To understand these three inter-related appeals, Cassidy v Cassidy and Hansen, No. 328004, No. 328024 and Cassidy v Cassidy, No. 333319, we first must state the facts of this not-so-simple divorce matter. Joy and Robert Cassidy were married in 1997. Joy filed for divorce from Robert in 2012 after confirming that Robert had been having an affair with Mary Hansen. During the course of the affair, Robert gave Hansen over $300,000 to remodel her East Ellen Street house. By the time of the trial, Robert decided the money was a “loan.”
Much of the trial
focused on whether Robert and Hansen, named as a defendant, conspired to
defraud Joy of her share of the marital estate. While Robert agreed that the
money should be considered part of the marital estate, he denied he and Hansen
acted together to thwart Joy’s share of the family money. Joy claimed to be
ignorant of the family’s financial situation.
After 15 days of
trial, Genesee Circuit Court Judge F. Kay Behm found that Robert and Hansen
conspired to defraud Joy of her right-full share of the marital estate. She
ordered that a constructive trust existed over East Ellen Street home.
Three appeals resulted:
No. 328004—Hansen
appealed the judgment of divorce claiming that the trial court erred in failing
to grant Hansen a summary disposition on Joy’s claim under the Uniform
Fraudulent Transfer Act (UFTA), arguing that:
1. UFTA doesn't apply because Joy was not a creditor at the time of the transfer and there was no active concealment of assets,
2. The court erred in denying jury request, and
3. The court erred in ordering Hansen to pay back more than the loan amount and in placing a lien in favor of ConRadical (Robert's business) who was a non-party to the divorce.
1. UFTA doesn't apply because Joy was not a creditor at the time of the transfer and there was no active concealment of assets,
2. The court erred in denying jury request, and
3. The court erred in ordering Hansen to pay back more than the loan amount and in placing a lien in favor of ConRadical (Robert's business) who was a non-party to the divorce.
No: 328024—Defendant
Robert appealed challenging the division of property, which included holding
him responsible for substantial tax liability for under-payment of taxes, $1000
a month spousal support and an award of over $150,000 in attorney fees.
No: 333319—Defendant
Robert challenged a trial court contempt order requiring to spend 10 days in
jail until he paid the attorney fees.
The COA upheld
the trial court’s decisions on all three appeals.
NO. 328004:
Hansen Appeal
According to the
COA, Hansen’s attorney led the trial court into an “unnecessary dialogue
regarding what ‘cause of action’ was raised against Hansen and, once plaintiff
settled on the UFTA, whether Hansen was entitled to a jury trial. Those
inquiries were unnecessary, given the trial court’s express equitable power in
the divorce proceeding to determine and distribute the marital estate.
The court reasoned that Hansen was
properly brought into the case because:
- The jurisdiction of the divorce court is statutory
and limited to determining the rights and obligations between the husband
and wife, to the exclusion of third parties.
- There is an exception (Estes
v Titus, 481 Mich 573 (2008)) when fraud is raised, third parties
can be added if they conspired with one of the parties to defraud the
other spouse of a property interest.
- Although Hansen was brought into the case involuntarily, the court, after reviewing Wiand v Wiand,178 Mich App 137 (1989), and Thames v Thames, 191 Mich App 299 (1991), found that the trial court may “adjudicate the rights of third parties even when they are not named as parties” due to the deliberate hiding of marital assets from one of the spouses.
The court also
decided that Hansen had no right to a jury trial writing: “Given that a trial
court may adjudicate the rights of third parties even when they are not named
as parties, as in Donahue [v Donahue, 134 Mich App
696; 352 NW2d 705 (1984)] and Wiand [v Wiand,178
Mich App 137; 443 NW2d 464 (1989)], it follows that there is no right to a jury
trial when the third party has been named as a party.”
And, finally,
Hansen argued that the court erred in placing a lien on the East Ellen home
that included the $364,000 she “borrowed” from Robert and the $70,000 she
received from ConRadical. The trial court determined the funds were Robert’s
wages and part of the “loan” received by Hansen and thus part of the marital
estate.
In this
well-reasoned opinion, the trial court decisions in both appeals NO: 333319 (contempt
of court) and NO: 328024 (challenges
to the distribution of the marital estate) were affirmed and plaintiff may tax
costs.
Labels: appeal, appeals, defraud, divorce appeal, Estes v Titus, family law, Family Law Appeals, Fenton, Genesee County, marital estate, Michigan, Michigan Appeals, Uniform Fraudulent Transfer Act