DOMINIC RIGGIO V SHARON RIGGIO
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STATE OF MICHIGAN
COURT OF APPEALS
DOMINIC RIGGIO,
UNPUBLISHED
October 14, 2010
Plaintiff-Appellee,
v
No. 291998
Macomb Circuit Court
LC No. 2009-000698-DO
SHARON RIGGIO,
Defendant-Appellee,
and
SUE E. RADULOVICH and SUE E.
RADULOVICH, P.C.,
Appellants.
Before: FORT HOOD, P.J., and JANSEN and WHITBECK, JJ.
PER CURIAM.
Appellants, Sue E. Radulovich and Sue E. Radulovich, P.C., appeal by right an order
discharging their retaining and charging liens for legal services previously provided to defendant
in a divorce action between plaintiff and defendant. We reverse and remand to the trial court for
further proceedings consistent with this opinion.
Appellants first argue that the trial court should have held a hearing to determine whether
it had subject matter jurisdiction over the divorce proceedings. We agree. The determination
whether a trial court had subject matter jurisdiction over a claim presents a question of law,
which is reviewed de novo. Ryan v Ryan, 260 Mich App 315, 331; 677 NW2d 899 (2004).
“Jurisdiction is the power of a court to act and the authority of a court to hear and
determine a case.” In re AMB, 248 Mich App 144, 166; 640 NW2d 262 (2001) (citation
omitted). Subject matter jurisdiction describes the types of cases and claims which a court has
the authority to address. Id. If a court does not have subject matter jurisdiction over a case, the
only action it can take is to dismiss the case. Bowie v Arder, 441 Mich 23, 56; 490 NW2d 568
(1992).
Subject matter jurisdiction over a judicial proceeding is an absolute requirement, and it
cannot be conferred by consent, conduct, waiver, or estoppel. In re AMB, 248 Mich App at 166.
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In addition, a stipulation of the parties cannot establish a court’s subject matter jurisdiction.
Redding v Redding, 214 Mich App 639, 643; 543 NW2d 75 (1995). In fact, a court must take
notice sua sponte of a lack of subject matter jurisdiction, regardless of whether the parties raise
the issue. In re AMB, 248 Mich App at 166.
For the trial court to have subject matter jurisdiction over a divorce proceeding, the
plaintiff or the defendant in the divorce action must have resided in the state 180 days prior to
filing the complaint. MCL 552.9(1); Smith v Smith, 218 Mich App 727, 730; 555 NW2d 271
(1996). Without subject matter jurisdiction over the divorce proceeding, a trial court may not
grant a judgment of divorce and must dismiss the case. Id.
In this case, the trial court should have held a hearing regarding whether it had
jurisdiction over the case. Plaintiff asserted in the complaint that both he and defendant had
resided in Michigan 180 days prior to commencing the divorce action. However, the prior
divorce action between the parties and before the same trial judge was dismissed as a result of a
controversy regarding whether the trial court had subject matter jurisdiction over the proceeding.
Appellants informed the trial court in the previous case that plaintiff had filed a declaration of
domicile in Florida less than 180 days before he filed his complaint and that defendant resided in
Florida. No hearing was held regarding whether the trial court had jurisdiction because the
parties agreed to a dismissal without prejudice. As this Court previously determined, the trial
court’s failure to hold a hearing in the initial divorce action was error. Riggio v Riggio,
unpublished opinion per curiam of the Court of Appeals, issued May 25, 2010 (Docket No.
290221). This Court remanded the case to the trial court to hold a hearing regarding whether the
trial court had subject matter jurisdiction. Id. There is no indication that any action was taken by
the trial court on remand. Moreover, at the hearing on defendant’s show-cause motion on March
9, 2009, Radulovich questioned whether the trial court had jurisdiction over the subsequent
divorce action and over appellants’ liens as a result of the issues in the previous case. Given the
concerns regarding jurisdiction in the prior divorce action presided over by the same trial judge,
and the fact that jurisdiction was raised again at the hearing, the trial court should have held a
hearing to determine whether it had jurisdiction over the divorce action. The trial court’s failure
to hold a hearing was an error.
It is impossible for this Court to know based on the evidence in the record whether the
trial court had jurisdiction over this divorce action. We conclude that the case should be
remanded to the trial court to determine whether it had subject matter jurisdiction over this
divorce. If the trial court lacked subject matter jurisdiction over the proceedings, the trial court’s
order of March 9, 2009, discharging the appellants’ liens, must be vacated.
However, the trial court may determine on remand that it had subject matter jurisdiction
over the divorce action. As a result, we will address appellants’ other arguments on appeal.
Appellants argue that the trial court erred by discharging their retaining and charging
liens. We agree. Whether the trial court had the authority to discharge a retaining lien and a
charging lien is a question of law subject to de novo review. See Ypsilanti Charter Twp v
Kircher, 281 Mich App 251, 281; 761 NW2d 761 (2008).
There are two kinds of attorney’s liens: (1) a general, retaining, or possessory lien; and
(2) a special, particular, or charging lien. George v Sandor M Gelman, PC, 201 Mich App 474,
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476; 506 NW2d 583 (1993). The general or retaining lien is the right to retain possession of all
documents, money, or other property of the client until the fee for services is paid. Id. A
retaining lien is not lost by transferring possession to either the court or another person pursuant
to a court order. Kysor Industrial Corp v D M Liquidating Co, 11 Mich App 438, 446; 161
NW2d 452 (1968).
A special or charging lien is an equitable right to have the fees and costs due for services
secured out of the judgment or recovery in a particular suit. George, 201 Mich App at 476. The
attorneys’ charging lien creates a lien on a judgment, settlement, or other money recovered as a
result of the attorney’s services. Id. These liens exist as part of the court’s inherent power to
oversee the relationship of attorneys with their clients; they provide a means of securing the
legitimate interest of the attorney in payment, but are subject to the control of the court for the
protection of the client and third parties as well. Kysor Industrial, 11 Mich App at 445.
In this case, we conclude the trial court erred by discharging appellants’ retaining and
charging liens. First, appellants had a valid retaining lien. Appellants set up the Sharon Riggio
Client Trust Account when they agreed to represent defendant in the initial divorce proceeding.
Defendant put funds into that account. It was out of the proceeds of this account that the parties
agreed to pay appellants in the original consent judgment. Although appellants claimed that they
were to be paid $150,000, there is no evidence of that in the record or in the consent judgment
for the amount of fees. Once the relationship between appellants and defendant broke down,
appellants still had retention of the account. Before transferring the proceeds from the account to
plaintiff’s counsel in the initial divorce action pursuant to an order from the trial court, appellants
filed a notice of retaining lien with the trial court on January 30, 2009. Transferring funds
pursuant to a court order does not discharge the lien. Id. at 446. Therefore, appellants had a
valid retaining lien.
Appellants also had a valid charging lien. Appellants represented defendant in the initial
divorce action and were entitled to the charging lien to secure payment for the services provided.
Moreover, appellants provided notice of the charging lien in the initial divorce action and again
in this proceeding.
It is true that these liens are an equitable remedy overseen by the court, which must also
consider the rights of the clients and other third parties. Id. However, the trial court did not
indicate why the liens were inequitable except to say that the amount of fees requested by
appellants was unreasonable. Instead of indicating an amount it thought fair, the trial court held
that the liens should be totally discharged based solely on concerns that the liens would hold up
resolution of the divorce proceedings. The trial court completely disregarded the interests of
appellants, indicating that they had alternative avenues for obtaining payment for services
rendered. However, there is no requirement that attorneys seek other remedies before obtaining
liens. In fact, the whole purpose of this equitable remedy is to allow attorneys to seek recovery
in precisely this manner. Moreover, the trial judge appeared to retaliate against appellants for
Radulovich’s arguments about jurisdiction. When Radulovich made arguments questioning the
trial court’s jurisdiction to hold a hearing about appellants’ attorneys fees, the trial court decided
to discharge the liens completely instead of setting aside a portion to cover attorney fees. We
find the trial court erred by discharging appellants’ retaining and charging liens, thereby failing
to protect appellants’ interests.
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Appellants also argue that the case should be reassigned to a different judge on remand.
We disagree. Remand to a different judge is appropriate (1) when the original judge would have
difficulty putting aside previously expressed views or findings, (2) when reassignment is
advisable to preserve the appearance of justice, and (3) when reassignment will not entail
excessive waste or duplication. Bayati v Bayati, 264 Mich App 595, 603; 691 NW2d 812
(2004). Reassignment is not warranted merely because a judge has reached the wrong legal
conclusion. Id. Judges are presumed to act impartially. VanBuren Twp v Garter Belt Inc, 258
Mich App 594, 598; 673 NW2d 111 (2003). To overcome this presumption, a party must prove
that “a judge harbors actual bias or prejudice for or against a party or attorney that is both
personal and extrajudicial.” MCR 2.003(B)(1); VanBuren, 258 Mich App at 598.
While the trial judge may have erred legally in this case, appellants have not
demonstrated that the trial judge had any actual bias or conflict of interest. Moreover, given that
the previous case was already remanded to the trial court to determine whether it had subject
matter jurisdiction, Riggio, slip op at 4, it would be wasteful to remand this case to a different
judge. We conclude that the case should be remanded to the same judge.
Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction.
/s/ Karen M. Fort Hood
/s/ Kathleen Jansen
/s/ William C. Whitbeck
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