Setoffs to the amount owed under a consent judgment; The common-law setoff rule; Tort principle that a plaintiff is entitled to only one recovery for an injury; Markley v Oak Health Care Investors of Coldwater, Inc; Distinction between tort & contract causes of action/remedies; Neibarger v Universal Coops, Inc; Corl v Huron Castings, Inc

The court held that the common-law rule of setoff did not apply here and that defendant had to show the language of the consent judgment (CJ) contract at issue entitled him to an offset. As the CJ had no such language, he was not entitled to any offsets. The case arose from “a series of loans and resulting promissory notes plaintiff made to defendant” and two others, nonparties-W and G (the debtors). After the debtors defaulted, plaintiff sued defendant for breach of contract, which resulted in the CJ. Plaintiff later served multiple writs of garnishment. Defendant filed objections to two of them. He asserted he was entitled to setoffs for, among other things, a payment plaintiff received from the malpractice insurance carrier for G on a malpractice claim; “criminal restitution payments plaintiff received from” G; and payments plaintiff received from W on the underlying promissory notes for the loans. The trial court concluded “that only the criminal restitution payments could be offset against the amount defendant owed under the” CJ. On appeal he focused “on the reasoning underlying the setoff rule that ‘a plaintiff is entitled to only one recovery for his injury.’” But the court noted “this rule concerns tort actions against joint tortfeasors, not breach-of-contract actions.” They are different causes of action and “the purposes of their respective remedies” are also different. The Michigan Supreme Court stated in Corl that it was reluctant to extend tort remedies to contract cases, particularly “where such an extension would be ‘in direct conflict with the fundamental precept that the remedy for breach of contract focuses on making the nonbreaching party whole.’ Such as is the case here.” The court added that there were “different ‘injuries’ (that is, different breaches) in this case.” Once the CJ was entered, “defendant’s obligations under the promissory notes were extinguished and replaced with his obligations under the” CJ. Plaintiff had “the right to be made whole under the promissory notes by” W, and also “a distinct right to be made whole under the [CJ] by defendant; accordingly, applying the common-law rule of setoff would undermine plaintiff’s rights under the” CJ. Affirmed.