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A Better Partnership
August 13, 2014

COA holds that ten-year statute of limitations applies to enforcement of property settlement incorporated by reference into foreign divorce judgment

In In re Dimeglio Estate, No. 315319, the Michigan Court of Appeals held that an action to enforce a property settlement, that was incorporated into a Virginia divorce judgment, is subject to the ten-year statute of limitations in MCL 600.5809(3), instead of the standard six-year limitations period for breach of contract actions.  
 
Dany Jo Peabody and Paul Dimeglio (the decedent) married in 1989, and divorced in 1995.  A property settlement was incorporated, but not merged, into their Virginia divorce decree.  The settlement stated that Dany Jo was the owner of their Colorado home, but that Paul had the right to sell it at any time.  Neither party was allowed to further encumber the property by mortgages without the other’s written consent.  The proceeds of any sale of the home would be divided equally between Dany Jo and Paul.  Between 2000 and 2004, Paul encumbered the property with a mortgage and twice conveyed his entire interest in the Colorado home to his new wife, Marta.  In 2004, Marta sold the property to a third party and used the proceeds to purchase real property in Michigan.  Paul died in 2011.
 
Dany Jo filed an eight-count complaint against Paul’s estate and Marta as personal representative of the estate and individually.  The probate court granted summary disposition in favor of Marta in both capacities because, among other reasons, the claims were barred by a six-year statute of limitations.  Dany Jo appealed the finding that the statute of limitations barred her claims.
 
The Court of Appeals first determined that Michigan law applied to the enforcement of this Virginia divorce judgment under the Uniform Enforcement of Foreign Judgments Act, MCL 691.1171, et seq.  Second, the court found that Dany Jo’s claims were not for breach of contract, but instead were claims to enforce a judgment.  Accordingly, under Gabler v Woditsch, 143 Mich App 709; 372 NW2d 647 (1985), the court found that a property settlement that was expressly incorporated by reference into a divorce judgment is subject to a ten-year statute of limitations under MCL 600.5809(3). 
 
Marta argued that, under Marshall v Marshall, 135 Mich App 702; 355 NW2d 661 (1984), that a property settlement not merged into a divorce judgment is only enforceable by resort to usual contract remedies.  The court found that the language of Marshall was ambiguous and not “germane to the controversy” in this case.  The court then reversed the probate court’s order granting summary disposition in favor of Marta and remanded for further proceedings.

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