Colestock v. Colestock

R. B. Burns, J.

Plaintiffs appeal from an order granting defendant’s petition to modify the property settlement provisions of the judgment of divorce.

Plaintiff David M. Colestock and defendant Judy *396Ann Colestock were married on November 20, 1971. Two children were born during their marriage.

As a result of injuries sustained by plaintiff in an automobile accident on September 7, 1979, the parties, represented by the same attorney, filed a lawsuit in federal court seeking damages jointly and severally.

On August 7, 1980, plaintiff filed a complaint for divorce. After the divorce action was filed defendant retained the same attorney who was representing her in the divorce action to file an appearance in the accident case.

A trial in the divorce case was held on June 15, 1981. The trial court ruled that plaintiff’s cause of action in the tort suit was not a marital asset but that defendant was not precluded from asserting any claim she might have for herself or on behalf of the children arising out of the suit. The judgment of divorce entered on June 18, 1981, contains a provision which states that the judgment will not affect any of defendant’s rights to proceed on her own behalf or on behalf of the children for any cause of action she may personally have as a result of the September 7, 1979, automobile accident. The judgment of divorce was silent as to plaintiff’s potential recovery from the suit filed in federal court. Defendant did not appeal from the judgment of divorce.

On November 5, 1981, plaintiff settled his federal tort claim, which was dismissed on November 16, 1981. The settlement agreement and release signed by the plaintiff recites that plaintiff was settling his claims for noneconomic loss and was waiving his right to recover for economic loss. The noneconomic losses included but were not limited to pain and suffering, emotional trauma, anxiety, *397embarrassment, humiliation and unsightly scarring.

Defendant filed a petition to modify the property settlement provisions of the divorce judgment on December 4, 1981. Defendant sought a determination by the trial court that the monies received by plaintiff as the result of his settlement in the federal tort action were marital assets subject to distribution between plaintiff and defendant.

On December 4, 1981, defendant’s attorney filed a petition in the circuit court to require plaintiff to disclose the amount of the settlement and to modify the divorce judgment. Following a hearing, the court issued an order on July 1, 1982, declaring that the plaintiff’s settlement proceeds were marital assets.

It should be noted that plaintiff married Lois Colestock, intervening plaintiff, on February 24, 1982, and that plaintiff substantially disbursed the settlement proceeds in the purchase of real property on March 21, 1982. In addition, on April 20, 1982, defendant settled the federal tort action brought on her own behalf and on behalf of the children for an undisclosed amount.

The trial court had also issued an opinion on June 18, 1982, granting defendant’s petition to modify the judgment of divorce. The trial court stated that it had incorrectly found that plaintiff’s cause of action was not a marital asset. The trial court ruled that proofs be reopened on the issue of the portion of the settlement to be awarded defendant.

Property settlement provisions of a divorce judgment, unlike alimony or child support provisions, are final and, as a general rule, cannot be modified. Boucher v Boucher, 34 Mich App 213; 191 NW2d 85 (1971). A judgment of divorce dividing *398marital property is res judicata and not subject to collateral attack, even if the judgment may have been wrong or rested on a subsequently overruled legal principle. McGinn v McGinn, 126 Mich App 689; 337 NW2d 632 (1983). Like all final judgments, a party may seek relief from the property settlement provisions of a judgment of divorce within a "reasonable time” for the following reasons:

"(1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under subrule 527.2; (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.” GCR 1963, 528.3.

Before a party may obtain relief from a judgment under the broad language of GCR 1963, 528.3(6), three conditions must be satisfied: "(I) the reason for setting aside the judgment must not fall under subrules (1) through (5), (II) the substantial rights of the opposing party must not be detrimentally affected if the motion is set aside, and (III) extraordinary circumstances must exist which mandate setting aside the judgment in order to achieve justice”. Lark v Detroit Edison Co, 99 Mich App 280; 297 NW2d 653 (1980).

The trial court, defendant and defense counsel were all aware of plaintiff’s pending tort action. At the time of trial, defendant was represented by *399separate counsel in the federal tort suit. The trial court ruled that plaintiffs cause of action was not a marital asset. Thus, the question to be decided is whether the trial court’s legal ruling at trial constitutes an extraordinary circumstance mandating modification of the property settlement provisions in order to achieve justice.

We find that the trial court’s ruling at trial that plaintiffs cause of action in the tort suit was not a marital asset is not an extraordinary circumstance justifying relief from the operation of the judgment. In Postill v Postill, 116 Mich App 578; 323 NW2d 491 (1982), this Court affirmed the trial court’s ruling which denied the plaintiffs motion pursuant to GCR 1963, 528.3(6) for relief from the judgment of divorce. The defendant in Postill initiated a libel action during the course of the marriage. At the time of the parties’ divorce, the defendant was awarded $200,000 in the libel action. Thereafter, the plaintiff moved to have the property settlement set aside and to have 50% of the defendant’s recovery awarded to her. Because the plaintiff was aware of the defendant’s cause of action which was pending at the time of divorce, there was no reason justifying reopening or setting aside the judgment of divorce. Postill, supra, p 581.

The trial court abused its discretion in granting defendant relief from the property settlement provisions of the divorce judgment pursuant to GCR 1963, 528.3(6). Defendant should have appealed the trial court’s initial ruling not to include plaintiffs cause of action in the marital estate subject to distribution. Instead, defendant waited until plaintiff negotiated a settlement and then sought to collaterally attack the previously rendered judgment of divorce. This she cannot do.

Reversed.

*400R. L. Tahvonen, J., concurred.