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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.

MICHIGAN DIVORCE 79: Plaintiff intentionally hindered the sale of the house.

The court found that the parties were equally at fault for the breakdown of the marriage, and it found that Plaintiff had intentionally hindered the sale of the house after the court ordered that it be listed so it could receive a realistic determination of the house’s value. The record showed that Plaintiff had declined several showings.

MICHIGAN WILLS/TRUSTS 33: Trustees required to provide notice informing recipients that they may challenge the validity of a trust and the period allowed for bringing such a challenge.

The notice sent clearly advised her that if she wanted to contest the validity of the Trust in a judicial proceeding, the law required her to do so within six months from the date of the letter. Nothing in the statute requires a trustee to inform the recipients of the specific legal consequences of not acting during the time allowed.

MICHIGAN REAL ESTATE 97: The court imposed a constructive trust on defendant’s one-half interest in the property in favor of plaintiff.

The trial court found that plaintiff sustained her burden of establishing that a constructive trust was necessary to prevent defendant from being unjustly enriched. Accordingly, the court imposed a constructive trust on defendant’s one-half interest in the property in favor of plaintiff and ordered defendant to convey his interest in the property to plaintiff.

MICHIGAN REAL ESTATE 95: Property owners did not place a condition upon the delivery of the deed; rather, they delivered the deed to themselves.

When the delivery of a deed is contingent upon the happening of some future event, title to the subject property will not transfer to the grantee until the event has occurred. However, in this case A and J did not place a condition upon the delivery of the deed; rather, they delivered the deed to themselves, then deposited the deed with their attorney with the instruction to record the deed only upon the happening of a future event, thereby placing a condition only upon the recording of the deed.

MICHIGAN PROBATE 57: Brother granted permanent guardianship of siblings.

At a multiday hearing to address the extension of the guardianship, the eldest children, the mother’s relatives and friends, and school personnel testified regarding the mother’s care of the children, appellant’s treatment of and interaction with the children, and the eldest siblings’ role in aiding the mother to raise the children.

FAMILY LAW 88: The trial court found that the children did not have an established custodial environment with defendant because, before the separation, he did not have a large role in the children’s lives.

The trial court credited plaintiff’s testimony that, before the parties’ separation, defendant spent minimal time helping to care for the children, so its finding that the children would not have looked to defendant for guidance, discipline, the necessities of life, and parental comfort during that time was not against the great weight of the evidence.

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