David G Osim v. Jill E Scott ( 2023 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
DAVID G. OSIM, UNPUBLISHED
May 18, 2023
Plaintiff-Appellant,
v No. 359770
Crawford Circuit Court
JILL E. SCOTT, LC No. 11-008659-DO
Defendant-Appellee.
Before: GADOLA, P.J., and PATEL and MALDONADO, JJ.
PER CURIAM.
Plaintiff David Osim (husband) appeals the trial court’s order (1) requiring him to pay
defendant Jill Scott (wife) one-half of his monthly gross social security benefits pursuant to the
parties’ contracted property settlement, and (2) modifying spousal support to award wife $1,000
monthly support. Because such action is prohibited by law, the trial court erred by dividing
husband’s social security benefits. The court also erred by setting July 1, 2017, as the effective
date of its order; it should be effective April 3, 2017, which is the date husband moved to modify
spousal support. While the court did not abuse its discretion in its modification of spousal support,
its error concerning the property division could affect the amount of support warranted. We affirm
in part, reverse in part, and remand to the trial court for further proceedings consistent with this
opinion.
I. BACKGROUND
We previously summarized the initial facts of this case as follows:
The parties divorced in 2012 after nearly 35 years of marriage. They
entered into a consent judgment and a property settlement that disposed of their
marital assets, but they were unable to agree on spousal support. [Husband] had
worked for AT&T for over 20 years, while [wife] had not worked during the
marriage. [Wife] was a stay-at-home mother and also has significant health
problems. The property settlement gave [wife] half of the value of [husband]’s
401(k) plan, half of their joint checking and savings accounts, half of [husband]’s
Social Security benefits, and half of the stocks they owned. The parties agreed that
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[wife] would keep the marital home (free and clear of any liens), while [husband]
would keep his pension. The parties could not agree on how much spousal support
[husband] should pay [wife], so they submitted the issue to the trial court for
resolution. The trial court calculated a monthly support payment of $2,000, which
was permanent (until [wife]’s death or remarriage) and modifiable, and added this
provision to the consent judgment, which the parties subsequently signed. This
monthly support payment was more than [wife] originally requested and was
ordered due to [her] health concerns. The trial court notified the parties that
[husband] could ask to modify the spousal support obligation when he retired.
[Husband] retired in December 2016, and filed a motion to eliminate spousal
support, arguing that his only source of income was the pension he received in full
in the property settlement. After an evidentiary hearing, the trial court rejected
[husband]’s argument and reduced [his] monthly spousal support obligation to
$961.50 to reflect his reduced income.
* * *
In its opinion modifying the spousal support, the trial court opined that,
based on the evidence, neither party had the ability to continue working in more
than a part-time capacity. It found the property awarded to each party in the divorce
as a compelling reason for modification of the spousal support award. The trial
court stated that at the time of the divorce, the marital home awarded to [wife] was
“somewhere between the [husband]’s appraisal of $115,000 and the [wife]’s
submission of the SEV based value of $86,258.” It noted that no party provided
direct evidence of the value of [husband]’s pension at the time of the divorce, but
that because the value of [husband]’s lump sum pension payout was $441,303.96
at the time of his December 2016 retirement, “there can be little question . . . that
its value in 2012 was significantly higher than that of the home.” The trial court
concluded that, “in terms of the amount of property awarded in the judgment of
divorce, the [husband] received significantly more value by receiving his entire
pension than the [wife] did by receiving the home.” It further concluded that the
predecessor judge who conducted the pro confesso hearing and entered the
judgment of divorce was clearly not aware of this disparity, did not take it into
account, and that the initial spousal support award was based on an assumption that
marital home and pension were equal in value. [Osim v Scott, unpublished per
curiam opinion of the Court of Appeals, issued October 31, 2019 (Docket No.
342237), pp 1-3.]
In his earlier appeal, husband argued that the trial court erred in its modification of spousal
support by (1) improperly considering his pension as income for the purpose of calculating support,
(2) improperly considering the spousal-support factors and determining support via an arbitrary
formula, and (3) failing to impute an income to wife. Id. at 2, 6. We agreed with the first argument,
and concluded that the trial court was bound to follow the parties’ divorce settlement granting
husband his entire pension as part of the contracted property division and thus the trial court erred
by considering husband’s pension when modifying support. Id. at 4-5.
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Nevertheless, we elaborated that our ruling “does not necessarily mean that any
consideration of the amount of [husband]’s pension for purposes of calculating an amendment to
spousal support is precluded.” Id. Because the parties’ divorce settlement allowed modification
of spousal support, we stated that the principles generally governing modification of spousal
support applied. Id. “Thus, the current amount of the pension is relevant to the extent of how the
award of the pension to [husband] now affects the incomes and needs of the parties. This
consideration is part of the trial court’s review of the spousal support factors in calculating the
modified support amount.” Id. at 5-6.
Notwithstanding the improper consideration of husband’s pension, we found that the trial
court did not otherwise err when modifying support. Ultimately, we found that the trial court
properly concluded that spousal support should be reduced, but erred in its calculation of the
modified support amount; accordingly, we remanded for further proceedings consistent with our
opinion. Id. at 7.
On remand, wife asserted she was entitled to an increased support award because husband
was receiving Social Security Disability Insurance (SSDI) benefits. She argued that she was
entitled to half the SSDI benefits pursuant to the parties’ property settlement. Husband countered
that the parties’ property division did not automatically entitle wife to half his benefits; rather, it
simply allowed her to make her own claim for benefits based on his earnings record. He also
maintained that support should be eliminated or reduced to a minimal amount.
The trial court ordered that husband continue paying support at a modified amount of
$1,000 per month, and “remit to [wife] half of his social security benefits.” However, “to balance
the equities,” the court ordered “that in any month in which half of [husband]’s social security
benefits exceeds $1,000, [husband] shall simply pay that amount. In any month in which half of
his social security benefits is less than $1,000, [husband] shall pay that amount . . . plus the
difference between that amount and $1,000, so that [wife] shall not receive less than $1,000 in any
given month.” Lastly, because the social security payments were required by the parties’ property
settlement, the court awarded those amounts to be paid retroactively “to the first month [husband]
began receiving social security benefits.” The court determined that support should be permanent
but still be modifiable on a proper showing of a change in circumstances.
Husband moved for relief from the trial court’s order under MCR 2.612(C). The trial court
acknowledged that the order should state that spousal support was “indefinite” rather than
“permanent,” but otherwise sustained its prior findings and ordered payments. The parties
ultimately agreed that the social security division would be retroactive to June of 2017 and there
would be direct payment of the benefits to the wife. The court entered an order requiring husband
to pay wife half of his monthly gross social security benefits pursuant to the parties’ contracted
property settlement and modifying spousal support to award wife $1,000 per month in indefinite
support (deducted by the amount of husband’s social security benefits paid to wife in a given
month, with no support owed for a given month where wife receives over $1,000 in social security
benefits). The order was retroactively effective to July 1, 2017, “or the date which [husband]
became eligible for Social Security benefits.” This appeal followed.
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II. STANDARDS OF REVIEW
We review a trial court’s discretionary award of spousal support for an abuse of discretion.
Loutts v Loutts, 298 Mich App 21, 25; 826 NW2d 152 (2012). “An abuse of discretion occurs
when the trial court’s decision falls outside the range of reasonable and principled outcomes.” Id.
at 26. We review a trial court’s factual findings relating to the award or modification of spousal
support for clear error. Smith v Smith, 328 Mich App 279, 286; 936 NW2d 716 (2019). “A finding
is clearly erroneous if [this Court] is left with a definite and firm conviction that a mistake has
been made.” Id. When a trial court’s findings are not clearly erroneous, we must then decide
whether “the dispositional ruling was fair and equitable in light of the facts.” Id. An award of
support “must be affirmed unless this Court is firmly convinced that it was inequitable.” Andrusz
v Andrusz, 320 Mich App 445, 452; 904 NW2d 636 (2017) (cleaned up).
“A settlement agreement, such as a stipulation and property settlement in a divorce, is
construed as a contract.” Myland v Myland, 290 Mich App 691, 700; 804 NW2d 124 (2010). “The
same legal principles that govern the construction and interpretation of contracts govern the
parties’ purported settlement agreement in a divorce case.” Id. “The existence and interpretation
of a contract involves a question of law that this Court reviews de novo.” Id. We also review
issues of statutory interpretation de novo. Comerica, Inc v Dep’t of Treasury, 332 Mich App 155,
161; 955 NW2d 593 (2020), aff’d by 509 Mich 204 (2022).
Because husband’s alleged distinction between SSDI and regular social security retirement
benefits was never raised in or decided by the trial court, we review this issue for plain error
affecting his substantial rights. See Glasker-Davis v Auvenshine, 333 Mich App 222, 227; 964
NW2d 809 (2020); Elahham v Al-Jabban, 319 Mich App 112, 121; 899 NW2d 768 (2017).
III. EFFECTIVE DATE OF ORDER
Husband argues, albeit briefly, that the trial court erred by setting July 1, 2017, as the
effective date of its final order. We agree.
According to husband, his support obligation should have been modified from April 3,
2017, the date he initially filed his motion to modify support. He claims that the trial court’s
decision to modify support from the later July 2017 date was contrary to MCL 552.603 and left a
gap between those dates when it is unclear whether husband paid the proper amounts of support.1
MCL 552.603 provides, in relevant part:
1
We disagree with wife that husband waived this issue. We recognize that a party cannot stipulate
to a matter before the trial court and then argue on appeal that the resulting action was erroneous,
and such an agreement amounts to a waiver that extinguishes any error. See Hodge v Parks, 303
Mich App 552, 556; 844 NW2d 189 (2014). But husband only stipulated that the social security
division, not the spousal support modification, would be retroactive to July 2017.
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(1) A support order issued by a court of this state shall be enforced as provided in
this act.
(2) . . . Retroactive modification of a support payment due under a support order is
permissible with respect to a period during which there is pending a petition for
modification, but only from the date that notice of the petition was given to the
payer or recipient of support.
“The primary goal of statutory interpretation is to give effect to the intent of the Legislature,
focusing first on the statute’s plain language.” Comerica, Inc, 332 Mich App at 165. “If a statute
is unambiguous, judicial construction is neither required nor permitted, and the statute must be
enforced as written.” Id.
Pursuant to the plain, unambiguous language in MCL 552.603(2), retroactive modification
of spousal support is permissible only from the date that notice of a petition to amend support is
given, i.e., when husband filed his motion to eliminate support. Here, while the final order’s
effective date was apparently based on the parties’ stipulation as to when the property division
should have taken effect, no such stipulation was made specific to the support award. We conclude
that the trial court erred in setting an effective date of July 1, 2017, for its modification of spousal
support. The modification of support should have been effective April 3, 2017.
IV. DIVISION OF SOCIAL SECURITY BENEFITS
Husband argues that the trial court erred by awarding wife half of his SSDI benefits under
the parties’ contracted property settlement and by interpreting this agreement to divide his direct
social security payments between the parties. We conclude that the trial court erred by dividing
husband’s social security benefits pursuant to the parties’ property settlement, but not for
husband’s argued reasons.
“A contract must be interpreted according to its plain and ordinary meaning.” Holmes v
Holmes, 281 Mich App 575, 593; 760 NW2d 300 (2008). As such, “courts must construe
unambiguous contract provisions as written.” Id. at 594. “However, if the contractual language
is ambiguous, extrinsic evidence can be presented to determine the intent of the parties.”
Kendzierski v Macomb Cty, 503 Mich 296, 311; 931 NW2d 604 (2019); see also Vigil v Vigil, 118
Mich App 194, 197; 324 NW2d 571 (1982) (“[W]here any property settlement is ambiguous, the
court has inherent power to interpret and clarify its terms.”). “A contractual term is ambiguous on
its face only if it is equally susceptible to more than a single meaning,” or “if two provisions of the
same contract irreconcilably conflict with each other[.]” Kendzierski, 503 Mich at 311 (cleaned
up). “It is a well-settled principle of law that courts are bound by property settlements reached
through negotiations and agreement by parties to a divorce action, in the absence of fraud, duress,
mutual mistake, or severe stress which prevented a party from understanding in a reasonable
manner the nature and effect of the act in which she was engaged.” Vittiglio v Vittiglio, 297 Mich
App 391, 400; 824 NW2d 591 (2012).
The parties’ 2012 divorce judgment, which was largely handwritten, states, in relevant part,
that wife is to receive “½ of [husband]’s Social Security.” Although neither party raised an
objection to this division in the trial court or on appeal, binding authority precludes Michigan
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courts from treating social security benefits as marital property, thus preventing the division of
social security benefits in divorce cases. Specifically, in Biondo v Biondo, 291 Mich App 720;
809 NW2d 397 (2011), we concluded that the trial court erred by enforcing an equal division of
the parties’ social security benefits pursuant to their consent judgment of divorce. Id. at 727. We
determined that the parties’ contracted division of social security was preempted by federal law,
specifically § 407(a) of the Social Security Act prohibiting the transfer or assignment, among other
things, of social security benefits. Id. at 724-727. See also In re Lampart, 306 Mich App 226,
234-241; 856 NW2d 192 (2014) (concluding that the trial court violated 42 USC § 407(a) by
ordering restitution payments from the respondent’s SSDI income). This statute provides:
The right of any person to any future payment under this subchapter shall
not be transferable or assignable, at law or in equity, and none of the moneys paid
or payable or rights existing under this subchapter shall be subject to execution,
levy, attachment, garnishment, or other legal process, or to the operation of any
bankruptcy or insolvency law. [42 USC § 407(a).]
We explicitly held in Biondo that social security benefits cannot be treated as a marital asset,
although parties’ anticipated social security benefits are still relevant in devising an equitable
distribution of marital property. Id. at 729-731. We stated that, because no prior published
Michigan cases removed social security benefits from the realm of marital property, we viewed
the consent judgment’s equalization of social security benefits as a mutual mistake. Id. at 728-
729. Accordingly, we remanded for modification of the parties’ property settlement. Id. at 729.
“[T]his Court is bound to follow the rule of law established by its prior published opinions
so long as those opinions were issued on or after November 1, 1990, and have not been reversed
or modified by the Supreme Court, or by a special panel of the Court of Appeals.” In re Medina,
317 Mich. App. 219, 230; 894 NW2d 653 (2016), quoting MCR 7.215J(1) (cleaned up). Because
Biondo was decided after November 1, 1990, and has not been reversed or modified, we are bound
to follow its ruling. The trial court had no power to divide husband’s social security benefits or
otherwise enforce any transfer or assignment thereof. Accordingly, we vacate the trial court’s
division of husband’s social security pursuant to the parties’ property settlement. Given this
conclusion, the parties’ dispute as to whether the property settlement was intended to automatically
entitle wife to half of husband’s SSDI benefits—and any ambiguity in the agreement on this
matter—is irrelevant.2
2
We note that wife may be able to file her own social security claim based on husband’s working
record and still receive the same benefit amount that the parties improperly included in their
property settlement and that the court erroneously enforced. See 42 USC § 402(b)(1) and (2); see
also 42 USC § 416(d)(1) (defining “divorced wife” as “a woman divorced from an individual, but
only if she had been married to such individual for a period of 10 years immediately before the
date the divorce became effective.”).
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V. MODIFICATION OF SUPPORT
Husband argues that the trial court improperly considered his pension and otherwise used
a faulty mechanism to determine its support award. We disagree.
First husband argues the trial court on remand violated the law-of-the-case doctrine by
again improperly considering his pension and failing to address the various other issues we
identified in our prior opinion. “The law-of-the-case doctrine is a judicially created, self-imposed
restraint designed to promote consistency throughout the life of a lawsuit. The idea is that if an
appellate court has passed on a legal question and remanded the case for further proceedings, the
legal questions thus determined by the appellate court will not be differently determined on a
subsequent appeal in the same case where the facts remain materially the same.” Rott v Rott, 508
Mich 274, 286; 972 NW2d 789 (2021) (cleaned up). “Thus, as a general rule, an appellate court’s
determination of an issue in a case binds lower tribunals on remand and the appellate court in
subsequent appeals.” Id.Husband further asserts that the mechanism used by the trial court to determine its modified
support amount had no clear basis on the parties’ actual incomes, needs, and expenses, and was
further tainted by the court’s erroneous consideration of husband’s pension and its division of his
SSDI payments. “The object in awarding spousal support is to balance the incomes and needs of
the parties so that neither will be impoverished; spousal support is to be based on what is just and
reasonable under the circumstances of the case.” Loutts, 298 Mich App at 26. Among the factors
to be considered are
(1) the past relations and conduct of the parties, (2) the length of the marriage, (3)
the abilities of the parties to work, (4) the source and amount of property awarded
to the parties, (5) the parties’ ages, (6) the abilities of the parties to pay alimony,
(7) the present situation of the parties, (8) the needs of the parties, (9) the parties’
health, (10) the prior standard of living of the parties and whether either is
responsible for the support of others, (11) contributions of the parties to the joint
estate, (12) a party’s fault in causing the divorce, (13) the effect of cohabitation on
a party’s financial status, and (14) general principles of equity. [Myland, 290 Mich
App at 695.]
“The trial court should make specific factual findings regarding the factors that are relevant to the
particular case.” Id.
We conclude that the trial court neither violated the law-of-the-case-doctrine in its
consideration of husband’s pension nor otherwise abused its discretion in awarding wife modified
support of $1,000 per month. Husband, apart from again challenging consideration of his pension,
does not assert that any of the trial court’s specific factual findings, particularly regarding the
parties’ incomes and expenses, were clearly erroneous. We find that the trial court adhered to our
instruction in its modification of support. The trial court explicitly excluded husband’s pension
withdrawals as income to determine support. It simply acknowledged that the pension was a
relevant asset that alleviated husband’s need to rely on his other income from SSDI to pay
expenses. This consideration was consistent with our prior opinion: “the current amount of the
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pension is relevant to the extent of how the award of the pension to [husband] now affects the
incomes and needs of the parties.” Osim, unpub op at 5-6.
We also find that the trial court sufficiently addressed the other relevant considerations
surrounding husband’s pension. The court explicitly acknowledged the significant tax
consequences of husband’s pension withdrawals, and it noted that the fund’s performance could
suffer in the future and thus limit husband’s ability to rely on these withdrawals as income.
Although the court did not reference the value of the pension when the parties divorced in 2012 or
husband’s postdivorce contributions, the court properly addressed the current amount of the
pension as relevant to its effect on the needs and incomes of the parties.
We further find that the court’s modified support award was fair and equitable in light of
the facts. Disregarding husband’s pension income (as well as additional income from the current
wife), the trial court found he had $32,500 in recurring annual social security income and $1,800
to $2,100 in total monthly expenses. In contrast, the court found that wife had $15,000 in annual
income and $1,700 in monthly expenses. However, given that husband shares expenses with the
current wife, it found that he essentially had half the expenses of wife. Considering just these
amounts, the court’s award leaves husband $20,500 in income to cover $10,200 in expenses per
year (with a $10,300 surplus), whereas wife is left with $27,000 in income to cover $20,400 in
expenses per year (with a lesser surplus of $6,600).
While husband is correct that this award did not equalize the parties’ incomes, the award
only needed to balance the needs and incomes of the parties without impoverishing either.
Husband fails to account for the various other relevant findings of the trial court, including that
husband shares expenses with the current wife, who herself has significant earnings; that wife has
significant medical needs that could limit her future ability to continue work; and the disparities
between the parties’ other assets not included in the analysis of their income.
Ultimately, an award of support “must be affirmed unless [this Court is] firmly convinced
that it was inequitable.” Andrusz, 320 Mich App at 452. We are not firmly convinced that the
trial court’s modified support award here was inequitable. But the trial court’s improper award to
wife of half of husband’s social security benefits pursuant to their property settlement affects this
issue to the extent that vacating the property division may alter the incomes and needs of the
parties. Accordingly, we remand for further proceedings to determine if $1,000 in monthly support
remains equitable in light of wife not being entitled to half of husband’s social security benefits
pursuant to the property division.
We affirm in part, reverse in part, and remand for further proceedings consistent with this
opinion. We do not retain jurisdiction.
/s/ Michael F. Gadola
/s/ Sima G. Patel
/s/ Allie Greenleaf Maldonado
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