Clohset v. No Name Corp.

824 N.W.2d 191, 296 Mich. App. 525
Michigan Court of Appeals·Decided May 15, 2012·No. Docket No. 301681·Published·Cited by 1 cases

Opinion

Boonstra, J.

Plaintiff, Phillip M. Clohset, appeals as of right a circuit court order denying his motion for summary disposition and granting summary disposi[529] tion in favor of defendants, No Name Corporation (No Name), Geraldine K. Goodman, and the estate of Walter A. Goodman, deceased, entered on November 30, 2010. We vacate the judgment of the circuit court and remand to the district court for reinstatement and enforcement of the stipulated consent judgment entered on October 1, 1999.

The facts of this case are not in dispute. But the case presents an unusual procedural history that requires us to consider issues of (a) subject-matter jurisdiction and (b) the validity, or degree of validity, of a stipulated consent judgment entered by the district court in an amount in excess of its jurisdictional limit.

Under the unusual circumstances outlined herein, we conclude that the district court had subject-matter jurisdiction over this case and that its entry of a stipulated consent judgment was proper, without regard to the jurisdictional amount-in-controversy limit that applies under the district court’s general jurisdictional authority. Moreover, having neither appealed nor properly moved to alter or amend the stipulated consent judgment, defendants could not collaterally attack it, under the circumstances presented, 10 years later. Our conclusion derives in part from the well-established maxim that a party may not properly create error in a lower court and then claim on appeal that the error requires reversal. See, e.g., Dresselhouse v Chrysler Corp, 177 Mich App 470, 477; 442 NW2d 705 (1989) (“A party is not allowed to assign as error on appeal something which his or her own counsel deemed proper [in the trial court] since to do so would permit the party to harbor error as an appellate parachute.”).

We find that the district court erred by transferring this case to the circuit court. Further, given the jurisdiction of the district court, we find that the circuit [530] court erred by ruling on the merits of the case, by dismissing plaintiffs claims, and by granting summary disposition to defendants on plaintiffs claims.

I. FACTUAL AND PROCEDURAL HISTORY

This action was originally brought by Clarence and Virginia Clohset (the Clohsets). The Clohsets have since passed away and plaintiff, Phillip Clohset, has taken over as personal representative of their estates. The Clohsets and defendant No Name entered into a lease agreement for commercial premises in 1991, to which defendants Geraldine Goodman and Walter Goodman obligated themselves as guarantors for No Name. Defendant No Name subsequently failed to make its lease payments. The Clohsets filed a demand for possession on No Name in the district court on October 6, 1998, demanding possession of the premises. On October 21, 1998, they filed a complaint against No Name for nonpayment of rent, seeking possession of the premises and costs, but not seeking money damages, which the complaint acknowledged would exceed the district court’s general statutory jurisdictional limit of $25,000. MCL 600.8301(1). The complaint noted that money damages would be sought in a separate action in the circuit court.

On November 11, 1998, the Clohsets entered into a settlement agreement with No Name, Geraldine Goodman, and Walter Goodman, stating, in part, that No Name owed the Clohsets $384,822.95, plus 9.5 percent interest. The settlement agreement further required the parties to execute “pocket” consent judgments for entry, potentially, in the district court and/or the circuit court. The consent judgments were to be held by the Clohsets, and one or both were to be filed in the event that No Name or the Goodmans defaulted on the [531] settlement agreement. Upon their filing, the consent judgments would add Geraldine Goodman and Walter Goodman as named defendants, and would obligate all defendants as set forth therein. Subsequently, the Clohsets filed the district court consent judgment, along with an affidavit from their attorney at the time, stating that defendants had defaulted and owed the Clohsets a net amount of $222,102.09, plus additional amounts, including costs and attorney fees, as outlined in the settlement agreement. The district court entered the stipulated consent judgment on October 1, 1999.1

Over nine years passed, during which time plaintiffs Clarence and Virginia Clohset and defendant Walter Goodman passed away, and then on March 24, 2009, plaintiff sent defendant Geraldine Goodman a demand letter for $222,102.09. Defendants stipulated with regard to a renewal of the consent judgment and the district court entered the stipulated renewal of the consent judgment on September 15, 2009. On October 14,2009, defendants moved to vacate the original, October 1, 1999, consent judgment on the ground that the district court had lacked subject-matter jurisdiction to enter it. Plaintiff responded by moving to transfer the proceedings to the circuit court. The district court denied defendants’ motion to vacate the judgment, granted plaintiffs motion to transfer (while striking proposed language that would have found a lack of subject-matter jurisdiction), and transferred the case to the circuit court pursuant to MCR 2.227(A)(1) (which authorizes a transfer only when the transferring court “determines that it lacks jurisdiction of the subject matter of the action”).

[532] Plaintiff then moved for entry of the consent judgment (previously entered in the district court) in the circuit court. The circuit court denied that motion, holding that the judgment was void for lack of subject-matter jurisdiction in the district court, dismissed the case without prejudice, and permitted plaintiff to file an amended complaint. After filing an amended complaint asserting breach of the parties’ various agreements and related equitable claims, plaintiff moved for summary disposition on his breach claims only, and defendants countered with a motion for summary disposition on all of plaintiffs claims, both contract-based and equitable. The circuit court granted summary disposition in favor of defendants and dismissed plaintiffs claims.

Plaintiff claims on appeal that the circuit court erred by denying his motion to enter the consent judgment in the circuit court, by dismissing his initial claims, and by later denying summary disposition to plaintiff and granting summary disposition to defendants.

II. STANDARD OF REVIEW

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Clohset v. No Name Corp., 824 N.W.2d 191, 296 Mich. App. 525 (Mich. Ct. App. 2012).

824 N.W.2d 191 (Clohset v. No Name Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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