Smith v. Smith
292 Mich. App. 699
| Mich. Ct. App. | 2011Background
- Married 40+ years; substantial shared assets; extensive discovery; entered PSA August 25, 2009 dividing assets including retirement accounts.
- Defendant’s IRA valued using February 2009 statement; by PSA date value rose by about $1.4 million.
- PSA retirement section used fixed values; transfer to equalize required defendant to transfer ~ $1.4 million to plaintiff; the increase was not included in final judgment.
- PSA included a full-disclosure provision; plaintiff claimed defendant had to inform her of IRA's value increase.
- Trial court held no duty to disclose; values fixed; plaintiff could have calculated current value from the February 2009 statement.
- On appeal, plaintiff argued she was entitled to share IRA increase; court reviews de novo and enforces unambiguous contract terms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff may share IRA increase under fixed PSA | Plaintiff seeks share of IRA rise due to equalized division. | Terms fixed; no provision to account for market fluctuations. | No; contract unambiguous; not modified to include increase. |
| Duty to disclose IRA increase under PSA/divorce judgment | Full-disclosure required informing of value rise. | Disclosures provided; plaintiff could compute current value; no duty to update. | No duty to disclose; fixed-value terms control. |
| Whether reformation or modification of PSA is warranted due to extrinsic facts | Extrinsic fact of value increase warrants adjustment. | Extrinsic facts cannot rewrite clear terms; no mutual mistake. | No reform; enforce the agreement as written. |
Key Cases Cited
- MacInnes v MacInnes, 260 Mich App 280 (2004) (de novo contract interpretation; must harmonize entire contract)
- Duval v Aetna Cas & Surety Co, 304 Mich 397 (1943) (interpret contract as whole; can't rewrite plain terms)
- Harbor Park Market, Inc v Gronda, 277 Mich App 126 (2007) (courts may not rewrite unambiguous contract terms)
- Zeer v Zeer, 179 Mich App 622 (1989) (property-settlement agreements are generally final and enforceable)
- Keyser v Keyser, 182 Mich App 268 (1990) (PPAs are enforceable absent fraud, duress, or mutual mistake)
- Hamade v Sunoco, Inc (R & M), 271 Mich App 145 (2006) (parol evidence cannot vary clear contract terms)
- Marshall v Marshall, 135 Mich App 702 (1984) (reformation not available for extrinsic price adjustment absent mistake)
- Harbor Park Market, Inc v Gronda, 277 Mich App 126 (2007) (see above)