in Re Martin Wallich Trust No 1 & Phyllis S Wallich Trust No 1
333512
Mich. Ct. App.Nov 9, 2017Background
- Three brothers (Patrick, Christopher, Martin Jr.) are beneficiaries and were co-trustees of their parents’ trusts holding Tecumseh Plywood Company (TPC). Patrick managed TPC for ~40 years and had power of attorney/proxy for Martin Sr.
- Christopher and Martin Jr. petitioned (2012) to remove Patrick as co‑trustee and terminate his power of attorney, alleging failure to account, self‑dealing, and conflicts. Patrick counterclaimed alleging misconduct by his brothers.
- The court appointed a special master who presided over a May 2014 stipulation addressing repayments, use of company assets, and appointment of a forensic accountant to determine amounts owed to TPC; parties later disputed whether a binding stipulation existed.
- The trial court ultimately ordered a full forensic audit (Feb 23, 2015), later replaced the initially appointed auditor, and in April 2016 appointed Plante Moran to complete the audit with a capped fee.
- Patrick appealed the April 11, 2016 order appointing Plante Moran and argued the 2014 stipulation (which provided for a limited audit) was binding and controlled the audit terms; the Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the May 2014 stipulation was a binding settlement controlling the scope and auditor for the forensic audit | Patrick: stipulation (transcribed) and email evidence show a binding agreement requiring a limited forensic audit and specific terms | Opposing parties: no meeting of the minds; stipulation not made in open court and writing/email lacked required terms | Court: Not binding — no MCR 2.507(G) compliance; no meeting of the minds; trial court did not abuse discretion |
| Whether the trial court erred in appointing Plante Moran to complete the full forensic audit | Patrick: trial court should have enforced stipulation limiting audit and auditor | Christopher/Martin Jr./court: trial court previously ordered a full audit and had discretion to select replacement auditor; parties had conceded some positions below | Court: No error; prior appealable orders denying stipulation not timely challenged; Patrick had urged appointment of a different full‑audit firm below and cannot now complain |
| Whether Patrick waived appellate review by failing to timely appeal earlier final orders (Feb 23, 2015 and Oct 15, 2015) | Patrick: seeks enforcement of stipulation despite not appealing earlier orders | Defendants: Patrick failed to timely appeal earlier final orders and thus cannot relitigate now | Court: Patrick’s failure to appeal earlier final orders bars his claim on appeal |
| Whether the trial court abused discretion in finding no enforceable settlement (considering transcript, email, and special master report) | Patrick: transcript and email show assent; recording/transcript satisfies writing requirement | Opposing parties: email lacked substantive terms; special master lacked authority; documents inconsistent | Court: No abuse of discretion; documentary record inconsistent and insufficient to satisfy MCR 2.507(G) and mutual assent requirement |
Key Cases Cited
- Surman v. Surman, 277 Mich. App. 287 (discussing timeliness of appeals from intermediate orders)
- Marshall Lasser, P.C. v. George, 252 Mich. App. 104 (party cannot claim error for a result it requested below)
- Mouzon v. Achievable Visions, 308 Mich. App. 415 (issues must be raised and decided below to preserve appellate review)
- Neiderhouse v. Palmerton, 300 Mich. App. 625 (appellate courts need not consider issues not properly raised)
- Columbia Assoc., LP v. Dep’t of Treasury, 250 Mich. App. 656 (settlement agreements governed by contract principles)
- Kloian v. Domino’s Pizza, LLC, 273 Mich. App. 449 (definition of "subscribe" and requirements for electronic signatures in settlement communications)
- In re Draves Trust, 298 Mich. App. 745 (settlement agreements in trust proceedings must satisfy court rule requirements)
- Michigan Mut. Ins. Co. v. Indiana Ins. Co., 247 Mich. App. 480 (interpretation of court rules is reviewed de novo)
- Vittiglio v. Vittiglio, 297 Mich. App. 391 (appellate standard for review of trial court’s finding on consent to settlement)
- Clark v. Al‑Amin, 309 Mich. App. 387 (contract requires mutual assent on all essential terms)