                           STATE OF MICHIGAN

                            COURT OF APPEALS


DANIEL FISHER,                                                       UNPUBLISHED
                                                                     June 23, 2016
               Plaintiff-Appellant,

v                                                                    No. 327483
                                                                     Washtenaw Circuit Court
BJP CONSULTING, L.L.C., and BARBARA                                  LC No. 14-000169-PS
KUSISTO,

               Defendants-Appellees.


Before: FORT HOOD, P.J., and RONAYNE KRAUSE and GADOLA, JJ.

PER CURIAM.

       Plaintiff, Daniel Fisher, appeals as of right an order dismissing his case. Plaintiff filed a
complaint alleging fraudulent conveyances and successor liability in an effort to collect a debt
allegedly owed by defendants. On appeal, plaintiff argues that the trial court erred in granting
defendants’ motion for summary disposition. We affirm.

       This case arises from plaintiff’s efforts to collect on two district court judgments against
Kusisto Totalgraphics, owned and operated by Michael Kusisto, defendant Barbara Kusisto’s
husband. After plaintiff obtained the judgments, Kusisto Totalgraphics closed and filed for
bankruptcy. Plaintiff contends that Kusisto Totalgraphics fraudulently transferred its assets to
Barbara’s company, defendant BJP Consulting, L.L.C., and that BJP Consulting was a mere
continuation of Kusisto Totalgraphics. Plaintiff asserts that defendants should therefore be liable
for the district court judgments. The trial court granted summary disposition in favor of
defendants, and dismissed the case.

       As a preliminary matter, we reject plaintiff’s argument that defendant’s appeal was
untimely and this Court lacks jurisdiction. “Whether a party’s claim of appeal is timely affects
this Court’s jurisdiction according to MCR 7.204(A) and is, therefore, reviewed de novo.”
Wickings v Arctic Enterprises, Inc, 244 Mich App 125, 132–133; 624 NW2d 197 (2000).

       The court rules plainly provide that a final judgment of a circuit court is appealable to this
Court as of right. MCR 7.203(A). A final judgment is the first one that, among other things,
“disposes of all the claims and adjudicates the rights and liabilities of all the parties . . ..” MCR
7.202(6)(a)(i ). Upon the circuit court’s entry of a final judgment, a party has 21 days to file an
appeal as of right. MCR 7.204(A)(1)(a). “The time limit for an appeal of right is jurisdictional.”
MCR 7.204(A). Hence, the failure to timely file an appeal within this time frame deprives this


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Court of jurisdiction to consider the appeal as of right. Chen v Wayne State Univ, 284 Mich App
172, 192–193; 771 NW2d 820 (2009).

         Here, the initial order of the trial court appeared to be a final judgment. However, there
was ambiguity in the order itself, which was compounded by an erroneous note in the register of
actions. Thus, the trial court’s subsequent order clarifying its holding was properly considered
the final judgment, appealable as of right. MCR 7.204(A)(1)(a). While plaintiff did contribute
to the error of this Court by seemingly failing to respond to this Court’s defect notices during his
initial appeal, we do not wish to deprive plaintiff his appeal as of right due to a clerical error.
The April 30, 2015 order granting the motion for clarification provides, unquestionably, that
“[p]laintiff’s claims as to both defendants are hereby dismissed with prejudice.” Given the
ambiguity with the court’s first order and the clear language from the April 30, 2015 order, we
conclude that the April 30, 2015 order constitutes the final judgment and we address the merits
of plaintiff’s claim of appeal.

        Plaintiff first argues that the trial court erred in granting defendant’s motion for summary
disposition pursuant to MCR 2.116(C)(4) based on plaintiff’s failure to satisfy the jurisdictional
amount in controversy requirement. We agree. “Whether a court has subject-matter jurisdiction
is a question of law reviewed de novo. Issues of statutory interpretation are also reviewed de
novo.” Hillsdale Co Sr Services, Inc v Hillsdale Co, 494 Mich 46, 51; 832 NW2d 728 (2013)
(citations omitted).

         MCL 600.605 provides “Circuit courts have original jurisdiction to hear and determine
all civil claims and remedies, except where exclusive jurisdiction is given in the constitution or
by statute to some other court or where the circuit courts are denied jurisdiction by the
constitution or statutes of this state.” MCL 600.8301(1) provides for an exception for bringing
civil actions in district court “when the amount in controversy does not exceed $25,000.00.”
Recently, in discussing the jurisdiction of the district court, our Supreme Court addressed the
meaning of “amount in controversy.” The Court held “in its subject-matter jurisdiction inquiry, a
district court determines the amount in controversy using the prayer for relief set forth in the
plaintiff’s pleadings, calculated exclusive of fees, costs, and interest.” Hodge v State Farm Mut
Auto Ins Co, ___ Mich ___, ___; ___ NW2d ____ (2016) (Docket No. 149043), slip op at 12.

        Here, plaintiff pled an amount in controversy over $25,000 based on two district court
judgments. Notably, the aggregate dollar amount of the judgments was over $25,000. While
one of the judgments orders that plaintiff shall have possession of and sell several pieces of
collateral, including a printing press, the value of the property is not included in the judgment.
The bankruptcy court later valued the collateral as $6,550. Again, however, the amount in
controversy is the amount included in the prayer for relief, not the amount eventually shown by
the proofs at trial. Id. at ____; slip op at 12. While the parties dispute whether plaintiff was
required to take possession of and sell the collateral, such a dispute over the amount claimed
does not allow jurisdiction in the district court where the amount pled was greater than $25,000.
Further, the amount required by plaintiff was not so obviously erroneous or baseless that would
suggest bad faith in the pleadings. Id. at ___; slip op at 12. Indeed, plaintiff continues to
contend that the amount in controversy is greater than $25,000. Thus, the trial court erred.



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       We also reject defendants’ assertion that plaintiff cannot aggregate the two district court
judgements. Defendants do not challenge plaintiff’s contention that the judgment to Floral
Marketing, L.L.C. was later assigned to plaintiff. Thus, both judgments favor plaintiff. Further,
defendants fail to provide legal authority for their contention that plaintiff cannot aggregate the
judgments. Indeed, such a conclusion would be contrary to the interests of judicial economy as it
would essentially require plaintiff to bring two lawsuits against defendants, one for each
judgment.

        Plaintiff next argues that the trial court erred in granting defendants’ motion for summary
disposition on the basis of res judicata. We disagree. This Court reviews motions for summary
disposition de novo. Dextrom v Wexford Co, 287 Mich App 406, 416; 789 NW2d 211 (2010).
“The applicability of the doctrine of res judicata constitutes a question of law that this Court also
reviews de novo.” Beyer v Verizon North Inc, 270 Mich App 424, 428; 715 NW2d 328 (2006)
(citation omitted). An argument that summary disposition should be granted on the basis of res
judicata is properly asserted under MCR 2.116(C)(7).                 See Alcona Co v Wolverine
Environmental Prod, Inc, 233 Mich App 238, 246; 590 NW2d 586 (1998). “[I]n considering a
motion under that subrule, the court may consider all affidavits, pleadings, and other
documentary evidence, construing them in the light most favorable to the nonmoving party.” Id.
(citation omitted; alteration added).

        “Courts apply the doctrine of res judicata to promote the finality of judgments, which in
turn increases certainty, discourages multiple litigation and conserves judicial resources.”
Sanders Confectionery Prod, Inc v Heller Fin, Inc, 973 F2d 474, 480 (CA 6, 1992).1 Res
judicata, or claim preclusion, has four elements:

       1. A final decision on the merits in the first action by a court of competent
       jurisdiction;

       2. The second action involves the same parties, or their privies, as the first;

       3. The second action raises an issue actually litigated or which should have been
       litigated in the first action;

       4. An identity of the causes of action[.] [Id. (citations omitted).]

        “[A]s a general principle, res judicata can be invoked in a lawsuit on the basis of an
earlier bankruptcy proceeding.” RDM Holdings, LTD v Contl Plastics Co, 281 Mich App 678,
692; 762 NW2d 529 (2008). Here, plaintiff only discusses the second element of res judicata,
that the second action involves the same parties, asserting that res judicata cannot apply because
defendants were not named parties in the bankruptcy. For completeness, we address each
element.


1
 “This Court must apply federal law in determining whether the doctrine of res judicata requires
dismissal of this case because the . . . judgment in the prior suit was entered by a federal court.”
Pierson Sand & Gravel, Inc v Keeler Brass Co, 460 Mich 372, 380-381; 596 NW2d 153 (1999).


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        “A bankruptcy order that entirely resolves all the issues pertaining to a claim will satisfy
the res judicata requirement of a final judgment.” Id. at 694. In bankruptcy proceedings, closing
orders are final judgments on the merits. Id. Here, the bankruptcy was closed without objection.
Thus, the first element was met.

        In regard to the second element, plaintiff, as a listed creditor, was considered a party to
the bankruptcy. “Creditors in bankruptcy proceedings must be considered parties for purposes of
res judicata.” Id. at 695. Admittedly, neither defendant was a listed creditor in the bankruptcy.
Plaintiff relies on RDM Holdings, where all defendants in the initial bankruptcy were listed as
creditors. Id. Because that is not the case here, plaintiff concludes that defendants were not the
same parties for the purposes of res judicata. However, plaintiff fails to consider whether
defendants should be considered the privy of Kusisto Totalgraphics. “Privity in this sense means
a successor in interest to the party, one who controlled the earlier action, or one whose interests
were adequately represented.” Sanders, 973 F2d at 481 (emphasis added). Indeed, plaintiff’s
entire claim is based on his premise that defendants constitute a mere continuation of Kusisto
Totalgraphics, referring to BJP Consulting as a successor corporation. In viewing the evidence
in a light most favorable to plaintiff, as we must in reviewing a motion for summary disposition,
defendants were a successor corporation to Kusisto Totalgraphics. Alcona Co, 233 Mich App at
246. Thus, we conclude that defendants would be considered in privity with Kusisto
Totalgraphics for the purpose of res judicata.

        This discussion is buttressed by consideration of the third element, that the second action
raises an issue actually litigated or which should have been litigated in the first action. In RDM
Holdings, this Court held that “a claim under the [Uniform Fraudulent Transfer Act (UFTA)]
would constitute a core proceeding in bankruptcy[.]” RDM Holdings, 281 Mich App at 698. In
RDM Holdings, the Court held:

       With the avenues available to plaintiffs in the bankruptcy proceedings to have
       their fraudulent transfer issues addressed, their decision to do nothing implicates
       some of the underlying purposes of res judicata, which include conservation of
       judicial resources and prevention of inconsistent decisions. Indeed, if plaintiffs
       were allowed to pursue the UFTA claim in state court, and were they successful
       in obtaining the requested relief attaching the transferred assets, MCL
       566.37(1)(b) (attachment relief for UFTA violation), an underlying premise upon
       which the relief was awarded would be that the property should have remained in
       the hands of [the debtor]. This conclusion would run contrary to the trustee’s
       accounting in bankruptcy showing that [the debtor] had zero assets to disburse
       and it would offend the rights of other creditors. [Id. at 701-702.]

In opposing summary disposition, plaintiff alleged that Kusisto Totalgraphics fraudulently
transferred its assets to BJP Consulting and then filed for bankruptcy. Despite this, plaintiff
completely failed to raise this contention during the bankruptcy proceedings. Indeed, plaintiff
made no objections in the bankruptcy. Given these circumstances, plaintiff’s case falls squarely
within the holding of RDM Holdings and plaintiff’s fraudulent transfer claim raises an issue that
should have been litigated in the bankruptcy proceeding.



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        RDM Holdings is also instructive regarding plaintiff’s successor liability claim. In RDM
Holdings, the court also barred the plaintiff’s successor liability claims based on res judicata to
the extent that “the claim was subsumed under the UFTA claim, which was properly dismissed
on the basis of res judicata. . . . We will not permit plaintiffs to pursue any fraudulent transfer
allegations under the guise of a successor liability claim.” Id. at 707. Here, plaintiff’s complaint
alleged:

       32.    Any transfer between Kusisto Totalgraphics, Inc. to Defendants was
       fraudulent, made in bad faith, without consideration and the creditors of Kusisto
       Totalgraphics, Inc. were not provided for in said transactions.

       33.    The transferee Defendants were and are mere continuations or
       reincarnations of Kusisto Totalgraphics, Inc.

       34.    The totality of the conveyances between Kusisto Totalgraphics, Inc. to
       Defendants demonstrate a basic continuity of the enterprise between the
       predecessor and successor companies.

Similar to RDM Holdings, the entirety of plaintiff’s successor liability case relied on the
fraudulent transfer claim. Thus, this claim was also properly barred by res judicata.

        Based on our disposition of this issue, we conclude that it is unnecessary to address
plaintiff’s final issue on appeal.

       Affirmed.

                                                             /s/ Karen M. Fort Hood
                                                             /s/ Amy Ronayne Krause
                                                             /s/ Michael F. Gadola




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