BOONSTRA, J.
Plaintiff, Phillip M. Clohset, appeals as of right the November 30, 2010, circuit court order denying his motion for summary disposition and granting summary disposition in favor of defendants, No Name Corporation (No Name), Geraldine K. Goodman, and the estate of Walter A. Goodman (Walter), deceased. By opinion issued on May 15, 2012, we vacated the judgment of the Oakland Circuit Court and remanded to the 48th District Court for reinstatement and enforcement of the stipulated consent judgment entered on October 1, 1999. Clohset v. No Name Corp., 296 Mich.App. 525, 824 N.W.2d 191 (2012).
On July 3, 2013, our Supreme Court vacated this Court's 2012 opinion and remanded for reconsideration in light of MCL 600.5739(1) and MCR 4.201(G)(2)(b). Clohset v. No Name Corp., 494 Mich. 874, 832 N.W.2d 387 (2013). We now again vacate the judgment of the circuit court and remand to the district court for reinstatement and enforcement of the stipulated consent judgment issued on October 1, 1999.
The facts of this case are not in dispute. But the case presents an unusual procedural history that requires us to consider issues of (a) subject-matter jurisdiction and (b) the validity, or degree of validity, of a stipulated consent judgment entered by the district court in an amount in excess of its jurisdictional limit.
Under the unusual circumstances outlined herein, we conclude that the district court had subject-matter jurisdiction over this case and that its entry of a stipulated consent judgment was proper, without regard to the jurisdictional amount-in-controversy limit that applies under the district court's general jurisdictional authority. Moreover, having neither appealed nor properly moved to alter or amend the stipulated consent judgment, defendants could not collaterally attack it,
We hold that the district court erred by transferring the case to the circuit court pursuant to MCR 2.227(A)(1). Further, given the jurisdiction of the district court, we hold that the circuit court erred by ruling on the merits of the case, by dismissing plaintiff's claims, and by granting summary disposition to defendants on plaintiff's claims.
This action was originally brought by Clarence and Virginia Clohset (the Clohsets). The Clohsets have since passed away and plaintiff, Phillip Clohset, has taken over as personal representative of their estates. The Clohsets and defendant No Name entered into a lease agreement for commercial premises in 1991, to which defendants Geraldine and Walter obligated themselves as guarantors for No Name. Defendant No Name subsequently failed to make its rental payments. The Clohsets filed a demand for possession on No Name in the district court on October 6, 1998, demanding possession of the premises. On October 21, 1998, they filed a complaint against No Name for nonpayment of rent, seeking possession of the premises and costs, but not seeking money damages, which the complaint acknowledged would exceed the district court's general statutory jurisdictional limit of $25,000. MCL 600.8301(1). The complaint noted that money damages would be sought in a separate action in circuit court.
On November 11, 1998, the Clohsets entered into a settlement agreement with No Name, Geraldine Goodman, and Walter Goodman, stating, in part, that No Name owed the Clohsets $384,822.95, plus 9.5 percent interest. The settlement agreement further required the parties to execute "pocket" consent judgments for entry, potentially, in the district court or the circuit court. The consent judgments were to be held by the Clohsets, and one or both were to be filed in the event that No Name or the Goodmans defaulted on the settlement agreement. When filed, the consent judgments would add Geraldine Goodman and Walter Goodman as named defendants, and would obligate all defendants as set forth therein. Subsequently, the Clohsets filed the district court consent judgment, along with an affidavit from their attorney at the time, stating that defendants had defaulted and owed the Clohsets a net amount of $222,102.09, plus additional amounts, including costs and attorney fees, as outlined in the settlement agreement. The district court entered the stipulated consent judgment on October 1, 1999.
Over nine years passed, during which time plaintiffs Clarence and Virginia Clohset and defendant Walter Goodman passed away, and then on March 24, 2009, plaintiff sent defendant Geraldine Goodman a demand
Plaintiff then moved for entry of the consent judgment (previously entered in district court) in circuit court. The circuit court denied that motion, finding the judgment was void for lack of subject-matter jurisdiction in district court, dismissed the case without prejudice, and permitted plaintiff to file an amended complaint. After filing an amended complaint, asserting breach of the parties' various agreements and related equitable claims, plaintiff moved for summary disposition on his breach of contract claims only, and defendants countered with a motion for summary disposition on all plaintiff's claims, both contract-based and equitable. The circuit court granted summary disposition in favor of defendants and dismissed plaintiff's claims.
Plaintiff claims on appeal that the circuit court erred by denying his motion to enter the consent judgment in circuit court, by dismissing his initial claims, and by later denying summary disposition to plaintiff and granting summary disposition to defendants.
This Court reviews a trial court's decision whether to enter a consent judgment for an abuse of discretion. Cf. Vestevich v. West Bloomfield Twp., 245 Mich.App. 759, 763, 630 N.W.2d 646 (2001) ("This Court reviews for abuse of discretion a trial court's decision on a motion to set aside a consent judgment."). "An abuse of discretion occurs when the trial court chooses an outcome falling outside the range of principled outcomes." Edry v. Adelman, 486 Mich. 634, 639, 786 N.W.2d 567 (2010), citing People v. Babcock, 469 Mich. 247, 269, 666 N.W.2d 231 (2003). A motion under MCR 2.116(C)(8) tests the legal sufficiency of a claim on the pleadings alone. Maiden v. Rozwood, 461 Mich. 109, 119, 597 N.W.2d 817 (1999). The motion should be granted only when the plaintiff's claims are "`so clearly unenforceable as a matter of law that no factual development could possibly justify recovery.'" Id. (citation omitted). Likewise, a motion made under MCR 2.116(C)(9) tests the legal sufficiency of a defense on the pleadings alone. BC Tile & Marble Co., Inc. v. Multi Bldg. Co., Inc., 288 Mich.App. 576, 582, 794 N.W.2d 76 (2010). The motion should be granted only when "the defendant's pleadings are so clearly untenable that as a matter of law no factual development could possibly deny the plaintiff's right to recovery." Slater v. Ann Arbor Pub. Sch. Bd. of Ed., 250 Mich.App. 419, 425-426, 648 N.W.2d 205 (2002). We review de novo a trial court's grant of summary disposition on the basis of legally insufficient pleadings. Maiden, 461 Mich. at 118, 597 N.W.2d 817. A motion for summary disposition under MCR 2.116(C)(10) tests the factual sufficiency of the complaint. Liparoto Constr., Inc. v. Gen. Shale Brick, Inc., 284 Mich.App. 25,
Although plaintiff does not argue that the district court had subject-matter jurisdiction to enter the consent judgment, and does not challenge defendants' right to have collaterally attacked the judgment ten years later or the circuit court's holding that the judgment was void ab initio, a discussion of this issue is necessary before proceeding with the parties' arguments on appeal. This Court does not generally address issues not raised by the parties on appeal. See Mayberry v. Gen. Orthopedics, PC, 474 Mich. 1, 4 n. 3, 704 N.W.2d 69 (2005). However, "[a]ll courts `must upon challenge, or even sua sponte, confirm that subject-matter jurisdiction exists....'" Bezeau v. Palace Sports & Entertainment, Inc., 487 Mich. 455, 479 n. 2, 795 N.W.2d 797 (2010) (Young, J., dissent), quoting Reed v. Yackell, 473 Mich. 520, 540, 703 N.W.2d 1 (2005) (opinion by Taylor, C.J.). Further, this Court is empowered to "enter any judgment or order or grant further or different relief as the case may require." MCR 7.216(A)(7).
District courts in Michigan have exclusive jurisdiction over civil matters where the amount in controversy does not exceed $25,000. MCL 600.8301(1). In addition, district courts have "equitable jurisdiction and authority concurrent with that of the circuit court" with respect to equitable claims arising under chapter 57 of the Revised Judicature Act (RJA), MCL 600.5701 et seq., which concerns proceedings to recover possession of premises. See MCL 600.8302(1) and (3).
This Court has previously held that MCL 600.8302(3) is a "more specific" grant of jurisdictional authority than the "general grant of jurisdictional power" found in MCL 600.8301(1). Bruwer v. Oaks (On Remand), 218 Mich.App. 392, 396, 554 N.W.2d 345 (1996), citing Driver v. Hanley, 207 Mich.App. 13, 17-18, 523 N.W.2d 815 (1994). "Because [MCL 600.8302(3)] is specific, it takes precedence over [MCL 600.8301(1)]." Bruwer, 218 Mich.App. at 396, 554 N.W.2d 345, citing Driver, 207 Mich.App. at 17-18, 523 N.W.2d 815. When a "district court's action flowed from its power arising under Chapter 57 of the RJA [MCL 600.5701 et seq.], its actions are within the scope of [MCL 600.8302(3)], and [MCL 600.8301(1)] is inapplicable." Bruwer, 218 Mich.App. at 396, 554 N.W.2d 345.
The Court in Bruwer faced an apparent "conflict between the two jurisdictional statutes regarding whether district courts have the jurisdiction to issue a judgment in excess of [the then existing statutory limit of] $10,000 when the case arises under Chapter 57 of the RJA." Id. Resolving that apparent conflict in favor of the district court's exercise of jurisdiction under the
While it is true that a judgment entered by a court that lacks subject-matter jurisdiction is void, Altman v. Nelson, 197 Mich.App. 467, 472-473, 495 N.W.2d 826 (1992), subject-matter jurisdiction is established by the pleadings and exists "when the proceeding is of a class the court is authorized to adjudicate and the claim stated in the complaint is not clearly frivolous." In re Hatcher, 443 Mich. 426, 444, 505 N.W.2d 834 (1993); see also Grubb Creek Action Comm. v. Shiawassee Co. Drain Comm'r, 218 Mich.App. 665, 668, 554 N.W.2d 612 (1996), citing Luscombe v. Shedd's Food Prod. Corp., 212 Mich.App. 537, 541, 539 N.W.2d 210 (1995) ("A court's subject-matter jurisdiction is determined only by reference to the allegations listed in the complaint.").
Because subject-matter jurisdiction is determined by reference to the pleadings, and because the complaint filed by the Clohsets in the district court invoked the district court's specific jurisdiction under MCL 600.8302(1) and (3) and chapter 57 of the RJA, that specific jurisdictional grant takes precedence over the more general jurisdictional grant found in MCL 600.8301(1), which is inapplicable here. See, Bruwer, 218 Mich.App. at 396, 554 N.W.2d 345. The district court accordingly had jurisdiction over this case.
Having properly acquired jurisdiction, the district court was obliged to render a final decision on the merits. "`[W]hen a court of competent jurisdiction has become possessed of a case, its authority continues, subject only to the appellate authority, until the matter is finally and completely disposed of; and no court of co-ordinate authority is at liberty to interfere with its action.'" Schafer v. Knuth, 309 Mich. 133, 137, 14 N.W.2d 809 (1944), quoting Maclean v. Wayne Circuit Judge, 52 Mich. 257, 259, 18 N.W. 396 (1884). A matter is finally and completely resolved when a judgment is entered. "A judgment [is] defined as the final consideration and determination of a court of competent jurisdiction on the matters submitted to it." 6A Michigan Pleading & Practice (2d ed., 2010), § 42:1, p. 231. In other words, once a court acquires jurisdiction, unless the matter is properly removed or dismissed, that court is charged with the duty to render a final decision on the merits of the case, resolving the dispute, with the entry of an enforceable judgment.
Consistent with Bruwer, and with its authority and obligation to render a judgment on a matter properly before it, the district court's specific jurisdiction over this case extended to the entry of a stipulated consent judgment presented by the parties, even though that consent judgment included an agreed-upon monetary component that, if it had been premised on the district court's general jurisdiction, would have exceeded the otherwise applicable statutory jurisdictional limit.
When defendants defaulted on the subsequent settlement agreement, the Clohsets entered a consent judgment in district court for the $222,109.09 then owed by defendants. This amount clearly exceeded the district court's general jurisdictional limit, if it applied here (which we find it did not
Even assuming arguendo that this monetary component of the stipulated consent judgment exceeded the district court's authority, defendants still could not properly collaterally attack the entry of that judgment. As the Michigan Supreme Court explained in Bowie v. Arder, 441 Mich. 23, 49, 490 N.W.2d 568 (1992), quoting Jackson City Bank & Trust Co. v. Fredrick, 271 Mich. 538, 545, 260 N.W. 908 (1935) (citation omitted):
In other words, "lack of subject matter jurisdiction can be collaterally attacked[, whereas] the exercise of that jurisdiction can be challenged only on direct appeal." In re Hatcher, 443 Mich. at 439, 505 N.W.2d 834.
For the reasons noted, in this case there was no "want of jurisdiction." Rather, and because the district court had jurisdiction, it could at most be argued that the court erred in the "exercise of jurisdiction." Accordingly, as articulated in Bowie and Jackson, defendants were not entitled to attack this judgment collaterally during the 2009 proceedings; their only option, if any, was to challenge the error on direct appeal
This conclusion is not negated by the fact that the consent judgment provided stipulated relief that was different in kind from that initially requested in the district court complaint, or by the fact that the monetary amount of the stipulated damages exceeded the general jurisdictional limit of the district court. For the reasons noted, the district court had specific subject-matter jurisdiction under chapter 57 of the RJA, and the general jurisdictional limit thus was "inapplicable." See, e.g., Bruwer, 218 Mich.App. at 396, 554 N.W.2d 345.
Moreover,
Consent decrees differ from typical judgments because the "voluntary nature of a consent decree is its most fundamental characteristic." Local No. 93, Int'l Ass'n of Firefighters, AFL-CIO, CLC v. City of Cleveland, 478 U.S. 501, 521-522, 106 S.Ct. 3063, 92 L.Ed.2d 405 (1986) (recognizing that the agreement of the parties "serves as the source of the court's authority to enter any judgment at all"). See also Goldberg v. Trustees of Elmwood Cemetery, 281 Mich. 647, 649, 275 N.W. 663 (1937) ("A judgment by consent cannot ordinarily be set aside or vacated by the court without consent of the parties thereto for the reason it is not the judgment of the court but the judgment of the parties.");
Accordingly, the fact that the Clohsets' complaint did not seek money damages, and the fact that the stipulated money damages (as set forth in the consent judgment) exceeded the general jurisdictional amount otherwise applicable in the district court, does not preclude enforcement of the consent judgment.
As noted at the outset of this opinion, it is fundamental that a party may not create error in a lower court, and then claim on appeal that the error requires reversal. See, e.g., Dresselhouse, 177 Mich.App. at 477, 442 N.W.2d 705 ("A party is not allowed to assign as error on appeal something which his or her own counsel deemed proper [in the trial court] since to do so
Here, defendants stipulated to the entry of the consent judgment. The district court relied on that stipulation in entering the consent judgment on October 1, 1999. Even assuming arguendo that the consent judgment was premised on an error in the exercise of the district court's jurisdiction, that error was of the parties' own creation. Having created that error by stipulating to the entry of the consent judgment, defendants cannot now be heard to complain about that alleged error. To sanction such an argument would be to permit defendants to harbor their own error as an "appellate parachute," which we decline to do.
We are cognizant of the fact that, generally speaking, a district court cannot render a judgment that exceeds its jurisdictional limit. See, e.g., Zimmer v. Schindehette, 272 Mich. 407, 409, 262 N.W. 379 (1935) (holding void a judgment rendered by a justice of the peace because it was in an amount in excess of the justice's jurisdiction); Krawczyk v. DAIIE, 117 Mich.App. 155, 163, 323 N.W.2d 633 (1982), rev'd in part on other grounds 418 Mich. 231, 341 N.W.2d 110 (1983) (holding that a judgment awarded in the district court exceeding the then-existing jurisdictional limit of $10,000 not invalid, provided that amounts in excess of the jurisdictional limit can be attributed to costs, attorney fees, and interest, or that the case represents an exception, specified by statute, that would permit the court to render a judgment over the jurisdictional amount).
However, we find the general rule to be inapplicable to the circumstances presented in this case. In the cited cases, the plaintiffs' claims fell within the general jurisdiction of the court, and the judgments in those cases were thus constrained by the amount-in-controversy limitations of the courts' general jurisdiction. By contrast, the Clohsets' claims fell within the district court's specific jurisdiction under chapter 57 of the RJA, and those general jurisdictional limits were thus "inapplicable." See, e.g., Bruwer, 218 Mich. App. at 396, 554 N.W.2d 345.
Even assuming arguendo that the general jurisdictional limit applied, it might at most be argued that the monetary amount of the consent judgment in excess of the $25,000 general jurisdictional limit (plus interest, costs, and attorney fees) was not recoverable, not that the entirety of the judgment was void. This was the result, for example, in Brooks v. Mammo, 254 Mich.App. 486, 496, 657 N.W.2d 793 (2002), where this Court limited the plaintiff's recovery to the district court's $25,000 general jurisdiction limit.
But the circumstances in Brooks were in any event unusual and largely inapplicable here. In Brooks, the plaintiff had brought suit in the circuit court for an amount in excess of the then applicable $10,000 district court general jurisdictional limit. Following a mediation evaluation of $3,500, the circuit court transferred the case to the district court, which then held a jury trial that resulted in a jury verdict in the plaintiff's favor in the amount of $50,000. As of the trial date, former MCL 600.641 (which is not at issue here, but which had permitted the removal of circuit court actions to the district court even where the amount in controversy otherwise would preclude it, and which further made lawful subsequent jury verdicts in excess of the otherwise applicable jurisdictional limit) had been repealed. Before the judgment was entered on the jury verdict in the district court, the jurisdictional limit of the
Even if Brooks were applicable here, its application would not void the consent judgment. Rather it, would only limit the recoverability of the judgment to the amount of the district court's general jurisdictional limit of $25,000 (plus interest, costs, and attorney fees).
Because the district court had jurisdiction over this case and improperly transferred the case to the circuit court, the circuit court was completely without jurisdiction to rule on plaintiff's motion to enter the consent judgment, on defendant's motion to dismiss or, later, on the parties' cross-motions for summary disposition. Accordingly, the circuit court erred by ruling on those motions, and should instead have transferred the case back to the district court pursuant to MCR 2.227(A).
Having reached the above conclusions, we need not address plaintiff's remaining arguments on appeal.
As directed by our Supreme Court, we have reconsidered our initial opinion, Clohset, 296 Mich.App. 525, 824 N.W.2d 191, in light of MCL 600.5739(1) and MCR 4.201(G)(2)(b). For the reasons that follow, we conclude that neither the statute nor the court rule alters our analysis or requires a different outcome.
MCL 600.5739(1) provides:
MCR 4.201(G) provides the procedure for joinder of claims and counterclaims in summary proceedings to recover possession of premises. MCR 4.201(G)(2)(b) provides:
We conclude that the filing of a stipulated consent judgment does not constitute the "introduction" of a "claim or counterclaim for money judgment." Claims and counterclaims are stated in pleadings, and a plaintiff's "statement of claim" is set forth in its complaint. MCR 2.111(B). A party generally "must join every claim" it possesses against the opposing party in "a pleading." MCR 2.203(A). Even when the joinder of claims is permissive, the claims must be joined by a "pleader." MCR 2.203(B). The term "pleading" is specifically and narrowly defined, and does not include a consent judgment. MCR 2.110. "No other form of pleading is allowed." Id. A "claim" therefore is not "introduced" except as set forth in a "pleading." Indeed, the proper way to "introduce" a claim that is not stated in a party's initial pleading is by way of an amendment to the pleading. MCR 2.118(A); see also, e.g., Weymers v. Khera, 454 Mich. 639, 663, 563 N.W.2d 647 (1997). The filing of the stipulated consent judgment in this case thus did not constitute the "introduction" of a "claim," and MCL 600.5730(1) and MCR 4.201(G)(2)(b) are therefore inapplicable.
Also, as noted earlier, consent judgments differ significantly from litigated judgments. It bears repeating that "[a] consent judgment is different in nature from a judgment rendered on the merits because it is primarily the act of the parties rather than the considered judgment of the court. No pleadings are required to support an agreed or negotiated judgment.
Certainly, once entered, consent judgments are treated the same as litigated judgments in terms of their force and effect. Trendell v. Solomon, 178 Mich.App. 365, 368-369, 443 N.W.2d 509 (1989). However, the fact that a stipulated consent judgment may be enforced identically as a litigated judgment does not mean that a district court lacks jurisdiction to enter a consent judgment merely because it may have lacked jurisdiction to entertain a "claim" set forth in a "pleading" that resulted in a litigated judgment.
The district court indisputably had jurisdiction over plaintiff's claim. We hold that, in the unique circumstances presented, it possessed authority to enter the parties' stipulated consent judgment. In any event, it might at most be argued that the district court erred in the exercise of jurisdiction relative to a portion of the agreed-upon relief set forth in the stipulated consent judgment. But, as noted, any such error could have been challenged only on direct appeal, and not collaterally, ten years later, as defendants seek to do in this case. See Bowie, 441 Mich. at 49, 490 N.W.2d 568; Jackson, 271 Mich. at 545, 260 N.W. 908.
For these reasons, we hold that no "claim or counterclaim for money judgment" was "introduced" in the district court proceedings that would have necessitated the transfer of this case (or any portion thereof) to the circuit court. Therefore, neither MCL 600.5739(1) nor MCR 4.201(G)(2)(b) compels us to alter our original analysis or conclusion, as stated in this opinion.
We vacate the judgment of the circuit court and remand to the district court for reinstatement and enforcement of the consent judgment. We do not retain jurisdiction.
KRISTEN FRANK KELLY, P.J., and WILDER, J., concurred with BOONSTRA, J.
In that regard, this Court is compelled to note that it is particularly troubled that, in contesting plaintiff's argument that they waived the statute of limitations defense, and while accusing plaintiff of a "blatant mischaracterization" of the settlement agreement, defendants have used an ellipsis to categorically alter the meaning of the waiver provision of the settlement agreement. Rather than preserving "substantive defenses," as defendants suggest, the actual language of the settlement agreement confirms that such defenses are waived. This Court makes no judgment at this juncture regarding whether defendants made this representation intentionally or merely in error. The Court additionally notes that the statute of limitations is not, as defendants suggest, a "substantive" defense, but rather is a "procedural one," so that it would have been waived even under defendants' errant reasoning. Staff v. Johnson, 242 Mich.App. 521, 531, 619 N.W.2d 57 (2000).
