PATRICIA A SHOUNEYIA V ALEC E SHOUNEYIA
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
PATRICIA A. SHOUNEYIA,
FOR PUBLICATION
January 18, 2011
9:05 a.m.
Plaintiff-Appellee,
v
No. 297007
Oakland Circuit Court
Family Division
LC No. 2007-739768-DM
ALEC E. SHOUNEYIA,
Defendant-Appellant,
and
SHOUNEYIA BROTHERS CORPORATION,
Appellant.
Before: MURPHY, C.J., and METER and GLEICHER, JJ.
GLEICHER, J.
Defendant Alec E. Shouneyia owes money to plaintiff Patricia A. Shouneyia, his former
spouse, for a property settlement and attorney fees contained in a judgment of divorce. Plaintiff
moved for the appointment of a receiver over assets or income possessed by defendant in
Shouneyia Brothers Corporation, an entity coowned by defendant and his brother, Frank
Shouneyia. The circuit court appointed a receiver over Shouneyia Brothers Corporation without
joining the company as a party to the proceeding, prompting defendant and Shouneyia Brothers
(collectively referred to as “appellants”) to seek leave to appeal, which this Court granted. We
affirm the order appointing a receiver, but remand for the addition of the corporation as a party
defendant.
In October 2008, the circuit court entered a divorce judgment, which in pertinent part
awarded plaintiff a $50,000 property settlement and ordered defendant to pay plaintiff $40,000 in
attorney fees. In June 2009, plaintiff urged the court to appoint a receiver “to collect the money
Defendant owes Plaintiff” pursuant to the judgment of divorce, because defendant had paid
nothing toward this debt. Plaintiff added that although defendant represented in January 2009
that he “was attempting to get a loan,” that the loan apparently “has never come to fruition.”
Defendant responded that he had a long list of properties in foreclosure and other debts that left
him insolvent. At a July 2009 hearing, plaintiff accused defendant of having lied under oath at
the divorce trial about his lack of income from several real property rentals, his purchase of a
-1-
winning lottery ticket ($15,000), and his receipt of checks (including one in the amount of
$50,000) from his mother. The court ruled, “I understand there’s quite a bit of distrust; however,
before we go to a receiver, I think it’s not unreasonable to hold a creditor’s exam.”
At a December 2009 examination, defendant appeared without counsel or supporting
documentation, and in response to inquiries by plaintiff’s counsel he repeatedly expressed an
inability to recall or answered in a nonspecific fashion. Defendant did testify that he received a
salary of about $300 a week from the Vineyard Market, operated by Shouneyia Brothers.
Defendant averred that he and his brother, Frank Shouneyia, jointly ran Shouneyia Brothers and
Vineyard Market, but that his brother was “out of the business right now,” in part because of a
pending lawsuit that defendant had filed against Frank. With respect to the only other income
source defendant could recall, a shopping center coowned by eight siblings, defendant could not
remember how much income he received. Defendant denied having any other personal income
or assets, apart from occasional monetary assistance from his mother and siblings. When
plaintiff’s attorney presented defendant with a statement reflecting a $20,000 wire transfer from
defendant’s girlfriend to defendant’s business account, defendant responded that the money was
to “[h]elp me out, get the business going, maybe I was short, maybe at the time; though, I don’t
remember.” Regarding monthly business-related bank deposits between December 2008 and
July 2009 in amounts of more than $400,000 to in excess of $600,000, defendant explained that
he provided check cashing services for his customers, resulting in large deposits. Defendant
proclaimed that he charged little to no money for this service, which thus generated no
appreciable income. Defendant refused to answer any questions relating to whether he ever won
the lottery and induced an employee to claim the winnings for him.
In January 2010, plaintiff filed a renewed motion for the appointment of a receiver to
collect the divorce judgment awards defendant owed her. Plaintiff characterized defendant’s
December 2009 testimony “as either a total fabrication and/or misrepresentation, perjury and at
best evasive.” The circuit court found as follows at a hearing on plaintiff’s motion:
Well, I have read the transcript of the creditor’s exam, and to say that Mr.
Shouneyia was evasive would be an understatement. Thousands of dollars
coming in and out of these accounts and he never has any funds. I don’t know.
But I tried this case and he was ordered to make a property settlement to this lady
and a year has gone by; she has not received a nickel. And she is spending
attorney fees and there are children. It’s unconscionable. Unconscionable.
If he is receiving money from the [family] trust, where has that been?
Now at the eleventh hour, a year later, he’s going to offer her some money from
the trust? Too little, too late. She should not have to chase him around to get
these funds. And I don’t believe there was an honest answer through this entire
creditor’s exam.
It’s unfortunate, however, a receiver is more than justified. I will appoint
Henry Nirenberg as receiver. And if indeed Mr. Shouneyia has no assets, Mr.
Nirenberg will report that back to us, but I think he needs to have a look.
-2-
. . . Somebody needs to step forward, be honest, and let’s get off the mark.
But I don’t think, a year from now, this lady should still be chasing around to get
$50,000. That’s ridicules [sic].
On January 20, 2010, the circuit court entered an order granting plaintiff’s motion to appoint a
receiver.
In February 2010, plaintiff filed another motion to appoint a receiver. Plaintiff premised
the motion on the same facts set forth in the January 2010 motion to appoint a receiver, but
requested “that the Receiver have powers over Shouneyia Brothers Corporation, . . . D/B/A
Vineyard Market,” among other business entities. Receiver Nirenberg advised the court at a
March 2010 hearing that defendant had thwarted his initial efforts to review the Vineyard
Market’s inventory and records. However, Nirenberg did notice “that the cash registers are
zeroed out each day on a Z key three times a day, and that was indicated clearly to my
accountant; therefore, there is no trail of what comes in and out of that business. The check
cashing that goes on, there is no trail of that, as well.” Defendant expressed a desire to discuss a
settlement, prompting the hearing to adjourn. A week later, defendant had not engaged in any
settlement discussions with the receiver. The circuit court reasoned as follows that it would
appoint a receiver over the corporate entity operating the market:
Well, frankly, having read all of the briefs I’m not really convinced that
Estes versus Titus, [481 Mich 573; 751 NW2d 493 (2008),] is applicable in this
situation, I think that was a little bit of a different scenario where assets were
transferred to avoid payment, it really wasn’t a receivership type of case, and I’m
not positive the Court has jurisdiction to grant the relief that’s been requested.
However, I am going to . . . grant your motion, . . . because we don’t have
objections from either of the third parties. I think the bank is satisfied that they’re
protected, the other partner . . . or the other member of the corporation is not
objecting, so there’s really no one else to protect at this point.
On March 17, 2010, the court entered an order appointing Nirenberg “as Receiver of the assets of
Defendant, . . . Shouneyia Bros. Corp, including all businesses operated through said Entity,
including Vineyard III Market . . . as well as all of the following-described property . . . .” The
court added that it was grounding the receiver’s appointment on MCL 600.2926.
Appellants first aver on appeal that the circuit court’s failure to join Shouneyia Brothers
as a party defendant in the underlying divorce action precluded the court from exercising
authority over the corporation. Michigan courts have consistently recognized that court may not
make “[a]n adjudication affecting” the rights of a person or entity not a party to the case. Capitol
Savings & Loan Co v Standard Savings & Loan Ass’n, 264 Mich 550, 553; 250 NW 309 (1933);
see also Spurling v Battista, 76 Mich App 350, 353; 256 NW2d 788 (1977) (finding that “the
trial court did not have the power to compel [a law firm] to pay witness fees” when the law firm
“was not a party to this action”). Plaintiff theorizes that the appointment of a receiver does not
-3-
adversely affect any interested nonparty’s rights, given that Frank Shouneyia, defendant’s
coowner in Shouneyia Brothers, consented to the receivership. But plaintiff’s argument ignores
that the corporation itself amounts to an interested party.1 The circuit court thus did not have
authority to adjudicate the rights of Shouneyia Brothers without first making it a party to the
case.
But, as recognized in MCR 2.207, “Misjoinder of parties is not a ground for dismissal of
an action. Parties may be added or dropped by order of the court on motion of a party or on the
court’s own initiative at any stage of the action and on terms that are just.” See also Henkel v
Henkel, 282 Mich 473, 488; 276 NW 522 (1937) (explaining that ordinarily “if the proper parties
plaintiff are not joined, this court will direct the joinder of the proper parties plaintiff on
appeal”). Except in circumscribed circumstances, “the jurisdiction of a divorce court is strictly
statutory and limited to determining the rights and obligations between the husband and wife, to
the exclusion of third parties.” Estes, 481 Mich at 582-583 (internal quotation omitted). “Third
persons may be made defendants in an action for divorce where it is charged that such persons
have conspired with the husband with intent to defraud the wife out of her interest in property.”
Berg v Berg, 336 Mich 284, 288; 57 NW2d 889 (1953). Because plaintiff here has alleged in
multiple receivership motions that defendant sought to conceal income and assets in the market
operated by Shouneyia Brothers, which plaintiff has a claim to as a judgment debtor, this divorce
matter presents an appropriate case for joinder of the third party purportedly engaged in fraud.
Consequently, we direct the circuit court on remand to add Shouneyia Brothers as a necessary
party to this action. MCR 2205(A) (“[P]ersons having such interests in the subject matter of an
action that their presence in the action is essential to permit the court to render complete relief
must be made parties . . . .”); MCR 2.207.2
In light of the fact that Shouneyia Brothers may properly be joined in the case, we must
next address the propriety of the circuit court’s order imposing a receivership over the
1
“A corporation is a person in the eyes of the law.” Jones v Martz & Meek Constr Co, Inc, 362
Mich 451, 455; 107 NW2d 802 (1961); see also Foodland Distributors v Al-Naimi, 220 Mich
App 453, 456; 559 NW2d 379 (1996) (“As a general proposition, the law treats a corporation as
an entirely separate entity from its stockholders, even where one person owns all the
corporation’s stock.”).
2
Under the unusual circumstances of this case, we find it appropriate to substantively review the
propriety of the circuit court’s order imposing a receivership over the Shouneyia Brothers
corporation, instead of simply vacating the order and remanding the case to allow the corporation
to formally file a pleading as a party and then litigate anew the receivership issue. The
corporation is a party to this appeal and has already set forth its position against the imposition of
a receivership, which mirrors defendant’s challenge to the receivership. It would be a waste of
judicial time and resources for the circuit court to relitigate the receivership issue given that (1)
the corporation’s sole shareholders are defendant and his brother, (2) defendant’s brother
apparently consented to the receivership, and (3) on remand the corporation would either not file
any pleadings or make filings consistent with those already presented by defendant in the circuit
court.
-4-
corporation. “We review for an abuse of discretion the circuit court’s decision to appoint a
receiver.” Ypsilanti Charter Twp v Kircher, 281 Mich App 251, 273; 761 NW2d 761 (2008).
The circuit court correctly cited MCL 600.2926 as investing it with authority to appoint
receivers. Specifically, MCL 600.2926 authorizes, in pertinent part:
Circuit court judges in the exercise of their equitable powers, may appoint
receivers in all cases pending where appointment is allowed by law. . . . In all
cases in which a receiver is appointed the court shall . . . define the receiver’s
power and duties where they are not otherwise spelled out by law. Subject to
limitations in the law or imposed by the court, the receiver shall be charged with
all of the estate, real and personal debts of the debtor as trustee for the benefit of
the debtor, creditors and others interested. [Emphasis added.]
Furthermore, “[a]fter judgment for money has been rendered in an action in any court of this
state, the judge may, on motion in that action or in a subsequent proceeding . . . . [a]ppoint a
receiver of any property that the judgment debtor has or may thereafter acquire . . . .” MCL
600.6104(4).
[MCL 600.2926] has been interpreted as authorizing a circuit court to appoint a
receiver when specifically allowed by statute and also when no specific statute
applies but the facts and circumstances render the appointment of a receiver an
appropriate exercise of the circuit court’s equitable jurisdiction. The purpose of
appointing a receiver is to preserve property and to dispose of it under the order of
the court. In general, a receiver should only be appointed in extreme cases. But a
party’s past unimpressive performance may justify the trial court in appointing a
receiver. [Reed v Reed, 265 Mich App 131, 161-162; 693 NW2d 825 (2005)
(internal quotation omitted).]
See also Cohen v Cohen, 125 Mich App 206, 214; 335 NW2d 661 (1983) (noting that “[t]he
appointment of a receiver may be appropriate when other approaches have failed to bring about
compliance with the court’s orders”).
The pertinent facts appear undisputed. Pursuant to the parties’ agreement, the circuit
court incorporated into the October 2008 judgment of divorce the property settlement of
$50,000. Defendant made no payments toward either this amount or the circuit court’s award of
attorney fees to plaintiff over the course of the 1-1/2 years between entry of the judgment of
divorce and the March 2010 order appointing the receiver, from which defendant now appeals.
In this 1-1/2 year period, plaintiff made unsuccessful efforts to collect the judgment owed from
defendant: (1) plaintiff’s counsel questioned defendant under oath at a creditor’s examination, at
which the court expressly found that defendant had given evasive and false answers; and (2) the
court nonetheless subsequently afforded defendant the opportunity to negotiate a settlement with
plaintiff, but defendant thereafter declined to enter a settlement. At the creditor’s examination,
defendant acknowledged when shown market bank records that the business had consistently
deposited between $440,000 and $669,000 over the course of several months in the first half of
2009, but denied earning any appreciable income from these deposits. And, as Niremberg
advised the court, the business practices at the market, the multiple daily acts of zeroing out cash
registers, left in doubt the source of the money coming into the store. Under these
-5-
circumstances, which substantiated defendant’s prolonged avoidance of his divorce judgment
obligations to plaintiff, the circuit court did not abuse its discretion when it appointed Niremberg
to investigate the state of business income and hold assets to satisfy plaintiff’s divorce judgment
debt—at least provided that the court joins Shouneyia Brothers as a party in the case.
The identity of Shouneyia Brothers as a corporate entity does not preclude the court’s
order appointing a receiver to investigate corporate funds and records, once the corporation is
joined as a party in the case. Plaintiff made allegations in support of which she offered
substantial support concerning defendant’s efforts to defraud her of her divorce judgment debt by
concealing income within Shouneyia Brothers. The circuit court noted in January 2010 when it
first contemplated granting the receivership, “Thousands of dollars coming in and out of these
accounts and he never has any funds. It may well be that he has no funds. I don’t know. . . . And
if indeed [defendant] has no assets, [the receiver] will report that back to us, but I think [the
receiver] needs to have a look.” Notably, defendant does not contest the import of plaintiff’s and
the receiver’s contentions that Frank Shouneyia, defendant’s coowner in the corporation, had no
objection to the appointment of a receiver over Shouneyia Brothers.3 The allegations and
evidence of record tending to substantiate that defendant, through his control over Shouneyia
Brothers, has sought to hide income in Shouneyia Brothers or the market operated by the
corporate entity renders the circuit court’s appointment of a receiver to investigate the financial
condition of the corporation a decision within the principled range of outcomes, as long as the
court joins the Shouneyia Brothers entity as a party to the case. See Ypsilanti Twp, 281 Mich
App at 273 (noting that a court abuses its discretion where its decision falls outside the range of
reasonable and principled outcomes); Reed, 265 Mich App at 161-162; Attica Hydraulic
Exchange v Seslar, 264 Mich App 577, 590; 691 NW2d 802 (2004) (“After a judgment for
money has been rendered, a trial court has the discretion to appoint a receiver of any property the
judgment debtor has or may acquire.”). The allegations and evidence of record strongly
suggesting that defendant has tried to conceal income in the corporation also make irrelevant
appellants’ contention that the circuit court could not appoint a receiver over Shouneyia Brothers
because it “owe[d] no debt to the judgment creditor [plaintiff].”
Our conclusion finds support in Michigan case law. The Michigan Supreme Court
decades ago considered several appeals
aris[ing] out of the receivership pending under the decree of divorce in Westgate v
Westgate, 291 Mich 18[; 288 NW 860 (1939).] The appointment of the receiver
was upheld by this court in Westgate v Westgate, 294 Mich 88[; 292 NW 569
(1940)]; Westgate v Drake, 294 Mich 116[; 292 NW 573 (1940)]; and Westgate v
3
Appellants impugn only the extent of plaintiff’s factual support for this proposition, noting in
their appellate brief’s statement of facts: “Plaintiff offered no explanation of how Frank
Shouneyia had consented and no factual support for the proposition that Frank Shouneyia had
consented to the receivership.” At a March 10, 2010 hearing, defendant did not object or request
additional substantiation when plaintiff’s counsel advised the court of Frank Shouneyia’s consent
to the receivership.
-6-
Drake, 294 Mich 120[; 292 NW 574 (1940)]. [Westgate v Larsen, 296 Mich 434,
435; 296 NW 317 (1941).]
In one of the referenced appeals upholding the receiver’s appointment, Westgate v Drake, 294
Mich at 117, the Supreme Court summarized the relevant factual background:
On November 30, 1938, Bertha L. Westgate was awarded a decree of
divorce from Elmore L. Westgate with provisions of alimony granting her a onehalf interest in all of his rights in an oil business known as the Direct Refinery
Stations. Because of her inability to ascertain the exact nature of the ownership of
Mr. Westgate in such business, plaintiff filed a petition in the divorce proceedings
setting forth that her husband and defendants herein, as well as others, were
engaged in a conspiracy to cheat her out of her rights in the business by
concealment of property rights and ownership; that Elmore L. Westgate was the
real owner of the business but that in order to defraud her he had covered up such
interests under the names of others. In her petition, Mrs. Westgate prayed that
defendants and others be joined as defendants in the proceedings and that they
show cause why a temporary receiver should not be appointed for the Direct
Refinery Stations.
Unlike in this case, the petition for receivership in Westgate asked “for leave to join certain
parties as defendants,” and “[t]he defendants named in this petition [appeared and] filed answers
thereto denying all the material allegations contained in plaintiff’s petition.” Westgate v
Westgate, 294 Mich at 89-90.
In Westgate v Westgate, 294 Mich at 91-96, the Supreme Court discussed the general
responsibilities of a receiver, and other legal principles, as informative to the question in that
case “whether or not the trial court had a right to make . . . orders awarding attorney fees, the
property in question being in the hands of a receiver.” In Westgate v Drake, 294 Mich 116, 118,
the Supreme Court examined a different question than the receiver appointment challenge
presented here, an attack on the validity of a trial court injunction “from interfering with the
receiver’s possession of the premises and business of the Direct Refinery stations.” The Court
highlighted that the defendants had not challenged the initial order appointing the receiver: “No
attack upon the order appointing the receiver is made as far as the record discloses, except in
defendants’ answer; and they could not attack the validity of such an appointment, or question
the extent of the receiver’s possession, on a motion which did not raise such an issue.” Id. at
119. In Westgate v Drake, 294 Mich 120, 121-122, the defendant Nellie Drake, “[o]ne of the
parties who filed an answer in . . . [the] receivership action,” claimed on appeal “that a certain
tractor used in the oil business belongs to her.” Drake “raise[d] numerous questions regarding
the validity of the appointment of the receiver,” among other issues, with respect to which the
Supreme Court ruled, “We are of the opinion that all of these claims are without merit.” Id. at
123. It does not strike us as entirely clear that the Supreme Court in the Westgate appeals cited
in this paragraph answered the precise questions appellants raise here. But the Westgate
decisions at least strongly suggest that in a divorce case, a circuit court may appoint a receiver
over a third party corporation in the face of allegations that one of the divorcing spouses had
utilized the corporate form to conceal assets or funds that could be used to satisfy a judgment
debt to the other spouse.
-7-
With respect to the Shouneyia Brothers’s complaint that the company never received
proper notice of the receivership in violation of its right of due process, the record reflects that
defendant is the registered agent for Shouneyia Brothers. Shouneyia Brothers thus had actual
notice of plaintiff’s multiple motions to appoint a receiver, as well as the circuit court’s order
imposing a receivership. Sweet Air Investments v Kenney, 275 Mich App 492, 505; 739 NW2d
656 (2007) (“due process in civil cases requires notice of the nature of the proceeding”).
Notwithstanding the corporation’s actual notice of the relevant proceedings, Shouneyia Brothers
made no attempt to be heard by the circuit court in a manner separate from defendant’s
appearance as an individual. In any event, we are instructing that the circuit court add the
corporation as a party to the case.
We conclude that in light of (1) defendant’s poor past performance in making any
payments due plaintiff under the judgment of divorce, despite the court’s employment of
methods less drastic than receivership, and (2) plaintiff’s showing that defendant exercises
control over Shouneyia Brothers and has not accounted for regular, large deposits into the
corporation’s bank accounts, the circuit court acted within its discretion by appointing a receiver
to preserve funds and property that could satisfy defendant’s judgment debt to plaintiff. Reed,
265 Mich App at 161-162; Cohen, 125 Mich App at 214; see also 65 Am Jur 2d, Receivers, § 31
(“[A]ppointment of a receiver may be based on a showing of a danger of loss of property through
waste, neglect, or misconduct.”); 65 Am Jur 2d, Receivers, § 36 (“In certain cases the courts will
appoint a receiver for a corporation in the case of waste of corporate property in connection with
fraudulent conduct.”).
Affirmed in part, and remanded for further proceedings consistent with this opinion. We
do not retain jurisdiction.
/s/ Elizabeth L. Gleicher
/s/ William B. Murphy
/s/ Patrick M. Meter
-8-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.