Fred D. Trost and Fred D. Trost Enterprises v. Buckstop Lure Company, Inc.

In this action seeking relief from a judgment, plaintiffs Fred D. Trost and Fred D. Trost
Enterprises, Inc.,1 appeal as of right from a trial court order granting defendant summary
disposition pursuant to MCR 2.116(C)(8). We affirm.

I. Facts and Proceedings

In 1992, defendant Buckstop Lure Company, Inc., filed a libel action against plaintiffs
Fred D. Trost and Fred D. Trost Enterprises, Inc., in the Montcalm Circuit Court. Following a
several-week trial, the trial court entered a judgment in the amount of $4 million in favor of
Buckstop. As a result of that judgment, Trost filed an application for delayed leave to appeal on
April 1, 1994. The parties then stipulated to dismiss the appeal with prejudice. Subsequently, on
January 12, 1995, Trost filed another claim of appeal, seeking to appeal an order denying a
motion to set aside a default. Again, this appeal was, by stipulation of the parties, dismissed with
prejudice.

Then, on February 10, 1999, Trost filed in the circuit court the instant independent action
against Buckstop. This action sought relief from the judgment in the previous action pursuant to MCR 2.612(C)(3). Specifically, Trost alleged (1) that the court in the previous action lacked
subject-matter jurisdiction, (2) that the proofs elicited by Trost's counsel at trial had been "infirm
and not cognizable by [the] court," (3) that the prior judgment had been "based upon an improper
statement and understanding of the law by the Court," (4) that the conduct of and preparation for
trial by Trost's counsel had been "either absent, incompetent or negligently performed and that
[Trost] was deprived of the advice and presence of competent counsel," and (5) that "manifest
injustice" had taken place as a result of these actions.

Rather than filing an answer to Trost's complaint, Buckstop moved for summary
disposition pursuant to MCR 2.116(C)(8), arguing that MCR 2.612(C)(3) allowed a court to
grant relief from a judgment in an independent action only if a party performed fraud on the
court. In response, Trost argued that MCR 2.612(C)(3) provided three bases for an independent
action seeking relief from judgment: (1) to relieve a party from a judgment, order, or proceeding,
(2) to grant relief to a defendant not actually served, and (3) to set aside a judgment for fraud on
the court. Trost further maintained that if the court did not have subject-matter jurisdiction over
the underlying libel claim, MCR 2.612(C)(3) permits him to seek relief from the judgment. The
trial court granted defendant's motion, finding that MCR 2.612(C)(3) provides relief from a
judgment only when a defendant had not been personally notified or when fraud was perpetrated
on the court, and that neither of those two bases had been pleaded by Trost. The trial court also
found that even if MCR 2.612(C)(3) allowed independent actions solely "to relieve a party from a
judgment, order, or proceeding," there was no showing of facts that would form the basis for
such an action.

* * *

The first question that we must decide is whether MCR 2.612(C)(3) allows a party to seek
relief from a judgment in an independent action on grounds other than extrinsic fraud or
nonservice. We conclude that it does.

MCR. 2.612(C)(3) provides:

This subrule does not limit the power of a court to entertain an
independent action to relieve a party from a judgment, order, or proceeding; to
grant relief to a defendant not actually personally notified as provided in subrule
(B); or to set aside a judgment for fraud on the court.

The express language of MCR 2.612(C)(3) provides that the provisions in MCR 2.612(C)(1) and
(2) in no way "limit[s] the power of a court to entertain an independent action to relieve a party
from a judgment, order, or proceeding . . . ." Hence, a party need not allege fraud or nonservice
in order to seek relief from a judgment in an independent action pursuant to MCR 2.612(C)(3).
In this regard, we find the following commentary to be particularly persuasive:

MCR 2.612(C)(3) expressly notes that its provision for relief from
judgment by a motion directly in the same proceedings "does not limit the power
of a court to entertain an independent action to relieve a party from a judgment."
In Michigan, an independent action in chancery for relief from a judgment has
been long recognized. Such independent equitable actions granted relief either by
setting aside the judgment, if rendered by the same court, or by enjoining its
enforcement or execution or declaring it void, if rendered by another court. This
equitable relief was most frequently granted as to judgments at law but was also
available to restrain enforcement of an equity decree itself.

Relief from a judgment by an independent equitable action has been
recognized in Michigan as proper on numerous grounds, including the following:
judgment void for lack of jurisdiction; newly-discovered evidence; afterdiscovered
defense; and extrinsic fraud in the procurement of a judgment. If the
judgment is not void for lack of jurisdiction, the party seeking relief from a
judgment by an independent equitable action must show that it has a meritorious
defense or cause of action before equitable relief will be given. [Michigan Court
Rules Practice, Rule 2.612, § 2612.17, p 483 (citations omitted; emphasis added).]

In the instant case, Trost based his complaint on five factual grounds, including lack of
subject-matter jurisdiction. Because the two prior appeals were dismissed with prejudice, there
was no remedy at law available to Trost; therefore, the complaint, on its face, fulfilled the
requirements of MCR 2.612(C)(3) and case law on independent actions. Accordingly, the trial
court erred in determining that MCR 2.612(C)(3) only allowed for independent actions based on
nonservice or extrinsic fraud.

Nonetheless, the court also found that even if MCR 2.612(C)(3) provided Trost with an
independent action for relief from the judgment, he had not pleaded sufficient facts to state a
cause of action, and therefore, Buckstop was entitled to summary disposition. We agree.

* * *

Click the case caption above for the full text of the Court's opinion.

Applying these five elements to the facts here, Trost fails to establish entitlement to relief
from the judgment. Nothing in the lower court record establishes that Trost had a valid defense to the underlying cause of action. Because Trost has failed to establish a valid defense, it is
evident that fraud, accident, or mistake did not prevent Trost from obtaining the benefit of a
defense and that he is not entitled to a legal remedy. Further, there is no evidence disproving his
own negligence or fault or suggesting that the prior judgment should not, in equity or good
conscience, be enforced. Accordingly, Trost failed to establish any of the five elements and, as
such, the trial court correctly granted Buckstop's motion for summary disposition.3

Affirmed

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