Background
After the parties divorced in 2014, Michael Robach was required to maintain healthcare coverage for their three daughters through their last day of high school in May 2022. The parties later agreed that he would continue providing insurance and that both parents would equally share out-of-pocket healthcare expenses for their adult children. Their stipulated agreement, entered as an order in October 2022, imposed a $100 penalty for a payment breach plus $50 for every week the breach continued.
In December 2024, Michael sought to hold Stacey Morea in civil contempt, alleging unpaid or late reimbursements and substantial accumulated penalties. After correcting an accounting error, he reduced his penalty claim from $37,200 to $15,950. Morea moved to set aside the stipulated order as unconscionable. The trial court declined to decide unconscionability but set aside the order under MCR 2.612(C)(1)(f), reasoning that the penalties were grossly inequitable, violated usury laws, and resulted partly from Michael’s delay and allegedly spurious accounting.
The Court’s Holding
The Court of Appeals vacated the order setting aside the parties’ agreement. Relief under MCR 2.612(C)(1)(f) required extraordinary circumstances mandating relief to achieve justice and could not detrimentally affect the opposing party’s substantial rights. The circumstances identified by the trial court did not satisfy those requirements.
Michael’s alleged accounting problems and delay in seeking enforcement occurred after entry of the stipulated order and therefore did not show improper conduct through which he obtained the order. The accumulation of weekly fees also was a foreseeable consequence of the agreement as written, not an extraordinary or unexpected circumstance. Setting aside the order affected Michael’s substantial rights because it eliminated potential entitlement to late fees and exposed previously paid expenses and penalties to possible reimbursement.
The appellate court did not determine whether Morea owed reimbursements or penalties, should be held in contempt, or could prevail on other defenses. It left the trial court to consider on remand whether the agreement was unconscionable, whether the late-fee clause was an unenforceable penalty rather than reasonable liquidated damages, and whether alleged pressure or threats during negotiations supported relief. It separately explained that the late fees were not interest and therefore did not violate Michigan’s usury laws.
Key Takeaways
- A court may not set aside a stipulated order under MCR 2.612(C)(1)(f) merely because enforcement produces a harsh but foreseeable result.
- Postjudgment accounting errors or enforcement delay generally do not establish that the underlying order was obtained through improper conduct.
- The decision does not establish that the late fees are enforceable; unconscionability, improper bargaining conduct, and the liquidated-damages issue remain open on remand.
Why It Matters
The opinion reinforces the demanding standard for relief from a stipulated order under MCR 2.612(C)(1)(f). Trial courts must identify extraordinary circumstances and address the effect on the opposing party’s substantial rights rather than relying on a general sense that the negotiated result is inequitable.
For family-law practitioners, the decision also highlights the importance of drafting limits on recurring late fees and developing evidence about the circumstances existing when an agreement was made. A facially dramatic disparity between an unpaid amount and accumulated fees may support other contract defenses, but it does not alone justify relief under the rule invoked here.