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Court upholds default judgment and sanctions in construction litigation

In these consolidated cases, the court held that the trial court did not abuse its discretion in refusing to set aside the default judgment or in refusing to hear the plaintiff's "untimely and improperly filed" written motion to withdraw admissions. It also rejected her arguments that the defendants failed to mitigate their damages, and concluded that the trial court did not abuse its discretion in awarding them attorney fees. As to case evaluation sanctions, plaintiff could not show that the trial court abused its discretion by setting the hourly rate at $200. Thus, in Docket No. 314767, the court affirmed the trial court's judgment in favor of defendant-Hertler, individually and d/b/a/ Hertler Construction, on his counterclaim after a default judgment and a trial on damages. In Docket No. 316118, it affirmed the trial court's amended judgment, which imposed case evaluation sanctions against plaintiff. The parties entered into a written contract for Hertler to rebuild plaintiff's lake house. When she did not pay an invoice, Hertler filed and recorded a construction lien on the property. Plaintiff sued to remove the lien, and alleged breach of contract, conversion, and misappropriation. Hertler filed a counterclaim for breach of contract, foreclosure of the lien, implied contract, and unjust enrichment. When plaintiff did not timely answer the counterclaim, the trial court entered a default against her, and after a hearing, granted Hertler's motion for default judgment. Hertler successfully moved to deem his requests for admissions admitted after plaintiff did not answer them, and the trial court granted him summary disposition as to the claims in plaintiff's complaint, relying on her admissions. A bench trial was held on damages as to Hertler's counterclaims. The trial court awarded Hertler the requested $11,190.59 in construction-related damages and $32,269.48 in attorney fees. It later awarded Hertler case evaluation sanctions, and signed an amended judgment awarding Hertler $11,190.59 in construction-related damages, $32,269.48 in attorney fees under the CLA and the parties' contract, plus $15,331.55 in case evaluation sanctions, for a total of $58,791.62. As to plaintiff's claim that the trial court abused its discretion by not setting aside the default and default judgment, the court held that she failed to show a meritorious defense. Also, contrary to her assertion, the counterclaim stated claims upon which relief could be granted. "It stated claims for breach of contract, implied contract, and unjust enrichment, as well as for foreclosure under the CLA. There was nothing insufficient with regard to these claims." Further, the alternative counterclaims for implied contract and unjust enrichment were permissible. The court also concluded that the trial court sufficiently examined the factors required to determine an attorney fee's reasonableness, and the record supported its findings.

FAMILY LAW 83: A trial court can terminate a parent’s rights and permit a stepparent to adopt a child.

A trial court has discretion to terminate a parent’s rights and permit a stepparent to adopt a child when the conditions of MCL 710.51(6) are met. MCL 710.51(6)(b) requires the petitioner to establish that the other parent had the ability to visit, contact, or communicate with the children, and substantially failed or neglected to do so for a period of two years.

PROBATE 53: The trust agreement included an Incontestability Provision.

A settlor’s intent is to be carried out as nearly as possible. Generally, in terrorem clauses are valid and enforceable. However, a provision in a trust that purports to penalize an interested person for contesting the trust or instituting another proceeding relating to the trust shall not be given effect if probable cause exists for instituting a proceeding contesting the trust or another proceeding relating to the trust.

FAMILY LAW 82: Court stated it would terminate the personal protection order (PPO) after the parties present documentation of the initiation of the divorce proceedings.

However, the trial court concluded that these matters should, in fact, be in the province and the jurisdiction of the Family Division and in that respect, having issued a personal protection order, the Court stated it would terminate the personal protection order after the parties present documentation of the initiation of the divorce proceedings.

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PROBATE 51: Trust filed a petition to determine title to credit union account.

The probate court explained that the owners of the account are S and J. When S passes, J becomes the owner of the account. J is the one who had the authority to make the designation. Nowhere in any documents is there a designation by J that SJ be the owner -- or the beneficiary of the account. The designation made by his father was no longer binding because he was no longer the owner at the time J passed away.

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FAMILY LAW 77: Court awarded plaintiff sole legal custody; defendant was unwilling to work with plaintiff.

For joint custody to work, parents must be able to agree with each other on basic issues in child rearing including health care, religion, education, day to day decision making and discipline and they must be willing to cooperate with each other in joint decision making. If two equally capable parents are unable to cooperate and to agree generally concerning important decisions affecting the welfare of their children, the court has no alternative but to determine which parent shall have sole custody of the children.

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