LINDA M HALL V MICHAEL NOVIK
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STATE OF MICHIGAN
COURT OF APPEALS
LINDA M. HALL, n/k/a LINDA M. THOMAS,
Plaintiff-Appellee,
v
FOR PUBLICATION
April 29, 2003
9:05 a.m.
No. 232260
Oakland Circuit Court
LC No. 91-405744-DP
MICHAEL NOVIK,
Defendant-Appellant.
Updated Copy
June 6, 2003
Before: Hoekstra, P.J., and Bandstra and Saad, JJ.
BANDSTRA, J.
Defendant Michael Novik appeals by leave granted from an order of the circuit court
denying his motion for modification of previous child-support orders. We affirm in part, reverse
in part, and remand.
Background Facts and Proceedings Below
While unmarried, plaintiff Linda M. Hall gave birth to a child on December 20, 1990,
following a relationship with Novik. On February 15, 1991, Hall filed a complaint for paternity
against Novik. With the assistance of attorneys, the parties entered into a process of negotiation
and an agreement was reached resulting in a court-approved consent order entered on December
23, 1991. This order provided that Novik did not acknowledge that he was the father of Hall's
child but that he would make payments to Hall for the child's support and education at a set level,
as well as provide a policy of health-care insurance on the child's behalf. The circuit court, in its
order approving the parties' agreement, specified that the agreement made "adequate provision
for the support and education" of the child. Further, the order expressly barred any remedies that
might otherwise be available to Hall against Novik, specifically disallowing any later
modification of the agreement. The parties' agreement and the court order approving it were
entered pursuant to MCL 722.713;1 the parties do not argue that any provision of the statute
1
Before its repeal by 1996 PA 308, § 2, MCL 722.713 provided:
(a) An agreement or compromise made by the mother or child or by some
authorized person on their behalf with the father concerning the support and
(continued…)
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authorizing this agreement and order (hereinafter the original support order) was not complied
with fully.
During the ensuing decade, the constitutionality of the statute upon which this
arrangement was based became the subject of a number of appellate-court decisions. Initially, a
divided panel of this Court enforced a similar nonmodifiable settlement agreement, rejecting a
claim that the statute was an unconstitutional denial of equal protection to illegitimate children.
Crego v Coleman, 201 Mich App 443, 446-447; 506 NW2d 568 (1993) (Crego I). In 1995, in a
separate case, a panel of our Court reached the opposite conclusion on the constitutional question
and, because the statute underlying a nonmodifiable support agreement was thus struck down,
held that the agreement could be modified through a further court order. Dones v Thomas, 210
Mich App 674, 679-680; 534 NW2d 221 (1995). As a result of Dones, the statute was repealed.
See Sturak v Ozomaro, 238 Mich App 549, 556; 606 NW2d 441 (1999). However, that repeal
did not affect orders, like that at issue here, that were entered while the statute was still in effect.
The Dones Court did not consider Crego I. However, the Crego case returned to our Court and
another panel decided that it was required to follow Crego I and uphold the constitutionality of
the statute, although it agreed with the Dones panel's holding that the statute was
unconstitutional. Crego v Coleman, 226 Mich App 815, 821; 573 NW2d 291 (1997) (Crego II).
The opinion in Crego II was then vacated, and a special panel, convened to resolve this conflict
of authority, MCR 7.215(H)(3), concluded that the statute was an unconstitutional violation of
the equal-protection guarantees of the United States and Michigan constitutions. Crego v
Coleman, 232 Mich App 284, 294-296; 591 NW2d 277 (1998) (Crego III). The issue was
finally resolved by our Supreme Court, which held that the statute did not violate the equal
protection clauses of the federal and state constitutions and that, therefore, nonmodifiable
support agreements entered into pursuant to the statute are enforceable. Crego v Coleman, 463
Mich 248, 269-272; 615 NW2d 218 (2000) (Crego IV).
To summarize this history, during the period when the parties here negotiated and
initially complied with their 1991 agreement, the statute upon which the agreement was based
was considered constitutional.2
Dones held otherwise in 1995, and its finding of
unconstitutionality was ultimately affirmed by this Court through the 1998 conflict-panel
decision in Crego III. The five-year period running from Dones, during which the statute was
(…continued)
education of the child shall be binding upon the mother and the child only when
the court having jurisdiction to compel support and education of the child shall
have determined that adequate provision is reasonably secured by payment or
otherwise and has approved the agreement or compromise.
(b) The performance of the agreement or compromise, when so approved,
shall bar other remedies of the mother or child for the support and education of
the child.
2
The statute had been in effect since 1956, apparently without any constitutional challenge until
Crego I. See Crego III, supra at 297 (Whitbeck, J., dissenting).
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considered unconstitutional, was ended by the 2000 Supreme Court decision in Crego IV, which
constitutes the final resolution of the equal-protection issue.
In the instant case, notwithstanding the agreement, Hall returned to the circuit court
seeking a modification of the original support order. Relying on Dones, the circuit court granted
that relief and entered an order increasing the monthly payments that Novik was required to pay
on behalf of the child and also making other changes to the benefits that were due.3 This order
(hereinafter referred to as the increased support order) further required the parties to undergo
testing to determine whether Novik was the child's biological father. Following attempts by
Novik to avoid that requirement,4 Novik was determined to be the child's biological father.
Question Presented and Standard of Review
As noted earlier, the question presented here is the effect of Crego IV on the increased
support order. Shortly after Crego IV was decided, defendant filed a motion asking the circuit
court to reinstate the original support order and require reimbursement of amounts paid in excess
of it by Novik to Hall under the increased support order.
We are, of course, bound by Crego IV. However, Crego IV did not specify whether it
should be applied retroactively; instead, it merely remanded the case to the circuit court "for
further proceedings consistent with this opinion." Crego IV, supra at 282. Crego IV is thus a
case in which the Court "announce[d] a change of law" while "refrain[ing] from going the next
step to indicate how its new rule is to be applied." Riley v Northland Geriatric Ctr (After
Remand), 431 Mich 632, 643; 433 NW2d 787 (1988). The issue of the retroactive or prospective
application of Crego IV is now left for us to decide here. Id. This is a question of law that we
review de novo. Curtis v City of Flint, 253 Mich App 555, 563-564; 655 NW2d 791 (2002).
Prospective Application of Crego IV
By completely denying Novik's motion, the circuit court ruled that Novik must continue
to comply with the obligations of the increased support order in the future. In so doing, the
circuit court failed to give Crego IV even prospective effect. Crego IV held that agreements such
as that entered into by the parties here in 1991 are enforceable, the statute on which they were
based being constitutional. Hall presents arguments against the retroactive application of Crego
IV, which would amount to a decision requiring that she reimburse Novik for payments made in
excess of the original support order as a result of the increased support order. She presents no
argument against prospectively applying Crego IV to reinstate the original support order in the
3
Although Hall complains in her brief about Novik's failure to promptly comply with the
increased support order, that is not an issue presented for decision here. Instead, the parties'
argument is solely related to the effect of Crego IV on whether Hall must reimburse Novik for
the difference in support that has been provided under the increased support order (and similar
supplementary orders), compared to the original support order and whether the increased support
order should continue to be enforced in the future.
4
Again, Novik's compliance with the paternity determination order is not at issue in this appeal.
-3-
future.5 We hold that the circuit court erred in failing to give Crego IV even this prospective
application.
We realize that Hall and the child have been accustomed to receiving support at a higher
level under the increased support order. Accordingly, reverting back to the support level found
in the original support order will require adjustment and represent a hardship to them.
Nonetheless, Crego IV clearly held that the original agreement was premised on a constitutional
statute and should have been enforced throughout. Accordingly, having freely negotiated and
accepted that agreement initially, Hall cannot now rightfully claim that it is unfair to impose its
limitations upon her in the future.
Further, we recognize that the situation has changed dramatically since the agreement
was entered, Novik now having been determined to be the child's biological father. However, as
Novik points out, he did not submit to paternity testing willingly, but was required to do so by
the circuit court in contravention of the original agreement. The paternity determination would
not have occurred but for precedents that incorrectly struck down the statute under which the
agreement had been entered. It would be unfair now to continue imposing the obligations of the
increased support order on Novik on the basis of that determination.
Retroactive Application of Crego IV
Whether Crego IV should be applied retroactively to require that Hall reimburse Novik
for "excess payments" made under the increased support order presents a larger question.6
Resolution of the issue of retroactive or prospective application "ultimately turns on
considerations of fairness and public policy" requiring a court to "'take into account the total
situation confronting it and seek a just and realistic solution of the problems occasioned'" by an
opinion that alters the law. Riley, supra at 644-645, quoting Placek v Sterling Hts, 405 Mich
638, 665; 275 NW2d 511 (1979). However, certain rules or principles providing guidance have
evolved. Riley, supra at 645. The "first criterion that must be determined in deciding whether a
judicial decision should receive full retroactive application is whether that decision is
establishing a new principle of law . . . ." MEEMIC v Morris, 460 Mich 180, 190; 596 NW2d
142 (1999).7 A judicial decision establishes a new principle of law if it overrules "clear past
precedent on which the parties have relied . . . ." Id.
5
Under the orders at issue here, Novik is required to continue making support payments until the
child reaches the age of eighteen, approximately another six years.
6
The issue of the retroactive prospective application has been aptly described as a "dilemma."
Riley, supra at 645. Our review of available precedents suggests that, while there are guidelines
to follow, the application of those guidelines is not without question and some confusion. While
applying the guidelines as best we can, we will provide footnote reference to questions or
problems that we find to be unanswered.
7
The effect of this "first criterion" is not clear. The MEEMIC Court merely stated that, if a
decision does not announce a new principle of law, "then full retroactivity is favored," id. at 191,
suggesting that full retroactivity might not always be required in the absence of such a "new
(continued…)
-4-
We conclude that Crego IV presents such a "new principle of law." As the summary of
precedents presented above indicates, by the time Dones was decided, and certainly by the time a
conflict panel affirmed Dones in Crego III, "clear precedent" from our Court established that
MCL 722.713 was unconstitutional. That precedent was relied on by Hall in bringing her motion
for modification of the original support order. It was also relied on by the circuit court in
granting the increased support order. Further, we note that the Legislature relied on our Court's
determinations that the statute was unconstitutional in repealing the statute shortly after Dones
was decided. Sturak, supra. By finding the statute constitutional, Crego IV overturned the law
upon which all these actions were based; it established a new principle of law.
We reach that conclusion while acknowledging that the reversal by the Supreme Court of
a Court of Appeals precedent does not always represent a new principle of law. See, generally,
MEEMIC, supra at 191-197. In MEEMIC, supra at 197, the Court reasoned that the precedent it
overturned was so poorly reasoned that its reversal was not "an unforeseeable decision . . . ."
The Supreme Court noted that the precedent "was in direct conflict with the plain language of the
statute, the intent of the Legislature in enacting the statute, and two previous decisions" of the
Supreme Court. Id. Further, the Supreme Court noted that, in the precedent, our Court had itself
noted that the decision being rendered was "'repugnant to the purposes and objectives . . . and to
the plain language'" of the statute. Id. at 194, quoting Profit v Citizens Ins Co of America, 187
Mich App 55, 62; 466 NW2d 354 (1991).
In contrast, our Court's rulings in Dones and Crego III that MCL 722.713 was
unconstitutional were not so poorly reasoned that parties could not justifiably rely upon them or
foresee that they would be overturned by Crego IV. Instead, as illustrated by the dissenting
opinions in Crego IV, the constitutionality of the statute was a close question where reasonable
minds could differ. See Crego IV, supra at 293-296; see also Tebo v Havlik, 418 Mich 350, 362;
343 NW2d 181 (1984) (rejecting the argument that precedents of the Court of Appeals, not being
decisions by the Supreme Court, cannot properly be relied upon), and Gusler v Fairview Tubular
Products, 412 Mich 270, 298; 315 NW2d 388 (1981) (a Supreme Court decision contrary to
prior interpretations by the Court of Appeals was considered to be "not unlike the announcement
of a new rule of law").
(…continued)
principle of law." However, having determined that such a new principle of law was not at issue
in the case before it, the Court held that full retroactive application was appropriate without any
further analysis, id. at 197, suggesting that, in the absence of a new principle of law, retroactivity
is automatic or necessary. This comports with the MEEMIC Court's citation of Chevron Oil Co v
Huson, 404 US 97, 106-107; 92 S Ct 349; 30 L Ed 2d 296 (1971), where the United States
Supreme Court reasoned that "'the decision to be applied nonretroactively must establish a new
principle of law . . . .'" See MEEMIC, supra at 189. (Emphasis supplied.) It also comports with
the characterization of the new-principle-of-law question as being a "threshold" issue. Riley,
supra at 646 n 8. In any event, we need not resolve the question because we determine here that
Crego IV did present a new principle of law, thus allowing the possibility of nonretroactive
application.
-5-
As noted earlier, the determination that Crego IV established a new principle of law
allows us to consider whether it should be applied nonretroactively, but it does not resolve that
question. We find further guidance in Riley, supra, a case factually similar to that presented
here. There, the issue was whether a prior Supreme Court decision, Gusler, supra, should be
applied retroactively to require recipients of worker's compensation benefits to repay excess
sums received from their employers. They had previously received those sums by reason of
precedents adopting an erroneous computation formula. The Supreme Court held that retroactive
application was inappropriate:
We believe fairness requires that Gusler be applied to workers'
compensation awards made after . . . the date Gusler was decided . . . . Such a
holding is fair because it allows employers to reduce their payments in accordance
[with Gusler] while protecting employees with respect to payments received
before Gusler. [Riley, supra at 645.]
The Court noted that employees and employers had relied for a number of years on the preGusler interpretation of the worker's compensation act that allowed for benefit payments in
excess of those available under Gusler. The Court reasoned that a prospective application of
Gusler "appropriately recognizes that reliance, and . . . safeguards employees by not requiring
repayment of any portion of benefits received prior to Gusler." Id. at 646.8
The same considerations lead us to conclude that a prospective application of Crego IV is
appropriate here. As noted above, in modifying the original order to increase the support
payments, the circuit court relied on earlier appellate decisions finding MCL 722.713
unconstitutional. In so doing, the circuit court determined that an increase was warranted to
properly care for the child, a decision not contested by Novik. Hall received the increased
payments and used them for the child's care. For example, the record here is clear that the child
has been attending a private school that would likely not have been affordable under the original
support order. It would be as unfair here to require that Hall reimburse Novik for amounts paid
in excess of those due under the original support order as it would have been in Riley to require
the worker's compensation benefit recipients to make reimbursement to their employers. As has
8
We recognize that courts often apply a three-part test in determining retroactivity questions,
weighing (1) the purpose to be served by the new rule, (2) the extent of reliance on the old rule,
and (3) the effect of retroactivity on the administration of justice. See, e.g., Pohutski v City of
Allen Park, 465 Mich 675, 696; 641 NW2d 219 (2002). However, this analysis has not been
employed in every case presenting a retroactivity question. See, e.g., Tebo, supra at 360-364;
Stanton v Lloyd Hammond Produce Farms, 400 Mich 135, 144-148; 253 NW2d 114 (1977). In
other cases, the second and third factors meld together "because the amount of past reliance will
often have a profound effect upon the administration of justice." People v Hampton, 384 Mich
669, 677; 187 NW2d 404 (1971). To the extent that analysis under the three-part test is required,
we note that Riley, supra at 646, upon which we primarily rely, did consider that test and
concluded that prospective application of the new rule at issue was appropriate. For the same
reasons in this factually similar case, we would reach that same conclusion if we were to apply
the three-part test.
-6-
been noted, "[r]equiring . . . a woman to make 'restitution' of years of child support payments
could impose a tremendous hardship, literally to the point of bankruptcy." Crego III, supra at
329 (Whitbeck, J., dissenting).
Further, the public policy of this state, as reflected by statute, is that support payments
once made for the care of a child are not normally "subject to retroactive modification." MCL
552.603(2). "[T]his provision normally operates to prevent a payer from retroactively decreasing
support payments that have already come due . . . ." Harvey v Harvey, 237 Mich App 432, 437438; 603 NW2d 302 (1999). The purpose of this statute is that "'[t]he custodial parent, who
actually provides for the child's welfare, should be able to rely on receiving the court-ordered
amount'" until a petition for reduction has been filed. Id. at 438, quoting House Legislative
Analysis, SB 318-320, June 30, 1987. Similarly, consistent with this statutory policy, a parent
should be able to use court-ordered support payments without fear that reimbursement will be
later required following a change in the law.
Earlier, we recognized that prospectively applying Crego IV works a hardship on Hall
and now we acknowledge that failing to apply Crego IV retroactively works a hardship on
Novik. Had the statute been considered constitutional throughout, as Crego IV finally
determined it is, the original support order would have been enforced and Novik's payments
would not have escalated. Nonetheless, any change of law presents a difficult situation and the
job of the court is to determine the issue of prospective or retroactive application in a manner
that best accommodates the interests of all those affected by it. In this case, we conclude that a
prospective-only application of Crego IV best achieves that goal.9
Conclusion
The circuit court erred in failing to give Crego IV prospective effect. The circuit court
granted a stay of proceedings pending appeal here, placing payments beyond those required by
the original support order into escrow beginning February 1, 2001. Beginning that date, Novik
should be required to support the child only as specified in the original support order and the
escrowed amounts should be returned to him.10 We affirm the circuit court's ruling that Crego IV
should not be applied retroactively to require that Hall reimburse Novik any amounts paid
previously to her in excess of those required by that original order, pursuant to the increased
support order.
9
The gist of Novik's argument that Crego IV should be applied retroactively is that this approach
would best return the parties to the status they had under the original support agreement and
order. However, we note that, even though paternity testing was improperly required of Novik,
as a matter of fact, a determination has been made that he is the child's biological father. To that
extent, things have changed irrevocably since the parties entered into their agreement, making
full reinstatement of that agreement problematic.
10
Similarly, in other cases where circuit courts have modified agreements on the basis of Dones
or its progeny, reinstatement of those agreements should be effective prospectively, beginning on
the date that the circuit court enters an order to that effect.
-7-
We remand this case for further proceedings consistent with this opinion. We do not
retain jurisdiction.
/s/ Richard A. Bandstra
/s/ Joel P. Hoekstra
/s/ Henry William Saad
-8-
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