IN RE NESTOROVSKI ESTATEAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
In re Estate of Vlado Nestorovski, Deceased.
March 31, 2009
Oakland County Probate Court
LC No. 2004-292348-DE
Advance Sheets Version
Before: Saad, C.J., and Borrello and Gleicher, JJ.
Respondent, Vasko Nestorovski, appeals as of right an Oakland County Probate Court
order adopting an arbitrator’s decision invalidating the decedent’s 2001 will, setting aside two
deeds signed in 2001 and a power of attorney signed in 2000, and distributing the assets of the
decedent’s estate pursuant to the laws of intestate succession. We affirm.
I. Basic Facts and Procedural History
Vlado Nestorovski, the decedent, was born in Macedonia in 1925. In 1972, Vlado and
his wife emigrated to the United States. The Nestorovskis’ two children, respondent and
petitioner, Bora Petrovski, are the only interested persons for the purposes of these proceedings.1
In April 2001, respondent consulted attorney Rod Sarcevich regarding an estate plan for
Vlado. Sarcevich referred respondent to attorney Ronald Ambrose. Ambrose met with
respondent and Vlado at his law office. Ambrose later testified that during their meeting, which
lasted less then 10 minutes, Vlado spoke only “broken English.” The parties agree that Vlado
could not read or understand documents written in English. After Ambrose’s single brief
meeting with Vlado and respondent, Ambrose prepared Vlado’s will, which bequeathed all of his
property and assets to respondent, with the exception of a $60,000 payment to petitioner.
Vlado’s wife, Vesna, died in 1994 and is not an interested party. MCR 5.125(C)(8)(a).
Ambrose also prepared two quitclaim deeds conveying Vlado’s individual ownership of two
Michigan properties to respondent, with joint ownership and survivorship rights.
On April 25, 2001, Sarcevich brought the will, the deeds, and another power of attorney
to the home Vlado shared with respondent and respondent’s family.2 Vlado signed the
documents in the presence of a priest and a neighbor. Sarcevich admitted that he did not speak
Serbian and that he made no effort to explain the documents to Vlado. The priest, a certified
translator, translated the documents into Serbian for Vlado.
After Vlado’s death, petitioner filed in the Oakland County Probate Court a petition
challenging the validity of the will and the two deeds. The petition alleged that respondent
unduly influenced Vlado and that Vlado lacked the requisite testamentary capacity because he
had suffered from Alzheimer’s disease since 1999. Petitioner sought to have the will and the
deeds set aside and requested an award of attorney fees and costs.
The probate court ordered the parties to engage in facilitation of their dispute. On May
20, 2005, the court-appointed facilitator spent six hours with the litigants, but could not achieve a
resolution. On September 27, 2005, the day scheduled for trial, the probate court entered a
handwritten order prepared by petitioner’s attorney, stating, “This matter is to be scheduled for
binding arbitration before a sole arbitrator to be determined by the parties within one week.”
The signature of respondent’s attorney appears on the order, next to the word “Approved.” The
parties agree that no transcript exists documenting their positions regarding the planned
arbitration. Neither party ever filed an objection to arbitration, and neither sought to revoke the
agreement before the arbitrator rendered a decision.
The arbitration commenced on November 29, 2005, and extended through three days.
The parties presented witnesses and submitted written closing arguments. Patricia Gormely
Prince, the parties’ chosen arbitrator, later prepared a detailed “Arbitration Decision and Award,”
finding that “Vlado was subject to undue influence and was not competent to make a Will.”
Prince similarly concluded that Vlado’s lack of capacity warranted the setting aside of the two
quitclaim deeds Vlado signed in April 2001 and a power of attorney that Vlado signed in 2000.
Prince also determined that MCL 700.2101 and MCL 700.2103 required that Vlado’s estate be
equally divided between petitioner and respondent. Prince recommended that the parties bear
“their own attorney fees” and that no fees be charged to Vlado’s estate.
On May 31, 2006, respondent filed in the probate court “Objections to Certain
Provisions” of the arbitration decision, which contested only the portions of the ruling involving
Vlado’s real property and the power of attorney Vlado signed in 2000. In support of those
objections, respondent invoked MCL 600.5005 and McFerren v B & B Investment Group, 233
Mich App 505; 592 NW2d 782 (1999). On the same day, respondent filed a “Supplemental
Objection” to the entire arbitration decision and award, insisting that, as reflected by the
Michigan Supreme Court’s analysis in In re Meredith Estate, 275 Mich 278; 266 NW 351
Vlado and Vesna lived with respondent, respondent’s wife, and respondent’s family for 27
(1936), the probate court lacked the authority to refer to arbitration the parties’ estate-based
dispute concerning Vlado’s testamentary capacity. The probate court confirmed the arbitrator’s
decision “in its entirity [sic],” and this appeal ensued.
A. The Agreement to Arbitrate
Respondent contends that because the parties did not have a written arbitration
agreement, the probate court erred by adopting the arbitrator’s award. Respondent failed to raise
this issue in the probate court. “Generally, an issue not raised before and considered by the trial
court is not preserved for appellate review.” Adam v Sylvan Glynn Golf Course, 197 Mich App
95, 98; 494 NW2d 791 (1992). However, because “the question is one of law and the facts
necessary for its resolution have been presented,” we choose to review respondent’s contention.
Id. at 98-99.
In a document filed in the probate court entitled “Response to Petition for Entry of Order
Upon Breach of Contract,” respondent admitted that the probate court entered a stipulated order
for arbitration. This Court has recognized that stipulations are “a type of contract . . . .”
Limbach v Oakland Co Bd of Co Rd Comm’rs, 226 Mich App 389, 394; 573 NW2d 336 (1997).
“Stipulated orders that are accepted by the trial court are generally construed under the same
rules of construction as contracts.” Phillips v Jordan, 241 Mich App 17, 21; 614 NW2d 183
The stipulated order involved here unambiguously provides that “[t]his matter is to be
scheduled for binding arbitration before a sole arbitrator to be determined by the parties within
one week.” Moreover, by voluntarily participating in the arbitration process without objection,
respondent waived the issue whether the parties had entered into a valid agreement to arbitrate.
American Motorists Ins Co v Llanes, 396 Mich 113, 114; 240 NW2d 203 (1976). “[A] party
may not participate in an arbitration and adopt a ‘wait and see’ posture, complaining for the first
time only if the ruling on the issue submitted is unfavorable.” Arrow Overall Supply Co v
Peloquin Enterprises, 414 Mich 95, 99-100; 323 NW2d 1 (1982). We thus reject as factually
and legally unfounded respondent’s claim that the parties lacked a written arbitration agreement.
Respondent next challenges the arbitrator’s ruling as violative of MCL 700.1302,
pursuant to which the probate court possesses exclusive jurisdiction over estate-related disputes.
We review de novo “a trial court’s determination that an issue is subject to arbitration . . . .”
Rooyakker & Sitz, PLLC v Plante & Moran, PLLC, 276 Mich App 146, 152; 742 NW2d 409
Respondent’s jurisdictional argument rests primarily on In re Meredith Estate.
According to respondent, In re Meredith Estate compels a conclusion that despite the parties’
stipulation to submit their dispute to arbitration, they could not properly agree to “supersede” the
probate court’s statutorily vested responsibility to determine Vlado’s testamentary capacity.
Respondent therefore suggests that the probate court lacked authority to adopt the arbitrator’s
decision. Petitioner concedes that § 1302 invests the probate court with “exclusive legal and
equitable jurisdiction” regarding all matters relating to a decedent’s estate, but argues that this
jurisdictional exclusivity does not limit the probate court’s power to enforce a common-law
arbitration agreement. Petitioner further asserts that MCR 5.143(A) specifically authorizes the
probate court to employ methods of alternative dispute resolution and that the jurisdictional
limitations deemed critical in In re Meredith Estate no longer apply. Because the parties argue at
length concerning the interpretation and application of In re Meredith Estate, we now turn to a
careful examination of that decision.
The decedent in In re Meredith Estate executed his will in March 1932, naming the
Detroit Trust Company and James O. Murfin as his executors and trustees. In re Meredith
Estate, supra at 284. In August 1934, the decedent executed a codicil that named Frederick W.
Campbell as an additional executor and trustee, but did not otherwise alter any aspects of the
will. Id. After the decedent died in December 1934, Murfin petitioned for the admission of the
will to probate, and Campbell petitioned to admit the codicil. Id. at 284-285. At a probate court
hearing, Murfin testified that the decedent’s doctors had advised Murfin that the decedent “was
mentally incompetent to transact business when” he executed the codicil. Id. at 285. The
decedent’s housekeeper expressed her belief that “Mr. Meredith knew what he was doing” when
he executed the codicil, and that his doctor had examined him before he executed it. Id.
Campbell and Murfin agreed “in open court to submit the question of the mental
competency of the testator to a leading Detroit attorney.” Id. The attorney interviewed
witnesses and concluded that the decedent lacked “sufficient testamentary capacity to make and
execute the codicil . . . .” Id. The probate court admitted the will to probate, but rejected the
codicil. Id. at 286. Campbell appealed, arguing that because the probate of a will or codicil
constituted an in rem proceeding, it was not subject to common-law arbitration. Id. at 287.
The Michigan Supreme Court considered whether the executors possessed the authority
to submit the question of the testator’s mental capacity to ascertainment by a third party. The
Supreme Court commenced its analysis by observing, “The rule is firmly settled in this State that
estates of deceased persons may be settled between all those interested competent to contract
without the intervention of the probate court.” Id. at 290. However, the Supreme Court noted,
“That question is not here.” Id. Rather, the Supreme Court explained, “The only question is
who shall act as executor of his last will and testament which includes the original instrument
and any legal codicils thereto duly admitted to probate.” Id. The Supreme Court further
demarcated the scope of its analysis as follows: “Assuming there was an agreement between the
executors named in the will and the executor named in the codicil, the question is whether they
had any power or authority to agree in open court to submit the question of the mental
competency of the testator to a third person for determination.” Id. (emphasis added).
The Supreme Court reasoned as follows that the probate court had erred by adopting the
The statutes contemplate a hearing before the probate court and a
determination by the probate court of the testamentary capacity of the testator.
Under the statute, notice of the time and place of proving the will and the codicil
must be given and this notice is usually given by publication to all persons
interested, and the date fixed by such notice is “when all concerned may appear
and contest the probate of the will.” No order or rule of court named [the third-
party attorney] as the person before whom testimony in relation to the mental
competency of the testator was to be taken and the testimony, if any adduced, was
not taken before him by deposition. [Id. at 290-291 (citations omitted).]
Manifestly, the Supreme Court premised its decision in In re Meredith Estate on the language of
the probate statutes then in existence. The following statements in the opinion underscore our
conclusion that in reaching its decision, the Supreme Court in In re Meredith Estate relied
exclusively on the provisions of the 1929 Michigan Compiled Laws governing probate
The sole authority to pass upon the testamentary capacity of the testator is
vested by statute in the probate court. . . .
Parties cannot by agreement supersede the essential regulations made by
law for the investigation of causes, and by stipulation set aside the statutory
method prescribed for determining the mental capacity of the testator.
The right to contest a will is, in this State, purely statutory and can be
exercised only in accordance with and within the limitations prescribed by statute.
[Id. at 291-292 (citations omitted; emphasis added).]
The Supreme Court further observed in In re Meredith Estate that “[t]he legatees and
beneficiaries under the trusts created by the will are not here” and “[t]here is nothing upon the
face of the order which indicates it was an order entered by consent.” Id. at 294, 296.
Consequently, the executors and trustees of the decedent’s estate had
no such interest in the estate as to permit them to agree to submit the testamentary
capacity of testator to a third person for determination. Their agreement could not
bind those who have a pecuniary interest in the estate. No agreement of this kind
under any circumstances could bind the estate unless all persons interested
therein were parties thereto. [Id. at 294 (emphasis added).]
The Supreme Court in In re Meredith Estate thus held that executors or trustees may not
agree to arbitrate the competency of a testator. In obiter dictum, the Supreme Court added:
No stipulation such as here involved can oust the jurisdiction of the
probate court, permit the probate judge to abdicate his jurisdiction and power or
delegate it to a third person not a judicial officer, and no stipulation can provide
for the determination of the status of the codicil in any other manner than that
provided by statute. Jurisdiction to determine the competency of the testator may
not be conferred by agreement on a third person. [Id. at 297.]
Several conclusions reached by the Supreme Court in In re Meredith Estate derive from
its unique facts. The arbitration conducted by the “leading Detroit attorney” proceeded
informally, without notice to or involvement of all interested parties or the administration of
oaths to witnesses. Id. at 285, 291. Murfin and Campbell neglected to agree in advance whether
the arbitration would be binding. Id. at 295. These procedural deficiencies undoubtedly fueled
the Supreme Court’s condemnation of the use of arbitration under the circumstances presented in
that case. Id. at 295-298.
But the procedures utilized in this case differ markedly from those described in In re
Meredith Estate. Here, all interested parties agreed to submit their dispute to binding arbitration.
Counsel for the parties entered into a written stipulation for binding arbitration, and the arbitrator
held a hearing during which she placed witnesses under oath. These distinctions are highly
significant and render In re Meredith Estate inapplicable. However, because of the broad nature
of the Michigan Supreme Court’s critical pronouncements regarding the arbitrability of any
probate dispute, we must now consider whether the current state of the law in Michigan allows
for resolution of probate litigation through binding arbitration.
During the more than 72 years that have elapsed since the Michigan Supreme Court
announced its decision in In re Meredith Estate, our Legislature has enacted three substantial
revisions of Michigan’s probate laws. When the Supreme Court decided In re Meredith Estate, 3
Comp Laws 1929, Chapter LI, § 15519 et seq., governed the powers and jurisdiction of the
probate courts. During that era, our Supreme Court observed that “[p]robate courts have always
been regarded as courts for peculiar and limited purposes, which are outside ordinary litigation,
and incapable of dealing completely with ordinary rights.” Burgess v Jackson Circuit Judge, 249
Mich 558, 563; 229 NW 481 (1930). In 1939, the Legislature enacted a new probate code. 1939
PA 288. In 1978, the Legislature replaced the 1939 probate code with the Revised Probate Code.
1978 PA 642. Neither the older probate codes nor the Revised Probate Code furnished the
probate court with general equitable powers. Van Etten v Manufacturers Nat’l Bank of Detroit,
119 Mich App 277, 282-283, 287; 326 NW2d 479 (1982). However, when the Legislature
enacted the Revised Probate Code, it unquestionably expanded the powers of the probate courts
by contemporaneously enacting MCL 600.847, which provides as follows:
In the exercise of jurisdiction vested in the probate court by law, the
probate court shall have the same powers as the circuit court to hear and
determine any matter and make any proper orders to fully effectuate the probate
court’s jurisdiction and decisions. [Emphasis added.]
In 1998, our Legislature enacted the Estates and Protected Individuals Code (EPIC),
MCL 700.1101 et seq., which took effect in April 2000. EPIC confers on probate courts the
“exclusive legal and equitable jurisdiction” of matters that “relate to the settlement of a
deceased individual’s estate . . . .” MCL 700.1302(a). Section 1303(1) of EPIC provides the
In addition to the jurisdiction conferred by section 1302 and other laws,
the court has concurrent legal and equitable jurisdiction to do all of the following
in regard to an estate of a decedent . . . :
(a) Determine a property right or interest.
(b) Authorize partition of property.
(c) Authorize or compel specific performance of a contract in a joint or
mutual will or of a contract to leave property by will.
In addition to expanding the probate court’s powers, the Legislature crafted EPIC as a
user friendly code, with provisions designed to reduce court involvement in trusts and estates.
For example, MCL 700.1303(3) states:
The underlying purpose and policy of this section is to simplify the
disposition of an action or proceeding involving a decedent’s, a protected
individual’s, a ward’s, or a trust estate by consolidating the probate and other
related actions or proceedings in the probate court.
The Legislature additionally instructed that all of EPIC
shall be liberally construed and applied to promote its underlying purposes and
policies, which include all of the following:
(a) To simplify and clarify the law concerning the affairs of decedents,
missing individuals, protected individuals, minors, and legally incapacitated
(c) To promote a speedy and efficient system for liquidating a decedent’s
estate and making distribution to the decedent’s successors. [MCL 700.1201.]
Significant procedural innovations have accompanied the evolution of the probate court’s
substantive powers. In 1980, this Court declared that “the general court rules do not apply to the
probate court except in those instances where the probate court rules adopt provisions of the
general court rules by specific reference.” In re Swanson Estate, 98 Mich App 347, 350; 296
NW2d 256 (1980). The current Michigan Court Rules contrarily provide that “[p]rocedure in
probate court is governed by the rules applicable to other civil proceedings, except as modified
by the rules in this chapter.” MCR 5.001(A). Thus, the rules of practice in probate courts are
now substantially similar to those in the circuit courts.
Along with the Legislature’s modernization of probate practice, Michigan’s courts have
witnessed an expansion in the use and judicial approval of alternative dispute resolution (ADR)
procedures. In 1999, this Court observed that “[j]udicial approval of arbitration has broadened
and strengthened in recent decades.” Rembert v Ryan’s Steak Houses, Inc, 235 Mich App 118,
128; 596 NW2d 208 (1999). “While our legal system may have had only a lukewarm tolerance
for arbitration in the past, it now embraces arbitration as an expeditious, inexpensive, and fair
means of dispute resolution.” Hetrick v David A Friedman, DPM, PC, 237 Mich App 264, 271;
602 NW2d 603 (1999), disapproved on other grounds in Wold Architects & Engineers v Strat,
474 Mich 223, 232 n3; 713 NW2d 750 (2006). In contrast with currently prevailing judicial
philosophies regarding ADR, “centuries of judicial hostility to arbitration agreements”
previously limited their enforcement. Scherk v Alberto-Culver Co, 417 US 506, 510; 94 S Ct
2449; 41 L Ed 2d 270 (1974).3 The United States Supreme Court observed in Scherk that
In Dean Witter Reynolds, Inc v Byrd, 470 US 213, 219-220; 105 S Ct 1238; 84 L Ed 2d 158
English courts “traditionally considered irrevocable arbitration agreements as ‘ousting’ the courts
of jurisdiction, and refused to enforce such agreements for this reason.” Id. at n 4.
In In re Meredith Estate, supra at 297, the Supreme Court suggested in obiter dictum that
arbitration would divest the probate court of its rightful jurisdiction: “No stipulation such as here
involved can oust the jurisdiction of the probate court, permit the probate judge to abdicate his
jurisdiction and power or delegate it to a third person . . . .” This Court rejected a similar
jurisdictional argument in Rooyakker, supra at 150-152, in which the plaintiffs challenged a
circuit court’s enforcement of a contractual agreement containing client solicitation and
arbitration clauses. The plaintiffs asserted that because the circuit courts have exclusive
jurisdiction of claims under the Michigan Antitrust Reform Act (MARA), MCL 445.771, the
circuit court erred by referring to arbitration the question whether the client solicitation clause
violated MARA. Rooyakker, supra at 155. This Court concluded that the circuit court did not
err, explaining, “Just because the statute provides jurisdiction to the circuit court, it does not
follow that it precludes arbitration. If the Legislature intended to exempt all antitrust actions
from arbitration, it could have done so.” Id. at 156.
We find the logic of Rooyakker compelling and reject the notion that arbitration divests a
court of its rightful statutory jurisdiction. We agree with the Minnesota Supreme Court’s
there appears never to have been any factual basis for holding that an agreement
to arbitrate “ousted” jurisdiction. It has no effect upon the jurisdiction of any
court. Arbitration simply removes a controversy from the arena of litigation. It is
no more an ouster of judicial jurisdiction than is compromise and settlement or
that peculiar offspring of legal ingenuity known as the covenant not to sue. Each
disposes of issues without litigation. One no more than the other ousts the courts
of jurisdiction. The right to a jury trial, even in a criminal case, may be waived.
So, also, may the right to litigate be waived. Such waiver may be the result of
contract or unilateral action. [Park Constr Co v Independent School Dist No 32,
Carver Co, 209 Minn 182, 186; 296 NW 475 (1941).]
See also Wold Architects & Engineers, supra at 249 (concurring opinion by Corrigan, J.):
[T]he common-law rule allowing unilateral revocation of arbitration
agreements is based on the outdated notions that arbitration is an unfavorable
means of resolving disputes and that arbitration ousts the courts of their rightful
jurisdiction over disputes. The courts are no longer jealous of their jurisdiction,
and arbitration is now a favored method of dispute resolution.
(1985), the Supreme Court again noted “the judiciary’s longstanding refusal to enforce
agreements to arbitrate,” and Congress’s more recent characterization of this attitude as “‘an
anachronism of our American law’” deriving from “‘the jealousy of the English courts for their
own jurisdiction . . . .’” Id. at 220 n6 (citation omitted).
We further observe that when the Supreme Court decided In re Meredith Estate, the
common law generally supported the use of arbitration in will contests. For example, in two
cases predating Meredith, Hoste v Dalton, 137 Mich 522, 523-524; 100 NW 750 (1904), and
Sellers v Perry, 191 Mich 619; 158 NW 144 (1916), the Supreme Court upheld agreements
removing will challenges from probate court jurisdiction.4 Reflective of this pro-arbitration
attitude in the context of probate disputes is Professor Martin Domke’s note, in his treatise on
Commercial Arbitration, that President George Washington “embodied in his Last Will and
Testament a reference to arbitration by fair-minded men”; Washington’s will provided, in
relevant part, as follows:
“But having endeavored to be plain and explicit in all the Devises—even
at the expense of prolixity, perhaps of tautology, I hope, and trust, that no disputes
will arise concerning them; but if contrary to expectation the case should be
otherwise from the want of legal expression, or the usual technical terms, or
because too much or too little has been said on any of the devises to be consonant
with law, my will and direction expressly is, that all disputes (if unhappily any
should arise) shall be decided by three impartial and intelligent men, known for
their probity and good understanding; two to be chosen by the disputants, each
having the choice of one, and the third by those two—which three men thus
chosen shall, unfettered by Law, or legal constructions, declare their sense of the
Testator’s intention; and such decision is, to all intents and purposes, to be
binding on the Parties as if it had been given in the Supreme Court of the United
States.” [1 Domke, Commercial Arbitration (3d ed), § 16.6 p 16-36 (2008
Despite the Michigan Supreme Court’s rejection of the particular probate arbitration
conducted in In re Meredith Estate, other precedent supports the proposition that our Supreme
Court has approved of and accepted properly conducted common-law arbitration in probate
matters. In Hoste, supra at 523, the widow and children of the deceased “entered into a written
agreement by which they settled a pending contest of the will” of the decedent. The arbitration
agreement provided, “‘If any question should hereafter arise between the parties hereto as to the
construction and enforcement of this agreement, the same shall be submitted for decision to this
court [the agreement was entitled in the circuit court for the county of Wayne] and its decision
shall be final.’” Id. at 525. The complainants brought suit to enforce the arbitration agreement,
and the circuit court entered a decree in their favor. Id. at 523. The defendants contended that
the arbitration agreement was invalid because it “ousts the Supreme Court of jurisdiction.” Id. at
526. The Supreme Court rejected this argument, reasoning as follows:
In Sellers, supra at 627, the Supreme Court expressed, “It is, we think, well settled in this State
that legatees under a will, and persons having such an interest in the estate as to entitle them to
contest the instrument, may make valid agreements to forbear a contest, and such contracts are
favored by the law when made in good faith.”
The agreement under consideration does not oust all courts of their
jurisdiction. On the contrary, it requires the decision of a court of competent
jurisdiction, and the only court of original jurisdiction. It is true that the
agreement, by preventing the defeated litigant from reviewing his case in the
Supreme Court, ousts that court of its jurisdiction. That agreement is not
prohibited by the foregoing authorities. [Id.]
The Supreme Court concluded, “We think on grounds of public policy litigants should be
encouraged to accept as final the decisions of courts of original jurisdiction.” Id. at 527.
In light of the Michigan Supreme Court’s analysis in Hoste, we reject respondent’s
argument that probate proceedings inherently lack arbitrability.5 The Supreme Court’s
unconditional acceptance and enforcement of the arbitration agreement in Hoste clearly signals
that even under the probate laws existing 100 years ago, properly convened and conducted
arbitration could resolve a will contest.
Moreover, EPIC has eliminated virtually all the restrictions that applied to probate court
powers in 1936, when the Supreme Court decided In re Meredith Estate. The aversion to
arbitration articulated in In re Meredith Estate must give way to the substantial changes in the
substantive and procedural law governing probate practice, as well as jurisprudential recognition
of the “desirability of arbitration as an alternative to the complications of litigation.” Scherk,
supra at 511 (quotation marks and citation omitted). For example, the current Michigan Court
Rules contain several provisions encouraging courts and litigants to utilize ADR. A court rule
applicable to the circuit courts, MCR 2.410, addresses ADR procedures in those courts,
describing them as “any process designed to resolve a legal dispute in the place of court
adjudication,” including settlement conferences, case evaluation, domestic relations mediation,
“and other procedures provided by local court rule or ordered on stipulation of the parties.”
MCR 2.410(A)(2). In 2001, our Supreme Court adopted a corresponding probate court rule,
MCR 5.143(A), which states, “The court may submit to mediation, case evaluation, or other
alternative dispute resolution process one or more requests for relief in any contested proceeding.
MCR 2.410 applies to the extent feasible.”
In summary, we hold that to the limited extent that In re Meredith Estate barred
arbitration of probate disputes, that holding lacks continued viability because it has been
superseded by more recent legislative developments and intervening changes in the court rules.
Further, the central holding of In re Meredith Estate lacks applicability here, because all
interested parties had notice of the contemplated arbitration, agreed that the arbitration would
supply a binding resolution regarding Vlado’s testamentary capacity, and actively participated in
the arbitration process. Therefore, In re Meredith Estate does not preclude the instant parties
On the same basis, we reject the dissent’s contention that In re Meredith Estate held that
testamentary capacity is never arbitrable, or resides “within the exclusive jurisdiction of the
probate court.” Post at 1-2. The dissent has elected to entirely ignore Hoste, as well as the plain
language in In re Meredith Estate anchoring that opinion to its unique facts and the probate
statutes then in existence.
from conducting binding common-law arbitration of probate disputes, including the question of
B. The Quitclaim Deeds
Respondent next argues that the arbitrator lacked the authority to render any award
regarding the quitclaim deeds, which she set aside on the basis of her finding that “Vlado was
subject to undue influence and was not competent to transfer property.” In support of his
argument, respondent invokes MCL 600.5005 and McFerren. Petitioner replies that because the
parties participated in common-law rather than statutory arbitration, the arbitrator properly
considered the distribution of Vlado’s real property. Petitioner further asserts that respondent’s
full participation in the arbitration deprived him of the ability to challenge its scope. We review
de novo a circuit court’s decision to enforce a statutory arbitration award. Tokar v Albery, 258
Mich App 350, 352; 671 NW2d 139 (2003). The existence of a contract to arbitrate and its
enforceability constitute judicial questions that we also consider de novo. Watts v Polaczyk, 242
Mich App 600, 603; 619 NW2d 714 (2000).
In Michigan, a distinction exists between statutory and common-law arbitration. Wold
Architects & Engineers, supra at 229. The Michigan arbitration act (MAA), MCL 600.5001 et
seq., governs statutory arbitration.7 For an agreement to qualify for statutory arbitration, it must
meet the requirements contained in the statute. Wold Architects & Engineers, supra at 229. The
statute, MCL 600.5001(1), applies to the arbitration of existing controversies, and provides as
All persons, except infants and persons of unsound mind, may, by an
instrument in writing, submit to the decision of 1 or more arbitrators, any
controversy existing between them, which might be the subject of a civil action,
except as herein otherwise provided, and may, in such submission, agree that a
judgment of any circuit court shall be rendered upon the award made pursuant to
We emphasize that, contrary to the allegations made by the dissent, our holding in this case
neither overrules In re Meredith Estate nor disturbs the rule of stare decisis. Post at 1-2. The
facts of the instant case bear no resemblance to those presented in In re Meredith Estate, and
neither do the controlling statutory authorities. The doctrine of stare decisis lacks applicability
when the Legislature has amended the statutory underpinnings of a Supreme Court decision. See
Lamp v Reynolds, 249 Mich App 591, 604; 645 NW2d 311 (2002), and People v Pfaffle, 246
Mich App 282, 303-304; 632 NW2d 162 (2001).
Throughout Wold Architects & Engineers, supra at 235, the Supreme Court referred to
statutory arbitration as being governed by the provisions of “MCL 600.5001 et seq.” We thus
construe MCL 600.5005, as contained within the MAA.
The arbitration statute “only refers to such agreements as fix upon some designated court
in which judgment shall be entered on the award.” McGunn v Hanlin, 29 Mich 476, 480 (1874).
“When the parties’ agreement to arbitrate does not comply with the requirements of MCL
600.5001, the parties are said to have agreed to a common-law arbitration.” Wold Architects &
Engineers, supra at 231. “[T]he result of a defective statutory arbitration is a common-law
arbitration . . . .” Whitaker v Seth E Giem & Assoc, Inc, 85 Mich App 511, 513; 271 NW2d 296
(1978). Because the order submitting the parties’ dispute to arbitration did not provide that a
judgment could enter in accordance with the arbitrator’s decision, this case involves commonlaw arbitration, to which the statutory arbitration procedures do not apply. Beattie v Autostyle
Plastics, Inc, 217 Mich App 572, 578; 552 NW2d 181 (1996).
Respondent contends that regardless of whether the arbitration qualified as common-law
or statutory, the arbitrator lacked jurisdiction to consider the parties’ interests in Vlado’s real
property. Respondent points out that MCL 600.5005 prohibits submitting to arbitration a dispute
involving real estate ownership interests. Additionally, respondent asserts that in McFerren, this
Court construed MCL 600.5005 as precluding arbitration of all disputes regarding fee ownership
interests in real property.
In McFerren, supra at 509-511, this Court held that an arbitrator lacked jurisdiction to
decide competing quiet-title claims because of the arbitration prohibition contained in MCL
A submission to arbitration shall not be made respecting the claim of any
person to any estate, in fee, or for life, in real estate, except as provided in Act No.
59 of the Public Acts of 1978, as amended, being sections 559.101 to 559.272 of
the Michigan Compiled Laws. However, a claim to an interest for a term of
years, or for 1 year or less, in real estate, and controversies respecting the partition
of lands between joint tenants or tenants in common, concerning the boundaries
of lands, or concerning the admeasurement of dower, may be submitted to
However, seven years after this Court decided McFerren, our Supreme Court
reemphasized in Wold Architects & Engineers that common-law arbitration continues to exist in
Michigan, not having been preempted by statutory arbitration. According to the Supreme Court,
statutory and common-law arbitrations “have long coexisted” in our state, and the MAA includes
no provisions evidencing a legislative intent to reform the common law. Wold Architects &
Engineers, supra at 234. Because “the language of the MAA does not show an intention to
abrogate common-law arbitration,” the Supreme Court concluded “that the MAA . . . does not
occupy the entire area of arbitration law and does not preempt common-law arbitration in
Michigan.” Id. at 234-235. If arbitration agreements do not conform to the MAA, they simply
are not enforceable under the MAA. Id. at 231. For example, if parties were to arbitrate a real
estate dispute in violation of MCL 600.5005, they could not enforce the award in the circuit
Those statutes involve condominiums and do not apply here.
If parties wish to conform an agreement to statutory requirements, they must reduce it to
writing and include the requirement that a circuit court may enter judgment on the award.
“Otherwise, it will be treated as an agreement for common-law arbitration.” Wold Architects &
Engineers, supra at 235. Here, the parties failed to conform their arbitration agreement to the
statutory requirements. Accordingly, the common-law arbitration they conducted is not subject
to the statutory arbitration requirements or prohibitions. Because the common law does not limit
the parties’ ability to arbitrate real estate disputes, we reject that MCL 600.5005 precluded
arbitration regarding Vlado’s capacity to execute the deeds.
The Supreme Court’s decision in Hoste buttresses our conclusion that MCL 600.5005
does not apply to or restrict a common-law arbitration. The complainants in Hoste were married
women. Id. at 524. The MAA then in effect provided, “All persons, except infants and married
women, and persons of unsound mind, may, by an instrument in writing, submit to the decision
of one or more arbitrators, any controversy existing between them . . . .” 1897 CL 10924. The
defendants argued that the parties’ settlement, achieved through arbitration, did not bind them
“because complainants, being married women, were incapable of entering into a contract of
arbitration.” Hoste, supra at 524. The Supreme Court rejected this logic, holding, “The
arbitration in question was not a statutory arbitration, and therefore the clause in section 10924 of
the Compiled Laws of 1897, excepting ‘married women’ from the persons who may enter into a
statutory arbitration, has no application.” Hoste, supra at 524.
Here, as in Hoste, the parties conducted a common-law arbitration. Here, as in Hoste, the
MAA would have altogether precluded arbitration of the dispute. But because the common law
governed the instant parties’ arbitration, and not the statute, the heirs remained free to
contractually agree to arbitrate whether Vlado possessed the requisite mental capacity when he
signed the two quitclaim deeds in April 2001. Although MCL 600.5005 prohibits the submission
of certain real estate disputes to statutory arbitration, we hold on the basis of Wold Architects &
Engineers that § 5005 does not eliminate the parties’ ability to arbitrate a real estate dispute
under the common law.
C. The Power of Attorney
Respondent next argues that neither the arbitrator nor the probate court possessed the
authority to set aside a power of attorney Vlado executed in 2000. The power of attorney
permitted a Macedonian attorney to act on Vlado’s behalf with respect to real and personal
property Vlado owned in Macedonia. Respondent avers that the probate court lacked jurisdiction
to enter an order regarding the Macedonian property or affecting the actions of the foreign
Respondent premises his argument on quoted material contained in Niemetta v Teakle,
210 Mich 590; 178 NW 37 (1920), specifically its holding that a court lacked power “to make
decrees affecting property beyond its jurisdiction.” Id. at 592-593. However, in Niemetta, the
Supreme Court upheld an equitable order entered by the Wayne Circuit Court regarding property
located in Macomb County, explaining, “In view of the fact that all parties were before the court
we see no serious barriers in the way which would prevent the Wayne circuit court from
compelling an equitable adjustment of the matters involved.” Id. at 594.
Contrary to respondent’s contention, the probate court in this case did not assume
jurisdiction over the Macedonian property. Rather, the arbitrator merely determined that Vlado
had become incompetent by January 1, 2000. In light of the arbitrator’s finding concerning
Vlado’s lack of competency, the arbitrator recommended that the probate court set aside the
power of attorney Vlado signed in September 2000 and that the foreign property be considered
an asset of the probate estate unless it had been transferred before January 1, 2000. We conclude
that the probate court correctly determined that it possessed the authority to set aside the power
D. The Scope of the Arbitration
Respondent additionally contends that the arbitrator exceeded the scope of the arbitration
agreement by considering whether Vlado lacked testamentary capacity before the date that he
executed the will and the deeds. Although respondent failed to raise this issue in the probate
court, we nonetheless will address it because the argument involves a legal question and the facts
necessary for its resolution appear in the record. Adam, supra at 98-99.
A three-part test applies for ascertaining the arbitrability of a particular issue: “1) is there
an arbitration agreement in a contract between the parties; 2) is the disputed issue on its face or
arguably within the contract’s arbitration clause; and 3) is the dispute expressly exempted from
arbitration by the terms of the contract.” Detroit Automible Inter-Ins Exch v Reck, 90 Mich App
286, 290; 282 NW2d 292 (1979). This Court has expressed a general disapproval of segregating
disputed issues “into categories of ‘arbitrable sheep and judicially-triable goats’.” Id. at 289.
“Any doubts about the arbitrability of an issue should be resolved in favor of arbitration.”
Huntington Woods v Ajax Paving Industries, Inc (After Remand), 196 Mich App 71, 75; 492
NW2d 463 (1992).
The parties’ stipulation, which constituted their arbitration agreement, described the
scope of the contemplated arbitration simply as “[t]his matter.” The “matter” pending before the
probate court involved the distribution of Vlado’s entire probate estate, not merely selected
assets. Petitioner’s March 2004 petition alleged that “[f]rom 1999 to the time of his death, Vlado
Nestorovski did not have the mental capacity, ability, or power to understand the nature,
character, effect and extent of his property.” Vlado’s testamentary capacity to execute the power
of attorney plainly falls within the broad scope of the matters presented in the case.
Respondent’s failure to lodge in the probate court an objection to the arbitrator’s consideration of
the power of attorney further suggests that the parties understood this issue to fall within the
scope of the parties’ arbitration agreement. Because the basic arbitrability requirements exist in
this case, we find that the arbitrator properly considered Vlado’s capacity to execute the 2000
power of attorney.
Respondent lastly complains that the arbitrator exceeded her authority by deciding that
both parties should bear their own attorney fees and that none of the fees should be chargeable to
the estate. Respondent maintains that MCL 700.3720 requires that the estate pay his attorney
fees. According to MCL 700.3720, “[i]f a personal representative or person nominated as
personal representative defends or prosecutes a proceeding in good faith, whether successful or
not, the personal representative is entitled to receive from the estate necessary expenses and
disbursements including reasonable attorney fees incurred.” “[W]here the fiduciary was partially
to blame for bringing about unnecessary litigation, the fiduciary rather than the estate should be
responsible for the attorney’s fees.” In re Valentino Estate, 128 Mich App 87, 95-96; 339 NW2d
698 (1983). Given the arbitrator’s well-supported finding that respondent exerted undue
influence on Vlado, we conclude that MCL 700.3720 does not apply here because respondent did
not defend the April 2001 will “in good faith.”
Borrello, J. concurred.
/s/ Elizabeth L. Gleicher
/s/ Stephen L. Borrello