DEBORAH LYNN GARNER V JOHN CHRISTOPHER GARNER
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STATE OF MICHIGAN
COURT OF APPEALS
DEBORAH LYNN GARNER,
UNPUBLISHED
November 17, 2009
Plaintiff-Appellant,
v
No. 283385
Osceola Circuit Court
Family Division
LC No. 06-010767-DM
JOHN CHRISTOPHER GARNER,
Defendant-Appellee.
Before: Murphy, P.J., and Meter and Beckering, JJ.
PER CURIAM.
Plaintiff appeals as of right from the consent judgment of divorce issued by the circuit
court following a bench trial. Plaintiff argued at trial and argues on appeal that the parties’
prenuptial agreement entitles her to receive any real or personal property purchased during the
marriage with money generated by business interests plaintiff owned before the marriage, as well
as those acquired after the marriage with funds traceable to those business interests. The court
found before trial that the prenuptial agreement was valid, but held that certain property acquired
during the marriage was properly considered part of the marital estate and subject to division.1
We agree, and thus affirm the decision of the circuit court. This appeal has been decided without
oral argument pursuant to MCR 7.214(E).
Plaintiff argues on appeal that because the trial court found that the parties’ prenuptial
agreement was valid, it was obligated to enforce the document according to its plain terms.
1
The real property at the heart of the dispute between the parties consists of the following: (1)
the Lamplighter restaurant (purchased before marriage); (2) a home on 210 South Fair Street
(purchased before marriage); (3) the marital home located at 5159 70th Street (cabin and ten
acres purchased before marriage); (4) an additional 50 acres located at 5159 70th Street
(purchased and home remodeled after marriage); (5) a home on 343 Cherry Street (offer made
before marriage, finalized after marriage); (6) the Chippewa Lake Restaurant and cabins
(purchased after marriage); (7) property known as the Lake Miramichi property (purchased after
marriage); (8) a condominium known as Unit 27 Northridge (purchased after marriage); and (9) a
parcel of land known as Neguanee (purchased after marriage).
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According to plaintiff, the plain terms of the agreement entitled her to receive all property
purchased with income or profits from her premarital assets. The court rejected this argument.
The specific property in dispute on appeal is the Chippewa Lake Restaurant and cabins and the
Miramichi property; all other property contested below was awarded to plaintiff.
The prenuptial agreement provided, in pertinent part, as follows:
WHEREAS the parties contemplate legal marriage . . . and WHEREAS it
is the mutual desire of the parties to enter into this agreement whereby they will
regulate their relationships toward each other with respect to property each of
them own, and in which each of them may have an interest; and it is desired by
the parties that their marriage shall not in any way change their legal right, or that
of their heirs in the property of each of them;
NOW THEREFORE IT IS AGREED AS FOLLOWS:
1. That all properties of any kind and nature, real, personal or mixed,
wherever the same may be found, which belongs to each party, shall be and
forever remain the individual estate of said party, including all interest, rents and
profits which may accrue therefrom.
2. That each party shall have at all times the full right and authority, in all
respects, the same as each would have if not married, to use, enjoy, manage,
convey and encumber such property as may belong to him or her.
***
5. That each party[ ] shall have no right as against the other by way of
claim for support, alimony, attorney fees, costs or division of property, at such
time as either party shall seek a divorce.
6. It is further agreed that this agreement is entered into with full
knowledge on the part of each party, as to the extent and probable value of the
other’s property and of all the rights conferred by law upon each, in the estate of
the other, by virtue of their marriage, but it is their desire that their respective
rights to each other’s estate shall be fixed by this agreement which shall be
binding upon their respective heirs and legal representatives.
After finding that the parties’ agreement was valid, the court stated that its decision did not
necessarily have any bearing on “what the effect of this document is.” The court continued:
I’m not deciding what the consequence of commingled funds is. I am not
setting aside or making any determination on what I perceive to be my principal
obligation in this trial that’s coming up and that is to do a fair and equitable
distribution of the property between both parties.
Plaintiff argues on appeal that the court’s primary objective should not have been to
ensure that the property distribution was fair and equitable, but rather to enforce the terms of the
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parties’ contract. Plaintiff is correct that the court had a duty to enforce the prenuptial
agreement. However, plaintiff’s argument presumes that the contract is unambiguous and that
this presumed clarity works in her favor on appeal. Although the trial court did not explicitly
state so, it is clear from the entirety of the proceedings that the court found the agreement to be
ambiguous. We review de novo a trial court’s interpretation of a contract, including whether the
language of a contract is unambiguous and must be enforced according to its plain terms. Reed v
Reed, 265 Mich App 131, 141; 693 NW2d 825 (2005).
Contrary to plaintiff’s assertion, the court’s repeated references to its primary obligation
to provide a fair and equitable division of property is not at odds with its duty to interpret the
prenuptial agreement. “The goal in distributing marital assets in a divorce proceeding is to reach
an equitable distribution of property in light of all the circumstances.” Berger v Berger, 277
Mich App 700, 716-717; 747 NW2d 336 (2008). The existence and meaning of a prenuptial
agreement is one of those circumstances, and may be dispositive in many situations, but it does
not strip the court of its overarching obligation.
The trial court expressed a particular concern with the language found in paragraph five
of the agreement. The language of this paragraph is very broad and could be read as indicating
that none of the property at issue is marital property and all that remains for the court to
determine is how the separate assets are to be segregated. This reading supposes that the parties
intended that no marital estate would be created during the duration of the marriage.
However, reading the agreement as outlined above would essentially require this Court to
violate a venerated rule of contract law by reading into the document a provision addressing
after-acquired property. Cottrill v Michigan Hosp Service, 359 Mich 472, 476; 102 NW2d 179
(1960) (observing that courts may not read into a contract a provision not contained therein, and
thereby reform or modify the contract). In Reed, this Court determined that the language of the
prenuptial agreement at issue clearly contemplated the acquisition of separate assets over the
course of the marriage. Reed, supra at 146-147. This conclusion was based in large part upon
the following language found in the agreement:
“Separate Property. Except as herein provided, each party shall have
complete control of his or her separate property, and may enjoy and dispose of
such property in the same manner as if the marriage had not taken place. The
foregoing shall apply to all property now owned by either of the parties and to all
property which may hereafter be acquired by either of them in an individual
capacity.” [Id. at 146.]
Significantly, there is no “after-acquired-property” provision in the prenuptial agreement in the
case at hand.
Further, paragraph six refers to the parties’ knowledge of “the extent and probable value
of each other’s property . . . in the estate of the other.” This clearly only references the property
owned at the time the agreement was executed because it is axiomatic that someone cannot know
about what does not then exist (e.g., after-acquired property). Therefore, reading the preamble
and paragraphs one and two of the agreement in the context of paragraph six, the words “own”
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and “belong[s] to” are best understood as conveying a present-sense understanding of ownership,
i.e., property in the parties’ possession at the time the agreement was executed.
Plaintiff also argues that because during the marriage she purchased the Chippewa Lake
Restaurant and the Lake Miramichi property with profits stemming from her premarital estate
and loans obtained using premarital assets as collateral, these after-acquired properties should
have been awarded to her. This argument is based on paragraph one of the prenuptial agreement,
which provides that “all properties of any kind and nature, real, personal or mixed, wherever the
same may be found, which belongs to each party, shall be and forever remain the individual
estate of said party, including all interest, rents and profits which may accrue therefrom.”
(Emphasis added.) Regarding the Lake Miramichi property, we conclude that because plaintiff
requested that it be awarded to defendant at the conclusion of trial, she cannot purse a different
result on appeal. “Error requiring reversal cannot be error to which the aggrieved party
contributed by plan or negligence.” Phinney v Perlmutter, 222 Mich App 513, 537; 564 NW2d
532 (1997). In any event, for the reasons set forth below, we find no error in the distribution of
the Lake Miramichi property, or in the distribution of the Chippewa Lake property.
Plaintiff testified that she purchased the Chippewa Lake Restaurant in 1998 for $120,000.
The purchase was funded by a mortgage secured by the marital home and cash. Additionally,
plaintiff stated she “had to pay . . . $18,000 of [defendant] and his ex-wife’s back bills to get the
loan.” Between February and August 25, 1998, the building was significantly improved and
changed so that it could operate as a restaurant. Specifically, plaintiff testified to spending over
$98,000 during this process. Plaintiff asserted that all of the improvements were funded by
monies flowing from the operation of the Lamplighter. Plaintiff also stated that she purchased
the Lake Miramichi property for $22,000 in 2004, and as of trial there was nothing owing on it.
The terms “income” and “profit” have unique meanings. Compare definition for
“income,” p 778, with definition for “profit,” p 1246, Black’s Law Dictionary (8th ed).
However, US Individual Income Tax form 1040, Schedule C, does use the terms
interchangeably, and even directs the filer to enter the calculated net profit or loss on the line
designated for business income on the 1040 form. Nevertheless, plaintiff testified that her
average yearly business income during the course of the marriage was only $20,795. Plaintiff
also stated that rental on the South Fair Street property “was taken out in labor,” although she
later qualified that by stating that some money changed hands “[f]rom time to time.” These
funds were not, however, reported as income on her taxes. Also, we note that defendant testified
that the Lake Miramichi property was purchased with the parties’ savings, not just with funds
stemming from plaintiff. Given this testimony, along with the considerable acquisitions made in
addition to the Chippewa Lake Restaurant and the Lake Miramichi property and the sheer
amount of money expended, it is not an unreasonable conclusion that defendant contributed in
some fashion to the purchase of the property.
In keeping with the testimony provided, and acknowledging the trial court’s superior
position to assess witness credibility, see People v Aldrich, 246 Mich App 101, 124; 631 NW2d
67 (2001), we conclude that the court did not clearly err in crediting defendant for contributing to
the purchase and development of the two post-marriage properties in dispute. Sparks v Sparks,
440 Mich 141, 151-152; 485 NW2d 893 (1992). Indeed, we simply are not left with a definite
and firm conviction that the trial court made a mistake in awarding the Chippewa Lake
Restaurant and cabins and the Lake Miramichi property to defendant. Kitchen v Kitchen, 465
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Mich 654, 661-662; 641 NW2d 245 (2002). Even assuming that business income from the two
restaurants could be considered profit within the meaning of the prenuptial agreement, the
evidence nonetheless supports the finding that defendant contributed both financially and
through his physical efforts to the purchase and development of the Chippewa Lake facilities and
the Lake Miramichi property. As noted earlier, defendant stated that the Lake Miramichi
property was purchased with some of the parties’ savings, and he also stated that he “designed”
and “built” the Chippewa Lake Restaurant and that he was responsible for its day-to-day
operations during its first two years in business. There was also evidence that defendant helped,
through his labor, to improve the Chippewa Lake property. Thus, it was proper for these
properties to not be characterized merely as the sole property of plaintiff under the prenuptial
agreement. See Reed, supra at 152 (“In general, assets a spouse earns during the marriage are
properly considered part of the marital estate, and thus subject to equitable division.”).2
In sum, the circumstances do not lead to a firm conviction that an inequitable result has
been reached, and the property division is thus affirmed. Sparks v Sparks, 440 Mich 141, 152;
485 NW2d 893 (1992).
Affirmed.
/s/ William B. Murphy
/s/ Patrick M. Meter
/s/ Jane M. Beckering
2
Moreover, a circuit court may invade a spouse’s separate estate where the opposing party has
“‘contributed to the acquisition, improvement, or accumulation of the property.’” See Reed,
supra at 152, quoting MCL 552.401.
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