Post-divorce judgment enforcement of a drag-along business-interest proceeds provision; Consent judgment construed as a contract; Meaning of “net” & “actual receipt” in the payout clause; Limits on modifying property settlements in consent judgments; Andrusz v Andrusz; Relief from judgment; MCR 2.612(C)(1); Rose v Rose; Domestic-relations arbitration award; Domestic Relations Arbitration Act (DRAA); MCR 3.602; Cipriano v Cipriano; Judicial estoppel; Szyszlo v Akowitz

The court held that the divorce judgment’s drag-along provision unambiguously entitled plaintiff-ex-wife to 50% of the “net” proceeds defendant-ex-husband actually received from the sale of the marital business (Envision) and that “net” allowed only deductions for taxes and costs. Thus, it reversed the denial of an additional payout sought by plaintiff and remanded. The parties’ 2020 consent judgment (incorporating an arbitration award) awarded plaintiff 50% of any net proceeds defendant actually received from any sale of marital business interests. Envision sold its assets in 2021. The sale proceeds were received in two distributions. For the second distribution, “all Envision members with an equal membership interest to defendant received the same disbursement amount except him—his share, alone, was subject to a $517,000 transfer from himself to” a business partner, “which defendant claimed reflected amounts defendant owed Envision for his excess compensation.” He calculated plaintiff’s share using only the $129,624.11 “disbursement he received after the $517,000 deduction.” The trial court treated the diversion as a proper reduction and denied plaintiff’s motion for more. On appeal, the court first held that the judgment and incorporated arbitration award were to be enforced as written. Read together, the term “net” was used “only in relation to the deduction of taxes and costs[,]” not undisclosed personal liabilities. The court concluded that interpreting the term “to include an undisclosed debt in defendant’s sole name would thus conflict with—and circumvent—the divorce judgment’s other-debts and full-disclosure provisions.” The court next construed “actual receipt” to mean proceeds in fact conferred or accepted. Envision allocated $540,233.72 to defendant, he owed tax on that amount, and he affirmatively redirected $517,000, so he “actually received” the full allocation for divorce judgment purposes. The trial court effectively and impermissibly modified the parties’ property settlement. Because the judgment incorporated a domestic-relations arbitration award limiting deductions to taxes and costs, the trial court also lacked authority to alter that result absent a proper motion under the DRAA/MCR 3.602. And judicial estoppel did not apply. Plaintiff consistently sought 50% of proceeds “‘net of taxes and costs.’”