Valeria Tostige v. Mark Ragsdale, 334094

In 2006 Gladys Ragsdale loaned her daughter (plaintiff) $40,000; plaintiff paid $7,200 then stopped payments.
Gladys created the Gladys Ragsdale Trust, whose assignment provision expressly transferred the grantor’s tangible personal property; Schedule A listed only three real properties.
Gladys became incapacitated in 2009; her son Mark became successor trustee and also held power of attorney.
Mark sued plaintiff (first in his individual capacity, then on behalf of the Trust) to collect the note; plaintiff defaulted and a default judgment for $62,671 was entered after she failed to answer.
Plaintiff later sued Mark and the Trust alleging the default judgment was procured by fraud because the promissory note was not an asset of the Trust and the complaint misrepresented the assignment; she sought to vacate the default judgment and asserted fraud and breach of fiduciary duty.
The trial court denied plaintiff’s motion for partial summary disposition on fraud but granted judgment for defendants under MCR 2.116(I)(2); the court sua sponte granted summary disposition on the breach of fiduciary duty claim. The Court of Appeals affirmed in part, reversed in part, and remanded.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether default judgment may be set aside in an independent equitable action for fraud on the court	Ragsdale: complaint misrepresented that Gladys assigned all personal assets (including the promissory note) to the Trust; therefore the Trust was not the real party and the judgment should be vacated	Mark: at worst an interpretation dispute over the Trust assignment; even if assignment limited to tangible property, claim may have become trust asset upon incapacity; no fraud shown	Court: affirmed dismissal of fraud claim—plaintiff met several Trost factors (judgment not enforceable, valid defense, possibly prevented from obtaining defense, no remedy at law) but failed Trost element 4 (plaintiff’s own negligence in failing to seek discovery or defend); defendants entitled to judgment as a matter of law on fraud claim
Whether trial court violated due process by sua sponte granting summary disposition on breach of fiduciary duty without notice	Ragsdale: trial court decided fiduciary claim in its opinion though the claim was not briefed or argued, depriving her of an opportunity to be heard	Mark: trial court had discretion to grant MCR 2.116(I)(2) and to consider matters sua sponte	Court: reversed grant of summary disposition on breach of fiduciary duty—the issue was decided sua sponte without notice or explanation, denying procedural due process and requiring remand

In re Beatrice Rottenberg Living Trust, 300 Mich. App. 339 (Mich. Ct. App. 2013) (chose of action to collect a debt is intangible personal property)
Trost v. Buckstop Lure Co., Inc., 249 Mich. App. 580 (Mich. Ct. App. 2002) (five-factor test for independent equitable action to set aside a judgment for fraud on the court)
Matley v. Matley, 242 Mich. App. 100 (Mich. Ct. App. 2000) (definition of fraud on the court: material concealment or misrepresentation)
Al-Maliki v. LaGrant, 286 Mich. App. 483 (Mich. Ct. App. 2009) (standards for trial court sua sponte summary disposition and rehearing procedures)
Grimmer v. Lee, 310 Mich. App. 95 (Mich. Ct. App. 2015) (sua sponte disposition without giving a party an opportunity to be heard can violate due process)