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UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION ______________________________________________________________________ ROBERT AIKENS, Appellant-Defendant, v. Case No. 20-13257 TIMOTHY J. MILLER, Trustee, Appellee-Plaintiff. ________________________________/ OPINION AND ORDER AFFIRMING THE BANKRUPTCY COURTâS DECISION TO GRANT SUMMARY JUDGMENT IN FAVOR OF APPELLEE AND TO DENY SUMMARY JUDGMENT IN FAVOR OF APPELLANT Appellee Timothy J. Miller, trustee for the Chapter 7 bankruptcy estate of Alexandra Aikens (âDebtorâ), filed this action seeking turnover of property under 11 U.S.C. § 542(a) and (b). According to Appellee, Appellant Robert Aikens owed the estate $42,614.62 based on the terms of a Judgment of Divorce (âJODâ) agreed to between Debtor and Appellant. The parties filed cross motions for summary judgment before the bankruptcy court, and the bankruptcy court ruled in favor of Appellee. (ECF No. 3, PageID.336-37.) The bankruptcy court ordered that Appellant pay the estate $42,614.62. (Id.) Appellant challenges the bankruptcy courtâs decision. (ECF No. 1.) The matter has been thoroughly briefed. (ECF Nos. 5-7.) The court has reviewed the record and does not find a hearing to be necessary. E.D. Mich. LR 7.1(f)(2). For the reasons provided below, the court will affirm the bankruptcy courtâs decision. I. BACKGROUND The parties agree that there are no factual disputes in this case. (ECF No. 5, PageID.527, Appellantâs Brief (âIt was agreed between the parties that the issues in the Suit were strictly legal in natureâ); ECF No. 6, PageID.564.) The following facts are taken from the record established by both parties. Debtor and Appellant were married and lived in a house in Canton, Michigan. (ECF No. 3, PageID.319; ECF No. 5, PageID.525.) Divorce proceedings were initiated in May 2019, and Debtor and Appellant agreed to a JOD on February 10, 2020. (ECF No. 3, PageID.319-20; ECF No. 5, PageID.525.) The JOD contained a provision that required sale proceeds from the martial house to be used to pay Debtorâs and Appellantâs outstanding debts: [I]n the event the [marital home] is sold, and sale proceeds are applied to some of the parties[â] debt, but there arenât enough proceeds to pay all of the parties[â] debt, the parties will be equally responsible for 50% [of] the balance of the debt that remains owing and will hold the other harmless. (ECF No. 3, PageID.52-53; ECF No. 3, PageID.320.) On March 16, 2020, Debtor filed for Chapter 7 bankruptcy. (ECF No. 3, PageID.320; ECF No. 5, PageID.525.) Appellee was appointed as trustee over Debtorâs bankruptcy estate, and upon agreement between Debtor and Appellant, the marital home was sold for $203,000.00. (ECF No. 3, PageID.320-21.) After paying closing costs and secured claims, $19,172.09 remained. (ECF No. 6, PageID.562.) Pursuant to the terms of the JOD, the proceeds from the sale were used to pay marital debt. (ECF No. 3, PageID.320-21; ECF No. 6, PageID.572.) Even after the proceeds were applied to existing marital debt, there remained $85,229.24 in debt. (ECF No. 3, PageID.321; ECF No. 6, PageID.572.) All the remaining marital debt was incurred under Debtorâs name. (ECF No. 6, PageID.561; ECF No. 3, PageID.144-54; ECF No. 7, PageID.596.) Appellee brought this suit under 11 U.S.C. § 542(a) and (b) to collect under the JOD $42,614.62, or half the remaining marital debt, from Appellant. (ECF No. 3, PageID.321.) Appellant refused to pay, arguing that the terms of the JOD did not mandate payment, and the parties filed cross motions for summary judgment. (Id.) On December 3, 2020, the bankruptcy court issued an opinion granting summary judgment in Appelleeâs favor and denying summary judgment in Appellantâs favor.1 (Id., PageID.318-35.) The court reviewed the elements of an action under 11 U.S.C. § 542(b). Section 542(b) states that âan entity that owes a debt that is property of the estate and that is matured, payable on demand, or payable on order, shall pay such debt to, or on the order of, the trustee.â The court reasoned that âentityâ under § 542(b) included individuals such as Appellant; that Appellantâs legal obligations under the JOD to pay 50% of remaining marital debt constituted a âright to paymentâ on the part of Debtor and thus a âdebtâ collectable by Appellee; that the debt âmaturedâ when the marital home was sold; and that the debt was âthe property of [Debtorâs bankruptcy] estate.â (ECF No. 3, PageID.318-35.) Thus, according to the court, Appellant was liable to Appellee for $42,614.62. (Id., PageID.334-35.) Appellant appealed the bankruptcy courtâs decision on December 11, 2020. (ECF No. 1.) 1 The bankruptcy court also granted in part and denied in part a motion to dismiss filed by Appellant. (ECF No. 3, PageID.322-324.) The court held that Appellee did not state a valid claim under 11 U.S.C. § 542(a), but it reasoned that Appellee did state a valid claim under 11 U.S.C. § 542(b). (ECF No. 3, PageID.322-324.) The holding on Appellantâs motion to dismiss was not appealed. II. STANDARD To prevail on a motion for summary judgment, a movant must showâpoint outâ that âthere is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.â Fed. R. Civ. P. 56(a). First, the moving party bears the initial burden of presentation that âdemonstrate[s] the absence of a genuine issue of material fact.â Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). There is no requirement, however, that the moving party âsupport its motion with [evidence] negating the opponentâs claim.â Id. (emphasis removed); see also Empârs Ins. of Wausau v. Petrol. Specialties, Inc., 69 F.3d 98, 102 (6th Cir. 1995). Second, âthe nonmoving party must come forward with âspecific facts showing that there is a genuine issue for trial.ââ Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (emphasis removed) (quoting Fed. R. Civ. P. 56(e)). This requires more than a âmere existence of a scintilla of evidenceâ or ââ[t]he mere possibility of a factual dispute.â Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986); Mitchell v. Toledo Hosp., 964 F.2d 577, 582 (6th Cir. 1992) (quoting Gregg v. Allen-Bradley Co., 801 F.2d 859, 863 (6th Cir. 1986)). For a court to deny summary judgment, âthe evidence [must be] such that a reasonable [finder of fact] could return a verdict for the nonmoving party.â Anderson, 477 U.S. at 248. All reasonable inferences from the underlying facts must be drawn âin the light most favorable to the party opposing the motion.â United States v. Diebold, Inc., 369 U.S. 654, 655 (1962); Moran v. Al Basit LLC, 788 F.3d 201, 204 (6th Cir. 2015). District courts have jurisdiction to review bankruptcy court decisions under 28 U.S.C. § 158(a). In re Conco, Inc., 855 F.3d 703, 709 (6th Cir. 2017). âOn appeal from a bankruptcy court, a district court applies the clearly erroneous standard of review to findings of fact, and reviews questions of law de novo.â In re Gardner, 360 F.3d 551, 557 (6th Cir. 2004). III. DISCUSSION Appellant advances four reasons why he believes the bankruptcy court should be reversed. He argues that the bankruptcy courtâs decision âdestroy[ed] the [JODâs] mutuality of obligationsâ; that the court âcreat[ed] a remedial provisionâ not contained in the JOD; that the court âaltert[ed] . . . provisionsâ of the JOD; and the court failed to interpret the JOD against the drafting party. (ECF No. 5, PageID.537.) Each argument will be addressed in turn. A. Mutuality of Obligations The center of the partiesâ dispute is the JOD provision stating that, after the sale of the marital home, âthe parties will be equally responsible for 50% [of] the balance of the debt that remains owing and will hold the other harmless.â (ECF No. 3, PageID.52- 53.) The parties agree that the interpretation of the JOD, and whether Appellee is entitled to compensation under the agreement, is governed by Michigan law. See Raleigh v. Ill. Depât of Revenue, 530 U.S. 15, 20 (2000) (quotations and citations removed) (âThe basic federal rule in bankruptcy is that state law governs the substance of claims . . . Congress having generally left the determination of property rights in the assets of a bankrupt's estate to state law.â). (ECF No. 5, PageID.541-42; ECF No. 6, PageID.568.) âA divorce judgment entered by agreement of the parties represents a contract.â Rose v. Rose, 795 N.W.2d 611, 613 (Mich. Ct. App. 2010). When interpreting a contract, âthe courtâs obligation [is] to determine the intent of the parties by examining the language of the contract according to its plain and ordinary meaning.â In re Smith Trust, 480 Mich. 19, 745 N.W.2d 754, 758 (2008) (citing Frankenmuth Mut. Ins. Co. v. Masters, 460 Mich. 105, 595 N.W.2d 832, 837 (1999)). â[It] must . . . give effect to every word, phrase, and clause in a contract and avoid an interpretation that would render any part of the contract surplusage or nugatory.â Klapp v. United Ins. Grp. Agency, 468 Mich. 459, 663 N.W.2d 447, 453 (2003). 1. Whether the Bankruptcy Court Improperly Granted Summary Judgment in Favor of Appellee Sua Sponte First, Appellant claims that the bankruptcy courtâs decision rested solely on the interpretation of the JOD language âequally responsible for 50% [of] the balance of the debt,â and the court improperly issued a summary judgment determination sua sponte. (ECF No. 5, PageID.537-41.) The premise of Appellantâs argument is incorrect; the bankruptcy courtâs decision did not rely solely on the â50% clause.â The court analyzed the 50% clause in the context of § 542(b)âs requirement that Appellantâs debt be âmatured.â (ECF No. 3, PageID.326-27.) Appellant had argued that Debtor had not suffered harm from Appellantâs refusal to pay 50% of the marital debt because Debtor declared bankruptcy and would at some point be discharged from paying the debts. (Id., PageID.327.) Thus, according to Appellant, enforcement of the JOD was not necessary to âhold [Debtor] harmless.â (Id., PageID.52-53, 327.) The bankruptcy court accurately noted that Appellantâs argument overlooked the 50% clause and its intimate connection to the âhold harmless clause.â (Id.) The court reasoned, assuming that Appellant was correct that âhis promise to hold [Debtor] harmless has not matured,â his promise to be âresponsibleâ for 50% of the marital debt had in fact matured. (Id., PageID.327-28.) The 50% clause and the hold harmless clause are two essential parts to the same agreement: that Appellant will pay half of the marital debt. The bankruptcy concluded that Appellant cannot prevail even assuming that his legal argument had merit. However, the court did not stop there. Later in the bankruptcy courtâs opinion, it directly addressed Appellantâs argument that âthe hold harmless provision . . . cannot be enforced against him because [Debtor] has not suffered any injury.â (Id., PageID.330.) It explicitly rejected the argument. The court first noted that the hold harmless clause undeniably applied to the 50% clause and Appellantâs obligation to help pay marital debt. (Id., PageID.332.) Further, the court reasoned that all the marital debts at issue were âincurred solely in [Debtorâs] name.â (Id.) Therefore, âthe creditors holding these unpaid debts do not have any direct recourse against [Appellant]â and must obtain recovery by means of âthe property in [Debtorâs] bankruptcy estate.â See In re Lennys Copy Center, 515 B.R. 562, 564 (Bankr. E.D. Mich. 2014) (â[T]he Debtor's duties and interests after filing the Chapter 7 bankruptcy case are aligned with the interest of the Chapter 7 Trustee and the bankruptcy estate, in maximizing the recovery of assets for the benefit of the bankruptcy estate and its creditors.â); 11 U.S.C. § 541(a) (stating that the bankruptcy estate âis comprised of . . . all legal or equitable interests of the debtor in property.â). (ECF No. 3, PageID.332-33.) If Appellant fails to meet his obligation to pay 50% of the marital debt, â[Debtorâs] bankruptcy estate,â whom Appellee represents, âwill have fewer assets by which to pay such debts.â See In re Shelbyville Road Shoppes, LLC, 775 F.3d 789, 794 (6th Cir. 2015) (âIt is axiomatic that a trustee's interests and rights in property are limited by and to the rights and interests of the debtor in that property.â). (ECF No. 3, PageID.333.) Thus, the bankruptcy court reviewed Appellantâs claim that an injury was not present in the case and that the JOD did not apply, and concluded that the argument was flawed. (ECF No. 3, PageID.333.) Appellantâs assertion on appeal that the bankruptcy court based its opinion solely on the 50% clause is inaccurate. However, even if Appellant were correct that the bankruptcy courtâs decision rested on the 50% clause, Appellant is incorrect to claim that the bankruptcy court granted summary judgment sua sponte. Both parties moved for summary judgment, and both parties disputed the impact and obligations contained in the JOD. (See ECF No. 3, PageID.80-94, 234-54.) In fact, Appelleeâs motion for summary judgment explicitly stated that it âseeks to enforce . . . [Appellantâs] agreement to hold the Debtor harmless from [Appellantâs] responsibility to pay 50% of the Marital Debt.â (Id., PageID.87.) Appellee went further and explicitly argued that, under the JOD, Appellant agreed to both 1) âpay 50% of the Marital Debtâ and 2) âhold the Debtor harmless.â (Id., PageID.88, 93.) In Appelleeâs response to Appellantâs motion for summary judgment, Appellee again noted that Appellant âagreed to pay a portion of the Marital Debt,â i.e. 50%, and in addition â[agreed] to hold the Debtor harmless for it.â (Id., PageID.286.) Furthermore, Appellee quoted the entire JOD provision, including the 50% clause, when arguing that the debt had matured under § 542(b). (Id., PageID.299.) Both parties repeatedly referred to, and cited, the JOD provision generally, albeit often labelling the provision as the âhold harmlessâ provision. (See ECF No. 3, PageID.80-94, 234-54.) While a portion of the bankruptcy courtâs analysis relied on a distinction between the hold harmless and 50% clause (id., PageID.327-28), the two clauses are inherently interlinked. Appellant, in the JOD, agreed to hold Debtor harmless from 50% of the marital debt. (Id., PageID.52-53.) The clauses can be appropriately analyzed together. The issue of whether Appellant was liable for half of the remaining marital debt under the JOD was properly before the bankruptcy court, and the court did not err in analyzing the meaning of the JODâs language. See also Shelby Cnty. Health Care Corp. v. S. Council of Indus. Workers, 203 F.3d 926, 932 (6th Cir. 2000) (holding that, even where a district considered summary judgment sua sponte in favor of a non-moving party, there was no abuse of discretion because the parties had ânotice and opportunity to address the issuesâ raised by the moving party); Green v. Nevers, Case No. 92-76881, 1993 WL 1620511, at *27 (E.D. Mich. April 13, 1993) (Rosen, J.) (stating that courts have no obligation to share their âindependent legal research and [exact] analysis with counsel before issuing [their] ruling[s]â). In accordance with its responsibilities, the bankruptcy court independently and accurately analyzed the partiesâ motions and the JOD. 2. Whether the Bankruptcy Court âDestroyedâ the Mutuality of Obligations Appellant next argues that the bankruptcy courtâs decision eliminated the mutuality of obligations between Debtor and Appellant in the JOD. In support of this argument, Appellant claims that, under the bankruptcy courtâs decision, he is liable for $42,614.62 while his contracting party (Debtor) is in bankruptcy and not required to pay her half of the marital debt.2 (ECF No. 5, PageID.542-43.) Appellantâs argument fails on its own terms. Due to the amount of her debt, Debtor was forced to declare bankruptcy, and Appellee now administers her interests 2 Appellant does not assert that Debtor has failed to pay for her portion of the marital debt, or that Appellant has ever commenced legal proceedings against Debtor or Appellee to compel payments owed under the JOD. and assets to satisfy her remaining debt obligations. See In re Lennys Copy Center, 515 B.R. 562, 564; In re Shelbyville Road Shoppes, LLC, 775 F.3d at 794. As the bankruptcy court stated, and Appellant does not contest, âthe creditors holding [the] unpaid debts do not have any direct recourse against [Appellant]â and must obtain recovery by means of âthe property in [Debtorâs] bankruptcy estate.â (ECF No. 3, PageID.332-33.) The bankruptcy estate, which is comprised of Debtorâs âlegal or equitable interests,â 11 U.S.C. § 541(a), is still obliged to pay Debtorâs half of the marital debt, to the extent that the estate has enough assets available. (ECF No. 3, PageID.332-33.) To that end, payment from Appellant is important because without it â[Debtorâs] bankruptcy estate will have fewer assets by which to pay such debts.â (ECF No. 3, PageID.333.) Thus, Appellantâs claim that Debtor has not suffered harm or detriment, and that âshe has no responsibility for marital debt,â is legally and factually inaccurate.3 (ECF No. 5, PageID.542-43.) Even if Debtor and her bankruptcy estate were not obliged to pay 50% of the marital debt under the JOD, that does not mean, as Appellant argues, that mutuality of obligations is âdestroyed.â (ECF No. 5, PageID.544.) Mutuality of obligation is foundational element of a legally enforceable contract. See Bank of America, NA v. First Am. Title Ins. Co., 499 Mich. 74, 878 N.W.2d 816, 830 (2016) (stating the elements of a contract). Without it, no contract exists ab initio. Id. The requirement that parties have 3 If the mutuality of obligations is eliminated simply because one party has entered bankruptcy, the ability of a trustee to collect on past debts and âmaximiz[e] the recovery of assets,â his primary responsibility, would be materially limited. In re Lennys Copy Center, 515 B.R. at 564; 9 Am. Jur. 2d Bankruptcy § 570 (2021) (âIn Chapter 7 bankruptcy proceedings . . . the trustee must investigate the financial affairs of the debtor, collect and reduce to money the property of the estate, and maximize the value of the estate.â). mutuality of obligation is synonymous with the requirement of consideration. Hall v. Small, 705 N.W.2d 741, 744 (Mich. Ct. App. 2005) (quotations removed) (âIf the requirement of consideration is met, there is no additional requirement of mutuality of obligation.â). âTo have consideration there must be a bargained-for exchange; there must be a benefit on one side, or a detriment suffered, or service done on the other.â Innovation Ventures v. Liquid Mfg., 499 Mich. 491, 885 N.W.2d 861, 871 (2016). Without question consideration existed in the JOD, even outside the partiesâ mutual agreement to pay 50% of the marital debt. The JOD is a collection of exchanges of obligations and property between Debtor and Appellant. For instance, Debtor received â[h]er Grandfatherâs table and chairsâ and agreed to âhold [Appellant] harmlessâ to âany liability on the . . . property.â (ECF No. 3, PageID.50.) Appellant was awarded other âhousehold furnitureâ and âcash, bank accounts, and jewelryâ that were at the time in his possession. (Id., PageID.50-51.) In the JOD, Debtor and Appellant traded benefits, property, and legal rights to conclude their divorce proceedings. To the extent that Appellant believes after Debtorâs bankruptcy that the JOD left him in a comparatively weaker economic position, that in no way affects the existence of consideration. It is well established that courts do not âinquire into the sufficiency of consideration.â General Motors Corp. v. Depât of Treasury, 466 Mich. 231, 644 N.W.2d 734, 738 (2002). âIt has been said a cent or a pepper corn, in legal estimation, would constitute a valuable consideration.â Id. Even if in retrospect Appellant believes Debtor benefited substantially from the JOD at the expense of Appellant, the court must enforce the contractual agreement he willingly entered. B. Creating a New Remedial Provision in the JOD Appellant argues that the bankruptcy court âcreatedâ a new JOD provision that established remedies in the event of breach on the part of Appellant. (ECF No. 5, PageID.537.) He claims that the exclusive remedy for breach of the JOD is to petition for spousal support, and he cites the following JOD provision (âpetition for spousal support provisionâ): [I]n the event that either party is in default and fails to pay the debts as set forth [in the JOD], and such failure to pay is impacting the other parties[â] credit, the injured party can petition for spousal support in an amount to pay the debt obligation to preserve credit. (ECF No. 3, PageID.53.) It is a basic tenet of contract law that, when an agreement is breached, â[t]he remedy . . . is to place the nonbreaching party in as good a position as if the contract had been fully performed,â primarily by means of monetary compensation. Corl v. Huron Castings, Inc., 450 Mich. 620, 544 N.W.2d 278, 280 (1996); Wright v. Genesee Cnty., 504 Mich. 410, 934 N.W.2d 805, 810 (2019) (âIn a breach-of-contract action, an injured party may seek damages for an injury caused by another party's breach of a contractual obligation.â); see also Restatement (Second) of Contracts § 346 (Am. L. Inst. 1981). In addition, Appellant does not contest the bankruptcy courtâs holding that courts may âfashion an appropriate remedy, including the entry of a money judgment, when a party to a consent judgment of divorce fails to honor an obligation under it.â (ECF No. 3, PageID.330 (citing Butler v. Butler, 356 Mich. 607, 97 N.W.2d 67, 73 (1959)).) Despite these basic legal precepts, Appellant argues that the JOD can be enforced solely through a âpetition for spousal support.â (ECF No. 3, PageID.53.) He misreads the language and meaning of the JOD. No provision in the JOD states that basic remedies for contracts and divorce judgments are excluded, limited, or otherwise barred. Further, the provision cited by Appellant states that Debtor âcanâ petition to receive spousal support in the case that Appellant fails to pay certain debts, and the failure to pay affects Debtorâs credit. (ECF No. 3, PageID.53.) The word âcanâ does not imply exclusivity. See In re Smith Trust, 745 N.W.2d at 758 (stating the courts, in engaging in contract interpretation, must âexamin[e] the language of the contract according to its plain and ordinary meaningâ). âCanâ is defined as an expression of âobjective possibility, opportunity, or absence of prohibitive conditions.â Can, Oxford English Dictionary (2021). Simply because it is possible for Debtor to obtain spousal support if Appellant is in default does not mean that Debtor is required to seek spousal support as the sole remedy in the case of default. Like the word âmay,â âcanâ âimplies discretion,â in contrast to âthe word âshallâ [which] usually connotes a requirement.â Kingdomware Tech., Inc. v. United States, 136 S.Ct. 1969, 1977 (2016). The structure of the partiesâ contract supports this interpretation. See Klapp, 663 N.W.2d at 453 (stating that the court âmust . . . give effect to every word, phrase, and clause in a contractâ). The JOD explicitly disclaims any right to spousal support for either Debtor or Appellant. The agreement states that neither party is âentitled to spousal support and spousal support for [both parties] is forever barred.â (ECF No. 3, PageID.43.) This provision and petition for spousal support provision work in concert. The JOD sets a general rule that spousal support is not permitted, but then allows (but does not require) the collection of spousal support in the case of default on certain debts specified in the JOD. The provisions do not in any way alter the default rules that a party may sue and receive compensation for a breach of contract or divorce judgment.4 See Corl, 544 N.W.2d at 280; Wright, 934 N.W.2d at 810. (ECF No. 3, PageID.330.) Appellant cites the interpretive cannon that âspecific [contractual] provision controls over a related but more general . . . provisionâ to support his theory that the petition for spousal support provision trumps any general remedy provision the bankruptcy court âcreated.â (ECF No. 5, PageID.545.) However, that interpretive cannon, as applied to the JOD, supports Appelleeâs position. The general rule under the JOD is that spousal support is not permitted. (ECF No. 3, PageID.43.) The petition for spousal support provisions creates a specific exception to that general rule. (Id., PageID.53.) Debtor would be permitted to seek spousal support where Appellant defaults on certain debts and the default negatively affects Debtorâs credit, notwithstanding the JODâs general prohibition on spousal support. However, the provisions say nothing about whether and to what extent Debtor can utilize traditional remedies to enforce Appellantâs obligation to pay 50% of the marital debt. The bankruptcy court did not âcreateâ a new remedial provision in the JOD and reversal of the bankruptcy court on this issue is not warranted. C. Altering Provisions of the JOD Appellant claims that the bankruptcy court âalter[ed]â and âadd[ed]-in provisions to [the JOD].â (ECF No. 5, PageID.524.) He notes that courts are generally âwithout 4 The determination of whether spousal support is justified is âwithin the . . . courtâs discretionâ and is based on equitable considerations. Berger v. Berger, 747 N.W.2d 336, 354 (Mich. Ct. App. 2008). The court calculates spousal supported considering what is âjust and reasonableâ and reviews several factors, such as âthe past relations and conduct of the partiesâ and âthe partiesâ ages.â Id. (quotations removed). The legal standard for a spousal support petition is different, and far more discretionary, than a breach of contract claims for sum certain. authority to modify unambiguous contracts.â (Id., PageID.542 (quoting Holmes v. Holmes, 760 N.W.2d 300, 312 (2008)).) In support of this argument he again claims that the JOD did not permit Appellee to collect a monetary award for breach of Appellantâs obligation to pay 50% of the marital debt. (ECF No. 5, PageID.546-47.) As explained above, the bankruptcy court properly found that Appellee could enforce the obligation through an award of monetary compensation. See supra Section III.B. Despite the fact that Debtor could seek spousal support if Appellant defaulted on certain debts, and the default harmed Debtorâs credit, the JOD allowed Debtor and Appellee to recover amounts owed under basic principles of contract and divorce judgment enforcement. Id. The bankruptcy court interpreted and enforced the JOD as written and did not âalterâ the contract. (ECF No. 5, PageID.524.) Appellantâs claim that the bankruptcy court added a remedial provision by means of its legal analysis lacks a basis of support. Appellant adds that only Wayne County Circuit Court has jurisdiction to alter the JOD. (ECF No. 5, PageID.518, 548.) First, the bankruptcy court did not alter the JOD, and this jurisdictional argument has no merit. Furthermore, Appellee brought this suit under federal bankruptcy law, 11 U.S.C. § 542(b), and the bankruptcy court, and this court, have jurisdiction over those claims. See 28 U.S.C. §§ 1334(b), 157(a); Wellness Intâl Network, Ltd. v. Sharif, 575 U.S. 665, 669-70 (2015) (describing the jurisdictional bases for bankruptcy litigation and bankruptcy courts); see also See Raleigh, 530 U.S. at 20 (quotations and citations removed) (âThe basic federal rule in bankruptcy is that state law governs the substance of claims.â). D. Interpreting the JOD Against the Drafting Party For Appellantâs final argument, he states that if the JOD is unambiguous, the bankruptcy court improperly expanded the remedies available to Appellee. (ECF No. 5, PageID.549-51.) However, if the agreement is ambiguous, according to Appellant, it must be interpreted in his favor because Debtor drafted the JOD. (Id.) When a contractâs language in unambiguous, â[the] court[] must interpret and enforce the contract as written, because an unambiguous contract reflects the parties' intent as a matter of law.â In re Smith Trust, 745 N.W.2d at 758. âIf the language is ambiguous, longstanding principles of contract law require that the ambiguous provision be construed against the drafter.â Wilkie v. Auto-Owners Ins. Co., 469 Mich. 41, 664 N.W.2d 776, 787 (2003). However, this rule âis only to be applied if all conventional means of contract interpretation, including the consideration of relevant extrinsic evidence,â have been exhausted. Klapp, 663 N.W.2d at 455. First, the court notes that Appellant, in his appeal, states that â[a]ll parties to the litigation . . . agreed that the JOD and the provisions therein were unambiguous.â (ECF No. 5, PageID.545.) This is in conformity with Appellantâs stance before the bankruptcy court. (See, e.g., ECF No. 3, PageID.250, Appellantâs Motion for Summary Judgment.) Thus, Appellantâs argument that the JOD should be construed against Appellee if the JOD is ambiguous cannot, based on Appellantâs own positions in the case, support reversal of the bankruptcy court. Second, the parties did not submit extrinsic evidence or questions of fact to the bankruptcy court. Both parties agree that there are no genuine disputes of fact. (ECF No. 5, PageID.527; ECF No. 6, PageID.564.) As Appellant states in his briefing, âthe JOD and the provisions therein [are] unambiguousâ (ECF No. 5, PageID.545), and the sole task left to the bankruptcy court was to interpret the meaning of the JOD. As explained above, the bankruptcy court correctly determined that the JOD unambiguously obligated Appellant to pay 50% of the marital debts and that the JODâs provisions on spousal support did not bar Appelleeâs recovery. Thus, the doctrine of construing a contract against the drafter, which may only be used âif all conventional means of contract interpretationâ have been exhausted, does not apply in this case. See In re Smith Trust, 745 N.W.2d at 758; Klapp, 663 N.W.2d at 455. Third, Appellee accurately identifies that Appellant did not argue in briefing before the bankruptcy court that the JOD is ambiguous and the agreement should be construed against Appellee as the drafter. (ECF No. 6, PageID.588.) Appellant does not contest that he failed to raise the argument before the bankruptcy court, nor does he provide an explanation for his decision to wait until after a final decision to advance this new claim. Thus, Appellantâs argument has been forfeited. See In re Eagle-Picher Indus., Inc., 963 F.2d 855, 863 (6th Cir. 1992) (declining to consider an issue ânot raised in the bankruptcy courtâ); accord Conwood Co., L.P. v. U.S. Tobacco Co., 290 F.3d 768, 791 n.5 (6th Cir. 2002) (ââ[A]rguments . . . not raised below . . . may not be asserted . . . on appeal.â). IV. CONCLUSION The bankruptcy court thoroughly reviewed the partiesâ arguments and correctly determined that Appellant is obliged to pay Appellee $42,614.62 under the JOD. The four grounds of appeal do not support reversal of the bankruptcy courtâs decision. Accordingly, IT IS ORDERED that the bankruptcy courtâs decision to grant summary judgment in favor of Appellee and to deny summary judgment in favor of Appellant is AFFIRMED. s/Robert H. Cleland / ROBERT H. CLELAND UNITED STATES DISTRICT JUDGE Dated: July 14, 2021 I hereby certify that a copy of the foregoing document was mailed to counsel of record on this date, July 14, 2021, by electronic and/or ordinary mail. s/Lisa Wagner / Case Manager and Deputy Clerk (810) 292-6522 S:\Cleland\Cleland\JUDGE'S DESK\C2 ORDERS\20-13257.AIKENS.BankruptcyAppeal.RMK.RHC.3.docx
Case Information
- Court
- E.D. Mich.
- Decision Date
- July 14, 2021
- Status
- Precedential