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DIVORCE 45: DEFENDANT’S MOTION TO SET ASIDE THE JUDGMENT OF DIVORCE WAS EXPRESSLY PERMITTED BY THE DIVORCE SETTLEMENT AGREEMENT.

UNDERLYING FACTS

Plaintiff and defendant were married in September 2001 and divorced in August 2013. The parties entered into a divorce settlement agreement which included, in relevant part, a provision titled “Mutual Release of Claims,” which did not exclude any claims based upon fraud or which arise out of the obligations created by or specifically preserved in this Settlement Agreement .The divorce settlement agreement was incorporated into and merged with the judgment of divorce.

 This case arises out of defendant’s allegations that plaintiff committed fraud by stealing $250,000 from him while they were married, using most of that money to buy a house with her boyfriendwhile she was still married to defendant, and then failing to disclose any of this information during the divorce proceedings. Defendant learned about plaintiff’s alleged actions in October 2017 when he deposed Plaintiff in an unrelated case. Four months after learning about plaintiff’s alleged fraud, defendant filed a motion to set aside the judgment of divorce based on plaintiff’s fraud. Plaintiff argued that defendant’s motion was untimely and that, even if it was timely, the mutual release clause expressly precluded defendant from bringing any claim based on fraud. The trial court agreed with plaintiff and denied defendant’s motion to set aside the judgment of divorce. This appeal followed.

ANALYSIS

Defendant argues that the trial court erred by denying his motion to set aside the judgment of divorce based on plaintiff’s alleged fraud. We agree. A trial court’s decision on a motion to set aside a prior judgment is discretionary and will not be reversed on appeal absent an abuse of discretion.   The interpretation and application of court rules present questions of law to be reviewed de novo using the principles of statutory interpretation.

A settlement agreement in a divorce action constitutes a contract. In ascertaining the meaning of a contract, we give the words used in the contract their plain and ordinary meaning that would be apparent to a reader of the instrument.  The language of the mutual release clause is clear and unambiguous. The second sentence specifically addresses claims of fraud and claims to enforce the terms of the divorce settlement agreement. Thus, the trial court erred when it held that the mutual release clause barred defendant’s fraud claim.

Even though the divorce settlement agreement permitted defendant to bring his fraud claim, his motion to set aside the judgment of divorce was nevertheless required to be timely for the trial court to consider it. A party may seek relief from judgment under MCR 2.612(C). Defendant’s motion to set aside the judgment of divorce is only timely if the requirements of subrule (1)(f) are met. A motion to set aside a prior judgment is timely under MCR 2.612(C)(1)(f) if it is filed in a “reasonable time.” MCR 2.612(C)(2). Defendant filed his motion to set aside the judgment of divorce about 4 ½ years after the judgment of divorce, but only four months after Compton’s deposition in which Compton outlined the alleged scope of plaintiff’s fraudulent actions. Thus, defendant filed his motion to set aside the judgment of divorce within a reasonable time because it was filed only four months after learning of plaintiff’s alleged fraud. Where a party has alleged that a fraud has been committed on the court, it is generally an abuse of discretion for the court to decide the motion without first conducting an evidentiary hearing regarding the allegations. An evidentiary hearing is necessary where fraud has been alleged because the proof required to sustain a motion to set aside a judgment because of fraud is “of the highest order.”

CONCLUSION

For the reasons stated earlier, the trial court’s order denying defendant’s motion to set aside the judgment of divorce is vacated and we remand to the trial court for proceedings consistent with this opinion.

ADVICE TO CLIENTS FRAUD ISSUES IN DIVORCE SETTLEMENTS

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