Background
After Stacey Morea and Michael Robach divorced, their child-support order required Robach to maintain healthcare coverage for their three daughters through May 2022. The parties later agreed that he would continue providing insurance and that they would split the adult children’s out-of-pocket healthcare expenses. Their agreement, incorporated into an October 3, 2022 stipulated order, imposed a $100 penalty for a breach of its billing and reimbursement provisions plus $50 for every week the breach continued.
Robach later sought contempt sanctions, claiming that Morea had failed to make reimbursements and had accumulated substantial late fees. After correcting an accounting error, he reduced his late-fee claim to $15,950. Morea moved to set aside the stipulated order as unconscionable. Without deciding unconscionability, the trial court granted relief under Michigan Court Rule 2.612(C)(1)(f), reasoning that the fees were grossly inequitable, violated usury laws, and resulted from Robach’s delayed enforcement and allegedly spurious accounting.
The Court’s Holding
The Court of Appeals vacated the order granting Morea relief and remanded. The trial court had not identified the extraordinary circumstances required by MCR 2.612(C)(1)(f). Robach’s alleged accounting misconduct and delay occurred after entry of the stipulated order and therefore did not show that he obtained the order through improper conduct. The accumulation of weekly fees was also a foreseeable consequence of the terms the parties adopted, not an unexpected circumstance warranting relief from the order.
Setting aside the order also detrimentally affected Robach’s substantial rights because it threatened both his pending late-fee claim and payments already made under the agreement. The appellate court further held that the late fees were not interest and therefore did not violate Michigan’s usury laws. It did not decide whether the agreement was unconscionable, whether the fees were unenforceable penalties rather than reasonable liquidated damages, whether Morea owed any reimbursements or fees, or whether contempt or sanctions were appropriate; those issues remained open on remand.
Key Takeaways
- Relief under MCR 2.612(C)(1)(f) requires extraordinary circumstances, and foreseeable operation of an agreed late-fee provision does not alone satisfy that standard.
- Alleged misconduct in enforcing an order generally does not justify vacating it when the misconduct did not procure the order, though it may support sanctions or other defenses.
- The trial court may consider unconscionability, improper conduct during formation, and the enforceability of the late-fee provision on remand, but must make the necessary findings under the governing law.
Why It Matters
The decision reinforces the demanding standard for undoing stipulated orders under MCR 2.612(C)(1)(f). A court’s view that contractual consequences are harsh or inequitable does not itself permit the court to erase negotiated terms, particularly when those consequences were foreseeable when the agreement was made.
At the same time, the ruling does not validate Robach’s claimed fees. It preserves formation-based contract defenses and the distinction between enforceable liquidated damages and an unenforceable penalty, leaving the trial court to resolve those questions on an adequate record.