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A Better Partnership
May 29, 2014

COA upholds general rule that Michigan courts can exercise jurisdiction over a defendant's property in Michigan to enforce a foreign judgment

In Arbor Farms, LLC v. Geostar Corporation, the Michigan Court of Appeals reiterated that a court largely has jurisdiction to enforce a foreign judgment wherever property of the defendant is found. The Court reasoned that the jurisdictional rule for enforcing a foreign judgment in Michigan is wider than the general requirement for personal jurisdiction. So long as the defendant owns property in Michigan—even property unrelated to the underlying action—a Michigan court can exercise personal jurisdiction over the defendant to enforce a judgment. To hold otherwise, the Court reasoned, would permit debtors to avoid enforcement simply by moving his property to a state in which his creditor cannot otherwise obtain personal jurisdiction. The Court also reaffirmed that a circuit court judge’s oral orders can have the weight and effect of a written order. The Court found that the circuit court judge’s oral ruling had sufficient indicia of formality and finality, which reflected the circuit court’s formal resolution of the matter. Finally, the Court held that the appointment of a receiver to oversee the preservation and inventory of the defendant’s Michigan business records was not an abuse of discretion. Prior to the circuit court’s appointment of a receiver, the defendant made little effort over nine months to comply with the document preservation and inventory order. The Court dispelled the concern that using a receiver would prejudice the defendant by noting that documents held by a receiver is tantamount to the court possessing the documents itself.

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