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Allen, P.J.
In this matter we have the opportunity, for the first time, to set forth and describe the degree of specificity of the stated time or identity of the offense mandated by the following language in MCL 767.51; MSA 28.991:
[T]he court may on motion require the prosecution to state the time or identify the occasion [of the offense] as nearly as the circumstances will permit, to enable the accused to meet the charge.
Following a jury trial, defendant was convicted on November 1, 1984, on four counts of first-degree criminal sexual conduct, MCL 750.520b(1)(b); MSA 28.788(2)(1)(b), and one count of second-degree criminal sexual conduct, MCL 750.520c(1)(b); MSA 28.788(3)(1)(b). He was sentenced on December 18, 1984, to four concurrent terms of fifteen to thirty years imprisonment, to be served concurrently with a fifth term of ten to fifteen years imprisonment. Defendant appeals from his convictions and sentences as of right.
Complainant, the defendant’s former stepdaughter, testified that in 1984, when she was thirteen years old, the defendant engaged in sexual relations with her on three separate occasions. The first two incidents took place while defendant was still married to complainant’s mother and while he was still residing at the family home. The third episode unfolded at the defendant’s apartment, after he and complainant’s mother had separated.
Complainant testified that the first assault took place at approximately 2:45 a.m. one morning, while her mother was working the night shift. Defendant awoke complainant and informed her that her friend Quincy had come by to visit and was waiting downstairs in the family room. When complainant entered the family room and Quincy was nowhere in sight, the defendant led her into his bedroom. He ordered her to disrobe, undressed himself, made her rub his penis, and then proceeded to engage in sexual intercourse with her. Further, he treatened to hurt complainant’s mother, and then complainant, if anyone was informed of this incident.
The second episode also took place while complainant’s mother was working. As complainant pretended to sleep, the defendant tried to awaken her and then carried her downstairs to his bedroom. While she continued to feign slumber, defendant pulled down one leg of her pajamas and inserted his penis into her vagina. Complainant then pretended to awake, and was told by defendant to implicate her natural father if it ever became known that she was sexually active. Complainant refused and returned to her room.
Complainant testified that the final incident took place on the day that defendant’s new vacuum cleaner was delivered to her home. Complainant cleaned defendant’s apartment every Thursday, but always while he was at work. On this particular day, defendant was at complainant’s home when she arrived from school, and drove complainant to his apartment so that she could do some housework. However, instead of leaving the apartment, the defendant called into work sick. He then indicated that he wanted to have sex with complainant, and threatened to hurt her mother if she refused to cooperate. Complainant therefore acquiesced as the defendant put his penis in her mouth and, thereafter, in her vagina.
Complainant had difficulty recalling exactly when these events took place. Detective Robert Wolverton indicated that such confusion was not abnormal, explaining that children who are victims of ongoing sexual assaults will often confuse one episode with another. In addition, these children often experience difficulty in remembering the exact dates of the assaults. Wolverton therefore worked with complainant in an effort to have her identify the dates. He encouraged her to recall some other events that she could temporally associate with the assaults. These other events were then used as reference points in zeroing in on the dates that these assaults happened.
With respect to the final episode, this technique was successful. Complainant recalled that the assault took place on the day that defendant’s vacuum cleaner was delivered. Complainant’s aunt, Terrie Naugle, testified that she and defendant both purchased and took delivery of vacuum cleaners from a door-to-door salesman on May 21, 1984. Further, Terrie Naugle corroborated complainant’s testimony, stating that complainant left with defendant after he purchased the vacuum cleaner and that complainant regularly cleaned his apartment.
With regard to the first two assaults, complainant could only narrow the time periods during which the assaults occurred to a range of possible dates. She recalled that the first assault happened about two weeks before she, her mother, and her brother were taken to a protective shelter because the defendant had a gun and was threatening to shoot himself. Complainant’s mother reported that they went to the shelter on March 18, 1984. Thus, Wolverton concluded that the first incident took place between February 1 and March 18, 1984.
With respect to the second offense, complainant believed that it had occurred on a Thursday, since she had a test on the following day and tests were given on Fridays. In addition, she recalled unusual weather conditions. She remembered that the snow accumulation on the ground had melted and that her uncle had mowed the grass once or twice before they had another snowfall. The second incident occurred after the weather had warmed up again. Wolverton dated these weather patterns as having occurred between April 1, 1984, and May 20, 1984. At trial, a weather observer testified that the last date of snow accumulation on the ground was March 29, 1984. On April 17, 1984, there was a snowfall but the snow melted without accumulation.
Defendant’s motion to dismiss the charges relative to the first two incidents was denied. As an alternative, defendant requested a bill of particulars seeking to clarify the dates of the offenses. However, this was not furnished, presumably because no more specificity could be provided. Defendant maintains that the imprecise dates set forth in the information effectively precluded him from preparing an alibi defense. He now argues that he was denied due process of law by the trial court’s failure to require that the dates of the offenses be alleged with more specificity. Thus, we must determine whether the trial court’s failure to require a more definite time frame was proper.
An information need only state the time of an offense "as near as may be.” MCL 767.45(2); MSA 28.985(2). However, MCL 767.51; MSA 28.991 provides in pertinent part:
[T]he court may on motion require the prosecution to state the time or identify the occasion [of the offense] as nearly as the circumstances will permit, to enable the accused to meet the charge. [Emphasis added.]
Although this Court has never been called upon to construe the foregoing language, the statute clearly endows the trial court with discretion to determine when and to what extent specificity will be required. Accordingly, we will not reverse the lower court decision absent an abuse of that discretion. Nonetheless, we believe that certain factors should be included in making such a determination, including but not limited to the following: (1) the nature of the crime charged; (2) the victim’s ability to specify a date; (3) the prosecutor’s efforts to pinpoint a date; and (4) the prejudice to the defendant in preparing a defense.
Where the facts demonstrate that the prosecutor has stated the date and time of the offense to the best of his or her knowledge after undertaking a reasonably thorough investigation, we would be disinclined to hold that an information or bill or particulars was deficient for failure to pinpoint a specific date. See People v Morris, 61 NY2d 290; 473 NYS2d 769; 461 NE2d 1256 (1984). Moreover, while we believe that a defendant’s intention to assert an alibi defense should be a consideration in the trial court’s determination, we do not believe that it must necessarily militate in favor of either requiring specificity or dismissing the charges against a defendant. Such a holding would give rise to an untenable tactic. A defendant would simply have to make the assertion of alibi in order to escape prosecution once it became apparent that a child was confused with respect to the date of a sexual assault.
Moreover, given that an exact date need not be specified, like the circumstances in State v DBS, 700 P2d 630, 634 (Mont, 1985), the assertion of an alibi defense in this particular case appears specious. In DBS, the father was charged with incest, which was alleged to have occurred during a ten-month period in which the defendant’s daughter was in his sole custody. The court noted that offering an alibi for this ten-month period would have been a futile gesture. Similarly, where, as here, the defendant was living in the same house with his victim over an extended period of time and the victim was often left solely in defendant’s, care it appears that creating a viable alibi defense was not a realistic option.
Given the facts of this case, we find no error in the trial court’s decision not to require more specificity. The offense dates herein were identified "as nearly as the circumstances [would] permit.” MCL 767.51. The victim was thirteen years old at the time of the alleged offenses. Although only three offenses were charged, she testified that the defendant had been molesting her since she was approximately eight years old. Thus, it is conceivable that specific dates would not stick out in her mind. As Detective Wolverton explained, children who are victims of ongoing sexual assaults have difficulty remembering the exact dates of the individual assaults. Complainant testified that she was unable to recall the specific dates of the incidents. Detective Wolverton’s testimony suggests that the prosecution exerted a good-faith effort to specify the dates. The detective tried to help complainant remember the dates by establishing some points of reference and was successful in assigning the time periods given in the informations. Under the circumstances, we do not believe that the trial court abused its discretion in holding that the informations were sufficiently specific.
Defendant next asserts that the prosecution failed to establish the dates of these offenses beyond a reasonable doubt. However, time is not an element of a sexual assault offense. People v McConnell, 122 Mich App 208, 212; 332 NW2d 408 (1982), rev’d on other grounds 420 Mich 852 (1984). Moreover, defendant’s argument is primar ily based on inconsistencies in complainant’s testimony with respect to the dates. We note that complainant’s testimony as to dates was corroborated by other witnesses. In any event, we believe that any inconsistencies have affected the weight the jury chose to accord her testimony, but would not necessarily have negated its substance. We are not prepared to assume the jury’s role of weighing the evidence or of assessing complainant’s credibility.
Defendant next argues that an improper foundation was established for Dr. Ascuncion Luz’ testimony regarding the condition of complainant’s pelvic area. In a criminal sexual conduct case, an examining physician’s testimony is admissible for the narrow purposes of establishing penetration or penetration against the will of the victim. People v McGillen #2, 392 Mich 278, 284; 220 NW2d 689 (1974). If a victim has engaged in intercourse subsequent to the alleged assault but prior to the medical examination, the physician is not qualified to opine whether the victim was assaulted on the alleged date unless a proper foundation is established. People v Gerald Wells, 102 Mich App 558, 561-562; 302 NW2d 232 (1980), lv den 417 Mich 916 (1983); People v Mikula, 84 Mich App 108; 269 NW2d 195 (1978). A proper foundation requires some evidence as to the condition of the victim’s pelvic area prior to the date of the alleged assault. Without such a foundation, the physician’s testi mony must be limited to whether penetration has occurred. McGillen #2 and Wells, supra.
In the instant case, Dr. Luz’s testimony was confined to the issue of whether penetration had occurred. She explained that the victim’s hymen was torn and that her vaginal opening was unusually lax for a thirteen-year-old child, indicating that complainant had been penetrated more than once or twice. The doctor did not express an opinion as to when the penetration had occurred. Therefore, her testimony was admissible despite the lack of a foundation relative to the condition of complainant’s pelvis prior to the alleged offenses. See Wells, supra.
Finally, defendant maintains that the trial court’s departure from the sentencing guidelines was based on improper considerations. Defendant’s minimum term for the first-degree criminal sexual conduct convictions was fifteen years, whereas the recommendation under the guidelines was six to ten years. We believe that the trial judge gave valid reasons for the departure.
Although the sentence calculated pursuant to the guidelines took into account the stepfather-stepdaughter relationship, the judge found this factor significant and cited it as a reason for departing from the guidelines. Since the factor was already considered pursuant to the guidelines, defendant asserts that additional consideration was error. However, this argument was rejected in People v Kenneth Johnson, 144 Mich App 125, 137; 373 NW2d 263 (1985). A sentencing judge is free to reconsider or accord more weight to a factor already taken into account by the sentencing guidelines. Id.
In defendant’s presentence report, there appar ently was an allegation, attributed to complainant, asserting that defendant had been having sexual relations with his stepdaughter since she was seven years old. At trial, defendant testified that he had never had sexual relations with complainant. Since defendant’s trial testimony refuted the statement in the presentence report, defendant maintains that the trial judge erred in considering this factor without first holding an evidentiary hearing. See People v Books, 95 Mich App 500, 505; 291 NW2d 94 (1980).
A sentencing judge may consider other criminal activity of a defendant which does not result in a conviction or charge. However, such reliance is only proper if the information is accurate. People v McCuaig, 126 Mich App 754, 762; 338 NW2d 4 (183), lv den 419 Mich 876 (1984), to ensure accuracy, the defendant must be given an opportunity to review his presentence report and to refute factual information which will be relied upon in sentencing. If refuted, the judge may either accept the defendant’s verison of the facts, disregard the information, or hold an evidentiary hearing to ascertain its validity. Books, supra. However, if the defendant does not take advantage of the opportunity to object to the information, relief is unavailable on appeal. People v Butts, 144 Mich App 637, 641; 376 NW2d 176 (1985).
The record demonstrates that the defendant was given an opportunity to review his presentence report prior to sentencing. Moreover, although he disputed some dates relative to his marriage and divorce, he otherwise confirmed that the report was factually accurate at sentencing. Since the defendant did not object to the information contained in the presentence report, he is entitled to no relief. His denial at trial of the past sexual involvement was not sufficient to notify the sentencing judge that the information may have been inaccurate or subject to dispute. We think it obvious that the proper time to refute a presentence report is at the sentencing hearing, and not at trial. Accordingly, defendant’s convictions and sentences are affirmed.
Affirmed.
We note that in People v Howell, 396 Mich 16, 27, n 13; 238 NW2d 148 (1976), the Supreme Court suggested that an imprecise time allegation would be acceptable for sexual offenses involving children, given their difficulty in recalling precise dates.
Defendant does not take issue with the fact that neither MCL 767.45(2) nor MCL 767.51 requires an exact date. Moreover, he does not suggest that due process requires such precision. He merely asserts that designating a span of ninety-eight days during which two of the assaults occurred was unreasonable and that a shorter time period should have been provided.
Defendant also argues that the proofs were deficient due to the fact that the prosecutor posed numerous leading questions to the complainant. We note that defendant objected to only one question on the basis that the prosecutor was leading. We find no abuse of discretion in the trial court’s overruling of this objection on the grounds that "[the leading of the witness wasn’t] all that bad at [that] point.” See MRE 611(a) and (c). Defendant failed to renew the objection at any later point in complainant’s testimony and, accordingly, we do not believe that this facet of defendant’s argument has been preserved for review.
Three points were assigned under Offense Variable 7 for offender exploitation of the victim’s vulnerability. | [
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M. J. Kelly, P.J.
Plaintiffs appeal as of right from an order of partial summary judgment granted December 4, 1984, dismissing Jet-Way, Inc., as a defendant in this action. Plaintiffs also appeal from the trial court’s order of February 26, 1985, denying their motion for a rehearing or, in the alternative, for leave to file a second amended complaint. We affirm.
Plaintiffs filed this action on January 28, 1983, for noneconomic damages suffered as the result of a motor vehicle accident which occurred on December 10, 1982. Plaintiffs Calvin and Cheryl Whittaker were passengers in a car driven by Mary Wilson and owned by Russell Wilson. The Wilson car was struck from behind by an automobile operated by defendant Stanley Price, Jr. The force of the impact caused plaintiffs’ vehicle to roll over and burst into flames and both plaintiffs were left with serious and permanent injuries and disfigurements. Plaintiff Eric Whittaker’s claim is derivative of that of his parents. Initially, Stanley Price, Jr., was the only named defendant.
On September 28, 1983, plaintiffs filed their first amended complaint adding Mary and Russell Wilson as well as Jet-Way, Inc., as party defendants. Stanley Price was an employee of Jet-Way and had attended a Christmas party hosted by Jet-Way on its premises at Willow Run Airport in Wayne County on the night of the accident. While at the party, Price consumed alcoholic beverages provided by Jet-Way and became intoxicated. Plaintiffs asserted the following claims against Jet-Way in their first amended complaint: (1) Jet-Way breached its duty to maintain its premises in a reasonably safe condition, (2) Jet-Way breached its duty to warn persons on the premises of the dangers inherent in consuming alcohol, (3) Jet-Way breached its duty to stop serving alcohol to invitees who were visibly intoxicated and (4) Jet-Way breached its duty to provide alternative transportation to its invitees who were too intoxicated to safely operate an automobile.
Jet-Way eventually moved for partial summary judgment for plaintiffs’ failure to state a claim against it. Jet-Way argued that it could not, as a matter of law, be held liable for plaintiffs’ injuries under the theory of premises liability because the accident did not occur on Jet-Way’s premises. Defendant Jet-Way secondly pointed out that the remainder of plaintiffs’ claims against Jet-Way related to the provision of alcoholic beverages at the party and were not actionable since, as a matter of law, social hosts cannot be held liable for the harm caused by intoxicated guests. The trial court granted Jet-Way’s motion in its entirety and dismissed plaintiffs’ claims against it. Plaintiffs do not challenge the dismissal of their premises liability claim and we thus limit our analysis to Jet-Way’s liability as a social host or as an employer.
Under Michigan common law, it is not a tort to furnish intoxicating beverages to a person over twenty-one years of age. The theory behind this rule is that it is the drinking rather than the furnishing of the alcohol which is the proximate cause of any injury to a third party. Longstreth v Gensel, 423 Mich 675, 684, 686; 377 NW2d 804 (1985). See also Westcoat v Mielke, 108 Mich App 115; 310 NW2d 293 (1981), lv den 413 Mich 862 (1982), and LeGault v Klebba, 7 Mich App 640; 152 NW2d 712 (1967). Given the Supreme Court’s comments in Longstreth, we decline plaintiffs’ invitation to change the common law of this state and we instead leave that task, if it is to be performed at all, to the Supreme Court or Legislature as suggested in Longstreth. Because a third party has no cause of action against a social host who furnishes alcohol to the tortfeasor, the trial court did not err in this case in granting Jet-Way’s motion for summary dismissal.
Nor did the trial court err in denying plaintiffs’ motion for rehearing or in denying plaintiffs’ motion to file a second amended complaint to plead the doctrine of respondeat superior. Plaintiffs assert that they have a cause of action against defendant under the rule announced in Romeo v Van Otterloo, 117 Mich App 333; 323 NW2d 693 (1982), lv den 417 Mich 1004 (1983), but we cannot agree. In Romeo, the defendant-employer hosted a party for one of its corporate clients in order to further the business relationship with the client. Defendant Van Otterloo was required by his employer to host the event, which was conducted outside normal business hours and at a location separate from defendant’s normal place of business. Van Otterloo became intoxicated at the function and, while driving home, caused an automobile accident which fatally injured one person.
The trial court in Romeo granted summary judgment in favor of the employer for failure of the plaintiffs to state a cause of action. This Court reversed, however, holding that the plaintiff had stated a claim under the doctrine of respondeat superior:
Here, in order to further its business, defendant required Van Otterloo to play the role of party host in circumstances where the possibility of alcohol consumption could be presumed. In doing so, defendant created the risk that Van Otterloo would become intoxicated and endanger others, including those in his path as he traveled home. These circumstances, as alleged in plaintiffs complaint, were sufficient to state a cause of action for negligent supervision by defendant of Van Otterloo. The trial court erred in granting summary judgment under GCR 1963, 117.2(1). [117 Mich App 343.]
Plaintiffs argue that the facts set forth in Romeo are similar to the facts involved in this case and conclude that Jet-Way should also be held liable under the doctrine of respondeat superior.
Unlike the employee in Romeo, however, the employee Price in this case attended his employer’s party voluntarily and as a social invitee rather than in the course of fulfilling any employment duties. It is undisputed that the party hosted in this case was a company Christmas party open to customers, friends, employees, and employees’ spouses. There is nothing to suggest that Price’s attendance at Jet-Way’s party was required and plaintiffs did not allege this element in their amended complaint. Defendant asserted at appellate oral argument that Price had admitted in his deposition that he was in fact not required to attend. We find a remarkable similarity between the facts in this case and the facts outlined in Behnke v Pierson, 21 Mich App 219; 175 NW2d 303 (1970), in which we upheld the lower court’s dismissal of the employer for the plaintiff’s failure to state a cause of action.
Plaintiffs failed to state a cause of action under the doctrine of respondeat superior in their second amended complaint since there is no allegation that Stanley Price was acting in the course of his employment when he became intoxicated and caused the accident in question. The trial court thus properly denied plaintiffs’ motion to file that complaint.
Affirmed.
In support of its motion, defendant Jet-Way cited GCR 1963, 117.2(3) for authority rather than GCR 1963, 117.2(1), now MCR 2.116(C)(8). All parties and the trial court understood the nature of Jet-Way’s motion and we review this case as though it had cited the proper court rule.
The trial court record in this case does not include any deposition transcripts so we rely only on the amended complaint. | [
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Per Curiam.
In this legal malpractice action, the trial court granted defendants’ motion for accelerated judgment under GCR 1963, 116.1(5), ruling that the period of limitation had already expired. Plaintiff appeals as of right.
The alleged malpractice arose out of plaintiffs attempts to recover payment from Wayne Harding for construction work done on his home by plaintiffs business. In February, 1980, defendants filed both a claim of lien on the Harding property and a lawsuit against Wayne Harding in circuit court. We have not been apprised of the exact nature of this lawsuit. The lien, which defendants concede was defective, was withdrawn by defendants, apparently in April, 1980, but the lawsuit continued.
By letter dated March 1, 1982, plaintiff informed defendants that he no longer wished for them to represent him, because they had twice adjourned the scheduled trial date due to unpreparedness. Defendants confirmed by letter dated March 3, 1982, that they would no longer represent plaintiff. Plaintiff hired another attorney and the case against Wayne Harding proceeded to trial in June, 1984. However, on June 15, 1984, Wayne Harding filed for bankruptcy, listing Dowker as an unsecured creditor, and the circuit court trial was halted and removed from the calendar without conclusion.
Plaintiff filed his complaint alleging legal malpractice on August 9, 1984.
In Michigan, an action for legal malpractice must be brought within two years of the date the attorney discontinues serving the plaintiff or within six months after the plaintiff discovers or should have discovered the existence of the claim, whichever is later. MCL 600.5805(4), 600.5838; MSA 27A.5805(4), 27A.5838, Luick v Rademacher, 129 Mich App 803, 806; 342 NW2d 617 (1983).
Plaintiffs argument that his discharge of defendants in March, 1982, was not discontinuation of service for purposes of the statute, because defendant Peacock did not sign a formal consent to substitution of attorneys until August 27, 1982, is unavailing. An attorney discontinues serving, for purposes of this statute, when the attorney is relieved of that obligation either by the client or by a court. Berry v Zisman, 70 Mich App 376, 379; 245 NW2d 758 (1976); Basic Food Industries, Inc v Travis, Warren, Nayer & Burgoyne,; 60 Mich App 492, 496; 231 NW2d 466 (1975). Plaintiff relieved defendants of that obligation on March 1, 1982, which was well over two years before plaintiff filed this action.
Plaintiff must, therefore, show that he did not or could not have discovered the existence of his claim until after February 9, 1984.
As with other tort actions, a malpractice claim accrues only when all the necessary elements of a cause of action have occurred, including damages. Luick v Rademacher, supra, p 806. It is the fact of identifiable and appreciable loss, and not the finality of monetary damages, that gives birth to the cause of action. Id.
In Biberstine v Woodworth, 406 Mich 275; 278 NW2d 41 (1979), the Court ruled that the period of limitation did not begin to run on the plaintiff’s malpractice claim until the suit in which the plaintiff was involved, his own bankruptcy, was terminated. Until then, the defendant attorney could have amended the petition to schedule the debt, omission of which formed the basis of plaintiff’s malpractice action. Similarly, in Zatolokin v Grimm, 99 Mich App 257; 297 NW2d 900 (1980), lv den 410 Mich 916 (1981), this Court ruled that the period of limitation on the plaintiffs’ malpractice claim did not begin until the period of limitation on their underlying claim concerning certain investments had expired without the defendants’ taking any action. These cases are in accord with decisions from other jurisdictions which hold that the period of limitation on a malpractice claim begins to run from the time the result of the attorney’s inaction or delay is irremediable. See Anno., When Statute of Limitations Begins to Run Upon Action Against Attorney for Malpractice, 32 ALR4th 260, 266-267.
It is plaintiff’s theory in this case that, even though defendants negligently filed the lien in 1980 and withdrew it without his permission, plaintiff still could have recovered from Wayne Harding through the circuit court lawsuit, or at least acquired a judgment lien, which would have put him in the same position as if he had a valid construction lien. It was only when Wayne Harding filed for bankruptcy, before the lawsuit could be prosecuted to judgment, that the lack of a valid construction lien caused identifiable loss to plaintiff. Therefore, plaintiff argues, his malpractice claim did not mature until June 15, 1984, when Wayne Harding filed for bankruptcy.
Defendants appear to be arguing that the circuit court lawsuit was fatally defective and plaintiff never could have attained a favorable judgment, so his claim accrued as soon as the time limit within which to amend either the lien or the lawsuit complaint had passed, which would have been in 1982.
We have no way of evaluating or verifying defendants’ "case-within-the-case” argument. From the record before us, it would be pure speculation to say that plaintiff never could have prevailed in the lawsuit. If plaintiff had prevailed in the lawsuit against Wayne Harding, he would have no claim of malpractice against defendants for the defective lien, having suffered no injury. Bourke v Warren, 118 Mich App 694; 325 NW2d 541 (1982). But when Harding’s bankruptcy aborted the lawsuit, the defective lien became decisive. Indeed, until the outcome of the circuit court action was known, it could not be ascertained whether plaintiff had suffered any harm by defendants’ negligence regarding the construction lien. Had plaintiff filed a malpractice action against defendants while the lawsuit against Wayne Harding was still in progress, it would have been dismissed as premature. Sawabini v Desenberg, 143 Mich App 373, 384; 372 NW2d 559 (1985).
The trial court in this case made numerous explicit findings of fact before granting accelerated judgment to defendants. This was improper, and is in itself grounds for reversal. Gojcaj v Moser, 140 Mich App 828, 832; 366 NW2d 54 (1985). In deciding a motion for accelerated judgment, the court is to accept all well-pleaded allegations of the non-moving party as true. Id. The court may also consider affidavits submitted by either party. Id.
Plaintiff states in his affidavit that, although he knew by early May, 1980, that defendants had withdrawn the construction lien on the Wayne Harding property, defendant Peacock assured him the withdrawal did him no harm because of the circuit court action. Plaintiff’s pursuit of an alternative route to recover his claim against Harding is what distinguishes this case from cases like Luick v Rademacher, where the plaintiff knew almost immediately that he had definitely suffered a loss through his attorney’s negligence, but was fighting to have the judgment set aside.
Plaintiff’s injury was not certain until Wayne Harding filed for bankruptcy on June 15, 1984, so plaintiff’s claim for malpractice filed less than two months later was timely.
Reversed. | [
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McDonald, J.
Defendant is charged with operating a vehicle while under the influence of intoxicating liquor, MCL 257.625; MSA 9.2325. Defendant appeals by leave granted a circuit court order reversing a district court order suppressing blood test results revealing that defendant’s blood alcohol content was 0.18 percent. We affirm the circuit court’s reversal of the district court’s order suppressing the blood test results, but hold defendant is entitled to an adverse inference instruction because of the violation of the search warrant statute that occurred in this case.
On March 11, 1995, defendant was arrested and taken to the police station. The police advised defendant of his chemical test rights pursuant to subsection 6(b) of the implied consent statute, MCL 257.625a(6)(b); MSA 9.2325(l)(6)(b), but defendant refused to submit to a Breathalyzer test. After obtaining a search warrant, the police transported defendant to the hospital to obtain a blood sample, which was mailed to the Michigan State Police laboratory for testing. The toxicology report was completed March 15, 1995, and indicated defendant had a blood alcohol content of 0.18 percent. The blood sample was later destroyed pursuant to departmental procedure on May 16, 1995. On July 3, 1995, the prosecution provided defendant with a copy of the blood test results.
Defendant moved to suppress the blood test results in the district court, arguing the police violated the relevant search warrant statute, MCL 780.655; MSA 28.1259(5) (hereafter § 5), by failing to preserve the blood sample for trial. The prosecution claimed defendant had notice the blood sample would be destroyed because of discovery that took place at the pretrial conference on May 3, 1995. Although not entirely clear from the record, it appears the prosecution claimed defendant saw the lab report, which indicated the department policy to destroy samples within thirty days. However, both parties appear to agree that defendant was not provided with his own copy of the test results until July 3, 1995. The prosecution argued that despite notice the blood sample would be destroyed, defendant did not take any action. Defendant countered that the statute did not require him to take any action. Defendant also claimed he had requested the sample be saved when he requested in a letter dated April 11, 1995, an opportunity to inspect any tangible evidence the prosecution intended to introduce at trial. The prosecution also argued evidence had not been destroyed because it was the test results that would be used as evidence at trial, not the blood sample. Defendant responded that the search warrant statute does not specify that the evidence to be saved for trial must be evidence the prosecution, rather than the defendant, intends to use at trial. Finally, the prosecution argued defendant should not be in a better position because his refusal to consent required the police to get a search warrant to obtain a blood sample. Defendant argued he was in a different position because of the differences in the statutes and that there were conse quences for refusing to consent under the implied consent statute. The district court granted defendant’s motion to suppress, remarking that the case should not be treated differently than if it were a case involving a large quantity of heroin that was destroyed. The district court also reasoned that the blood sample was direct evidence relevant to the issue of defendant’s blood alcohol content.
The prosecution appealed to the circuit court by leave granted, again arguing that the implied consent statute did not require the blood sample to be preserved because the test results, not the blood sample, was the evidence. The prosecution also argued defendant’s due process rights were not violated by the destruction of the blood sample, relying on California v Trombetta, 467 US 479; 104 S Ct 2528; 81 L Ed 2d 413 (1984). The circuit court accepted the prosecution’s argument and found the district court erred in suppressing the test results.
On appeal, defendant argues the blood test results should be suppressed at trial because the police violated § 5. Statutory interpretation is a question of law that this Court reviews de novo. People v Denio, 454 Mich 691, 698; 564 NW2d 13 (1997).
Section 5 provides:
When an officer in the execution of a search warrant finds any property or seizes any of the other things for which a search warrant is allowed by this act, the officer, in the presence of the person from whose possession or premises the property or thing was taken, if present, or in the presence of at least 1 other person, shall make a complete and accurate tabulation of the property and things so seized. The officer taking property or other things under the warrant shall forthwith give to the person from whom or from whose premises the property was taken a copy of the warrant and shall give to the person a copy of the tabulation upon completion, or shall leave a copy of the warrant and tabulation at the place from which the property or thing was taken. He shall file the tabulation promptly with the court or magistrate. The tabulation may be suppressed by order of the court until the final disposition of the case unless otherwise ordered. The property and things so seized shall be safely kept by the officer so long as necessary for the purpose of being produced or used as evidence on any trial. As soon as practicable after trial, stolen or embezzled property shall be restored to the owner thereof. Other things seized under the warrant shall be disposed of under direction of the court or magistrate, except that moneys and other useful property shall be turned over to the state, county or municipality, the officers of which seized the property under the warrant. Such moneys shall be credited to the general fund of the state, county or municipality. [MCL 780.655; MSA 28.1259(5) (emphasis added.)]
The thing seized in this case was defendant’s blood, which was destroyed on May 16, 1995. Defendant does not allege any bad faith on the part of the police and does not dispute that the blood was destroyed pursuant to routine departmental procedure. However, because the blood was destroyed, it was not safely kept for the purpose of being produced or used as evidence at trial. Accordingly, we find the statute was violated in this case.
The issue is whether suppression of the test results is the appropriate remedy for this violation of § 5. The statute itself does not provide a remedy for its violation. The parties have not cited, and our research has not revealed, a case where the police violated § 5 by failing to preserve seized items for trial in the context of a criminal case.
In People v Stoney, 157 Mich App 721; 403 NW2d 212 (1987), this Court addressed the issue whether test results should be suppressed in the context of the implied consent statute, MCL 257.625a; MSA 9.2325(1). In Stoney, the defendant’s blood was drawn and tested by hospital personnel. The hospital later discarded the blood sample and forwarded the test results, which revealed the defendant’s blood alcohol content was 0.21 percent, to the prosecutor pursuant to subsection 9 of the implied consent statute. This Court held the trial court erred in suppressing the test results because the plain language of subsection 1 of the implied consent statute provides it is the test results, not the blood sample itself, which are admissible at trial. Stoney, supra at 725. Moreover, this Court reasoned that while the statute provides the results of the test must, upon request, be made available to the defendant or the defendant’s attorney, it does not require preservation of the sample itself. Id. Accordingly, this Court held the test results were admissible under the implied consent statute and the destruction of the sample was “irrelevant.” Id.
However, this case is not governed by the implied consent statute because the police obtained the blood sample through a search warrant. This Court has repeatedly held that when authorities obtain a search warrant to take a blood sample, the issue of consent is removed, and the implied consent statute is not applicable. Manko v Root, 190 Mich App 702, 704; 476 NW2d 776 (1991); People v Snyder, 181 Mich App 768, 770; 449 NW2d 703 (1989); People v Hempstead, 144 Mich App 348, 353; 375 NW2d 445 (1985); People v Cords, 75 Mich App 415, 421; 254 NW2d 911 (1977). In other words, the search warrant procedure exists independently of the testing procedure set forth in the implied consent statute. Manko, supra at 704; Snyder, supra at 770. Although we recognize that the implied consent statute refers to chemical tests performed pursuant to a court order in subsection 6(b)(iv), this portion of the statute simply states that the allegedly intoxicated driver must be advised that if the driver refuses the officer’s request to take the test, the test may be taken pursuant to a court order. See Snyder, supra at 771. The implied consent statute does not provide that tests performed pursuant to a court order fall within its purview. We refuse to read this into the statute as written by the Legislature. Accordingly, we must look to § 5 to determine the appropriate remedy in this case.
The parties have not cited, and our research has not revealed, a case where the police violated § 5 by failing to preserve seized items for trial in the context of a criminal case. However, our research has revealed that this Court has addressed a violation of § 5 in the context of a civil forfeiture proceeding in In re Forfeiture of $25,505, 220 Mich App 572; 560 NW2d 341 (1996). There, the officers seized cash found in the ceiling of the claimant’s basement that allegedly was the proceeds of his son’s drug trafficking. The officers did not sequester the cash to preserve it for trial, but instead merely deposited it in a bank account. This Court assumed § 5 was violated because the prosecution did not dispute there was a violation. The claimant argued he was prejudiced by this violation because he could not test the cash for fingerprints to prove that it was his, not his son’s. Id. at 577. After examining previous decisions regarding violations of other portions of § 5, see note 2, supra, this Court recognized that “even in the context of criminal proceedings, suppression of the evidence is not a necessary remedy for a violation of § 5.” In re Forfeiture, supra at 578. This Court explained that the language of § 5 suggested “the principal focus of the statute is to ensure police integrity rather than to create a personal legal right in the claimant. The preservation of evidence for the benefit of a party from whom property is seized is a clear benefit of § 5 but only an incidental one.” Id. at 579. This Court concluded that summarily returning seized property to a claimant was not an appropriate remedy for a viola tion of § 5. Instead, this Court held that “an effective remedy for a violation of § 5 is normally to instruct the factfinder that it may infer that evidence unpreserved because of violations of the statute would have favored the claimant.” Id. at 579-580. We believe giving an adverse inference instruction is also appropriate in the context of criminal proceedings. As explained in In re Forfeiture, supra at 580:
[A] violation of § 5 resulting in the loss of relevant evidence raises a rebuttable presumption that the unpreserved evidence would have been adverse to the police. The police thus act at their peril when they fail to observe the requirements of § 5.
In this case, the violation of § 5 did result in the loss of relevant evidence. We agree with the district court that the blood sample was directly relevant to the issue of defendant’s blood alcohol content. We recognize the fact that the blood sample was not meaningful without test results, but we do not believe this fact negates the blood sample’s relevance.
We also believe that to warrant an adverse inference instruction, a defendant must articulate how the violation of § 5 prejudiced the defendant. In In re Forfeiture, supra at 578-579, this Court emphasized that the claimant had alleged prejudice from the violations of § 5, namely, that he could not test the lost cash for fingerprints, which prejudiced his ability to prove his claim that the money did not belong to his son. Moreover, in People v Lucas, 188 Mich App 554, 573; 470 NW2d 460 (1991), where the police failed to leave copies of the search warrant and tabulation with the defendant, this Court held that the “hypertechnicai” violation of § 5 did not require sup pression of the seized evidence, “particularly where defendant cannot articulate any harm or prejudice that resulted.” We do not characterize the violation in this case as hypertechnical, however we conclude defendant must articulate how he was prejudiced in this case. In other words, defendant must explain how the lost evidence might be expected to play a significant role in his defense. Although we are disturbed at the conclusory nature of defendant’s appellant brief, which fails to allege prejudice, defendant argued below the loss of the blood sample prevented him from conducting an independent analysis of the sample. Accordingly, the articulation requirement is met in this case. For these reasons, an adverse inference instruction to the jury is appropriate at trial in this case.
Finally, we note the prosecution has argued defendant’s due process rights were not violated in this case, primarily relying on Trombetta, supra. Defendant relies on the search warrant statute, not the constitution, in arguing the police should have preserved the blood sample. Our holding is confined to interpreting the search warrant statute, and whether there was a violation of defendant’s due process rights is not relevant to this determination.
Affirmed as modified and remanded for trial. We do not retain jurisdiction.
Cavanagh, J., concurred.
Defendant also argued the statute was violated because the police did not provide him with a copy of the tabulation. The district court ultimately rejected this argument, and it is not relevant to this appeal.
This Court has addressed violations of other portions of § 5. See People v Lucas, 188 Mich App 554, 573; 470 NW2d 460 (1991) (holding the failure to leave copies of the search warrant and tabulation with the defendant was a “hypertechnical” violation of § 5 and did not require suppression of the seized evidence); People v Myers, 163 Mich App 120; 413 NW2d 749 (1987) (holding suppression not required where the police committed a “hypertechnical” violation of § 5 by failing to give the defendant a copy of the search warrant); People v Tennon, 70 Mich App 447; 245 NW2d 756 (1976) (holding the failure to make the tabulation in the presence of the defendant, a “ministerial duty,” did not amount to error requiring reversal.)
We also note it is clear the officers were proceeding pursuant to the search warrant statute because they complied with other requirements set forth in § 5 such as filing the tabulation, i.e., the return, and providing defendant a copy of the search warrant.
The trial court did not have the benefit of this decision at the time of its ruling. However, it was released well before the parties filed their briefs on appeal and neither party cited this decision.
The claimant also contended the officers violated § 5 because they did not count the cash in his presence, which prejudiced his ability to prove his claim the officers seized more than $25,505 in cash.
See also Arizona v Youngblood, 488 US 51, 56; 109 S Ct 333; 102 L Ed 2d 281 (1988), in which the United States Supreme Court, in the context of unpreserved breath samples, refused to suppress Breathalyzer test results and remarked:
[FJirst, “the officers here were acting in ‘good faith and in accord with their normal practice’ ”; second, in the light of the procedures actually used the chances that preserved samples would have exculpated the defendants were slim; and third, even if the samples might have shown inaccuracy in the tests, the defendants had “alternative means of demonstrating their innocence.” [Citations omitted.] | [
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Mackenzie, J.
This declaratory judgment action arises from the refusal of defendant American Motorists Insurance Company (amico) to defend and indemnify plaintiffs (collectively referred to as Arco) for costs incurred in an action brought by the Department of Natural Resources (DNR) for remediation of contamination at the automotive parts manufacturing plant of Arco Industries Corporation. Following a bench trial, the trial court entered an order requiring AMICO to indemnify Arco for 68.63 percent of all indemnifiable losses up to the aggregate limits of AMlCO’s coverage of $3.5 million. This is the third time the case has been before this Court. See Arco Industries Corp v American Motorists Ins Co, 198 Mich App 347; 497 NW2d 190 (1993), reversed 448 Mich 395; 531 NW2d 168 (1995) (Arco I), and Arco Industries Corp v American Motorists Ins Co (On Remand), 215 Mich App 633; 546 NW2d 709 (1996), reversed 456 Mich 305; 572 NW2d 617 (1998) (Arco II). The case is before this Court pursuant to a second remand from the Supreme Court “for consideration of the issues raised in [the] Court [of Appeals] but not addressed in its opinion.” Arco Industries Corp v American Motorists Ins Co, 456 Mich 1230 (1998). We now affirm in part, reverse in part, and remand.
i
The pertinent facts were set forth by the Supreme Court in Arco I:
Plaintiff Arco Industries Corporation is a small automotive parts manufacturer that has operated a manufacturing plant in Schoolcraft, Michigan, since 1967. As part of the manufacturing process, the automotive parts are dipped into liquid plastisol or vinyl. Volatile organic compounds (vocs) such as perchloroethylene, trichloroethylene, 1-2 dichloroethylene and vinyl chloride, were used to clean the parts during the manufacturing process and to remove plastisol from the plant floors. The plant floor was designed with a trench drain system that drained waste from the plant floor into an unlined seepage lagoon located in the back of the plant. As a result, vocs contaminated the seepage lagoon and ground water.
In November, 1985, the Department of Natural Resources notified Arco that the seepage lagoon was contaminated with vocs, and records indicate that Arco was the source of the contamination. After Arco’s failure to resolve the prob- • lem, the dnr [in October, 1987] filed suit against Arco in federal court in an attempt to compel Arco to remedy the VOC contamination and collect claimed response costs. Subsequently, [in October, 1989] the State of Michigan and Arco entered into a consent decree whereby Arco agreed to pay the state $450,000 in response costs together with attorney fees. Arco also agreed to develop and implement a multimillion dollar ground water and soil remediation program. [448 Mich 399-400.]
In February 1987 — after Arco received the dnr notice letter, but before the dnr brought its federal suit — Arco filed this declaratory judgment action to compel AMICO, and six other insurers that had issued comprehensive general liability policies to Arco since 1967, to defend and indemnify Arco in any potential dnr action. Amico had issued annual comprehensive general liability policies to Arco covering the years 1968 through 1974. In each of the policies, AMICO agreed to “pay all sums which the insured shall become legally obligated to pay as damages because of (a) bodily injury or (b) property damage to which this insurance applies, caused by an occurrence,” and an “occurrence” was defined as “an accident, including injurious exposure to conditions, which results, during the policy period, in bodily injury or property damage neither expected nor intended from the standpoint of the insured.” The policies also included an “owned property” exclusion and, in addition, three of the policies contained a pollution exclusion.
Arco I, supra, involved AMlCO’s claim that there was no “occurrence” that would require it to indemnify Arco for its remediation costs. In that case, the Supreme Court determined that several discharges at the Arco plant were accidents, 448 Mich 406-407, and that Arco and its employees did not intend or expect the resultant environmental contamination. 448 Mich 418. The Court therefore concluded that the release of vocs constituted a covered occurrence under amico’s policies.
Arco II, supra, addressed amico’s claim that, even if Arco’s release of vocs was an “occurrence,” coverage was not triggered until the voc-contaminated groundwater was discovered in 1985 — well after the last of AMICO policies was no longer in effect. The Arco II Court held that because the policies define an “occurrence” as an accident that results in property damage “during the policy period,” the policies dictate an injury-in-fact approach to the question of when coverage was triggered. 456 Mich 319-320. Under that approach, coverage is triggered when exposure to the pollutants results in actual property damage. Id., p 313. The Court was apparently satisfied that Arco’s discharge of solvents resulted in property damage from 1968 to 1974; it “affirm[ed] the trial court’s findings that there had been coverage triggering occurrences in each of the defendant’s policy periods.” Id., p 330.
We now turn to the parties’ remaining claims.
n
Three of the seven amico policies contain a pollution exclusion that excludes from coverage claims arising out of the discharge of contaminants, unless the discharge is “sudden and accidental.” In its appeal, AMICO contends that the discharges at the Arco plant were neither sudden nor accidental, so that Arco’s claims were not covered. The Supreme Court’s opinion in Arco I, supra, leads us to conclude otherwise.
In Upjohn Co v New Hampshire Ins Co, 438 Mich 197; 476 NW2d 392 (1991), the Supreme Court addressed the meaning of “sudden and accidental” in a pollution exclusion clause. The Court stated:
We conclude that when considered in its plain and easily understood sense, “sudden” is defined with a “temporal element that joins together conceptually the immediate and the unexpected.” [United States Fidelity & Guaranty Co v] Star Fire Coals, [Inc, 856 F2d 31, 34 (CA 6, 1988)]. The common, everyday understanding of the term “sudden” is “ ‘happening, coming, made or done quickly, without warning or unexpectedly; abrupt.’ ” FL Aerospace [v Aetna Casualty & Surety Co, 897 F2d 214, 219 (CA 6, 1990)]. “Accidental” means “[ojccurring unexpectedly and unintentionally; by chance.” The American Heritage Dictionary: Second College Edition, p 72. [Id. pp 207-208.]
When determining whether a discharge is “sudden and accidental,” the focus is on the initial entry of the pollutants into the environment, and not the subsequent migration of the pollutants after their release. Protective Nat’l Ins Co of Omaha v Woodhaven, 438 Mich 154, 161-162; 476 NW2d 374 (1991). See also Polkow v Citizens Ins Co of America, 438 Mich 174, 179; 476 NW2d 382 (1991).
In Arco I, supra, the Supreme Court stated that “[t]he trial court found that there were definitely unintentional, accidental releases of vocs [at the Arco plant], and we hold that this was fully supported by the evidence.” 448 Mich 405. The Court then presented a list of incidents during the policy periods illustrating the accidental character of the releases, including (1) several unintentional spills of mop buckets holding four to five gallons of solvents, most of which went into the drain system and seepage pond, (2) drums of solvents being punctured by forklifts or hunters’ guns and leaking into the ground, and (3) numerous spills of drums of solvents while being transported within the plant or transferred into a holding tank, resulting in several gallons of solvents going into the drain. 448 Mich 406. The Court declared that “[t]hese incidences indicate that the spills were unintentional and constituted accidents. There is ample evidence establishing that they were an undesigned contingency, not anticipated, and not naturally to be expected.” 448 Mich 406-407. Thus, the Supreme Court has expressly determined that Arco’s release of the solvents into the environment was unexpected and accidental.
Although the Supreme Court did not separately consider whether the listed incidents contained the temporal element of suddenness, an examination of the incidents relied on by the Court in affirming the trial court’s findings reveals that each of these incidents contains a temporal element as well as being unexpected: a bucket spilling, a drum tipping, drums being shot or punctured by a forklift are all events that are “made or done quickly, without warning or unexpectedly; abrupt.” Upjohn, supra, p 207. This compels the conclusion that the Supreme Court would likewise deem that the incidents were sufficiently unexpected to be considered “sudden.”
In light of Arco I, we must conclude that the trial court did not err in determining that the incidents were within the “sudden and accidental” exception to the pollution exclusion, so that the exclusion did not preclude coverage.
m
Amico also contends that the trial court erred in determining that the “owned property” exclusion did not bar coverage for the cost of remediating the soil and seepage pond on Arco’s property. That exclusion states that the policies do not apply to property damage to “(1) property owned or occupied by or rented to the insured, (2) property used by the insured, or (3) property in the care, custody or control of the insured or as to which the insured is for any purpose exerting physical control.” Amico essentially concedes that the “owned property” exclusion does not apply to the groundwater beneath the Arco facility, but asserts that the exclusion precludes coverage for the expenses relating to remediation of the contaminated soil on Arco’s property. The trial court ruled that the exclusion did not bar coverage because the failure to clean up the soil and seepage pond at the site would farther contaminate the groundwater. We agree with the trial court.
In United States Aviex Co v Travelers Ins Co, 125 Mich App 579, 590-592; 336 NW2d 838 (1983), this Court held that an “owned property” exclusion will not bar coverage where an insured’s on-site contamination has spread to groundwater percolating beneath the insured’s property. The reasoning behind the holding was that the groundwater was not the exclusive property of the landowner. Id. This reasoning was expanded in Upjohn Co v New Hampshire Ins Co, 178 Mich App 706, 719-720; 444 NW2d 813 (1989), reversed on other grounds 438 Mich 197; 476 NW2d 392 (1991). There, the subsoil at an Upjohn facility was contaminated as the result of a leaking underground storage tank and the contaminants were slowly making their way into the groundwater. This Court observed that “the improper release of toxic wastes may cause property damage not only to the actual owner of the land, but also to the government because of its independent interest, behind the titles of its citizens, in all the air and earth (i.e., its natural resources) within its domain.” Id., p 720. Finally, in Polkow v Citizens Ins Co of America, 180 Mich App 651, 659; 447 NW2d 853 (1989), reversed on other grounds 438 Mich 174; 476 NW2d 382 (1991), this Court again held that an “owned property” exclusion would not bar coverage associated with groundwater contamination. Significantly, the panel also stated that the public interest in the purity of not only groundwater, but the environment and the state’s natural resources as a whole, is significant enough to defeat an “owned property” exclusion:
[W]e conclude that the alleged contamination in this case [contaminated soil on the insured’s property causing contaminated groundwater] falls outside of the policy exclusion for damage to the insured’s own property for reasons broader in scope [than the reasoning of Aviex, supra]. We hold that these allegations are essentially for injury to the public interest in the well-being of the environment and natural resources of this state. This public interest is apparent in the tenor of the statutory framework for environmental protection which, as we have already alluded, vests the dnr and the Attorney General with substantial powers to preserve and protect the environment. This public interest was noted in Aviex, supra, p 589, where the Court stated that the statutory provision of MCL 323.10; MSA 3.529(1) [now MCL 324.3115(2); MSA 13A.3115(2)] authorizing suit by the Attorney General for civil damages to natural resources “clearly indicates the state’s interest in its natural resources.” That this public interest is enough to defeat an exclusion for damage to the insured’s own property was acknowledged in [Fireman’s Fund Ins Cos v] Ex-Cell-O Corp, [662 F Supp 71], 75 [(ED Mich, 1987)] and Upjohn [supra, p 720]. [Id., pp 659-660.]
Thus, in environmental contamination clean-up cases, this Court has long recognized an independent public interest in the state’s natural resources that supersedes any “owned property” exclusion. Anderson Development Co v Travelers Indemnity Co, 49 F3d 1128, 1134 (CA 6, 1995). This view is consistent with the case law from other jurisdictions. See, e.g., Intel Corp v Hartford Accident & Indemnity Co, 952 F2d 1551, 1565-1566 (CA 9, 1991); Pepper’s Steel & Alloys, Inc v United States Fidelity & Guaranty Co, 668 F Supp 1541, 1550 (SD Fla, 1987). See also anno: Liability insurance coverage for violations of antipollution laws, 87 ALR4th 444.
Even in the absence of an overriding public interest in the state’s natural resources, the case law of the majority of other jurisdictions holds that on-site soil clean-up is not barred by an “owned property” exclusion where there is a threat that the contaminants in the insured’s soil would migrate to the groundwater or to the property of others. See, e.g., South Carolina Ins Co v Coody, 813 F Supp 1570, 1578-1579 (MD Ga, 1993); Chemical Leaman Tank Lines, Inc v Aetna Casualty & Surety Co, 788 F Supp 846, 852-853 (D NJ, 1992); Boyce Thompson Institute for Plant Research, Inc v Ins Co of North America, 751 F Supp 1137, 1141 (SD NY, 1990); New Castle Co v Continen tal Casualty Co, 725 F Supp 800, 816-817 (D Del, 1989), aff'd in part and rev’d in part on other grounds sub nom New Castle Co v Hartford Accident & Indemnity Co, 933 F2d 1162 (CA 3, 1991). See also cases cited in 87 ALR4th 444, § 28, pp 539-549.
Here, the trial court found that there was a substantial threat that the contaminants in the soil and seepage pond on Arco’s premises would migrate into the groundwater absent remediation of the soil. This finding is supported by the record. Thus, under either the theory that the “owned property” exclusion does not bar coverage on public policy grounds, Polkow, supra, or the theory that the exclusion does not bar coverage where remediation of the insured’s soil is necessary to prevent the migration of contaminants, the “owned property” exclusion did not bar coverage in this case.
IV
Amico’s final claim is that the trial court erred in its allocation of Arco’s insurers’ responsibility for Arco’s indemnifiable losses. Allocation of responsibility for coverage among insurers becomes relevant once it is determined under which policies coverage has been triggered. See comment: Apportioning coverage responsibility of consecutive insurers when the actual occurrence of injury cannot be ascertained: Who has to contribute in a settlement?, 49 Mercer L R 1151, 1157 (1998). In this case, given the six other insurers’ settlements with Arco and the Supreme Court’s decision in Arco II, it appears that coverage was triggered — that is, that there was an iryury-in-fact as defined in Arco II — under each successive compre hensive general liability policy in effect during the twenty years between the time Arco began operating the facility and the cessation of wastewater discharges into its seepage lagoon in 1987.
According to the trial court’s opinion in this case, the allocation of a 68.63 percent share of indemnifiable losses to amico represents “the ratio of [amico’s] limits to the limits available under all the policies which were effective over the period of time which the damage occurred.” This allocation was apparently based on an “other insurance” provision contained in the seven amico policies.
A
Courts and commentators have discussed five possible methods for allocating liability among successive insurance policies in cases involving property damage or injuries occurring over the course of several years. See, generally, comment: Allocating progressive injury liability among successive insurance policies, 64 U Chi L R 257 (1997), cited in Arco II, supra, 456 Mich 312, 314. These methods are generally referred to as the “joint and several liability” or “all sums” method, the “stacking coverage” method, the “coverage provided” method, the “other insurance” method, and the “time-on-the-risk” method. Id.
Under the “all sums” method of allocation, each triggered insurer is liable for the insured’s entire loss, even though the injury giving rise to liability may have begun before, and continued after, the insurer’s policy period. One insurer pays the entire loss and then may seek contribution from other triggered insurers under the common-law doctrine of contribu tion or pursuant to each policy’s “other insurance” clause. See, e.g., Keene Corp v Ins Co of North America, 215 US App DC 156; 667 F2d 1034 (1981).
Under the “stacking coverage” method of allocation, the coverage limits of all triggered policies are aggregated and the insured is allowed to exhaust the coverage limits of all the policies up to the level of its loss — again, regardless of whether the underlying injury was sustained before or after the policies’ coverage period. 64 U Chi L R 257, 273-274. This method also appears to permit a selected insurer to sue other triggered insurers for contribution if the injury does not exhaust the coverage limits of all triggered policies. Id. See, e.g., Cole v Celotex Corp, 599 So 2d 1058 (La, 1992).
Under the “coverage provided” method of allocation, liability is determined by multiplying the number of years an insurer provided coverage by the limits of that insurer’s policies, and then assigning liability corresponding to the ratio of the total coverage provided by that insurer to the total coverage provided by all the triggered policies. 64 U Chi L R 257, 274-275. See, e.g., Owens-Illinois, Inc v United Ins Co, 138 NJ 437; 650 A2d 974 (1994). The fourth method of allocation, the “other insurance” clause approach, appears to be a refinement of the “all sums” method in which allocation is based on principles of joint and several liability. See 64 U Chi L R 257, 278-279.
The final method of allocation is the “time-on-the-risk” approach. This method allocates liability among triggered policies using the periods covered by each insurer without considering the coverage limits of the triggered policies. 64 U Chi L R 257, 280. See, e.g., Ins Co of North America v Forty-Eight Insulations, Inc, 633 F2d 1212 (CA 6, 1980). Under this method, insurers are responsible for the portion of the underlying injury that occurred during their policy period; the effect is to prorate coverage for continuous damage across each period that the damage occurred.
B
We are of the opinion that the “time-on-the-risk” method of apportionment should be used in cases such as this one, involving continuous property damage and successive policies of liability coverage. We reach this conclusion primarily on the basis of the Supreme Court’s decision in Arco II, supra, where the Court applied the “injury-in-fact” trigger of coverage. The Arco II Court made it clear that, under the language of the amico policies, coverage was available to Arco when actual property damage occurred “during the policy period.” The logical corollary is that amico must provide coverage for damage sustained “during the policy period,” but not for the years outside the policy period. As stated in Northern States Power Co v Fidelity & Casualty Co of New York, 523 NW2d 657, 662 (Minn, 1994):
[T]he choice of trigger theory is related to the method a court will choose to allocate damages between insurers. . . . A “pro rata by limits” [or “all sums”] allocation is inconsistent with the actual injury [or “injury-in-fact”] trigger theory.
The essence of the actual injury trigger is that each insurer is held liable for only those damages which occurred during its policy period; no insurer is held liable for damages outside its policy period. Where policy periods do not overlap, therefore, the insurers are consecutively, not concurrently liable. A “pro rata by limits” allocation method effectively makes those insurers with higher limits hable for damages incurred outside their policy periods and is therefore inconsistent with the actual trigger theory.
Arco II instructs that the policy language in this case states unequivocally that the policies apply to damage and injury that take place “during the policy period.” Consequently, we must reject any method of allocation that would require AMICO to provide coverage on a joint and several or “all sums” basis, since that method would require AMICO to indemnify Arco for damage occurring outside the policy period.
Our decision is strengthened by the history of comprehensive general liability policies as a whole. The seminal case adopting the “injury-in-fact” trigger of coverage, American Home Products Corp v Liberty Mut Ins Co, 565 F Supp 1485, 1500-1503 (SD NY, 1983), aff’d as modified 748 F2d 760 (CA 2, 1984), provides an extensive discussion regarding the intention of the drafters of the standard comprehensive general liability (cgl) policy, including the following:
[T]he evidence establishes that the cgl draftsmen, as well as the parties, contemplated coverage only for injuries shown in fact to have occurred during periods of coverage.
. . . For example, Richard Elliott, then Secretary of the National Bureau of Casualty Underwriters, in presenting what he described as “the underwriting intent” of the cgl’s revisers, explained that “the definition of occurrence serves to identify the time of loss for the purpose of applying coverage — the injury must take place during the policy period.” He recognized that long exposure could involve “cumulative injuries,” in which “more than one policy afford[s] coverage,” and “each policy will afford coverage to the bodily injury or property damage which occurs during the policy period.” . . . [Another commentator stated:] “Injury or damage must occur during the policy period to be covered.”
Thus, it appears that the intent of the drafters of the policies at issue here, whose language we are required to uphold, was to provide coverage for the policy period only, and not for damages arising before or after the policy period. Again, this intent precludes imposition of an “all stuns” or joint and several liability approach. “While the insurers agreed to indemnify [the insured] for ‘all sums,’ it had to be for sums incurred during the policy period.” Outboard Marine Corp v Liberty Mut Ins Co, 283 Ill App 3d 630, 642; 670 NE2d 740 (1996).
Finally, we note the commentators’ preference for the “time-on-the-risk” method of allocating responsibility among successive insurers. As stated in 64 U Chi L R 257, 281-283:
The time-on-the-risk method should be adopted by courts because its inherent simplicity promotes predictability, reduces incentives to litigate, and ultimately reduces premium rates.
Courts can easily administer the time-on-the-risk method. Once a court determines the scope of the progressive injury, that is, the total damage ... it can readily allocate the damages among the triggered policies. The court divides the total damages by the number of triggered years and simply allocates to each year the result. If, for example, a certain policy spans three years out of a total of ten triggered years, then thirty percent of the damages will be allocated to that policy.
Unlike the Owens-Elinois method, the effects of deductibles, excess insurance, and self-insurance are easy to calculate by pretending that the policy’s share of damages was the damage that actually occurred during that policy period.
The time-on-the-risk method has intuitive, commonsense appeal....
The simplicity of the time-on-the-risk method removes many of the incentives to litigate the allocation of damages. Since the parties will know in advance how the court will allocate liability, there is much less of the 'uncertainty that encourages wasteful litigation. . . . While there will still be many issues to litigate, such as which policies are triggered and total damages, reducing the amount of allocation litigation should substantially decrease the costs of insurance.
In addition to decreasing the amount of litigation, this method provides a way for insurance companies to estimate more accurately total expected liability; as a result premiums should decline. . . . Because this method, unlike the Owens-Elinois method, does not rely on a case-by-case determination of how much coverage was purchased, it also obviates the concern about inconsistent application.
See also 49 Mercer L R 1151, 1159-1166.
c
Because we conclude that each insurer in this case is responsible for coverage “during [its] policy period,” and is not jointly and severally responsible for providing coverage for all policy periods, we cannot agree with the trial court’s reliance on the “other insurance” clauses of the AMICO policies in apportioning amico’s share of liability. “Other insurance” clauses do not provide a solution to the allocation problem here because they were not meant to allocate liability among successive insurers. 64 U Chi L R 257, 278. Rather, they relate to the effect of concurrent coverages of a single occurrence. Continental Casualty Co v Medical Protective Co, 859 SW2d 789, 791 (Mo App, 1993). They are individual contractual agreements between the insured and the insurer, designed to prevent the insured from recovering multiple times for an injury that occurs at one point in time. 64 U Chi L R 257, 279. Because this case involves consecutive policies covering different policy periods, we conclude that the “other insurance” clauses have no application.
D
Applying the “time-on-the-risk” method of allocating the insurers’ liability in this case, we reverse the judgment of the trial court holding amico responsible for 68.63 percent of Arco’s indemnifiable losses. As previously noted, the coverages of the various insurers were triggered over a twenty-year period, from 1967 to 1987. Amico was Arco’s liability insurer for seven of those years, from 1968 to 1974. Under the time-on-the-risk method of allocation, therefore, amico was responsible for 7/20ths, or thirty-five percent, of Arco’s losses. Accordingly, we remand for a recalculation of amico’s liability applying the time-on-the-risk method.
E
Finally, the parties are in agreement that AMICO has no indemnity obligation with regard to the costs of remediating Area n of Arco’s facility. The record is not clear with regard to whether the trial court included the costs of remediating Area n in its calculations, nor is it clear what effect exclusion of the remediation costs attributable to Area n would have on the judgment. On remand, therefore, the trial court should consider the effect of the parties’ stipulation that amico had no duty to indemnify Arco with regard to Area n.
v
In its cross appeal, Arco argues that the trial court erred in determining that Arco was not entitled to defense costs incurred between the time it received the November 1985 notice letter from the dnr and the filing of the complaint in the underlying federal court action in October 1987. We agree.
In Arco I, supra, 448 Mich 417, n 15, the Supreme Court noted its expectation that this Court would find guidance on this issue in Michigan Millers Mut Ins Co v Bronson Plating Co, 445 Mich 558, 572-575; 519 NW2d 864 (1994). In Bronson Plating, the Supreme Court held that a prp (potentially responsible party) letter from the Environmental Protection Agency to an insured was the functional equivalent of the initiation of a lawsuit, giving rise to the insurer’s duty to defend. More recently, in South Macomb Disposal Authority v American Ins Co (On Remand), 225 Mich App 635, 660-668; 572 NW2d 686 (1997), this Court held that notice letters to an insured from the dnr were analogous to a prp letter and constituted the initiation of a suit that gave rise to an insurer’s duty to defend. In both cases, the Courts looked primarily to the contents of the letters and the authority of the agencies that prepared the letters. The Courts then concluded that because the letters carried immediate and severe implications and were prepared by agencies with substantial regulatory authority, they were the functional equivalent of a lawsuit for purposes of triggering the insurers’ duty to defend. See Bronson Plating, supra, pp 573-574; South Macomb, supra, pp 667-668.
The notice letter from the dnr involved in this case informed Arco that it had been identified as the party responsible for groundwater contamination and notified Arco that, as a responsible party, it was required to determine the extent of contamination and to initiate remedial action. The letter further “requested” the submission of “plan of intent to investigate the extent of groundwater contamination for which you are responsible” to the dnr by a specific date. Although the letter was not as strongly worded as the letters in Bronson Plating and South Macomb, the clear implication of the letter was that Arco was causing unlawful pollution and the dnr intended to take enforcement action to remedy the situation. Further, as indicated in South Macomb, supra, p 667, the dnr had the power to take substantial action against Arco. In short, the letter was not a “ ‘garden variety’ demand letter[], which expose[s] one only to a potential threat of litigation.” Id., p 668. Rather, consistent with the reasoning of South Macomb and Bronson Plating, supra, the notice letter from the dnr in this case constituted a “suit” for purposes of triggering amico’s duty to defend. Accordingly, we reverse the trial court’s ruling that Arco was not entitled to defense costs incurred before the federal suit was filed. On remand, the trial court shall determine the amount of those costs.
VI
Arco next contends that it should have been allowed to recover attorney fees for amico’s bad-faith breach of its duty to defend. However, Arco waived this issue when the case was last before this Court; it is therefore beyond the scope of the present remand order. In any event, the claim is without merit. See Burnside v State Farm Fire & Casualty Co, 208 Mich App 422; 528 NW2d 749 (1995); Auto Club Ins Ass’n v State Farm Ins Cos, 221 Mich App 154, 167-168; 561 NW2d 445 (1997).
vn
Arco next argues that the trial court abused its discretion by limiting its award of attorney fees to a particular rate schedule. Some additional factual background is necessary to consider this claim.
The DNR sent its notice letter to Arco in November 1985. In May 1986, another of Arco’s insurers retained the firm of Plunkett & Cooney to defend Arco. Arco rejected the tendered defense, apparently because it had already retained the firm of Honigman Miller Schwartz & Cohn.
The trial court’s award of attorney fees was based on the rates Plunkett & Cooney would have charged the other insurance company, although Arco’s representation was actually provided by the Honigman firm at a higher rate. In denying Arco’s motion to increase the award to match the Honigman firm’s rates, the court noted that Plunkett & Cooney is a “recognized and respected law firm” with an environmental law section and concluded that Arco had no reasonable basis for rejecting the tendered defense.
On appeal, Arco contends that Plunkett & Cooney’s rates should not have been used to calculate its reasonable attorney fees because the firm could not have represented Arco because of a conflict of interest. This argument is without merit for two reasons. First, by Arco’s own admission, the alleged “conflict” did not arise until June 1987, á year after Arco rejected the tender of representation by Plunkett & Cooney. Second, had Arco accepted the tender, Plunkett & Cooney quite possibly could have avoided the conflict by declining to represent the party that resulted in the conflict of interest. Moreover, even if an unavoidable conflict existed, Arco’s insurers might have retained other counsel at rates similar to those of Plunkett & Cooney.
Arco has failed to present any substantial or reasonable reason for rejecting the other insurer’s tender of representation. Because Arco’s insurer stood ready to provide it with a competent defense at a quoted fee scale, Arco was not entitled to recoup attorney fees at a higher rate. Under these circumstances, we find no abuse of discretion in the trial court’s calculation of attorney fees at the rate quoted by Plunkett & Cooney.
vm
Arco also claims that the trial court erred in determining that Arco could not collect twelve percent penalty interest pursuant to MCL 500.2006; MSA 24.12006 because coverage was reasonably in dispute. We must conclude that Arco is correct.
MCL 500.2006; MSA 24.12006 provides in relevant part:
(1) A person [including an insurer; see MCL 500.114; MSA 24.1114] must pay on a timely basis to its insured . . . the benefits provided under the terms of the policy ....
* *
(4) When benefits are not paid on a timely basis the benefits paid shall bear simple interest from a date 60 days after satisfactory proof of loss was received by the insurer at the rate of 12% per annum, if the claimant is the insured or an individual or entity directly entitled to benefits under the insured’s contract of insurance. Where the claimant is a third party tort claimant, then the benefits paid shall bear interest from a date 60 days after satisfactory proof of loss was received by the insurer at the rate of 12% per annum if the liability of the insurer for the claim is not reasonably in dispute.... The interest shall be paid in addition to and at the time of payment of the loss .... Interest paid pursuant to this section shall be offset by any award of interest that is payable by the insurer pursuant to the award. [Emphasis added.]
In Yaldo v North Pointe Ins Co, 457 Mich 341, 348-349; 578 NW2d 274 (1998), the Supreme Court recently addressed the question whether the twelve percent interest allowed under MCL 500.2006(4); MSA 24.12006(4) is available to an insured only when the claim for coverage is not reasonably in dispute. The Court concluded that, “[w]ith respect to collection of twelve percent interest, reasonable dispute is applicable only when the claimant is a third-party tort claimant.” Yaldo, supra, p 349. Thus, “[w]here the action is based solely on contract, the insurance company can be penalized with twelve percent interest, even if the claim is reasonably in dispute.” Id., p 348, n 4.
Under Yaldo, AMICO could be assessed penalty interest pursuant to MCL 500.2006(4); MSA 24.12006(4) even though Arco’s claim for coverage was reasona bly in dispute. Accordingly, on remand the trial court shall modify Arco’s award to include that interest.
IX
Finally, Arco contends that the trial court erred in ruling that Arco should not receive prejudgment interest under MCL 600.6013; MSA 27A.6013 from the date it filed its complaint for declaratory judgment against AMICO. This claim is without merit. As Arco acknowledges, this Court has held that, in actions to collect benefits of insurance contracts, it is error to award prejudgment interest pursuant to MCL 600.6013; MSA 27A.6013 from the date of the complaint with respect to claims that arise after the complaint is filed. Beach v State Farm Mut Automobile Ins Co, 216 Mich App 612, 624-625; 550 NW2d 580 (1996). Rather, prejudgment interest with respect to claims that arise after the filing of the complaint is properly awarded from the postcomplaint date on which the insurer refused to pay and the delay in receiving money began. Id. See also McKelvie v Automobile Club Ins Ass’n, 203 Mich App 331, 339-340; 512 NW2d 74 (1994). Here, Arco filed its complaint for declaratory relief against amico more than 2-1/2 years before the entry of the 1989 federal consent decree making Arco liable for response costs and remediation program funding. Under Beach, therefore, Arco was entitled to prejudgment interest dating back only to the date on which AMICO refused coverage for that loss; it was not entitled to prejudgment interest dating back to the filing of the complaint against AMICO in 1987.
x
To summarize, we affirm the trial court’s determination that the pollution and “owned property” exclusions contained in amico’s policies did not bar coverage; AMICO was required to indemnify Arco for a share of Arco’s losses resulting from its discharge of solvents from 1967 to 1987. However, we conclude that the trial court erred in allocating amico’s share of responsibility for indemnification in relation to the six other insurers that covered Arco during that twenty-year period; the court should have allocated responsibility based on a “time-on-the-risk” approach. We therefore remand for recalculation of amico’s indemnification obligation.
With regard to amico’s duty to defend in the underlying federal action brought by the dnr, we find no abuse of discretion in the trial court’s award of attorney fees. We also find no error in the court’s refusal to allow prejudgment interest for the period between the filing of the complaint in this case and the entry of the consent judgment in the federal case. However, we reverse the trial court’s determination that Arco was not entitled to defense costs incurred before suit was filed in the federal court. Additionally, we reverse the court’s determination that Arco was barred from receiving twelve percent penalty interest under MCL 500.2006; MSA 24.12006; the fact that Arco’s claim was reasonably in dispute was irrelevant. Consequently, those items should be calculated and added to the judgment on remand.
Affirmed in part, reversed in part, and remanded. We do not retain jurisdiction.
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Per Curiam.
Plaintiff, the Wayne County prosecutor, appeals as of right from an order dismissing his complaint for superintending control. We affirm.
Plaintiff brought this action to obtain an order requiring defendants, the Department of Corrections and the Parole Board, to allow plaintiff to intervene as a party in parole revocation proceedings in cases where the Parole Board is considering revocation based on a parolee’s alleged commission of a felony. It is plaintiff’s contention that, in instances where there are several years remaining in the reoffending parolee’s maximum sentence for the paroled offense, it would be more expedient for the Parole Board to rescind parole and order a lengthy period before the offender would again be considered for parole than it would be to prosecute the parolee for the new offense. The circuit court dismissed plaintiffs complaint, concluding that the Parole Board has no clear legal duty to allow the prosecutor to intervene as a party in parole revocation proceedings.
i
Superintending control is an extraordinary remedy, and extraordinary circumstances must be presented to convince a court that the remedy is warranted. 4 Martin, Dean & Webster, Michigan Court Rules Practice (2d ed), p 331. For an order of superintending control to issue, the plaintiff must show that a clear legal duty has not been performed by the defendant. Beer v Fraser Civil Service Comm, 127 Mich App 239, 242; 338 NW2d 197 (1983). The grant or denial of an order of superintending control is within the sound discretion of the court considering the matter. In re Goehring, 184 Mich App 360, 366; 457 NW2d 375 (1990). Absent an abuse of discretion, this Court will not disturb the denial of a request for an order of superintending control. Id.
n
The Parole Board is part of the Department of Corrections. MCL 791.231a; MSA 28.2301(1). MCL 791.234; MSA 28.2304 and MCL 791.235; MSA 28.2305 govern the procedures surrounding parole interviews and the decision to grant or deny parole. Although the statutes no longer expressly so provide, the length of the parole period is generally discretionary with the Parole Board. See Lane v Dep’t of Corrections, 383 Mich 50, 61; 173 NW2d 209 (1970). Under MCL 791.234(7); MSA 28.2304(7), the Parole Board’s decision to grant or deny parole is appealable to the circuit court by the prisoner, the prosecutor, or the victim. See also MCR 7.104(D). The circuit court’s decision, in turn, may be appealed by leave to this Court. MCR 7.104(D)(6).
A prisoner on parole is still in the “legal custody and control” of the Department of Corrections. MCL 791.238(1); MSA 28.2308(1). If a parolee commits a new crime while on parole and the prosecutor opts not to prosecute the parolee for the new crime, the department issues a warrant for the return of the parolee. MCL 791.238(1); MSA 28.2308(1). A parolee is entitled to a preliminary probable cause hearing within ten days after arrest for parole violation, MCL 791.239a(l); MSA 28.2309(1)(1), and is entitled to a fact-finding hearing before a member of the Parole Board or a hearing officer within forty-five days of return to prison. MCL 791.240a(l); MSA 28.2310(1)(1). The parolee is entitled to be represented by counsel at the parole revocation hearing. MCL 791.240a(2); MSA 28.2310(1)(2). Additionally, the parolee is entitled to hear the evidence against the parolee, to testify and present evidence, and to cross-examine witnesses. Id. A parole violation must be established by a preponderance of the evidence, MCL 791.240a(5), (6); MSA 28.2310(1)(5), (6).
After the hearing, the hearing officer prepares a report and recommendation for disposition by the Parole Board. MCL 791.240a(5); MSA 28.2310(1)(5). The board then enters an order either rescinding parole or reinstating it. MCL 791.41; MSA 28.2311. A rescinding order also sets the length of time before the offender will again be eligible for parole. See Wayne Co Prosecutor v Dep’t of Corrections, 451 Mich 569, 583, n 29; 548 NW2d 900 (1996). That period can range from one day to the maximum sentence imposed for the original offense, in the discretion of the board. Id.-, MCL 791.238(2); MSA 28.2308(2). Parole revocation proceedings are contested cases under the Administrative Procedures Act (apa), MCL 24.201 et seq.; MSA 3.560(101) et seq., and judicial review of the proceedings is available under the apa. Penn v Dep’t of Corrections, 100 Mich App 532, 537-540; 298 NW2d 756 (1980).
m
The statutory framework outlined above includes participation by the prosecutor and the victim when a prisoner is granted parole. Significantly, however, it does not provide for such participation at parole revocation proceedings. A court must not judicially legislate by adding into a statute provisions that the Legislature did not include. Empire Iron Mining Partnership v Orhanen, 455 Mich 410, 421; 565 NW2d 844 (1997). In the absence of a statutory provision that would permit a prosecutor to participate in parole revocation hearings, the Parole Board had no clear legal duty to allow plaintiff to intervene. Accordingly, we find no abuse of discretion in the circuit court’s decision to deny plaintiff’s request for an order of superintending control.
IV
Plaintiff argues that, even if the statutes governing parole revocation proceedings do not include a provision contemplating a prosecutor’s participation in the proceedings, a right to intervene exists by way of the apa. As explained in LeDuc, Michigan Administrative Law, § 6:16, pp 27-28:
Michigan's Administrative Procedures Act has no provisions regarding intervention. In the absence of a statute providing some guidance as to who is entitled to participate or intervene in a contested case proceeding, intervention has remained largely the province of individual agency policy and the discretion of administrative hearing judges and officers. These policies may be embodied in rule, but they are more likely revealed by the customs and practices of the agency in conducting contested cases.
Except for the circumstances of clear statutory direction or agency rules about intervention, one seeking to intervene is left with the arguments that can be based on the definition of contested case and parties in the apa and the nature of the interests which may be affected in a particular contested case setting. Basically, the argument that must be made is that the contested case will determine the legal rights, duties, or privileges of the person seeking intervention, and that the person seeking to intervene is properly seeking and entitled of right to be admitted as a party.
Thus, where, as here, there is no statutory or administrative rule governing intervention, an administrative agency’s decision whether to allow a person to intervene in a contested case is discretionary; again, there is no particular clear legal duty to allow intervention. The one exception is if the person wishing to intervene can show entitlement to “party” status under the apa. The apa defines a “party” as “a person or agency named, admitted, or properly seeking and entitled of right to be admitted as a party in a contested case.” MCL 24.205(4); MSA 3.560(105)(4). With regard to who is a party for purposes of contested cases, Professor LeDuc states:
[0]ne may turn to four sources to find out who a party in a contested case can be. As usual, the first source is the underlying statute, which either may identity specifically, at least by class or general description, those who are entitled to a contested case hearing, or may identify the interests which are protected, giving the possessors of those interests a status which entitles them to be admitted as a party. The second source is due process, under which property and liberty interests are protected and subject to the APA contested case provisions to protect their possessors. The third source is the apa itself, which identifies legal rights, interests, and privileges as protected, if they are to be determined in the contested case proceeding. The fourth source is the agency rules, which may, like a statute, identify those who are entitled to receive a contested case hearing. [Michigan Administrative Law, § 6:15, pp 26-27.]
Under the parole revocation statutes, due process, the apa, and the department’s administrative rules, the only persons with a protected interest who are entitled to a parole revocation hearing are the parolee, whose protected interest involves the loss of conditional liberty, and the department, which has “legal custody and control” of the parolee. See Penn, supra, pp 537-538; MCL 791.238(1); MSA 28.2308(1). Plaintiff contends that a county prosecutor has an interest in the outcome of a parole revocation hearing because if the parolee is denied reconsideration for parole for several years, the prosecutor — satisfied that the parolee will remain imprisoned for a substantial period — can choose not to prosecute the new crime and save taxpayer money. The interest identified by plaintiff, while laudable, is a broad public interest that is simply too attenuated to entitle plaintiff to party status in parole revocation proceedings. Certainly, the outcome of parole revocation proceedings may be one of many factors taken into consideration by a prosecutor when deciding whether to prosecute a reoffending parolee. Nevertheless, the outcome of the parole revocation proceedings has virtually no effect on the prosecutor’s ability to prosecute or to otherwise carry out official responsibilities. In the absence of any direct bearing on plaintiff’s prosecutorial duties, he is not entitled to party status in a parolee’s revocation hearing under the apa. Accordingly, the Parole Board did not have a clear legal duty to allow plaintiff to intervene as a party. The circuit court did not abuse its discretion in refusing to order superintending control.
v
Plaintiff raises additional reasons why he should be allowed to intervene in parole revocation proceedings. He maintains that he is an interested party under MCL 49.153; MSA 5.751, which provides:
The prosecuting attorneys shall, in their respective counties, appear for the state or county, and prosecute or defend in all the courts of the county, all prosecutions, suits, applications and motions whether civil or criminal, in which the state or county may be a party or interested.
This statute authorizes the prosecutor to appear in courts. Parole revocation proceedings are not prosecutions, and the Department of Corrections is not a court or a part of the judiciary. People v Raihala, 199 Mich App 577, 579; 502 NW2d 755 (1993); Penn, supra, pp 536-537. The statute does not confer plaintiff party status in parole revocation proceedings.
Plaintiff also claims that he should be allowed to intervene in parole revocation proceedings because they are analogous to probation revocation hearings, where prosecutors routinely participate. However, parole and probation occupy different places in the law. Probation is an alternative to confining an offender and is granted at the discretion of the trial court in lieu of incarceration. People v Greenlee, 133 Mich App 734, 736; 350 NW2d 313 (1984). The trial court’s decision to revoke probation and impose a term of imprisonment involves imposition of a different sentence to replace the order of probation. People v Saylor, 88 Mich App 270, 275; 276 NW2d 885 (1979). It is therefore an extension of the original trial court proceedings in which the prosecutor participates. In contrast, parole revocation involves the Parole Board’s decision to rescind its parole order and return the parolee to prison to continue serving an existing sentence. Raihala, supra, pp 579-580. There is no additional trial court involvement, and hence no additional prosecutorial involvement.
VI
We appreciate plaintiff’s attempt to take advantage of a reoffending parolee’s unserved maximum sentence in lieu of instituting yet another felony prosecution against the parolee. Plaintiff’s approach is expedient and would benefit taxpayers as well as ease court dockets. A policy that reoffending parolees could face long-term parole ineligibility might also serve as a disincentive to violate parole and thus reduce recidivism. As the circuit court noted, however, plaintiff’s arguments involve lawmaking and therefore must be directed to the Legislature rather than the courts. See People v Kirby, 440 Mich 485, 493-494; 487 NW2d 404 (1992). We cannot read into the parole revocation statutes a duty to allow prosecutors to intervene in the proceedings when no such duty exists. Empire Iron Mining, supra. However, we can, and do, urge the Legislature to consider amending the parole revocation statutes to allow prosecutor participation, just as it has seen fit to allow participation when parole is granted.
Finally, although we hold that the trial court did not abuse its discretion in finding that the Parole Board had no clear legal duty to allow plaintiff to intervene in parole revocation proceedings, we stress that intervention remains available in the board’s discretion. See LeDuc, supra. We also note that, if the prisoner whose parole has been revoked is again granted parole within a period that the prosecutor believes is unacceptably short, the prosecutor can appeal the decision to grant parole at that time. MCL 791.234(7); MSA 28.2304(7). These measures are cumbersome and offer marginal assurance that they will result in the Parole Board’s increased use of reoffending parolees’ unserved maximum sentences. Until the Legislature acts, however, those are the measures available to plaintiff to accomplish his objectives.
Affirmed. | [
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Sharpe, J.
Plaintiff is a domestic, without business experience. In the summer of 1925, George F. Chestnut, a sales agent for the defendant company, called at the house at which plaintiff was working to see' another party and met plaintiff and sought to interest her in the purchase of some lots he was selling for the defendant company. He called upon her several times thereafter. She testified that he said that “the water was in, that the contract was made for the sidewalks and the shade trees and cinderizing the roads in the fall.” She finally went with him to look at the lots and saw some crocks, which seemed to confirm his statement about the water. It was her first experience in the purchase of real estate. She testified that she relied on such statements, and was induced thereby to enter into a contract for the purchase of a lot, and a little later for the purchase of another lot. A few weeks later, she was induced by another agent of the defendant company to purchase an adjoining lot, and did so in reliance on the representations made to her by Chestnut. The purchase price of these lots was $1,550, $1,225, and $1,175, respectively. The plaintiff made down payments of $10 in cash and notes for $220, $174, and $166, respectively, and thereafter monthly payments, in all amounting to the sum of $987, the last of-which were made on July 23, 1926. These payments were all made at the defendant Bennett’s office. She testified that she did not see the lots again until August, 1926, and then discovered that no water mains had been installed, nor had any sidewalks been constructed; that the street had not been cinderized, nor had any shade trees been planted; that she then saw Mr. Bennett, and told him she had been “misled,” and “wanted her money back;” that she gave him her contracts, and he handed them back to her. She soon after filed this bill, praying for rescission of the contracts and the return of the money paid by her. From a decree awarding her the relief prayed for, defendants appeal.
Plaintiff testified that the' representations were made as claimed by her. Chestnut denied that they were. She also testified that she entered into the contracts oh the assumption, founded on Chestnut’s assurances that she could quickly dispose of the lots at a considerable profit. She had no money with which to build on the lots, and no intention of doing so. Her only resources were her savings out of her earnings as a domestic. Her down payment of but $10 on each lot strongly supports her testimony in this respect. It therefore seemed of much importance to her that the lots were then supplied with water and that contracts had been let for the other improvements. The chances of a quick sale would be enhanced thereby. The burden was on her to establish the representations by a preponderance of the evidence. While the contract itself obligated the vendor to pay for the sidewalks and plant shade trees and cause water mains to be laid and sewers to be constructed along the avenues, the representations claimed to have been made in no way conflicted with .this provision. They were an assurance to plaintiff that certain of these had already been installed or contracted for. In view of the better opportunity of the trial court to weigh the evidence submitted, we are unwilling to reverse his finding that the representations were made as claimed.
We think it also established that the representations were relied on by her and that she was induced thereby to enter into the contracts. It is urged that in her interview with Mr. Bennett, when she sought rescission, she made no such complaint. While we are inclined to accept his statement of what there occurred, we do not think it should preclude us from affirming the decree. She had had no business experience. She had not at that time consulted an attorney, and had not been advised of her legal rights. The contract was subject to the approval of Mr. Bennett. It is conceded that the representations were binding on him as well as on the land company.
The decree is affirmed, with costs to appellee.
North, Fellows, Wiest, Clark, and McDonald, JJ., concurred.
Chief Justice Flannigan and the late Justice Bird took no part in this decision. | [
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Sharpe, J.
The defendant is engaged in the sale of merchandise in a four-story building in Bay City, on each floor of which its goods are kept on display for sale. On January 20, 1926, the plaintiff, accompanied by her little girl, five years of age, went up the stairway leading to the third floor. It is her claim that as she landed on the floor she caught sight of a bolt of linoleum, which had been standing on end, falling towards her; that she pushed her little girl out of reach of it and caught it with her hands; that it pulled her to the floor, wrenching her back and otherwise inflicting serious injury upon her. She brings this action to recover the damages she sustained thereby.
The proofs were submitted to a jury, after which, on motion of defendant’s counsel, the trial court directed a verdict in its favor. The plaintiff seeks review of the judgment entered thereon by writ of error.
The bolt of linoleum which fell was- not a solid one.
It was a remnant 6 feet wide and 21 feet long, containing about 14 square yards and weighing about 5 pounds per square yard. When rolled, it was from 18 to 24 inches in diameter. The defendant offered proof that the customary way of handling linoleum 6 feet in width in the stores in Bay City in which it is kept for sale, of which there are several, was to stand it on end, and several witnesses so testifying added that they had never known of an instance in which such coils or bolts had fallen of their own volition. It also had proof that a roll or bolt partly uncoiled would have a larger diameter at the bottom than at the top. No proof was offered by plaintiff tending to contradict these statements. Before concluding its defense, defendant brought into court and offered as an exhibit a coil of linoleum similar in all respects to that by which plaintiff was injured, except that it was a foot shorter. Experiments were conducted with it, the purpose of which was to demonstrate that it would safely stand on end. After standing on the floor for a considerable léngth of time, and while a witness was leaving it and another passing by it to the witness chair, it toppled over.
Plaintiff’s counsel contend for her right of recovery for two reasons:
(1) The action of defendant’s employees in permitting the partially uncoiled roll of linoleum, unsupported by solid bolts standing around it, to stand near the place to which plaintiff was invited to go in making purchases in the store, was evidence of negligence.
(2) The jury had a right to infer negligence from the falling in their presence of the coil of linoleum, quite similar in all respects to that by which plaintiff was injured.
Plaintiff was entitled to all the rights of an invited person in passing about the store. It may be stated as a general proposition that a customer in a store “has the right to rely upon the safety of passage along passageways used by customers.” Wine v. Newcomb, Endicott & Co., 203 Mich. 445, 451. That plaintiff was injured by the fall of the linoleum is not sufficient in itself to entitle her to recover. “That the mere fact of an accident occurring is no evidence of negligence is well established in this State.” Fuller v. Wurzburg Dry Goods Co., 192 Mich. 447, 448. But the fact that an accident has happened may be taken into consideration, with all of the other facts and circumstances, for the purpose of determining whether in fact there was negligence. The circumstances must be such “as to take the case out of the realm of conjecture and within the field of legitimate inferences.” Burghardt v. Railway, 206 Mich. 545 (5 A. L. R. 1333). A rule for testing liability in such cases was stated in Tozer v. Railroad Co., 195 Mich. 662, 666, as follows:
“If a man does an act and he knows, or by the exercise of reasonable foresight should have known, that in the event of a subsequent occurrence, which is not unlikely to happen, injury may result from his act, and such subsequent occurrence does happen and injury does result, the act committed is negligent, and will be deemed to be the proximate cause of the injury.”
This rule was cited approvingly in Jaworski v. Detroit Edison Co., 210 Mich. 317; Ignaszak v. McCray Refrigerator Co., 221 Mich. 10; Northern Oil Co. v. Vandervort, 228 Mich. 516; Butrick v. Snyder, 236 Mich. 300. Applying it to the facts here presented, the jury, had the case been submitted to them, if their verdict had been for the plaintiff, must have found that defendant’s employee who placed the linoleum where it was when plaintiff was injured knew, or by the exercise of reasonable foresight should have known, that it was likely to fall, and that injury to some person might result therefrom. The undisputed testimony of the several witnesses who sell linoleum in Bay City that it was the universal practice in the city to stand on end coils of linoleum similar to that by which plaintiff was injured, and that they had never known one to topple over, so clearly establishes both the absence of such knowledge and the lack of such foresight that a verdict based thereon would not be permitted to stand.
“The line must be drawn in these cases between suggestions and possible precautions, and evidence of actual negligence, such as ought reasonably and properly to be left to a jury.” Larkin v. O’Neill, 119 N. Y. 221 (23 N. E. 563).
While custom and usage in the conduct of such a business is competent evidence of the care and diligence required, it will not be allowed to overturn matters of common knowledge or to establish a custom obviously unreasonable or dangerous. The record, however, is barren of any proof tending to show that any danger should have been anticipated in permitting the linoleum to stand on end where it was placed at the time of plaintiff’s injury. No similar question has been heretofore presented to this court, nor has our attention been called to, nor do we find, any case in other jurisdictions in which it has been decided. The following, however, lend support to the conclusion we have reached:
“A storekeeper, -while required to use ordinary care to keep his place of business in a reasonably safe condition so as not to expose his customers to unnecessary danger, is not liable for accidents they may therein sustain, except upon proof of default.” Chapman v. Clothier, 274 Pa. 394 (118 Atl. 356).
In Chilberg v. Standard Furniture Co., 63 Wash. 414 (115 Pac. 837, 34 L. R. A. [N. S.] 1079), plaintiff, a customer of defendant, was injured by slipping upon a small rug, laid upon a smooth maple floor in defendant’s store for the purpose of display. There was proof that it was “the custom to permit the carpets, after being shown, to remain upon the floor a reasonable length of time until removed by a porter.” After discussing the duty of the defendant “to maintain its display room in such a condition as a reasonably careful and prudent merchant would deem sufficient to protéct customers from danger, while exercising ordinary care for their own safety,” the opinion concludes:
“Appellant having shown it followed the usual custom in the place and manner of its display of its merchandise, using the same method employed by ordinarily prudent men engaged in the same line of busi ness, there being no evidence to the contrary, and the accident itself being no proof of negligence, there was no proof of negligence to submit to the jury, and the motion to dismiss should have been sustained.”
An exhaustive note on “Duty and liability respecting condition of store or shop” will be found in 33 A. L. R. 181 et seq.
That the roll of linoleum, exhibited by defendant to the jury, toppled over in the court room has no bearing on defendant’s liability. It was there placed upon a carpeted floor, and, while the cause of its falling is unexplained, the jury would have had no right to infer negligence therefrom on the part of the employee in placing' it or permitting it to stand on end- at the time of plaintiff’s injury.
The judgment is affirmed.
Flannigan, C. J., and Fellows, Wiest, Clark, McDonald, and Bird, JJ:, concurred.
The late Justice Snow took no part in this decision. | [
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WlEST, J.
The question: If a debtor, without compliance with the bulk sales law, sells a half interest in his business to another who becomes his partner, and later, and again without compliance with the bulk sales law, sells out to his partner, may his. creditors hold the purchaser in garnishment proceedings for the value of the merchandise received?
The answer: Yes.
The facts: Gaylord B. Angus conducted a retail coal business. In March, 1924, he was indebted to plaintiff, had about $500 worth of coal on hand, sold a half interest in the business and merchandise to defendant John W. Noor, and the seller and purchaser became equal partners and continued the business. In August, 1925, the partnership had $1,500 worth of coal on hand and Noor purchased the interest of Angus. The provisions of the bulk sales law (2 Comp. Laws 1915, § 6346 el seq.) were not complied with at any time. Plaintiff obtained judgment against Angus in the sum of $1,289.44, and sued out a writ of garnishment against defendant Noor. The garnishee was examined in court and adjudged liable to respond to plaintiff for one-half the value of the coal in stock' at the time of each purchase. Noor paid some othefi creditors of Angus to an amount, he claimed, in excess of the value of the coal, but how much was so paid before the writ was served and how much after service was not shown. The garnishee defendant, by case-made, reviews the judgment rendered against him for $1,000.
Claims of garnishee defendant:
“(1) The transfer by the owner of a stock of merchandise and fixtures of an interest in his business to another is not a sale, transfer or assignment in bulk within the purview of the ‘bulk sales law.’ (Fixtures are not involved in this case.)
“(2) The disclosure and examination of the garnishee defendant failed to show unqualified liability on the part of the garnishee defendant, and are, therefore, insufficient to support a judgment for plaintiff.
“(3) In no event was plaintiff entitled to recover a judgment for the full value of all merchandise received by the garnishee defendant from' the principal defendant.”
The law: If defendant Noor is liable by reason of noncompliance with the bulk sales law, then garnishment was proper procedure. Spurr v. Travis, 145 Mich. 721 (9 Ann. Cas. 250, 116 Am. St. Rep. 330); Musselman Grocer Co. v. Kidd, Dater & Price Co., 151 Mich. 478; Marquette County Savings Bank v. Koivisto, 162 Mich. 554; National Grocer Co. v. Plotter, 167 Mich. 626.
The statute (2 Comp. Laws 1915, § 6346) provides:
“The sale, transfer or assignment, in bulk, of any part or the whole of a stock of merchandise, or merchandise and the fixtures pertaining to the conduct ing of said business, otherwise than in the ordinary-course of trade and in the regular and usual prosecution of the business of the seller, transferor, or assignor, shall be void as against the creditors of the seller, transferor, assignor,” * * *
unless certain specified conditions are observed. In the first sale of a half interest and formation of the partnership there was a transfer in bulk of a part of the stock and merchandise, and such was. not in the ordinary course of trade or the regular and usual transaction of the business of the seller, and, having been made in violation of the bulk sales law, was void as to creditors, and the purchaser became accountable to the creditors of the seller to the valuei of the interest in the merchandise so purchased. See Virginia-Carolina Chemical Co. v. Bouchelle, 12 Ga. App. 661 (78 S. E. 51), covering such a sale and formation of a partnership.
Authorities are at variance upon the question here presented; the- divergence in some instances being attributable to language of particular statutes, in others to the adoption of strict or liberal construction, while in still others there is flat disagreement. We have examined the cases, and, without citing all, will give our views.
Some courts consider the bulk sales law as in derogation of the common law, and, therefore, to be strictly construed (Smith-Calhoun Rubber Co. v. McGhee Rubber Co. [Tex. Civ. App.], 235 S. W. 321; Fair-field Shoe Co. v. Olds, 176 Ind. 526 [96 N. E. 592]), but no court departs from the express provisions of the statute. We consider the law remedial and to be given such construction as will effectuate its clear-purpose.
In Daly v. Sumpter Drug Co., 127 Tenn. 412 (155 S. W. 167, Ann. Cas. 1914B, 1101), it was urged, in behalf of the purchaser:
“That a sale of a half interest in a stock of goods, where the purchaser contemporaneously becomes a partner therein with the seller, does not fall under the ‘bulk sales law,’ and therefore, he was not bound to comply with the terms of that law, and his purchase was not fraudulent in law.”
The court answered:
“We are of the opinion that the case before us falls within the terms of the act. The language of the act is:
“ ‘A sale of any portion of a stock of merchandise otherwise than in the ordinary course of trade in the regular and usual prosecution of the seller’s business, or a sale of an entire stock of merchandise in bulk, shall be presumed to be fraudulent and void as against the creditors of the seller, unless,’ etc.
“A half interest is a portion of the stock. We do not think the act means that it must be a distinct portion or a part severed from the whole stock. The sale of a half interest by a merchant for the purpose of taking the vendee into partnership is within the purpose and reason of the act, since it very materially changes the relation of the vendor’s creditors to the stock, if such sale be valid.”
It will be noted that the Tennessee statute is similar to the Michigan statute, except in the particular that our statute declares a sale in violation of its conditions to be void. See, also, Marlow v. Ringer, 79 W. Va. 568 (91 S. E. 386, L. R. A. 1917D, 619); Virginia-Carolina Chemical Co. v. Bouchelle, supra; Howell v. Howell, 142 Tenn. 31 (215 S. W. 278).
In Schoeppel v. Pfannensteil, 122 Kan. 630 (253 Pac. 567, 51 A. L. R. 398), it was held, two judges dissenting, that a sale of an undivided half interest in a partnership stock of merchandise by one partner to his fellow partner is not governed by the bulk sales law. That decision is in line with Taylor v. Folds, 2 Ga. App. 453 (58 S. E. 683), but, as pointed out by the Georgia court in the later , case of Virginia,Carolina Chemical Co. v. Bouchelle, supra, is not ap plicable to the case at bar. To make this plain we quote from the latter case:
“It is insisted that under a strict construction of the act it should not be made to apply to a sale by one partner to his associate of his interest in a mercantile business. This was held in Taylor v. Folds, 2 Ga. App. 453 (58 S. E. 683), a decision relied on by the defendant in error. We are unwilling, however, to extend the principle of that decision so far as to include a case like the present; for to do so would practically nullify the sales in bulk act and defeat the very purpose which the general assembly had in mind, namely, to protect persons who had extended credit to a merchant on the faith of apparent prosperity indicated by a stock of goods which would be sold out gradually and replenished from time to time.
“If the debtor and the claimant had been .partners in the business at the time the credit was extended to Cook, a subsequent sale by Cook to the claimant of his interest in the business would have been valid, under the decision in Taylor v. Folds, supra. But Cook and the claimant were not partners when the credit was extended to Cook. After the extension of credit, Cook sold out a half interest in the business to the claimant, and then, within less than three months, sold out the other half interest to 'his partner. If a transaction of this kind could be sustained, it would be quite an easy matter in any case to defeat the act of 1903 by selling out on one day a half interest in a business and then selling the other half on the day following. No such construction of the act of 1903 is permissible, and the decision in Taylor v. Folds does not so hold.” *
In Fairfield Shoe Co. v. Olds, supra, it was held that a sale by one partner to the other partner of his interest in a stock of merchandise was not within the purview of the bulk sales law, citing, among other cases, Taylor v. Folds, supra.
Defendant Noor held the merchandise he purchased on both occasions for the creditors of Angus and is liable to plaintiff in garnishment although he has paid his vendor in full, and even if he has disposed of all the merchandise so received.
We think the examination of the garnishee defendant in open court disclosed a liability sufficient to support the judgment rendered. Upon the record, plaintiff was entitled to recover to the full value of all merchandise received by the garnishee defendant from the principal defendant in violation of the bulk sales law.
The judgment is affirmed, with costs to plaintiff. '
North, Fellows, Clark, McDonald, and Sharpe, JJ., concurred.
Chief Justice Flannigan and the late Justice BIRD took no part in this decision. | [
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Fellows, J.
Plaintiffs leased to defendant a filling station located in Pontiac. During the term of the lease it was destroyed by fire. Plaintiffs, claiming that the fire was caused by the negligence of one Parker, who they claim was defendant’s agent in the operation of the station, bring this action to recover the damages occasioned by the fire. Defendant denies that the fire was caused by the negligence of Parker, and also denies that Parker was- his agent, insisting that he had leased the premises to Parker and that he, Parker, was operating the station for himself and paying rent therefor to defendant. Parker was admittedly running the station either for himself or defendant. The morning of the fire was very cold. Plaintiffs called a witness named Leach, who, upon the face of the record, was disinterested, and who testified that on the morning in question he entered the station and found a can of oil on a red hot stove, that he called to Parker, who was outside, and who came in and in attempting to remove the oil, which was afire, spilled it on the floor, thus causing the fire. Parker and a witness who was, on the face of the record, disinterested testified that no such occurrence took place, and that Leach was not present at all. There was testimony corroborative of both claims. Defendant also introduced evidence tending to, show that the fire was caused by defective wiring and defendant alleged negligence of plaintiffs in wiring the building and sought to recover for such damages as he suffered on occasion of the fire. Both claims were submitted to the jury who found for plaintiffs.
' The main question 'in the case grows out of defendant’s insistence that he was entitled to' a directed verdict so far as plaintiffs’ claim is concerned, on .the ground that he had undisputably established that Parker was his tenant and not his agent. Upon his motion for a directed verdict the testimony and'the legitimate inferences to be drawn from the established facts most favorable to plaintiff must be accepted. While it was defendant’s testimony that Parker was his tenant and sold his goods on consignment, having the right to purchase some goods from others, it also appeared from his testimony, and that of witnesses called by him, that each morning a man was sent by him to check up the station, and that this man took from the cash register for him all cash above $25; that Parker worked six days of the week and that an employee of defendant ran the station the other day. It also appeared from defendant’s proof that he ran several stations in Pontiac and that each was given a number and that this station had a number and was known as number four, and there is no testimony that the man who checked up the various stations used any different method in checking up number four and in collecting the cash than he did in checking up the other numbers which admittedly were run by defendant or in collecting the cash therefrom. Defendant himself paid the rent to plaintiffs.
Whether the facts detailed and others which might be detailed were consistent with defendant’s claim that Parker was but a tenant and was not his agent, presented a question for the jury and was properly submitted to them by the court. Nor do we think it may be said that the heating of oil so that it would flow more easily on a cold morning in a filling station where it was kept for sale, was as matter of law so far outside the scope of Parker’s employment, if he was an employee, as to relieve defendant from liability for such act.
Several errors are assigned on the admission and rejection of testimony but one of which merits discussion. The chief of the fire department was called by defendant as a witness and produced the record of his office; it was the record from which he made up his report to the State fire marshal. He testified that he did not reach the fire until it was “pretty well out;” that the record was made up by a “partial personal investigation,” and information furnished his master mechanic. It stated as the cause of the fire, “electric motor.” It also contained statements as to the value of the property consumed and considerable additional detail. So far as it records the hour the call came and time the apparatus returned to the station, it was received, but in its entirety it was rejected. It is pointed out by defendant’s counsel that under section 9108, 2 Comp. Laws 1915 (amended by Act No. 168, Pub. Acts 1919 [Comp. Laws Supp. 1922, § 9108]), the chief of the fire department is required to file his report of all fires with the State fire marshal and it is insisted upon the authority of Harrington v. Accident Ass’n, 232 Mich. 101, and Hertzler v. Manshum, 237 Mich. 289, that a certified copy of such report would be admissible. And it is urged that the original record from which such report is made is likewise admissible. But in both the cases cited we held that the certificates of death there involved were admissible per force of the statute making them prima facie evidence (2 Comp. Laws 1915, § 5607). Our attention is called to no like provision in the State fire marshal act and we have found none. As a general rule, in the absence of a statute, the report of an officer not made On his personal knowledge is not admissible as substantive evidence of the facts reported. Sterling v. City of Detroit, 134 Mich. 22; Goosen v. Packard Motor Car Co., 174 Mich. 654. The trial judge did not err in declining to receive the exhibit in its entirety.
A motion was made for a new trial in which it was urged that the verdict was against the weight of the evidence. The trial judge in a carefully prepared opinion denied it. Both parties here urge many circumstances not detailed in this opinion which each insist corroborates his claim. The testimony was in direct conflict upon the material facts. The jury believed the plaintiffs and their witnesses and of necessity disbelieved defendant and his witnesses on the material questions. Whether we would reach the same result as did the jury is not the test. For this court to reverse on this ground requires us to find that the verdict is against the clear weight, the overwhelming weight of the evidence.. This we can not find on this record.
The judgment will be affirmed.
North, Wiest, Clark, McDonald, and Sharpe, JJ., concurred.
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K. F. Kelly, J.
In this child protective action initiated by the Department of Human Services (DHS or petitioner), respondent-mother, Holly Johnson, appeals as of right the “custody” order entered by Wayne Circuit Court Judge Jerome C. Cavanagh, assigned to the juvenile section of the family division of the court, awarding the father, Michael Reid, joint legal custody and sole physical custody of the minor child, B.J. Sole legal and physical custody of the minor child had previously been awarded to Johnson by an earlier order entered in an active paternity action between Johnson and Reid pending before Wayne Circuit Court Judge Arthur J. Lombard, assigned to the domestic relations section of the family division.
The issue raised on appeal requires us to consider whether a trial court presiding over a child protective proceeding, or juvenile case, may make determinations in related actions under the Child Custody Act (CCA). We hold that a trial court that is part of a circuit court’s family division under MCL 600.1011 presiding over a juvenile case has jurisdiction to address related actions under the CCA consistent with MCL 600.1021 and MCL 600.1023, as well as local court rules. We further hold that when exercising its jurisdiction, a trial court must abide by the relevant procedural and substantive requirements of the CCA. Accordingly, we vacate the trial court’s “custody” order entered in the child protective proceedings and remand for further proceedings.
I. FACTS AND PROCEDURAL BACKGROUND
Reid and Johnson had a child out of wedlock, B.J., who was born on March 3, 2004. When Reid discovered Johnson was pregnant with B.J., Johnson and Reid separated. Reid saw B.J. on only one occasion, for approximately 20 minutes, shortly after B.J.’s birth.
In October 2004, a paternity action was initiated in the Wayne Circuit Court, Johnson v Reid, Docket Number 2004-462722-DE This paternity action was assigned to Judge Lombard. Reid admitted that he is B.J.’s father and signed an affidavit acknowledging paternity. Judge Lombard entered a judgment of support and filiation granting Johnson sole legal and physical custody of B.J. Reid was not granted any parenting time but was ordered to pay child support and other related expenses.
Johnson also has another child, A.E, born on March 14, 1993, from a previous marriage to Gyshawn Pres-berry. Johnson and Presberry divorced in 1997. The judgment of divorce awarded Johnson legal and physical custody of A.E, permitted Presberry supervised parenting time, and required Presberry to pay child support. Presberry, however, failed to pay child support and at the time of these events had several warrants for his arrest because of his child support arrearage.
A. CHILD PROTECTIVE SERVICES PETITION AND TRIAL
In April 2006, the DHS received a complaint that Johnson was physically abusing A.E A.E allegedly had welts and her arms were bleeding. A.E admitted that her mother frequently beat her. Johnson, however, evaded DHS involvement by sending A.E to Tennessee.
In December 2006, after A.E had returned to Michigan, another complaint was filed against Johnson. The DHS sought temporary wardship of both A.E and B.J. in the case currently on appeal. In the initial petition, it was alleged that Johnson had beaten A.E and had also allegedly left A.E, who was 12 or 13 years old at the time, to care for B.J. while Johnson was gone from 4 p.m. to midnight. The petition noted that neither of the children’s fathers sought custody of the children, sought to visit them, or provided assistance for the children’s care. As a result, the children were removed from Johnson’s care on December 5, 2006, and placed with relatives.
A preliminary hearing on the petition was held on December 6, 2006, Referee Leslie Graves presiding, during which the DHS indicated that it was unsafe to keep the children in Johnson’s home. The court authorized the petition, continued the children’s placement with relatives, and granted Johnson supervised parenting time at the agency. The matter was set for a pretrial hearing before Referee David Ferkins, which was held on January 16, 2007. A.E’s father did not attend the pretrial hearing. B.J.’s father, Reid, however, did attend this hearing and was granted supervised parenting time at the agency.
Trial began before Referee Ferkins on March 22, 2007, and continued on April 20, 2007, and June 1, 2007. A.E testified that the allegations of physical abuse were false and that although her mother threatened to whip her for misbehaving, Johnson never did. According to A.P, her father made false reports of child abuse in retaliation against Johnson for not permitting him to see A.E A.P further indicated that allegations that her mother had hit her with a vacuum cleaner cord, a belt, and a coat hanger and had left her alone with B.J. were false, but admitted making these accusations to a protective services worker. Nonetheless, A.P testified that her mother “whooped” her “[l]ike how other kids get whippings” and further admitted that her mother whipped her with a belt sometime around Thanksgiving 2006. A.E also testified that Johnson, on one occasion, had ordered her to strip down to her underwear and to lie down with her arms and legs outstretched while Johnson hit her on the thighs with a belt.
Johnson’s mother, Judith Johnson, testified that she saw Johnson hit A.E on two or three occasions and that she thought Johnson was hitting A.E too hard. She also saw bruises on A.E’s thighs that appeared to be “from some kind of cord....” Johnson’s sister, Kristi Johnson, testified that A.E had told her that Johnson whipped her on numerous occasions using a vacuum cleaner cord, an extension cord, or a belt and that Johnson had left A.E alone with her brother until midnight.
Reid, who had lived with Johnson for three months, testified that he had also witnessed Johnson whip A.E “uncontrollably” with a coat hanger and had also seen Johnson beat A.E with her hand and a belt. In addition, Reid admitted to having broken Johnson’s keyboard when Reid and Johnson separated because Johnson had allegedly tried to prevent him from leaving the apartment. As a result of this incident, Reid had pleaded guilty of malicious destruction of property and was ordered to pay restitution. Reid denied having any other convictions, although the DHS had documentation of prior convictions for domestic violence and carrying a concealed weapon. He admitted that he had a child support arrearage for B.J., and for three other children from other relationships as well, and that he had “dealt with the warrants for the child support.” Reid testified that he had not seen B.J. because Johnson had prevented him from seeing his son. Johnson acknowledged that she wrote to Reid in 2005, after B.J.’s birth, and told him that she did not want him to have anything to do with B.J. Reid indicated that he was self-employed as a handyman and that he had part-time jobs delivering flowers and pizza. A.E’s father did not attend the proceedings. At the end of the trial, the court assumed temporary jurisdiction over the children, ordered that a parent-agency agreement be prepared, ordered that psychological and psychiatric evaluations of Johnson, Presberry, and Reid be performed, and recommended counseling.
B. JULY 2007 DISPOSITIONAL REVIEW HEARING
Subsequently, at the dispositional hearing on July 27, 2007, the parties entered into a parent-agency agreement that included, among other requirements, obtaining suitable housing, individual and family counseling, obtaining a legal source of income, and attending parent education classes. Referee Perkins also ordered Johnson to undergo anger management and domestic violence counseling. Reid was permitted unsupervised parenting time, including overnights and weekends, while Johnson’s supervised parenting time at the agency was reinstated. Between the trial and this dispositional hearing, Reid had not missed a single visit with his son.
C. OCTOBER 2007 PERMANENCY PLANNING HEARING
On October 24,2007, a permanency planning hearing was held. The foster care worker assigned to the case, Khaleelah Dawson, testified that Reid was in full compliance with the parenting time schedule, had completed a psychological evaluation, and had recently been assigned an individual counselor but had not yet started counseling. Dawson reported that his unsupervised weekend visits with B.J. had been going well and that B.J. had indicated to her that he would like to stay with Reid. Dawson also indicated that B.J. “[got] along well” with Reid’s other two children, who visited during the weekends and over the summer. Reid lived alone in his own home, and Dawson indicated that the previous caseworker had been out to the house and found it appropriate. Dawson recommended that B.J. be placed with Reid with in-home services specifically directed at social and educational resources on parenting.
With respect to Johnson, Dawson testified that Johnson was attending individual counseling. Dawson, however, commented that Johnson continued to deny any type of physical abuse and thus recommended individual psychotherapy. Dawson reported that Johnson had attended the domestic violence and substance abuse assessments, as well as parenting classes, but had failed to take any of the random drug screens ordered. Johnson had not yet completed a psychiatric evaluation. Further, although Johnson was permitted weekly supervised visitation at the agency, she had only visited twice since the previous dispositional hearing in July 2007. Dawson testified that Johnson had insisted on weekend visits, which were not available at the agency, and that Johnson had not made arrangements to visit during the week despite the agency’s efforts to make accommodations. Johnson had informed Dawson that she worked during the day and would not be able to make nighttime visits during the week. Nonetheless, Johnson had failed to submit to Dawson a work schedule or pay stubs, despite Dawson’s repeated requests, and Dawson had not been able to verify Johnson’s employment. Dawson also indicated that Johnson lacked stable housing because she had moved twice in the previous 90 days. At the end of the hearing, the referee ordered that the children remain temporary wards of the court and continued the previous orders, including one requiring psychotherapy for Johnson.
D. JANUARY 2008 DISPOSITIONAL REVIEW HEARING
A dispositional review hearing followed on January 10, 2008. Dawson testified that Johnson was in partial compliance with her treatment plan. Johnson had started attending supervised visits with the children on a regular basis, participated in a clinic for “child study,” and completed the psychological evaluation. However, Dawson had not yet received the results of the psychiatric evaluation, and Johnson had remained reluctant to accept responsibility for the physical abuse, although her therapist reported that she was beginning to accept responsibility. Johnson had also failed to complete the random drug screens, but Dawson did not believe Johnson was using any illicit substances. Dawson agreed to omit the drug screen requirement unless Johnson showed signs of drug use. Dawson recommended that Johnson be allowed to have some unsupervised day visits, at Dawson’s discretion, contingent upon continued compliance with the court’s orders. Dawson noted that Johnson did not have suitable housing and that she had referred Johnson to housing assistance. The court report Dawson submitted indicated that during visitation Dawson had to “redirect” Johnson on two separate occasions when Johnson spoke negatively about the children’s respective fathers in the children’s presence and acted hostilely toward her own parents after parenting time had ended.
Dawson further testified that Reid was in complete compliance with the treatment plan and had done everything the court had asked of him. Reid had actively participated in therapy, and his weekend-long unsupervised visits continued to go well. Dawson had also visited Reid’s home and reported that it was suitable. Dawson recommended that B.J. be placed with Reid once in-home services and a suitable day-care plan were in place. Reid had already begun arranging daycare plans with family members.
At the end of this hearing, the court ordered petitioner to place B.J. with Reid because it determined that it was unnecessary to wait for in-home services to begin. The court acknowledged that Reid intended to move for a change of custody of B.J., but explained that custody is a separate issue and that its order for placement did not substitute for, or obviate the need to file, a motion for change of custody. The court also adopted Dawson’s recommendation that Johnson be given unsupervised day visits with her children at Dawson’s discretion. The children continued to be wards of the court.
E. MAY 2008 MOTION FOR CUSTODY
Subsequently, Reid moved for sole custody of B.J. However, the motion for change of custody was not filed in the paternity action before Judge Lombard, in which the original custody order had been entered, but was filed in the juvenile case pending before Referee Perkins. It was noticed to be heard on May 12, 2008, the same day as the next dispositional review hearing and permanency planning hearing. Because of the change of custody motion, Referee Perkins transferred the case to the docket of Judge Cavanagh.*
At the outset of the hearing, petitioner asked the court to address the change of custody motion before conducting the dispositional hearing, and the court agreed. Reid argued that he was entitled to custody because he had completely complied with the treatment plan. Johnson objected to the motion for custody generally and to an award of sole legal custody specifically. Johnson also sought custody of B.J. While she argued that she had made progress on her treatment plan and had had trouble with petitioner’s caseworker, she failed to articulate a specific objection to a change of physical custody. The attorney appointed for the child argued that Johnson should not be given custody as she had concerns that B.J. would be at risk if placed in Johnson’s home because Johnson had physically abused A. P and directed the court’s attention to the exhaustive material in both the legal and confidential file. The child’s attorney did not object to Reid’s obtaining sole physical custody of B.J., with joint legal custody for both parents. Petitioner’s attorney stated that the DHS was “not really a party to this case” and did not object to the motion for custody going forward.
After hearing the parties’ arguments, the trial court stated: “Okay. After considering the motion the Court’s going to grant joint legal custody to mother and father and sole physical custody to Mr. Reid....” Before proceeding with the juvenile case, the court indicated that it would consider Johnson’s testimony with regard to the motion for custody.
The court then conducted the dispositional review and permanency planning hearings. At the outset, the trial court admitted evidence petitioner presented, including extensive documentation of the parties’ psychological evaluations and related reports prepared by the DHS. During the hearing Dawson testified that Reid had completed his treatment plan, that she could offer him no other services, and that she had no objections to B. J.’s staying in Reid’s home. Dawson believed that it was in B.J.’s best interests to be in Reid’s physical custody and that upon entry of a custody order, the trial court should dismiss its jurisdiction over B.J.
Dawson also testified that Johnson’s individual therapy had been terminated because of lack of atten dance. Dawson indicated that Johnson still did not believe that she had done anything wrong and “blame[d] others for her problems.” According to Dawson, Johnson’s therapist wanted Johnson to re-enroll for more therapy to work on this problem. Johnson’s visitation had also reverted to supervised visits at the agency because Johnson had failed to return B. J. to the agency after an unsupervised Saturday visit and kept him for an entire weekend. Dawson recommended that the current order with respect to Johnson’s visitation rights, which included unsupervised visitation at Dawson’s discretion, be continued. Dawson testified that she was unable to verify Johnson’s housing or employment. Initially, Johnson had told Dawson that she was living with a friend but did not want Dawson to come out and view the home because she would not be living there with her children. Dawson did not conduct a home assessment and was informed on the day of the hearing that Johnson had allegedly found a new home.
As part of this hearing, Dawson’s May 8, 2008, court report was admitted into evidence. The report indicated that Johnson had completed the parenting classes and domestic violence classes. The report also noted that Johnson’s individual therapy had been terminated as of May 6, 2008, because Johnson’s last session had been scheduled for March 8, 2008, and the therapist’s attempts to re-engage Johnson had failed. The report further stated that Johnson had written numerous complaints to petitioner indicating that “she was innocent of all allegations and that she was the victim.” Dawson indicated in the report that Johnson had been unavailable to plan for reunification. Dawson’s attempts to speak with Johnson had been unsuccessful because when Dawson attempted to communicate with Johnson, Johnson would state that someone else was servicing her case. Dawson testified that she and Johnson had experienced a “communication barrier” and that, as a result of Johnson’s complaints, the case was about to be transferred to a different foster care worker.
Johnson testified that she had completed parenting classes and that she had completed therapy. According to Johnson, neither her therapist nor Dawson had told her she needed to continue therapy, but she testified that she would continue to attend sessions. Johnson also testified that she had notified the agency that she had new housing, but had not notified Dawson because there was always a “tussle/tussle” when she tried to talk to Dawson. Johnson admitted that she had filed three other complaints against different DHS employees.
After hearing this testimony, the court stated:
The Court’s jurisdiction over [B.J.] is dismissed. Wardship’s terminated. The Court finds reasonable efforts have been made to preserve and unify the family. Progress towards that goal and the goal of reunification have been made.[ ]
The trial court continued Johnson’s parenting classes and individual therapy sessions. Subsequently, the trial court entered a single order under the juvenile case number dismissing the court’s jurisdiction over B.J., terminating its wardship over him, and awarding Reid sole physical custody and Reid and Johnson joint legal custody of B.J. This appeal followed.
II. STANDARDS OF REVIEW
Three standards of review are relevant to our review of a trial court’s decision on a motion for change of custody. The trial court’s factual findings are reviewed under the great weight of the evidence standard. McIntosh v McIntosh, 282 Mich App 471, 474 ; 768 NW2d 325 (2009). The court’s factual findings are against the great weight of the evidence if the evidence clearly preponderates in the opposite direction. Berger v Berger, 277 Mich App 700, 705; 747 NW2d 336 (2008). We review for an abuse of discretion the trial court’s discretionary decisions, such as the award of custody. Id. Questions of law in custody matters are reviewed for clear legal error. Phillips v Jordan, 241 Mich App 17, 20; 641 NW2d 183 (2000). Clear legal error exists when the trial court incorrectly chooses, interprets, or applies the law. Foskett v Foskett, 247 Mich App 1, 4-5; 634 NW2d 363 (2001). Further, whether the circuit court has jurisdiction over both child protection actions and domestic relations matters is a question of law we review de novo. See Berger, 277 Mich App at 702.
III. APPLICABLE LAW
Johnson argues that the trial court erred by failing to consider the best interests factors enumerated in the CCA when it awarded custody of the minor child to Reid. Conversely, petitioner and the attorney for the child characterize the trial court’s decision as a determination under the juvenile code, meaning that no analysis of the best interests factors was appropriate or even required. While we agree that the trial court erred in the manner in which it entered the “custody” order, we find it necessary to first consider the applicable law governing this case.
A. FAMILY LAW’S CONSTITUTIONAL DIMENSION
In this case, there are two distinct and separate statutory schemes affecting the care and custody of the minor child: the juvenile code and the CCA. Relevant to each of these statutory schemes are the relative interests of the state, the parents, and the child in the child’s upbringing. Generally, the state has no interest in the care, custody, and control of the child and has no business interfering in the parent-child relationship. See Ryan v Ryan, 260 Mich App 315, 333; 677 NW2d 899 (2004). As a practical matter, the state is not equipped to supply a child with the necessary care and direction that a parent is equipped to provide. Neither is it its place to do so, as due process precludes a government from interfering with parents’ fundamental liberty interest in making decisions regarding the care, custody, and control of their children absent a compelling state interest. Troxel v Granville, 530 US 57, 65-66, 120 S Ct 2054; 147 L Ed 2d 49 (2000); DeRose v DeRose, 469 Mich 320, 328-329; 666 NW2d 636 (2003); Herbstman v Shiftan, 363 Mich 64, 67-68; 108 NW2d 869 (1961); Ryan, 260 Mich App at 333-334. Rather, it is the parent’s duty, and fundamental right, to do what the state cannot — direct a child’s upbringing and education and prepare that child for future obligations. Troxel, 530 US at 65-66. Similarly, a child also has a due process liberty interest in his or her family life, In re Clausen, 442 Mich 648, 686; 502 NW2d 649 (1993), which includes having a fit parent, In re Anjoski, 283 Mich App 41, 60-61; 770 NW2d 1 (2009); Herbstman, 363 Mich at 67-68. In other words, a child has a “ ‘right to proper and necessary support; education as required by law; medical, surgical, and other care necessary for his health, morals, or well-being....’” Ryan, 260 Mich App at 333-334, quoting Herbstman, 363 Mich at 67. Thus, when a parent is fit and a child’s needs are met, there is no reason for the state to interfere in a child’s life.
B. THE CHILD CUSTODY ACT AND THE JUVENILE CODE
The state, however, may become involved in a child’s upbringing under certain limited circumstances when a child’s welfare is affected. Ryan, 260 Mich App at 333. Under domestic relations law, for example, certain actions implicate the state’s interest in the child’s welfare. These include actions for child support, LME v ARS, 261 Mich App 273; 680 NW2d 902 (2004), paternity actions, Sinicropi v Mazurek, 273 Mich App 149; 729 NW2d 256 (2006), and dissolution of marriage, Harvey v Harvey, 470 Mich 186; 680 NW2d 835 (2004). If any of these actions directly or incidentally involve the legal or physical custody of a child, the courts are bound by the CCA in determining who should have physical and legal custody of a child. See Sirovey v Campbell, 223 Mich App 59, 68; 565 NW2d 857 (1997). In making this determination, the child’s best interests are of paramount importance, and the goal is to resolve a custody dispute in a way that promotes the child’s best interests and welfare. Harvey, 470 Mich at 192-193. Once a court enters a custody order, it cannot change the award of custody without overcoming certain procedural safeguards. See, e.g., MCL 722.25(1); MCL 722.27. These safeguards are in place for the stability of the child and are meant to protect against unwarranted and disruptive changes of custody. Corporan v Henton, 282 Mich App 599, 603; 766 NW2d 903 (2009); Vodvarka v Grasmeyer, 259 Mich App 499, 509; 675 NW2d 847 (2003).
Similarly, the state may become involved in the parent-child relationship when a child’s safety is threatened, for example, if the parent has abused or neglected the child or has abandoned the child. The state’s involvement under these types of circumstances is governed by the juvenile code, MCL 712A.1 et seq. A court presiding in juvenile proceedings obtains jurisdiction over the matter once a petition is filed and the court has authorized the petition after conducting a preliminary inquiry. MCL 712A.2; MCL 712A.11(1); see In re Jagers, 224 Mich App 359, 361; 568 NW2d 837 (1997). Although the court has jurisdiction over the matter, the child will not come under the court’s jurisdiction and become a ward of the court until the court holds an adjudication on the merits of the allegations in the petition and finds by a preponderance of evidence that there is factual support for permitting judicial intervention. In re AMB, 248 Mich App 144, 176-177; 640 NW2d 262 (2001). Subsequently, the court can hold dispositional review hearings and permanency planning hearings and enter orders governing the child’s care and custody. Id. at 177; MCL 712A.18f(4). The goal of these proceedings is always reunification of the family unit. See In re B & J, 279 Mich App 12, 18; 756 NW2d 234 (2008).
However, a conflict may arise concerning the care and custody of a child, as in this case, where domestic relations law and juvenile law intersect. See In re Brown, 171 Mich App 674; 430 NW2d 746 (1988). Obviously, upon entry of a child custody order under the CCA, a child’s parents, or other custodians, must abide by the terms of the custody order. However, once a juvenile court assumes jurisdiction over a child and the child becomes a ward of the court under the juvenile code, the juvenile court’s orders supersede all previous orders, including custody orders entered by another court, even if inconsistent or contradictory. MCR 3.205(C); see Krajeweski v Krajewski, 420 Mich 729, 734-735; 362 NW2d 230 (1984). In other words, the previous custody orders affecting the minor become dormant, in a metaphoric sense, during the pendency of the juvenile proceedings, but when the juvenile court dismisses its jurisdiction over the child, all those previous custody orders continue to remain in full force and effect. This is necessarily the result because the prior domestic relations court never relinquished its jurisdiction over the custody dispute, as the CCA vests a court with continuing jurisdiction over the matter, Harvey, 470 Mich at 192, nor was the prior court required to relinquish or waive its jurisdiction in order for the juvenile court to exercise its jurisdiction, Krajewski, 420 Mich at 734-735; MCR 3.205(A). In addition, the juvenile court’s orders function to supersede, rather than modify or terminate, the custody orders while the juvenile matter is pending because the juvenile orders are entered pursuant to a distinct statutory scheme that takes precedence over the CCA. See Krajewski, 420 Mich at 734-735. We note that during the duration of the juvenile proceedings, while the parties subject to the custody order can move to modify the custody order, any modification would remain superseded by the juvenile court’s orders.
C. 1996 PA 388: “FAMILY COURT PLANS”
Until very recently, only Michigan’s probate courts had original jurisdiction over all juvenile cases. Const 1963, art 6, § 15, grants probate courts “original jurisdiction in all cases of juvenile delinquents and dependents, except as otherwise provided by law.” However, 1996 PA 388, amending the Revised Judicature Act (RJA) by adding chapter 10, reorganized Michigan’s court system by creating a family division within the circuit court, which assumed much of the jurisdiction over juvenile cases formerly given to the probate courts. MCL 600.1001; MCL 600.1003; MCL 600.1021; see In re AMB, 248 Mich App at 167. It required each judicial circuit to develop a “family court plan” under which the family division of each circuit has “sole and exclusive jurisdiction” over, but not limited to, actions under the CCA, child protective actions, and paternity actions. MCL 600.1011; MCL 600.1021. This reorganization, and the mandate that each judicial circuit create a family court plan tailored to its community’s needs, is intended to “promote more efficient and effective services to families ....” MCL 600.1011(1). As part of this goal, 1996 PA 388 added a provision intended to better serve families who face multiple matters before different judges and encompasses the concept of “one judge, one family.” See Saoud Hallmark, The new family division in Michigan, 76 Mich B J 956, 958 (1997). MCL 600.1023 provides:
When 2 or more matters within the jurisdiction of the family division of circuit court involving members of the same family are pending in the same judicial circuit, those matters, whenever practicable, shall be assigned to the judge to whom the first such case was assigned.
And the act specifically gives a judge presiding over a juvenile matter the “power and authority” to hear actions under the CCA. MCL 600.1021(3). Nonetheless, family division judges must still abide by the procedural requirements incumbent upon them when hearing a custody matter under the CCA or conducting proceedings under the juvenile code. See MCR 3.205.
The Wayne Circuit Court developed a family court plan that divided its family division into a juvenile section and a domestic relations section, each of which is assigned particular causes of action in part because the geographical distance between the Lincoln Hall of Justice (where child protective proceedings are heard) and the Coleman A. Young Municipal Building (where domestic relations matters are heard.) Wayne Circuit Court Administrative Order No. 1997-04; Wayne Circuit Court Administrative Order No. 1997-05. For example, the juvenile section is assigned delinquency and abuse and neglect cases, whereas the domestic relations section is assigned cases pertaining to divorce, paternity, support, custody, and emancipation of minors. Each section, however, has the same authority and jurisdiction as the other section over matters enumerated in MCL 600.1021.
The Wayne Circuit Court has also developed its own procedures to better serve families who face multiple matters before different judges within its family division consistent with MCL 600.1023: When a domestic relations dispute arises and a juvenile action involving the same parties is already pending, or vice versa, one judge may resolve both matters if the judges on the respective dockets confer and deem it appropriate. See AO 1997-04; AO 1997-05.
IV ANALYSIS
A. JURISDICTION AND AUTHORITY
Petitioner and the child’s attorney mischaracterize the trial court’s decision to award “custody” to Reid as a determination made under MCL 712A.19(1) of the juvenile code and MCR 3.976. According to petitioner and the child’s attorney, the trial court was not required to consider the best interests factors delineated in the CCA, as Johnson contends, because the court was acting under the juvenile code. The attorney for the child further argues that the posture of the case was such that the trial court was precluded from making a custody determination under the CCA because Johnson was incapable of taking custody and application of the factors would be “premature.” We disagree.
MCL 712A.19(1) provides, in relevant part:
Subject to [MCL 712A.20] if a child remains under the court’s jurisdiction, a cause may be terminated or an order may be amended or supplemented, within the authority granted to the court in [MCL 712A.18] at any time as the court considers necessary and proper. An amended or supplemented order shall be referred to as a “supplemental order of disposition”.
In other words, when a parent has successfully completed his or her treatment plan, and has otherwise become a fit parent, it is appropriate for the court to terminate its jurisdiction over the child. Similarly, MCR 3.976 provides courts with guidance regarding a child’s return to a parent in proceedings under the juvenile code and states:
(A) Permanency Plan. At or before each permanency planning hearing, the court must determine whether the agency has made reasonable efforts to finalize the permanency plan. At the hearing, the court must review the permanency plan for a child in foster care. The court must determine whether and, if applicable, when:
(1) the child may be returned to the parent, guardian, or legal custodian[.]
(E) Determinations; Permanency Options.
(1) Determining Whether to Return Child Home. At the conclusion of a permanency planning hearing, the court must order the child returned home unless it determines that the return would cause a substantial risk of harm to the life, the physical health, or the mental well-being of the child.
While it is true that Reid was granted “custody” of the minor child in an order captioned as a juvenile court order and entered during a juvenile proceeding, petitioner and the children’s attorney are incorrect to characterize the trial court’s determination as based on either of these provisions. Rather, Reid specifically filed a motion for a change of custody, requesting that he have sole custody of B.J. When the trial court granted the motion, it had not yet dismissed its jurisdiction over the minor child pursuant to MCL 712A.19(1), nor had it conducted the permanency planning hearing, as MCR 3.976 requires. Further, had the trial court dismissed its jurisdiction over the minor child under MCL 712A.19(1) before it considered Reid’s motion for custody, the minor child would have necessarily been returned to Johnson because the previous custody order from the paternity action granted Johnson sole legal and sole physical custody. MCR 3.205(C). The minor child, however, was permitted to remain in Reid’s care. Given these facts and the court’s explicit statement that it had considered the change of custody motion and decided to grant Reid joint legal and sole physical custody of the minor child, it is unequivocal that the court’s determination was based on the CCA and not the juvenile code.
Although the trial court erred in the manner in which it conducted the change of custody hearing, as discussed later, we find nothing inherently wrong with the court’s exercising its discretion to consider the merits of the motion. There is no authority to preclude a circuit judge from determining custody pursuant to the CCA ancillary to making determinations under the juvenile code, and neither petitioner nor the child’s attorney has identified any such authority. To the contraiy, the RJA, as amended by 1996 PA 388, specifically permits a judge presiding over a juvenile matter to consider related actions under the CCA. Judge Cavanagh, a circuit judge, was acting as a juvenile section judge. Pending before the court were three matters involving the same family: a motion for change of custody, a dispositional review hearing, and a permanency planning hearing. Because the juvenile section has the same authority and jurisdiction as the domestic relations section, MCL 600.1021, we conclude that Reid’s motion for custody, as well as the accompanying child protective action, were properly before the court.
We stress, however, that when a family division court deems it appropriate to consolidate numerous matters concerning the same family that fall within the jurisdiction of the family division under MCL 600.1021 but may have originally been assigned to different judges, it is necessary that family division courts follow the procedural requirements incumbent upon them. Here the trial court failed to require that the motion be captioned with the appropriate paternity case name and number and, instead, proceeded to decide the motion for custody under the juvenile case number. And the resultant custody order that the court entered was entered in the same supplemental juvenile order rather than in the paternity action. This was error.
B. CUSTODY AWARD
Turning to the substance of Johnson’s argument, we also agree that the trial court erred by failing to consider the best interests factors before changing custody.
1. THRESHOLD FINDING AND BURDEN OF PERSUASION
Under the CCA, if a child custody dispute has arisen, the circuit court may, in the best interests of the child, modify its previous orders or judgments “for proper cause shown or because of change of circumstances ....” MCL 722.27(l)(c). Thus, the party seeking a change of custody must first establish proper cause or change of circumstances by a preponderance of evidence. Vodvarka, 259 Mich App at 508-509. The movant must make this requisite showing before the trial court determines the burden of persuasion to be applied and conducts the evidentiary hearing. Id. at 509.
In determining the applicable burden of persuasion, the court must first determine whom the custody dispute is between. If the dispute is between the parents, the presumption in favor of the established custodial environment applies. MCL 722.27(l)(c) embodies this presumption and provides:
(1) If a child custody dispute has been submitted to the circuit court as an original action under this act or has arisen incidentally from another action in the circuit court or an order or judgment of the circuit court, for the best interests of the child the court may do 1 or more of the following:
(c) Modify or amend its previous judgments or orders for proper cause shown or because of change of circumstances until the child reaches 18 years of age and, subject to section 5b of the support and parenting time enforcement act, 1982 PA 295, MCL 552.605b, until the child reaches 19 years and 6 months of age. The court shall not modify or amend its previous judgments or orders or issue a new order so as to change the established custodial environment of a child unless there is presented clear and convincing evidence that it is in the best interest of the child.
As a threshold matter to determining which party will carry the burden of rebutting the presumption by clear and convincing evidence, the court is required to look into the circumstances of the case and determine whether an established custodial environment exists. See Bowers v Bowers, 190 Mich App 51, 53-54; 475 NW2d 394 (1991). A child’s custodial environment is established “if over an appreciable time the child naturally looks to the custodian in that environment for guidance, discipline, the necessities of life, and parental comfort.” MCL 722.27(l)(c). In making this determination, a court must also consider the “age of the child, the physical environment, and the inclination of the custodian and the child as to permanency of the relationship . ...” Id. If an established custodial environment exists with one parent and not the other, then the noncustodial parent bears the burden of persuasion and must show by clear and convincing evidence that a change in the custodial environment is in the child’s best interests. Berger, 277 Mich App at 710. We note that in circumstances in which an established custodial environment exists with both parents, see Foskett, 247 Mich App at 8, the party seeking to modify the custody arrangement bears the burden of rebutting the presumption in favor of the custodial environment established with the other parent.
Once the court has determined the applicable burden, it must next determine whether a change in the established custodial environment is in the child’s best interests. This analysis involves a consideration of the best interests factors enumerated in MCL 722.23, which are:
(a) The love, affection, and other emotional ties existing between the parties involved and the child.
(b) The capacity and disposition of the parties involved to give the child love, affection, and guidance and to continue the education and raising of the child in his or her religion or creed, if any.
(c) The capacity and disposition of the parties involved to provide the child with food, clothing, medical care or other remedial care recognized and permitted under the laws of this state in place of medical care, and other material needs.
(d) The length of time the child has lived in a stable, satisfactory environment, and the desirability of maintaining continuity.
(e) The permanence, as a family unit, of the existing or proposed custodial home or homes.
(f) The moral fitness of the parties involved.
(g) The mental and physical health of the parties involved.
(h) The home, school, and community record of the child.
(i) The reasonable preference of the child, if the court considers the child to be of sufficient age to express preference.
(j) The willingness and ability of each of the parties to facilitate and encourage a close and continuing parent-child relationship between the child and the other parent or the child and the parents.
(k) Domestic violence, regardless of whether the violence was directed against or witnessed by the child.
(Z) Any other factor considered by the court to he relevant to a particular child custody dispute.
2. APPLICATION
In the present matter, the trial court, at petitioner’s request, first addressed Reid’s motion for custody. We find no fault with the court’s decision to first consider Reid’s motion. After hearing the parties’ arguments, however, the trial court, without making any of the required findings, simply stated: “Okay. After considering the motion the Court’s going to grant joint legal custody to mother and father and sole physical custody to Mr. Reid... .” We cannot condone this conclusory award of custody and the manner in which the court reached its decision, as it was plainly inconsistent with the procedural requirements of the act.
i. THRESHOLD DETERMINATIONS
First, consistently with the CCA, the trial court should have first determined whether Reid had shown by a preponderance of evidence proper cause or change of circumstances. Clearly a change of circumstances had occurred since the entry of the order of custody entered by Judge Lombard in the paternity action: the minor child was removed from Johnson’s care and custody in December 2006 and subsequently started living with Reid in January 2008. Reid was considered to have completed his treatment program as of May 12,2008, while Johnson was then unable to independently undertake the care and custody of the children without state oversight.
Next, because Reid met the requisite showing, the court should have articulated on the record the applicable burden of persuasion. As discussed earlier, this determination requires a consideration of both whom the dispute is between and, if it is between the parents, whether an established custodial environment exists with either party. The trial court, however, did not make any findings with respect to the existence of an established custodial environment, nor did it articulate the applicable burden of persuasion. Here, because the dispute is between the parents, the presumption in favor of the established custodial environment applies. MCL 722.27(l)(c).
To determine which party bears the burden of rebutting the presumption, the trial court should have considered whether an established custodial environment existed with either Reid or Johnson. Again, the court made no such finding. However, when there is sufficient information in the record on this issue, we make our own determination of this issue by de novo review. Jack v Jack, 239 Mich App 668, 670; 610 NW2d 231 (2000). The minor child has resided with Reid since January 2008 and has enjoyed parenting time with Reid since December 2006. Before the child began residing with Reid, the child indicated a desire to reside with Reid, and Reid’s complete compliance with his treatment plan indicates a desire on Reid’s part to make his relationship with the minor child permanent. Further, petitioner had consistently reported that the parenting time had been going well and that the child looked to Reid for “guidance, discipline, the necessities of life, and parental comfort.” MCL 722.27(1)(c). Reid also resided in his own home, which petitioner deemed appropriate for the child’s needs. In our view, these facts were sufficient to establish the existence of an established custodial environment. As a result, Johnson had the burden of showing by clear and convincing evidence that a change in the established custodial environment was in the child’s best interests.
ii. BEST INTERESTS FACTORS
This inquiry necessarily requires that a trial court consider the best interests factors delineated in MCL 722.23. Johnson argues that the court’s failure to do so constitutes error requiring a remand. We agree that the trial court erred and agree that a remand is necessary.
With respect to the best interests factors,
the finder of fact must state his or her factual findings and conclusions under each best interest factor. These findings and conclusions need not include consideration of every piece of evidence entered and argument raised by the parties. However, the record must be sufficient for this Court to determine whether the evidence clearly preponderates against the trial court’s findings. [MacIntyre v MacIntyre (On Remand), 267 Mich App 449, 452; 705 NW2d 144 (2005) (citations omitted).]
“Where a trial court fails to consider custody issues in accordance with the mandates set forth in MCL 722.23 and make reviewable findings of fact, the proper remedy is to remand for a new child custody hearing.” Rittershaus v Rittershaus, 273 Mich App 462, 475; 730 NW2d 262 (2007) (citations and quotation marks omitted). The scope of such a hearing is within the discretion of the trial court on remand, but it must consider all the evidence and information currently before it.
Here the trial court was faced with a fit father, an unfit mother, and the DHS. Because Reid had become a fit parent, the compelling circumstances justifying pe titioner’s initial interference in the minor child’s life no longer existed and the state no longer had any interest or right to intervene in Reid and B.J.’s enjoyment of their parent-child relationship, in which they both have a fundamental liberty interest. See DeRose, 469 Mich at 328-329; In re Clausen, 442 Mich at 686; In re Anjoski; 283 Mich App at 54; Ryan, 260 Mich App at 333. We note that this fundamental interest of a parent in the care and custody of his or her child extends to noncustodial parents, like Reid, as “[t]here is no reason to conclude that a parent has a diminished constitutional right to his child merely because he does not have physical custody of that child.” In re Rood, 483 Mich 73, 121; 763 NW2d 587(2009) (opinion by CORRIGAN, J.). It follows that the state “may not enter into agreements with an unfit custodial parent that may compromise the state’s efforts to reunite the child with the noncustodial parent.” Id. at 86 n 11. While it may appear that the competing and remaining interests of Reid and Johnson, a fit and an unfit parent, are easily resolved when considered in conjunction with the child’s fundamental liberty interest — it is undoubtedly in the child’s best interests to be in the care and control of the fit parent — we cannot condone a conclusory award of custody, as was done in this case, given the nature of the parents’ rights involved. In any matter involving a change of custody, there must be reviewable indicia on the record showing that the court satisfied itself concerning the best interests of the child. It is simply not enough to grant a change of custody motion without making any findings of fact and merely sign an order. The trial court should have, at a minimum, taken judicial notice of the confidential and legal file, taken any relevant testimony if necessary, given its findings on the best interests factors of the CCA, and subsequently made its custody determination in the paternity action.
Because the trial court failed to make any findings, we are prevented from determining whether the underpinnings of the ultimate determination are against the great weight of the evidence. We note that this is not for a lack of a sufficient evidentiary record. The record contains a'plethora of information, compiled during the ongoing juvenile^toceedihgs since 2006, on which the court could have básed its determination, including numerous psychological evaluations and court reports regarding the parties’ progress, as well as the testimony of the parties involved. But the trial court failed to refer to any of this information in support of its custody determination. Thus, in the absence of a reviewable determination, we must remand for the trial court to articulate factual findings consistent with the requirements of the CCA and conduct a new evidentiary hearing as necessary to make its ultimate custody determination.
v CONCLUSION
To conclude, our ruling in this case should be understood as clarifying the responsibilities of family division courts exercising jurisdiction under MCL 600.1021 and presiding over multiple matters controlled by different statutory schemes affecting a minor child. If a court presiding over a juvenile proceeding finds itself in a position in which the matter before it has been consolidated with a related custody matter, it must make clear that it is exercising jurisdiction pursuant to chapter 10 of the RJA. Conversely, if a court presiding over a domestic relations matter finds itself in a position in which the matter before it has been consolidated with a juvenile matter, it must also make clear that it is exercising jurisdiction under chapter 10 of the RJA. It is equally important that the court’s exercise of jurisdic tion be consistent with relevant local court rules. Once a court has made clear its jurisdictional authority, it must be cognizant of which statutory scheme it is applying and must be mindful to put an indication on the record that accurately reflects what is being done and how it is being accomplished. To this end, it is self-evident that family division courts considering consolidated matters must abide by the procedures delineated in the statutory schemes affecting the parties.
In such instances, when one of the matters is a custody dispute, the court making the custody decision must make the requisite threshold determinations and then support its ultimate determination on the record by considering and making findings with respect to the best interests factors. While it was not necessary for the trial court to undertake a lengthy and intensive examination of the best interests factors under the unique circumstances of this case, we caution lower courts finding themselves in a similar procedural posture that there must be some indicia on the record showing that the court has satisfied itself that its determination is in the child’s best interests. Harvey, 470 Mich at 192-193. We cannot stress the importance of this imperative enough. This requirement is necessary not only for preserving an adequate record for appellate review, see People v Petty, 469 Mich 108, 117-118; 665 NW2d 443 (2003), but is also essential for the protection of the fundamental rights of the parties involved. Because the trial court here did not abide by this requirement, a remand is necessary.
Remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
Child protective proceedings pending before the Wayne Circuit Court are heard in the Lincoln Hall of Justice, located in the city of Detroit.
Domestic relations matters pending before the Wayne Circuit Court are heard in the Coleman A. Young Municipal Center in the city of Detroit.
MCL 722.1003(1) provides: “If a child is born out of wedlock, a man is considered to be the natural father of that child if the man joins with the mother of the child and acknowledges that child as his child by completing a form that is an acknowledgment of parentage.” The acknowledgement “establishes paternity, and.. . may be the basis for court ordered child support, custody, or parenting time ... .” MCL 722.1004.
A.E was placed with her maternal grandparents, while B.J. was placed with his maternal uncle.
Referee Graves is assigned to the juvenile section of the Wayne Circuit Court’s family division.
Referee Perkins is assigned to the juvenile section of the Wayne Circuit Court’s family division.
By the time of this dispositional hearing, A.E was no longer staying with relatives but had been placed in a juvenile detention center as a result of pending criminal charges. These charges were eventually dismissed, and A.E then began residing with her maternal grandparents again.
It had been discovered that Johnson did not visit B.J. according to the court’s orders and allegedly saw B.J. every Sunday without supervision. As a result of her actions, Johnson’s visitation with B.J. had been suspended as of the date of this dispositional hearing.
If a court determines that the “return of the child to his or her parent would not cause a substantial risk of harm to the child’s life, physical health, or mental well-being, the court shall order the child be returned to his or her parent.” MCL 712A.19a(5).
The motion was captioned with the case name and docket number of the child protective proceedings. Further, it is unclear from the lower court record whether Reid was asking for joint legal custody or sole legal custody. Reid’s motion simply sought “sole custody” of the child.
Wayne Circuit Court family division referees assigned to the juvenile section do not hear custody motions, but it is unclear from the record if that is because of a specific prohibition or simply local practice.
In child protection actions, the legal file is a record of all the court proceedings, while the confidential file contains information concerning the parents’ treatment plans and related documentation. The confidential file is not available to the general public.
The trial court continued its wardship of A.E
Reid, a respondent below, is not involved in this appeal.
The DHS is currently required to provide noncustodial parents of children suspected of being abused or neglected with forms on “how to change a custody order” after determining there is an open “friend of court case” concerning the children. MCL 722.628(21).
1961 PA 236, MCL 600.101 et seq.
Linda Saoud Hallmark is now a judge of the Oakland County Probate Court assigned to the family division of the Oakland Circuit Court.
There is no indication on the record showing that the procedures of AO 1997-04, AO 1997-05, and MCL 600.1023 were not followed, and the parties do not contest whether these procedures were followed. And, while MCL 600.1023 would indicate that the original judge who heard the paternity action in 2004 should be assigned to the case, the lengthy-juvenile proceedings and the geographical separation of the juvenile and domestic relations sections of the Wayne Circuit Court would make it impracticable to assign the matter to Judge Lombard’s docket in light of Judge Cavanagh’s comparatively heightened familiarity with the current proceedings.
Alternatively, if the dispute is between a parent and a third party or agency, then the parental presumption embodied in MCL 722.25(1) applies and “trumps” the established custodial environment presumption. In re Anjoski, 283 Mich App at 54. In such instances, not relevant here, it is not necessary for the trial court to make findings with respect to the existence of an established custodial environment. | [
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Clark, J.
(dissenting). Plaintiff received of its sheriff, defendant Nutten, his official bond on which the other defendant was surety, conditioned to
“well and faithfully in all things perform and execute the office of sheriff of said county of Lenawee, during his continuance in office by virtue of the said election, without fraud, deceit or oppression, and shall pay over all moneys that may come into his hands as such sheriff.”. * * *
Certain persons convicted of crime satisfied the judgments of the circuit court of the county by payment of fines and costs. . The sheriff received the payments. He gave the amount of the fines to the county clerk and he retained the costs which he distributed to the committing magistrate, his deputies and himself to satisfy their respective charges in such cases. On this record it may be said that then and thereby a cause of action accrued to the county to recover of the sheriff the sums so retained by him. This action, so to recover against the sheriff and his surety on the bond, was not commenced until nearly five years later. Plaintiff had verdict, but, on decision of a reserved motion to direct a verdict, defendants had judgment non obstante. Plaintiff brings error. The sole question is on the statute of limitations. We quote a part of section 12323, 3 Comp. Laws 1915:
“Section 13. All actions in any of the courts of this State shall be commenced within six years next after the causes of action shall accrue, and not afterwards, except as hereinafter specified: Provided, however,
“1. That actions founded upon * * * bonds of public officers, * * * may be brought at any time within ten years from * * * the time when the cause of action accrued on such bond. * * *
“3. Actions against sheriffs for the misconduct or neglect of themselves, or their deputies, * * * shall be brought within two years from the time the cause of action accrues, and not afterwards.”
Plaintiff contends that this is an action founded on a bond of a public officer and is covered by the first proviso. Defendants contend that the action is for misconduct of the sheriff and that the third proviso is applicable. The first proviso is general in its terms and applies to all bonds of public officers. The third proviso is specific and is applicable to sheriffs alone, and, in a sense is an exception to the first. Trask v. Wadsworth, 78 Me. 336 (5 Atl. 182).
The sheriff was guilty of misconduct. The action against him ought to have been brought within two years. The cause of action therefore is barred. And when barred against the principal it is also barred against the surety. The bond is merely collateral security in case of the sheriff’s failure in performance of official duty.
The trial judge, with ample citation of authorities, said in an able opinion filed:
“Suppose, in the instant case, that the sheriff had given no bond at all. His liability for failure to turn over costs would have rendered him liable but that liability, under the law, would cease unless action was brought within the two-year period. Does the giving of a bond increase that liability or extend the statute? Does it create a new liability or does it merely afford security for his misconduct? It seems to me there can be but one answer. Certainly the liability of the sheriff must be established before there can be a liability on the bond. The gist of the action is the misconduct of the sheriff, to wit, failure to turn over money belonging to the county. Though the form of the action is on the bond the real meat of the action is the misconduct, the failure to turn over the money, and the bond is only collateral security thereto.”
We quote from Ryus v. Gruble, 31 Kan. 767 (3 Pac. 518):
“As before stated, the wrongs committed by the defendant are the real and substantial foundation for the plaintiff’s cause of action, and the sheriff’s bond is virtually only a collateral security for the enforcement of such cause of action. The bond does not give the cause of action; the wrongs or delicts do; and the bond simply furnishes security to indemnify the persons who suffer by reason of such wrongs or delicts; and while the statute cited by plaintiff operates to bar every action brought upon the bond to enforce a cause of action which accrued more than five years prior to the commencement of the action, yet such statute does not operate to suspend the operation of the other statutes of limitations, or to continue in force or revive a cause of action which had already been barred by some one of the other statutes of limitations. Whenever a cause of action is barred by any statute of limitations, the right to maintain an action therefor upon a bond which simply operates as a security for the same thing, must necessarily cease to exist.”
And from People v. Putnam, 52 Colo. 517 (122 Pac. 796, Ann. Cas. 191SE, 1264):
“If Putnam incurred any liability it was in his official capacity; suit could have been brought against him without joining his bondsmen; he would have been liable had he not given a bond, but to such causes of action the one year statute of limitation applies; hence, this action was barred against him individually. This being the case, the bond did not increase his liability nor change it in any way. The bond being the security to indemnify against the wrongful acts of the sheriffs, it follows that when the cause of action is barred as against the principal debt or cause of action, it is barred against the security, otherwise we would have the anomalous position with no cause of action against the principal which could be enforced, yet which could still be maintained against the surety.”
See, also, Spokane County v. Prescott, 19 Wash. 418 (53 Pac. 661, 67 Am. St. Rep. 733); State v. Blake, 2 Ohio St. 147; Kenton County v. Lowe, 91 Ky. 367 (16 S. W. 82); Royse v. Reynolds, 73 Ky. 286.
As pointed out by the trial judge this principle finds support in Biddle v. Wendell, 37 Mich. 452, from which we quote syllabus:
“An administrator’s bond has no independent force apart from the administration proceedings, and if a liability is barred which it was meant to secure, action on the bond to enforce that liability is barred also.”
Had plaintiff commenced its action against the sheriff within the two years, and, having judgment, had later sought to charge the surety, a different question would be presented. Adams v. Overboe, 105 Minn. 295 (117 N. W. 496).
Judgment should be affirmed.
Sharpe, J.
Defendant’s bond is conditioned, first, that he shall “well and faithfully in all things perform and execute the office of sheriff,” and, second, that he shall “pay over all moneys that may come into his hands as said sheriff.” This form of bond appears in the Compiled Laws of 1857, and has been retained without change since that time.
The 1857 compilation (§ 5363) contained the following provision as to limitation of actions:
“All actions against sheriffs, for the misconduct or neglect of their deputies, shall be commenced within, three years next after the cause of action shall accrue, and not afterwards.”
It was retained without change until the enactment of the judicature act in 1915, when the words “themselves, or” were inserted after the words “neglect of.” 3 Comp. Laws 1915, § 12323.
In placing a construction upon the language of this section, we should, I think, have in mind the purpose of such statutes.
“The mischief which statutes of limitation are intended to remedy is the general inconvenience resulting from delay in the assertion of a legal right which it is practicable to assert.” 17 R. C. L. p. 665.
They are said to be—
“statutes of repose, the object of which is to suppress fraudulent and stale claims from springing up at great distances of time and surprising the parties or their representatives.” 37 C. J. p. 684.
The reason for the enactment of the two-year statute seems apparent. It applies to actions for trespass on lands, for assault and battery, for libel and slander, and for malpractice, as well as those against sheriffs for the misconduct or neglect of themselves or their deputies. In all of these actions the plaintiff will have notice of the wrong or injury done to him at the time it is committed, and it is deemed no hardship to require him to begin his action therefor within the short period of limitation fixed by the statute. This reasoning applies with force to actions against sheriffs for alleged misconduct or neglect of their deputies, and it was thought wise to apply it also to that class of actions preferred against the sheriffs personally. There was no reason, however, for applying it to his failure to pay over moneys received by him officially.
Fines paid to a sheriff after commitment must within 30 days be paid over by him to the county treasurer (3 Comp. Laws 1915, § 15790). If not so paid, it is the duty of the county treasurer to immediately commence suit therefor, and, if the neglect to pay over continues for a period of 60 days, the sheriff is guilty of a misdemeanor (3 • Comp. Laws; 1915, § 15791). Should the county treasurer be unaware of such payment to the sheriff, or be neglectful! of the duty imposed on him by this statute, for the. period of two years, under the holding of Mr. Justice Clark the county would be unable to collect such moneys.
There is a two-fold obligation in the bond of the sheriff: first, that he will faithfully perform the duties of his office, and, second, that he will “pay over all moneys that may come into his hands as said sheriff.”
In my opinion, the undertaking to pay over moneys received by him officially is within subdivision 1, relating to the bonds of public officers.
The jury rendered a verdict for the plaintiff. This verdict was set aside and a judgment entered for defendant under the Empson act. That judgment will now be vacated and the case remanded with directions to the trial court to enter a judgment upon the verdict. Plaintiff will have costs of both courts.
Snow, Steere, Wiest, and McDonald, JJ., concurred with Sharpe, J. Bird, C. J., did not sit. Fellows, J., took no part in this decision. | [
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Cavanagh, J.
The issue presented is whether plaintiffs can maintain a cause of action based on violation of MCL 436.33; MSA 18.1004, which prohibits a person from knowingly selling or furnishing alcoholic liquor to a person under twenty-one years of age, against persons who are social hosts.
I
The trial court granted defendants’ motion for summary judgment on the basis of a failure to state a claim upon which relief could be granted. GCR 1963, 117,2(1). A motion brought under this subrule tests the legal sufficiency of plaintiffs’ complaint. The motion should be granted only if the claims are so clearly unenforceable as a matter of law that no factual development could possibly justify recovery. Abel v Eli Lilly & Co, 418 Mich 311, 323-324; 343 NW2d 164 (1984), reh den 419 Mich 1201 (1984), cert den sub nona E R Squibb & Sons, Inc v Abel, 469 US 833 (1984). Accordingly, for the purposes of this appeal, we accept as true all well-pled allegations contained in plaintiffs’ complaint.
A
On July 7, 1979, plaintiffs’ nineteen-year-old son, Jamie Longstreth, attended a private wedding reception hosted by the Gensels and the Langstons. While at the reception, Jamie consumed an unspecified amount of alcoholic beverage. In the early morning hours of July 8, 1979, Jamie was killed in an automobile accident.
Plaintiffs initially alleged that the defendants breached a duty not to give, provide, or furnish alcoholic beverages to anyone under the age of twenty-one. Plaintiffs further alleged that the defendants were negligent in furnishing alcohol to Jamie and that this negligence was the proximate cause of his death. Longstreth v Fitzgibbon, 125 Mich App 261, 265; 335 NW2d 677 (1983).
In response to defendants’ motion for summary judgment, plaintiffs argued that MCL 436.33; MSA 18.1004 imposed a duty not to furnish alcoholic beverage to a person under twenty-one years of age. The trial court noted that the common law did not recognize a cause of action against social hosts. It then ruled that the statute only applied to licensees under the Michigan Liquor Control Act, MCL 436.1 et seq.; MSA 18.971 et seq., and entered summary judgment for the Gensels and Langstons.
B
The Court of Appeals disagreed:
Our review of the current statute, MCL 436.33; MSA 18.1004, which prohibits the selling or furnishing of alcoholic beverages to a minor, leads us to conclude that its application is not limited to Liquor Control Act licensees; rather, it is applicable to all persons who violate its terms. We believe that the Legislature did not intend to eliminate the misdemeanor offense attendant to the furnishing of alcoholic beverages to minors by persons other than licensees under the Liquor Control Act.
Accordingly, we hold that a civil cause of action continues to exist for injuries or death caused by the furnishing of liquor to a minor by a social host or other persons not falling under the purview of the Liquor Control Act. [.Longstreth, supra, p 266.]
The Court of Appeals remanded the case with instructions to allow plaintiffs to amend their complaint to state a cause of action in accordance with MCL 436.33; MSA 18.1004. Plaintiffs amended their complaint, and we granted defendants’ application for leave to appeal. 418 Mich 876 (1983).
II
We are asked once again to ascertain and give effect to the intention of the Legislature. We may determine legislative intent after considering the language and general scope of the act, in light of the general purpose it seeks to accomplish or the evil it seeks to remedy. White v City of Ann Arbor, 406 Mich 554, 562; 281 NW2d 283 (1979). We agree with the Court of Appeals that the provisions of § 33 are not limited to licensees. The development of the act as a whole, and specifically § 33, persuades us that the Legislature intended the act to have a broad scope.
A
The historical development of the act supports our conclusion that the act was intended to govern the entire regulation of liquor within Michigan. During Prohibition, it was illegal, among other things, to manufacture, sell, give away, or furnish intoxicating liquors to anyone. 1917 PA 338. However, the Prohibition Act was repealed by 1933 PA 64. The 1933 regular session act was then repealed by the present Liquor Control Act. 1933 (Ex Sess) PA 8. The present act was based on a referendum.
At the November election in 1932, the people adopted a constitutional amendment (Const 1908, art 16, § 11), which reads:
"The legislature may by law establish a liquor control commission, who, subject to statutory limitations, shall exercise complete control of the alcoholic beverage traffic within this State, including the retail sales thereof; and the legislature may also provide for an excise tax on such sales; Providing, however, that neither the legislature nor such commission may authorize the manufacture or sale of alcoholic beverages in any county in which the electors thereof, by a majority vote, shall prohibit the same.”
Following the adoption of this amendment the legislature created "a liquor control commission for the control of the alcoholic beverage traffic within this State,” and prescribed "its powers, duties and limitations,” et cetera. Act No. 8, Pub. Acts 1933 (Ex. Sess.), as amended (Comp. Laws Supp. 1940, § 9209-16 et seq., Stat. Ann. § 18.971 et seq.). [Black v Liquor Control Comm, 323 Mich 290, 293; 35 NW2d 269 (1948). Emphasis supplied.]
On the basis of Const 1908, art 16, § 11, the Legislature provided that alcohol could be sold to persons twenty-one years of age or older. However, the Age of Majority Act, passed in response to ratification of the Twenty-sixth Amendment to the United States Constitution, granted certain rights and privileges to eighteen-year-olds. As a result, the legal drinking age was reduced, and alcoholic liquor could legally be sold to those persons eighteen years of age or older. 1972 PA 13.
However, in 1978, the people of this state passed Proposal D, which returned the legal drinking age to twenty-one years. In doing so, the people retained the "complete control” language found in Const 1908, art 16, § 11, as emphasized in Black, supra. Const 1963, art 4, § 40 now provides:
A person shall not sell or give any alcoholic beverage to any person who has not reached the age of 21 years. A person who has not reached the age of 21 years shall not possess any alcoholic beverage for the purpose of personal consumption. An alcoholic beverage is any beverage containing one-half of one percent or more alcohol by volume.
Except as prohibited by this section, the legislature may by law establish a liquor control commission which, subject to statutory limitations, shall exercise complete control of the alcoholic beverage traffic within this state, including the retail sales thereof. The legislature may provide for an excise tax on such sales. Neither the legislature nor the commission may authorize the manufacture or sale of alcoholic beverages in any county in which a majority of the electors voting thereon shall prohibit the same. [Emphasis supplied.]
We believe that this recent constitutional amendment recognizes three very important principles. First, the raising of the drinking age indicates that the people of this state have made a public policy determination that persons under twenty-one years of age should not possess alcohol for the purpose of personal consumption. Second, other persons should be prohibited from selling or giving away alcohol to those under twenty-one years of age. These first two principles will be discussed below.
The third principle is more applicable to our present analysis. The amendment makes it clear that, from the very inception of the act to the present, the people intended the Liquor Control Commission to exercise complete control of the alcoholic beverage traffic within this state, including (and by implication, not limited to) its retail sale. The title of the act has been given a broad interpretation to effectuate the will of the people. See Beacon Club v Kalamazoo Co Sheriff, 332 Mich 412, 420; 52 NW2d 165 (1952). The act does more than merely regulate liquor traffic; it involves the public health, safety, and morals. Turner v Schmidt Brewery Co, 278 Mich 464, 469; 270 NW 750 (1936). Therefore, the act was not intended to apply only to licensees. It was intended to govern the entire regulation of liquor within Michigan.
B
A reading of specific statutes within the act also indicates that its purview is not restricted to licensees. "Person” includes any person, firm, partnership, association, or corporation. MCL 436.2k; MSA 18.972(H). "Sale” includes exchange, barter, traffic, or the furnishing or giving away of any alcoholic liquor. MCL 436.2n; MSA 18.972(14). The act prohibits the consumption of alcoholic liquor on the public highways. MCL 436.34; MSA 18.1005. It also prevents a person less than twenty-one years of age from knowingly transporting or possessing alcohol in a motor vehicle unless the person is employed by a licensee. MCL 436.33a; MSA 18.1004(1). Obviously, these sections were not included with only licensees in mind. Instead, the act was meant to apply to all persons who violate its terms.
C
Defendants argue that the dramshop provision of the act, MCL 436.22; MSA 18.993, is the exclusive remedy for persons claiming injury under the act.
At common law, it was not a tort to sell, give away, or furnish intoxicating liquors to an able-bodied adult. The rule was based on the theory that the drinking of the liquor, rather than the furnishing of it, was the proximate cause of the injury. Accordingly, the dramshop provision was meant to "fill a void” created by the common-law rule. See Manuel v Weitzman, 386 Mich 157, 163; 191 NW2d 474 (1971).
However, it must be emphasized that § 22, the dramshop provision, is only a small portion or subset of the whole act. Browder v Int'l Fidelity Ins Co, 413 Mich 603, 606, n 3; 321 NW2d 668 (1982). The dramshop section of the act imposes bonding requirements on certain licensees. It also imposes liability on licensees for injuries caused to third persons as a result of the sale or furnishing of liquor to minors or visibly intoxicated adults. Thus, § 22 specifically deals with the obligations and liabilities of licensees.
However, the present appeal does not involve an attempt to impose liability on a licensee. Plaintiffs’ complaint is brought against social hosts, and is grounded on the violation of § 33 and not § 22 of the act. Accordingly, the defendants’ reliance on several cases, holding that § 22 of the act is a plaintiffs exclusive remedy against licensees, is misplaced. See Manuel, supra; LeGault v Klebba, 7 Mich App 640; 152 NW2d 712 (1967); Lucido v Apollo Lanes & Bar, Inc, 123 Mich App 267; 333 NW2d 246 (1983), lv den 417 Mich 1087. Unlike § 22, § 33 is not restricted to the regulation of licensees. To the contrary, § 33 indicates that any person who violates its terms is guilty of a misdemeanor.
D
Defendants also rely on cases which have declined to impose liability on social hosts who dispense alcoholic beverages. See, e.g., Behnke v Pierson, 21 Mich App 219; 175 NW2d 303 (1970), lv den 384 Mich 757 (1970); Westcoat v Meilke, 108 Mich App 115; 310 NW2d 293 (1981). For purposes of this appeal, however, we feel that those cases are distinguishable on the basis of the fact that the liquor there was furnished to adults. Courts have reached differing conclusions regarding the imposition of liability on social hosts for furnishing liquor to adults. Compare Kelly v Gwinnell, 96 NJ 538; 476 A2d 1219 (1984) (host serving liquor to visibly intoxicated adult guest is liable for injuries inflicted on third parties), and Clark v Mincks, 364 NW2d 226 (Iowa, 1985) (common-law principles create a cause of action on behalf of third parties against host serving to adult guest on the basis of a violation of a statute which prohibits any person from selling or giving liquor to any intoxicated person), with Klein v Raysinger, 504 Pa 141; 470 A2d 507 (1983) (generally no liability at common law imposed on a social host who serves liquor to a visibly intoxicated adult guest). These recent cases indicate that the law in other jurisdictions is in a state of flux in this area. We emphasize that that issue is not before us today and that the common-law rule remains the law until modified by this Court or the Legislature.
In comparison, the present appeal involves allegations that the defendants knowingly furnished alcohol to a person who was under twenty-one years of age. The people of this state (through Const 1963, art 4, § 40), as well as the Legislature (through § 33 of the act), have determined that those under twenty-one years of age should not be sold, given, or furnished alcoholic beverages. We believe that this distinction is crucial for the purposes of this appeal. Lover v Sampson, 44 Mich App 173, 181-182; 205 NW2d 69 (1972), accord Congini v Portersville Valve Co, 504 Pa 157, 160-164; 470 A2d 515 (1983).
Ill
The law is not static; it is dynamic and often develops in response to changes in social mores. This is readily apparent in the issue faced today. Several sister states have recently addressed similar problems dealing with sale to minors. Although the results are mixed, these decisions recognize the increased social awareness of the dangers involved in furnishing alcohol to all age groups.
The Minnesota Supreme Court has declined to impose liability on a social host for damages occurring to a third party after a minor guest became intoxicated. Holmquist v Miller, 367 NW2d 468 (Minn, 1985). In that case, the Court noted that Minnesota originally imposed liability on social hosts. See Ross v Ross, 294 Minn 115; 200 NW2d 149 (1972). Ross, in turn, interpreted the Minne sota Dramshop Act, which at that time imposed liability "against any person, who shall by illegally selling, bartering, or giving intoxicating liquors” causes injury. However, the Minnesota Legislature deleted the phrase "or giving” from the statute in 1977. Subsequent case law indicated that this deletion evidenced the Legislature’s intent to negate the holding in Ross. See Holmquist, supra, pp 470-471, citing Cole v Spring Lake Park, 314 NW2d 836, 840 (Minn, 1982), and Cady v Coleman, 315 NW2d 593, 595 (Minn, 1982).
A comparison of the development of Minnesota case law and statutory law with our own supports our conclusion that imposition of liability is warranted in this case. Our statutes have not experienced a history similar to those of Minnesota’s. On the contrary, in spite of the various amendments previously discussed, both our statutes and constitution continue to prohibit any person from giving alcoholic beverages to those under the legal drinking age.
The Wisconsin Supreme Court held that a third party has a common-law cause of action against social hosts who knew or should have known that a minor would be driving while intoxicated. Koback v Crook, 123 Wis 2d 259; 366 NW2d 857 (1985). There, the complaint alleged that the defendants held a party at their home, furnished liquor to minor guests, and then allowed one of them to leave on a motorcycle while intoxicated. The plaintiff, a passenger on the motorcycle, sued after being injured when the motorcycle struck a parked car. Koback extended an earlier opinion, Sorensen v Jarvis, 119 Wis 2d 627; 350 NW2d 108 (1984), which held that a vendor’s violation of a criminal statute prohibiting the sale of liquor to minors was negligence per se. The Koback court applied Sorensen and common-law negligence prin cipies to noncommercial vendors and concluded that it was negligence per se for anyone to furnish liquor to minors.
The Wisconsin case was decided on the basis of several statutes which provided penalties for furnishing or giving liquor to those under the legal drinking age. The Koback court was not troubled by the fact that these statutes were grouped together with licensing regulations which clearly applied only to commercial vendors. In effect, the court said that the prohibiting statutes applied to all persons who violated their terms.
The state of Georgia also imposes liability on a social host for damages to third parties caused by the furnishing of liquor to minors. Sutter v Hutchings, 254 Ga 194; 327 SE2d 716 (1985). In that case, Mrs. Hutchings hosted a party for her seventeen-year-old daughter and provided a keg of beer for her guests. The complaint alleged that the hostess watched a minor guest drive away after expressing her concern for his ability to drive after drinking seven beers. The minor ran a red light and killed the plaintiffs’ decedent._
The Georgia statute provided:
No person knowingly, by himself or through another, shall furnish [or] cause to be furnished . . . any alcoholic beverage to any person under 19 years of age. [Ga Code Ann, § 5A-510(1).]
The Sutter court concluded that this statute and others were meant to protect third parties from the actions of negligent social hosts and their intoxicated guests. However, the court declined to recognize a cause of action on behalf of the seventeen-year-old intoxicated driver against the social host, on the basis of a finding that the driver owed a duty to exercise ordinary care for his own safety. Sutter, supra, p 198, n 7.
IV
In light of the aforementioned principles and case law, we may now analyze the specific statute which forms the basis of plaintiffs’ complaint. The current version of § 33 provides:
Alcoholic liquor shall not be sold or furnished to a person unless the person has attained 21 years of age. A person who knowingly sells or furnishes alcoholic liquor to a person who is less than 21 years of age, or who fails to make diligent inquiry as to whether the person is less than 21 years of age, is guilty of a misdemeanor. A suitable sign which describes this section and the penalties for violating this section shall be posted in a conspicuous place in each room where alcoholic liquors are sold. The signs shall be approved and furnished by the state liquor control commission. [Emphasis supplied.]
This statute has been amended several times, dating back to its original enactment as part of 1933 (Ex Sess) PA 8. However, for purposes of this appeal, the most important change in § 33 was caused by enactment of 1978 PA 531, which repealed MCL 750.141a; MSA 28.336(1) (the specific criminal statute prohibiting sale to a minor). Defendants argue that the repeal of that criminal statute extinguishes plaintiffs’ cause of action. We disagree.
Again, a brief historical analysis is instructive. Up until 1943, the Penal Code did not contain a statute regulating the noncommercial furnishing of alcoholic liquor to minors. However, 1943 PA 205 amended the Penal Code by adding the following section:
Any person, who wilfully gives or furnishes any alcoholic beverage to a minor except upon authority of and pursuant to a prescription of a duly licensed physician, shall be guilty of a misdemeanor. [MCL 750.141a; MSA 28.336(1).]
The statute was later amended by 1963 PA 162, § 1 to provide:
Any person, who knowingly gives or furnishes any alcoholic beverage to a minor except upon authority of and pursuant to a prescription of a duly licensed physician, shall be guilty of a misdemeanor, and if the furnishing involved any consideration, the person shall be imprisoned for not more than 1 year or fined not more than $1,000.00 or both.
Prior to enactment of 1978. PA 531 (which repealed the statute quoted above), the Court of Appeals held that a civil cause of action existed on the basis of a breach of duty caused by violation of MCL 750.141a; MSA 28.336(1). See Lover v Sampson, supra; Thaut v Finley, 47 Mich App 542; 209 NW2d 695 (1973), rev’d on reh 50 Mich App 611; 213 NW2d 820 (1973). The Legislature is presumed to know of statutory interpretations by the Court of Appeals and this Court. SEMTA v Dep’t of Treasury, 122 Mich App 92, 103; 333 NW2d 14 (1982); Jeruzal v Wayne Co Drain Comm’r, 350 Mich 527, 534; 87 NW2d 122 (1957). After Lover was decided in 1972, and especially during the legislative process which led to enactment of 1978 PA 531, the Legislature could have easily addressed this question. However, subsequent to Lover and Thaut, we find no indication that the Legislature intended to address this precise question.
On the contrary, after comparing the current version of § 33 with MCL 750.141a; MSA 28.336(1), we find that the Legislature incorporated the salient terms of the latter statute (1963 PA 162) into §33. This is consistent with the Legislature’s intent that the act regulate all liquor activity within the state. In other words, it made sense to incorporate the terms of the former penal provision into the act, since it was meant to regulate all aspects of liquor consumption within the state.
Section 33 now provides that a person who knowingly sells or furnishes liquor to anyone under twenty-one years of age, or fails to make diligent inquiry regarding the person’s age, is guilty of a misdemeanor. MCL 750.141a; MSA 28.336(1), is no longer part of the Penal Code. However, violations of certain provisions of § 33 remain misdemeanors. Accordingly, we consider § 33 to be a penal statute.
Although the Legislature has not addressed social host liability, we must determine whether § 33 provides a basis for liability where the complaint alleges negligence in furnishing intoxicating beverages to a minor. The proven violation of a penal statute is prima facie evidence of negligence. Zeni v Anderson, 397 Mich 117, 128-129, 143; 243 NW2d 270 (1976), citing Thaut, supra; Massey v Scripter, 401 Mich 385, 394-395; 258 NW2d 44 (1977). See generally 57 Am Jur 2d, Negligence, § 245, p 628.
However, this type of evidence is only available to certain plaintiffs under certain situations. 2 Restatement Torts, 2d, § 286, p 25 states:
The court may adopt as the standard conduct of a reasonable man the requirements of a legislative enactment or an administrative regulation whose purpose is found to be exclusively or in part
(a) to protect a class of persons which includes the one whose interest is invaded, and
(b) to protect the particular interest which is invaded, and
(c) to protect that interest against the kind of harm which has resulted, and
(d) to protect that interest against the particular hazard from which the harm results.
See also Zeni, supra, pp 137-138, ns 21, 22; Prosser & Keeton, Torts (5th ed), § 36, pp 229-230; 57 Am Jur 2d, Negligence, §§ 257-258, pp 641-643; SJI2d 12.01.
We find that the alleged violation of § 33 was sufficient to preclude summary judgment. Section 33 was meant to protect a class of persons, i.e., those under the legal drinking age, and this plaintiff falls within that class. The statute protects a particular interest, i.e., freedom from injury caused by the use of alcohol by persons under twenty-one years of age. We again stress that this interest exists as a result of legislation (§ 33) and constitutional provision (Const 1963, art 4, § 40). Section 33 was meant to protect against the kind of harm which resulted, i.e., injury and death. Finally, the statute was meant to protect against a particular hazard, i.e., the dangerous effects of intoxication of those under twenty-one years of age. Therefore, we hold that the plaintiffs can maintain a cause of action based on violation of §33.
We hold today only that a violation of § 33 creates a rebuttable presumption of negligence. In Zeni, supra, p 143, Justice Williams wrote:
An accurate statement of our law is that when a court adopts a penal statute as the standard of care in an action for negligence, violation of that statute establishes a prima facie case of negligence, with the determination to be made by the finder of fact whether the party accused of violating the statute has established a legally sufficient excuse. If the finder of fact determines such an excuse exists, the appropriate standard of care then becomes that established by the common law. Such excuses shall include, but shall not be limited to, those suggested by [2] Restatement Torts, 2d, § 288A, and shall be determined by the circumstances of each case.
Section 33 prohibits any person from knowingly selling or furnishing alcohol to anyone under the legal drinking age. Accordingly, a defendant’s lack of knowledge may be an excuse depending on the facts of the case. See Christensen v Parrish, 82 Mich App 409; 266 NW2d 826 (1978).
V
We have heretofore focused on the liability of the social host. However, we do not believe that our analysis should stop there. The majority of cases in this area involve injuries inflicted upon innocent third parties by the intoxicants. See, e.g., Lover v Sampson, supra; Clark v Mincks, supra; Kohack v Crook, supra. But we are confronted with the more difficult question regarding whether an underage person can recover for injury inflicted upon himself after consuming alcohol furnished by his host.
This question arises due to the general rule that the drinking of liquor, rather than the furnishing of it, is the proximate cause of a plaintiffs injury. See n 4. However, the general rule, as applied to both licensees and social hosts, has been rejected recently.
Furthermore, the question of proximate cause is one for the trier of fact. In the present case, the proven violation of § 33 would establish the plaintiffs’ prima facie case. They are still required to establish proximate cause. Zeni, supra, p 143; Con gini, supra, p 163, n 4. We are unable to state at this time that the plaintiffs’ cause of action is precluded as a matter of law.
We recognize that our conclusion gives this underage plaintiff a remedy against his hosts which is not presently available under §22 against licensees. In spite of the "growing number of cases” in other jurisdictions (n 10), an intoxicated person cannot sue licensees under § 22 for injuries in this state. See, generally, Kangas v Suchorski, 372 Mich 396, 399-400; 126 NW2d 803 (1964). This Court has not yet chosen to address a licensee’s responsibility to an intoxicated minor. Nevertheless, we believe that today’s decision is supported by law and public policy.
A dramshop action is based on § 22, which has been interpreted to provide an exclusive statutory remedy on behalf of designated third parties against licensees. The cause of action is not based on negligence principles. Dahn v Sheets, 104 Mich App 584, 593; 305 NW2d 547 (1981). This must be compared with the present case, which is based on common-law negligence principles. Accordingly, application of 2 Restatement Torts, 2d, § 286, persuades us that this underage guest can assert a cause of action for his own injuries, since he clearly falls within the class of persons which the statute intends to protect. Congini, supra, p 163.
Finally, we believe that application of comparative negligence principles may lessen any perceived hardships of this rule. Defendants asserted, as an affirmative defense, that Jamie Longstreth was negligent by failing to use proper care for his own safety when he drove after drinking at the wedding reception. In analyzing this question, we are again aided by recent cases regarding the contributory or comparative negligence of the driver-consumer.
In Congini, supra, p 164, the Pennsylvania Supreme Court held that an eighteen-year-old driver could maintain a suit against his employer which hosted a Christmas office party. Social-host liability was based on a violation of a penal statute and 2 Restatement Torts, 2d, §286. The court added that an eighteen-year-old driver who knowingly consumed alcohol was also guilty of a summary offense. The court concluded:
Thus, although we recognize that an eighteen year old minor may state a cause of action against an adult social host who has knowingly served him intoxicants, the social host in turn may assert as a defense the minor’s "contributory” negligence. Thereafter, under our Comparative Negligence Act 42 Pa C S § 7102 it will remain for the fact finder to resolve whether the defendant’s negligence was such as to allow recovery,
Congini, supra, pp 162-166. See, also, Young v Caravan Corp, 99 Wash 2d 655; 663 P2d 834; 672 P2d 1267 (1983) (contributory negligence of the minor driver diminishes recovery in proportion to the percentage of negligence); but see Sutter v Hutchings, supra, n 7 (minor driver cannot recover against the social host, since as between the host and consumer, consumer had last opportunity to avoid the effects of the alcohol).
We believe that the rules enunciated in Congini and Young are more consistent with our current interpretation of § 33 and the doctrine of comparative negligence. The central focus of this appeal is on the liability of the social hosts. However, we cannot allow this focus to obscure the entire record. Although Jamie was not considered competent to handle the effects of the intoxication, the law does presume that he was competent to drive an automobile in a nonnegligent manner. In light of the fact that this is an appeal based on reversal of a summary judgment, we express no opinion on the asserted affirmative defenses. This is a matter which should be decided by the jury. However, we do believe that comparative negligence principles should be considered on remand and applied if the facts so demand.
VI
The dangers and policy considerations related to serving intoxicants are especially significant when underage persons are involved. In Michigan, imposition of various sanctions and penalties on the basis of furnishing of liquor to underage persons has had a long history. _
However, this is the first time we have been called upon to address this precise question. Accordingly, this opinion shall apply to the instant case, cases commenced after issuance of this opinion, and cases pending in the trial and appellate courts.
Affirmed.
Williams, C.J., and Levin and Brickley, JJ., concurred with Cavanagh, J.
Plaintiffs’ complaint contained other counts against other defendants, including Dennis Fitzgibbon, personal representative of the estate of Bryan Fitzgibbon. Bryan Fitzgibbon was the driver of the other vehicle involved in the accident. However, this appeal only involves the propriety of the summary judgment in favor of the social hosts, defendants Gensel and Langston.
Specifically, the Court of Appeals noted that plaintiffs’ amended complaint failed to allege that defendants "knowingly sold or furnished alcoholic liquor to a person who is less than 21 years of age, or . . . fail[ed] to make diligent inquiry as to whether the person is less than 21 years of age.” Longstreth, supra, p 267. Plaintiffs filed their second and third amended complaints on April 13, 1983, and April 18, 1983, respectively. The relevant allegations are identical to those found in the Court of Appeals opinion, except for the addition of the following allegations in paragraph 52:
"52. That it was then and there the duty of Defendants Edward Gensel, Mrs. Edward Gensel, Samuel Langston and Myrna Langston, to:
"F. Not knowingly sell or furnish alcoholic beverages to Plaintiffs’ decedent, Jamie H. Longstreth, who was less than 21 years of age.
"G. Not sell or furnish alcoholic beverages to Plaintiffs’ decedent, Jamie H. Longstreth, without making diligent inquiry as to whether said Jamie H. Longstreth was less than 21 years of age.”
We note that we have given this term a more restrictive meaning in the past. See Guitar v Bieniek, 402 Mich 152; 262 NW2d 9 (1978). However, Guitar is distinguishable. There, we addressed whether a private rental hall fell within the definition of "person,” thereby subjecting the hall to liability under § 22 of the act. We emphasized that the term should be interpreted in light of the definitional section, unless the context required otherwise. Guitar, supra, pp 157-158. We held that liability under § 22 was limited to persons within the class of retailers specifically delineated in §22, as well as those "equally chargeable” under that section. Guitar, supra, pp 166-167.
However, Guitar did not address potential liability under § 33. Therefore, that case does not prevent us from ascribing a broader interpretation to the term "person” as the context may require.
See, generally, 48A CJS, Intoxicating Liquors, § 430, p 139; 45 Am Jur 2d, Intoxicating Liquors, § 553, p 852; see also Hollerud v Malamis, 20 Mich App 748, 754-755; 174 NW2d 626 (1969).
In this respect, the Court of Appeals mislabeled the entire act. See Loxigstreth, supra, p 263, n 1.
The applicable statutes are set forth in the opinion as follows:
"Sec. 66.054(20)(a), Stats. 1979-80, provides: 'Except as otherwise provided in this section, no person may sell or furnish fermented malt beverages to a minor . . . .’ (Emphasis supplied.)
"In respect to intoxicating liquors, sec. 176.30(2)(a), Stats. 1979-80, provides: 'No person may: 1. Sell, furnish or give intoxicating liquor to a person under age 18.’ (Emphasis supplied.)
"We take judicial notice of these statutes and, as in Sorensen, supra, we conclude that proof of the violation of either statute constitues negligence per se. The allegations of the complaint specifically assert that fermented malt beverages were furnished by the Brooks[] to Michael Crook. The complaint also alleges that the Brooks[] caused and permitted alcoholic beverages to be served to Michael Crook. Under the rationale of Sorensen, these allegations, if proved, constitute negligence per se. The fact that these statutes apply with particularity to vendors of the controlled beverages, by virtue of the statutes’ placement among the licensing regulations, does not restrict their prohibitions to licensed persons only. They apply to all who furnish liquor or fermented malt beverages to minors.” (Koback, supra, 123 Wis 2d 266-267.)
These recent decisions reflect strong policy considerations.
Although Kelly v Gwinnell, supra, involved an adult consumer, the competing policy considerations were aptly summarized:
"We impose this duty on the host to the third party because we believe that the policy considerations served by its imposition far outweigh those asserted in opposition. While we recognize the concern that our ruling will interfere with accepted standards of social behavior; will intrude on and somewhat diminish the enjoyment, relaxation, and camaraderie that accompany social gatherings at which alcohol is served; and that such gatherings and social relationships are not simply tangential benefits of a civilized society but are regarded by many as important, we believe that the added assurance of just compensation to the victims of drunken driving as well as the added deterrent effect of the rule on such driving outweigh the importance of those other values. Indeed, we believe that given society’s extreme concern about drunken driving, any change in social behavior resulting from the rule will be regarded ultimately as neutral at the very least, and not as a change for the worse; but that in any event if there he a loss, it is well worth the gain.” Kelly, supra, p 548.
The above quotation was cited in Koback v Crook, supra. The Wisconsin court then added:
"To have 'carefree’ social affairs where the host does not exercise care is to invite injury, suffering, and death, and, as a matter of social policy, liability for the consequences.” 123 Wis 2d 276.
1978 PA 531 became effective on December 21, 1978. The actions involved in plaintiffs’ complaint occurred on July 7 and 8, 1979.
In this context, “penal” pertains to a statute which prescribes a punishment and relates to acts which are not necessarily delineated as criminal. 70 CJS, Penal, p 386; 82 CJS, Statutes, § 389, pp 922-924. Thus, the mere fact that MCL 750.141a; MSA 28.336(1) is no longer part of the Penal Code does not mean that portions of § 33 cannot be considered penal in nature. For example, the penal statute in Zeni v Anderson, 397 Mich 117; 243 NW2d 270 (1976), required pedestrians to walk on the sidewalk, or on the left side of the highway if no sidewalk was provided. That penal statute was part of the Motor Vehicle Code.
In Brannigan v Raybuck, 136 Ariz 513, 516; 667 P2d 213 (1983), the Arizona Supreme Court stated:
"There are cases holding that the seller of liquor is not liable for the mere sale of liquor to an intoxicated person who subsequently causes injury to himself as the result of intoxication. Noonan v Galick, 19 Conn Supp 308, 310; 112 A2d 892 (1955); see 48A CJS, Intoxicating Liquors, § 428 at 134. A growing number of cases, however, have recognized that one of the very hazards that makes it negligent to furnish liquor to a minor or intoxicated patron is the foreseeable prospect that the patron will become drunk and injure himself or others. See Vesely v Sager, 5 Cal 3d 153, 164; 95 Cal Rptr 623; 486 P2d 151 (1971). Accordingly, modern authority has increasingly recognized that one who furnishes liquor to a minor or intoxicated patron breaches a common law duty owed both to innocent third parties who may be injured and to the patron himself. See Nazareno v Urie, 638 P2d 671 (Alas, 1981); Rappaport v Nichols, 31 NJ 188; 156 A2d 1 (1959); Jardine v Upper Darby Lodge No 1973, Inc, 413 Pa 626; 198 A2d 550 (1964).”
In distinguishing the general rule of nonliability, the Congini court stated:
"In Klein v Raysinger, supra, we held that there exists no common law liability on the part of a social host for the service of intoxicants to his adult guests. In arriving at this decision we relied upon the common law rule that in the case of an ordinary able bodied man, it is the consumption of alcohol rather than the furnishing thereof, that is the proximate cause of any subsequent damage.
"However, our legislature has made a legislative judgment that persons under twenty-one years of age are incompetent to handle alcohol. Under Section 6308 of the Crimes Code 18 Pa C S § 6308, a person 'less than 21 years of age’ commits a summary offense if he 'attempts to purchase, purchases, consumes, possesses or transports any alcohol, liquor or malt or brewed beverage.’ Furthermore, under Section 306 of the Crimes Code, 18 Pa C S A § 306, an adult who furnishes liquor to a minor would be liable as an accomplice to the same extent as the offending minor.
“This legislative judgment compels a different result than Klein, for here we are not dealing with ordinary able bodied men. Rather, we are confronted with persons who are, at least in the eyes of the law, incompetent to handle the effects of alcohol. Accord, Burke v Superior Court, 129 Cal App 3d [570,] 575; 181 Cal Rptr [149,] 151 [1982]; Thaut v Finley, supra (197[3]); Lover v Sampson, 44 Mich App 173; 205 NW2d 69 (1972).”
"The accepted rule now is that a breach of statute by the plaintiff is to stand on the same footing as a violation by the défendant. A few courts have held that the plaintiffs breach does not constitute contributory negligence as a matter of law, upon the ground that the statutes were enacted for the protection of others, and not of the actor himself. But it seems clear that the safety statutes, such as speed laws and traffic rules, usually are designed for the broad purpose of preventing accidents or dangerous situations, in which the plaintiff is quite as likely to be hurt as the defendant; and it is not difficult to discover a purpose to protect the plaintiff by setting up a standard of his own conduct, the unexcused violation of which is negligence per se, or evidence of negligence, as the jurisdiction may provide. If, as is frequently the case, the statute is found to be intended solely for the protection of other persons, or the prevention of a different type of risk, the breach will be irrelevant, or at best evidence of negligence for the jury. The assertion that in such cases the breach of statute is not the proximate cause of the harm has no more validity here than in the case of a violation on the part of the defendant.” Prosser & Keeton, supra, pp 231-233. (Emphasis supplied; footnotes omitted.) See also 2 Restatement Torts, 2d, § 469, pp 518-519.
This tradition literally spans Michigan’s statehood. RS 1838, part 1, tit 9, ch 5, § 11 provided:
"No tavern keeper or common victualler shall suffer any person to drink to drunkenness or intoxication in his premises, nor suffer any minor, travellers excepted, to have any strong drink there, on pain of forfeiting five dollars for each offence.” (Emphasis supplied.)
The tradition continued after the repeal of the second period of Prohibition. 1933 (Ex Sess) PA 8, § 33 provided:
"No alcoholic liquor, other than beer, shall be sold to any person unless he shall have attained the age of twenty-one years; and no beer shall be sold to any person unless he shall have attained the age of eighteen years.”
1943 PA 205 added MCL 750.141a; MSA 28.336(1) to the Criminal Code, and vital terms were incorporated into the present version of § 33 of the act. Today, the tradition applies to licensees as well as social hosts. See 1980 PA 351, which amended § 22 to impose liability on a licensee for furnishing liquor to minors and to visibly intoxicated adults. See also 1984 PA 348 which established a drunk-driving task force. | [
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Williams, C.J.
Introduction
The narrow issue in this case is whether the right to grievance arbitration of an unjust discharge claim survives the expiration of the collective bargaining agreement by which it is created.
The resolution of this question requires us to consider fundamental principles of contract and labor law. Foremost among these is that the right to arbitration is necessarily a creation of the par ties’ intent as expressed in their collective bargaining agreement. A corollary is the right by the parties in their collective bargaining agreement to terminate the right to arbitration.
This question is one of first impression in the Michigan Supreme Court, and it has not been ruled on directly by the United States Supreme Court. The United States Supreme Court case which comes closest to answering the question presented here concerned a dispute over severance pay rather than an unjust discharge. That case has spawned a number of lower federal court cases, with disparate results. Several jurisdictions have recognized that the parties’ original contractual intent may be effectuated by ordering postcontract arbitration of disputes regarding the kinds of rights which can accrue or vest during the contract’s term, but which may not ripen for enjoyment until after expiration.
We find this reasoning persuasive. Therefore, we hold that the right to grievance arbitration does survive the expiration of a collective bargaining agreement when the dispute concerns rights which can accrue or vest during the contract’s term.
The right not to be discharged except for just cause in this case is not the kind of right which can accrue or vest during the contract’s term. Therefore, Ms. Jaklinski’s right to arbitrate her discharge did not survive the expiration of the collective bargaining agreement.
Ms. Jaklinski cannot rightly claim that her right survived the agreement’s expiration because it was a mandatory subject of bargaining which the employer could not alter prior to impasse. First, her grievance arose and was denied after impasse was reached and after the employer’s duty had terminated. Second, such an "unfair labor practice” claim is within the exclusive jurisdiction of MERC.
Ms. Jaklinski cannot rightly claim that her rights under 1969 PA 312 were frozen in place during the pendency of the interest arbitration invoked by her union, because they had expired long before Act 312 was invoked.
For these reasons, we reverse the decision of the Court of Appeals and reinstate the circuit court’s order enjoining arbitration.
I. Facts
Diedre Jaklinski was appointed to the office of deputy sheriff in the Ottawa County Sheriff’s Department in 1977. She was initially represented for purposes of collective bargaining by and was a member of the Ottawa County Deputy Sheriffs’ Association. However, in October, 1979, the Police Officers Association of Michigan (poam) became her bargaining agent.
The collective bargaining agreement between the county and the sheriff (referred to here as the joint employers) and the Deputy Sheriffs’ Association at the time Jaklinski was appointed gave the joint employers the right to discharge or fail to reappoint employees, but only for just cause. The agreement defined a "grievance” as "a claim, reasonably and sensibly founded, of a violation of this agreement and/or violation of the rules and regulations of the Ottawa County Sheriff Department and/or Ottawa County.” A grievant and the association were given the right to request binding arbitration of "grievances,” but the arbitrator’s decision was limited to the application or the interpretation of the provisions of the collective bargaining agreement or the written rules and regulations of the employer.
The following chronology of events is set forth for the reader’s convenience.
December 31, 1979... The collective bargaining agreement expired; negotiations between the joint employers and poam for a new collective bargaining agreement continued.
April 14, 1980....... The mediator declared that the parties’ negotiations for a new collective bargaining agreement were at an impasse.
April 29, 1980....... The poam petitioned the Michigan Employment Relations Commission for interest arbitration under 1969 PA 312.
June 9, 1980 ........ The poam filed an amended petition before the merc.
December, 1980 ..... Jaklinski received notice that she would not be reappointed as deputy sheriff at the end of her term on December 31, 1980.
December 9, 1980____ Jaklinski and poam filed a grievance with the joint employers contesting the failure to reappoint her.
January 1, 1981..... Jaklinski’s termination became effective.
February 27, 1981 ... The joint employers filed suit in Ottawa Circuit Court, seeking a stay of Jaklinski’s grievance arbitration.
March, 1981......... The Act 312 interest arbitration hearing was held.
March 31, 1981...... merc appointed an arbitrator to arbitrate Jaklinski’s grievance at the request of the poam and Jaklinski.
August 28, 1981 ..... The Act 312 interest arbitration award was issued and the new collective bargaining agreement became effective.
March 5, 1982....... Muskegon Circuit Judge Piercey enjoined the arbitration of Jaklinski’s grievance.
The December 9, 1980, request for grievance arbitration alleged that the failure to reappoint Ms. Jaklinski was not for "just cause,” in violation of the former collective bargaining agreement. The joint employers denied the request, claiming that Jaklinski’s right not to be refused reappointment except for just cause and her right to arbitrate her grievance did not survive the expiration of the collective bargaining agreement. The Ottawa Circuit Court agreed with the joint employers that the constraints placed upon the sheriff by contract were no longer effective at the time Jaklinski filed her grievance. No relief was available under the new collective bargaining agreement because the grievance procedure and arbitration clause of the new agreement were not given effect retroactively to January 1, 1980.
In an unpublished opinion, the Court of Appeals reversed the judgment of the circuit court and ordered the parties to arbitrate the grievance. We granted the joint employers’ application for leave to appeal, instructing the parties to include among the issues to be briefed:
(1) whether Michigan should adopt from federal labor law a rule that an employer’s obligation to arbitrate grievances in a collective bargaining agreement lapses with the termination of the agreement and (2) if so, whether such arbitration is revived by a petition for interest arbitration under 1969 PA 312, MCL 423.233; MSA 17.455(33). [419 Mich 934 (1984).]_
II. Unavailing Claimed Sources of the Right to Arbitration
Jaklinski’s argument that she is entitled to arbitrate her failure to be reappointed is three-pronged. First, she argues that her right to arbitration is a mandatory subject of bargaining which the joint employers had a duty not to unilaterally alter prior to an impasse in negotiations for a new collective bargaining agreement, and which therefore survived termination of the contract. Second, she contends that her right to arbitration was a "condition of employment” frozen in place during the pendency of "Act 312” interest arbitration. Third, she urges us to adopt lower federal court decisions holding that a "presumption of arbitrability” arises whenever a collective bargaining agreement fails to state expressly that the duty to arbitrate terminates automatically with the agreement.
A. Arbitration as a Mandatory Subject of Bargaining
The first prong of Jaklinski’s argument is that because grievance and arbitration procedures were "mandatory subjects of bargaining” over which the parties were obligated to bargain in good faith the joint employers could not unilaterally change the right to grievance arbitration. It is argued that the right thus survived the hiatus between the expiration of the old agreement and the invocation of Act 312 arbitration. This was also the theory accepted by the Court of Appeals when it ruled that Jaklinski was entitled to arbitrate her failure to be reappointed.
It is true that public employers are required to bargain in good faith to impasse regarding "wages, hours, and other terms and conditions of employment.” MCL 423.215; MSA 17.455(15). Because "wages, hours, and other terms and conditions of employment” are regarded as mandatory subjects of bargaining, once a party negotiating a collective bargaining • agreement proposes such a subject, neither party may take unilateral action regarding it prior to impasse. Detroit Police Officers Ass’n v Detroit, 391 Mich 44, 54-55; 214 NW2d 803 (1974). Grievance and arbitration procedures are mandatory subjects of bargaining. Pontiac Police Officers Ass’n v Pontiac, 397 Mich 674, 681; 246 NW2d 831 (1976).
Under this line of reasoning, it logically follows that as part of its duty to bargain in good faith the joint employers had a duty prior to reaching impasse not to unilaterally alter the grievance arbitration mechanism in place at the time the contract expired. However, Jaklinski’s grievance arose and was denied long after the parties had negotiated to impasse, at a time when the joint employers no longer had a duty not to alter the grievance arbitration mechanism.
In addition, these duties are created in the public employment relations act, and are only enforceable under the mechanism set forth in the pera by the Legislature. Breach of these duties is an unfair labor practice, and requests for an order to "cease and desist” from such practices are within the exclusive jurisdiction of the Michigan Employment Relations Commission. MCL 423.216; MSA 17.455(16). Lamphere Schools v Lamphere Federation of Teachers, 400 Mich 104, 118; 252 NW2d 818 (1977). Jaklinski’s claim in circuit court must be based on a viable contractual right to arbitration, and her claim based on statutory rights to "good faith bargaining” must be ad dressed to the merc. We thus reject the first prong of Jaklinski’s argument.
B. Arbitration Under Act 312
The second prong of Jaklinski’s argument is that her right to arbitration was a "condition of employment” frozen in place during the pendency of Act 312 interest arbitration. It is helpful to distinguish at the outset between "grievance” and "interest” arbitration. The former involves arbitration of disputes arising under an existing collective bargaining agreement; the latter involves arbitration of the terms to be included in a new collective bargaining agreement after the parties have negotiated to impasse. Binding interest arbitration is the statutory right of fire fighters and police officers (including sheriff’s deputies) and their public employers. 1969 PA 312, MCL 423.231; MSA 17.455(31).
After "Act 312” interest arbitration is invoked, neither party to the dispute may alter existing "wages, hours, [or] other conditions of employment” without the consent of the other during the pendency of proceedings before the arbitration panel. MCL 423.243; MSA 17.455(43). These statutes evince the Legislature’s particular concern that public employees who provide vital services to their communities, and who are therefore deprived of the right to strike, have a forum available to resolve labor disputes which is more expeditious and less expensive than the courts.
This statutory scheme does not, however, support Jaklinski’s claim that she is entitled to arbitrate her failure to be reappointed. First, the compulsory arbitration provided for in Act 312 is not available to individuals with grievances regarding the interpretation of an existing or expired collective bargaining agreement. Local 1518, AFSCME v St Clair Co Sheriff, 407 Mich 1, 12; 281 NW2d 313 (1979). Second, the "wages, hours, [or] other conditions of employment” which are frozen in place during the pendency of Act 312 arbitration are those which exist at the time such arbitration is invoked. Therefore, Jaklinski’s right to arbitrate her failure to be reappointed could not be preserved under Act 312 unless it survived the expiration of the old collective bargaining agreement on December 31, 1979, and then remained viable during the hiatus between that date and the invocation of Act 312 arbitration in April, 1980. Lastly, nothing in these statutes indicates that invocation of Act 312 proceedings should "revive” rights which terminated at the expiration of an old collective bargaining agreement. Thus, we conclude that the second prong of Jaklinski’s argument is without merit unless it can be shown that her rights survived the hiatus between January 1 and April 29, 1980, a proposition we next examine.
III. Federal Law: Nolde Brothers and its Progeny
The third prong of Jaklinski’s argument is that we should adopt from the common law of federal labor relations a rule that a "presumption of arbitrability” arises whenever a collective bargaining agreement fails to state expressly that the duty to arbitrate terminates automatically with the agreement. It is true that some lower federal courts have adopted the presumption advocated by Jaklinski, but it is equally true that others have rejected it. Therefore an extensive discussion of the federal cases is necessary.
The United States Supreme Court has held that the right to arbitrate a severance pay grievance survives the expiration of a collective bargaining agreement. Nolde Bros, Inc v Bakery & Confectionery Workers Union, 430 US 243; 97 S Ct 1067; 51 L Ed 2d 300 (1977). In Nolde, the collective bargaining agreement terminated; thereafter, during negotiations for a new collective bargaining agreement, the employer closed its plant. The expired agreement contained a clause entitling employees to binding arbitration of "any grievance,” and a clause entitling them to severance pay on the termination of their employment. The employees sought arbitration of their claims to severance pay. A majority of the Court rejected the employer’s argument that its duty to arbitrate necessarily expired with the collective bargaining agreement and ordered the parties to arbitrate.
We note at the outset the incongruence between the narrow holding in Nolde and the language which accompanied it. The Court held that under the parties’ collective bargaining agreement severance pay disputes were arbitrable following the expiration of the agreement. However, language in the opinion suggests two principal propositions. The first is that the right to grievance arbitration survives the expiration of any collective bargaining agreement whenever the dispute is over an obligation "arguably created” by the expired agreement. Id., p 252. The second proposition is that a "presumption of arbitrability” arises whenever the parties fail to state expressly that their duty to arbitrate terminated automatically with the contract. Id., p 254. We see no reason to recognize such dicta.
The Court also developed weak rationales for its two propositions. The Court reasoned that the parties could have anticipated that they would be bound to arbitrate postcontract, because they drafted an unusually broad arbitration clause against the backdrop of a national labor policy favoring arbitration as a dispute settlement process. In addition, the Court presumed that because the parties expressed their preference for arbitration during the contract’s term, they would not change their opinion about the advantages of arbitration after their contract expired. The Court did not attempt to discern the actual intent of the parties.
The disparity between the actual holding on the facts in Nolde and its language has undoubtedly been a source of confusion to the lower federal courts. Subsequent decisions demonstrate a split in opinion as to how broadly or narrowly Nolde should be read. There appear to be four discrete approaches to this problem, although a given court may rely on or mention more than one such approach.
The first approach is that taken by the United States Court of Appeals for the Third Circuit, which accepts a broad interpretation of Nolde. That court follows the first proposition of Nolde and holds that where the expired collective bargaining agreement contains a broad arbitration clause, and where the dispute "arises under” the expired agreement, the duty to arbitrate survives the expiration of the agreement. Federated Metals Corp v United Steelworkers, 648 F2d 856 (CA 3, 1981), cert den 454 US 1031 (1981) (employer ordered to arbitrate pension benefits dispute de spite fact that the pension claimants were ineligible at the time the agreement expired); United Steelworkers v Fort Pitt Steel Casting Div, 635 F2d 1071 (CA 3, 1980), cert den 451 US 985 (1981) (presumption of arbitrability not overcome by clause in contract that defined "employees” as workers for whom the union acted as representative "during the life of this Agreement,” and employer ordered to arbitrate severance pay dispute).
A second approach has been to rebut the presumption raised in the second proposition by focusing on the breadth of the arbitration clause and other expressions of the parties’ actual intent. Arbitration of a "no just cause” termination was denied where the collective bargaining agreement defined "grievance” as a dispute arising "during the term of the Agreement.” General Warehousemen & Employees Union v J C Penney Co, 484 F Supp 130, 132 (WD Pa, 1980). Similarly, arbitration was denied where 1) the arbitrators served only for the "duration of this agreement,” 2) express provision was made in the contract for post-expiration continuation of employees’ health and insurance benefits, indicating the parties knew how to provide for survival of benefits when they so desired, and 3) in negotiating the new collective bargaining agreement, the union sought a clause allowing arbitration of disputes on the basis of events occurring prior to the effective date of the new contract, indicating the union’s acknowledgment that arbitration would not be available otherwise. Garland Coal & Mining Co v United Mine Workers of America, 596 F Supp 747 (WD Ark, 1984).
A third approach has been to side-step the language of both propositions by examining whether a contractual no-strike clause also survives the expiration of the collective bargaining agreement. A no-strike clause has been described by the United States Supreme Court as the quid pro quo for an employer’s agreement to submit grievances to binding arbitration. Boys Markets, Inc v Retail Clerks Union, 398 US 235, 248; 90 S Ct 1583; 26 L Ed 2d 199 (1970) (enjoined strike in violation of no-strike clause where grievance was subject to arbitration). Thus, the United States Court of Appeals for the Third Circuit held that ,a union’s engaging in a strike not forbidden by a no-strike clause did not alter the employer’s duty to arbitrate grievances arising after the labor contract expired. United Steelworkers v Fort Pitt Steel, supra, pp 1076-1078. See also General Warehousemen, supra, pp 136-137.
Nolde cannot reasonably be read as relying on the quid pro quo concept because the Court made no mention of any "no-strike” clause and because there was no open plant capable of being struck. The dispute sought to be arbitrated involved severance pay allegedly due as a result of the plant closing. The duty to arbitrate was imposed upon the employer because of its presumed intent, not as the quid pro quo for any agreement on the part of the union not to strike an already closed plant. See Textile Workers of America v Columbia Mills, Inc, 471 F Supp 527, 531 (ND NY, 1978) (ordering arbitration of grievance in spite of the fact that collective bargaining agreement had terminated and employer’s operations had ceased).
The fourth and most persuasive approach has been to recognize that Nolde is factually limited to grievances regarding contract rights which can vest or accrue while a collective bargaining agreement is in effect, but which may not ripen until after its expiration. In Oil, Chemical & Atomic Worker’s Int’l Union, Local No 4-23 v American Petrofina Co of Texas, 586 F Supp 643 (ED Tex, 1984), rev’d 759 F2d 512 (CA 5, 1985), an employee was discharged following the expiration of a collective bargaining agreement which contained both a "no termination except for just cause” clause and an arbitration clause. The court noted that in Nolde, the grievance concerned severance pay, a benefit already in place prior to the contract’s termination. The court interpreted cases subsequent to Nolde as requiring arbitration where 1) the dispute centered on events which took place totally or in part prior to contract termination, or 2) the dispute involved accrued rights, such as pension or disability benefits. Id., p 647. Because the dispute before it did not fit within either category, the court denied arbitration. The court expressly rejected the broad reading given Nolde in Fort Pitt, supra:
[I]t is apparent that [Fort Pitt’s] standard is simply an overbroad misinterpretation. Other decisions have limited Nolde to apply only to accrued rights and benefits; and this Court believes this is the proper view. Otherwise, almost every clause and term of a collective bargaining agreement would stay in effect after the agreement was terminated. This certainly would not reflect the in tention of the parties; but it certainly would lead to a raft of litigation. [Petroñna, supra, pp 648-649.]
Disputes involving accrued but unused rights were also held arbitrable after the expiration of the collective bargaining agreement in Erie Co Geriatric Center v Local No 2666, AFSCME, 464 F Supp 561 (WD Pa, 1978), aff'd 622 F2d 578 (CA 3, 1980) and 716 F2d 890 (CA 3, 1983). There the arbitration clause in the collective bargaining agreement defined an arbitrable grievance as "a dispute concerning the interpretation, application, or alleged violation of a specific term or provision of this agreement.” Id., p 565. The court reasoned that the breadth of the arbitration clause evinced the parties’ intent that the clause survive the termination of the collective bargaining agreement. Noting that Nolde made clear that the timing of the demand for arbitration was not dispositive, the court ordered arbitration of disputes over workers’ accrued but unused seniority rights and benefits. Id., p 565. See also Int’l Brotherhood of Teamsters v Brinks, Inc, 744 F2d 283, 286 (CA 2, 1984) (reading Nolde as requiring post-contract arbitration where the claims "arise under the collective bargaining agreement, but do not ripen until after it expires”); United Mine Workers v Jericol Mining, Inc, 492 F Supp 132, 136 (ED Ky, 1980) (eligibility for accruable vacation pay arbitrable following expiration of contract, regardless of whether the pay vested during life of agreement).
IV. Adopted Rule: Postcontract Arbitrability of Accrued or Vested Rights
For the reasons which follow, we adopt the fourth approach outlined above and hold that the right to grievance arbitration survives the expiration of the collective bargaining agreement when the dispute concerns the kinds of rights which could accrue or vest during the term of the contract. We do so because such a rule recognizes and sustains both fundamental principles of law and the right of employees and employers to develop the common law of labor relations in their collective bargaining agreements.
The duty to arbitrate grievances arises from a contractual agreement between an employer and its employees. Absent such an agreement, neither party is obliged to submit to binding arbitration. Grand Rapids v Fraternal Order of Police, 415 Mich 628, 635, 644; 330 NW2d 52 (1982). Parties enter into arbitration agreements because they believe such dispute resolution is in their mutual self-interest. Parties usually also find it in their mutual self-interest to have their contractual obligations terminate at a specified time. They usually express this intent in an unambiguously phrased contract-duration clause.
Arbitration has become the favored procedure for resolving disputes in Michigan and federal labor relations because parties have expressed their preference for arbitration in their contracts. The federal labor policy favoring arbitration originated in the Labor Management Relations Act, which states that "[f]inal adjustment by a method agreed upon by the parties is declared to be the desirable method for settlement of grievance disputes arising over the application or interpretation of an existing collective bargaining agreement.” 29 USC 173(d) (emphasis added). This provision was interpreted by the United States Supreme Court as creating a national policy favoring arbitration, but notably the statute refers not to arbitration but to a method "agreed upon by the parties.” Thus, "[i]t is by enforcing the agreement of the parties” to forego adjudication "that the law 'prefers’ arbitration.” Grand Rapids, supra, p 635.
The rule adopted here effectuates the parties’ original intent as expressed in their collective bargaining agreement. Usually parties have agreed that certain rights, such as pension, disability, seniority and vacation benefits, can accrue or vest during the life of the contract. The realization of some of these rights may be contingent upon a well-defined future event. An employee should not be deprived of already accrued or vested rights on the fortuity that they become ripe for enjoyment following the expiration of the agreement. Such an employee remains entitled to such rights and to the dispute resolution process the parties agreed to use to enforce them. While the substantive right to continue to accrue benefits terminates with the contract, the right to arbitrate disputes regarding benefits which may have already accrued or vested survives.
In adopting this rule, we follow the holding in Nolde, as circumscribed by its facts. We find persuasive the reasoning of those federal courts which have recognized Nolde’s factual limitation to contract rights which can accrue or vest during the contract’s term. We also note that this construction of Nolde has received approval among labor law scholars. We reject as unjustifiably expansive those decisions which require postcontract arbitration whenever a dispute concerns an obligation arguably created by the expired agreement.
We also note that the rule adopted here neither contradicts policies established by the merc, nor deprives employees of protections vigorously guarded by the merc.
Nothing stated here should be interpreted to mean that the parties to a collective bargaining agreement cannot explicitly agree to terms which depart from any rule announced here. They may agree to their own definition of "accrued” or "vested” rights. They may explicitly agree to extend beyond contract expiration any substantive or procedural rights. They may explicitly agree that accrued and vested rights and the right to arbitrate concerning them also extinguish at contract termination.
We also wish to emphasize that in a suit to compel or enjoin arbitration, a court’s inquiry is limited to the question of arbitrability. While the rule announced here necessarily requires courts to learn some of the circumstances surrounding the substantive dispute, courts must assiduously avoid deciding the merits of the underlying dispute in the guise of deciding arbitrability. We caution courts to heed the admonition of the United States Supreme Court:
Since any attempt by a court to infer [a purpose to exclude the claim from arbitration] necessarily comprehends the merits, the court should view with suspicion an attempt to persuade it to become entangled in the construction of the substantive provisions of a labor agreement, even through the back door of interpreting the arbitration clause, when the alternative is to utilize the services of an arbitrator. [United Steelworkers v Warrior & Gulf Navigation Co, 363 US 574, 585; 80 S Ct 1347; 4 L Ed 2d 1409 (1960).]
Thus, while a court would act well within its power by deciding that a dispute must be submitted to postcontract arbitration because it involved the kind of contract right which accrued or vested during the life of the contract, it would usually act outside its legitimate province by deciding whether a particular employee’s rights had actually accrued or vested.
V. Application to Facts
It is clear that Jaklinski’s failure to be reap pointed would have been arbitrable had it occurred prior to the contract’s expiration. However, nothing in the collective bargaining agreement evinces the parties’ intent to extend the right to arbitration beyond the unambiguously expressed termination date of December 31, 1979.
In addition, her right to be reappointed except for just cause was not the kind of right which could accrue over time or which could vest upon a particular contingency. See Marine Engineers Beneficial Ass’n v Puerto Rico Marine Management, Inc, 537 F Supp 813, 816 (SD NY, 1982) (distinguishing between claims to benefits arguably accruing during the term of the contract, which were arbitrable postcontract, and a "discharge without cause” claim, which was arbitrable only if the discharge occurred during the term of the contract). Thus, under the rule announced here, the joint employers cannot be ordered to arbitrate this dispute.
Jaklinski has argued that she is entitled to. postcontract arbitration because her discharge might have been based, in part, on conduct which took place while her "just cause” right was still viable. Because the just cause right "vested,” it is argued, when at least some of the offending conduct took place, the employee should be entitled to arbitrate the discharge.
We reject any attempt to analogize the right not to be discharged except for just cause and rights which can be said to have accrued or vested during the life of the contract for two reasons. First, the concept of "accrued or vested rights” cannot be stretched to include the right not to be discharged except for just cause. The right not to be dis charged except for just cause is of equal strength at the moment the contract is signed and at the moment the contract terminates. It does not entitle its holder to increased benefits over time, nor is its exercise contingent on other events. Second, it would be ridiculous to extend the right to arbitrate beyond contract termination for an employee who may have committed a wrong during the contract’s term, when the right to arbitrate other kinds of clearly nonoffensive conduct terminates with the contract.
Moreover, we believe that ordering arbitration because a discharge might have been based on events which occurred prior to the contract’s expiration would have several unfortunate consequences. First, the substantive "just cause” right which the parties agreed would terminate with the contract would be continued indefinitely. Second, courts would necessarily have to inquire into the causes for a disputed discharge, and the risk that courts would decide the merits of a case in the guise of deciding arbitrability would be enhanced. Lastly, parties would be encouraged to litigate the question of arbitrability because most employees could allege that some conduct which occurred prior to contract termination contributed to the employer’s decision to discharge.
Jaklinski has also based a claim for postcontract arbitration on the quid pro quo concept, described ante> pp 18-19, as the third approach taken by the federal courts in interpreting Nolde. Jaklinski argues that because public employees are denied the right to strike, MCL 423.202; MSA 17.455(2), their public employers should similarly be denied the right to refuse postcontract arbitration._
This argument ignores important distinctions between the public and private sector. First, just as public employees are denied their most powerful economic weapon, the strike, so too are public employers denied their most powerful economic weapon, the shutdown or lockout. Second, in return for giving up the right to strike, at least some public employees, including Jaklinski, receive a benefit not enjoyed by private sector employees: the right to compulsory interest arbitration. MCL 423.231; MSA 17.455(31). Because of these distinctions, one cannot say that a public employer should be forced to submit to postcontract grievance arbitration as a quid pro quo for the public employees’ inability to strike.
The courts of New York have reached a similar conclusion. Poughkeepsie Bd. of Ed v Poughkeepsie Public School Teachers Ass’n, 349 NYS2d 47; 75 Misc 2d 931 (1973), aff'd 354 NYS2d 589; 44 AD2d 598 (1974). Poughkeepsie rejected a ruling by the New York Public Employment Relations Board that a public employer was obliged to maintain existing terms of employment during negotiations for a successor collective bargaining agreement. The board thought such an obligation a fitting quid pro quo for the no-strike obligation on the part of the public employees. The court ruled, however, that the Legislature had provided a detailed procedure for resolving deadlocks in collective bargaining and that thus a public employer need not comply with all terms of an expired collective bargaining agreement. See also Village of Lynbrook v Lynbrook Police Benevolent Ass’n, 385 NYS2d 484; 87 Misc 2d 57 (1976); Betts v Hoosic Valley Teachers’ Ass’n, 382 NYS2d 647; 86 Misc 2d 964 (1976).
Our holding does not preclude the possibility that employers and employees may be required under a proper contract to arbitrate disputes aris ing out of postcontract discharges. Rather, we leave control over the question of arbitrability with the parties, from whose agreement the right to arbitration arises. Unions and employers can agree that the terms of employment during a hiatus between contracts will include the right to binding arbitration of some or all grievances. Similarly, they can agree that arbitration rights in the new collective bargaining agreement will be given effect retroactively to the date of the expiration of the old agreement.
Conclusion
Jaklinski’s right to arbitrate her claim that the Sheriff’s failure to reappoint her was not for just cause did not survive the expiration of the collective bargaining agreement. For all the reasons above, we reverse the decision of the Court of Appeals and reinstate the order of the circuit court enjoining arbitration.
Ryan, J., concurred with Williams, C.J.
Nolde Bros, Inc v Bakery & Confectionery Workers Union, 430 US 243; 97 S Ct 1067; 51 L Ed 2d 300 (1977).
The 1977-1979 agreement between Ottawa County, the Sheriff of Ottawa County, and the Ottawa County Deputy Sheriffs’ Association included the following provisions:
"Article II
"Rights of County
"Except as specifically restricted by the terms of this Agreement, the customary and usual rights, powers, functions, and authority of Management are vested in the Employer. These rights include, but are not limited to, those provided by statute or law along with the right to hire, direct, promote, transfer, assign, and retain employees in positions within the Department. Further, to suspend, demote, discharge (including failure to reappoint), or take other disciplinary action but only for just cause, and to maintain the efficient administration of the Employer.
"Article XIX
"Grievance Procedure
"Section 1. A grievance is a claim, reasonably and sensibly founded, of a violation of this agreement and/or violation of the rules and regulations of the Ottawa County Sheriff Department and/or Ottawa County. Any grievance filed shall refer to the specific provision alleged to have been violated and shall adequately set forth the facts pertaining to the alleged violation. Any claims not conforming to the provisions of this definition shall be automatically denied as not constituting a valid grievance.
"Section 2. Any employee having a grievance in connection with the terms of this Agreement or the rules and regulations shall present it as follows:
"Section 3. Arbitrator’s Powers. The arbitrator shall have no power to amend, add to, alter, ignore, change, or modify the provisions of this Agreement or the written rules or regulations of the Department or of the Employer, and the arbitrator’s decision shall be limited to the application and/or the interpretation of the above and to the specific issue presented to him.
"Article XXIV
"Duration
"This Agreement shall remain in full force and effect until December 31, 1979, and shall become automatically renewable from year to year thereafter, unless either party wishes to terminate, modify, or change this Agreement, in which event, notification of such must be given to the other party in writing one hundred and eighty-two (182) days prior to the expiration date of this Agreement, or any anniversary date thereof.”
The judges of the Ottawa Circuit Court had disqualified themselves.
See Leonard, Post-contractual arbitrability añer Nolde Brothers: A problem of conceptual clarity, 28 NY L Sch L R 257, 291-294 (1983), describing the similar division of jurisdiction between the nlrb and the federal courts.
Federal courts have acceded to the special competence of the nlrb by refusing to order arbitration on the basis of an employee’s claim that the employer’s refusal to arbitrate is a "unilateral change.” See Procter & Gamble Independent Union v Procter & Gamble Mfg Co, 312 F2d 181, 190 (CA 2, 1962), cert den 374 US 830 (1963); Milwaukee Typographical Union v Madison Newspapers, Inc, 444 F Supp 1223, 1227 (WD Wis, 1978), aff'd 622 F2d 590 (CA 7, 1980).
Jaklinski uses this quid pro quo concept to argue that she is entitled to arbitrate the failure to reappoint her. We dispose of this claim post, pp 25-28.
The United States Court of Appeals for the Fourth Circuit made this distinction in its well-reasoned opinion in Bakery & Confectionery Workers Union v Nolde Bros, Inc, 530 F2d 548, 553 (CA 4, 1975) (ordering arbitration of disputes regarding rights, like severance pay, but unlike discharges or employer lockouts, which employees earn and whose vesting is contingent upon a particular event).
The United States Court of Appeals held that the question whether the discharge was arbitrable must itself be submitted to arbitration, because the court could not be sure that the arbitration clause of the collective bargaining agreement was not susceptible to an interpretation that would mandate arbitration of the discharge. While this renders the district court’s decision of little precedential value, that court’s discussion of Nolde remains illuminating.
United Steelworkers v American Mfg Co, 363 US 564, 566-567; 80 S Ct 1343; 4 L Ed 2d 1403 (1960).
See, e.g., Krupman, "Arbitration after contract expiration,” in A Review of the NLRA Interpretations & Current Case Law, 211, 223 (ABA Committee on Development of Law Under the NLRA, 1984); Feldwisch, Nolde & arbitration of post-contract disputes, 40 Ohio St L J 187, 207 (1979); Geslewitz, Case development since Nolde Brothers: When must post-contract disputes be arbitrated?, 35 Lab L J 225, 239 (1984); Kriksciun, Post-contract arbitrability since Nolde Brothers, 54 U Colo L R 103, 112 (1982); Leonard, n 4 supra, p 290.
California appears to have adopted a similar rule. See Thornton v Victor Meat Co, 260 Cal App 2d 452, 471; 67 Cal Rptr 887 (1968), holding that rights, including the right to arbitrate, which may have accrued under the collective bargaining agreement survive its termination; Northern California Hod Carriers v Pennsylvania Pipeline, Inc, 103 Cal App 3d 163; 162 Cal Rptr 851 (1980), cert den 449 US 874 (1980), holding that the right to arbitrate "vests” on the date the alleged grievance arises, and thus is enforceable even if not demanded until after the contract expires.
Merc has not afforded relief to claimants pursuing unfair labor practices charges against their employers for refusing to arbitrate grievances arising after contract expiration. Merc has held that an employer’s refused to abide by a contractual grievance and arbitration procedure following the expiration of the collective bargaining agreement is not a "unilateral change” which violates the employer’s duty to bargain, as long as the employer is willing to discuss individual grievances at the bargaining table. Warren Consolidated Schools v Warren Ed Ass’n, 1975 MERC Lab Op 129; Jackson Community College v Faculty Ass’n, 1978 MERC Lab Op 913; Inland Lakes Schools v Northern Michigan Ed Ass’n, 1984 MERC Lab Op 173; City of Dearborn v Alcamo, 1984 MERC Lab Op 78.
The Michigan Employment Relations Commission is the state agency specially empowered to protect employees’ rights. While this Court is not bound by the decisions of that agency, we acknowledge the merc’s expertise and judgment in the area of labor relations.
Notably, the merc’s refusal to find a right to postcontract arbitration is a more restrictive policy them that endorsed by the National Labor Relations Board, which has held that an employer breaches its duty to bargain in good faith by refusing to arbitrate a postcontract discharge. American Sink Top & Cabinet Co, Inc v Millmen-Cabinet Makers Local 550, 242 NLRB 408 (1979); Digmor Equipment & Engineering Co, Inc v Teamsters Local 166, 261 NLRB 1175 (1982).
This argument is primarily based on language in the NLRB’s decisions in American Sink Top & Cabinet Co, Inc, and Digmor Equipment & Engineering Co, Inc, supra.
See Kriksciun, n 8 supra, p 107, n 12.
For criticism of American Sink Top and Digmor, see Geslewitz, n 8 supra, pp 230-232.
In addition, nothing hete should be interpreted to preclude any claim that an employee had a right not to be discharged except for just cause under the doctrine announced in Toussaint v Blue Cross & Blue Shield, 408 Mich 579; 292 NW2d 880 (1980). Such a claim was raised below by Jaklinski, but its rejection by the Court of Appeals under the facts of this case was not appealed. Hence, we have not considered it. | [
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E. E. Borradaile, J.
Plaintiff commenced suit on February 15, 1985, as decedent’s personal representative under the Michigan dramshop act, claiming that the deceased, Seymour Michael Stamp, was intoxicated and that his intoxication caused or contributed to his death in an automobile accident on or about February 24, 1983, and that he was served intoxicating liquors while visibly intoxicated by the various bar defendants in the case. On May 6, 1985, defendants-appellants, Patricia Pasco, doing business as Groveland Valley Lounge; Donelli, and Gerald Bernadotte and George M. Crawford, doing business as J.B.’s Orion Lounge, filed their answers and affirmative defenses, alleging that plaintiff, as decedent’s personal representative, was not a proper party to bring a dramshop action under MCL 436.22; MSA 18.993.
On May 14, 1985, plaintiff filed her first amended complaint alleging that she sued in her individual capacity as wife of the decedent as well as in her representative capacity. On May 22, 1985, J.B.’s moved for summary disposition, claiming that plaintiff had failed to state a claim upon which relief could be granted. MCR 2.116(C)(8). It was apparent that J.B.’s was not aware of the first amended complaint and, on May 28, 1985, amended its motion, claiming that plaintiff’s amended complaint was barred by the statute of limitations. On that same date, Groveland filed a similar motion for summary disposition. Donelli filed its answer and affirmative defenses to plaintiffs first amended complaint on May 28, 1985.
On June 13, 1985, visiting Judge T. John Lesinski, sitting in Oakland Circuit Court, heard defendants-appellants’ motions for summary disposition and, on June 20, 1985, granted defendants-appellants’ motions in part by dismissing plaintiffs action as personal representative and denied defendants-appellants’ motions in part by allowing plaintiff to proceed as an individual and by allowing plaintiffs first amended complaint to relate back to February 15, 1985.
Thereafter, J.B.’s, Groveland and Donelli moved for a rehearing and, on July 3, 1985, visitng Oakland Circuit Judge Martin B. Breighner heard the motions and, on July 8, 1985, granted defendants’ motions for rehearing and overturned Judge Lesinski’s earlier decision by dismissing plaintiffs first amended complaint, finding that it was barred by the statute of limitations and therefore could not relate back to February 15, 1985. Plaintiff appeals as of right, and only Groveland and J.B.’s have filed briefs in opposition to the appeal.
We reverse the Breighner decision and affirm the Lesinski decision.
I
Plaintiff first challenges the rehearing on the motion which had been heard by the first visiting judge. MCR 2.119(F)(3) provides:
Generally, and without restricting the discretion of the court, a motion for rehearing or reconsideration which merely presents the same issues ruled on by the court, either expressly or by reasonable implication, will not be granted. The moving party must demonstrate a palpable error by which the court and the parties have been misled and show that a different disposition of the motion must result from correction of the error.
This provision is a new provision not found in the General Court Rules, and is similar to local rule 17(k) of the United States District Court for the Eastern District of Michigan. The transcripts of the two hearings before the different judges have not been provided to this Court, but the Court will deal with the issues raised by this particular question.
Similar language has been used by the appellate courts relating to a trial judge’s granting of a new trial in a case. See Graeger v Hager, 275 Mich 363, 368; 266 NW 382 (1936), where the Court said "[tjrial courts have a large discretion in the matter of granting new trials, and this court will not interfere unless the abuse of that discretion is palpable.” (Citations omitted.) "Palpable” is defined in Black’s Law Dictionary (5th ed, 1979), p 1000, as "[e]asily perceptible, plain, obvious, readily visible, noticeable, patent, distinct, manifest.”
The other provisions of MCR 2.119(F) indicate that no response to the motion may be filed and there is no oral argument unless the court otherwise directs, and the motion is to be filed no later than seven days after entry of the order disposing of the motion. It is not clear from the court rules whether sanctions are applicable. In MCR 2.114, sanctions are made applicable for pleadings signed in violation of the rule, and in MCR 2.116, sanctions are imposable for filing a motion or affidavit in bad faith for summary disposition of a case. Since no response is allowed and nor oral argument is permitted unless the court orders, the penalties provided under 2.119(E)(4)(c) are not applicable.
While we feel that the issues to be discussed subsequently are more important to this case, it seems highly unlikely that the defendants had demonstrated a palpable error in the case to show that the parties had been misled and that a different disposition of the motion must result from the correction of the error. It seems that the rule can be read that an error as to the law would be applicable. The language of the court rule reads "palpable error” in the conjunctive with the language "parties have been misled,” and that does not seem applicable here.
Defendant Groveland argues that the dismissal of plaintiffs individual claim resulted in final disposition of the case and that the only way that there could have been correction if that motion had not been granted by the second judge would have been on appeal, with greater expense to all parties involved. Defendant Groveland is attempting to bootstrap the issue of whether plaintiff had the right to amend and whether that amendment would relate back to save the claim under the statute of limitations, and this is not an adequate response to the questions raised in this case.
II
Defendant Groveland in particular says that the pleading requirements of a case are governed by MCR 2.113 and that every pleading must contain a caption stating the names of the parties to the action and that plaintiffs complaint did not conform to the requirement of that rule.
Plaintiff counters that argument by alleging that in paragraph 12 of the original complaint, the following language was used:
12. That Plaintiff, Patricia Stamp, wife and personal representative of deceased Seymour Michael Stamp brings this action pursuant to [MCL] 436.22.
and that paragraph 13 reads:
13. Plaintiff, as wife and personal'representative of said deceased is entitled to recover herein such damages as shall be deemed fair and just under all the circumstances to those persons who may be entitled to such damages recovered under the aforesaid statute ....
Defendant Groveland counters that plaintiffs prayer for relief says:
Wherefore, Plaintiff, Patricia Stamp, administrator of the estate of Seymour Michael Stamp, deceased, claims judgement against the defendants in whatever amount plaintiff is found to be entitled, together with costs, attorney fees, interest from the date of judgement, and all other relief proper in the premises.
The question of caption of the case is not particularly important, as noted by Justice Smith in his concurring opinion in Sovereign v Sovereign, 354 Mich 65, 71; 92 NW2d 585 (1958), in which, in dealing with the question of whether an attorney had entered a special appearance or a general appearance under the old 1939 Court Rules to attack jurisdiction, he said "we are not bemused by the form of words use, by the caption as special or general. We look to the relief asked.”
In Koons v Walker, 76 Mich App 726; 257 NW2d 229 (1977), this Court, in dealing with the question of whether a successor owner of a business had been properly notified of the claim brought by a plaintiff, held that the party was properly in the suit though another person had been named as the original defendant in the action. This Court does not feel that any different result should apply to a plaintiff than applies to a defendant in an action.
III
The primary substantive issue in this case is whether the defendants had been given notice of the pending action so that the relation-back rule of MCR 2.118(D) overrides the passage of the period of limitation and whether in fact a different party is in the case than the plaintiff who originally started the lawsuit.
Defendants pin their whole argument in this case upon Genesee Merchants Bank & Trust Co v Bourrie, 375 Mich 383; 134 NW2d 713 (1965), where the Supreme Court held that a wrongful death action brought by the fiduciary of the estate under the dramshop act was improper and that an amendment to name the individual plaintiff after the period of limitation had passed was the introduction of a new cause of action. Defendants have relied upon the wrong case. Chief Justice T. M. Kavanagh said in Genesee Merchants Bank v Bourrie, supra, pp 388-389:
The first issue to be determined is the applicability to this case of the General Court Rules of 1963 .... GCR 1963, 14, makes the new rules effective January 1, 1963, and applicable to all proceedings subsequent to that date in actions brought before that date, unless it would not be feasible or would work injustice. Since a final order had been signed in this case before the effective date of GCR 1963, the latter rules do not govern any proceedings in this case.
In answer to plaintiff’s claim that the trial court erred in refusing to permit the substitution as a real party in interest of the widow of plaintiffs decedent, defendants indicate that the substitution of the widow was not moved for until after the order of dismissal, on the motion for rehearing. Since the record reveals no earlier request, any right to such substitution has been waived.
Plaintiff’s declaration and motion to amend each indicates that the action is being brought under the death by wrongful act statute, and neither mentions nor cites the dram shop act.
The defendants, but in particular defendants J.B.’s, argue that Doan v Chesapeake & Ohio R Co, 18 Mich App 271; 171 NW2d 27 (1969), only covers those situations where the administrator of a decedent’s estate either had not yet been appointed or was acting as a special representative prior to full appointment.
We are satisfied that defendants attempt to read GCR 1963, 118.4, now MCR 2.118(D), too narrowly. As stated in Drapefair, Inc v Beitner, 89 Mich App 531; 280 NW2d 585 (1979), amendment of pleadings may be allowed to change the identity of a party plaintiff where the plaintiff originally brought an action in the wrong capacity and the new plaintiff may be allowed to take advantage of the former action if the original plaintiff had, in any capacity, either before or after the commencement of the action, an interest in the subject matter of the controversy. Drapefair, supra, pp 541-542, quotes from Plowman v Satkowiak, 22 Mich App 425; 177 NW2d 641 (1970), noting that the Plowman Court cited Doan, supra, in which the Doan Court approved the limitation found in 63 Harvard L Rev 1177, 1239 (1950):
"However . . . where the plaintiff sues in the wrong capacity some courts have experienced con siderable difficulty in avoiding the objection that the original action was void, and have thus disallowed the change of the party plaintiff. Nevertheless, the new plaintiff is today usually allowed to take advantage of the former action if the original plaintiff had, in any capacity, either before or after the commencement of suit, an interest in the subject matter of the controversy.” (Emphasis supplied.) [18 Mich App 279.]
In Plowman, supra, p 430, the Court quoted from the Supreme Court in LaBar v Cooper, 376 Mich 401, 405-406; 137 NW2d 136 (1965), which quoted from 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), p 416, as follows:
"Subrule 118.4 is intended to introduce a more liberal and workable test, borrowed from the Federal rules. See committee comment (5), supra. The test is no longer conceptual, but rather functional. The amendment relates back to the date of the original pleading and, therefore, is not barred by limitations, whenever the claim or defense asserted in the amendment arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading. It is thus beside the point that the amendment introduces new facts, a new theory, or even a different cause of action, so long as it springs from the same transactional setting as that pleaded originally. The new test satisfies the basic policy of the statute of limitations, because the transactional base of the claim must still be pleaded before the statute runs, thereby giving defendant notice within the statutory period that he must be prepared to defend against all claims for relief arising out of that transaction.” [Emphasis supplied.]
It is quite clear in our case that defendants were given notice in the original pleading that the action was brought under the dramshop act, as was set forth in paragraph 8 of the pleadings as well as paragraph 10, and, while the pleadings were not well drafted, plaintiff did state in paragraphs 12 and 13 that she was entitled to recover as wife in addition to her position as personal representative and in paragraph 10 that the parties had acted in violation of the provisions of MCL 436.22; MSA 18.993.
To rule that this was a new action by an entirely different party when the wife clearly has a right under the dramshop act to recover from defendants who have violated the dramshop act and not to apply the relation-back provision of the court rule would be to exalt form over substance.
The order of Judge Breighner is reversed and the order of Judge Lesinski is reinstated.
Reversed and remanded for trial.
Michigan dramshop act, 1933 (Ex Sess) PA 8, § 22, effective immediately on December 15, 1933; last amended 1980 PA 351, § 1, effective immediately on December 29, 1980. MCL 436.22; MSA 18.993. | [
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Allen, J.
Petitioner appeals as of right from a May 21, 1985, judgment of the Michigan Tax Tribunal sustaining a corporate income tax liability assessment of $68,640.15, plus $11,953.54 interest, for a total of $80,593.69 for the taxable years ending June 30, 1972, and June 30, 1973.
The principal issue in this case is whether petitioner’s Texas speedway operation and its sand and gravel operations constitute a unitary business for purposes of the Michigan corporate income tax. Petitioner contends that its sand and gravel business is dependent upon or at least contributory to the speedway business. The Department of Treasury (treasury) contends that the aggregate and raceway operations are "separate and distinct” businesses to which "there is neither operational nor economic unity.” If treasury is correct in its position, the three-factor apportionment formula employed by petitioner cannot be used to enable petitioner to offset losses from its Texas activity against Michigan source income. On the other hand, if the two operations are unitary in nature, their incomes may not be subjected to the separate accounting method demanded by treasury. Though the facts hereinafter set forth are not substantially disputed, the legal conclusions drawn therefrom are.
Charles McGee, general manager for petitioner’s sand and gravel enterprise and secretary for the taxpayer, testified that petitioner was principally engaged in two types of business activities: (1) the production and sale of sand and gravel aggregates in Michigan and out-of-state areas and (2) construction projects, such as earth filled dams, underground sanitary sewers, and race track construction in Michigan and in Colorado, Pennsylvania, Texas and Kentucky. At times, construction projects were acquired as a joint venture with one of petitioner’s two affiliated companies, Holloway Sand & Gravel and Holloway Construction. Field offices were maintained at the job sites; the administrative offices were in Wixom, Michigan.
Petitioner is eighty percent owned by its president, Dan Holloway, and twenty percent owned by McGee. Dan Holloway, Jr., was petitioner’s vice-president. Wixom was the headquarters for all permanent employees, including project engineers and estimators. The majority of foremen and superintendents were hired in Wixom and then sent to the various job sites. All administrative, executive, and financial decisions were directed from the Wixom office. The president negotiated and approved equipment purchase decisions. Payroll checks for the construction crews were approved in Wixom and sent by air mail to the job sites. The board of directors convened at the Wixom location.
Petitioner was the principal contractor for the "Texas World Speedway.” Construction work commenced in or about 1969. Petitioner performed the asphalt work for the speedway and supervised subcontractors building the stands. Petitioner was paid in full for all effort under the construction contract except for the last estimate, dated January 9, 1970, which showed an unpaid balance of $385,506.41.
Petitioner was unable to collect the balance due because the company which contracted with peti tioner for the construction went bankrupt. Petitioner had a second lien on the speedway and purchased the speedway to protect its interest. Petitioner’s objective was to eventually sell the speedway. In order to demonstrate to potential buyers that the speedway was a going concern and to establish a market value, petitioner decided to operate the speedway. The adjacent vacant land was sold at a profit.
Dan Holloway, Jr., vice-president, appointed to oversee operations of the speedway, died prior to the evidentiary hearing. Purchasing decisions were approved and payroll checks were signed at the Wixom office. A certified public accountant in Michigan took care of the majority of the speedway’s financial reporting requirements, including corporate franchise tax returns and federal payroll tax returns.
During the course of the speedway’s two-year operation, two racetrack managers were employed. The first manager was discharged in 1971. During his employment, a certified public accountant from Texas was apparently involved in the speedway’s payroll matters. William Marvel was the second racetrack manager. A limited checking account in Texas was established for day-to-day expenditures in connection with the racetrack.
Eight races were held between the time the speedway was acquired in late 1971 and the time it closed in October, 1973. Between races, employees maintained and safeguarded the racetrack. Dan Holloway, Jr., attended every race. He personally handled advertising promotions. Petitioner utilized the speedway as publicity for its construction business. The speedway’s losses in 1972 and 1973 were partially attributed to rainy weather conditions on the dates of seven of the eight races held. The speedway was sold approximately two years prior to the evidentiary hearing in 1978 before the sbta.
i
Was the Texas speedway business unitary with the Michigan sand and gravel business? We begin our analysis of this issue by rejecting petitioner’s claim that the primary issue is whether the formulary apportionment method set forth in MCL 206.115; MSA 7.557(1115) and admittedly employed by petitioner in filing its income taxes fairly represented the business activities of petitioner in Michigan. Petitioner claims that the statutory formula method used by it fairly represented its business activities in Texas and Michigan and that treasury erred in forcing upon it a separate accounting method as allowed under § 195 of 1967 PA 281. Under § 195, the commissioner of revenue may require a separate accounting or any other method to effectuate an equitable allocation of a taxpayer’s taxable income. MCL 206.195; MSA 7.557(1195); Clarke-Gravely Corp v Dep’t of Treasury, 412 Mich 484, 488; 315 NW2d 517 (1982); Jones & Laughlin Steel Corp v Dep’t of Treasury, 145 Mich App 405; 377 NW2d 397 (1985). Where a separate or different method of accounting is demanded, the burden of proof is on the state to show that the statutorily preferred formula is inadequate to determine the taxpayer’s extent of business activity in Michigan. Payne & Dolan of Wisconsin, Inc v Dep’t of Treasury, 138 Mich App 418; 360 NW2d 208 (1984).
However, as was so clearly pointed out in the comprehensive opinion of the hearing officer, apportionment formulas may only be applied where the taxpayer’s activities within the taxing state are integral segments of an interstate unitary business. Rudolph, State Taxation of Interstate Business: The Unitary Business Concept and Affiliated Corporate Groups, 25 Tax L Rev 171, 192 (1970). It is only where the Michigan business activities of the taxpayer are unitary with the taxpayer’s activities outside of Michigan that the apportionment formula is applicable. Mobil Oil Corp v Comm’r of Taxes of Vermont, 445 US 425, 440; 100 S Ct 1223; 63 L Ed 2d 510 (1980); F W Woolworth Co v Taxation & Revenue Dep’t of New Mexico, 458 US 354, 372; 102 S Ct 3128; 73 L Ed 2d 819 (1982). Simply stated, in the absence of an underlying unitary business, apportionment of a taxpayer’s multi-state business income is precluded. As noted earlier, the hearing officer, and in turn the Tax Tribunal, concluded that the Texas operations were not unitary with the Michigan operations.
Accordingly, the issue before us is whether the Tax Tribunal’s decision is proper. Appellate review of an administrative body’s action is limited to determining whether the action is supported by law and whether the factual findings are supported by competent, material, and substantial evidence on the whole record. MCI Telecommunications Corp v Dep’t of Treasury, 136 Mich App 28; 355 NW2d 627 (1984), lv den 422 Mich 883 (1985); Master Craft Engineering, Inc v Dep’t of Treasury, 141 Mich App 56, 68; 366 NW2d 235 (1985). "Substantial evidence” must be more than a scintilla of evidence, although it may be substantially less than the preponderance of evidence necessary for most civil cases. Holy Spirit Ass’n for the Unification of World Christianity v Dep’t of Treasury, 131 Mich App 743; 347 NW2d 707 (1984). The burden of proof in an appeal from an assessment, decision or order of the sbta is on the appellant. MCL 205.7; MSA 7.657(7). Here, petitioner was the appellant.
The hearing officer determined that the minimum contact or nexus required to support apportioned taxation was lacking in the instant case. In reaching this conclusion the hearing officer identified five factors: (1) economic realities; (2) functional integration; (3) centralized management; (4) economies of scale, and (5) substantial mutual interdependence. These factors were not selected arbitrarily by the hearing officer. Rather, they are the guideposts developed by the United States Supreme Court for determining whether a multistate business is unitary or discrete. Mobil Oil Corp, supra ("economic realities”); Exxon Corp v Wisconsin Dep’t of Revenue, 447 US 207; 100 S Ct 2109; 65 L Ed 2d 66 (1980), and F W Woolworth v Taxation & Revenue Dep’t of New Mexico, 458 US 354; 102 S Ct 3128; 73 L Ed 2d 819 (1982) (functional integration, centralized management, "economies of scale”); Container Corp of America v Franchise Tax Board, 463 US 159; 103 S Ct 2933; 77 L Ed 2d 545 (1983), and ASARCO Inc v Idaho State Tax Comm, 458 US 307; 102 S Ct 3103; 73 L Ed 2d 787 (1982) ("substantial mutual interdependence”). Clearly, the methodology used by the hearing officer in arriving at a decision was authorized by law. The more delicate question is whether the findings of fact regarding each of the five factors were supported by substantial evidence and whether the evidence so adduced supported the ultimate conclusion that petitioner’s Texas business was not unitary with its Michigan operations.
The first factor is to identify the "economic realities” of the two businesses in question. As explained in Mobil Oil, supra, it is the underlying activity which is looked at. The form of business organization has little to do with the underlying unity or diversity of the business enterprise. While the hearing officer articulated no factual findings for this first factor, it is clear to us that the activitiy involved, viz.: operating a raceway, is wholly distinct and diverse from operating a sand and gravel business. Thus, as to this first factor, we find support for the decision that the Texas speedway and Michigan sand and gravel operations were separate and distinct enterprises.
The second factor concerns functional integration of the two businesses. As to it the hearing officer found that (1) aside from centralized administrative services in Michigan, the two enterprises acted relatively autonomously, particularly on a day-to-day basis, (2) the speedway did not enhance the use of the sand and gravel enterprise’s existing resources, (3) the track was purchased as an investment to protect petitioner’s financial interests, and (4) there was no substantial flow of value between the speedway and the sand and gravel enterprise. These findings are supported by substantial evidence. Although administrative services were centralized in Michigan, the sand and gravel enterprise was so functionally different from the speedway that it is difficult to perceive how there could be functional integration. While petitioner’s executive staff did oversee both the sand and gravel and the speedway enterprises, this does not presumptively foreclose finding that, functionally, the two were administered as separate and distinct enterprises. The speedway was not an integral part of the sand and gravel enterprise. It was purchased to protect petitioner’s claim under a construction contract. Petitioner’s objective was to establish a market value and sell the speedway. Thus, one can reasonably conclude that the decision was made with an eye toward achieving a short-range goal. There is no evidence that decisions were made to coordinate the sand and gravel enterprise with the speedway enterprise so as to optimize overall short-range or long-range profits for petitioner. Consequently, we find that the hearing officer’s finding of no functional integration is supported by substantial evidence.
The third factor concerns the extent of centralized management. The hearing officer found some evidence of centralization: (1) payroll and expense checks were signed at the Wixom office in Michigan; (2) most of the accounting work was handled by the same accountant responsible for the sand and gravel enterprise, and (3) a managerial link existed through the vice-president. The hearing officer also found decentralization evidenced by (1) a limited separate bank account in Texas and (2) an indication that payroll taxes were cared for by an accountant in Texas. Furthermore, the hearing officer found that there was no proof offered on centralized company-wide policies or pay scales, on joint meetings by personnel from both businesses at the track manager’s level, on the preparation of consolidated financial statements, and on joint retention of legal counsel. Ultimately, the hearing officer made no conclusion as to whether the factor of centralized management came down on the side of a unitary business or a distinct and separate enterprise. Given the fact that, as previously discussed, petitioner has the burden of proof to show error, and the fact that the hearing officer appeared to conclude this factor was largely a draw, we are unable to find error.
The fourth factor of a "unitary business” is economies of scale. The hearing officer concluded that the evidence adduced at the hearing did not concretely reveal any benefits resulting from the asserted consolidation of the speedway and sand and gravel enterprises. We agree. Although major decisions such as purchasing were centralized in Michigan, there was no evidence that this resulted in increased profits through bulk purchases or an improved allocation of resources. This is a pertinent factor. F W Woolworth Co, supra. Other economies of scale, such as an ability to secure financing at a more advantageous rate, were neither alleged nor proved.
The fifth and final factor involves the question of whether substantial mutual interdependence exists. Container Corp, supra. The hearing officer recognized that some aspects of the sand and gravel and speedway enterprises were related because, as previously discussed, the administrative and financial services were centralized in Michigan and major decisions were made by the same executive officers overseeing both enterprises. Furthermore, the speedway was acquired as a direct consequence of petitioner’s construction activity. However, the hearing officer concluded that there was no "substantial” interdependence because there was no showing that a quantifiable flow of business value existed or that one enterprise’s stable operations was important to the other’s "full utilization” of capacity. F W Woolworth Co, supra. This was a correct legal analysis and was supported by substantial evidence.
In summary, in order to find a business activity to be a "unitary business,”
there [must] be some sharing or exchange of value not capable of precise identification or measurement — beyond the mere flow of funds arising out of a passive investment or a distinct business operation — which renders formula apportionment a reasonable method of taxation. [Container Corp of America, 463 US 166.]
The hearing officer concluded from the totality of the five factors discussed above that petitioner’s Texas speedway was a separate and distinct enterprise from its Michigan sand and gravel enterprise. The nexus necessary to support apportioned taxation of its business income in Michigan was lacking. We agree and further agree that, from this, it can be concluded that the Texas speedway’s losses for 1972 and 1973 should be treated as "nonbusiness income” for purposes of the allocation and apportionment provisions of the Income Tax Act of 1967 and excluded from petitioner’s Michigan taxable income.
Our decision in the above respect is supported by a sixth factor — one not mentioned by the hearing officer or Tax Tribunal but whose factual basis appears in exhibit 4 of the record. In its Michigan income tax return for the fiscal year ending June 30, 1973 (this being the second tax year involved in the instant suit), petitioner subtracted the capital gain of $662,022.02 from the sale of land adjacent to the Texas speedway from its Michigan tax base as nonbusiness income. If, as petitioner contends, the speedway operations were unitary with petitioner’s sand and gravel operations, any capital gain arising from the sale of land associated with the speedway would be business income from a unitary enterprise. As such it would be taxable in Michigan. Johns-Manville Products Corp v Comm’r of Revenue Administration, 115 NH 428; 343 A2d 221 (1975). In essence, petitioner’s treatment of its capital gain from speedway land as nonunitary is inconsistent with its claim in the instant case that the Texas operation was unitary. Petitioner should not have it both ways.
II
In the second issue on appeal petitioner contends that the Tax Tribunal’s failure to enter a timely decision requires reversal or abatement of all interest assessed on the tax deficiency. It is undisputed that a substantial delay occurred. The evidentiary hearing before the sbta was held on June 29, 1978, and the thirty-page proposed judgment of the hearing officer was issued February 6, 1985. On May 21, 1985, the Tax Tribunal adopted the proposed judgment as its final decision.
A similar claim that the judgment should be reversed because of inordinate delay between the date of hearing by the sbta and the date of decision by the newly created Tax Tribunal was rejected by this Court in Master Craft Engineering, supra. Our Court held that a taxpayer must show prejudice in order to justify reversal. Petitioner claims prejudice because the approximate seven-year delay foreclosed petitioner from obtaining relief in the intervening years. The facts show otherwise. The speedway was sold two years before the evidentiary hearing. Similarly, the Single Business Tax replaced the corporate income tax on January 1, 1976. Also, there are currently pending before the Tax Tribunal deficiency assessments against petitioner for the taxable period June 30, 1973, to December 31, 1975. Given these facts we fail to see that petitioner was prejudiced.
However, the Master Craft Court did grant an abatement of interest on grounds that the 3½-year delay in reaching a decision was not attributable to the taxpayer.
Furthermore, because the delay in reaching a decision was not attributable to actions on the part of petitioner, we do not find it equitable for petitioner to be assessed interest over this long period of time. Accordingly, interest should not have accrued between the date when the decision should have been reached, that is, August 6, 1980, through the date when such was actually rendered, that being August 30, 1983. [141 Mich App 74-75.]
In the instant case not all of the delay was attributable to the Treasury Department. By statute, judgment should have been rendered by the sbta twenty days after the evidentiary hearing on June 29, 1978. However, a thirty-day delay was requested and granted to petitioner in order to obtain and submit certain documents to the sbta. The documents were filed on July 12, 1978. In addition, the parties were allowed thirty days from July 31, 1978, to file post-hearing briefs and fifteen days to file reply briefs. Petitioner filed a reply brief on September 29, 1978. Thus, it would be equitable to abate interest for the period following twenty days after September 29, 1978. This is when the decision should have been rendered. Accordingly, we determine that interest is abated for the period commencing October 20, 1978.
Judgment affirmed. Interest on judgment is abated commencing October 20, 1978. No costs, neither party having prevailed in full.
The deficiency assessment was first issued by respondent, Department of Treasury, on December 30, 1975. In January 1986, petitioner appealed for review to the State Board of Tax Appeals (sbta). In June, 1978, the sbta conducted an evidentiary hearing. On October 1, 1982, the case was transferred to the newly formed Michigan Tax Tribunal for decision. On February 6, 1985, the hearing officer entered a proposed judgment upholding the deficiency assessment on grounds that petitioner’s Texas speedway and Michigan sand and gravel operations were separate and distinct and that apportionment formulas, therefore, had no application. On May 21, 1985, the Tax Tribunal adopted the proposed judgment as the final decision of the tribunal.
Repealed by 1980 PA 162, § 3, effective September 30, 1982, which was after the hearing in this case, conducted by the State Board of Tax Appeals on June 29, 1978. Although transferred to the Tax Tribunal for ultimate decision, the burden of proof remains with the taxpayer.
On June 1, 1973, Holloway sold 1,988 acres of unimproved and unused land which it had purchased in 1971 as part of the speedway transaction. The sale price was $1,236,374.99 and the 1971 purchase price was $574,352.97.
MCL 205.7; MSA 7.657(7). Repealed by 1980 PA 162. | [
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Per Curiam.
Plaintiff appeals by leave granted from an April 23, 1985, opinion and order of the Workers’ Compensation Appeal Board, one member concurring in result, affirming a decision by the hearing referee denying plaintiff workers’ compensation benefits. The central issue involved is whether the heavy physical exertion required by plaintiff’s job sufficiently contributed to plaintiff’s disease or arteriosclerosis so as to be compensable.
Plaintiff began work with the Fisher Body Division of General Motors Corporation in Lansing on November 1, 1954. After working as an inspector and welder, jobs which kept him on his feet, in 1976 or 1977 he was assigned to "set gates.” Plaintiff described that job as follows: "As the gates come in, you push them into place and kick the clamps down to lock them, the tie bars, set the tulip panels and so forth, setting in the skow in the front.” No further explanation was given. Swinging one end of the gate entailed moving a couple hundred pounds.
Plaintiff’s legs began bothering him in 1974, before he got the "gate setting” job, but during his gate setting job the pain in his legs became severe. In October, 1977, plaintiff had just pushed a gate when he got a "hot shock” through his feet and fell over. An ambulance was summoned to take him to the hospital. A cardiovascular surgeon, Dr. Seong Chi, found plaintiff suffered from eighty percent to ninety percent blockage of the left femoral artery and forty percent to fifty percent blockage of his right femoral artery. Surgery was performed on November 16, 1977, to replace the blocked artery in plaintiff’s left leg with a plastic tube. Plaintiff attempted to return to work in February, 1978, but after three weeks he was unable to continue. He had been changed from the gate setting job to a less strenuous "line job,” but the constant standing was too much for him and he was again taken from work to the hospital by ambulance. He was off work for over eight months before he attempted to return again in November, 1978. This time he lasted only a week. Eleven months later, in October, 1979, plaintiff was finally successful in returning to work.
At the hearing held December 23, 1980, before hearing referee Gerald T. Richardson, plaintiff testified at length and depositions of three medical experts, two submitted on behalf of plaintiff, were received in evidence. Plaintiff testified to the above facts and testified that the problem with his legs commenced getting worse when he was assigned to the heavy lifting and leg work of the gate setting job. During previous positions he had to do a lot of standing, and that made his legs feel "poorly” by the end of the day. The pain in his legs got severe, however, during the gate setting job where he was required to lift the end of a gate weighing several hundred pounds.
The deposition of plaintiff’s treating doctor, Dr. Chi, indicated that plaintiff’s problems were due to arteriosclerosis, which is not caused by the type of work an individual does, but the symptoms of arteriosclerosis may be aggravated by physical exertion such as plaintiff’s job involved. Dr. Chi said that that type of excessive activity causes the symptoms, although excessive activity outside the shop would also cause such symptoms.
Plaintiff also submitted the deposition of Dr. Edward Romond. Dr. Romond explained that the pain plaintiff was feeling in his leg was due to intermittent claudication. Claudication is a result of a vascular insufficiency problem which is brought on by exercise. The pain is present when the muscles are being used, but is relieved again when the muscles are at rest.
Defendant submitted the deposition of Dr. Richard Bates. Dr. Bates testified that plaintiff’s arterial difficulty was due to his gender; his age (fifty-six); his heavy, prolonged cigarette smoking; and his heavy drinking. There was no evidence that plaintiff’s disease was aggravated or caused by his work. On cross-examination, Dr. Bates admitted that, prior to plaintiff’s surgery, heavy physical exertion would cause plaintiff pain until he rested.
Hearing referee Richardson denied benefits without opinion. The wcab affirmed, with one panel member concurring in the result only. The board held that the plaintiff’s extensive use of his legs on the job did not cause, aggravate, or contribute to his "arteriosclerotic condition. Rather, the exertional activities, to the extent that they generated an enhanced need for oxygenated blood, symptomatically signaled the presence of the underlying arteriosclerosis.”
Although the litigants frame the issues differently, particularly issues i and ii, we find three issues raised on appeal: (I) Were the wcab’s findings of fact supported by competent, material, and substantial evidence; (II) Did the wcab correctly apply the law to the facts; (III) Was the wcab’s decision adequate to provide for appellate review?
I
Plaintiffs claim on this issue is best illustrated by the manner in which plaintiff frames the issue. Plaintiff states the issue thusly: "Whether the wcab decision is based on sufficient evidence on the whole record inasmuch as it relies exclusively upon medical testimony distorting the legal meaning of 'cause,’ while ignoring lay testimony establishing the temporal proximity of the plaintiffs collapse to a particular incident of heavy exertion on the job?” Basically plaintiff argues that the wcab ignored the heavy physical exertion required in the "gate setting” job and relied almost exclusively on medical testimony. We are not persuaded.
Plaintiff has not alleged fraud, and the record discloses none. Findings of fact by the wcab will be affirmed on appeal if there is competent evidence in the record to support them and there is no fraud involved. Aquilina v General Motors Corp, 403 Mich 206, 213; 267 NW2d 923 (1978). Thus, the relevant issue is whether there is competent evidence to support the wcab’s findings in the instant case.
Review of the transcript leads us to conclude that the board’s findings of fact are amply supported by the evidence. Contrary to plaintiffs assertion, the wcab did not consider only the medical testimony. The written decision summarizes both the lay and medical testimony. Kostamo v Marquette Iron Mining Co, 405 Mich 105, 131-132; 274 NW2d 411 (1979), holds that although medical testimony may be ultimately decisive, the wcab is obligated to consider all the testimony and that lay testimony may not be ignored in considering the causal connection between employment and a heart attack. While the wcab found the medical evidence dispositive on the issue of causation in the instant case, there is no indication that it considered only the medical evidence. To the contrary, the decision clearly indicates that the wcab carefully considered plaintiffs testimony, but, as permitted by Kostamo, ultimately found the medical testimony controlling.
II
Plaintiff contends that the wcab improperly applied the law by focusing on the cause of the disease instead of on the cause of the disability. Further, even if plaintiffs disability was caused by arteriosclerosis, the evidence indicated that this “result” came sooner than it normally would have due to the heavy exertions required in the gate setting job. Defendant argues that it is irrelevant whether the employment aggravated the symptoms since current Michigan law requires that the testimony establish that the work contribute to the disease or cause an injury such as a heart attack.
The workers’ compensation law does not provide compensation for a person afflicted with an ordinary disease of life. MCL 418.401(2)(b); MSA 17.237(401)(2)(b). Arteriosclerosis has been found to be an ordinary disease of life. Miklik v Michigan Special Machine Co, 415 Mich 364, 368; 329 NW2d 713 (1982). Arteriosclerosis will not necessarily prevent compensation, however. An employee with a pre-existing disease may recover upon the showing of one of two things:
(1) The work accelerated or aggravated the illness, disease, or deterioration, and thus contributed to it; or
(2) The work, coupled with the illness, disease, or deterioration, caused an injury. Kostamo, supra, p 116.
Plaintiff argues that he may recover under either of the two prongs. Again we disagree.
Plaintiff argues that he may recover under the first prong because the proofs clearly show that his work aggravated his symptoms by causing pain in his legs and this is sufficient aggravation to allow compensation. Kostamo and two of the cases consolidated with it held that compensation is not merited just because the worker cannot work without pain. Pain is an aggravation of a symptom of arteriosclerosis rather than an aggravation of the disease itself.
Therefore, whatever the stress of the jobs, there was no injury. Since stress does not aggravate arteriosclerosis, the wcab decisions denying them compensation must be affirmed. Although there is a causal relationship between the underlying disability, arteriosclerosis, and Fiszer’s and Hannula’s inability to continue working, that disability was not caused and could not have been aggravated by their employment. [Kostamo, 118.]
Concerning the second prong, plaintiff argues that the physical exertion required of his gate setting job coupled with his arteriosclerosis caused an "injury,” i.e., intermittent claudication, just as stress coupled with arteriosclerosis can cause a heart attack. Intermittent claudication is described in Stedman’s Medical Dictionary, Third Unabridged Lawyers' Edition (1972), p 258, as "a condition caused by ischemia of the leg muscles due to sclerosis with narrowing of the arteries of the legs; it is characterized by attacks of lameness and pain, brought on by walking, chiefly in the calf muscles.” Plaintiffs medical expert, Dr. Chi, described claudication as the pain a victim of arteriosclerosis feels when his muscles require more oxygen because of exertion and the victim’s body cannot provide enough blood fast enough to supply the muscles with oxygen. The pain would be transient, depending on the amount of exertion. Dr. Chi also diagnosed plaintiff as having trans-ischemic attacks. The cause of the attacks is a lack of circulation to the brain. The symptoms can include blackout spells, numbness, tingling sensations, blurred vision, or sluggish speech. Both intermittent claudication and trans-ischemic attacks were caused by plaintiffs arteriosclerosis.
Plaintiff’s argument is of first impression. Answering the argument is made difficult by the lack of specific medical testimony regarding the effect of intermittent claudication and trans-ischemic attacks on plaintiffs body. The issue is whether these caused further damage to the body amounting to "an injury” as defined under the second Kostamo prong, or are just the name for the symptoms of advanced arteriosclerosis. Only the former is compensable.
A panel of this Court allowed compensation for a worker suffering myocardial ischemia produced by arteriosclerosis, Peterson v White Pine Copper Co, 93 Mich App 742; 286 NW2d 911 (1979). The Supreme Court vacated that decision and remanded to the wcab for a determination of whether plaintiff suffered a heart injury or merely was unable to do strenuous work because of his disease of arteriosclerosis. 408 Mich 913 (1980). In the instant case, plaintiff had this same burden.
Plaintiff, however, elicited no testimony indicating that either intermittent claudication or transischemic attacks are separate "injuries” or cause further damage. According to Miklik, supra, it is the heart damage that results from a heart attack that is compensable. Thus plaintiff must prove that he suffered damage due to his claudication or attacks. No such proof was offered. According to the depositions of the medical experts, plaintiffs left femoral artery was eighty percent to ninety percent blocked both before and after the pain he suffered. Injury implies something more than the changes incident to an existing disease. Marman v Detroit Edison Co, 268 Mich 166, 167; 255 NW 750 (1934).
Under the Supreme Court’s ruling in Peterson, plaintiffs claim, though well presented, must be denied. Plaintiff is on the same footing as plaintiffs in Fiszer and Hannula. The pain he experienced prohibited him from performing the strenuous work the job required him to do. Dr. Chi’s deposition testimony was unequivocal that work does not affect arteriosclerosis. Thus, in the absence of proofs that intermittent claudication or trans-ischemic attacks are separate "injuries,” we cannot find error under issue n.
in
Finally, plaintiff argues that because the wcab did not discuss whether his employment acted in combination with that disease to result in his disability, and also failed to discuss whether the heavy exertion of plaintiffs job contributed to bringing about the disability sooner than if the exertion had never taken place, even if the disability was largely due to the underlying disease, the decision is inadequate for appellate review.
The portion of the wcab’s decision stating the legal standard followed and the reasoning used was brief but adequate. From the board’s state ment of the issue, it appears that the standard it used was that the employment must cause, aggravate, or contribute to plaintiffs disease. Then the wcab found that the pain plaintiff experienced was just a symptom of the disease. In our opinion, the wcab stated the standard and reasoning used sufficiently to permit appellate review.
Affirmed.
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Per Curiam.
Plaintiff appeals as of right from a circuit court order granting summary disposition of plaintiff’s complaint for breach of an oral employment contract.
Plaintiff was employed as a receptionist for de fendant law firm from September, 1983, until May, 1984. Plaintiff did not enter into a written contract. At the time of her hire, the law firm gave plaintiff an office manual which outlined employee duties and responsibilities. The manual did not specify termination procedures. In addition, plaintiff had at least two conversations with representatives of the law firm prior to assuming the receptionist position. Plaintiff testified in her deposition that, in both conversations, she was assured that "... I had a job as long as I did a good job.”
Plaintiff was discharged from employment on May 9, 1984. The circumstances surrounding her discharge are in dispute. In August, 1984, plaintiff filed a complaint alleging that defendants had breached the employment contract by failing to pay plaintiff’s hospitalization benefits and by terminating plaintiff’s employment in bad faith and without just cause. Plaintiff further alleged that, as a result of defendants’ wrongful acts, including intentional infliction of emotional distress, she suffered from loss of self-esteem and confidence in her ability. Plaintiff’s second count, for libel, was dismissed by stipulation of the parties.
The trial court granted defendants’ motion for summary judgment on the basis that plaintiff’s deposition testimony established that plaintiff had a "satisfaction” contract and could be terminated at any time without just cause. Plaintiff argues on appeal that the defendants’ assurances that she would have a job as long as she "did a good job” constituted an oral promise that she not be discharged except for just cause and that the lower court erred in summarily dismissing her claim.
The circuit court did not specify which section of the court rule it was relying upon in granting summary judgment. However, since the court referred to plaintiff’s deposition testimony as the basis for its decision, we conclude that summary judgment was granted pursuant to GCR 1963, 117.2(3), now MCR 2.116(0(10), no genuine issue as to any material fact.
Summary judgment is appropriate under this subrule only if the court is satisfied that it is impossible for the nonmovant’s claim to be supported at trial because of a deficiency which cannot be overcome. Rizzo v Kretschmer, 389 Mich 363; 207 NW2d 316 (1973). Courts are liberal in finding that a genuine issue of material fact does exist and must give the benefit of every reasonable doubt to the party opposing the motion. Rizzo, supra; Wong v City of Riverview, 126 Mich App 589; 337 NW2d 589 (1983); Jones v Schaeffer, 122 Mich App 301; 332 NW2d 423 (1982).
In Toussaint v Blue Cross & Blue Shield of Michigan, 408 Mich 579, 598; 292 NW2d 880 (1980), reh den 409 Mich 1101 (1980), the Supreme Court held that
1) a provision of an employment contract providing that an employee shall not be discharged except for cause is legally enforceable although the contract is not for a definite term — the term is "indefinite,” and
2) such a provision may become part of the contract either by express agreement, oral or written, or as a result of an employee’s legitimate expectations grounded in an employer’s policy statements.
The oral representations relied upon in Toussaint and Ebling v Masco Corp, its companion case, are almost identical to those given to plaintiff in the present case. Moreover, in both cases, the Court decided that, based on the representations, juries could conclude that the defendant companies had entered into express agreements to discharge Toussaint and Ebling only for cause. We believe that a jury could reach a similar conclusion in the present case.
Here, defendants’ representatives orally assured plaintiff that she would remain employed as long as she did a good job. Contrary to the lower court’s finding, a jury could reasonably have construed the oral representations as a promise to discharge only for good or just cause. Toussaint, supra, p 610. See also Cowdrey v A T Transport, 141 Mich App 617, 621; 367 NW2d 433 (1985); Bullock v Automobile Club of Michigan, 146 Mich App 711; 381 NW2d 793 (1985). Therefore, the questions of whether plaintiff’s contract included a termination for just cause provision and whether she was terminated in breach of the oral contract were for the jury and summary judgment was improperly granted on this basis.
Plaintiff also argues that the trial court erred in granting summary disposition on that portion of her claim alleging emotional distress. We note that plaintiff failed to plead intentional infliction of emotional distress in a separate count but rather incorporated it in her breach of contract claim.
Damages for mental distress are not recoverable for breach of an employment contract. Valentine v General American Credit, Inc, 420 Mich 256, 259; 362 NW2d 628 (1984). Furthermore, in order to recover exemplary damages, plaintiff must plead tortious conduct independent of the breach of contract. Kewin v Massachusetts Mutual Life Ins Co, 409 Mich 401, 419; 295 NW2d 50 (1980); Brewster v Martin Marietta Aluminum Sales, Inc, 145 Mich App 641; 378 NW2d 558 (1985). Our review of plaintiff’s complaint reveals that plaintiff failed to plead a breach of duty distinct from the breach of contract.
Plaintiffs single reference to intentional infliction of emotional distress is conclusory at best and fails to allege the basic elements of that cause of action. See Roberts v Auto Owners Ins Co, 422 Mich 594; 374 NW2d 905 (1985). Plaintiff states only that as a result of "defendants’ malicious and wrongful acts, including intentional infliction of emotional distress, plaintiff suffers from loss of self-esteem and confidence in her abilities.” This is insufficient to state a cause of action for intentional infliction of emotional distress. Summary judgment was proper as to plaintiffs claim for emotional distress.
Plaintiff also asks this Court to find that she was not terminated for just cause and that defendants breached the employment contract. These are questions properly left to the trier of fact and inappropriate for appellate review.
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Per Curiam.
Defendant appeals following his conviction of one count of armed robbery, MCL 750.529; MSA 28.797, three counts of assault with intent to commit murder, MCL 750.83; MSA 28.278, one count of felony-firearm, MCL 750.227b; MSA 28.424(2), and one count of carrying a concealed weapon (ccw), MCL 750.227; MSA 28.424. Defendant was sentenced to from ten to fifteen years imprisonment on the robbery count, from twenty to forty years on each assault count, from three to five years on the ccw count, and two years on the felony-firearm count.
Defendant’s convictions arise from an armed robbery of a Saginaw convenience store. On the night in question, defendant entered the store, drew a revolver and demanded money from the two clerks on duty. After receiving a bag full of money, defendant fled the store. One clerk summoned the police with a silent alarm and then went out of the store to see in which direction defendant had left. After defendant turned a corner, the clerk got into his car and followed defendant. During the clerk’s pursuit of defendant, two police cars arrived and gave chase after the defendant. During the chase, defendant pulled his revolver and fired several rounds at the officers.
Defendant first argues that the trial court erred in convicting him of assault with intent to commit murder as there was insufficient evidence that defendant possessed the requisite intent. The intent may be inferred from the circumstances. People v Fields, 64 Mich App 166; 235 NW2d 95 (1975). In this case, the trial court found that the requisite intent was supported by the factual find ings of defendant’s pointing and aiming the gun at the officers from twenty-five to thirty-five feet away and that he fired all six rounds. We do not believe that the trial court’s conclusion was erroneous.
Next, defendant argues that his convictions for both felony-firearm and ccw constitute double jeopardy. We disagree, though we recognize that a conflict exists in this Court on the issue. While ccw may not be used as the predicate felony to support a felony-firearm conviction, this does not mean it is impossible to commit both offenses during the same criminal escapade. In this case, the record indicates that defendant was carrying a concealed weapon and that he also possessed that weapon during the commission of four subsequent felonies. Although we recognize that People v Sturgis, 130 Mich App 54; 343 NW2d 230 (1983), lv gtd 422 Mich 857 (1985), lacks precedential value while the appeal in that case is pending in the Supreme Court, we nevertheless believe that the Sturgis analysis is correct. We conclude, therefore, that defendant’s double-jeopardy interests were not violated.
Defendant’s next argument is that the trial court improperly scored the Sentencing Information Report (sir). However, defendant raised no objection in the trial court to the scoring of the sir, thus precluding appellate review. People v Jones, 147 Mich App 292; 382 NW2d 772 (1985); People v Jannifer Williams, 147 Mich App 1; 382 NW2d 191 (1985).
Finally, defendant argues that he was denied due process by the denial of his motion to remand and motion for appellate forensic referral. Defendant claims a remand and forensic evaluation are necessary to determine if defendant was competent to stand trial, whether he received effective assistance of counsel, and whether defendant is competent to assist in his appeal.
First, defendant argues that his trial counsel’s failure to challenge the finding of defendant’s competency to stand trial and the failure to pursue an insanity defense constitute ineffective assistance of counsel. We disagree. Trial counsel did pursue and receive a forensic referral to determine defendant’s competency to stand trial. The examiner opined that defendant was, in fact, competent. Although a failure to prepare and pursue a meritorious insanity defense constitutes ineffective assistance of counsel, this Court will not reverse a conviction on this basis if it is persuaded that there is little chance of success had the insanity defense been raised. People v Parker, 133 Mich App 358; 349 NW2d 514 (1984); People v Anderson, 112 Mich App 640; 317 NW2d 205 (1981). See also People v Garcia, 398 Mich 250; 247 NW2d 547 (1976) (reversal required only if there is a reasonably likely chance of acquittal absent defense counsel’s mistake). Similarly, we will not reverse where failure to raise an insanity defense is a question of trial strategy. People v Lotter, 103 Mich App 386; 302 NW2d 879 (1981).
We have reviewed the record supplied to us and there is no basis for concluding that, had an insanity defense been pursued, there was a reasonably likely chance of acquittal. First, defendant’s testimony and statements to the trial court do not appear obviously irrational. In fact, defendant at sentencing clearly brought the court’s attention to alleged inaccuracies in the presentence report, which the trial court accepted in part. Further, the manner in which the crime was committed does not indicate it was the product of an obviously irrational mind. It appears to have been well planned, including both disguise and weaponry, and defendant fled the scene and attempted to elude the officers. In fact, had the store clerk not given chase, defendant may have been able to escape capture. Finally, the forensic examination found defendant competent to stand trial. With this in mind, we cannot conclude that trial counsel seriously erred in abandoning a strategy of an insanity defense following the filing of the forensic evaluation.
Defendant also argues that defense counsel was ineffective at sentencing for failing to argue defendant’s mental state as a mitigating factor. We disagree. There is no basis to believe such an argument would have affected the trial court’s sentence nor was there any evidence on the record to support counsel’s making of such an argument.
Finally, we turn to defendant’s argument that this Court should make a referral for a forensic examination to determine if defendant is competent to assist counsel in pursuing an appeal. This appears to be a novel issue supported by neither statute nor case law. However, we have given the issue full consideration and concluded that it would be unwise to require that defendants on appeal be competent to assist counsel in preparing their appeal.
Assuming that a defendant is incompetent to assist in his appeal, the only remedy this Court could fashion would be to hold a defendant’s appeal in abeyance until the defendant regained his competency. Under these circumstances, this Court would not be able to consider even clearly reversible error that counsel could bring to this Court’s attention. Such a circumstance would work to a defendant’s detriment. While it would be advantageous for every defendant to be competent to assist in the preparation of his appeal, we conclude that it is best that an appeal proceed regardless of a defendant’s competency. If such an appeal is unsuccessful and a defendant subsequently regains his competency and discovers additional issues which should have been raised previously and were not, that defendant may, of course, file an application for delayed appeal asking this Court to consider those additional issues.
Accordingly, defendant’s motion for appellate forensic examination is again denied.
Affirmed.
Compare People v Carter, 96 Mich App 694; 293 NW2d 681 (1980) (conviction for both offenses constitutes double jeopardy) and People v Sturgis, 130 Mich App 54; 343 NW2d 230 (1983), lv gtd 422 Mich 857 (1985).
See MCL 750.227b(1); MSA 28.424(2)(1).
See People v Phillips, 416 Mich 63, 74-75; 330 NW2d 366 (1982). | [
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Per Curiam.
Defendant was convicted by a jury of second-degree criminal sexual conduct, MCL 750.520c; MSA 28.788(3), and of absconding in criminal proceedings, MCL 750.199a; MSA 28.396(1). He was sentenced to concurrent prison terms of from ten to fifteen years and two to four years. Defendant appeals as of right.
Defendant was charged with sexually assaulting his seven-year-old daughter, Jaydeen, on January 7, 1982,'by touching her vaginal area. At trial it was established that in January, 1982, Jaydeen was attending school for the educable mentally impaired and that she functioned very low academically. She was twice determined prior to trial to be incompetent to testify. However, following a third pretrial hearing, the district court judge found her competent to testify at trial. At an in camera proceeding, the trial court likewise concluded that Jaydeen was able to understand the difference between truth and falsehood and qualified her as a witness.
Jaydeen testified that on January 7, 1982, she and defendant took a bath together and then defendant put his finger in her vagina. On cross-examination, Jaydeen denied that she had been home alone with her father and both admitted and denied that defendant had touched her vagina. Prior to her testimony, Jaydeen’s school teacher and school principal testified as to Jaydeen’s statements made to them on the day following the incident.
The witnesses testified that on January 8, 1982, Jaydeen and a young boy were found exposing themselves underneath a cement turtle on the school playground. When the witnesses confronted the children, Jaydeen blurted out that she would not take the boy out to "play games” like she and her father did anymore. When questioned about the "games,” Jaydeen responded that she and her father would go up and down in a chair together, would take baths together, and lie in bed and look at pictures of naked women. When asked if her father touched her, Jaydeen responded yes and pointed to her vaginal area. Jaydeen told them that the "games” had occurred the preceeding evening when her mother and sisters were gone. Both witnesses testified that Jaydeen became progressively more excited and upset as the questioning continued. After the conversation, the principal called protective services and charges were eventually brought against defendant.
The testimony of Lynett Purdy, Jaydeen’s half sister and defendant’s stepdaughter, and the testimony of Sherry Bishop, defendant’s natural daughter, were admitted under MRE 404(b) to show defendant’s scheme, plan or system. Purdy was fourteen years old and Bishop was twenty-one at the time of trial. Both witnesses testified that, when they were young, defendant had engaged in what he called "games” with them. Purdy recalled that she would sit naked in chairs with defendant until he ejaculated, they would shower together and lie in bed together and look at pictures of naked women. Bishop testified to similar episodes.
In his defense, defendant presented the testimony of Helen Garland, his present wife and Jaydeen’s stepmother, and Heidi and Susan Vincent, Helen’s daughters and defendant’s stepdaughters. They testified that on January 7, 1982, Jaydeen was not left home with defendant but that she had gone to K-mart with her stepmother and stepsister. When they returned, Helen Garland and defendant went to the movies while Susan Vincent gave Jaydeen a bath and put her to bed.
Defendant raises several issues on appeal, the first of which involves the admission of the testimony of the school teacher and principal relating to Jaydeen’s statements. The court admitted the statements under the excited utterance exception to the hearsay rule. MRE 803(2). In order for Jaydeen’s statement to be admissible under this exception, her statement must (1) have arisen out of a startling occurrence, (2) have been made before there had been any time to contrive or misrepresent, and (3) relate to the circumstances of the startling occurrence. People v Gee, 406 Mich 279; 278 NW2d 304 (1979). The determination of whether the statement is admissible as an excited utterance is within the trial court’s discretion. People v Lobaito, 133 Mich App 547; 351 NW2d 233 (1984).
While it is arguable that the startling event which provoked Jaydeen’s statement was the playground incident, we are not convinced that the sexual assault of the previous evening was not causally connected.
Although Jaydeen did not immediately report the assault either that evening or early the following morning, this Court has previously found that an overnight delay or even a delay of several days does not negate application of the excited utterance exception if there was a plausible explanation for the delay. See People v Soles, 143 Mich App 433; 372 NW2d 588 (1985); People v Cobb, 108 Mich App 573; 310 NW2d 798 (1981); In the Matter of Meeboer, 134 Mich App 294; 350 NW2d 868 (1984). Here the victim was a seven-year-old child of limited mental ability. Furthermore, the defendant had apparently threatened his daughter not to tell anyone of the "games.” These circumstances make it unlikely that Jaydeen would have contrived or misrepresented the sexual matters and provide a plausible explanation for the delay. Meeboer, supra. We conclude that the trial court did not abuse its discretion in admitting the statement.
Defendant next claims that the trial court erred by refusing to exclude the similar-acts testimony of Lynett Purdy and Sherry Bishop. MRE 404(b) and MCL 768.27; MSA 28.1050 allow the admission of similar-acts testimony under limited circumstances. Whether or not to admit the testimony is within the trial court’s discretion. People v Alexander, 142 Mich App 231; 370 NW2d 8 (1985). People v Golochowicz, 413 Mich 298, 309; 319 NW2d 518 (1982), set forth the requirements which must be met before such evidence may be introduced:
(1) there must be substantial evidence that the defendant actually perpetrated the bad act sought to be introduced; (2) there must be some special quality or circumstance of the bad act tending to prove the defendant’s identity or the motive, intent, absence of mistake or accident, scheme, plan or system in doing the act and, in light of the slightly different language of MRE 404(b) we add, opportunity, preparation and knowledge; (3) one or more of the factors must be material to the determination of the defendant’s guilt of the charged offense; and (4) the probative value of the evidence sought to be introduced must not be substantially outweighed by the danger of unfair prejudice.
After applying the test to the facts at hand, we find no abuse of discretion by the trial judge in allowing the testimony to be presented to the jury.
The crux of defendant’s claim is that the testimony was not material to a determination of guilt and that it failed to show a common scheme. We disagree. Not only did the witnesses testify to defendant’s use of the term "games” but each witness also described remarkably similar conduct. Moreover, each testified that the episodes occurred when they were prepubescent. Accordingly, we believe that the prior acts were so similar that they established defendant’s scheme, plan or system in engaging in the misconduct. Since defendant put into issue his opportunity to commit the offense, the testimony was admissible to show his method or system of committing the acts. Finally, we note that the trial court instructed the jury as to the limited purpose of admitting the similar-acts evidence. Under these circumstances, we are not persuaded that the admission was an abuse of discretion.
Neither do we believe that the Supreme Court’s decision in People v Jones, 417 Mich 285; 335 NW2d 465 (1983), mandates a different conclusion. Unlike the prior-acts testimony in Jones, the evidence in the instant case was admitted only under a similar-acts analysis. The Supreme Court recognized that evidence of prior sexual acts between a defendant and others could be admissible on this basis. 417 Mich 290, n 1.
Defendant also contends that error occurred when the trial court excluded him from the in camera competency hearing. MCL 600.2163; MSA 27A.2163 provides that an examination of a child may be made either "publicly, or separate and apart.” As defense counsel acknowledged on the record, this determination is within the discretion of the court. We do not dispute that defendant has a right to be personally present during any stage of the proceedings when his substantial rights may be adversely affected. People v Mallory, 421 Mich 229, 247; 365 NW2d 673 (1984); MCL 768.3; MSA 28.1026. Nonetheless, we do not believe that defendant’s absence from the in camera hearing which was strictly limited to the issue of competency adversely affected his substantial rights.
We likewise reject defendant’s claim that it was error to permit both attorneys to examine the witness during the hearing. The statute does not proscribe the parties from questioning the witness but only requires that the court conduct its own inquiry and make its own determination. MCL 600.2163; MSA 27A.2163. A review of the record reveals that this requirement was met.
Finally, we note that defendant failed to object to the court’s determination to qualify the child as a witness. Defendant’s failure to object to the admission of the testimony waived his right to assert this error on appeal. Cobb, supra.
Next, defendant asserts that the prosecutor impermissibly led Jaydeen during his examination of the witness. The trial court has discretion to permit the use of leading questions. MCL 768.24; MSA 28.1047. Given the witness’s age, mental abilities and the nature of the offense, we are not persuaded that the use of leading questions was improper.
We are equally unpersuaded that the prosecutor’s comments during closing or rebuttal argument were improper and require reversal. Defendant failed to object to any comments during closing argument and his objections during rebuttal were limited to charges of facts not in evidence. After each objection, the court duly instructed the jury that they were to judge the facts. Moreover, our review of the record indicates that, in both closing and rebuttal argument, the prosecutor was merely commenting on the evidence and the demeanor of the witnesses and the inferences which could be drawn therefrom. His comments were within the ambit of proper closing argument. People v Buckey, 424 Mich 1; 378 NW2d 432 (1985); People v Janear, 140 Mich App 222; 363 NW2d 455 (1985). Defendant cannot claim error merely because the testimony of the witnesses was emotional and sympathetic.
Because we do not find that any errors occurred in the conduct of the trial, we do not believe that defendant was denied a fair and impartial trial.
Defendant’s final issue concerns the court’s departure from the sentence recommended by the Michigan sentencing guidelines. In articulating its reasons for departure, the trial court explained that the guidelines did not adequately meet the requirements of the case because defendant’s sexual activities were of an ongoing nature, the victim was young and she experienced emotional difficulties. These reasons were sufficient to satisfy the departure policy set forth in the guidelines. Administrative Order 1984-1, 418 Mich lxxx (1984); People v Kenneth Johnson, 144 Mich App 125; 373 NW2d 263 (1985); People v Fleming, 142 Mich App 119; 369 NW2d 499 (1985). Neither does the ten- to fifteen-year sentence imposed on defendant for sexually assaulting his seven-year-old daughter shock our judicial conscience. People v Coles, 417 Mich 523; 339 NW2d 440 (1983).
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Fitzgerald, P.J.
Defendant is a licensed dentist. Following a jury trial, he was convicted of three counts of filing a false claim for health care benefits, MCL 752.1003(3); MSA 28.547(103)(3), and was sentenced to two years' probation. Defendant was also ordered to pay restitution in the amount of $4,OCX). He appeals as of right. We affirm.
Defendant’s convictions arose from instances in which he billed Blue Cross and Blue Shield of Michigan for applying amalgams to the teeth of three children when in actuality sealants, which were not a covered benefit, were applied. The statute under which defendant was convicted, subsection 3 of § 3 of the Health Care False Claim Act, MCL 752.1003(3); MSA 28.547(103X3), provides:
A person shall not knowingly make or cause to be made a false statement or false representation of a material fact to a health care corporation or health care insurer for use in determining rights to health care benefits. Each claim which violates this subsection shall constitute a separate violation.
Subsection h of § 2 of the act provides that "knowingly” means:
[T]hat a person is in possession of facts under which he or she is aware or should be aware of the nature of his or her conduct and that his or her conduct is substantially certain to cause the payment of a health care benefit. "Knowing” or "knowingly” does not include conduct which is an error or mistake unless the person’s course of conduct indicates a systematic or persistent tendency to cause inaccuracies to be present. [MCL 752.1002(h); MSA 28.547(102)(h).]
Subsection c of § 2 defines "false” as "wholly or partially untrue or deceptive.” Subsection b of § 2 defines "deceptive” as "making a claim to a health care corporation or health care insurer which contains a statement of fact or which fails to reveal a material fact, which statement or failure leads the health care corporation or health care insurer to believe the represented or suggested state of affair to be other than it actually is.”
On appeal, defendant raises three arguments in support of his assertion that the act is unconstitutional. First, defendant maintains that § 3 is unconstitutionally vague because it does not provide fair notice of the conduct proscribed and because it is so indefinite that it confers unlimited discretion on the trier of fact to determine whether an offense was committed. Such challenges must be examined in the light of the facts at hand. People v Gunnett, 158 Mich App 420, 426; 404 NW2d 627 (1987), after remand 182 Mich App 61; 451 NW2d 863 (1990).
A statute must be sufficiently clear and definite to give a person of common intelligence fair notice of prohibited conduct. Allison v Southfield, 172 Mich App 592, 596; 432 NW2d 369 (1988). The statute, on its face, provides that a person, as defined by the statute, may not make an untrue or partially untrue statement or representation on a claim to a health care insurer. The person must be aware, or should be aware, of the nature of the untrue statement or representation, and aware that this statement will, with substantial certainty, cause payment of a health care benefit. Giving the word "untrue” its ordinary meaning, People v Jackson, 140 Mich App 283, 287; 364 NW2d 310 (1985), the statute gives a person of ordinary intelligence a. reasonable opportunity to know what conduct is prohibited, and allows such a person to avoid that conduct. People v Hayes, 421 Mich 271, 284; 364 NW2d 635 (1984).
The gist of defendant’s argument, however, is that the terms of the statute are liberal enough to include a clerical mistake. We disagree. The defini tion of "knowingly” specifically excludes inadvertent error unless a "systematic or persistent tendency” toward inaccuracies is present. Further, a defendant can not challenge a statute by asserting the hypothetical rights of others. Gunnett, supra, 158 Mich App 427. Although defendant claims that the false claims were the result of clerical mistakes, the evidence was sufficient to permit a rational trier of fact to find that defendant engaged in a systematic attempt to defraud Blue Cross and that the claims did not occur as the result of a mistake.
Subsection 2 of § 7 of the statute creates a rebuttable presumption that a person knowingly made a claim for a health care benefit if the person signed or stamped the health care claim. MCL 752.1007(2); MSA 28.547(107X2). Defendant maintains that the presumption eliminates the element of intent by nullifying that portion of the definition of "knowingly” that provides an exception for errors or mistakes.
The standard for presumptions in criminal cases was set forth in Leary v United States, 395 US 6, 33-34; 89 S Ct 1532; 23 L Ed 2d 57 (1969):
[A] statutory presumption cannot be sustained if there be no rational connection between the fact proved and the ultimate fact presumed, if the inference of the one from proof of the other is arbitrary because of lack of connection between the two in common experience. This is not to say that a valid presumption may not be created upon a view of relation broader than that a jury might take in a specific case. But where the inference is so strained as not to have a reasonable relation to the circumstances of life as we know them, it is not competent for the legislature to create it as a rule governing the procedure of courts.
Here, there is a rational connection between the fact proved and the fact presumed. Nonetheless, the statute provides for situations wherein the connection between the fact proved and the fact presumed is not established by making the presumption rebuttable. Evidence that the claims were submitted as the result of an error could, therefore, rebut the presumption and prevent a conviction where the claims were not knowingly made. We decline to reverse on vagueness grounds.
Second, defendant claims that the act violates the title-object clause of Const 1963, art 4, § 24. Specifically, defendant maintains that the provisions of the act are broader than the title because the act allows prosecution for conduct that is not accompanied by fraudulent intent. Defendant fails to recognize, however, that the act requires that any false statement or representation be made "knowingly.” Where a statute requires that the criminal act be committed "knowingly,” the crime is a specific intent crime. People v American Medical Centers of Michigan, Ltd, 118 Mich App 135, 153; 324 NW2d 782 (1982). Accordingly, health care fraud is a specific intent crime.
Defendant further claims that the statute is broader than its title, which discusses fraud "in the obtaining of benefits or payments in connection with health care coverage and insurance,” because the statute does not require receipt of benefits. We disagree. Mirroring the title, the statute requires that the false statement or representation be made "for use in determining rights to health care benefits.” MCL 752.1003(3); MSA 28.547(103X3).
Last, defendant argues that the statute is unconstitutional because it (1) requires no actor, (2) eliminates the prosecution’s burden of proof, and (3) eliminates the presumption of innocence.
Statutes are presumed to be constitutional and are to be so construed unless their unconstitutionality is clearly apparent. Caterpillar, Inc v Dep’t of Treasury, 440 Mich 400, 413; 488 NW2d 182 (1992); People v Trinity, 189 Mich App 19, 21; 471 NW2d 626 (1991). Every reasonable presumption must be indulged in favor of a statute’s constitutionality. Petrus v Dickinson Co Bd of Comm’rs, 184 Mich App 282, 293; 457 NW2d 359 (1990).
First, the act requires an actor. There must be a "person,” as statutorily defined, who makes a false statement or representation. MCL 752.1003(3); MSA 28.547(103X3).
Second, the offense is a specific intent crime. Where knowledge is an element of an offense, it includes both actual and constructive knowledge. People v American Medical Centers, supra at 154. Hence, the statute does not eliminate the element of knowledge by providing that it is not necessary to show that a provider "had actual notice that the acts by the persons acting on the person’s behalf occurred.” MCL 752.1007(1); MSA 28.547(107)(1). Rather, the statute merely addresses the prosecutor’s burden of proof.
Finally, the presumption of knowledge does not eliminate the presumption of innocence or shift the burden of proof. The Fourteenth Amendment of the United States Constitution requires that the prosecution prove every element of a criminal offense beyond a reasonable doubt. Sandstrom v Montana, 442 US 510, 520; 99 S Ct 2450; 61 L Ed 2d 39 (1979). Thus, the prosecution may not use a conclusive presumption, or one that shifts the burden of persuasion to a defendant. Here, the statute creates a "rebuttable presumption.” Such a presumption shifts only the burden of production, not the burden of persuasion. Nonetheless, the trial court did not instruct the jury regarding the presumption and, therefore, the presumption had no effect on defendant’s trial. Gunnett, supra, 158 Mich App 427.
Next, we reject defendant’s argument that the magistrate utilized an incorrect standard in binding defendant over for trial. A probable cause standard regarding the commission of the crime is consistent with the governing statute. People v Fiedler, 194 Mich App 682, 689; 487 NW2d 831 (1992); MCL 766.13; MSA 28.931.
Defendant also challenges the sufficiency of the evidence presented at the preliminary examination to bind him over for trial. A defendant must be bound over for trial if evidence is presented at the preliminary examination that a crime has been committed and there is probable cause to believe that the defendant was the perpetrator. MCL 766.13; MSA 28.931; People v McBride, 204 Mich App 678, 681; 516 NW2d 148 (1994). At that stage, the prosecutor is not required to prove each element beyond a reasonable doubt. Id. However, there must be some evidence from which these elements may be inferred. People v Coddington, 188 Mich App 584, 591; 470 NW2d 478 (1991). Thus, circumstantial evidence and reasonable inferences arising from the evidence may be sufficient to justify binding over the defendant. Id. On appeal, we will not substitute our judgment for that of the examining magistrate unless an abuse of discretion is apparent. People v Talley, 410 Mich 378, 385; 301 NW2d 809 (1981).
The elements of the offense under MCL 752.1003(3); MSA 28.547(103X3) are: (1) a false statement or false representation, (2) of a material fact, (3) made knowingly, (4) to a health care corporation or health care insurer, (5) for use in determining rights to health care benefits.
During the preliminary examination, evidence was presented that claim forms that had been used to bill Blue Cross for amalgams contained defendant’s signature and his provider number. The patients’ charts for those billings contained a notation that sealants had been performed upon those patients. Evidence was presented that the patients were in fact given sealants, that sealants were not a covered benefit, and that defendant’s assistants routinely billed for amalgams when sealants were performed. One dental assistant testified that defendant looked over the forms before signing them and liked to make sure that they were correct. Another dental assistant testified that she was instructed to use the code for amalgams when sealants were applied. In each of the cases where amalgams were falsely billed, Blue Cross made a payment. After reviewing the evidence presented, we cannot say that the district court magistrate abused his discretion when he bound over defendant.
Next, defendant contends that dismissal of the criminal action is required because notice was not sent to the Attorney General and to defendant pursuant to § 8 of the act before an investigation of defendant commenced. We disagree. MCL 752.1008(1) and (2); MSA 28.547(108X1) and (2) clearly apply only to investigations by "the attorney general or a prosecuting attorney.” The investigation in this case was conducted by a private investigator working on behalf of Blue Cross. Consequently, no violation of § 8 occurred. Further, a review of § 8 reveals that the statute is not jurisdictional. Rather, the statute provides a comprehensive investigation and discovery system._
Defendant also contends that the trial court abused its discretion in admitting similar acts evidence of other instances in which he performed sealants and billed for amalgams. The argument is without merit. The evidence was offered for the purpose of showing the absence of mistake, it was relevant, and the probative value of the evidence was not substantially outweighed by the danger of unfair prejudice. People v VanderVliet, 444 Mich 52, 55; 508 NW2d 114 (1993).
Defendant also claims that the trial court erred in denying his motion for a directed verdict because the evidence was insufficient to sustain his conviction. Specifically, defendant maintains that the element of intent was not established beyond a reasonable doubt.
When ruling on a motion for a directed verdict, the trial court must consider the evidence presented by the prosecutor up to the time the motion was made in the light most favorable to the prosecution and determine whether a rational trier of fact could find the essential elements of the charged crime were proven beyond a reasonable doubt. People v Jolly, 442 Mich 458, 466; 502 NW2d 177 (1993). When reviewing a trial court’s ruling on a motion for a directed verdict, this Court tests the validity of the motion by the same standard as the trial court. People v Daniels, 192 Mich App 658, 665; 482 NW2d 176 (1992).
Viewed in a light most favorable to the prosecution, the evidence was sufficient to permit a rational trier of fact to find that defendant knowingly made or caused to be made a false representation of material fact to Blue Cross for use in determining rights to benefits. The case boiled down to a credibility contest between defendant on the one hand and one of defendant’s assistants and the investigator for Blue Cross on the other. Questions of credibility are left to the trier of fact, and will not be resolved anew by this Court. People v Velasquez, 189 Mich App 14, 16; 472 NW2d 289 (1991).
Last, relying on the allegations of error presented on appeal, defendant argues that the trial court abused its discretion in denying his motion for a new trial. Because we have found no error, and because the verdict is not against the great weight of the evidence, MCR 2.611(A)(1)(e), we find defendant’s argument to be without merit.
Affirmed.
See infra.
The magistrate’s erroneous conclusion that health care fraud is not a specific intent crime is rendered harmless by the sufficiency of the evidence of intent presented at the preliminary examination. | [
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Shepherd, J.
Following a jury trial, a verdict in plaintiffs favor in the amount of $3,000,000 was entered jointly against defendant cross-defendant appellant, W.J.C. Kaufmann Construction Co. (Kaufmann) and defendant cross-plaintiff appellee Markward & Karafilis, Inc. (Markward). The jury awarded total indemnity in favor of Markward. Kaufmann now appeals as of right from the trial court’s order denying its motion for judgment notwithstanding the verdict on the issue of indemnity. Markward also appeals, claiming that it should have been granted a directed verdict in favor of indemnity. The appeals have been consolidated by order of this Court. We find Kaufmann’s claim to be meritorious since we find that Kaufmann owed no obligation of indemnity to Mark-ward.
On December 11, 1976, plaintiffs decedent, Charles G. Kingston, who was employed by defendant Chrysler Corporation, was assisting another employee in replacing metal plate covers on top of an oil reservoir. The plate cover on which Kingston was standing slipped and he fell into the reservoir and died.
The reservoir and metal plate covers had been constructed in 1969 and 1970 when the plant at which Kingston worked was renovated. The metal plates were constructed by Kaufmann pursuant to an agreement with Chrysler that was embodied in a purchase order and related documents dated February 27, 1969. By reference in the purchase agreement, the parties’ contract was to be governed by Chrysler’s General Conditions, apparently standard conditions included by Chrysler in its contracts. Included in the General Conditions was a clause indemnifying Chrysler against property damage and personal injury related to the contractor’s (Kaufmann’s) work.
On March 19, 1969, Chrysler and Markward entered into an agreement for the construction of an addition to the same building. That purchase letter was issued on April 17, 1969. The metal plates constructed by Kaufmann were considered a substructure of the building; the addition con structed by Markward was labeled a superstructure which was added to the building.
On April 3, 1969, Chrysler Corporation sent Kaufmann a letter, informing Kaufmann that its contract was "assigned” to Markward. The letter also said:
"We will be issuing a Purchase Order Change shortly officially effecting this assignment. At that time the above noted contractor will assume the responsibility for overall administration and coordination, but Chrysler will continue to make direct payments to you under the terms of our present contract.”
Kaufmann acknowledged the letter on April 8, 1969:
"This will acknowledge receipt of your letter of April 3, 1969, advising that our Purchase Order for the above subject work is being assigned to Markward & Karafilis, Inc.
"We have no objection to this assignment as long as our retention money is not held until completion of the Marward contract.”
Kaufmann finished work on the reservoir plates in May, 1969. The purchase order change was issued on June 16, 1969, and said:
"Add to Order:
"The coordination and responsibility of this contract is now assigned to the General Contractor, Markward & Karafilis, Inc., with payment being made direct by Chrysler Corporation.”
On July 7, 1969, Markward sent a letter to the architect associated with the renovation, John G. Hoad & Associates, advising Hoad that gratings (covers) on the oil reservoir tanks were not an chored and therefore posed a danger to property and people. Markward asked Hoad to inspect the gratings. Markward was not advised of any subsequent changes to be made, nor was Kaufmann ever informed by Markward of the slippage problem or of Markward’s concern. Under the terms of Kaufmann’s contract with Chrysler, construction of "stops” on the plates would have been considered extra and additional work, according to Hoad, since they were not included in the plans and specifications issued to Kaufmann.
In November, 1969, Hoad notified Chrysler by letter that Kaufmann had completed the substructure work in acceptable condition. Markward concurred and final payment was recommended. In January, 1970, construction meetings were held at which Chrysler, Hoad, and Markward, among others, were present, and at which the loose fit of the gratings was noted. Kaufmann was not represented at the meeting. Protective stops apparently were never added to the gratings.
Decedent’s estate ultimately brought an action against Markward, which plaintiff claimed was the general contractor; Kaufmann, which plaintiff identified as a subcontractor; and Hoad Associates, the architect. Third-party complaints for common-law indemnity were filed against Chrysler by Markward and Kaufmann. Markward cross-claimed for indemnity against Kaufmann on the basis of the assignment of the contract by Chrysler. Chrysler tendered its defense to the third-party complaint to Kaufmann, claiming that it had a right to indemnity under its contract with Kaufmann.
At trial, upon the close of proofs, Markward moved for a "conditional” directed verdict on its cross-claim: if the jury found "active” negligence by Markward or Kaufmann or found that Mark-ward was liable for failing to point out Kaufmann’s negligence, then Markward would be totally indemnified by Kaufmann. The trial judge denied the motion, stating:
"I don’t think there is anything in the testimony or anything in the way the parties have described their conduct that indicates that the — that there was, indeed, intended to be the broad indemnification moving to Markward and Karafilis from Kaufmann that is referred to in the body of that indemnification paragraph.”
However, the court eventually charged the jury:
"I charge you that the evidence indicates that Mark-ward and Karafilis pursuant to the assignment of the purchase order in question had a contract with W.J.C. Kaufmann Construction Company and, therefore, W.J.C. Kaufmann Construction Company is bound by the applicable terms of said contract. The existence of the indemnity agreement in the contract language between Markward and Karafilis and W.J.C. Kaufmann Construction Company is undisputed. Because of this, I charge you that the indemnity agreement is presumed to be understood by both parties.
"You are instructed that the Markward and Karafilis Company is entitled to a verdict in its favor on the cross-claim for indemnity under the language of the purchase order under any one of the following circumstances:
"One. That the W.J.C. Kaufmann Construction Company was negligent and its negligence was the full proximate cause of the plaintiffs decedent’s death, or:
"Number two. That both Markward and Karafilis and W.J.C. Kaufmann Construction Company were negligent and this negligence was a proximate cause of plaintiffs decedent’s death.”
Kaufmann noted its objections to the charge.
The jury returned a verdict in the amount of $3,000,000 in favor of plaintiff, jointly against Markward and Kaufmann. On the cross-claim, the jury awarded total indemnity in favor of Mark-ward, the general contractor. Markward and Kaufmann were found to have no cause of action against Chrysler.
Kaufmann filed a motion for new trial or remittitur and a motion for judgment notwithstanding the verdict on the indemnity claim on March 20, 1981. On May 6, 1981, Kaufmann and plaintiff entered into a covenant not to enforce the judgment. Plaintiff received payment of $1,000,000 for the covenant. On August 10, 1981, the trial court denied Kaufmann’s motion for judgment notwithstanding the verdict on the indemnity claim. The order was entered on August 31, 1981.
On appeal, the parties raise separate issues. Neither addresses the issues raised by the other. Since we find one issue raised by Kaufmann to be dispositive, we do not reach all issues raised by both parties.
Kaufmann argues that assignment of the indemnity clause was void because it created two indemnitees (in that Chrysler also attempted during the lawsuit to claim indemnity under the contract) and because substituting Markward as a party materially increased the risk that indemnification would be sought. Kaufmann raised this issue in its motion for judgment notwithstanding the verdict.
3 Restatement Contracts, 2d, § 317(2), p 15 provides:
"(2) A contractual right can be assigned unless
"(a) the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or
"(b) the assignment is forbidden by statute or is otherwise inoperative on grounds of public policy, or
"(c) assignment is validly precluded by contract.”
Comment (d) to § 317(2) of the Restatement provides that the definition of a "material increase” in the burden of risk imposed depends on the nature of the contract and on the circumstances.
The subject of assignment is also discussed in Corbin, Contracts:
"From what has preceded, it has been made to appear that a party to a contract cannot by any process called assignment change in any material way the performance to be rendered by the other party. He has power to substitute a new party as holder of the right; he has no power to change the performance that the right requires. In other sections, also, it has been made to appear that one cannot by assignment change the conditions on which the other party has promised to perform — the limiting facts the non-occurrence of which prevents duty of immediate performance. This is true whether the limiting conditions are prescribed in words or by implication or by construction of law. Special attention is here directed to the application of this rule to aleatory contracts.
"If the obligor’s duty is aleatory in character — that is, if he has promised to perform only upon the happening of some event that is not certain to occur and that is not within the control of either party — the element that may be described as hazard, chance, or risk, is of special importance. And in such cases an assignment is defeated if the risk of the obligor is materially increased —that is, if the happening of the uncertain event is made more likely. The promisee cannot change the performance to be rendered; and also he must not, in the aleatory case, increase the risk that the performance will have to be rendered. An unjustified act increasing this risk discharges the obligor’s duty altogether.
"It is on this ground that a surety is discharged if the creditor discharges the principal debtor or grants him a binding extension of time to pay the debt. It is partly on this ground, also, that the holder of a fire insurance policy cannot effectively assign the policy rights to a purchaser of the insured property. The burning of that property is the uncertain event upon which the duty of the insurer depends. The risk of its occurrence must not he increased; and the transfer of the property may very considerably increase it.” 4 Corbin, Contracts, § 868, pp 468-469 (1951).
It is clear that an assignment of the indemnity provision would significantly increase the risk to Kaufmann. The substance of the indemnity provision indicates that it was intended to protect the owner (identified as Chrysler) from claims for accident and injury. Kaufmann was protected from the greatest foreseeable risk with regard to Chrysler, however, by workers’ compensation laws which would render Chrysler liable in workers’ compensation benefits to its employees for injuries suffered on the job. With regard to those claims, Chrysler could not be sued in tort by an injured employee. If the right to indemnification were assigned to Markward, however, the risk to Kaufmann became significantly greater, since Chrysler’s employees could sue Markward. Because the risk was significantly increased by the assignment, the assignment was void.
Furthermore, it was clear prior to and throughout litigation that Chrysler considered itself the proper beneficiary of the indemnity provision. Chrysler could not unilaterally create an obligation of indemnity for both itself and Markward by the assignment. Circumstances here would seem to indicate that Chrysler did not intend to assign the indemnity provision; that instead, it intended to assign to Markward the supervision of and control over Kaufmann’s project, not the entire contract between itself and Kaufmann. Chrysler also clearly retained the right to the work performed by Kaufmann and the duty to pay Kaufmann for work completed. The scope of the assignment was apparently very limited. See 3 Restatement Contracts, 2d, § 317(1), pp 14-15.
The indemnity promise was aleatory in nature. The obligation to provide indemnification was to arise only when the "owner” was subjected to a claim for injury or damage. By substituting Mark-ward as the owner, the circumstances upon which the clause would be used were greatly increased— that is, with Chrysler as indemnitee, exposure to claims by employees for Chrysler’s negligence was nil and by third persons very slim; with Markward as indemnitee, exposure encompassed almost every foreseeable situation.
This Court has expressly reserved judgment on the American Law Institute rule which states that the law will presume that an entire assignment of an executory, bilateral agreement will be interpreted as a delegation of the assignor’s duties as well as an assignment of his rights, in the absence of circumstances showing a contrary intention. Keyes v Scharer, 14 Mich App 68; 165 NW2d 498 (1968). However, in this case the circumstances and documents indicate no intention of an entire assignment.
If both Chrysler and Markward claim indemnification under the contract, clearly the risk to Kaufmann was at least doubled and Chrysler’s intent to assign becomes highly doubtful. If the indemnity clause was assigned to Markward, Kaufmann’s risk was increased because of the greater likelihood of tort suits by Chrysler employees. Either interpretation significantly increases the risk to Kaufmann and renders the alleged assignment of the indemnity clause void.
Because the remainder of the issues raised by Kaufmann also go to the validity of the assignment or to the operation of the indemnity clause itself, and since our holding that the assignment was void mandates reversal, we find it unnecessary to deal with the remainder of the issues raised by Kaufmann.
As we find any purported assignment of the indemnity clause to be void, Markward’s claim that it was entitled to a directed verdict on the operation of the indemnity clause must obviously fail. The second issue raised by Markward is also without merit. While plaintiffs counsel’s questioning of a Markward officer regarding his conception of moral duty was irrelevant and should not have been admitted, the questions were not so egregious as to result in a mistrial. The trial court, therefore, did not err in denying Markward’s motion for mistrial.
Likewise, we are not persuaded by Markward’s final claim of error that it should have been allowed to raise Kingston’s contributory negligence as a defense. At the time this case was tried, a plaintiffs negligence could not provide a defense where the plaintiff’s injury was proximately related to the defendant’s failure to provide a proper safety devise. Tulkku v Mackworth Rees Div of Avis Ind, Inc, 406 Mich 615; 281 NW2d 291 (1979), rev’d on other grounds on remand, 101 Mich App 709; 301 NW2d 46 (1980), lv den 411 Mich 897 (1981). That rule has since been revised to allow a defense of comparative negligence to be raised, assuming that any evidence of the plaintiffs negli gence exists. Beals v Walker, 416 Mich 469, 479; 331 NW2d 700 (1982); Hardy v Monsanto Enviro-Chem Systems, Inc, 414 Mich 29; 323 NW2d 270 (1982); Post v Textron, Inc, 554 F Supp 419 (WD Mich, 1983).
We are unable to determine the basis for the trial court’s refusal to permit Markward to raise a contributory negligence defense. Apparently all relevant discussions were held off the record. We point out that Markward’s failure to provide this Court with a record of the trial court’s findings, if available, or to request a special record for purposes of this Court’s review, may be argued to constitute a waiver of the issue. See People v Kelly, 122 Mich App 427; 333 NW2d 68 (1983); Dehring v Northern Michigan Exploration Co, Inc, 104 Mich App 300; 304 NW2d 560 (1981). More importantly, however, there exists neither evidence nor inference on the record before us to indicate that plaintiff’s decedent was negligent in the instant case. Even if the trial court’s decision was based on the previous exclusionary rule, and even if we found that the new rule could properly be retroactively applied, the new rule only allows a comparative negligence defense to be raised where some evidence of the decedent’s negligence actually exists. Since we find no such evidence here, we decline to reverse.
The trial court’s order denying Kaufmann’s motion for judgment notwithstanding the verdict on the indemnity claim is reversed and its ruling denying Markward’s motion for directed verdict on the indemnity claim is affirmed. Kaufmann’s motion for judgment notwithstanding the verdict on the indemnity issue is hereby granted. The jury verdict in favor of plaintiff in the amount of $3,000,000 is affirmed, with Markward and Kauf mann being jointly and severally liable for that award.
Reversed in part, affirmed in part.
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Per Curiam.
Defendant pled guilty as charged to attempted larceny in a building, MCL 750.92; MSA 28.287 and MCL 750.360; MSA 28.592, and to a supplemental information charging him with being an habitual offender, MCL 769.12; MSA 28.1084. He was sentenced to five years probation with the first six months to be served in the Bay County Jail. Defendant now appeals his conviction as of right, raising two issues.
Defendant first contends that the trial court erred in treating his conviction of attempted larceny in a building as a felony for purposes of the habitual offender and length of probation provisions of the Code of Criminal Procedure. MCL 769.12; MSA 28.1084 and MCL 771.2; MSA 28.1132. Prior to submitting his plea, defendant moved to dismiss the supplemental information on the ground that the principal charge was for a misdemeanor offense and thus did not trigger the habitual offender statute. The trial court denied defendant’s motion.
Defendant correctly argues that under the Michigan Penal Code, attempted larceny in a building is a misdemeanor offense punishable by a term in prison of not more than two years. MCL 750.92; MSA 28.287 and MCL 750.503; MSA 28.771. However, the Code of Criminal Procedure defines felony for purposes of that statute as "a violation of a penal law of this state for which the offender, upon conviction, may be punished by death or by imprisonment for more than one year”. MCL 761.1(g); MSA 28.843(g). The majority view of this Court is that a two-year misdemeanor under the penal code will be construed as a felony for purposes of the Code of Criminal Procedure. See People v Reuther, 107 Mich App 349; 309 NW2d 256 (1981) (but see Judge Bronson’s partial concurrence and partial dissent); People v Stiles, 99 Mich App 116; 297 NW2d 631 (1980), lv den 410 Mich 891 (1981); People v Rosecrants, 88 Mich App 667; 278 NW2d 713 (1979); People v Bernard Smith, 81 Mich App 561; 266 NW2d 40 (1978), rev’d on other grounds 406 Mich 926; 277 NW2d 506 (1979). For a contrary view see People v Alford, 104 Mich App 255; 304 NW2d 541 (1981). We follow the majority view and hold that the trial court did not err in applying the habitual offender and length of pro bation provisions of the Code of Criminal Procedure.
Defendant next contends that the trial court erred in refusing to award defendant credit on his jail sentence for time already served while awaiting trial. We agree. MCL 769.11b; MSA 28.1083(2) provides:
"Whenever any person is hereafter convicted of any crime within this state and has served any time in jail prior to sentencing because of being denied or unable to furnish bond for the offense of which he is convicted, the trial court in imposing sentence shall specifically grant credit against the sentence for such time served in jail prior to sentencing.” See also GCR 1963, 785.8(3).
This Court has construed the statute to be mandatory in nature. People v Lyles, 76 Mich App 688, 690; 257 NW2d 220 (1977); People v Donker, 70 Mich App 692, 694; 247 NW2d 330 (1976); People v Peterson, 62 Mich App 258, 260-261; 233 NW2d 250 (1975), lv den 397 Mich 811 (1976). Such a construction is necessitated by the general purpose of the statute which is to put the indigent defendant who cannot post bail on an equal status with the defendant who can. People v Davis, 87 Mich App 72, 73; 273 NW2d 591 (1978); People v Cantu, 117 Mich App 399, 402; 323 NW2d 719 (1982). The fact that the trial court may have granted a lenient sentence in light of the time already served does not satisfy the credit requirement. People v Lyles, supra; People v Chattaway, 18 Mich App 538, 541; 171 NW2d 801 (1969). However, because defendant has been discharged from probation in the State of Michigan to serve sentences in Alabama, we do not remand for resentencing.
Affirmed. | [
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Per Curiam.
Plaintiff filed this garnishment action in circuit court seeking to enforce a consent judgment against the principal defendant (defendant) for child support arrearages. The garnishee-defendant had twice disclaimed liability after being served with writs and affidavits of garnishment on November 24, 1982, and on November 29, 1982. Following a bench trial, the court found that garnishee-defendant was not in possesssion or control of any property, money, goods or chattels belonging to the defendant at the time of service and the garnishee-defendant, in any event, had a right of setoff against defendant’s commissions for loans or monies previously advanced. Plaintiff appeals as of right. Neither defendant nor garnishee-defendant has filed a brief on appeal and we affirm.
Defendant is employed with garnishee-defendant as a “designer salesperson” on a commission basis, receiving 6% of his gross developed sales. To offset the fluctuation in furniture sales, garnishee-defendant implements an advance payment system whereby an employee is paid weekly advances which are then added together on a monthly basis and compared to the commission earned by that employee that month. If the commissions exceed the amount advanced, the employee receives a check for the difference. If the advances exceed the commissions, the difference is carried forward. A written agreement entered into between the garnishee-defendant and the employee provides that the employee’s monthly commissions are to be first applied toward any deficit owed the garnishee-defendant. The advances are viewed as "loans” to the employee for necessary living expenses.
Under this agreement, defendant received weekly advancements of $488. At the time of trial, he had been employed by garnishee-defendant for a period of approximately one year and three months during which his commission never exceeded the monthly total of his weekly advances. Defendant owed garnishee-defendant in excess of $3,195.20, the difference between loans or advances made by garnishee-defendant and commissions earned.
While we recognize the potential for abuse that may accompany such a payment system regarding creditors’ rights, we find that a reasonable construction of the relevant statutes and court rules supports the result reached by the trial court in this case, particularly in light of the rule that exemptions to garnishment provided by court rules and statutes will be construed to maximize protection of the principal debtor. Sears, Roebuck & Co, v A T & G Co, Inc, 66 Mich App 359, 369; 239 NW2d 614 (1976).
GCR 1963, 738.6 clearly permits a garnishee-defendant to claim any setoffs available to the garnishee-defendant against the principal defendant when determining its liability to that defendant. Renshaw v Samuels, 117 Mich App 649, 658-659; 324 NW2d 117 (1982). Thus, a garnishee-defendant’s claim against the defendant will have priority over the plaintiff’s claim with regard to property being garnished. Sears, Roebuck & Co v A T & G Co, supra, p 368.
In Sears, Roebuck & Co v A T & G Co, Sears attempted to garnish the earnings of an employee of A T & G. In the disclaimer filed by A T & G, the employee’s gross earnings were listed at $189.88 and his mandatory deductions at $26.30, leaving him a disposable income of $163.58. Out of this disposable income, A T & G claimed a deduction of $40.89 as a weekly installment payment on loans of $5,957.32 made by AT & G to the employee. A T & G claimed that this deduction, being 25% of the debtor’s disposable income, barred any payment to Sears because of federal law limiting garnishments to 25% of a debtor’s disposable income. See 15 USC 1671-1677. The Court concluded that a garnishee-defendant is entitled to deduct from disposable income whatever sum was agreed upon by the debtor, with no limitation. The plaintiff can then claim the difference, if any, between 25% of disposable income and the garnishee-defendant’s deduction. If the garnishee-defendant’s deduction is more than 25% of the debtor’s disposable income, the plaintiff will recover nothing.
In this case, defendant entered into an agreement with garnishee-defendant allowing garnishee-defendant to deduct defendant’s entire disposable income in commissions, if necessary, and apply it toward the debt accrued by the defendant in advances. Garnishee-defendant thus had a right to apply defendant’s entire monthly commission to the debt owed. The trial court did not err in concluding that garnishee-defendant had no liability to plaintiff. We note that, in this case, there is no argument or evidence to suggest that the payment system worked out between defendant and garnishee-defendant was fraudulently designed to avoid defendant’s obligation to his creditors.
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Per Curiam.
The Michigan Employment Security Commission (MESC) appeals as of right from an order entered May 2, 1983, in Wayne County Circuit Court. In that order, the circuit court reversed the decision of the MESC Board of Review denying Leon Gibbs’s claim for trade readjustment allowance (TRA) benefits. On appeal, Gibbs’s employer, General Motors Corporation, Cadillac Motor Car Division, seeks an order reversing the circuit court’s decision.
To qualify for TRA benefits, Gibbs had to have at least 26 weeks of employment at wages of $30 or more in the 52 weeks immediately prior to being separated from "adversely affected employment”. 19 USC 2291. The MESC referee noted that Gibbs had 19 weeks of such employment during the appropriate qualifying period, January 14, 1979, through January 12, 1980. Gibbs was on sick leave from Cadillac from June 29, 1979, until January, 1980, and during that period received sickness and accident benefits. The MESC referee, following guidelines of the United States Department of Labor, found that sickness and accident payments do not constitute qualifying wages or employment for the purposes of the Trade Act of 1974 and, therefore, denied Gibbs’s claim.
The MESC Board of Review upheld the referee’s decision. On appeal, the Wayne County Circuit Court reversed.
The question before us is whether a period of absence due to illness during which sick pay is received constitutes "employment at wages” for the purposes of qualifying for TRA benefits. The MESC and General Motors Corporation contend that the decisions of the referee and the MESC Board of Review correctly interpreted the Federal Trade Act of 1974 and, under the act, the sickness and accident payments received by Gibbs did not qualify as wages or employment. We agree.
Under the Trade Act of 1974, the United States Secretary of Labor has the authority to certify a group of workers eligible to apply for TRA benefits. 19 USC 2272, 2273. Also, the Secretary has the power to authorize a state agency, such as the MESC, to act as its agent in receiving and processing applications for TRA benefits. 19 USC 2311(a).
The act also provides that judicial review of a state agency’s determination as to eligibility for TRA benefits is to be in the same manner as the agency’s determination made under applicable state law. 19 USC 2311(d). Under Michigan law, a decision by the MESC may be reversed only where it is contrary to law or is not supported by competent, material, and substantial evidence on the whole record. MCL 421.38(1); MSA 17.540(1).
Recently, in Paison v Ford Motor Co, 134 Mich App 124; 351 NW2d 197 (1983), lv applied for (1983), this Court addressed the same issue as presented to us in the instant case and the panel affirmed the lower court’s order affirming the determination by the MESC that sick pay benefits did not constitute wages for employment within the meaning of the Trade Act of 1974.
In light of the Paison decision, we cannot conclude that the MESC Board of Review’s determiniation was contrary to law. Therefore, we must reverse the lower court’s order reversing the decision of the MESC Board of Review. In our opinion, deference should be given to the interpretation of the federal statute by the agency administering it. We believe that the agency is in a better position to determine eligibility under the statute. Until contrary interpretations of the statute are resolved on the federal level, or a decision of our Supreme Court to the contrary, uniformity of application would be achieved among the states by following the agency’s interpretation. Final resolution of the issue by the federal courts will ultimately flow back through the agency administering the statute and any change in statutory interpretation will be applied at the agency level as controlling law.
Reversed._
We do note that in International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v Donovan, 568 F Supp 1047, 1048 (D DC, 1983), the district court reached a result contrary to this decision and the Paison, supra, decision. | [
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R. I. Cooper, J.
Defendant, Douglas Cook, was convicted by a jury of breaking and entering a building with the intent to commit the crime of larceny therein, MCL 750.110; MSA 28.305. He was sentenced to a prison term of not less than three and one-half years nor more than ten years.
Prior to the trial, defendant submitted a motion in limine to suppress evidence of his prior criminal record. The prosecutor indicated that he would use evidence of three prior felony convictions to impeach the defendant: i.e., 1) attempted unarmed robbery; 2) escape; and 3) entry without breaking with intent to commit larceny. Defense counsel argued that admission of evidence of defendant’s prior convictions would effectively deny defendant the right to take the witness stand and that prejudice would result from the similarity of the prior convictions to the charged offense. The trial court ruled that the entry without breaking with intent to commit larceny conviction was so similar to the instant offense that admission of evidence of that conviction would be more prejudicial than probative. The trial court also suppressed evidence of the escape conviction in that its probative value was not sufficiently related to the question of credibility. The trial court did not suppress evidence of the prior conviction of attempted unarmed robbery.
At the trial, the following information was established. While on patrol, a police officer heard an alarm. He checked a business known as "The Historical Shop”. He found that the window of the shop had been smashed, items were pulled out of the store through the broken window, and merchandise was scattered on the sidewalk. The owner of the building was called and arrived at approximately 5:45 a.m. She observed that the front window had been smashed in, drapes were torn down, a display case was turned over, items in the case were broken, a small case with jewelry was found next door behind a beauty shop, and a small jewelry box containing rings was missing. She identified an ivory hand carved ring as being a missing ring. It was established that it had snowed during the night. Police Officer Richard O’Brien followed two sets of footprints in what he described as freshly fallen snow. He noticed distinguishing marks about each set of footprints in that one set had round indents and the other set had a waffled-type design with elliptical lines running the length of the shoe. The officer followed the footprints to a house located at 318-1/2 West Parent Street. He observed a separate set of footprints leaving that address and tracked them to the scene of the crime. The arriving and departing set of footprints matched each other. The officer then returned to the house on Parent Street and knocked on the door. The defendant and Jack Weston came out of the house. Both were wearing boots. The officer compared the footprints left by the two men and determined that they were the same size and shape as the tracks that he had followed. He advised the defendant of his Miranda rights. The defendant emptied his pockets which contained three watches and a white floral stone ring. At the trial, it was stipulated that the ring and three watches found on defendant Cook were not taken from the Historical Shop. A search of the house revealed various watches, earrings, and a ring. Only the ring was identified as coming from the Historical Shop.
Pursuant to a defense motion for a directed verdict, the trial court determined that, although the bootprints were not conclusive evidence of guilt, the jury had a right to consider the prints as proper circumstantial evidence in conjunction with other testimony and evidence presented at the trial and thus denied the motion. The defense attorney emphasized that there were no eyewitnesses, that no stolen property wa§ found on the defendant, and that the recovered ring was located in Jack Weston’s bedroom. He also stated that there was a failure to prove that the boots worn by the defendant when he came to the door matched the footprints left in the snow except as to size and shape.
Defense witness Jack Weston, who had pled guilty and was incarcerated for the breaking and entering of the Historical Shop, testified that he and Dale Cruthers had broken into the Historical Shop. He testified that defendant Cook and a man named Kelly Sutherland had remained at the Parent Street address and were still there when they returned after the breaking and entering. Weston testified that Mr. Cook put on Cruthers’s boots because Mr. Weston had told the defendant it had snowed during the evening. Witness Weston admitted that he had never mentioned the existence of Dale Cruthers on the evening of the arrest. He also testified that he did not know how to reach Mr. Cruthers. A detective located Dale Cruthers through use of a computer, but the gentleman who was located said he did not know the defendant or Jack Weston. Witness Kelly Sutherland testified that he and Mr. Cook had visited Mr. Weston’s house but that witness Sutherland had drunk so much Southern Comfort that he fell asleep about midnight and did not wake up until the police arrived. He stated that no one else had arrived at the house.
On appeal, defendant argues that the trial court improperly admitted evidence of the defendant’s prior conviction of attempted unarmed robbery.
The admissibility of evidence of prior convictions is governed by MRE 609(a), which provides in pertinent part:
"For the purpose of attacking the credibility of a witness, evidence that he has been convicted of a crime shall be admitted if elicited from him or established by public record during cross-examination but only if
"(1) the crime was punishable by death or imprisonment in excess of one year under the law under which he was convicted, or the crime involved theft, dishonesty or false statement, regardless of the punishment, and
"(2) the court determines that the probative value of admitting this evidence on the issue of credibility outweighs its prejudicial effect.”
The trial court has discretion in admitting evidence of a defendant’s prior convictions for impeachment purposes. People v Avery, 114 Mich App 159; 318 NW2d 685 (1982); People v Jackson, 391 Mich 323; 217 NW2d 22 (1974). This discretion requires the trial court to balance the probative value of the evidence of prior convictions against the prejudicial effect. People v Avery, supra; People v Hughes, 411 Mich 517; 309 NW2d 525 (1981). In its balance of the probative value against the prejudicial effect on the issue of credibility, the court must weigh the following three factors:
"The factors which the judge must weigh in making his determination include: (1) the nature of the prior offense (did it involve an offense which directly bears on credibility, such as perjury?), (2) whether it is for substantially the same conduct for which the defendant is on trial (are the offenses so closely related that the danger that the jury will consider the defendant a 'bad man’ or infer that because he was previously convicted he likely committed this crime, and therefore create prejudice which outweighs the probative value on the issue of credibility?), and (3) the effect on the decisional process if the accused does not testify out of fear of impeachment by prior convictions (are there alternative means of presenting a defense which would not require the defendant’s testimony, i.e., can his side of the story be presented, or are there alternative, less prejudicial means of impeaching the defendant?).” People v Crawford, 83 Mich App 35, 39; 268 NW2d 275 (1978).
The opinion in the Crawford case also observes that there must be a "true exercise of discretion by balancing the competing factors involved’, citing People v Farrar, 36 Mich App 294; 193 NW2d 363 (1971), and that "the people must justify admission”, citing People v McCartney, 60 Mich App 620; 231 NW2d 472 (1975). Crawford, supra, p 38.
The purpose of the three-fold inquiry enumerated in Crawford is as follows:
"1) To put before the jury only those prior convictions indicative of the defendant’s disposition toward truthfulness and veracity; and
"2) To keep from the jury those convictions which, although they may be indicative of defendant’s disposition toward truthfulness, may interfere with the jury’s ability to determine the defendant’s guilt or innocence on the basis of the evidence. Such interference is what is meant by 'prejudice’.
"If, after evaluating these factors, the judge believes the prejudicial effect of admitting prior conviction evidence outweighs its probative value, the evidence should be excluded.” People v Hughes, 411 Mich 517, 520-521; 309 NW2d 525 (1981), reh den 412 Mich 1101 (1981).
The trial court must exercise its discretion on the record, People v Cherry, 393 Mich 261; 224 NW2d 286 (1974); People v West, 408 Mich 332; 291 NW2d 48 (1980), or it must appear on the record that the judge was aware that he had discretion. People v Avery, supra, and People v Hogan, 105 Mich App 473; 307 NW2d 72 (1981), lv den 413 Mich 937 (1982).
Regarding MRE 609(a), the trial court observed that the attempted unarmed robbery was a felony under § (1) and that under § (2) it addressed credibility by stating that the felony would relate to truthfulness and veracity. The trial court compared the similarity of the three prior convictions and determined that the conviction of attempted unarmed robbery would not violate the "similarity” concern. Finally, the trial court observed that the defendant had alternative means of presenting a defense without testifying. This latter factor is pertinent in that witness Jack Weston presented considerable exculpating testimony which, if believed, would have acquitted the defendant.
It is important that one not lose sight of the fact that a motion in limine, such as presented in the present case, is frequently addressed prior to trial. At that point in time, the trial court has not been exposed to the opening arguments of the attorneys nor the development of evidence at trial. Thus, the court has to rely on the prosecutor’s intended purpose which, as stated under MRE 609(a), deals with attacking the credibility of a witness. In one sense, the language of the rule itself makes credibility a primary factor to be considered and thus makes credibility a primary probative factor. By excluding evidence of similar offenses, an important prejudicial factor is eliminated. The question remains whether "credibility” is sufficiently probative in itself, or whether the concept of credibility has to be directed towards a particular element or circumstance or matter of evidence involved in the particular case being tried. It would be most difficult at a pretrial stage for a prosecutor to be able to know if credibility is going to be related to a particular matter of evidence, circumstance, or other matter of contention. Thus, it is reasonable and understandable that the main probative value asserted by the people will be that of credibility in general without a greater showing of specificity regarding probative value. Certainly, defendants will feel that the prosecutor is being given a "candied apple” to carry into the courtroom not only to satisfy the appetite of the prosecutor but also to be hurled against the defendant if the defendant testifies. However, this concern is somewhat mitigated by the third factor under Crawford which requires the trial court to ascertain whether there are alternative methods by which the defendant can present a defense without having to testify. Again in our case, witness Weston satisfied that factor.
The standard on appeal as to whether the trial court abused its discretion by admitting evidence of the defendant’s prior conviction of attempted unarmed robbery is:
"(1) whether the trial judge recognized his discretion to decline to admit evidence of the convictions, and (2) whether the trial judge’s decision was so palpably and grossly violative of fact and logic as to amount to an abuse of discretion.” People v Carpenter, 120 Mich App 574, 580; 327 NW2d 523 (1982).
Abuse of discretion is defined as follows:
" '[A]n abuse of discretion involves far more than a difference in judicial opinion between the trial and appellate courts. The term discretion itself involves the idea of choice, of an exercise of the will, of a determination made between competing considerations. In order to have an " 'abuse’ ” in reaching such determination, the result must be so palpably and grossly violative of fact and logic that it evidences not the exercise of will but perversity of will, not the exercise of judgment but defiance thereof, not the exercise of reason but rather of passion or bias.’ ” People v Talley, 410 Mich 378, 387; 301 NW2d 809 (1981), quoting from People v Charles O Williams, 386 Mich 565, 573; 194 NW2d 337 (1972).
As stated above, it is clear that the trial court exercised discretion by excluding evidence of two of the prior convictions and by weighing credibility in relation to honesty and truthfulness. The crime of unarmed robbery is a crime of moral turpitude. Thus, although it does not directly involve veracity, it does have probative value. See People v Whigham, 102 Mich App 96; 300 NW2d 753 (1980), lv den 412 Mich 932 (1982). Where a trial court takes a more cautious approach than delineated by this opinion and suppresses evidence of a prior dissimilar conviction, it may well reserve the right to allow the admission of evidence of such a prior condition after all, if the defendant does in fact testify in a manner inconsistent with his having a prior record such as by claiming he has a clear record or has never had any trouble with the law. These examples are not to be all inclusive. In conclusion, the trial court did not abuse its discretion by admitting evidence of defendant’s prior attempted unarmed robbery conviction. The trial court exercised discretion and properly balanced the Crawford factors.
Next, defendant argues that the prosecutor’s statements during closing argument denied him a fair trial. The prosecutor and defense had stipulated that the watches found on the defendant were not from the Historical Shop. In his closing argument, the defense attorney reminded the jury of the stipulation that the property taken from the defendant was not taken from the Historical Shop. The prosecutor, on rebuttal, stated as follows:
"He points to the fact that there was a stipulation with regards to these watches. It’s true, we did stipulate to the fact that those watches were not from the Historical Shop. We don’t know where these watches came from. All we know is that there were numerous watches produced by the defendant when he was arrested by the police.”
Because there was no objection at the trial, the issue becomes whether there was a manifest injustice committed by the prosecutor. See People v Duncan, 402 Mich 1; 260 NW2d 58 (1977), rev’d on other grounds 414 Mich 877 (1982). It is clear that the defense attorney in his closing argument referred to the aforementioned stipulation. The prosecutor also had a right to refer to the same stipulation. The prosecutor’s arguments were derived from evidence admitted in the case. If the defense thought a prejudicial statement had been presented, it could have sought a curative instruction. No objection was raised. Thus, even if the comment exceeded permissible bounds, failure to object precluded a chance for a timely curative cautionary instruction to the jury. See People v Farrar, 36 Mich App 294; 193 NW2d 363 (1971); People v Stout, 116 Mich App 726; 323 NW2d 532 (1982). In conclusion, the prosecutor’s error, if any, is harmless beyond a reasonable doubt insofar as a curative instruction would have cured any prejudice.
Defendant fails in his argument that the trial court erred in denying defendant’s motion for a directed verdict. The standard to be employed by this Court in reviewing a claim that a directed verdict was improperly denied is as follows:
"In summary, the trial judge when ruling on a motion for a directed verdict of acquittal must consider the evidence presented by the prosecution up to the time the motion is made, Garcia, supra [People v Garcia, 398 Mich 250; 247 NW2d 547 (1976)], view that evidence in a light most favorable to the prosecution, People v Vail, 393 Mich 460, 463; 227 NW2d 535 (1975), and determine whether a rational trier of fact could have found that the essential elements of the crime were proven beyond a reasonable doubt, [Jackson v Virginia, 443 US 307; 99 S Ct 2781; 61 L Ed 2d 560 (1979)].” People v Hampton, 407 Mich 354, 368; 285 NW2d 284 (1979), cert den 449 US 885 (1980).
In the present case, defendant was convicted of breaking and entering a building with intent to commit larceny therein, MCL 750.110; MSA 28.305. The elements of this offense are 1) the breaking and entering of 2) a building or unoccupied dwelling with 3) felonious intent. In viewing the evidence and testimony in the light most favorable to the prosecution, it was shown that the officers found footprints in freshly fallen snow that led them to a house where the defendant was present during the early morning hours. The defendant responded to the knock on the door and was observed wearing boots which matched by shape and size those footprints which led from the scene of the breaking and entering to said residence. The crime scene clearly showed a breaking and entering in that a front window was broken and goods were strewn about including items found outside of the building. The building was a store. A rational trier of fact could have found beyond a reasonable doubt that the above matters proved a breaking and entering of a building with felonious intent and that the defendant was the perpetrator of this offense.
The trial court, when instructing the jury on direct and circumstantial evidence, omitted CJI 3:1:10(7) and revised CJI 4:2:02(7). The latter states: "If the * * * evidence * * * is open to two reasonable constructions, one indicating guilt and the other innocence, it is your duty to accept the construction indicating innocence.” The defendant argues that this instruction should have been given in that the circumstantial evidence against the defendant was weak. However, defense counsel failed to object to the omission at the trial. Appellate review is precluded if counsel failed to object to the trial court’s jury instructions. People v Brocato, 17 Mich App 277; 169 NW2d 483 (1969); People v Doss, 122 Mich App 571; 332 NW2d 541 (1983). Absent an objection, "the verdict will not be set aside unless the error results in a miscarriage of justice”. People v Bonner, 116 Mich App 41; 321 NW2d 835 (1982). This Court has previously articulated that the giving of CJI 3:1:10(7) is confined to cases where the circumstantial evidence against the defendant is weak. People v Freeland, 101 Mich App 501; 300 NW2d 616 (1980). In reviewing the circumstantial evidence in this case, we do not find that the evidence is weak. In addition to the tracking of footprints and the defendant’s wearing of boots matching the footprints, and the fact that the footprints were of a large size and that the defendant was 6'5" tall, there is strong circumstantial evidence linking the defendant to the scene of the crime. Further, witness Weston’s testimony may well have been disbelieved in that witness Sutherland testified that no one other than the defendant and Mr. Weston were present in the Parent Street residence. At that time, the name Dale Cruthers was not mentioned. Finally, the prosecutor revealed that the house had been searched without anyone else being found and that an interview with Dale Cruthers located via police computer showed no connection with the defendant or Mr. Weston. In conclusion, based upon the evidence presented and the defendant’s failure to object, the matter has not been preserved for appeal and omission of the jury instruction did not constitute a miscarriage of justice.
Defendant’s final argument is that the court committed error requiring reversal by failing to state its reasons for arriving at the sentence rendered. At the time that the sentence was rendered, there was no requirement that the court describe its reasons for the particular sentence rendered. The Michigan Supreme Court has recently ruled as follows:
"The rule requiring trial courts to state on the record the specific criteria considered in sentencing and the reasons for the nature and length imposed is to be given only prospective application from the date of this decision.” People v Coles, 417 Mich 523, 551-552; 339 NW2d 440 (1983).
The holding in the Coles case does allow appellate review of a trial court’s exercise of discretion. Relief may be afforded a defendant where the appellate court finds that the trial court’s sentence shocks the conscience of the appellate court. In our present case, the sentence falls within the limits imposed by statute, there is no factual argument that the presentence report was inaccurate, and there has been no showing that the trial court improperly applied criteria for determining an appropriate sentence so as to shock the conscience of this Court. No error being found, the sentence of imprisonment for from three and one-half to ten years stands.
Affirmed.
Miranda v Arizona, 384 US 436; 86 S Ct 1602; 16 L Ed 2d 694; 10 ALR3d 974 (1966). | [
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Per Curiam.
Plaintiff, Michigan Professional Employees Society, a labor union, filed a complaint in circuit court alleging that defendant employer, Michigan Department of Natural Resources, had discriminated against three of its members on the basis of race, in violation of their collective bargaining agreement, the Michigan Constitution, and the Civil Rights Act. All of the defendants, dnr, Michigan Department of Civil Service (dcs), and each of their respective directors, filed a motion seeking accelerated judgment, arguing that the circuit court lacked jurisdiction to decide plaintiff’s claims. The trial judge granted defendants’ motion for accelerated judgment without prejudice on all of plaintiff’s claims. Plaintiff appeals as of right from the granting of accelerated judgment on its constitutional and statutory claims.
The facts giving rise to plaintiff’s complaint are not in dispute. The three members of plaintiff union are classified civil service employees (engi neers) with the dnr. All three of these employees applied and interviewed for a promotion to a vacant position at the dnr. Subsequently, the dnr filled the vacant position by appointing a black man who had not previously been employed at the dnr. The three members of plaintiff union are all nonblack males.
During the hearing conducted on defendants’ motion for accelerated judgment, it was revealed that the collective bargaining agreement between plaintiff and defendants provided that defendants would oppose all forms of illegal discrimination. It was also revealed that the collective bargaining agreement required that all contract disputes be submitted to arbitration. At the time of the hearing, the dnr was opposing arbitration proceedings, arguing that this case involved an issue concerning management which was not covered by the collective-bargaining agreement. This issue of arbitrability of the contract claim had been submitted to an arbitrator, but had not been decided at the time of the circuit court hearing.
Pursuant to the accelerated judgment hearing, the trial judge specifically held that plaintiff could not proceed in circuit court on the contract claim prior to the arbitrator’s determination of whether this claim was arbitrable under the contract. On appeal, plaintiff does not challenge this finding. The trial judge went on to hold that he did not believe the circuit court had jurisdiction over plaintiff’s Civil Rights Act claims, since the administrative remedies provided by the dcs to classified civil service employees had not yet been exhausted. The trial judge also held that the circuit court had jurisdiction to address plaintiff’s constitutional claims. However, he concluded that whether or not he had jurisdiction over the statutory and constitutional claims, the doctrine of "judicial abstention” applied to this situation, and that he would abstain from addressing all of the plaintiff’s claims while the arbitration procedure on the contract claim was incomplete. The trial judge then granted defendants’ motion for accelerated judgment.
Plaintiff argues that the trial judge erred in finding that the circuit court had no jurisdiction over its Civil Rights Act claims and in applying the "doctrine of judicial abstention” as a basis for granting accelerated judgment on its statutory and constitutional claims. We agree.
As to plaintiffs first claim of error, we note that this Court recently held in Marsh v Dep’t of Civil Service, that classified civil service employees may directly, and in the first instance, bring suit in the circuit court seeking injunctive relief and damages for alleged violations of the Michigan Constitution and the Civil Rights Act. The Marsh Court reversed a trial court’s grant of accelerated judgment for lack of jurisdiction over a classified state employee’s statutory and constitutional claim of employment discrimination. Specifically, the Marsh Court found that the Legislature could validly promulgate legislation such as the Civil Rights Act which provides classified civil service employees with a cause of action in circuit court against state agencies for employment discrimination. The Marsh Court summarized the reasons for its findings as follows:
In light of these two constitutional provisions prohibiting discrimination, securing the constitutional and statutory civil rights of all persons, and mandating implementation of these provisions by the Legislature, we hold that the prohibition of legislation for resolution of employment disputes of the classified civil service, Const 1963, art 4, § 48, does not extend to the area of employment discrimination. The classified civil service is not exempted from legislation prohibiting discrimination and securing civil rights in employment. Thus the Elliott-Larsen and Handicappers’ Civil Rights Acts apply to employees of the classified civil service, and the Civil Rights Commission and circuit court have jurisdiction over discrimination claims of aggrieved employees. [Marsh, supra, pp 568-569.]
We note that another panel of this Court has adopted the reasoning and holding of Marsh in a decision on this issue. We find the reasoning in Marsh persuasive and, thus, conclude that the trial judge erred in finding that the circuit court lacked jurisdiction to address plaintiffs Civil Rights Act claims based on the fact that plaintiffs members had failed to exhaust their administrative remedies.
As to plaintiffs claim that the trial judge erred in applying the "doctrine of judicial abstention” as a basis for granting accelerated judgment, we first note that plaintiffs simultaneous pursuit of its members’ contract claim through arbitration procedures does not preclude the circuit court from addressing plaintiffs statutory and constitutional claims. Furthermore, we find that the "doctrine of judicial abstention” does not apply in this situation. The "doctrine of judicial abstention” is applied by the federal courts in order to allow state courts to decide as-yet unresolved questions of their own state law before a federal court will decide a case involving the unresolved state law issue. This doctrine is based on principles of federalism unique to the relationship between federal and state courts and does not apply to the within situation involving the relationship of a circuit court and an administrative arbitrator. Therefore, we conclude that the "doctrine of judicial abstention” does not provide a basis for the trial judge’s granting of accelerated judgment in this case.
On appeal, defendants argue that the trial judge misspoke when he stated that he was applying the doctrine of judicial abstention and actually was applying the state law doctrine of primary jurisdiction. After reviewing the record of the trial judge’s findings, we find that defendants’ assertion is without factual merit.
However, even if the trial judge meant to apply the doctrine of primary jurisdiction, we find that this doctrine is inapplicable in this situation. The doctrine of primary jurisdiction comes into play when the determination of a claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body. The determination of an employment discrimination claim does not require the resolution of issues which, under a regulatory scheme, have been placed within the special competence of the dcs or any other administrative body. An employment discrimination claim does not involve a complex, pervasive regulatory scheme, such as detailed price regulations in a specialized industry, but involves basic issues of fact and law which the courts address on a regular basis. Thus, we conclude that the doctrine of primary jurisdiction does not apply in this situation to provide a basis for granting accelerated judgment.
Based on our above analysis of plaintiffs statutory and constitutional claims in this case, we conclude that the trial judge had no basis in law for granting defendants’ motion for accelerated judgment. We expressly note that we have not decided whether the trial judge, for reasons of judicial economy and consistency of result, could properly hold this case in abeyance while the contract claim arbitration procedure is completed. In this appeal, we find only that the trial judge erred in granting defendants’ motion for accelerated judgment on plaintiffs statutory and constitutional claims.
Reversed and remanded.
Const 1963, art 1, § 2; Const 1963, art 11, § 5.
MCL 37.2101 et seq.; MSA 3.548(101) et seq.
142 Mich App 557; 370 NW2d 613 (1985).
Walters v Dep’t of Treasury, 148 Mich App 809; 385 NW2d 695 (1986).
Kewin v Bd of Ed of Melvindale-Northern Allen Park Public Schools, 65 Mich App 472, 477-479; 237 NW2d 514 (1975); Oakley v Dep’t of Mental Health, 122 Mich App 638; 332 NW2d 552 (1983), vacated on other grounds 418 Mich 886 (1983).
Harris County Comm’rs Court v Moore, 420 US 77; 95 S Ct 870; 43 L Ed 2d 32 (1975).
Attorney General v Diamond Mortgage Co, 414 Mich 603, 613; 327 NW2d 805 (1982). | [
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Per Curiam.
On February 13, 1981, the trial court entered an order granting summary judgment in favor of defendants David L. McNew and Norman Mesack, doing business as Long Lake Bar and a judgment of no cause of action in favor of defendant Mary Tepass, doing business as Whispering Pines Bar. Plaintiffs have appealed as of right.
The Michigan Liquor Control Act provisions relating to lawsuits against bar owners or other sellers of intoxicants, "dramshop actions”, are an exclusive remedy in this state. There is no common-law dramshop remedy. Browder v International Fidelity Ins Co, 413 Mich 603, 613; 321 NW2d 668 (1982).
Moreover, the provision of MCL 436.22; MSA 18.993, mandating that "the minor or the alleged intoxicated person” be named as a defendant in the action, is mandatory and apparently without exception. Putney v Haskins, 414 Mich 181, 189-190; 324 NW2d 729 (1982).
Affirmed. | [
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N. J. Lambros, J.
Three cases have been consolidated on appeal in this matter. Case No. 85065 was remanded to this Court for consideration as on leave granted by the Supreme Court and deals with plaintiff-appellant Francis Nezdropa’s appeal from a Workers’ Compensation Appeal Board decision that he was not entitled to total and permanent disability benefits for the loss of industrial use of both legs and that his attorney was entitled to an attorney fee on amounts reimbursable by Wayne County to Blue Cross/Blue Shield, to be paid by either Blue Cross/Blue Shield or Wayne County. Case No. 85066 was also remanded to this Court by the Supreme Court. It concerns defendant-appellant Wayne County’s appeal from the same wcab opinion which determined that, for purposes of the Workers’ Disability Compensation Act, Wayne County was plaintiff’s employer and that plaintiff was disabled. Case No. 87823 is unrelated to the first two and concerns Wayne County’s appeal by leave granted of an August 30, 1985, opinion and order of the wcab which determined that Wayne County was plaintiff Earl Bush’s employer. Plaintiff Mary Bush filed a cross-appeal contesting the findings that she was not entitled to a penalty for late payment of benefits and that she was only entitled to ten percent interest on overdue awards.
85065 and 85066
The facts of these cases are not in dispute. Plaintiff Nezdropa first experienced gastrointestinal problems during the early 1950’s while serving in the U.S. Army. After he left the service in 1954, plaintiff began work on a bachelor’s degree at the University of Detroit and worked for the Detroit Police Department on a probationary basis. Plaintiff continued to experience gastrointestinal problems, and, as a result, he had surgery to remove his gall bladder in 1955. Plaintiff terminated his employment with the police department. After he received his degree, he began to work for the County of Wayne as a probation worker intern while pursuing graduate studies in social work.
When he was hired in September of 1958, plaintiff was qualified for temporary light duty based upon a letter from the Veteran’s Administration relating to plaintiff’s gastrointestinal problems. At that time, plaintiff was taking medication and characterized his health as fairly good. Plaintiff completed his master’s degree in 1959. He passed Civil Service and physical examinations administered by the county and began to work for the County of Wayne full time as a probation officer. In 1965, plaintiff was promoted to the newly ere ated position of administrative assistant to Judge James Lincoln of the probate court.
In 1970, Judge Lincoln appointed plaintiff Nezdropa to the position of Director of Case Work Services for the Wayne County Juvenile Court. In this capacity, plaintiff supervised the staff of 150 and worked about sixty hours per week. In 1971, Judge Lincoln discharged the Director of the Wayne County Clinic for Child Studies and added the responsibilities of that position to plaintiff’s duties as Director of Case Work.
On or about November 11, 1977, plaintiff filed a petition for hearing with the Bureau of Workers’ Disability Compensation, claiming that his position as Director of Case Work Services for the Wayne County Probate Court — Juvenile Division had aggravated, accelerated, and combined with his internal weaknesses and diseases to produce a disablement from occupational disease in January of 1976. On June 4, 1980, hearing referee James V. Lemhagen issued a memorandum opinion finding that plaintiff was totally and permanently disabled by reason of loss of the industrial use of both legs as of January 15, 1976, that the State of Michigan was plaintiff’s employer and that it was responsible for payment of weekly benefits and medical/ hospital benefits ordered, paid or reimbursed, and that Wayne County was not liable to plaintiff, and ordered that an appropriate attorney fee be paid to plaintiff’s attorney pursuant to Rule 14 of the Bureau of Workers’ Disability Compensation, 1972 AACS, R 408.44.
The wcab affirmed the award with modifications, holding that, while plaintiff did not have the reasonable use of his legs in industry, he was not entitled to compensation for total and permanent disability based on the loss of the industrial use of his legs, that plaintiff was an employee of the County of Wayne and that plaintiffs employment aggravated his preexisting Crohn’s disease from a dormant stage to a stage of devastating disability, and that the work-related disability precipitated a disabling depression, and required defendant to pay plaintiffs attorney an amount equal to thirty percent of the amount paid to Blue Cross/Blue Shield by defendant for reimbursement of advance payments made by Blue Cross/ Blue Shield to plaintiff.
Findings of fact made by the wcab are conclusive absent a showing of fraud and may not be set aside if they are supported by record evidence. Spencer v Clark Twp, 142 Mich App 63, 66; 368 NW2d 897 (1985); MCL 418.861; MSA 17.237(861). Although findings of fact by the wcab are subject to limited judicial review, where the board misconstrues the law the appellate court is free to overturn its interpretation. Tew v Hillsdale Tool & Mfg Co, 142 Mich App 29, 32; 369 NW2d 254 (1985).
Defendant argues that the wcab erred in determining plaintiff Nezdropa to be disabled due to the aggravation of his Crohn’s disease by his employment. We disagree. Workers’ compensation benefits are payable where work has accelerated or aggravated a worker’s illness, disease, or deterioration and thus contributed to it, or the work, coupled with the illness, disease, or deterioration, causes the illness in fact. Kostamo v Marquette Iron Mining Co, 405 Mich 105, 116; 274 NW2d 411 (1979). Findings of fact by the wcab that there was a causal nexus between plaintiff’s job and his illness or injury will not be disturbed on appeal where the findings are supported by competent evidence and the board applied the correct legal standard. Kain v Michigan, 109 Mich App 290, 297-298; 311 NW2d 351 (1981), lv den 413 Mich 910 (1982). The credibility of medical and lay witnesses is for the determination of the wcab, Sanford v Ryerson & Haynes, Inc, 396 Mich 630, 635; 242 NW2d 393 (1976), reh den 397 Mich 956 (1976). Causation is a factual question beyond the scope of review of appellate courts. Scroggins v Corning Glass Co, 382 Mich 628, 630; 172 NW2d 367 (1969). The question of whether plaintiff is disabled is also a question of fact. Dressler v Grand Rapids Die Casting Corp, 402 Mich 243, 251; 262 NW2d 629 (1978).
The wcab’s determination was amply supported by the evidence produced. Plaintiff Nezdropa testified that he believed that his employment contributed adversely to his physical and mental disability. Dr. Lawrence H. Warbasse testified that emotional stress may exacerbate Crohn’s disease. He noted that while there is a controversy as to whether Crohn’s disease is made worse by stress, there is no doubt that the symptoms of the disease are made worse by it. In his opinion, plaintiff was disabled by the symptoms of the disease. Dr. Joel S. Dreyer testified that plaintiff’s work caused depression, anxiety, and a diminished ability to function. Dr. William U. Reid, who examined plaintiff at the county’s request, testified that plaintiff’s employment had little effect on the course of the disease, although it could have affected his symptoms. He admitted that, occasionally, the symptoms of Crohn’s disease can be disabling and maintained that stress could have contributed to the severity of plaintiff’s symptoms, but not to the underlying pathology. Dr. Aubrey Goldman testified that stress can exacerbate the symptoms of Crohn’s disease, although it is doubtful that the disease process itself is affected. Dr. Goldman noted that the symptoms of the disease could prevent an individual from working or even kill him. Dr. Erwin F. Finklestein testified that plaintiff Nezdropa had a psychiatric disability, but that it was not related to his work. He noted that he had never seen an individual with Crohn’s disease who did not have episodic depression. Dr. Finklestein indicated that work could have exacerbated plaintiff’s depression.
On these facts, it is clear that the wcab’s determination on this issue should not be disturbed.
In a related issue, plaintiff argues that the wcab erred when it determined that he was not entitled to total and permanent disability benefits for the loss of industrial use of both legs. Once again we agree with the wcab’s findings.
MCL 418.361(3)(g); MSA 17.237(361)(g) provides:
Total and permanent disability, compensation for which is provided in section 351 means:
(g) Permanent and total loss of industrial use of both legs or both hands or both arms or 1 leg and 1 arm; for the purpose of this subdivision such permanency shall be determined not less than 30 days before the expiration of 500 weeks from the date of injury.
There is permanent and total lack of industrial use of both legs where (1) an employment-related injury in one or both legs causes pain or other condition that prevents use of both legs in industry or (2) the use of one or both legs, whether or not injured, triggers an employment-related injury or malady in any part of the body, including one or both legs, that causes pain or other condition that prevents use of both legs in industry. Burke v Ontonagon Co Road Comm, 391 Mich 103, 114; 214 NW2d 797 (1974). Loss of industrial use is a question of fact to be determined by the wcab. Villanueva v General Motors Corp, 116 Mich App 436, 440; 323 NW2d 431 (1982), lv den 417 Mich 937 (1983).
This case is controlled by Triplett v Chrysler Corp, 394 Mich 518; 232 NW2d 168 (1975), reh den 395 Mich 911 (1975), where the Supreme Court held that the Burke rule was not intended to include cases in which the loss of industrial use of the legs is caused by a generally debilitating disease. 394 Mich 520.
In the present case, the wcab concluded:
Plaintiff’s loss of industrial use of his legs is the result of a myopathy which, presumably nutritional in nature, is most likely related to plaintiffs Crohn’s disease and the accompanying malabsorption syndrome and results in the generalized muscle weakness which plaintiff experiences. Per the testimony of Dr. Warbasse, while plaintiffs legs are somewhat more affected than other muscle groups, the myopathy is nonetheless generalized in nature. Plaintiffs loss of use of his legs is therefore the result of his Crohn-related myopathy and, to a substantial degree, affects all muscle functions throughout his body in a similar manner. Plaintiff is thus not entitled to statutory benefits for industrial loss of use of his legs.
We find that the wcab correctly applied the Triplett test and that plaintiff was not entitled to compensation for the loss of industrial use of his legs.
Having determined that the wcab was correct in deciding the compensation to which plaintiff was entitled, we turn to the question of determining which entity was responsible for paying that compensation. Wayne County argues that the State of Michigan should be responsible; the State of Michigan argues that Wayne County should be responsible. Plaintiff, as is to be expected, does not care who pays as long as he collects his compensation.
A similar question was addressed in Kain v Michigan, 109 Mich App 290; 311 NW2d 351 (1981), lv den 413 Mich 910 (1982), where this Court was asked to determine whether the City of Grand Rapids or the State of Michigan was liable for workers’ disability compensation benefits due to the dependents of a deceased assignment clerk of the 61st District Court. This Court held that the 61st Judicial District is an administrative unit of the state’s one court of justice. However, the judicial district was created by statute, MCL 600.8101(1); MSA 27A.8101(1), which then created a district control unit and assigned it the cost of operating the court. Thus, this Court concluded that there was clear legislative intent to make the court the employer, which mandated that the local control unit provide workers’ compensation disability coverage.
We have decided to approach the issue in a different fashion. Although we reach the same result we would have had we followed Kain, supra, we feel that a different test should be used.
Under Michigan’s Worker’s Disability Compensation Act, MCL 418.101 et seq.; MSA 17.237(101) et seq., the economic realities test is used to determine if an employer-employee relationship exists. Farrell v Dearborn Mfg Co, 416 Mich 267, 276; 330 NW2d 397 (1982). That test was first adopted by the Supreme Court in Tata v Muskovitz, 354 Mich 695; 94 NW2d 71 (1959). While earlier applications of the test dealt with the distinction between an independent contractor and an employee or labor-broker situations, it is also appropriate to use the economic realities test to determine which of two entities was a claimant’s actual employer for purposes of the Workers’ Disability Compensation Act. Wells v Firestone Tire & Rubber Co, 421 Mich 641, 647; 364 NW2d 670 (1984).
The relevant factors to be considered under the economic realities test are: (1) control of a worker’s duties; (2) payment of wages; (3) the right to hire, fire, and discipline; and (4) the performance of the duties as an integral part of the employer’s business toward the accomplishment of a common goal. Lambard v Saga Food Service, Inc, 127 Mich App 262, 270; 338 NW2d 207 (1983), lv den 419 Mich 958 (1984); Askew v Macomber, 398 Mich 212, 217-218; 247 NW2d 288 (1976). The test looks to the employment situation in relation to the statutory scheme of workers’ compensation law, with the goal of preserving and securing the rights and privileges of all parties. No one factor is controlling. Farrell, supra, p 276.
In this case, plaintiff Nezdropa testified that Judge James H. Lincoln appointed him to the position of Director of Case Work Services for the Wayne County Probate Court — Juvenile Division. In that capacity, he was the administrative head of the Social Services Division of the court and was responsible for seven or eight divisions. Wayne County paid his salary and his medical insurance. He had a contract with Wayne County, and if he had a grievance he would negotiate it with Wayne County. Plaintiff was on a pension provided by Wayne County and his desk and supplies were provided by Wayne County. Plaintiff prepared budgets which were sent to Wayne County.
William M. Lawrence, Jr., testified that he was employed by the Wayne County Juvenile Court as a court executive. According to Lawrence, the executive judge appoints the Director of Case Work Services of the Juvenile Court and he or she discharges individuals in that position. It would be fair to say that, as a matter of economic reality, the court system depended on Wayne County for all its funds. Salaries of the juvenile court judges were paid by the county and supplemented by the state. Clearly, the wcab’s findings were amply supported by the evidence produced.
We recognize that there is some conflict in this Court as to whether application of the economic realities test is a question of fact or a matter of law. We feel it is the latter. See Askew, supra, Lambard, supra, and Stover v Midwest Tank & Fabrication Co, Inc, 87 Mich App 452; 275 NW2d 15 (1978), lv den 406 Mich 926 (1979). To the extent that there are other cases which infer that application of the economic realities test is a question of fact, we decline to follow them. See Coleman v Western Michigan University, 125 Mich App 35; 336 NW2d 224 (1983), lv den 418 Mich 872 (1983); Nichol v Billot, 406 Mich 284; 279 NW2d 761 (1979).
The last issue in these two appeals concerns plaintiffs attorney’s fee. The wcab initially ordered Blue Cross/Blue Shield to pay plaintiffs attorney an amount equal to thirty percent of the amount reimbursable to Blue Cross by Wayne County. This Court’s June 22, 1983, order denying leave to appeal summarily reversed that award:
It is ordered, pursuant to GCR 1963, 806.7 and 820.1(7), that the March 8, 1983 order of the Worker’s Compensation Appeal Board in this cause, fixing and awarding attorney fees and ordering payment thereof by Blue Cross Blue Shield of Michigan, be, and the same is hereby reversed, Boyce v Grand Rapids Paving Co, 117 Mich App 546, 549-550 (1982); and,
It is further ordered that this cause be, and the same is hereby remanded to the Worker’s Compensation Appeal Board for further proceedings consistent with this order. If the pertinent events occurred subsequent to the 1979 amendment to Rule 14, 1972 AACS, [R] 408.44, the employer may be liable for payment of the attorney’s fee. Boyce, supra, 117 Mich App at 551, n 1.
Upon remand, the wcab concluded that pertinent events occurred subsequent to the 1979 amendment to Rule 14 and ordered Wayne County to pay plaintiffs attorney an amount equal to thirty percent of the amount reimbursed to Blue Cross. On September 5, 1984, this Court vacated that portion of the wcab order directing Wayne County to pay plaintiff’s attorney a fee on the amount reimbursable to Blue Cross. Because this case is before us on remand from the Supreme Court, we must now determine whether Blue Cross, Wayne County, or neither should be required to pay plaintiffs attorney thirty percent of the amount reimbursable to Blue Cross by Wayne County.
Wayne County and Blue Cross have an agreement that Blue Cross does not pursue litigation against the county in workers’ compensation cases and the county reimburses Blue Cross for one hundred percent of medical expenses in cases where the county has an open award or pays voluntarily. According to Blue Cross, this system saves time, effort, and administrative costs and Blue Cross does not have to gain the cooperation of a claimant’s attorney. The reimbursed amount is credited to the group’s utilization and the subscriber’s history file.
This Court originally reversed the wcab’s award of attorney fees based on Boyce v Grand Rapids Asphalt Paving Co, 117 Mich App 546; 324 NW2d 28 (1982), lv den 417 Mich 1023 (1983). In Boyce, this Court held that a hospital, which did not employ or authorize employment of plaintiffs attorney, is not responsible for any portion of the attorney fees. Id., 549-550. This Court noted:
Where one of several persons, all of whom are equally interested in the results of a suit, employs an attorney to conduct the case for him and the benefit of the attorney’s services from the nature of the case extends to all interested parties, the other parties do not, merely by accepting the benefits of the attorney’s services without objection, become liable for the attorney’s fees. [117 Mich App 549.]
We find Boyce to be controlling on this issue. The agreement between Blue Cross and Wayne County undoubtedly saves time and money which is reflected in the price of health insurance premiums the county pays to Blue Cross on behalf of its employees. In a society which is said to be overly litigious, we find this method of "alternative dispute resolution” to be a matter of sound public policy. The fact that the agreement is apparently not in writing matters not. Only a statute of frauds problem would require a writing and this agreement does not violate the statute of frauds. See MCL 566.132; MSA 26.922.
Plaintiff contends that Boyce, supra, is inapplicable because his attorney seeks compensation pursuant to MCL 418.821; MSA 17.237(821) and not under any implied contract theory. The statute expressly authorizes the assessment of a pro rata share of a claimant’s attorney’s fees against an insurance company which seeks to enforce an assignment given it by the claimant-employee in exchange for an advance payment under a group hospitalization insurance policy. See Zeeland Community Hospital v VanderWal, 134 Mich App 815, 824; 351 NW2d 853 (1984).
We find a flaw with plaintiff’s argument. Blue Cross never sought to enforce an assignment. Blue Cross got a trust and assignment only at the behest of the hearing referee. We decline to order Blue Cross to enforce an agreement it did not want and to be represented by an attorney it did not hire and had no desire to be represented by.
We next turn to the issue of whether Wayne County should be liable for the fee. This issue was also addressed by this Court in Boyce, supra, when it discussed MCL 418.315; MSA 17.237(315). In pertinent part, it provides:
The employer shall furnish, or cause to be furnished, to an employee who receives a personal injury arising out of and in the course of his employment, reasonable medical, surgical, and hospital services and medicines, or other attendance or treatment recognized by the laws of this state as legal, when they are needed. ... If the employer fails, neglects or refuses so to do, the employee shall be reimbursed for the reasonable expense paid by him, or payment may be made in behalf of the employee to persons to whom the unpaid expenses may be owing, by order of the hearing referee. The hearing referee may prorate attorney fees at the contingent fee rate paid by the employee ....
While the final sentence could be construed to require Wayne County to pay plaintiffs attorney fee, it must be interpreted in light of the administrative rules of the Bureau of Workers’ Disability Compensation. Rule 14, which was in effect on the date of plaintiffs injury, contains the following subrule:
(2) In a case tried to completion with proofs closed or compensation voluntarily paid, an attorney shall first deduct the reasonable expenses from the accrued compensation which have been incurred by the plaintiff. The fee which the referee may approve shall not be more than 30% of the balance. [1972 AACS, R 408.44.]
Reasonable expenses, listed in subrule 5, include hospital and medical expenses. Thus, under the rule, "an attorney cannot recover a percentage fee for any portion of compensation recovery which represents accrued medical expenses.” Boyce, supra, p 551.
As footnote 1, page 551 of Boyce, supra, points out, the rule was amended in 1979, deleting hospital and medical expenses from the list of reasonable expenses. This case was previously remanded to the wcab for determination of whether the "pertinent events” occurred subsequent to the 1979 amendment, thus making Wayne County liable for payment of the attorney’s fee. The wcab determined that the assignment, plaintiffs attorney’s efforts, and the hearings in this matter all occurred after the 1979 amendment and ordered Wayne County to pay the attorney’s fees. That directive was vacted by this Court on September 5, 1984.
According to our reading of Boyce, the pertinent event is the date of plaintiffs injury. Although footnote 1 in Boyce does mention the contingency fee contract between the plaintiff and the attorney, we find that the implicit holding of Boyce is that the date of the injury controls. In the present case, plaintiff Nezdropa alleges his injury occurred in January, 1976, long before the 1979 amendment of Rule 14. Thus, Wayne County is not liable to plaintiffs attorney for attorney fees on the amount reimbursable to Blue Cross.
87823
On May 26, 1982, the Workers’ Compensation Appeal Board ordered the Common Pleas Court to pay compensation to Mary Bush (plaintiff), the widow of Earl Bush, deceased. Plaintiff’s petition contended that Earl Bush suffered a heart attack and cerebral vascular accident brought on by his duties as a bailiff or process server for the Court of Common Pleas.
When payment was not forthcoming plaintiff brought an action in Wayne Circuit Court, which granted Wayne County’s motion for summary judgment and denied plaintiffs petition for entry of judgment in the action. The Bureau of Workers’ Disability Compensation then held a Rule V hearing to determine if there had been a lack of compliance with the final order of the wcab. The bureau concluded that the wcab’s order was ambiguous and that an appellate court would have to resolve the question of which governmental entity was liable for the benefits which defendant Com mon Pleas Court was ordered to pay. On October 11, 1983, a panel of this Court held that it was for the bureau to determine which of the defendants was responsible for paying the benefits awarded. See Bush v Detroit, 129 Mich App 658, 662; 341 NW2d 859 (1983).
On August 30, 1985, the wcab ordered Wayne County to pay all benefits due and owing pursuant to the wcab’s May 26, 1982, order, because, for the purposes of this case, Wayne County and the Common Pleas Court were one and the same. No penalty was imposed against Wayne County by the WCAB.
The first issue we address is whether the wcab erred when it ordered Wayne County to pay benefits to plaintiff. Plaintiff argues that this Court is not called on to decide which entity was plaintiff’s decedent’s employer; rather, we are only being asked to determine what entity was responsible for paying the debt of the Common Pleas Court, which was found to be plaintiff’s decedent’s employer by the hearing referee. We disagree and find that the real issue, as in the Nezdropa case, is which entity —the city, the county, or the state — was the plaintiff’s decedent’s employer for purposes of the Workers’ Disability Compensation Act. As we decided in the Nezdropa case, under Michigan’s Workers’ Disability Compensation Act, the economic realities test is used to determine if an employer-employee relationship exists.
Earl Bush, now deceased, was appointed as a bailiff with the Common Pleas Court in January of 1969. According to the chief deputy clerk of the Common Pleas Court, the bailiffs are not court employees and are paid service fees, which are set by statute, when and if they serve the papers in an action. Wayne County issued the checks paid to Earl Bush.
The offices and all office equipment and furniture of the bailiffs was furnished by Wayne County. The county furnished a secretary for the bailiffs and handled their pension plan. The county provided medical and life insurance and required and paid for a physical examination for all new hires of the court system. The Court of Common Pleas informally used the Wayne County Civil Service system.
A review of the above, when considering the relevant factors of the economic realities test as found in Askew v Macomber, supra, pp 217-218, leads us to the conclusion that for the purposes of the Workers’ Disability Compensation Act, plaintiff’s decedent was an employee of Wayne County. Thus, we affirm the wcab order that Wayne County be responsible for paying benefits to plaintiff.
We next address whether the wcab erred when it found that plaintiff was not entitled to a $1,500 penalty for late payment of benefits.
At the time of Earl Bush’s injury, MCL 418.801(2); MSA 17.237(801)(2) provided:
If weekly compensation benefits, accrued weekly benefits, medical bills, or travel allowance are not paid within 30 days after becoming due and payable in cases where there is no ongoing dispute, $50.00 per day shall be added and paid to the worker for each day over 30 days in which the compensation, medical bills, or travel allowance are not paid. Not more than $1,500.00 in total may be added pursuant to this subsection.
Two reasons were given by the wcab for not ordering that Wayne County pay a penalty. The first is that the Common Pleas Court had ceased to exist when the wcab entered its order in 1982. The failure of the board to specify which governmental entity was responsible for payment for workers’ compensation purposes was sufficient to constitute an ongoing dispute within the meaning of the statute. Another member'noted that since Wayne County had not previously been notified of its liability, it would be violative of due process to assess a penalty for late payment.
A workers’ compensation award is "in dispute,” for purposes of this section, while a review or appeal is pending and during the time periods for filing a claim for review or of appeal. Warner v Collavino Bros, 133 Mich App 230, 235; 347 NW2d 787 (1984), lv den 422 Mich 862 (1985). The existence of a dispute is a finding of fact which will not be overturned by this Court if it is supported by some competent evidence. Id., 237.
Clearly, the wcab’s finding that there was a dispute in this case was correct. This Court’s own earlier opinion in this case indicated that there was an existing controversy. We therefore affirm the wcab’s ruling on this issue.
In a related issue, plaintiff contends she should have been given twelve percent interest on overdue benefits. We disagree.
MCL 418.801(5); MSA 17.237(801)(5), as set forth in 1981 PA 194, provided:
When weekly compensation is paid pursuant to an award of a hearing referee, the board, or a court, interest on the compensation shall be paid at the rate of 12% per annum from the date each payment was due, until paid.
In Selk v Detroit Plastic Products (On Resubmis sion), 419 Mich 32, 35; 348 NW2d 652 (1984), the Supreme Court held that when an employer pays compensation on or after January 1, 1982, pursuant to an award interest on the award shall be paid at twelve percent from the date each payment was due.
However, 1985 PA 103, accepted and filed July 30, 1985, and ordered to take immediate effect, amended MCL 418.801; MSA 17.237(801). The new version of subsection 6 of the statute now provides that interest on the compensation shall be paid at the rate of ten percent. The wcab entered the order in this case on August 30, 1985. The analysis of Selk, supra, applies to the new statute as well. Since Wayne County will pay compensation after the effective date of the act, the ten percent rate of the new act is the correct rate of interest.
Remanded for proceedings consistent with this opinion.
We note that the parties are referring to MCL 418.361(2)(g); MSA 17.237(361)(2)(g). The 1980 amendment to this section redesignated parts of subsection 2 and 3 as subsections 3 and 4. See the historical note to MCL 418.361 in the Michigan Compiled Laws Annotated volume. Presumably the earlier numbering of the section was in effect when this plaintiff was injured. See Ayres v American Chain & Cable Co, 56 Mich App 111; 223 NW2d 641 (1974), lv den 393 Mich 784 (1984) (date of injury controls compensation rights).
The Legislature, in 1980 PA 438, provided for state assumption of court costs for Wayne Circuit, Detroit Recorder’s, and the 36th District Courts. However, this plaintiff claims he became disabled in January, 1976, when the Wayne County courts were still locally funded.
We have not discussed Judges of the 74th Judicial Dist v Bay County, 385 Mich 710; 190 NW2d 219 (1971), Employees & Judges of the 2nd Judicial Dist Court v Hillsdale Co, 423 Mich 705; 378 NW2d 744 (1985), and similar cases because we find them to be inapplicable. See 2C Larson, Workmen’s Compensation Law, § 4342. These cases deal with the financing and power structure of the Michigan courts and do not address the Workers’ Disability Compensation Act.
This statute was amended by 1978 PA 523, § 1 and 1982 PA 282, § 1. However, since neither amendment made a substantive change in the statute, it is unnecessary for us to determine if the statute or either of its amended versions governs.
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M. Warshawsky, J.
Defendant appeals as of right from the Oakland County Circuit Court’s March 23, 1982, judgment awarding damages to plaintiffs for defendant’s failure to seize property pursuant to a writ of execution.
A detailed statement of facts and proceedings is necessary for resolution of the issues raised. On September 27, 1974, and November 24, 1974, default judgments were entered in favor of plaintiffs and against Peter Lazaros and the Lazaros trust. These judgments totaled $550,000 against Lazaros individually and $850,000 against the trust. Plaintiffs made several efforts thereafter to enforce the judgments and, on February 19, 1976, an order for a bench warrant for the arrest of Lazaros was entered after he failed to appear for a creditor’s examination. In March, 1976, plaintiffs filed a petition for writ of superintending control directing Sheriff Spreen to execute the bench warrant. Sheriff Spreen was granted time to produce medical evidence that Peter Lazaros was not physically fit to be brought before the court. On or about April 18, 1976, Lazaros was admitted to a local hospital. On April 21, 1976, the sheriff was ordered to execute the bench warrant, and at that time Lazaros was taken into custody pursuant to the bench warrant by placing a rotating sheriffs guard at the hospital room. On April 28, 1976, the sheriff moved to absolve himself from the obligation to bring Lazaros before the court until it was determined to be medically reasonable, and a hearing on the motion was scheduled for May 10, 1976. On May 3, 1976, a writ of execution against property of Peter Lazaros and the Lazaros trust was issued and delivered to the Oakland County Sheriff’s office. The writ specified for seizure certain items of jewelry purportedly held in Lazaros’s hospital room and a 1972 Cadillac limousine.
The hospital room guard was removed on May 6, 1976, pursuant to direction of Undersheriff John Nichols. This action was taken pursuant to a letter to the circuit judge from the Oakland County Prosecuting Attorney. Execution was not made on any item of jewelry before the guard was removed. On May 7, 1976, Sheriff Spreen was informed by the hospital that Peter Lazaros was leaving that day. Sheriff Spreen directed the hospital to permit Lazaros’s departure. Lazaros left the hospital and apparently went to a Cleveland, Ohio, hospital for further treatment.
On May 19, 1976, plaintiffs filed a complaint alleging misfeasance and malfeasance on the part of the Oakland County Sheriff and misfeasance of the county itself as the sheriff’s employer. Plaintiffs’ complaint sought damages in the full amount of their judgments against Lazaros and the Laza ros trust, plus punitive damages against the sheriff. The trial court dismissed plaintiffs’ claim against the sheriff, finding that plaintiffs had failed to meet an asserted burden that Lazaros actually possessed the proeprty sought to be seized and to prove its value. The claim against Oakland County was dismissed pursuant to the constitutional restriction against county liability for a sheriff’s acts. Const 1963, art 7, § 6.
On plaintiffs’ appeal a panel of this Court affirmed dismissal of the claim against the county but reversed the dismissal of the claim against Sheriff Spreen. Valentino v Oakland County (Docket No. 52781, decided August 12, 1981 [unreported]). The Court held that once a plaintiff shows that a sheriff has failed to levy a writ of execution, he is entitled to recover the full amount of the prior final judgment, and the burden is on the sheriff to prove that his failure to levy was excused, primarily upon a showing that the property sought for execution does not exist. The case was remanded for trial on the issue of whether Sheriff Spreen was negligent in failing to restore the guard to the hospital room on May 7, 1976. The Supreme Court denied leave to appeal. 412 Mich 876 (1981).
Trial was held on March 15, 1982. Based on stipulations of counsel, the court found in pertinent part that the guard was removed from Lazaros’s hospital room pursuant to direction of Under-sheriff Nichols, who was acting pursuant to his authority as second in command of the sheriff’s office; that Sheriff Spreen had no personal knowledge that the guard was removed on May 6, 1976; and that Lazaros’s hospital room was not searched during the time he was under guard until and including the time he was permitted to leave the hospital. The trial court issued an oral opinion finding that Under sheriff Nichols was negligent in removing the guard and that Sheriff Spreen was vicariously liable for the acts of Undersheriff Nichols. On March 22, 1982, the court issued the following written opinion supplementing its oral opinion:
"This court having previously rendered its oral opinion, supplements that opinion with this written addition.
"Based on the stipulations of fact on the record and admitted facts in the pleadings, the court determines as a matter of fact and law that the defendant sheriff was not only negligent but without lawful excuse, through his undersheriff who acted in his place, intentionally disregarded an order of the court and released Peter Lazaros from custody, thus depriving the plaintiffs of any opportunity to determine the assets available, if any, to satisfy the plaintiff’s [sic] judgments.”
Judgment against Sheriff Spreen was entered March 23, 1982, awarding plaintiffs $2,247,000, including interest. Defendant filed a claim of appeal on April 9, 1982.
On April 12, 1982, plaintiffs filed a motion to modify the court’s findings of fact, and subsequently filed two supplemental motions to modify findings of fact. Plaintiffs alleged that Sheriff Spreen had prior knowledge of the removal of the guard from Lazaros’s hospital room and that defense counsel’s statements to the contrary were made falsely. Plaintiffs asked the court to delete its earlier finding that the sheriff had no prior knowledge of the guard’s removal, and sought a finding that Sheriff Spreen was negligent in failing to execute the bench warrant and in failing to levy the writ of execution.
Following evidentiary hearings, the trial court on November 10, 1982, entered written findings of fact and conclusions of law. The court found in pertinent part that Sheriff Spreen was personally informed on May 7, 1976, that Lazaros was leaving the hospital and failed to take Lazaros into custody as required by the bench warrant and the April 21, 1976, court order; that the sheriff’s act of permitting Lazaros to leave the jurisdiction on May 7, 1976, was a wrongful and intentional act, even though it was made in good faith reliance upon advice of civil counsel; that the sheriff did not have personal knowledge of the existence of the writ of execution on May 7, 1976, but was charged with legal notice of the writ; and that, in addition to the sheriff’s liability for his own intentional act, he was vicariously liable for the negligence of Undersheriff Nichols in removing the guard on May 6, 1976. The court reaffirmed the March 23, 1982, judgment as modified. Final judgment was entered December 2, 1982.
I
Following Entry of the Court’s March 23, 1982, Judgment and Defendant’s Filing of the Claim of Appeal From That Judgment, Did the Trial Court Have Jurisdiction to Hold Further Evidentiary Hearings and to Modify Its Earlier Findings?
Defendant argues that the motion was in effect a motion for new trial or to amend or alter a judgment, both of which must be served within 20 days after entry of the judgment. GCR 1963, 527.1, 527.2, 527.5. Defendant asserts that the court was without jurisdiction to hear the motion to modify findings of fact or to hold an evidentiary hearing because the motion was not served on him until April 13, 1982, the twenty-first day after entry of the judgment. In a related argument defendant asserts that the trial court lost jurisdiction at the time defendant filed the claim of appeal on April 9, 1982. Finally, defendant says that because the court’s original findings were based on stipulations of counsel, the court was without authority to hold an evidentiary hearing and make contrary findings of fact. We disagree with all of defendant’s contentions.
Plaintiffs’ motion to modify was expressly brought pursuant to GCR 1963, 517.2, and was so considered by the trial court. That subrule provides:
"Upon motion of a party made not later than 20 days after entry of judgment the court may amend its findings or malee additional findings and may amend the judgment accordingly. The motion may be made with a motion for new trial pursuant to Rule 527. When findings of fact are made in actions tried by the court without a jury, the question of the sufficiency of the evidence to support the findings may thereafter be raised whether or not the party raising the question has made in the circuit court an objection to such findings or has made a motion to amend them or a motion for judgment.”
We read the subrule as requiring that the motion be filed within 20 days from the time the judgment is entered. The motion to modify in this case was filed on April 12, 1982, the twentieth day after entry of the judgment, and was therefore timely.
As to defendant’s argument that the court lost jurisdiction upon the filing of the claim of appeal, GCR 1963, 802.2(1) provides:
".2 Effect of Filing Claim of Appeal.
"(1) Except as otherwise provided by statute or rule, and until the record is filed in the Supreme Court or Court of Appeals, the trial court, tribunal or officer has jurisdiction to grant further time to do, properly perform, or correct any act in connection with the appeal, omitted or insufficiently done, except to extend time for filing claim of appeal or paying the appeal fee, to dismiss the appeal, or to allow a delayed appeal.”
In Williams v State Highway Dep't 44 Mich App 51, 62-63; 205 NW2d 200 (1972), lv den 389 Mich 780 (1973), the Court held that the subrule confers concurrent jurisdiction on the trial court and the Court of Appeals until the record is filed. Since the record in the instant case was not filed until March 4, 1983, the circuit court had jurisdiction to decide plaintiffs’ motion to modify findings of fact.
Defendant finally asserts that the court, having made findings based on stipulations of counsel at the March 15, 1982, hearing, was without authority to take further evidence and make findings of fact contrary to the stipulations.
Defendant relies on Dana Corp v Employment Security Comm, 371 Mich 107, 110; 123 NW2d 277 (1963), in which the Court stated that once stipulations have been received and approved they are sacrosanct, and neither a hearing officer nor a judge may thereafter alter them. However, a trial court does have equitable power to relieve a party from a stipulation where there is evidence of mistake, fraud or unconscionable advantage taken by one party over the other. See Jackson v Wayne Circuit Judge, 341 Mich 55; 67 NW2d 471 (1954); Powell v Martone, 322 Mich 441; 33 NW2d 914 (1948); Collins v Searight-Downs Mfg Co, 245 Mich 41; 222 NW 84 (1928); Meyer v Rosenbaum, 71 Mich App 388; 248 NW2d 558 (1976). A fraud is perpetrated on the court when some material fact is concealed from the court or some material misrepresentation is made to the court. DeHaan v DeHaan, 348 Mich 199; 82 NW2d 432 (1957); MacArthur v Miltich, 110 Mich App 389, 391; 313 NW2d 297 (1981). Where a party alleges that a fraud has been perpetrated on the court, the court must conduct an evidentiary hearing to determine whether such fraud exists. Parlove v Klein, 37 Mich App 537, 544-545; 195 NW2d 3 (1972), lv den sub nom Willey v Partridge, 387 Mich 780 (1972).
In this case plaintiffs’ motion to modify findings of fact and supplemental motions alleged that certain correspondence released to the media indicated that, contrary to defense counsel’s in-court stipulations, Sheriff Spreen did have prior knowledge of the guard’s removal from the hospital room and prior knowledge that Lazaros was leaving the hospital. Plaintiffs’ motions specifically alleged fraud upon the court in that defense counsel falsely represented that Sheriff Spreen had no prior knowledge of the pertinent facts of this case. We find under these circumstances that the trial court did not err in holding a hearing and deciding the factual issue of Sheriff Spreen’s prior knowledge based on the evidence.
II
Did the Trial Court Err in Holding That Defendant Had the Burden of Proving the Nonexistence of Property Subject to Levy?
In the prior appeal a different panel of this Court addressed this question and held that:
"[A] plaintiff who shows that a sheriff has failed to levy a writ of execution has established a prima facie case and is entitled to recover the full amount of the prior final judgment. Dunphy v People for Use of Whipple, 25 Mich 9, 12 (1872); People for Use of Springett v Colerick, 67 Mich 362, 368-370; 34 NW 683 (1887). While the sheriff may excuse his failure to enforce a levy, primarily upon showing the property sought for execution does not exist, Dunphy, supra, he bears the burden of proving such an excuse. Coville v Bentley, 76 Mich 248, 250; 42 NW 1116 (1889); Beard v Clippert, 63 Mich 716; 30 NW 323 (1886).” Valentino v Oakland County, supra. (Footnote omitted.)
The Court concluded that the trial court erred in dismissing the complaint on the ground that plaintiffs had failed to show damages, and remanded for a determination of Sheriff Spreen’s liability.
Where a prior ruling of this Court concerns the same question of law in the same case, the doctrine of the law of the case applies and the prior ruling is controlling. People v Stinson, 113 Mich App 719, 730; 318 NW2d 513 (1982). The issue raised by defendant in this appeal is precisely the same issue raised in the earlier appeal. This Court’s prior decision is therefore controlling.
Ill
Did the Trial Court Err in Holding Sheriff Spreen Directly Liable for His Failure to Restore the Guard to Lazaros’s Hospital Room on May 7, 1976?
In the trial court’s original decision issued in March, 1982, Sheriff Spreen was found vicariously liable for Undersheriff Nichols’s removal of the guard on May 6, 1976. Following the evidentiary hearing the trial court issued an opinion on November 10, 1982, reaffirming the finding of vicari ous liability and, in addition, holding the sheriff directly liable for his failure to restore the guard on May 7, 1976. The trial court held:
"The decision of the defendant, Johannes Spreen, not to restore the guards at the hospital room of Peter Lazaros was wrongful. The sheriff was under the direct orders of this court as evidenced by the bench warrant of February 19, 1976, and the ruling of April 21, 1976. Upon arresting any defendant on a bench warrant, it is the express duty of the sheriff to detain him in his custody until the court orders otherwise. MCL 600.1735; MSA 600.1735.
"The decision of the defendant, Johannes Spreen, was not an act of negligence. It was an intentional act taken after consultation with civil counsel. Defendant’s reliance upon the advice of civil counsel was in scrupulous good faith; nonetheless that reliance was misplaced. Although good faith reliance upon the advice of counsel may be some evidence of reasonable care in the performance of a sheriff’s duty, it does not on the facts of this case excuse the defendant from compliance with the orders of this court. Defendant was aware of his duty and of the outstanding orders. Defendant was the respondent in litigation to compel the performance of his duty. Defendant’s decision not to restore the guards was made on the eve of an evidentiary hearing to determine whether Peter Lazaros could be safely moved and brought before the court. There is no justifiable reason why the defendant should have contemplated refusing to follow the orders of this court. Consequently, the defendant’s decision not to re-arrest Peter Lazaros was without lawful excuse.
* * *
"The effect of the decisions to remove the guards and not to re-arrest Peter Lazaros was apparent even prior to the final decision having been made. Peter Lazaros was in the process of leaving St. Joseph’s Hospital at the time the defendant was personally apprised of his actions. Having left the hospital and the custody of the sheriff, it must have been reasonably anticipated that he would leave the jurisdiction of the court. This he did. Therefore, the decisions to remove and not to restore the guards were proximately related to the ultimate inability of the sheriff to execute on the writ.
"Although defendant, Johannes Spreen did not have personal knowledge of the existence of the writ of execution until after the commencement of this present suit, he should have known and consequently must be charged with knowledge of the existence of that writ.” (Footnote omitted.)
The court’s December 2, 1982, order states in pertinent part:
"It is further ordered and adjudged that the intentional act of the Oakland County Sheriff, Johannes Spreen, in refusing to re-arrest Peter Lazaros on the advice of counsel, after being informed by the head of security at St. Joseph Mercy Hospital that Peter Lazaros was discharging himself from the hospital, was without lawful excuse and contrary to the court’s order for bench warrant, writ of superintending control, and the statutes of the State of Michigan.
"It is further ordered and adjudged that the Oakland County Sheriff, Johannes Spreen, was negligent for his failure to levy or otherwise act upon the writ of execution issued and delivered to the Oakland County Sheriff on May 3, 1976.”
Defendant argues that, although he may have violated the bench warrant and the April 21, 1976, order, liability to plaintiffs does not attach because the allegedly wrongful act did not proximately cause plaintiffs’ alleged loss. Citing Palsgraf v Long Island R Co, 248 NY 339; 162 NE 99; 59 ALR 1253 (1928), defendant asserts that, since he was not aware of the writ of execution, the risk of loss to plaintiffs was not foreseeable and proximate causation was therefore not established. We do not agree.
There is no challenge to the trial court’s finding that Sheriff Spreen intentionally failed to comply with the bench warrant and the April 21, 1976, order to arrest Lazaros. The record clearly supports this finding. Although Sheriff Spreen did not have actual knowledge of the existence of the writ of execution as of May 7, 1976, we agree with the trial court that under these circumstances he must be charged with notice of the writ. The trial court stated:
"Since March 26, 1976, when the defendant was named as the respondent on plaintiffs’ petition for writ of superintending control, he had notice that Peter Lazaros was subject to arrest on civil process. He was also on notice that the civil process issued for the failure of Peter Lazaros as a judgment debtor to appear for discovery. From March 26, 1976, through May 10, 1976, defendant was actively engaged, through counsel, in proceedings to determine his obligation with respect to that outstanding civil process. Given the nature of the outstanding process, defendant’s active involvement in litigation to enforce that process and the length of time, defendant, Johannes Spreen, had a duty to check the records of the civil division for outstanding writs of execution. Having failed to make that obvious investigation he must be charged with knowledge that a writ had in fact been received by the office of the sheriff.”
The court did not err in holding that Sheriff Spreen should reasonably have foreseen that his failure to maintain Lazaros in custody, in disobedience of court orders, would likely result in Lazaros’s leaving the jurisdiction of the court and hence, the inability to seize property pursuant to the writ of execution. We conclude that the court did not err in finding that plaintiffs’ damage was proximately caused by defendant’s intentional act.
Defendant also relies on MCL 600.1741; MSA 27A.1741, which provides:
"Whenever an officer is required to keep any person arrested upon a bench warrant in actual custody, and to bring him personally before any court, the inability, from sickness or otherwise, of such person to attend such court personally, is a sufficient excuse for not bringing him before such court.”
Defendant asserts that this statute relieved him from any duty to prevent Lazaros from departing the hospital on May 7, 1976. However, the clear language of the statute only excuses the officer from bringing the arrested person before the court; nothing in the statute authorizes release of the arrested person from custody.
We conclude that the trial court did not err in holding Sheriff Spreen directly liable for his failure to restore Lazaros to custody on May 7, 1976. This holding makes it unnecessary to consider whether the sheriff was also vicariously liable for Undersheriff Nichols’s removal of the guard on May 6, 1976.
IV
Did the Trial Court Err in Placing the Burden on Defendant to Prove That Plaintiffs Had Failed to Mitigate Damages?
Defendant was permitted to amend his answer on October 22, 1982, adding the affirmative defense of failure to mitigate damages. Defendant alleged that: _ _
"Plaintiffs did not attempt to mitigate their damages by suing in the State of Ohio on their Michigan judgment against Peter Lazaros and then exercising their rights as a judgment creditor against Peter Lazaros and against the estate of Peter Lazaros.”
The trial court rejected this defense, finding no duty to mitigate and that, if a duty did exist, defendant had failed to carry his burden of proof on the issue. We find no error in this decision.
It is well-established in Michigan that the defendant has the burden to show that a plaintiff has not employed every reasonable effort to mitigate damages. Reinardy v Bruzzese, 368 Mich 688; 118 NW2d 952 (1962); Froling v Bischoff, 73 Mich App 496; 252 NW2d 832 (1977). The rule is applicable in tort actions as well as in actions for breach of contract. Rich v Daily Creamery Co, 296 Mich 270; 296 NW 253 (1941). We express no opinion on what constitutes reasonable efforts to mitigate damages under the circumstances of this case. We hold only that defendant has completely failed to carry his burden of proof on this issue.
Affirmed.
It was subsequently determined that the Cadillac was not registered to Peter Lazaros.
The letter states:
"Dear Judge Thorburn:
"I have advised Undersheriff John Nichols that it is not necessary for him to maintain an around the clock security guard over Peter Lazaros while the latter is confined to the hospital. I am further advised that my instructions to Undersheriff Nichols represents your thinking in this matter.
"The removal of the guards is solely my responsibility. If there are any questions regarding this recent action, please do not hesitate to contact me personally.
Very Truly yours, /s/
L. Brooks Patterson Prosecuting Attorney”
Const 1963, art 7, § 6 provides:
"The sheriff may be required by law to renew his security periodically and in default of giving such security, his office shall be vacant. The county shall never be responsible for his acts, except that the board of supervisors may protect him against claims by prisoners for unintentional injuries received while in his custody. He shall not hold any other office except in civil defense.”
See MCL 51.70; MSA 5.863, which provides that "[a] sheriff shall not be responsible for the acts, defaults, and misconduct in office of a deputy sheriff”. Defendant has raised the issue of whether this statute precludes a finding that he is vicariously liable for the negligent act of Undersheriff Nichols in this case. We find it unnecessary to decide the question in view of our holding that Sheriff Spreen is directly liable for his own wrongful act. | [
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O’Connell, J.
In this declaratory judgment action, plaintiff, Folands Jewelry Brokers, Inc., appeals as of right the grant of summary disposition pursuant to MCR 2.116(0(10) (no genuine issue of material fact) for defendant, City of Warren. We affirm.
Folands operates a licensed precious metal and gem dealership at 4100 Fourteen Mile Road in Warren, Michigan. As a dealer, Folands buys and sells precious metals and gems. Most of the precious metals and gems Folands purchases are sold to the general public. However, customers sometimes repurchase gems or metals at a substantially higher price, pursuant to a repurchase option offered by Folands.
The Warren city attorney issued an opinion stating that Folands’ jewelry business constituted pawnbroking and was, therefore, subject to regulation under the city’s pawnbroker ordinance. Folands filed suit, seeking a declaratory judgment that it was not a pawnbroker. In a well-reasóned opinion, the circuit court concluded that Folands was subject to regulation as a pawnbroker.
The sole issue on appeal is whether Folands falls within the statutory definition of a pawnbroker and is, therefore, subject to regulation as a pawnbroker. The Warren Code, art IV, § 30-47, which follows closely the language of §3 of Michigan’s pawnbroker act, MCL 446.203; MSA 19.583, provides as follows:
Any person who loans money on deposit or pledge of personal property or other valuable thing, other than securities or printed evidence of indebtedness, or who deals in the purchasing of personal property or other valuable thing on condition of selling the same back again at a stipulated price, is hereby defined to be a pawnbroker.
As noted, Folands purchases precious metals or gems from customers. At the time of sale, it grants the customer the right to repurchase the item at the full purchase price within fifteen days. However, Folands also extends a second type of repurchase option to certain customers. Within one week after the sale, select customers may buy a thirty-day option to repurchase their precious metal or gem at an eight to eleven percent premium over the original purchase price. The option itself also costs between eight and eleven percent of the original purchase price of the item. Further, the option may be renewed at the same cost, that is, eight to eleven percent, every thirty days for up to six months. In effect, Folands receives an annualized rate of return of between 96 and 132 percent, plus the eight to eleven percent premium charged.
The city contends that both types of repurchase options constitute pawnbroking because both involve the sale of property "on condition of selling the same back again at a stipulated price.” Warren Code, art IV, § 30-47 and MCL 446.203; MSA 19.583. We agree.
When interpreting a statute, our goal is to ascertain and effectuate the intent of the Legislature. Farrington v Total Petroleum, Inc, 442 Mich 201, 212; 501 NW2d 76 (1993). We look first to the specific language of the statute, House Speaker v State Administrative Bd, 441 Mich 547, 567; 495 NW2d 539 (1993), resorting to judicial construction only where reasonable minds could disagree with regard to the statute’s meaning. Dep’t of Social Services v Brewer, 180 Mich App 82, 84; 446 NW2d 593 (1989). Additionally, when considering an ordinance, we apply the same rules of construction as when considering a statute. Albright v Portage, 188 Mich App 342, 350, n 7; 470 NW2d 657 (1991). Finally, our review of the lower court’s construction is de novo. Madison v Detroit, 208 Mich App 356, 358; 527 NW2d 71 (1995).
Turning to the statute and ordinance in issue, we find no express legislative recognition of repurchase transactions such as those conducted by Folands. We are also unaware of any Michigan precedent addressing the question whether these transactions constitute pawnbroking. However, while this question may be new to Michigan, it has been addressed by the Supreme Court of Connecticut.
In Rhodes v City of Hartford, 201 Conn 89; 513 A2d 124 (1986), the Supreme Court of Connecticut was faced with a factual situation remarkably similar to that at hand, and traced the history of "repurchase transactions” to 1911, when they were vilified as "[t]he greatest evil of the small money lending business.” Id., p 97, quoting S. Levine, A Treatise on the Law of Pawnbroking (1911), pp 115-116. That Court concluded as follows:
[T]he legislature indicated that it intended the statutes to regulate not only those transactions that take the classic form of a conventional pawnbroking loan, but also financing arrangements that, in substance if not in form, amount to any economic equivalents of such a loan. Accordingly, the statutes apply to any transaction, regardless of its label or form, in which a pawnbroker gives a customer money and, in return, receives the right to hold the customer’s property and the right to demand payment from the customer for the use of the money before allowing the customer to reclaim his property. (Id., p 96. Emphasis added.)
We conclude that the broad language used by our Legislature in MCL 446.203; MSA 19.583 evinces a similar intent to include activities such as those of Folands within the definition of pawnbroking.
Therefore, regardless of the legerdemain of denominating the transaction in issue a sale rather than pawnbroking, such transactions legally constitute pawnbroking. Accordingly, those engaging in such transactions must possess pawnbrokers’ licenses and may charge an effective interest rate not in excess of thirty-six percent a year, the maximum allowed by law for pawnbrokers. MCL 446.210; MSA 19.590.
We would note in passing that our Supreme Court’s recent decision in People v Lee, 447 Mich 552; 526 NW2d 882 (1994), does not control the matter presently before this Court. In Lee, the Supreme Court decided that transactions such as the ones in issue may not be considered loans, and, accordingly, may not be prosecuted as usurious. We conclude only that these transactions constitute pawnbroking and must be regulated as such. To extend the reasoning of Lee to the present situation would serve only to sound the death knell of pawnbroking and the concomitant compliance with the Pawnbroker Act, a result obviously at odds with the intent of our Legislature.
G. S. Allen, J., concurred.
By labeling this transaction a "sale” rather than a "pawn,” our Supreme Court in People v Lee, 447 Mich 552; 526 NW2d 882 (1994), has stated that this chicanery is not usurious.
As noted by the trial court in Rhodes, supra, p 92, “[o]ne should not be able to avoid a tax on shoes by calling shoes slippers.”
We would limit the application of Lee, supra, to criminal cases involving the charge of usury.
Which is to say, what individual would become a pawnbroker, thereby becoming subject to the Byzantine regulation pawnbroking entails, when one could simply engage in the type of transactions conducted by Lee and Folands, and thereby operate essentially unregulated with the freedom to, in effect, exact usurious rates of interest? | [
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Per Curiam.
Defendant was charged with operating a vehicle while under the influence of intoxicating liquor (DUIL), MCL 257.625; MSA 9.2325. Over objection of the prosecutor, the district judge permitted defendant to plead guilty to a second charge of operating a vehicle while impaired (DWI), MCL 257.625b; MSA 9.2325(2), and subsequently dismissed the charge of DUIL. The circuit court affirmed, and the prosecutor appeals to this Court by leave granted.
The complaint charged that defendant:
"did then and there operate a certain vehicle, to-wit: 1974 Dodge upon a certain highway or other place open to the general public, including any area designated for the parking of vehicles, to-wit: John R. Street, while under the influence of intoxicating liquor; contrary to MCL 257.625(1), (3), of the CL of 1970 as amended; MSA 9.2325.
"Operating a vehicle under the influence of intoxicating liquor misdemeanor: 90 days and/or not less than $100.00 nor more than $500.00, together with costs.
"Upon conviction of the above charge the prosecutor gives the court to further understand that the said offense is hereby charged as a second offense operating a vehicle while his ability to operate a motor vehicle was visibly impaired due to the consumption of intoxicating liquor in that the said Michael Steven Leonowicz was previously convicted of driving while his ability to operate a motor vehicle was visibly impaired due to the consumption of intoxicating liquor in the 37th District Court for Macomb County on 2-4-81; contrary to MCL 257.625b(l), (2), of the CL 1970 as amended.
"Operating a vehicle impaired — second or subsequent offense misdemeanor: 1 year and/or $1,000.00.”
Defendant maintains that this complaint sets forth two separate offenses, namely DUIL and DWI, second offense, and that the trial court was at liberty to allow defendant to plead to the latter charge. The prosecution argues that the complaint charges one count of DUIL, and further contains a notice provision informing defendant that he might be subject to an enhanced sentence due to his prior conviction for DWI. We agree with the prosecution.
In that part of the motor vehicle code proscribing the operation of a vehicle while under the influence of drugs or liquor, the Legislature created a scheme of graduated punishment. See People v Pipkin, 93 Mich App 817; 287 NW2d 352 (1979). While a first conviction for DWI was punishable by no more than 90 days imprisonment and/or a fine not to exceed $300, a second or subsequent conviction carried a possible penalty of one year and/or a $1,000 fine. MCL 257.625b; MSA 9.2325(2). The statute governing DUIL contains similar sentence enhancement provisions. MCL 257.625; MSA 9.2325. If these provisions are to be used the prior offense must be charged and proved; if it is not charged the defendant will not know what punishment he faces. People v Bosca, 25 Mich App 455, 458; 181 NW2d 678 (1970). It was therefore correct procedure to notify defendant of the sentencing implications of his prior DWI conviction. Although that conviction could not be used for sentence enhancement were defendant to be convicted of DUIL, the principal charge, it could be so used if defendant were found guilty of the lesser-included offense of DWI.
Defendant argues that, although the prosecution may subjectively have intended the second section of its complaint as a notice provision, it may objectively be interpreted only as an allegation of a separate offense. We do not agree. Again, the disputed paragraph reads:
"Upon conviction of the above charge the prosecutor gives the court to further understand that the said offense is hereby charged as a second offense operating a vehicle while his ability to operate a motor vehicle was visibly impaired due to the consumption of intoxicating liquor in that said Michael JSteven Leonowicz was previously convicted of [DWI] * * (Emphasis supplied.)
The emphasized language strongly suggests that what follows is a sentence enhancement provision and not a second charge. Additionally, as a matter of English sentence construction, the phrase "said offense” would seem to refer to "the above charge” rather than to any independent charge. As previ ously noted the sentence enhancement could operate in this case only if defendant were found guilty of the lesser-included offense, DWI; thus the statement that the charged offense was prosecuted as a "second offense [DWI]” is not completely accurate. Defendant has alleged no prejudice arising from this defect, and we perceive none. In summary, although the complaint could have been more artfully drawn, we read the disputed paragraph as a notice of possible sentence enhancement rather than a statement alleging a second independent offense.
The complaint charged only one offense, a count of DUIL. In Genesee Prosecutor v Genesee Circuit Judge, 391 Mich 115; 215 NW2d 145 (1974), the Supreme Court held that a judge may not, over the prosecutor’s objection, accept a plea of guilty to a lesser-included offense and dismiss the charge of the greater offense. See also People v Anderson, 409 Mich 474; 295 NW2d 482 (1980).
Defendant concedes that DWI is a lesser-included offense of DUIL, but argues that such is not the cáse with DWI, second violation. We find no cause to make such a distinction. The prior DWI conviction is not an element of DWI, second offense, but merely serves to enhance the maximum punishment. See People v Bosca, 25 Mich App 455; 181 NW2d 678 (1970). Defendant’s remaining arguments are without merit._
The district court was in error in accepting defendant’s plea to DWI, second offense, and dismissing the principal charge.
Keversed and remanded.
The drunk driving laws have since undergone some significant changes pursuant to 1982 PA 309-311, effective March 30,1983.
Defendant refers us to Wayne County Prosecuting Attorney v Recorder’s Court Judge, 47 Mich App 615, 616; 209 NW2d 610 (1973), a decision which found "no authority supporting the proposition that the circuit judge has no jurisdiction to accept a plea of guilty to a lesser included offense of the crime charged”. In Genesee Prosecutor, supra, the Supreme Court created such authority. As a result, the Wayne County case was reversed in an order, 391 Mich 791 (1974).
People v Harold Johnson, 96 Mich App 652; 293 NW2d 664 (1980).
Although Bosca addressed a prosecution for DUIL, second offense, its holding is readily transferable to DWI, second offense, as the same principles are involved. | [
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Gribbs, J.
In this case we are presented with an issue similar to that addressed in Farm Bureau Mutual Ins Co v Horace Mann Ins Co, 131 Mich App 98; 345 NW2d 658 (1983). In Farm Bureau we decided that the "other insurance” clauses of conflicting insurance policies should be disregarded and liability prorated based on the combined policy limits. See Lamb-Weston, Inc v Oregon Automobile Ins Co, 219 Or 110; 341 P2d 110 (1959). Here, the insurance policies of the self-insured plaintiif, Mary Free Bed Hospital and Rehabilitation Center, and the defendant, Insurance Company of North America (INA), contain conflicting "excess” clauses. Consistent with our opinion in Farm Bureau, we hold that the clauses should be disregarded and pro-rata liability attached.
In assigning pro-rata liability, a problem not present in Farm Bureau arises. The Mary Free Bed Plan has a policy limit of $250,000. The INA policy has a $1,000,000 limit and a $10,000 deductible. The deductible amount was paid for here by the Mary Free Bed Plan. Thus, the hospital argues that in considering its pro-rata liability, the policy’s value is $240,000, which is the policy limit less the sum covered under INA’s deductible. INA argues that proration should be based on the plaintiffs policy limit of $250,000 without adjustment. The trial court used the plaintiffs calculation to arive at a liability proportion of 19.35% for Mary Free Bed and 80.65% for INA. We disagree with this method and accept INA’s "policy limits” argument. See 8A Appleman, Insurance Law & Practice, §4909, p 408; 16 Couch, Insurance (2d ed), § 62:2, pp 436-437. The applicable deductible does not affect proration. The insurers are to pay the loss in proportion to their policy limits.
The trial court properly determined that prorata liability applies, but erroneously calculated the amount of proration. We affirm in part and reverse in part and remand for entry of an order consistent with this opinion.
We do not retain jurisdiction. | [
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Per Curiam.
Respondent, Michgian Department of Corrections appeals as of right from a circuit court opinion and order reversing a decision of the department which found the petitioner prison inmate guilty of major misconduct for possession of dangerous contraband. The department’s decision was based on a hearing officer’s conclusion that a 2 Vi inch utility knife cutting blade, pointed at both ends, which was found under a book on a desk in petitioner’s cell, was a weapon and therefore dangerous contraband. In reversing this finding, the circuit court held that the decision was not supported by competent, material, and substantial evidence. We disagree and reverse.
1979 AC, R 791.5501 provides:
(2) A resident alleged to have committed the following behavior shall be charged with major misconduct:
(b) Behavior that constitutes a felony under state or federal law.
(f) A violation of rules that clearly jeopardizes facility security or safety as defined in resident guide book.
The resident guide book which was in force at the time the blade was found defined possession of dangerous contraband as a threat to prison order and security, and specifically defined the offense as "[possession of weapons, explosives, acids, caustics, materials for incendiary devices, escape materials. Possession of 'critical’ tools.” (Emphasis added.)
Petitioner’s misconduct hearing was held on March 2, 1982. The report filed by the hearing officer contained the following summary of the submitted evidence:
Resident was present at this hearing. Resident states that before the major disturbance he use [sic] to work in Industrial Maintance [sic] as a clerk. Resident states that while on his assignment he used what he called a razor blade to scrape off carbon[s]. States that it "Razor Blade” was in his cell and he did know it was there, but had no knowledge that the item was considered dangerous contraband. Hearings officer viewed the pictorial evidence submitted with the report. The item in question is a razor blade type object about 2Vi" long pointed on two ends. Hearings officer cannot contest that this object was or not used on his assignment, when he was on the assignment. Resident did not ask for witnesses, hearing investigator or relevant documents.
The hearing officer’s findings were stated as follows:
Hearing officer after looking at a picture of the item does feel that it fits the category of dangerous contraband. It is not a makeshift "Shank” per say [sic]. But is in a fact more than just a "Razor blade” (shaving type). It is about 2½" inches long and is pointed on both ends. It was not authorized by any official to be in this resident cell, and accordingly it was in an unauthorized area (being his cell). Hearings officer cannot conclude that the resident intended to use the item as a weapon. Yet it is a weapon and is dangerous contraband. It was knowing [sic] in the resident’s cell by his own admission.
On May 4, 1982, petitioner filed in the circuit court a petition for judicial review pursuant to the Administrative Procedures Act, MCL 24.201 et seq.; MSA 3.560(101) et seq., arguing inter alia that the department’s decision was not supported by sufficient findings of fact or reasons. In an opinion dated January 16, 1985, the circuit court held that the determination that petitioner was guilty of major misconduct was not supported by substantial, material, and competent evidence on the whole record and accordingly reversed the department’s decision. The court reasoned:
The court notes that R 791.5501(2)[b] provides that behavior which constitutes a felony under state or federal law will result in major misconduct charges being filed against a prisoner. Weapon-related felonies include carrying a concealed weapon, MCL 750.227; MSA 28.424, and carrying a dangerous weapon, MCL 750.226; MSA 28.423. To support the weapon element of either of these charges requires finding that an article or instrument not included in the statute’s list of per se weapons must have been used or carried for use as a weapon or for purposes of assault or defense, People v Brown, 406 Mich 215, 222-223; 277 NW2d 155 (1979). A jacknife or a razor are not per se dangerous weapons even if the blade is over three inches in length without showing it was carried for assaultive or defensive purposes. People v Vaines, 310 Mich 500, 506; 17 NW2d 729 (1945), People v Mack, 64 Mich App 587, 591-592; 236 NW2d 523 (1975).
The record relects in the Reasons for Findings, "Hearings officer cannot conclude that the resident intended to use the item as a weapon.” The facts as established in the record cannot support finding the requisite intent under either [the resident guidebook definition of possession of dangerous contraband] or the appropriate felony statutes.
We believe that the court’s construction of the term "weapon” to include only articles specifically intended to be used for assaultive purposes is too narrow. The flaw in the court’s construction lies in its fallacious premise that a "weapon” within prison walls must be equated with a "weapon” as that term is defined in the Penal Code. MCL 800.283; MSA 28.1623, a felony provision governing weapons prohibited in prison, belies that premise. That statute provides in pertinent part:
Unless authorized by the chief administrator of the correctional facility, a prisoner shall not have in his or her possession or under his or her control a weapon or other implement which may be used to injure a prisoner or other person, or to assist a prisoner to escape from imprisonment. [MCL 800.283(4); MSA 28.1623(4).]
Mindful of the above language, it seems clear that, within the prison setting, the element which transforms an unauthorized article into a weapon is its potential to cause injury, and not the subjective intent of the inmate in possession of the article as the circuit court held.
Administrative rules should be liberally construed in light of their purposes and so as to effectuate the intent of the agency. Bentley v Associated Spring Co, 133 Mich App 15, 20; 347 NW2d 784 (1984), lv den 419 Mich 938 (1984); Longo v McIlmurray, 115 Mich App 479, 485; 321 NW2d 701 (1982), lv den 417 Mich 899 (1983); Johnston v Billot, 109 Mich App 578, 589; 311 NW2d 808 (1981), lv den 414 Mich 955 (1982). The clear purpose of the major misconduct rule is to protect inmates and guards from assaults and injury. Consistent with that purpose, we believe that the more sound construction of the term "weapon” as that term is used in the resident guide book’s definition of dangerous contraband is one which includes those unauthorized objects which may be used to injure another. Under this construction, a finding of specific intent to assault is unnecessary.
Applying our construction of the term "weapon,” we conclude that the department’s determina tion that petitioner was in possession of a weapon, and thus dangerous contraband, was supported by competent, material, and substantial evidence on the whole record. Petitioner was not authorized to have the blade in his cell. The hearing officer examined a photograph of the blade and noted that, although it was not a "shank” or homemade knife, it was "more than just a 'Razor blade’ (shaving type)”; it was 2½ inches long and pointed on both ends. Although the hearing officer did not specifically state that the blade was capable of causing injury to another, that conclusion is implicit in his description of the item. Accordingly, the determination of the department is reinstated and the circuit court’s order reversed.
Petitioner’s second argument in his petition for judicial review was not addressed by the circuit court. In that argument, petitioner contended that the department’s failure to promulgate rules under the hearings division act, MCL 791.251 et seq.; MSA 28.2320(51) et seq. (hda), renders void all hearings held by the department pursuant to the hda, including petitioner’s misconduct hearing in the instant case. We find the contention to be without merit.
Section 54(4) of the hda requires only that the department promulgate rules "necessary to implement this chapter.” Section 52 of the hda sets forth in detail the procedures to be employed in hearings. Petitioner attacks the failure of the department to promulgate rules, but does not specify any procedure inadequately addressed by § 52 which necessarily must be implemented by rule. We do not believe that hearings held since the inception of the hda should be declared void on the mere possibility that a necessary rule may not have been implemented. Since petitioner has failed to present facts establishing that a procedure was followed that necessarily had to be implemented by rule, we decline to declare void the decision of the department on this basis.
Reversed. | [
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M. J. Kelly, P.J.
Plaintiffs appeal as of right from the dismissal of their complaint to vacate an arbitration award under GCR 1963, 769.9(1), now MCR 3.602(J). We affirm.
Plaintiffs allege that on February 16, 1979, they suffered personal injuries when their motor vehicle swerved to avoid an unidentified truck and crashed into an overpass wall. The truck made no contact with the plaintiff’s vehicle. Plaintiff Nagi Said was insured with defendant under a no-fault policy which included an uninsured motorist provision. Defendant denied benefits under this provision and plaintiffs submitted the claim to arbitration. An arbitration decision was rendered August 9, 1983, in favor of defendant.
Plaintiffs appealed to the circuit court claiming clear legal error on the part of the arbitrators in requiring plaintiffs to show serious impairment of a body function and in enforcing, contrary to public policy, the insurer’s definition of "hit and run.” The circuit court disagreed with both contentions and entered an order of summary judgment on January 18, 1985, dismissing plaintiffs’ application to vacate the arbitration award.
We find no error on the face of the arbitration award entered in this case, which states merely that plaintiffs’ claims against defendant are "hereby deemed denied.” See DAIIE v Gavin, 416 Mich 407, 443; 331 NW2d 418 (1982). As is typically the case, the arbitrators did not state any reasons for their decision and it is thus "virtually impossible to discern the mental path leading to” the award. Henderson v DAIIE, 142 Mich App 203, 206; 369 NW2d 210 (1985).
Another panel of this Court has already rejected the public policy argument advanced by plaintiffs against enforcement of an insurance policy definition requiring physical contact in a hit and run situation. Auto Club Ins Ass’n v Methner, 127 Mich App 683; 339 NW2d 234 (1983), lv den 418 Mich 940 (1984). We agree with the analysis in Methner and hold that the arbitrators properly acted within the scope of the contract in the instant case.
Plaintiffs also argue that the arbitrators required plaintiffs to establish serious impairment of body function, contrary to the terms of the insurance contract. However, the arbitrators’ analysis of plaintiffs’ injuries is unclear from the face of the award, the terms of the contract, or any documentation provided by the parties. As defendant notes, the arbitrators may have found that the plaintiffs were not injured as a result of this accident. Appellate review of this issue is not possible on this record and we thus do not find it relevant to discuss any conflict of authority between panels of this Court.
Affirmed. | [
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Doctoroff, J.
Petitioner appeals as of right from an order of the Ottawa Circuit Court, Family Court Division, denying her petition to terminate respondent’s parental rights pursuant to § 39 of the Adoption Code, MCL 710.39; MSA 27.3178(555.39). We affirm.
Petitioner and respondent began a dating relationship in March or April 1997. They planned to live together and began looking for a house. Soon thereafter, petitioner learned that she was pregnant. They discussed abortion, but decided to have, and raise, the child. In August 1997, respondent applied for a mortgage, which was later approved. However, just before they were to close on the house, petitioner decided to have an abortion. By this time, respondent opposed the abortion and wanted petitioner to have the baby. In part, because of this difference of opinion, petitioner ended the relationship. As a result, respondent decided not to purchase the house. In September 1997, petitioner decided to place the baby for adoption. She falsely told respondent that he was not the father. In December 1997, the adoption agency notified respondent that petitioner had named him as the father. In January 1998, respondent filed a notice of intent to claim paternity. The baby was bom on February 6, 1998, and was immediately turned over to the prospective adoptive parents. Petitioner did not inform respondent that the baby had been bom.
Petitioner then filed a petition for a hearing to terminate respondent’s parental rights, conditioning the release of her parental rights on the termination of respondent’s parental rights. The hearing was held on February 27, 1998. The trial court found that, under the circumstances of this case, respondent’s filing of the notice of intent to claim paternity constituted “support or care” for the purposes of subsection 39(2). The trial court went on to find that, even if respondent did not fall within subsection 39(2), pursuant to subsection 39(1), he was fit and able to properly care for his child, and it was in the best interests of the child to grant custody to him. Accordingly, the trial court denied the petition to terminate respondent’s parental rights.
Petitioner first argues that the trial court erred in ruling that a putative father’s filing of a notice of intent to claim paternity constitutes the provision of “support or care” for the purpose of MCL 710.39(2); MSA 27.3178(555.39)(2). We agree, but conclude that the error was harmless. This issue presents a question of law, which we review de novo on appeal. In re Hamlet (After Remand), 225 Mich App 505, 521; 571 NW2d 750 (1997).
MCL 710.39; MSA 27.3178(555.39) provides, in part:
(1) If the putative father does not come within the provisions of subsection (2), and if the putative father appears at the hearing and requests custody of the child, the court shall inquire into his fitness and his ability to properly care for the child and shall determine whether the best interests of the child will be served by granting custody to him. If the court finds that it would not be in the best interests of the child to grant custody to the putative father, the court shall terminate his rights to the child.
(2) If the putative father has established a custodial relationship with the child or has provided support or care for the mother during the pregnancy or for either mother or child after the child’s birth during the 90 days before notice of the hearing was served upon him, the rights of the putative father shall not be terminated except by proceedings in accordance with section 51(6) of this chapter or section 2 of chapter XIIA.
As the Court stated in In re Barlow, 404 Mich 216, 229; 273 NW2d 35 (1978):
Section 39 of the code creates two categories of putative fathers and provides different standards for termination of the rights of each. Putative fathers who have established no custodial relationship with the child, and who have provided no support for the mother or child prior to the notice of hearing, may have their parental rights terminated if the court finds, after examining the father’s fitness and ability to properly care for the child, “that it would not be in the best interests of the child to grant custody” to him. The parental rights of the second group, those who have established some kind of custodial or support relationship prior to the notice of hearing, are subject to termination only by proceedings under the general jurisdictional provisions of chapter 12A of the Probate Code.
The test to determine whether a putative father has provided “support or care” for the mother or child is whether the father provided reasonable care under the circumstances of the case. In re Gaipa, 219 Mich App 80, 86; 555 NW2d 867 (1996). In determining whether the father has provided reasonable care under the circumstances, the court should consider factors such as the father’s ability to provide support or care, the needs of the mother, the kind of support or care provided, the duration of the support, whether the mother impeded the father’s efforts to provide her with support, and any other significant factors. Id. The support or care must be “more than an incidental, fleeting, or inconsequential offer of support or care,” but need not rise to the level of “regular and substantial” support in all cases. Id. at 85.
The trial court determined that
[g]iven these unusual facts where the mother tells the father he is not the father and then names him as the father in the Notice to Putative Father and Custody Statement [MCL 710.37; MSA 27.3178(555.37)], and he responds by filing the Section 33 [MCL 710.33; MSA 27.3178(555.33)] Notice of Intent to Claim Paternity, we hold that the father comes within Subsection (2) of MCL 710.39 [MSA 27.3178(555.39)] as construed by Gaipa, supra.
The filing of a notice of intent to claim paternity is not “support or care” for the purposes of MCL 710.39(2); MSA 27.3178(555.39)(2). A notice of intent to claim paternity merely creates a rebuttable presumption of paternity for the purposes of the Paternity Act and dependency or neglect proceedings under MCL 712A. et seq.-, MSA 27.3178(598.1) et seq. MCL 710.33(2); MSA 27.3178(555.33)(2). Nothing in § 33 or § 39 reflects that the Legislature intended the filing of a notice of intent to claim paternity to constitute support or care for the purposes of subsection 39(2).
Although the trial court erred in determining that respondent’s filing of the notice of intent to claim paternity was sufficient evidence of “support or care” to satisfy subsection 39(2), the error was harmless because the trial court further found that, even if respondent did not fall within subsection 39(2), pursuant to subsection 39(1), respondent was fit and able to properly care for the child, and that it was in the child’s best interests to grant custody to respondent.
Nevertheless, we feel compelled to express our concern that § 39 treats a putative father unfairly where, as in the instant case, the mother’s actions prevent the putative father from providing support or care for the mother during the pregnancy or establishing a custodial relationship with the child. Here, petitioner told respondent that she planned to abort the child, later told him that he was not the father of the child, and then did not inform him when she gave birth to the child. In such a situation, we do not believe the putative father should be placed in the category of putative fathers who fall within subsection 39(1). However, because § 39, as written, does not account for such a situation, we must conclude in the instant case that respondent did not satisfy subsection 39(2).
Petitioner next argues that the trial court erred in ruling that, when determining the best interests of the child under subsection 39(1), the court should only examine the circumstances of the putative father, and should not compare the putative father to the prospective adoptive parents. We disagree. The interpretation of a statute is a question of law, which we review de novo on appeal. In re Schnell, 214 Mich App 304, 310; 543 NW2d 11 (1995).
The primary goal of judicial interpretation of statutes is to ascertain the intent of the Legislature. Id. at 309. The first criterion in determining intent is the specific language of the statute. Id. at 310. The Legislature is presumed to have intended the meaning it plainly expressed, and when the language of a statute is clear and unambiguous, judicial construction is neither required nor permitted. Id. However, if a statute is ambiguous and reasonable minds can differ with regard to the meaning of the statute, judicial construction is permitted. Id. at 311. When construing a statute, the court must use common sense and should construe the statute so as to avoid unreasonable consequences. Gaipa, supra at 84-85. Because the Adoption Code is in derogation of the common law, it must be strictly construed. Schnell, supra at 310.
Subsection 39(1) clearly indicates that, when a putative father does not fall within the provisions of subsection 39(2), the court must “inquire into his fitness and his ability to properly care for the child
. . . Subsection 39(1) further provides that the court must determine whether it is in the best interests of the child to grant custody to the putative father. According to subsection 22(f) of the Adoption Code:
“Best interests of the adoptee” or “best interests of the child” means the sum total of the following factors to be considered, evaluated, and determined by the court to be applied to give the adoptee permanence at the earliest possible date:
(i) The love, affection, and other emotional ties existing between the adopting individual or individuals and the adoptee or, in the case of a hearing under section 39 of this chapter, the putative father and the adoptee.
(ii) The capacity and disposition of the adopting individual or individuals or, in the case of a hearing under section 39 of this chapter, the putative father to give the adoptee love, affection, and guidance, and to educate and create a milieu that fosters the religion, racial identity, and culture of the adoptee.
(hi) The capacity and disposition of the adopting individual or individuals or, in the case of a hearing under section 39 of this chapter, the putative father, to provide the adoptee with food, clothing, education, permanence, medical care or other remedial care recognized and permitted under the laws of this state in place of medical care, and other material needs.
(iv) The length of time the adoptee has lived in a stable, satisfactory environment, and the desirability of maintaining continuity.
(v) The permanence as a family unit of the proposed adoptive home, or, in the case of a hearing under section 39 of this chapter, the home of the putative father.
(vi) The moral fitness of the adopting individual or individuals or, in the case of a hearing under section 39 of this chapter, of the putative father.
(vii) The mental and physical health of the adopting individual or individuals or, in the case of a hearing under sec tion 39 of this chapter, of the putative father, and of the adoptee.
(viii) The home, school, and community record of the adoptee.
(ix) The reasonable preference of the adoptee, if the adoptee is 14 years of age or less and if the court considers the adoptee to be of sufficient age to express a preference.
(x) The ability and willingness of the adopting individual or individuals to adopt the adoptee’s siblings.
(xi) Any other factor considered by the court to be relevant to a particular adoption proceeding, or to a putative father’s request for child custody. [MCL 710.22(f); MSA 27.3178(555.22)©.]
Before subsection 22(f) (formerly subsection 22[b]) was amended by 1994 PA 222, it did not mention § 39. The amendment’s addition of the language “or, in the case of a hearing under section 39 of this chapter,” clarified the apparent legislative intent, that the putative father’s circumstances be examined alone, without comparison to the prospective adoptive parents’ circumstances, when determining the best interests of the child under § 39. The factors containing the language referring to § 39 indicate that the court is to consider those factors with respect to the adopting individual or individuals, “or, in the case of a hearing under section 39 of this chapter,” the court is to consider the factors with respect to the putative father. The references in subsection 22(f) to the adopting individual or individuals are only relevant when the “best interests of the adoptee” are being considered for purposes other than § 39. Nothing in the language of § 39 or subsection 22(f) indicates that the putative father is to be compared to the prospective adopting individual or individuals when evaluating the best interests of the child under § 39. If the Legislature had intended such a comparison it could have easily stated that the putative father is to be compared with the prospective adoptive parents. We also note that the interpretation urged by petitioner cannot be applied in cases where adoptive parents have not yet been found.
Moreover, to require a comparison between the putative father and the prospective adoptive parents would be unfair and unreasonable. Where a putative father appears in court desiring custody of his child and is found to be fit and able to properly care for his child, he should not be required to compete with individuals who wish to adopt his child. Specifically, in the instant case, where it was petitioner’s conduct that kept respondent from his child, we do not believe that respondent should have to compete with the prospective adoptive parents. Accordingly, we conclude that if the court determines that the father is fit and able to raise his child, the court should then determine, by considering the father’s situation alone, whether the best interests of the child are satisfied by placing the child with the father or by terminating the father’s parental rights and placing the child for adoption.
Petitioner relies on In re Ballard, 219 Mich App 329, 336-337; 556 NW2d 196 (1996), in which this Court stated that subsection 22(f) directs a court to compare the putative father with the adopting person or persons to determine the best interests of the child under § 39. The relevant issue in Ballard was whether a putative father’s provision of custody and care by relatives while he was in prison could be considered under § 39 and § 22 of the Adoption Code. Ballard, supra at 336. In Ballard, the hearing to terminate the respondent’s parental rights was held before the effective date of the amendment of § 22 by 1994 PA 222, and the probate court’s decision specifically referred to the statute as it existed before the amendment. Ballard, supra at 330. Therefore, the current version of subsection 22(f) was not before this Court. Although this Court referred to subsection 22(f) in its opinion, it was actually the current subsection 22(f)’s predecessor, the former subsection 22(b), that was before this Court in Ballard. Accordingly, we are not bound to follow Ballard.
Affirmed.
MCL 722.711; MSA 25.491 through MCL 722.730; MSA 25.510. | [
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O’Connell, J.
This is an employment discrimination and retaliation case. In Docket No. 195669, defendant appeals a jury verdict in favor of plaintiff. We reverse and remand. In Docket No. 195670, defendant appeals the trial court’s damage award in the Court of Claims action. We reverse.
The facts relevant to this appeal are fairly straightforward. Plaintiff is a white male and has been a Michigan State Police Trooper since 1977. Although he has been eligible for promotion for a number of years, he has not been promoted. In the years preceding this suit, plaintiff derided his superiors for hiring and promoting employees pursuant to an affirmative action program. He also wrote a memo questioning Ms superiors’ use of seMority as a factor in promotion decisions, arguing that low semority troopers were bemg promoted more often than Mgh seMority troopers. During tMs time, defendant was hiring and promoting pursuant to an affirmative action program. Defendant was also participating in a system of “augmented certification,” that, in certain circumstances, gave favorable treatment to women and minorities.
Plaintiff originally filed a complaint in the Livmgston Circuit Court allegmg that the MicMgan State Police failed to promote him on the basis of Ms age or m retaliation for Ms opposition to MicMgan State Police policies that discriminated against certain employees on the basis of their age, race, and gender. Plaintiff also filed a Court of Claims complaint allegmg a violation of “the public policy embodied in the MicMgan and Urnted States Constitutions” and a violation of equal protection under the MicMgan Constitution. The parties stipulated jomder of the two actions, with the circmt court action to be decided by a jury and the Court of Claims action to be decided by the circmt judge. During the trial, plaintiff amended Ms circmt court complaint to add claims of race and gender discrimination. At trial, plaintiff argued that he has not been promoted because he opposed violations of the Civil Rights Act, MCL 37.2101 et seq.-, MSA 3.548(101) et seq., and because of Ms age, race, and gender. Defendant argued that plaintiff was not promoted because he did not have the qualities of a leader. Using a special-verdict form, the jury found defendant liable on all claims and awarded plaintiff $850,000 in damages. In the Court of Claims action, the trial court found defendant not hable on plaintiffs public policy and age claims, but found defendant hable for race and gender discrimination in violation of the Michigan Constitution, and awarded plaintiff $850,000. The trial court then added costs and interest to both awards, and attorney fees to the circuit court award.
DOCKET NO. 195669
On appeal, defendant first argues that plaintiff failed to prove a prima facie case of retahation. Defendant contends that plaintiff did not show that he opposed a violation of the Civil Rights Act, as required under MCL 37.2701(a); MSA 3.548(701)(a). While it appears that this argument has merit, defendant failed to raise it below. Thus, this issue is unpreserved, and we will not review it. Napier v Jacobs, 429 Mich 222, 237-238; 414 NW2d 862 (1987).
Defendant next argues that the trial court abused its discretion in allowing plaintiff to amend his complaint midtrial. We agree.
MCR 2.118(C) provides for the amendment of pleadings to conform to the evidence introduced at trial:
(1) When issues not raised by the pleadings are tried by express or implied consent of the parties, they are treated as if they had been raised by the pleadings. In that case, amendment of the pleadings to conform to the evidence and to raise those issues may be made on motion of a party at any time, even after judgment.
(2) If evidence is objected to at trial on the ground that it is not within the issues raised by the pleadings, amendment to conform to that proof shall not be allowed unless the party seeking to amend satisfies the court that the amendment and the admission of the evidence would not prejudice the objecting party in maintaining his or her action or defense on the merits. The court may grant an adjournment to enable the objecting party to meet the evidence.
Our Supreme Court has addressed the difference between amendments before trial and amendments during trial:
MCR 2.118(C)(2) establishes strict requirements for amending a pleading during trial. Unless the party requesting amendment “satisfies the court that. . . amendment. . . would not prejudice the objecting party,” amendment “shall not be allowed.” This rule contrasts sharply with the free amendment allowed before trial. [Dacon v Transue, 441 Mich 315, 333; 490 NW2d 369 (1992). ]
Here, the trial court allowed plaintiff to amend his complaint on the basis of a motion brought after five days of trial. In granting the motion, the trial court placed a great deal of emphasis on the fact that the parties both referenced race and gender claims in their opening statements. According to the trial court, plaintiff’s counsel “opened the door” to race and gender claims in his opening argument, and defendant failed to object. The trial court also focused on defense counsel's statements at the beginning of the third day of trial. At that time, defense counsel essentially stated that he had always perceived the case as a reverse discrimination case, but, after reviewing the pleadings, he realized that plaintiff was claiming only age discrimination and retaliation. The trial court felt that defense counsel’s statements were crucial: “It appears to me from my recollection now that there was a defining moment in this case, and I can’t remember what day that was, where [defense counsel] came in and said, I had a chance to really look at this case. And I was trying something different than what [plaintiff alleged in his complaint].” The trial court apparently concluded that defense counsel was prepared to defend against claims of race and gender discrimination.
After discussing the amendment during the sixth day of trial, a Wednesday, the trial court put the matter off and finished the day’s testimony. There was no action on the case on Thursday, and on Friday morning the parties came in to further argue the motion to amend. Plaintiff’s attorney essentially argued that, on the basis of defense counsel’s statements on the third day of trial, defendant was not “in a position to argue that they were actually prejudiced.” Defense counsel responded: “[W]hen I prepared for that opening statement I had corrected my erroneous belief and no longer thought it was [a race and gender case].” The trial court continued its focus on the opening statements, asking defense counsel: “Do you agree that it was laid out in the opening statements it was clearly laid out in that fashion to the jury?”
After listening to both attorneys, the trial court questioned defense counsel: “Mr. Gartner, if I were to grant the motion, tell me how you would be prejudiced and what you would need to cure that prejudice.” After additional arguments, the trial court granted the motion:
Rule 2.118 (C)(1) [and] (2) take a liberal approach towards conforming the pleadings to the proofs, and they include safety valves of prejudice, hi this case, it’s clear to me that the issue [sic] of retaliation, age, gender, sex, race was [sic] clearly laid on the table, and in the Plaintiff’s opening statement not objected to by the Defendant; and, in fact, responded to by the Defendant in their [sic] opening statement.
The case was really being tried on those issues until what I call the moments of enlightenment came on this record, at least which would be February 2nd, 1996 after we had gone through a number of witnesses when the matter was brought up by [defense counsel],
I am satisfied that substantial justice can be achieved and complete relief as it relates to this case can be submitted to the jury. I’m going to allow the amendment as indicated.
The trial court went on to describe the remedial measures it would allow defendant to use to “shore up the defense.” The court also noted that the trial was being delayed for one week anyway, because of the judge’s and jurors’ schedules, which would give the defense time to prepare.
The trial court applied the wrong analysis and standard in granting plaintiffs motion. In focusing on the opening statements, the trial court was apparently trying to apply MCR 2.118(C)(1). In other words, the trial court was trying to decide whether defendant had impliedly consented to the additional claims. This was improper, because defense counsel made it clear on the third day of trial that he was not consenting to the trial of race and gender issues. In fact, defense counsel vigorously opposed the introduction of evidence on those issues. When plaintiff brought his motion to amend two days later, any “implied consent” had long since been revoked. Thus, MCR 2.118(C)(1) was inapplicable.
The trial court’s statement that MCR 2.118(C)(2) “takes a liberal approach” toward amendments was clearly incorrect as a matter of law. As noted above, our Supreme Court has made it clear that MCR 2.118(C)(2) establishes strict requirements that must be met by the party requesting amendment. Dacon, supra at 333. Otherwise, the amendment “shall not be allowed.” Id. The trial court compounded its error by asking defendant to establish the nature and extent of any prejudice, when the court rule clearly places that burden entirely on the party requesting amendment, in this case, plaintiff.
After a thorough review of the record, it is clear that plaintiff did not meet the requirements of MCR 2.118(C)(2), and we conclude that the trial court abused its discretion in granting plaintiff’s motion to amend. Plaintiff argues on appeal that defendant could not have been surprised by the amendment and that defendant was not prejudiced by it. First, we note that this argument is not especially convincing coming from the party who had the ability to avoid this issue by simply amending before trial. Second, it is clear that the addition of race and gender claims changed the nature of the case. The added claims placed new factual questions at issue and changed the import of evidence that had already been admitted. Under these circumstances, plaintiff could not have shown an absence of prejudice to defendant. As our Supreme Court has recognized, “ ‘litigation may proceed to a point where the opposing party cannot reasonably be expected to defend against the amendment; this is an especially pertinent factor on the eve of, during, or after trial.’ ” Weymers v Khera, 454 Mich 639, 659; 563 NW2d 647 (1997) (quoting Ben P Fyke & Sons v Gunter Co, 390 Mich 649, 663; 213 NW2d 134 [1973]). In this case, litigation had proceeded well past the point where defendant could reasonably have been expected to defend against plaintiff’s amendment. Therefore, we reverse the jury verdict in Docket No. 195669 and remand for a new trial.
DOCKET NO. 195670
Defendant argues that the trial court erred in awarding plaintiff monetary damages for a constitutional violation. We agree.
In a splintered opinion, our Supreme Court has addressed the question whether a plaintiff may sue the state for damages for a violation of the Michigan Constitution. Smith v Dep’t of Public Health, 428 Mich 540; 410 NW2d 749 (1987), aff’d sub nom Will v Michigan Dep’t of State Police, 491 US 58; 109 S Ct 2304; 105 L Ed 2d 45 (1989). After a thorough review of United States Supreme Court decisions on point, two justices declined to find such a remedy. Id. at 612-632 (Justice Brickley, joined by Chief Justice Riley). However, four other justices “would recognize the propriety of an inferred damage remedy arising directly from violations of the Michigan Constitution in certain cases.” Id. at 647 (Justice Boyle, joined by Justice Cavanagh), 658 (Justice Archer, joined by Justice Levin). While the Court did not precisely identify which cases would justify an inferred damage remedy, Justice Boyle offered some guidance:
We would recognize the propriety of an inferred damage remedy arising directly from violations of the Michigan Constitution in certain cases. As the Bivens [v Six Unknown Federal Narcotics Agents, 403 US 388, 407; 91 S Ct 1999; 29 L Ed 2d 619 (1971)] Court recognized, there are circumstances in which a constitutional right can only be vindicated by a damage remedy and where the right itself calls out for such a remedy. On the other hand, there are circumstances in which a damage remedy would not be appropriate. The absence of any other remedy would, as in Bivens, heighten the urgency of the question. Justice Harlan, concurring in Bivens, states that “[t]he question then, is, as I see it, whether compensatory relief is ‘necessary’ or ‘appropriate’ to the vindication of the interest asserted.” 403 US 407. In answering this question in the positive, Justice Harlan commented, “[f]or people in Bivens’ shoes, it is damages or nothing.” Id., p 410. Where a statute provides a remedy, the stark picture of a constitutional provision violated without remedy is not presented. [Id. at 647.]
Justice Boyle went on to look at other factors that might weigh for or against an inferred damage remedy. One of those factors calls for a court “to consider the text, history, and previous interpretations of the specific provision for guidance on the propriety of a judicially inferred damage remedy. The provision itself may commit creation of a remedy to the Legislature rather than the courts.” Id. at 650-651.
Art 1, § 2 of the Michigan Constitution of 1963 states: The last line of the section certainly weighs against an inferred damage remedy. Indeed, that sentence alone could be viewed as dispositive of this issue. See Smith, supra at 632 (opinion of Brickley, J.). hi addition, the availability of a remedy under the Civil Rights Act obviates any need for an inferred damage remedy in age, race, or gender discrimination cases, or in retaliation cases. Here, plaintiff could, and did, file a Civil Rights Act action against defendant. Thus, we have no trouble concluding that this was not an appropriate case in which to infer a damage remedy. For this reason, we must reverse the trial court’s damage award in Docket No. 195670.
No person shall be denied the equal protection of the laws; nor shall any person be denied the enjoyment of his civil or political rights or be discriminated against in the exercise thereof because of religion, race, color or national origin. The legislature shall implement this section by appropriate legislation.
Docket No. 195669: Reversed and remanded for a new trial. We do not retain jurisdiction.
Docket No. 195670: The trial court’s damage award is reversed.
Several of plaintiff’s writings were introduced at trial. These writings included statements regarding affirmative action. One statement came from plaintiff’s evaluation of a State Police instructor:
Once again our department is using officers with far too little experience to teach programs which relate to patrols. I respect only those that I know in my own mind are qualified to teach those areas. Those promoted under the auspices of “affirmative action” are not worthy of respect, or my attention. Having been a 21 yr resident of Detroit I did not appreciate [the instructor] ridiculing the Detroit Police tactics of the 60’s. When I was a kid I could walk the streets of Detroit and was safe. S.T.R.E.S.S. and the “Big Four,” both of which [the instructor] attacked were responsible for the safe streets. Its [sic] very evident that Coleman Young and “Affirmative Action” have turned the streets into a “War Zone.”
Another statement came from a memo plaintiff wrote to the Director of the Michigan State Police:
We have seen many changes in the 80’s. Experience, maturity, leadership, and capability are no longer used as a consideration for promotion. Mediocrity and affirmative action are the standard. Those that deserve the least reap the most. Gone are the days of promoting the most qualified person for that position. Affirmative action has given us a new breed of manager, one who thinks that people skills is a training program for the unemployed, and a leader is something which is put on the end of a fishing pole.
The whole process of augmented certification is somewhat complex. While this issue occupied a great deal of time at trial, it is not relevant to this appeal, and we will not attempt to describe it here.
The trial court and the parties apparently agreed that plaintiff was not entitled to collect both awards. This was obviously correct, because collection of both awards would have given plaintiff a double recovery.
The Civil Rights Act protects those who seek redress for civil rights violations. Pursuant to the act, an employer may not “ [retaliate or discriminate against a person because the person has opposed a violation of this act.” MCL 37.2701(a); MSA 3.548(701)(a). In reviewing the record, we found no evidence that plaintiff “opposed a violation” of the Civil Rights Act. Plaintiff’s writings to his superiors did not raise the specter of a discrimination complaint, nor did they contain any hint of any illegality on the part of defendant. Indeed, the writings can, at best, be interpreted as plaintiff’s expression of disagreement with defendant’s employment practices. We do not believe that the protections of the Civil Rights Act extend to such statements. Compare McLemore v Detroit Receiving Hosp, 196 Mich App 391, 396; 493 NW2d 441 (1992). See also Booker v Brown & Williamson Tobacco Co, Inc, 879 F2d 1304, 1311-1314 (CA 6, 1989).
Defendant should have raised this issue in its motion for a directed verdict. At the very least, defendant should have filed a motion for judgment notwithstanding the verdict or a motion for a new trial.
For example, before the amendment, plaintiff only had to show that he had a “good faith belief” that defendant was violating the Civil Rights Act. In addition, plaintiff did not have to show that defendant was discriminating against him on the basis of his race or gender; he could show that he opposed discrimination against others. After the amendment, plaintiff had to show that defendant was actually discriminating against him on the basis of his race or gender. In addition, the change in factual issues also changed the available defenses. Because defendant was acting pursuant to an affirmative action policy, there is at least a possibility that it is immune from liability on plaintiff’s race and gender claims. See MCL 37.2210; MSA 3.548(210); Victorson v Dep’t of Treasury, 439 Mich 131, 137-146; 482 NW2d 685 (1992). See also Kulek v Mount Clemens, 164 Mich App 51, 64-65; 416 NW2d 321 (1987).
For instance, the trial court admitted a statement suggesting that a State Police supervisor had to hire “a black and a woman” for certain positions. At the time the evidence was introduced, it was admitted to show only that plaintiff believed that defendant was discriminating on the basis of race and gender. After the amendment, however, this evidence became directly relevant for its truth.
We believe that a new trial on plaintiffs age and retaliation claims is required. Once the motion to amend was erroneously granted, defendant was forced to dedicate time and resources during the remainder of the trial to combat the new claims. This obviously forced defense counsel to shift their focus away from the elements of a prima facie case of age discrimination or retaliation, which, as noted in footnote 3, were apparently lacking, and focus instead on the new claims of race and gender discrimination. Under these circumstances, affirming any part of the jury’s verdict would be inequitable, because affirmance would allow plaintiff to benefit indirectly from the belated, improper amendment of plaintiffs complaint.
Plaintiff cites Johnson v Wayne Co, 213 Mich App 143; 540 NW2d 66 (1995), for the proposition that this Court has already recognized the existence of such a remedy. However, the panel in Johnson did not directly address this issue. | [
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Gage, J.
Defendants appeal as of right the trial court’s partial denial of their motion for summary disposition. We affirm.
This case involves a dispute regarding the enforceability of § 280 of the Saginaw County Solid Waste Ordinance. In 1984, plaintiff’s solid waste management plan, by which it accepted responsibility for countywide planning and management of solid waste disposal, was approved by the Department of Natural Resources (dnr). In 1993, the dnr approved plaintiff’s update to the plan. Paragraph eight of the update provided that plaintiff’s board of commissioners would pursue and explore all feasible means of financing countywide solid waste management, including tax levies, state and federal grants, bond issues, and licensing fees. Pursuant to the update, the board of commissioners also intended to establish an enforcement agency to carry out the provisions of the plan. The board envisioned enforcement agency funding from “surcharges, tipping fees and/or other appropriate means of financing.”
In November 1990, Saginaw County voters approved a millage increase for the purpose of establishing and operating plaintiff’s recycling and other waste management programs. However, in 1993 plaintiff elected not to collect this millage because of plaintiff’s concern that it would exceed its millage cap. Also in 1993, the Governor withdrew all state funding of county health departments.
In August 1993, plaintiff’s board of commissioners adopted a solid waste ordinance, § 280 of which imposed a fifty-cent surcharge on every cubic yard of solid waste disposed of in county landfills. Subsection 280.2 mandated that all surcharge payments be paid quarterly to the county treasurer, but failed to identify the intended payor. Defendants admitted that they had collected the surcharge from those dumping waste in their landfills, but did not remit any of the collected money to the county treasurer. Plaintiff initially filed separate complaints in January and February 1994 against defendant landfill operators alleging their nonpayment of the disposal surcharge. Defendants counterclaimed that the ordinance was invalid and unenforceable because it was preempted by state waste disposal statutes and regulations, and that the surcharge constituted an illegal tax and was unconstitutionally vague. A September 1994 amendment of subsection 280.2 stated explicitly that landfill owners and operators were to collect the surcharge and remit quarterly surcharge payments to the county treasurer.
In May 1995, defendants moved for summary disposition. The trial court agreed that state statutes had preempted most of the ordinance, and concluded that the surcharge provision as originally enacted was unconstitutionally vague. Because plaintiff had brought its claims pursuant to this vague preamendment § 280, the trial court dismissed plaintiffs complaint. However, the trial court found that the September 1994 amendment of § 280 cured its vagueness problem and that the surcharge was severable and would remain in effect.
i
First, defendants contend that the trial court erred in upholding the validity of postamendment § 280. They argue that this section improperly delegates governmental authority to private parties by requiring that defendants perform tax collection duties. We disagree.
Defendants cite two Michigan cases addressing delegations of legislative authority. Blue Cross & Blue Shield of Michigan v Governor, 422 Mich 1; 367 NW2d 1 (1985); Penn School Dist No 7 v Lewis Cass Intermediate School Dist Bd of Ed, 14 Mich App 109; 165 NW2d 464 (1968). The Supreme Court in Blue Cross & Blue Shield, supra at 51, explained that “[challenges of unconstitutional delegation of legislative power are generally framed in terms of the adequacy of the standards fashioned by the Legislature to channel the agency’s or individual’s exercise of the delegated power.” Legislative delegations of power are reviewed in terms of the adequacy of the standards provided to guide the exercise of the power whether the Legislature has delegated power to an administrative agency, the judiciary, or a private group or person. Dukesherer Farms, Inc v Director of the Dep’t of Agriculture, 405 Mich 1, 25, n 4; 273 NW2d 877 (1979). The Supreme Court concluded in Blue Cross & Blue Shield, supra, at 52-55, that the Legislature had impermissibly conferred standardless discretion on the Insurance Commissioner to review risk factors proposed by a statutorily created actuary panel. In Penn School Dist, supra at 121-124, this Court recognized that legislative authority generally may not be delegated to private persons or associations, but concluded that the committees authorized to determine school district boundaries did not qualify as private entities because they had been created by statute, and also that these committees possessed sufficient statutory guidance regarding the exercise of their powers.
However, the instant case does not involve a delegation of legislative authority similar to those involved in the cases cited by defendants. The ordinance at issue merely imposes a ministerial duty on landfill owners and operators to collect fees payable by those who deposit waste in the landfills. Plaintiff’s ordinance does not provide landfill operators with any discretion in setting the landfill disposal surcharge amounts or in deciding from whom it will collect the surcharge. Under the ordinance, defendants must simply collect fifty cents a cubic foot of waste deposited in their landfills and remit its collections quarterly to the county treasurer. The solid waste management act, MCL 324.11501 et seq.) MSA 13A.11501 et seq., also imposes on landfill owners and operators a nearly identical quarterly surcharge collection requirement of municipahty-imposed impact fees. MCL 324.11532(4); MSA 13A.11532(4). We conclude that both plaintiff and the Legislature may constitutionally impose these ministerial functions on private landfill owners and operators. See Whatcom Co v Taxpayers of the Whatcom Co Solid Waste Disposal Dist, 66 Wash App 284, 293-294; 831 P2d 1140 (1992) (upholding ordinance’s delegation of collection of garbage disposal excise tax, a ministerial function, to private garbage collectors). Therefore, because the instant ordinance does not vest defendants with the authority to exercise any legislative discretion, defendants’ reliance on the Blue Cross & Blue Shield, supra, and Penn School Dist, supra, cases involving delegations of legislative authority is misplaced.
Defendants also failed to cite authority to support their argument that it is illegal for a governmental entity to impose a fee or tax collection requirement on any private entity unless the private entity itself has an obligation to pay the tax or fee. The Uniform City Utility Users Tax Ordinance (Utility Tax Ordinance), MCL 141.1161 et seq.) MSA 5.3188(261) et seq., contradicts defendants’ argument. While § 3 of the Utility Tax Ordinance imposes a tax on utility users, § 4 imposes on the utility service providers the ministerial task of billing utility customers for the tax. The utility service providers’ billing duty is analogous to the landfill operators’ duty to collect surcharges from landfill depositors. Therefore, defendants’ argument that the duty of tax or fee collection may be validly imposed only on a private party who itself has an obligation to pay the charge is without merit.
n
Second, defendants argue that the landfill surcharge constitutes an illegal tax that violates the Headlee Amendment. Section 31 of the Headlee Amendment prohibits local governments
from levying any tax not authorized by law or charter when this section is ratified or from increasing the rate of an existing tax above that rate authorized by law or charter when this section is ratified, without the approval of a majority of the qualified electors of that unit of Local Government voting thereon. [Const 1963, art 9, § 31.]
Plaintiff did not submit the landfill surcharge issue to the electorate. Therefore, should the surcharge provision impose a tax, it is illegal and unenforceable.
Whether the instant landfill surcharge represents a valid user fee or unconstitutional tax is a question of law that we review de novo. Gorney v Madison Heights, 211 Mich App 265, 267; 535 NW2d 263 (1995). Although no bright-line test exists for distinguishing one from the other, a fee generally is exchanged for a service rendered or a benefit conferred, and some reasonable relationship exists between the amount of the fee and the value of the service or benefit. Bolt v Lansing, 221 Mich App 79, 86; 561 NW2d 423 (1997), lv gtd 456 Mich 946 (1998); Northgate Towers Associates v Royal Oak Charter Twp, 214 Mich App 501, 503; 543 NW2d 351 (1995), modified on other grounds 453 Mich 962 (1996). A regulatory fee will be construed as an illegal tax when the revenue generated by the regulation exceeds the cost of the regulation. Rouge Parkway Associates v City of Wayne, 423 Mich 411, 419; 377 NW2d 748 (1985). The Supreme Court examined the regulatory fee/tax distinction in Merrelli v St Clair Shores, 355 Mich 575; 96 NW2d 144 (1959).
To be contrasted with the revenue derived from municipal taxation are those moneys accruing from the issuance of licenses or permits coming under the police power of the community. These are regulatory measures involving the public health, morals, or welfare. . . .
. . . One involves an exercise of the municipal power of taxation. Its purpose is to raise money. The other is an exercise of the police power of the community. Its purpose is the protection of the public health, safety, and welfare. True, certain moneys may be obtained in connection therewith, but such moneys are incidental to the accomplishment of the primary purpose of guarding the public. The differences between the 2 were well expressed in Vernor v Secretary of State, 179 Mich 157, 167-170 [146 NW 338 (1914)], involving the validity of an automobile licensing fee:
“To be sustained, the act we are here considering must be held to be one for regulation only, and not as a means primarily of producing revenue. Such a measure will be upheld by the courts when plainly intended as a police regulation, and the revenue derived therefrom is not disproportionate to the cost of issuing the license, and the regulation of the business to which it applies. [Citations omitted.]
“Anything in excess of an amount which will defray such necessary expense cannot be imposed under the police power, because it then becomes a revenue measure. [Citations omitted.]
“In determining whether a fee required for a license is excessive or not, the absence or amount of regulatory provisions and the nature of the subject of regulation should be considered, and, if the amount is wholly out of proportion to the expense involved, it will be declared a tax.” [Merrelli, supra at 582-584.]
The instant landfill surcharge qualifies as a regulatory fee because it is reasonably related to the costs involved in managing the county’s disposal of solid waste. Our review of the county’s estimated budgetary figures for 1994 indicates that the revenue generated by the landfill surcharge of § 280 does not exceed the costs of implementing the county’s solid waste plan. The budget reflects that in 1994 the surcharge generated nearly $400,000. For the same year, the operational costs of the solid waste plan’s health department, recycling department, and solid waste (administrative) department totaled over $450,000. According to the county’s solid waste management director, these operational costs included county solid waste employee salaries, benefits, and travel expenses, promotion of the county’s recycling program, and ordinance enforcement and implemen tation activities such as monitoring who utilizes each landfill, recording the landfill activity of each hauler, ensuring that no improper waste enters the landfills, and aerial capacity estimates of landfill space. Thus, the revenues derived from the surcharge fall below these costs of implementing the county’s solid waste disposal plan.
Defendants insist that the revenues derived from the landfill surcharge should not be measured against the costs of implementing the county’s solid waste disposal plan in its entirety, but against only the health department’s budgetary figures. The health department, whose responsibility it is to conduct landfill inspections and to enforce landfill ordinances and statutes, estimated its share of budgetary expenses to amount to less than $120,000. Defendants thus reason that because the landfill surcharge revenues greatly exceed actual landfill inspection and enforcement costs, the surcharge represents a general revenue-raising tax. We disagree.
In Bowers v Muskegon, 305 Mich 676; 9 NW2d 889 (1943), the Supreme Court addressed the issue whether revenue from newly installed parking meters constituted a fee or a tax. Muskegon’s parking meter ordinance provided that the city would apply parking meter revenues to parking meter regulation and enforcement and to “other traffic control devices and regulations.” Id. at 681. The plaintiffs alleged that the parking meter fees could exceed by $18,000 the amount of parking meter acquisition, maintenance, and policing costs, and other incidental enforcement expenses, and that they therefore constituted a tax. Id. at 682. However, the Supreme Court did not believe “that receiving revenue for ‘other traffic con trol devices and regulations’. . . [was] so remote from the parking problem that to contemplate proceeds for such purposes from the parking meters is to create an intent as a matter of law to raise ‘revenue under the guise of a police regulation.’ ” Id. at 682-683. The Court therefore concluded that the parking meter costs properly constituted fees. Id. at 685.
Similarly, we do not believe that any aspect of plaintiff’s solid waste program is so remote from its waste disposal problems in landfills that to contemplate proceeds for its recycling program, solid waste administrative costs, and other solid waste purposes from the landfill surcharge revenues is to create an intent as a matter of law to raise revenue under the guise of a police regulation. Plaintiff’s other solid waste efforts are intimately connected with its landfill regulations. For example, to the extent that plaintiff successfully promotes its recycling program, these efforts directly affect the amount of waste flowing into county landfills. We agree with the trial court’s astute observations regarding this interrelationship:
The Court further finds that said [landfill surcharge] fee is reasonably related to the cost of implementing the County’s solid waste plan, and is proportionate and not in excess of the cost of the regulation. Contrary to defendants’ assertion, this Court finds nothing inconsistent with imposing the costs of the recycling program upon those who use the landfills. As was pointed out at oral argument, part of providing solid waste service is preserving landfill space for county generated waste. Recycling is a necessary part of that program so as to ensure that landfills are not quickly filled up, requiring expansion or the opening of new facilities and all the attendant problems that follow. The Court accordingly concludes that the instant surcharge is not a tax as defendants’ [sic] suggest but a regulatory fee.
We likewise conclude that the landfill surcharge represents a valid regulatory fee, not a tax, and that therefore enactment of the surcharge did not violate the Headlee Amendment.
m
Third, defendants also suggest that the solid waste management act (hereinafter the act) entirely preempts plaintiffs 1993 solid waste ordinance. Specifically, defendants challenge the trial court’s conclusion that the act does not preempt amended § 280 of plaintiff’s solid waste ordinance. A preemption determination involves legal questions of statutory interpretation, which we review de novo. Oakland Co Bd of Co Rd Comm’rs v Michigan Property & Casualty Guaranty Ass’n, 456 Mich 590, 610; 575 NW2d 751 (1998).
Preemption occurs when a municipal ordinance directly conflicts with a statute or statutory scheme or when, even if the ordinance and the statute do not directly conflict, the state statutory scheme occupies an entire field of regulation. People v Llewellyn, 401 Mich 314, 322; 257 NW2d 902 (1977). The Llewellyn Court provided the following guidelines to consider in determining whether an ordinance was preempted:
First, where the state law expressly provides that the state’s authority to regulate in a specified area of the law is to be exclusive, there is no doubt that municipal regulation is pre-empted.
Second, pre-emption of a field of regulation may be implied upon an examination of legislative history.
Third, the pervasiveness of the state regulatory scheme may support a finding of pre-emption. While the pervasiveness of the state regulatory scheme is not generally suffi cient by itself to infer pre-emption, it is a factor which should be considered as evidence of pre-emption.
Fourth, the nature of the regulated subject matter may demand exclusive state regulation to achieve the uniformity necessary to serve the state’s purpose or interest.
. . . [W]here the nature of the regulated subject matter calls for regulation adapted to local conditions, and the local regulation does not interfere with the state regulatory scheme, supplementary local regulation has generally been upheld. [Id. at 323-325 (citations omitted).]
The surcharge provision of § 280 does not conflict with the act or with any of the regulations promulgated thereunder. Therefore, § 280 is valid only if the act does not occupy the field of landfill regulation.
We do not believe that the act occupies the field to the extent that it preempts plaintiffs surcharge requirement. First, the act does not expressly provide that the state has exclusive authority to regulate solid waste disposal. To the contrary, § 11538 of the act, MCL 324.11538; MSA 13A. 11538, contemplates local regulation of solid waste disposal. Subsection 11538(8) specifically addresses local landfill measures, explaining that any such ordinance that “prohibits or regulates the location or development of a solid waste disposal area, and which is not part of or not consistent with the approved solid waste management plan for the county, shall be considered in conflict with this part and shall not be enforceable.” Thus, the act explicitly prohibits only those local regulations that attempt to regulate landfill location and development. Second, relevant legislative history regarding the predecessor of the current act (MCL 299.401 et seq.; MSA 13.29[1] et seq.') reveals that the House favored dual state and local control of solid waste management, although it is impossible to discern the intent of the Senate. Southeastern Oakland Co Incinerator Authority v Avon Twp, 144 Mich App 39, 43-44, & 44, n 1; 372 NW2d 678 (1985). The repeal of the prior act and its reenactment as the current act occurred as part of the Legislature’s attempt to reorganize all statutes relating to the environment and natural resources, and did not represent a change in legislative policy regarding solid waste. Senate Fiscal Agency Bill Analysis, SB 257, July 19, 1994. Third, as panels of this Court have previously recognized, the state’s regulatory scheme of solid waste disposal is pervasive. Southeastern Oakland Co Incinerator, supra at 44. While this factor is evidence of preemption, pervasiveness is not generally sufficient by itself to infer preemption. Llewellyn, supra at 324. Fourth, while the nature of solid waste disposal may demand exclusive state regulation regarding location, development, and operation of solid waste disposal areas, see MCL 324.11538(8); MSA 13A.11538(8); Southeastern Oakland Co Incinerator, supra at 45-46, the instant surcharge provision does not affect these concerns. The surcharge provision is designed to offset the regulatory costs incurred by plaintiff in monitoring and enforcing its solid waste management plan. Different landfill locations and features are not identical, and regulatory costs related to solid waste disposal may vary from county to county. Therefore, for each county to effectively offset its costs would require regulation adapted to its particular local conditions. Because of the need for localized regulation in this area and because local regulations imposing varied surcharges on garbage disposal would not otherwise interfere with the state’s uniform scheme regulating landfill location, development, and operation, we believe the instant surcharge is a permissible local regulation that is compatible with the Legislature’s statutory scheme. Llewellyn, supra at 324-325. Thus, although the state has regulated extensively in the area of solid waste disposal, we conclude that the state’s regulatory scheme does not preempt the instant surcharge. The instant surcharge is consistent with plaintiff’s existing solid waste management plan and does not attempt to regulate landfill location or development; it is therefore valid under subsection 11538(8).
Defendants contend that this Court’s opinions in Fort Gratiot Charter Twp v Kettlewell, 150 Mich App 648; 389 NW2d 468 (1986), Weber v Twp of Orion Bldg Inspector, 149 Mich App 660; 386 NW2d 635 (1986), and Southeastern Oakland Co Incinerator, supra, mandate that we find the instant surcharge preempted. All of these cases held that township ordinances regulating landfill operations were preempted by the act. Fort Gratiot, supra at 655; Weber, supra at 663; Southeastern Oakland Co Incinerator, supra at 46. We distinguish these cases on the basis that none of them specifically addressed a local surcharge on landfill disposal. The instant surcharge represents the primary source of plaintiff’s revenue for enforcement of its solid waste plan. The surcharge is imposed on those who haul garbage to landfills, is to be collected by landfill operators like defendants, and is to be forwarded to the county. The surcharge does not affect landfill operations. To the extent that we can discern the subject matter of the local solid waste ordinances addressed in the cases cited by defendants, they all affected landfill development or operation. Therefore, defendants’ reliance on these prior opinions is misplaced.
The trial court properly severed the surcharge provision from the preempted provisions of the ordinance. The trial court found most of the other provisions of the ordinance, which addressed various landfill operational requirements, invalid. However, § 422 of the ordinance contained a severability provision, reflecting plaintiff’s desire that all valid provisions remain in effect in the event some provisions were stricken. The surcharge provision remains enforceable independently of the invalid portions of the ordinance, and we believe the surcharge provision remains reasonable in view of the ordinance as originally drafted. MCL 8.5; MSA 2.216; Citizens for Logical Alternatives & Responsible Environment v Clare Co Bd of Comm’rs, 211 Mich App 494, 498; 536 NW2d 286 (1995).
The trial court did not address defendants’ subargument that the state should properly provide the funding for the county’s solid waste management plan because plaintiff had its health department certified as an environmental quality enforcement agency. Nor did the trial court discuss defendants’ contention that MCL 324.11532(1); MSA 13A.11532(1), which authorizes municipalities to impose “an impact fee of not more than 10 cents per cubic yard on solid waste that is disposed of in a landfill,” does not authorize counties to impose such a fee. However, regarding defendants’ state-funding argument, MCL 324.11547(2); MSA 13A. 11547(2) does not forbid the receipt of funds from other sources for the purpose of funding a county’s solid waste management plan. Although § 11547 could conceivably provide a basis for an action by a city or county against the state in the event that the state failed to provide the funding described therein, it does not establish a private cause of action by individuals against a city or county that tries to make up a deficiency when the state fails to provide the described funding. Furthermore, regarding defendants’ second subargument, although subsection 11532(1) of the act fails to mention counties while authorizing municipalities to impose a landfill impact fee, § 11532 merely constitutes a limitation on the amount of fees that a municipality may impose on landfill disposal. While § 11532 neglects to mention counties, subsection 11520(1), MCL 324.11520(1); MSA 13A.11520(1), contemplates that “[f]ees collected by a health officer [of a certified city, county, or district department of health — see subsection 11504(1)] under this part” may be used to implement a solid waste management plan. We infer from the fact that the act contains no explicit limitation on county-imposed landfill disposal fees and the fact that the act contemplates that counties will collect fees under the act, that counties may impose such fees.
IV
Fourth, defendants argue that the surcharge is invalid because plaintiff possessed no authority to impose it. As a political subdivision of the state, plaintiff county possesses only those powers delegated to it by constitution or statute. Mudge v Macomb Co, 210 Mich App 436, 442; 534 NW2d 539 (1995), rev’d in part on other grounds 458 Mich 87; 580 NW2d 845 (1998). We conclude that plaintiff possessed statutorily granted authority to promulgate the instant surcharge ordinance.
MCL 46.11; MSA 5.331 invests a county board of commissioners with a list of powers, including the power to,
[b]y majority vote of the members of the county board of commissioners elected and serving, pass ordinances that relate to county affairs and do not contravene the general laws of this state or interfere with the local affairs of a township, city, or village within the limits of the county, and . . . provide suitable sanctions for the violation of those ordinances. [MCL 46.11(m); MSA 5.331(m) (emphasis added).]
The county’s statutorily granted authority should be liberally construed in plaintiff’s favor and includes those powers “fairly implied and not prohibited by th[e] constitution.” Const 1963, art 7, § 34. We again review de novo this issue of statutory interpretation. Oakland Co Bd of Co Rd Comm’rs, supra.
Construing MCL 46.ll(m); MSA 5.331(m) liberally, we conclude that plaintiff possessed authority to enact the landfill surcharge. The surcharge was intended to fund the enforcement of the county’s solid waste management plan, and therefore, it related to county affairs. Defendants do not allege that the surcharge in any way interfered with the local affairs of a city, township, or village. Therefore, we conclude that MCL 46.11(m); MSA 5.331(m) constituted at least one basis for plaintiffs passage of the surcharge ordinance.
Furthermore, we believe plaintiff possessed authority to pass the surcharge ordinance under the solid waste management act. As we previously mentioned, subsection 11538(8) of the act, MCL 324.11538(8); MSA 13A. 11538(8), declares that, after approval of a countywide solid waste management plan by the Department of Environmental Quality, only a county ordinance that affects landfill location or development and is not part of or is inconsistent with the county’s approved plan is prohibited. Because the surcharge does not fall into the category of ordinances explicitly prohibited by subsection 11538(8), it is valid. The surcharge also comports with the most recent, state-approved update to plaintiffs solid waste management plan. The update requires that the county board of commissioners establish an enforcement agency to carry out the plan and provides for enforcement agency funding “by surcharges, tipping fees and/or other appropriate means of financing.”
Finally, subsection 11520(1) provides that “[f]ees collected by a health officer [defined within § 11504 of the act, MCL 324.11504; MSA 13A.11504, as a certified city or county health department’s administrative officer] under this part shall be deposited with the city or county treasurer, who shall keep the deposits in a special fund designated for use in implementing this part.” Plaintiff’s health department is a certified health department that may collect fees to implement its solid waste management plan. As we discussed above, we believe that subsection 11520(1) contemplates that such certified cities and counties may impose solid waste disposal fees.
v
Fifth, defendants claim that amended § 280 violates the Equal Protection Clauses of the United States and Michigan Constitutions, US Const, Am XIV; Const 1963, art 1, § 2. Defendants argue that the ordinance creates a classification of persons who utilize landfills and improperly imposes the costs of the county’s solid waste program on them, when the program benefits all the county’s residents. Defendants also contend that the surcharge is not applied equally because only Type n landfill users must pay the fee. We review these constitutional issues de novo. Wayne Co Chief Executive v Governor, 230 Mich App 258, 263; 583 NW2d 512 (1998).
Where the proponent of an equal protection argument is not a member of a protected class, or does not allege violation of a fundamental right, we review the equal protection claim using a rational basis test. Yaldo v North Pointe Ins Co, 457 Mich 341, 349; 578 NW2d 274 (1998). Under the rational basis test, we will uphold the challenged statute or ordinance if it furthers a legitimate governmental interest and if the classification is rationally related to achieving the interest. Id.
Defendants’ equal protection arguments lack merit. The county imposed the surcharge to fund the enforcement of its solid waste management plan, a legitimate, state-approved interest. Regarding defendants’ argument that the surcharge improperly applies only to landfill users, it was certainly reasonable for the county to impose the surcharge on only those people who deposited their waste in county landfills, thus increasing the county’s solid waste management burden. Regarding defendants’ argument that the surcharge improperly applies only to Type n and not to Type in landfills, these two types of landfills are labeled and classified differently because each type is authorized to collect different types of wastes. Type n landfills potentially receive “household waste, municipal solid waste incinerator ash” and “commercial waste, nonhazardous sludge, conditionally exempt small quantity generator waste, and industrial waste,” 1993 AACS, R 299.4104(d). Type m landfills include construction and demolition waste landfills or industrial waste landfills, but are not hazardous waste landfills. 1993 AACS, R 299.4105(a)(ii). The mere fact that these different types of landfills receive different types of waste would constitute a rational basis for imposing a fee on disposal in one type and not in the other. Although the record is unclear what specific rationale led plaintiff to impose disposal fees on waste entering only Type n landfills, testimony indicated that all Type in landfills in Saginaw County are privately owned facilities, in which their owners dispose of their own industrial wastes. Perhaps these privately owned Type m landfills also generate less waste volume than the Type n landfills open to the general public. In any event, the Legislature has also seen fit to distinguish between Type n and Type in landfills, imposing larger construction permit application fees for Type n landfills (see MCL 324.11509[2], [3]; MSA 13A11509[2], [3]), and requiring larger operating license application fees for all Type n landfills receiving more than five hundred tons of waste a day rather than the flat operating license application fee paid by Type in landfills (see MCL 324.11512[7]-[9]; MSA 13A.11512[7]-[9]). Therefore, we conclude that the fact that the two types of landfills contain different types of waste constitutes a rational basis for imposing a fee on disposal in one type while imposing no fee for disposal in the other.
VI
Lastly, defendants contend that plaintiffs ordinance contains penalty provisions for its violation beyond those that the Legislature has authorized a county to impose and therefore these penalty provisions are preempted. We note that although defendants failed to preserve this argument by raising it before the trial court, we may address it for the first time on appeal because it involves only a question of law. Miller v Inglis, 223 Mich App 159, 168; 567 NW2d 253 (1997).
We agree with defendants that the penalty provisions of the ordinance are invalid and unenforceable. MCL 46.10b(l); MSA 5.330(2)(1) limits the penalties imposed on one who violates an ordinance to “a fine of not more than $500.00 or imprisonment for not more than 90 days, or both.” Subsection 333.1, apparently mislabeled within the ordinance as subsection 332.1, provides for civil penalties of from $1000 to $3000, and subsection 334.1 authorizes fines of up to $10,000 a day for “major violations” of the ordinance. These ordinance penalties clearly exceed those authorized by the Legislature and are therefore preempted and unenforceable. Llewellyn, supra at 322. However, the mere fact that the ordinance authorizes the imposition of a greater penalty than does the statute does not invalidate the ordinance. Kalita v Detroit, 57 Mich App 696, 705; 226 NW2d 699 (1975). Therefore, the surcharge provision remains enforceable.
Affirmed.
Exhibit five to defendants’ lower court brief in reply to plaintiff’s response to defendants’ motion for summary disposition is a copy of the Avon Township landfill ordinance that this Court deemed preempted in Southeastern Oakland Co Incinerator Authority, supra. The Avon Township ordinance purported to regulate landfill permit and bond requirements, landfill performance standards and other operational regulations, landfill soil excavation, and landfill restoration, all areas in which the act and regulations promulgated thereunder currently regulate. The Weber Court also addressed “certain local ordinances preventing [plaintiffs] from operating a sanitary landfill.” Weber, supra at 662. Fort Gratiot, supra, contains no description of the township ordinances there at issue.
Subsection 11520(1) refers to fees collected “under this part.” Several sections of the act establish fees. For example, § 11509, MCL 324.11509; MSA 13A.11509, delineates various construction permit application fees, § 11512, MCL 324.11512; MSA 13A.11512, contains a list of landfill operating license application fees, and § 11525a, MCL 324.11525a; MSA 13A.11525a, imposes on landfill owners and operators a solid waste program administration fee. However, none of these fees are receivable by a city or county health officer. Subsection 11509(7) mandates that the department of environmental quality (the department) deposit the construction permit application fees in the state’s solid waste management fund (created pursuant to § 11550, MCL 324.11550; MSA 13A.11550), subsection 11512(11), MCL 324.11512(11); MSA 13A.11512(11), also orders the department to deposit the operating license application fees into the solid waste management fund, and subsection 11525a(5) directs that solid waste administration fees also be deposited in the solid waste management fund. The only other fees explicitly discussed within the act are municipal impact fees in § 11532, MCL 324.11532; MSA 13A. 11532. Because none of the fees specifically authorized by the act represent fees that a county could collect as fees “under this part,” we conclude that § 11520 must contemplate that counties may impose various solid waste fees of their own, such as the instant surcharge.
We reject plaintiff’s contention that the penalty provisions of the ordinance are consistent with MCL 324.11546; MSA 13A.11546 and therefore are valid. Subsection 11546(2) authorizes fines of up to $10,000 a day for violation of “any provision of this part or rules promulgated under this part” or for failure “to comply with any permit, license, or final order issued pursuant to this part.” Plaintiff’s ordinance constitutes neither a rule promulgated under this part, nor a permit, license, or final order issued pursuant to the act. Therefore, § 46 cannot be construed to permit plaintiff’s ordinance to impose penalties beyond those authorized by MCL 46.10b(l); MSA 5.330(2)(1). | [
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Murphy, J.
Plaintiff appeals as of right from the order granting in part and denying in part defendant’s motion for summary disposition. We affirm.
This case arises out of Lisa Burchett’s termination of employment as an optician with defendant. However, this appeal only addresses the claims involving plaintiff’s son, Jacob. Lisa began working at Rx Optical in 1992. In December 1994, she became pregnant and informed her supervisor. On January 1, 1995, Lisa received a paycheck from which defendant had deducted money pursuant to its policy that its opticians would be responsible for mistakes made on accounts. On January 4, 1995, plaintiff contacted the Michigan Department of Labor to report defendant’s policy of requiring opticians to reimburse defendant for mistakes that they made on certain accounts. Upon discovering that defendant’s policy was illegal, Lisa informed both the owner and the president of Rx Optical. That same day, Lisa experienced vaginal bleeding and her doctor instructed her to go home. The next day, she was placed on a two-week disability leave; however, before the end of this two-week period she was terminated from her job for allegedly having a bad attitude.
On March 16, 1995, Lisa and John Burchett, her husband, filed an action alleging that Lisa’s termination violated the Whistleblowers’ Protection Act (wpa), MCL 15.361 et seq.; MSA 17.428(1) et seq., the Civil Rights Act (CRA), MCL 37.2101 et seq.; MSA 3.548(101) et seq., the Michigan Handicappers’ Civil Rights Act (hora), MCL 37.1101 et seq.; MSA 3.550(101) et seq., and the Family and Medical Leave Act (fmla), 29 USC 2601 et seq. John Burchett alleged that because of Lisa’s termination, he suffered loss of consortium. Following the premature birth of their son, Jacob, the Burchetts amended their complaint to add Jacob as a party, alleging that defendant’s actions caused Lisa to suffer stress, which resulted in Jacob’s premature birth and associated injuries.
Defendant filed a motion for summary disposition pursuant to MCR 2.116(C)(8) and (10). Although plaintiff may very well have had considerable problems establishing that defendant’s alleged violations of the statutes proximately caused the alleged injuries to Jacob, the trial court did not reach the issue of proof. Rather, the trial court granted the motion with respect to the claims involving Jacob under MCR 2.116(C)(8) (failure to state a claim on which relief can be granted). The trial court denied defendant’s motion for summaiy disposition with respect to John and Lisa Burchett’s claims; however, the parties settled those claims after the trial court’s order. Plaintiff appeals from the trial court’s dismissal of Jacob’s claims.
We review de novo a trial court’s decision to grant a motion for summary disposition. Citizens Ins Co v Bloomfield Twp, 209 Mich App 484, 486; 532 NW2d 183 (1995). A motion for summary disposition under MCR 2.116(C)(8) tests the legal sufficiency of a claim and only permits consideration of the pleadings. Wade v Dep’t of Corrections, 439 Mich 158, 162; 483 NW2d 26 (1992). A trial court should grant a motion for summary disposition under MCR 2.116(C)(8) only where a claim is so clearly unenforceable as a matter of law that no factual development could possibly justify recovery. Id.
Plaintiff argues that Jacob should be allowed to maintain a cause of action under the cra, the hcra, and the wpa. Plaintiff does not challenge the trial court’s decision with respect to the fmla. The fundamental purpose of statutory construction is to discover and give effect to the intent of the Legislature. Ansell v Dep’t of Commerce (On Remand), 222 Mich App 347, 355; 564 NW2d 519 (1997). Once discovered, the Legislature’s intent must prevail, any existing rule of construction to the contrary notwithstanding. Id. Where reasonable minds may differ about the meaning of the statute, we look to the objective of the statute and the harm it is designed to remedy and apply a reasonable construction that best accomplishes the Legislature’s purpose. Id.
Although we appreciate the remedial nature of these acts and recognize that appellate courts have consistently construed these acts liberally, see Chmielewski v Xermac, Inc, 457 Mich 593; 580 NW2d 817 (1998) (the HCRA); Chandler v Dowell Schlumberger Inc, 456 Mich 395, 398; 572 NW2d 210 (1998) (the wpa); Reed v Michigan Metro Girl Scout Council, 201 Mich App 10, 15; 506 NW2d 231 (1993) (the CRA), we are not prepared to say that the Legislature, by its adoption of these acts, intended to create a cause of action for physical injuries to an infant, allegedly resulting from a stress-induced premature birth caused by unlawful employment discrimination directed at the infant’s mother.
We first address whether Jacob can maintain a cause of action under the CRA. In Eide v Kelsey-Hayes Co, 431 Mich 26; 427 NW2d 488 (1988), our Supreme Court addressed a distinctly different question. In that case, the Court addressed whether a derivative cause of action for loss of consortium is precluded by the CRA. Id., 28. According to the majority in Eide, “a claim for loss of consortium is simply one for loss of society and companionship,” which needs no independent statutory authority for it to be brought. Id., 29-30. What is necessary is that the impaired spouse has sustained some legally cognizable harm or injury — in Eide, injuries from sexual harassment in violation of the CRA — resulting in a loss of society and companionship to the unimpaired spouse. Id., 29. Because “courts have consistently treated loss of consortium not as an item of damages, but as an independent cause of action,” Justice Boyle, writing for the majority, framed the issue before the Court as “not whether a cause of action [for loss of consortium] is available under the Civil Rights Act, but whether there is anything in the act which would preclude this independent cause of action.” Id., 29-30 (emphasis added). Stated differently, a loss of consortium claim is not a claim under the CRA at all, but a claim at common law. Id., 33-34, citing Prosser & Keeton, Torts (5th ed), § 125, pp 931-934. Our Supreme Court concluded that neither the plain language of the CRA nor conventional rules of statutory construction support the argument that the Legislature intended to preclude a cause of action for loss of consortium. Id., 31, 34.
In our view, the question before this Court is entirely different. Unlike the loss of consortium claim, the claim presented here is not an independent cause of action rooted in the common law. While it is true that Michigan common law recognizes a claim of negligence on behalf of a fetus for prenatal injury if (1) the fetus is later bom alive, or (2) the fetus was viable at the time of injury, Jarvis v Providence Hosp, 178 Mich App 586, 591; 444 NW2d 236 (1989), the cause of action presented in this case is not a negligence claim. Rather, the claim made by lisa Burchett, as next friend of her son Jacob, can only be perceived as a civil rights claim brought directly under the CRA. In other words, we are asked to decide not whether there is anything in the CRA that would preclude an infant’s independent cause of action for physical injuries, resulting from a premature birth that was allegedly caused by employment discrimination against the infant’s pregnant mother, but whether the infant can maintain such a cause of action directly under the CRA. We believe that the CRA cannot be so broadly construed as to authorize such a claim.
Statutory analysis necessarily begins with the language of the statute in question. House Speaker v State Administrative Bd, 441 Mich 547, 567; 495 NW2d 539 (1993). The civil enforcement provision of the CRA provides:
A person alleging a violation of this act may bring a civil action for appropriate injunctive relief or damages, or both. [MCL 37.2801(1); MSA 3.548(801)(1).]
Although remedial statutes are to be liberally construed to suppress the evil and advance the remedy, Eide, supra, 34, we are not convinced that the Legislature intended to allow an infant to pursue a cause of action for injuries that the infant has incurred as a result of a civil rights violation inflicted upon the infant’s mother, irrespective of whether the infant has alleged that prenatal or postnatal injuries were incurred as a result of the civil rights violation.
Enacted by the Michigan Legislature in 1976 to supplant the Fair Employment Practices Act, the CRA prohibits discrimination based on sex, race, national origin, religion, height, weight, or marital status in employment, housing, use of public accommodations, public service, and educational facilities. With respect to discrimination in employment, the CRA provides:
(1) An employer shall not do any of the following:
(a) Fail or refuse to hire or recruit, discharge, or otherwise discriminate against an individual with respect to employment, compensation, or a term, condition, or privilege of employment, because of religion, race, color, national origin, age, sex, height, weight, or marital status.
(b) Limit, segregate, or classify an employee or applicant for employment in a way that deprives or tends to deprive the employee or applicant of an employment opportunity, or otherwise adversely affects the status of an employee or applicant because of religion, race, color, national origin, age, sex, height, weight, or marital status.
(c) Segregate, classify, or otherwise discriminate against a person on the basis of sex with respect to a term, condition, or privilege of employment, including, but not limited to, a benefit plan or system. [MCL 37.2202; MSA 3.548(202).]
In our view, when this portion of the CRA is read with the civil enforcement provision of the act, we are compelled to conclude that the Legislature intended to authorize only the person whose civil rights were violated to bring a cause of action under the CRA. Because plaintiff does not claim that defendant violated Jacob’s civil rights but, rather, alleges that Jacob suffered damages as a result of the violation of the civil rights of Jacob’s mother, we conclude that Jacob cannot maintain a cause of action directly under the CRA.
Plaintiff next argues that Jacob should be allowed to maintain a cause of action under the HCRA. However, the HCRA has the same purposes and goals as the CRA, and this Court has held that claims under the hcra should be treated similarly to those under the cra. Milnikel v Mercy-Memorial Medical Center, Inc, 183 Mich App 221, 223-224; 454 NW2d 132 (1989). Further, the civil enforcement provision of the hcra is identical to that of the CRA. See MCL 37.1606(1); MSA 3.550(606)(1). Therefore, for the reasons set forth above, we likewise decline to interpret the hcra as authorizing Jacob’s claim.
Plaintiff also argues that Jacob should be allowed to maintain a cause of action under the wpa. Although the wpa and the civil rights acts do not share identical purposes and goals — the wpa is designed to protect the public by protecting employees who report violations or suspected violations of the law to a public body, Dolan v Continental Airlines, 454 Mich 373, 378; 563 NW2d 23 (1997) — case law nonetheless supports the conclusion that the wpa, the cra, and the HCRA deserve like treatment. See Stewart v Fairlane Community Mental Health Centre (On Remand), 225 Mich App 410, 421; 571 NW2d 542 (1997); Anzaldua v Band, 216 Mich App 561, 580-581; 550 NW2d 544 (1996). Further, the civil enforcement provision of the wpa is substantively the same as those of both the CRA and the HCRA. See MCL 15.362; MSA 17.428(2). Accordingly, for the reasons discussed above, we are also satisfied that the Legislature, by its adoption of the wpa, did not intend to establish a cause of action for a person other than the person against whom a violation of the WPA was directed. Because the alleged violation of the wpa in this case was directed at Jacob’s mother and not Jacob, we conclude that Jacob cannot maintain a cause of action against defendant under the statutory scheme established in the WPA.
In sum, a court’s decision regarding whether a statute creates a private right of action must be consistent with legislative intent while furthering the Legislature’s purpose in enacting the statute. See Gardner v Wood, 429 Mich 290, 301; 414 NW2d 706 (1987). We conclude that the Legislature, by its adoption of the cra, the hcra, and the wpa did not intend to create the private right of action brought in this case by lisa Burchett, as next friend of her son Jacob. Further, because these areas of law have been so extensively addressed by the Legislature, we are not prepared to recognize a new derivative cause of action in the area of civil rights or the wpa for prenatal injuries allegedly inflicted on the child of the person whose rights were violated. Such recognition is best left to the Legislature, if it is so inclined.
Accordingly, the trial court did not err in granting defendant’s motion for summary disposition with respect to Jacob’s claims.
Affirmed.
Sawyer, J., concurred. | [
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Wahls, P.J.
In this worker’s compensation case, plaintiff appeals by leave granted from a decision of the Worker’s Compensation Appellate Commission (wcac) reversing a magistrate’s award of benefits. We reverse the decision of the WCAC and reinstate the magistrate’s award.
Plaintiff is employed by defendant Jahm, Inc., as vice president of engineering. In 1993, Jahm held a week-long, senior management meeting, which plaintiff attended. The meeting was held on a cruise ship, and spouses were encouraged to attend. During some of their free time on the trip, plaintiff and his wife rented a motorbike on the island of Martinique. While riding back to the ship, plaintiff was run off the road and suffered injuries that required the amputation of his right leg above the knee. Plaintiff then filed a petition seeking worker’s compensation benefits for a specific loss.
There were only two issues before the magistrate in this case: First, did plaintiffs injury arise “out of and in the course of his employment.” MCL 418.301(1); MSA 17.237(301)(1). And second, was plaintiffs injury “incurred in the pursuit of an activity the major purpose of which is social or recreational,” MCL 418.301(3); MSA 17.237(301)(3). The magistrate determined that plaintiffs injury arose out of and in the course of his employment and that the major purpose of plaintiffs activity at the time of injury was work-related, not social or recreational. Thus, the magistrate entered an order awarding plaintiff specific-loss benefits. Defendants then appealed to the WCAC. In their appeal, defendants raised only one issue. They claimed that, assuming plaintiffs injury arose out of and in the course of his employment, the magistrate erred in concluding that MCL 418.301(3); MSA 17.237(301)(3) did not apply. Thus, the only issue before the wcac was whether plaintiffs injury was incurred in the pursuit of an activity the major purpose of which was social or recreational. The WCAC concluded, in a 2-1 decision, that the major purpose of plaintiff’s activity at the time he was injured was social or recreational, and reversed the magistrate’s award.
Our review of the wcac’s decision is limited; the only issue before us is whether the wcac exceeded its authority when it reversed the magistrate’s decision. Goff v Bil-Mar Foods, Inc (After Remand), 454 Mich 507, 538; 563 NW2d 214 (1997). Our Supreme Court has articulated the scope of the wcac’s authority:
If the magistrate’s decision is reasonably supported in the record by any competent, material, and substantial evidence, then it is conclusive and the wcac must affirm. If it does not, it is exceeding the scope of its reviewing power and impermissibly substituting its judgment for the magistrate’s. In reviewing the magistrate’s decision, the wcac must do so with sensitivity and deference toward the findings and conclusions of the magistrate in its assessment of the record. If in its review the wcac finds that the magistrate did not rely on competent evidence, it must carefully detail its findings of fact and the reasons for its findings grounded in the record. [Jd.][ |
Here, the wcac exceeded its authority when it reversed the magistrate’s decision. The question whether a plaintiff was engaged in “an activity the major purpose of which is social or recreational” is necessarily one of fact. The testimony in this case showed that, at the time he was injured, plaintiff was traveling on a motorbike on his way back to a cruise ship to get something to eat and prepare for a business meeting. Plaintiff further testified that the meeting was to be held on the cruise ship, that the entire trip was paid for by the employer, and that the trip was essentially mandatory. This testimony constituted competent, material, and substantial evidence to support the magistrate’s finding that the major purpose of plaintiff’s activity at the time of his injury was not social or recreational. While there may also have been evidence to support the wcac’s findings regarding this issue, this Court and the wcac are not authorized to identify alternative findings that could have been supported by substantial evidence and then supplant the magistrate’s findings with our own. Instead, we must defer to the magistrate with regard to questions of fact. Layman v Newkirk Electric Associates, Inc, 458 Mich 494, 507-508; 581 NW2d 244 (1998). Because there was sufficient evidence to support the magistrate’s findings, the WCAC erred in substituting its own findings.
The decision of the WCAC is reversed, and the decision of the magistrate is reinstated.
Plaintiff’s wife, who was riding with him, was also injured.
That section reads in part:
An employee, who receives a personal injury arising out of and in the course of employment by an employer who is subject to this act at the time of the injury, shall be paid compensation as provided in this act. [MCL 418.301(1); MSA 17.237(301)(1).]
That section reads in part:
An employee going to or from his or her work, while on the premises where the employee’s work is to be performed, and within a reasonable time before and after his or her working hours, is presumed to be in the course of his or her employment. Notwithstanding this presumption, an injury incurred in the pursuit of an activity the major purpose of which is social or recreational is not covered under this act. [MCL 418.301(3); MSA 17.237(301)(3).]
We question whether an employer who requires attendance at an event should be permitted to argue that the major purpose of the event was social or recreational in order to avoid liability. However, the parties have not raised this issue, and we will not attempt to resolve it here.
Plaintiff argues that, as a traveling employee, he was entitled to compensation for any injury arising in the course of his travel. The “traveling employee” doctrine has previously been applied in determining whether a plaintiffs injury arose out of and in the course of his employment. Another panel of this Court recently described the doctrine:
Traveling employees on a business trip are considered to be continuously within the scope of their employment during their trip, except when a distinct departure for a personal errand can be shown. Thus, for traveling employees, the “arising out of and in the course of employment” tests are generally met by their being away from home for their employer’s benefit and being at the place of injury because of their employment. [Eversman v Concrete Cutting & Breaking, 224 Mich App 221, 225; 568 NW2d 387 (1997) (citations omitted).]
As noted above, defendants have not appealed the magistrate’s finding that plaintiffs injury arose out of and in the course of his employment. Thus, the traveling employee doctrine does not have any direct application here. Plaintiff essentially asks us to extend the traveling employee doctrine by creating a presumption that a traveling employee on a business trip is not engaged in an activity that is primarily social or recreational in nature. Because we conclude that the magistrate’s decision must be reinstated even without such a presumption, we decline to address this issue.
The Supreme Court recently reaffirmed this holding. See Layman v Newkirk Electric Associates, Inc, 458 Mich 494, 507; 581 NW2d 244 (1998).
The two commissioners writing the majority opinion interspersed numerous findings of fact among their opinions and legal conclusions:
The so-called “Senior Management Meeting” was already, from its very nature, an at-most marginal work-related event. It already had very little to it that was not ’’social or recreational.” Now we add to this already less than fully work-related event an additional diversion or deviation - leaving the plush confines of the luxurious cruise ship during a designated “free” time in order to explore the island on a motorbike. Plaintiff and his wife decided to risk their safety by engaging in the inherently dangerous activity of riding about on a motorbike in a strange land. The idea that this deviation from a trip that was already in itself a significant deviation from normal workplace activity, all crafted to satisfy the social and recreational desires of high paid executives . . . should somehow still be deemed work-related exceeds our conception of a reasonable interpretation of the law. [Emphasis in original.]
From their findings, we can only conclude that the commissioners did not approve of the course of plaintiffs employment. Apparently, the commissioners do not believe that “high paid executives” who work in “luxurious” surroundings should qualify for worker’s compensation benefits when they “significantly deviate” from “normal workplace activities.” We have not found any case law or statute suggesting that any of these factors are relevant in this case. In addition, we note that all of these factors were in the control of the employer, rather than plaintiff. Perhaps the commissioners expected plaintiff to refuse to work under such conditions. We conclude that the commissioners should have confined their analysis to the question whether an employee, who the parties agreed was acting within the scope of his employment when he lost his leg, was entitled to benefits under the Worker’s Disability Compensation Act. As noted above, the commissioners’ only role in this regard was to determine whether the magistrate’s findings were supported by competent, material, and substantial evidence. | [
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Fellows, J.
A special meeting of the electors of defendant district was held on January 21, 1927, at which it was voted to issue the bonds of the district in the sum of $40,000, the proceeds to be used in erecting and furnishing a new addition to the main building. Plaintiffs, taxpayers of • the district, file this bill to restrain such action. They insist, that Act No. 219, Pub. Acts 1925, then in force (now repealed by Act No. 319, Pub. Acts 1927), was applicable to the district without the referendum provided for in the former act, to which we shall presently refer, and without action by the board of education, that the act was not followed, hence the election was void. Defendants concede that the district is in a city of the fourth class, that the provisions of the act were not followed, and if they are applicable the election was void, but they insist that the act was never adopted by a referendum vote or action of the board of education, and, therefore, is not applicable to defendant district. While there are other allegations in the bill they are not sustained by proof and the clear-cut issue above stated is before us.
The original act, Act No. 275, Pub. Acts 1915 (2 Comp. Laws 1915, § 5841 et seq.), provided for the division of the districts into voting precincts, made quite extensive provision for registration, the conduct of elections, canvassing of votes, and manner in which persons could become candidates. By section 8 (§ 5848) the act could not become applicable to any district except by referendum vote. The act was amended by Act No. 303, Pub. .Acts 1919 (Comp. Laws Supp. 1922, § 5842), unimportant here. By the act of 1925, section 8 was repealed. Section 1 of the act of 1925 reads as follows: '
“The board of education of any school district, except primary school districts, may form said districts into one or more voting precincts as shall be necessary, ■and shall provide for the registration of voters, and for elections therein suitable ballot boxes, poll lists and other supplies or equipment as may be necessary or proper. Such voting precincts shall be made at least thirty days previous to the first election after this act becomes operative in any district.”
It will be noted that the permissive word “may” is used in the first sentence of this' section. In many of the other provisions of the act the mandatory word “shall” is used and it is urged by plaintiffs that, by reason of the mandatory provisions of the act running through its entire structure, we should construe all the first section to be mandatory. Courts have not infrequently construed the word “may” to mean “shall” and vice versa. But this has been done to effectuate the legislative intent. It should not be done to stifle that intent. Here the legislature has used both the word “may” and the word “shall,” and we should give them their ordinary and accepted meaning unless so to do would frustrate the legislative intent. We are satisfied that a proper construction of the act requires the giving of the words their ordinary and accepted meaning. By the use of the word “may” in the first section, the legislature authorized and permitted the board of education to come under the provisions of the act if it so desired. By the use of the word “shall” in the other portions of the act it was the legislative intent that if the board of education adopted the act, then such other provisions became mandatory and the board of education became bound to follow and enforce them. In other words, districts “may” come under the provisions of the act. If they do its provisions “shall” be followed. This construction, we think, is the logical one. There are large districts in the State whére such provisions are desirable; there are small ones like defendant where the additional expense is unnecessary and the provisions undesirable. By making it optional with the board of education whether it should be adopted or not both classes were permitted to determine for themselves as their needs required. The view that this was the legislative intent is strengthened by the language of section 9. Without detailing all the language persuasive in that section, we find difficulty in reconciling the claim that when the act took effect it ipso facto applied to all districts whether they had elected to come under the act or not, with the opening language of this section which is as follows: “If any election district has come under the provisions of this act,” etc. If it was the legislative intent that all districts automatically came under the provisions of the act, these words are quite inapt to express such intention.
The decree dismissing plaintiffs’ bill will be affirmed, with costs of this court.
Flannigan, C. J., and Wiest, Clark, McDonald, Bird, and Sharpe, JJ., concurred.
The late Justice SNOW took no part in this decision. | [
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Flannigan, C. J.
This is an action for malicious prosecution. Plaintiff, a colored man 34 years old, is an ordained minister of the gospel in charge of the Church of God in the Risen Christ, located at Jackson, Michigan. He has a wife but no children. The congregation is small and poor, affording him but about $20 monthly from its collections. To support himself and wife it was necessary that he seek other employment as and where offered. At different times he was employed in Detroit and at the Michigan Central junction and Jackson Fence Company in Jackson. When not otherwise occupied he solicited insurance for the Detroit Casualty Company. He seems to have justly borne a good reputation and to have had the good will of his neighbors, white and colored.
He purchased on conditional sale contract from the B. & H. Motor Company a second-hand automobile. The price was $948.08, of which he paid $320 in cash and agreed to pay the remainder in 12 monthly installments of $52.34 each, beginning with March 6, 1926. The contract was assigned by the B. & H. Motor Company to defendant, and Bernard W. Brighton was appointed its agent in connection with the handling of the contract and collection of the various installments.
On September 16, 1926, Brighton swore to a criminal complaint charging plaintiff with violation of section 15385, 3 Comp. Laws 1915, in that he fraudulently disposed of and concealed the automobile in question with intent to defraud defendant. The issue of a warrant on this complaint was authorized in writing by the prosecuting attorney. Plaintiff was arrested at his home on the afternoon of the same day, taken to the police station and locked up. He remained in his cell until the following morning, when he was taken before a magistrate. The proceedings before the magistrate resulted in his being sent to the county jail, where he was kept in confinement until, by paying $25 for a bond, he was able to arrange his release on September 18, 1926. He was before the magistrate for examination on October 7, 1926, when the proceeding against him was dismissed on motion of the prosecuting attorney.
Plaintiff paid some installments on time, others behind time and others not at all. August 29, 1926, about $130 was due and unpaid on the contract. On that day plaintiff was conducting .religious services at his church at Jackson. The car was parked in front of the church. Brighton went to the church and after the services demanded of plaintiff payment in full or return of the car. Plaintiff was unable to pay. Brighton took possession of the car but released it on plaintiff’s promise to send money from Detroit within a few days. He took the car to Detroit with Brighton’s knowledge. Furthermore, he had the right under the terms of the contract of purchase to take and use it there or at any other place in this State. After waiting a reasonable time and receiving no money from plaintiff, Brighton instituted a search for the car with the view of taking possession thereof. In making the search he employed one or two assistants. The search consisted of nothing more than keeping an eye open for the car while driving about Jackson. Between August 29th and plaintiff’s arrest on September 16th neither Brighton nor his assistants either saw or talked with plaintiff or made demand on him for return of the car or request for information regarding its location. On Sunday, September 5th, plaintiff again conducted religious services in his church at Jackson, but, contrary to his custom, he parked the car in a garage next door rather than in front of the church. He returned to Detroit the next day without calling on Brighton with reference to this matter. These and other incidents of like general character are chiefly relied upon by defendant’s counsel as establishing probable cause.
Brighton testified on cross-examination:
“Q. You had him arrested to get the automobile or the money?
“A. I had him arrested to get the automobile because we could not get the money.
“Q. Either one or the other?
_ “A. Because I could not get the money. I had him arrested because I could not get the automobile or get the money; yes, sir.
“Q. Then your purpose in instituting this criminal prosecution was to recover that automobile or to get the money?
“A. Recover possession of that automobile because the money was not forthcoming.”
The declaration counted for false arrest and malicious prosecution. The count for false arrest was abandoned and trial was had on the count for malicious prosecution.
When the proofs were in, defendant’s counsel moved, for direction of the verdict on the ground there was no evidence tending to show malice, or want of probable cause, and on the further ground that under the undisputed evidence the disclosure made by Brighton to the prosecuting attorney was such as to entitle defendant to the defense of advice of counsel as a matter of law. Decision of the motion was reserved and the questions submitted for the determination of the jury as disputed questions of fact. Plaintiff had verdict for $2,500. Thereafter the motion to direct was re-argued and denied, and for review of the judgment entered on the verdict defendant sued out writ of error.
Error is assigned on the refusal of the court to grant the motion to direct. Whether the evidence generally left the defense of advice of counsel and malice jury questions it will be needless to inquire. By his own admission Brighton’s motive in procuring the arrest of plaintiff was to regain possession of the automobile. If one makes use of the criminal law for some collateral or private purpose, such as to compel the delivery of property or payment of a debt rather than to vindicate the law, he is guilty of a misuse of process and a fraud upon the law. His employment of the criminal law to obtain return of the automobile was effective to deprive defendant of the defense of advice of counsel and constituted strong if not conclusive proof of malice. The court said in Gallaway v. Burr, 32 Mich. 332:
“We are all of opinion that where a criminal prosecution is commenced for the purpose of collecting a private claim, such fact would be very strong, if not conclusive evidence of malice, and that advice of counsel under such circumstances would be no protection. The commencement of a criminal action for such a purpose is an abuse of the process of the courts, and cannot be justified.”
See, also, Seiber v. Price, 26 Mich. 518; 38 C. J. p. 424.
We are satisfied, after due consideration of the evidence as a whole bearing on the question of probable cause, that the submission of that question for settlement by the jury was all, if not more, than defendant was entitled to.
Error is also assigned on the failure of the court to instruct the jury as to what facts in the case if found by them would establish probable cause. What constitutes probable cause in a particular case is a mixed question of law and fact. The correct practice requires that, where the facts are in dispute, the court shall state hypothetically what facts, if found, would constitute probable cause. Slater v. Walter, 148 Mich. 650. That was not done in this case. But the trial judge himself is not required to cull out from the record of the trial and compile for presentation to the jury all the facts, circumstances, and surroundings claimed by defendant to establish probable cause. It is the business of defendant’s counsel to do> that, and in doing it to keep within the rule limiting the inquiry to facts known when the prosecution was commenced; and to present his compilation to the court in the form of a request to charge.
Before the case was submitted the court requested counsel to draw up such a statement. He drew up a statement which was not filed or presented as a request to charge, but we will so treat it. It was properly refused. The rule is generally accepted that in determining whether there was probable cause for the institution of a criminal prosecution, only those facts and circumstances as were known to the complainant at the time of instituting the criminal prosecution are to be considered, and not facts which subsequently appeared. The inquiry as to probable cause goes back to the commencement of the criminal prosecution, and it relates to facts then known as they, then appeared. 38 C. J. p. 407. The statement drawn up by counsel was objectionable in this, that it included several material facts which did not come-to Brighton’s knowledge until after the arrest was; made. The rule is well established in this State that' where a party asks an instruction which is partly good and partly bad, it is proper to refuse it altogether. Westchester Fire Ins. Co. v. Earle, 33 Mich. 143; Bedford v. Penny, 58. Mich. 424; Courtemanche v. Supreme Court, I. O. F., 136 Mich. 30 (64 L. R. A. 668, 112 Am. St. Rep. 345). If the charge was not as full on the subject mentioned as defendant desired, the fault may not be laid at the door of the trial judge.
Such of the remaining, assignments of error as are not covered by what has been said are without merit.
The judgment below is affirmed, with costs to plaintiff.
Fellows, Wiest, Clark, McDonald, Bird, and Sharpe, JJ., concurred.
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Wiest, J.
Convicted of possessing, furnishing, and selling intoxicating liquor, defendants review on exceptions before sentence. According to testimony in the case defendants were Frank Balon’s “bootleggers” at a fixed price of $5 per gallon for “moonshine whisky.” Balon planned a Saturday evening party at his home and arranged with defendants to furnish him with five gallons of “moonshine.” . The evening of the party defendants were at Balon’s home with seven gallons of “moonshine” which they turned over to him at the price of $5 per gallon, but had not received their pay when officers of the law appeared at the party. Under search warrant officers visited the home of Frank Balón the night of the party, found the “moonshine” and arrested Balón. The next day defendants appeared and endeavored to get their pay for the “moonshine.” Balón made complaint against defendants and they were arrested on the charge of possessing, furnishing, and selling “moonshine.”
At their examination, and again in the circuit, defendants moved to suppress the evidence obtained under the search warrant on the grounds that the affidavit for the warrant did not set up cause for searching Balon’s. home, nor did the warrant set up the essentials of the affidavit upon which it was issued, and, as they were guests of Balón, the immunity accorded his home extended to them as his guests. We are not impressed with the point. Balón, the householder and claimed host, does not make any such claim. The protection accorded homes may well be left to the householder to assert and we can see no good reason for letting the “guests” raise the question of immunity, at least in a case where the householder caused the arrefet of his self-styled “guests.” Defendants took ■ the “moonshine” to Balon’s home about 6 o’clock in the evening, turned it over to him, and he placed most of it in his barn. The officers with the search warrant appeared at Balon’s home about 10 o’clock the same night. Defendants claimed they ought not to have been convicted on the three counts charging them with possession, selling, and furnishing intoxicating liquor. Under the evidence they were guilty of having the liquor in their possession when they carried it tb Baton’s home; were guilty of furnishing Baton with the liquor, and none the less so in selling it to him. The fact that Baton did not pay for the liquor at the time did not make the transaction less than a sale because he had ordered it and was to pay for it.
After the jury received the case, and late at night, the court permitted the jurors to separate until the next morning. The jury was composed of men and women. Defendants claimed this was error; their counsel citing 16 R. C. L. p. 305. There was no error. Act No. 385, Pub. Acts 1919 (Comp. Laws Supp. 1922, § 12621), permits a separation under such circumstances. See, also, People v. Monroe, 240 Mich. 44.
It is also claimed the charge of the court was argumentative and prejudicial. The charge pointed out, in more than usual detail, the method of determining facts, but was neither argumentative nor prejudicial.
The morning the jury reassembled, after permitted separation, the court, upon request from the jury, gave some further instruction, at the close of which the court asked: “Are there any other suggestions by counsel?” Counsel for defendants stated: “No, excepting it is their duty to find the respondents guilty beyond a reasonable doubt of each and every element that constitutes these various offenses, perhaps the court has already covered it.” The court had.
We find no error. Convictions affirmed, and judgments advised.
Sharpe, C. J., and Bird, Flannigan, Fellows, Clark, and McDonald, JJ., concurred.
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Clark, J.
The bill was filed to remove cloud on title. Andrew Jaster, on April 19, 1919, purchased from Faunce Realty Company, a Michigan corporation, six lots in Columbus Park, No. 1, township of Springwells, county of Wayne. He made a down payment and paid some later installments of the purchase price. He got into difficulty with his wife. She filed bill for divorce. The record shows no children born of the marriage.
On May 2, 1921, Jaster and his wife, each aided by reputable counsel, made and entered into a property settlement under the terms of which Jaster agreed to assign the land contract to the wife, which he did the same day. The assignment was indorsed on the contract and signed by Andrew Jaster. On November 3, 1921, Mrs. Jaster surrendered the contract to Faunce Realty Company for a consideration paid and the company entered into possession of the lots, paid taxes, and sold the lots to various third parties on land contracts.
Later, and on May 4, 1923, Andrew Jaster filed in the divorce case an amended answer and cross-bill and a lis pendens was also filed with respect to the lots in question. On December 5, 1924, Jaster was granted a decree of divorce, Mrs. Jaster not appearing, of which counsel states that her whereabouts then were unknown. The decree of divorce purports to set aside the property settlement and to restore the lots to Jaster. Jaster deeded the lots to defendant Jordan, who later, it is said, reconveyed them to Jaster. Faunce Realty Company conveyed by deed the lots to plaintiff, subj ect to the contracts outstanding, which plaintiff agreed to fulfill.
In the trial Jaster gave some testimony to the effect that the property settlement had been procured from him by duress. The weight of evidence is to the contrary, but we think the question not necessary to decision. . There is a mass of other facts, so-called, which in our view of the case need not be stated. Defendants had decree. Plaintiff has appealed.
Jaster’s assignment of the land contract to his wife was regular and valid on its face as was also the property settlement. That the Faunce Realty Company was told that the assignment had been made pur-' suant to a property settlement between the Jasters was not a notice of infirmity. Such settlements, made in recognition of an existing separation and respecting alimony, as distinguished from allowance for support of children, and the conveyances made to carry them out, are presumptively valid.
It was held in Palmer v. Fagerlin, 163 Mich. 345, 349:
“This court has consistently held that, after actual separation or the launching of a bill for divorce, amicable settlement between the parties, of their property interests, are not only lawful but are to be commended. Randall v. Randall, 37 Mich. 563; Owen v. Yale, 75 Mich. 256.”
And, see, In re Berner’s Estate, 217 Mich. 612, where the matter is discussed. '
In any event Jaster was under no legal disability. He was free to convey property to his wife. Neither she nor her assigns had the burden of negativing fraud or duress. That burden generally, as respects instruments of conveyance, is upon him who asserts the fraud or duress. The Faunce Realty Company, when it accepted surrender of the contract from Mrs. Jaster and paid her the consideration and took possession of the lots, did so innocently and without knowledge or notice of Jaster’s belated claim of duress.
Although the record fails to show a surrender in writing of the contract, the actual surrender, the payment of the consideration, and the taking and keeping possession of the property and exercising dominion over it clearly constitute a surrender by operation of law, excepted by section 11975, 3 Comp. Laws 1915; Hall v. Proctor, 221 Mich. 400; Stevens v. Wakeman, 213 Mich. 559, 569; 19 L. R. A. (N. S.) 879, note; 25 R. C. L. p. 579. The Faunce Realty Company and. those who claim from or under it, including plaintiff, were not parties to Jaster’s divorce case, and are, with respect to the lots in question, not at all affected by the decree in that cause. The rights of Faunce Realty Company, upon surrender of the contract, became fixed and were not impaired by Jaster’s later filing a lis pendens in connection with his suit for divorce. Plaintiff, grantee of Faunce Realty Company, succeeds to its rights and stands in its shoes, likewise without prejudice because of the lis pendens.
We have considered all questions raised, and think further discussion not merited.
The decree is reversed, with costs in both courts. Plaintiff will have decree to be settled in the usual way.
Flannigan, C. J., and Wiest, McDonald, Bied, and Shaepe, JJ., concurred. Fellows, J., did not sit.
The late Justice Snow took no part in this decision. | [
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WlEST, J.
This is an action to recover damages for personal injuries. Plaintiff lived in the village of Fowlerville. The morning of January 7, 1926, about daybreak, he started to drive in a Ford coupé to his farm. Near his home, and in the village, his way brought him to the highway crossing of defendant’s railroad tracks. He was driving with the car lights on. When he reached, a point about 40 feet from the railroad crossing he stopped his car and looked and listened. At that point he could not view the railroad tracks to the east because of an elevator, box car, and flag shanty. Hearing no train, he started to make the crossing, and, while in a zone of safety under ordinary road conditions, he became aware of an approaching train from the east, applied the brakes to his car and would have stopped in safety but, on account of ice covering the highway, his car skidded into the path of the locomotive. He was injured, brought this suit, and had judgment for $5,000 in -the circuit. Defendant reviews by writ of error.
Plaintiff first stopped where he had no view of the track, and this placed upon him the duty of exercising precautions commensurate with the situation. This duty we will mention again. As he ■ approached the tracks he discovered the oncoming train and had space within which to stop under ordinary conditions, and attempted to stop, but could not accomplish the ordinary stop because of ice covering the highway. It is manifest the accident would not have happened if the highway had not been coated with ice. This coating of ice was not merely at the point of the accident but general throughout the -village. The condition of the highway was open to plaintiff’s observation and should have been noted by him as a factor to be considered in operating his car. Every driver of a motor vehicle is bound, in using a highway, to notice the con‘dition thereof occasioned by climatic incidents. If we accord plaintiff’s testimony every reasonable intendment, it is clear that the condition of the highway and his want of care caused the accident. The proximate cause of the accident was the ice upon the public highway and plaintiff’s inattention thereto, and de fendant’s negligence, if any, afforded but a culmination to such, prior cause to which it bore no causal relation.
Plaintiff was guilty of contributory negligence as a matter of law. There is a standard of conduct, based on the rule of reasonable care, to which all drivers of motor vehicles must conform or bear the consequences. This standard is stated by the Supreme Court of the United States in Baltimore & Ohio R. Co. v. Goodman, U. S. Adv. Ops. 1927, 28, p. 22 (48 Sup. Ct. 24), and we quote therefrom:
“When a man goes upon a railroad track he knows that he goes to a place where he will be killed if a train comes upon him before he is clear of the track. He knows that he must stop for the train, not the train stop for him. In such circumstances it seems to us that if a driver cannot be sure otherwise whether a train is dangerously near he must stop and get out of his vehicle, although obviously he will not often be required to do more than to stop and look. It seems to us that if he relies upon not hearing the train or any signal and takes no further precaution he does so at his own risk. If at the last moment Goodman found himself in an emergency it was his own fault that he did not reduce his speed earlier or come to a stop. It is true, as said in Flannelly v. Delaware & Hudson Co., 225 U. S. 597, 603 (32 Sup. Ct. 783, 44 L. R. A. [N. S.] 154), that the question of due care very generally is left to the jury. But we are dealing with a standard of conduct, and when the standard is clear it should be laid down once for all by the courts. See Southern Pacific Co. v. Berkshire, 254 U. S. 415, 417, 419 (41 Sup. Ct. 162).”
Defendant’s motion for a directed verdict should have been granted.
The judgment is reversed, without a new trial, with costs to defendant.
Sharpe, C. J., and Bird, Flannigan, Fellows, Clark, and McDonald, JJ., concurred.
The late Justice SNOW took no part in this decision. | [
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Flannigan, J.
Plaintiff filed her bill against defendant for divorce, alleging extreme cruelty. He appeared and answered. On the hearing it developed he had purchased on land contract a property located on Tuxedo avenue, Detroit, and called in the record the Tuxedo. He assigned his rights under the contract to the plaintiff, but his claim was he did so with the understanding she was to take and hold the same for the joint use and benefit of both. Another property, known as the Lafayette, was purchased on land contract, and, at the date of the hearing, was held by the parties by the entireties. The purchase price of the Tuxedo was $31,000 and of the Lafayette $45,000. At the date of the hearing $15,214.84 of the principal of the Tuxedo and $18,230.22 of the principal of the Lafayette had been paid. The accrued interest on both contracts had also been paid. The decree gave plaintiff an absolute divorce and custody of the three children of the marriage. The rights granted by the contract covering the Tuxedo property were confirmed in the plaintiff and a division of the Lafayette contract was. ordered, one-third to go to plaintiff and two-thirds to defendant. The decree made provision for a sale of the Lafayette if found necessary to effect a division, and, pending such division, the control and management of the same with authority to collect rents, make payments on the contract, and to pay taxes and insurance, was committed to plaintiff, coupled with the obligation to pay defendant two-thirds of the net proceeds after deduction of such expenses. The decree further ordered that, upon sale of the property to effect a division, defendant pay plaintiff $1,500 out of his share of the proceeds. No provision was made by the decree for the care, support, and' education of the children.
As related to a division of property, the questions before the court below were whether equitably the Tuxedo property was held by plaintiff for the joint use and benefit of herself and husband; and how much was contributed by each on the contract covering the Lafayette property. To set out here even a brief synopsis of the testimony relied on by each .as establishing their respective claims would extend this opinion beyond legitimate bounds and would be of no interest to the profession. The learned circuit judge heard the testimony, saw the witnesses and, as an aid in arriving at a just result, had the important advantage denied us of observing their appearance and manner. He did' not file a written opinion, but his convictions and conclusions announced orally are in the record. The entire record has been inspected and considered with care and deliberation. We are unable to conclude the division made of the Lafayette contract was inequitable as between the husband and wife. But a portion of the share allotted to him should have been set over to the mother for the maintenance and education of the children.
Since the decree was signed the eldest child died. Two boys, aged eight and five, are living. Plaintiff has no income of consequence other than the rents of the Tuxedo and Lafayette buildings. After providing for interest, taxes, insurance, and essential repairs, the rents have proved barely sufficient to meet the monthly installments called for by the contracts. To provide money for the support of the children and her personal wants, plaintiff was obliged to seek employment. The Lafayette building is old and some of its rooms or apartments are frequently vacant; Whether the contract can be sold to realize the amount paid on it is problematical. Defendant is 40 years old, has had an extended business experience, and should be able to earn substantial wages. No property was taken from him and given to plaintiff as alimony. The effect of the decree was merely to quiet in her the title to property already hers. To educate the boys to the extent every American boy is entitled to be educated, to provide for them in sickness, to supply them with clothing and the other innumerable lesser expenses incident to the bringing up of two boys until they arrive at the age of 16 years, will amount in the aggregate to a considerable sum. Upon review of the entire situation, as disclosed by the record, we are of the opinion the decree should be modified so as to give of the contract held by the parties by the entireties, one-third to plaintiff, one-third to defendant, and the remaining third to plaintiff for the support and education of the children, but subject to a lien thereon in her favor to the extent of $1,500, being the amount fixed by the decree as due her from defendant.
Modified to accord with this opinion, the decree will stand affirmed, with costs of this court to plaintiff.
Sharpe, C. J., and Bird, Fellows, Wiest, Clark, and McDonald, JJ., concurred.
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Fellows, J.
In September, 1925, James Weaver, husband of defendant, was convicted of violating the prohibition law and was placed on probation for two years upon his execution of the following instrument:
“To Ben Peterson,
Probation Officer:
“Having been convicted of the so-called liquor law, and being desirous of being placed on probation for that offense, I hereby agree that:
“1. I will abstain from the use of intoxicating liquor during the term of my probation.
“2. I will not have intoxicating liquor in my possession during the term of my probation.
“8. I will not allow intoxicating liquor or implements used for the manufacture of intoxicating liquor to be or remain on the premises I now occupy or shall occupy either as a residence, business place or otherwise during the term of my probation.
“4. I will not allow any member of my family living with me to violate any provision of the so-called liquor law, nor will I, myself, violate any provision of the so-called liquor law.
“To that end, I hereby authorize, license and grant to Ben Peterson, probation officer, or any officers of the law authorized by him in writing, to enter, inspect and search for intoxicating liquors without) a search warrant or order of any court or magistrate, the premises now occupied by me or Which shall be occupied by me during the term of my probation. This shall apply to any place of business or dwelling house occupied by me during the term of my probation.
“I hereby waive my constitutional or statutory privilege in regard to such inspection and search and authorize Ben Peterson or the parties authorized by him to seize any intoxicating liquor, implements or furniture used in the manufacture or possession of intoxicating liquor.
“Dated at Muskegon, Michigan, this 1st day of October, A. D. 1925.
(Signed) “James Weaver.”
It was made to appear on the motion to suppress in the instant case that the home occupied by Mr. and Mrs. Weaver when he was convicted was owned by Mrs. Weaver, or at least that she was buying it on a contract and that she alone was paying for it; that after Mr. Weaver’s conviction when he was in Muskegon Heights he stayed at this place but he was much of the time away from home working, and that when the search here involved was made he had gone to Benton Harbor to work, and that she had instituted divorce proceedings against him. She was keeping roomers and boarders. On June 11, 1927, without any search warrant, or any warrant against defendant, and claiming to act solely under the authority of the waiver signed by Mr. Weaver, officers searched her home and found in the pocket of an overcoat in one of the boarder’s rooms a half pint of moonshine whisky and in the refrigerator in the house a quantity of home brew beer of slight alcoholic content. Her prosecution for unlawful possession followed. The question presented is whether the waiver signed by the husband of defendant precludes defendant under the facts in the instant case from asserting her constitutional right under section 10, article 2 of the Constitution of this State to immunity from the unreasonable search of the home owned and occupied by her.
When the case was submitted it did not appear at first blush to be fraught with difficulties, but an examination of the works of textwriters and the decisions of other courts demonstrates a divergence of views. In some instances the conclusion arrived at is no doubt due to a failure to analyze carefully the authorities relied upon. As a general rule it may be stated that the authorities agree to the proposition that one may waive the issuance of a search warrant and by consent permit the search of his premises. Cases where this question has arisen have frequently been cases where the search warrant was defective but the search had been invited, and the courts have in the main recognized the distinction between the submission to apparent authority of the officer, and unqualified consent, although this distinction has not been noted in some of the cases. In the instant case Mr. Weaver gave his unqualified consent, and, if he were defendant here, could not be heard to complain. But that is not the question here involved. The question before us is whether the constitutional right of the defendant to immunity from the unreasonable search of her home, one owned by her, may be waived by another, that other being her husband from whom she is seeking divorce.
We need not consider the cases dealing with search by consent generally, but will confine our consideration to those dealing with consent by parties other than the owner, and will first consider those that are thought to sustain such right. Sheftall v. Zipperer, 133 Ga. 488 (66 S. E. 253, 27 L. R. A. [N. S.] 442), is regarded as a leading case. The action was a civil one brought to recover for an unlawful entry and illegal search. The .plaintiff counted in trespass and the case really was made to turn on the question of pleadings. The defendants had entered the premises by permission of the wife of the plaintiff, and it was held on the authority of the ease of the Six Carpenters, 8 Coke, 146-a, that they were not trespassers ab initio. The court recognized, however, that the plaintiff was entitled to recover damages for the illegal search, but held that so to do he must count in case and not trespass. In Commonwealth v. Tucker, 189 Mass. 457 (76 N. E. 127, 7 L. R. A. [N. S.] 1056), the evidence (broken pieces of a knife) was obtained by searching the place where defendant resided, consent having been given to make the search by his mother, although the officers had a search warrant. It does not appear from the opinion whether the house was owned by the mother or son. Upon the authority of earlier cases, it was held that the evidence was admissible. In Smith v. McDuffee, 72 Or. 276 (142 Pac. 558, 143 Pac. 929, Ann. Cas. 1916D, 947), the supreme court of that State unequivocally held (we quote from the syllabus) : 1
“Where there had been an attempted appointment of a special officer by a justice of the peace, and he exhibited a search-warrant to the wife of plaintiff, her consent to a search of the premises waived any in-formalities in the complaint, writ and appointment of the officer.”
The case which goes further than any other that we have found is State v. Griswold, 67 Conn. 290 (34 Atl. 1046, 33 L. R. A. 227). In this case the search was made with the consent and assistance of one in charge of defendant’s office and found by the court to be his agent. It was held that defendant’s constitutional rights had not been infringed. I think this decision is fundamentally unsound. If the constitutional rights of the citizen may be waived by any Tom, Dick, or Harry, whom he employs and temporarily puts in charge of his property, they hang by a very slender thread indeed.
We will now consider some of the cases thought to deny such right. Amos v. United States, 255 U. S. 313 (41 Sup. Ct. 266), has been cited as denying the right to search on the consent of the wife. But the case does not go so far. What the court did hold was that the consent of the wife given under the implied coercion of the apparent authority of the officers'did not justify the search. But in Weeks v. United States, 232 U. S. 383 (34 Sup. Ct. 341, L. R. A. 1915B, 834, Ann. Cas. 1915C, 1177), the officer was admitted by another than defendant, “probably a boarder in response to a rap,” and made the search of defendant’s room. It was held that defendant’s constitutional rights were infringed and that the evidence so obtained was not admissible in evidence and should have been suppressed, and it was said:
“If letters and private documents can thus be seized and held and used in evidence against a citizen accused of an offense, the protection of the Fourth Amendment declaring his right to be secure against such searches and seizures is' of no value, and, so far as those thus placed are concerned, might as well be stricken from the Constitution.”
In United States v. Rykowski, 267 Fed. 866, it was held (quoting from the syllabus) :
“Property seized under an unlawful search warrant cannot be used in evidence against accused, merely because his wife consented to the search, there being no presumption that she was his authorized agent to consent to such search, so that the government must prove that she had such authority before it can rely on her consent.”
And in Re Tri-State Coal & Coke Co., 253 Fed. 605, it was held (likewise quoting syllabus) :
“That an agent of petitioners, whose property had been seized under search warrants illegally issued, consented to execution of the warrants, held not an acquiescence which would deprive petitioners of. their constitutional rights.”
In State v. Warfield, 184 Wis. 56 (198 N. W. 854), the defendant rented a room at a rooming house. The landlady took care of it, and had access to it. She consented to the search of the room by the officers without a search warrant. It was held that the search was in violation of defendant’s constitutional rights and the evidence so obtained was not admissible in evidence. In Humes v. Taber, 1 R. I. 464, 472, it was said:
“The next ground of defense- was, that the defendant entered and searched the dwelling house of the plaintiff by the license and permission of his wife.
“The charge of the court upon this part of the case' was pro forma, and to the effect, that the law implied an authority in the wife fin the absence of the husband, to license a search of his house for stolen goods.
“We are satisfied the charge in this particular was incorrect. The law implies no such authority. Undoubtedly, the wife’s authority extends to the rendering of the ordinary civilities of life. If she invite a neighbor, friend, or even a stranger, to enter the house in the way of hospitality, such invitation would, under ordinary circumstances, be a valid license so to do.
“But to imply an authority to the extent contended for by the defendant in the present case, would be dangerous. An artful man might impose on the wife in the absence of the husband, and thus, for malicious and unlawful purposes, obtain from her a license to search the desks and private papers of her husband.
“No case has been cited by the counsel for the defendant which gives any countenance to such a doctrine; it is unsupported by principle, and would be mischievous in its consequences.”
The position of the State in the instant case is hardly consistent. It insists for the purpose of bringing defendant within the act in question that the home brew beer at least was in her possession in her home; for the purpose of placing her without the protection of the Constitution, it insists that the husband was the head of the household, the home his as matter of law and his consent to the search a waiver of defendant’s constitutional rights. The contentions are incongruous. Manifestly, if the home was defendant’s for the purpose of the statute law, it was hers for the benefits the Constitution bestows. In this State married women may own property and deal with it as though they were feme sole. Defendant owned this property, was there conducting a boarding and rooming house, and, so far as this record discloses, was supporting herself. She had instituted divorce proceedings. To hold that the waiver signed by her husband nearly two years before prevents her from here asserting her constitutional rights would place such rights into the care and keeping of the husbands of all the married women of the State. I conclude that the search was illegal, that the evidence obtained thereby should have been suppressed, and as it is the only evidence against the defendant,, the case should be reversed and the defendant discharged.
North, Wiest, Clark, McDonald, and Sharpe, JJ., concurred.
Chief Justice Flannigan and the late Justice Bird took no part in this decision. | [
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North, J.
The plaintiffs herein are asking foy a writ of mandamus to the circuit judge of Mackinac county commanding hinj to vacate an order appointing a receiver, and. a temporary restraining order issued incident thereto. The defendant has made return to an order to show cause issued herein. From the record it appears that a partnership known as the Murray Brothers has carried on a mercantile business for years in the city of St. Ignace, Mackinac county, and also a lumber business. Since the death of a former member of this firm the business thereof has been conducted by the plaintiffs, Ann Murray and Mary Murray.
The financial affairs of the firm became involved, and on the 8th of September, 1927, the copartners, through their attorneys, submitted to their creditors a proposition to' settle the firm obligations by paying 50 cents on the dollar. This attempt failed because it was acceptable to only a portion of the creditors. In their sworn answer filed in the case incident to which mandamus is now sought, the plaintiffs herein stated:
“Thereupon, being apprehensive, these defendants caused to be prepared and executed the trust mortgages * * * covering all the real and personal property of Murray Brothers, naming as trustee therein Walter C. Wylie.”
• On the 14th of October following, Peter Goudreau and Bridget Derusha filed a bill in behalf of themselves and other creditors in the circuit court of Mackinac county, in which the partnership, the members thereof, Honor a Quinn, and said Walter C. Wylie were made defendants. The plaintiffs prayed that Wylie be removed as trustee; that the copartners be restrained from further incumbering, selling, or disposing of the firm assets; that a receiver be appointed; and that the defendant Honora Quinn be restrained from transferring or incumbering 80 shares of bank stock which had belonged to a former member of this firm. The plaintiffs herein and said Walter C. Wylie answered this bill of complaint. Upon a hearing before the circuit judge, these plaintiffs being present, on motion of the plaintiffs in the chancery case, a Mr. John Kolar was appointed receiver of the partnership, and the members thereof and the trustee under the mortgage were restrained from interfering with the receiver’s possession. The order covers other incidental matters.
The plaintiffs herein assert that the circuit judge should be required to vacate his order appointing the receiver, etc., and assign as reasons therefor:
(1) That the bill of complaint filed in the main case does not set forth facts and circumstances sufficient to confer jurisdiction upon the court (in equity) or the judge thereof.
(2) That the appointment of the receiver and the issuing of the injunction prevents the trustee from operating, but still leaves the copartnership property incumbered with a trust mortgage and incapable of being handled.
(3) That the plaintiffs in the chancery case have a complete and adequate remedy at law.
(4) That there was an abuse of discretion on the part of the circuit judge in entering the order appointing the receiver.
(5) That said order was entered by the court at chambers.
(6) That the receiver does not have the necessary qualifications and experience, and will not secure the best results for the plaintiffs herein.
The meritorious question presented is whether the equity court has jurisdiction. These plaintiffs are now before this court saying in effect that they caused this mortgage to be .executed for the benefit of the creditors of Murray Brothers. It is stated in their petition that they contributed $40,000 of personal funds to the firm’s needs but “that notwithstanding the cash contribution your petitioners had trouble in satisfying the present creditors of Murray Brothers and finally decided, after careful consideration and consultation with counsel, to execute trust mortgages covering all of their property to some properly qualified person as trustee for all the creditors, without preference.” Each of the two mortgages contains a similar recital. The execution of these instruments by the plaintiffs amounts to an assignment of all of their property for the benefit of creditors.
“Whether an instrument is a general assignment depends on its character, and not on1 the name which parties see fit to give it.” Kendall v. Bishop, 76 Mich. 636.
The rights of these litigants should be passed upon and tested by the same rules that apply to one who has made an assignment for the benefit of creditors. By giving a trust mortgage of all the assets of the firm, the plaintiffs have accomplished the same result that would have followed the execution and delivery of a trust deed, excepting they have deliberately tied the trustee’s hands so he is unable to act in behalf of the creditors until he first forecloses his mortgage liens. This looks a bit like stalling for time; and his first step relative to executing the trust in the real estate will force the trustee to come into the court of equity, the very thing against which plain tiffs now protest. The mortgages did not give the trustee either possession or control of the trust property. While he was given the right after the expiration of 30 days to take control at his option, there is nothing in the instruments which requires him to act within any given time or vests authority in any of the creditors to compel action by the trustee. In any event, obviously as to the real estate, the period of redemption must run after foreclosure before thé trustee will be in position to act effectively in behalf of the creditors. As to them, the result is the same as though the trustee had neglected his duties or was incompetent. The plaintiffs have voluntarily created a trust embodying conditions which are adverse to the creditors, and they should be subjected to the same rule of law as one who makes a voluntary assignment; and not allowed to do indirectly what they could not do directly. The statute governing assignments provides :
“In case * * * the assignee shall fail * * * to promptly and faithfully execute said trust, any person interested therein may file his bill in the circuit court in chancery in the proper county for the enforcement of said trust; and the court in its discretion may appoint a receiver.” * * * 3 Comp. Laws 1915, § 13616.
Concerning this statute it has been said: “This section was intended to give creditors ample relief against the incompetency, neglect, or fraud of the assignee.” Burnham v. Haskins, 72 Mich. 235, 240. Referring to a trustee’s failure to conform to the requirements of this statute (i. e. file a bond), Justice Champlin said:
“A creditor of the assignors * * * has two remedies open to him. He may proceed upon the equity side of the court, to have the trust carried out through the intervention of a receiver and the supervisory powers of a-court of chancery,” or he may proceed at law.. . Bread v. Clippert, 63 Mich. 716.
See, also, Appeal of Smith, 86 Mich. 149, 158. So, in this case, while the, plaintiffs herein could not claim-this was a valid assignment for the benefit of their creditors under the statute, we think the plaintiffs in the chancery suit had a right to elect to do so-.
Except where there is express statutory authority, or where one has an actual lien or security giving him an original right to file a bill, he must exhaust his remedy at law before resorting to equity. Vanderpool v. Notley, 71 Mich. 422, 430. But these plaintiffs have given a lien to their creditors by executing the trust mortgage. And, further, “equity may afford relief where the legal remedy would be inadequate or not immediately available.” Maclean v. Fitzsimons, 80 Mich. 336. The fact that there is a remedy at law incident to a contractual relation has been held “not to preclude an election of an equitable remedy which was much more complete, embracing what would otherwise have been numerous suits at law, with a possible necessity for equitable relief finally.” Olson v. Morrison, 29 Mich. 395; Carroll v. Rice, Walk. Ch. 373.
This record discloses various reasons indicative of equity jurisdiction; such as need of injunctive relief, the probability of avoiding a multiplicity of suits, and possibly need of an accounting. We therefore conclude that the equity court was justified in entertaining jurisdiction of this case.
We have given consideration to the other questions raised, but in view of the facts disclosed by. the respective pleadings and the return made by the circuit judge, we find they are without merit.
The writ is denied, with costs against plaintiffs.
Flannigan, C. J., and Fellows, Wiest, Clark, McDonald, Bird, and Sharpe, JJ., concurred. | [
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Hoekstra, J.
In this quo warranto action plaintiff challenges defendant’s successful election to the office of Ingham County Commissioner for the ninth district. The lower court granted plaintiff summary disposition pursuant to MCR 2.116(C)(10), and defendant appeals as of right from that order. We affirm.
On May 9, 1996, defendant filed an affidavit of identification with the Ingham County Clerk’s Office and paid the filing fee. See MCL 168.558(1); MSA 6.1558(1). She obtained the nomination of the Democratic Party at the primary on August 6, 1996, and at the general election on November 5, 1996, succeeded in defeating plaintiff, the Republican incumbent. Before defendant took office in January 1997, plaintiff initiated this action on December 12, 1996. Plaintiff filed a motion for summary disposition pursuant to MCR 2.116(C)(10), arguing that defendant had not sat isfied the state-law eligibility requirements for a candidate, MCL 46.411; MSA 5.359(11), because at the time defendant became a candidate for the election, she was neither a resident nor a registered voter in the district she sought to represent. The lower court agreed and granted plaintiffs motion, rejecting defendant’s arguments that plaintiff’s suit was barred by the doctrine of laches and that plaintiff lacked standing to bring suit against defendant.
In the first of two assignments of procedural error, defendant asserts that the lower court erred in finding that plaintiff had standing to bring his suit pursuant to MCR 3.306(B)(2). Defendant argues that the lower court should have instead applied MCR 3.306(B)(3)(a)-(b) and found that plaintiff did not have standing to bring suit because he lacked a “proper interest.” The interpretation of court rules is a question of law that we review de novo on appeal. In re Neubeck, 223 Mich App 568, 570-571; 567 NW2d 689 (1997). In pertinent part, the court rule states the following:
(B) Parties.
(1) Actions by Attorney General. An action for quo warranto is to be brought by the Attorney General when the action is against:
(b) a person who usurps, intrudes into, or wrongfully holds or exercises an office in a public corporation created by this state’s authority;
(2) Actions by Prosecutor or Citizen. Other actions for quo warranto may be brought by the prosecuting attorney of the proper county, without leave of court, or by a citizen of the county by special leave of the court.
(3) Application to Attorney General.
(a) A person may apply to the Attorney General to have the Attorney General bring an action specified in subrule (B)(1). The Attorney General may require the person to give security to indemnify the state against all costs. and expenses of the action. The person making the application, and any other person having the proper interest, may be joined as parties plaintiff.
(b) If, on proper application and offer of security, the Attorney General refuses to bring the action, the person may apply to the appropriate court for leave to bring the action himself or herself. [MCR 3.306. See also MCL 600.4501; MSA 27A.4501.]
In general, the effect of MCR 3.306 depends on whether the court rule assigned the action to the Attorney General. This case, which concerns plaintiffs allegation that defendant wrongfully holds or exercises office, would be a case within the purview of those assigned to the Attorney General provided that Ingham County is within the definition of a “public corporation created by this state’s authority,” as the phrase is used in MCR 3.306(B)(1)(b). Courts have not yet resolved the parameters of this definition. See 4 Martin, Dean & Webster, Michigan Court Rules Practice, pp 438-443. However, whether courts should employ a comprehensive definition, so as to include counties, or a more restricted definition, so as to include only quasi-proprietary corporations such as park authorities or drainage districts, is irrelevant here because under either part of the court rule, plaintiff has standing to maintain this action against defendant.
Assuming arguendo that an Ingham County Commissioner is not an officer of a public corporation and that the action is not assigned to the Attorney General, plaintiff has standing pursuant to MCR 3.306(B)(2) because he is a citizen of the county and obtained leave of the lower court to bring this action. Conversely, assuming arguendo that an Ingham County Commissioner is an officer of a public coiporation and that the action is assigned to the Attorney General pursuant to MCR 3.306(B)(1)(b), plaintiff has standing pursuant to MCR 3.306(B)(3)(b) because the Attorney General declined plaintiffs request to bring the action and plaintiff obtained leave of the lower court to bring this action himself. See Ballenger v Cahalan, 145 Mich App 811, 818; 378 NW2d 607 (1985) (“A private citizen, even one claiming title to the contested office, has no standing until a proper request has been made to the Attorney General and he has refused.”).
Referencing the last sentence of MCR 3.306(B)(3) (a), defendant argues that plaintiff, a Republican, cannot have a “proper interest” in maintaining an action challenging the outcome of a Democratic primary. In support of this position, defendant imprudently relies on two inapposite decisions of out-of-state courts and on the statement in Ferency v Secretary of State, 190 Mich App 398, 415; 476 NW2d 417 (1991), vacated in part 439 Mich 1021 (1992), that “primary elections are . . . primarily party functions.” Defendant’s argument is without merit. First, defend ant’s reliance on the phrase “proper interest” is misplaced because the last sentence of MCR 3.306(B)(3) (a) concerns the joinder of a party in addition to “the person making the application.” Additionally, nothing in the court rule prompts the inference that a plaintiff’s standing to challenge an election is dependent on the plaintiff’s political party affiliation or membership. Rather, the only restriction on the face of the court rule is that the person who is granted leave to bring the action must be the one who gave the information to the Attorney General. MCR 3.306(B)(1); MCR 3.306(B)(3)(b). See also MCL 600.4501; MSA 27A.4501 (“If the attorney general receives information from a private party and refuses to act, that private party may bring the action upon leave of court.”). The personal interest of the person applying for leave of the court is irrelevant. Grand Rapids v Harper, 32 Mich App 324, 328-329; 188 NW2d 668 (1971). Therefore, we find that the lower court reached the right result in deciding that plaintiff could maintain this action.
Next, defendant argues that the lower court erred in finding that laches did not bar plaintiff’s action. We review the lower court’s decision for clear error. See, e.g., Sedger v Kinnco, Inc, 177 Mich App 69, 73; 441 NW2d 5 (1988). The application of the doctrine of laches requires the passage of time combined with a change in condition that would make it inequitable to enforce the claim against the defendant. City of Troy v Papadelis (On Remand), 226 Mich App 90, 96-97; 572 NW2d 246 (1997). The defendant must prove a lack of due diligence on the part of the plaintiff resulting in some prejudice to the defendant. Id. More specifically, in Stokes v Clerk of Monroe Co Bd of Canvassers, 29 Mich App 80, 87; 184 NW2d 746 (1970), this Court found that the rule to apply in actions for quo warranto is whether the action is commenced within a reasonable time, taking into account the excuse for delay, the probable harm to the defendant, and the detriment to the public. See also Brown v Dep’t of Military Affairs, 386 Mich 194, 199; 191 NW2d 347 (1971), citing Grix v Liquor Control Comm, 304 Mich 269; 8 NW2d 62 (1943).
For example, in Grix, supra at 274, the defendants relied on only two facts to show laches: that the plaintiff did not bring suit until nearly two years after the plaintiff was discharged and that in the meantime another person was hired and paid for the work that was formerly done by the plaintiff. Our Supreme Court held that the defendants had not shown prejudice or detriment to justify barring the plaintiff’s suit. Id. Similarly, in Stokes, supra at 88, where the plaintiff instituted a quo warranto action challenging the title to the office of county supervisor approximately forty days after the defendant was officially declared the winner of the election, this Court held that the delay by the defeated candidate was not unreasonable and did not preclude maintenance of the action.
Plaintiff initiated this action approximately one month after defendant was elected and several weeks before defendant took office. Defendant accuses plaintiff of waiting until after he learned who his opponent would be and after being defeated at the general election before filing this suit. However, the record does not establish when plaintiff discovered defendant’s failure to meet the eligibility requirements of MCL 46.411; MSA 5.359(11); therefore, defendant has not shown that plaintiff lacked due diligence in pursuing his claim. Additionally, defendant has not shown that the delay resulted in prejudice. Indeed, defendant herself cannot claim prejudice where she has wrongfully held office during the duration of plaintiff’s suit. Moreover, the public will not bear the burden of paying a double salary because plaintiff will not be automatically reinstated and compensated for the wages lost from his previous position. See Brown, supra at 199-200. Instead, when a vacancy occurs, the vacancy is filled by appointment for the remainder of the term of the office. MCL 46.412; MSA 5.359(12). Consequently, we find that the lower court did not clearly err in deciding that laches did not bar plaintiff from enforcing his claim against defendant.
Last, we address the substantive issue defendant raises on appeal, which is that the lower court erred in finding as a matter of law that defendant had not satisfied the state-law eligibility requirements for a candidate. This Court reviews de novo an order granting summary disposition. Waldan General Contractors, Inc v Michigan Mut Ins Co, 227 Mich App 683, 685; 577 NW2d 139 (1998). A court properly grants a motion for summary disposition pursuant to MCR 2.116(C)(10) when, except with respect to the amount of damages, there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Id. Giving the benefit of reasonable doubt to the nonmovant, the court must determine whether a record might be developed that would leave open an issue upon which reasonable minds might differ. Id.
In pertinent part, MCL 46.411; MSA 5.359(11) provides that “[candidates for the office of commissioner shall be residents and registered voters of the district which they seek to represent and shall remain so to hold their office, if elected.” In her affidavit of identification, defendant listed an apartment within the ninth district as her residence. However, at the time defendant filed the affidavit, she physically occupied a location within the twelfth district, although she considered the apartment in the ninth district her residence because she was “welcome” to stay there. There is no merit in defendant’s attempt to distinguish between occupancy and residence because “residence,” for registration and voting purposes, means “the place at which a person habitually sleeps, keeps his or her personal effects and has regular place of lodging.” MCL 168.11; MSA 6.1011. Even if a person has more than one residence, it is “that place at which the person resides the greater part of the time” that is considered the official residence according to the statute. Id. Regarding her voter registration, defendant conceded that she is uncertain when she requested that the clerk’s office change her voter registration from the twelfth-district address to the ninth-district address. In any event, defendant does not contend on appeal that she met the eligibility requirements of MCL 46.411; MSA 5.359(11) on May 9, 1996, the date on which she filed her affidavit of identification.
Defendant instead argues that she was eligible to be a candidate because she moved to a location within the ninth district on or about August 1, 1996, a few days before the primary election was held. This Court has previously rejected this precise argument in Okros v Myslakowski, 67 Mich App 397; 241 NW2d 223 (1976), which also concerned a challenge to the right of the successfully elected defendant to hold office as a county commissioner. There, this Court held that status as a candidate regarding residency and voter requirements is determined as of the date that the candidate files for election to the office, not the date of the primary. Id. at 401-402.
Defendant argues that this Court’s subsequent decision in Ferency, supra, requires us to overrule Okros. Defendant’s position rests on the panel’s statement that “the purpose of the primary election for partisan offices is to select each major party’s nominees for a particular office.” Ferency, supra at 415-416, citing Line v Bd of Election Canvassers of Menominee Co, 154 Mich 329, 332; 117 NW 730 (1908). Defendant argues that this statement supports her position that the status of a candidate regarding residency and voter requirements is determined as of the date of the primary. However, the issue before this Court in Fer-ency was the constitutionality of closed presidential primaries in Michigan, not the eligibility requirements for a candidate to run for office. Therefore, we are not persuaded by defendant’s reading of Ferency.
Defendant also asserts that we are not bound by Okros, supra at 401-402, because the statement on which we rely was dicta. We disagree. “[Statements concerning a principle of law not essential to determination of the case are obiter dictum and lack the force of an adjudication.” Roberts v Auto-Owners Ins Co, 422 Mich 594, 597-598; 374 NW2d 905 (1985). In Okros, supra at 401, in order to decide whether manifest injustice would result from allowing the default judgment to stand, this Court was required to judge the merits of the defendant’s argument, which was that a candidate’s eligibility is determined as of the date of the primary. Therefore, the statement about when a candidate’s eligibility to run for office is determined was not dicta but was essential to resolving the case.
Even if we agreed with defendant that this Court’s statement in Okros, supra at 401-402, was dicta, we would adopt the reasoning of the panel in Okros and hold in this case that the status of a candidate regarding residency and voter requirements is determined as of the date that the candidate files for election to the office, not the date of the primary. The requirements of MCL 46.411; MSA 5.359(11) apply to “[c]andidates for the office of commissioner.” Defendant became a candidate by filing an affidavit of identification with the clerk’s office and paying the filing fee. See MCL 168.558(1); MSA 6.1558(1); Grand Rapids, supra at 330 (“a participant in a primary election is a candidate for office”). Because defendant did not meet the requirements of MCL 46.411; MSA 5.359(11) at the time she filed the affidavit and paid the fee, she was ineligible to run for the office of commissioner in Ingham County. See Okros, supra at 401. Therefore, defendant’s subsequent nomination and election were void.
Accordingly, we hold that the lower court properly granted plaintiff summary disposition because there is no genuine issue of material fact and plaintiff is entitled to judgment as a matter of law. The office of Ingham County Commissioner for the ninth district is vacant as of the date this opinion is released and must be filled pursuant to MCL 46.412; MSA 5.359(12).
Affirmed.
Saad, P.J., concurred. | [
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Jansen, RJ.
Defendant appeals as of right from a jury’s verdict in favor of plaintiff in this sexual harassment case. We affirm.
Defendant, a corporation engaged in managing food service operations for various businesses, hired plaintiff as a temporary cook in June 1995, intending to use plaintiff in various locations pending possible placement in a permanent position. Defendant initially assigned plaintiff to take the place of a cook at ADP, Inc., in Ann Arbor. During this assignment, while the regular on-site supervisor was on vacation, defendant assigned a temporary supervisor, Paul Wolshon. According to the evidence at trial, Wolshon immediately commenced a pattern of sexually harassing plaintiff. Plaintiff filed suit against defendant, alleging assault, sexual assault, sexual harassment, and retaliatory discharge. Plaintiff agreed to dismiss her claims of assault and sexual assault at the close of her proofs at trial, and she withdrew her claim of retaliatory discharge before closing argument. The jury found in plaintiffs favor with respect to her claim of sexual harassment.
This appeal essentially concerns an employer’s vicarious liability (respondeat superior) in a sexual harassment case brought under the Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq. The arguments made by the employer in this case have been squarely rejected by the United States Supreme Court in Burlington Industries, Inc v Ellerth, 524 US 742; 118 S Ct 2257; 141 L Ed 2d 633 (1998), and Faragher v Boca Raton, 524 US_; 118 S Ct 2275; 141 L Ed 2d 662 (1998). The Supreme Court held that the labels “quid pro quo” and “hostile work environ ment” are not controlling for purposes of establishing employer liability. Ellerth, supra, 141 L Ed 2d 648, 655. However, for any sexual harassment preceding the employment decision to be actionable, the conduct must be severe or pervasive. Id., p 648. Further, an employer can be liable for a supervisor’s sexual harassment where the employer’s own negligence is a cause of the harassment. Id., p 651. An employer is negligent with respect to sexual harassment if it knew or should have known about the conduct and failed to stop it. Id.
First, defendant’s claim that plaintiff failed to establish a claim of sexual harassment in the form of hostile work environment is meritless. During a one-week period in July 1995, Paul Wolshon, a “float manager” (but not plaintiff’s full-time manager) engaged in numerous incidents of sexually harassing plaintiff. There was evidence that Wolshon rubbed plaintiff’s buttocks, grabbed her breasts, asked plaintiff to go to a hotel and have oral sex with him, and rubbed whipped cream on plaintiff’s hands and stated, “Now tell everybody you were creamed by Paul.” One of plaintiff’s co-workers also testified that Wolshon stated that he would like to put whipped cream on his tongue and put it between plaintiff’s legs and lick plaintiff’s breasts. The same co-worker also saw Wolshon grab plaintiff’s breasts. Plaintiff also testified that these types of harassing incidents occurred every day of the week that Wolshon was her supervisor.
Defendant’s claim that plaintiff’s allegations are “a discrete, singular set of occurrences” that were not sufficiently outrageous to form a single incident of hostile work environment is incorrect and meritless. The evidence preferred by plaintiff was clearly sufficient to establish a hostile work environment claim of sexual harassment because it was severe or pervasive. Therefore, the jury’s finding that Wolshon sexually assaulted or molested plaintiff through the use of his supervisory powers over her is entirely supportable by the evidence presented. Accordingly, the trial court did not err in denying defendant’s motion for a directed verdict on this basis.
Further, defendant’s claims that the terms of plaintiff’s employment were not affected by her rejection of Wolshon’s overtures and that plaintiff did not believe that any terms of her employment would be affected by accepting or rejecting the sexual overtures are likewise without merit. Plaintiff was discharged from her position on September 11, 1995. Defendant claimed that she was discharged because of her failure to arrive for work or call regarding her absence. Plaintiff claimed that she was never told why she was discharged. Even if the discharge was not related to the sexual harassment incidents, the terms of plaintiff’s employment were clearly affected; that is, Wolshon’s harassment toward her was severe or pervasive and created an intimidating, hostile, or offensive work environment. Id., p 648; Faragher, supra, 141 L Ed 2d 675; Harris v Forklift Systems, Inc, 510 US 17, 21; 114 S Ct 367; 126 L Ed 2d 295 (1993); Radtke v Everett, 442 Mich 368, 382-383; 501 NW2d 155 (1993). It is not necessary that a plaintiff suffer economic harm or tangible discrimination. Harris, supra, p 21.
All that was necessary was that plaintiff show that the supervisor created a hostile work environment, which the evidence at trial showed that she did. Thus, we turn to the question of the employer’s vicarious liability.
With respect to the question of vicarious liability, the Supreme Court held:
An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee. When no tangible employment action is taken, a defending employer may raise an affirmative defense to liability or damages, subject to proof by a preponderance of the evidence .... The defense comprises two necessary elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise. ... No affirmative defense is available, however, when the supervisor’s harassment culminates in a tangible employment action, such as discharge, demotion, or undesirable reassignment. [Ellerth, supra, 141 L Ed 2d 655; Faragher, supra, 141 L Ed 2d 689.]
In the present case, the jury found that defendant failed to take prompt remedial action after it knew or should have known that plaintiff had been sexually harassed. This finding is supportable by the evidence presented at trial. Plaintiff testified that she spoke to Kevin McLaughlin, the regional director of operations for HDS, on the telephone on July 6, 1995. McLaughlin asked plaintiff if something was wrong, and McLaughlin testified that he could sense that something was bothering plaintiff. Plaintiff indicated that she could not express her complaints of Wolshon at that time because Wolshon was standing next to her. McLaughlin told plaintiff that he would be at ADP, Inc., on July 8, 1995, and would speak to her at that time. It is disputed whether McLaughlin went there on July 8. He testified that he went there, but plaintiff made no attempt to talk to him. However, plaintiff testified that McLaughlin never went to ADP that week.
When plaintiffs regular supervisor, Jennifer Hostutler, returned to work on July 11, 1995, plaintiff reported her specific complaints regarding Wolshon. Hostutler asked plaintiff to write down her allegations, which plaintiff did. Plaintiff also testified that she spoke to McLaughlin, who told her that he would investigate the matter. Plaintiff testified that McLaughlin never asked her what happened regarding Wolshon and that no one from HDS ever contacted her or informed her of any results of the investigation.
In reviewing the evidence and all legitimate inferences drawn from the evidence in a light most favorable to plaintiff, Mason v Royal Dequindre, Inc, 455 Mich 391, 397; 566 NW2d 199 (1997), plaintiff has satisfied the requirements of Ellerth and Faragher. That is, defendant is subject to vicarious liability for an actionable hostile environment created by Wolshon, plaintiffs immediate supervisor. Assuming that plaintiff was not discharged for reporting Wolshon’s actions, although there is no tangible employment action, defendant may raise the affirmative defense that it exercised reasonable care to prevent and cor rect promptly any sexually harassing behavior and that plaintiff failed to take advantage of any preventive or corrective opportunities provided by defendant or to otherwise avoid harm. Here, the jury could have, and apparently did, reject McLaughlin’s testimony and accept plaintiff’s testimony regarding defendant’s attempts to prevent or correct Wolshon’s sexually harassing behavior. Accordingly, the jury could reasonably infer that defendant was vicariously liable for Wolshon’s sexually harassing behavior because defendant failed to exercise reasonable care to prevent and correct promptly Wolshon’s behavior.
The facts of the present case are as compelling as those in Ellerth or Faragher to support a finding in favor of the plaintiff. In Ellerth, the plaintiff did not allege that she suffered a tangible employment action at the hands of her supervisor, but the Supreme Court held that this was not dispositive. Rather, the employer is still subject to vicarious liability for the supervisor’s activity, but the employer has the opportunity to assert and prove the affirmative defense to liability. Ellerth, supra, p 655. In Ellerth, the plaintiff clearly alleged that she was subjected to a hostile work environment created by the supervisor, but she did not inform anyone in authority about the supervisor’s conduct, despite knowing that the employer had a policy against sexual harassment. Id., p 645. Summary judgment against the plaintiff was reversed, and the district court was given the opportunity to decide whether to allow the plaintiff to amend her pleadings or supplement discovery.
Similarly, in Faragher, the plaintiff was subjected to a hostile work environment created by two supervisors, and the plaintiff reported the behavior to another supervisor, who took no action against the other two supervisors. Further, the employer failed to disseminate its policy against sexual harassment among its employees and its officials made no attempt to keep track of the conduct of supervisors, such as the two involved in this case. The employer also failed to include any assurance that the harassing supervisors could be bypassed in registering complaints. Faragher, supra, p 689. The Supreme Court held, as a matter of law, that, under those circumstances, the defendant could not be found to have exercised reasonable care to prevent the supervisors’ conduct Id., p 690. Therefore, the district court’s judgment in favor of the plaintiff was reinstated by the Supreme Court.
Accordingly, the trial court did not err in denying defendant’s motion for a directed verdict on the basis of respondeat superior. The jury could properly find that defendant was vicariously liable for the acts of its supervisor.
Finally, defendant argues that the trial court’s instruction to the jury that an employer is strictly liable if a supervisor sexually assaults or molests an employee through the exercise of his supervisory powers was erroneous. We find that any error in the trial court’s instruction regarding strict liability was harmless, MCR 2.613(A), because there is ample evidence of a hostile work environment sufficient to establish defendant’s vicarious liability, and the jury specifically found that defendant failed to take prompt remedial action after it knew or should have known that plaintiff had been sexually harassed, a finding that is supported by the evidence presented at trial. Moreover, there was no specific finding by the jury that defendant was strictly liable.
Affirmed.
Markey, J., concurred.
Because defendant Trettco, Inc, doing business as HDS, is the only defendant involved in this appeal, the use of the term “defendant” will refer solely to Trettco.
Our Supreme Court has noted that “[o]ur courts have consistently relied on the federal judiciary for guidance when addressing the Michigan Civil Rights Act.” Koester v Novi, 458 Mich 1, 11-12; 580 NW2d 835 (1998).
Moreover, to the extent that defendant argues that plaintiff failed to establish a prima facie case of quid pro quo sexual harassment, we need not address that claim because the Supreme Court has made clear that the labels “quid pro quo” and “hostile work environment” are not controlling for purposes of establishing employer liability- Thus, we only address whether Wolshon’s conduct was severe or pervasive enough to be actionable. | [
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Bird, J.
Plaintiff recovered a judgment of $8,404.52 in the Wayne circuit court against defendants Alfred Robinson and Albert Jaeger for a balance due him on a promissory note, dated April 28, 1920. He caused a fieri facias to be issued thereon, and the same was levied upon lots 16, 84, and 35 of Cherry Grove subdivision in the village of Ecorse. To determine the efficacy of the levy this bill in aid of execution was filed.
Lot 16. This lot was purchased in May, 1919, on contract by Albert Jaeger and his wife, Ella. One hundred dollars was paid upon the execution of the contract, and $10 a month was paid thereon until May 12, 1924, when the parties received a deed. It will be noted that most of the consideration paid for the lot was paid after the note was given, and it does not appear that the wife contributed anything toward the consideration. In view of this, the fact that they were tenants by the entirety would avail them nothing. Newlove v. Callaghan, 86 Mich. 297, 300, was a similar case, and the court said:
“It would be a gross injustice to permit debtors to apply moneys which should be applied to the payment of their debts to the creation of an estate which would be beyond the reach of their creditors. * * * In other words, estates in entirety cannot be created at the expense of creditors, and held in fraud of the latter’s right.”
And defendants could not avoid this conclusion from the fact that they purchased the lot on contract a few months before the husband became obligated on the note. Michigan Beef & Provision Co. v. Coll, 116 Mich. 261, 262. In this case the same point was made, but the court said:
“We may properly infer that all of Coil’s property is in this land, and that considerable was paid upon the contracts which he should have paid to his creditor, suit being then pending. This was not justified by the fact that he had outstanding contracts,. and we think should be no more beyond reach' than as though the entire title had passed to the wife, as said in Newlove v. Callaghan.”
Our conclusion is that lot 16 was not protected from levy by reason of the fact that it was held by Jaeger and his wife as tenants by the entirety.
The lot is also claimed to be exempt because it is a homestead. This presents the question whether a vacant lot purchased in May, 1919, on contract and a deed received therefor in May, 1924, and no improvement made thereon before the day of levy, is exempt as a homestead.
The constitutional exemption provides that:
“Every homestead of not exceeding 40 acres of land and the dwelling house thereon and the appurtenances to be selected by the owner thereof and not included in any town plat, city or village, or instead thereof, at the option of the owner, any lot in any city, village or recorded town plat, or such parts of lots as shall be equal thereto, and the dwelling house thereon, and its appurtenances, owned and occupied by any resident of the State, not exceeding' in value fifteen hundred dollars, shall be exempt from forced sale on execution or any other final process from a court.” * * * Michigan Constitution, Art. 14, § 2.
Statutory homestead is defined in section 12888, 3 Comp. Laws 1915.
In the early case of Coolidge v. Wells, 20 Mich. 79, the court held that a 40-acre tract with no dwelling upon it, and upon which the judgment debtor did not reside, was not protected as a homestead, under the foregoing constitutional provision. In the course of the opinion it was said:
“As to the defense of a homestead, we see no ground upon which this defense can be maintained. The most that the evidence shows is that the defendant contemplates, at some future time, building a dwelling house upon the land and going there to reside with his family. But it expressly appears from the evidence that no dwelling house had ever been erected or even commenced upon the land, and that neither the defendant or any member of his family had ever resided upon it.
“Neither the Constitution, nor the statute has undertaken to exempt a merely contemplated future homestead. Both leave the parties first to make or obtain a homestead in fact and then apply the exemption to the homestead thus acquired. Neither has undertaken to furnish homesteads, or the means of obtaining them, to those who have none. And as held by this court in Beecher v. Baldy, 7 Mich. 501, the land which is to be exempted as a homestead must contain the dwelling house, and must constitute a homestead in fact.”
Since that holding, however, the court has held that one may have a homestead' in a vacant lot, if purchased with the intention of making it a homestead for himself and family, and incloses it and uses and occupies it with a constant purpose of making it his home, and erects thereon a dwelling house within a reasonable time after acquisition. The following cases support this liberal construction of the constitutional provision: Reske v. Reske, 51 Mich. 541 (47 Am. Rep. 594); Deville v. Widoe, 64 Mich. 593 (8 Am. St. Rep. 852); Mills v. Hobbs, 76 Mich. 122; Corey v. Waldo, 126 Mich. 706.
These cases make important the fact of the continued intention to'make the vacant lot a homestead within a reasonable time after acquisition’. In the present case the Jaegers acquired the lot in 1919. In 1924 they received a deed, and nothing has since been done to evidence a continued intention to make it a homestead. It does not appear that the lot has been fenced or worked as a garden, it does not appear that shade trees or. shrubs have been set out, it does not appear that any improvements have been made, or any outbuildings constructed. It does appear that they purchased it with the intention of making it a homestead. Mrs. Jaeger testified:
“The purpose we had in mind in buying this lot was to build a home on it as soon as we got money enough, but we had never yet got money enough.”
It nowhere appears that the intention which they had when they purchased the property has been continued or that they now have such an intention. The homestead could not exist indefinitely in intention alone. The case of Ware v. Hall, 138 Mich. 70 (67 L. R. A. 313, 110 Am. St. Rep. 301), is much like the present one, and holds that no exemption existed. Our conclusion is that lot 16 was not exempt as a homestead.
Lot 34. It is conceded by plaintiff’s counsel that lot 34 is used and occupied by Mr. Robinson and his wife as a homestead and is exempt from process of this character.
Lot 35. Lot 35 adjoins 34, and was conveyed to Robinson and wife. After erecting a dwelling and shop on lot 34 they purchased, in 1922, lot 35. A fence was then placed around both properties. The acquisition of lot 35 did- not add materially to the enjoyment of lot 34, except to provide a driveway to reach the dwelling. • While it does not appear how large the lots are, it does appear that Mr. Robinson’s homestead was complete before purchasing lot 35. We do not think this lot is protected by the homestead law, and as funds were used to purchase this lot which, in good conscience, ought to have been applied upon his obligation to plaintiff, we think the Robinsons can claim nothing on the ground that they held the lot as tenants by the entirety. Newlove v. Callaghan, supra.
Neither are we impressed with counsel’s argument that because 30 per cent, of defendants’ wages were exempt from garnishee process that it remained exempt after it was paid on his land contract.
Our conclusion is that lots 16 and 35 are subject to levy and sale. The decree may provide for the sale of these lots on plaintiff’s execution. The decree of the trial court will be reversed as to these two lots, and- affirmed as to lot 34. The plaintiff will recover his costs.
The foregoing opinion was prepared by the late Justice Bird and is now adopted as the opinion of the court.
Fellows, Wiest, Clark, McDonald, and Sharpe, JJ., concurred.
Chief Justice Flan-nigan and the late Justice Snow took no part in this decision. | [
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Fellows, J.
Plaintiff brings this action to recover on the following note:
“$1,661.00. February 14, 1925.
“One year after date, I promise to pay to the order of Miss May Steep, one thousand six hundred sixty-one and 00/100 dollars at 6 per cent, per annum.
“Value received.
“No.............. Due..................
“Ona Harpham.” .
Defendant filed an affidavit denying the execution of the note and gave notice under her plea of the general issue of the defense of want of consideration. As the important question in the case is whether the court should have directed a verdict for the defendant at the close of plaintiff’s proofs, we will briefly outline what such proofs show. Defendant is the widow of Bert Harpham, who died in December, 1924. He left an estate which was “probated” as one of the witnesses testified. In the year 1917, on three different occasions, plaintiff loaned Mr. Harpham different sums aggregating $1,100 and took his notes therefor. These notes being unpaid at his death, the two women discussed what should be done about the matter, and it was finally agreed that defendant should give her individual note for the amount then due, which included interest, and plaintiff should give up and destroy the notes given by deceased. This arrangement was carried out. Defendant gave the note in question, and plaintiff destroyed the old notes and presented no claim against Mr. Harpham’s estate.
Defendant’s counsel insist that Mr. Harpham’s notes were outlawed when the note in suit was given. If the record sustained this claim without dispute, we would not be required to proceed further. Taylor v. Weeks, 129 Mich. 233, would control. But the record does not show that these notes were outlawed. The statute of limitations did not begin to run on the day the notes were executed; it did not begin to run until the notes fell due. The record is barren of evidence as to what the due dates of the respective notes were, but plaintiff’s testimony tends to show that both she and defendant treated and regarded them as valid subsisting claims against the estate of Mr. Harpham at the time the agreement was made and the note in question was given. The case on this record can not be disposed of on the theory that the notes were outlawed and we must proceed further with our inquiry.
There is no testimony or claim that the estate of Mr. Harpham was insolvent. Mr. Harpham had died in December, and the note here involved was given the following February. Had the proceedings in probate court been conducted with all reasonable speed, the last meeting of the commissioners on claims could not have been held at the time the note here involved was given and the old notes given by Mr. Harpham destroyed. From anything that appears in the plaintiff’s case, and we must accept her testimony as true on a motion by defendant for a directed verdict, there was no impediment in her way to a presentation of her claim to the commissioners, its allowance and payment out of Mr. Harpham’s estate. By the acceptance of defendant’s note, which extended the time of payment, and the giving up and destruction of Mr. Harp-ham’s notes, this right was lost to her. Manifestly, to constitute a consideration there must be a detriment to one or a benefit to the other. Thus, if A has no claim against B but asserts an unfounded one, and C gives his note to A to settle such unfounded claim, A has parted with nothing and C has received nothing and the note is without consideration. This has been the law of this State since Rood v. Jones, 1 Doug. 188, and it was upon this theory that the case of Taylor v. Weeks, supra, was decided. But in the Rood Case, Mr. Justice Felch quite clearly stated the rule. He said:
“It is not denied that every promise must be founded on some legal consideration. The rule of law in reference to the sufficiency of the consideration, seems to be that it must arise, either, first, by reason of a benefit to the party promising, or, at his request, to a third person, by the act of the promisee; or,• secondly, on occasion of the latter sustaining- any loss or inconvenience, or subjecting himself to any charge .or obligation, at the instance of the person making the promise, although such person obtain no advantage therefrom: Ch. Contr., 29. If, in the given case, the consideration be within either of these branches of the rule, it is sufficient.
“When a promise to pay the debt is made by a third person to the creditor, in consideration of his forbearance to sue his debtor, it comes under the latter branch of the rule. The forbearing to sue is a damage to the creditor. He is about to enforce, the collection of his dues by using the legal means for that purpose, but he lays aside the instruments by which his money might be obtained of the debtor, in due process of law, and receives instead, the promise of a third person to pay the debt. It can make no difference whether the forbearance be for a long or a short time, or whether the creditor suffers much or little from his forbearance; it is enough if there is an actual relinquishment of his legal remedy, by giving time, or forbearing to enforce the collection of his demand. By forbearing to sue, the plaintiff suffers damages.”
In 3 R. C. L. p. 935, it is said:
“But whether a debt due from another* person to the payee will support the instrument seems to be a matter of some uncertainty. Some courts assert that if a third person, without any consideration personal to himself, gives his promissory note to a creditor as collateral to the mere naked debt of another, without any circumstance of advantage to the debtor or disadvantage to the creditor, the note is without consideration. It has been held that a note given by a widow for the payment of a debt due by her husband, who was insolvent at the time of his death, without any new consideration to support it, is void, and that the renewal of the note from time to time will not raise such consideration. On the other hand it has been asserted to be indisputable that an undertaking to pay the debt of another, on condition that that other shall be entirely discharged from liability, is founded on a sufficient consideration, upon the ground that the promisor, in such case, has become an original debtor, on the discharge of the former debt, which is supposed to deprive the promisee of some previous advantage, or to subject him to some prejudice and delay in realizing it.”
We have noted that plaintiff must have lost something or defendant gained something in order to furnish a consideration for the note sued on. But it is not necessary that plaintiff negative all possible defenses to the note in suit or to the original notes in order to make a prima facie case. The burden was upon her to show a consideration, and this burden rested on her throughout the entire case (Manistee Nat. Bank v. Seymour, 64 Mich. 59), and the trial court so charged. This burden did not shift to defendant as claimed by plaintiff and as sometimes inaptly stated by courts. But if plaintiff made a prima facie case, the burden of' going forward with the testimony did rest on the defendant. The plaintiff’s testimony made a case. The note itself imported a consideration (Manistee Nat. Bank v. Seymour, supra). There was proof that defendant signed it, and the testimony we have detailed showed a valid consideration. The burden then rested on the defendant of going forward with the testimony on the subject of consideration. This burden'she did not take up, contenting herself with leaving plaintiff’s case on that subject as it was and insisting she did not sign the note sued upon. On this question the jury found against her. The case upon this record can not be distinguished from and is controlled by Cawthorpe v. Clark, 173 Mich. 267.
Several assignments of error deal with rulings on the admissibility of proof. As none of these rulings constitutes reversible error, we do not discuss them. The charge of the court stated the law applicable to the case, but defendant claims it was not as full as it should have been, and did not go as far as it should have gone. But no instructions other than for a directed verdict which, as we have seen was properly refused, were preferred. Had defendant’s counsel desired further and specific instructions they should have requested them.
The judgment will be affirmed.
North, Wiest, Clark, McDonald, and Sharpe, JJ., concurred.
Chief Justice Flannigan and the late Justice Bird took no part in this decision. | [
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McDonald, J.
The plaintiff, who is a minority stockholder in the defendant company, filed this bill to wind up its affairs, to have its assets distributed among the stockholders, to have a receiver appointed and an accounting from certain of its officers who have been in active management and control of the company’s business. The theory of the bill is that the charter of the corporation was annulled by forfeiture on December 21, 1923, for failure to comply with the corporation tax law; that, on the happening of that event, the title to the corporate property became vested in the stockholders as tenants in common and that as one of the stockholders the plaintiff is entitled, in this suit, to have the affairs of the company wound up and the assets divided aftiong the stockholders as thpir interests may appear.
The Western Hydro-Electric Company was incorporated August 30, 1909, under Act No. 232, Pub. Acts 1903 (2 Comp. Laws 4915, § 9017 et seq.), for the purpose of conducting a general electric light and power business in the counties of Mecosta and Montcalm. In 1921, a controversy arose between the corporation and the secretary of State over the amount of the privilege fee which it was required to pay for that year. The corporation submitted its report with an inclosure of $52, of which $2 was stated to be in payment of the filing fee and $50 for the privilege fee. The secretary of State computed the fee at $1,750 and demanded payment of that amount. It was not paid. In 1922, the corporation again submitted its annual report and paid the filing fee of $2 and a privilege fee of $50. On this report, the secretary of State computed the fee to be $366.10, but stated that he could not. accept the report because of the default in the payment of the fee for 1921. No further reports were filed or payments tendered by the corporation; and on November 21, 1923, the secretary of State, of his own motion, granted an extension of 30 days in which to file proper reports and to pay the fees demanded. In his letter to the defendant corporation he said:
“In case you fail within the limit of time, we will be obliged to consider your charter void, and mark your company ‘out’ in our files.”
The request was not complied with and the company was marked “out” in the secretary of State’s files on the 21st of December, 1923.
In March, 1926, Mr. James E. Tobin, secretary and general manager of the corporation, and Mr. Dutcher, an accountant, went to Lansing to arrange some settlement of the disputed tax items. It was then conceded by the secretary of State that his computation of the fee for 1921 was erroneous to the amount of $1,384.25. The assessment as corrected was paid by Mr. Tobin. He was then advised by the secretary of State that the company’s charter had been forfeited and that it would be necessary to file new articles of incorporation. The reincorporation was undertaken by Mr. Tobin without counsel other than the secretary of State and without authorization by the corporation. When the matter of the reorganization was presented to the public utilities commission, an order was made which read in part as follows:
“After the filing of said articles of association, as above provided, applicants are hereby authorized to issue twenty-six thousand one hundred twenty-five (26,125) shares of no-par value capital stock, and to exchange the same for the property owned by the persons formerly constituting the Western HydroElectric Company, a corporation whose charter has been forfeited, in the ratio that the amount of stock of said corporation whose charter has been forfeited held by each individual stockholder bears to the whole amount of outstanding capital stock of said corporation whose charter has been forfeited, it being the object and intention of this corporation to acquire all of the property formerly held by said Western Hydro-Electric Company whose corporate existence has expired and whose corporate charter has been declared forfeited, said property to be acquired subject to the outstanding liens thereon and the indebtedness against the same.”
No conveyances to the reorganized company were made. The plaintiff, who owned 85 shares in the old company, refused to exchange them for stock in the new company. The incorporation into a new company of the same name was apparently carried on in good faith in the belief that such action was necessary to reinstate the company which had become in default for failure to pay the tax required by the secretary of State. On the hearing, the circuit judge entered a decree in which the plaintiff was granted all of the relief prayed for. The defendants have appealed.
The controlling question presented by the record is whether the charter of the defendant company was forfeited by the action of the secretary of State in December, 1923. The plaintiff’s claim of right to have the affairs of the corporation wound up and its assets distributed is based entirely on the alleged forfeiture for failure to pay the required fee. It follows that, if there were no forfeiture, he is not entitled to the relief sought.
The law in force at the time of the corporation’s default in 1921 and 1922 provided the following penalty for failure to report and pay the required fees:
“In ease any corporation required to file the report 'and pay the fee or fees prescribed in this act shall fail or neglect to make such report within the period required by law, such corporation shall, in addition to its liability for such privilege fee and interest thereon, be subject to a penalty of one hundred dollars, and an additional penalty of five dollars for each day’s continuance of such failure or neglect, which penalty or penalties shall be collected in an action to be instituted by the attorney general of this State as prescribed by law; and it shall be the duty of the secretary of State to report to the attorney general every case of such failure or neglect promptly.” Act No. 85, Pub. Acts 1921, § 10 (Comp. Laws Supp. 1922, § 11861 [12]).
The legislature of 1923, in Act No. 172, added a section to chapter 2, pt. 5, of Act No. 84, Pub. Acts 1921, to stand as section 7. This section provides, in part, that, if a corporation shall neglect or refuse to file the required report and pay the fee, “the charter of such corporation shall be void, unless the secretary of State shall, for good cause shown, extend the time for the filing of such report or the payment of such fee,” etc.
The defendants have attacked the constitutionality of this provision of Act No. 172 on various grounds which we do not deem it necessary to discuss; for, assuming that the act is valid and applies to the corporation’s default in 1921 and 1922, it is not self-executing, but requires a judicial proceeding to declare and enforce a forfeiture by the State.
“The secretary of State cannot forfeit a charter, even though the statute prescribes forfeiture for nonpayment of taxes; but it is constitutional to provide by statute, as is the case in New Jersey and some other States, that the charter and all corporate powers shall be void and cease upon the nonpayment of taxes.” Cook’s Principles of Corporation Law,, p. 708.
“A statute, that after a year’s suspension of business the franchises shall be) deemed surrendered and the corporation be adjudged dissolved, is not self-executory, but requires the judgment of the court.” 3 Cook on Corporations (8th Ed.), p. 2361, § 638.
“Frequently a charter of a railroad corporation requires it to complete its road or a certain number of miles of road within a certain time, and the charter expressly declares that for the failure to comply with this requisite the corporate powers and existence shall cease. There is a strong line of decisions to the effect that such a provision as this forfeits the charter absolutely upon noncompliance, and that no decree of a court is necessary to effectuate that forfeiture. But this drastic and dangerous construction of charters does not commend itself to law and justice. It adds one more to the perils which are attached to all great corporate enterprises. Even in New York, where the above doctrine seems to have had its origin, the courts are inclined to limit its application. The New York courts have held that a provision in a charter, that unless certain things are done within a certain time the company shall forfeit the rights acquired, does not work a forfeiture ipso facto, and that a provision in a charter, that unless work shall be commenced within two years ‘all rights and privileges granted hereby shall be null and void,’ is not self-executing, and a judgment of the court is necessary before forfeiture takes place, and the weight of authority, as well as logic and public policy, favors such a rulé.” 3 Cook on Corporations (8th ed.), p. 2356, § 638).
In Illinois, the statute provides that a failure to make a report and pay the fee “shall be prima facie evidence that said corporation is out of business, and shall work a forfeiture of the charter of such corporation;” and that the secretary of State shall enter the cancellation of the charter of such corporation upon his record. In People v. Rose, 207 Ill. 352 (69 N. E. 762), this statute was construed and it was held that it was not self-executing but that the fact of forfeiture must be determined “only by a court of competent jurisdiction.”
In South Carolina, a statute incorporating a railroad company provided that “all powers, rights, privileges, and immunities hereby granted shall cease, determine, and be void,” unless certain things are done by the company in a certain time. In a suit to declare a forfeiture, it was held that a failure to perform the conditions required by the statute did not ipso facto dissolve the corporation but that “the franchise remains in force until the forfeiture is declared in a direct judicial proceeding brought by the State against the corporation for that purpose.” State, ex rel. Spartanburg City Council, v. Railroad Co., 51 S. C. 129 (28 S. E. 145).
In Ohio National Bank of Washington v. Construction Co., 17 App. D. C. 524, it was claimed that the defendant corporation had forfeited its charter for failure to pay an annual license tax. The statute provided that, “Any such corporation, which shall fail to pay this tax, shall, because of such failure, forfeit its charter to the State.” In holding that the charter had not been forfeited, the court said:
“Under the decisions of the courts of West Virginia, which may well be taken as a guide in this regard, and which are in accord with the general tenor, of judicial decisions on this point, a charter of incorporation is not ipso facto abrogated or annulled by failure to pay a license tax, notwithstanding that the statute may provide that such failure may work a forfeiture. Such failure, of course, will afford ground for legal proceedings to vacate a charter; but it requires a legal proceeding, by way of quo warranto or other equivalent process, to vacate a charter of corporation. Mere proclamation by an executive officer will not accomplish the result.”
A similar rule is announced in Murphy v. Wheatley, 102 Md. 501 (63 Atl. 62) ; Greenbrier Lumber Co. v. Ward, 30 W. Va. 43 (3 S. E. 227); Atchafalaya Bank v. Dawson, 13 La. 497; Vermont & Canada R. Co. v. Vermont Cent. R. Co., 34 Vt. 1; New York, etc., Bridge Co. v. Smith, 148 N. Y. 540 (42 N. E. 1088) ; Briggs v. Cape Cod Ship Canal Co., 137 Mass. 71; Brown v. Railway Co., 68 Ark. 134 (56 S. W. 862); Cluthe v. Railway Co., 176 Ind. 162 (95 N. E. 543, Ann. Cas. 1914A, 935); 7 R. C. L. p. 725, § 732; 14A C. J. pp. 1094, 1095.
In some of these cases it was held that the legislature might rightfully provide that, for a breach of a subsequent condition, such as a failure to pay a corporation tax, its charter should be ipso facto forfeited without any judicial proceeding; that it was a question of legislative intent, but that the intent to so terminate the charter must be very plainly expressed in the statute. If we should adopt this rule in determining the question in the instant case, an examination of our statute will show that the legislature did not intend that for failure to pay the corporation fee the corporate charter should be ipso facto terminated. It provides that, for such failure-the •charter of the corporation shall be “void.” The word “void” is frequently used in statutes in the sense of avoidable. In New York, etc., Bridge Co. v. Smith, supra, it was said:
“It cannot be said that the words ‘shall be null and void’ disclose the legislative intent to make this clause self-executing. The words ‘null and void,’ as used in this connection, clearly mean voidable.”
Our attention has not been called to any case where this question has been considered heretofore ‘by this court. In examining cases in other jurisdictions we are impressed with the justice of the rule which in these circumstances requires a judicial inquiry to determine the fact of forfeiture. As was said by Mr. Cook, “the weight of authority, as well as logic and public policy, favors such a rule.”
It is our conclusion in the instant case that the failure of the corporation to pay the 1921 and 1922 fees, though such failure was in part due to the erroneous demands of the secretary of State, was a cause for forfeiture which could only be enforced in a judicial proceeding by the State brought for that purpose. As no such proceedings were taken, the charter was not forfeited. The reincorporation was a mistake, but we are satisfied that such action,- though unnecessary and unauthorized, was taken by Mr. Tobin with an honest purpose and in the belief that he was acting for the best interests of the old corporation. No one has been injured. The new company has been in charge Qf the corporate business and appears to have been operating it successfully. In view of the facts and circumstances, this new corporation must be held to have been functioning for the old one. The old corporation still owns the corporate property and is entitled to conduct the corporate business. It should forthwith call a meeting pursuant to its charter and by-laws and elect a board of directors who shall have the charge and management of the property and affairs of the corporation.
We have said that there was no forfeiture of this company’s charter. As no other cause of relief is relied on by the plaintiff, it is not necessary to consider the case further. His bill should be dismissed. It is dismissed, with costs to the defendants. A decree will be entered in accordance with this opinion.
Sharpe, C. J., and Bird, Flannigan, Fellows, Wiest, and Clark, JJ., concurred.
The late Justice Snow took no part in this decision. | [
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Fellows, J.
Plaintiff, who was born December 14, 1908, received injuries on July 5, 1922, which resulted in the bringing of this action by his next friend. At the time of the injuries he was attending school and was in grade 6-A. In going to and from school he crossed the railroad track on Post avenue and was familiar with the crossing. On the day in question when on his way home from school at noon, the crossing was blocked by a string of freight cars to which an engine was attached at each end. None of the employees of defendants were at or near the crossing. After waiting upwards of ten minutes plaintiff attempted to cross between the cars. The train started and his foot was crushed, necessitating the amputation of a portion of it. At the close of plaintiff’s proofs a verdict was directed for defendants, the trial judge concluding that no negligence of defendants which could be said to be the proximate cause of the accident had been established, and that plaintiff was guilty of contributory negligence.
In this court the arguments in the main were addressed to the question of contributory negligence. It was settled by Bird v. Railroad Co., 86 Mich. 79, that (quoting the syllabus) :
“A train standing upon a highway, with an engine attached, is of itself notice of danger; and, in the absence of a special assurance on the part of the railroad company to one desiring to cross between two cars, over the couplings, that he may safely do so, so far as any movement of the train is concerned, he assumes all risks incident to such an attempt.”
This case was followed in Lahnala v. Railway Co., 192 Mich. 460, where it was held (again quoting the syllabus):
“It was contributory negligence which precluded a recovery for injuries to a minor of ten years and two months old, of fair intelligence, who, in reliance on an alleged custom to ring the bell before starting, attempted to crawl through beneath a freight train and between two of the cars and was caught by the movement of the cars and injured.”
But it was sought in the court below and is here sought to negative the effect of these holdings by the claim that plaintiff was mentally defective, and testimony was permitted of a physician who had examined plaintiff shortly before the trial to the effect that his mental development was but 60 per cent, normal. This tended to fix his mentality at the time of the accident as that of a normal boy of about eight years of age, although plaintiff had regularly made his grades in school and was alleged in the declaration to be “well, healthy, and studious,” and “eager to receive instructions in school.” This court has. had occasion to discuss the question of contributory negligence of minors. In Henderson v. Railway Co., 116 Mich. 368, it was said by Mr. Justice Montgomery, speaking for the court:
“If the boy had sufficient intelligence to appreciate the danger, and had in mind the necessity of taking precautions, it is not necessary that he should have had the intelligence of an adult fully.”
And in Mollica v. Railroad Co., 170 Mich. 96, it was said by Mr. Justice Steere:
“In the case of a child of the age of deceased, the law is well settled in this State that he is responsible for the exercise of such care and vigilance as may reasonably be expected of one of his age and capacity; and the want of that degree of care is negligence. The fact that he may not have as mature judgment as an adult will not excuse him from exercising the judgment and discretion which he possesses, or from heedlessly rushing into known dangers. Where the dangers are known and understood by him, the rule of contributory negligence is fully applicable.”
See, also, Knickerbocker v. Railway Co., 167 Mich. 596; Henry v. Railroad Co., 189 Mich. 45; Otto v. Railroad Co., 189 Mich. 463; Apps v. Walters, 216 Mich. 17; Stahl v. Railroad Co., 227 Mich. 469.
Turning to the record we find that the physician called by plaintiff testified as follows:
“Q. You would not want to say that this boy in the' 6th grade, 13, when he came down Post avenue on the 5th day of July, 1922, did not have enough mentality not to go between two cars standing on the crossing?
“A. I think he would know enough for that.
“Q. A boy of seven years of age who was normal would know enough, would he not?
“A. If he was not hurried or excited, he would.
“Q. You do not have a question about the fact that when he got up there this same boy you examined last January, in July, 1922, having gone to school through the sixth grade, would know that to get between two cars would be very dangerous when he saw an engine attached to each end of the train?
“A. I think he would realize that.”
And plaintiff testified:
“Q. It was a common occurrence for the drag of cars to move out of the D. T. I. up on Pere Marquette and go west?
“A. Yes.
“Q. You have seen that a good many times?
“A. Yes, sir.
“Q. You knew when you went through this string of cars that they were going to move west sooner or later ?
“A. Yes, sir.
“Q. You did not know when?
“A. No.
“Q. You took a chance of getting through before they moved?
“A. They are supposed to- have a signal.
“Q. You took a chance of being able to get through before they moved ?
“A. Sure, yes.
“Q. Sure, you took the chance?
“A. Yes, sir.”
The testimony in the case, all coming from plaintiff and his witnesses, establishes beyond peradventure that plaintiff fully understood the danger of crossing between the cars; he was not hurried or excited; had waited over ten minutes and doubtless had grown impatient, and, as he said, took a chance of getting across in safety. In so doing he was guilty of contributory negligence barring recovery.
As this disposes of the case we need not consider the other questions discussed further than to say that there was no error in rejecting any of plaintiff’s proffered proof.
The judgment will be affirmed.
Sharpe, C. J., and Bird, Wiest, Clark, and McDonald, JJ., concurred. Flannigan, J., did not sit.
The late Justice Snow took no part in this decision. | [
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Clark, J.
Plaintiff was employed as a clerk in defendant’s retail store in Ironwood during 1925 and one week in January, 1926. After plaintiff left the employment a dispute arose over the meaning of the following language quoted from the governing writing between them:
“I will give you thirty dollar a week 1/0 per cent, on all your sales, everything over 33500.00 I will give you 1/0 per- cent, on all sales made, over 40,000 I will give you 2/0 on all sale made.”
Plaintiff had been paid the wages and the commission of 1% on his own sales during 1925. Admittedly defendant was indebted to him in the sum of $30.96 for wages and commission of 1% on his own sales for the week in January, 1926.
To state the contentions of the parties,, we quote from a brief:
“The plaintiff claimed besides his 1925 wages and commission of $1,869.69 and in addition to such $30.96, 2% on the entire gross sales of the business in 1925, admitted to amount to $41,187.49 or $823.75 and $14 interest, a total of $868.71. The lower court directed a verdict in his favor for $868.70 and costs. * * *
“The defendant, insisting that the contract, properly construed, provided for compensation at a $30 weekly wage, 1% commission on his own sales (both of which items, excepting $30.96, admittedly have been paid), 1% on all sales made in the shop between $40,000 and $41,187.49, on April 13, 1926, made a formal offer of judgment of $133.58 and costs to date of the offer. This offer was renewed in open court on the trial.
“This sum offered is composed as follows:
1:1% on the difference between $33,500 and
$41,187.49 ($7,687.49) ........................ $76.87
2:2% on the difference between $40,000 and
$41,187.49 ($1,187.49) ........................ 23.75
3:Wages for one week ($30.00) and 1% commission on personal sales made.............. 30.96
4: To cover interest at 5% annually on above items (amounting to $1.87)................... 2.00
Total ........................................$133.58
“This offer of judgment was ignored by the plaintiff, who holds uncashed the defendant’s checks for $88.75 and $30.96, offered.”
Defendant requested an instruction for verdict against it in the sum of $133.58 and was refused.
We think the writing is capable of no other interpretation than that placed on it by defendant, and that therefore the requested instruction of verdict against it in the sum of $133.58 ought to have been given.
The judgment therefore is reversed, with costs of this court to defendant. New trial granted.
Noeth, Fellows, Wiest, McDonald, and Shaepe, JJ., concurred.
Chief Justice Flannigan and the late Justice Bibd took no part in this decision. | [
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Fellows, J.
It must be conceded, I think, that the holdings of this court are not consistent upon the question now before us. In Acme Lumber Co. v. Construction Co., 214 Mich. 357, the affidavit for lien did not contain the recital that the companies were corporations. Answering the contention that it was fatally defective for this reason, it was said by this court:
“Nor do we think there is any force in the contention that the affidavit is defective because it does not recite that the Acme Lumber Company and the Modern Construction Company are corporations. Kleinert v. Knoop, 147 Mich. 387. There is no claim that they are not corporations and upon their incorporation they became possessed of this corporate name, could sue and be sued in such name and could transact business in such name. While a recital that a party is a corporation organized under the laws of the State is not infrequent, the use of the corporate name goes to the corporation as one of its rights and such recital is not imperatively necessary to the conduct of its business.”
In Weber v. Wayne Circuit Judge, 217 Mich. 561, it was held that no jurisdiction was acquired where the bare name of the corporation was stated in the affidavit and process, and that it was necessary to state that it was a corporation in order to confer jurisdiction. I think it should be noted that in that case the word “company” or its equivalent was not a part of the corporate name. The language of the opinion in First Nat. Bank of Hanford v. Morganthaler, 219 Mich. 300, quite - materially modifies the holding in the Weber Case, and it was pointed out by Mr. Justice Bird that Ettelsohn v. Insurance Co., 64 Mich. 331, upon which the Weber Case was largely based, was' decided before foreign corporations were answerable in garnishment proceedings and that it was quite likely that this furnished a reason for the holding in the Ettelsohn Case. It should also be noted that but one Justice concurred in all that was said by Mr. Justice Sherwood in the Ettelsohn Case.
Unquestionably proper pleading requires that there should be a recital that the party is a corporation. But if the affidavit, process, or pleading omits such recital it is in my judgment amendable. In People v. Meyer, 204 Mich. 331, the information alleged that Herpol sheimer Company whose property was stolen was a corporation. This court sustained the right to amend by alleging that the company was a partnership. I am persuaded that the rigor of the holding in the Weber Case should be relaxed and it should be held that where the name of the party imports a corporation or an association, the court acquires jurisdiction even though the fact that it is a corporation or association is not affirmatively stated.
The judgment is affirmed.
Wiest, Clark, McDonald, Bird, and Sharpe, JJ., concurred.
The late Justice Snow and Justice Steere took no part in this decision. | [
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Wiest, J.
Defendant Schoonmaker had a grocery store, soft drink place, boat livery, gasoline filling station, and dance hall at Fisher lake, a summer resort in St. Joseph county. Defendant Martin was in-, terested with Schoonmaker in operating the dance hall. The prosecuting attorney for St. Joseph county filed the bill herein charging that the dance hall, as operated by defendants, constituted a nuisance and asked for the abatement thereof. Proofs were taken upon issue joined, and decree entered directing seizure and sale of the dance hall equipment and locking the building for one year, unless bond was given to abate the nuisance. Defendants appealed.
Act No. 389, Pub. Acts 1925, § 1, provides:
“Any building, vehicle or place used for the purpose of lewdness, assignation or prostitution or gambling, or used by or kept for the use of prostitutes or other disorderly persons, or used for the unlawful manufacture, storing, possessing, transporting, sale, keeping for sale, giving away, bartering, furnishing or otherwise disposing of any vinous, malt, brewed, fermented, spirituous or intoxicating liquors or any mixed liquors or beverages, any part of which is intoxicating, is hereby declared a nuisance.” * * *
The act provides for abatement, by decree, under bill in chancery on the relation of the attorney general or prosecuting attorney. The statute is an exercise of the police power. The right of organized society to abate public nuisances is old and the denouncement of evils may extend to the needs of decent society.
A public dance hall is not a nuisance per se; neither is it denounced by any statute. No claim was made that the place was used for the purpose of lewdness, assignation, or prostitution, or used by or kept for the use of prostitutes, or used for the manufacture, storing, possessing, transporting,- sale, or keeping for sale, bartering, furnishing, or disposing of intoxicating liquors. The charge in its broadest sense included keeping of a gambling device on the premises, use of the premises by disorderly persons, and the possession upon the premises of intoxicating liquors by persons attending the dances.
The circuit judge was of the opinion that the dance hall was a nuisance. Under the evidence the use of the dance hall by persons was only as they attended the dances. The finding of gambling was based on the fact that, about a year before, some slot machines were removed by the State police.
Defendants engaged a deputy sheriff to be present at the dances, and up to the time of an occurrence we will mention the officer made no arrest. There was a dance the evening of July 3, 1926, and the deputy sheriff was outside the hall, earning his hire, when an intoxicated man drove up in a car and in an altercation ’assaulted him. The intoxicated man had not been at the dance but probably came to attend. Some people, attending the dances, brought liquors which they secreted outside the hall and retired to partake thereof and some persons outside of the hall used profane language. A year or more before the bill was filed a young girl in her bathing suit went into defendants’ place and came out, it is claimed, with liquor on her breath. The case presented by the evidence is that defendants furnished no liquor and endeavored to prevent persons attending the dances from bringing liquor and drinking on the premises, and to that end hired a deputy sheriff to be present. The case is set apart from those where the owner connived at violations by others on his premises.
In Rossi v. United States, 16 Fed. (2d) 712, it was stated:
“The situation is not presented of where a party goes to a roadhouse or public place, and brings liquor for his own consumption, unknown to or unassisted in securing the same by the proprietor.”
This is a suit in equity, and, upon appeal, we hear the case de novo. The proofs may be said to show illegal acts by some persons attending the dances, but that is not enough. Defendants did not maintain a nuisance unless they permitted such illegal use of the premises; that is, consented to it or acquiesced, and whether they did so was a question of fact, not established by efforts to prevent misuse of the premises but only by some evidence disclosing permissive use. See State v. Frazier, 79 Me. 95 (8 Atl. 347).
It seems to us that the statute denounces a place where persons are permitted, either expressly or impliedly, or by connivance, such as furnishing aid or accessories to resort there for the purpose of drinking intoxicating liquors. Such seems to be the holdings under the Federal act, and an extended search discloses no adjudication supporting the decision herein in the Circuit. This statute is salutary if kept to its purpose. One inviting the public to his place for commercial purposes must take care not to invite or acquiesce in transgressions of the law. That transgressions may happen is possible, but remain offenses of the wrongdoer unless tolerated by the occupant to the extent of permissive use of the premises for such purpose or indifference thereto. The statute does not deprive one person of the use of his property by reason of the illegal acts of another, unless the owner’s use bears a participating relation to the violation. Were the premises used in violation of the law so as to constitute the same a nuisance? We think the question answered in Notary v. United, States, 16 Fed. (2d) 434:
“One of the paragraphs of the charge of the court, excepted to and assigned as error, relates to the contention of the defendants that it was a part of their duty and that they did use reasonable diligence to prevent the bringing of liquor and the possessing of it on the premises. In that connection the court said:
“ ‘Now, the question, whether they used reasonable diligence to prevent it does not make any difference. It is no excuse for a violation of law that they tried to prevent it. A man who permits liquor to be trafficked on his premises, if he knows what is going on, has to prevent it at his peril.’
“We think this statement on the part of the court was clearly reversible error.”
Intoxicating liquor was not used in the dance hall but secreted by patrons outside of the hall and secretly visited. The mentioned charge of gambling, unsupported by other prohibited use of the premises, is too stale to warrant decree. The same is true of the incident of the girl in the bathing suit. We have not had the aid of a brief by the prosecuting attorney in behalf of the people.
The decree is reversed and the bill dismissed.
Sharpe, C. J., and Bird, Flannigan, Fellows, Clark, and McDonald, JJ., concurred.
The late Justice Snow took no part in this decision. | [
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Flannigan, J.
The J. C. Vogt Sales Company, a domestic corporation located at Saginaw, was engaged in the retail sale of cash registers. Defendant was its secretary, a member of its board of directors, and a creditor to the extent of $13,252.20. On or about October 9, 1919, he, representing the company, sold its entire stock, furniture and fixtures in bulk to one William H. Murphy, an employee of the company, for $10,000, which represented its fair market value at the time, and received in payment therefor Murphy’s individual note for $10,000. Again acting for the company, defendant indorsed the Murphy note to himself and credited the company with the face thereof on its indebtedness to him. At the date of the sale the company was hopelessly insolvent. It is conceded that in making the sale the provisions of the bulk sales law (2 Comp. Laws 1915, §§ 6346-6348) were violated.
On October 14, 1919, less than a week after the sales were made, a majority of the directors of the company filed a petition, alleging its insolvency and praying for its dissolution and appointment of receiver. In the schedule of assets attached to the petitiofi the property sold Murphy was not included. On* the filing of the petition, Murphy was appointed temporary, and on November 24, 1919, when a decree was entered dissolving the corporation, permanent receiver. Upon bis appointment as permanent receiver he gave a bond in the sum of $3,000. This bond was signed by the defendant as surety and the condition thereof was as follows:
“Now, therefore, the condition of this obligation is such, that if the said William H. Murphy shall well and faithfully and according to the direction of the said court, do and perform all and singular his duties as such permanent receiver, and whenever required so to do by the said court duly account for all moneys and assets and whatever he'shall receive or have in charge as such receiver, and shall pay o.ut, apply and dispose of the same as he may be directed from time to time by the said court, and obey such orders as the court may from time to time make in relation to the said trust, and in all respects faithfully discharge the duties of the said trust, then this obligation to be void, otherwise in force.”
Murphy sold and disposed of the property. He did not include the proceeds in his report as receiver or account therefor although ordered by the court to do so. When his successor demanded he do so, he refused.
On petition of a creditor, Murphy was removed as receiver and John Hopkins appointed to succeed him. Hopkins, as receiver, filed a bill against Murphy and others, alleging the intention of the sale to him was the defeat of creditors and that it was void as to them for that reason and also because it was made contrary to the provisions of the bulk sales law, and praying for a money decree against Murphy for the value of the property. The court held both grounds established, the sale void as to creditors, and ordered Murphy to pay the receiver $10,000. From that decree no appeal was taken nor has any part of it been paid. Defendant was not made a party to that suit.
Thereafter this suit was brought against defendant as surety to recover the penalty of the bond on the theory the condition had been violated by the failure of Murphy, the principal, to account for the property or its proceeds. On the trial no' issue of fact was presented by the evidence and both sides moved for a directed verdict. A verdict was directed in favor of plaintiff for $3,.000, the full penalty of the bond and judgment thereon was entered in due course. The case is here on writ of error sued out by the defendant.
If Murphy, as receiver, was bound to account for the property, or its proceeds, transferred to him, his failure to do so constituted a breach of the condition of .the bond and the defendant as surety thereon became liable according to its tenor and effect. The question, therefore, upon which the case must turn, is whether Murphy as receiver was so bound.
The receiver has full power to reach the assets of a dissolved corporation which could be reached by any creditor. Jacobs v. E. Bement’s Sons, 161 Mich. 415. While he represents the insolvent as far as collection and conservation of its assets are concerned, in his hands all those claims become assets which are assets as to creditors as well as those which are assets as to the insolvent corporation. Detroit Trust Co. v. Goodrich, 175 Mich. 168 (Ann. Cas. 1915A, 821).
Where a sale is made in bulk without observance of the provisions of the bulk sales law, the same is void as against creditors of the seller (2 Comp. Laws 1915, § 6346), and the purchaser is accountable to the creditors for the property received by" him or the proceeds thereof (2 Comp. Laws 1915, § 6348). From the moment the property was delivered to Murphy he held it subject to the rights of creditors. It was his duty to pay the proceeds thereof to himself as receiver.
Commonwealth v. Gould, 118 Mass. 300, is a case directly in point. After holding the receiver was obligated by his bond, which in material substance was similar to the bond in the instant case, to account for moneys borrowed by him from the corporation before his appointment; and his omission to pay the amount thereof to'himself as receiver was a breach of the bond for Which he and hís sureties were equally liable; that court said:
“The case falls within the general rule of law, that when the same person is liable to pay money in one capacity, and to recover it and account for it in another, the law presumes that he has done what it was his duty and within his power to do,_ and holds him and his sureties responsible in case of his failure to do it.”
The judgment is affirmed, with costs of this court to appellee.
Sharpe, C. J., and Bird, Fellows, Wiest, Clark, and McDonald, JJ., concurred. The late Justice Snow did not sit. | [
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Fellows, J.
Defendants King are the fee owners of a farm in Oakland county; they sold it on contract to defendant Hugh Wilton. Plaintiff recovered a judgment in an action at law against him. Before execution was issued he assigned his interest in the contract to his wife, defendant Grace Wilton. Levy was made under the execution when issued. The Wiltons left the State. Defendants King commenced summary proceedings against- them to recover possession of the farm; they were brought in by publication. Defendants King had judgment for restitution on August 21, 1924, and $1,408.42 was: found to be the amount due on the contract. This bill was filed September 18, 1924. By it plaintiff seeks as to defendants Wilton the setting aside as fraudulent the assignment of the contract from Hugh Wilton to his wife, and as to defendants King the right to redeem. By the bill plaintiff tendered the amount due the Kings and costs, and deposited with- the clerk such amount. On filing the bill a summons and an injunction restraining defendants King from proceeding further with the summary proceedings were issued and placed in the hands of the sheriff for service. They were not served until the 27th. Defendants Wilton were brought in by publication and their default duly entered. Defendants King answered issuably and upon a hearing the bill was dismissed. Plaintiff appeals.
Some minor questions should be first disposed of. They require little discussion. This bill is clearly a bill in aid Of execution and is maintainable if the facts support its allegations (3 Comp.‘Laws 1915, § 12897, as amended by Act No. 215, Pub. Acts 1917 [Comp. Laws Supp. 1922, § 12897]; Lipp v. Jacobs, 198 Mich. 357; Raymond v. Bigley, 226 Mich. 182). The fact that plaintiff may not be entitled to all the relief prayed for in the bill does not preclude the court from granting such relief as the facts stated in the bill and sustained by the proofs justify where, as in this case, there is a prayer for general relief. The suit was commenced when the summons was in good faith placed in the hands of the officer for service, or when given to plaintiff’s attorney. Taylor v. Mathews, 224 Mich. 133, and authorities there cited. Good faith in the instant case is not questioned. That Mr. King was away on a hunting trip and could not be served until the 27th did not prevent the court from acquiring jurisdiction of the case on the day it was commenced, the 18th. Plaintiff made its case against the Wiltons under Act No. 215, Pub. Acts 1917 (Comp. Laws Supp. 1922, § 12897). Defendants King insist they are not within the purview of that act and as to them plaintiff should have been required to go further in its proof. But defendants King are not concerned in the issue between plaintiff and defendants Wilton. The interest in the land contract was subject to levy and sale under the statute and cases above cited and on the same authority a bill in aid of execution was proper to set aside a fraudulent conveyance of that interest. This was the issue between plaintiff and the Wiltons. As to defendants King, as we have before stated, the bill was a bill to redeem. Defendants King were entitled either to their money or the land. The Wiltons were not concerned with the issue as to the Kings nor the Kings that with the Wiltons.
The principal contention of defendants is this: The Kings recovered judgment before the commissioner August 21st; that judgment cannot be collaterally attacked; payment of the amount found due could be made within the next 30 days, then only to the commissioner; the tender into the circuit court in chancery of the amount did not save plaintiff’s right to redeem; the suit was not commenced until process was served and this was after the 30 days had expired and defendants’ title had matured. The last point is already answered by what has been said. When the suit was commenced and the money tendered into court there was still time to redeem.
It is well settled that a court of equity will not try out issues tried or triable before the commissioner in summary proceedings cases in which that court has jurisdiction. Security Investment Co. v. Meister, 214 Mich. 337; Manuel v. Savings Bank, 227 Mich. 647; Blazewicz v. Weberski, post, 431. But in a summary proceeding before the commissioner, equitable defenses are not permissible. Bartlett v. Bartlett, 103 Mich. 293; Gale v. Eckhart, 107 Mich. 465; Cottrell v. Moran, 138 Mich. 410. The issues here involved are purely equitable issues for determination by a court of equity and would give plaintiff no standing in the case before the commissioner. Under these circumstances, we are unable to distinguish the instant case upon principle from Puziol v. Kastle, 231 Mich. 100. There we held that the plaintiffs were subrogated to the rights of others and permitted them to redeem although the bill was not filed until after the 30-day period for redemption had expired, while here the bill was filed and the money was brought into court before the period had expired. There plaintiffs could not with safety pay the amount found due by the commissioner before they had had their equitable rights determined by a court of equity. So here, plaintiff could not sell under its levy until the fraudulent assignment of the contract had been set aside leaving the vendee’s interest in Hugh Wilton, and this could only be done in a court of equity. If it paid to the commissioner without first obtaining that equitable relief, it hazarded the claim which might be made that it was a volunteer in making the payment. This we do not think it was required to do. It brought the money into a court of equity before the time of redemption had expired, and this, we think, was sufficient where exclusive equitable relief was necessary to protect its rights.
But defendants’ counsel say this tender was conditional. It was not on its face. The bill unequivocally tendered the money and it was paid to the clerk. But from a practical viewpoint we think counsel are right. No court of equity would decree that this money should be paid to defendants King unless it gave plaintiff relief. It would manifestly be inequitable to give defendants King over $1,400 of plaintiff’s money and at the same time deny that plaintiff had any interest in the land under its levy. So practically, counsel are right. But because they are right is all the more reason why equity should entertain this bill. Only in a court of equity may the rights of all the parties be worked out. Here the fraudulent conveyance of Wilton to his wife may be set aside and plaintiff may proceed to collect what it can from its absconding debtor. Here defendants King will receive the money and all the money due them on their contract and that is all they are entitled to as a matter of good conscience. The case of Wray-Austin Machinery Co. v. Flower, 140 Mich. 452, strongly relied upon by defendants, is not controlling. There all the facts were found to be with defendants; here they are with plaintiff. There Mrs. Flower had expressly refused to enter into a lease with plaintiff and was not, as this court found, estopped from asserting her rights; without her consent it could not obtain a lease to it from her; it had no rights in the premises which under the law she was bound to recognize. Here with the fraudulent conveyance set aside plaintiff had an absolute right under the statute to sell the vendee’s interest in the lands upon which the levy was made, and incidentally thereto could protect such interest from default. We think the cases are clearly distinguishable.
The decree dismissing the bill will be reversed and one here entered in conformity with this opinion. As payments have matured on the contract since this suit was commenced, plaintiff will be required to make payment of all past due instalments, the amount unless agreed upon to be fixed on the settlement of the decree. Plaintiff will recover costs of both courts.
Bird, C. J., and Sharpe, Snow, Steere, Wiest, Clark, and McDonald, JJ., concurred. | [
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Steere, J.
Plaintiffs seek by mandamus to compel defendant to set aside an order made by him as circuit judge on June 9, 1925, dismissing their cross-appeal in a chancery suit of Wayne county brought by plaintiffs against Michael Kolodziejczck and several others in which a decree had been signed and filed on March 13, 1925. After decree the following took place: On March 18, 1925, two of the defendants, named Kaluzny, filed a claim of appeal, paid the required appeal fee, obtained and filed the stenographer’s certificate, and secured a written order granting 60 days’ additional time in which, to perfect their appeal, all within the 20-day limit after decree. On March 23, 1925, plaintiffs filed their claim of appeal and paid no appeal fee, filed no stenographer’s certificate and made no motion for extension of time. On March 27, 1925, defendant Kolodziejczck filed his claim of appeal. ■ He filed no stenographer’s certificate, but on April 1, 1925, obtained an order of 60 days’ extension of time. On June 6, 1925, he moved for an order dismissing plaintiffs’ appeal on the ground that they had not within the first 20 days moved for an additional 60 days to perfect their appeal or taken any further steps to that end. Said motion was granted and an order of dismissal entered June 9, 1925. Defendant’s return herein to an order to show cause states as his ground for dismissing plaintiffs’ appeal that—
“by reason of said plaintiffs having failed to take any action at all to further perfect their appeal in said cause within the said 20-day period following the entry of decree therein, that this court so far as relators herein be concerned, lost jurisdiction.”
| It is admitted that in the chancery case out of which this proceeding arose certain of the defendants first filed their claim of appeal and have taken within the required time all necessary steps to perfect the same. They thereby removed the case to this court and conferred upon it jurisdiction to hear the same de novo, upon pleading's and proofs before the court in the original hearing as certified and returned on appeal from that court. It is conceded such is and has long been the general rule in this jurisdiction, and there is no occasion to cite the various decisions by this, court discussing that proposition and so holding. But with them went the early and repeated qualification, as occasion arose, that an adverse party who has failed to appeal from a decree may not have it modified or changed in his favor. In the early case of Proctor v. Robinson, 35 Mich. 284, this court said, speaking through Justice Graves:
“Robinson alone appealed. As no appeal has been taken on the other side, previous decisions of this court forbid any variation of the decree in favor .of complainant.”
We are not advised what this chancery suit was about, or the nature of .the decree rendered in the court below, beyond the fact that it was final and evidently adverse to the claims of at least three of the several defendants, particularly defendants Kaluzny, who» made haste to file their claim of appeal, followed im due time by all requisite steps to perfect the same,, which, irrespective of what the other litigants did, transferred the case in toto to this court with full jurisdiction to rehear the same as before outlined. They having claimed an appeal and started the case to this court for review, plaintiffs, as adverse and apparently prevailing parties, took a so-called cross-appeal and timely filed their claim of appeal, indicating that the decree they obtained did not afford the full measure of relief they asked and on review they would claim additional affirmative relief. Trailing plaintiffs’ appeal defendant Kolodziejczck recovered command of his name sufficiently to subscribe, or have it subscribed, to a claim of appeal within the requisite 20 days and obtain a 60-day extension of time. Within that time he made this motion to dismiss plaintiffs’ appeal because they had not obtained an extension of time, as he had done, nor filed the stenographer’s certificate and paid the appeal fee, as he had not done.
In the numerous cases brought before this court involving irregularities, in appeal proceedings, it has had frequent occasion to emphasize that appeals are purely statutory and the appellate court acquires no jurisdiction to entertain a case unless the jurisdictional statutory requirements and authorized rules promulgated pursuant to them have been complied with. That subject was concisely clarified and the essentials summarized by Justice Hooker in Waterman v. Bailey, 111 Mich. 571, and again in Walker v. Wayne Circuit Judge, 226 Mich. 393, where requirements of our statutes and auxiliary rules for conferring jurisdiction, both on the law and equity side of the court, were concisely summarized by Justice McDonald in plain and unmistakable terms.
When jurisdiction is once acquired in chancery cases the appellate court hears them' de novo and reviews on the record returned both questions of law and fact, with the qualification before noted, while on the law side of the court only questions of law are reviewed under such claimed errors as the party taking out a writ of error sees fit to assign. If the opposing party desires to review other and different rulings of law by the trial court adverse to his interest, and presumably favorable to his opponent, he must take out his own writ of error and independently assign his additional claimed errors for review under it before the court can take jurisdiction to entertain them. In chancery appeals no assignment of errors is required and a claim of appeal is the only official notice to the court or opposing counsel that the appealing party is dissatisfied with the decree appealed from. It negatives the inference which otherwise might arise from his silence and inaction that he is satisfied with the decree of the lower court, to his exclusion from urging any claim in the appellate court beyond its validity.
The question arising on irregularities in appeals which this court has most often been required to seriously consider, and by reason of it most strictly enforce compliance with statutory requirements, is that of jurisdiction as limited by the mandatory pro visions as to time which the statutes impose. The reason therefor is made plain by Justice Fellows in Marr v. Railway, 228 Mich. 46, as follows:
“The legislative department in making the provisions it has (as to time) was doubtless prompted so to do in order to prevent unnecessary delay in bringing cases to this court for review and final decision. * * * Arguments on that question should be addressed to the legislature.”
The law now governing appeals in chancery under the judicature act and court rules is to be found in 3 Comp. Laws 1915, §§ 13754, 13755, Supreme Court Rule No. 61 (208 Mich, xxxvii), and Circuit Court Rule No. 66.
The decree of the court below was in plaintiffs’ favor to the extent at least that defendants Kaluzny promptly took steps to continue the litigation in the appellate court, filed their claim of appeal, paid the appeal fee, ordered transcript of the testimony, filed the stenographer’s certificate of order, moved for and obtained an extension of time in which to settle the case for review, all within the 20-day limit, and thereby transferred jurisdiction of the case to this court, except as it remained for the lower court to settle the case on the testimony, if presented within the time limit after proper notice, and certify the record as made to this court. Plaintiffs were entitled to a copy of the testimony and to be heard on settlement of the case. Whether plaintiffs, or any other of the defendants, filed claim of or perfected an appeal, this court had jurisdiction of the case.
Plaintiffs, who were the adverse and prevailing parties, did, however, subsequently and within the time ■limit, file their claim of appeal, and to that extent at least gave notice that the decree which defendants were taking steps to review did not give them the full measure of relief asked and if the case was to be reheard in this court they desired further affirmative relief. Whatever their motives, they were content to take the chance of defendants perfecting their appeal, for regardless of how many parties to a suit file claims of appeal if no one of them perfects his appeal they all fall by the way together.
The question here is whether, in a chancery suit, the prevailing party in the court below, who follows his adversary’s claim of appeal by also filing a claim, must duplicate the steps taken by the moving party to perfect an appeal before he can ask on rehearing in the appellate court other or further relief than that granted in the court below. This court has already noted a distinction in the status of first and subsequent appellants, and recognized that the latter are not strictly bound to follow all statutory requirements in appeal proceedings provided the party first filing a claim of appeal has by complying with them given the appellate court jurisdiction over the case with power to rehear the same. By Supreme Court Rule No. 61, when one of the parties to a chancery suit has first taken an appeal, other parties to the suit are given 20 days after receiving notice of such appeal to appeal in their own behalf. Plaintiffs filed their supplemental appeal within the required time. If defendants’ construction of the statute and rules is well founded plaintiffs and all other subsequent appellants would 'have to pay an appeal fee, order transcript of the testimony, file stenographer’s certificate and move within the 20-day period for additional time, to be followed by each preparing his separate case for appeal, and, after notice to all other parties to the suit of time and place, presenting it. to the court for settlement, resulting in a needless and confusing multiplicity of all those things involving extra expense, labor and delay not within the intent or purpose of the statute. When once complied with by an appealing party, their duplication by those who follow is not essential to jurisdiction.
The customary course in a chancery appeal, regardless of the number of appellants, is to settle the case as a whole on the record made in the court below, and make but a single return on appeal. While it is conceivable that an exceptional case might arise where a later appealing party would be entitled to a separate return, no such situation is suggested here.
In Mack v. Engel, 165 Mich. 540, complainant contended that defendant’s appeal should be dismissed for the reason, amongst others, that he had not paid an appeal fee as required by statute. The other reasons were not discussed but pronounced without merit. Upon the statutory requirement that an appealing party must, within the time specified, pay the prescribed appeal fee, the court said:
“We are of opinion that the statute relied upon by complainant contemplates the payment of but one fee to the register When this fee is once paid by either party, the opposite party may seasonably claim an appeal, and the costs, including the appeal fee, will be taken care of by the final decree.”
That the secondary or cross-appellants must themselves file their claims of appeal to confer jurisdiction upon the appellate court to recognize them as such is settled by abundant authority; but thereafter, unless they desire to appeal, whether their predecessors do or not and are content to take chances on their abandoning their appeal, we discover no good reason for their repeating what the others have already done, which retains jurisdiction in the appellate court over the parties and subject-matter of the suit, whether it be to pay the appeal fee, order transcript of testimony, file stenographer’s certificate or secure extension of time.
The authorities cited by defendant are not in conflict with such construction. In most of them the appeal was dismissed because the appellant did not file a claim of appeal within the jurisdictional 20-day limit, or, being the only appealing party, failed to comply with some other jurisdictional requirement. Such was the situation in Guthrie v. Leelanau Circuit Judge, 197 Mich. 321, where Guthrie was the only appellant and failed to timely pay the appeal fee.
It is especially urged for defendants that the case of Munroe, Boyce & Co. v. Ward, 207 Mich. 369, is on all fours with the instant case and controlling. That was a chancery suit involving a lengthy accounting. Apparently both parties appealed, as the court incidentally said the case would be taken as though plaintiff had filed no notice of appeal and only questions urged by defendant for modification of the decree would1 be considered. The decree was affirmed. While inferable that an appeal fee was paid, it is not shown by whom. In disposing of plaintiff’s appeal, the court stated that the decree was filed on February 8, 1918, and plaintiff’s claim of appeal is dated March 18, 1918, ór more than 20 days after the decree was filed. Referring to the holding in the Guthrie Case, the court said:
“The right of appeal is a statutory one, and unless the mandatory provisions of the statute are complied with the court has no jurisdiction to entertain the appeal;” citing other cases.
As digested in the syllabus, the manifest holding in that case was that plaintiff’s appeal could not be considered because not filed within the 20-day statutory limitation. In the instant case it was.
For the foregoing reasons the order appealed from dismissing plaintiffs’ appeal must be set aside, with costs. If required the writ prayed for may issue.
Bird, C. J., and Sharpe, Snow, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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Fellows, J.
One Emde obtained a judgment against plaintiff in justice’s court on April 22, 1921. Plaintiff desired to appeal and defendant Louis Petex became surety on his appeal bond and he gave Petex a deed of the vacant lot here involved located on Fenkell avenue in Detroit. Emde recovered judgment in the circuit on October 21, 1922, for $330 and costs. Plaintiff paid but $135 on the judgment and refused to pay the balance; he claims to have been sick. Defendant Louis Petex paid the balance of the judgment. Defendants Lezin and Bockall are brothers-in-law. They deal some in real estate. In the spring of 1923, lots on Fenkell avenue were advancing in price, and defendant Lezin acting for himself and Bockall got from the city treasurer’s office the names of owners of lots on Fenkell in this subdivision. Defendant Louis Petex had in the meantime deeded the lot in question to his wife, Camela. Lezin and Bockall purchased four lots on Fenkell including the lot in question, which they bought on contract with defendants Petex, making a down payment to them of $600. The abstract showed title in Mrs. Petex. They made two other payments of $15 each. We entertain no doubt that they purchased in actual good faith.
Plaintiff files this bill seeking to have his deed to Petex decreed to be a mortgage, and claiming that the transaction with Lezin and Bockall was not bona fide and asking that it be set aside as in fraud of his rights. As we have stated, we are satisfied that Lezin and Bockall bought in actual good faith, and we are likewise satisfied that the deed to Petex was given as security only. The trial court so found and a decree was entered declaring the deed to be a mortgage, requiring plaintiff to pay to Lezin and Bockall as equitable assignees of Petex the amount he had paid on the judgment and giving them a decree against Petex for the balance of their payments and damages. This decree is based on the conclusion reached by the trial court that plaintiff had such possession of the lot as to give defendants notice of his rights.
Neither defendants Lezin nor Bockall saw the lot before they purchased it. They knew that lots in this subdivision on Fenkell were advancing in price. They learned who were the owners from the tax roll, sought them out and purchased such lots as they could come to terms on. They insisted on seeing an abstract before making the down payment and it showed title in Mrs. Petex. The lot was a vacant lot; plaintiff lived over on Ellsworth; there was a fence around it and a pump and an abandoned shack on it; there was a “For Sale” sign on it giving plaintiff’s name and address; plaintiff was not actually occupying the lot, and his recorded deed as disclosed by the abstract showed he had parted with title to it. Under the holding of this court in Fischer v. Lauhoff, 222 Mich. 128, plaintiff did not have such possession as would put defendants upon inquiry. The placing of a for sale sign upon vacant property alone is not such possession as necessitates proceedings at law to terminate. Donnelly v. Lyons, 173 Mich. 515. Lezin and Bockall were bona fide purchasers as matter of fact and we think they were likewise bona fide purchasers as matter of law.
Lezin and Bockall purchased on contract and have paid on the purchase price $630. They had not received a deed before they had notice of this suit and of plaintiff’s claim, and 'have not since made further payments. Equity requires that they be reimbursed their payments with interest but it does not require more. Wiles v. Shaffer, 175 Mich. 704.
The decree will be modified by increasing the amount to be paid Lezin and Bockall to the sum of $630 and interest, and awarding plaintiff a personal decree against defendant Petex for the amount he is required to pay Lezin and Bockall less the sum paid by Petex on the judgment, and as so modified will be affirmed, with costs to appellants.
Bird, C. J., and Sharpe, Snow, Steere, Wiest, Clark, and McDonald, JJ., concurred. | [
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Sharpe, J.
The facts in this case quite fully appear in the opinion published in 229 Mich. 495, wherein the decree entered in the lower court was modified and affirmed. In that decree the subscriptions signed by plaintiffs for stock in the Harmony Oil Company and the notes given pursuant thereto were canceled because procured by fraudulent representation, and the defendants were ordered to deliver them and all moneys and effects arising therefrom to the plaintiffs. It further provided that, if such surrender of securities and payment of moneys be not made within 20 days, a receiver be appointed to secure the same and to make report thereof to the court. Jurisdiction was retained to make such further order as might be necessary in the premises.
The de'cree was modified on its settlement by Mr. Justice Fellows by the insertion of the following paragraphs :
“The said circuit judge is directed to cause notice to be given to all subscribers of the capital stock of the said Harmony Oil Company and to cause an account to be taken of the relative equities of persons who contributed to the fund of the proposed Michigan corporation of the Harmony Oil Company and make such further decree in the premises as shall be necessary to do equity among all such stockholders.
“And the said circuit judge is authorized and directed to appoint a receiver of the said Harmony Oil Company, if necessary to properly adjust the interest of the subscribers of stock of the company and to properly protect the creditors of said company, if any there be, but the defendant, and each of them, are barred from participating as creditors in the fund created by subscriptions to the stock of said company.”
Pursuant to these provisions, a receiver was appointed, and the moneys referred to are now in his hands for distribution. Laurence W. Smith, who acted as attorney for the defendants in the circuit and in this court, filed a claim against the fund in the hands of the receiver in the sum of $2,486.88, and insists upon his right to participate therein as a creditor of the oil company. The case is again before us on his appeal from the order of the circuit court denying his right thereto.
Mr. Smith testified in support of his claim that he was first consulted by Mr. Weaver, one of the defend ants, just prior to May, 1923, and advised him as to the procedure relative to the reorganization of the company; that he assisted in the preparation of a call for a stockholders’ meeting, and had some talk with Mr. Galpin, one of the trustees, about it; that after the meeting he prepared the by-laws for the corporation and the articles of association, and attended to their filing; that he defended the suit brought, in which the decree referred to was rendered, in both the circuit court and this court; paid for the printing of the record and briefs, and looked after the accounting had after the remand to the circuit court. He further testified that he was retained by Mr. Weaver and his wife and J. Stuart Knee, who were the only defendants named in the bill of complaint. The corporation was not named as a party.
There is no issue as to the services rendered by Mr. Smith, or the charge therefor. The question is, Has he rights in this fund as a creditor? The money in the fund, in equity, belongs to the subscribers who paid it to the trustees. Anticipating that indebtedness might have been- incurred in reliance on the action of the subscribers, the decree as modified provides that creditors having such claims might participate. Costs were allowed against the defendants in both the circuit court and this court. We are now asked to allow not only the taxable costs of the defendants but that to which Mr. Smith is entitled as between attorney and client to be paid out of the fund. It would be an injustice to plaintiffs and other subscribers of stock, and to the cláss of creditors referred to, to give such a construction to the word creditors as would permit this to be done.
The order of the circuit court is affirmed, with costs to appellees.
Bird, C. J., and Snow, Steere, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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SNOW, J.
Plaintiff was injured by an automobile in which he was riding going over the embankment of the approach to a bridge over the tracks of the defendant railway company, at a point in the main highway between Flint and Lapeer, about three miles west of said last named city. He was riding in the front seat with his father-in-law, William Whiteside, who was driving a Buick K-45 automobile, with the top up and without side curtains. Their wives were in the rear seat. Mr. Whiteside had never been over this road before, but on looking down the road going east could see the bridge a quarter of a mile away. At this distance from the bridge he was going about 25 miles an hour, and when about 20 rods back from the bridge passed a sign reading “Dangerous Curve.” Approaching the bridge from the west the highway runs almost directly east. At this point the Grand Trunk tracks run a little south of east and intersect the highway at the bridge in question. Going east the highway turns to the left over the bridge at an angle less than a right angle, and after turning upon the bridge one must turn still farther to the left to avoid striking the east side of the bridge. There is a grade in the highway approaching the overhead bridge and the turn is at the top of this hill, where there was a fence at the end of the highway which was the east rail of the bridge extended.
Plaintiff claims that as the car in which he was riding approached the bridge it was being driven about 8 or 10 miles an hour, and as its driver made the turn, another car, coming from the other direction, had stopped on the opposite end of the bridge; that the right front hub cap of plaintiff’s car came in contact with the rail of the fence on the east side of the bridge which ran parallel with and in the same direction as the automobile in attempting to pass over the bridge. As the hub cap hit the fence the steering wheel was jerked from the hands of the driver; the car was turned to the right and sidewise against the fence which, being in a decayed condition, did not support it, but gave way, and the car and its occupants went down the embankment, and plaintiff received his injury.
Mr. Whiteside, the driver of the car, testified:
“As I was coming up to the bridge I slowed right down to about 8 or 9 miles an hour. I saw the other car on the other side approaching the bridge. I did not know who was going to make it first, and I said to myself T got to hold right down,’ and I did, and I crowded the side a little too much. If the bridge had been square it would have been all right, but the bridge comes back a little too much. That is what deceived me, the bridge and the narrowness of the approach got me. The other car stopped right on the approach of the bridge.”
On cross-examination this witness testified:
“I would say that it would be 15 or 20 rods from the bridge that I reduced my speed from 18 to 20 miles an hour down to 8 or 9. I held my car right down. I said to my folks, ‘Now, this is a bridge and I got to look out for it.’ I had my foot on the brake and I seen I was not going to make the bridge. I took my foot off. That is the last of it. I see I was going too slow. I speeded up for a few minutes. There were some cars ahead of me and there was some dust. The dust did not bother me. I seen the bridge and I knew I was coming to a bridge.”
The fence referred to at the turn at the end of the road on the approach to the bridge was in effect a guard rail, placed there to warn travelers of the turn in the road. Plaintiff claims it was defective and was rotted and decayed in portions and would not support the weight of the automobile which was driven against it. There was a dispute in the testimony as to the condition of the fence, but it is conceded that at the time of the accident it was standing in proper place and position as a guide and warning to travelers, and that it was plainly seen by the driver of the automobile in which plaintiff was riding. The defendant insists that no negligence on its part was shown, and that the cause of the accident was the negligence of the driver of the car which undisputedly is imputed under the circumstances to the plaintiff. This view of the case was taken by the trial judge, who, after he had submitted the case to the jury, recalled them and directed a verdict in favor of the defendant, from which verdict plaintiff appeals.
The defendant is responsiblé for the condition of the road and the bridge over its tracks, and it is bound to keep them in a reasonably safe condition for travel. It was bound in this instance to erect a fence or barrier at the turn of the road on the approach to the bridge to warn travelers along the highway of its dangers, but it was not bound to erect a barrier that would withstand the impact of an automobile. Gerrie v. City of Port Huron, 226 Mich. 630; Babbitt, Law of Motor Vehicles (3d Ed.), § 414; Long v. Township of Weare, 195 Mich. 706. If such barriers were required to stop automobiles, driven at a high rate or low rate of speed, nothing short of a concrete wall would suffice. Such a barrier is not necessary, and plaintiff cannot complain that the fence would not support the automobile which was driven against it.
Counsel for plaintiff assert that the leading case in Michigan which is authority for submission of the instant case to the jury to determine as a question of fact the negligence of the defendant, is Gage v. Railroad Co., 105 Mich. 335. In this case a single horse attached to a sleigh was being driven onto the approach of a bridge; it made a sudden shy to the right, stumbled and slipped and went over the embankment and injured plaintiff. There were no railings of any kind, and the question was left to the jury to determine whether such absence of railings constituted a defect in the road that would render defendant liable, and whether it was the proximate cause of the injury. In the instant case there was a barrier which was a guide and a warning to drivers of automobiles approaching the bridge from this direction. But counsel for plaintiff in their brief contend:
“In other words, the railing should have been of sufficient' strength and resistance under these circumstances to have supported the car and prevented it from falling over the embankment.”
And again in their brief counsel say:
“We do not contend that a railing should be strong enough to stop a car going at full speed straight into the railing, but we do submit that where the car of the plaintiff was on the east side of the bridge, due to the negligence of the defendant in maintaining a dangerous approach and narrow bridge, that under these circumstances they should maintain a rail strong enough to support a car being driven at a reasonable rate of speed and which finds itself by reason thereof thrown against said railing.”
This cannot be laid down as a rule, but, as we have pointed out, there was no obligation upon the part of the defendant to construct this fence so rigidly as to withstand the shock of an automobile driven against it, and it was not so intended.
Counsel for plaintiff also claim that Minkley v. Township of Springwells, 113 Mich. 347, is authority for sustaining their position in the instant case. In this case the highway was out of repair, in that the planks were loose and flew up and scared the horse which shied against the railing which gave way. There the roadbed, for which defendant was also responsible, was out of repair, and the court held the defendant liable if the jury found such in fact was its condition.
In the case at bar there was no defect in the traveled portion of the road. It was a gravel road over which there was much travel, in fact it was the main traveled highway between Flint and Lapeer. At the point where the accident occurred the road was 14 feet, 10 inches wide; there were no holes or other defects in it that caused the driver of the automobile to run against the fence. To get onto the bridge he had to make a rather short turn to the left. Signs along the road, one of which at least he observed, warned him of the curve. He says he realized he must make the turn as he approached it and mentioned the fact to those in the car with him. He failed to completely turn onto the bridge and ran against the fence. The injury was caused by the negligence of the driver rather than that of the defendant.
“Upon approaching an intersecting highway, a bridge, dam, sharp curve or steep descent, and also in traversing such intersecting highways, bridge, dam, curve or descent, a person operating a motor vehicle shall have it under control and operate it at such speed as is reasonable and proper, having regard to the traffic then on such highway and the safety of the public.” Act No. 368, Pub. Acts 1921, § 21 (Comp. Laws Supp. 1922, § 4817).
While this statute is intended for the protection of others, it also has application to the driver for his own safety.
The court was right in directing a verdict on the grounds that “there is no negligence shown by the testimony against the defendant, and that the plaintiff was guilty of contributory negligence.”
Assignments. of error as to the rejection of testimony offered by the plaintiff need not be discussed as its admission would not establish negligence on the part of defendant or want of contributory negligence on the part of the driver.
Judgment is affirmed.
Bird, C. J., and Sharpe, Steere, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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McDonald, J.
The plaintiff recovered a judgment of $2,811.55 for money deposited with the defendant for transmission to a foreign bank. The defendant brings error.
In addition to the common counts the declaration alleges:
“That heretofore, to wit, on the 8th of September, 1919, and on the 15th of September, 1919, the said defendant received from the plaintiff at its Russell street branch, the sum of twenty-one hundred and forty-five ($2,145) dollars, which said sum of $2,145 was to be transmitted by the defendant to Hungary and to Jugo-Slavia for credit to the account of the plaintiff and the passbook to be returned to the plaintiff. That the said defendant failed and neglected to transmit the said money as agreed by it and that the said money was never transmitted in accordance with the agreement on the part of the defendant.”
The transaction between the parties is evidenced by the following writing:
“City of Detroit, Mich. Date Sept. 8, 1919. No. 215263.
Received from Ivan Vasu, 842 Franklin St.
Twelve hundred................Dollars. $1,200.00 the equivalent of which foreign Sixty Thousand amount
Kronen to be remitted to: Banca Victoria
Address: Arad, Hungary
For Credit to Ivan Vasu’s Account
Passbook to be Returned to Us.
The delivery of this amount will be subject to the rules and regulations of the foreign Post Offices in question. Claims should be made not later than four months from date.
“People’s State Bank
Russell St. Branch Ratz
Indorsed on back ‘Fate Inquired No. 3, 1920, Traced Mar. 29, 1920.’ ”
A similar receipt was given on September 15, 1919, showing the deposit of $945 with the defendant for transmission to Temesvar, Banat, Jugo-Slavia. It is claimed by the plaintiff that on both occasions he was told by the teller of the bank that if the passbooks were not received in two or three months, the defendant would return the money. On the trial the defendant offered no testimony, but at the close of plaintiff’s case requested the court for a directed verdict for reasons which we will presently consider. The request was denied, and the issues submitted to the jury, resulting in a verdict for the plaintiff.
The record presents the following questions:
Did the court err in refusing to strike out the plaintiff’s testimony as to the alleged oral agreement, that if the passbooks were not received in two or three months the defendant would return the $2,145? We are convinced that evidence of the oral agreement should not have been submitted to the jury. The writing showing the transaction between the parties is something more than a receipt. It is a contract to transmit money to a foreign bank. The question is controlled by Karnov v. Goldman, 229 Mich. 551. The court erred in allowing the jury to consider this evidence and for this, error the judgment must be reversed.
Should the court have directed a verdict for the defendant? It is contended by the defendant that in any event the court should have directed a verdict as to the $945, because of plaintiff’s admission that a passbook for that amount had been tendered to him by the bank. When asked if the bank did not tender him a passbook showing the deposit of $945, which was to be transmitted to Temesvar, the plaintiff testified:
“They offer me a book, but it isn’t sent that place over there. It isn’t my name on that book.” ■
. If the bank had any such book it is strange that it was not produced in court. It would have settled the question. It would have shown conclusively that the $945 had been transmitted according to its agreement. Instead of producing the book, if it had one, the defendant was content to rely on what it claims was an admission of the plaintiff. If the book which was tendered to the plaintiff showed that the money was not deposited in his name, or in that place designated in the agreement, it was not such a book as the plaintiff was required to accept. The plaintiff made no admission that would have justified the court in directing a verdict for the defendant as to the $945.
In regard to the other reasons advanced for the direction of a verdict, the claims presented by counsel for the defendant in their brief have been considered. It is not necessary to discuss them because the same questions were before this court in Cechanowicz v. Highland Park State Bank, 224 Mich. 37, and were there disposed of adversely to the contention here. The court did not err in refusing the defendant’s ‘request for a directed verdict.
But for the error in refusing to strike out the testimony as to an oral agreement to return the money, the judgment is reversed, with costs to the defendant.
Bird, C. J., and Sharpe, Snow, Steere, Fellows, Wiest, and Clark, JJ., concurred. | [
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Steere, J.
Plaintiff is a corporation engaged in the lumber business in the city of Detroit and vicinity. It filed this bill to foreclose a lien upon a house and 40-foot lot known as 37 Van Dyke place, located in a subdivision of the Van Dyke farm near Detroit. The fee title to the property was held by one or both of defendants George and Flora Letterman, but defendants Harry G. Bevington and his wife, Charlotte M. Bevington, held the property as joint purchasers under a land contract and are the active defendants in this proceeding. They desired to remodel the house on these premises and Mrs. Bevington had, amongst others, a building contractor named Flinn look over the building with her and pointed out to him the work desired done, requesting him to submit figures to herself and husband, which he did, and a contract was made with him to do the work. A written contract was drawn up providing at length the details of the remodeling, involving in various particulars reconstruction and additions. The contract price for this undertaking was $5,800, including work and material. Who prepared the instrument is in dispute. ' It is typewritten and signed by J. L. Flinn and Harry G. Bevington. The introductory paragraph recites that it is made between J. L. Flinn of Detroit, party of the first part, and “Dr. H. G. Bevington and Charlotte M. Bevington of the same place, party of the second part.” Mrs. Bevington is not otherwise mentioned in the instrument aiid did not sign it. The contractee is thereafter referred to as “party of the second part.” It is undated, but the testimony indicates it was executed before work was begun, some time between May 15th and June 22, 1920.
Flinn timely entered upon performance of his contract and procured his material for the woodwork from plaintiff. Its first delivery was on June 22,1920, and the last on October 2, 1920. Mrs. Bevington made no payments on this contract and is not shown to have any independent estate. As the work progressed Flinn from time to time obtained payments on his contract from Dr. Bevington, aggregating $4,850, claiming he needed the money to buy material and go on with the work, but in that connection furnished him no sworn statements under the statute. He finally failed to complete his contract and defaulted in payments for material. Plaintiff timely filed a lien on the premises for a balance due for material furnished, amounting to $2,966.48.
It was shown that the property in question was being remodeled as their home by Dr. Bevington and his wife, and was held by them as vendees under an executory contract of purchase as joint tenants by entireties. The issue raised by defendants’ counsel was not directed against the regularity of the lien proceedings as such, but to whether any lien could attach when the written contract pursuant to which the improvements were made was not signed by the wife. At conclusion of the proofs the court dismissed plaintiff’s bill under the following provision of the lien law (3 Comp. Laws 1915, § 14797):
“Section 2. In case the title to such lands upon which _ improvements are made is held by husband and wife jointly, or in case the lands upon which such improvements are made are held and occupied as a homestead, the lien given by this act shall attach to such lands and improvements if the improvements be made in pursuance of a contract in writing signed by both the husband and wife.”
No mention is made in plaintiff’s brief of the various decisions of this court in which that question is discussed, but it is chiefly devoted to Mrs. Bevington’s active participation in what was being said and done in connection with this contract, and the equity of plaintiff’s claim. The husband and wife were remodeling and modernizing their home. Her interest and active participation, proprietary claims and dictation as to what should be done, and how, may be conceded. To these the doctor seems to have discreetly deferred,, but he signed the contract and paid the bills, to the-, extent they were paid. She paid nothing and did not. sign the contract. Those matters and the equities: in the case, which both sides claim, are foreign to the controlling question of attachment of the lien.
It has been often and consistently held that this statutory provision for a lien is in derogation of the common law and to be strictly construed in passing upon the attachment of a lien. That rule is reiterated in Burman v. Ewald, 192 Mich. 293, cited by the trial court in dismissing plaintiff’s bill. The court there said:
“It is apparent that the statutory requirement for the signatures of both husband and wife to the contract, where the property is held by the entirety, must be_ satisfied before the lien can attach, and that up to this point a strict compliance with the statute is required under all the authorities;” citing McMillan v. Schneider, 147 Mich. 258; Bauer v. Long, 147 Mich. 351 (11 Ann. Cas. 86, 118 Am. St. Rep. 552); Frolich v. Blackstock, 155 Mich. 604; Restrick Lumber Co. v. Wyrembolski, 164 Mich. 71; Sheldon, Kamm & Co. v. Bremer, 166 Mich. 578.
Analogous here on the state of the title it was held in the Frolich Case (quoting from the syllabus) :
“A mechanic’s lien cannot be created against land, or the building erected thereon, held by husband and wife bjr executory contract, as tenants by the entire-ties, for materials furnished under a building contract made by defendant in which the wife did not join.”
The decree is affirmed, with costs to defendants.
Bird, C. J., and Sharpe, Fellows, Clark, and McDonald, JJ., concurred. Wiest, J., did not sit.
Justice Moore took no part in this decision. | [
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Snow, J.
About 9:30 o’clock in the nighttime of July 7, 1922, the plaintiff’s Ford sedan, while being driven by him, was struck and demolished by a train of the defendant .backing along its tracks across Chippewa avenue, in the city of Manistique. Plaintiff brought an action against the defendant to recover for this damage and was awarded a verdict for $690. Defendant has appealed.
Chippewa avenue is a public street on the west side of the city and runs north and south, and is intersected by Elk street, which runs east and west. Defendant’s railroad track intersects Chippewa avenue at a point about 184 feet from the south line of Elk street, and between it and Elk street are three switch tracks of the Soo Line Railway, the southerly one being 120 feet north of defendant’s track. On Élk street west of Chippewa avenue and north of defendant’s track are a number of houses, and the track comes from the north between the third and fourth houses and angles to the south and east where it crosses Chippewa avenue in a slightly southeasterly direction. In the daytime a person standing in Chippewa avenue 50 feet north of the track can see along it to the west 140.3 feet, while one standing 25 feet north of the track can see a distance of 300 feet.
Plaintiff was driving south. The night was very dark, and he was not familiar with the street. He testified he was going about 15 miles an hour when he struck the first switch track; that he then slowed down to about 12 miles an hour, and passed over the others. When he first saw defendant’s track by his headlights showing up the rails, he was about 25 or 30 feet from it, and slowed down to 5 or 8 miles an hour. He says he had his car under control and could stop it in 4 or 5 feet; that he looked both ways and saw no train; that he drove toward and onto the track and kept looking all the time to see if a train were coming; that he drove on the track while still looking and saw no train. There was no light on the rear of the train, the front approaching car, and there was no man stationed on the first car. Plaintiff was corroborated by others who were in the car. His wife sat beside him in the front seat and she testified that she saw the defendant’s tracks when from 20 to 25 feet away; that she could see to the west and that she looked to the west and ahead as well; that she did not see any train coming from the west; that she was looking to see if a train was coming right up to the point when they reached the track, and that she saw none. Mrs. Gould, who was sitting on the back seat of the car testified that plaintiff was driving slowly and that she saw no train.
At the close of plaintiff’s case the defendant moved for a directed verdict on the grounds that there had been no negligence shown, and that undisputedly plaintiff had been guilty of contributory negligence barring his recovery. This motion was overruled and the court later submitted the case to the jury, leaving for its consideration only the question as to whether or not the train had a man with a lighted lantern on the head car when it came to the crossing. Defendant now insists its motion should have been granted and claims that the testimony of plaintiff upon the question of the negligence of the defendant in failing to have a man and a light upon the head end of the first car of the train is purely negative, and made no issue for a jury upon the question of negligence. It is conceded that defendant’s train in backing over this street crossing in the nighttime should have been guarded in some manner at its rear, and the defendant claims that it was guarded by a lighted lantern held by one of the brakemen on the head of the first car approaching the crossing. This made a clear question of fact for the jury. The testimony of plaintiff cannot be said to be negative. He slackened his speed to a reasonable rate, and he looked both ways before, and was still looking, when he drove upon the track. He says positively that there was no light, and that he saw no train. Assuming he was telling the truth, he could do no more than he did do to ascertain if a train were approaching.
It must be borne in mind that it was a very dark night, and while there was no obstruction to his view along the track, still he could not have seen the train if it were unlighted, and it is equally true that had there been a light on the train, as there should have been, he would have seen it. These facts are not similar to the facts in those cases where the view was unobstructed by darkness or by objects, and where it was physically impossible to have looked and not have seen the approaching train. Plaintiff’s wife also gave positive testimony that she looked continuously until they were upon the tracks, and that she saw no train. Both plaintiff and his wife did everything possible by way of looking to inform themselves as to the approach of a train, and their testimony is positive when they state they saw no train and no light. Neither did they hear the approach of a train. The mind of plaintiff was intent upon ascertaining if a train were approaching on the defendant’s track. If he slackened his speed and looked for the train or the warning light repeatedly, as he says he did, he must have also used his sense of hearing to assist him in determining the existing condition of affairs.
The instant case falls within the line of authorities discussed by Mr. Justice Fellows in Lambert v. Railway Co., 209 Mich. 107, which holds the evidence sufficient to make a case for the jury. This plaintiff claims he looked most carefully, and his mind and attention were upon the crossing. The negligence of the defendant as well as his contributory negligence were questions of fact, and the court clearly and properly submitted them to the jury. Mills v. Waters, 198 Mich. 637.
Other assignments of error are raised by the defendant, and counsel in their brief insist that while they are not discussed they are not abandoned. We have examined them and find that for the most part they merge in those here discussed. ■ Those complaining of the court’s instructions have been examined, and under the holdings here, we find the court properly instructed the jury. Judgment is affirmed, with costs to plaintiff.
Bird, C. J., and Sharpe, Steere, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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Boyles, J.
The only question here for decision is whether the jurors were coerced by the court into rendering a verdict, as a result of which a new trial should he granted.
This is a damage suit arising out of a collision between two automobiles, As usual, the essential issues of fact submitted to the jury were whether the defendant was guilty of negligence and, if so, whether plaintiff Chester A. Decker was guilty of contributory negligence. Testimony was received from witnesses for each of the parties, the conflicting testimony disclosed the usual sharp issues of fact, and the casB was submitted to the jury after lengthy instructions from the court, concerning which no complaint is made.
The case was given to the jury on a Thursday morning. Later in the same day the jury asked for and received permission to confer with the court. In court the foreman said to the judge, among other things:
“We can’t agree exactly on who contributed the negligence or whether they both did. * * * We are in general disagreement — that is about all.”
The coui$ asked how the jury stood and was told that' they (the jurors) thought the defendant was guilty of negligence but nine claimed that the plaintiff driver was guilty of contributory negligence and were for ‘ ‘ no cause for action. ’ ’ After a lengthy discussion between court and jury concerning credibility of witnesses, the discrediting of testimony, the degree of care that a prudent driver must use, and the duty of a driver in a sudden emergency, the court told the jury it could recess until 9:30 the next (Friday) morning when he would have the court stenographer read the conflicting testimony on certain questions raised. The court said: ‘
“It will take another jury if you can’t agree. It will take another jury three or four days to arrive at the same place you are at now, and I would rather you come back in the morning at 9:30 and attempt to agree upon it.”
At 9: 30 Friday morning the jury came into court, parts of the testimony were read by the stenographer, and a further discussion ensued between court and jurors which concluded as follows:
“The Court: I think you should go back to the jury room and consider this testimony — and unless you are able to agree that Mr. Decker was free from negligence, then you can’t bring in a verdict for him.
“The Foreman: Nine of us feel he was guilty of contributory negligence and three members of the jury think that he was a prudent driver and done the proper thing.
“The Court: Three to nine can’t bring in a verdict you know.
“The Foreman: We understand that.
“The Court: So what are you going to do? Are you going to dispose of it? Or are you going to leave the thing hanging so that we’ll have to try it again? I think I’ll ask you to go back to the jury ' room and talk the thing over.”
At 4:30 the same afternoon the jury requested opportunity of the court to ask further questions,were brought into court, and this occurred:
“The Court: Have you agreed upon a verdict?
“The Foreman: We have agreed to disagree.
“The Court: You can’t do that. That isn’t a verdict, you know.
“The Foreman: Well, some of the members, judge, wanted to come in and ask you some more questions.
“The Court: I am here, ready and willing to answer any that I can.
“The Foreman: At present we stand five to seven in favor of no cause.
“The Court: Seven for no cause and five disagreeing with you?
“The Foreman: I don’t know just liow you would say it — but we seem to be deadlocked. The seven don’t feel they should hardly change their convictions, and the five say they’ll never give up, and there you are. Just what are you going to do?
“The Court: There must be either five or seven contrary people on this jury. I hate to spend another four days on the trial of this case.”
Then, after considerable further colloquy between the court and jurors, the court said:
“Well, what are you going to do? I don’t know what to do with you. We had a jury that got started this way about a year ago. They hung on each case that they tried — couldn’t decide a case. I don’t say this jury will do that. We have got cases to be tried in this court and we don’t want anybody to hang on them and it is a bad thing to get in the habit of hanging — of thinking you don’t have to inquire into what the other party thinks about the-case. If I were on a jury and voted according to the dictates of my conscience and all the rest did. and it stood eleven to my one, that would upset me quite a little and I would wonder if I was the one that was wrong. I would consider the thing again in order to' determine whether I was wrong. You should work just as hard to see if you are occupying the wrong position as to see if you are occupying the right position. Argue it out with the other party to see where you really belong and what you can do. It takes a unanimous verdict of a jury in order to come to a verdict — a unanimous agreement of the jury.”
This was followed by further discussion during which the court continued to refer to the facts of the case, and then sent the jurors back to the jury room to “take another ballot and see if you can arrive at a verdict.” Later the jury again “reas s emble d” in the courtroom (Friday afternoon) where the following occurred:
“The Court: Any progress?
“The Foreman: We haven’t made a particle of progress. We have argued this thing over and over and the minority say they will never change.
“The Court: What does the majority say?
“The Foreman: Pretty near the same thing. Neither side will change their vote.
“The Court: Everybody ought to be ready to change his vote when he is convinced.
“The Foreman: They refuse to be convinced. We have had a lot of arguments.
“The Court: I am sorry this has taken place at this time. You people have to approach the subject right in order to get a verdict. You haven’t approached it with the right disposition. You are antagonistic. How do. men and women agree on a thing? They don’t take a position and say, ‘You never can convince me.’ That sort of person can’t be fit for jury service if he says that. You have to be convinced or yon can’t agree. There isn’t a jury in the world that will' all vote the same on the first ballot — unanimous. Therefore, you have to be in position to agree when you are convinced.
“You can come back in the morning at 9:30 and try again, but this will be bad advertising to the attorneys. I look to see cases go oyer the term pretty fast unless you do agree because attorneys can’t afford to spend the time and expense of trying cases before juries that will not arrive at verdicts. You have been here four days and tomorrow will be the fifth day of expense to the court for a jury and besides the length of time the attorneys have put in and the expense they have put in producing evidence. We can’t hardly afford in.this case to do it twice, so come back at 9:30 in the morning. ’ ’ ■
■ The next morning (Saturday) the jury reconvened and, after having had the case approximately two and one-half days, shortly returned into court a verdict of no cause for action. Judgment was entered accordingly. Motion for new trial on the ground that the verdict was the result of .coercion by the court was denied, and this appeal is from the order of denial.
Ordinarily the granting of a motion for new trial rests in the sound discretion of the trial court, and affirmance of a denial of such motion depends on whether prejudicial error was committed. This appeal is - directed at the acts of the trial judge who conducted the trial and also decided the motion for a new trial, and justice requires that we give consideration to the ground relied on for setting aside the order denying a new trial.
We have considered the many cases cited by counsel and decided by this court where the question now before us has been raised. Plainly each decision has been controlled by the facts and circumstances, the length of time of the deliberations, and mainly on what -was said in each case by the trial judge. , As was said in Zeitz v. Mara, 290 Mich. 161, 166, and repeated with approval in Gordon v. Samson, 294 Mich. 294, 297:
“Examination of the authorities shows that, when it is claimed1 that a jury has been coerced into returning a verdict, all of the facts and circumstances must be considered as .well as the particular language used by the trial judge. ’ ’
A statement made by the judge after only five hours of deliberation (Cook v. Vineyard, 291 Mich. 375) might not coerce a jury into arriving at a verdict, while a different result might follow when jurors had continued to adhere to individual convictions after two days of deliberation, as in the case before us. What may be said by the court as to their duty to try to agree then carries the inference that it is their duty to agree. Such is not the law.
“The law contemplates that they (the jurors) shall, by their discussions, harmonize their views if possible, but not that they shall compromise, divide and yield for the mere purpose of an agreement.” Goodsell v. Seeley, 46 Mich. 623, 628 (41 Am. Rep. 183).
“The rule as stated in 38 Cyc. p. 1762, is, we think, the only safe one to follow-:
“ ‘The court may impress upon the jury the propriety and importance of coming to an agreement, and harmonizing their views, state th'e reasons therefor and tell them it is their duty to try to agree; but should not give instructions having a tendency to coerce the jury into agreeing on a verdict. While the court may reasonably urge an agreement, its discretion does not extend to the limit of coercion.’
“See, also, Pierce v. Pierce, 38 Mich. 412; People v. Engle, 118 Mich. 287; People v. De Meaux, 194 Mich. 18.” People v. Strzempkowski, 211 Mich. 266, 268 ( 10 A. L. R. 420).
In People v. De Meaux, 194 Mich. 18, after the jurors had been out for some time, they returned into court and were advised by the court as follows (pp. 28, 29):
‘ ‘ The Court: When you are placed on the jury, it is your sworn duty to arrive at a verdict. In order to arrive at a verdict you have got to discuss the matter impartially and fairly without prejudice, but you must do what you can to arrive at a verdict. That is what you are here for. Is there any portion of the law that you do not understand? (Several jurors answer ‘No.’)
“The Court: If not, I will send you hack to your room with the instruction that you ought to arrive at a verdict.”
This was held to be reversible error and the verdict Avas set aside on appeal.
Under the circumstances shoAvn by the record before us we conclude that the statements of the court to the jury during the lengthy period of its deliberations resulted in coercing the jurors into agreeing on a verdict contrary to the individual convictions of some of the jurors. The plain purport of the statements made by the court to the jurors was that it was their duty to agree, and to arrive at a verdict.
The order appealed from is set aside and a new trial granted, with costs of this court to appellants.
Starr, C. J., and North, Wiest, Butzel, Bushnell, Sharpe, and Reid, JJ., concurred. | [
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Per Curiam.
These consolidated appeals arise out of plaintiffs’ claims of adverse employment actions. In Docket No. 279997, plaintiff John Bedo appeals by leave granted the trial court order granting defendant, city of Ecorse, summary disposition with regard to his claim under the Whistleblowers’ Frotection Act (WFA), MCL 15.361 et seq. In Docket No. 280693, defendant appeals as of right the jury verdict in favor of plaintiff Robert Shaw on his claims of age discrimination and breach of contract and the trial court’s order denying its motion for a new trial or remittitur. In Docket No. 279997, we reverse and remand for further proceedings. In Docket No. 280693, we affirm.
I. FACTUAL BACKGROUND
A. FACTS IN DOCKET NO. 279997
Bedo worked for the city of Ecorse Fire Department from 1973 to 2006. In the 1990s, he was promoted to fire captain, and in 2003 and 2004 he temporarily served as fire chief. In mid-2004, he returned to his position as fire captain. On June 9, 2006, Fire Chief Ronald French issued a command reducing the number of firefighters required to be on duty. Later that day, Bedo objected to the command in a department report, stating, “Per your Directive dated 6/9/06,1 believe both Mayor Salisbury and Interim Chief French [have] jeopardized our Citizens’ and Firefighters’ safety In the event of either the Citizens’, Firefighters’, or my injury or death, caused by these actions, I will hold you both responsible.”
On June 13, 2006, Bedo testified in a case initiated by former Fire Chief Ronald Lammers against defendant in which racial discrimination and breach of contract were alleged. Both Bedo and Fire Captain Arthur Andring were subpoenaed to testify on behalf of Lammers. On June 20,2006, the jury returned a verdict in favor of Lammers and awarded him $600,000. According to Bedo and Andring, immediately after the trial, Fire Chief French and the former president of the firefighters’ union told them that they were “in trouble” and that defendant would “go after them” because of their testimonies in the Lammers case.
On June 23, 2006, Mayor Larry Salisbury filed departmental charges against Bedo, including: (1) conduct unbecoming an officer; (2) insubordination; (3) failing to follow a chain of command; (4) dissuading firefighters from performing their duties; and (5) criticism/ridicule. Police Chief George Anthony conducted disciplinary hearings on the charges on June 30, 2006, July 6, 2006, and July 14, 2006. The evidence presented at the hearings focused on the department report Bedo had submitted to Fire Chief French, but a substantial portion of the evidence suggested that Bedo was responsible for the death of a firefighter in the early 1990s.
According to Bedo, he was “forced to retire” in late July 2006 because of the “stress created by the mayor’s actions after [he] testified for the Plaintiff against the City of Ecorse in [the] Lammers trial.” Defendant denied Bedo’s requests for a “cash out,” his pension, and to transfer pension plans. On July 21, 2006, Bedo filed suit against defendant, raising a claim under the WPA. Bedo claimed that defendant brought the departmental charges against him, subjected him to the disciplinary hearings, forced him to retire, and withheld his benefits because of his testimony at the Lammers trial.
On August 15, 2006, Police Chief Anthony submitted his findings to Mayor Salisbury. On the basis of the evidence presented at the disciplinary hearings, he upheld four out of the five charges filed against Bedo and issued this decision: “Captain John Bedo should not be assigned to any command or supervisors'- level position. I direct that Captain John Bedo be immediately demoted from the rank of captain to firefighter. In addition, I further direct that Captain Bedo undergo a physical and psychological examination to determine his continued fitness for duty.”
B. FACTS IN DOCKET NO. 280693
Shaw was born on March 18,1938. He worked for the city of Ecorse Police Department from 1968 to 2004. He became deputy chief in 1999. In 2001, when Shaw was 63 years old, defendant appointed him as police chief. In June 2004, John Clark, an attorney working on a contractual basis for defendant, sent a letter to Mayor Salisbury and the city council stating that under the city charter, “[a]ny Fireman or Policeman who attains the age of sixty (60) years shall be retired and pensioned as herein provided,” that pursuant to that provision, Shaw should be “considered retired effective immediately,” and that any further contractual relationship with Shaw would be in violation of the charter. Shaw responded to the letter, stating that he had no intention of retiring as police chief before August 2005 and that he disagreed with Clark’s reading of the charter. Shaw explained, “Mr. Clark’s opinion ignores the fact that you hired me [on a contractual basis] when I was over age 60.1 believe that I will have claims against the City if I am wrongfully removed from my position.”
On August 2, 2004, the city council voted to relieve Shaw of his duties as police chief. The resolution stated that pursuant to the city charter, Shaw had been serving on a month-to-month basis since November 2001 and that he served “at the pleasure of the Mayor and council.” Council members Brenda Banks, Nathaniel Elem, Gerald Strassner, and Arnold Lackey voted to remove Shaw. Councilwoman Julie Cox voted against removing him. Councilwoman Theresa Pegúese was not present for the vote.
Later on August 2, Shaw received a telephone call from a coworker informing him that the city council had voted to remove him from his position. At the time, Shaw was in Nebraska for his grandson’s brain surgery. More than two weeks later, on August 20, 2004, Shaw wrote the mayor and city council a letter, stating the following:
It has been brought to my attention that I have been removed from my position as Chief of Police with the city of Ecorse even though I have received no official written or verbal notice to this effect. If this is indeed the fact, I am hereby requesting that I begin receiving my retirement benefits immediately. Since it is not my choice to retire at this time, I make this request under protest.
Shaw subsequently requested “back pay,” a “cash out” of leave already accrued, and a pension plan transfer. Defendant offered at least two pension plans to its employees: the City Charter Pension Plan (Charter plan) and the MERS (Municipal Employees Retirement System) plan. Retirees were entitled to 65 percent of their final average compensation (FAC) under the Charter plan and 80 percent of their FAC under the MERS Plan, based on a 36-month period selected by the retiree. Shaw was a member of the Charter plan at the time of his retirement and requested to be transferred to the MERS plan. He believed he could make such a transfer under defendant’s agreement with the Police Officers Association of Michigan (the POAM contract). Defendant initially denied all of Shaw’s requests. In April 2005, several months after Shaw gave his notice of retirement, the board of trustees for the city retirement system adopted a resolution stating that Shaw was entitled to 50 percent of his FAC based on the period of its choosing. According to Shaw, he did not receive any pension benefits until May 2005.
C. PROCEDURAL HISTORY
In September 2005, Shaw filed suit against defendant, alleging age discrimination and breach of con tract, among other claims. In July 2006, Bedo was added to Shaw’s second amended complaint as a coplaintiff, raising his claim under the WPA. Thereafter, defendant moved for summary disposition of both plaintiffs’ claims. The trial court denied defendant’s motion with regard to Shaw’s claims, but reserved ruling on Bedo’s claims.
Shaw’s case proceeded to trial in June 2007. The jury returned a verdict in favor of Shaw. Defendant subsequently moved for a new trial or remittitur. The trial court denied the motion. In August 2007, the trial court heard additional oral arguments on defendant’s motion for summary disposition of Bedo’s claims and granted the motion.
II. BEDO’S WPA CLAIM
Bedo argues that the trial court erred in granting defendant summary disposition with regard to his WPA claim. We agree.
We review a trial court’s decision on a motion for summary disposition de novo on the basis of the entire record to determine if the moving party is entitled to judgment as a matter of law. Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). When reviewing a motion under MCR 2.116(C)(10), which tests the factual sufficiency of the complaint, we consider all the evidence submitted by the parties in the light most favorable to the nonmoving party. Maiden, supra at 120. Summary disposition should be granted only where the evidence fails to establish a genuine issue regarding any material fact. Id. The interpretation and application of a statute involve questions of law that this Court reviews de novo on appeal. Lincoln v Gen Motors Corp, 461 Mich 483, 489-490; 607 NW2d 73 (2000).
Bedo brought his whistleblower claim under MCL 15.362, which states:
An employer shall not discharge, threaten, or otherwise discriminate against an employee regarding the employee’s compensation, terms, conditions, location, or privileges of employment because the employee, or a person acting on behalf of the employee, reports or is about to report, verbally or in writing, a violation or a suspected violation of a law or regulation or rule promulgated pursuant to law of this state, a political subdivision of this state, or the United States to a public body, unless the employee knows that the report is false, or because an employee is requested by a public body to participate in an investigation, hearing, or inquiry held by that public body, or a court action.
“To establish a prima facie case under this statute, a plaintiff must show that (1) the plaintiff was engaged in protected activity as defined by the act, (2) the plaintiff was discharged or discriminated against, and (3) a causal connection exists between the protected activity and the discharge or adverse employment action.” West v Gen Motors Corp, 469 Mich 177, 183-184; 665 NW2d 468 (2003). If a plaintiff is successful in establishing a prima facie case under the WPA, the burden shifts to the defendant to establish a legitimate business reason for the adverse employment action. Roulston v Tendercare (Michigan), Inc, 239 Mich App 270, 280-281; 608 NW2d 525 (2000). Once the defendant produces such evidence, the plaintiff has the burden to establish that the employer’s proffered reasons were a mere pretext for the adverse employment action. Id. at 281.
In this case, the trial court found that Bedo failed to establish a prima facie case under the WPA because he was not engaged in protected activity. The trial court stated:
This case is a Whistleblower’s case or at least the one claim, and essentially the Whistleblower’s Act provides any employer-or an employer shall not discharge, threaten, or otherwise discriminate against an employee regarding the employee’s compensation, terms, conditions, locations, or privileges of employment because the employee or a person acting on behalf of the employee reports or is about to report verbally or in writing a violation or suspected violation of law or a regulation or rule promulgated pursuant to law of the state. And it says reporting should be to a public body or something like that and in a court.
And I really, as I read over Mr. Bedo’s testimony, he talked about a lot of political stuff, but I don’t really recall seeing him or reading that he reported some kind of violation of the law against that current administration ....
Well, I think the plaintiffs only cited [Henry v Detroit, 234 Mich App 405; 594 NW2d 107 (1999)] and I read that over, and [it] is a lot different from this particular case ....
So really in [Henry], you really do have some Whistle-blower activities that he testified to in a court proceeding —
And I really, frankly speaking, in reading over Bedo’s testimony during the trial don’t see that he did anything close to this in terms of Whistleblowing activity. And the issue in [Henry] seemed to surround what was a court proceeding under the statute as a case being a public body [sic] and that kind of thing.
I just don’t see the Whistleblower activity here on the part of Bedo. He came in, just testified to what was going on. I don’t think he clearly established any violation of the law or suspected violation of the law. And so for that reason, even though he was disciplined later, I just don’t see that there’s a prima facie case of Whistleblower activity, so I am accordingly going to grant the motion for summary disposition with regard to Mr. Bedo. And that’s the court’s ruling.
Conversely, Bedo argues that he was engaged in protected activity when he testified under subpoena at a court proceeding where defendant’s conduct was at issue. We agree. In Henry, supra, this Court interpreted and applied the language of MCL 15.362, stating, in part:
The plain language of the statute provides protection for two types of “whistleblowers”: (1) those who report, or are about to report, violations of law, regulation, or rule to a public body, and (2) those who are requested by a public body to participate in an investigation held by that public body or in a court action. See Chandler v Dowell Schlumberger, Inc, 214 Mich App 111, 125; 542 NW2d 310 (1995) (D.E. SHELTON, J., dissenting), aff'd 456 Mich 395; 572 NW2d 210 (1998); Ruga & Kopka, Wrongful Discharge and Employment Discrimination, § 2.24, p 50. On the basis of the plain language of the WPA, we interpret a type 1 whistleblower to be one who, on his own initiative, takes it upon himself to communicate the employer’s wrongful conduct to a public body in an attempt to bring the, as yet hidden, violation to light to remedy the situation or harm done by the violation. In other words, we see type 1 whistleblowers as initiators, as opposed to type 2 whistle-blowers who participate in a previously initiated investigation or hearing at the behest of a public body. If a plaintiff falls under either category, then that plaintiff is engaged in a “protected activity” for purposes of presenting a prima facie case. [Henry, supra at 409-410.]
“As indicated, a type 2 whistleblower is an employee who is ‘requested by a public body to participate in ... a court action.’ ” Id. at 412, quoting MCL 15.362. The WPA defines “public body” to include “[t]he judiciary and any member or employee of the judiciary.” MCL 15.361(d)(ci). The Henry Court found that an employee who provides deposition testimony under subpoena in a court action where his employer’s conduct is at issue meets the definition of a type 2 whistleblower. Henry, supra at 413. The Court explained:
In the case at bar, by giving a deposition in a civil case, plaintiff clearly participated in a ‘court action.’...
[Deposition testimony is part of the trial or discovery process in civil litigation and is governed by the Michigan Court Rules. See generally MCR 2.300.... MCR 2.305(A), entitled “Subpoena for Taking Deposition,” also provides that a party may subpoena another to give deposition testimony after suit has been commenced. A subpoena is a court-ordered command for the person to whom it is directed to attend and give testimony. MCR 2.306(3). Thus, a deponent who (a) is an employee of the entity whose conduct is at issue, (b) has provided testimony by a deposition and, thereby, has “participated in a court proceeding”, and (c) would be subject to a court-ordered subpoena to compel his attendance in any event, meets the definition of a type 2 whistleblower. Specifically, in the instant case, plaintiff... had no choice but to give deposition testimony in the Lessnau case. Consequently, we are constrained to conclude that providing testimony in Lessnau’s civil case, which involved both plaintiffs and Lessnau’s employer and was pending in a state circuit court, meets the requirements for a type 2 whistleblower who “is requested by a public body to participate in a.. . court action.” Indeed, as a deponent, plaintiffs attendance and testimony were compelled, which is certainly a higher standard than requested. We therefore find plaintiffs testimony to be an activity protected by the WPA. [Henry, supra at 412-413.]
Contrary to the trial court’s findings in this case and defendant’s argument on appeal, neither the plain language of MCL 15.362 nor this Court’s interpretation of the statute in Henry requires a type 2 whistleblower to report or testify regarding a violation or suspected violation of a law, regulation, or rule. Although the plaintiff in Henry did, in fact, testify regarding an alleged violation of departmental rules by the defendants, such testimony is not required to qualify a person as a type 2 whistleblower under MCL 15.362. The primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature, and the first criterion in determining intent is the specific language of the statute. USAA Ins Co v Houston Gen Ins Co, 220 Mich App 386, 389; 559 NW2d 98 (1996). Provisions not included in the statute by the Legislature should not be included by the courts. Polkton Charter Twp v Pellegrom, 265 Mich App 88, 103; 693 NW2d 170 (2005). The trial court clearly imposed on Bedo a requirement not included in MCL 15.362.
Recently, in Kimmelman v Heather Downs Mgt Ltd, 278 Mich App 569; 753 NW2d 265 (2008), this Court addressed whether the plain language of MCL 15.362 limits claims to those where the employee is reporting, about to report, or testifying about the conduct of his or her employer. In that case, an at-will employee had cooperated in the prosecution of a coowner of his employer for assaulting one of his coworkers after working hours. Id. at 571. The employee’s employment was terminated, and he sued his employer for allegedly retaliating against him for his cooperation in the criminal investigation. Id. at 572. Reading the plain and unambiguous language of MCL 15.362, this Court concluded that the “statute is not limited to violations by employers,” and stated, in part:
[T]he plain language of the statute is not limited to violations by employers. ... The language in the WPA is unambiguous: an employee need only be requested by a public body to participate in an investigation, hearing, inquiry, or court action (or, under the first part of the statute, report or be about to report a violation of law). There is absolutely nothing, express or implied, in the plain wording of the statute that limits its applicability to violations of law by the employer or to investigations involving the employer. [Kimmelman, supra at 574-575 (citations omitted; emphasis in original).]
Footnote 2 of Kimmelman states, in part:
The Legislature intended the WPA to serve a vitally important and far-reaching goal: protection of the public by protecting all employees who have knowledge that is relevant to the protection of the public from some abuse or violation of law and who, for whatever reason, might fear that their employers would not wish them to divulge that information or otherwise participate in a public investigation. The Legislature clearly intended to maximize employees’ involvement by removing as much doubt as possible regarding whether those employees will face negative consequences. Moreover, the Legislature clearly did not intend the WPA to protect the public only from violations of law or abuses by employers, but rather from violations of law or abuses in general. [Id. at 574 n 2 (emphasis in original).]
In this case, former Fire Chief Lammers filed suit against defendant for racial discrimination and breach of contract. Bedo was subpoenaed and testified on behalf of Lammers. In other words, Bedo testified under subpoena, i.e., at the request of a public body, at a court proceeding. Accordingly, we find that Bedo was engaged in activity protected by the WPA as a type 2 whistle-blower. Furthermore, although Bedo may not have testified about a specific violation of law, regulation, or rule committed by defendant, Lammers’s attorney stated in his affidavit that Bedo’s testimony directly contradicted that of several defense witnesses and substantiated many of Lammers’s claims. Bedo testified, among other things, that he heard city council members say that they wanted to “get rid of Lammers,” that the city council hired people for positions in the fire department who were not qualified for their positions, that both he and Lammers had been mistreated by the city council, and that he heard a city council member refer to the fire department as being “lily white.”
Defendant further argues that Bedo was not engaged in protected activity because his testimony did not relate to a matter of public concern. Defendant is correct that the underlying purpose of the WPA is the protection of the public. Henry, supra at 409. But, as this Court stated in Henry, “[t]he act meets this objective by protecting the whistleblowing employee and by removing barriers that may interdict employee efforts to report violations or suspected violations of the law. Without employees who are willing to risk adverse employment consequences as a result of whistleblowing activities, the public would remain unaware of large-scale and potentially dangerous abuses.” Id. (quotation marks and citations omitted). In this case, Bedo’s testimony helped bring to light discriminatory acts committed by city officials, a matter that is certainly of public concern. Cf. Id. at 413 n 1.
Alternatively, defendant argues that even if Bedo was engaged in protected activity, he failed to establish a causal connection between the protected activity and the adverse employment action. The trial court did not address this issue, and we conclude that a material question of fact exists with regard to causation.
A plaintiff may establish a causal connection through either direct evidence or indirect and circumstantial evidence. Direct evidence is that which, if believed, requires the conclusion that the plaintiffs protected activity was at least a motivating factor in the employer’s actions. Sniecinski v Blue Cross & Blue Shield, 469 Mich 124, 132-133; 666 NW2d 186 (2003). To establish causation using circumstantial evidence, the “circumstantial proof must facilitate reasonable inferences of causation, not mere speculation.” Skinner v Square D Co, 445 Mich 153, 164; 516 NW2d 475 (1994). Speculation or mere conjecture “is simply an explanation consistent with known facts or conditions, but not deducible from them as a reasonable inference.” Id. (quotation marks and citation omitted). In other words, the evidence presented will be sufficient to create a triable issue of fact if the jury could reasonably infer from the evidence that the employer’s actions were motivated by retaliation. See Taylor v Modern Engineering, Inc, 252 Mich App 655, 661; 653 NW2d 625 (2002).
In this case, Bedo claims that defendant brought departmental charges against him, subjected him to disciplinary hearings, forced his retirement, and withheld his retirement benefits because of his testimony at the Lammers trial. A jury returned a verdict in favor of Lammers on June 20, 2006. Three days later, on June 23, 2006, Mayor Salisbury filed the charges against Bedo. A temporal connection between protected activity and an adverse employment action does not, in and of itself, establish a causal connection, West, supra at 186, but it is evidence of causation, see, e.g., Henry, supra at 414. In addition to the “temporal connection,” Bedo presented evidence that immediately after the Lammers trial, both he and Andring were told by Fire Chief French and the former president of the firefighters’ union that they were “in trouble” and that defendant would “go after them” because of their testimonies. Bedo also presented evidence that defendant’s disciplinary actions against him were unusual. He presented the affidavit of union president Scott Douglas stating that the “mayor’s action in setting a hearing on John Bedo was unprecedented,” and that Bedo’s “response to the order that threatened the safety of firefighters was appropriate and certainly not something that should have provoked the response it did.” Bedo testified that to his knowledge, no other firefighter had ever been subjected to a “mayor’s hearing” or denied a request to “cash out.”
Defendant claims that disciplinary actions were taken against Bedo because of his June 9, 2006, departmental report about firefighter and citizen safety. Bedo claims that defendant’s response to his report was unprecedented and completely disproportionate, and that the report was a mere pretext for disciplining him. He claims that defendant’s actions were done in retaliation for his testimony at the Lammers trial and he presented circumstantial evidence in support of his claim. We find that the evidence presented by Bedo, viewed in the light most favorable to him, created a material question of fact regarding the cause of the adverse employment action.
In sum, we hold that Bedo engaged in activity protected under the WPA, that a material question of fact exists regarding causation, and therefore, that the trial court erred in granting defendant summary disposition.
III. SHAW’S AWARD OF NONECONOMIC DAMAGES
Defendant argues that the trial court abused its discretion by denying its motion for a new trial or remittitur of the jury’s award of noneconomic damages to Shaw. We disagree.
A new trial may be granted when excessive or inadequate damages apparently influenced by passion or prejudice were awarded or when the verdict was clearly or grossly inadequate or excessive. MCR 2.611(A)(1)(c), (d); MCL 600.6098(2)(b)(ic), (v); McManamon v Redford Charter Twp, 273 Mich App 131, 139; 730 NW2d 757 (2006). If, however, the reviewing court determines that the only trial error is the inadequacy or excessiveness of the verdict, it may deny a motion for a new trial on the condition that, within 14 days, the nonmoving party consent in writing to the entry of a judgment in the amount determined by the court to be the lowest or highest amount the evidence will support. MCR 2.611(E)(1); Burtka v Allied Integrated Diagnostic Services, Inc, 175 Mich App 777, 780; 438 NW2d 342 (1989); see also MCL 600.6098(2)(d).
In determining whether remittitur is appropriate, a trial court must decide whether the jury award was supported by the evidence. Diamond v Witherspoon, 265 Mich App 673, 693; 696 NW2d 770 (2005). This determination must be based on objective criteria relating to the actual conduct of the trial or the evidence presented, such as whether the award was influenced by bias or prejudice or whether the award was comparable to those in similar cases. Palenkas v Beaumont Hosp, 432 Mich 527, 532; 443 NW2d 354 (1989); Diamond, supra at 694. The power of remittitur should be exercised with restraint. Hines v Grand Trunk W R Co, 151 Mich App 585, 595; 391 NW2d 750 (1985). If the award falls reasonably within the range of the evidence and within the limits of what reasonable minds would deem just compensation, it should not be disturbed. Palenkas, supra at 532-533. A trial court’s decision regarding remittitur is reviewed for an abuse of discretion. Id. at 533. We review all the evidence in the light most favorable to the nonmoving party. Wiley v Henry Ford Cottage Hosp, 257 Mich App 488, 499; 668 NW2d 402 (2003).
In this case, the jury awarded Shaw $1.5 million in past noneconomic damages and $250,000 in future noneconomic damages. In denying defendant’s request for remittitur, the trial court stated that there was considerable evidence presented at trial about the emotional damage Shaw suffered as a result of being relieved of his duties and that, considering the evidence presented, the court could not conclude that the award was excessive. On appeal, defendant does not assert that any improper methods were used at trial and admits that Shaw suffered at least some mental anguish and humiliation as a result of its actions. Nonetheless, defendant argues that the amount of the jury’s award was unsupported by the evidence. We disagree.
Shaw testified that he felt embarrassed, humiliated, and betrayed by defendant’s actions. Shaw’s wife, Maureen Garza-Shaw, testified that before he was removed from his position as police chief, Shaw “lived and breathed” his job, was extremely active in the community, and loved Red Wings hockey, bowling, and other sports. When Shaw first learned that he had been removed, he and Maureen were in a hospital in Nebraska where their grandson had just undergone brain surgery. Shaw slid against the wall, hit the floor, and said, “They just fired me.” Thereafter, Shaw became depressed, withdrawn, and lost interest in almost everything, including sports and family activities. Shaw’s stepdaughter, Debra Petraska, similarly testified that Shaw loved his job and never complained about it. After he was removed from his position, Shaw became abnormally quiet, withdrawn, and depressed. He refused to participate in many of the things he previously enjoyed, such as traveling, watching sports, playing on his bowling league, community events, and even family barbecues.
Dr. Gerald Shiener performed a clinical psychiatric examination of Shaw and testified on his behalf. The doctor testified that after his removal, Shaw felt frus trated, embarrassed, and irritable. Shaw felt that his reputation in the community had been ruined, suffered sleeplessness, loss of appetite and sex drive, had bowel problems, and could not enjoy any of his previous activities. Dr. Shiener determined that Shaw was not fit for duty, diagnosed him with depression with features of posttraumatic stress disorder, and recommended that he undergo counseling.
Although Dr. Jeffrey Kezlarian’s testimony suggested that Shaw was not depressed and suffered very little emotional damage from defendant’s actions, with the exception of some initial embarrassment, the testimony of Shaw, his wife, his stepdaughter, and Dr. Shiener suggested otherwise. Considering that Shaw was removed from his office as police chief when he was 66 years old, after serving on the city police department almost his entire career, with little warning or explanation and while his grandson was having brain surgery, and that he suffered through months of defendant’s refusal to pay his retirement benefits, we hold that the jury’s award of noneconomic damages for mental and emotional harm was supported by the evidence.
Defendant further argues that the amount of noneconomic damages awarded in this case far exceeds the amounts awarded in comparable cases. Defendant listed nine cases that it claims are comparable to this case. However, most of defendant’s examples are deficient. In the first case defendant cites, Wilson v Gen Motors Corp, 183 Mich App 21, 40; 454 NW2d 405 (1990), this Court held that the trial court did not abuse its discretion in reducing the jury’s award of $750,000 for mental anguish to $375,000. But, the Court specifically stated that the plaintiff had only presented evidence of her own subjective feelings and that the amount of the award stemmed from the jury’s desire to punish the defendant. Id. Also of note is the fact that Wilson is a 1990 case. In another case cited by defendant, Clopp v Atlantic Co, 2002 US Dist LEXIS 18898, an unpublished opinion of the United States District Court for the District of New Jersey, issued October 7, 2002 (Docket No. 00-1103), the court remitted the damages awarded from $300,000 to $75,000, but specifically noted that the plaintiffs did not suffer loss of employment and that some of the emotional distress indicated in testimony could not be attributed to the defendants. Moreover, the final five cases cited by defendant, with awards ranging from $17,825 to $250,000, are trial court judgments that provide absolutely no explanation for the amount of damages awarded.
Shaw also listed several “comparable” cases in his brief on appeal. In Diamond, supra, and Olsen v Toyota Technical Ctr, unpublished opinion per curiam of the Court of Appeals, issued December 27, 2002 (Docket No. 229543), this Court affirmed the trial court’s decisions to deny remittitur. The Court upheld a jury award of $2,625,000 to the three plaintiffs in Diamond for depression and anxiety, and an award of $5 million to the plaintiff in Olsen for emotional distress. Like the final five cases cited by defendant, the two trial court judgments cited by Shaw, with awards of over $2 million, offer no explanation for the amount of the awards.
Given the wide range of awards in the cases cited by the parties and the evidence Shaw presented at trial regarding the emotional and mental anguish he suffered because of defendant’s actions, we hold that the trial court properly denied defendant’s request for remittitur. Defendant argues that the noneconomic damages awarded Shaw were so extreme that they were meant to be punitive or exemplary. But, because the evidence presented at trial supported the amount of the jury’s award, defendant cannot establish that the award was meant as punishment. The trial court, having heard the testimony and seen the evidence as well as the jury’s reactions, was in the best position to evaluate the credibility of the evidence and make an informed decision, and we afford its decision due deference. Palenkas, supra at 534.
IV SHAW’S AWARD OF PENSION BENEFITS
Defendant next argues that we should remand for remittitur of the jury’s award of pension benefits, because the jury wrongfully concluded that Shaw was entitled to transfer to the MERS plan and receive 80 percent of his FAC. We disagree.
At trial, Shaw presented evidence about two of the pension plans available to defendant’s employees: the MERS plan and the Charter plan. During closing arguments, Shaw’s attorney argued that Shaw was entitled to transfer to the MERS plan under § 53.18 of the POAM contract, even after he had retired, and that as a member of the MERS plan, he would be entitled to 80 percent of his FAC. A copy of the POAM contract was provided for the jury’s review. When the jury returned its verdict, the foreperson specifically stated that the jury determined that Shaw was entitled to 80 percent of his FAC and calculated his award of pension benefits accordingly.
Defendant now asserts that Shaw could not transfer to the MERS plan after he had retired under a proper interpretation of the POAM contract and he was therefore entitled to 65 percent of his FAC. At trial, defendant argued that Shaw was entitled to only 50 percent of his FAC, and failed to raise any argument about the proper interpretation of the POAM contract. Nor did defendant raise the argument in its motion for a new trial or remittitur. Therefore, this issue is unpreserved for appellate review. Peña v Ingham Co Rd Comm, 255 Mich App 299, 315-316; 660 NW2d 351 (2003). Further, any challenge to the sufficiency of the evidence in a civil case is waived by a party’s failure to raise the issue in a timely motion at trial. Napier v Jacobs, 429 Mich 222, 238; 414 NW2d 862 (1987). By failing to challenge the sufficiency of the evidence regarding the pension benefits awarded in its motion for a new trial or remittitur, defendant has effectively waived the issue. Nonetheless, we will briefly address the merits of the claim.
If a contract’s language is clear, its construction is a question of law that is subject to review de novo. Archambo v Lawyers Title Ins Corp, 466 Mich 402, 408; 646 NW2d 170 (2002). But interpretation of an ambiguous contract is a question of fact that must be decided by a jury. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 469; 663 NW2d 447 (2003). A contract is ambiguous if the words may reasonably be understood in different ways or the provisions irreconcilably conflict with each other. Id. at 467.
At trial, the parties stipulated that Shaw was a third-party beneficiary of the POAM contract. Section 53.18 of the contract provides: “Employees may elect to transfer to MERS Pension Plan B-3 . .. and earn benefits accordingly under that plan, as modified herein, and have all past employee contributions to the Ecorse Police & Fire pension plan refunded to employees by the Ecorse Police & Fire Pension System.”
Defendant asserts that § 53.18 does not apply to Shaw because he was not a current or active employee when he attempted a pension plan transfer. On the other hand, Shaw asserts that the meaning of the term “employees” in § 53.18 is ambiguous and the proper interpretation of the term was for the jury to decide. We agree with Shaw. As Shaw has pointed out, throughout the POAM contract, the term “employees” is used in a general sense, encompassing all employees-both active and retired. For example, § 53.26(H) of the contract states that in order to modify an MERS Plan, the employee “must be an active employee as of the date of the window” for modifications. Although § 53.26(H) is not at issue in this case, it demonstrates that the drafter of the POAM contract used phrases such as “active employee” when a section of the contract was intended to apply only to certain employees. Likewise, § 53.27 of the contract refers to benefits for both “transferred active employees” and “transferred retired employees,” indicating that the drafter of the contract used modifiers such as “active” and “retired” to differentiate between different types of employees. Thus, the term “employees” in § 53.18, standing alone without a modifier, could be interpreted to mean either an active employee or a retired employee, or both. Because the term is equally susceptible to more than one meaning, its meaning is ambiguous and is for the jury to determine. Klapp, supra at 470.
Further, we note that § 53.18 makes no reference to a specific time frame for transferring pension plans. Other sections of the contract include references to a time frame, such as § 53.14(B), which states that “Before the effective date of the member’s retirement or conversion from a disability retirement. . . , but not thereafter, a member may elect to receive his or her benefit. . ..” The drafter of the contract did not include such a provision in the section at issue.
Although it seems a bit unusual that an employee would be permitted to transfer pension plans after retirement, “ambiguities are to be construed against the drafter of the contract.” Klapp, supra at 470. We conclude that the meaning of the term “employees” in § 53.18 was a question properly submitted to the jury and that the jury’s interpretation of the term was reasonable in light of the evidence presented. Remittitur of the jury’s award of pension benefits is not warranted.
V ADMISSION OF TESTIMONY ABOUT THE DEPUTY CHIEF POSITION
Finally, defendant argues that the trial court abused its discretion in admitting the testimonies of James Francisco and Willie Tolbert, Jr., about the deputy chief position because they were irrelevant and unfairly prejudicial. Again, we disagree.
At trial, Francisco testified that in the summer of 2004, he applied for the deputy chief position in the city of Ecorse Police Department. He underwent a series of oral interviews in late July 2004, conducted by three separate groups. The first group consisted of three city council members, including Cox and Elem. Before the interview started, Cox asked Francisco how old he was. When Francisco said that he was 60 years old, Elem stood up and said, “You’re too old for the job, you’ll just be wasting our time.” According to Francisco, Elem left the room to obtain legal advice and, when he returned, said, “We’ll go ahead and interview you, but I don’t think it’ll do any good.” During the interview, Cox said, “It’s too bad you’re not 59.” Francisco was not selected for the position. Tolbert testified that he also applied for the deputy chief position, but was never interviewed. When Tolbert questioned Elem about the interviews, Elem said that Tolbert was “too old” and gave him a copy of the city charter provision stating that policemen must be less than 60 years old. At the time, Tolbert was 63 years old.
Defendant argues that Elem’s statements to Francisco and Tolbert that they were too old for the deputy chief position were irrelevant and unfairly prejudicial. We review preserved challenges to the admission or exclusion of evidence for an abuse of discretion. Elezovic v Ford Motor Co, 472 Mich 408, 419; 697 NW2d 851 (2005). Statements that are made outside the immediate adverse action context, generally referred to as “stray remarks,” and that the plaintiff alleges to be direct evidence of bias, must be examined for relevancy using the following four factors: “(1) Were the disputed remarks made by the decisionmaker or by an agent of the employer uninvolved in the challenged decision? (2) Were the disputed remarks isolated or part of a pattern of biased comments? (3) Were the disputed remarks made close in time or remote from the challenged decision? (4) Were the disputed remarks ambiguous or clearly reflective of discriminatory bias?” Krohn v Sedgwick James of Michigan, Inc, 244 Mich App 289, 292; 624 NW2d 212 (2001). If the “stray remarks” are determined to be relevant, their probative value must be weighed against the risk of unfair prejudice. Id. at 302-303; MRE 403.
Elem’s statements about Francisco and Tolbert’s ages were relevant to establishing that age was a determining factor in Shaw’s removal as police chief. To prevail on a claim of age discrimination, a plaintiff must establish that age was a determining factor in the adverse employment action. Meagher v Wayne State Univ, 222 Mich App 700, 709-710; 565 NW2d 401 (1997). Although the official “decision maker” in this case was the city council as a whole, Elem was a council member and voted to remove Shaw as police chief. In fact, Elem testified at trial that he asked the mayor’s secretary to draft a resolution removing Shaw from his position and that he made the motion for the removal at the next city council meeting. Clearly, Elem was an active participant in the decision making process, not an “uninvolved agent.” Elem’s statements to Francisco and Tolbert contradicted his testimony at trial that he did not believe Clark’s letter about the age provision in the city charter and that he never based employment decisions on age. Elem unambiguously informed both Francisco and Tolbert, on separate occasions, that they did not qualify for the deputy chief position because of their ages and used the city charter as a justification. Further, Elem made these “stray remarks” within two weeks of the council’s decision to remove Shaw.
Defendant argues that Elem’s statements were irrelevant because they related to the deputy chief position, not the police chief position. But, there is a logical and important connection between the two positions. Not only were both positions at a senior level in the city police department, but the same group of people-the city council-decided who would fill them. In that way, this case is distinguishable from the case cited by defendant, Schrand v Fed Pacific Electric Co, 851 F2d 152, 156 (CA 6, 1988), where the “stray remarks” at issue were made by a person uninvolved in the defendant’s decision to terminate the plaintiffs employment and there was no logical or reasonable connection between the remarks and the plaintiffs termination.
Additionally, we conclude that the challenged evidence was not unfairly prejudicial or misleading. Pursuant to MRE 403, even relevant evidence “may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. . . .” “Evidence is unfairly prejudicial when there exists a danger that marginally probative evidence will be given undue or preemptive weight by the jury.” Waknin v Chamberlain, 467 Mich 329, 334 n 3; 653 NW2d 176 (2002) (quotation marks and citation omitted). Elem’s statements about Francisco and Tolbert’s ages were highly relevant to an issue of consequence at trial, as indicated above. Further, while the evidence was damaging to defendant’s case, there is no indication in the record that the jury gave it preemptive weight or was mislead by it in any way. Therefore, defendant has failed to establish that the evidence should have been excluded under MRE 403.
Finally, even if there had been an abuse of discretion, in light of all the evidence presented at trial, defendant cannot establish that the outcome of the case would have been any different but for the admission of the evidence. Error warranting reversal may not be predicated on an evidentiary ruling unless a substantial right is affected. MRE 103(a); Craig v Oakwood Hosp, 471 Mich 67, 76; 684 NW2d 296 (2004). Defendant removed Shaw as police chief when he was 66 years old and immediately replaced him with a younger man. Shortly before his removal, a city attorney drafted a letter stating that, under the city charter, Shaw should be “considered retired effective immediately” because of his age. Three council members testified that one of the reasons they voted to remove Shaw was that during their campaigns they promised to terminate his employment. But, the other council members testified that they recalled no such promises being made. Two council members testified that when they voted to remove Shaw, they believed that he wanted to retire or had already quit. But, there is absolutely no evidence in the record supporting such assertions. Further, at least two council members stated that Shaw was removed because of his age. In August 2004, Strassner told a newspaper reporter that Shaw was removed because he was over 60 years old. At trial, Strassner claimed that he had lied to the reporter. Cox, who voted against releasing Shaw, testified that she believed his employment was terminated because of his age. This evidence was more than sufficient to support the jury’s finding of age discrimination.
In Docket No. 279997, we reverse and remand for further proceedings consistent with this opinion. In Docket No. 280693, we affirm. We do not retain jurisdiction.
Defendant argues that a federal district court case, Johnson v Lapeer Co, 2006 US Dist LEXIS 76182, an unpublished opinion of the United States District Court for the Eastern District of Michigan, issued October 11, 2006 (Docket No. 04-74659), supports its argument that a type 2 whistleblower must testify about a violation of a law, regulation, or rule. But, Johnson is not binding on this Court and it does not stand for the proposition argued by defendant. Furthermore, its reasoning has since been rendered invalid by Kimmelman v Heather Downs Mgt Ltd, 278 Mich App 569; 753 NW2d 265 (2008), discussed later in this opinion. | [
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Sharpe, J.
The defendant reviews his conviction on a charge of violating what is known as the prohibition law on exceptions before sentence. After arraignment, and before trial, the defendant filed a motion to suppress certain evidence (intoxicating liquors) which had theretofore been secured by a deputy sheriff under a search warrant. The only exception discussed by counsel is the denial of this motion.
The affidavit of the deputy sheriff as to the facts supporting his belief that defendant was violating the law was thus stated:
“That on the tenth day of October, 1924, the said Alphonsus E. Ward had occasion to go into the said dwelling house for the purpose of interviewing and talking with the said Orville Batten, concerning the burglary of a certain store in the village of McBride, in said county and State, on the night of October 9th, and that while in said dwelling house, he, the said affiant, saw therein a crock containing about ten gallons of moonshine whisky mash, which crock was on the floor behind the stove, and on a table in said house was a machine used for capping bottles, and also a few sacks containing a quantity of caps that are used upon bottles. That in the said crock was a rubber siphon tube. That he, the said affiant, asked the said Orville Batten who was making the moonshine mash and the said Orville Batten replied that he was making it. That the said Orville Batten had a Ford automobile in the yard, near the house, and that the said affiant found and saw in said automobile several empty beer bottles, and that the said Orville Batten stated to the said affiant that he, the said Orville Batten, intended to put the moonshine liquor they were making into said bottles, and that he, the said affiant, went into said dwelling house about the hour of nine o’clock and thirty minutes in the forenoon of October 10th, A. D. 1924, and that said crock containing about ten gallons of moonshine whisky mash was on the floor behind the stove, and the machine for capping bottles and sacks containing a quantity of caps were on the table in said house, and the rubber siphon tube was in said crock of moonshine whisky mash. That he is familiar with the smell of moonshine whisky mash, and that the contents of said crock was moonshine whisky mash.”
There can be no doubt that the officer in the investigation of the burglary which had been committed had the right to call upon the defendant at his home and interrogate him relative thereto. When in the house, he saw evidence that defendant was violating the law. Clearly, he had the right to lay these facts before the justice in the form of an affidavit, and that official was justified in issuing a search warrant thereon.
The exceptions are overruled. The trial court will proceed to sentence.
Bird, C. J., and Snow, Steere, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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Fellows, J.
(after stating the facts). Upon 74 of the 80 lots single dwellings have been erected of substantial character. Some of these are not exactly on the building line; some are back of it, and some are in front; there are some of the second stories which also project slightly beyond the building line; but these slight encroachments measuring at most a few inches, and in one case but .24 of an inch, are too inconsequential to merit discussion. The plaintiffs are not estopped by them from protesting against the erection in their neighborhood of an apartment house with 19 apartments and having stores on the ground floor.
There is some force in plaintiffs’ contention that the word “building,” found in 79 of the deeds, is somewhat modified and restricted by the later use of the term “dwelling” in the restrictions. DeGalan v. Barak, 223 Mich. 378; Killian v. Goodman, 229 Mich. 393; Schadt v. Brill, 173 Mich. 647 (45 L. R. A. [N. S.] 726). But we shall not dispose of the case on this question, as we are convinced upon this record that there was a common plan from the inception down to the present time carried out by every one of the owners of the 74 occupied lots for a high class residential district of single dwellings and that defendant had notice thereof.
Mr. Michelson of the Michigan Land & Home Company was deceased at the time of the hearing of this case. Defendant, however, called as a witness in his behalf the former bookkeeper of the company who gave some testimony thought to 'be favorable to the defendant. But upon cross-examination he admitted that:
“It was originally intended to restrict the subdivision to residence purposes and dwellings, other than Hamilton. The agents were instructed to tell purchasers that the property was restricted that way.”
And all of the home owners who testified on the subject, and there were a number of them, gave testimony tending to show that they were induced to purchase lots and to erect their homes on the understanding that the street was a residential street of single dwellings and that everything else was tabooed. The oral testimony fortified by - numerous photographs presents a situation that could scarcely be overlooked by a most casual observer, and in addition to this there is positive testimony that defendant was informed before he purchased the lot that the street was restricted to “single residences only.” This testimony was corroborated but was disputed by defendant. But defendant’s testimony on the whole was quite unsatisfactory and we are persuaded that upon this disputed question of fact we should find with the plaintiffs.
The recent case of Sanborn v. McLean, 233 Mich. 227, will be found illuminating on many of the questions here involved.
There has been no such laches on the part of the plaintiffs as to defeat their right to relief. Not only was defendant given actual notice before he purchased, but he and his contractor promptly received protests from interested parties on beginning the work. Attempts to adjust matters failed and the bill was filed before the work had progressed very far.
The right, if it has been acquired, to live in a district uninvaded by stores, garages, business and apartment houses is a valuable right. In Allen v. City of Detroit, 167 Mich. 464 (36 L. R. A. [N. S.] 890), it was said:
“Building restrictions are private property, an interest in real estate in the nature of an easement, go with the land, and are a property right of value, which cannot be taken for the public use without due process of law and compensation therefor; the validity of such restriction not being affected by the character of the parties in interest.”
It is the province of a court of equity to protect the individual in this as in other property rights. See Harris v. Roraback, 137 Mich. 292 (109 Am. St. Rep. 681); Misch v. Lehman, 178 Mich. 225; Hartz v. Kales Realty Co., 178 Mich. 560; Stewart v. Stark, 181 Mich. 408; Kingston v. Busch, 176 Mich. 566; Harvey v. Rubin, 219 Mich. 307; Swan v. Mitshkun, 207 Mich. 70; Kelman v. Singer, 222 Mich. 454; McQuade v. Wilcox, 215 Mich. 302 (16 A. L. R. 997); McNair v. Raymond, 215 Mich. 632; Harley v. Zack, 217 Mich. 549; Oliver v. Williams, 221 Mich. 471; Nechman v. Ross, 225 Mich. 112; Davison v. Taylor, 196 Mich. 605; Rosenzweig v. Rose, 201 Mich. 681; Farley v. Finn, 226 Mich. 205; Moreton v. Louis G. Palmer & Co., 230 Mich. 409; Putnam v. Ernst, 232 Mich. 682; Marrick v. Furnari, 233 Mich. 146. An examination of these cases will disclose that this court has not hesitated in proper cases to restrain by injunction the invasion of these valuable property rights. It will not hesitate so to do in the instant case, nor in the future.
The decree appealed from will be set aside and one here entered in conformity with the prayer of the bill. Plaintiffs will recover costs of both courts.
Bird, C. J., and Sharpe, Snow, Steere, Wiest, Clark, and McDonald, JJ., concurred. | [
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Snow, J.
March 20, 1925, plaintiff commenced an action of replevin against John Cairns in the justice’s court for the city of Detroit. The writ was duly served, and the goods and chattels described therein seized. On the return day of the writ, to-wit, March 30th, plaintiff appeared and filed his declaration, and the case was adjourned to April 7th. On the adjourned day plaintiff appeared and took judgment by default, defendant failing to appear. Justice John F. McKinlay found the right of possession of the goods and chattels to be in the plaintiff and rendered a judgment for damages in his favor in the sum of $153.70, and $3 costs.
April 27th, plaintiff filed an affidavit in garnishment. Summons was issued and on May 2d, the return day thereof, plaintiff appeared in court, and, upon cause shown, the case was adjourned to May 5th, on which day the return of the garnishee defendant was filed in writing and summons to show cause was issued. On May 11th, the return day, plaintiff appeared and defendant did not. Judgment against the garnishee defendant in the sum of $156.70, and $3 costs, was thereupon rendered. May 19, 1925, eight days after the garnishment judgment, in response to a request, plaintiff’s attorney called at the office of the justice, who told him he wished to see the plaintiff and would set the original case for hearing again for May 21st. On this date, without testimony, and simply upon the request of the attorney for the principal defendant, the justice attempted to void the judgments in both the principal and garnishment proceedings, and attempted to render judgment for plaintiff for the possession of the property, but no judgment for damages as he had previously done.
Plaintiff thereupon filed his petition in the circuit court for the county of Wayne for a mandamus to compel the justice to remove from his docket all entries made subsequent to the date of the original judgments referred to, and to issue an execution in favor of the plaintiff against the principal and garnishee defendants thereon. An order to show cause was issued by the circuit court, and the justice filed his return as follows:
“That before the time of the commencement of the action in garnishment mentioned in the petition for mandamus the records of this court showed that according to the file judgment had been rendered in the replevin case for the return of the goods and $3 costs but no money judgment was indorsed upon the file and that likewise the docket showed at that time that there was no money judgment. This defendant further says that upon his learning of the garnish ment action he investigated and found that the entry of the money judgment on the file had been made long after the last hearing upon the cause and that at that time no entry of same had been made in the docket, and that he also learned that the total value of the goods replevined was far less than the alleged judgment for detention and that no further proof being offered he caused the judgment appearing upon the file to be canceled and marked void.”
The judgments against the principal defendant in the replevin case and the garnishee defendant in the garnishment proceedings were at some time both entered in the docket of the justice which he is required to keep by law for that purpose. The docket entries establish this and the return of the justice does not deny it. He also returns that he learned (presumably after the trial) that the total value of the goods re-plevined was far less than the judgment rendered, and that he caused the judgments rendered to be canceled and marked void. The justice was justified in so doing by no provision of law.
Act No. 118, Pub. Acts 1919 (Comp. Laws Supp. 1922, § 3381), and the charter of the city of Detroit gave this justice power and authority to set aside a ■verdict and grant a new trial upon cause shown. Motion must be made, however, within five days after rendition of the judgment, notice must be given to the adverse party, and the motion submitted and heard within one week after same shall have been filed. No authority of law permits a justice to set aside or vacate a legally rendered and docketed judgment on his own motion or at his own caprice, even though, as in this case, by investigation he concluded he should not have rendered the judgment in the first instance. In a proceeding of this character, a justice of the peace may not impeach his own docket which the law requires him to keep. The entries therein, showing the rendition of the judgments, are controlling, even if contradicted by his return to the order to show cause.
The plaintiff is entitled to the writ of mandamus, but without costs.
Bird, C. J., and Sharpe, Steere, Fellows, Wiest, Clark, and McDonald, JJ., concurred. | [
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Butzel, J.
Plaintiffs Fowler and Finch are duly-licensed chiropodists under the Michigan State chiropody act,.Act No. 115, Pub. Acts 1915 (1 Comp. Laws 1929, §6793 et seq., as amended by Act No. 221, Pub. Acts 1939 [Comp. Laws Supp. 1940, § 6793 et seq., Stat. Ann, and Stat. Ann. 1944 Cum. Supp. § 14.661 et seq.]). It provides that an applicant must have certain defined qualifications before talcing an examination for license to practice chiropody, He must pass an examination under the immediate authority and direction of the board of registration in chiropody in 17 or more subjects which include surgery, materia medica, anatomy, histology, neurology, pathology, mechanical orthopedics, et cetera. Section 2 of the act provides that a certificate of qualification or license “shall not authorize chiropodists to amputate the human foot or toes or to use or administer anaesthetics other than local.”
Michigan has adopted the uniform narcotic drug act (Act No. 343, Pub. Acts 1937 [Comp. Laws Supp. 1940, § 9234-25 et seq., Stat. Ann. 1944 Cum. Supp. § 18.1071 et seq.]). Under section 1 of the act a physician is defined as “a licensed practitioner of medicine or osteopathy as defined by law in this State and any other person authorized by law to treat sick and injured human beings in this State and to use narcotic drugs in connection with such treatment. ’ ’ Under section 7 of the act, a physician in good faith and only in the course of his professional practice may prescribe, administer and dispense narcotic drugs or may cause them to be administered by a nurse or interne under his direction and supervision. Under the former narcotic drug act (Act No. 172, Pub. Acts 1931), the definition of a physician was limited to a licensed practitioner of medicine or osteopathy as defined by law in this State. It did not include any other person authorized by law to treat sick human beings in this State and to use narcotic drugs in connection with such treatment. A still earlier act did not include osteopaths.
Plaintiffs claim, and it is not denied, that previous to 1943 chiropodists were able to procure a narcotic permit from the State. In 1943, however, the attorney general issued an opinion to the director of drugs and drug stores, holding that there was no authority under the chiropody act which would give a chiropodist the right to use narcotics in the course of his practice, and that the right to administer a local anaesthetic limited chiropodists to the use of several substances used in local anaesthetics, such as butaline or 2 per cent, novocain, evidently claimed to be nonnarcotic.
Previous to instituting the present suit brought by plaintiffs to mandamus the defendants to issue a narcotic permit to them, plaintiffs joined in a bill of complaint filed in the United States district court for the eastern district of Michigan asking that the collector of internal revenue be restrained from refusing to accept plaintiffs’ applications for reregistration under the provisions of the Harrison narcotic act and that he be ordered to issue forthwith special tax stamps as evidence of such reregistration. The district supervisor for district No. 8, narcotic bureau of the United States treasury department, also was made a party defendant. The case was heard before Honorable Frank A. Picard, United States district judge (Fowler v. Kavanagh, Collector of Internal Revenue, 63 Fed. Supp. 167 ). The attorneys for the State have included in their brief appendices which also set forth the opinion which evidently has not been published. In the opinion, there is set forth the clause of section 2 of the chiropody act hereinbefore quoted. The district judge calls attention to how the training in plaintiffs ’ profession has advanced. The opinion further gives a definition of local anaesthetics as follows :
“Local anaesthetics are anaesthetics that when locally applied produce an absence of sensation in the organ or tissue treated.' Narcotics, including cocaine, other derivatives of coca -leaves, and similar compounds when properly applied produce such an effect, and are used as local anaesthetics.”
It further states that the Michigan statute is similar to the uniform narcotic act adopted by many other States, and that it has been held by the attorneys general of six of these States that members of plaintiffs’ profession come within the purview of and are entitled to licenses under the uniform narcotic act. The court further dwelt upon the fact that in the case of Bruer v. Woodworth, 22 Fed. (2d) 577 (United States district court for the eastern district of Michigan), it was held that an osteopath was entitled to use narcotics although the law of Michigan at that time limited the use of narcotics to physicians, that a practitioner of osteopathy was a physician and entitled to use narcotics in his profession. From a decree in favor of complainants in Fowler v. Kavanagh, Collector of Internal Revenue, supra (the United States district court), appeal was taken to the circuit court of appeals for the 6th circuit (Kavanagh, Collector of Internal Revenue, v. Fowler [C. C. A.], 146 Fed. [2d] 961) and it was held that the Federal court ordinarily should not undertake the interpretation of a local law without some views of local judges who are familiar with the intricacies and trends of local law and practice. For that reason, the decree of the district court was reversed and complainants, two of whom are plaintiffs in the instant case, properly began mandamus proceedings in this court in order to obtain such relief as they are entitled to. Diligent research by attorneys and the court fails to. disclose any helpful authorities. The attorney general has added to his brief an opinion by the' attorney general of Iowa stating that inasmuch as the podiatrists (chiropodists) were granted the right to use local anaesthetics, the legislature had in mind the use of whatever narcotic drugs might be necessary to produce local anaesthesia. There is also appended to Ms brief a copy of the opinion .of the assistant attorney general of Minnesota who comes to the opposite conclusion. In Georgia Association of Osteopathic Physicians & Surgeons, Inc., v. Allen, Collector of Internal Revenue, 31 Fed. Supp. 206 (affirmed 112 Fed. [2d] 52), the court held that an osteopath was not entitled to a permit to use narcotics. The Georgia law at that time did not include osteopaths or contain the broader definition of a physician. The district court for the eastern district of Michigan under a similar act then in force came to a’ conclusion exactly to the contrary. Bruer v. Woodworth, 22 Fed. (2d) 577, and Hostetter v. Woodworth, 28 Fed. (2d) 1003.
The attorney general relies on the familiar maxim “ expressio unius est exclusio alterius,” and contends that inasmuch as the chiropodists ,are not mentioned in the act, which specifically mentions physicians, dentists and veterinarians, it was the intention of the legislature not to include chiropodists. He overlooks the broader definition of physicians in the act. The chiropodists are called upon to perform many operations such as removal of ingrowing nails, growths, and callosities on the foot, manipulation of the bones of the foot, et cetera, all of which would cause tremendous pain to the patient were anaesthetics, not used. We have held that a chiropractor may practice medicine within the limits of the chiropractic act, but in doing so he does not become a licensed physician, surgeon or doctor. Erdman v. Great Northern Life Ins. Co., 253 Mich. 579. The narcotic act and the chiropody act taken together indicate that a chiropodist may use local anaesthetics. If “local anaesthetics” do not include the use of narcotics, why did the legislature in section 2 of the chiropody act state that the certificate of qualification or license of the chiropodist does not authorize him to use anaesthetics other than local? No limitations as to local anaesthetics would have been necessary for, if the State is correct, local nonnarcotic anaesthetics may be used by anyone and there would have been no occasion for the law to mention it. "We believe local anaesthetic means, as defined in Dorland’s American Medical Dictionary (Rev. 1941):
“That which is confined to one limited part of the body.”
The agency employed to bring about such anaesthesia is not restricted by the law. This seems to us to be a 'far more reasonable interpretation of the law, and we so hold. If the legislature had any other intention, and we believe not, the law can be readily'amended at the next session.
Plaintiffs have no other recourse except by mandatory procedure and are entitled to a writ. It will be issued. A public question being involved, there will be no costs.
Starr, C. J., and North, Bushnell, Sharpe, Boyles, and Reid, JJ., concurred. The late Justice Wiest took no part in the decision of this case.
See 26 TTSCA, § 2550 et seq.—Reporter.
Published in 1946.—Reporter.
See 2 Comp. Laws 1929, § 6739 (Stat. Ann. § 14.533).—Re-PORTER. | [
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Fead, J.
Howard R. Ward, formerly branch manager of defendant, assigned to plaintiff all his claims and causes of action against defendant. Two days later plaintiff commenced action against defendant ánd brought garnishment proceedings against Ward. In the affidavit for garnishment, made by plaintiff’s attorney, the liability of defendant was stated as $1,433.97, over and above all legal set-offs. Ward filed disclosure that he owed defendant $1,513.42, over and above all legal set-offs. Defendant moved to quash the writ of garnishment on the grounds of invalidity and falsity of the affidavit of garnishment, that the assignment was only colorable and, therefore, the affidavit and writ constituted abuse of process.. The court quashed the writ and dismissed the garnishment proceedings.
The record is convincing that the assignment by Ward to plaintiff was made in order to institute the garnishment action and that Ward is the real party in interest in the principal suit, in effect garnisheeing himself. Ward, in a letter, stated that he had assigned his claim and the assignee was suing defendant for him. In his affidavit on the motion to quash, he made general denial of bad faith in the assignment but did not aver it was for a consideration nor that the assignee is the owner of the claim in his own right. There was no showing that the account between Ward and defendant is otherwise than as stated in the garnishment affidavit and dis closure. Upon the account, the balance of $79.45 is due defendant.
The garnishment law provides no procedure for attacking the truth of the allegations of the affidavit, on motion to quash or dismiss. As the proceedings at bar were regular on their face and in conformity with the statute, the power to quash exists only in the authority of the court to correct abuse of its process.
The procedure here followed by Ward, by way of assignment and garnishment, was founded on Barlow v. Lincoln-Williams Twist Drill Co., 186 Mich. 46, which is in point on the issue except in the one respect that, there, the amount owing the defendant by the garnishee-assignor was less than the debt of the defendant to the garnishee-assignor.
The significance of the distinction lies in the fact that, at bar, on the face of the records, plaintiff cannot recover a judgment in any amount because defendant has a set-off of a greater amount; defendant cannot recover the excess set-off in the suit by the assignee (3 Comp. Laws 1929, § 14136), but will be put to the expense of a separate action therefor ; and defendant is prevented from recovering the excess admittedly due it until disposal of garnishment proceedings.
Abuse of process is “employment of process for a purpose not contemplated by law. ” 50 C. J. p. 612. It is not a purpose contemplated by law to permit- a debtor to use the process of the court to enable him to retain possession of money admittedly owing to another. Ward’s right to a speedy and final determination of the account between him and defendant could have been conserved by direct action. There was no showing of facts or reason to justify the circuitous route taken nor to indicate that it was done in good faith.
The record discloses an abuse of process and judgment of dismissal is affirmed, with costs.
Nelson Sharpe, C. J., and Potter, North, Wiest, Bushnell, and Edward M. Sharpe, JJ., concurred. Butzel, J., did not sit. | [
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Sharpe, J.
The plaintiff and defendant were married in 1901, and lived together until December, 1922. In the bill for divorce, filed by her herein, she alleges repeated acts of extreme cruelty on his part. In his answer defendant denies such allegations, and by cross-bill charges extreme cruelty on her part, and prays that a divorce be granted to him. The trial court concluded that both of the parties were at fault, and dismissed the bill and cross-bill. Plaintiff appeals.
In Kellogg v. Kellogg, 171 Mich. 518, this court, speaking through Mr. Justice Stone, emphasized the salutary rule theretofore laid down in Hoff v. Hoff, 48 Mich. 281, that, where the charges of cruelty in both bill and cross-bill are established by the proofs, neither party is entitled to any relief in a court of equity. He quoted the statute (3 Comp. Laws 1897, § 8625 [3 Comp. Laws 1915, § 11401]), and said that this court would not “apply a rule of comparative extreme cruelty” in construing it. There was a similar holding in Cowdrey v. Cowdrey, 211 Mich. 305, in Hatfield v. Hatfield, 213 Mich. 368, and in Legatski v. Legatski, 230 Mich. 186. It will serve no useful purpose to review the evidence. In our opinion, the trial court was clearly right in denying relief to plaintiff on the record as made.
Plaintiff’s counsel complain of the action of the court in refusing to permit the children of the parties to be sworn in rebuttal. There was no such refusal. The trial judge expressed himself very forcibly as to the propriety of calling the children as witnesses in such cases. After some discussion, counsel for the defendant expressed his willingness to admit that the children would testify as counsel for the plaintiff might state. A statement was thereupon made. If we treat the part of it which would have been admissible as proof in rebuttal as though it had been testified to, we are of the opinion that it would have been but corroborative of plaintiff’s testimony, and would not have affected the result reached. This court can but suggest to counsel, as did the trial court, that the best interests of the family demand that the children of the parties should not be called as witnesses in divorce cases. If, however, counsel insist on calling them, there is no statute or rule of law which will warrant the court in excluding their testimony. Ames v. Ames, 231 Mich. 347.
The decree is affirmed. No costs are allowed.
Bird, C. J., and Steere, Fellows, and McDonald, JJ., concurred with Sharpe, J. | [
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Butzel, J.
A controversy arose between the board of street railway commissioners of the city of Detroit and two sets of employees as to the proper rule of seniority in employment. Under previous regulations, there had existed two separate and distinct systems of seniority, one applicable to the motorcoach drivers exclusively, the other applicable to those engaged in the operation of street cars. Thus, in so far as employment on the motor-coach lines was concerned, motorcoach operators were granted a preference over employees in the street car service, length of service on the bus lines being determinative, rather than length of service in the street railway department in general. Subsequently, however, the defendant board determined to effect a change in the seniority systems, by which the classification between the two groups of employees would be abolished. • The contemplated change became particularly important in view of the fact that business conditions necessitated a reduction in the number of employees throughout the transportation system. As a result of the proposed abolition of the classification between the two groups, employees whose length of service in the operation of street cars might exceed that of employees serving as motorcoach operators would be given priority and preference by the board in deciding which employees to retain and which to discharge in the event of a reduction in the personnel of the entire system. The Motorcoach Operators Association, consisting of some 600 employees, plaintiffs herein, objected to the proposed change,- and demanded that the question be submitted to arbitration.
Title 4, chap. 13, § 19, of the charter of the city of Detroit, referring to the board of street railway commissioners of that city, provides as follows:
“In case of dispute over wages or conditions of employment, said board is hereby authorized and directed to arbitrate any question or questions, provided each party shall agree in advance to pay half of the expense of such arbitration.”
The commissioners at first favored arbitration, but subsequently deemed it inadvisable, and refused to appoint an arbitrator or to proceed with the arbitration. The Motorcoach Association and a number of the employees accordingly filed a bill of complaint, seeking a mandatory injunction to compel the board of street railway commissioners of the cityof Detroit, its members, and the Amalgamated Association of Street & Electric Railway Employees of America, Local No. 26, to submit the question to arbitration. An additional defendant also intervened. Tbe trial judge denied the injunction, holding that the charter provision in regard to arbitration was merely permissive or directory, and not mandatory. The correctness of this ruling is the sole question in the case.
In determining whether the provisions of a statute are directory or mandatory, the intention of the legislature controls. Bowman v. Wayne Circuit Judge, 214 Mich. 518; Smith v. School District No. 6, Fractional, Amber Township, 241 Mich. 366. It is undoubtedly true that arbitration is a proper and rational method for the solution of controversies between employer and employee, and present-day courts widely encourage its use. It is also true that when a statute confers a power upon a corporation, to be exercised for the public good, the exercise of such power is commonly held to be not merely discretionary, but mandatory. Attleboro v. Commissioners of Corporations & Taxation, 257 Mass. 43 (153 N. E. 333); Fidelity & Casualty Co. of New York v. Brightman (C. C. A.), 53 Fed. (2d) 161; 2 Lewis’ Sutherland, Statutory Construction (2d Ed.), § 636, p. 1150.
However, the wording of the proviso in the quoted section of the charter in the instant case plainly shows that there was no intent to make the resort to arbitration mandatory upon the board. Under the charter the board is authorized to arbitrate only “provided each party shall agree in advance to pay half the expense of such arbitration.’’ The power of the board to arbitrate is thus made dependent upon its own agreement to perform a condition precedent to the arbitration, a clear indication that arbitration was required only when the board, in its own discretion, believed such a course to be advisable. Plaintiffs contend that the proviso should be interpreted as if it stated, “Provided that the party desiring arbitration agrees to pay half the expenses.” This, however, is not the language of the charter, and if such had been the intention of those who framed ,it, they could very easily have inserted language to that effect. The very situation that arose in the instant case, where the parties in dispute involved two opposing groups of employees, as well as the employer, might make a resort to arbitration highly inadvisable. Even had the board of street railway commissioners agreed to settle the dispute by that method, the defendant Amalgamated Association of Street & Electric Railway Employees, being well satisfied with the original action of the board, might have withheld itself from the arbitration by refusing to pay its share of the expenses, thus creating the possibility of further confusion' and dissension in the event that the arbitration resulted in a reversal of the board’s resolution.
Furthermore, it is significant that the charter makes no provision whatsoever as to the machinery or method of procedure for such arbitration. It neither specifies the number of arbitrators to be chosen, nor the manner of their selection, nor whether a majority or unanimous award is required, nor whether such award is to be final and binding or merely advisory, or, if binding, for what length of time. It is true that in Stern Co. v. Friedman, 229 Mich. 623, where a lease gave the lessee the option to renew at the end of the term at a rental “to be agreed upon between the parties hereto or determined by arbitration,” we held that the mere failure of the parties to stipulate as to the manner in which such arbitration should be carried out did not make the contract too indefinite to afford relief in damages for a breach thereof, since the rent was merely incidental to the lessee’s clear contractual right to continue in possession after having exercised its option to renew. This is far different from the instant case, where the sole question is whether the charter provision relative to arbitration was intended to be mandatory or directory. The total failure of those who framed the charter to set up any requirement as to the manner in which the board shall effect such arbitration points strongly to the conclusion that they did not intend arbitration to be mandatory upon the board.
In Binney v. Chesapeake & Ohio Canal Co., 8 Pet. (33 U. S.) 201, a public utility corporation chartered by the State legislature was empowered to provide navigation by the construction of canals, and to acquire land and water rights incidental thereto. Under the charter the corporation was “empowered and directed” to enter into reasonable agreements with the proprietors of adjoining land by which the latter would be permitted to use the surplus water admitted into such canals. The question arose as to whether the use of the term “directed” made it mandatory upon the corporation to enter into such agreements. The court held as follows :
“Much stress has been laid on the word ‘directed,’ as used in the statute. ‘The company are hereby empowered and directed,’ etc. The word, if standing alone, might imply something mandatory to the company. But it must be taken with the context, and the general scope and object of the provision, in order to ascertain the intention of the legislature. * * * But the whole structure of the clause shows, it was to be a voluntary and mutual agreement of the parties. It cannot be supposed that if any compulsory measures were contemplated, the act would have heen left so entirely silent, as to the mode and manner in which this was to be enforced upon the company. If, as we think, it clearly was the intention of the act that the use of the water should be subject to the mutual agreement of the parties, no legislative provision was necessary. The parties having authority to make the agreement, they could make it, in any manner, or under such modifications as they might think proper.
“It is not a well-founded objection to this construction of the act, that the most apt and appropriate phraseology to convey this meaning, has not been employed. The great object is, to ascertain the intention of the legislature; and there is certainly nothing in the language used, that is repugnant to the construction we have adopted.
“If the right of the appellant to compel the company to make the agreement, was clearly established, it might be within the province of a court of chancery, to enforce the consummation of such agreement, and carry it into effect. But the entire absence of any provision looking to compulsory measures, as to the mode and manner in which the agreement is to be made or executed, is a very strong, if not conclusive reason to show that no such right exists; and leads irresistibly to the conclusion, that this is a matter left open for the voluntary arrangement of the parties.”
The trial judge correctly refused to grant plaintiffs the. relief prayed for, and the decree dismissing the bill is affirmed, but without costs, the question being a public one.
Nelson Sharpe, C. J., and Potter, North, Fead, Wiest, and Edward M. Sharpe, JJ., concurred, Bushnell, J., did not sit. | [
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Archer, J.
The issue presented is whether a motor vehicle no-fault insurer, pursuant to the omnibus clause of its no-fault policy, should be held liable for all or part of a settlement a landowner’s general liability insurer pays where an injury arising out of the use of a motor vehicle occurs on the landowner’s premises. We hold the no-fault insurer has no duty to indemnify the general liability insurer because the landowner’s conduct did not arise from the use of a motor vehicle and was beyond the scope of the no-fault policy.
i
Shell Oil Company contracted with Ernest E. Kuhns, doing business as Corrosion Control Company, to sandblast pipes. Shell Oil, in turn, contracted with B & L Hotshot, Inc (blh), to deliver pipes to Corrosion Control’s premises, and, after sandblasting, to pick up the sandblasted pipes and return them to Shell.
On April 10, 1980, Russell Naasko, a blh foreman, and another blh employee drove to Corrosion Control’s premises in a blh boom truck to retrieve the sandblasted pipes. During the loading operation, Naasko held a guideline attached to the pipe being lifted by the boom. Naasko was injured when the boom came into contact with an overhead electrical power line Consumer’s Power Company maintained on Corrosion Control’s premises. Naasko was severely burned and collected workers’ compensation benefits.
In June 1981, Naasko sued Corrosion Control and Consumer’s Power Company in Kalkaska Circuit Court. Naasko asserted a landowner’s liability claim against Corrosion Control. In his complaint, Naasko alleged that Kuhns ordered the blh employee, who had delivered the pipes to Corrosion Control’s premises, to place them near the power line where they would be sandblasted. Naasko claimed that, by storing the sandblasted pipes near an overhead power line, Corrosion Control created a hazardous work environment. He further alleged that Kuhns knew or should have known that, when blh employees came back to pick up the finished pipes, the boom would come into contact with the overhead power line. Naasko’s wife asserted a loss of consortium claim.
Celina Mutual Insurance Company, Corrosion Control’s general liability insurer, agreed to defend Corrosion Control and filed an answer on its behalf. The only affirmative defense raised was Naasko’s own negligence.
In June 1983, six months after mediation, Celina tendered to Aetna Life & Casualty Company, blh’s no-fault motor vehicle insurer, its defense of Corrosion Control. Celina claimed that, through the acts or omissions of Naasko and his co-workers, Corrosion Control became an additional insured under the omnibus clause of Aetna’s no-fault policy issued to blh. Aetna, however, refused to defend Corrosion Control. The following day, which was less than one month before trial, Naasko settled with Corrosion Control for $32,000, which Celina paid._
Celina, subrogated to any claim Corrosion Control might have against Aetna, then filed the present lawsuit in November 1983. In addition to requesting a declaration that Aetna wrongfully refused to defend Corrosion Control in the underlying suit, Celina sought to recover the $32,000 settlement paid to Naasko and the cost of Corrosion Control’s defense.
Both parties moved for summary disposition. This appeal, however, only concerns Aetna’s amended motion for summary disposition in which Aetna claimed that, even if the blh vehicle was insured under its policy, Corrosion Control had no contractual rights under the policy because Naasko’s complaint against Corrosion Control did not state a claim arising out of the use, ownership, or maintenance of a motor vehicle.
The trial court rejected Aetna’s argument and denied the motion, holding that, even though Naasko’s complaint alleged a landowner’s liability claim, Naasko’s injuries arose from the use of a motor vehicle. In light of the omnibus insured clause of Aetna’s policy, the trial court concluded that Corrosion Control was an additional insured under Aetna’s liability policy. Consequently, the court held that Naasko’s complaint alleged an injury within the scope of the policy.
Aetna appealed, and the Court of Appeals unanimously affirmed in an unpublished per curiam opinion, decided June 23, 1988 (Docket No. 95658). The Court held that Corrosion Control was an additional insured under Aetna’s omnibus clause, and that it was "using” the boom truck as a motor vehicle when Naasko was injured. The Court, consequently, concluded that Naasko had pled a cause of action within the scope of Aetna’s policy.
Aetna subsequently applied for leave to appeal, which we granted to determine whether Aetna is liable to Celina for the costs of Corrosion Control’s defense and the $32,000 settlement Celina paid to Naasko. 432 Mich 892 (1989)._
II
Three elements establish prima facie liability coverage under Aetna’s policy. First, the injury must arise from the use of a motor vehicle. Second, the tortfeasor must be an insured. Finally, the motor vehicle from which the injury arose must be "an owned or a temporary substitute” vehicle within the meaning of the policy.
Aetna alleged in its amended motion for summary disposition that, pursuant to MCR 2.116(C) (8), Celina had failed to state a claim for which the law could grant relief because Aetna, as a matter of law, had no duty to indemnify or defend Corrosion Control in Naasko’s suit. A motion for summary disposition brought under MCR 2.116(C)(8) tests the legal sufficiency of the plaintiff’s complaint. Abel v Eli Lilly & Co, 418 Mich 311, 323; 343 NW2d 164 (1984), cert den 469 US 833 (1984). For purposes of Aetna’s amended motion for summary disposition, therefore, we assume, without deciding, Celina’s allegation that Naasko’s injuries, as against his employer, arose from the use of the blh boom truck and were otherwise within the scope of Aetna’s policy. Consequently, our task is to determine whether Corrosion Control is an insured under Aetna’s policy.
This Court held in Citizens Ins Co of America v Tuttle, 411 Mich 536; 309 NW2d 174 (1981), that the no-fault act, MCL 500.3101 et seq.; MSA 24.13101 et seq., did not abrogate a nonmotorist defendant’s tort liability even though his negligence caused a motor vehicle accident. Defendant Tuttle’s cow was roaming on a highway when a Zaiger Beverage Company truck struck the cow. Citizens Insurance Company, Zaiger Beverage’s insurer, paid Zaiger’s no-fault claim for the damage to its truck. Subsequently, Citizens Insurance, subrogated to Zaiger’s claim, sued Tuttle.
We began our analysis in Tuttle, by examining the language of the section of the no-fault act abrogating tort liability:
(2) Notwithstanding any other provision of law, tort liability arising from the ownership, maintenance, or use within this state of a motor vehicle with respect to which the security required by section 3101(3) and (4) was in effect is abolished .... [MCL 500.3135(2); MSA 24.13135(2).]
Subsection (2) addresses tort liability that arises from either a defendant’s wrongful act or failure to act. 411 Mich 544. Only that liability, however, arising from a defendant’s "ownership, maintenance, or use of a motor vehicle” is abrogated. Thus, from the plain and unambiguous statutory language, we concluded that, in order for tort liability to be abrogated, the no-fault act required more than a plaintiff’s injuries having arisen merely from the use of a motor vehicle. The defendant’s wrongful act or omission, upon which his liability was predicated, must also have arisen from the ownership, maintenance, or use of a motor vehicle. In addition to the plain and unambiguous statutory language, we also found support for this position in the model no-fault act, the unreasonableness of a contrary construction in light of other sections of the Michigan no-fault act, and the act’s policy to eliminate duplicative recoveries and reduce insurance costs.
Because defendant Tuttle was negligent, if at all, for the improper keeping of his cow, we concluded that his wrongful act did not arise from the ownership, maintenance, or use of a motor vehicle. The act, consequently, did not abrogate his tort liability:
In the instant case, the wrongful act asserted is Tuttle’s improper keeping of his cow. Such a wrongful act does not relate to the ownership, maintenance or use of a motor vehicle. Tuttle’s tort liability, if any, arose only from his alleged wrongful keeping of the cow, not from the ownership, maintenance or use of a motor vehicle.
Tuttle would have been subject to tort liability for his wrongful keeping of a cow whether it collided with a motor vehicle, trampled a rose garden, or walked through a plate glass window. His tort liability in the instant case no more "arose from” the ownership, maintenance or use of a motor vehicle than it would have "arisen from” the ownership, maintenance or use of a rose garden or a plate glass window. It arose solely from the wrongful keeping of a cow. [411 Mich 545.]
Hence, Tuttle’s conduct was beyond the scope of the no-fault act. His conduct was still subject to tort liability, even though the damage to the plaintiff’s truck arose out of the plaintiff’s use of a motor vehicle and the damage was otherwise compensable under first-party benefits provided by the Citizens Insurance no-fault policy.
hi
The analysis of Celina’s argument that Corrosion Control is an additional insured under Aetna’s policy requires that we revisit the same issue addressed in Tuttle, but from the opposite perspective. Thus, the narrow question presented today is whether Corrosion Control is a motorist defendant whose tort liability falls within the scope of the no-fault act and Aetna’s policy. In light of the policy’s language, the no-fault act, and the principles set forth in Tuttle, we are unpersuaded that Corrosion Control is a motorist defendant because its alleged wrongful act and, hence, its alleged liability, did not arise from the use, ownership, or maintenance of the blh boom truck. Consequently, we hold that Naasko’s injury, as to Corrosion Control, was beyond the scope of Aetna’s liability policy. Corrosion Control, therefore, had no contractual rights under Aetna’s policy, even if Naasko’s claim was false, fraudulent, or groundless.
A
We first note that the Court of Appeals conclusion of law that Corrosion Control "used” the blh boom truck is incorrect. An omnibus clause extends liability coverage to a person or organization legally responsible for the use of the named insured’s vehicle. See 12 Couch, Insurance, 2d, §45:291. Although an agency or contractual relationship is not necessary in order for a third party to become an additional insured, id., §45:305, p 638, there must be, at the very least, some type of relationship between the named insured and the party alleged to be an additional insured in order to find that the latter is legally responsible for the use of the named insured’s motor vehicle.
The Court of Appeals concluded that, within the meaning of Aetna’s omnibus clause, Corrosion Control was "using” the blh boom truck when "[Corrosion Control] had B & L Hotshot use the truck to load and transport the pipes from its premises to a location specified by Shell Oil Company pursuant to the contract entered into between Corrosion Control and Shell Oil Company.” (Emphasis added.) As Aetna correctly points out, however, the only inference that can be fairly drawn from the allegations in Celina’s complaint is that Shell Oil, and not Corrosion Control, was legally responsible for the use of blh’s boom truck when Naasko was injured. In its complaint, Celina specifically pled that blh and Naasko "were on the Corrosion Control premises pursuant to a contract with Shell Oil to load and deliver pipe which had been sandblasted by Corrosion Control.”
In addition, Naasko’s complaint alleged that Corrosion Control ordered blh employees to place the presandblasted pipes near the overhead power line in the first place. Although this allegation standing alone may support a landowner’s liability claim sounding in negligence, when added to Celina’s admission that blh was acting pursuant to a contract with Shell Oil Company, there is simply no basis on this record for concluding Corrosion Control was "using” the blh boom truck or was otherwise legally responsible for blh’s own use of the truck when Naasko was injured. Therefore, we reject the lower courts’ holdings that Corrosion Control "used” the blh boom truck.
More fundamentally, however, we also reject the lower courts’ conclusions that, without consideration of the underlying nature of its own alleged wrongful conduct, Corrosion Control could become an insured under the policy solely as a result of the acts or omissions of Naasko and blh. As we explained in Tuttle, the no-fault act did not abolish tort liability and impose third-party no-fault compensation merely because an injury happens to arise from the use, maintenance, or operation of a motor vehicle. What is abolished is tort liability arising from the use, operation, or maintenance of a motor vehicle. Because liability, at the very least, requires a defendant’s wrongful act or failure to act, Tuttle, 411 Mich 544, we concluded in Tuttle that the no-fault statute left intact tort liability arising from an act other than the use, ownership, or maintenance of a motor vehicle. Although Naasko’s injuries arguably arose from the use of the blh boom truck, the issue here is whether Naasko’s complaint alleges Corrosion Control’s wrongful conduct, upon which its liability to Naasko is predicated, also arose from the use of the boom truck. We believe it does not.
Nowhere on the face of the complaint does Naasko allege facts indicating that Corrosion Control’s wrongful conduct arose from the use, maintenance, or operation of a motor vehicle. To be sure, Naasko does allege that his injuries arose from the use of the blh boom truck and that Kuhns created an unsafe work environment by negligently instructing blh employees to place the pipes near the overhead power lines. While these allegations may form a sufficient basis for Naasko to state a prima facie claim for first-party benefits under the policy as against his employer, it is an insufficient basis to support the legal conclusion that Corrosion Control’s own negligence also arose from the use of the blh boom truck and fell within the scope of Aetna’s no-fault policy.
Even if we look to the gravamen of the com plaint, we can only conclude that Corrosion Control was negligent, if at all, for directing blh employees to place the pipes near the overhead power lines in the first place. Although the blh boom truck was involved, Corrosion Control’s conduct no more arose , from the use of the blh boom truck than did the defendant’s from the beverage truck in Tuttle. Corrosion Control was negligent, if at all, for the very reason Naasko alleged in his complaint: By ordering the pipes placed near the overhead power line, Corrosion Control failed to maintain a safe workplace. As we stated in Tuttle, in spite of the no-fault act, compensation for injuries nonmotorist defendants cause is still determined by fault:
The no-fault act is a system of compensating injuries and damages incurred in accidents caused by motor vehicles. Compensation is due without regard to fault, and the tort system for adjudicating fault was partially abolished. In the context of the no-fault act, therefore, the abolition of "tort liability arising from the ownership, maintenance, or use ... of a motor vehicle” carries the implicit sense of tort liability for injuries or damage caused by the ownership, maintenance or use of a motor vehicle.
Only persons who own, maintain or use motor vehicles can be subject to tort liability for injuries or damage caused by the ownership, maintenance or use of a motor vehicle. The nonmotorist tortfeasor cannot be subject to tort liability for injuries or damage caused by the ownership, maintenance or use of a motor vehicle. The abolition of tort liability for injuries or damage caused by (arising from) the ownership, maintenance or use of a motor vehicle, therefore, does not abolish the tort liability of the nonmotorist tortfeasor. [411 Mich 545-546. Emphasis in the original.]
Under the plain language of the no-fault act and our interpretation of the act in Tuttle, therefore, the tortfeasor’s conduct, upon which liability is predicated, must also arise from the use, maintenance, or operation of a motor vehicle in order for the tortfeasor’s liability to be abolished and for the plaintiff to receive no-fault compensation under the tortfeasor’s liability policy. Absent this causal link between the plaintiff’s injury and the tortfeasor’s conduct, the no-fault act does not abrogate the tortfeasor’s liability, and the plaintiff’s right to compensation, as against the tortfeasor, is determined only with regard to fault under common-law tort principles. It is precisely this causal link that is missing in the present case.
B
Celina also argues that the Court of Appeals holding in Michigan Mutual Liability Co v Ohio Casualty Ins Co, 123 Mich App 688; 333 NW2d 327 (1983), supports its claim that Corrosion Control is an additional insured. Although Celina vigorously contends that it "stands in the same shoes as Michigan Mutual” and Corrosion Control is as much an additional insured as Uganski Crane & Truck Service, Michigan Mutual’s insured, we are unpersuaded. As the Court of Appeals noted, Uganski’s negligence arose from the act of preparing to tow a Michigan Foundry & Supply Company truck, during which Helmer, a Michigan Foundry employee, was injured. Thus, the Court unanimously concluded Uganski’s negligent use of its own vehicle, in conjunction with the Michigan Foundry truck, could not "be considered such an independent, intervening, disassociated act that Helmer’s injury did not arise out of or flow from the maintenance or use of the Michigan Foundry truck.” 123 Mich App 696. In the present case, however, Corrosion Control is clearly a nonmotorist defendant, and its alleged failure to maintain a safe work environment is far different than "[preparing to tow a disabled or stuck vehicle[,] ... an activity that is identifiable with the maintenance and use of such vehicle and foreseeably necessary.” 123 Mich App 695-696. Thus, we reject Celina’s reliance on Michigan Mutual.
The reasoning and analysis of cases such as Central Mutual Ins Co v Walter, 143 Mich App 332; 372 NW2d 542 (1985), lv den 424 Mich 851 (1985), however, does persuade us that Corrosion Control is not an additional insured. An automobile brought into a service station for repair leaked gasoline onto the station floor. The fuel spread, came into contact with the open flame of a hot water heater located in the service bay, and a fire erupted.
Central Mutual Insurance Company (cmi) insured the premises and settled the property damage claim. Cmi then sued Detroit Automobile Inter-Insurance Exchange, the automobile’s insurer. Cmi’s legal theory was that, since the property damage arose from the use or maintenance of a motor vehicle, the damage fell within the scope of daiie’s property protection clause issued pursuant to MCL 500.3121(1); MSA 24.13121(1). Although the trial court agreed with cmi and granted its motion for summary disposition, the Court of Appeals reversed. The Court held that the property damage did not arise from the ownership or maintenance of an automobile within the meaning of § 3121(1). The Court reasoned that, although proximate causation is not required, a minimal causal connection of some sort must exist between the injury and the defendant’s use, maintenance, ownership, or operation of a motor vehicle. 143 Mich App 336. The Court found support for this proposition from our decision in Tuttle by noting that the property damage resulted from a premises hazard unrelated to the use, maintenance, or operation of a motor vehicle. 143 Mich App 337. As in the present case, the mere fact that a motor vehicle was involved in an incident resulting in bodily injury or property damage is simply not sufficient to bring a claim asserted against a nonmotorist defendant within the scope of a no-fault liability policy.
c
Finally, the conduct of the underlying litigation also persuades us that the parties themselves did not regard Naasko’s claim to fall within the scope of Aetna’s policy. Neither Naasko’s complaint nor Corrosion Control’s answer raised the issue of no- fault coverage. In addition, Corrosion Control expressly conceded in its trial brief, filed almost two years after Naasko brought suit and nearly one month before trial, that "[t]he duties owed by Mr. Kuhns to the Plaintiff were strictly limited to those owed by an owner of land to a business invitee.” It was only when Celina was on the verge of settling Naasko’s claim — nearly six months after mediation and less than one month before trial was scheduled to begin — that Celina first raised the no-fault issue by tendering its defense to Aetna.
CONCLUSION
In light of the plain and unambiguous language of the no-fault act and our holding in Tuttle, supra, it is clear that, in order for a claim to fall within the scope of the no-fault act and third-party liability policies issued pursuant to the act, an injured plaintiff must show more than that his injuries arose merely from the use, operation, or maintenance of a motor vehicle. Because the act abrogates tort liability arising from the use, operation, or maintenance of a motor vehicle, the defendant’s wrongful conduct, which gives rise to that liability, must also arise from the use, operation, or maintenance of a motor vehicle. Since Corrosion Control was negligent, if at all, under a landowner’s liability claim and not from the use, ownership, or maintenance of the blh boom truck, Corrosion Control is a nonmotorist defendant whose tort liability is beyond the scope of the no-fault act and Aetna’s policy. _
Because Naasko’s complaint failed to allege a claim against Corrosion Control falling within the scope of Aetna’s no-fault policy, Corrosion Control had no rights under Aetna’s policy. We hold, therefore, that Aetna likewise had no duty to indemnify Celina, as Corrosion Control’s subrogee, for the costs of Corrosion Control’s defense or the settlement paid to Naasko.
The Court of Appeals opinion in this case is reversed, and the case is remanded for proceedings consistent with this opinion.
Riley, C.J., and Boyle, J., concurred with Archer, J.
The truck had a flat bed with a mounted boom crane. While the pipes were being loaded onto a separate trailer, outriggers immobilized the truck.
Under an omnibus clause, liability coverage is extended to third persons legally responsible for the use of an insured vehicle. See n 8 and accompanying text.
See n 7 and accompanying text.
Celina moved for summary judgment under GCR 1963,117.2(3) (no genuine issue of material fact), claiming that Corrosion Control was entitled to defense and indemnification as a matter of law. The triad court has not yet ruled on this motion, however, since Celina has failed to present evidence that blh owned the boom truck in question.
Aetna has not admitted that its policy insured the blh boom truck because Celina has not produced any evidence that blh owned the vehicle, or that it was insured under Aetna’s policy.
Aetna also argued that, under Johnston v Hartford Ins Co, 131 Mich App 349; 346 NW2d 549 (1984), Naasko’s injuries did not arise from the use of a motor vehicle.
The bodily injury clause of Aetna’s policy provides:
The company will pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage to which this insurance applies, caused by an occurrence and arising out of the ownership, maintenance or use, including loading and unloading ... of an owned automobile or of a temporary substitute automobile, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient .... [Emphasis added.]
The following are insureds under the policy:
(a) the named Insured;
(c) any other person while using an owned automobile or a temporary substitute automobile with the permission of the named insured, provided his actual operation or (if he is not operating) his other actual use thereof is within the scope of such permission, but with respect to bodily injury or property damage arising out of the loading or unloading thereof, such other persons shall be an Insured only if he is:
(1) a lessee or borrower of the automobile, or
(2) an employee of the named Insured or of such lessee or borrower;
(d) any other person or organization but only with respect to his or its liability because of acts or omissions of an Insured under (a), (b) or (c) above.
See n 7 and accompanying text.
See n 8 and accompanying text.
411 Mich 545-547.
Id. at 548-551.
Id. at 551-554.
We note that the parties have not distinguished between the duty to defend and the duty to indemnify, apparently assuming that the outcome of the latter question will determine the former. Thus, in this case, we assume, without deciding, that because Aetna had no duty to indemnify, it had no duty to defend in the suit against Corrosion Control.
Given our holding, it is unnecessary to determine whether the policy’s workers’ compensation exclusion applies to Corrosion Control.
Corrosion Control also admitted this fact in the trial brief it filed in Naasko’s suit.
Even if Naasko was otherwise entitled to first-party benefits, his workers’ compensation award would appear to bar recovery under the policy’s workers’ compensation exclusion endorsement.
See Longworth v Dep’t of State Hwys, 110 Mich App 771; 315 NW2d 135 (1981) (under Tuttle, since the defendant’s liability arose from the negligent maintenance of the highway, and not from a motor vehicle, the no-fault act was inapplicable). See also Lundy v Groty, 141 Mich App 757; 367 NW2d 448 (1985) (motor vehicle manufacturer and dealership nonmotorist defendants); Coleman v Franzon, 141 Mich App 99; 366 NW2d 86 (1985) (the no-fault act did not abolish a motor vehicle repair facility’s tort liability for negligent brake repairs); Hengartner v Chet Swanson Sales, Inc, 132 Mich App 751; 348 NW2d 15 (1984) (the no-fault act did not abrogate a motor vehicle repair facility’s tort liability); Ohio Casualty Ins Group v Robinson, 127 Mich App 138, 147; 338 NW2d 898 (1983) (Mackenzie, J., concurring in part and dissenting in part) (if the defendant’s negligence arose from grease on the garage floor, the no-fault act did not abolish the service station’s tort liability); Grof v Michigan, 126 Mich App 427; 337 NW2d 345 (1983) (the no-fault act is not applicable where the defendant failed to maintain an intersection in reasonable repair).
Under property protection insurance an insurer is liable to pay benefits for accidental damage to tangible property arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle subject to the provisions of this section and sections 3123, 3125 and 3127. [MCL 500.3121(1); MSA 24.13121(1).]
Justice Brickley’s concurring opinion is appealing because it states an extremely complex and intricate question very simply. Although there is nothing wrong with this, his opinion only serves to perpetuate the same flawed analysis that the lower courts employed. The opinion fails to articulate a principled analysis of Aetna’s entire omnibus clause.
We agree with Justice Brickley’s contention that our task in this case is to interpret a contract of insurance. In this regard, surely no one can dispute that the principles articulated in the no-fault act and case law interpreting the act shed light on the contracting parties’ no-fault insurance agreement. We also agree that the concurring opinion reaches the legally correct result. The opinion, however, rests upon mere conclusory statements without articulating a principled analysis of Aetna’s omnibus clause.
As the concurring opinion notes, whether Corrosion Control is an additional insured under Aetna’s policy rests upon "its liability because of [the] acts or omissions” of either Naasko or blh. As the concurring opinion correctly states, "because of ” is not the mere "but for” causation test commonly found in tort law, but rather, a more narrowly construed concept implying " 'a relationship connecting the culpable acts of persons using the vehicle to [the] liability of another, who then becomes an "insured.” ’ ” Post, p 311. "Because of,” at the very least, includes, but surely is not limited to, vicarious liability as defined in tort and agency law. See post, pp 311-312.
Although the concurring opinion attempts to analyze the "relationship” between Corrosion Control and Naasko, it fails to consider the fact that both Aetna’s omnibus clause and the New York trial court’s interpretation of similar language in Long Island Lighting Co v Hartford Accident & Indemnity Co, 76 Misc 2d 832; 350 NYS2d 967 (1973), expressly refers to the "liability” of the alleged additional insured. In Aetna’s omnibus clause, "liability” precedes "because of” and refers to the alleged liability of the alleged additional insured: "(d) any other person or organization but only with respect to his or its liability because of acts or omissions of an Insured under (a), (b) or (c) above.” [Emphasis added.] The court in Long Island Lighting also noted that the "liability” referred to is that of the alleged additional insured: " 'The words imply a relationship connecting the culpable acts of persons using the vehicle to [the] liability of another, who then becomes an "insured.” ’ ” Post, p 311 (emphasis added).
The ultimate question of the case is whether a sufficient relationship links Naasko’s injuries to Corrosion Control’s alleged liability within the meaning of Aetna’s omnibus clause. As the omnibus clause itself clearly indicates, one factor included in the analysis of this relationship is Corrosion Control’s alleged liability. The issue that the concurring opinion fails to resolve in a principled analysis concerns the scope of this relationship: what "liability” does Aetna’s omnibus clause refer to? As the court in Long Island Lighting correctly noted, the parties to a third-party liability no-fault contract do not " 'demonstrate[ ] [an] intent to deem as an "insured” just any party whose own separate negligence, apart from the vehicle, was a contributor to an accident.’ ” Post, p 312. As the court aptly stated, any other result or interpretation of the no-fault contract would be " 'bizarre.’ ” Id.
The concurring opinion essentially rests upon the New York trial court’s observation, albeit a correct one, that it would be "bizarre” to conclude that Corrosion Control is an additional insured under Aet na’s policy where its alleged liability arose from a premises hazard unrelated to the use of the blh boom truck. In contrast, we have attempted to provide a principled analysis and rational explanation supporting the proposition that the parties to a no-fault insurance contract, absent a contrary agreement, did not intend to extend third-party liability coverage to individuals or organizations like Corrosion Control, " 'whose own separate negligence, apart from the vehicle, was a contributor to an accident.’ ” See post, p 312.
Thus, although it may be true, it is wholly inadequate to rest upon the conclusion that "Corrosion Control, if it is indeed liable at all, is liable because of its own negligence . . . [and] not 'because of ’ Naasko’s acts or omissions . . . .” Post, p 312. The undisputed fact is that if Corrosion Control’s own alleged negligence and resultant liability did arise out of the use of the blh boom truck, Corrosion Control would fall within Aetna’s omnibus clause. It is this precise limitation upon the conduct of third-parties, which the parties to the no-fault contract have agreed, that the concurring opinion fails to analyze. It is for this reason that, within the meaning of Aetna’s omnibus clause, the requisite relationship linking Corrosion Control’s alleged liability to Naasko’s injuries is missing. | [
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Brickley, J.
We granted leave to appeal in this case to decide whether the state or federal prohibition against double jeopardy should have barred defendant’s retrial on armed robbery and felony-firearm charges following a mistrial granted at his request, and whether the prosecutor’s closing argument was so prejudicial to defendant that his conviction on those charges must be reversed. We answer no to the first question and yes to the second, and therefore reverse defendant’s conviction.
I
Defendant Schweidel Tyson and another man, Tommy Lee Forrest, were charged with armed robbery and possession of a firearm during the commission of a felony in connection with the robbery of Flag’s Restaurant in Belleville on December 16, 1980. Defendant’s postarrest statements to the police were the subject of a lengthy Walker hearing, following which the trial judge ruled the statements involuntary and therefore inadmissible. Essentially, defendant had confessed the crime to police, stating that he had originally planned on robbing a bank, but was deterred when he saw the protective glass covering the tellers’ windows.
During direct examination of the officer in charge of the case in defendant’s second trial, the prosecutor was pursuing a line of questioning related to defendant’s demeanor during the trial in an apparent attempt to discredit defendant’s insanity defense by eliciting testimony that he was "putting on sort of an act.” Following testimony to that effect, amid several objections by defense counsel, the record then reveals the following:
Q. Now, the way the Defendant appeared during the booking process immediately after his arrest, does that — did he appear then pretty much then as he appears at times in the courtroom now?
A. I don’t feel so, other than I would have to say when I first spoke with him he appeared to have a —a feeling of — or he displayed a feeling of remorse. [Emphasis added.]
Defense counsel objected and had the jury excused, whereupon the following colloquy occurred:
Mr. Hallmark: Your Honor, I believe the last testimony elicited from the officer was in direct and deliberate violation of this Court’s order as to any and all oral and written statements made by the Defendant. It was intended to and it did get across to this jury the notion that the Defendant talked about this offense, and that he showed some remorse, some feeling of guilt. It was deliberately done. And I would ask for a mistrial at this point.
Mr. Seller: Well, first, as to the notion of it being deliberately done. I can certainly address the Court, and I think it is incumbent upon me to say there was no intention on my part to get into the context of any statements whatsoever, and I think from my perspective it was not deliberate on the officer’s part. It is a difficult area sometimes where you search for words. Certainly one can look sorry as well as saying I am sorry, and I don’t know whether it got across to the jury, you know, what the defense attorney says it got across. It certainly wasn’t intended in any case.
Mr. Hallmark: Your Honor, I have been objecting for the last ten minutes to this line of questioning, because it was leading in that direction. The officer indicated, if I am correct in my recollection, expressed a remorse.
The Court: I doubt that it was intended to violate any Court’s order, but it contains a clear implication that the Defendant said he was sorry he did it. The Motion is granted.
Defendant unsuccessfully moved to bar retrial on the ground that double jeopardy prevented further proceedings because the mistrial was provoked by the prosecutor’s deliberate misconduct or gross negligence.
The third attempt at trying defendant resulted in his conviction of both charges. Defendant’s insanity defense was unsuccessful. A court-appointed psychiatrist, Dr. Joel Dreyer, testified in support of the defendant’s insanity defense, stating his opinion that defendant was a schizophrenic and an alcoholic, and had no impulse control. Testimony from defendant’s family and acquaintances revealed that he had exhibited bizarre behavior since childhood, that he had been in several mental hospitals and alcohol rehabilitation centers, and that he had repeatedly attempted suicide by slashing his wrists, the last attempt being two days before the robbery of the restaurant.
During cross-examination of Dr. Dreyer, the prosecutor asked him a hypothetical question which was factually based upon defendant’s post-arrest statements, previously ruled involuntary:
Q. Now once it occurred to him to rob the Flag’s Restaurant, he couldn’t say no?
A. That’s right.
Q. Had it occurred to him to rob a bank, he would not have been able to say no?
A. No.
Q. Even if he walked in there and found himself faced with bulletproof glass, he couldn’t have stopped himself?
A. Yep, you got it.
Defense counsel objected on the ground that the prosecutor was again attempting to get into evidence a statement that had been ruled inadmissible. Nevertheless, both the prosecution’s expert, Dr. Charles Clark, and Officer Lindberg, the officer in charge of the case, were allowed to testify on rebuttal as to defendant’s postarrest statements regarding the bank. The court gave a cautionary instruction, admonishing the jury that the statements were to be considered not as substantive evidence that defendant had committed the robbery; rather, they could be used only to show his state of mind.
During closing argument, the prosecutor made several references to the fact that defendant’s expert witness, Dr. Dreyer, had been paid for his testimony and that that was his motivation for testifying. He also argued to the jury that Dr. Dreyer was lacking in integrity and that the prosecution’s expert, Dr. Charles Clark (employed at the Forensic Center), was an "unbiased expert who works for the State of Michigan.” Defense counsel objected both during and after the prosecutor’s argument and moved for a mistrial because of the "unfair inferences” made by the prosecutor. The trial judge declined to grant the mistrial, but allowed defense counsel to respond to some of the statements, ruling:
The Court: All right. Number one, the question was not asked of the doctor how he was going to be paid, during the course of either Direct or Cross-Examination. Strictly speaking, it goes beyond the scope of testimony.
In order to balance one against the other, the Court will permit counsel for Defendant, in his Closing Argument, to state that the doctor — Dr. Dreyer was a court-appointed psychiatrist. If you wish to state he was paid by the County, you may do so, although you are not required to. And I may also state for the record that he or any psychiatrist could get more money in their private practice than by a court-appointment. I think that will balance it off. Anything more, gentlemen?
Defense counsel made the following statement during his closing argument:
I believe in Closing Argument, Mr Seller was just a little bit less than kind to Dr. Dreyer. He indicated that Dr. Dreyer’s testimony in this courtroom was bought and paid for; that he wouldn’t have testified on behalf of this Defendant if he wasn’t bought and paid for. That is what it comes down to. Well, it is unfair, for this reason. He failed to say and he failed to put into evidence when he had the opportunity to do so, that Dr. Dreyer is Court-appointed. That man is indigent. The County of Wayne pays Dr. Dreyer, not that man, not me. He failed to say, also, that Dr. Dreyer can earn far more money sitting in his own office treating patients. He is an active treating psychiatrist. He can make more money in his own practice than he can make sitting on that witness stand in this courtroom and standing around during delays and taking abuse from two attorneys who may not think the same or understand the terminology the same as a medical person or a psychiatrist would.
The Court of Appeals affirmed defendant’s conviction of both charges, 133 Mich App 318; 350 NW2d 248 (1984), rejecting defendant’s double jeopardy argument and holding that, although the prosecutor’s closing argument was misconduct, that "this claim of error was waived when defense counsel accepted the court’s offer to make countering arguments.” Id., 325. We granted leave to appeal. 419 Mich 943 (1984).
II
We turn first to defendant’s contention that the mistrial occasioned by Officer Lindberg’s response to the prosecutor’s question regarding defendant’s demeanor following his arrest and at trial should have barred retrial on double jeopardy grounds. Defendant contends that the prosecutor, either by intentional misconduct or gross negligence, precipitated the mistrial by asking a question which was sure to elicit an improper response.
As a general rule, both the federal and state guarantee against being put twice in jeopardy for the same crime does not bar the retrial of a defendant after his prior trial has been terminated following his successful mistrial motion. 98 ALR3d 997 (1980).
Both on the federal and state levels, however, an exception to the rule has developed where the successful mistrial motion is precipitated by prosecutorial or judicial error. Difficulties have arisen, however, both in attempts to define the type of error required for a double jeopardy bar to retrial and in applying the definition to the facts of a given case. As a result of this, different standards have evolved in the federal and state court systems.
The federal standard has evolved through a series of United States Supreme Court cases, culminating in the decision of Oregon v Kennedy, 456 US 667; 102 S Ct 2083; 72 L Ed 2d 416 (1982). In that case, the Oregon Court of Appeals had barred defendant’s retrial for theft of an oriental rug on the ground that the prosecutor’s conduct in asking the complaining witness whether his refusál to do business with defendant was because "he [was] a crook” constituted prosecutorial overreaching sufficient to invoke the protections of the double jeopardy clause. Id., 669.
The Supreme Court reversed, holding that
[t]he circumstances under which such a defendant may invoke the bar of double jeopardy in a second effort to try him are limited to those cases in which the conduct giving rise to the successful motion for a mistrial was intended to provoke the defendant into moving for a mistrial. [Id., 679.]
Prior to Kennedy, several federal and state courts had relied on language from earlier Supreme Court cases, which had suggested that the standard was not one of subjective intent to cause a mistrial, but rather "prosecutorial . . . overreaching,” " 'bad-faith conduct by [the] judge or prosecutor,’ ” intended to provoke a mistrial request by the defendant in order to " 'afford the prosecution a more favorable opportunity to convict’ the defendant,” or "motivated by bad faith or undertaken to harass or prejudice,” in analyzing issues of this kind. Since Kennedy, some state courts have opted to offer broader-reaching double jeopardy protection under their own constitutions, and have adhered to the pre-Kennedy standard.
We find it unnecessary to decide at this time whether Michigan should adopt the pre-Kennedy or the Kennedy standard of prosecutorial error, because we find that the prosecutor’s error in this case was insufficient to meet either standard. The record reflects that the prosecutor was pursuing a line of questioning designed to show the jury that the defendant was a sophisticated actor rather than an insane schizophrenic and could change his demeanor at will, depending upon who was watching him. This line of questioning was certainly relevant, and the question regarding any differences in defendant’s demeanor following his arrest and at trial was a proper one. Officer Lindberg’s answer exceeded the bounds of the question and could not reasonably have been anticipated by the prosecutor. We also note that, following defense counsel’s mistrial motion, the prosecutor denied that the motion had been intentionally provoked, and the trial judge agreed that there had been no intentional misconduct on the prosecutor’s part. We concur in the Court of Appeals statement that
[w]e are unwilling to assume bad intent where the conduct of the prosecutor is, at least, equally consistent with a good faith effort to comply with the court’s order. The objective facts do not support defendant’s claim of deliberate misconduct. [133 Mich App 321.]
Accordingly, we hold that there was neither intentional misconduct nor overreaching on the part of the prosecutor, and that defendant was properly retried on the charges.
Ill
We now turn to the defendant’s claim that the prosecutor’s statements during his closing argument in the third trial, to the effect that defendant’s psychiatric expert had testified only because he was paid to do so, was misconduct so prejudicial that it denied defendant a fair trial. The prosecutor variously referred to Dr. Dreyer as "totally lacking in integrity,” "a businessman who gets paid to do this sort of thing,” and "testifying in a way that was in his best interests to testify.” The trial judge attempted to "balance out” the error by allowing defense counsel to state to the jury that Dr. Dreyer was court-appointed and that the fee paid him by the County of Wayne was less than he could have earned in private practice. The Court of Appeals held that this waived any claim of error by defendant:
We agree with defendant’s claim that the argument made by the prosecutor must be considered misconduct. The record clearly supports defendant’s claim that the prosecutor was aware that his statements to the jury inaccurately characterized the facts concerning the payment of the court-appointed psychiatrist. This argument appears to have been a deliberate attempt to inject prejudicial error into the trial. Nonetheless, we believe that this claim of error was waived when defense counsel accepted the court’s offer to make countering arguments. Defense counsel could have reasonably believed that these countering arguments successfully undermined the credibility of the prosecuting attorney to the extent that defendant might benefit from having his case decided by this jury. To waive this claim of error was a reasonable tactical choice. We find no manifest injustice even though the trial judge might have done more to correct the misstatements made by the prosecuting attorney. [133 Mich App 325.]
We agree with the Court of Appeals that the prosecutor committed misconduct in his closing argument to the jury. We disagree, however, that the error was waived by counsel’s countering statements. Further, we hold that the error was not cured by defense counsel’s statements, and therefore reverse defendant’s conviction.
In People v Williams, 218 Mich 697; 188 NW 413 (1922), the prosecutor charged during closing argument that the defense experts had "prostitute[d] themselves” by testifying in support of defendant’s insanity claim. This Court reversed, holding that
[t]he argument of the prosecuting attorney was highly prejudicial and cannot be excused by anything in the record .... The testimony of the alienist being in the case it was reversible error for the prosecutor to urge the jury to reject the opinions of the alienists and take his opinion and to ask that this be done on the ground they had not been given the facts. . . . There should have gone forth an instruction . . . that it was not permissible for the jury to take the personal opinion of the prosecutor, and also that the alienists were not subject to the charge of prostituting themselves by coming in as witnesses and giving their opinion evidence relative to the mental condition of the accused. [Id., 705-707.]
Similarly, in People v Cowles, 246 Mich 429; 224 NW 387 (1929), this Court reversed the conviction of defendant where the prosecutor stated during closing argument:
I don’t believe there was ever a more disreputable thing seen — I don’t think there was anything more disreputable pulled off in a court of justice, than was pulled off by these two doctors ... if these two doctors were to put on a stunt like that in a vaudeville show, they would go over big. They would get a big laugh. . . . Now, gentlemen of the jury, we all pay taxes for universities, and they turn out things like that. I ask you, gentlemen, what chance a girl has to defend herself against such testimony? And I tell you that those two doctors are worse than the Indian medicine men or negro voodoos? How any professional man can so prostitute his profession and come in here and swear to such statements as that in a court of justice is beyond me. [Id., 431-432.]
This Court held:
The prosecuting attorney had a right to analyze the testimony, urge the jury, upon reason existing in the case to reject it and point out, if possible, its inapplicability. But invective, ridicule, injection of his belief, and innuendoes was not permissible argument, and was unfair to the experts and prejudicial to defendant. See People v Williams, 218 Mich 697 [188 NW 413 (1922)]. [246 Mich 432-433.]
In the civil context, this Court has likewise refused to let stand verdicts rendered following trials in which one party committed misconduct during closing argument. Wayne Co Road Comm v GLS LeasCo, 394 Mich 126; 229 NW2d 797 (1975); Kern v St Luke’s Hospital, 404 Mich 339; 273 NW2d 75 (1978); Reetz v Kinsman Marine Transit Co, 416 Mich 97; 330 NW2d 638 (1982).
Today, we reaffirm the rule established in Williams and Cowles, supra. The closing argument of the prosecutor in this case squares exactly with the situations in those cases. The question whether, and how much, Dr. Dreyer was being paid for his testimony was raised for the first time in closing argument, was without evidentiary support, and was clearly injected to attempt to impeach defendant’s claim of insanity. This personal attack on the defendant’s expert was intended to, and did, distract the jury from the real issues, and required defendant to defend on an issue that was improperly before the jury. Clearly, the critical issue in this case was whether or not defendant was insane. This case, as are so many others, was obviously decided on the basis of which expert the jury chose to believe. For this reason, it is especially important to protect against prosecutorial misconduct designed to impugn the credibility of the defendant’s expert witness.
Because of the high stakes involved in any criminal trial, and because the trial judge in this case failed to give any cautionary instruction to the jury to disregard the prejudicial portion of the prosecutor’s closing argument, we decline to employ a harmless-error analysis. Although defense counsel was given an opportunity to attempt to balance the error, he was still forced to counter an argument that had no basis in the evidence adduced at trial.
For the foregoing reasons, we reverse defendant’s conviction and remand the case for retrial.
IV
Because it may reoccur on retrial, we briefly address one other claim of error by defendant. Both Officer Lindberg and Dr. Clark, the prosecution’s psychiatric expert, were allowed to testify on rebuttal to defendant’s postarrest statements, previously ruled involuntary following a Walker hearing. The jury was given a cautionary instruction that the testimony was to be used only to show defendant’s state of mind, and not for substantive evidence that he had committed the offenses with which he was charged.
Involuntary confessions may not be used for any purpose at trial, either for substantive evidence or for impeachment purposes. People v Reed, 393 Mich 342; 224 NW2d 867 (1975), cert den 422 US 1044, 1048 (1975). See also Mincey v Arizona, 437 US 385; 98 S Ct 2408; 57 L Ed 2d 290 (1978).
The prosecution makes an interesting and novel argument that the statements used in this case were not the type of confession ruled involuntary, and therefore inherently untrustworthy, in Reed and Mincey, and that this Court should recognize a distinction between statements "involuntary in fact” and those "involuntary in law,” and allow the latter to be admitted for impeachment purposes or in rebuttal.
While we find this argument to be worthy of consideration, we decline to take this opportunity to address it since it is not necessary to our decision today. We have reviewed the Walker hearing transcript de novo and find that the trial judge did not clearly err in holding defendant’s statements to be involuntary.
V
Defendant also contends that the trial court erred in giving, over his objection, an instruction on the disposition of defendant in the case of his acquittal by reason of insanity. For the reasons stated in our opinion in People v Goad, 421 Mich 20; 364 NW2d 584 (1984), there should be no such instruction given on retrial.
VI
We have reviewed defendant’s other claim of error and find it to be without merit.
For the foregoing reasons, defendant’s convictions are reversed and the case is remanded for a new trial.
Williams, C.J., and Levin, Ryan, Cavanagh, and Riley, JJ., concurred with Brickley, J.
People v Walker, 374 Mich 331; 132 NW2d 87 (1965).
The first mistrial came about during the empaneling of the jury. During a break in the proceedings, members of the prospective jury panel apparently overheard in the hallway of the acquittal of Tommy Forrest on the same charges. Both parties consented to the mistrial, and it is not the subject of this appeal.
The series of questions and objections preceding the fatal question were as follows:
"Q. Now, have you noticed any difference in his behavior or demeanor during the times that the jury is present in the courtroom and during the times that they are not present.
"Mr. Hallmark: Your Honor, I am going to object; that this relates to any pretrial proceedings. The jury can observe themselves what the Defendant’s demeanor is. That’s their position. It is not for this Officer to testify as to what his demeanor is at times when the jury isn’t present. It is what goes on in the courtroom when the jury is present that is evidence in this case, not what this officer may or may not have seen or may or not believe, as to a difference in this Defendant’s demeanor.
"The Court: The People cannot testify?
"Mr. Hallmark: A change. I believe he called it a change in his demeanor between when the jury is in the courtroom and when the jury is not.
"The Court: Why not?
"Mr. Hallmark: It seems to me it is something out of court and simply the officer’s opinion.
"The Court: Well, every bit of testimony we heard are about events that occurred out of court.
"Mr. Hallmark: I understand that, Your Honor. This is . . .
"The Court: Well. . .
"Mr. Hallmark: If he is relating it to pretrial proceedings, those are proceedings that the jury has no need to know about.
"The Court: We are not talking about any — are you talking about some pretrial proceeding? I didn’t gather that out of that question.
"Mr. Seller: I intended to include within — I intended to include pretrial proceedings to the extent that they immediately — I am talking about the last couple of days, today, yesterday, the day before. If the court wishes me to limit it to just this trial when the jury is outside of the courtroom. I can do that too, but I had intended to include what has gone on in this Court in the last couple of days. I, of course, am not making reference to any testimony that may or may not have been taken outside of the presence of the jury, I am not talking about testimony at all, I am talking about demeanor.
"The Court: Oh, all right.
"Mr. Seller: Okay?
"The Court: Yes, that’s — there is nothing wrong with that.
"Mr. Seller: Thank you, Your Honor.
"By Mr. Seller:
"Q. Now, in looking at the Defendant, watching the way he acts or talks or moves, do [sic] notice any difference between the times that the jury is in the room and the times they [sic] are not in the courtroom?
"A. I feel so, yes.
"Q. How so?
"A. I feel when the jury is in the courtroom he will sit and just stare straight ahead. He will look down. He will very, very infrequently look over at the jury or attempt to make any conference with his attorney. I feel when the jury is out of the room he is a type of individual who will look all around, and seems like he is putting on sort of an act.
”Q. Let me ask you this . . .
"Mr. Hallmark: Your Honor, I’m going to object, again. Now, that is definitely an opinion, and it has nothing to do with his observation. It is an opinion and nothing more. That’s the whole basis of this, his opinion.
"The Court: Well, there is nothing wrong with getting his opinion, but that’s a bare conclusion, and it is not helpful.
"Mr. Hallmark: I would ask that that statement be stricken from the record.
"The Court: The statement that it is an act is stricken. The jury is instructed to disregard it.
"Mr. Seller: Thank you, Your Honor.
"By Mr. Seller:
”Q. Have you had occasion to hear the Defendant talk? Just talk?
"A. Yes, I have.
"Q. Now, I’m not talking about anything he ever said, just the way he talks. Does he talk normal like you and I?
"A. Yes.
"Q. Are you familiar with what psychologists and psychology refer to as an effect [sic]?
"A. No, not that term?
"Q. Okay. Let’s talk about then the expressions that accompany words. You know, if you are angry your face looked a certain way, pleased, and so there are a certainly [sic] set of expressions and gestures that go with the thing we say, and normally one kind fits the other.
"Now, using that as what we are talking about when the defendant —when you seen [sic] him talking, saying something, does he have the right kind of an effect [sic]; do his expressions kind of fit what he is saying?
"A. I felt so, yes.
"Q. Did he appear pretty much normal?
"A. Very much normal.
"Q. Does he appear alert?
"A. Yes.
"Q. Was there . . .
"Mr. Hallmark: Your Honor, again the same objection as to he appears. That’s again a conclusion as to what is normal. Who is normal, whether he appears to be, or is alert. Again a conclusion, the whole questioning.
"The Court: No doubt about it, it is a conclusion, but it is one which laymen are allowed to make.
"By Mr. Seller:
"Q. You have seen him not only talk, but talk to people and people talk to him, is that correct?
"A. Yes.
"Q. Does he respond appropriately when talked to?
"A. I feel he does.
"Q. And with the accompanying facial expressions when talked to?
"A. Yes.
"Q. His mannerisms in sitting and walking, do they appear normal?
"A. At what point?
"Q. Well, simply orientated, is he able to go from one point to another knowing where he is going without wandering around aimlessly?
"A. Oh, yes, I feel he knows what is going on.
"Mr. Hallmark: I object to the remark if he knows what is going on or not. This officer doesn’t know. It is again a conclusion, which he is not allowed to make.
"The Court: You can cross-examine him.”
Following argument outside the presence of the jury, the prosecutor continued his cross-examination on a special record. Although the record is somewhat unclear, it appears that the testimony was not read back to the jury.
Dr. Clark’s testimony was as follows:
"Q. Would you also tell us what he told you about the crime and what conclusion you drew from that, particularly with regard to whether he knew it was wrong or not?
"A He told me that he did enter the bank but immediately observed that there was protective glass or plexi-glass surrounding the tellers’ windows and he said, 'This put me off the rest.’ I asked him what he meant by that. He said he meant it deterred him from robbing the bank. He didn’t rob the bank. Instead, he said he went into the Flag’s Restaurant next door and in his words, 'ordered some money’ while holding the gun on the manager and then exited the restaurant and drove away.
”Q. Now he further stated to you that he had intended to rob the bank, that he went into the bank and saw that the tellers’ windows were closed off with glass, presumably bullet-proof glass. Does that have any significance to you? Then he decides not to rob it, but to rob the restaurant instead. Does that have any significance to you?
"A. Yes. It would appear from that report, that he was able to exercise good common sense on that occasion, to assess the situation, to see that it was not a good place to rob and to leave it.
”Q. Does it all comport with the notion that it is inconsistent with the notion at all that this Defendant, once he got into his mind to do any crime, to do something wrong, couldn’t stop himself?
"A. This behavior showed he was able to be deterred from a crime he had intended to commit.
"Q. Is that a pretty strong indication that, in fact, the Defendant had the capacity to conform his conduct to the requirements of law?
"A. It’s really hard to find a much stronger indication of that sort of report.”
Officer Lindberg testified:
"Q. I’m just asking you to be exact as you can and simply say what it was he said.
"A. He said, T went into the bank to rob it, but they had glass in front of the teller cage, so I went into the restaurant and told the people to give me the money out of the cash register.’ ”
The judge ruled:
"The Court: Let me make this clear to the jury, that the statements that were made by the accused to the psychiatrist or Dr. Clark or Dr. Dreyer or to Mr. Lindberg who just testified here, is not for the purpose of showing substantive evidence. By that, I mean it is not to be considered by you with respect to the crime with which he has been charged for. It is not for any admission on his part. It is only as to the purpose of his state of mind. It is not to be considered of [sic] substantive evidence of his having committed the crime.”
The complained-of portion of the closing argument was as follows:
"Now that brings us to the testimony of Dr. Dreyer. Dr. Dreyer' took the stand and said, Yeah, he’s mentally ill. He’s schizophrenic. I know because I’m an intelligent qualified psychiatrist. I talked to him. He told me he’s a prophet and I believe him and he exhibited signs of having trouble controlling his emotions and he told me he heard voices that told him he was a prophet. And I guess that’s about it. I’m not sure what else he had to say.
"My position, quite simply, is that Dr. Dreyer is lacking in integrity. Whether these are out and out lies, I don’t know. But Dr. Dreyer testiñed in a way that was in his best interests to testify.
"Now what possible interest could Dr. Dreyer have, in testifying that this man is insane? That is easy; money. He gets paid to do it. And what Defendant is going to hire him to testify he is not insane and criminally responsible?
"Mr. Seller: I’m not suggesting necessarily that Dr. Dreyer just came to you and just plain out and out lied for a few bucks. I’m suggesting to you Dr. Dreyer was seeing what he wanted to see, which was insanity, getting him off the hook and getting his fee. I’m not suggesting, by the way, that he only gets paid if he comes down in favor of the Defendant. I’m suggesting it is a business. I’m suggesting, therefore, that he’s willing to look at what he saw with that kind of an eye, with that kind of self-interest, not the kind of impartial self-interest of a medical man or somebody who was looking objectively at the set of facts. But I don’t know. Perhaps, as a businessman he doesn’t have the kind of integrity he should have. Therefore, his opinion, I suggest to you, comes out shallow and unsupported by evidence and lacking any relevance.
"I hope very much you could see this, that you can see through Dr. Dreyer. I compare him with Dr. Clark who is here in the courtroom. I don’t want to call attention to Dr. Clark, but contrast the testimony of Dr. Dreyer with Dr. Clark and their positions. Dr. Clark is an unbiased expert who works for the State of Michigan. He is automatically appointed by the Court to examine anybody who has raised the defense of insanity. He has no axe to grind, no reason to come down, one way or the other. He examines a person automatically and then comes available by law, automatically, to either decide logically whichever side he comes down on, that is the side that is going to call him to testify in trial. He has no connection with me or to the Defendant, in fact, as you heard at the last trial I was in, that Dr. Clark was in, also, he testified on the other side. He testified the fellow, in fact, did meet the requirements of insanity.
"Getting back to Dr. Dreyer’s testimony, he comes in and tells you, As sure as I am Dr. Dreyer — and that means something — as sure as I’m Dr. Dreyer, this man is crazy. Why? Well, I suppose the best thing he had to say was that somewhere in some hospital record he had found somebody had written down 'schizophrenic’ years ago in some other place, That’s the best thing he had to say.
"The Defendant, when he took that test, was faking it. It is the People’s position he did the same thing with Dr. Dreyer. Dr. Dreyer bought it. He bought it because he wanted to buy it, because he gets paid to do this sort of thing.” (Emphasis added.)
The full text of defense counsel’s objection is as follows:
"Mr. Hallmark: Your Honor, this is my first opportunity I’ve had to address the Court outside the presence of the jury since the Prosecutor’s Closing Argument. And I have stated at least one objection during the argument.
"There are several things in the Closing Argument I find objectionable and prejudicial. Most important of those is the statement by the Prosecutor that Dr. Dreyer’s testimony was paid for. That is an unfair inference. It is not based upon the testimony. The Prosecutor had every opportunity to bring out, in testimony from Dr. Dreyer, just what his status is here. The Court record shows that and we argued that before, outside the presence of the jury.
"It’s been mentioned a number of times. Dr. Dreyer is court-appointed. The Defendant is indigent. The County is paying for Dr. Dreyer’s services and Dr. Dreyer could make far more money outside in his own practice, in his own office, than what he could make coming down here to accept a court appointment.
"I’ve expressed to the Court in front of the Prosecutor, a number of times, and I’ve expressed before Judge Dunn a number of times the difficulty I had to get any psychiatrist to even consider examining the Defendant because of the lack of financial payment on the part of the County, the small amount of payment. There was a great deal of difficulty, and Judge Dunn personally had to persuade the doctor to take this case. I think this is an unfair inference.
"It is all the more crucial, because he is the most important Defense witness in the case. It is extremely prejudicial. If I’m not, in some manner, allowed to respond to that, I don’t see how I can respond on the basis of the evidence. Of course, no evidence was introduced as to this Court’s appointment as to the amount of money he’s to be paid for this service.
"Again, I’d ask for a mistrial. I believe it is that prejudicial to this client, to have the doctor’s credibility in Closing Argument, to be put before the jury, which is not in evidence.”
US Const, Am V.
Const 1963, art 1, § 15.
United States v Jorn, 400 US 470, 484; 91 S Ct 547; 27 L Ed 2d 543 (1971).
United States v Dinitz, 424 US 600, 611; 96 S Ct 1075; 47 L Ed 2d 267 (1976).
Lee v United States, 432 US 23, 33; 97 S Ct 2141; 53 L Ed 2d 80 (1977).
As a practical matter, however, it is only in the most egregious cases that retrial has been barred on double jeopardy grounds, regardless of whether the higher standard of subjective intent or the more lenient standard of overreaching or bad faith harassment is employed. See, e.g., United States v Kessler, 530 F2d 1246 (CA 5, 1976); United States v Broderick, 425 F Supp 93 (SD Fla, 1977); United States v Martin, 561 F2d 135 (CA 8, 1977). See generally Note, Double Jeopardy: An illusory remedy for governmental overreaching at trial, 29 Buffalo LR 759 (1980).
See, e.g., State v Oliver, 57 Or App 567; 646 P2d 107 (1982) (prosecutor discussed armed robbery victim’s testimony with police officer in hallway outside courtroom despite order excusing witnesses); Commonwealth v Miele, 300 Pa 197; 446 A2d 298 (1982) (unsolicited prejudicial comment by police officer during direct examination); State v Bodley, 394 So 2d 584 (La, 1981) (witness for prosecution not included on witness list).
However, in none of the above cases was the defendant successful in having a retrial barred on double jeopardy grounds. This continues to illustrate the reality that the prosecutorial overreaching exception does not serve as a carte blanche to prevent reprosecution.
We reject the Court of Appeals holding that defense counsel waived any claim of error by accepting the court’s offer to rebut the prosecutor’s statements during his closing argument. The trial court already denied his motion for mistrial; he was faced with either letting the extremely prejudicial statements stand unrebutted, only to risk having an appellate court say he waived the error by not accepting the court’s offer to cure it, or attempt to balance the statement as best he could, within the offer of the trial judge, and hope for the best while still preserving the issue for appeal. The Court of Appeals opinion essentially places a defendant in a no-win situation: he waives the error by accepting the offer and also waives it by declining. This situation hardly allows defense counsel to make, as put by the Court of Appeals, "a reasonable tactical choice.”
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] |
Archer, J.
We granted leave to consider whether the statute of limitations bars the majority of the alleged use tax sought to be assessed against the derivatively liable corporate officer, where there was no issuance of a notice of intent to assess against the officer and where the notice of final assessment was issued more than four years after a majority of the assessment and the taxable period.
We would hold that the use tax statute of limitation found in MCL 205.100(3); MSA 7.555(10)(3) has no application to derivatively liable corporate officers. Consequently, the limitation period does not bar a majority of the tax debt imposed upon the officer. Further, we would hold that the Department of Treasury is not required to send individual notice of personal liability to derivatively liable officers. Accordingly, the decision of the Court of Appeals is affirmed.
FACTS
Appellant Seabourn S. Livingstone was the sole owner, chairman of the board of directors, and treasurer of the St. Clair Rubber Company, a corporation subject to the Use Tax Act. Pursuant to the act, the appellee, Department of Treasury, issued a notice of intent to assess St. Clair as a result of a use tax audit deficiency for the period July 1, 1978, through June 30,1981.
St. Clair timely appealed the assessment to a Department of Treasury hearing referee. On July 12,1982, the referee issued a recommendation that the intent to assess be finalized for the amount of the deficiency deemed owing.
The referee’s decision was not appealed. As a result, on September 29, 1982, under the authority of MCL 205.22(2); MSA 7.657(22)(2), the department issued a notice of final assessment against St. Clair. St. Clair, nonetheless, failed to remit the taxes and interest due.
In accordance with MCL 205.96(3); MSA 7.555(6)(3), the department issued notices of personal liability, individually, against appellant, Seabourn S. Livingstone, and H. Gordon Wood, the named secretary of the corporation, for the unpaid assessment against St. Clair. In a consolidated effort, both Livingstone and Wood appealed their liability to the Michigan Tax Tribunal.
On September 23, 1986, the tribunal issued its opinion and judgment. Citing Metro GMC Truck Center, Inc v Dep’t of Treasury, 4 MTTR 54, 56 (Docket No. 74377, September 6, 1985), and Rowland v Collins, 48 Ohio St 2d 311; 358 NE2d 582 (1976), the tribunal concluded,
"[A]n unappealed final assessment becomes due and payable by operation of law. Because the corporate officer’s liability for the overdue tax is derivative in nature, the corporate officer is bound by the oscitancy of the corporation.” Petitioners, therefore can not raise the statute of limitations bar and exemption claim, nor challenge the method of computation once the assessment is final. The position of primary or secondary debtor has no [effect] on the right of the Petitioners to challenge the makeup of the assessment. The finality of the assessment is the factor which establishes a bar to such a challenge.[ ]
On October 13, 1986, Seabourn Livingstone filed a claim of appeal, arguing that assessments against derivatively liable corporate officers were separate and distinct from those against the corporation, as was the officer’s right to assert the statute of limitations. The Court of Appeals affirmed the decision of the Tax Tribunal, holding that a corporate officer’s liability for unpaid corporate taxes was not separate and distinct from the assessment against the corporation, and thus separate notice of an unfiled return or an unpaid tax was not required when the officer, by his responsible corporate position, already knew or should have known that the tax had not been paid. Further, the Court held that the "finality” of the assessment on the corporation barred the corporate officer from contesting the amount of taxes owed. We subsequently granted leave to appeal.
i
A
The issue before us involves the interplay between two provisions of the Use Tax Act. MCL 205.91 et seq.; MSA 7.555(1) et seq. The specific provisions at issue provide, in pertinent part:
If a corporation licensed under this act fails for any reason to file the required returns or to pay the tax due, any of its officers having control, or supervision of, or charged with the responsibility for making the returns and payments shall be personally liable for the failure. [MCL 205.96(3); MSA 7.555(6X3).]
A deficiency, interest, or penalty shall not be assessed after the expiration of 4 years from the date set for the filing of the required return or the date the return was filed, whichever is later. [MCL 205.100(3); MSA 7.555(10X3).]
The first, and perhaps, least difficult aspect of the task before us concerns the determination of exactly when and under what circumstances a corporate officer may be held personally liable for unpaid corporate use taxes. In addressing this question, the Court of Appeals in Peterson v Treasury Dep’t, 145 Mich App 445, 450; 377 NW2d 887 (1985), held:
In order to hold a person personally liable for a corporation’s tax liability under [MCL 205.96(3); MSA 7.555(6)(3)], the Department of Treasury must first show that the person is an officer of the corporation. Then it must show either (1) that this officer has control over the making of the corporation’s tax returns and payments of taxes; or (2) that this officer supervises the making of the corporation’s tax returns and payments of taxes; or (3) that this officer is charged with the responsibility for making the corporation’s returns and payments of taxes to the state. [See also Keith v Treasury Dep’t, 165 Mich App 105, 108; 418 NW2d 691 (1987).]
We agree that personal tax liability will not attach to corporate officers who simply have significant involvement in the financial affairs of a corporation. The involvement must be tax specific.
In this case, the appellant’s "responsibility for making the returns and payments” of taxes pursuant to MCL 205.96(3); MSA 7.555(6X3) is uncontested. It was further conceded at oral argument that the statute renders the appellant "derivatively” liable. On that account, the appellant cites the factually similar, Bloom v United States, 272 F2d 215, 221 (CA 9, 1959), in which the Court of Appeals for the Ninth Circuit espoused the following supposition regarding derivatively liable parties:
In our view, [the applicable statutory section] imposes a separate and distinct liability upon the officer of the corporation who has the duty or is responsible for the collection and payment of the tax and who willfully fails either to collect the tax or to pay it over. While this liability is denominated "penalty” it is "to be assessed and collected in the same manner as taxes are assessed and collected.” While it might be said that the assessment made on appellant is derivative of the assessments made on the corporation, in that they both relate to taxes collected or withheld by the corporation, the liability imposed upon appellant by [the applicable statute] is statutory and in such cases the statutory limitations are controlling.
The conclusory nature of the Bloom court’s characterization and application of the terms "derivative,” "solely of derivative character,” and "separate and distinct,” unfortunately diminishes their effect here. Hence, we believe that as a preliminary matter the term "derivative liability,” as it pertains to corporate officers, in this context, ought to be clearly defined and effectively applied to the facts at bar.
The Random House Dictionary of the English Language (2d ed, unabridged), defines the term "derivative,” as "not original; secondary.” Black’s Law Dictionary (5th ed) offers, "Coming from another; taken from something preceding; secondary. That which has not its origin in itself, but owes its existence to something foregoing. Anything obtained or deduced from another.”
Our application of the preceding to the present facts leads us to the conclusion that the liability imposed upon the appellant was, indeed, strictly and solely derivative for several reasons. First, in 1923, St. Clair Rubber Company established itself as an incorporated entity under the laws of our state. Arguably, one of the most attractive features of modern incorporation is the opportunity for individuals to avail themselves of limited liability. See Henn & Alexander, Law of Corporations (3d ed), § 79, p 148. When a business person, such as the appellant, cognitively makes the decision to incorporate, we believe, he also cognitively enjoys the benefit of having shielded himself, in however limited a Sense, from the direct or primary responsibility to answer, legally, in his own name.
Second, the tax liability imposed under MCL 205.96(1); MSA 7.555(6)(1), was created by St. Clair Rubber Company, the corporate entity, by its "storage, use, or consumption of ” tangible personal property or services. See MCL 205.91 et seq.; MSA 7.555(1) et seq. The ensuing corporate taxation was not based on or directed at the activities of Seabourn Livingstone, the individual. The responsibility for the tax originated from acts "solely” attributed to the entity, St. Clair Rubber Company. St. Clair, and not Mr. Livingstone, was the principal tax actor and, hence, the taxpayer.
Finally, MCL 205.96(3); MSA 7.555(6)(3) expressly provides: "any of its officers . . . shall be personally liable for the failure.” (Emphasis added.) The statute does not say "shall be personally liable for the taxes,” so as to create the arguable "separate and distinct” liability, suggested in Bloom, supra. The phrase "liable for the failure” plainly carries with it the notion that failure is the condition necessary to be fulfilled in order for the provision to be activated. Thus, in this case, it is the fact of St. Clair Rubber Company’s failure to pay its requisite taxes, that provides the fabric from which the appellant’s liability derives._
B
Moving to the more difficult issues presented by this case, we next address whether the four-year limitation period for the assessment of use taxes is applicable to a corporate officer who has been held personally liable for use taxes his corporation failed to pay, and whether the department is required to send individual notice of personal tax liability to corporate officers.
The appellant argues that the language "shall not be assessed after the expiration of 4 years,” found in MCL 205.100(3); MSA 7.555(10)(3), should be interpreted to preclude assessment against derivatively liable corporate officers. (Empahsis added.) The appellant also believes that the department should be required to send individual notice of personal tax liability to corporate officers held so liable. To the contrary, the department asserts that because the original assessment against St. Clair Rubber Company became "final” on September 29, 1982, the appellant cannot collaterally attack the amount due for any reason, including the statute of limitations. The department further asserts that because the appellant personally received notice of his corporation’s tax deficiency, the necessity for sending individual notice of liability was obviated.
As noted by the Tax Tribunal and the Court of Appeals, this case poses an issue of first impression in this state. Therefore, our consideration encompasses a discussion of the rules regarding the interpretation and applicability of statutes of limitations, the direction taken by our sister courts in addressing statutes of limitations and the requirement of individual notice, as well as the policy implications any decision by this Court may have concerning this issue of great public significance.
II
STATUTES OF LIMITATION
A
The limitation provision at issue was enacted to govern the time in which the Department of Treasury could assess use taxes. With specific regard to the construction of statutes of limitation, this Court in McKisson v Davenport, 83 Mich 211; 47 NW 100 (1890), reasoned that statutes of limitation should be construed in a manner that best effectuates the policies the Legislature intended to promote. Furthermore, whenever dismissal of an action filed beyond a statute of limitations would not further the Legislature’s objectives in proscribing the limitation period, a plaintiff should be given an opportunity to assert his claim. 54 CJS, Limitation of Actions, §3, pp 17-18, n 19, citing Platoro Ltd, Inc v Unidentified Remains of a Vessel, 614 F2d 1051 (CA 5, 1980).
In Lenawee Co v Nutten, 234 Mich 391, 396; 208 NW 613 (1926), we further acknowledged that "[i]n placing a construction upon the language of [a statute of limitation], we should . . . have in mind the purpose of such statutes.” In Sproat v Hall, 189 Mich 28, 32; 155 NW 361 (1915), we determined that the "whole chapter” in which a statute of limitation was contained, was "to be read as one act, with its several parts and clauses mutually acting on each other as their sense requires.”
Correspondingly, Sands advises, "whenever the legislature enacts a provision it has in mind previous statutes relating to the same subject matter,” and "legislation is never written on a clean slate, nor is it ever read in isolation or applied in a vacuum.” 2A Sands, Sutherland Statutory Construction (4th ed), §§ 51.02, 53.01, pp 453, 549.
It has been universally held that statutes of limitation sought to be applied to bar rights of the government must receive a strict construction in favor of the government. See Badarroco v Comm’r of Internal Revenue, 464 US 386, 391-392; 104 S Ct 756; 78 L Ed 2d 549 (1983) (When a taxpayer files a fraudulent return, taxes may be assessed "at any time” regardless of whether the limitations period has run). Furthermore, the United States Court of Appeals for the Fifth Circuit, observed that "limitation statutes barring the collection of taxes otherwise due and unpaid are strictly construed in favor of the government.” Lucia v United States, 474 F2d 565, 570 (CA 5, 1973) (A statute of limitations for excise wagering tax was held to be inapplicable because the extent to which assessments are barred is exclusively controlled by Congress; there is no fundamental right to have taxes assessed and collected within any period of limitations). See also McDonald v United States, 315 F2d 796, 801 (CA 6, 1963) (A statute of limitations did not bar assessment of excise taxes where no return was filed; a limitation barring collection of taxes must receive strict construction in favor of the government). Pacific Coast Steel Co v McLaughlin, 61 F2d 73, 75 (CA 9, 1932) (Statutes of limitation barring the collection of income and excess profit taxes that are justly due and unpaid must receive a strict construction in favor of the government). Loewer Realty Co v Anderson, 31 F2d 268, 269 (CA 2, 1929) (Statutes of limitation barring the collection of income taxes must receive a strict construction in favor of the government such that collection after the expiration of the limitation period is not barred).
B
The appellant’s contention that the limitation period should be deemed applicable to any person "assessed” thereunder, is based, primarily, on the belief that the sentence containing the four-year period makes no internal reference to whom it should apply, i.e., the sentence itself contains no limiting words like "against the taxpayer.” However, viewing the limitation statute in the light most favorable to the Department of Treasury, we find significant the fact that succeeding sentences in the provision do expressly refer to "the taxpayer” and the "person subject to tax under this act.” MCL 205.100(3); MSA 7.555(10X3). (Emphasis added.) These specific references throughout the whole of the provision dissuade us from believing that their absence from the seminal sentence prescribe, exclusively, to whom the provision should apply. Furthermore, we believe their inclusion is indicative of the Legislature’s intent that the dictates found therein be directed, not at "any person” but at "the taxpayer
The dissent believes that derivatively liable corporate officers are "taxpayers” under the statutory scheme in operation here. In principal support for this assertion, the dissent contends that it is the officer’s status as a "taxpayer” that provides the right of appeal in this Court. The dissent further believes that corporate officers are "assessed” when their tax liability arises under MCL 205.96(3); MSA 7.555(6)(3). We disagree with both propositions.
We have concluded that because § 10(3) refers to "the taxpayer” and the "person subject to tax,” the Legislature intended § 10(3) to apply solely to principle tax actors. (Emphasis added.) Accordingly, a person who becomes liable either primarily or derivatively can be termed, in the most literal sense, a "taxpayer,” i.e., one who pays taxes. However, this does not diminish or effect the plain truth that Mr. Livingstone, in his status as a derivatively liable corporate officer under §6(3), did not engage in the taxable acts out of which the principle or primary tax liability in this case was born. The appellant simply cannot occupy the same taxpayer status as St. Clair Rubber Company. Therefore, the limitations period in § 10(3) was drafted with the intent that it apply narrowly to the events surrounding the taxable activity from which the principle assessment against St. Clair was rendered. Thus, contrary to the dissent, our conclusion that the appellant is not a "taxpayer” does not rest feebly and trivially upon hollow word usage or placement, but on a substantively sound and well-founded premise.
Accordingly, St. Clair, the tax actor, was "assessed” in accordance with MCL 205.21(1); MSA 7.657(21)(1); St. Clair was sent notice of the department’s intent to levy; St. Clair requested and received an informal conference at which the hearing officer affirmed the assessment in accordance with MCL 205.21(2); MSA 7.657(21)(2); St. Clair refused or failed to appeal the department’s final determination as provided in MCL 205.22; MSA 7.657(22), etc. The procedures accorded the appellant here were the department’s notification to him that his personal liability had been triggered and his right of appeal to the Tax Tribunal, the Court of Appeals, and finally here, in accordance with MCL 205.22(1); MSA 7.657(22)(1). Thus, we disagree with the dissent’s blanket assertion that "the responsible officer in this case was accorded procedures applicable to 'taxpayers’ throughout the whole assessment and collection process.” See post, p 824, n 22. (Emphasis added.)
Moreover, the word "assess,” as used in the phrase "shall not be assessed,” encompasses a great deal more than presentment and collection of a tax bill. As a practical matter, in order for a party to be "assessed,” the department must: identify the taxable party, categorize the taxable activity, estimate the tax value associated with the activity, measure the quantity of activity, and fix the amount of taxes due and payable to the state.
Accordingly, the word "assessed,” as used in the instant provision, refers to a process which has its anchor in the tax activities of "the taxpayer,” while presentment and collection represent only ministerial steps in the procedure. In the present case, the Department of Treasury properly "assessed” a tax deficiency against St. Clair Rubber Company within the constraints of MCL 205.100(3); MSA 7.555(10X3). However, upon the happening of the condition, i.e., nonpayment of the taxes due, the department sought to enforce and collect the debt created by St. Clair’s default in accordance with MCL 205.96(3); MSA 7.555(6)(3).
C
Any interpretation or construction of the use tax limitation period must be done with comprehensive and simultaneous examination of statutes with which it must function. Hence, our task here is not to construe and interpret the limitation period in isolation. See Hall, supra at 32. Our consideration necessarily includes the statute under which the tax assessment liability was imposed, which, in this case, is § 6(3). See 2A Sands, Sutherland Statutory Construction (4th ed), §§51.02, 53.01, pp 453, 549. Because both provisions are contained in the Use Tax Act, they are to be construed as mutually acting toward the fulfillment of the purpose envisioned by the Legislature in enacting them. See Nutten, supra at 396.
The dissent has proposed that the repeal of MCL 205.100(3); MSA 7.555(10)(3) was intentionally preceded by the 1986 addition of MCL 205.27a(2), (5); MSA 7.657(27a)(2), (5) to the Revenue Division of the Department of Treasury.
The dissent contends that the near duplicity of the language found in the now repealed § 10(3) and § 27a(2) necessarily presumes that the legislative intent of the drafters of § 10(3), as well as of §6(3), can be gleaned from or evidenced by an analysis of subsections 27a(2) and (5). We disagree with this presumption.
Certainly, the Legislature compiled Michigan’s tax statutes with the intent of enacting specific provisions directed to particular types and kinds of liabilities. We do not believe the Legislature intended or intimated that subsections 27a(2) and (5) or any provision of the Revenue Division be applied or adopted in the place of provisions specifically enacted under other self-contained tax acts. Our decision in this case is governed by an analysis of the interrelationship between §§ 6(3) and 10(3) as they read at the time the appellant was aggrieved.
Furthermore, the language appearing in subsections 27a(2) and (5) is not identical to that contained in the provisions of the Use Tax Act. Accordingly, in our view those entities bound by the Use Tax Act should be bound and guided narrowly by the specific provisions of the act itself. We do not believe that it was the Legislature’s intent to adopt subsections 2 and 5 in the place of provisions specifically enacted within other self-contained tax acts. Hence, we do not agree that the case at bar was affected in any way by the aforementioned 1986 amendments of the Revenue Division.
The limitation period at issue, now MCL 205.100(3); MSA 7.555(10)(3), was first introduced into the Use Tax Act in 1949. Apparently, rejecting the application of a general civil limitation period to tax assessments, the Legislature felt it necessary to enact a provision specifically designed for tax assessment.
MCL 205.96(3); MSA 7.555(6X3), the statute imposing corporate tax liability in this case, originally contained no provision for derivative liability. However, in 1971, subsection c, now subsection 3, was enacted. Thus, we may consider that in enacting this provision, the Legislature had in mind matters of monetary recourse and the establishment of derivative resources for tax debt payment.
Construing the statutes together, we conclude that the limitation provision applies only to those "persons,” hence, private corporations, see MCL 205.92(a); MSA 7.555(2)(a), who store, use, or consume tangible personal property or services. As we noted previously, the corporate officer, although "charged with the responsibility for making returns and payments” of corporate taxes, is nonetheless not the taxable actor and cannot, therefore, be "assessed.” The transposition of a tax debt onto a derivatively liable party, irrespective of the terminology used, is an ancillary, ministerial step in the collection process, created, apparently in light of the Legislature’s recognition of the need to insure the payment, collection or satisfaction of tax deficiencies "assessed” against corporate tax actors. Thus, commensurate with what we deem to be a reasonable interpretive analysis of legislative intent and purpose, we conclude that operation of the use tax limitation period is restricted to the corporate entity "subject to the tax,” which, in this case, is St. Clair Rubber Company.
D
Statutes of limitation serve several purposes in jurisprudence. As arbitrary enactments, they are designed to accord and limit a reasonable time within which an action may be brought. As a general rule, the limitation period begins to run at the time when a complete cause of action or right of action accrues or arises or when there is a demand capable of present enforcement. See 54 CJS, Limitation of Actions, §81, p 117. See also Howard v General Motors Corp, 427 Mich 358, 384-385; 399 NW2d 10 (1986).
Statutes of limitation are, in essence, intended to exact diligence in the prosecution of a litigant’s claim. Accordingly, "[l]imitation statutes are not enacted for the sake of defeating legal claims, but only to require notice of such claims within a reasonable time and thus guard against the unfair handicaps of defending against unfounded and belated suits.” Lynch v American Motorists Ins Co, 101 F Supp 946, 949 (ND Tex, 1951).
In the present case, the appellant believes that the limitation period found in § 10(3) applies to corporate officers on the basis of the assumption that corporate officer liability is "separate and distinct.” Accordingly, the appellant contends that because he received the first notice of personal liability three years after such notice was sent to St. Clair, he should only be responsible for paying a portion of the taxes owed to the state. However, because we do not believe corporate officer liability to be "separate and distinct,” or that § 10(3) applies to such officers, we also do not believe notice, other than that sent by the department in this case, is required to be sent to officers liable under §6(3).
The courts below in their analyses of the notice prong of this action relied principally on three cases: Van Orman v Indiana, 416 NE2d 1301 (Ind App, 1981), Keith v Dep’t of Treasury, supra, and Ball v Indiana Dep’t of Revenue, 525 NE2d 356 (Ind Tax Ct, 1988). Van Orman, the first decided of these, involved, as in the case at bar, the State of Indiana’s suit against a corporate president to recover unpaid corporate sales and use taxes. F. Harold Van Orman, the President of Van Orman Enterprises, Inc., complained that no notice of the department’s intent to hold him personally liable for Van Orman Enterprises’ unpaid taxes was given within the three-year corporate tax period of limitation, and, for that reason, the state should have been barred from collecting the tax debt. The court, disagreeing with Mr. Van Orman, reasoned,
[I]t would not be unreasonable to conclude [that] Van Orman, as president and general manager of Van Orman Enterprises, Inc., was obviously aware that the corporation had failed to pay the sales and use tax during the period in question. He not only signed the protest to the State’s assessment, but he participated in the hearing on the assessment. To say that Van Orman was unaware of the corporation’s failure to pay the tax or to contend that he was unaware of his personal liability, in the face of [the statute outlining conditions for personal liability of corporate officers], is ludicrous. All persons are charged with the knowledge of the rights and remedies prescribed by statute. . . . The clear pronouncement of the statute is, ipso facto, sufficient notice that a duty exists to remit the tax fund held in trust. No personal notice of the assessment is required. [Id. at 1306. Citations omitted.]
Although devoid of a statute of limitations discussion, the per curiam decision in Keith v Dep’t of Treasury, supra, nonetheless provided the lower courts in this case with much of the substantive reasoning on which their decisions were based. The facts in Keith similarly involved the personal liability of corporate officers for unpaid corporate use taxes. The issue there, however, was whether proper notice of the corporate officer’s liability for payment of the corporate sales tax was given pursuant to MCL 205.24(1); MSA 7.657(24)(1). Holding that notice to the corporate officer was not necessary, the Court opined:
Statutory notice provisions are designed to provide due process of law, the purpose being to provide the taxpayer with notice that a deficiency assessment has been levied for certain taxes and to afford the taxpayer an opportunity to contest it. A defect in formal notice does not violate due process if notice was in fact given. . . . The due process test concerning notice is whether the means chosen to serve notice are reasonably calculated to reach the party, and not whether notice is actually received. [Id. at 109. Citations omitted.]
Despite semantic distinctions between the statute considered at bar and the Indiana sales and withholding tax statute analyzed in Ball v Indiana Dep’t of Revenue, supra, the lower courts in this case found its reasoning persuasive. In Ball, which, likewise, dealt with whether notice of a tax deficiency sent and received by a corporation provided sufficient notice to the responsible officer, the Indiana Tax Court held:
When notice to the corporation is notice to the officer, the officer is apprised of the amount assessed against the corporation. Because [the corporate officer’s] personal liability for the tax is purely derivative, he is also effectively apprised of his potential personal liability for the amount assessed against the corporation. Notice to the corporation is therefore reasonably calculated to apprise the responsible officer of his personal liability for corporate tax.
Since the responsible officer’s personal liability for the tax is purely derivative, the application of a separate statute of limitations to the responsible officer’s assessment makes no sense.[ ] [Id. at 358-359. See also Rowland v Collins, supra.]
E
We reject the appellant’s assertion that derivatively liable officers should receive individual notice of the Treasury’s intention to seek personal collection. We believe that a corporate officer who is liable under MCL 205.96(3); MSA 7.555(6X3) must have necessarily been intimately involved in the corporation’s failure to pay taxes and consequently does not need formal notice of such liability to be able to defend in a subsequent action. See United States v Hunter Engineers & Constructors, Inc, 789 F2d 1436 (CA 9, 1986). The service of notice to derivatively liable corporate officers would simply add an additional formalistic requirement upon which parties liable under MCL 205.96(3); MSA 7.555(6)(3) could rely for the purpose of thwarting the Legislature’s intent to recover the unpaid use taxes from such person. We believe a conclusion by this Court that the appellant, Mr. Livingstone, who, on his own admission, consciously failed to pay the taxes owed by a corporation he individually owned, and whose activities he personally oversaw, is not now responsible to remit the same, in its entirety, would be absurd.
Officers who are made personally aware of corporate tax deficiencies and who, through neglect or intent, fail to make provisions for the satisfaction of the corporate tax debt when due, simply cannot be allowed to take advantage of their own omissions. To say that the appellant was unaware of his imminent personal liability in the face of MCL 205.96(3); MSA 7.555(6)(3), would be unrealistic. The clear pronouncement of the statute is, we agree, ipso facto sufficient notice that a duty exists to ultimately remit the tax liability to the state. See Van Orman, 416 NE2d 1306.
CONCLUSION
In light of the foregoing, we conclude that the use tax statute of limitation found in MCL 205.100(3); MSA 7.555(10)(3), has no application to derivatively liable corporate officers. Consequently, the statute of limitation here should not bar a majority of the use tax imposed upon the appellant. We further would hold that the Department of Treasury is not required to provide individual notice of personal liability to derivatively liable officers. Accordingly, the decision of the Court of Appeals should be affirmed.
Cavanagh, J., concurred with Archer, J.
The phrase "majority of the alleged use tax” can be summed up as follows:
St. Clair Rubber Company, as a corporate entity, was assessed for use taxes on December 10, 1981, for the three year period beginning July 1, 1978, through June 30, 1981. The appellant believes that because he received the first notice of personal liability on July 27, 1984, that under the four-year statute of limitations found in MCL 205.100(3); MSA 7.555(10)(3) he should only be liable for the taxes owing from July of 1980, thus extinguishing his obligation to pay the taxes owing for years 1978 and 1979. Accordingly, the appellant asserts that if the statute of limitations is found to be applicable to derivatively liable corporate officers, that "a majority” of his tax liability should be barred. Thus, contrary to the belief of the dissent, Mr. Livingstone’s attempted application of the corporate limitations period to corporate officers is, as a practical matter, an attack on challenge to the "amount” of the assessment against St. Clair, for which, of course, Livingstone became liable upon St. Clair’s failure to pay. See MCL 205.96(3); MSA 7.555(6)(3).
MCL 205.100(3); MSA 7.555(10)(3) provided:
A deficiency, interest, or penalty shall not be assessed after the expiration of 4 years from the date set for the filing of the required return or the date the return was filed, whichever is later. The taxpayer shall not claim refund of any amount paid to the department after the expiration of 4 years from the date of payment. A taxpayer shall not assign a claim against the state to any other person. If a person subject to tax under this act shall fraudulently conceal liability for the tax or a part of the tax, the revenue commissioner, upon discovery of the fraud and within 2 years thereafter, shall proceed to assess the tax with penalties and interest as provided, computed from the date on which the tax liability originally accrued and the tax, penalties, and interest shall become due and payable after notice and hearing as provided.
We recognize that as of December 21, 1988, MCL 205.100(3); MSA 7.555(10)(3) was amended, apparently, eliminating the four-year limitation period. However, in order to address the issues appealed, we have based our analysis on the provision as it existed when the notice of intent to assess St. Clair Rubber Company was originally rendered, that being December 10,1981. The provision presently provides:
Claims for refund pursuant to the 1988 amendatory act amending section 2 shall be filed not later than March 31, 1989. The approved refunds shall be paid without interest. The department shall not pay refunds totaling more than $1,000,000.00 in any 1 fiscal year, unless the single business tax act, Act No. 228 of the Public Acts of 1975, being sections 208.1 to 208.145 of the Michigan Compiled Laws, is amended to impose a 1-year surcharge on the business activity of contract construction to recover the cost of the refunds.
The Use Tax Act is found in MCL 205.91 et seq.; MSA 7.555(1) et seq. St. Clair was subject to this act as a result of its use of electrical power and its consumption of gas.
MCL 205.21(1); MSA 7.657(21X1) provides:
If a person fails or refuses to make a return as required, in whole or in part, or if the department has reason to believe that a return made does not supply sufficient information for an accurate determination of the amount of tax due, the department may obtain information on which to base an assessment of the tax. The department, by its duly authorized agents, may examine the books, records, and papers and audit the accounts of a person or any other records pertaining to the tax. As soon as possible after procuring information, the department shall assess the tax determined to be due and shall notify the taxpayer of the assessed amount and the specific reasons for the assessment.
The amount of the tax assessment was $9,053.18, while the interest accrued at that time, amounted to $1,736.82, totaling $10,790. At the time of the application to this Court, the accrued interest had increased to $3,161.22, thus adjusting the amount due to $12,214.40.
MCL 205.22(1); MSA 7.657(22)(1) provides, in pertinent part:
A person aggrieved by an assessment, decision, or order of the department may appeal the contested portion of an assessment, decision, or order to the tax tribunal within 30 days, or to the court of claims within 90 days after the assessment, decision, or order.
MCL 205.22(2); MSA 7.657(22)(2) provides:
The assessment, decision, or order of the department, if not appealed in accordance with this section, shall be final and shall not be reviewable in any court by mandamus, appeal, or other method of direct or collateral attack.
MCL 205.96(3); MSA 7.555(6)(3) provides:
If a corporation licensed under this act fails for any reason to file the required returns or to pay the tax due, any of its officers having control, or supervision of, or charged with the responsibility for making the returns and payments shall be personally liable for the failure. The dissolution of a corporation shall not discharge an officer’s liability for a prior failure of the corporation to make a return or remit the tax due. The sum due for such a liability may be assessed and collected as provided in section 17.
The tribunal, further, extinguished the liability of secretary H. Gordon Wood for St. Clair’s delinquent taxes, on the basis of the lack of evidence of Wood’s control or supervision of St. Clair’s tax payment activities.
Livingstone v Dep’t of Treasury, 169 Mich App 209; 426 NW2d 184 (1989).
Livingstone v Dep’t of Treasury, 432 Mich 891 (1989).
See Michigan Tax Tribunal Opinion and Judgment at 5. The appellant did not contest the tribunal’s finding in the Court of Appeals or in this Court.
The linchpin of the Bloom court’s belief that corporate officer liability is not "solely of derivative character,” appears to be the fact that the liability imposed is "statutory.” However, because the court failed to cite any authority or to provide any explanatory support for its conclusions, we find its statement unhelpful.
The dissent expresses the view that the term "failure” to pay the requisite taxes refers to each time a corporation fails to file a return or pay taxes "on or before the fifteenth day of each calendar month.” MCL 205.96(1); MSA 7.555(6)(1). Accordingly, the dissent believes § 6(3) derivative liability is triggered each time a corporation fails to so file or pay. We disagree. It is our belief that the Legislature intended § 6(3) derivative liability to be activated following the allotment of a full and fair opportunity for a corporation to file and pay taxes, either voluntarily, as per MCL 205.96(1); MSA 7.555(6)(1) or following MCL 205.21(1) and (2); MSA 7.657(21X1) and (2), assessment and levy. We believe adoption of the literal reading urged by the dissent, i.e., the random, monthly activation of § 6(3) liability, so as to create responsibility for tax payment in the corporation one month, and in the derivatively liable officer the next, etc., would mock the purpose of the provision itself. For we agree that "[w]hile the intention of the legislature must be ascertained from the words used to express it, the manifest reason and obvious purpose of the law should not be sacrificed to a literal interpretation of such words.” 2A Sands, Sutherland Statutory Construction (4th ed), § 46.07, p 110.
In the present case, St. Clair failed to file and pay "on or before the fifteenth day of each calendar month,” for three years. Accordingly, the department assessed St. Clair for the three years it had been tax deficient. MCL 205.21(1); MSA 7.657(21X1). The taxpayer, St. Clair, clearly availed itself of the procedural avenues for review and evaluation in accordance with MCL 205.21(2); MSA 7.657(21X2) and following a final determination of the taxes due, St. Clair, indeed, still failed to file, pay, or even appeal further. It was not until the assessment amount was deemed "final” that the appellant received notice of his personal, derivative liability. We believe the procedure followed by the department reflected a reasonable interpretation of the legislative scheme in operation here. Accordingly, we do not believe corporations and corporate officers can be "assessed” at the same time because § 6(3) liability cannot attach to a corporate officer until the provisions found in MCL 205.21(1) and (2); MSA 7.657(21X1) and (2) have been fairly and fully availed and any assessments made thereunder, deemed final.
The dissent, further, cites Allan v United States, 386 F Supp 499 (ND Tex, 1975), in support of the notion that a derivatively liable corporate officer is a taxpayer. However, we distinguish Allan on the basis of several facts. Allan concerned facts governed by 26 USC 6672, a federal tax statute, very different from MCL 205.96(3); MSA 7.555(6)(3) and MCL 205.22; MSA 7.657(22), i.e., the right to appeal under the federal scheme, apparently, must be limited to those deemed "taxpayers.” Furthermore, the court in Allan specifically limited its reasoning to a "§ 6672 setting.” Id. at 504. Likewise, Williams v United States, unpublished memorandum opinion of the United States District Court for the Northern District of Illinois, decided October 6, 1983 (Docket No. 82 C 3505), and Holcomb v United States, 622 F2d 937 (CA 7, 1980), each cited by the dissent, as well, analyze and construe the federal tax scheme as it relates to waiver forms. Finally, in Calderone v United States, 799 F2d 254 (CA 6, 1986), the court reasoned that corporate officers and corporate entities can be assessed at the same time on the basis of a "separate and distinct” liability analysis. The case at bar does not involve waiver forms or "separate and distinct” liability. We, therefore, find the federal dicta cited by the dissent neither binding nor persuasive. See also n 26.
In terms of a corporate officer’s right to be before this Court, we note that MCL 205.22; MSA 7.657(22) explicitly begins, "A person aggrieved by an assessment, decision, or order of the department . . . .” (Emphasis added.) We do not believe the provision either states or implies that the aggrieving "assessment” is one necessarily made as against the person appealing.
We believe St. Clair and the appellant both find their rights to appeal in § 22. In light of the Legislature’s decision to incorporate the term "person aggrieved” into the appeal provision, as opposed to uniformly utilizing the term "taxpayer,” we likewise do not believe the Legislature intended to allow appeals by "persons aggrieved” only to the Tax Tribunal or the Court of Claims, while affording "taxpayers” with appeals to the Court of Appeals and this Court. Indeed, the ability to appeal from a final determination of the Tax Tribunal is limited only by its own self-contained statutory framework. See MCL 205.753(2); MSA 7.650(53)(2). Accordingly, the appellant, Mr. Livingstone, is appropriately before this Court as a person aggrieved by an “assessment” made against St. Clair.
Importantly, the use tax limitation period contains the phrase "shall not be assessed” and not "shall not be collected.”
Our reasoning that appellant Livingstone could not be "assessed” was deduced principally from our determination that the liability imposed upon him was unequivocally derived from that which was first imposed upon St. Clair. The dissent wishes to render the term "derivative liability” a nullity when it asserts that a corporate officer’s liability may be labeled "derivative” but that the officer is to be "assessed” a "separate and distinct” indebtedness. To the contrary, we believe application of the term "derivative liability” to corporate officers under MCL 205.96(3); MSA 7.555(6)(3), directs that every facet of an officer’s resultant financial responsibility, including being "assessed,” derives not from the officer’s acts, but from the corporation’s taxable business functioning.
The dissent curiously believes that the Legislature "intended to refer to MCL 205.100; MSA 7.555(10),” or §10, instead of MCL 205.107; MSA 7.555(17), or § 17, when it drafted the sentence, "The sum due for such a liability may be assessed and collected as provided in section 17,” found in §6(3). It is upon this creative premise of "legislative mistake” that the dissent hinges its assertion that derivatively liable officers are "assessed” for taxes in the same manner as principal corporate taxpayers. It is our belief, however, that this assertion cannot be proved or disproved by this Court, as such matters can only be appropriately resolved by the Legislature.
However, we note that § 17 has been repealed. Moreover, before its revocation, the provision read as follows:
Any person who fails or refuses to make any return required under this act or who makes any false or fraudulent return or false statement in any return, with intent to defraud the state or evade payment of the tax or any part thereof imposed by this act, or who aids or abets another in any attempt to evade the payment of the tax or any part thereof as imposed by this act, or any person or president, vice-president, secretary or treasurer of any company or association who makes or permits to be made for any person, company or association any false return or any false statement in any return required in this act, with the intent to evade or assist in evading the payment of any tax hereunder, shall be deemed guilty of a misdemeanor and upon conviction thereof, shall be fined not less than $500.00 nor more than $5,000.00 or imprisoned in the county jail not more than 1 year, or by both such fine and imprisonment in the discretion of the court. In addition to the foregoing penalties, any person who shall knowingly swear to or verify any false or fraudulent return, or any return containing any false or fraudulent statement, with the intent to defraud or to aid, abet or assist in defrauding the state, shall be guilty of the offense of perjury, and, on conviction thereof, shall be punished in the same manner provided by law. [Emphasis added.]
We believe the referenced sentence found in § 6(3) was drafted in order that it be made clear that corporate officers were subject to the same severe penalties as principal taxpayers for tax evasion, etc. Thus, we think the Legislature’s intent was clear. Consequently, we find the dissent’s assertions of legislative mistake unfounded.
(2) A deficiency, interest, or penalty shall not be assessed after the expiration of 4 years after the date set for the filing of the required return or after the date the return was filed, whichever is later. The taxpayer shall not claim a refund of any amount paid to the department after the expiration of 4 years after the date set for the filing of the original return. A person who has failed to file a return is liable for all taxes due for the entire period for which the person would be subject to the taxes. If a person subject to tax fraudulently conceals any liability for the tax or a part of the tax, or fails to notify the department of any alteration in or modification of federal tax liability, the department, within 2 years after discovery of the fraud or the failure to notify, shall proceed to assess the tax with penalties and interest as provided by this act, computed from the date on which the tax liability originally accrued. The tax, penalties, and interest shall become due and payable after notice and hearing as provided by this act.
(5) If a corporation liable for taxes administered under this act fails for any reason to file the required returns or to pay the tax due, any of its officers having control, or supervision of, or charged with the responsibility for making the returns or payments shall be personally liable for the failure. The signature of any corporate officers on returns or negotiable instruments submitted in payment of taxes shall be prima facie evidence of their responsibility for making the returns and payments. The dissolution of a corporation shall not discharge an officer’s liability for a prior failure of the corporation to make a return or remit the tax due. The sum due for a liability may be assessed and collected under the related sections of this act.
As used in this act:
(a) "Person” means an individual, firm, partnership, joint venture, association, social club, fraternal organization, munici pal or private corporation whether or not organized for profit, company, estate, trust, receiver, trustee, syndicate, the United States, this state, county, or any other group or combination acting as a unit, and the plural as well as the singular number, unless the intention to give a more limited meaning is disclosed by the context. [MCL 205.92(a); MSA 7.555(2Xa).]
The appellant noted at oral argument that the Department of Treasury, in its appellate brief, described the July 27, 1984, notice of personal tax liability sent to the appellant as an "assessment.” The dissent also emphasized that the department frequently employed the term in describing the corporate officer’s indebtedness. Nonetheless, we do not believe word usage, in this instance, is dispositive. We stress that the differentiation we make between assessing corporate entities and transferring tax debts to derivatively liable corporate officers is substantive in nature.
The department’s argument that the "finality” of the assessment amount against the corporation under MCL 205.22(2); MSA 7.657(22X2), barred the appellant’s effort here to reduce the amount owing, is, we believe, a sound argument, and our decision to address and develop the first impression issue whether MCL 205.100(3); MSA 7.555(10)(3) can be applied to derivatively liable corporate officers was not intended to diminish or nullify its merits. We have chosen, however, to express no opinion as to its import on the facts at bar at this time. Thus, contrary to that which appears in the dissent, we express neither approval or disapproval as to the validity of this premise.
See In re Straight Estate, 329 Mich 319, 325; 45 NW2d 300 (1951).
MCL 205.24(1); MSA 7.657(24X1) provides:
If a person fails or refuses to file a return or pay a tax administered under this act within the time specified, the department, as soon as possible, shall assess the tax against the person and notify the person of the amount of the tax.
In its brief, the Department of Treasury sought to analogize derivative corporate tax liability to that of lender or surety corporate tax liability, as discussed in United States v Associates Commercial Corp, 721 F2d 1094 (CA 7, 1983). In Associates, the court held that the same limitation period applicable to principally taxed corporate employers should also be applicable to its lenders. The court further held that under 26 USC 6303(a),* a lender was a "person liable for the unpaid tax,” so that separate notice of liability was required to be sent to a lender within the principal taxpayer limitation period.
We decline to apply the reasoning found in Associates to the present facts for several reasons. First, the court in Associates principally addressed the tax ramifications arising out of an individual’s choice to lend funds to a corporation, a situation clearly distinguishable from the case at bar. Second, our decision today narrowly speaks with regard to derivative corporate officer liability as outlined in MCL 205.96(3); MSA 7.555(6)(3), and does not purport to supply any guidance as to corporate lenders or sureties. Third, and most important, the opinion espoused in Associates was repudiated by the United States Supreme Court in United States v Jersey Shore State Bank, 479 US 442; 107 S Ct 782; 93 L Ed 2d 800 (1987), where the Supreme Court held that the language found in 26 USC 6303(a), to the effect that "notice of [an assessment] to each person liable for the unpaid tax,” did not require the government to provide notice and a demand for payment to a lender before bringing suit to collect sums for which the lender was liable.
* Section 6303. Notice and demand for tax.
(a) General rule. — Where it is not otherwise provided by this title, the Secretary shall, as soon as practicable, and within 60 days, after the making of an assessment of a tax pursuant to section 6203, give notice to each person liable for the unpaid tax, stating the amount and demanding payment thereof. Such notice shall be left at the dwelling or usual place of business of such person, or shall be sent by mail to such person’s last known address.
In cases where a corporate tax default occurs before the officer assumes control over the respective tax activities of a corporation, the officer cannot be held personally liable for the corporation’s tax debts, because he was not "charged with the responsibility for making the corporation’s returns and payments” of the corporate taxes at the time the default occurred. See Slodov v United States, 436 US 238; 98 S Ct 1778; 56 L Ed 2d 251 (1978).
In view of the most recent amendment of MCL 205.100(3); MSA 7.555(10X3), see n 2, the question whether there is a need for a statute of limitation directed specifically at derivatively liable corporate officers under MCL 205.96(3); MSA 7.555(6)(3), so that the length of time in which an officer may be held liable for payment of corporate use taxes can be limited or "cut short,” is one that is appropriately addressed to the Legislature. | [
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Wahls, J.
The question in this appeal from the trial court’s opinion and order granting defendant’s motion for a summary judgment is whether Scott Blekkenk’s oral cancellation of his insurance policy was an effective cancellation. In answering this question, we are called upon to determine Blekkenk’s rights and obligations under MCL 500.3020; MSA 24.13020 and the insurance policy.
On April 6, 1983, Blekkenk went to the Boyer Agency and applied for no-fault automobile insurance from defendant, Allstate Insurance Company. Blekkenk paid $40 and received a certificate of no-fault insurance with a stated expiration date of June 6, 1983. This certificate, or insurance binder, was a contract of temporary insurance pending issuance of a formal policy or proper rejection by Allstate. See generally State Automobile Mutual Ins Co v Babcock, 54 Mich App 194, 203-206; 220 NW2d 717 (1974). On April 12, 1983, Jon Raatz, the insurance agent who serviced Blekkenk, forwarded the insurance application to Allstate.
On April 19, 1983, Blekkenk returned to the Boyer Agency and orally requested that Raatz cancel his insurance policy. Because Allstate had not yet issued a formal policy, Raatz did not have a policy number and, therefore, merely made a memorandum of Blekkenk’s cancellation. After Blekkenk’s policy arrived from Allstate, a secretary at the Boyer Agency prepared a cancellation request on an Allstate form, dated May 2, 1983. This form was sent to Allstate along with the policy, on May 4, 1983, and indicated that the cancellation was effective as of April 19, 1983.
On May 7, 1983, Blekkenk was severely injured in an accident while driving the car for which he had orally cancelled the insurance. Allstate issued a check on May 10, 1983, refunding the unused portion of Blekkenk’s down payment on his premium. Allstate contends that Blekkenk’s oral cancellation was effective and, therefore, Blekkenk was without no-fault coverage at the time of the accident. The trial court agreed with Allstate and granted Allstate’s motion for summary judgment based on that contention. Plaintiff, Shirley Mae Blekkenk, guardian of the person and conservator of the estate of Scott Blekkenk, appeals therefrom. Intervening plaintiffs, the Michigan Attorney General and Department of Social Services, also appeal therefrom. The appeals were consolidated by the Court of Appeals.
i
Appellants argue first that Blekkenk’s cancellation was ineffective because it was not in conform ity with the applicable statute. Appellants contend that it was necessary for Blekkenk to return the insurance binder to Boyer Agency or Allstate and that Blekkenk was entitled to ten days’ written notice of cancellation accompanied by a statement that he should not operate an uninsured vehicle.
MCL 500.3020; MSA 24.13020 provides in relevant part:
(1) A policy of casualty insurance, except worker’s compensation, including all classes of motor vehicle coverage, shall not be issued or delivered in this state by an insurer authorized to do business in this state for which a premium or advance assessment is charged, unless the policy contains the following provisions:
(a) That the policy may be canceled at any time at the request of the insured, in which case the insurer shall, upon demand and surrender of the policy, refund the excess of paid premium or assessment above the customary short rates for the expired time.
(b) That the policy may be canceled at any time by the insurer by mailing to the insured at the insured’s address last known to the insurer or an authorized agent of the insurer, with postage fully prepaid, a 10 days’ written notice of cancellation with or without tender of the excess of paid premium or assessment above the pro rata premium for the expired time. The excess, if not tendered, shall be refunded on demand and the notice of cancellation shall state that the excess premium, if not tendered, will be refunded on demand.
(4) A notice of cancellation, including a cancellation notice under section 3224, shall be accompanied by a statement that the insured shall not operate or permit the operation of the vehicle to which notice of cancellation is applicable, or operate any other vehicle, unless the vehicle is insured as required by law. [Emphasis added.]
We conclude that appellants’ reliance on this statute is misplaced.
First, subsection (1)(a) does not require that the insurer demand and actually receive the policy in order for the cancellation to be effective. The clear import of the language is that, upon canceling his insurance, the insured may demand refund of the unused premium and the insurer is statutorily obligated to make the refund upon such demand and surrender of the policy.
Second, subsection (1)(b) does not apply to cancellation by the insured but requires ten days’ written notice only where cancellation is by the insurer. National Ben Franklin Ins Co of Michigan v West, 136 Mich App 436, 448; 355 NW2d 922 (1984), lv den 422 Mich 852 (1985).
Third, the warning statement in subsection (4) is required only where the insurer cancels the policy. The warning statement must accompany a notice of cancellation, which, as we have noted above, is not required where the insured cancels the policy.
n
Appellants also argue that cancellation must be according to the provisions of the policy and that such provisions may not be waived, even by "mutual agreement” of the parties.
In this case, the Allstate policy stated as a general condition:
The named insured may cancel this policy by mailing to Allstate written notice stating when thereafter such cancellation shall be effective, or by surrender of the policy to Allstate or any of its authorized agents and, if so, the cancellation shall be effective at the time of surrender.
Another general condition of the policy provided:
The terms of this policy may not be waived or changed by notice to or knowledge possessed by any agent or other person, but, subject to Condition 6, only by policy endorsement. Such terms of this policy as are in conflict with statutes of the state in which this policy is issued are hereby amended to conform.
These provisions are relevant because the rights and liabilities of the parties pursuant to the insurance binder are determined by reference to the conditions of the policy expected to be issued. State Automobile Mutual Ins Co v Babcock, supra, 54 Mich App 205.
"Generally speaking, the rights and obligations of parties to an insurance contract on termination thereof depend on the specific provisions of the policy.” VanZanten v National Casualty Co, 333 Mich 28, 43; 52 NW2d 581 (1952). "Notice of cancellation of an insurance policy must be according to the provisions of the policy and be peremptory, explicit, and unconditional.” Beaumont v Commercial Casualty Ins Co, 245 Mich 104, 106-107; 222 NW 100 (1928). There is old authority for appellants’ position that strict compliance with the policy provisions is essential.
In Schroeder v Farmers' Mutual Fire Ins Co, 87 Mich 310; 49 NW 536 (1891), plaintiff had paid up his dues and assessments and directed the insurer’s secretary to take his name off the books, as he wished to withdraw. The secretary made an entry: "Withdrawn, Nov. 21, 1889; policy not returned.” Plaintiff’s house was destroyed by fire on January 20, 1890, and plaintiff sought benefits from the insurance company. The company contended that plaintiff had withdrawn, notwithstanding noncompliance with the following provision of the company’s charter:
Any member may, at any time, withdrawn therefrom by returning his or her policy or policies to the secretary, and by paying all assessments made, or liable to be made, for previous losses and debts, and claims then due, or liable to become due, from such member to the company.
Following a trial, the jury returned a verdict for defendant and plaintiff appealed. The Supreme Court concluded:
The court in its charge seems to have understood the right of the company to require the surrender of the policy before the withdrawal became operative and effective, so far as the rights of the company are concerned, and yet he directed the jury that the withdrawal became complete, if the secretary and the plaintiff so understood it, though the policy was not surrendered. In this the court was in error. There was no such act done as required by the charter in order to withdraw from the company, and, had a fire occurred by which other members met with losses, the plaintiff could have been held liable to an assessment for his proportionate share of such losses. This obligation still resting upon the plaintiff, the defendant company must be held equally bound, under the circumstances, to pay the plaintiffs loss. [87 Mich 313.]
Interestingly, the Court then fell back on an alternative ground for reversal, assuming the trial court’s theory was correct. One justice dissented from that part of the majority’s opinion which held that surrender of the policy was essential to withdrawal.
A scenario similar to that envisioned by the Schroeder Court was addressed in Nichol v Murphy, 145 Mich 424; 108 NW 704 (1906). There the defendant applied for fire insurance on November 14, 1896, and was issued a policy for a term of three years. About one year later, defendant sought to withdraw and surrendered his policy with his request to a local agent. He did not, however, pay his pro rata share of the as yet unassessed premium. While defendant clearly believed that he had withdrawn, and the local agent probably believed likewise, the home company did not receive notice of the withdrawal, and its receiver upon dissolution sued defendant for the assessments owed for the final two years of the policy term. A unanimous Supreme Court concluded that defendant’s cancellation was ineffective, citing Schroeder, supra, and other cases.
In Anno: Construction, application, and effect of clause that liability insurance policy may be canceled by insured by mailing to insurer written notice stating when thereafter such cancellation shall be effective, 11 ALR4th 456, 458, the annotator concluded that "the general rule seems to be that an effective cancellation will require strict compliance with the cancellation clause.” The annotator reviewed two cases from other jurisdictions in which oral statements were found ineffective where written notice of cancellation was required.
The general rule of strict compliance recognizes that both the insured and the insurer have their respective rights and interests in the policy. The rule is designed to protect against a unilateral cancellation by the insurer, depriving the insured of expected coverage, or by the insured, depriving the insurer of expected profits from the premiums. However, the general rule will not be applied where its application does not serve its purpose of preserving the contract intended by the parties.
Thus, in Beaumont v Commercial Casualty Ins Co, supra, 245 Mich 107, the Supreme Court stated that defective cancellation may be ratified and strict policy notice may be waived. An example of waiver is provided in Hillock v Traders Ins Co, 54 Mich 531; 20 NW 571 (1884). In Hillock, the agent notified the insured that the policy was canceled and requested surrender of the policy. The insured did not return the policy, believing that he did not have it, and asked the agent to procure other insurance. No premium refund was made, although the policy provided for termination by the company "on refunding a ratable proportion of the premium for the unexpired term of the policy.” In the absence of a contractual provision conditioning cancellation on surrender of the policy, the Surpreme Court concluded that the failure to return the policy was unimportant, although it was some evidence on the question of cancellation. The Court further concluded that the insured’s direction to the agent to procure other insurance, "which must have been upon the understanding that he would use the premium money for the purpose, was a waiver of any tender of its return to him.” 54 Mich 538. "All such transactions,” the Court stated, "are to be construed reasonably and fairly, and in accord with the evident understanding of the parties at the time.” Id.
In Anno: Obtaining new property insurance as cancellation of existing insurance, 14 ALR4th 781, 783, the annotator states,
The method of cancellation provided for in an insurance policy is not necessarily exclusive so as to preclude an effective cancellation of the policy by mutual agreement without compliance with the procedure so provided. Thus, it is well established that a policy of insurance may be canceled at any time before loss, by an agreement between the parties, and that such cancellation may be by the consent of the parties, express or implied from the circumstances, independently of the terms of the policy. On the other hand, it is equally true that in the absence of fraud or misrepresentation, neither party to an insurance contract can withdraw therefrom, or cancel it without the consent, express or implied, of the other.
Citing the same encyclopedic source as the annotation, this Court has followed the "well-established” rule that cancellation may be by mutual agreement or consent. American & Foreign Ins Co v Allied Plumbing & Heating Co, 36 Mich App 561, 568; 194 NW2d 158 (1971). See also Auto-Owners Ins Co v Southern Michigan Mutual Ins Co, 123 Mich App 39, 44, n 6; 333 NW2d 168 (1983) (noted that holding did not preclude company from raising defense of cancellation by mutual consent), National Ben Franklin Ins Co of Michigan v West, supra, 136 Mich App 448-449 (regardless of what happened, it was clear that all parties understood the policy was canceled, so the cancellation was effective).
We turn now to the specific facts of this case and, for the sake of clarity, restate the relevant provisions of the insurance policy. General Condition 10, governing cancellation, provided in part:
The named insured may cancel this policy by mailing to Allstate written notice stating when thereafter such cancellation shall be effective, or by surrender of the policy to Allstate or any of its authorized agents and, if so, the cancellation shall be effective at the time of surrender.
General Condition 5, governing changes, provided:
The terms of this policy may not be waived or changed by notice to or knowledge possessed by any agent or other person, but, subject to Condi tion 6, only by policy endorsement. Such terms of this policy as are in conflict with statutes of the state in which this policy is issued are hereby amended to conform.
Allstate argues that the condition for cancellation is inapplicable in this case because no policy had been issued to Blekkenk when he sought to cancel coverage and, therefore, he could not surrender the policy. Appellants contend that, during the period before the formal policy is delivered, the condition for cancellation must be construed as requiring surrender of the insurance binder.
Allstate also argues that the conditions for cancellation are not mandatory because the word "may” is used without a further provision that cancellation may only be by written request or by surrender of the policy. Because the condition for cancellation is designed to aid the insurer, Allstate argues that the insurer may accommodate the insured by waiving the requirements of written notice or of surrender. Appellants, of course, view the condition as mandatory and reject the possibility of waiver in light of General Condition 5, which prohibits waiver of policy terms except by policy endorsement.
Underlying the parties’ respective arguments are two different fundamental points of view. Appellants proceed upon the well-established principle that insurance laws, and policies, are to be liberally construed in favor of policyholders, creditors and the public. See Dearborn National Ins Co v Comm’r of Ins, 329 Mich 107, 118; 44 NW2d 892 (1950). Allstate’s argument, at its most basic level, relies on the fact that Blekkenk, Boyer Agency and Allstate itself all understood the policy to be canceled. Resolution of the issue in this case requires that we take into account both of these perspectives. However, in doing so, our analysis takes a somewhat different course then that presented by the parties.
It is the established law in this State that surety contracts, entered into in an attempt to comply with statutory requirements, are read in the light of such statutory requirements and the terms of such contracts are construed to comply with the statutory requirements. The statute is read into the contract. Oakland County v Central West Casualty Co, 266 Mich 438; 254 NW 158 (1934). The same rules of construction apply to suretyship contracts and to insurance policies. City of Detroit, for use of Watson v Blue Ribbon Auto Drivers’ Ass’n, 254 Mich 263; 237 NW 61; 74 ALR 1306 (1931). Insurance contracts are subject to statutory regulation. They should be construed in the light of statutory requirements, and mandatory statutory provisions should be read into such insurance contracts. [Galkin v Lincoln Mutual Casualty Co, 279 Mich 327, 331; 272 NW 694 (1937).]
MCL 500.3020(1)(a); MSA 24.13020(1)(a), governing cancellation by the insured, mandates that the policy contain a provision that the policy may be canceled "at any time at the request of the insured.” We think that this statute prohibits a construction of Allstate’s policy that would preclude oral cancellation by the insured as occurred in this case. Accordingly, we need not consider whether the arguments as presented by Allstate would independently require the conclusion that General Condition 10 permits oral cancellation without return of the insurance binder and/or policy.
As is evident from the cases of Schroeder and Nichol, discussed earlier in this opinion, policyholders share an interest not only in having coverage but also in avoiding unneeded or unwanted premiums and coverage. Clearly, insurance policies have typically required more than a simple oral cancellation by the insured and this, in conjunction with the rule of strict compliance, has worked to favor the insured’s interest in coverage. Yet we ha$e not found in the case law that a public policy has been identified mandating a certain level of protection in favor of coverage and thus limiting the insured’s freedom to contract; rather, the courts have relied on the parties’ agreements. However, we believe that the present statute limits the insurer’s ability to protect its premiums through restrictions on the insured’s method of cancellation. While this may mean that a person will not be covered in a situation where coverage would have been found pursuant to Schroeder or Nichol, it is not for us to review the wisdom of the legislation.
The clear language of subsection (1)(a) provides that the insured may cancel his policy at any time upon request. In contrast, subsection (1)(b) provides for written notice of cancellation by the insurer. We conclude that, had the Legislature intended to require that the insured submit a written notice, it would have clearly said so. The Legislature having permitted an oral cancellation, Allstate may not prohibit it. Galkin, supra, and see General Condition 5 of the Allstate policy.
Subsection (1)(a) also states that "the policy may be canceled . . ., in which case the insurer shall, upon demand and surrender of the policy, refund the excess.” In this provision, surrender of the policy is tied to the refund and obviously assumes that cancellation has already occurred. Accordingly, to give effect to all of the words, it must be concluded that surrender of the policy is not required for cancellation. Allstate’s imposition of such a restriction on Blekkenk’s right to cancel is in conflict with and must give way to the statutory provision.
Blekkenk’s cancellation was in accord with MCL 500.3020(1)(a); MSA 24.13020(1)(a). That he intended to cancel and that Allstate’s agent accepted his cancellation are without dispute. Jon Raatz, whose testimony was accepted hy all the parties for purposes of the proceedings thus far, testified that the cancellation occurred as follows:
[H]e came into the office. And he said, "Mr. Raatz, I need to cancel the insurance on my Gremlin.” I know this isn’t the exact wording, but it went along that line. And I asked him why. And he said that it was broken down. It wouldn’t be running and it would be several months. It’d be a long time, maybe as long as June, before he got his car running. I made some small talk with him. And said if it was only going to be a couple weeks don’t cancel the insurance. And I kidded him about getting it — I remember I kidded him about Murphy’s Law saying, "You’ll probably get the car running on Sunday, and then you won’t be able to drive because you have no insurance.” And he said, "Oh, no. That wouldn’t happen. Just cancel the policy.” I said, "Fine. We’ll do it for you. And when you get it running, come back and see me.”
The facts being undisputed, the trial court correctly concluded as a matter of law that Blekkenk was without coverage, and that Allstate was entitled to summary judgment pursuant to GCR 1963, 117.2(3), now MCR 2.116(0(10).
Affirmed.
See, generally, 43 Am Jur 2d, Insurance §§ 431, 432. | [
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Per Curiam.
Defendant appeals as of right his jury trial convictions of armed robbery, MCL 750.529; MSA 28.797, two counts of felonious assault, MCL 750.82; MSA 28.277, three counts of possession of a firearm in the commission or attempted commission of a felony, MCL 750.227b; MSA 28.424(2), and being an habitual offender, fourth offense, MCL 769.12; MSA 28.1084. Defendant’s sentences for the underlying offenses were vacated, and defendant was sentenced to a term of thirty to forty-five years’ imprisonment as an habitual offender. We affirm.
On November 18, 1991, an armed gunman robbed Gem and Diamond Specialists, an Imlay City jewelry store. The gunman entered the store and browsed briefly. He then indicated that he wanted to look at a ring. While Suzanne Johnson, the owner of the store, was removing the ring from the showcase, the man drew a gun and ordered her to lie down in the store safe. After binding Johnson’s wrists and ankles, the gunman took approximately $2,000 from the cash register. The robber then entered a back office and similarly bound the employee working there.
While the robber was still in the back, Kim Jorgensen, a business associate of Johnson, entered the store. Jorgensen discovered Johnson in the safe, handed her a pair of scissors, and hurried to the telephone. The gunman emerged from the back and told Jorgensen to hang up the telephone. At this time, Johnson, who had freed herself, pointed a gun at the gunman. The gunman aimed his gun at Johnson, but quickly left the store without firing.
The store was equipped with a video surveillance camera, which recorded some of the actions of the gunman. The videotape, as well as several frames of the film developed into still photographs, were later admitted into evidence at trial.
The police investigation eventually focused on defendant. After Johnson identified defendant in a photographic lineup, defendant was arrested.
Defendant escaped from custody in March 1992 while visiting a dentist’s office in Lapeer. While waiting for the dentist, defendant asked to use the restroom. After he had been in the restroom for approximately a minute, defendant opened the door and said he needed help. When Deputy Michael Hollenbeck approached the restroom, defendant pointed a gun at him. Defendant ordered Hollenbeck to step into the restroom. Defendant then disarmed Hollenbeck and, with a gun in each hand, instructed him to remove defendant’s restraints and use them to shackle himself to the plumbing fixtures. After Hollenbeck complied, defendant fled. Defendant’s girl friend, Carolyn Rau, picked up defendant in Flint later that morning. Defendant was later apprehended in and extradited from Tennessee.
i
Defendant first argues that the trial court erred so as to require reversal in allowing the prosecutor to introduce evidence of defendant’s armed escape from custody. In particular, defendant cites Hollenbeck’s testimony as prejudicial; Hollenbeck stated that defendant had pointed a semiautomatic weapon at him and said, "Don’t do it, I’ll shoot you right where you’re at.” Defendant contends that the admission of this evidence allowed the jury to conclude that defendant had a propensity to commit armed robberies.
A trial court’s decision to admit evidence will not be reversed absent an abuse of discretion. The standard for reviewing an abuse of discretion is narrow; the result must have been so violative of fact and logic that it evidences a perversity of will, a defiance of judgment, or an exercise of passion or bias. People v Woods, 200 Mich App 283, 288; 504 NW2d 24 (1993).
It is well established in Michigan law that evidence of flight is admissible. See, e.g., People v Cammarata, 257 Mich 60, 66; 240 NW 14 (1932); People v Cutchall, 200 Mich App 396, 398-401; 504 NW2d 666 (1993); People v Clark, 124 Mich App 410, 413; 335 NW2d 53 (1983). Such evidence is probative because it may indicate consciousness of guilt, although evidence of flight by itself is insufficient to sustain a conviction. Cutchall, supra at 399, 401; see CJI2d 4.4. The term "flight” has been applied to such actions as fleeing the scene of the crime, leaving the jurisdiction, running from the police, resisting arrest, and attempting to escape custody. 29 Am Jur 2d, Evidence, § 532, p 608.
Although defendant concedes that evidence of flight is admissible, he argues that he was unfairly prejudiced by the admission of the evidence regarding the details of his escape because it involved criminal acts separate from those at issue in the trial. Defendant contends that because the admission of evidence of other criminal activity is strictly limited by MRE 404(b), the trial court erred in allowing the jury to learn of the criminal acts committed by defendant in the course of his escape.
The Missouri Court of Appeals addressed this issue in State v Meeks, 659 SW2d 306 (Mo App, 1983). In Meeks, in the course of escaping from the hospital, the defendant attacked the deputy guarding him; during the struggle, the defendant beat the deputy, choked him, and knocked out his lower teeth. The court ruled that evidence of the assault on the deputy was admissible even though it constituted evidence of another, unrelated crime, because "it is obvious that the assault was part of the res gestae of the escape.” Meeks, supra at 307.
We likewise hold that testimony regarding the criminal actions accompanying an escape or attempted escape is admissible because those actions are part of the res gestae of the incident. The trial court therefore did not err in allowing the prosecution to introduce evidence of not only the fact of defendant’s escape, but also the details of how the escape was accomplished. See 22A CJS, Criminal Law, § 747, p 397.
The fact that evidence of other criminal activities would generally be inadmissible under MRE 404(b) does not affect our holding. Evidence that is admissible for one purpose is not inadmissible because its use for a different purpose is precluded. People v VanderVliet, 444 Mich 52, 73; 508 NW2d 114 (1993).
ii
Defendant next argues that the trial court erred in refusing to exclude evidence of defendant’s prior conviction of conspiracy to commit armed robbery, MCL 750.157a; MSA 28.354(1). Defendant argues that similarity between armed robbery and conspiracy to commit armed robbery unfairly prejudiced him.
MRE 609(a)(2) provides that evidence that a witness has been convicted of a crime is admissible for purposes of impeachment where
the crime contained an element of theft, and
(A) the crime was punishable by imprisonment in excess of one year or death under the law under which the witness was convicted, and
(B) the court determines that the evidence has significant probative value on the issue of credibility and, if the witness is the defendant in a criminal trial, the court further determines that the probative value of the evidence outweighs its prejudicial effect.
The trial court’s decision to allow impeachment by evidence of a prior conviction is within its sound discretion and will not be reversed on appeal absent an abuse of that discretion. People v Hicks, 185 Mich App 107, 110; 460 NW2d 569 (1990).
The Supreme Court has stated that when analyzing the prejudicial effect of a defendant’s prior conviction, a court should consider the similarity of the conviction to the charged offense. People v Allen, 429 Mich 558, 606; 420 NW2d 499 (1988). In refusing to exclude evidence of the conviction of conspiracy to commit armed robbery, the trial court reasoned that the former offense is not identical to the charged offense, armed robbery. Defen dant argues that the two offenses are so similar that introduction of evidence of the prior conviction was more prejudicial than probative.
We find it unnecessary to determine whether the trial court abused its discretion in refusing to exclude evidence of defendant’s conviction of conspiracy to commit armed robbery. The erroneous admission of evidence of a prior conviction is harmless error where reasonable jurors would find the defendant guilty beyond a reasonable doubt even if evidence of the prior conviction had been suppressed. Hicks, supra at 111-112.
In the present case, the prosecution presented strong evidence of defendant’s guilt. Before trial, Johnson identified defendant in a photographic lineup; at trial, both Johnson and Jorgensen identified defendant as the robber. The store videotape of the robbery and still photographs made from it were entered into evidence.
Moreover, given defendant’s chosen defense, we cannot say that allowing the jury to learn of defendant’s previous conviction was unduly prejudicial. Defendant testified that he was an "expert” armed robber, and that he could not possibly have committed the robbery in the present case because the perpetrator was clearly an amateur. Defendant then played the store videotape and critiqued the performance of the robber, indicating at each step what he would have done differently had he committed the crime. On cross-examination, defendant estimated that he had successfully committed approximately forty armed robberies. Defendant further volunteered that if he had been the robber, he would have shot anyone he had to in order to escape with the jewelry in the store as well as the cash. In light of defendant’s testimony, we think it unlikely that the evidence of a single prior conviction had any effect at all on the jury’s verdict.
hi
Lastly, defendant argues that the trial court erred in allowing defense witness Carolyn Rau to be impeached with evidence of her conviction of aiding and abetting defendant’s escape from jail. We find no error.
The credibility of a witness is always an appropriate subject for the jury’s consideration. Evidence of a witness’ bias or interest in a case is highly relevant to credibility. People v Mumford, 183 Mich App 149, 152; 455 NW2d 51 (1990); see CJI2d 3.6(3). Rau testified that she and defendant had been at their Mount Morris home at the time of the robbery. The trial court properly allowed the admission of evidence that illustrated Rau’s relationship with defendant and her personal interest in the outcome of the trial.
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Per Curiam.
Claimant, Floyd K. Jones, appeals as of right from a judgment, entered following a bench trial, that directed the forfeiture of claimant’s real property located at 19203 Albany, Detroit, Michigan, as a "container” for illegal drugs pursuant to MCL 333.7521(l)(c); MSA 14.15(7521) (l)(c). We affirm.
i
On June 14, 1991, a police officer on surveillance observed claimant leave 19203 Albany and walk to the corner, where he engaged in a transaction with a confidential informant. The informant, who had been searched beforehand, received fifteen grams of cocaine. Claimant returned to 19203 Albany and, several minutes later, left and drove to a house on Dequindre. On June 17, 1991, another surveillance officer observed claimant leave 19203 Albany, engage in a similar transaction at the corner, then return to 19203 Albany, after which he left and proceeded to the house on Dequindre.
On June 18, 1991, police officers executed a search warrant at 19203 Albany and confiscated a sandwich bag containing seven grams of cocaine powder from the floor joists in the basement, a shopping bag containing approximately one pound of marijuana from an upstairs bedroom, a .32 caliber blue-steel revolver, and paraphernalia commonly used in the narcotics trade, including ziplock baggies, a triple-beam scale, a pager, and a beeper-type transmitter. Officers also seized various utility bills from the house addressed to claimant at that address. Incident to claimant’s arrest, officers seized jewelry and $655 in currency from claimant. At booking, claimant identified the house on Dequindre as his residence. At trial, the prosecutor produced a recorded warranty deed for the Albany residence, titled in claimant’s name. Claimant then admitted sole ownership of the Albany residence.
In the complaint for forfeiture, the prosecutor sought forfeiture of the real property and residence at 19203 Albany as a "thing of value . . . used or intended to be used to facilitate any violation of’ the controlled substances act, MCL 333.7521(1X0; MSA 14.15(7521X1X0, or as a "container” of controlled substances, MCL 333.7521(1) (c); MSA 14.15(7521)(l)(c). In its ruling from the bench, the trial court held that the prosecutor had proved by a preponderance of the evidence that 19203 Albany had been used as "a container for illegal drugs that were to be sold and that were sold.” The court ordered the forfeiture of the property on that basis and did not address the prosecutor’s alternative facilitation theory.
n
We are asked in this case to resolve a conflict among previous panels of this Court regarding the question whether real property may be forfeited as a "container” under MCL 333.7521(l)(c); MSA 14.15(7521)(l)(c). We hold that it may.
A
MCL 333.7521(l)(c); MSA 14.15(7521)(l)(c) provides for forfeiture of "[property which is used, or intended for use, as a container” for illegal narcotics or for materials, products, or equipment used, or intended for use, in manufacturing or distributing illegal narcotics. In People v 8120 Ravine Rd, Alamo Twp, 151 Mich App 358, 362; 390 NW2d 242 (1986), a panel of this Court held as a matter of law that a house was not a "container” for purposes of § 7521(l)(c). The panel reasoned that the term "container” does not include "something fastened to the earth such as a house,” but rather "embraces the concept of an object capable of holding another object, it is commonly understood to refer to a receptacle used to package or to ship articles and goods.” Id. Accord People v 2850 Ewing Rd, 161 Mich App 266, 269; 409 NW2d 800 (1987); In re Forfeiture of 30800 Grandview, 178 Mich App 434, 437-438; 444 NW2d 547 (1989).
Rejecting the reasoning and conclusion of 8120 Ravine Rd, another panel of this Court in In re Forfeiture of 45649 Maben Rd, 173 Mich App 764, 768; 434 NW2d 238 (1988), held:_
This Court can envision cases where a dwelling house or appurtenant structure may serve a primary purpose of warehousing drugs. To construe subsection (c) so as not to include buildings would be to give an overly technical meaning to the word "container” which conflicts with common sense. Whereas some controlled substances such as cocaine and lsd (which were at issue in 8120 Ravine Road) can be easily secreted in small portable containers like a box, crate, can or jar, other controlled substances such as marijuana require larger containers for storage.
Logic and common sense compels this Court to rule that the question whether or not a particular dwelling house is a "container” within the provisions of subsection (c) of the controlled substances act is a question of fact for the trial court to determine.
See also In re Forfeiture of 719 N Main, 175 Mich App 107, 115-118; 437 NW2d 332 (1989) (dicta).
Instructive to our analysis is In re Forfeiture of $5,264, 432 Mich 242; 439 NW2d 246 (1989), where our Supreme Court held that real property is subject to forfeiture under §7521(l)(f), i.e., "[a]ny thing of value . . . that is used or intended to be used to facilitate any violation” of the controlled substances act. Id. at 248-250. The Court observed that this conclusion was consistent with legislative intent, given that the language of §§ 7523(3) and 7524(2) revealed that the Legislature undoubtedly contemplated the forfeiture of real property. Id. at 250-251. The Court held that, while forfeitures are not favored in the law, the Public Health Code expressly mandates that its provisions lie liberally construed in order to promote the health, safety, and welfare of Michigan citizens. Id. at 258-259; MCL 333.1111(2); MSA 14.15(1111X2).
In resolving the conflict of authority, we adopt and endorse as our own the reasoning and conclusion drawn in In re Forfeiture of 45649 Maben Rd, supra. Reasonably construed, we believe that the Legislature intended the focus of § 7521(l)(c) to be on the manner in which the subject "property” is used, not on its character. Consonant with this reasoning, we adopt the "substantial nexus” test that has been applied to forfeitures brought under §7521(l)(f). The substantial nexus test precludes forfeiture of property that has only an incidental or fortuitous connection to the underlying unlawful activity. In re Forfeiture of $5,264, supra at 260-262. Accordingly, upon proof by a preponderance of the evidence that real property subject to forfeiture has a substantial nexus to illegal drug activity, such that the property constitutes a "container” under § 7521(l)(c) of the controlled substances act, a court may order a forfeiture of that real property.
B
In determining whether forfeiture was proper in this case, we review the findings of fact of the trial court sitting without a jury under the clearly erroneous standard. In re Forfeiture of $5,264, supra at 260. A finding is clearly erroneous when although there is evidence to support it the reviewing court is left with the definite and firm conviction that a mistake was made. Id.
Here, the evidence indicated that the property at 19203 Albany was being used exclusively for trafficking in illegal narcotics. Claimant, sole owner of the property, was observed conducting illegal narcotics sales from the property, yet apparently living at another house on Dequindre. A search warrant executed at 19203 Albany yielded illegal drugs and drug-related items throughout the house, including approximately one pound of marijuana, seven grams of cocaine, and assorted drug paraphernalia. Accordingly, we find that the trial court did not clearly err in determining that a substantial nexus existed between 19203 Albany and the alleged criminal activity such that the property was being used as a container for illegal narcotics.
hi
Claimant asserts that the trial court lacked jurisdiction to enter an order of forfeiture because the seizing law enforcement agency did not have the requisite possession or control over the property at 19203 Albany. We disagree.
Forfeiture proceedings are in rem proceedings. In re Forfeiture of $28,088, 172 Mich App 200, 203; 431 NW2d 437 (1988). A forfeiture proceeding brought under the controlled substances act requires the seizing agency to be in possession or control of the res in order to vest the court with jurisdiction to enter an order of forfeiture. In re Forfeiture of 301 Cass St, 194 Mich App 381, 387; 487 NW2d 795 (1992). Possession or control of real property may be accomplished by placing the property under seal, MCL 333.7523(2)(a); MSA 14.15(7523)(2)(a), or by any other reasonable method of exercising possession or control. Id. Here, the prosecutor had filed a notice of lis pen-dens against 19203 Albany before filing the forfeiture complaint in the circuit court; therefore, we find that the state exercised control over the property sufficient to vest jurisdiction of the complaint in the circuit court. See United States v James Daniel Good Real Property, 510 US —; 114 S Ct 492; 126 L Ed 2d 490, 506 (1993).
Affirmed.
While previous panels of this Court have disagreed with regard to this issue, none of those decisions was binding under Administrative Order No. 1990-6 (or its successors).
MCL 333.7523(3); MSA 14.15(7523X3) provides:
Title to real property forfeited under this article . . . shall be determined by a court of competent jurisdiction. A forfeiture of real property encumbered by a bona fide security interest is subject to the interest of the secured party who neither had knowledge of nor consented to the act or omission.
MCL 333.7524(2); MSA 14.15(7524)(2) provides, in part:
In the course of selling real property pursuant to subsection (l)(b), the court that has entered an order of forfeiture may, on motion of the agency to whom the property has been forfeited, appoint a receiver to dispose of the real property forfeited. | [
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Allen, J.
This is a slip and fall case coming to us on leave granted on plaintiffs petition for leave to appeal a June 24, 1982, opinion and order of the circuit court for Wayne County, affirming a common pleas court jury verdict of no cause of action. Leave to appeal was granted by this Court on March 18, 1983. A certified statement of facts was adopted by the Wayne Circuit Court.
Plaintiffs complaint, filed in April, 1977, alleges that, on July 21, 1974, at "Ethel’s Lounge” in Detroit, plaintiff sustained serious personal injuries "when she slipped and fell on an unlighted defective step near the women’s bathroom, which step was inadequately lighted, had no guardrail, had no warnings and which was of an improper design and negligently maintained”. Defendant, Will Johnson, and his wife, Beatrice Johnson, owned the building, a part of which was leased to Ethel White, who operated a bar therein known as "Ethel’s Lounge”. Ethel White died on June 3, 1974, and on June 11, 1974, Will Johnson was appointed executor of Ms. White’s estate and authorized to operate the bar for the benefit of the estate.
Will Johnson presented multiple defenses including (a) denial that plaintiff was in the bar on July 21, 1974; (b) denial that a dangerous condition existed; (c) a claim that, if anyone was liable, it was the estate of Ethel White and not himself individually. It is alternate defense (c) which is the subject of this appeal.
Defense counsel’s opening statement included the following assertions:
"It is our theory that at the time that this alleged incident occurred that the premises were being leased to Ethel White * * * that he [defendant] had no control over these premises.
"At the time of this alleged offense, Mr. Johnson was, in fact, conducting the affairs of the estate, not personally, not for himself, not for his own benefit. He was bound by the Wayne County Probate Court. The records will be introduced in this court to conduct [sic] that particular business and then the proper parties, if there was any liability whatsoever, who had been the estate of Ethel White, not Mr. Johnson personally. He had no control over that business.
"It is our contention that the law is clear that the mere owner of the premises has no liability when he has no control. The control was definitely in the hands of Ms. White while she was living and when she was deceased, it was her estate. Although Mr. Johnson served at the pleasure of the probate court as executor, he had no individual liability. We submit that, in fact, the person liable in this case is, in fact, the estate of Ethel White.
"It is our theory that * * * if there is any liability whatsoever, it belongs to the estate of Ethel White. * * * If there is any liability to hold liable for [sic] and we would ask at the conclusion of this trial that you find no cause of action against Mr. Will Johnson.”
Plaintiffs attorney objected to these statements, arguing that, under Bannigan v Woodbury, 158 Mich 206; 122 NW 531 (1909), an executor in possession of real property is personally liable for injuries sustained on the property.
Plaintiffs attorney requested the following instruction but the trial court did not give it:
"The estate is not responsible for this occurrence since Ethel White died before plaintiff was injured. The issue for you to decide is the liability of Will Johnson, if any. It is the law that the person in control of premises is responsible for his own wrongful conduct, if any, with respect to the condition of the premises.”
The trial court repeated defendant’s theory of nonliability, saying in its charge to the jury:
"It is further the theory of defendant Will Johnson that if there was any liability whatsoever, it would be the liability of the estate of Ethel White and not of Will Johnson.”
However, the trial court did instruct the jury:
"The estate of Ethel White is not in this lawsuit, however, so you are going to decide the liability of Will Johnson, and not of the estate of Ethel White.”
The jury was instructed to answer a special inter rogatory, "Was the defendant negligent?” However, the jury returned a verdict of no cause of action and did not answer the interrogatory.
On appeal to us, plaintiff contends that the common pleas court erred by telling the jury and allowing defense counsel to tell the jury that, if anyone was liable, it was the estate of Ethel White, not defendant, and further, that the trial judge for the circuit court for Wayne County also erred by affirming the verdict on the ground that Bannigan v Woodbury, supra, was inapplicable since the alleged dangerous condition in that case (loose window glass) had existed for a long period of time and should have been known to the administrator of the estate of the building owner, whereas the alleged dangerous condition in the instant case had existed, if it existed at all, for only a day or. so. Defendant’s brief on appeal follows the rationale of the Wayne County circuit judge. Essentially, defendant contends that he is not liable for injuries merely because he was in control of the property at the time that the accident occurred. Instead, defendant argues, the defect must have existed long enough that he must, or should, have been aware of it.
Defendant construes Bannigan too narrowly. While it is true that liability does not fall upon an administrator or executor merely because the administrator or executor has control and possession of the premises, because to so hold would be tantamount to adoption of the doctrine of res ipsa loquitur, liability is imposed upon an administrator or executor who has control and possession and who fails to exercise reasonable care in the exercise of such control and possession. Whether the fiduciary was in control and possession long enough to have become aware, or as a reasonable person should have become aware, of the alleged defect is a factor to be considered on the issue of whether reasonable care was exercised. Defendant’s theory (c) of nonliability is that, even if defendant failed to exercise reasonable care and was in control and possession of the premises, defendant is not individually liable and only the estate is liable. This is not the rule in Michigan. Under Michigan law, if the fiduciary is in control and possession and is negligent (fails to exercise due care), then the fiduciary individually, not the estate, is liable.
Most jurisdictions concur in the Michigan rule. See 82 ALR3d 892, although a minority have recognized exceptions, e.g., the estate may be held liable where it benefits from the executor’s tort, Clark v Knox, 70 Ala 607 (1881); Alphonzo E Bell Corp v Bell View Oil Syndicate, 46 Cal App 2d 684; 116 P2d 786 (1941); Grimes v Barndollar, 58 Colo 421; 148 P 256 (1914); Ernest G Beaudry, Inc v Freeman, 73 Ga App 736; 38 SE2d 40 (1946). Another exception recognized by a minority of jurisdictions is that an estate properly engaged in business is liable for a tort of the executor committed in the course of business, particularly where the tort committed by the executor is a common incident of the kind of business activities, Fife v Richards, 77 Ga App 698; 49 SE2d 772 (1948); Smith v Coleman, 100 Fla 1707; 132 So 198 (1931); Bright National Bank v Hanson, 68 Ind App 61; 113 NE 434 (1916). In essence, defendant’s alternative theory of nonliability is the latter exception, exemplified in Vance v Estate of Myers, 494 P2d 816; 82 ALR3d 883 (Alas, 1972).
The Alaska Court noted that the more modern view is found in the Uniform Trust Act, which provides that the fiduciary may be sued in his fiduciary capacity with collection to be made from the trust assets if "the tort was a common incident of the kind of business activity in which the trustee or his predecessor was properly engaged for the trust”. Uniform Trust Act, § 14. However, Michigan has not adopted the Uniform Trust Act and, until the Legislature enacts such law or the Supreme Court modifies Bannigan and successor cases, this Court must follow the majority rule.
Plaintiffs requested instruction was an accurate statement of the law; defendant’s alternate theory (c) of defense was not. The trial court’s refusal to give the requested instruction was error. The error was compounded when the trial court advised the jury of defendant’s erroneous theory of defense. Because the jury returned a general verdict of "no cause of action” without responding to plaintiffs special interrogatory "Was the defendant negligent?” it is impossible to determine from the verdict itself whether the jury found that defendant was not negligent in any respect, or whether it found that he was negligent but, under defendant’s alternate theory of defense, liability belonged to the estate.
At the time that the accident occurred, defendant Johnson was operating the bar as executor of Ethel White’s estate. Whether he had been operating the bar long enough to have become aware of the defect, and thus legally chargeable with failure to exercise due care, was a question for jury determination. On this issue the proofs were conflicting. Under no circumstances can the trial court’s instructions to the jury, when read as a whole, be considered a fair statement of the law. Under Michigan law, an executor is personally liable for failure to exercise due care in the operation of the estate. The jury was not so informed and was left with an impression to the contrary. Clearly, the error was one without which the jury might have come to a different conclusion. Under these circumstances we must reverse. Falconer v Salliotte, 103 Mich App 234, 237; 303 NW2d 11 (1981).
The judgment of June 24, 1982, affirming the verdict in favor of defendant is reversed and the cause remanded to the common pleas court for a new trial. Costs to plaintiff.
The circuit court also ruled that plaintiff was not prejudiced because plaintiff was free to present proof that Johnson was, in fact, negligent and because the jury instructions, when read as a whole, informed the jury that Johnson could be held liable as the person in control of the premises.
Bannigan has been cited with approval in Dombrowski v Gorecki, 291 Mich 678, 681; 289 NW 293 (1939). See also Nezworski v Mazanec, 301 Mich 43; 2 NW2d 912 (1942); Merritt v Nickelson, 80 Mich App 663, 667; 264 NW2d 89 (1978), aff’d 407 Mich 554; 287 NW2d 178 (1980). | [
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On Remand
Before: M. J. Kelly, P.J., and Shepherd and C. W. Simon, JJ.
Shepherd, J.
This case is before this Court on remand pursuant to an order of the Supreme Court. Malburg v Sterling Heights, 422 Mich 925 (1985). We find that plaintiffs’ complaint was timely filed in the circuit court and the limitation period tolled in the Tax Tribunal. Accordingly, the case is remanded for further proceedings in the Tax Tribunal.
i
Plaintiffs, owners of property along Schoenherr Road in the City of Sterling Heights, brought an action against the city, seeking injunctive relief from a special assessment for paving and widening Schoenherr Road which was confirmed by defendant’s city council on July 6, 1976. Plaintiffs were to pay $145,314.71 as a result of the special assessment. The complaint, filed in circuit court on August 4, 1976, alleged that: (1) the special assessment was invalid because defendant did not have title or an easement to their property, (2) the special assessment was illegal because defendant’s agents had rezoned plaintiffs’ property from residential to commercial in order to be able to impose a special assessment upon it, and (3) the special assessment was invalid because plaintiffs’ property was not benefitted by the improvements. Plaintiffs requested that the circuit court enjoin defendant from collecting the special assessment and declare the special assessment void. That same day, the circuit court issued an ex parte temporary restraining order against defendant, restraining it from levying the special assessment against plaintiffs’ property and ordering defendant to show cause why a preliminary injunction should not issue. The complaint prompted defendant’s city council that evening to reconsider and postpone indefinitely the special assessment.
On August 23, 1976, pursuant to stipulation of the parties, the circuit court ordered: (I) the temporary restraining order dissolved, (2) that defendant give plaintiffs notice of any meeting to reconsider the assessment, (3) that the "request for a preliminary injunction be held in abeyance to be considered at such time as may be necessary,” (4) that the parties arrange for the deposition of Richard Schoenherr, and (5) that the "case be scheduled . . . for an early Pre-Trial and Trial.” Shortly thereafter plaintiffs deposed Schoenherr, defendant’s deputy planning commissioner. The following spring, on April 19, 1977, defendant’s city council reconfirmed a revised special assessment on the assessment district. Under the assessment plaintiffs were required to pay $59,516.28. Plaintiffs deposed Eugene Betzold in connection with their circuit court suit on October 26, 1977. On December 15, 1977, work was substantially completed on Schoenherr Road.
On September 28, 1978, almost a year and a half after the revised special assessment was confirmed, plaintiffs sought to amend their complaint to create a class action joining other affected property owners and to add facts pertaining to the revised special assessments. Defendant opposed the motion and moved for accelerated judgment on the grounds that the circuit court lacked subject-matter jurisdiction and that, in any event, plaintiffs’ amended complaint stated a new cause of action, which was barred by the «statute of limitations. The court denied plaintiffs’ motion to amend their complaint and granted defendant’s motion for accelerated judgment against those whom plaintiffs had attempted to join as parties to the class action.
In plaintiffs’ appeal by leave granted and defendant’s cross-appeal, this Court peremptorily reversed the circuit court’s decision and held that the circuit court lacked subject-matter jurisdiction over special assessment questions. This Court also allowed plaintiffs an opportunity to file their complaint with the Tax Tribunal within thirty days of its order and ordered the Tax Tribunal to waive its thirty-day period of limitations.
Both parties sought leave to appeal to the Michigan Supreme Court. Plaintiffs also filed an action in the Tax Tribunal pursuant to this Court’s order. On December 28, 1983, the Michigan Supreme Court denied plaintiffs’ request for leave to appeal. Malburg v Sterling Heights, 418 Mich 888 (1983). On that same date, the Court held in abeyance its decision on defendant’s application for leave to appeal, pending its decisions in Szymanski v City of Westland and Eyde v Charter Twp of Lansing. Then, on June 24, 1985, the Michigan Supreme Court issued the following order:
Pursuant to MCR 7.302(F)(1), in lieu of granting leave to appeal, the May 19, 1983 order of the Court of Appeals is vacated and the case is remanded to that Court for consideration of whether the action might have been timely filed under § 12.12 of defendant’s city charter in light of the confirmation of the revised special assessment districts on April 19, 1977. On remand, the Court of Appeals shall not direct the Tax Tribunal to waive any expiration of the thirty-day filing rule set forth in MCL 205.735(3); MSA 7.650(35)(3) unless that Court finds that the running of an applicable limitation period has been tolled under the principles applied in Wikman v City of Novi, 413 Mich 617, 653-654 [322 NW2d 103] (1982). Juridiction is not retained. [Malburg, supra, 422 Mich 925.]
ii
Several holdings in Wikman are relevant in this case. First, the Supreme Court held that the Tax Tribunal has exclusive jurisdiction over cases in which a plaintiff seeks review of a special assessment. 413 Mich 646. Our prior ruling in this case that the circuit court lacked subject-matter jurisdiction over the present dispute was not affected by the Supreme Court’s order and is thus the law of the case. It also appears that, under Wikman, our prior ruling was correct. Second, the Supreme Court in Wikman reviewed § 35 of the Tax Tribunal Act, MCL 205.735; MSA 7.650(35), and concluded that its thirty-day filing limit applies only when "a specific provision providing a longer period of limitation does not exist.” 413 Mich 653; Szymanski v Westland, 420 Mich 301, 304; 362 NW2d 224 (1984). In Wikman, the Novi City Charter’s sixty-day limitation provided such an applicable longer limitation period. Finally, the Court held that although timely filing in the circuit court was not sufficient to invoke the jurisdiction of the Tax Tribunal, it nevertheless tolled the applicable statute of limitations.
The timely filing in the circuit court was not sufficient to invoke the jurisdiction of the Tax Tribunal. However, through this action, the circuit court acquired jurisdiction over defendants. MCL 600.5856; MSA 27A.5856 provides that the statute of limitations is tolled whenever jurisdiction over the defendant was otherwise acquired. Because the period of limitations was tolled and did not expire during the pendency of this suit, MCL 205.735; MSA 7.650(35) did not remove this proceeding from the jurisdiction of the Tax Tribunal. The Court of Appeals did not err in ordering that this case be remanded to the Tax Tribunal pursuant to GCR 1963, 820.1(7). [Footnotes omitted. 413 Mich 654.]
In this remand from the Supreme Court we are directed to determine whether plaintiffs’ action in the circuit court was timely filed under § 12.12 of the defendant’s city charter "in light of the confirmation of the revised special assessment districts on April 19, 1977.” This is the critical question. If plaintiffs’ action in the circuit court was timely, the limitations period was tolled under Wikman and plaintiffs may challenge the special assessment in the Tax Tribunal. If the circuit court action was not timely, the Tax Tribunal is without jurisdiction to consider plaintiffs’ petition.
Sterling Heights Charter, ch XII, § 12.12 provides in pertinent part:
Except and unless notice is given to the council in writing of an intention to contest . . . any special assessment . . . within thirty (30) days after the date of the meeting of council at which it is finally determined to proceed with the making of the improvement in question, ... no suit or action of any kind shall be instituted or maintained for the purpose of contesting or enjoining the collection of such special assessments.
As noted above, plaintiffs’ original complaint and the circuit court’s order to show cause and an ex parte temporary restraining order were filed on August 4, 1976. These documents were sufficient to put defendant’s city council on notice that plaintiffs would challenge the city council’s confirmation of July 6, 1976. However, the problem in this case arises because defendant’s city council, after receiving plaintiffs’ complaint, reconsidered its decision to confirm the special assessment and thereafter indefinitely postponed confirming the special assessment. The parties then held further action on the circuit court complaint in abeyance pending further action by the city council. That action came in the form of the revised special assessment confirmed on April 19, 1977. However, plaintiffs did not seek to amend their complaint to reflect the intervening action by the city council until almost a year and a half later. The questions then are whether § 12.12 sets only an outside limit on the giving of notice and whether the complaint was sufficient to give notice under § 12.12 of plaintiffs’ intention to contest the subsequent revised special assessment. We answer both questions affirmatively. In reaching this result, we are aided by the following rule of construction:
Statutory provisions establishing remedies so that the taxpayer may recover taxes unjustly collected have generally been liberally construed. This applies to proceedings for abatement and refund of taxes, statutory procedure for setting aside assessments, moratorium laws providing for remission of penalties and extending the time for paying taxes, and provisions allowing judicial review. [Footnotes omitted. 3 Sutherland, Statutory Construction (4th ed), § 66.07, p 202.]
We agree with plaintiffs that § 12.12 appears to set only an outside limit upon giving defendant’s city council written notice of an intent to contest an assessment. In any event, it is at least ambiguous as to whether notice given before the final confirmation is sufficient and thus should be construed in favor of the taxpayer.
We further conclude that under the circumstances of this case the filing of the complaint and subsequent actions of the parties put defendant on notice of plaintiffs’ intent to contest the revised assessment. Plaintiffs promptly commenced suit when defendant initially confirmed the special assessment. They claimed that defendant lacked the authority to impose a special assessment on their property. After the city council reconsidered the assessment, the parties stipulated to hold the circuit court action in abeyance pending further action by the city council on the assessment. (The complaint was not dismissed and, in fact, the stipulation anticipated the possibility of a later trial.) That action came on April 19, 1977, when the city council confirmed a revised special assessment on plaintiffs’ property to fund the same project. Plaintiffs claim that their attorney objected to the revised assessment at that meeting. Even after the council’s earlier tabling of the assessment, plaintiffs demonstrated their intent to challenge a future special assessment by deposing two witnesses. One was deposed before the confirmation of the revised assessment and one after. In light of the continuation of the circuit court action even after the city council’s nullification of the initial special assessment, we conclude that defendant received notice of plaintiffs’ intent to contest the revised special assessment under § 12.12.
We further conclude that plaintiffs were either entitled to file an amended complaint as of right because defendant failed to file a responsive pleading in this action, MCR 2.118(A)(1), or leave to amend to reflect the changed facts should have been granted by the circuit court under MCR 2.118(A)(2). See also LaBar v Cooper, 376 Mich 401; 137 NW2d 136 (1965). Moreover, plaintiffs are entitled to have their amended complaint relate back to the date of their original pleading because the claims raised in their amended pleading arose out of the same conduct, transaction or occurrence as set forth in their original pleading. MCR 2.118(D). Defendant’s argument that the amend ment raises a new claim and thus may not relate back is based on law which is no longer valid. Under the Michigan Court Rules "[i]t is . . . beside the point that the amendment introduces new facts, a new theory, or even a different cause of action, so long as it springs from the same transactional setting as that pleaded originally.” LaBar, supra, p 406, quoting 1 Honigman & Hawkins, Michigan Court Rules Annotated, p 416. Thus, since plaintiffs’ complaint was timely filed under § 12.12, the statute of limitations for a petition in the Tax Tribunal is tolled under Wikman, supra. Accordingly, this case is remanded to the Tax Tribunal.
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Per Curiam.
Plaintiffs appeal as of right from the trial court’s order affirming two separate administrative decisions of the defendant, Michigan Department of Social Services (DSS), denying each plaintiff benefits under this state’s Aid to Families With Dependent Children (AFDC) program. The basis for defendant’s decision was that each plaintiff owned interests in nonhomestead real property having a market value in excess of the amount permitted by MCL 400.56g(l)(a); MSA 16.456(7)(l)(a). On appeal, each plaintiff raises sev eral issues, none of which require reversal.
First, plaintiffs cite federal regulations, 45 CFR 233.20(a)(3)(ii)(D) for the proposition that their real estate interests are not "available for current use”, because they have not been liquidated and because they cannot readily be converted into cash. An identical argument has been addressed and rejected in this Court’s recent decision, Kilpatrick v Dep’t of Social Services, 126 Mich App 559; 337 NW2d 576 (1983). In Kilpatrick, this Court held that an AFDC applicant’s interest in a sawmill was "available” within the meaning of the above-cited regulation, so long as there was no legal impediment to immediate sale of that interest on the open market. Kilpatrick, supra, pp 566-567, citing Kanda v Chang, 475 F Supp 368 (D Hawaii, 1979). The Court held that, even though real property which has been listed for sale remains unsold due to a depressed market situation, that property still remains "available” for AFDC purposes. Although the property may not readily be sold at the applicant’s desired price, if it can be priced for quick sale and the proceeds under such conditions still exceed the statutory ceiling, AFDC benefits are properly denied. Kilpatrick, supra._
Plaintiffs attempt to distinguish Kilpatrick, supra, on the basis that the sawmill involved in that case was an income-producing asset rather than a residence. According to plaintiffs, the sawmill always had the potential of producing income for the AFDC applicant’s family, whereas plaintiffs could not anticipate any comparable flow of income from their interests in former residences. We find no significance in this distinction. The decision in Kilpatrick did not turn upon the type of property involved, nor did it depend upon a showing that the AFDC applicant may have received a flow of income as the result of holding an interest in a particular type of real property. Instead, the decision in that case was based upon the principle that the DSS must consider "available” any resource which may legally be sold for measurable value, even if the determined value is the result of depressed market conditions or a distress sale:
"Pursuant to DSS policy, the determination of an AFDC applicant’s equity value in non-home realty begins with an assessment of the property’s fair market value. * * * It must be assumed that the * * * assignment of fair market value to plaintiffs sawmill took into consideration the depressed market situation. There was no legal impediment to the sale of the sawmill”. Kilpatrick, supra, pp 566-567.
The Court acknowledged that the result may seem unfair to those who may be forced to liquidate their realty interests under conditions of distress but observed that this is a consideration which goes beyond the scope of the AFDC program:
"While plaintiff and her family may, in a very real sense, have been 'needy’ * * *, the present system is not designed to respond to persons in their situation, who may be forced to sell property at 'fair market values’ which are, temporarily, significantly low due to economic recession and depression. Absent conflict with federal requirements, the state is free 'to insure that limited welfare funds be spent on behalf of those genuinely incapacitated and most in need’. [Citation omitted.] State response to persons who, like plaintiff, are among the growing ranks of the 'new poor’, and who are denied AFDC benefits solely because of their ownership of resources obtained in better economic times, must be a legislative response. Given the present system, judicial response is precluded.” Kilpatrick, supra, pp 567-568.
Plaintiffs next urge that state law prohibits defendant from considering plaintiffs’ properties as "available” resources. Once more, their arguments have been fully addressed and rejected in Kilpatrick, supra. Michigan’s AFDC program has been implemented through both statutory provisions and administrative regulations. MCL 400.56g(l)(a); MSA 16.456(7)(l)(a) renders a family ineligible for AFDC benefits if it owns property in excess of $2,000. Although the applicable regulation, 1979 AC, R 400.12(10), limits consideration of an applicant’s resources to those which are "available in fact for current use”, this Court’s holding in Kilpatrick indicates that a resource need not be liquidated in order to fall within the scope of this regulation. Real property is "available in fact for current use” under this regulation so long as there is no legal impediment to immediate sale of the equity in the open market. Kilpatrick, supra. Thus, in the present case, Michigan’s regulatory scheme does not prohibit defendant from considering plaintiffs’ properties in determining their eligibility.
Plaintiffs’ final argument on appeal is that defendant has denied them procedural due process by creating an irrebuttable presumption that their property can be sold and the proceeds used to support their families. We find no merit in this argument. The presumption that the properties can be sold is neither improper nor violative of due process.
There is no question that the properties involved here — or any real estate, for that matter — could be sold for some price, however depressed that price may have been as the result of market conditions or a distress sale situation. As long as the DSS uses this depressed valuation (rather than a valuation based upon hypothetical or ideal market conditions) in determining eligibility, there has been no improper reliance upon any inaccurate presumption of fact. The DSS has merely denied eligibility based upon a finding that the property could readily be sold for an amount exceeding the statutory ceiling.
This is not a situation in which the DSS has denied eligibility based upon valuations which might have presupposed optimal market conditions. Plaintiffs would have had a stronger argument if DSS has based its denial of benefits upon a valuation which "irrebuttably” presumed more favorable market conditions. Since the DSS’s decision in the present case was not based upon any inaccurate presumptions regarding market conditions, and since there is no dispute that each of the plaintiffs’ properties could readily be sold for some amount in excess of the statutory ceiling, we conclude that plaintiffs’ procedural due process argument must fail.
Defendant properly notes that there has been no denial of substantive due process either. In determining whether or not classifications of persons under social welfare programs violate substantive due process, courts must inquire whether the clas sification in question is patently arbitrary or "utterly lacking in rational justification”. Weinberger v Salfi, 422 US 749; 95 S Ct 2457; 45 L Ed 2d 522 (1975).
In the present case, the applicable federal and state regulations classify potential AFDC recipients according to their ownership of various assets. Those persons, like plaintiffs, who have substantial interests in nonhomestead realty are treated differently from those who have no such interests: The former are denied benefits, whereas the latter may be eligible. The basis for this classification was noted in Kilpatrick, supra: The state must ensure that limited welfare funds are spent on behalf of those who are most in need. Persons who own nonhomestead real estate are not so acutely in need of aid for their subsistence as those who are unable to turn to and, if necessary, liquidate such resources. It is apparent that the classification created by governing regulations has at least some rational basis in determining priorities for spending scarce welfare funds. We find this basis sufficient to justify the challenged classification. Weinberger v Salfi, supra. There has been no denial of substantive due process.
The trial court’s order upholding the DSS’s decisions is affirmed.
Affirmed.
We reject defendant’s threshold argument that this matter has been rendered moot by the sale of plaintiff McKee’s property. Even if McKee’s claim might have been rendered moot (a question which we do not address, given the uncertainties created by the possibility of a DSS action to recoup previously disbursed benefits), it is undisputed that the claim of co-plaintiff Johndro is not moot. Accordingly, this Court must still address the substance of the issues presented. We note further that the questions raised in the present case are of great importance to the public, and the present dispute is likely to recur on numerous occasions. As a result, we would still be inclined to review the issues presented, even if both of the individual plaintiffs had sold their properties before the filing of this appeal. See Milford v People’s Community Hospital Authority, 380 Mich 49; 155 NW2d 835 (1968); Hernandez v Consumers Power Co, 51 Mich App 288; 214 NW2d 846 (1974); Regents of University of Michigan v State of Michigan, 47 Mich App 23; 208 NW2d 871 (1973), modified on other grounds 395 Mich 52; 235 NW2d 1 (1975). | [
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Saad, J.
In this tragic case, Paul Stewart, Sandra Stewart, Donald Nagel, and Theresa Haupt died from exposure to mercury vapors because Paul Stewart wrongfully and unwisely attempted to smelt metal alloy in the basement of Donald Nagel’s home. The evidence strongly suggests that Paul Stewart wrongfully took the metal alloy from his employer, Kerr Manufacturing Company. In their complaints, plaintiffs seek to hold Kerr liable in negligence for the deaths sustained by plaintiffs’ decedents. The trial court granted Kerr’s motion for summary disposition of the negligence claim because it reasoned that Kerr owed no duty to plaintiffs’ decedents for deaths caused by the theft and subsequent misuse of its property by its employee. The trial court also dismissed a separate claim brought by Richard Nagel for recovery of response-activity costs under the Michigan Environmental Response Act, MCL 299.601 et seq.; MSA 13.32(1) et seq. Plaintiffs appeal as of right in these consolidated actions. For the reasons stated below, we affirm the decision of the trial court. .
i
There is no dispute that plaintiffs’ decedents died of exposure to mercury vapors. Paul Stewart, without proper precaution or procedure, tried to smelt metal alloy in a furnace in the basement of the home of Donald Nagel, Paul Stewart’s father-in-law. Investigators found that the application of heat caused the mercury in the alloy to vaporize. The bucket of metal alloy used in the basement was the same type of alloy used at Kerr. Kerr’s operations included, among other things, the manufacture of dental fillings, which created "reclaim alloy” as a by-product. Kerr stored the reclaim alloy in different colored buckets to indicate the various levels of mercury concentration. The reclaim alloy was collected and sent to a vendor for recovery of its silver content, for which defendant Kerr would receive credit.
In their suits, plaintiffs asserted that Kerr should be liable for the deaths because it was negligent in failing to properly label the containers of reclaim alloy and keep those containers under tight security in order to prevent their removal. Kerr responded that it should not be held responsible because Paul Stewart stole and misused the reclaim alloy. No evidence was presented to show that Paul Stewart had permission to possess the reclaim alloy. As noted above, the trial court granted Kerr’s motion for summary disposition with respect to all claims. We affirm.
ii
The central issue is whether Kerr owed a duty to plaintiffs’ decedents. We conclude that because it was not reasonably foreseeable that one of its employees would engage in intentional criminal conduct by stealing and subsequently misusing its property, Kerr owed no duty to any of plaintiffs’ decedents.
Whether a defendant owes a plaintiff an actionable duty is a legal question for the court to decide "after assessing the competing policy considerations for and against recognizing the asserted duty.” Colangelo v Tau Kappa Epsilon Fraternity, 205 Mich App 129, 132; 517 NW2d 289 (1994). Our Supreme Court said so in Buczkowski v McKay, 441 Mich 96, 100-101; 490 NW2d 330 (1992):
Duty is actually a " 'question of whether the defendant is under any obligation for the benefit of the particular plaintiff and concerns 'the problem of the relation between individuals which imposes upon one a legal obligation for the benefit of the other.’ ” " 'Duty’ is not sacrosanct in itself, but is only an expression of the sum total of those considerations of policy which lead the law to say that the plaintiff is entitled to protection.” [Citations omitted.]
In Buczkowski, supra at 101, n 4, the Court articulated "several variables that. . . go to the heart of a court’s determination of duty.” This Court in Colangelo, supra at 133, incorporated those same variables into its analysis of duty as follows:
In determining whether a duty exists, courts may contemplate the following policy considerations: foreseeability of the harm, degree of certainty of injury, closeness of connection between the conduct and injury, moral blame attached to the conduct, policy of preventing future harm, and the burdens and consequences of imposing a duty and the resulting liability for breach. [Citations omitted.]
Consistent with the approach taken by this Court in Colangelo for determining the existence of a legal duty, we conclude that Kerr owed no legal duty to plaintiffs’ decedents.
First, regarding foreseeability, we find that injury to plaintiffs’ decedents was not clearly foreseeable by Kerr. It was not foreseeable that one of Kerr’s employees would steal the reclaim alloy, take it to a residence, attempt to smelt the alloy, and thus release the toxic mercury vapors. Importantly, all of the evidence indicates that Paul Stewart obtained the reclaim alloy illegally. While such criminal misconduct by employees is unfortunately an all too frequent occurrence, it should not be considered to be reasonably foreseeable so as to impose a duty upon employers.
Second, regarding the "degree of certainty” of injury, we conclude that the injury to plaintiffs’ decedents was remote. The duty proposed by plaintiffs is that Kerr should have imposed stricter security measures at its facilities. However, if Kerr were to breach the proposed duty of stricter security suggested by plaintiffs we cannot say, with any degree of certainty, that other persons situated similarly to plaintiffs’ decedents would not have been injured.
Third, examination of the "closeness of the connection between the conduct and the injury” reveals that the injury to plaintiffs’ decedents was far removed from Kerr’s operations. As indicated in the factual summary, supra, there was a long and tortuous chain of intervening and superseding events that occurred before plaintiffs’ decedents were injured.
Fourth, we would not attach any "moral blame” to Kerr’s conduct because there was no evidence that Kerr violated safety regulations or ignored the potential danger of its products. The evidence shows that Kerr identified and separated the reclaim alloy that was contaminated with mercury. Kerr neither misidentified nor failed to separate the reclaim alloy that caused the deaths of plaintiffs’ decedents. Further, Paul Stewart had no permission to take the reclaim alloy. We refuse to shift the moral blame and its consequences from Paul Stewart to his employer.
Fifth, the policy of "preventing future harm” could conceivably be advanced by imposing a legal duty upon Kerr. However, any such benefit would be minimal, considering the unpredictability of criminal behavior, and would be insufficient, in itself, to impose a duty upon Kerr after weighing the other competing policy considerations.
Sixth, considering the "burdens and consequences of imposing a duty and the resulting liability for breach” thereof, we find that businesses and employers of this state, such as Kerr, should not be burdened with the potential for liability in cases such as this. To shift responsibility for the misconduct from the wrongdoer to another party simply because the business may be in a better position to compensate the victims would be unsound public policy. To impose a duty upon the businesses of this state to foresee and protect against the criminal conduct of its employees who steal and misuse their products would be unfair to small and large businesses alike, and we refuse to do so.
Therefore, consistent with Colangelo and Buczkowski', supra, we hold that a business or manufacturer is not liable for negligence for injuries caused to a thief, or others, by the theft and misuse of its product by one of its employees. The trial court properly granted summary disposition of plaintiffs’ negligence claims. MCR 2.116(C)(10).
hi
Next, plaintiff Nagel argues that Kerr should be held liable under Michigan’s Environmental Response Act, MCL 299.601 et seq.; MSA 13.32(1) et seq., for the response costs associated with the release of mercury from the Nagel residence. However, a cursory reading of the plain language of the statute makes it clear that the Legislature did not intend the act to apply to this type of situation. Witherspoon v Guilford, 203 Mich App 240, 246-247; 511 NW2d 720 (1994). The act provides that the owner or operator of a "facility” shall be liable for response-activity costs incurred as a result of a release "from a facility.” MCL 299.612; MSA 13.32(12). Here, the mercury was released from the Nagel residence; clearly, the Nagel residence was not one of Kerr’s facilities. There can be no doubt that the Legislature did not intend the act to apply in such a case.
For the foregoing reasons, we conclude that the trial court properly granted summary disposition for Kerr with respect to plaintiffs’ negligence claims and claims under the Michigan Environmental Response Act.
Affirmed._
In a similar manner, our Supreme Court has refused to impose liability upon business owners for the criminal activities of third parties. See Scott v Harper Recreation, Inc, 444 Mich 441, 451-453; 506 NW2d 857 (1993).
Because this case involves mixed questions of law and fact, summary disposition under MCR 2.116(C)(10) is appropriate. The trial court properly determined that certain material facts were not disputed before concluding that Kerr owed no legal duty to plaintiffs’ decedents. | [
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R. B. Burns, P.J.
This controversy centers on the operation of the La Barge Dam located in Kent County on the Thornapple River. Between 1971 and 1980, plaintiffs purchased properties abutting the river upstream from the dam. In 1980, defendant bought the dam and all rights appurtenant thereto from Consumers Power Company. Consumers had ceased using the dam to generate electricity in 1965 and in 1970 had ceased using the dam gates, leaving them open. After purchasing the dam, defendant renovated the power-generating equipment and prepared to re-establish it as a hydroelectric power-producing facility. In July, 1982, defendant closed the dam gates, raising the level of the water to approximately 2-3 inches above the dam’s spillway. The dam’s spillway is 18 feet above the low-water mark or approximately 698 feet above sea level.
The closing of the dam gates caused flooding on plaintiffs’ properties and, consequently, they commenced the present action seeking injunctive and monetary relief. A temporary restraining order was issued, which continued in effect until the bench trial on the merits. In a bench opinion, the judge dismissed the plaintiffs’ claims, finding that the defendant had the right to impound water to a height of 699 feet above sea level and, further, that defendant had flowage easements over plaintiffs’ properties, permitting it to flood portions of their properties by operating the dam. The trial judge also rejected plaintiffs’ claim based on the Michigan Environmental Protection Act, MCL 691.1201 et seq.; MSA 14.528(201) et seq. Plaintiffs now appeal from the trial court judgment and order to that effect.
The origins of the dam are discussed in Allen v Thornapple Electric Co, 144 Mich 370, 371; 108 NW 79 (1906). The Thornapple Electric Company had purchased the original dam sometime prior to the lawsuit filed in that case and had also acquired the right to flow water over certain properties upstream from the dam. The flowage easements were recorded between 1903 and .1905. It was stipulated at trial in the present case that the express flowage easements acquired by the Thorn-apple Electric Company covered the plaintiffs’ properties with the exception of the property owned by one plaintiff who has not appealed. It was also stipulated that 18 plaintiffs purchased their property with either deeds or title insurance policies which expressly stated that their title was subject to Consumers’ flowage easements. The remaining plaintiffs bought their property pursuant to deeds which stated that their property was subject to easements of record.
As to those plaintiffs whose deeds do not specifically refer to the flowage easement, it is argued that the marketable record title act, MCL 565.101 et seq.; MSA 26.1271 et seq., operates to extinguish the express easements. Section 3 of the act provides in pertinent part that a person holding marketable title takes it free and clear of any interests whose existence depends in whole or in part on any "act, transaction, event, or omission that occurred” 40 years prior to the time the person obtains title. Since the validity of the express flowage easements depends on conveyances and recordings which took place more than 40 years prior to their acquisition of the property, plaintiffs argue that the express easements are ineffective as to those plaintiffs whose deeds do not specifically refer to the easements.
Assuming, without deciding, that plaintiffs are correct in this contention, the record establishes that defendant has, nonetheless, acquired valid flowage easements over plaintiffs’ properties. The marketable record title act does not extinguish interests created by hostile possession. MCL 565.101; MSA 26.1271. Prescriptive easements fall within this category. A prescriptive easement is founded on the supposition of a grant. It arises from an open, notorious, continuous, and adverse use across the land of another for a period of 15 years. Outhwaite v Foote, 240 Mich 327, 331; 215 NW 331 (1927); Reed v Soltys, 106 Mich App 341, 346; 308 NW2d 201 (1981). A use of land is adverse when made under a claim of right where no right exists. Thus, if a claimant has obtained a conveyance of an easement which is ineffective, his use of the subservient estate, made on the assumption that the conveyance was legally effective, is adverse and not made in subordination to the owner of the burdened estate. 3 Powell, Real Property, § 413, pp 34-109 — 34-110.
We find that even if the marketable record title act extinguished the express easements acquired by defendant’s predecessor in interest, defendant would still have a right to flow waters over plaintiffs’ properties because defendant would have acquired prescriptive flowage easements over the properties.
Defendant acquired all prescriptive rights appurtenant to the dam from Consumers. Consumers operated the dam from the time it acquired the facility in 1927 until the time it opened the dam gates in 1970. This operation and resultant flooding of what are now plaintiffs’ properties constituted an open, notorious, and continuous use of the properties for a period in excess of the requisite 15 years. Furthermore, if the express easements were extinguished by the marketable record title act, under the guidelines set forth above, the use of the properties was also adverse.
In addition, any prescriptive flowage easements acquired by defendant would not have been abandoned. To prove abandonment, plaintiffs would have to show continuous nonuse of the easements for 15 years. McDonald v Sargent, 308 Mich 341; 13 NW2d 843 (1944). There is no evidence of nonuse for 15 years. Rather, Consumers continued to operate the dam gates and impound water to the top of the spillway until 1970.
We must also reject plaintiffs’ argument that previous circuit court decrees limit the exercise of any easement that may have survived the marketable record title act. The 1922 circuit court decree did not alter the 1915 circuit court decision which allowed the defendant’s predecessor to impound the water up to 20.59 feet above the river’s tailwaters. Therefore, both decrees confirmed defendant’s predecessor’s right to maintain an 18-foot-high dam and to impound water to a point above the spillway. Accordingly, the trial judge was not in error in concluding that the defendant is entitled to operate the dam to its full impoundment level.
We also find plaintiffs’ equitable estoppel argument to be unconvincing. Plaintiffs argue that they reasonably relied upon their 40-year chains of title showing no easements and the fact that the dam was not being used to generate electricity but had its gates open when the plaintiffs bought their properties in concluding that the dam would not affect their properties. Furthermore, plaintiffs contend that Consumers failed to advise plaintiffs of the easements or to update the county records to show the easements and thereby induced plaintiffs to buy the properties. Under these circumstances, plaintiffs argue, defendant, as Consumers’ successor, is estopped from using the easements and harming plaintiffs’ properties.
An estoppel arises where: (1) a party by representation, admissions, or silence, intentionally or negligently induces another party to believe facts; (2) the other party justifiably relies and acts on this belief; and (3) the other party will be prejudiced if the first party is permitted to deny the existence of the facts, e.g., Wynn v Farmers Ins Group, 98 Mich App 93; 296 NW2d 197 (1980). We find no intentional or negligent action on the part of Consumers which induced plaintiffs into believing that no one had the right to flood their properties. Consumers was under no duty to update the county records or to inform the owners that they or a successor might someday exercise their recorded flowage easements.
In addition, there is no evidence that Consumers made any representations to anyone to the effect that the dam would never be operated. Thus, the trial judge did not err in refusing to find that defendant was estopped from operating the dam.
Finally, the trial judge did not err in dismissing plaintiffs’ claim based on the Michigan Environmental Protection Act. The trial judge found that, based on the testimony, the dam’s operation was not likely to pollute, impair, or destroy the environment. We agree. The testimony presented indicated that if the dam were to operate again, certain plant life would be destroyed and certain animals displaced. There was no evidence that the plant life was unique or that the displaced animals would not have a suitable environment if the dam were operated. We find that the defendant’s operation of the dam does not rise to the level of impairment or destruction of natural resources so as to constitute an environmental risk and justify judicial intervention. Committee for Sensible Land Use v Garfield Twp, 124 Mich App 559, 563; 335 NW2d 216 (1983). We disagree that the trial court did not make sufficient findings of fact on this issue. See Ray v Mason County Drain Comm’r, 393 Mich 294; 224 NW2d 883 (1975). The trial court found that plaintiffs had failed to make out a prima facie case that defendant’s conduct did, or is likely to, pollute, impair, or destroy the environment. This finding relieved the trial court of the need to make further findings. Thus, contrary to plaintiffs’ arguments, a remand for specific findings on whether defendant rebutted plaintiffs’ prima facie case is not required.
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Mackenzie, P.J.
The prosecutor appeals as of right from the trial court’s order dismissing the charge against defendant of delivery of less than 50 grams of a mixture containing a controlled substance, cocaine, MCL 333.7401(2)(a)(iv); MSA 14.15(7401)(2)(a)(iv). The alleged offense occurred on or about October 21, 1981, in the City of Parchment, Michigan. Prior to trial, defendant moved for a hearing on his defense of entrapment pursuant to People v Turner, 390 Mich 7; 210 NW2d 336 (1973). The facts adduced at that hearing were as follows.
In September and October, 1981, Dale Carpenter, a Kalamazoo City Police Officer and the complainant herein, was working undercover in the investigation of controlled substance offenses. The investigation had focused on defendant’s girlfriend, among others. Carpenter met defendant’s girlfriend for the first time on September 28, 1981. On that day, Carpenter went to the residence she shared with defendant in Kalamazoo and purchased from her a small amount of LSD. Defendant witnessed this transaction. On the following day, Carpenter returned to the Kalamazoo residence to purchase some LSD from another acquaintance of défendant. While there, Carpenter purchased one ounce of marijuana from defendant.
Sometime before October 21, 1983, defendant and his girlfriend moved from the City of Kalamazoo to the City of Parchment, Michigan. At approximately 6:45 p.m. on October 21, 1981, Carpenter called defendant’s girlfriend in reference to purchasing some cocaine. About 8:30 p.m. that same night, defendant called Carpenter and advised Carpenter that he could purchase a gram of cocaine from him. Carpenter then drove to defendant’s Parchment apartment and gave defendant $105. Defendant left the apartment and later returned with a packet suspected to contain cocaine, which he gave to Carpenter. Defendant was not arrested until several months later in March of 1982.
The trial court questioned Carpenter regarding his authority to operate in the City of Parchment. It is undisputed that the undercover operations were not in conjunction with the Parchment Police Department, the Kalamazoo County Sheriffs Department, or the Michigan State Police. The trial judge stated that he was not aware of any authority permitting an officer to operate outside his jurisdiction when such operation is not in conjunction with another law enforcement agency. The trial judge concluded that the actions of Officer Carpenter were without legal sanction and sua sponte dismissed the complaint against defendant.
Under MCL 764.2a; MSA 28.861(1):
"A peace officer of a county, city, village, or township of this state may exercise authority and powers outside his own county, city, village, or township, when he is enforcing the laws of this state in conjunction with the Michigan state police, or in conjunction with a peace officer of the county, city, village, or township in which he may be, the same as if he were in his own county, city, village, or township.”
While admitting that Officer Carpenter’s undercover purchase of cocaine from defendant in Parchment was not in conjunction with or authorized by any other law enforcement agency as required by the above statute, the prosecution relies on the "hot pursuit” exception found in MCL 117.34; MSA 5.2114, which provides as follows:
"When any person has committed or is suspected of having committed any crime or misdemeanor within a city, or has escaped from any city prison, the police officers of the city shall have the same right to pursue, arrest and detain such person without the city limits as the sheriff of the county.”
We find this statute inapplicable to the facts of the present case. When Officer Carpenter entered the City of Parchment, he did not do so in order to arrest defendant for any crime defendant had or was suspected of having committed. Rather, the offense with which defendant was charged had not yet occurred. Also, the fact that approximately one month earlier defendant had allegedly sold marijuana to Carpenter in Kalamazoo was not the reason for Carpenter’s entry into Parchment, as evidenced by the fact that Carpenter did not arrest defendant for this alleged sale of marijuana.
The prosecution next argues that, even if Officer Carpenter were acting outside his statutory authority as a police officer, dismissal was not the proper remedy because Carpenter still has the statutory authority as a citizen to swear to the factual allegations of the complaint against defendant and to testify at defendant’s preliminary examination to support a finding of probable cause. MCL 764.1a, 766.13; MSA 28.860(1), 28.931. However, the flaw in this argument is that it overlooks the fact that the sole basis on which Carpenter might act as the complaining witness is his undercover drug purchase from defendant, and Carpenter had neither authority as a police officer nor as a private citizen to engage in this illegal drug transaction.
The prosecution also relies on People v Bashans, 80 Mich App 702; 265 NW2d 170 (1978), and People v Burdo, 56 Mich App 48; 223 NW2d 358 (1974), in support of its assertion that the court erred in dismissing the charge against defendant. However, those cases are distinguishable. In Bash-ans, supra, pp 712-713, this Court held that even though the police officers in arresting the defendant in another jurisdiction were acting outside their police authority under MCL 764.2a; MSA 28.861(1) the arrest, nevertheless, was not unlawful because the officers had statutory authority as citizens to arrest the defendant under MCL 764.16; MSA 28.875. In the present case, the question is not whether Officer Carpenter had authority to arrest defendant (indeed, defendant’s arrest did not occur in Parchment), but rather whether he had authority to engage in the drug transaction which formed the basis of the offense charged against defendant. We have already determined that Carpenter did not have such authority as a police officer, and clearly the statutory authority of a citizen to make an arrest does not allow citizens to engage in illegal drug transactions in order to make an arrest.
In People v Burdo, supra, this Court held that, even though a police officer lacked statutory authority to arrest the defendant, the statutory violation did not require suppression of evidence seized as a result of the arrest since the arrest was not constitutionally invalid and thus the exclusionary rule was inapplicable. The instant case presents the altogether different issue of whether a defendant may be prosecuted for an offense based on an illegal transaction with a police officer who had no authority, either as a police officer or a citizen, to engage in the illegal transaction.
We hold that the trial court did not err in dismissing the charge against defendant and that dismissal is the proper remedy where a defendant is charged with an offense based on a drug transaction with a police officer who acted outside his jurisdiction and without statutory authority. We find Officer Carpenter’s drug purchase from defendant without having statutory authority to do so is analogous to entrapment activities by police officers, for which the remedy is dismissal of charges against the defendant, People v D’Angelo, 401 Mich 167, 179; 257 NW2d 655 (1977). Like entrapment, Officer Carpenter’s engagement in an illegal drug transaction without statutory authority tainted the law enforcement process; and, in order to deter such police misconduct and to protect the integrity of the judicial process, dismissal of the charge against defendant which arose out of that unauthorized police activity is warranted. See People v D’Angelo, supra, pp 174, 179.
Affirmed.
T. C. Megargle, J., concurred. | [
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M. J. Kelly, P.J.
Plaintiff appeals as of right from an order of summary judgment in favor of defendants.
Plaintiff and defendants are parties to a Michigan standard fire insurance policy, MCL 500.2832; MSA 24.12832, whereby plaintiff agreed to provide fire loss protection for defendants’ retail store located in Highland Park, Michigan. Two fires occurred at the store, one on December 1, 1977, and another on April 1, 1978. Defendants filed proofs of loss with plaintiff but the parties were unable to agree on the dollar amount of defendants’ combined losses. Following the implementation of the appraisal procedures provided for in the policy, a court-appointed umpire entered an award of $26,903.26. Defendants’ initial claim had been for approximately $73,000.
One month and one week after entry of the appraisal award, plaintiff filed an amended complaint in circuit court alleging that the appraisal had been overvalued due to misrepresentations and false statements made by the defendants during the appraisal proceedings. Plaintiff further contended that defendants’ allegedly fraudulent actions did not become apparent to plaintiff until sometime during those proceedings. Plaintiff sought a declaratory judgment holding the insurance policy void for fraud pursuant to the following standard policy provision:
"This entire policy shall be void if, whether before or after a loss, the insured has wilfully concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of the insured therein, or in case of any fraud or false swearing by the insured relating thereto.” MCL 500.2832; MSA 24.12832.
This case is before us for the second time. In an unpublished per curiam opinion, American Automobile Ins Co v Kevreson (Docket No. 48879, decided October 8, 1981), we reversed an order of summary judgment in favor of the defendants on the ground that the trial court had erred in finding no genuine issue of material fact as to whether the insurance policy is void for misrepresentation, fraud, and false swearing on the part of the defendants regarding the value of their losses. On remand, defendants, prompted by certain language in our earlier opinion, again moved for summary judgment, this time on the ground that plaintiff had waived its right to assert a claim of fraudulent misrepresentation of losses because it had failed to raise it within the appropriate time.
Specifically, defendants argued and the trial court held that MCL 500.2836(2); MSA 24.12836(2) requires an insurer to raise all liability defenses within 30 days following entry of an appraisal award. We, however, cannot agree. MCL 500.2836(2); MSA 24.12836(2) provides:
"Except as otherwise provided in section 2845, losses under any fire insurance policy shall be paid within 30 days, notwithstanding the provisions of any contract or statute to the contrary.”
We read this provision as requiring payment within 30 days only where there is no bona fide dispute over the insurer’s liability. The phrase "losses under any fire insurance policy” actually excludes the loss involved here. Assuming the allegations contained in the plaintiffs complaint to be true, as we must under a motion for summary judgment, Blurton v Bloomfield Hills Bd of Ed, 60 Mich App 741; 231 NW2d 535 (1975), the policy would be void due to the defendants’ wilful misrepresentations of material fact. MCL 500.2832; MSA 24.12832. If the policy is void the losses obviously do not come within the policy and the 30-day provision is inapplicable.
Moreover, this Court has construed MCL 500.2836(2); MSA 24.12836(2) to require payment by the insurer within 30 days after "ascertainment of loss”. Krim v Commercial Union Assurance Co, 94 Mich App 639, 642; 288 NW2d 463 (1980), lv den 409 Mich 875 (1980). Since the appraisal process does not resolve any question of liability of an insurer but merely resolves the amount of losses suffered by the insured, we cannot conclude that an appraisal award constitutes "ascertainment of loss” under the statute. We thus decline to construe MCL 500.2836(2); MSA 24.12836(2) as a statute of limitations on an insurer’s right to pursue in good faith a liability defense of fraud.
Reversed.
In our earlier decision, we noted that "[w]hile there may well be some outside limit to the time in which an insurer may raise its policy defenses, that question is not now before us. | [
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Per Curiam.
Plaintiff appeals by leave granted the April 4, 1981, order of the trial court granting accelerated judgment for defendant, pursuant to GCR 1963, 116.1(2), lack of jurisdiction of the subject matter. In an opinion dated March 12, 1981, the trial court found that plaintiff’s claims under the Michigan Handicappers’ Civil Rights Act, MCL 37.1101 et seq.; MSA 3.550(101) et seq., and the Elliott-Larsen Civil Rights Act, MCL 37.2101 et seq.; MSA 3.548(101) et seq., were barred by the exclusive remedy provision of the Michigan Worker’s Disability Compensation Act, MCL 418.131; MSA 17.237(131).
The facts are not complicated. On February 28, 1977, plaintiff injured his right arm and shoulder while working for defendant, his employer. On September 11, 1978, plaintiff’s physician told plaintiff that he could return to work. Although plaintiff was ready and willing to return, defendant did not permit him to return to work until January 7, 1980. During this period, plaintiff received workers’ compensation benefits.
On January 7, 1981, plaintiff filed a complaint alleging that defendant’s refusal to take him back to work prior to January 7, 1980, constituted discrimination prohibited by the Handicappers’ Act and the Elliott-Larsen Act. Defendant’s motion for accelerated judgment followed, alleging that plaintiffs exclusive remedy lay with the Bureau of Worker’s Disability Compensation.
In his complaint, plaintiff sought damages pursuant to both of the civil rights acts cited above, particularly MCL 37.1605; MSA 3.550(605), and MCL 37.2801; MSA 3.548(801). Plaintiff requested lost wages in the amount of $15,476.80 and any raise which plaintiff would have received had he been working during his period of involuntary unemployment. In its opinion, the trial court concluded that the substance of plaintiffs complaint was a demand for lost wages arising from a work-related injury. In granting accelerated judgment, the trial court relied upon the case of Stimson v Michigan Bell Telephone Co, 77 Mich App 361, 368; 258 NW2d 227 (1977), where the Court, quoting from Larson’s treatise on Workmen’s Compensation Law, stated:
" 'If the essence of the tort, in law, is non-physical, and if the injuries are of the usual non-physical sort, with physical injury being at most added to the list of injuries as a makeweight, the suit should not be barred. But if the essence of the action is recovery for physical injury or death, the action should be barred even if it can be cast in the form of a normally non-physical tort.’ 2A Larson, Workmen’s Compensation Law, § 68.34, pp 13.31-13.32.”
In this case, the trial court, guided by Stimson’s language emphasizing the nature of damages claimed, ruled that plaintiffs prayer for lost wages merely camouflaged an attempt to secure double damages. We find that the trial court erred be cause Stimson did not squarely hold that the nature of damages requested alone controls the applicability of the exclusive remedy bar. In holding that disability benefits were the exclusive recourse of Mrs. Stimson, the panel emphasized that her mental injuries had culminated in a disabling condition for which compensation was available. Recovery for the nervous breakdown, embarrassment, humiliation, and loss of esteem was, therefore, barred by the exclusive remedy provision. However, the Stimson panel held that the plaintiff’s discharge and inability to obtain wage promotion, if proven to have resulted from sex discrimination, were injuries for which the Worker’s Disability Compensation Act provided no remedy and were, therefore, not barred.
Stimson was most recently discussed by another panel of this Court in Pacheco v Clifton, 109 Mich App 563; 311 NW2d 801 (1981). In that case, the plaintiffs, a husband and wife, had alleged discrimination on the basis of national origin under the now repealed Michigan fair employment practices act (FEPA), MCL 423.301 et seq.; MSA 17.458(1) et seq. The plaintiff husband alleged that he suffered psychological and emotional injuries, neurosis, and pain and suffering as a result of the employment discrimination. The trial court denied the defendants’ motion for summary judgment, which had challenged the court’s jurisdiction in light of the exclusive remedy provision. This Court affirmed the denial of summary judgment and held that damages resulting from employment discrimination, including humiliation, embarrassment and lost wages, are not barred by the exclusive remedy provision of the Worker’s Disability Compensation Act even where the unlawful discrimination results in a mental injury for which compensation is otherwise available under the act. Further, the Court stated:
"To the extent Stimson may be interpreted as holding that, when mental injuries arising from discrimination culminate in a physical disability claim (which is compensable under the WDCA), the prior claims for the mental suffering are 'merged’ with the physical disability claim, we disagree. Such a result, we believe, is inconsistent with prior Michigan law in this area. * * * We can find no logic in holding that the bureau is the proper forum for recovering compensátion when discriminatory employment tactics cause emotional injuries which culminate in disability but that the circuit court is the appropriate forum when the same discrimination conduct does not cause physical disability. In either case, the alleged cause of the injuries stemmed from the same source: intentional employment discrimination. This is the very conduct the FEPA was designed to protect against. It is not the type of conduct the WDCA was designed to protect against. To hold otherwise, would cancel two remedial statutes.” (Emphasis in original.) 109 Mich App 575.
In addition, several federal cases have strictly construed Stimson to bar a separate employment discrimination suit only where mental injuries resulting from such discrimination culminate in physical disability. Freeman v Kelvinator, Inc, 469 F Supp 999 (ED Mich, 1979); Moll v Parkside Livonia Credit Union, 525 F Supp 786 (ED Mich, 1981).
On the basis of the above decisions, we reverse the order of the trial court granting accelerated judgment. Plaintiff alleged a unique, separate injury resulting from unlawful employment discrimination. Plaintiff has not alleged employment discrimination culminating in disability; rather, the disability preceded the alleged unlawful discrimination. The fact that plaintiff has received disabil ity benefits does not preclude him from suing for this independent injury nor does the fact that plaintiff has received disability benefits for his physical disability occurring on February 28, 1977, have any bearing on whether defendant committed unlawful employment discrimination in refusing to return plaintiff to work on September 11, 1978. Clearly, the two injuries are distinct. The Handicappers’ Civil Rights Act was designed to redress the type of injury alleged in plaintiff’s complaint. Section 202 of the act states in part:
"Sec. 202. (1) An employer shall not:
"(a) Fail or refuse to hire, recruit, or promote an individual because of a handicap that is unrelated to the individual’s ability to perform the duties of a particular job or position.
"(b) Discharge or otherwise discriminate against an individual with respect to compensation or the terms, conditions, or privileges of employment, because of a handicap that is unrelated to the individual’s ability to perform the duties of a particular job or position.
"(c) Limit, segregate, or classify an employee or applicant for employment in a way which deprives or tends to deprive an individual of employment opportunities or otherwise adversely affects the status of an employee because of a handicap that is unrelated to the individual’s ability to perform the duties of a particular job or position.” MCL 37.1202; MSA 3.550(202).
The plaintiff must be physically and mentally able to perform his job efficiently to satisfy the act. Also, there must be a job available that he could perform, one for which he was specifically turned down because of the injury. These, of course, are matters of proof to be resolved in a factfinding process.
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W. R. Peterson, J.
This is an appeal as of right from an order of the probate court terminating the parental rights of respondent-appellant. He contends that the probate court used an incorrect standard of proof and that the evidence was le gaily insufficient to sustain the findings of the probate court.
. As to the first point, appellant argues that the probate judge erroneously terminated his rights based on a standard of the best interests of the children rather than by requiring clear and convincing evidence of his parental unfitness. The probate judge said:
"The court has found that the children are within the jurisdiction of the court and must now enter an order for disposition. The court must receive clear and convincing evidence in order to consider the recommended termination of parental rights (JCR 8.3[B]). The court’s decision is to be guided by the best interests of the children.”
We find that to be a most appropriate statement of the duty of the probate court in such cases.
It is true that the Child Custody Act, which seeks to resolve claims of competing parties to custody of a child according to the best interests of the child, is not applicable to proceedings in the juvenile division of the probate court. In re Maria S Weldon, 397 Mich 225; 244 NW2d 827 (1976). But, even in cases not falling within the Child Custody Act, the concept of the best interests of the child has long been the polar star for judicial guidance in cases involving children. Corrie v Corrie, 42 Mich 509; 4 NW 213 (1880); In re Ernst, 373 Mich 337; 129 NW2d 430 (1964). As noted in In the Matter of Baby Boy Barlow, 404 Mich 216, 236; 273 NW2d 35 (1978), a case involving the Adoption Code:
"We find the factors comprising the best interests of the child contained in the Child Custody Act to be ones which the Legislature, case law and common sense would indicate ought likewise to be relevant in cases arising under § 39(1) of the Adoption Code.”
So, too, the best interests of the child are relevant in proceedings under the juvenile code. That is not to say that the probate court can take jurisdiction of a child for the child’s best interests absent the statutory basis under MCL 712A.2; MSA 27.3178(598.2); In the Matter of John C. Kurzawa, Jr, 95 Mich App 346; 290 NW2d 431 (1980). Nor can the best interests of the child justify a termination of parental rights and a permanent custody order under § 19a, MCL 712A.19a; MSA 27.3178(598.19a), without clear and convincing proof of the statutory grounds therein, JCR 8.3(B); In the Matter of LaFlure, 48 Mich App 377; 210 NW2d 482 (1973); In the Matter of Atkins, 112 Mich App 528; 316 NW2d 477 (1982).
But once the statutory grounds justifying a permanent custody order have been established by clear and convincing evidence, the question remains as to whether such an order should enter and what disposition should be made as to the children. Entry of a permanent order is not mandatory. Section 19a says:
"the court may make a final determination and order placing the child in the permanent custody of the court, if it finds, etc. * * (Emphasis added.)
In the exercise of this discretionary power, and in making dispositional orders under § 20 of the juvenile code, MCL 712A.20; MSA 27.3178(598.20), the best interests of the child are to be considered by the probate court. In re Franzel, 24 Mich App 371; 180 NW2d 375 (1970); In the Matter of Rebecca Oakes, 53 Mich App 629; 220 NW2d 188 (1974); In the Matter of Sharpe, 68 Mich App 619; 243 NW2d 696 (1976); In the Matter of Baby X, 97 Mich App 111; 293 NW2d 736 (1980). The opinion of the probate judge shows a clear understanding of these requirements.
That opinion reached an appropriate conclusion from the evidence. Our review is de novo, the proceedings of the juvenile division of the probate court representing an exercise of chancery power. In re Maria S Weldon, supra. In the course of that review, we do not set aside the findings of the trial judge unless they are clearly erroneous, giving recognition to the special opportunity of the trial court to judge the credibility of witnesses. GCR 1963, 517.1.
A review of the evidence herein shows clear and convincing evidence of acts of neglect and abuse of his three children by appellant. The probate judge below found that the parents were unable to provide a fit home for the children by reason of neglect, MCL 712A.19a[e]; MSA 27.3178 (598.19a[e]), and that, after the children had been placed in foster care, they had been abandoned, MCL 712A.19a(b); MSA 27.3178(598.19a[b]).
Our review of the evidence convinces us that those findings are not clearly erroneous but are, rather, clearly correct. The order terminating parental rights, on those facts, is appropriate._
Affirmed.
Bronson, J., concurred.
MCL 722.21 et seq.; MSA 25.312(1) et seq.
Some recent decisions of this Court have assumed an inconsistency between de novo review and the "clearly erroneous” rule, and expressed doubt as to which should apply to review of orders terminating parental rights. See In the Matter of Mudge, 116 Mich App 159; 321 NW2d 878 (1982); In re Bailey, 125 Mich App 522; 336 NW2d 499 (1983); In re Arntz, 125 Mich App 634; 336 NW2d 848 (1983).
That they are not inconsistent, see Papin v Demski, 383 Mich 561; 177 NW2d 166 (1970); United States v United States Gypsum Co, 333 US 364, 395; 68 S Ct 525, 542; 92 L Ed 746 (1948), and 2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), pp 595-597. | [
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Per Curiam.
Appellants, beneficiaries of three-fourths of the Estate of Richard J. Kiebler, appeal as of right from the probate court’s allowance of the appellee’s first annual account. Appellants contest the allowance of fiduciary fees and attorney fees totaling $90,000.
The Revised Probate Code authorizes payment of reasonable compensation to a fiduciary and to attorneys who perform necessary legal services in behalf of the estate. MCL 700.541; MSA 27.5541 and MCL 700.543; MSA 27.5543. PCR 908.3 provides that, unless attorney fees are consented to by all the parties, the attorney seeking compensation must provide the court with a written description of services performed, a summary of the work done and other information that may be helpful to the court in determining reasonable compensation.
In the present case, appellee appended to his first annual account a 52-page statement of services rendered in behalf of the estate by the law firm of Smith, Johnson & Demlow, Attorneys, P.C., and by appellee in his capacity as personal representative. The statement contained itemized entries with brief descriptions of work performed on a total of 238 dates during the 13-month period beginning May 30, 1981, and ending June 30, 1982. The information supplied to the probate court did not, however, justify the allowance of $90,000 as reasonable fiduciary fees and attorney fees for the following reasons. See In re Estate of Weaver, 119 Mich App 796; 327 NW2d 366 (1982).
First, the statement fails to indicate whether the services were performed by appellee in his capacity as fiduciary or whether the work represented necessary legal services performed by the law firm. The distinction is important since MCL 700.543; MSA 27.5543 only allows compensation for necessary legal services. Appellee must identify which entries are claimed as legal services and what proportion of the total claimed fee represents compensation for legal services.
Second, certain entries relate to services rendered in connection with the operation of Kiebco Foods, Inc., the principal asset of the estate. To the extent appellee operated the company in his capacity as fiduciary of the estate, he is certainly entitled to reasonable compensation. However, it appears that appellee also performed services for Kiebco in his capacity as corporate counsel and was separately compensated for those services. We believe appellants are entitled to a determination regarding any services for which appellee has already been compensated in his capacity as corporate counsel for Kiebco.
Third, the statement contains no designation of the time spent in performing the claimed services. Several of the entries are identified only as conferences or telephone calls, without any description of the subject matter. Several other entries involved administrative duties such as writing checks and depositing receipts. We recognize that appellee and his law firm rendered many valuable and complex administrative and legal services during this period. However, the statement submitted by appellee leaves the probate court and this Court without any means of determining the reasonableness of time spent in performing the various legal services to the estate. Appellee has not shown how he arrived at the $90,000 figure.
Finally, we agree that appellants are entitled to a statement of whether the claimed fiduciary fees and attorney fees represent compensation for all of the services rendered to the date of the first annual account.
We therefore reverse the allowance of fiduciary fees and attorney fees and remand the case to the probate court for an evidentiary hearing and determination of reasonable fiduciary fees and attorney fees to which appellee may be entitled. Since Judge Robertson disqualified himself subsequent to his allowance of the first annual account, the determination must necessarily be made by a different probate judge. Our holding makes it unnecessary to rule on the remaining issue raised by appellants.
No interest shall be chargeable against attorney fees or fiduciary fees during the appeal period, nor shall attorney fees or fiduciary fees be charged against the estate for this appeal, this Court finding that such interest, fiduciary fees or attorney fees for appeal do not benefit the estate. In re Baldwin’s Estate, 311 Mich 288; 18 NW2d 827 (1945); In re Brack Estate, 121 Mich App 585; 329 NW2d 432 (1982).
Reversed and remanded. We do not retain jurisdiction.
The court’s order of February 17, 1982, approved payment of partial attorney fees in the amount of $40,000. The September 17, 1982, order allowing the first annual account approved fiduciary fees and attorney fees in the amount of $50,000, but stayed payment of $25,000 pending appeal.
Appellee is a shareholder in the law firm. | [
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D. L. Sullivan, J.
On June 3, 1982, the trial court granted defendant’s motion to dismiss the charge of manslaughter, MCL 750.321; MSA 28.553. The prosecution appeals as of right.
On June 29, 1981, the prosecution issued a complaint in the present case against defendant. Although the record is somewhat unclear, the parties have assumed that defendant was a prison inmate in a halfway house at the time. However, if he had not done so already, defendant very soon afterward fled the state. On July 3, 1981, he was arrested in Arkansas. Three days later, the Department of Corrections asked him if he would waive extradition. Although he intially refused, he in fact waived extradition on October 7, 1981.
Unless a prisoner waives extradition, it normally takes between three months and one year to extradite him. Noticing that the Department of Corrections was seeking extradition of defendant as an escapee, the prosecution decided not to proceed to seek extradition on its own for manslaughter. It did, however, inform the Department of Corrections about the manslaughter complaint.
Defendant was returned to Michigan on October 17, 1981. However, rather than informing the prosecution that defendant was back, the Department of Corrections merely processed him through the prison system. By chance, the prosecution found out about defendant’s return in February, 1982. Soon after, it petitioned for a writ of habeus corpus to procure defendant to prosecute him. The defendant was subsequently arraigned on March 6, and the preliminary examination was held on March 15, 1982.
The prosecution first argues that the application of People v Woodruff, 414 Mich 130; 323 NW2d 923 (1982), is prospective only. Before Woodruff, this Court was split on whether or not the 180-day rule, MCL 780.131; MSA 28.969(1), applied to prison inmates. Woodruff resolved the split, holding that it does. But even though it has limited retroactive activity, it applies to the present case:
"[T]his decision shall only apply to existing and future untried warrants, indictments, informations or complaints and to cases pending on direct review where the issue is preserved.” 414 Mich 138. (Footnote omitted.)
In fact, the Supreme Court has been applying it retroactively. E.g., People v Charles Moore, 417 Mich 878; 329 NW2d 304 (1983); People v Wheeler, 414 Mich 966 (1982); People v Jerrils, 414 Mich 935 (1982).
The next issue in this case concerns when the 180 days started. The prosecution claims that it started October 17, 1981, when defendant was brought back to Michigan. Defendant claims it started June 29, 1981, when the complaint was issued. Actually, which date we choose does not matter because we reach the same result either way. If we use June 29, we do not count the time between June 29 and October 17, because defendant was then an escapee fighting extradition. The prosecution could not have taken good faith efforts to bring defendant to trial within this time. We do not require it to do a useless act. Accordingly, the 180-day period was tolled during this time. People v Thomas, 21 Mich App 465, 472; 175 NW2d 540 (1970).
We hold that the trial court erred in dismissing this case. People v Castelli, 370 Mich 147; 121 NW2d 438 (1963), is almost directly on point. On November 2, 1960, the Oakland prosecutor issued a warrant against the defendant. At that time, he was in the Wayne County jail. However, the Wayne County prosecutor failed to deliver him to the Department of Corrections until March 3, 1961. The Oakland prosecutor failed to petition for a writ of habeas corpus until August 25, 1961. The Supreme Court held that the 180 days started to run on March 3. By August 25, when the petition for habeas corpus was filed, the 180 days had not quite elapsed. The Supreme Court held that jurisdiction had not been lost.
The 180-day rule does not require the prosecution to bring the defendant to trial within that period. Instead, it requires that the prosecution expend good faith efforts to commence proceedings against the defendant within 180 days. People v Hendershot, 357 Mich 300; 98 NW2d 568 (1959); People v Hegwood, 109 Mich App 438; 311 NW2d 383 (1981); People v Anglin, 102 Mich App 118; 301 NW2d 470 (1980); People v Downing, 31 Mich App 31; 187 NW2d 263 (1971), lv den 386 Mich 761 (1971). By the time the prosecution petitioned for habeas corpus, only 132 days had elapsed. In fact, the 180 days had not expired by the time defendant was arraigned or the preliminary examination held. Holding the preliminary examination within the 180-day period sufficiently complies with the rule. People v Stephens, 103 Mich App 640; 303 NW2d 51 (1981), lv den 413 Mich 912 (1982); People v Asher, 32 Mich App 380, 385; 189 NW2d 148 (1971), lv den 385 Mich 767 (1971); People v Linscott, 14 Mich App 334; 165 NW2d 514 (1968), lv den 381 Mich 807 (1969). Because the prosecution did commence proceedings within 180 days, the trial court erred in ruling that jurisdiction had been lost.
Reversed and remanded.
This particular conclusion was sub silentio overruled in People v Hill, 402 Mich 272, 280-281; 262 NW2d 641 (1978). However, Hill did not affect the rule’s interpretation that the court does not lose jurisdiction if the prosecution takes "good-faith action within that time to ready the case for trial”. 402 Mich 281. | [
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Per Curiam.
Plaintiffs Dorothy Ross (hereinafter plaintiff) and Joseph Ross commenced a medical malpractice action on March 12, 1981, against defendants Harvey G. Roth, D.O., Bruce T. Wheatley, M.D., John D. Sellers, D.O., and Holy Cross Hospital of Detroit, Inc. This was the second such lawsuit filed by plaintiffs. The first action was commenced on August 28, 1980, but was subsequently dismissed without prejudice for failure to serve any of the defendants within the 180 days required by the applicable court rule.
On August 10, 1978, defendant Sellers performed a voluntary termination of pregnancy upon plaintiff. On August 17, 1978, defendant Roth examined plaintiff postoperatively, which was the last time either defendant Roth or Sellers rendered treatment or otherwise served plaintiff.
On August 20, 1978, defendant Wheatley performed a second dilation and curettage and subsequent hysterectomy on plaintiff at defendant Holy Cross Hospital. It is from this surgery that the alleged malpractice occurred. Plaintiff continued as an inpatient at defendant Holy Cross until her discharge on September 7, 1978.
Following plaintiff’s discharge, she was seen by defendant Wheatley in his office on November 3, 1978, at which time she was released to return to work. Plaintiff consulted with defendant Wheatley on subsequent occasions through 1980 for treatment of such complaints as dizziness, nervous tension, depression, abdominal gas, hemorrhoids, insomnia, and dermatitis.
Following the filing of the second complaint on March 12, 1981, all four defendants filed motions for accelerated judgment alleging that the instant action was barred by the applicable statute of limitations for malpractice. An order granting accelerated judgment for defendant Wheatley was entered on November 6, 1981. Plaintiffs’ motion for rehearing and reconsideration of said order was subsequently denied. An order granting accelerated judgment for defendant Holy Cross was entered on January 12, 1982. On January 21, 1982, an order granting accelerated judgment for defendants Sellers and Roth was entered. Plaintiffs appeal as of right.
Plaintiffs contend that the trial court erred in granting accelerated judgment as to all four defendants by ruling as a matter of law that said defendants had discontinued treating plaintiff within the meaning of MCL 600.5838(1); MSA 27A.5838(1). We affirm the trial court’s decision with respect to all defendants except defendant Wheatley.
First, plaintiffs argue that defendant Wheatley continued to treat plaintiff, within the meaning of § 5838(1), after November 3, 1978. According to defendant Wheatley’s affidavit and office records, postsurgical care for the alleged act of malpractice ended on November 3, 1978, when plaintiff was released for work. Hence, according to Wheatley’s affidavit, this was the last date of treatment. Pursuant to the applicable statute of limitations, plaintiffs could have only until November 3, 1980, to file their complaint. However, having reviewed plaintiffs affidavit, which must be accepted as true, we believe that it conflicts with defendant Wheatley’s affidavit on the issue. We find that competent evidence is presented by plaintiffs raising a question of fact as to whether or not plaintiffs had only until November 3, 1980, to file their complaint. While plaintiff is not an expert, her affidavit states that defendant Wheatley told her that the symptoms she complained of were caused by or related to the hysterectomy; that Wheatley informed her that her problems would be resolved through continued care and treatment; that Wheatley informed her that as a result of the hysterectomy she would experience "change of life” symptoms, including hot and cold flashes, hormonal changes, nervousness and insomnia. Paragraph 6 of Wheatley’s affidavit shows that he treated plaintiff after November 3, 1978, for exactly these symptoms. Plaintiff could competently testify to these statements made by defendant since they are admissible as admissions by a party opponent under MRE 801(d)(2)(A). Whether or not the plaintiff or the defendant is to be believed is for the fact finder and thus accelerated judgment was improperly granted.
Next, plaintiffs argue that defendant Holy Cross treated plaintiff within the meaning of § 5838(1) after September 1, 1978. Defendant Holy Cross’s affidavit establishes that the last day of treatment for matters relating to the alleged malpractice was on September 7, 1978. Plaintiff’s affidavit in no way attempts to assert that subsequent emergency and outpatient visits to Holy Cross were for treatment arising out of the surgery performed by defendant Wheatley on August 20, 1978. In fact, plaintiffs affidavit never mentions Holy Cross and plaintiffs have never attempted to file a similar affidavit concerning subsequent treatment received at Holy Cross. According to the uncontroverted facts established by Holy Cross’s unopposed affidavit, the trial court was correct in its determination that the last date of treatment was September 7, 1978, and properly granted defendant Holy Cross’s motion for accelerated judgment.
Finally, plaintiffs argue that defendants Roth and Sellers continued to treat plaintiff within the meaning of §5838(1) after August 17, 1978. The affidavits of defendants Roth and Sellers firmly establish that neither of them treated plaintiff after August 17, 1978. Once again, plaintiff’s affidavit does not raise a question of fact as to this issue. It does not even mention defendants Roth or Sellers. Plaintiffs, in their brief, allege that if permitted to undertake discovery "they will show that defendants Roth and Sellers were treating * * * plaintiff Dorothy Ross after March 12, 1979”, which, if shown, they contend would validate their cause. However, plaintiffs’ allegations are substantially refuted by certain interrogatories submitted to plaintiffs by defendant Roth on May 5, 1981. Questions 9 and 16 provide as follows:
"9. Set forth the names and addresses of each and every medical practitioner who treated plaintiff Dorothy Ross subsequent to August, 1978;
"a) As to each medical practitioner listed, set forth the dates on which this person was treated and the reasons for such treatment.
"Answer: Dr. Wheatley, Dr. Soad, Dr. Newton, Dr. Galvin.
"16. With respect to the allegations contained in paragraph 10 of your complaint, list specifically and in detail each and every date which you claim plaintiff saw defendant Harvey G. Roth, D.O., during the months of August, September, and October of 1978.
"a) For each of the above dates, state specifically the reason for each visit.
"b) For each of the above dates, state specifically what treatment you claim Harvey G. Roth, D.O., rendered.
"Answer: Augúst 3, 1978 possible pregnancy.”
There is no reversible error. The trial court properly granted accelerated judgment as to defendants Roth and Sellers.
Affirmed in part and reversed in part. Costs to appellees. | [
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Per Curiam.
Plaintiff appeals as of right from an order granting summary judgment, GCR 1963, 117.2(3), to defendant Hughes in a dramshop action, MCL 436.22; MSA 18.993, and from a second order of summary judgment, GCR 1963, 117.2(1), granted to defendant Hughes after plaintiff filed an amended complaint.
Plaintiff alleged in his complaint a dramshop action against defendant Hughes as a licensed seller of alcoholic beverages illegally selling intoxicating liquor to a visibly intoxicated person, defendant Stephen Campbell. Defendant Campbell allegedly drove his automobile off the road striking a tree while plaintiff was a passenger. Plaintiff suffered serious injuries.
Defendant Hughes filed a motion for summary judgment with an affidavit attached and with reference to deposition testimony. In its April 24, 1981, opinion granting the motion, the trial court treated the motion as one brought pursuant to GCR 1963, 117.2(3), no genuine issue of material fact. The court found that undisputed deposition testimony showed that plaintiff and defendant Campbell drank together at the Blue Boat Inn before the accident. They purchased their drinks in "rounds” with one or several other friends. This method of purchasing liquor was voluntary and cooperative and implied the expectation that each person would consume and purchase his per capita share. The trial court held that buying such "rounds” amounted to buying drinks for other people. Thus, the trial court found that plaintiff bought liquor for the intoxicated defendant, Campbell. By doing so, plaintiff was a noninnocent party under the drampshop act and, thus, was precluded from proceeding under the act. See Kangas v Suchorski, 372 Mich 396; 126 NW2d 803 (1964).
Plaintiff argues that a genuine issue of fact remains: whether the purchase of "rounds” of liquor amounts to the purchase of liquor for another. Plaintiff states that the purchase of such "rounds” amounts only to the purchasing of liquor for oneself. Therefore, plaintiff argues, as he only purchased liquor for himself, he is not precluded from bringing this dramshop action against defendant Hughes.
We find that the question of whether buying rounds of liquor is the purchasing of liquor for another or only oneself is not material. What is a material question in this case is whether plaintiff actively participated in causing Campbell’s inebriation. Malone v Lambrecht, 305 Mich 58, 60; 8 NW2d 910 (1943); Todd v Biglow, 51 Mich App 346, 351; 214 NW2d 733 (1974). One who actively brings about the alleged intoxication may not recover for injuries sustained therefrom. Malone, supra.
In deciding whether there was a genuine issue of material fact regarding plaintiffs status as a non-innocent party under the dramshop act, the trial court was obligated to consider affidavits, depositions, and interrogatories, or, in short, the entire record. Rizzo v Kretschmer, 389 Mich 363; 207 NW2d 316 (1973). Giving every reasonable doubt to the opposing party, to grant judgment the court must be satisfied that it is impossible for the claim asserted to be supported by evidence at trial. Partrich v Muscat, 84 Mich App 724; 270 NW2d 506 (1978).
In this case, plaintiff, defendant Campbell, and one other participant in the drinking at the Blue Boat Inn on the night of the accident all agreed in deposition testimony that their group drank beer and schnapps in "rounds”. When a participant purchased the liquor, he did not purchase a quantity only for himself. Rather, he purchased a beer and a shot of schnapps for each drinker. In this fashion, both plaintiff and defendant Campbell consumed at least 8 to 10 beers and shots of schnapps.
We find that the purchasing of "rounds” in this manner does not show that plaintiff merely drank with Campbell. See Dahn v Sheets, 104 Mich App 584, 591; 305 NW2d 547 (1981), lv den 412 Mich 928 (1982). Rather, we find that by drinking in this manner plaintiff actively participated in the intoxication of Campbell, whether or not he eventually assumed the cost of the liquor he consumed. Thus, the trial court correctly granted defendant Hughes a summary judgment because there is no genuine dispute that plaintiff is a noninnocent party.
Plaintiff also argues that the dramshop action should not have been dismissed because a person’s active participation in bringing about the injury-producing intoxication should not bar recovery. Rather, plaintiff argues that the doctrine of comparative negligence should apply to such actions. See Placek v Sterling Heights, 405 Mich 638; 275 NW2d 511 (1979). We follow the decision in Dahn v Sheets, supra, p. 593, and reject this argument. The dramshop statute is a legislatively created exclusive remedy for injuries arising out of unlawful sales of intoxicating beverages by licensed retailers. A dramshop action is not a common-law negligence action. See Browder v International Fidelity Ins Co, 413 Mich 603, 615-616; 321 NW2d 668 (1982); Lucido v Apollo Lanes & Bar, Inc, 123 Mich App 267, 270-271; 333 NW2d 246 (1983). Because the doctrine of comparative negligence applies only to common-law tort actions sounding in negligence, it does not extend to a statutory dramshop action. Dahn, supra.
In his amended complaint, plaintiff added a count against defendant Hughes alleging a common-law cause of action for gross negligence in the sale of intoxicants to Campbell when Campbell was already visibly intoxicated and for ejecting Campbell from the bar knowing he had no other means of transportation than his automobile. Defendant Hughes filed a motion for summary judgment aruging that plaintiff failed to allege a legally cognizable claim in his amended complaint, GCR 1963, 117.2(1). In its February 22, 1982, opinion granting the motion, the trial court recognized that this Court in Grasser v Fleming, 74 Mich App 338; 253 NW2d 757 (1977), recognized a common-law action for gross negligence or wilful, wanton, or intentional misconduct where the complaint alleged that the licensed liquor establishment sold alcohol to a known compulsive alcoholic contrary to a promise made by the tavern owner to refrain from serving that person. However, the trial court found no such pleading in this case. Therefore, because a dramshop action is an exclusive remedy against a licensed tavern owner, plaintiff failed to state a cause of action.
A motion for summary judgment for failure to state a claim, GCR 1963, 117.2(1), tests the legal sufficiency of the pleadings alone. The factual allegations made in the complaint must be presumed true along with any inferences or conclusions which may be fairly drawn from them. Unless the claim is so unenforceable as a matter of law that no factual development could possibly justify recovery, the motion should not be granted. Romeo v Van Otterloo, 117 Mich App 333, 337; 323 NW2d 693 (1982).
The trial court properly granted the motion in this case. A dramshop action is plaintiff’s exclusive remedy. Browder, supra. The Grasser exception does not apply in this case. Plaintiff did not allege that Campbell was a known alcoholic. Moreover, the common-law actions found in Romeo, supra, do not apply. Defendant in Romeo was was not a licensed seller of alcoholic beverages.
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Per Curiam.
In our original opinion in this case, 131 Mich App 363; 346 NW2d 101 (1984), we affirmed defendant’s convictions of driving under the influence of liquor (DUIL), third offense, MCL 257.625; MSA 9.2325, and resisting arrest, MCL 750.479; MSA 28.747. We granted defendant’s application for rehearing to clarify our position regarding who has the burden of proof in a situation, such as defendant’s, where a prior DUIL conviction is challenged as invalid for sentence enhance ment purposes because the defendant was. not informed of his right to appointed counsel if indigent.
We hold that it is the defendant’s burden to show, when making his collateral challenge, that he was indigent at the time of the prior offense in order to invalidate a prior guilty plea conviction at which the trial judge failed to inform defendant of his right to appointed counsel if the defendant could not afford to retain an attorney. Our holding here puts no greater burden on a defendant than that borne by him originally. In order to obtain appointed counsel at trial, a defendant must disclose his financial status and show an inability to retain counsel. See People v Gillespie, 41 Mich App 748; 201 NW2d 104 (1972); People v Cochran, 406 Mich 947 (1979). Upon a showing of indigency, counsel is appointed for the defendant. Where a defendant asserts that a prior conviction is invalid because he was not informed of his right to appointed counsel, defendant must show prejudice by proving that he was indigent at the time of the prior conviction. Where, as here, a defendant makes no showing in his collateral challenge that he was, in fact, financially unable to retain counsel at the time of the prior proceeding, no prejudice is shown.
Affirmed. | [
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Per Curiam.
Plaintiffs appeal as of right a May 9, 1983, order of the circuit court for Benzie County granting defendant’s motion for summary judgment under GCR 1963, 117.2(1). The order was issued pursuant to the trial court’s written opinion filed April 29, 1983, in which the court ruled that while a parent can be held liable for negligence toward his own child, no liability attaches where the claim is based on negligent parental supervision. Plumley v Klein, 388 Mich 1; 199 NW2d 169 (1972). The trial court ruled:
"Viewing the facts and circumstances of this case, the court finds that the parents in the case, defendant Harry Wright and plaintiff Patricia Wright, may have been guilty of poor parental supervision which resulted in the accident and injuries to their daughter, Shirley Michelle Wright, but that negligent parental supervision is not actionable under the law of the State of Michigan and summary judgment should be, and is hereby granted against plaintiffs Patricia Wright, as parent and natural guardian of Shirley Michelle Wright, and Roy M. Benaway, conservator of Shirley Michelle Wright, a minor child.”
Patricia Wright, the natural mother of Shirley Michelle Wright, brings this suit in negligence against Harry Wright, father of Shirley, for injuries sustained by Shirley, who on May 20, 1979, at seven years of age, accidentally shot herself with a revolver she found in an automobile owned by Robert P. Jones. On May 20, 1979, Harry Wright took Shirley on a fishing trip with two friends, Robert P. Jones and Ronald Hughes. They all rode to the lake together in a 1979 Chevrolet owned and driven by Jones. While fishing, Shirley fell asleep in the boat. Upon return to shore, Harry Wright put Shirley in the back seat of the Chevrolet. Shirley remained asleep for most of the return trip to the motel. During the trip, Jones showed Wright a .38 caliber revolver and told him it was loaded. He explained he took the gun for protection against poisonous snakes which might be encountered on a fishing trip. Wright looked at the gun, replaced it in its holster and put it back on the front seat.
Upon arrival at the motel the three men and Shirley exited from the car. While the men worked on "buttoning up” the boat, Shirley threw rocks over a nearby bank. Both car doors were closed but not locked. After awhile, Shiley climbed back into the car. Some ten minutes later, Wright walked back to the car and discovered his daughter lying in the back seat with a wound in the cranial area.
On August 31, 1981, Patricia Wright, as parent, and Roy M. Benaway, as conservator of Shirley Wright, filed suit against defendant for negligence. Some time earlier plaintiffs had commenced a suit under the no-fault statute against Jones and Mich igan Mutual Insurance Company but summary judgment for those defendants had been entered by the trial court on the ground that damages did not arise out of the ownership, maintenance, or use of a motor vehicle. On December 28, 1981, defendant responded to interrogatories filed by plaintiffs. The question and answer to interrogatory No. 16 is as follows:
"Question
"On May 20, 1979, did you believe that you were promoting proper parental discipline over Shirley Michelle Wright by placing a loaded revolver on the seat of Robert Jones’ automobile?
"Answer
"I did not believe and do not believe that returning the handgun of Mr. Jones to the location where I found it had anything to do with the parental discipline of my daughter who, at that time, was riding in the back seat of the Jones automobile.”
On March 18, 1982, defendant filed a motion for summary judgment for failure to state a claim upon which relief could be granted, GCR 1963, 117.2(1), on the ground that the claim was barred by the doctrine of parental immunity. Plaintiffs filed a brief in opposition to the motion and on April 29, 1983, the trial court filed its written opinion granting the motion.
At the outset we quickly reject the claim that defendant’s answers to interrogatories propounded to him, particularly defendant’s answer to interrogatory No. 16, made it clear that defendant’s daughter was not injured as a result of "an exercise of reasonable parental authority”. We don’t believe the average layman is qualified to answer a question of law. Furthermore, interrogatory No. 16 was framed as a question of "parental discipline” and not as a question of parental authority. There is a vast difference, particularly to the ordinary layman, between authority and discipline. Quite naturally, defendant did not think he was "disciplining” his daughter when they returned to the motel and were busy putting away the boat.
Motions brought under GCR 1963, 117.2(1) are to be decided on the pleadings alone. Cooke Contracting Co v Dep’t of State Highways #2, 55 Mich App 479, 483; 223 NW2d 15 (1974). Interrogatories and depositions are not relevant when the motion is made under 117.2(1) rather than 117.2(3). Todd v Biglow, 51 Mich App 346, 349; 214 NW2d 733 (1974). For the foregoing reasons, we decline to find that the father’s statements in response to interrogatories were in themselves admissions that his conduct on the afternoon in question was not an exercise of reasonable parental authority.
This brings us to the main issue in this case. Did the father’s alleged negligent conduct constitute an exercise of reasonable parental authority over the child as that term was used by the Supreme Court in Plumley v Klein, 388 Mich 1; 199 NW2d 169 (1972)? In Plumley the common-law doctrine of parental immunity from suits against the parent for negligence was abrogated, subject to two exceptions:
A child may maintain a lawsuit against his parents for injuries suffered as a result of the alleged ordinary negligence of the parent. Like our sister states, however, we note two exceptions to this new rule of law: (1) where the alleged negligent act involves an exercise of reasonable parental authority over the child; and (2) where the alleged negligent act involves an exercise of reasonable parental discretion with respect to the provision of food, clothing, housing, medical and dental services, and other care.” 388 Mich 1, 8.
Defendant argues that his conduct on the day of the accident was not negligent but, even if negligent, that it falls within the first exception noted in Plumley. Defendant also contends the instant case is similar to and controlled by this Court’s decision in Paige v Bing Construction Co, 61 Mich App 480; 233 NW2d 46 (1975). Plaintiffs argue that what is "reasonable parental authority” is always a jury question and that Paige was wrongly decided. We agree with defendant.
Bearing in mind that motions for summary judgment under GCR 1963, 117.2(1) are to be decided on the pleadings alone, we turn to the pleadings to determine whether defendant Wright’s actions fall within the Plumley exception. Paragraphs 1 through 8 of the complaint set forth the facts as summarized earlier in this opinion. Paragraph 9 of the complaint then alleges that the injuries suffered by Shirley were the proximate result of Harry Wright’s negligence as follows:
"(i) Harry Wright then and there left her unattended inside the said automobile where, as he well knew, there was a loaded revolver;
"(ii) Harry Wright failed to warn her not to handle the said revolver;
"(iii) Harry Wright failed to remove or unload the said revolver;
"(iv) Harry Wright failed to lock the said revolver into the glove compartment of the said automoblie.”
No matter how much plaintiffs claim to the contrary, ¶ 9 of the complaint can only be construed as an action for negligent parental supervi sion. The conduct which the complaint lists as negligent is the father’s conduct in overseeing his daughter on the day the accident occurred. Unlike cases falling outside of the parental supervision exception, this case does not involve the direct commission of a wrongful act. It was not the father who loaded the gun or placed the gun on the front seat. It was not the father’s gun or his car. As was stated by Judge (now Justice) Cavanagh in Paige, supra:
"According to Plumley, where the alleged negligent act involves the exercise of reasonable parental authority over the child, the parents are immune from suit. While we note at the outset that this scheme is so general that it is difficult to apply the ambiguous exception to particular fact situations, we conclude that the first exception to the abrogation of parental immunity does apply so as to bar a claim of negligent parental supervision. A parent’s exercise of authority over his or her child involves more than discipline. It includes the providing of instruction and education so that a child may be aware of dangers to his or her well being. We find it impossible to separate such general phenomena as authority and supervision. In order to adequately supervise a child, every parent knows that some amount of discipline is inextricably involved. The right to exercise authority over a child certainly includes the responsibility to supervise that child’s behavior.” 61 Mich App 480, 484. (Emphasis supplied.)
We find the instant situation similar to and controlled by McCallister v Sun Valley Pools, Inc, 100 Mich App 131; 298 NW2d 687 (1980). There, suit was commenced by plaintiff against his parents for injuries sustained when plaintiff, then 15 years of age, dove into the family swimming pool striking his head and neck against the bottom of the pool. Plaintiff claimed his parents were negligent in failing to post warnings, install safety devices or take other steps to warn of the dangers of diving into the pool. The trial court granted summary judgment for defendants. On appeal this Court affirmed on grounds that:
"The alleged negligent acts and omissions of the defendants, which occurred three years after the pool was installed, involved an exercise of reasonable parental supervision over the child. Thus, the allegations set forth in plaintiffs complaint fall squarely within the first exception of Plumley, as explicated in Paige.” 100 Mich App 131, 139.
Like the gun in the instant case, the McCallister swimming pool was the dangerous instrumentality and the gravamen of the negligence was the failure of the parents to adequately warn or take steps to prevent potential injury. A similar decision was reached in Paige v Bing Construction Co, supra, where the child was injured when it fell into a man-made hole on defendant’s construction site. There also, the Bing-made hole was the dangerous instrumentality and the alleged negligence of the parents was their failure to oversee (supervise) the child.
Citing Grodin v Grodin, 102 Mich App 396; 301 NW2d 869 (1980), plaintiffs argue that the question of what is "an exercise of reasonable parental authority” falling within the Plumley exceptions is a jury question. According to plaintiffs, the word "reasonable” per se makes the issue one of fact for the jury to decide. We disagree.
Grodin involved the commission of an allegedly dangerous act (the use of tetracycline by the mother) rather than the supervision or overseeing of a child. Furthermore, plaintiffs’ argument, if applied to cases where the negligent act is the failure to reasonably supervise, is self-defeating. If a suit against the parents for negligence is subject to an exception where the negligent act involves parental supervision, but the reasonableness of the exception (parental supervision) itself is a jury question, then the so-called exception is meaningless. Negligence is unreasonable conduct requiring a jury determination of whether the conduct is reasonable or unreasonable. If the exception itself must go to the jury on the question of reasonableness, the exception is emasculated. Under plaintiffs’ theory summary judgment for defendants could never be granted under GCR 1963, 117.2(1) where the alleged negligence constituted inadequate parental supervision. This is contrary to this Court’s holdings in Paige and McCallister, supra.
Affirmed. Costs to defendant.
On January 27, 1982, this Court in a per curiam opinion affirmed the trial court’s grant of summary judgment. Affirmance was made "under Ciaramitaro v State Farm Ins Co, 107 Mich App 68; 308 NW2d 661 (1981)”. | [
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Per Curiam.
The people appeal as of right the trial court’s order dismissing child kidnapping charges against defendant. MCL 750.350; MSA 28.582. We reverse.
Defendant was previously convicted of kidnapping, pursuant to the general kidnapping statute, MCL 750.349; MSA 28.581. She was sentenced to four to ten years’ imprisonment. On appeal, this Court reversed defendant’s conviction and held that she had been improperly convicted under the statute. People v Setzler, unpublished opinion per curiam, decided September 23, 1992 (Docket No. 117179). Child kidnapping charges were subsequently instituted against defendant. Defendant moved to dismiss the charges, alleging that the Double Jeopardy Clause of the Fifth Amendment of the United States Constitution precluded her reprosecution. The trial court granted defendant’s motion.
The people claim that the trial court erred in dismissing this case. We agree. The Double Jeop ardy Clause does not preclude the retrial of a defendant whose conviction is set aside because of any error in the proceeding leading to conviction other than the insufficiency of the evidence to support the verdict. Montana v Hall, 481 US 400, 402; 107 S Ct 1825; 95 L Ed 2d 354 (1987); People v Langley, 187 Mich App 147, 150; 466 NW2d 724 (1991). However, double jeopardy bars reprosecution where the elements of the subsequent crime charged are identical to the elements of the original crime charged. Blockburger v United States, 284 US 299, 304; 52 S Ct 180; 76 L Ed 306 (1932).
The prior order of this Court reversing defendant’s conviction was predicated on the fact that there was insufficient evidence to support a conviction on a kidnapping charge brought pursuant to MCL 750.349; MSA 28.581. The trial court held that the Double Jeopardy Clause bars any subsequent prosecution in which the government, to establish an essential element of an offense charged in that prosecution, will prove conduct that constitutes an offense for which the defendant has already been prosecuted. Grady v Corbin, 495 US 508, 521; 110 S Ct 2084; 109 L Ed 2d 548 (1990). Here, in order to successfully prosecute defendant for child kidnapping, the people would have to prove that defendant took and intentionally concealed the child from his mother. The same conduct was required to be proved in defendant’s previous trial on the charge of kidnapping under the general statute. The trial court’s ruling was therefore absolutely correct at the time it was rendered on March 19, 1993.
Grady v Corbin, however, was expressly overruled on June 28, 1993, in United States v Dixon, 509 US —; 113 S Ct 2849; 125 L Ed 2d 556, 575 (1993), in which the Supreme Court rejected the "same conduct” test of Grady, and held that double jeopardy bars reprosecution only if the "same elements ” requirements of Blockburger are met. Child kidnapping does not require proof of confinement against the will of the victim, as does kidnapping. Thus, under the facts of this case, the subsequent prosecution of defendant survives the Blockburger test.
Reversed. | [
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M. J. Kelly, P.J.
Defendant appeals as of right from a judgment of divorce entered on October 12, 1982, in the Ingham County Circuit Court. The main issue on appeal is whether plaintiffs law degree constitutes a marital asset.
After a review of the record and briefs and the hearing of oral argument, we are of the opinion that the trial court erred in its holding that the plaintiffs law school education and license to practice law were not marital assets. The court observed: "I will tell you what the value of a law school education is. It is zero.” We reverse in accordance with this Court’s opinion in Woodworth v Woodworth, 126 Mich App 258; 337 NW2d 332 (1983), lv pending — Mich — (1983), and find that the trial court improperly refused to consider the plaintiffs law degree and license to practice law as marital assets. The trial judge has since retired and we therefore remand this case to his successor or such other circuit judge (as is assigned by rule or order) for evaluation of plaintiffs law degree as a marital asset.
The defendant also claims that the trial court’s failure to award alimony constitutes an abuse of discretion. The parties were married for ten years and both parties contributed to the joint estate. Plaintiff is in excellent health while defendant suffers from back problems and severe skin allergies which are irritated by her employment. Plaintiff has a high income potential because of his license to practice law and his current position as a district court judge. Defendant is restricted by minimal education and limited skills to a low income potential. We are of the opinion that, under these circumstances, the trial court’s failure to award defendant alimony constituted an abuse of discretion. Ozdagler v Ozdagler, 126 Mich App 468, 471; 337 NW2d 361 (1983). On remand the successor trial judge is instructed to reassess the alimony question.
j Finally, defendant alleges that the trial court abused its discretion in ordering plaintiff to pay defendant only $1,510 for attorney fees. Under the circumstances, we believe the award of attorney fees proper. See Tigner v Tigner, 90 Mich App 787, 791; 282 NW2d 481 (1979). However, we believe that defendant should be awarded attorney fees on appeal in accordance with Zimmers v Zimmers, 346 Mich 28, 37; 77 NW2d 267 (1956), and Chisnell v Chisnell, 99 Mich App 311, 316; 297 NW2d 909 (1980). We leave the assessment of the amount of the appellate attorney fees to the sound discretion of the circuit court on remand.
The judgment of divorce is affirmed; the property division and alimony awards are set aside and the matter is remanded for further proceedings in accordance with this opinion. | [
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Per Curiam.
Preston Oil Company appeals as of right the August 25, 1992, opinion and order of the Michigan Public Service Commission (psc) wherein the psc found that Preston had violated the natural gas act, 1929 PA 9 (Act 9), MCL 483.101 et seq.; MSA 22.1311 et seq., by constructing a gas pipe line without first obtaining a certificate of public convenience and necessity. We reverse.
Preston is one of several working-interest owners of the Eplett 1-3 gas well in Shelby Township, Macomb County, Michigan, and holds a seventy-three percent interest in the well. Appellee Savoy Oil & Gas, Inc., holds most of the remaining interest. According to a joint operating agreement (joa) executed by the various interest owners, all oil and gas produced from the well is owned by the various owners according to their proportionate shares of interest.
The joa provides for each owner to take "in kind” or separately dispose of its proportionate share of all oil and gas produced and incorporates a balancing agreement in the event one or more owners’ separate disposition of the gas causes split-stream deliveries to separate pipe lines or deliveries that on a day-to-day basis are not exactly equal to an owner’s respective proportionate share of total gas sales. The balancing agreement essentially provides that whenever one or more of the owners are unable to take their proportionate share of the gas produced because of the lack of a market, the remaining owners are entitled to produce, take, and deliver the maximum gas production from the well as their own, while the nonproducing or nontaking owners are given a credit in the gas remaining in storage according to their share of the net gas produced and taken at that time. The balancing agreement further provides for a final cash balancing in the event an imbalance remains in any owner’s account when the gas is ultimately depleted.
Although a twenty-six-inch gas transmission line owned by Consumers Power Company is located a short distance north of the Eplett 1-3 well, Consumers has refused to purchase or transport unblended Eplett gas without severe restrictions, because of the high nitrogen content of the gas. Preston arranged to have Eplett gas blended with gas from the Johnson 1-9 well owned by West Bay Exploration Company by means of an interconnect on the Johnson 1-9 gas line into Consumers’ pipe line distribution system, and proceeded to construct a three-inch gas pipe line between the Eplett 1-3 well and the Johnson 1-9 transmission line for that purpose. Although Savoy and the other parties to the joa had expressed willingness to pay some proportionate share of Preston’s pipe line and transmission costs in order to have their share of the Eplett gas transported through Pre ston’s pipe line, the parties were unable to reach any agreement, and Preston has refused to transport any of the other owners’ gas through its pipe line.
Savoy instituted these proceedings in the psc by filing an application, treated by the psc as a formal complaint, alleging that Preston’s pipe line is subject to the requirements of Act 9 and that Preston has violated Act 9 by constructing its pipe line without first obtaining a certificate of public convenience and necessity. Pending a hearing regarding the matter, the psc reduced the allowable production of the Eplett 1-3 well to 500 million cubic feet a month. By that time, Preston had already negotiated an end-user contract with Chrysler Corporation for the purchase of blended Eplett gas, but the new restrictions on monthly production imposed by the psc made deliveries under that contract proposal infeasible.
Ultimately, the psc held that Preston’s pipe line is subject to regulation under Act 9, finding that Preston is carrying the gas of other working-interest owners in the Eplett well for hire, compensation, or otherwise and is, in fact, exercising or claiming the right to engage in the business of piping or transporting natural gas. The psc further reasoned that requiring Preston to obtain a certificate of public convenience and necessity for the pipe line is consistent with the purposes of Act 9 in that it serves to avoid unnecessary waste of resources and related environmental and safety problems. Accordingly, the psc ordered Preston to immediately cease and desist from using its pipe line and to apply for a certificate of public convenience and necessity within thirty days or remove its pipe line and restore the pipe line area to its original condition. Preston has since applied for a certificate of public convenience and necessity as ordered, but Preston’s application is apparently still under review by the psc at this time.
We note that, in general, a psc order requiring a party to apply for a certificate of public convenience and necessity is interlocutory and, therefore, may not be subject to appellate review under MCL 462.26(1); MSA 22.45(1). Marshall v Consumers Power Co (On Remand), 206 Mich App 666, 674-675; 523 NW2d 483 (1994). However, none of the parties have disputed this Court’s jurisdiction to review the psc’s decision in this case, and we find it unnecessary to determine whether an appeal is in fact available. Even without the remedy of direct appellate review, the psc’s disputed assertion of jurisdiction over Preston’s pipe line is subject to collateral attack. See, e.g., Michigan Consolidated Gas Co v Sohio Petroleum Co, 321 Mich 102; 32 NW2d 353 (1948); Nat'l Steel Corp v Public Service Comm, 204 Mich App 630; 516 NW2d 139 (1994).
We find that Preston’s pipe line is not subject to regulation by the psc under Act 9. We begin by noting that the psc has no common-law powers, but only authority expressly conferred on it by specific statutory enactments. Union Carbide Corp v Public Service Comm, 431 Mich 135, 146; 428 NW2d 322 (1988); Nat'l Steel Corp, supra at 632. The psc’s regulatory authority under Act 9 extends to three types of entities: (1) those transporting natural gas through pipe lines for hire, compensation, or otherwise; (2) those engaged in the business of piping or transporting natural gas; and (3) those engaged in the business of buying and selling or transporting natural gas. MCL 483.101; MSA 22.1311.
In Sohio Petroleum, supra, the Michigan Supreme Court held that Sohio did not fall within any of these three categories when it used its own pipe line to transport gas from its own gas wells for sale to a single customer. Because Sohio’s pipe line was only used to transport its own property, Sohio was neither transporting "for hire, compensation or otherwise” nor engaged in “the business of’ piping or transporting. The Supreme Court analogized the situation to that of a farmer transporting the farmer’s own produce to market for sale. While such a farmer may be engaged in the business of selling produce, transporting one’s own goods does not constitute engaging in the transportation business. Id. at 108-109. Furthermore, because Sohio did not buy the gas it transported and sold, it was not engaged in the business of "buying and selling or transporting natural gas.” Id. at 109. Moreover, the Supreme Court concluded that the transportation of one’s own gas for sale to a single contract purchaser cannot be demonstrated to be a matter of public convenience and necessity. See also Nat'l Steel Corp, supra at 633-634.
Here, Preston does not propose to use its pipe line to transport anyone else’s gas but its own, nor has it proposed, to sell the gas to more than a single contract customer. Indeed, it was apparently Preston’s refusal to transport any of the gas belonging to the other working-interest owners that led to the institution of these proceedings in the PSC.
We find no support for the psc’s conclusion that Preston is carrying the gas of the other working-interest owners in its pipe line, much less that it is doing so "for hire, compensation or otherwise” or as a business separate and apart from merely marketing its own gas in accordance with the terms of the joa. While it is true that the joa generally provides that all oil and gas produced from the well is owned by all of the owners according to their proportionate share of interest, the agreement also specifically provides for the owners to take their shares of the gas produced in kind, not only to market their gas separately, but also to make separate deliveries of their respective shares of the gas through separate pipe lines. Such separate deliveries would be virtually impossible if the parties had intended each owner to hold an undivided interest in each molecule of gas produced from the well. Nor do we find the construction of a pipe line for the exclusive use of one or more of the owners in any way inconsistent with the terms of the owners’ agreement.
Even assuming, arguendo, that Preston’s deliveries of gas will exceed, on a day-to-day basis, its proportionate share of total gas sales to be allocated to it, this does not necessarily mean that Preston will be transporting any of the gas of the other working-interest owners. Rather, the owners’ balancing agreement provides for an adjustment in their respective ownership of the remaining gas reserves, with cash balancing in the event of depletion, when such disproportionate taking occurs.
If all of the working-interest owners were able to transport their own proportionate shares of the gas produced through their own separate pipe lines, each to a single contract customer, there would be no basis for the psc to exercise jurisdiction under Act 9, because each owner, like Sohio in the Sohio Petroleum case, would be transporting only its own gas to a single customer, and thus no matter of public convenience and necessity within the commission’s jurisdiction would be presented. The mere fact that this might result in wasteful and environmentally unwise duplication of effort would not alone support the psc’s exercise of jurisdiction. Indeed, similar concerns were present in the Sohio Petroleum case. Id. at 105. It follows that the environmental and conservation concerns expressed by the psc in this case are likewise insufficient to support the psc’s regulation of Preston’s pipe line under Act 9.
Our disposition of this issue renders discussion of Preston’s remaining issues unnecessary.
Reversed. | [
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Per Curiam.
Defendant appeals as of right from his conviction by a jury of two counts of first-degree criminal sexual conduct. MCL 750.520b(l)(f); MSA 28.788(2)(l)(f). Defendant was found guilty but mentally ill as to both counts. MCL 768.36; MSA 28.1059. We find that both of defendant’s convictions must be reversed because of instructional error and prosecutorial misconduct.
Defendant made no objection at the trial to the court’s instructions, and thus appellate review is precluded unless the instructions resulted in manifest injustice to the defendant. GCR 1963, 516.2; People v Prast (On Rehearing), 114 Mich App 469, 491; 319 NW2d 627 (1982). We find that manifest injustice occurred in the present case. With respect to the lesser included offense of third-degree criminal sexual conduct as to both counts, the trial court failed entirely to instruct on the elements of force and coercion. A trial court’s failure to instruct on an element of an offense, even if not objected to, requires reversal. People v Allensworth, 401 Mich 67; 257 NW2d 81 (1977). Even though defendant was ultimately convicted of first-degree, not third-degree, criminal sexual conduct, we do not believe that this error can be deemed harmless for this reason. There is some doubt as to whether the harmless-error test may properly be applied to the erroneous failure to instruct on an element of an offense, see People v Allensworth, supra. Moreover, even if it were applied, the jury may have believed that, once they found that force or coercion had been used, they could not properly convict defendant of the lesser offense of third-degree criminal sexual conduct because force or coercion was not an element of that offense, and thus this error may have contributed to defendant’s conviction of first-degree criminal sexual conduct.
In view of our conclusion that the above-described instructional error requires reversal, it is unnecessary to decide whether other alleged instructional errors raised by defendant on appeal constituted manifest injustice and require reversal. However, for purposes of guidance on retrial, we will note that the definition of legal sanity in CJI 7:8:02A(12) was modified in February, 1982, to replace "or” with "and”, so that it now correctly states the law, and this is the language which should be used.
We also find that misconduct by the prosecutor requires reversal. During cross-examination of defendant’s sole expert witness called in support of his insanity defense, the prosecutor asked if the witness had been fired from a former position for releasing Gary Addison Taylor, who subsequently killed 14 people. Defense counsel objected, and the court sustained the objection. The prosecutor also asked defendant’s expert about a movie concerning the psychiatric institution of which the expert was previously the director, which movie counsel described as showing "bizarre treatment” of patients. The prosecutor also asked the witness about a man known as "The Great Imposter” who successfully faked being a psychiatrist and worked at another institution unrelated to the witness. Defense counsel objected to these references to the movie and "The Great Imposter”, but the court did not sus tain his objections, although the court noted that these matters were "remote”.
While the prosecutor in cross-examining defendant’s expert was entitled to raise matters relevant to impeaching the expert’s credibility, the prosecutor’s references to Gary Addison Taylor, the movie, and "The Great Imposter” exceeded the scope of proper cross-examination as to credibility and injected into the trial irrelevant matters appealing to the emotions and prejudices of the jury. A prosecutor has the duty not only to protect the interest of the people, but also to see that a defendant is given a fair trial, and the prosecutor should not inject prejudicial innuendo into the proceedings. People v Brocato, 17 Mich App 277, 290-291; 169 NW2d 483 (1969); People v Ball, 33 Mich App 288, 290; 189 NW2d 816 (1971). The reference to Gary Addison Taylor was especially prejudicial to defendant and, although the court sustained defense counsel’s objection, the jury was not instructed to disregard the remark. We doubt that the jury could have disregarded it even if so instructed. See People v Kolowich, 262 Mich 137, 152; 247 NW 133 (1933). We note that defendant, on appeal, has raised other additional questions and closing remarks by the prosecutor which we find of questionable propriety but which we will not address because of defendant’s failure to object at the trial and because our conclusion that the above-described conduct of the prosecutor requires reversal makes it unnecessary to do so.
In view of our conclusion that the instructional error and prosecutorial misconduct require reversal, it is not necessary to address the issues of the defendant’s competency raised on appeal. However, since questions as to the defendant’s competency may again arise on retrial, we offer the following for the purpose of guidance. Even after a competency hearing is held at which a defendant is found competent to stand trial, a trial court must remain alert to changes in circumstances suggesting that a defendant is no longer competent because competency is an ongoing concern. Drope v Missouri, 420 US 162, 181; 95 S Ct 896, 908; 43 L Ed 2d 103, 119 (1975); People v Hamm, 79 Mich App 281, 288-289; 261 NW2d 288 (1977), lv den 402 Mich 888 (1978). However, after a formal competency hearing, complying with MCL 330.2020 et seq.; MSA 14.800 (1020) et seq. and GCR 1963, 786 has been held, further inquiries and determinations as to a defendant’s competency during the trial may be made without holding another formal hearing. People v Hamm, supra, pp 288-291.
Defendant raises two final arguments on appeal. First, defendant argues that the criminal sexual conduct statute allowing conviction in the first degree upon proof of personal injury, MCL 750.520b(l)(f); MSA 28.788(2)(l)(f), is void for vagueness unless "personal injury” is defined as some injury above and beyond that caused by the act of forcible intercourse itself. A defendant has standing to raise vagueness challenge to a statute only if the statute is vague as applied to his conduct. People v Gilliam, 108 Mich App 695, 703; 310 NW2d 843 (1981); People v Kraai, 92 Mich App 398, 404; 285 NW2d 309 (1979), lv den 407 Mich 954 (1980). The complainant testified that she suffered a painful back injury when defendant pulled her off a chair and shoved her down to the floor. This testimony provided sufficient evidence for the jury to find the personal-injury element satisfied based on conduct of defendant beyond the act of intercourse itself. Consequently, whatever merit defendant’s vagueness claim may have, de fendant lacks standing to raise this issue. People v Kraai, supra. Second, defendant argues that the statute allowing a jury to return a verdict of guilty but mentally ill, MCL 768.36; MSA 28.1059, violates due process because it leads to unfair compromise by the jury on the insanity issue. A panel of this Court recently rejected this argument in People v Delaughter, 124 Mich App 356; 335 NW2d 37 (1983), and we agree with that decision. We find that CJI 7:8:09, which was given by the court in the present case, adequately protects against any unfair compromise by informing the jury that before it may arrive at a verdict of guilty but mentallyy ill, the jurors must be convinced beyond a reasonable doubt that the defendant was legally responsible for his actions and that the defense of insanity does not apply to him.
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