Where a plaintiff filed for divorce and then was involved in a motorcycle crash, the trial court erred by finding that defendant was entitled to 50% of the plaintiff’s lawsuit proceeds related to the motorcycle crash.
“Plaintiff filed for divorce and then was involved in a motorcycle crash. The judgment of divorce included the parties’ settlement agreement, but the parties later disagreed about defendant’s right to a portion of plaintiff’s lawsuit proceeds related to the motorcycle crash. The trial court ordered the proceeds be divided and that plaintiff pay attorney fees. We affirm in part and reverse in part.
“Plaintiff filed for divorce in January 2021. In June 2021, plaintiff was involved in a motorcycle crash that ultimately resulted in the amputation of his leg. The parties participated in mediation in November 2021, and the January 2022 consent judgment of divorce (CJOD) included its terms.
“In the CJOD, the phrase ‘marital portion’ clearly and unambiguously refers to marital assets, and the personal-injury proceeds received as a result of suing the tortfeasor are considered separate property. ... The lawsuit against the tortfeasor did not include a loss-of-consortium claim, and there is no evidence that the settlement check was made payable to both parties or was treated like marital property.
“Defendant argues that the agreement would not have specifically excluded proceeds for ‘pain and suffering’ or ‘lost wages’ if the parties had intended for the agreement to abide by caselaw defining marital property. Lost wages are not considered separate property in the same way that proceeds compensating for pain and suffering are. The language of the parties’ agreement specifically excludes defendant from sharing in lost wages to which she may otherwise have been entitled. The inclusion of this language does not detract from the plain meaning of the contract, which otherwise provides for a division of any marital portion of the lawsuit proceeds. ... Further, this situation differs from one in which a court determines to invade separate property. ... The CJOD in this case included the terms of the settlement agreement, meaning that it was not necessary for the trial court to make any decisions about the distribution of the assets.
“Defendant also argues that there was no mutuality of agreement and, therefore, the settlement agreement was not a valid contract and must be set aside. ‘Michigan law presumes that one who signs a written agreement knows the nature of the instrument so executed and understands its contents.’ Watts v Polaczyk , 242 Mich App 600, 717; 619 NWd 714 (2000). Accordingly, it was defendant’s duty to be aware that ‘marital portion’ excluded personal-injury lawsuit proceeds. Therefore, the trial court erred by finding that defendant was entitled to 50% of proceeds from the lawsuit against the tortfeasor.
“Defendant is, however, entitled to 50% of the underinsured coverage. Defendant stated at the motion hearing that the underinsured-coverage policy premiums were ‘paid for during the time of the marriage.’ Plaintiff’s attorney confirmed this on appeal. ‘Uninsured motorist coverage is optional it is not compulsory coverage mandated by the no-fault act. Accordingly, the rights and limitations of such coverage are purely contractual and are construed without reference to the no fault act.’ To the extent that plaintiff argues that the underinsured settlement should also be encompassed within ‘pain and suffering’ and excluded from the marital estate under the parties’ CJOD, we reject that argument under the facts of this case. There is ample caselaw establishing that proceeds from tort claims for ‘pain and suffering’ are separate from marital property, as explained earlier. The husband’s person, and any rights or interests that naturally flowed from it, were never a marital asset. The underinsured contract, however, was unambiguously an asset of the marital estate, and any rights or interests that naturally flowed from it were a marital asset. ... To divest defendant of her share of proceeds from that marital asset, the CJOD would need to have been more explicit to put defendant on notice that she was giving up a valuable asset.
“Here, the trial court did not make findings sufficient to determine whether the attorney fees were due to anything beyond the issue of the lawsuit proceeds. Although defendant mentioned plaintiff’s withdrawal of retirement funds at the hearing about the lawsuit proceeds, the trial court had denied defendant’s request for attorney fees in its order about the retirement funds. Because it was not unreasonable for plaintiff to contest the release of personal-injury funds, an award of attorney fees related to that disagreement is not proper. See Reed, 265 Mich App at 164. There is also not a sufficient record to determine that attorney fees were otherwise proper, and, therefore, the trial court erred by awarding attorney fees.
“Affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion.”
Simmons v. Simmons; MiLW 08-108014 , 4 pages; Michigan Court of Appeals unpublished per curiam; Borrello, J., Swartzle, J., Young, J.; on appeal from Lapeer Circuit Court; Timothy P. Flynn for appellant; John L. Lengemann for appellee.
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