Background
Alexander Szecsku and David Mills disputed ownership of Metro Detroit Media Outdoors, LLC, which operated billboards in Redford and Howell. Their December 2022 settlement required Szecsku to refinance or pay off two loans by July 15, 2023. Until then, MDM had to continue paying its business expenses, including rent owed to Cedan Holdings for the Redford property. A timely payoff would require MDM to transfer its ownership interests and assets to Szecsku free of liens and debt.
Szecsku obtained financing conditioned on confirmation of the rent owed to Cedan Holdings and the availability of funds to pay it. Defendants did not supply the revenue records needed to calculate the rent, and the closing did not occur. The circuit court found that defendants breached the settlement, directed simultaneous payment of the loans and rent, and ordered defendants to transfer the business and remit all billboard advertising revenue earned after July 15, 2023. After defendants repeatedly failed to comply, the court ordered production of financial records and ultimately imposed $53,000 in interest expenses and $14,872 in attorney fees as civil-contempt sanctions.
Defendants sought partial relief from the post-settlement orders, alleging that Szecsku had fraudulently represented his ability to obtain financing and arguing that he should receive only lost profits rather than gross revenue. They also contended that Great Lakes Media and Michael Thompson should not be held in contempt. The circuit court rejected the motion as untimely and frivolous and entered judgment for Szecsku.
The Court’s Holding
The Court of Appeals affirmed. It held that the circuit court acted within its discretion in rejecting the fraud claim. Defendants knew before the July 2023 deadline that Szecsku’s financing remained conditioned on resolution of the Cedan Holdings rent, and the later evidence on which they relied did not reveal materially new information. They also had raised related financing objections earlier, failed to seek timely reconsideration, and waited until May 2024 to request relief. Szecsku meanwhile obtained the payoff funds and placed more than $811,000 in escrow.
The panel also upheld the order requiring defendants to turn over all advertising revenue received after July 15, 2023. That revenue was awarded as relief for breach of the settlement—not as a contempt sanction—because a timely closing would have given Szecsku all membership interests in MDM and the associated revenue. Defendants waited approximately nine months to challenge that relief and did not move within a reasonable time under Michigan’s rule governing relief from judgment.
The court likewise rejected the challenge concerning Thompson and Great Lakes Media. Both signed the settlement, had access to financial records needed to calculate the rent, and were covered by the circuit court’s enforcement orders. Their argument that there was no basis for liability was not raised within a reasonable time. The separate awards for financing-related interest and attorney fees remained valid contempt sanctions for noncompliance with the court’s orders.
Key Takeaways
- A party cannot characterize previously known facts about conditional financing as newly discovered fraud to obtain belated relief from a settlement-enforcement order.
- A motion for relief from judgment must be filed within a reasonable time; waiting months without seeking reconsideration can foreclose challenges to both liability and the remedy ordered.
- An award of post-closing-date gross revenue may enforce the benefit promised by a settlement, while interest expenses and attorney fees may separately serve as civil-contempt sanctions for violating court orders.
Why It Matters
The decision underscores the importance of promptly challenging settlement-enforcement orders. Parties that know the relevant facts but fail to raise their objections or seek reconsideration cannot ordinarily revive those issues months later through a motion alleging fraud or invoking catchall relief.
It also distinguishes contractual relief from contempt sanctions. Here, the billboard revenue represented the ownership-related benefit Szecsku would have received absent the breach, while the interest and attorney-fee awards addressed defendants’ subsequent failure to obey the court’s enforcement orders.