Spill lands Starbucks in hot water

For those of us old enough, we remember the infamous McDonald’s hot coffee lawsuit brought by Stella Liebeck in the 90s. Stella suffered third-degree burns on 16% of her body when the scorching liquid spilled on her legs and groin area, ultimately resulting in a jury trial when the two couldn’t reach an initial settlement. The judge reduced punitive damages from $2.7 million to $480,000, and the $200,000 compensatory damages were slashed to $160,000. Stella and McDonald’s eventually reached a private settlement.

Stella’s lawsuit became big news and was considered by many to be a frivolous money grab despite her serious injuries and treatment. Like a blast from the past, a jury just told Starbucks to cough up $50 million after Postmates driver Michael Garcia received third-degree burns to his groin and thighs while picking up hot tea in 2020. Michael had multiple skin grafts and claimed he suffers from pain with friction to the burned area.

For all you lookie-loos out there, you can watch the video of the incident from a camera directed at the Los Angeles’ Starbucks’ drive through window and see the extreme reaction after Michael is handed the drinks and the cup falls. The crux of Michael’s argument was that the employee neglected to secure the tea in the drink carrier.

As one would expect, Starbucks is appealing the massive jury award, stating that while it has sympathy for Michael, the beverage giant is not to blame. I’d be surprised if they don’t reach a settlement to avoid the continuous legal battle and potential bad press. However, companies should be reminded that in instances like these, it’s not just the customer who lands in hot water.

New year, new child support formula manual

New year, new you, new child support formula manual. Unlike your new year’s resolutions, the 2025 Michigan Child Support Formula (MCSF) manual must be adhered to for the next four years until another version is ushered in.

Nothing earth shattering has been changed in the 2025 version, although several things are worth mentioning. The annual ordinary medical amount that the payee of support must pay first before unreimbursed health care costs for the children are divided between the parties has actually been reduced. Prior formulas only increased the minimum amount the payee had to spend before the percentage split kicked in. However, the 2025 MCSF lowered the amount from $454 per year per child to $200 per year per child.  The new manual emphasizes that the payer of support pre-pays his or her percentage as part of the monthly support amount – while this is not new, clarification is helpful.  Uninsured health care costs for the children incurred by both the recipient and payer of support are subject to division.

 

Day care costs also have a new expiration date. The prior formula provided that child care costs could be included until August 31^st following the child’s 12^th birthday. Now, child care continues until the last day of the month that the child is under the age of 13. Of course, a court can extend the child care expiration date should it be necessary to do so for that specific case and child.

 

If a parent is incurring costs associated with his or her incarceration or conviction, those recurring payments can be deducted when calculating child support. This does not apply if the crime was failure to support children, or committed against the children in the case (or their sibling), the other parent or custodian.

 

Along with a new formula comes updated SCAO forms – be sure to use the most recent Uniform Child Support Orders and Deviation Addendum when submitting your support orders to the court. The Friend of the Court approval process should catch if an old form has been used, but it’s always easier to have it right the first time.

 

Sticking with the 2025 MCSF manual is easy because you don’t have a choice – good luck with the rest of your resolutions.

Following MCR is a must for motions

The four most important words when you file a motion are “follow the court rules.” The Michigan Court Rules (MCR) are the bible for dos and don’ts when petitioning the court for relief. Individual counties may have their own additional local rules so it’s important to peruse those also.

The risk of not paying attention to the MCR can lead to disastrous results in court – if you even make it that far. Service rules for filing a motion, notice of hearing and proof of service are of utmost importance and determine whether your motion can even be heard before the judge that day. The opposing party or his attorney must receive copies of your pleadings within a certain amount of time before the actual hearing. In addition, you must file a proof of service saying when and how you gave notice of the hearing and motion. It’s not enough to simply tell the court you did it – you must “prove” it by filing the proof of service/certificate of mailing in the court file.

 

At times, parties will accuse the other of lying on the proof of service, saying the documents were never actually sent, which may or may not be true. The USPS is blamed on the daily, to the extent you’d start to believe carrier pigeons would be more reliable.

 

The advent of electronic filing, called MiFile in Michigan, has helped alleviate some service questions as emails can be added to the system, ensuring the documents are routed directly to that person. MiFile also allows documents to be filed anytime of day, making the process more accessible than coming to the courthouse during business hours, and is considered personal service, requiring less advance notice than mailing. If available, attorneys must use MiFile, but self-represented parties can choose to file pleadings the old-fashioned way. Depending on the type of case, MiFile may not be available. One caution about MiFile – it can take 24+ hours for the document to reach its intended destination due to employees having to review and route the documents to the correct file and location, so courtesy emails are appreciated.

 

Rules governing service can be overwhelming and confusing. However, if they aren’t followed, you risk having your hearing canceled and not heard before the court until service is properly effectuated. During our dockets, I talk to the parties who have failed to provide proper service and explain that they won’t have an audience with the judge that day. Often both parties attend the hearing because they were notified but the moving party didn’t know he needed to file a piece of paper saying the other side was served. If both parties attend and agree to move forward, any defects in service can be waived; however, if a party demands proper service, the motion must be rescheduled.

 

Don’t forget to file a proof of service for the new date of hearing – if you don’t, you will end up in a “Groundhog Day” situation. If your concerns are important enough to bring to the judge’s attention, make sure you follow through on what’s required of you to have your day in court.

The Bare Minimum

Everyone has heard the expression “the bare minimum,” but did you know it can be applied to child support as well? The Michigan Child Support Formula (MCSF) is updated every four years, with 2025 being the kickoff to a new manual. Changes will be discussed in later articles, but I’d like to mention this often-overlooked section.

 If you are opted into the Friend of the Court (FOC) system, you are eligible for a child support review every 36 months or sooner if circumstances change. While this list is not exhaustive, examples of changes are the birth of another child, job loss or gain, raises, incapacitation and incarceration. If you are one of the lucky ones where nothing has caused you to adjust support in three years, the FOC should contact you to inquire if you want a review; depending on the answers, one will be started.

 

The volume of support review requests received by the FOC and courts is large, and the outcomes may not be what the parties were hoping for. People often think that every raise and every overnight have a big impact on what is being paid in support. However, depending on what the change is, and how it fits into the support algorithm, it may not make a dent in the formula recommended amount.

 

2025 MCSF Section 4.05 covers the minimum threshold for modification of child support. Those “bare minimums” are 10% of the currently ordered support amount, or $50 per month, whichever is greater. So, if you’re paying $450 per month in support, and the new recommended amount is $460, the bare minimum has not been met and support will stay the same. But if support is recommended to be $125, you’ve hit the jackpot, and the threshold has been met.

 

You can agree to modify support under the threshold amount and enter a new order, but it’s very unlikely the court would grant a modification that doesn’t meet the threshold without the parties’ agreement. If the FOC child support review exceeds the minimum threshold, the FOC must request a modification of the current order.

 

If your FOC review results in a letter telling you that the recommended amount did not meet the minimum threshold, now you know what that means. You can object to the review even if the threshold amount is not met, just like you could if a modification was recommended.

 

Before you ask for a support review, use the MiChildSupport Calculator, which can be accessed online at: https://micase.state.mi.us/calculatorapp/public/welcome/load.html, to get an idea as to whether your $2 raise or health care premium increase will move the needle. Doing the bare minimum can have a lasting effect on your resources and frustration.

What's mine in the future is mine

When people divorce, it should be a (mostly) clean break from their former spouse. Most know that their future earnings are considered for child support and spousal support too if that is ordered and modifiable. But what about speculative employment benefits you earn in the future or post judgment? Those should be yours and yours alone, right? If you said yes, the Michigan Court of Appeals agrees with you.

In the 2009 published case Skelly v Skelly, 286 Mich App 578, Wayne County trial court awarded Thomas Skelly’s former wife, Patricia, part of his future benefits with his employer Ford Motor Company. Tom had a lucrative position at Ford which came with a retention bonus, paid out in installments, totaling $108,000. The point of the bonus was to have Tom stay put at Ford through May 31, 2009 to receive the full amount (I’d be sold). If he didn’t, he had to reimburse Ford for every payment received.

 

The lower court did its usual equitable division of marital retirement, assets and debts, and awarded Patricia spousal support of $5,000 per month. While recognizing that the future retention bonus payments would likely be separate property, the court ultimately chose to invade it, noting Patricia’s limited ability to earn, and “in the Court’s mind, [the retention award] is based on performance during the marriage,” and awarded Tom 60%, and Patricia 40%. The court went on to award Patricia 40% of any future bonus received by Tom, in addition to the retention bonus. Earned bonuses are considered for support, including modifications as they are income, but the parties were divorced July 23, 2008, almost a full year before Tom could even get the last payment of his retention bonus. Not surprisingly, Tom appealed.

 

The court of appeals noted that assets earned during the marriage are part of the marital estate whether they are received during the marriage or after the judgment has been entered. However, the difference in the Skelly case is that the retention bonus was not truly earned during the marriage, so none of it was marital property. Don’t forget, Tom had to work until May 31, 2009 to get the full $180,000, and he had to pay it all back, including portions already received, if he didn’t stay with Ford until that time. Because of this, he hadn’t earned the money as “he had not satisfied the condition subsequent…required by the agreement between him and his employer.”

 

Ultimately, the court of appeals found the lower court erred in considering any portion of the retention bonus as marital property subject to division. It also held that the third payment was not separate property subject to invasion because he had not yet earned that money when the parties were divorced. As a final nail in the coffin, the court ruled that because speculative, future bonuses are not currently in existence, you can’t award them as part of the marital property division. Once again, they aren’t earned during the marriage and are “based solely on the potential occurrence of future events unrelated to the marriage.” Not even a crystal ball could’ve helped Patricia win this case.

Shooter drill misfires at the hospital

We’ve all suffered through false alarms, whether planned or not, but Michigan’s Department of Health and Human Services is paying for its part in one. On October 4, 2024, Judge James Redford approved a $13 million settlement to patients and employees of the Hawthorn Center for its huge mishap with a shooter drill.

While the Hawthorn Center is now defunct, it was fully operational right before Christmas in 2022, when patients and staff heard bellowed over the speakers that two armed men were inside the facility and shots had been fired. As if that isn’t bad enough, the Hawthorn Center, located in Northville Township, was a state-ran children’s psychiatric hospital. Read that again.

 

The element of surprise is often helpful when trying to effectively plan for any type of emergency. However, given America’s history with mass shootings and gun violence, and considering that this was literally a children’s psych hospital, leaving out that it was a drill was utterly devastating. It gets worse too – the police didn’t even know it was a drill. So, when 911 was called and families texted by terrified kids and staff, the police rushed to the scene in body armor and weapons used to combat this type of crisis.

 

It's hard to imagine the horror faced by the staff and children, who were already suffering from mental health issues. The hospital even went so far as to have two individuals pose as shooters, but thankfully they were not armed.

 

The settlement will award 50 children approximately $60,000 each, and 90 staff with more than $50,000 each. The score from a trauma exam will help determine the exact amount each person will receive. In addition, 24 other individuals will receive lesser amounts. Disturbingly, the director who organized the drill still works for the state of Michigan.

 

DHHS stated it was in everyone’s best interest to settle the matter, as opposed to prolonged litigation. While no amount of money will erase the trauma caused that day, the incident will certainly change how drills are handled in the future.

Spousal support is non-modifiable by agreement only

Spousal support is often a hard pill to swallow, even when the parties agree to the payment and terms. Imagine not having a say, and finding out from the court that you are stuck paying $2,500 per month…with no ability to change it. That was Frank Koy’s nightmare until the Michigan Court of Appeals stepped in (see Koy v Koy, 274 Mich App 653 (2007)).

Now, to be fair, Frank wasn’t exactly portrayed as an angel – his ex-wife Concetta, a widow when they married, testified that he squandered her $400,000 in real estate without her knowledge, leaving her with only $5,000. During their divorce, he didn’t comply with a multitude of court orders, including those related to discovery, which looks a little suspicious. His excuse was that he simply wasn’t good at answering those types of questions, and besides, his wife knew their assets.

 

On top of his utter lack of respect for court orders, when Frank failed to show up at the settlement conference, the court entered a default against him and declined to set it aside when asked.  Frank requested a stay relative to the default judgment of divorce and to set it aside, because Concetta was disposing of assets while his appeal was pending. The trial court agreed to the stay if Frank posted an over $500,000 bond – which he never did.

 

The trial court entered a default divorce judgment, awarding Concetta non-modifiable spousal support of $2,500 per month. The problem is, only parties can agree to a non-modifiable spousal support award – and Frank certainly didn’t agree. The Court of Appeals noted that “[a]n award of spousal support is subject to modification on a showing of changed circumstances,” and while the award “need not specify that it is modifiable, the award in this case improperly states that it is “non-modifiable.”

 

When divvying up the parties’ property, the trial court also failed to make sufficient findings of fact to support its decision. Upon remand, the court could consider redistribution of the assets to achieve the equitable division required.

 

The Court of Appeals held that the lower court did not abuse its discretion when denying Frank’s motion to set aside the default judgment of divorce, leaving him with a limited do over on the property, and of course, the spousal support win. This case is an excellent reminder that the court cannot issue a non-modifiable spousal support award absent agreement of the parties – proving that change isn’t always a bad thing.