Released: 12/04/2008   Panel: Bandstra, Beckering, GLEICHER

Domestic Relations - Child Support - Review - Standard
Child support orders are reviewed for an abuse of discretion, but issues of statutory construction, whether a trial court properly operated within the statutory framework relative to child support calculations and any deviation from the child support formula, and its findings as derived from an application of law to facts are reviewed de novo.

Contracts - Construction - Review - Standard
The determination of the existence of and the interpretation of a contract involve questions of law subject to de novo review.

Domestic Relations - Divorce - Settlement - Construction - Review - Standard
A judgment of divorce entered upon the settlement of the parties represents a contract, that, if clear, is to be interpreted as a question of law.

Appeal and Error - Preservation - Invited Error
A party may not take a position in the trial court and subsequently seek redress in an appellate court based on a position contrary to that taken in the trial court, nor stipulate to a matter and then argue on appeal that the resultant action was error. In this case, the parties divorced in 1996, pursuant to a settlement which included provisions regarding child support. In the ensuing years, modifications were made to the child support, and following a change to the defendant's obligation to pay a share of his bonus as child support, the plaintiff contended on appeal that the modification had been made in the absence of a change in circumstances necessary to make a modification. However, the plaintiff had alleged a change in circumstances in a cross-motion for modification, and had stipulated to recommendations made by a referee which included a suggested modification to the bonus provision. Under the circumstances, the plaintiff was precluded from asserting that there was no change in circumstances permitting the modification.

Domestic Relations - Child Support - Friend of the Court Guidelines - Departure - Procedure
Generally, under the Support and Parenting Time Enforcement Act, a court must order child support in an amount determined by application of the child support formula developed by the state Friend of the Court bureau. The court may enter an order which deviates from the formula if the court determines from the facts of the case that application of the child support formula would be unjust or inappropriate and sets forth in writing or on the record the child support amount determined by application of the child support formula, how the child support order deviates from the child support formula, the value of property or other support awarded instead of the payment of child support, if applicable, and the reasons why application of the child support formula would be unjust or inappropriate.

Domestic Relations - Child Support - Friend of the Court Guidelines - Departure - Agreement
The SPTEA does not prohibit a court from entering a child support order which is agreed to by the parties and which deviates from the child support formula, if the requirements for deviation from the formula are met.

Domestic Relations - Child Support - Friend of the Court Guidelines - Departure - Reasons
According to the 2004 FOC child support formula manual, the child support formula provides for appropriate support amounts in orders involving the support of children based on the estimated costs of raising children and factors like parental income, family size, and ages of children. The manual includes a list of potential criteria for deviation from the formula, including that one or both parents earn incomes of a magnitude not fully considered by the formula and that one or both parents have varying amounts of irregular bonus income.

Domestic Relations - Child Support - Agreement - Modification - Power - In Excess of Guidelines
The child support formula used by a court must be based upon the needs of the child and the actual resources of each parent, and a court must use the FOC child support guidelines in determining child support. A parent may not bargain away a child's right to receive support, and an agreement by the parties limiting an obligation to pay support will not suspend the authority of the court to enter a support order; a court retains inherent jurisdiction to modify the judgment as to support payments upon a proper showing at any time. However, the child support guidelines set forth a parent’s minimum support obligation, and thus a voluntarily assumed obligation to pay an amount in excess of the minimum is not inherently objectionable. Therefore, a contract enhancing a parent’s child support obligation should be enforced, absent a compelling reason otherwise. In this case, the parties had two minor children, and the judgment of divorce incorporated an agreement of the parties which included specifications regarding child custody and support. Under the agreement, the parties shared joint legal custody and the plaintiff mother had physical custody while the defendant father received overnight visits amounting to approximately 164 days a year. The agreement required the defendant to pay $1,263 per month in child support, which constituted an average of what his obligation would have been under the child support guidelines under the sole custody formula and the shared economic responsibility formula, as well as 25 percent of any bonus he received from his employer. The agreement also provided that the defendant waived his right to assert shared economic participation and that he would not introduce the issue into the support calculations for ten years, that support would remain fixed for one year before it could be reviewed, that review could only occur if either party received increased income, and that support could not be reduced unless the defendant became involuntarily unemployed or the plaintiff's earnings increased. The child support obligation was twice increased, but following ten years, the defendant moved to reduce the support obligation to $636 per month, asserting that he had custody of the children for 172 days per year and that the shared economic responsibility formula thus applied. The defendant also sought a commensurate reduction in his bonus obligation from 25 percent to four percent. The trial court modified the child support obligation, increasing it by $45 to $1,032.89 per month, based on the shared economic responsibility formula, but apparently concluded that it lacked the authority to enforce the bonus obligation to the extent that it exceeded the proportion suggested by the child support guidelines and thus the court reduced the proportion of bonus required to be paid to 9.3 percent, based on the formula. The plaintiff appealed, apparently arguing that the parties' agreement precluded modification of the child support bonus obligation. The language of the parties' settlement agreement was clear in requiring the defendant to pay 25 percent of his net bonuses as child support, and the only provision for the reduction or elimination of the obligation was the attainment of the age of majority or graduation from high school of the two children. The agreement contained no provision for the modification of the bonus obligation, and thus was not subject to modification by the court. That the agreement did not expressly prohibit modification did not render it subject to modification. Rather, the obligation was required to be enforced as written. Under the circumstances, the trial court improperly modified the defendant's obligation to pay 25 percent of his bonuses as child support.

Contracts - Construction - Plain Meaning
A contract must be interpreted according to its plain and ordinary meaning.

Contracts - Construction - Question of Fact/Law
Under ordinary contract principles, if contractual language is clear, construction of the contract is a question of law for the court. If the contract is subject to two reasonable interpretations, factual development is necessary to determine the intent of the parties and summary disposition is therefore inappropriate. If the contract, although inartfully worded or clumsily arranged, fairly admits of but one interpretation, it is not ambiguous.

Contracts - Enforcement
A court is without authority to modify a clear contract or rebalance the contractual equities struck by the contracting parties. A contract must be enforced as written unless it is contrary to public policy.

Contracts - Modification - Unilateral - Validity
Parties may include a written modification clause in a contract, but with or without such a clause, the principle of freedom to contract does not permit a party unilaterally to alter the original contract.

Domestic Relations - Divorce - Settlement - Enforcement
Judgments entered pursuant to the agreement of the parties are in the nature of a contract. Divorcing parties may create enforceable contracts.

Contracts - Construction - As a Whole
A contract must be read as a whole, with harmonious effect given to each word and phrase.

Contracts - Construction - General/Specific
Generally, a specific provision in a contract overrides a general provision.

Released: 12/04/2008   Panel: Hoekstra (concurring in result), Whitbeck, Talbot (PC)

Summary Disposition - Material Fact - Issue - Lack - Burden of Proof
A party may move for dismissal of a claim because there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. The moving party must specifically identify the undisputed factual issues and support its position with documentary evidence. The trial court must consider all the documentary evidence in the light most favorable to the nonmoving party.

Summary Disposition - Review - Standard
A trial court’s ruling on a motion for summary disposition is reviewed de novo on appeal.

Contracts - Construction - Review - Standard
Construction of clear contract language is a question of law subject to de novo review.

Statutes - Construction - Review - Standard
The interpretation of a statute is a question of law subject to de novo review.

Insurance - Automobile - Benefits - Personal Protection - Exclusions - Unlawful Taking of Vehicle
Under the no fault insurance act, a person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident he was using a motor vehicle or motorcycle which he had taken unlawfully, unless the person reasonably believed that he was entitled to take and use the vehicle.

Insurance - Automobile - Benefits - Personal Protection - Exclusions - Unlawful Taking of Vehicle - Family Member - No Intent to Steal
The exclusion from personal protection benefits under the no fault insurance act based on the unlawful taking of a vehicle excludes coverage only if the person actually intended to steal the vehicle, and does not preclude coverage of a family member who temporarily takes a vehicle without permission. In this case, the plaintiff insured obtained no fault coverage on a vehicle, but later was given the use of another vehicle by a third party in whose house she and the plaintiff minor were living. The plaintiff minor took the vehicle without the knowledge or permission of the plaintiff mother or the vehicle owner, and he was injured when the vehicle crashed. The plaintiffs sought personal injury protection coverage, and the defendant insurer refused to pay on various grounds. The plaintiffs brought suit and the defendant moved for summary disposition, arguing that coverage was precluded because the minor had unlawfully taken the vehicle. The trial court agreed and granted summary disposition for the defendant. However, the trial court was required to follow existing precedent which permits coverage for family members who temporarily take an insured vehicle without permission.

Appeal and Error - Stare Decisis - Supreme Court - Plurality
A plurality opinion of the Supreme Court does not establish binding precedent.

Appeal and Error - Stare Decisis - Departure - Erroneous Ruling
Statutes - Construction - Policy/Text
Statutory language must be enforced according to its plain meaning, and cannot be judicially revised or amended to harmonize with the prevailing policy whims of a court. Thus, although stare decisis is generally the preferred course, the Supreme Court will depart from erroneous precedent when governing decisions are unworkable or are badly reasoned.

Insurance - Automobile - Vehicle - Owner - Definition
Under the no fault insurance act, an "owner" of a vehicle is a person renting a motor vehicle or having the use of it, under a lease or otherwise, for a period greater than thirty days, or a person who holds the legal title to a vehicle, other than a person engaged in the business of leasing motor vehicles who is the lessor of a motor vehicle pursuant to a lease providing for the use of the motor vehicle by the lessee for a period greater than thirty days, or a person who has the immediate right of possession of a motor vehicle under an installment sale contract.

Insurance - Automobile - Vehicle - Owner - Multiple Owners
Under the no fault insurance act, there can be more than one owner of a vehicle.

Insurance - Automobile - Vehicle - Owner - Use of Vehicle - Standard
For the purpose of establishing ownership of a vehicle under the no fault insurance act, having the use of a vehicle means using the vehicle in ways which comport with concepts of ownership. Ownership follows from proprietary or possessory usage, rather than incidental usage under the direction or with the permission of another; a regular pattern of unsupervised usage will support a finding of ownership. In this case, the person who owned title to the vehicle gave the vehicle to the plaintiff mother for her extended, continuous and exclusive use, and the plaintiff mother so used the vehicle as her own for more than three months before the pertinent accident occurred. Under the circumstances, the plaintiff mother was an owner of the vehicle for the purpose of the no fault insurance act. Thus, the plaintiff minor took a vehicle owned by a family member, and he did so temporarily with no intent to steal. Under the circumstances, the exclusion of personal injury benefits for those who take a vehicle unlawfully did not preclude coverage.

Contracts - Construction - Plain Meaning
When presented with a contractual dispute, a court must read the contract as a whole to ascertain the intention of the parties, determine what the parties’ agreement is, and enforce it. Absent ambiguity, a contract must be construed to adhere to its plain and ordinary meaning. Technical and constrained constructions are to be avoided.

Contracts - Construction - As a Whole
A contract must be construed as a whole, and all its parts are to be harmonized so far as reasonably possible. Every word in it is to be given effect, if possible, and no part is to be taken as eliminated or stricken by some other part unless such a result is fairly inescapable.

Insurance - Contract - Construction - Exclusions
Clear and specific exclusions in an insurance policy should be given effect.

Insurance - Automobile - Contract - Construction - Statutory Provisions - Compliance
To the degree that a no fault insurance contract is in conflict with the no fault insurance act, it is contrary to public policy and invalid, but contracting parties are assumed to want their contract to be valid and enforceable, and a court must construe contracts to harmonize with the statute when reasonably possible. In this case, the defendant insurer's policy specified that it did not afford coverage to any person using a vehicle unlawfully taken, and the defendant thus argued that coverage was precluded. However, it was necessary to construe the contractual language in conformance with the no fault insurance act to afford coverage to a family member who took a vehicle temporarily.

Insurance - Automobile - Contract - Rescission - Material Misrepresentation - Estoppel - Third Party Claim - Innocence - Standard
When a policy of insurance is procured through the insured’s intentional misrepresentation of a material fact in the application for insurance, and the person seeking to collect no fault benefits is the same person who procured the policy of insurance through fraud, an insurer may rescind an insurance policy and declare it void ab initio. However, a policy may not be voided ab initio if to do so would affect an innocent third party. Only the claim of an insured who has committed the fraud will be barred, leaving unaffected the claim of any insured under the policy who is innocent of fraud. The determination whether a person was an innocent third party depends on whether the injured third party was innocent with respect to the misrepresentation made to the insurance company or was actively involved in defrauding the insurer. In this case, the plaintiff mother had initially obtained insurance coverage from the defendant for a vehicle she owned, but she later changed the coverage to another vehicle, which she represented to the defendant that she owned but which was owned by her other son, who presented a greater risk for the insurer. The defendant argued that because the plaintiff mother was responsible for the plaintiff minor's medical expenses, the plaintiff mother was the person actually seeking benefits and thus the person seeking benefits was not an innocent third party. However, the plaintiff minor had made no misrepresentations, and coverage could not be denied in him on the basis of his mother’s improper actions.

Insurance - Automobile - Insurable Interest - Necessity - Personal Protection
There is no requirement under the no fault insurance act that there be an insurable interest in a specific vehicle since an insurer is liable for personal protection benefits to its insured regardless whether the vehicle named in the policy was involved in the accident. A person has an insurable interest in his own health, and this insurable interest entitles persons to personal protection benefits regardless whether a covered vehicle was involved. In this case, the defendant argued that the plaintiff mother had not had an insurable interest in her older son's vehicle, but the lack of an insurable interest in that vehicle did not preclude personal injury protection coverage. Under the circumstances, the trial court improperly granted summary disposition for the defendant.

Released: 12/02/2008   Panel: HOEKSTRA, Cavanagh, Zahra (dissenting)

Opinion - Authored - Published View Opinion
Opinion - Dissenting View Opinion

Summary Disposition - Review - Standard
A decision on a motion for summary disposition is reviewed de novo on appeal.

Summary Disposition - Failure to State a Valid Defense - Standard
A motion for summary disposition based on the failure to state a valid defense tests the sufficiency of a defendant’s pleadings, and may be granted when the party has failed to state a valid defense to a claim. A defense is invalid when the party’s pleadings are so clearly untenable as a matter of law that no factual development could possibly deny the opposing party’s right to recovery.

Statutes - Common Law - Public Policy
The public policy of the state is reflected in its statutes, and when the statutes have not directly spoken, it is found in the decisions of the courts and the constant practice of the government officials.

Wills and Estates - Contest - Prohibition - Validity
Formerly, common law held that a clause in a will penalizing an heir for contesting the will was valid and enforceable, but under current statute, a provision in a will purporting to penalize an interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable if probable cause exists for instituting proceedings.

Trusts - Challenge - Prohibition - Validity
The public policy of the state declares that a clause in a will penalizing an heir for contesting the will is unenforceable if probable cause existed to institute proceedings challenging the will. That public policy applies similarly to such clauses in trusts. No-contest clauses in trusts are unenforceable if there is probable cause for challenging the trust, but it is not contrary to public policy to enforce a no-contest clause if there is no probable cause to challenge the trust. In this case, a trust provided that the principal was to be held in trust for the benefit of the petitioner and the settlor's dogs, but the trust failed to provide for the distribution of the trust corpus upon the death of the petitioner and the dogs. The trust also provided that if any beneficiary of the trust or heir of the settlor challenged the trust or the settlor's will, that person would receive no benefits. After the settlor died, the petitioner petitioned to contest the trust on the basis that the trust violated the rule against perpetuities, and asserted that the no-contest clause had been included in the trust as the result of undue influence. The respondent trustee then petitioned to enforce the no-contest clause. Following an evidentiary hearing, the trial court concluded that the perpetuities problem was the result of a drafting error and it reformed the trust to remedy the omission of a residuary clause, and it concluded that there had been no undue influence. The respondent moved for summary disposition, asserting that the no-contest clause was enforceable against the petitioner, but the trial court concluded that the clause was unenforceable and denied summary disposition. On appeal, the respondent argued that the statutory limitation on the enforceability of no-contest clauses applied only to wills and thus that the trust's clause was enforceable. However, the public policy reflected in the statute applied as well to trusts, and thus the trial court properly concluded that the petitioner, in asserting that there was probable cause to challenge the trust, had asserted a valid defense to the no-contest clause.

Summary Disposition - Material Fact - Review - Standard
A motion for summary disposition based on the lack of a material factual dispute tests the factual support for a claim. In reviewing the motion, an appellate court must consider the available pleadings, affidavits, depositions, and other documentary evidence in the light most favorable to the nonmoving party and determine whether the moving party was entitled to judgment as a matter of law.

Trusts - Challenge - Probable Cause - Standard
Wills and Estates - Contest - Probable Cause - Standard
Probable cause to challenge a testamentary document exists when, at the time of instituting the proceeding, there was evidence that would lead a reasonable person, properly informed and advised, to conclude that there was a substantial likelihood that the challenge would be successful.

Property - Rule Against Perpetuities - Applicability - Trusts
Trusts - Rule Against Perpetuities
A trust is invalid if it violates the rule against perpetuities. At the time relevant, a nonvested property interest was invalid unless: (1) when the interest was created, it was certain to vest or terminate no later than 21 years after the death of an individual then alive; or (2) the interest either vested or terminated within 90 years after its creation. In this case, the trust failed to provide for the distribution of the trust corpus after the death of the petitioner and the settlor's dogs, and thus the trust violated the rule against perpetuities. Under the circumstances, the petitioner therefore had probable cause to challenge the trust, and the no-contest rule was not enforceable against him. The trial court properly refused to grant summary disposition against the petitioner.

Released: 10/14/2008   Published: 12/02/2008
Panel: Markey, Sawyer, Kelly (PC)

Opinion - Per Curiam - Unpublished View Opinion
Opinion - Per Curiam - Published After Release View Opinion

Utilities - Rates - Review - Standard - Burden of Proof
Rates prescribed by the Public Service Commission are presumed to be lawful and reasonable. A party aggrieved by an order of the PSC has the burden of proving by clear and satisfactory evidence that the order is unlawful or unreasonable. To establish the unlawfulness of a PSC order, the appellant must show that the PSC failed to follow a mandatory statute or abused its discretion in exercising its judgment. An order is unreasonable if unsupported by the evidence.

Utilities - Rates - Review - Standard
The PSC has broad ratemaking authority and is not bound by any single ratemaking formula, and may make pragmatic adjustments when warranted by the circumstances of the particular matter before it. A rate-design decision should not be disturbed absent a showing that it is arbitrary, capricious, or an abuse of discretion.

Utilities - Rates - Natural Gas - Uncollectible Expense Adjustment - Validity
The deferred expenses of a utility are expenses of the year to which they are deferred, and are therefore prospective. When capitalized expenditures are amortized, the amortization becomes a current expense even though it reflects expenditures which were capitalized in the past. In setting the rates for natural gas, the PSC estimates the amount of uncollectible utility bills a provider will encounter in a period and adjusts the rate to accommodate that estimate, and then later modifies that adjustment to correct for the actual amount of unpaid bills. The adjustment does not constitute retroactive ratemaking. In this case, for 2005, the PSC established an uncollectible expense estimate for the appellee gas utility, and then permitted a surcharge for 2007 to the utility to accommodate uncollectible bills in excess of that estimate. The appellant argued that the adjustment constituted impermissible retroactive ratemaking. However, the PSC acted within its general ratemaking powers in adopting the adjustment mechanism to ensure that the portion of rates attributable to uncollectible expense would substantially match actual uncollectible expenses, and the deferred expenses were deemed expenses of the year to which they were deferred and, thus, were recovered on a prospective basis. The mechanism did not involve retroactive ratemaking, and the PSC properly permitted the surcharge.