Peabody v. DiMeglio
306 Mich. App. 397
| Mich. Ct. App. | 2014Background
- Peabody and Paul DiMeglio executed a property settlement agreement incorporated (but expressly not merged) into their Virginia divorce judgment (1995), covering a Colorado investment property.
- The settlement required Husband to pay all mortgage payments and indemnify Wife, gave Husband the option to sell with Wife having right of first refusal, and split net sale proceeds equally.
- Paul quitclaimed the Colorado property into Marta (his later wife) in 2003–2004; Marta sold it in 2004 and used proceeds in a §1031 exchange.
- Paul died in 2011; Peabody filed claims against his estate and Marta (as personal representative and individually) in probate court alleging enforcement of the divorce judgment, breach of contract, unjust enrichment, and related claims.
- Probate court granted summary disposition to Marta, finding breach-of-contract claims barred by the 6-year statute of limitations; denied Marta’s attorney-fee request. Peabody appealed; Marta cross-appealed on fees. The appellate court reversed as to enforcement and unjust enrichment counts and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether enforcement of an incorporated (but not merged) property settlement is governed by 10-year judgment statute (MCL 600.5809) or 6-year contract statute (MCL 600.5807(8)) | Peabody: Incorporation by reference makes the settlement enforceable as a judgment, so 10-year limitations applies. | Marta: Because the agreement was not merged, enforcement is a breach-of-contract claim subject to the 6-year period. | Court: Rule in favor of Peabody — incorporation (even without merger) allows enforcement as a judgment; 10-year period applies. |
| Accrual date for enforcement claim based on sale proceeds | Peabody: Claim accrued when property sold in 2004 and she was not paid her share. | Marta: (Implicit) Claim should have accrued earlier or is contract-based and time-barred. | Court: Cause of action accrued in 2004; Peabody’s 2012 filing was timely under the 10-year rule. |
| Whether unjust enrichment claim is barred by breach-of-contract statute of limitations | Peabody: Unjust enrichment is equitable and not duplicative of contract remedy here; thus different limitations (laches) governs. | Marta: Unjust enrichment cannot stand where an express contract covers the subject. | Court: Unjust enrichment may proceed because Peabody also alleges Marta’s retention of sale proceeds (equitable claim); statute-of-limitations for contract does not bar it; laches is the appropriate equitable defense to consider on remand. |
| Whether contractual attorney-fee clause allowed award to Marta on summary disposition | Marta: Clause permits recovery of reasonable costs for successful defense; she sought fees after summary disposition. | Peabody: Probate court interpreted clause narrowly and denied fees. | Court: The probate court’s interpretation was overly narrow; the clause can cover attorney fees for a successful defense, but reversal of summary disposition means Marta is not yet a successful defendant — remand needed. |
Key Cases Cited
- Maiden v. Rozwood, 461 Mich. 109 (1999) (standard of review for summary disposition)
- Gabler v. Woditsch, 143 Mich. App. 709 (1985) (incorporated property settlements enforceable as judgments under § 5809)
- Marshall v. Marshall, 135 Mich. App. 702 (1984) (discussed incorporation vs. merger; language treated as dictum here)
- Lothian v. Detroit, 414 Mich. 160 (1982) (unjust enrichment and laches as equitable limitation)
- Grace v. Grace, 253 Mich. App. 357 (2002) (contractual attorney-fee provisions as exception to American rule)
- Gleason v. Dep’t of Transp., 256 Mich. App. 1 (2003) (successful defense prerequisite for contractual fee award)
- Barber v. SMH (US), Inc., 202 Mich. App. 366 (1993) (unjust enrichment operates to imply a contract to prevent unjust enrichment)
- Diamond v. Witherspoon, 265 Mich. App. 673 (2005) (use of documentary evidence on MCR 2.116(C)(7) motions)