STATE OF MICHIGAN COURT OF APPEALS

STATE OF MICHIGAN COURT OF APPEALS In re Estate of MILMET. DAVID L. SOLOMON, Co-Personal Representative of the ESTATE OF MORRIS MILMET, ROBERT SOLOMON, and LOIS RENEE SOLOMON RICHARDS,, UNPUBLISHED August 7, 2012 Petitioners-Appellants, v No. 303304 Oakland Probate Court SARAH RONAYNE MILMET, Co-Personal LC No. 2003-291163-DE Representative of the ESTATE OF MORRIS MILMET, and Respondent-Appellee, DAVID P. SUTHERLAND, LAW OFFICES OF DAVID P. SUTHERLAND, and DOUGLAS CHARTRAND, Respondents. Before: MURPHY, C.J., and STEPHENS and RIORDAN, JJ. PER CURIAM. Petitioners, David L. Solomon, Robert Solomon and Lois Renee Solomon Richards, challenge the grant of summary disposition in favor of respondent Sarah Ronanye Milmet pursuant to MCR 2.116(C)(8). 1 We reverse and remand for further proceedings. 1 Petitioners also appealed an order granting summary disposition in favor of respondent Douglas Chartrand. During the pendency of this appeal, Chartrand was dismissed pursuant to a -1-

At the outset, we note that the parties have referenced a myriad of documents in setting forth the facts of this case. Because summary disposition was granted pursuant to MCR 2.116(C)(8), and the trial court indicated it was relying solely on the pleadings, we also look only to the pleadings in determining the relevant facts. This appeal concerns the petitioners executed disclaimers of their interests in the residuary estate of Morris Milmet. David Solomon and Sarah Milmet, the decedent s wife, were named co-personal representatives of the estate and retained attorney David Sutherland to represent them. Petitioners averred: [I]n June 2004, David P. Sutherland (and possibly others) conceived a method by which the Estate could avoid estate tax being paid on the non-marital portion of the Residuary Estate by shifting all of such assets into the Sarah Milmet Marital Trust by means of the Residuary Beneficiaries executing Disclaimers of their interests in the Residuary Estate and the Residuary Beneficiaries agreeing to pay taxes individually at either lower personal income tax rates or capital gains rates in the future on the cash equivalents of those assets as and when those assets were distributed to them as agreed upon by, between and among the Residuary Beneficiaries and Sarah Milmet. Petitioners alleged that the agreement with Milmet was conceived in an effort to protect the viability and continuation of an investment firm through restructuring taxes in a manner that would not necessitate its dissolution to meet tax obligations while simultaneously protecting the monetary interests of the investment firm s beneficiaries. Sutherland insisted that the petitioners consult with an independent attorney and obtain a written opinion before proceeding to disclaim their interests. Petitioners retained Douglas Chartrand who issued a letter on July 23, 2004, outlining the consequences if they were to execute Disclaimers of their residuary interest. Thereafter, petitioners executed the disclaimers. Petitioners averred that they executed the disclaimers in exchange for Sarah Milmet s agreement to provide the Residuary Beneficiaries with the value of their interest in the Residuary Estate at a later date. Petitioners averred that after the Estate s 706 [federal estate tax return] was allowed by the Internal Revenue Service with the foregoing Disclaimers, Sarah Milmet breached the foregoing agreements by, among other breaches, repudiating the same and retaining the 40 [percent] of the Residuary Estate bequeathed to the Residuary Beneficiaries for her own account. Petitioners alleged causes of action against Milmet for breach of contract, breach of fiduciary duty, fraud, and fraud in the inducement, conversion, civil conspiracy, unjust enrichment, and promissory estoppel. Petitioners also labeled one count Rescission, asserting that the disclaimers were procured by wrongful conduct and that equitable principles necessitated rescission of the disclaimers. In finding that petitioners failed to state common law and equitable claims against Milmet, the probate court concluded that petitioners disclaimers were irrevocably binding under stipulation by the parties. Accordingly, the issue raised in petitioners appellate brief pertaining to respondent Chartrand will not be addressed. -2-

the provisions pertaining to the disclaimer of property interests law, MCL 700.2901, et seq., within the Estates and Protected Individuals Act (EPIC), MCL 700.1101 et seq. The trial court concluded that EPIC required that the petitioners be treated as having never received their interests, as if they had predeceased the decedent, and had absolutely no right or interest whatsoever in the estate. The court concluded that petitioners could not avoid EPIC by alleging a private agreement that would render the law a nullity. The court concluded that because the enforcement of such an alleged agreement would permit a result statutorily prohibited, the agreement would be unenforceable as a matter of law and that any claims would be barred. On reconsideration, the court clarified that its disposition encompassed the fraud claim. Specifically, the court held that the disclaimer law could not be avoided by alleging fraud and that the disclaimers and Chartrand s opinion letter obviated any claim of fraud. Whether EPIC bars relief to petitioners requires a review of the statute, which constitutes a question of law that we review de novo. Whether summary disposition was properly granted pursuant to MCR 2.116(C)(8) for failure to state a claim is also reviewed de novo. In re Baldwin Trust, 274 Mich App 387, 396; 733 NW2d 419 (2007). The factual allegations in the complaint must be accepted as true and only the pleadings may be considered. To grant summary disposition under MCR 2.116(C)(8), the claim must be so clearly unenforceable as a matter of law that no factual development could possibly justify recovery. Maiden v Rozwood, 461 Mich 109, 119; 597 NW2d 817 (1999) (citation omitted). Whether public policy bars the contract and equitable claims, also constitutes a question of law, which we review de novo. Beach v Lima Twp, 489 Mich 99, 105-106; 802 NW2d 1 (2011). EPIC, MCL 700.2901, et seq., encompasses the disclaimer of property interest law. Specifically, MCL 700.2909 provides: (1) A disclaimer, or a written waiver of the right to disclaim, is binding upon the disclaimant or person waiving the right to disclaim, and all persons claiming through or under him or her. (2) A disclaimer acts as a nonacceptance of the disclaimed interest, rather than as a transfer of the disclaimed interest. The disclaimant is treated as never having received the disclaimed interest. [Emphasis added.] Events barring [the] right to disclaim property are delineated in MCL 700.2910 as follows: (1) The right to disclaim property is barred by any of the following events that occur after the event giving rise to the right to disclaim and before the disclaimer is perfected: (a) An assignment, conveyance, encumbrance, pledge, or transfer of the property, or a contract for such a transaction. (b) A written waiver of the right to disclaim. (c) An acceptance of the disclaimable interest or a benefit under the disclaimable interest after actual knowledge that a property right has been conferred. -3-

(d) A sale of the property under judicial sale. (e) The expiration of the permitted applicable perpetuities period. (2) The right to disclaim is barred to the extent provided by other applicable law. A partial bar does not preclude the disclaimant from disclaiming all or any part of the balance of the property if the disclaimant has received a portion of the property and there still remains an interest that the disclaimant is yet to receive. An act that bars the right to disclaim a present interest in joint property does not bar the right to disclaim a future interest in joint property. We find that a genuine issue of material fact existed whether the parties disclaimer was barred premised on MCL 700.2910(1)(a). In the circumstances of this case, the allegations contained in petitioners complaint regarding the existence of an agreement or contract in exchange for the effectuation of the disclaimers calls into question both the legitimacy of the disclaimers and the propriety of granting summary disposition under MCR 2.116(C)(8). The trial court erred in determining the effect of the disclaimer without first deciding petitioners assertion of the existence of a contractual agreement with respondent. Because the existence of such an agreement would preclude the validity of the disclaimers, the trial court effectively placed the cart before the horse. 2 On remand, should the trial court determine the existence of an agreement between the parties, the executed disclaimers would be void ab initio, making the remedy of specific performance or enforcement of the disclaimers unavailable. Bailey v Bailey, 321 Mich 166, 177; 32 NW2d 429 (1948). As such, the parties and estate would be returned to the status existing before execution of the disclaimers. The trial court also held that petitioners fraud claims could not stand because they would undermine the clear mandates of the disclaimer statute. The probate court concluded, based on Chartrand s letter and the disclaimers, that petitioners could not satisfy the reasonable reliance element necessary to establish their fraud claim. We note that the motion before the trial court was brought in accordance with MCR 2.116(C)(8). Thus, it was improper for the trial court could to look beyond the pleadings, and consider Chartrand s letter, in rendering a decision on the claim. Petitioners averred that they disclaimed their interests in exchange for Sarah Milmet s agreement to provide the Residuary Beneficiaries with the value of their interest in the 2 We further note that such an outcome is consistent with the related statutory provision, MCL 700.2910(2), which serves to bar a disclaimer to the extent provided by other applicable law. Specifically, 26 USCA 2518(b)(3) of the Internal Revenue Code has been interpreted such that [a] qualified disclaimer cannot be made with respect to an interest in property if the disclaimant has accepted the interest or any of its benefits, expressly or impliedly, prior to the disclaimer. Acceptance is manifested by an affirmative act which is consistent with ownership.... In addition, the acceptance of any consideration in return for making the disclaimer is an acceptance of the benefits of the entire interest disclaimed. Estate of Monroe v CIR, 124 F3d 699, 705 (CA 5, 1997). Specifically, the question for each disclaimer is whether the decision to disclaim was part of mutually-bargained-for consideration or a mere unenforceable hope of future benefit.... Id. at 710. -4-

Residuary Estate at a later date. Because this allegation must be accepted as true for purposes of the motion, the grant of summary disposition was not appropriate. We next address petitioners breach of fiduciary duty claim. Milmet owed a fiduciary duty to the beneficiaries under the will in accordance with MCL 700.3703(1). This would include a duty to administer the will in the interest of the beneficiaries. MCL 700.3703(1); MCL 700.7802(1). If, as alleged, she schemed to fraudulently induce petitioners to relinquish their interests through disclaimers, she could be found liable for breach of her fiduciary duty. Because petitioners stated a potential claim, summary disposition was inappropriate. Regarding petitioners claim of civil conspiracy, we note that in Advocacy Org for Patients and Providers v Auto Club Ins Ass n, 257 Mich App 365, 384; 670 NW2d 569 (2003), this Court stated: A civil conspiracy is a combination of two or more persons, by some concerted action, to accomplish a criminal or unlawful purpose, or to accomplish a lawful purpose by criminal or unlawful means. In count six of the complaint, plaintiffs alleged that defendants conspired to tortiously interfere with plaintiffs business and contractual relationships. However, a claim for civil conspiracy may not exist in the air; rather, it is necessary to prove a separate, actionable tort. [Internal citations and quotation marks omitted.] Petitioners averred that the conspirators were Milmet, Chartrand, and Sutherland. Milmet contends that this claim cannot be maintained because Chartrand and Sutherland have been dismissed from the lawsuit. Contrary to Milmet s assertion, it is permissible for an action to be maintained against any one conspirator without joining the coconspirators based upon an established conspiracy. Brown v Brown, 338 Mich 492, 504; 61 NW2d 656 (1953). Petitioners asserted that the alleged conspirators deprived them of their interests in the residuary estate through all of the underlying actions. The deprivation of rights was legal pursuant to the disclaimers, but petitioner avers that it was accomplished through unlawful means. One of these alleged means was fraud in the inducement. Thus, petitioners have alleged a separate actionable tort. Petitioners have, however, failed to state a claim for conversion. In Lawsuit Fin, LLC v Curry, 261 Mich App 579, 591; 683 NW2d 233 (2004), this Court stated: Conversion is defined as any distinct act of domain wrongfully exerted over another s personal property in denial of or inconsistent with the rights therein. To support an action for conversion of money, the defendant must have obtained the money without the owner s consent to the creation of a debtorcreditor relationship and must have had an obligation to return the specific money entrusted to his care. [Internal citations and quotation marks omitted.] Petitioners asserted that Milmet exercised wrongful dominion and control over the assets belonging to the residuary estate. Accepting petitioners allegations as true, she obtained dominion and control with petitioners consent to the creation of a debtor-creditor relationship -5-

and, presuming the agreement existed and was valid, she had a duty to return moneys pursuant to her promise to pay, not to return the residuary assets. This was not a conversion. Regarding the claim of unjust enrichment, in Morris Pumps v Centerline Piping, Inc, 273 Mich App 187, 195; 729 NW2d 898 (2006), this Court has previously stated: The essential elements of a quasi contractual obligation, upon which recovery may be had, are the receipt of a benefit by a defendant from a plaintiff, which benefit it is inequitable that the defendant retain. Thus, in order to sustain a claim of quantum meruit or unjust enrichment, a plaintiff must establish (1) the receipt of a benefit by the defendant from the plaintiff and (2) an inequity resulting to the plaintiff because of the retention of the benefit by the defendant. In other words, the law will imply a contract to prevent unjust enrichment only if the defendant has been unjustly or inequitably enriched at the plaintiff s expense. [Internal citations omitted.] Milmet argued that there was no unjust enrichment because petitioners had relinquished their interests in the residuary estate. This ignores the allegation that Milmet promised to pay petitioners the equivalent of their disclaimed interests. In response to petitioners breach of contract claim, Milmet argued that petitioners had failed to state a claim because they had not pleaded the existence of a contract. Petitioners did assert that they executed the... [d]isclaimers in exchange for Sarah Milmet s agreement to provide [them] with the value of their interests in the Residuary Estate at a later date. The essential elements of a valid contract are... (1) parties competent to contract, (2) a proper subject matter, (3) a legal consideration, (4) mutuality of agreement, and (5) mutuality of obligation. Hess v Cannon Twp, 265 Mich App 582, 592; 696 NW2d 742 (2005), quoting Thomas v Leja, 187 Mich App 418, 422; 468 NW2d 58 (1991). So long as there was a proper subject matter, petitioners have sufficiently stated a claim for breach of contract. The court also held that the claims were barred on public policy grounds because petitioners claims all centered on an agreement, which the court implies was illegal. Milmet posits that the alleged arrangement would be contrary to federal law in that it was a scheme to avoid payment of federal estate taxes. In fact, this was a basis relied on by Milmet in the lower court to argue that petitioners had failed to state a claim for breach of contract and the only basis for asserting that petitioners had failed to state a claim for promissory estoppel. While this Court will not engage in an interpretation of federal law, we note that a significant difference exists between tax avoidance and tax evasion. It is not immediately obvious or determinable based on the record before this Court regarding which the proposed contract may have contemplated. Petitioners represent that the arrangement was intended to protect the continuation of an investment firm by structuring the taxable events in a way that would not require its dissolution in order to pay taxes, while taking a countermeasure to protect petitioners monetary interests. Based on the disclaimers and the related treatment of the residuary estate, the estate legally avoided having to pay as much in taxes. Had petitioners been given the cash equivalencies of what they lost, they presumably would have had to pay taxes on those receipts. Before the claims can be dismissed on public policy grounds it must be -6-

established that the actions of the parties was illegal and not merely a legitimate restructuring of taxes. Thus, we remand for development of a record or legal argument on whether the disclaimer agreement was illegal and/or otherwise impermissible such that it would be void based on public policy. Reversed and remanded for proceedings consistent with this opinion. We do not retain jurisdiction. /s/ Cynthia Diane Stephens /s/ Michael J. Riordan -7-

STATE OF MICHIGAN COURT OF APPEALS In re Estate of MILMET. DAVID L. SOLOMON, Co-Personal Representative of the ESTATE OF MORRIS MILMET, ROBERT SOLOMON, and LOIS RENEE SOLOMON RICHARDS, UNPUBLISHED August 7, 2012 Petitioners-Appellants, v No. 303304 Oakland Probate Court SARAH RONAYNE MILMET, Co-Personal LC No. 2003-291163-DE Representative of the ESTATE OF MORRIS MILMET, and Respondent-Appellee, DAVID P. SUTHERLAND, LAW OFFICES OF DAVID P. SUTHERLAND, and DOUGLAS CHARTRAND, Respondents. Before: MURPHY, C.J., and STEPHENS and RIORDAN, JJ. MURPHY, C.J. (concurring in part, dissenting in part). In this challenging appeal, I respectfully concur in part and dissent in part for the reasons set forth below. This case concerns disclaimers filed by petitioners under the Estates and Protected Individuals Code (EPIC), MCL 700.1101 et seq., and in particular Part 9, MCL 700.2901 et seq., with respect to their interests in the residuary estate of Morris Milmet, which consisted of capital -1-

stock in M&S Investment, Inc. 1 At the heart of petitioners lawsuit is the claim that they executed and filed the disclaimers on the basis of an oral agreement with respondent Sarah Ronanye Milmet ( Milmet ). In the petition, it was alleged that petitioners signed the disclaimers in exchange for... Milmet s agreement to provide the Residuary Beneficiaries with the value of their interest in the Residuary Estate at a later date. The nature of the alleged agreement is also reflected in the affidavit of petitioner David Solomon, who averred as follows: David Sutherland proposed a method to Sarah Milmet and me by which the Estate could avoid estate tax being paid on the non-marital portion of the Residuary Estate by transferring all of such assets into the Sarah Milmet Marital Trust if the Residuary Beneficiaries would agree to execute Disclaimers of their interests in the Residuary Estate with the understanding that the Residuary Beneficiaries would later receive those assets from Sarah Milmet at a time when the stock held in M&S had appreciated in value (hereinafter the Disclaimer Agreement ).... After... meetings with David Sutherland, I was assured by Sarah Milmet that she would honor the Disclaimer Agreement by distributing the equity in M&S after the Estate was closed in accordance with Morris Milmet s Will if I and my brother Bob Solomon and sister Renee Solomon would accept [the] proposal. The affidavits of the other two petitioners set forth similar averments. On the strength of the alleged disclaimer agreement, purportedly, the three petitioners each executed separate but identical disclaimers that contained, in part, the following language: [I] irrevocably and unqualifiedly disclaim any and all interest I have in the residuary estate.... Further, I affirm that I have not accepted any interest in or benefit from the residuary estate, and... I have not received and I will not 1 A person may disclaim a disclaimable interest in whole or in part, MCL 700.2902(1), and a disclaimable interest includes property and the right to receive or control property, MCL 700.2901(2)(b). Property, which includes both real and personal property, means anything that may be the subject of ownership[,] MCL 700.2901(2)(i), and [a] disclaimer may be of a specific asset, an interest in a specific asset, a pecuniary amount, a fractional or percentage share, or a limited interest or estate[,] MCL 700.2902(2). MCL 700.2909 provides: (1) A disclaimer, or a written waiver of the right to disclaim, is binding upon the disclaimant or person waiving the right to disclaim, and all persons claiming through or under him or her. (2) A disclaimer acts as a nonacceptance of the disclaimed interest, rather than as a transfer of the disclaimed interest. The disclaimant is treated as never having received the disclaimed interest. -2-

receive any consideration for making this Disclaimer. Further, it is my intention that this Disclaimer constitute a qualified disclaimer as provided in Section 2046 and 2518 of the Internal Revenue Code of 1986, as amended, or the corresponding provisions of any subsequent federal tax law. It is also my intention that this transfer and Disclaimer constitute a qualified disclaimer as provided in M.C.L.A. Sections 700.2901 to 700.2912 [Part 9 of EPIC]. I note the inherent conflict between the alleged disclaimer agreement pursuant to which petitioners were promised consideration payable by Milmet at a future date in exchange for executing the disclaimers and the language used by petitioners in the disclaimers that denies any such arrangement by indicating that the petitioners had not received and would not receive any consideration for disclaiming their interests. Subsequently, the estate filed a federal estate tax return, Form 706, which incorporated the disclaimers, and it was accepted and approved by the Internal Revenue Service (IRS). The probate estate was closed and, according to petitioners, Milmet then failed to keep her end of the bargain and retained the disclaimed residuary interests. 2 Petitioners eventually filed the instant suit against Milmet, alleging causes of action for breach of contract, breach of fiduciary duty, fraud and fraud in the inducement, conversion, civil conspiracy, unjust enrichment, rescission, and promissory estoppel. In its ruling on Milmet s motion for summary disposition, the trial court, emphasizing the plain language in the executed disclaimers, 3 stated: In light of the clear mandates of the Disclaimer Law [under EPIC], and the express, unambiguous language of the Petitioners Disclaimers, which is entirely consistent with that law, this Court can reach no other conclusion then that the Disclaimers, once executed and delivered, were irrevocably binding upon the 2 In the petition, it was alleged that after the Estate s 706 was allowed by the Internal Revenue Service with the foregoing Disclaimers,... Milmet breached the foregoing agreements by, among other breaches, repudiating the same and retaining the 40% of the Residuary Estate bequeathed to the Residuary Beneficiaries for her own account. 3 Although the trial court indicated that it was only deciding the motion for summary disposition based on the pleadings for purposes of MCR 2.116(C)(8), it is clear that the court went outside the pleadings by examining documentary evidence, i.e., the disclaimers. When a trial court relies on documentary evidence beyond the pleadings, we treat the motion as having been granted pursuant to MCR 2.116(C)(10). Kefgen v Davidson, 241 Mich App 611, 616; 617 NW2d 351 (2000). We review de novo a trial court s ruling on a motion for summary disposition, and a motion under MCR 2.116(C)(10) tests whether there is factual support for a claim, with the court considering affidavits, pleadings, depositions, admissions, and other documentary evidence in a light most favorable to the nonmoving party in determining whether a genuine issue of material fact exists. Id. I have referenced documentary evidence in this opinion given the fact that the trial court also considered documentary evidence for purposes of its ruling. -3-

Petitioners. The Petitioners must be treated as never having received their interests in the Residuary Estate, i.e., as if they had predeceased Morris Milmet. The Petitioners cannot avoid the clear mandates of the Disclaimer Law by alleging a private agreement that would render that law a nullity. As a result of their Disclaimers, the Petitioners have absolutely no right or interest whatsoever in the Estate, and no damages that they can recover. In this matter, Petitioners simply cannot circumvent the clear mandates of the Disclaimer Law by relying on their asserted common law and equitable theories. Sustaining the enforcement of such theories would require this Court to permit indirectly what is prohibited directly by the statute. The courts have traditionally looked upon circumvention of statutes with extreme disfavor. [Citation omitted.] The trial court held that the alleged disclaimer agreement was unenforceable as a matter of law. Petitioners appeal as of right. 4 I find that the outcome of this case is entirely controlled by whether there was a disclaimer agreement between the parties. As part of my analysis, I will first assume the existence of the disclaimer agreement and examine the legal impact of the agreement on the disclaimers themselves and on the causes of action alleged by petitioners. Thereafter, I will make the assumption that no disclaimer agreement existed, as claimed by Milmet in her affidavit, 5 and briefly examine the legal impact of such a scenario on the disclaimers and petitioners causes of action. Finally, I will consider the question of the disclaimer agreement s existence and apply my conclusions in the context of the procedural posture of the case under MCR 2.116. MCL 700.2910 provides in pertinent part: (1) The right to disclaim property is barred by any of the following events that occur after the event giving rise to the right to disclaim and before the disclaimer is perfected: (a) An assignment, conveyance, encumbrance, pledge, or transfer of the property, or a contract for such a transaction. 4 Petitioners also appealed an order granting summary disposition in favor of respondent Douglas Chartrand. During the pendency of this appeal, however, he was dismissed pursuant to a stipulation of the parties. Accordingly, the issues raised in petitioners brief on appeal pertaining to Chartrand will not be addressed. 5 Milmet averred that [a]t no time before or after the death of my husband... did I, for any cause or reason, make a promise or enter into a contract, agreement or understanding with... [petitioners] verbally, in writing, by telephone, by electronic communication, or any other means that, in return for [petitioners] signing a Disclaimer..., I would pay [them] the interest to which [they were] entitled in the Residuary Estate at a later date in time. Milmet further indicated that she had no idea why petitioners executed the disclaimers and that their decisions to sign were made with no input, influence, suggestion, request, advice or other communication from Milmet. -4-

* * * (c) An acceptance of the disclaimable interest or a benefit under the disclaimable interest after actual knowledge that a property right has been conferred. * * * (2) The right to disclaim is barred to the extent provided by other applicable law. Under MCL 700.2910(1)(a), which the majority finds applicable if the disclaimer agreement truly existed, where there is a contract to transfer or convey property that arose after a person had the right to disclaim the property but before the perfection of any disclaimer, the person s right to disclaim the property would be barred. The alleged disclaimer agreement appears at first glance to fit the criteria set forth in MCL 700.2910(1)(a); however, the disclaimer agreement, in my view, was simply a contract whereby petitioners agreed to disclaim property rather than a contract under which petitioners would assign, convey, encumber, pledge, or transfer the property. A disclaimer acts as a nonacceptance of the disclaimed interest, rather than as a transfer of the disclaimed interest[,] [and] [t]he disclaimant is treated as never having received the disclaimed interest. MCL 700.2909(2) (emphasis added). A disclaimed interest devolves as if the disclaimant had predeceased the decedent. MCL 700.2907(1). Thus, despite petitioners affidavits speaking of an agreement by them to transfer assets to Milmet s trust, the alleged oral disclaimer agreement in reality was a contract in which petitioners promised not to accept the property or residuary interests as accomplished through execution of disclaimers. This would result by operation of law in the interests remaining in the estate for an alternative disbursement, which in this case was a disbursement of the interests to Milmet s trust. Regardless of the inapplicability of MCL 700.2910(1)(a), I find that MCL 700.2910(2) applies, and perhaps MCL 700.2910(1)(c), assuming, once again, the existence of the disclaimer agreement. As indicated above, MCL 700.2910(2) bars the right to disclaim property to the extent provided by other applicable law. 26 USC 2518 is referenced in the disclaimers, and petitioners indicated in said disclaimers that it was their intention that the documents constitute qualified disclaimers as provided in Section 2046 and 2518 of the Internal Revenue Code of 1986[.] 26 USC 2046 simply directs one to see 26 USC 2518, which provides in pertinent part: (a) For purposes of this subtitle, if a person makes a qualified disclaimer with respect to any interest in property, this subtitle shall apply with respect to such interest as if the interest had never been transferred to such person. (b) For purposes of subsection (a), the term qualified disclaimer means an irrevocable and unqualified refusal by a person to accept an interest in property but only if-- (1) such refusal is in writing, * * * -5-

(3) such person has not accepted the interest or any of its benefits,[ 6 ] and (4) as a result of such refusal, the interest passes without any direction on the part of the person making the disclaimer and passes.... [Emphasis added.] This federal statute was interpreted in Estate of Monroe v Comm r of Internal Revenue, 124 F3d 699 (CA 5, 1997). The federal court, providing an overview of the case, stated: This case requires interpretation of 2518(b) of the Internal Revenue Code and its accompanying regulations, which describe qualified disclaimer of benefits, a device commonly used for post-mortem estate and other tax planning. The disclaimants here were 29 legatees of the wife's will, all of whom were asked by her husband and did irrevocably disclaim the proffered bequests. Shortly afterward, the husband gave them gifts equaling or exceeding the bequests, and not long after that he died at age 93. The Tax Court concluded that the disclaimers were induced or coerced by the implied promise that [the disclaimants] would be better off if they did what Monroe wanted them to do..., even though he made no explicit promises. Finding that the coerced/induced standard is inconsistent with the regulations and a fair reading of the statute, we reverse on nearly all of the disclaimers. [Monroe, 124 F3d at 702.] The Monroe court initially indicated that Treasury Regulations explained that acceptance of the interest within the meaning of 2518(b)(3) includes not only explicit or implied acceptance of the interest or any of its benefits, but also receipt of consideration in return for executing the disclaimer. Id. at 708. The court also stated that an irrevocable and unqualified refusal to accept an interest, i.e., a qualified disclaimer, is a relinquishment of a legal right that is incapable of being retracted or revoked by the disclaimant and is not modified by reservations or restrictions that limit its enforceability. Id. The United States Court of Appeals for the Fifth Circuit ultimately held: [A] disclaimant cannot purport to disclaim, while taking actual advantage of the property or any of its benefits. Further, the disclaimant cannot accept benefits from the property by receiving consideration in exchange for the disclaimer. The juxtaposition in the regulation between the implied acceptance of the interest or any of its benefits and the consideration that must be received in exchange for a disclaimer is not accidental. One may impliedly accept the benefits of property, for instance by pledging it as security for a loan, and therefore act inconsistently when making an alleged disclaimer. On the other hand, only by receiving consideration in the classic sense does one receive property or any of its benefits in exchange for executing the disclaimer. We thus agree with the estate that to have accepted the benefits of a disclaimed 6 MCL 700.2910(1)(c) has fairly comparable language, where it bars the right to disclaim property where there has been [a]n acceptance of the disclaimable interest or a benefit under the disclaimable interest after actual knowledge that a property right has been conferred. -6-

interest, the disclaimant must have received actual consideration in return for renouncing his legacy. A disclaimant's mere expectation of a future benefit in return for executing a disclaimer will not render it unqualified. Consideration, used deliberately in the regulations, is a term of art. See Philpot v Gruninger, 81 US (14 Wall) 570, 577; 20 L Ed 743 (1872); Fire Ins Ass n v Wickham, 141 US 564, 579; 12 S Ct 84; 35 L Ed 860 (1891) (to constitute consideration, promise must have been offered by one party, and accepted by the other, as one element of the contract ). This is the way the regulations are written, and it is consistent with the Commissioner's letter rulings, which are properly cited as evidence of how the Commissioner has interpreted the law in the past. In each of the three rulings cited above, the obvious expectation that the disclaimant would be better off in the long-run by renouncing his interest in favor of the decedent's spouse did not violate the bar against acceptance of the disclaimed interest or its benefits.... In each case, the Commissioner cited the lack of an agreement between the parties as to what the disclaimants were to receive in the future. The Commissioner implicitly recognized the distinction between the expectation that renouncing is in the disclaimant's best interest and an expectation that rises to the level of consideration.... Thus, the question for each disclaimer is whether the decision to disclaim was part of mutually-bargained-for consideration or a mere unenforceable hope of future benefit, whether that unenforceable hope springs from family ties, long-term friendship or employment, or a generalized fear that benefits will be withheld in the future absent execution of the disclaimer. [Id. at 709-710 (citations omitted).] Here, the disclaimer agreement, which, again, I am merely presuming existed, concerned what the disclaimants (petitioners) were to receive in the future in return for executing the disclaimers. As asserted by petitioners, there was an offer, an acceptance, and mutual promises. The decisions to disclaim were part of mutually-bargained-for consideration giving rise to a contract. Indeed, that is the very foundation of petitioners lawsuit. Petitioners had an expectation of a contractual performance that constituted legal consideration and not a mere unenforceable hope of a future benefit. 7 The consideration for petitioners agreement to execute the disclaimers, which allowed the assets in the residuary estate to flow into Milmet s marital trust and resulted in the avoidance of burdensome estate taxes and the preservation of M&S Investment, Inc., was Milmet s promise to convey the equivalency of those assets to petitioners after the disclaimers cleared the IRS and the estate was closed. As reflected in Monroe, the IRS would not have approved the disclaimers nor found them to be qualified under 26 USC 2518 had it been known that the disclaimers were only executed because of Milmet s agreement to 7 No one has contended that petitioners signed the disclaimers after discussions with Milmet wherein she simply indicated that she might contemplate making a subsequent payment, gift, or distribution to petitioners if they executed disclaimers, as opposed to definitively making a promise to do so. -7-

make future payments or disbursements to petitioners. Although packaged and presented to the IRS as qualified disclaimers lacking any exchange or promises of consideration or conferment of benefits, that was simply not the case; the disclaimers, as maintained by petitioners themselves, were instead executed pursuant to an oral agreement involving consideration. Assuming the existence of the disclaimer agreement, the disclaimers would be rendered invalid or unqualified under federal law, 26 USC 2518(b)(3); Monroe, 124 F3d 699, and additionally, EPIC would dictate that the disclaimers be deemed invalid and void, given that the right to disclaim is barred to the extent provided by other applicable law, MCL 700.2910(2), which would encompass federal tax law. Furthermore, as indicated earlier, the language in 26 USC 2518(b)(3) is comparable to the language in MCL 700.2910(1)(c) of EPIC, and there is a strong argument that 2910(1)(c) should not be construed any differently than the federal statute was interpreted in Monroe, but it is not necessary to reach the issue considering the applicability of 2910(2). In sum, petitioners had no right or authority to disclaim their interests under EPIC if the disclaimers were only executed because of the alleged disclaimer agreement, which is exactly what petitioners contend. If the disclaimer agreement existed, thereby invalidating and voiding the disclaimers, the question that needs to be asked and answered is how would such a scenario affect petitioners lawsuit. Petitioners are effectively seeking alternative forms of relief, where they indicate that there is a basis to set aside or rescind the disclaimers, as reflected in their discussion of fraud and fraud in the inducement, and where, absent rescinding or setting aside the disclaimers, they seek to either enforce the disclaimer agreement, obtain a damage award for breach of the agreement, or to otherwise recover under the various causes of action alleged in the petition. If the disclaimer agreement is established, rendering the disclaimers void and effectively returning the parties and the estate to their pre-disclaimer positions, petitioners would in essence receive the very relief they requested when viewed in relationship to the specific request to rescind or set aside the disclaimers. Under those circumstances, wherein petitioners would be entitled to their residuary interests under the will, I fail to see how any of the causes of action seeking performance, damages, or other monetary recovery could survive. Either such causes of action would be rendered moot as no operative disclaimers would continue to exist or, assuming the claims could conceivably still stand minus the invalidated disclaimers, the causes of action would necessarily be predicated on an illegal and unenforceable disclaimer agreement. 8 With 8 The disclaimers, in and of themselves, would have been perfectly legal to file as part of an effort to properly avoid federal estate taxes, but when the oral disclaimer agreement is added to the mix, the entire transaction became illegal and the disclaimers became fraudulent. Petitioners desire that a court assist them in the completion of the illegal act by allowing them a chance to receive consideration for their disclaimers by way of a civil judgment, which would be in direct contravention of law. An agreement pursuant to which a person is to file a disclaimer, which appears on its face to be a qualified disclaimer, and submit it to the government for approval in exchange for an undisclosed promise that assets or cash will later be transferred to said person, with the parties knowing full well that the disclaimer is a misrepresentation, is an illegal and fraudulent contract. See 26 USC 7201. These were disclaimers containing knowingly false statements under petitioners own allegations and averments presented in this lawsuit, where the -8-

respect to any claim for which the requested relief was to set aside the disclaimers, it would be unnecessary to establish the elements of those claims, rendering them moot, as the mere existence of the disclaimer agreement, in and of itself, would support voiding and invalidating the disclaimers. I recognize that petitioners never alleged that the disclaimers should be set aside or rescinded simply because they were executed pursuant to the disclaimer agreement. However, EPIC and federal law dictate such a conclusion, and petitioners set forth all of the necessary facts in their petition that would give rise to a basis to void the disclaimers. Accordingly, if the disclaimer agreement is established, the only order or judgment that would need to be entered is one voiding or invalidating the disclaimers and reopening the estate, with petitioners suit otherwise being dismissed. Assuming that no disclaimer agreement existed and that Milmet never made the alleged promises, as she claimed in her affidavit, it would undermine each and every cause of action alleged by petitioners such that Milmet would be entitled to summary disposition. Ultimately, all of petitioners claims are founded on the existence of the disclaimer agreement, and the failure to establish that the parties had an agreement would eviscerate petitioners lawsuit. Moreover, there would also be no basis to set aside, rescind, invalidate, or void the disclaimers, where, absent the disclaimer agreement, the disclaimers would be sound under EPIC and federal law. With respect to procedural issues regarding the question of whether the parties had a disclaimer agreement, the trial court assumed, for purposes of MCR 2.116(C)(8), that the disclaimer agreement existed, and it found that the agreement was unenforceable as a matter of law, where the disclaimers were express, unambiguous, and entirely consistent with EPIC. For purposes of MCR 2.116(C)(8), all factual allegations contained in the complaint must be accepted as true, Dolan v Continental Airlines/Continental Express, 454 Mich 373, 380-381; 563 NW2d 23 (1997), and for purposes of MCR 2.116(C)(10), we must view the documentary evidence in a light most favorable to the nonmovant, RDM Holdings, Ltd v Continental Plastics Co, 281 Mich App 678, 687; 762 NW2d 529 (2008). Here, petitioners alleged the existence of the disclaimer agreement in their petition, and petitioners submitted documentary evidence in the form of affidavits supporting the existence of the disclaimer agreement. Therefore, whether under MCR 2.116(C)(8) or (10), we must analyze this appeal as if there was a disclaimer agreement as maintained by petitioners. I set forth above my conclusions regarding the proper treatment of the disclaimers and petitioners causes of action upon a finding that a disclaimer agreement existed. Given that Milmet denied the existence of the disclaimer agreement, that issue should be resolved in a remand. disclaimers indicated that no consideration was involved and that no interest survived. Under Michigan s wrongful-conduct rule, which is rooted in the public policy that courts should not aid a party who initiates litigation founded on his own illegal conduct, a court will generally not grant legal or equitable relief to a party who knowingly entered into an illegal contract, even when the other contracting party also did so knowingly and the suing party completed his performance under the contract. Orzel v Scott Drug Co, 449 Mich 550, 558-561; 537 NW2d 208 (1995); Mancourt-Winters Coal Co v Ohio & Mich Coal Co, 217 Mich 449, 454-455; 187 NW 408 (1922) (courts will not aid either party, but leaves them to reap the reward of their own folly ). -9-

In summation, I would find that the trial court erred in granting summary disposition in favor of Milmet, but only to the extent that the court s order precluded possible relief in the nature of voiding or setting aside the disclaimers predicated on the alleged disclaimer agreement. In all other respects, I would conclude that the trial court, albeit for different reasons, properly granted summary disposition in favor of Milmet. I would remand for trial, or possibly a renewed or new motion for summary disposition should a party choose that course, on the issue of whether the parties actually had a disclaimer agreement. If the answer is in the affirmative, the disclaimers should be voided and the estate reopened, and if no disclaimer agreement is established, petitioners would not be entitled to any relief, the disclaimers would stand, and the matter would be concluded. I find that my opinion constitutes a concurrence in relationship to: (1) the majority s decision to remand on the question whether a disclaimer agreement existed; (2) the majority s conclusion that the disclaimers would be rendered void if such an agreement is established; and (3) the majority s ruling that the conversion claim was properly dismissed. I further conclude that my opinion constitutes a dissent in relationship to the majority s determination that the fraud, breach of fiduciary duty, civil conspiracy, unjust enrichment, and breach of contract claims were improperly dismissed, as well as the majority s suggestion, when remanding on the issue, that the disclaimer agreement might perhaps be permissible under federal law as a legitimate restructuring of taxes. I respectfully concur in part and dissent in part. /s/ William B. Murphy -10-