John O'Brien May. 24, 2012, 7:45am
LANSING, Mich. (Legal Newsline) - Michigan Supreme Court Justice Diane Hathaway once took the stance that a woman who was battling breast cancer and was abandoned by her husband was still liable for the entire amounts of two mortgages.
Hathaway is now the subject of a formal complaint filed with the state Judicial Tenure Commission after WXYZ aired a report that showed she might have convinced a bank to let her off the hook for one of her mortgages by temporarily transferring her other homes to her stepchildren.
"This case just demonstrates the importance and need for Justice Hathaway to resolve the cloud lingering over her mortgage transactions, and to address the allegations that something inappropriate took place," said Matt Frendewey, the Michigan Republican Party communications director.
The WXYZ report showed that a bank agreed to a short sale of Hathaway's home at Lake St. Clair for $840,000, nearly half of Hathaway's mortgage. Before the sale, two of her homes - one in Florida and the other in Michigan - were transferred to her step-children, and another home was purchased in cash and put in her step-daughter's name.
After the short sale, two of the homes were put in Hathaway's name. The report noted that banks usually require homeowners to prove they are suffering a financial hardship to get a short sale. Hathaway makes more than $164,000 a year, and her husband is a lawyer, WXYZ added.
In the case of Janet Mandeville, her husband Frank frequently left the country for extended periods during the last decade of their 25-year marriage and completely abandoned her in the final 18 months of her life while she faced breast cancer.
Frank Mandeville acknowledged that he knew she was ill and did not attend her funeral after her July 13, 2002, death. In his absence, Janet had been paying the taxes, insurance and mortgage on their two properties.
Janet had also executed a living will that attempted to cut Frank out of the inheritance and left everything to her mother, Wanda Tkachik. Sister Susan Tkachik was named the personal representative of Janet's estate.
Frank attempted to set aside Janet's new will. Susan Tkachik said he should not be considered a surviving spouse because he had been willfully absent from the marriage for more than a year.
Tkachik also argued Frank should pay his share of the cost it took to preserve the properties during the 18 months he was gone. The state Supreme Court agreed.
A 4-3 majority ruled in 2010 that it "would be unjust for (Frank Mandeville) to retain the benefit of the monies that preserved these properties and made his eventual sole ownership possible upon her death."
However, Hathaway voted the other way. She and former Justice Betty Weaver joined Justice Robert Young in the minority.
Weaver and Hathaway specifically concurred with an excerpt from Young's lengthy dissent. It stated that the court "now permits collateral attacks on the validity of marriages in this state where neither spouse has taken the appropriate legal steps to challenge the marriage or the financial equities of the marriage during life."
The dissent said the majority created a new rule that is untested and "holds unforeseen consequences that reach much further than the narrow and unassuming decision."
The majority wrote that divorce can be an inadequate remedy, considering some might find it morally or religiously objectionable. It also was a "disproportionate remedy when compared to the relief actually sought - contribution for the past monetary expenses that Janet incurred in maintaining the properties."
Her attorney said she didn't want a divorce because she was a "visible professional in her career and didn't care to raise the issues in public," according to Dolan Media Newswire. He added that she might have filed for divorce in an effort to protect her estate, but she ran out of time.
Earlier this month, Young called on Hathaway to explain her financial transactions, stating that he was "naturally very concerned."
The records obtained by WXYZ showed Hathaway and husband Michael Kingsley borrowed $1.5 million for the Lake St. Clair home in 2007. Four years later, the bank approved the short sale.
In 2010, Hathaway sold a home valued at $200,000 to Kingsley's son and another home to Kingsley's daughter. After the short sale, the report says a home valued at $280,000 was bought by Hathaway and Kingsley from another daughter of Kingsley's, the report says.
Hathaway was elected to the court in 2008, defeating incumbent Clifford Taylor.
"I think her behavior in this has left a lot of Michigan families wondering what really took place because she refuses to answer serious questions about this," Frendewey said.
"She full well knows, as a licensed real estate broker in Michigan, what's right and wrong and should have no problem resolving it on the record so Michigan can have full confidence in its judicial system."
From Legal Newsline: Reach John O'Brien by e-mail at firstname.lastname@example.org.