Hare v. Starr Commonwealth Corp.

813 N.W.2d 752, 291 Mich. App. 206
CourtMichigan Court of Appeals
DecidedJanuary 4, 2011
DocketDocket No. 291476
StatusPublished
Cited by22 cases

This text of 813 N.W.2d 752 (Hare v. Starr Commonwealth Corp.) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hare v. Starr Commonwealth Corp., 813 N.W.2d 752, 291 Mich. App. 206 (Mich. Ct. App. 2011).

Opinion

JANSEN, J.

Plaintiff-garnishor, Charon Hare, personal representative of the estate of Marcel D. Hare, deceased, appeals by right the circuit court’s order denying her motion for summary disposition and granting summary disposition in favor of garnishee Frontier Insurance Company (Frontier) on the ground that a New York antisuit injunction was entitled to full faith and credit. We affirm, albeit for a different reason than that relied on by the circuit court.

i

This garnishment action arises out of the drowning death of plaintiffs decedent, Marcel D. Hare (Marcel), [210]*210in the Kalamazoo River. Marcel had been in foster care wibh Starr Commonwealth Corporation (Starr Commonwealth) since approximately December 1, 1999. After several unsuccessful short-term placements with various foster families, Starr Commonwealth ultimately placed Marcel in the home of foster parent Selma Melvin (Melvin) on March 28, 2000. On the evening of April 15, 2000, while under the care of Melvin, Marcel jumped from a bridge over the Kalamazoo River and drowned.

On February 28, 2003, plaintiff, as personal representative of Marcel’s estate, filed suit against Melvin and Starr Commonwealth in the Calhoun Circuit Court. According to plaintiff, Melvin regularly allowed Marcel to “wander the neighborhood” without adult supervision. Among other things, plaintiff alleged that Melvin had been negligent or grossly negligent by failing to properly supervise Marcel, especially given that Marcel was a special-needs child.

Frontier insured Starr Commonwealth under a professional-liability policy and a commercial, general-liability policy. These policies also included Melvin, as one of Starr Commonwealth’s foster parents, within the scope of their coverage. Frontier accordingly provided defense counsel for both Melvin and Starr Commonwealth.

On October 2, 2006, defendants Melvin and Starr Commonwealth jointly moved for summary disposition. On October 25, 2006, the circuit court granted the motion for summary disposition as it related to plaintiffs claims against Starr Commonwealth, dismissing Starr Commonwealth from the action. However, the circuit allowed plaintiffs claims against Melvin to go forward and the matter was scheduled for trial.

[211]*211Sometime before trial, Melvin informed her attorneys that she had decided not to appear for trial and that she would be discharging them as defense counsel. Citing a breakdown in the attorney-client relationship, Melvin’s attorneys filed a motion to withdraw as counsel of record on November 3, 2006. The circuit court granted the attorneys’ motion to withdraw on November 20, 2006. As she had threatened to do, Melvin refused to appear in the matter. Consequently, on December 12, 2006, the circuit court entered a default judgment against Melvin in the amount of $350,000 plus case-evaluation sanctions.

On October 24, 2008, plaintiff filed the instant garnishment action in the Calhoun Circuit Court, seeking a writ of nonperiodic garnishment against Frontier in the amount of $393,260 (the amount of the default judgment, plus costs and interest). On November 17, 2008, Frontier filed its garnishee disclosure statement, in which it alleged that it was not indebted to Melvin and was not responsible for any portion of the default judgment entered against her.

On January 5, 2009, Frontier moved for summary disposition. Frontier argued that plaintiffs garnishment action should be dismissed on the basis of a New York “order of rehabilitation,” which had been entered by the supreme court of the state of New York, county of New York, on October 10, 2001, and that purported to bar any and all legal actions against Frontier. Frontier attached a copy of the New York order of rehabilitation to its motion for summary disposition. The order of rehabilitation, entered pursuant to the New York insurance law, provides that Frontier is “incorporated in New York,” that Frontier is “subject to the New York Insurance Law,” that Frontier has become insolvent, that Frontier has “failed to cure its impairment of [212]*212capital,” and that Frontier has “consented to the entry of the order of rehabilitation[.]” The New York court determined that it was “in the best interest of Frontier’s policyholders, creditors and the general public that the [New York] Superintendent [of Insurance] be directed to take possession of Frontier’s property and to rehabilitate its business and affairs[.]” The order of rehabilitation directs the New York Superintendent of Insurance to “immediately take possession of [Frontier’s] property,” to “conduct [Frontier’s] business,” and to “take such other actions as set forth in ... the New York Insurance Law.” The order of rehabilitation also provides that “[a]ll persons are enjoined and restrained from commencing or prosecuting any actions, lawsuits, or proceedings against Frontier” and that “[a]ll persons are enjoined and restrained from obtaining preferences, judgments, [and] attachments or other liens . . . against Frontier’s assets[.]” Frontier contended that the Calhoun Circuit Court was required to afford full faith and credit to the New York order of rehabilitation pursuant to Michigan’s common law as well as the Uniform Enforcement of Foreign Judgments Act (UEFJA), MCL 691.1171 et seq,1

Thereafter, plaintiff filed a cross-motion for summary disposition. Plaintiff argued that the New York order of rehabilitation constituted an out-of-state antisuit injunction that was not entitled to legal effect beyond the [213]*213territorial limits of the state of New York. Plaintiff further argued that it would violate Michigan’s public policy for the circuit court to enforce the New York order of rehabilitation. Lastly, plaintiff argued that the order of rehabilitation was not entitled to full faith and credit or comity because she had not been subject to the personal jurisdiction of the New York courts at the time the order was entered and because the enforcement of the order in Michigan would negatively affect her substantial rights.2

Following oral argument, the circuit court issued a written opinion concerning the parties’ respective motions for summary disposition. In that opinion, the court observed that “[t]he dispositive issue in these motions for summary disposition ... is the effect in Michigan of a 2001 Order of the Supreme Court of the State of New York. . . which places [Frontier] in the possession of the Insurance Superintendent of the State of New York. . . and which enjoins all persons from commencing any actions and from obtaining any judgments or liens against Frontier.” Relying in part on Keehn v Charles J Rogers, Inc, 311 Mich 416, 425; 18 NW2d 877 (1945), the circuit court ruled that it was “satisfied .. . that the 2001 New York Supreme Court Order is entitled to full faith and credit in this action and therefore that the garnishment action against [Frontier] must be dismissed.” The court went on to state that “[p]laintiff[’s] remedy, if any, against Frontier lies in the State of New York.” On March 30, 2009, the circuit court entered a final order granting Frontier’s [214]*214motion for summary disposition, denying plaintiffs cross-motion for summary disposition, and dismissing plaintiffs claims against Frontier with prejudice.

n

We review de novo a circuit court’s decision to grant or deny a motion for summary disposition. Spiek v Dep’t of Transp, 456 Mich 331, 337; 572 NW2d 201 (1998).

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Bluebook (online)
813 N.W.2d 752, 291 Mich. App. 206, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hare-v-starr-commonwealth-corp-michctapp-2011.