, equity would not countenance holding defendant accountable for the sins of another person, especially where plaintiff could far more easily have protected its interests than could defendant. Again, perhaps this could have been better articulated. Nevertheless, the trial court's articulation is not required to be perfect. MCR 2.517(A)(2).
I would affirm.
/s/ Amy Ronayne Krause