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Docket Number

Docket No. 52957.

Attorney(S)

Ray J. MacNeil, for plaintiff. Marvin L. Failer, for defendant.

Judges

PER CURIAM.

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Smart Summary

Case Summary: MacARTHUR v. MILTICH, Docket No. 52957

Court: Michigan Court of Appeals

Date Decided: October 19, 1981

Panel: Per curiam; Beasley, P.J., and M.J. Kelly and N.A. Baguley, JJ. (circuit judge sitting by assignment)

Factual and Procedural Background

Plaintiff filed a complaint on November 8, 1979, alleging that the defendant had concealed assets in excess of $80,000 during their 1974 divorce trial and that defendant had admitted concealment to "various individuals." Defendant denied the allegations and moved to dismiss the complaint for failure to specifically plead fraudulent conduct under the applicable court rules. Plaintiff did not further specify the allegations in response to that motion. Defendant later moved for summary judgment on the ground that the complaint alleged no new matters. The trial court granted summary judgment for defendant on July 6, 1980. Plaintiff appealed the trial court's order; the Michigan Court of Appeals issued the opinion now being summarized.

Legal Issues Presented

Whether the pleadings were legally sufficient to state a cause of action that a material fraud was perpetrated on the court by defendant's alleged concealment of $80,000 in assets during the prior divorce proceedings.

Arguments of the Parties

Plaintiff's Arguments

Plaintiff alleged that defendant concealed assets in excess of $80,000 during the 1974 divorce trial.
Plaintiff asserted that defendant had admitted to "various individuals" that he had concealed assets.
By alleging concealment of assets, plaintiff sought relief from a final judgment on the basis that a fraud was perpetrated on the court.

Defendant's Arguments

Defendant denied the allegations of fraud.
Defendant moved to dismiss (and later for summary judgment), contending that the complaint failed to plead fraudulent conduct with the specificity required by court rules and that plaintiff alleged no new matters warranting relief.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Berar Enterprises, Inc. v. Harmon, 101 Mich. App. 216; 300 N.W.2d 519 (1980)	Independent action is required to seek relief from a final judgment on the basis of fraud upon the court (GCR 1963, 528.3).	The court cited this case to support the proposition that plaintiff, seeking relief from a final judgment rendered nearly five years earlier, was required to bring an independent action alleging fraud upon the court.
DeHaan v. DeHaan, 348 Mich. 199; 82 N.W.2d 432 (1957)	Definition of fraud upon the court: when a material fact is concealed from the court or a material misrepresentation is made to the court.	The court used DeHaan's definition to frame what constitutes fraud upon the court for purposes of evaluating plaintiff's complaint.
Crowther v. Ross Chemical Manufacturing Co., 42 Mich. App. 426; 202 N.W.2d 577 (1972)	Consideration of whether pleadings are legally sufficient to state a cause of action.	The court referenced Crowther in identifying the central appellate issue: the legal sufficiency of the pleadings to allege material fraud.
Todd v. Biglow, 51 Mich. App. 346; 214 N.W.2d 733 (1974), lv den 391 Mich. 816 (1974)	Standard that a motion is to be tested on the pleadings alone.	The court applied Todd to establish that the summary judgment motion here must be tested by reference to the pleadings alone.
Emerick v. Saginaw Twp., 104 Mich. App. 243; 304 N.W.2d 536 (1981)	When a complaint is insufficient to plead fraud, plaintiff is not entitled to present proofs of the fraud.	The court relied on Emerick to support the conclusion that mere allegations or conclusions are insufficient and that an insufficient complaint precludes presenting proof.
Dutkiewicz v. Bartkowiak, 372 Mich. 386; 126 N.W.2d 705 (1964)	An action in fraud must definitely and issuably set forth the facts relied upon to give defendant a fair opportunity to defend.	The court cited Dutkiewicz to emphasize the requirement of definite factual pleading in fraud actions.
Young v. David Young, 342 Mich. 505; 70 N.W.2d 730 (1955)	Averments of fraud unsupported by factual allegations are insufficient to afford the court jurisdiction to proceed with a hearing; the nature and extent of hidden assets must be specified.	The court cited Young as precedent where the Supreme Court upheld denial of relief because the motion alleging hidden assets did not specify nature or extent; the opinion invoked Young to show the necessity of more than conclusory allegations.

Court's Reasoning and Analysis

The court proceeded through a sequence of legal points drawn from governing rules and precedent:

Requirement of proper procedural vehicle: Because plaintiff sought relief from a final divorce judgment rendered nearly five years earlier, plaintiff was required to bring an independent action alleging fraud upon the court under GCR 1963, 528.3 (as supported by Berar Enterprises).
Definition of relevant misconduct: The court identified the legal meaning of "fraud upon the court"—concealment of material facts from the court or material misrepresentation to the court—drawing on DeHaan.
Scope of appellate inquiry: The central question on appeal was the legal sufficiency of the pleadings to allege a material fraud (Crowther), and the summary judgment motion was to be tested on the pleadings alone (Todd).
Pleading specificity requirement: The court emphasized that a fraud upon the court must be pled with specificity under GCR 1963, 112.2; mere conclusions or allegations are insufficient (Emerick), and fraud actions must "definitely and issuably" set forth the facts relied upon to allow a fair defense (Dutkiewicz).
Application to the record facts: Although plaintiff alleged the monetary extent of the allegedly hidden assets (more than $80,000), plaintiff failed to specify the nature of those assets or provide factual particulars supporting the allegation. The court also considered the trial court's review of the divorce record and transcript, which showed the parties' property interests were thoroughly litigated by competent counsel.
Conclusion from analysis: Given the lack of specific factual averments describing the fraudulent concealment (beyond a conclusory dollar amount and an assertion of admissions to "various individuals"), the pleadings did not meet the specificity required to state a cause of action for fraud upon the court. The trial court's determination that plaintiff was attempting to relitigate previously tried issues supported granting summary judgment.

Holding and Implications

Holding: The Court of Appeals affirmed the trial court's grant of summary judgment for defendant.

Implications:

Direct effect: Plaintiff's complaint alleging fraud upon the court for concealment of assets during the 1974 divorce was found legally insufficient because it failed to plead the fraud with the required specificity; the trial court's order granting summary judgment (entered July 6, 1980) was affirmed.
Scope of precedent: The opinion applied existing procedural and pleading rules (including GCR 1963, 528.3 and 112.2) and cited controlling case law to reaffirm that conclusory allegations of fraud and failure to describe the nature of alleged hidden assets are inadequate. The opinion did not announce a new legal rule; it applied established standards to the facts of this case.

Disposition: Affirmed.

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MacARTHUR v MILTICH

PER CURIAM.

Plaintiff brought suit in 1979, alleging that defendant had perpetrated a fraud upon the court by concealing assets during their divorce trial in 1974. Defendant moved for summary judgment on the ground that plaintiff failed to state a cause of action pursuant to GCR 1963, 117.2(1). Plaintiff appeals from the trial court's order granting summary judgment for defendant on July 6, 1980.

In her complaint filed November 8, 1979, plaintiff averred that she was informed and believed that defendant had concealed assets in excess of $80,000 during the divorce proceedings. The complaint also stated that defendant had admitted to "various individuals" that he had concealed assets. Defendant answered, denying the allegations of fraud, and moved to dismiss the complaint because it failed to specifically plead the fraudulent conduct. Plaintiff did not further specify her allegations of fraud in answering the motion. Defendant moved for summary judgment, stating that plaintiff had alleged no new matters.

Since plaintiff was seeking relief from a final judgment rendered almost five years earlier, she was required to bring an independent action alleging fraud upon the court. GCR 1963, 528.3; Berar Enterprises, Inc v Harmon, 101 Mich. App. 216; 300 N.W.2d 519 (1980). A fraud is perpetrated on the court when some material fact is concealed from that court or when some material misrepresentation is made to the court. DeHaan v DeHaan, 348 Mich. 199; 82 N.W.2d 432 (1957).

The issue on appeal is whether the pleadings were legally sufficient in stating that a material fraud was perpetrated on the court by defendant's alleged concealment of $80,000 in assets. Crowther v Ross Chemical Manufacturing Co, 42 Mich. App. 426, 429; 202 N.W.2d 577 (1972). The motion is to be tested on the pleadings alone. Todd v Biglow, 51 Mich. App. 346, 349; 214 N.W.2d 733 (1974), lv den 391 Mich. 816 (1974).

A fraud upon the court must be pled with specificity. GCR 1963, 112.2. Mere allegations or conclusions are not sufficient to apprise a defendant of the nature of the claim of fraud. The plaintiff is not entitled to present proofs of the fraud where the complaint is insufficient to plead the cause of action. Emerick v Saginaw Twp, 104 Mich. App. 243, 247; 304 N.W.2d 536 (1981). "An action in fraud must definitely and issuably set forth the facts complained of and relied upon for recovery" in order to give the defendant a fair opportunity to defend. Dutkiewicz v Bartkowiak, 372 Mich. 386, 389; 126 N.W.2d 705 (1964).

In Young v David Young, 342 Mich. 505; 70 N.W.2d 730 (1955), the plaintiff moved to set aside the judgment of divorce on the ground that the defendant had failed to disclose hidden assets, constituting a fraud on the court. The Supreme Court upheld the trial court's denial of the motion, stating that the "averment as to fraud on defendant's part, not supported by allegations of fact, was insufficient to afford jurisdiction to the court to proceed with a hearing". Young, supra, 509. The Court also noted that plaintiff's motion did not specify the nature or extent of the hidden assets.

While the plaintiff in the instant case did specify the extent of the allegedly "hidden assets", she did not specify the nature of them. Further, the trial court reviewed the entire transcript and file of the divorce action and noted that "the respective property interests of the parties were thoroughly litigated by competent trial counsel". It concluded that plaintiff was attempting to relitigate issues which were previously tried.

We cannot say that the trial court erred in granting defendant's motion for summary judgment. The allegation of fraud was not specific enough to constitute a cause of action based on a material fraud upon the court.

Affirmed.

MacARTHUR v. MILTICH