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e-Journal Summary
Opinion Date: 10/01/2013
e-Journal Date: 10/03/2013
Full Text Opinion

Practice Area(s):   Litigation

Issues: The district court's subject-matter jurisdiction; MCL 600.8301(1); MCL 600.8302(1) & (3); Bruwer v. Oaks (On Remand); Establishing subject-matter jurisdiction by the pleadings; In re Hatcher; District court's obligation to render a final decision on the merits; Schafer v. Knuth; Whether the district court properly transferred the case to the circuit court pursuant to MCR 2.227(A)(1); Whether the defendants could collaterally attack the agreed-upon consent judgment (CJ); Bowie v. Arder; Jackson City Bank & Trust Co. v. Frederick; Effect of a consent decree; Local No. 93, Int'l Ass'n of Firefighters, AFL-CIO, CLC v. City of Cleveland; Goldberg v. Trustees of Elmwood Cemetery; Walker v. Walker; Harboring error as an "appellate parachute"; Dresselhouse v. Chrysler Corp.; The validity of a stipulated CJ entered by the district court in an amount exceeding its jurisdictional limit; Distinguishing Brooks v. Mammo; Whether the circuit court properly ruled on the merits; MCL 600.5739(1); MCR 4.201(G)(2)(b); Whether the filing of a stipulated CJ constitutes the "introduction" of a "claim or counterclaim for money judgment"; MCR 2.111(B); MCR 2.203(A) & (B); "Pleading" defined (MCR 2.110); MCR 2.118(A); Weymers v. Khera; Settlement agreement (SA)
Court: Michigan Court of Appeals (Published)
Case Name: Clohset v. No Name Corp.
e-Journal Number: 55476
Judge(s): Boonstra, K.F. Kelly, and Wilder

On remand from the Michigan Supreme Court, the court held that under "the unusual circumstances" of the case, the district court had subject-matter jurisdiction and its entry of a stipulated CJ in an amount exceeding its jurisdictional amount-in-controversy limit was proper. The defendants could not collaterally attack the CJ, and the plaintiff may enforce it according to its terms. The court also concluded that "the filing of a stipulated consent judgment does not constitute the 'introduction' of a 'claim or counterclaim for money judgment.'" Thus, the district court erred by transferring the case to the circuit court, and the circuit court erred by ruling on the merits, dismissing plaintiff's claims, and granting defendants summary disposition. The court vacated the circuit court's judgment and remanded the case to the district court for reinstatement and enforcement of the CJ. The Clohsets and defendant-No Name entered into a commercial property lease in 1991, to which the individual defendants (the Goodmans) obligated themselves as guarantors for No Name. The Clohsets filed a demand for possession and a complaint for nonpayment of rent in the district court in 1998, seeking possession of the premises and costs, but not money damages, which the complaint acknowledged would exceed the district court's general statutory jurisdictional limit. The Clohsets entered into a SA with defendants, stating in part that No Name owed the Clohsets $384,822.95, plus 9.5% interest. The SA required the parties to execute "pocket" CJs for potential entry in the district court and/or the circuit court. One or both were to be filed if defendants defaulted on the SA. "Upon their filing, the consent judgments would add Geraldine Goodman and Walter Goodman as named defendants, and would obligate all defendants as set forth therein." The Clohsets later filed the district court CJ, with an affidavit from their attorney at the time, stating that defendants had defaulted and owed the Clohsets a net amount of $222,102.09, plus other amounts, including costs and attorney fees, as outlined in the SA. The district court entered the stipulated CJ in 1999. Plaintiff sent Geraldine a demand letter for $222,102.09 in 2009. Defendants stipulated to a renewal of the CJ and the district court entered the stipulated renewal on 9/15/09. On 10/14/09, defendants moved to vacate the 1999 CJ on the basis the district court lacked subject-matter jurisdiction to enter it. The court held that the district court's specific jurisdiction over the case extended to the entry of the parties' stipulated CJ, even though it "included an agreed-upon monetary component that, if it had been premised on the district court's general jurisdiction, would have exceeded the otherwise applicable statutory jurisdictional limit." As directed by the Supreme Court, the court reconsidered its initial opinion in light of MCL 600.5739(1) and MCR 4.201(G)(2)(b), and concluded that they did not apply here.

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