In Re Contempt of Cornbelt Beef Corp.

416 N.W.2d 696, 164 Mich. App. 114
CourtMichigan Court of Appeals
DecidedMay 22, 1987
DocketDocket 85152
StatusPublished
Cited by3 cases

This text of 416 N.W.2d 696 (In Re Contempt of Cornbelt Beef 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
In Re Contempt of Cornbelt Beef Corp., 416 N.W.2d 696, 164 Mich. App. 114 (Mich. Ct. App. 1987).

Opinion

Per Curiam.

Cornbelt Beef Corporation appeals as of right from the judgment entered in circuit court finding it guilty of contempt for failure to comply with the terms of a receivership order. We affirm.

On March 27, 1976, Anita Patterson gave birth to a child and, thereafter, a paternity action was instituted against Archie L. Brewer. Brewer acknowledged paternity and an order of filiation was entered on January 18, 1977. Brewer was required to pay support in the amount of $7 per week until April 1, 1977, and $10 per week thereafter during the child’s minority. He was also ordered to pay confinement expenses for the birth of the child in the amount of $2,900.56 at the rate of $7 per week until April 1, 1977, and $10 per week thereafter.

Sometime after the order of filiation was entered, Brewer became an employee of Cornbelt. On January 16, 1981, Brewer was injured in the scope of his employment and, thereafter, filed a worker’s compensation claim. The claim was handled for Cornbelt by its insurance carrier, Ohio Casualty *117 Group. On April 13, 1981, Brewer was laid off from work and did not return.

Meanwhile, Brewer had failed to make child support payments as required and a bench warrant was issued for his arrest. Following hearings regarding arrearages held on April 27, 1983, and on July 15, 1983, the circuit court entered an order appointing Gerhard F. Ritsema, Wayne County Friend of the Court, receiver for any funds that might be paid as the result of defendant’s workers’ disability compensation claim.

The order was mailed to Cornbelt on July 20, 1983, by certified mail, return receipt requested. An employee of Cornbelt received and signed for the order on July 21, 1983.

On March 8, 1984, Ohio Casualty sent a letter to Cornbelt proposing that Brewer’s workers’ compensation claim be redeemed for $5,000 and requesting authorization to settle for that amount. Cornbelt consented to the proposed settlement and on April 5, 1984, Brewer’s workers’ compensation claim was redeemed and he received $3,980. On March 29, 1985, as part of the receiver’s annual review of his files, an inquiry letter was mailed to Cornbelt. Cornbelt responded that Brewer’s workers’ compensation claim had been redeemed for $5,000 in March, 1984.

An order to show cause for Cornbelt’s failure to comply with the receivership order was issued on April 19, 1985. Subsequently, a show cause hearing was held before a friend of the court referee. Thereafter, the referee granted judgment against Cornbelt in the amount of $5,000 plus costs in the amount of $375. Cornbelt requested review of the decision and, on the same day, the matter was brought before the circuit court. However, because of a misunderstanding, Cornbelt’s attorney failed to appear and a default judgment was entered.

*118 On April 30, 1985, through consent of counsel, a hearing was conducted before Wayne Circuit Judge Richard D. Dunn. At the conclusion of this hearing, Judge Dunn reaffirmed the referee’s recommendation. On May 16, 1985, the judgment was amended to reflect the $3,980 actually received by Brewer.

On appeal, Cornbelt first claims that the order finding it in contempt was erroneous. 1 We disagree.

MCL 600.1701; MSA 27A.1701 provides:

Supreme court, circuit courts, and all other courts of record, have power to punish by fine or imprisonment, or both, persons guilty of any neglect or violation of duty or misconduct in the following cases:
(5) Parties to actions, attorneys, counselors, and all other persons for the nonpayment of any sum of money which the court has ordered to be paid, in cases where by law execution cannot be awarded for the collection of the sum, or the disobedience of or refusal to comply with any order of the court for the payment of temporary or permanent alimony or support money or costs made in any action for divorce or separate maintenance, or any other disobedience to any lawful order, decree, or process of the court.

In the instant case, the receivership order required Cornbelt to deliver the workers’ disability compensation funds to the receiver appointed for that purpose. Because execution could not be awarded for the collection of this sum, see In re *119 Ridgley, 261 Mich 42; 245 NW 803 (1932), the circuit court had the power to punish Cornbelt for contempt if Cornbelt was guilty of any neglect, violation of duty or misconduct with respect to nonpayment of the workers’ disability compensation funds to the receiver. Additionally, under MCL 600.1721; MSA 27A.1721, the circuit court had the power to order Cornbelt to pay the receiver the amount it should have paid him.

Cornbelt argues that it cannot be held in contempt of court because it did not violate the receivership order, since it was Ohio Casualty Group that actually paid Brewer and Cornbelt only approved the amount of the workers’ disability compensation settlement. This argument is without merit. Ohio Casualty paid the claim with Corn-belt’s consent. The fact that Cornbelt did not actually present the check to the defendant is insignificant. Cf. Ptak v Pennwalt Corp, 112 Mich App 490, 494-495; 316 NW2d 251 (1982).

Cornbelt also raises various arguments relating to the validity of the receivership order, which Cornbelt erroneously characterizes as an injunction. We find that the receivership order was valid in each respect challenged.

The power to appoint receivers is inherent in courts of equity. Michigan Minerals, Inc v Williams, 306 Mich 515; 11 NW2d 224 (1943). See also MCL 600.2926; MSA 27A.2926. Further, MCL 722.719(5); MSA 25.499(5) provides that receivers may be appointed to ensure that fathers of illegitimate children meet their support obligations. The friend of the court may properly be appointed receiver to receive and disburse workers’ compensation funds due a father. Cf. Petrie v Petrie, 41 Mich App 80, 84; 199 NW2d 673 (1972), lv den 388 Mich 771 (1972).

Further, we do not find that the receivership *120 order was invalid because it was not served upon Cornbelt’s insurance carrier. The intent of the receivership order was to ensure that the receiver was paid all funds that were due Brewer "on any and all worker’s disability compensation claims from: (1) Cornbelt Beef Corp.” Further, the order was to be served upon the "aforesaid employer and carrier heretofore set out in paragraphs [sic] (1) of [the] order.” Paragraph (1) listed only Cornbelt; no insurance carrier was listed. Since no insurance carrier was listed, the receiver was not required to serve the order upon Cornbelt’s carrier.

We reject the contentions that the receivership order was not binding upon Cornbelt because it was neither a party to the action nor in active concert with a party to the action or because it did not receive actual notice of the action. See Davis v Davis, 137 Mich App 291, 293; 358 NW2d 6 (1984); Tuller v Wayne Circuit Judge, 243 Mich 239, 243-245; 219 NW 939 (1928).

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Bluebook (online)
416 N.W.2d 696, 164 Mich. App. 114, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-contempt-of-cornbelt-beef-corp-michctapp-1987.