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Court of Appeals No. 285235. | [
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Court of Appeals No. 279353. | [
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Court of Appeals No. 278960.
Hathaway, J. {not participating). I recuse myself and will not participate in this case as I was the presiding trial judge. See MCR 2.003(B). | [
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Court of Appeals No. 286480.
Hathaway, J., did not participate. | [
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Court of Appeals No. 280884. | [
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The defendant has failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). Court of Appeals No. 287704. | [
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The defendant’s motion for relief from judgment is prohibited by MCR 6.502(G). Court of Appeals No. 284940. | [
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Leave to Appeal Granted May 29, 2009:
The parties shall address whether the Court of Appeals erred in concluding: (1) that the trial court abused its discretion when it granted the defendant a new trial; (2) that there was no error in the admission of the police detective’s repeated testimony about the defendant’s failure to deny certain accusations and his act of departing from the police interview, see People v Bigge, 288 Mich 417 (1939); and (3) that the defendant waived any error when defense counsel expressed satisfaction with the trial court’s instructions to the jury. Court of Appeals No. 283934. | [
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Court of Appeals No. 288558. | [
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] |
Court of Appeals No. 278169. | [
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The defendant has failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). Court of Appeals No. 286838. | [
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Court of Appeals No. 285409. | [
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Court of Appeals No. 279352.
Kelly, C.J. I would grant leave to appeal. | [
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Court of Appeals No. 290931. | [
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The defendant has failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). Court of Appeals No. 284369. | [
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The defendant has failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). Court of Appeals No. 283873. | [
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The defendant has failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). Court of Appeals No. 283803. | [
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The defendant has failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). Court of Appeals No. 283797. | [
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Summary Disposition March 25, 2009:
In lieu of granting leave, we reverse the Saginaw Circuit Court’s order denying defendant’s request for the production of his trial records, and we remand this case to the circuit court for production of the requested records under MCR 6.433(C). The circuit court did not err in applying the court rules to deny defendant’s requests. However, the court’s order merely delayed defendant’s inevitable, meritorious request for the records under MCR 6.433(C). Court of Appeals No. 283798. | [
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PER CURIAM.
A jury convicted defendant, Pecóla Jami-son, of assault with intent to do great bodily harm less than murder and felony-firearm. The trial court sentenced Jamison to a prison term of 1 to 10 years for assault with intent to do great bodily harm less than murder and the mandatory consecutive 2-year prison term for felony firearm. Jamison now appeals as of right. We vacate Jamison’s sentence and remand to the trial court for resentencing.
I. FACTS
Jamison and her boyfriend, Alexis Jenkins, dated from sometime in 2006 to the spring or early summer of 2007. In the winter of 2007, they engaged in consensual sexual relations, but Jenkins chose to end the relationship in early January 2008. Jenkins testified that Jami-son was not happy about the breakup and that he changed his telephone number so that Jamison could not contact him. After that, Jenkins saw Jamison at a social gathering in March 2008 and then several times in traffic before a May 3, 2009, encounter.
Jenkins testified that on May 3, 2009, at approximately 4:00 p.m., he made eye contact with Jamison while they passed each other in traffic. Shortly thereafter, Jenkins noticed Jamison’s vehicle in his rearview mirror. He testified that she was driving the vehicle erratically, swerving back and forth in the lane. Jenkins testified that Jamison’s vehicle was so close to his that he had to either speed up or get out of her way to avoid a collision.
Jenkins testified that he then pulled over on a side street. He thought that Jamison might have wanted to talk to him. Jenkins testified that Jamison pulled her vehicle alongside his and that the vehicles were separated by about three feet. Before Jenkins had the opportunity to speak to Jamison, she pulled out a pistol, pointed it at his face, and fired. Jenkins drove away and went to the hospital, thinking that he might have been shot. After being examined by hospital staff, he was reassured that he was not injured. There was, however, a large bullet hole in the driver’s side door. Police officers later removed a large caliber bullet from the driver’s seat of Jenkins’s vehicle. The next day, Jenkins filed for a personal protection order against Jamison in the Oakland Circuit Court.
A jury convicted Jamison of assault with intent to do great bodily harm less than murder and felony-firearm. The sentencing information report indicated the assessment of 10 points for offense variable (OV) 10 under the sentencing guidelines. Defense counsel objected to the OV 10 score, asserting that Jenkins and Jamison did not have the requisite domestic relationship to justify a score of 10 points. The trial court overruled the objec tion and sentenced Jamison on the basis of a total OV score of 40 points. Jamison now appeals.
II. OFFENSE VARIABLE 10
A. STANDARD OF REVIEW
A trial court has discretion to determine the number of points assigned for a particular offense variable, “provided that evidence of record adequately supports a particular score.” This Court will uphold a sentencing court’s scoring decision if it is supported by record evidence. However, we review de novo questions of law involving the proper construction or application of the statutory sentencing guidelines. When a sentence is based on a scoring error, resentencing is required.
B. LEGAL STANDARDS
This Court must affirm a sentence that is within the legislative guidelines range unless the trial court erred in scoring the sentencing guidelines or relied on inaccurate information in determining the defendant’s sentence. The facts the trial court relied on when assessing points for a particular variable under the sentencing guidelines need not have been determined by the jury when rendering its verdict. “Rather, all that is required is that evidence exists that is adequate to support a particular score.” This Court will uphold a sentencing court’s scoring decision if there is any record evidence to support it.
OV 10 deals with the exploitation of vulnerable victims. A sentencing court properly assesses 10 points for this variable if “[t]he offender exploited a victim’s physical disability, mental disability, youth or agedness, or a domestic relationship, or the offender abused his or her authority status.”
C. APPLYING THE STANDARDS
Jamison argues that there was no domestic relationship between her and Jenkins because the two had never shared a domicile, nor had they engaged in a familial or cohabitating relationship. Accordingly, Jami-son contends that had OV 10 been properly scored, her total OV score would have been 30 points. Because Jamison’s prior record variable score was 0, this would have lowered her minimum sentence range to 0 to 11 months. Thus, she argues that her one-year minimum sentence was in excess of the guidelines range, entitling her to resentencing.
In construing the statutory sentencing guidelines, courts must discern and give effect to the intent of the Legislature. The process begins with an examination of the plain language of the statute. When that language is unambiguous, Courts must “presume that the Legislature intended the meaning clearly expressed — no further judicial construction is required or permitted, and the statute must be enforced as written.”
The sentencing guidelines do not define “domestic” or “domestic relationship.” And this Court has not published an opinion addressing the meaning of the term “domestic relationship” in the context of OV 10. This Court has, however, interpreted the term in unpublished opinions, albeit with divergent conclusions. While these opinions are not binding precedent on this Court, we may consider them as instructive or persuasive.
In People v Davis, a panel of this Court turned to the domestic assault statute for guidance on interpretation of the phrase “domestic relationship” as used in OV 10. Under the domestic assault statute, a person is guilty of domestic assault if the person assaults “his or her spouse or former spouse, an individual with whom he or she has or has had a dating relationship, an individual with whom he or she has had a child in common, or a resident or former resident of his or her household.” “As used in this section, ‘dating relationship’ means frequent, intimate associations primarily characterized by the expectation of affectional involvement. This term does not include a casual relationship or an ordinary fraternization between 2 individuals in a business or social context.” The Davis panel held that because the victim and the defendant engaged in con sensual sexual relations; the defendant often spent the night at the victim’s apartment, keeping personal belongings there; and the defendant spent time with the victim’s family, taking care of the victim’s son when the victim was away, the pair maintained a domestic relationship.
Using the Davis approach, we would conclude that Jamison formerly maintained a dating relationship with Jenkins because they had a previous dating relationship, after the relationship ended they had infrequent consensual sexual relations, and Jenkins kept some clothing at Jamison’s residence. Therefore, if we were to adopt this interpretation, Jamison and Jenkins would have had a domestic relationship that merits a score of 10 points under OV 10. However, we find it significant that the defendant in Davis was convicted of domestic assault. This case is distinguishable in that the record here reflects that Jami-son was convicted of assault with intent to do great bodily harm less than murder and, further, the prosecution did not even charge Jamison with the crime of domestic assault. Additionally, it would seem that under the Davis approach, neither the brevity of the relationship’s duration nor its distant temporal nature is a limiting factor to designate a relationship as “domestic.” Thus, we find application of the approach questionable here, in which Jamison and Jenkins had a fairly brief relationship that ended more than a year before the shooting incident.
In contrast to the Davis approach, several other panels of this Court have used the lay dictionary definition of “domestic” and concluded that there must be a “familial” or “cohabitating” relationship to qualify as a domestic relationship. As explained in these decisions, if a statute does not provide a definition for a particular term, courts must “give the term its plain and ordinary meaning.” “When determining the common, ordinary meaning of a word or phrase, consulting a dictionary is appropriate.” Random, House Webster’s College Dictionary (1997) defines “domestic” as “1. of or pertaining to the home, family, or household affairs. 2. devoted to home life.” Under these definitions, a familial or cohabitating relationship characterizes a domestic relationship.
We do not believe that simply any type of dating relationship, past or present, meets the requirements of OV 10. If this were the case, the Legislature would merely have said “relationship” or “dating relationship” rather than “domestic relationship.” Thus, to qualify as a “domestic relationship,” there must be a familial or cohabitating relationship. Further, contrary to the Davis analysis that adopted the domestic assault definition of “domestic relationship,” we “cannot assume that the Legislature inadvertently omitted from one statute the language that it placed in another statute, and then, on the basis of that assumption, apply what is not there.” Accordingly, we are not inclined to adopt the Davis panel’s interpretation, as it implies a potentially overbroad application based on words that are not in the statute.
Thus, we conclude that Jenkins and Jamison did not have the requisite domestic relationship to warrant assessing 10 points for OV 10. The pair did not share a domicile, and they were not related. The prosecution nevertheless argues that such a relationship did exist, noting that at some point in the past Jenkins was allowed to keep various articles of clothing at Jamison’s house. However, merely being permitted to keep some of one’s belongings at a person’s home does not establish a cohabitating relationship. Therefore, Jamison and Jenkins’ relationship did not display the characteristics needed to elevate their ordinary relationship to “domestic relationship” status. Accordingly, the trial court erred by assessing 10 points for OV 10.
Jamison had a prior record variable level of zero points. Originally, her presentence investigation report showed a total OV score of 50 points. However, at sentencing, the parties stipulated that OV 17, for which 10 points had been assessed, should have received a score of zero points. For a class D offense, an OV level of 40 points results in a recommended minimum sentence range of zero to 17 months. Had points not been assessed for OV 10, Jamison’s offense variable level would have been 30 points, and her minimum sentence range would have been zero to 11 months. Because her minimum sentence of 1 year is in excess of the guidelines range, she is entitled to resentencing.
We vacate the trial court’s sentence for assault with intent to do great bodily harm less than murder and remand this matter for resentencing consistent with this opinion. We do not retain jurisdiction.
BECKERING, EJ., and WHITBECK and M. J. KELLY, JJ., concurred.
MCL 750.84.
MCL 750.227b.
People v Hornsby, 251 Mich App 462, 468; 650 NW2d 700 (2002).
People v Spanke, 254 Mich App 642, 647; 658 NW2d 504 (2003).
People v Hegwood, 465 Mich 432, 436; 636 NW2d 127 (2001).
People v Jackson, 487 Mich 783, 792; 790 NW2d 340 (2010).
MCL 769.34(10).
People v Williams, 191 Mich App 269, 276; 477 NW2d 877 (1991).
Id.
Spanke, 254 Mich App at 647.
MCL 777.40.
MCL 777.40(l)(b) (emphasis added).
See MCL 777.65.
See Jackson, 487 Mich at 792.
People v Morey, 461 Mich 325, 329-330; 603 NW2d 250 (1999).
Id. at 330.
Id.
MCR 7.215(C)(1); Slater v Ann arbor Pub Sch Bd of Ed, 250 Mich App 419, 432; 648 NW2d 205 (2002).
People v Davis, unpublished opinion per curiam of the Court of Appeals, issued April 14, 2009 (Docket No. 280547), p 5.
MCL 750.81(2) (emphasis added).
MCL 750.81(6).
Davis, unpub op at 5.
See People v Robbins, unpublished opinion per curiam of the Court of Appeals, issued February 19, 2009 (Docket No. 280080); People v Patrowie, unpublished opinion per curiam of the Court of Appeals, issued March 6, 2007 (Docket No. 267864); People v Counts, unpublished opinion per curiam of the Court of Appeals, issued May 20, 2004 (Docket No. 246717); cf. People v Montgomery, unpublished opinion per curiam of the Court of Appeals, issued May 22, 2007 (Docket No. 269201) (relying on both the domestic assault statute and dictionary definitions to conclude that the defendant had a domestic, or familial, relationship with the victim because they had a child together in a case in which the defendant was convicted of domestic violence, MCL 750.81(2), and assessed 10 points under OV 10).
Title Office, Inc v Van Buren Co Treasurer, 469 Mich 516, 522; 676 NW2d 207 (2004).
Id.
See Counts, unpub op at 3.
Farrington v Total Petroleum, Inc, 442 Mich 201, 210; 501 NW2d 76 (1993).
See Counts, unpub op at 3.
Because we conclude that Jamison and Jenkins did not have a domestic relationship, we refrain from determining the extent, if any, that it was exploited.
See MCL 777.16d.
MCL 777.65.
See id.
See Jackson, 487 Mich at 792. | [
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WILDER, J.
Defendant appeals as of right a judgment of the Court of Claims granting plaintiffs motion for summary disposition. Plaintiff filed a complaint in the Court of Claims seeking a refund of payments made to defendant for tax deficiencies assessed for the years 2000 and 2001. The Court of Claims granted plaintiffs motion for summary disposition and ordered defendant to refund the payments. We affirm.
I. FACTS AND PROCEDURAL HISTORY
Plaintiff is a resident of Tennessee and owns Life Care Affiliates II (LCA II), a Tennessee limited partnership. Plaintiff owns 99 percent of LCA II, 98 percent as a general partner and 1 percent as a limited partner.
LCA II is a general partner in 22 lower-level partnerships that own a total of 27 nursing homes operating in 11 different states. Each of these 22 partnerships is structured in the same fashion, with LCA II owning a 99 percent interest as general partner, and plaintiff owning a 1 percent interest as a limited partner. Ninety-nine percent of the profits and losses from each of the nursing homes are distributed to LCA II as the general partner of the lower-level partnerships. LCA II then combines the profits and losses distributed from the lower-level partnerships and distributes them to plaintiff based on his 99 percent interest in LCA II. LCA II has no business activity of its own and LCA II’s income and other contributions to its tax base are pass-through items from these 22 lower-level partnerships. One of the lower-level partnerships that LCA II and plaintiff own is Riverview Medical Investors Limited Partnership (RMI). RMI, in turn, owns two nursing homes that operate solely in Michigan. The remaining partnerships operate outside of Michigan. LCA II hired another company, Life Care Centers of America, Inc. (LCA), to manage and operate all of the nursing homes.
In 2007, defendant audited plaintiffs individual income tax returns for the years 1998-2001. Following the audit, defendant assessed income tax deficiencies for the years 2000 and 2001, totaling $27,145, plus $11,202.60 in interest because defendant disagreed with plaintiffs apportionment of income and losses from LCA II. During the years at issue, RMI reported gains to LCA II. However, some other partnerships reported losses. When filing his Michigan individual income tax returns for these years, plaintiff treated all the income and losses distributed from LCA II as business income and apportioned it among all the states in which LCA II had partnerships. Thus, the income that RMI reported from the nursing homes in Michigan was offset by losses from other partnerships.
Defendant contends plaintiff was required to apportion all his income derived from RMI to Michigan and is not permitted to apportion income and losses from other partnerships because the other partnerships did not operate in Michigan. Plaintiff requested an infor mal conference with defendant and argued that the income from RMI should be apportioned with income and losses from all the nursing homes because RMI is part of plaintiffs unitary nursing-home business (LCA II), which is conducted and taxable in Michigan and other states.
The hearing referee, who presided over the informal conference, rejected plaintiffs argument and recommended that plaintiff be assessed the tax deficiency as originally determined. Defendant then issued a final bill of taxes due for the amount of $38,347.62, which plaintiff paid under protest. Plaintiff then filed a complaint in the Court of Claims for a refund of monies paid. After conducting discovery, both parties filed motions for summary disposition.
The Court of Claims conducted a hearing on plaintiffs motion for summary disposition, and granted plaintiffs summary disposition motion from the bench. While acknowledging defendant’s contention that LCA II was a pass-through entity, nevertheless, the Court of Claims concluded that it was clear that the businesses were all related and that they were intended to operate as one unit, with LCA II serving as the head. Defendant filed a motion for reconsideration, which the Court of Claims denied. This appeal ensued.
On appeal, defendant argues that plaintiff is required to apportion the income that LCA II received from RMI to Michigan because RMI operates exclusively in Michigan. Defendant further asserts that under the Michigan Income Tax Act, MCL 206.1 et seq. (MITA), income derived from multistate business activities can only be apportioned if the income arose as part of a “unitary business.” Defendant contends that the income LCA II received from the other partnerships cannot be combined and apportioned under the MITA because the income was received from separate entities that do not operate in Michigan. In short, defendant asserts that plaintiffs income was not derived from a “unitary business,” but rather arose from several separate business entities, therefore precluding apportionment. We disagree.
II. STANDARD OF REVIEW
A trial court’s decision regarding a motion for summary disposition is reviewed de novo, as are questions involving statutory interpretation. GMAC LLC v Dep’t of Treasury, 286 Mich App 365, 372; 781 NW2d 310 (2009).
III. DISCUSSION
Although the United States Constitution does not impose a single tax formula on the states, apportionment is often implemented because of the difficulties in trying to allocate taxable income on the basis of geographic boundaries. Allied-Signal, Inc v Dir, Div of Taxation, 504 US 768, 778; 112 S Ct 2251; 119 L Ed 2d 533 (1992); Container Corp of America v Franchise Tax Bd, 463 US 159, 164; 103 S Ct 2933; 77 L Ed 2d 545 (1983). To address these difficulties, under what is known as the “unitary business principle,” states are permitted to tax multistate businesses “on an apportionable share of the multistate business carried on in part in the taxing State.” Allied-Signal, 504 US at 778.
Pursuant to the MITA, Michigan has adopted an apportionment-based tax scheme. If a taxpayer’s income-producing activities are confined solely to Michigan, then the taxpayer’s entire income must be allocated to Michigan. MCL 206.102. However, if a taxpayer has income from business activities that are taxable both in and outside of Michigan, that income is allocated or apportioned according to MITA. MCL 206.103. Income is apportioned to Michigan “by multiplying the income by a fraction, the numerator of which is the property factor plus the payroll factor plus the sales factor, and the denominator of which is 3.” MCL 206.115. “The property, payroll, and sales factors represent the percentage of the total property, payroll, or sales of the business used, paid, or made in this state.” Grunewald v Dep’t of Treasury, 104 Mich App 601, 606; 305 NW2d 269 (1981), citing MCL 206.116, MCL 206.119, and MCL 206.121.
In order to apply Michigan’s apportionment formula 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.’ ” Holloway Sand & Gravel Co, Inc v Dep’t of Treasury, 152 Mich App 823, 834-835; 393 NW2d 921 (1986), quoting Container Corp of America, 463 US at 166. In the absence of some underlying unitary business, multistate apportionment is precluded. Holloway, 152 Mich App at 830. To determine whether there is a unitary business this Court looks at (1) economic realities, (2) functional integration, (3) centralized management, (4) economies of scale, and (5) substantial mutual interdependence. Id. at 831.
Defendant advances three main arguments in support of its position that we should disregard the existence of LCA II for tax purposes and preclude plaintiff from apportioning his LCA II income. First, defendant cites Mich Admin Code, R 206.12(16), which provides:
Distributive share items received by a partner are allocated or apportioned as follows:
(a) Ordinary income is apportioned to Michigan by the partnership apportionment factors provided in [MCL 206.115 to 206.195].
Defendant argues that LCA II is the partner referenced in Rule 206.12(16) and that RMI and the other lower-level partnerships are the partnerships referenced in subsection (a). Therefore, defendant contends LCA IPs only Michigan income is its distributive share from RMI. Defendant’s interpretation, however, ignores the existence of plaintiff. It looks only at LCA II’s distributed share income from the 22 lower-level partnerships and then attempts to place plaintiff in the position of LCA II.
This argument is a strained reading of the administrative rule. By its plain language the rule provides that ordinary income received by a partner is apportioned by the partnership apportionment factors. In this case, plaintiff is the partner, and his distributed share of income received from LCA II is apportioned by the partnership apportionment factors. Although defendant asserts that the approach to apportionment referenced in its brief has been consistently applied, it cites no authority to support this. Rather, it simply cites the existence of Rule 206.12(16)(a).
Defendant next argues that we simply ignore LCA II for tax purposes because plaintiff is an “indirect partner” in all 22 lower-level partnerships, that is, plaintiff holds an interest in the partnerships through a “pass-thru partner.” In support of this argument, defendant relies on 26 USC 6231(a)(9) and (10). Under 26 USC 6231(a)(9), “ ‘pass-thru partner’ means a partnership . .. through whom other persons hold an interest in the partnership with respect to which proceedings under this subchapter are conducted.” 26 USC 6231(a)(10) provides that “ ‘indirect partner’ means a person holding an interest in a partnership through 1 or more pass-thru partners.” Defendant seeks to borrow the definitions of “indirect partner” and “pass-thru partner” from the federal Internal Revenue Code (IRC) and utilize them in interpreting Michigan Law.
However, MCL 206.2(2) provides that “[a]ny term used in this act shall have the same meaning as when used in comparable context in the laws of the United States . . ..” Thus, MCL 206.2(2) only applies when a term used in the MITA has been used in a similar context under the IRC. Because “indirect-partner” and “pass-thru partner” are terms not used in the MITA, defendant’s argument must fail. Notably, this Court previously rejected a similar argument concerning the former Single Business Tax Act, MCL 208.1 et seq. See Kmart Mich Prop Seros, LLC v Dep’t of Treasury, 283 Mich App 647, 655; 770 NW2d 915 (2009).
Finally, defendant argues that the unitary business principle does not apply. We disagree.
In its brief in response to plaintiffs motion for summary disposition, defendant did not argue that the unitary business principle did not apply to LCA II, but argued, as it does on appeal, that the principle is not recognized at all because Holloway is not binding. At the motion hearing, defendant’s counsel only argued that LCA managed the partnerships and that LCA II did not. Thus, the affidavit of Steve Ziegler, chief financial officer of LCA, submitted by plaintiff, went unrebutted. Ziegler asserted that LCA II hired LCA, a company owned and operated by plaintiff, to manage and operate all 22 lower-level partnerships. Ziegler explained that LCA used common operation and management techniques among the nursing homes, resulting in economies of scale. Furthermore, Ziegler stated that the nursing homes have centralized management and their costs are reduced through shared planning and centralized purchasing. Thus, in light of the information in Ziegler’s affidavit, it is clear that there is “ ‘some sharing or exchange of value not capable of precise identification or measurement’ ” that occurs from the centralized management. Holloway, 152 Mich App at 834, quoting Container Corp of America, 463 US at 166. Accordingly, there is no genuine issue of material fact regarding whether LCA II is a unitary business, and therefore, apportionment is proper under the MITA.
Affirmed.
METER, EJ., and Saad, J., concurred with WILDER, J.
LCA is wholly owned by plaintiff, and plaintiff serves as its CEO.
Furthermore, 26 USC 6231(a)(9) and (10) only apply to very limited situations. The general rule for partnerships under the IRC is that “[i]n determining his income tax, each partner shall take into account separately his distributive share of the partnership’s” gains and losses. 26 USC 702(a). Therefore, under the IRC, in determining his income tax, plaintiff would take into account his gains and losses from LCA II.
Defendant contends that “Holloway is not binding on Treasury for the reason that [in that case] the Court of Appeals was addressing a single entity that had two business operations, one in Michigan and one in Texas.” Defendant does not explain, or cite any authority that explains, why consideration of a single business entity with two operations should be treated differently than a single entity with 22 operations. | [
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BORRELLO, J.
Flaintiff appeals as of right the trial court’s order denying its claim to declaratory and mandamus relief following a bench trial. For the reasons set forth in this opinion, we reverse.
I. FACTS
The relevant facts are largely undisputed. Under the current statutory tax-foreclosure scheme, the state of Michigan has a right of first refusal to purchase any tax-foreclosed properties in the state. MCL 211.78m(l). If the state declines to purchase a property, the city, village, or township within whose limits the property is located may purchase it “for a public purpose.” Id. The price of purchase (referred to as the “minimum bid”) is set at what the minimum bid would be if the property were being auctioned off, which is determined by adding all taxes, interest, and fees owed on the property, so that the foreclosing governmental unit (FGU) breaks even on the property. MCL 211.78m(ll). Before 1999, the state administered the tax-foreclosure scheme in every Michigan county. In 1999, the Legislature passed Public Act 123, which allowed counties to “opt in” and replace the state as the FGU, administering foreclosures within their jurisdictions. MCL 211.78(3), as amended by 1999 PA 123. On December 14, 2004, Bay County elected to name its treasurer, defendant, as its FGU.
Starting in 2005, defendant, as the FGU, began foreclosing on properties, but plaintiff did not seek to purchase any foreclosed properties until 2008. In 2008, defendant foreclosed on 16 parcels within plaintiffs limits. Plaintiff informed defendant that it wished to purchase four of the parcels and forwarded a check to defendant in the amount of the total of the minimum bids for the four parcels. Defendant determined that he was not obligated to sell the parcels to plaintiff unless he was satisfied that plaintiff would be returning the property to a position in which the property would generate tax revenue. Following defendant’s determination, officials of plaintiff and Bay County met to discuss the issue and come to an understanding, but they were not able to reach an agreement. On August 22, 2009, plaintiff filed this action against defendant for declaratory and mandamus relief. Plaintiff sought a declaration that its stated public purpose for the parcels was valid and a writ of mandamus directing defendant to transfer title to the parcels.
The properties sought by plaintiff were located at 105 West Thomas, 1216 Park Avenue, 606 Wilson, and 1906 Broadway. In its complaint, plaintiff stated that its public purpose was “to reduce the number of vacant tax reverted properties within [plaintiff]’s limits thereby minimizing the real and present dangers they present and to remove certain blighted conditions present on the subject properties” and that, through redevelopment of the properties, plaintiff “will ensure a healthy and growing tax base.”
Both parties moved for summary disposition, with plaintiff arguing that there were only two conditions placed on the conveyance of property: that plaintiff tender the purchase price to the FGU and that plaintiff have a public propose for the property. Plaintiff argued it was undisputed that both of these requirements were fulfilled; hence, defendant had a clear legal duty to convey the properties and plaintiff had a clear legal right to the performance of that duty. Defendant argued he had a statutory duty “to confirm that the municipality wants the requested property for a public purpose and that the municipality will be able to accomplish that purpose efficiently and expeditiously.” He asserted that plaintiff had no public purpose for the Park Avenue, Broadway, and West Thomas properties and that plaintiff would not be able to achieve its public purpose for the Wilson property efficiently and expeditiously. The trial court denied both parties’ motions, and the case went to a bench trial.
At trial, defendant testified that it was unclear that plaintiff had a public purpose for the properties. Stephen Black, plaintiffs Deputy City Manager of Community Development, testified that plaintiff sought to acquire the Broadway property in order to tear down the building thereon and use the land as a parking lot for the adjacent property, which the city already owned. The Park Avenue property, according to Black, presented health and safety issues because it was “severely impacted by cat urine.” Black said that foreclosure of the West Thomas property presented an opportunity to eliminate a multi-family home, noting that multi-family homes generate complaints in single-family areas. The city planned to either demolish the home or redevelop it. Defendant testified that the West Thomas property was a single-family, not a multi-family, dwelling. As for the Wilson property, Black testified it was a vacant lot that the city was considering conveying to Habitat for Humanity for it to build a new home.
The trial court found for defendant with respect to the Wilson and Broadway parcels, and for plaintiff with respect to the Park Avenue and West Thomas parcels. The parties agreed that, pending appeal, defendant would not “auction, sell, or otherwise dispose of” the Park Avenue, West Thomas, and Wilson properties and that it would not convey the Park Avenue and West Thomas properties to plaintiff. Plaintiff agreed not to seek the Broadway property.
Because defendant did not appeal the decision with respect to the Park Avenue and West Thomas properties, and because plaintiff agreed not to pursue its claim to the Broadway property, the only property at issue in this appeal is the Wilson property.
II. MOOTNESS
Defendant argues on appeal that this claim is moot because he has offered to settle the suit by conveying the Wilson property to plaintiff. According to defendant, this removes any case or controversy between the parties. Defendant also argues that this does not fall into the mootness exception “carved out for those situations where ... the issue is of public significance and likely to recur while also likely to evade judicial review.” Defendant argues that it is speculative whether plaintiff will seek to purchase tax-foreclosed property from defendant again and that even if it does, it is only speculative that defendant will refuse to convey the property, and that even if both of these things occur, there will be opportunity for judicial review of the issue at that time.
Plaintiff denies the assertion that there is no case or controversy between the parties. Plaintiff argues that an offer to settle does not render a case moot unless the offer is accepted, and plaintiff has not accepted defendant’s offer to convey the properly in question. Plaintiff also notes that defendant has not conceded the legal points at issue in this case. Regarding the mootness exception for cases involving issues of public significance that recur but are likely to evade judicial review, plaintiff points out that, although it did not purchase any tax-foreclosed properties in 2009, it has regularly purchased tax-foreclosed properties in the past and certainly will do so in the future. And plaintiff argues that, if defendant’s settlement offer renders the issue moot, there is a possibility that the issue will evade judicial review because defendant could simply convey the property every time plaintiff challenges its refusal to do so.
In MGM Grand Detroit, LLC v Community Coalition for Empowerment, Inc, 465 Mich 303; 633 NW2d 357 (2001), the Detroit City Council passed an ordinance allowing the plaintiff to use a specified site to build a casino. Id. at 311-312 (CAVANAGH, J., dissenting). The defendant conducted a petition drive in an attempt to refer the ordinance, but the city clerk denied the petition on the ground that the ordinance was exempt from referendum. Id. at 312. The plaintiff sought a declaratory judgment that the ordinance was in fact exempt from referendum. Id. After the trial court granted the plaintiffs motion for summary disposition, the plaintiff went ahead with its casino construction, although the defendant had filed a claim of appeal in this Court. Id. at 312-313. Our Supreme Court addressed the issue of mootness in light of these developments. Justice CAVANAGH’s dissent, which Justice KELLY joined, concluded that the defendant could not have the relief it sought, because even if the referendum were allowed and the ordinance defeated, the casino would remain as an allowed, prior nonconforming use of the land. Id. at 313-314. The majority rejected this conclusion, holding that “a party can not [sic] obliterate an opponent’s appeal, on the basis of mootness, by so changing the status quo during the appeal. . . that [it] can then argue it is impossible to return to the situation that existed when the appeal was filed.” Id. at 307.
This case presents the reverse situation — defendant seeks to render the appeal moot not by making it impossible for plaintiff to have the relief it seeks, but by giving plaintiff that relief. In Oak Park & River Forest High Sch Dist 200 Bd of Ed v Ill State Bd of Ed, 79 F3d 654, 659 (CA 7,1996), the United States Court of Appeals for the Seventh Circuit held that a party’s “strategic choice [not to ‘cut its losses’ by settling] does not make [a] lawsuit moot. A desire for a favorable precedent will not prevent a case from becoming moot, but the fact that such a desire figures in the decision not to abandon or settle a suit does not make the suit moot.” (Citations omitted; emphasis in original.) Relative to the issues presented in this case, we find the reasoning of the Seventh Circuit persuasive. Here, defendant has offered a settlement. We note that a full and complete settlement has yet to be reached and there continues to be, though with an offer of settlement on the table, an ongoing controversy.
Additionally, as plaintiff notes, even if it received the Wilson property, this would only satisfy the mandamus claim. Plaintiff also sought a declaratory judgment that its “stated public purpose is a valid public purpose under the laws of the State of Michigan.” Because defendant will not and cannot give plaintiff such a declaration, there is still a controversy that this Court may decide. Although the nature of the action by which defendant seeks to render this case moot differs from that in MGM Grand Detroit, that case did hold that a defendant may not unilaterally render a case moot “by... changing the status quo during the appeal.” MGM Grand Detroit, 465 Mich at 307. Similarly, the fact that plaintiff has not accepted defendant’s offer to settle the suit by conveying the property to plaintiff because it desires a favorable precedent does not render the case moot. Oak Park, 79 F3d at 659. Accordingly, we hold that the issues presented in this case are not rendered moot by defendant’s offer of settlement.
III. PUBLIC PURPOSE UNDER MCL 211.78m(l)
Plaintiff argues that MCL 211.78m requires it to have a public purpose to purchase the Wilson property and that it sought the property to build a new home, which qualifies as economic development and therefore is a public purpose. Plaintiff further contends that defendant refused to convey the property because he did not believe that the public purpose could be accom plished “ ‘efficiently’ and ‘expeditiously.’ ” According to plaintiff, the statute only requires a public purpose and not these additional conditions. Conversely, defendant argues that the intent of MCL 211.78m will not be carried out unless properties are purchased by municipalities for a public purpose that can be efficiently and expeditiously carried out. Defendant points out that in other contexts, Michigan courts have interpreted “public purpose” to be more than just a speculative idea or a future possibility and have held that without a requirement of a detailed plan that can be expeditiously carried out, the “public purpose” requirement is illusory. According to the trial court, plaintiffs “proposal [regarding the Wilson property] does not promote the prosperity and general welfare of the residents of Bay City” and was “too speculative to constitute a proper public purpose.”
“A trial court’s decision regarding a writ of mandamus is reviewed for an abuse of discretion.” Casco Twp v Secretary of State, 472 Mich 566, 571; 701 NW2d 102 (2005). A trial court abuses its discretion when its decision falls outside the range of reasonable and principled outcomes. Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006). However, “whether defendant had a clear legal duty to perform and whether plaintiff had a clear legal right to the performance of that duty . . . are questions of law, which this Court reviews de novo.” Carter v Ann Arbor City Attorney, 271 Mich App 425, 438; 722 NW2d 243 (2006). Similarly, this Court reviews de novo the legal question of the interpretation of a statute. People v Moore, 470 Mich 56, 61; 679 NW2d 41 (2004); Robertson v DaimlerChrysler Corp, 465 Mich 732, 739; 641 NW2d 567 (2002).
In Tuggle v Dep’t of State Police, 269 Mich App 657, 668; 712 NW2d 750 (2006), this Court held that man- damns is appropriate where (1) the plaintiff has a clear legal right to performance of the specific duty sought, (2) the defendant has a clear legal duty to perform, (3) the act is ministerial, and (4) no other legal or equitable remedy exists that might achieve the same result. See also Lickfeldt v Dep’t of Corrections, 247 Mich App 299, 302; 636 NW2d 272 (2001); Delly v Bureau of State Lottery, 183 Mich App 258, 260-261; 454 NW2d 141 (1990).
MCL 211.78m(l) provides, in relevant part:
Not later than the first Tuesday in July, immediately succeeding the entry of judgment under section 78k vesting absolute title to tax delinquent property in the foreclosing governmental unit, this state is granted the right of first refusal to purchase property at the greater of the minimum bid or its fair market value by paying that amount to the foreclosing governmental unit if the foreclosing governmental unit is not this state. If this state elects not to purchase the property under its right of first refusal, a city, village, or township may purchase for a public purpose any property located within that city, village, or township set forth in the judgment and subject to sale under this section by payment to the foreclosing governmental unit of the minimum bid.
At trial, defendant seemingly conceded that plaintiff stated a public purpose for purchasing the Wilson property. On appeal, however, he argues that plaintiffs public purpose was unclear. He claims that plaintiff sought to obtain the properties “in order to minimize a ‘real and present danger’ and to remove ‘blighted conditions on the subject properties.’ ” But according to the complaint, plaintiff sought the property “to reduce the number of vacant tax reverted properties within Bay City’s limits thereby minimizing the real and present dangers they present and to remove certain blighted conditions present on the subject properties.” And the resolution passed by plaintiff authorizing it to acquire the properties reads, in relevant part, as follows:
Whereas, the City of Bay City desires to acquire selected tax-reverted properties for the purpose of stimulating private investment through the redevelopment of each property; and
Whereas, by improving and selling the various parcels, these economic development efforts will ensure a healthy and growing tax base ....
Thus, plaintiff demonstrated a public purpose beyond minimizing dangers and abating blight. Cf. Kelo v City of New London, 545 US 469, 484; 125 S Ct 2655; 162 NW2d 439 (2005) (rejecting the argument that economic development does not qualify as a public use in an eminent domain case and stating that “[p]romoting economic development is a traditional and long-accepted function of government”).
However, defendant argues that the statutory scheme requires that the identified public purpose be capable of being efficiently and expeditiously carried out. Plaintiff asserts that the trial court’s conclusion that plaintiffs plan to construct a new home on the Wilson property was too “speculative to constitute a proper public purpose” essentially incorporates the requirements that a public purpose must be executed efficiently and expeditiously. The terms “efficiently,” “expeditiously,” and “speculative” are not found in MCL 211.78m(l). The statute clearly and unambiguously provides that if the “state elects not to purchase the property under its right of first refusal, a city, village, or township may purchase” the property “for a public purpose.” MCL 211.78m(l). If the language in a statute is clear and unambiguous, this Court assumes that the Legislature intended its plain meaning, and the statute must be enforced as written. Roberts v Mecosta Co Gen Hosp, 466 Mich 57, 63; 642 NW2d 663 (2002). This Court “may read nothing into an unambiguous statute that is not within the manifest intent of the Legislature as derived from the words of the statute itself.” Id. Similarly, this Court should not “judicially legislate by adding language to the statute.” Empire Iron Mining Partnership v Orhanen, 455 Mich 410, 421; 565 NW2d 844 (1997). In Advisory Opinion on Constitutionality of 1976 PA 295, 1976 PA 297, 401 Mich 686, 696; 259 NW2d 129 (1977), our Supreme Court stated that “the determination of what constitutes a public purpose is primarily the responsibility of the Legislature, and .. . the concept of public purpose has been construed quite broadly in Michigan.” Accordingly, it is not for the courts to read into MCL 211.78m(l) restrictions or conditions on what constitutes a public purpose that are not within the language of the statute itself and that essentially usurp the Legislature’s authority to determine what constitutes a public purpose.
We note that while MCL 211.78m(l) does not contain any language requiring the property to be purchased for a public purpose that can be carried out efficiently and expeditiously, such language is found in MCL 211.78(1):
The legislature finds that there exists in this state a continuing need to strengthen and revitalize the economy of this state and its municipalities by encouraging the efficient and expeditious return to productive use of property returned for delinquent taxes. Therefore, the powers granted in this act relating to the return of property for delinquent taxes constitute the performance by this state or a political subdivision of this state of essential public purposes and functions.
The reference to “efficient and expeditious return to productive use” in this legislative finding is not a constraint on the public purpose identified by a city, village, or township purchasing tax-delinquent property-under MCL 211.78m(l). Rather, it is a statement of the purposes of the tax-reversion statutory scheme. Due to the perception of the Legislature that the existing statutory provisions addressing reverted properties were inefficient, the Legislature revamped the General Property Tax Act in 1999 PA 123 in order to effectuate “the efficient and expeditious return to productive use of property returned for delinquent taxes.” This is the public purpose of the GPTA, not the public purpose of a city, village, or township purchasing tax-delinquent property.
It is not the prerogative of this Court to “judicially legislate by adding language to [a] statute.” Empire Iron, 455 Mich at 421. In this case, the trial court essentially imposed a constraint on what constitutes a public purpose that is not found within the language of MCL 211.78m(l). Plaintiffs stated purpose was to improve and sell the property. Whether it could do so efficiently and expeditiously was relevant to plaintiffs ability to carry out its purpose, but was not relevant to the question whether plaintiff was purchasing the property “for a public purpose” as required by MCL 211.78m(l).
We hold that the trial court erred in finding for defendant with respect to the Wilson property by adding conditions on a “public purpose” that are not found within the clear and unambiguous language of MCL 211.78m(l). Given the evidence presented, including defendant’s admission at trial that plaintiff had stated a public purpose, there was no basis for the trial court to find in favor of defendant regarding the Wilson property. Because the trial court added language to the statute to arrive at its conclusions, it abused its discretion in denying mandamus relief to plaintiff.
IV COUNTY TREASURER’S AUTHORITY TO MAKE AN INDEPENDENT ASSESSMENT OF PUBLIC PURPOSE UNDER MCL 211.78m(l)
Plaintiff argues that MCL 211.78m(l) gives no authority to defendant to question plaintiffs determination of public purpose. According to plaintiff, such a determination is traditionally considered a legislative function and is thus properly left to plaintiff, as a legislative body. Plaintiff contends that unless the statute says otherwise, the power to review plaintiffs decision lies in the courts, the branch of government that traditionally reviews actions for their consistency with the laws. Finally, plaintiff argues that the proper course of action would be for defendant to obey the statute’s command that it sell the property to plaintiff. If it later becomes evident that plaintiff does not have a public purpose for the property, a party with standing could bring suit to challenge the purchase of the property.
Conversely, defendant argues that it does not usurp the function of the courts for an FGU to review a municipality’s determination of public purpose. Defen dant contends that if the courts can review the FGU’s determination, judicial review is still possible. Additionally, defendant argues that he is in the best position to determine which properties to allow municipalities to purchase at the minimum bid and which properties to put to public auction to best manage and maintain the integrity of the delinquent tax revolving fund.
As noted above, MCL 211.78m(l) requires property purchased by a municipality under the statute to be purchased “for a public purpose.” The statute does not, however, specify who makes the determination whether a purpose constitutes a public purpose, nor does it specify what body, if any, may review that determination.
Although defendant claims that the statute empowers him to review plaintiffs determination of public purpose, he makes no argument in support of this assertion. His argument, instead, is that it will benefit the entire county if he is allowed to decide which properties are sold to municipalities and which go to auction. But this argument does not relate to the question of public purpose — instead, defendant’s argument is that he should have general discretion to sell or not sell properties to municipalities on the basis of what most benefits the county.
Plaintiff argues that its council is the proper body to determine whether there is a public purpose, because it consists of “ ‘the elected representatives of the people.’ ” Horton v Kalamazoo, 81 Mich App 78, 81; 264 NW2d 128 (1978), quoting Gregory Marina, Inc v Detroit, 378 Mich 364, 394; 144 NW2d 503 (1966) (opinion by T. M. KAVANAGH, C.J.). Defendant points out that he is also an elected representative, elected by a larger constituency than plaintiffs council.
More to the point, however, is plaintiffs separation of powers argument. As noted previously in this opinion, our Supreme Court has stated that “the determination of what constitutes a public purpose is primarily the responsibility of the Legislature.” 1976 PA 295, 401 Mich at 696; accord Gregory Marina, Inc, 378 Mich at 394-395 (opinion by T. M. KAVANAGH, C.J.) (noting that determination of public purpose is a legislative, not a judicial, question); Advisory Opinion on Constitutionality of1986PA281, 430 Mich 93,129-130; 422 NW2d 186 (1988) (stating that Michigan has “recognized a liberal version of the public purpose doctrine”). The determination of public purpose is an essentially legislative function, see MCL 211.78, and plaintiffs council is a legislative body. The review of an action of the Legislature for compliance with the law is an essentially judicial function. The language of the portion of the statute at issue contemplates no discretionary or decision-making role for any executive body. Indeed, the FGU’s role in a city’s purchase of property is essentially administrative, as well as mandatory: “If property is purchased by a city, village, township, or county under this subsection, the [FGU] shall convey the property to the purchasing city, village, township, or county within 30 days.” MCL 211.78m(l) (emphasis added). The statute’s use of the word “shall” indicates a mandatory act, not a permissive one. People v Francisco, 474 Mich 82, 87; 711 NW2d 44 (2006).
In keeping with precedent, we hold that the determination of a proper purpose for the purchase of tax-delinquent property is a legislative function, vesting such determinations as arose in this case with plaintiffs council. Furthermore, because MCL 211.78m(l) creates a mandatory legal duty on defendant’s part to sell the property to plaintiff, granting him no discretion to decide not to sell such property, the statute does not empower a county treasurer such as defendant to make an independent determination as to a municipality’s professed “public purpose.” Pursuant to MCL 211.78m, the selling of property is a mandatory act by defendant, not a discretionary one. For these reasons, the trial court erred to the extent it implicitly held that defendant had a right to review plaintiffs determination of public purpose, and it abused its discretion by denying plaintiff mandamus relief.
Reversed and remanded. No costs are awarded to either party, a public question being involved. MCR 7.216(A)(7) and MCR 7.219(A).
Fort Hood, EJ., and Stephens, J., concurred with Borrello, J.
The legislative analysis prepared for 1999 PA 123 states that the then current “tax delinquent property reversion process takes about six years to complete.” House Legislative Analysis, HB 4489, July 23,1999, p 1. In order to address this delay in returning tax-delinquent property to tax-current status, while still honoring the rights of property owners, the legislation revamping the tax-reversion process was proposed. Id., p 2. While the use of legislative analysis has been criticized as being unpersuasive in terms of statutory construction, such analyses do have probative value in certain circumstances, see, e.g., Kinder Morgan Michigan, LLC v City of Jackson, 277 Mich App 159, 170; 744 NW2d 184 (2007), and continue to he cited in cases involving statutory interpretation, see, e.g., Bush v Shabahang, 484 Mich 156, 174 n 29; 772 NW2d 272 (2009).
In some ways, this is an example of the classic fallacy of equivocation. The term “public purpose” is being used in two different, albeit related, ways in MCL 211.78(1) and MCL 211.78m(l). | [
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JANSEN, EJ.
Elaintiffs appeal by right the trial court’s grant of summary disposition in favor of defendant QFD, Inc. We reverse in part and remand for further proceedings consistent with this opinion.
i
In this case of first impression, we are required to interpret and apply certain provisions of Michigan’s Mobile Home Commission Act (MHCA), MCL 125.2301 et seq. Specifically, we are asked to determine whether plaintiffs were entitled to sue QFD under MCL 125.2331 for rescission of their agreement to purchase a mobile home. We are also asked to determine whether, assuming plaintiffs were entitled to sue under MCL 125.2331, the applicable statutory period of limitations was effectively shortened by a term in the parties’ contract.
In November 2006, plaintiffs entered into a contract to purchase a mobile home from QFD at a mobile home park in Burton, Michigan. Thereafter, plaintiffs executed certain loan documents with QFD. Plaintiffs assert that their agreement to purchase the mobile home was conditioned on QFD’s promise to complete certain necessary repairs to the home. QFD apparently failed to complete these repairs, and plaintiffs hired an outside contractor to finish the work. According to plaintiffs, the contractor discovered that the hot-water heater in their mobile home was defective and “not safe for mobile home use.” It is plaintiffs’ contention that this defective hot-water heater was hidden behind a wall where it could not easily be inspected. Plaintiffs filed a complaint with the Bureau of Construction Codes, reporting the unsafe hot-water heater and detailing certain other alleged problems and irregularities with the sale, title, and condition of the mobile home. In September 2007, plaintiffs stopped making their monthly payments on the mobile home. Plaintiffs subsequently moved out of the home, allegedly because of the defective hot-water heater. At some point, QFD discovered that plaintiffs had moved out of the mobile home, and its agent entered and took possession of the home.
In September 2008, plaintiffs filed the instant action in the Genesee Circuit Court. After amending their complaint three times, plaintiffs ultimately set forth several claims against QFD, including claims of breach of warranty, false advertising, trespass to land, trespass to chattels, innocent misrepresentation, fraudulent misrepresentation, and constructive eviction. Plaintiffs also set forth claims (1) alleging that QFD had sold them the mobile home in violation of the MHCA and seeking damages, (2) seeking rescission of their mobile home purchase agreement and restoration of the status quo, (3) seeking revocation of acceptance under Article 2 of the Uniform Commercial Code (UCC), MCL 440.2102 et seq., and (4) alleging certain violations of Article 9 of the UCC, MCL 440.9101 et seq.
In September 2009, QFD moved for summary disposition pursuant to MCR 2.116(C)(7) and (10). Among other things, QFD argued that many of plaintiffs’ claims were based on the purchase agreement and actually sounded in breach of contract and were therefore time-barred by a shortened, one-year limitations period contained in the parties’ contract. It is undisputed that ¶ 14 of the parties’ purchase agreement provided:
Purchaser understands and agrees that — if either of us should breach this contract — the other of us shall have only one year, after the occurrence of that breach, in which to commence an action for a breach of contract.
QFD asserted that its sale of the mobile home to plaintiffs was governed by the UCC, under which buyers and sellers may contractually agree to “reduce the period of limitation to not less than 1 year.” MCL 440.2725(1). QFD asserted that because plaintiffs had waited more than one year after their purchase of the mobile home to file suit, their claims (including those alleging violations of the MHCA and seeking rescission) were barred by the shortened, one-year limitations period in the contract. QFD also contended that plaintiffs’ claims seeking rescission and revocation of acceptance were barred by ¶ 11 of the parties’ contract, which provided in pertinent part:
PURCHASER ALSO AGREES THAT ONCE PURCHASER HAS ACCEPTED THE UNIT, EVEN THOUGH A WARRANTY DOES NOT ACCOMPLISH ITS PURPOSE, THAT PURCHASER CANNOT RETURN THE UNIT TO RETAILER AND SEEK A REFUND FOR ANY REASON.
QFD lastly argued that even if plaintiffs’ claims were not barred by these two provisions in the purchase agreement, there remained no genuine issues of material fact and it was entitled to judgment as a matter of law.
In response to QFD’s motion for summary disposition, plaintiffs argued that they were entitled to sue for rescission of the purchase agreement because QFD had violated the MHCA in several respects. Plaintiffs pointed out that the MHCA contains its own internal statute of limitations, and argued that their claims were governed by this statutory limitations period rather than by the shortened, one-year period contained in the parties’ contract. Specifically, plaintiffs argued that because their claims were primarily based on the MHCA rather than on the parties’ contract, they were not breach-of-contract claims as QFD asserted and were therefore unaffected by the shortened, one-year period set forth in the purchase agreement.
The trial court entertained oral argument concerning QFD’s motion for summary disposition. The trial court agreed with QFD’s assertion that plaintiffs’ claim for rescission was actually a “contract” claim and that it was therefore time-barred by the shortened, one-year limitations period set forth in the purchase agreement. The court also found that plaintiffs’ remaining claims were either time-barred or insufficiently supported by admissible evidence. On October 5, 2009, the trial court entered an order granting QFD’s motion for summary disposition “for the reasons stated on the record.”
ii
We review de novo a trial court’s decision to grant a motion for summary disposition. Spiek v Dep’t of Transp, 456 Mich 331, 337; 572 NW2d 201 (1998). Statutory interpretation is a question of law that we review de novo on appeal. In re Complaint of Rovas Against SBC Michigan, 482 Mich 90, 102; 754 NW2d 259 (2008). Contract interpretation similarly presents a question of law that we review de novo. Daimler-Chrysler Corp v G-Tech Prof Staffing, Inc, 260 Mich App 183, 184-185; 678 NW2d 647 (2003).
hi
Plaintiffs argue that because QFD was operating in violation of certain provisions of the MHCA or the administrative rules promulgated thereunder, it was unauthorized to enter into any contract for the sale of a mobile home in this state. As a consequence, plaintiffs argue, the parties’ purchase agreement was void and unenforceable. We disagree.
The MHCA prohibits a dealer from engaging in the retail sale of mobile homes without a license. MCL 125.2321(1). The MHCA further authorizes the promulgation of administrative rules concerning, among other things, “[t]he business, sales, and service practices of mobile home dealers.” MCL 125.2305(l)(b). The rules promulgated under the MHCA specifically require a mobile home dealer to “obtain a license for each loca tion from which the [dealer] proposes to operate,” Mich Admin Code, R 125.1214g(l), and require a mobile home dealer to file “[s]eparate [license] applications ... for each sales location,” Mich Admin Code, R 125.1214g(2). It is undisputed that QFD was in violation of these rules because it did not have a license to sell mobile homes at the Burton location.
It is true, as a general matter, that “contracts founded on acts prohibited by a statute, or contracts in violation of public policy, are void.” Maids Int'l, Inc v Saunders, Inc, 224 Mich App 508, 511; 569 NW2d 857 (1997); see also Sands Appliance Servs, Inc v Wilson, 463 Mich 231, 239; 615 NW2d 241 (2000). But it does not necessarily follow that every statutory or regulatory violation by one of the contracting parties renders the parties’ contract void and unenforceable. In Maids Int'l, 224 Mich App at 511-512, this Court considered whether the plaintiffs violation of Michigan’s Franchise Investment Law (FIL), MCL 445.1501 et seq., rendered void and unenforceable certain franchise agreements entered into between the plaintiff and the defendants. In that case, the plaintiff, a Nebraska-based franchisor, sold franchises to the defendants. Maids Int'l, 224 Mich App at 509. However, the plaintiff allegedly failed to provide necessary disclosure documents to the defendants as required by the FIL. Id. at 510. The trial court determined that the franchise agreements were void because the plaintiff had failed to comply with the FIL, and accordingly granted summary disposition in favor of the defendants. Id. at 509.
On appeal, this Court reversed, rejecting the defendants’ argument that the franchise agreements were void. Id. at 511-512. This Court noted that the Legislature had “directly spoken” on the matter in question, and observed that the FIL “sets forth the various requirements a franchisor must meet in order to sell a franchise in this state.” Id. This Court went on to observe: “The Legislature also set forth the appropriate penalties for violation of the various requirements. The requirement plaintiff violated in this case, the provision of a disclosure statement, provides as remedies the franchisor’s liability for damages or rescission of the franchise agreement.” Id. at 512. Because the Legislature had provided an express remedy for the specific violation committed by the plaintiff — i.e., liability for damages or rescission, MCL 445.1531(1) — this Court determined that the defendants were left to the statutory remedy and that the plaintiffs violation did not render the franchise agreements void. Maids Int'l, 224 Mich App at 512.
Turning to the case at bar, the Legislature has similarly provided an express private remedy that may be pursued when a mobile home dealer has violated the MHCA or the administrative regulations promulgated thereunder. In particular, the Legislature has declared that “[a] person who offers, sells, or purchases a mobile home or equipment or a mobile home site in violation of this act or the [regulations promulgated thereunder] may have an action brought against him or her to rescind the transaction and recover damages.” MCL 125.2331. Because the Legislature has “directly spoken” and has provided an express private remedy for parties such as plaintiffs in this case, we conclude that plaintiffs were left to this statutory remedy and that QFD’s violation of the administrative rules promul gated under the MHCA did not render the parties’ purchase agreement void and unenforceable. See Maids Int’l, 224 Mich App at 511-512.
rv
Plaintiffs also argue that they were entitled to sue QFD for rescission and damages under MCL 125.2331, and that their claim was not time-barred by the shortened one-year limitations period contained in the purchase agreement.
A
As an initial matter, we reject QFD’s assertion that plaintiffs never actually pleaded a claim seeking rescission of the purchase agreement and damages under MCL 125.2331. Count I of plaintiffs’ third amended complaint alleged that QFD had sold the mobile home at issue in violation of the MHCA and requested money damages. Among other things, plaintiffs alleged that QFD had violated the MHCA or administrative rules promulgated thereunder by selling the mobile home without a license for the Burton location. Count VIII of plaintiffs’ third amended complaint sought rescission of the agreement by which plaintiffs had purchased the mobile home from QFD. As explained previously, it is undisputed that QFD was in violation of certain rules promulgated under the MHCA because it did not have a license to sell mobile homes at the Burton location. See Rule 125.1214g.
It is true that, although plaintiffs’ allegations concerning QFD’s violation and request for money damages were contained in count I of the third amended complaint, plaintiffs’ request for rescission of the purchase agreement was contained in count VIII. It is also true that plaintiffs’ third amended complaint did not specifically mention MCL 125.2331. However, Michigan is a notice-pleading state. See Roberts v Mecosta Co Gen Hosp (After Remand), 470 Mich 679, 700 n 17; 684 NW2d 711 (2004). All that is required is that the complaint set forth “allegations necessary reasonably to inform the adverse party of the nature of the claims the adverse party is called on to defend[.]” MCR 2.111(B)(1). Moreover, it is well settled that we will look beyond mere procedural labels and read the complaint as a whole when ascertaining the exact nature of a plaintiffs claims. Tipton v William Beaumont Hosp, 266 Mich App 27, 33; 697 NW2d 552 (2005); see also MacDonald v Barbarotto, 161 Mich App 542, 547; 411 NW2d 747 (1987). When read as a whole, the allegations in counts I and VIII of plaintiffs’ third amended complaint were sufficient to reasonably inform QFD that it would be required to defend against a claim for rescission and money damages brought pursuant to MCL 125.2331.
B
We must next address whether QFD’s failure to maintain a license for the Burton location was a sufficient violation of the rules promulgated under the MHCA to support plaintiffs’ claim for rescission and damages under MCL 125.2331. QFD argues that it committed a mere technical violation of the rules, which was too minor to support a claim under MCL 125.2331. QFD also contends that plaintiffs were not entitled to sue under MCL 125.2331 because any damages they sustained were not directly attributable to QFD’s failure to maintain a license for the Burton location. QFD suggests that MCL 125.2331 was never intended to allow rescission of a purchase agreement in cases such as this and asserts that even if plaintiffs properly pleaded a claim under MCL 125.2331, it is beyond factual dispute that plaintiffs are not entitled to any relief. We cannot agree with QFD.
Neither this Court nor our Supreme Court has interpreted or applied MCL 125.2331 in any reported decision. Our primary goal when interpreting a statute is to ascertain and give effect to the intent of the Legislature. Frankenmuth Mut Ins Co v Marlette Homes, Inc, 456 Mich 511, 515; 573 NW2d 611 (1998). “ £[T]he Legislature’s intent must be gathered from the language used, and the language must be given its ordinary meaning.’ ” Id. (citation omitted). The best evidence of the Legislature’s intent is the language used in the statute itself. Neal v Wilkes, 470 Mich 661, 665; 685 NW2d 648 (2004). The Legislature is presumed to have intended the meaning that it plainly expressed, Rowland v Washtenaw Co Rd Comm, 477 Mich 197, 219; 731 NW2d 41 (2007), and clear statutory language must be enforced as written, Fluor Enterprises, Inc v Dep’t of Treasury, 477 Mich 170, 174; 730 NW2d 722 (2007).
As explained earlier, MCL 125.2331 provides that ££[a] person who offers, sells, or purchases a mobile home or equipment or a mobile home site in violation of this act or the [regulations promulgated thereunder] may have an action brought against him or her to rescind the transaction and recover damages.” This language does not limit the availability of a private action for rescission and damages to instances in which a mobile home dealer has committed a significant or substantial violation of the MHCA or the regulations promulgated thereunder. Nor does it limit the availability of such an action to instances in which a dealer has acted in bad faith. Instead, the language of MCL 125.2331 simply provides that a party may sue “to rescind the transaction and recover damages” whenever a mobile home dealer has offered or sold a mobile home, mobile home site, or equipment “in violation” of the MHCA or the regulations promulgated thereunder. In other words, any violation of the MHCA or the regulations promulgated thereunder is sufficient to give rise to a claim under MCL 125.2331. Had the Legislature wished to limit the type of violations sufficient to give rise to a claim under MCL 125.2331 to significant or substantial violations only, it surely could have done so. See Potter v McLeary, 484 Mich 397, 422 n 30; 774 NW2d 1 (2009) (observing, albeit in an unrelated context, that “[i]f the Legislature wanted such a requirement it could have easily included it”). However, it did not. “We cannot read into a statute language that was not placed there by the Legislature.” Risk v Lincoln Charter Tvop Bd of Trustees, 279 Mich App 389, 399; 760 NW2d 510 (2008).
We also reject QFD’s assertions that, in order to proceed under MCL 125.2331, plaintiffs must be able to show that they relied to their detriment on QFD’s purported compliance with the MHCA or establish a direct link between their alleged damages and the fact that QFD lacked a license for the Burton location. The statutory text contains no support for such propositions. The scope of a statutory remedy or right of action is defined by the language of the statute itself. See Lash v Traverse City, 479 Mich 180, 193 n 25; 735 NW2d 628 (2007). The text of the MHCA says nothing about a plaintiffs reliance on a dealer’s purported compliance with the statute. Nor does the statute set forth any other prerequisites that must be satisfied before an injured plaintiff may bring an action for rescission and damages under MCL 125.2331. Instead, as noted earlier, MCL 125.2331 states that a plaintiff may bring an action to rescind the transaction and recover damages when a mobile home dealer has acted “in violation” of the act or the rules promulgated thereunder. We conclude that the Legislature intended MCL 125.2331 to serve as a general, private remedy provision, which may be invoked by an injured plaintiff whenever a mobile home dealer has acted “in violation” of the MHCA or the administrative rules.
Nor can we conclude that plaintiffs’ entitlement to proceed under MCL 125.2331 was in any way affected by the presence of alternate remedies in the MHCA. We acknowledge that the private cause of action for rescission and damages created by MCL 125.2331 is merely one of the several remedies that the Legislature has provided for violations of the MHCA or the rules promulgated thereunder. There are several other penalties and remedies set forth in the MHCA, including MCL 125.2341 (allowing the department or local prosecuting attorney to bring an action to enjoin a person from violating the MHCA), MCL 125.2342 (providing that a violation of the MHCA is a misdemeanor), and MCL 125.2343a (allowing the department to hold pro ceedings to summarily suspend a license under the MHCA). However, the Legislature has specifically declared that the remedies provided in the MHCA “are not mutually exclusive,” MCL 125.2344, and that the MHCA is “remedial and curative” in nature, MCL 125.2349(g). It is well established that a remedial statute must be “liberally construe[d] ... in favor of the persons intended to be benefited.” Empson-Laviolette v Crago, 280 Mich App 620, 629; 760 NW2d 793 (2008). It cannot be seriously disputed that the persons “intended to be benefited” by the MHCA are the purchasers of mobile homes and lots in mobile home parks.
In light of the fact that QFD violated the rules promulgated under the MHCA, we conclude that plaintiffs were entitled to bring an action for rescission of the purchase agreement and for damages under MCL 125.2331.
c
Plaintiffs further argue that the trial court erred by ruling that their claim under MCL 125.2331 was time-barred by the one-year limitations period contained in the parties’ purchase agreement. We agree.
QFD contends that this case is governed by the UCC and that, pursuant to MCL 440.2725(1), the parties were free to contractually “reduce the period of limita tion to not less than 1 year.” The problem with QFD’s argument in this regard is that ¶ 14 of the parties’ contract shortens the limitations period to one year for “action[s] for a breach of contract” only. Contrary to QFD’s assertions, plaintiffs’ claim for rescission of the purchase agreement and damages under MCL 125.2331 is a statutory claim — not an “action for a breach of contract” within the meaning of ¶ 14.
Furthermore, even if plaintiffs’ claim for rescission and damages under MCL 125.2331 could be characterized as an “action for a breach of contract,” we would still conclude that it is governed by the MHCA’s internal, three-year period of limitations. We acknowledge that the UCC governs at least some aspects of mobile home sales. See Ladd v Ford Consumer Fin Co, Inc, 217 Mich App 119, 126 n 3; 550 NW2d 826 (1996), rev’d on other grounds 458 Mich 876 (1998). But so, too, does the MHCA, which is more specifically applicable on the facts of this case. “When two statutes or provisions conflict, and one is specific to the subject matter while the other is only generally applicable, the specific statute prevails.” Frank v William A Kibbe & Assoc, Inc, 208 Mich App 346, 350; 527 NW2d 82 (1995). Because the MHCA is more specific, it prevails over the more general provisions of the UCC with regard to the issue of mobile home sales. See Ladd, 217 Mich App at 128.
The MHCA contains its own internal statute of limitations, which provides in relevant part that “[a] person may not bring an action under this act more than 3 years after the contract of sale . . . .” MCL 125.2333. We conclude that the MHCA’s three-year period of limitations controls plaintiffs’ statutory claim for rescission and damages under MCL 125.2331, and prevails over the more general UCC provisions governing the limitation of actions. See Ladd, 217 Mich App at 128. Because plaintiffs purchased the mobile home at issue in this case in November 2006 and filed the instant action in the Genesee Circuit Court in September 2008, their claim for rescission and damages under MCL 125.2331 was timely filed. MCL 125.2333.
v
Finally, with respect to QFD’s argument that plaintiffs’ rescission claim was barred by ¶ 11 of the purchase agreement, we simply note that any contractual provision purporting to bind a person “to waive compliance with [the MHCA] or a rule promulgated or order issued under [the MHCA] is void.” MCL 125.2332. As we have already explained, one of the possible remedies for aggrieved purchasers of mobile homes is rescission of the purchase agreement under MCL 125.2331. Paragraph 11 of the parties’ purchase agreement, which provided in relevant part that “once purchaser has accepted the unit,. . . purchaser cannot return the unit to retailer and seek a refund for any reason,” is void and unenforceable under MCL 125.2332 because it would essentially permit QFD to waive its own compliance with any order of rescission ultimately issued pursuant to MCL 125.2331.
VI
We do not disturb the trial court’s dismissal of plaintiffs’ breach of warranty, false advertising, trespass to land, trespass to chattels, innocent misrepresentation, fraudulent misrepresentation, constructive evic tion, and UCC claims, none of which have been addressed by plaintiffs on appeal.
However, we reverse the trial court’s grant of summary disposition in favor of QFD with respect to counts I and VIII of plaintiffs’ third amended complaint, which together amounted to a claim for rescission of the purchase agreement and damages under MCL 125.2331. We remand for further proceedings with respect to this statutory claim for rescission and damages. On remand, the trial court shall consider plaintiffs’ request to rescind the mobile home purchase agreement pursuant to MCL 125.2331 and shall balance the equities to determine whether plaintiffs are entitled to the rescission they seek. The trial court shall also consider what damages, if any, plaintiffs are entitled to recover from QFD under MCL 125.2331.
In light of our conclusions, we need not address the remaining arguments raised by the parties on appeal.
Reversed in part and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction. As the prevailing party, plaintiffs may tax costs pursuant to MCR 7.219.
Owens and Shapiro, JJ., concurred with Jansen, EJ.
All claims against defendant Homefirst, L.L.C., have been dismissed with prejudice. Homefirst is not involved in the present appeal. Similarly, defendants Winkelman, Lipschutz, Lewis, Karbal, Smith, and Meadow Creek Limited Partnership have all been dismissed by stipulation of the parties and are not involved in this appeal.
The Legislature has also provided certain civil, criminal, and administrative penalties for a mobile home dealer’s violation of the MHCA or the regulations promulgated thereunder. See, e.g., MCL 125.2341; MCL 125.2342; MCL 125.2343; MCL 125.2343a. The MHCA specifically provides that “[t]he remedies provided for in this act axe not mutually exclusive!.]” MCL 125.2344.
Although any violation of the MHCA or the regulations promulgated thereunder is strictly sufficient to give rise to a legally cognizable claim of rescission under MCL 125.2331, it does not follow that any violation of the MHCA or the regulations promulgated thereunder will be sufficient to entitle a plaintiff to relief. A claim to “rescind the transaction” under MCL 125.2331 is equitable in nature, and therefore discretionary with the trial court. Lenawee Co Bd of Health v Messerly, 417 Mich 17, 31; 331 NW2d 203 (1982) (stating that “[r]escission is an equitable remedy which is granted only in the sound discretion of the court”). Therefore, once a plaintiff has properly pleaded a claim of rescission under MCL 125.2331, the trial court must balance the equities to determine whether the plaintiff is entitled to the relief that he or she seeks. 27A Am Jur 2d, Equity, § 78, p 616. It strikes us that, in balancing the equities of a particular case, the trial court may assess the severity or significance of a mobile home dealer’s violation of the MHCA or the regulations promulgated thereunder, and may consider whether that violation is sufficient to warrant rescission of the transaction.
In addition to providing a claim to “rescind the transaction,” MCL 125.2331 also provides that an aggrieved party may “recover damages.” Unlike an action for rescission, a suit for damages is an action at law. See King v Gen Motors Corp, 136 Mich App 301, 308; 356 NW2d 626 (1984). Actions at law are founded upon a party’s absolute right rather than upon an appeal to the discretion of the court. Hathaway v Hudson, 256 Mich 694, 702; 239 NW 859 (1932). We note that a plaintiff is not required to elect between the remedies of rescission and damages. Jefferson Park Land Co v Wayne Circuit Judge, 234 Mich 341, 345-346; 207 NW 903 (1926).
“[T]he remedy of rescission returns the parties to the status quo, i.e., it places the parties in the position they occupied before the transaction in question.” McMullen v Joldersma, 174 Mich App 207, 218; 435 NW2d 428 (1988); see also Wall v Zynda, 283 Mich 260, 264; 278 NW 66 (1938). | [
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FITZGERALD, PJ.
The prosecution appeals by leave granted the trial court’s order granting defendant’s motion to suppress both his statements to the police and the evidence seized from his vehicle following an investigative stop. We reverse and remand.
I. FACTS AND PROCEDURAL HISTORY
On March 11, 2010, a Blackman Township Public Safety desk sergeant received a telephone call from Carol Williams, a loss-prevention officer employed by the Meijer store in Jackson. Williams had been trained to identify and monitor customers who might be purchasing precursors for the manufacture of methamphetamine. Williams informed the sergeant that a man had purchased packages of Sudafed and one gallon of Coleman fuel, both of which are known precursors for methamphetamine. Williams followed the person out of the store and observed him get into a Ford Taurus and drive off.
The desk sergeant contacted Blackman Township road patrol officer Brent Doxtader and provided him with the information relayed by Williams. According to Officer Doxtader, Williams had been trained by Black- man Township Public Safety and the Jackson County Narcotics Enforcement Team regarding the precursors for methamphetamine. Williams would contact officers to advise them of suspicious activities at Meijer involving the purchase or theft of methamphetamine precursors. During his employment, Officer Doxtader had had contact with Williams regarding methamphetamine investigations on more than 10 occasions, and the information that Williams provided had “always been spot on.”
After receiving the information from the sergeant, Officer Doxtader located the Ford Taurus on US-127 and conducted an investigative stop. He requested defendant’s driver’s license and vehicle paperwork. Defendant responded that he did not have a driver’s license. Officer Doxtader asked defendant to get out of the vehicle and, as a safety precaution, had him place his hands on the roof of the car. Officer Doxtader then informed defendant that he possessed information that there were controlled substances in the vehicle and asked defendant whether that information was accurate. Defendant responded that there was methamphetamine in the vehicle’s door. Officer Doxtader proceeded to engage in a brief conversation with defendant during which defendant answered affirmatively when asked if he used or “cooked” methamphetamine. Defendant also indicated that there were materials for manufacturing methamphetamine in the vehicle.
After this conversation, Officer Doxtader arrested defendant for possession of methamphetamine and for driving without a valid driver’s license. Officer Doxtader handcuffed defendant and placed him in the backseat of his patrol car. Officer Doxtader subsequently searched defendant’s vehicle and retrieved the methamphetamine that defendant had indicated was in the door.
Officer Doxtader transported defendant to the Black-man Township Public Safety Department and placed him in an interview room. After activating the room’s recording system, Officer Doxtader advised defendant of his Miranda rights. Defendant indicated that he understood and waived those rights. Officer Doxtader then interviewed defendant, who essentially repeated the statements he had made during the roadside questioning approximately 45 minutes earlier.
Defendant later moved to suppress both the evidence found in his vehicle and the statements to Officer Doxtader. Defendant claimed that the evidence was obtained in violation of the Fourth Amendment right to be free from unreasonable searches and seizures because the police lacked the requisite particularized suspicion necessary to conduct an investigative stop. Defendant also asserted that Officer Doxtader had subjected him to custodial interrogation at the location of the stop without first advising him of his Miranda rights. Finally, defendant asserted that the statements he made at the police station were inadmissible as the fruit of an illegal stop and an illegal roadside interrogation.
At the suppression hearing, the prosecutor argued that Officer Doxtader had a reasonable suspicion to stop defendant’s vehicle based on the combination of the officer’s training and experience and the tip from a trained and experienced loss-prevention officer who had knowledge of the precursors of methamphetamine and who had provided reliable information to the police in the past. The prosecutor also argued that even if defendant’s initial roadside statement had been obtained in violation of Miranda, Officer Doxtader’s subsequent questioning of defendant at the police station constituted a new and different experience from the roadside interrogation.
The trial court suppressed the evidence and defendant’s statements. The court opined that “the purchase of only one package of Sudafed and camping fuel is not enough to meet the standard of a particularized suspicion.” Thus, the court found that the traffic stop was illegal and that the evidence obtained from defendant’s vehicle was the fruit of an illegal search. The court also found that defendant was in custody for purposes of Miranda during the roadside interrogation and, therefore, that his statements were illegally obtained. Lastly, the court found that defendant’s statements at the police station were the fruit of an illegal roadside custodial interrogation because “there were no intervening circumstances to purge the taint between the statements made at the side of the road to the statements made in-house.”
II. STANDARD OF REVIEW
This Court reviews de novo a trial court’s ruling on a motion to suppress. People v Williams, 472 Mich 308, 313; 696 NW2d 636 (2005). Although this Court engages in a de novo review of the entire record, it will not disturb a trial court’s factual findings unless those findings are clearly erroneous. People v Jenkins, 472 Mich 26, 31; 691 NW2d 759 (2005). A factual finding is clearly erroneous if it leaves the Court with a definite and firm conviction that the trial court made a mistake. People v Akins, 259 Mich App 545, 564; 675 NW2d 863 (2003).
III. LEGALITY OF THE INVESTIGATIVE STOP
The prosecution argues that Officer Doxtader had a reasonable suspicion that criminal activity was afoot when he stopped defendant’s vehicle and that the investigative stop of the vehicle therefore did not violate the Fourth Amendment. In contrast, defendant argues that the mere purchase of methamphetamine precursors does not create a reasonable suspicion that criminal activity is afoot.
The stop of defendant’s vehicle implicated defendant’s right to be free from unreasonable searches and seizures. Both the United States and Michigan Constitutions guarantee protection against unreasonable searches and seizures. US Const, Am IV; Const 1963, art 1, § 11; People v Kazmierczak, 461 Mich 411, 417; 605 NW2d 667 (2000). The Fourth Amendment search and seizure protections also apply to brief investigative detentions. See People v Green, 260 Mich App 392, 396; 677 NW2d 363 (2004), overruled on other grounds by People v Anstey, 476 Mich 436; 719 NW2d 579 (2006). However, in Terry v Ohio, 392 US 1, 30-31; 88 S Ct 1868; 20 L Ed 2d 889 (1968), the United States Supreme Court held that the Fourth Amendment permits a police officer to make a brief investigative stop (a “Terry stop”) and detain a person if the officer has a reasonable, articulable suspicion that criminal activity is afoot. The police may also make a Terry stop and briefly detain a person who is in a motor vehicle if the officer has a reasonable, articulable suspicion that the person is engaged in criminal activity. People v Oliver, 464 Mich 184, 192; 627 NW2d 297 (2001).
In determining reasonableness, the court must consider whether the facts known to the officer at the time of the stop would warrant an officer of reasonable precaution to suspect criminal activity. Terry, 392 US at 21-22. “The reasonableness of an officer’s suspicion is determined case by case on the basis of the totality of all the facts and circumstances.” People v LoCicero (After Remand), 453 Mich 496, 501-502; 556 NW2d 498 (1996). “[I]n determining whether the totality of the circumstances provide reasonable suspicion to support an investigatory stop, those circumstances must be viewed ‘as understood and interpreted by law enforcement officers, not legal scholars ....’” Oliver, 464 Mich at 192, quoting People v Nelson, 443 Mich 626, 632; 505 NW2d 266 (1993). An officer’s conclusion must be drawn from reasonable inferences based on the facts in light of his training and experience. Terry, 392 US at 27. The United States Supreme Court has said that deference should be given to the experience of law enforcement officers and their assessments of criminal modes and patterns. United States v Arvizu, 534 US 266, 273-274; 122 S Ct 744; 151 L Ed 2d 740 (2002); see also Oliver, 464 Mich at 196, 200. Fewer foundational facts are necessary to support a finding of reasonableness when moving vehicles are involved than when a house or home is involved. Oliver, 464 Mich at 192.
Initially, we conclude that the trial court clearly erred when it found that Officer Doxtader had been informed that defendant purchased a single box of Sudafed. The evidence indicated that Officer Doxtader had been advised that defendant had purchased “packages” of Sudafed. The evidence also indicated that defendant purchased a gallon of Coleman fuel. Sudafed and Coleman fuel are both known methamphetamine precursors. This is not a case in which one person purchased only a quantity of Sudafed or only a gallon of fuel. Rather, defendant purchased “packages” of Sudafed together with a gallon of fuel. Because defendant was not a resident of the local area, the store pharmacist had alerted the loss-prevention officer of the purchase of the pills. The information regarding the purchase of the Sudafed and the Coleman fuel, as well as a description of defendant’s vehicle, was provided to the police by the loss-prevention officer who was trained to recognize methamphetamine precursors and had provided reliable information to the police in more than 10 previous methamphetamine investigations. Defendant’s purchase of a combination of methamphetamine precursors from one store, when considered in totality with Officer Doxtader’s training and experience with regard to the manufacturing of methamphetamine, formed a solid basis on which Officer Doxtader had a reasonable suspicion of criminal activity to justify the Terry stop. Thus, the trial court erred by granting defendant’s motion to suppress the fruits of the vehicle search.
IV THE ROADSIDE STATEMENTS
The prosecution argues that the trial court erred by suppressing defendant’s roadside statements on the ground that defendant had not been advised of his Miranda rights during the questioning. We review de novo the question whether defendant was in custody at the time he made the statements at issue. People v Herndon, 246 Mich App 371, 395; 633 NW2d 376 (2001).
Miranda warnings are not required unless the accused is subject to a custodial interrogation. People v Hill, 429 Mich 382, 385; 415 NW2d 193 (1987); People v Vaughn, 291 Mich App 183, 189; 804 NW2d 764 (2010). Generally, a custodial interrogation is a questioning initiated by law enforcement officers after the accused has been taken into custody or otherwise deprived of his or her freedom of action in any significant way. Yarborough v Alvarado, 541 US 652, 661; 124 S Ct 2140; 158 L Ed 2d 938 (2004); People v Zahn, 234 Mich App 438, 449; 594 NW2d 120 (1999). Whether an accused was in custody depends on the totality of the circumstances. The key question is whether the accused could have reasonably believed that he or she was not free to leave. Yarborough, 541 US at 663; Vaughn, 291 Mich App at 189.
However, a motorist detained for a routine traffic stop or investigative stop is ordinarily not in custody within the meaning of Miranda. Maryland v Shatzer, 559 US _, _; 130 S Ct 1213, 1224; 175 L Ed 2d 1045 (2010); Berkemer v McCarty, 468 US 420, 440; 104 S Ct 3138; 82 L Ed 2d 317 (1984); People v Burton, 252 Mich App 130, 138-139; 651 NW2d 143 (2002). As was stated in Berkemer, this is because
[t]wo features of an ordinary traffic stop mitigate the danger that a person questioned will be induced “to speak where he would not otherwise do so freely,” Miranda v. Arizona, 384 U. S. [436, 467; 86 S Ct 1602; 16 L Ed 2d 694 (1966)]. First, detention of a motorist pursuant to a traffic stop is presumptively temporary and brief. The vast majority of roadside detentions last only a few minutes. A motorist’s expectations, when he sees a policeman’s light flashing behind him, are that he will be obliged to spend a short period of time answering questions and waiting while the officer checks his license and registration, that he may then be given a citation, but that in the end he most likely will be allowed to continue on his way. In this respect, questioning incident to an ordinary traffic stop is quite different from stationhouse interrogation, which frequently is prolonged, and in' which the detainee often is aware that questioning will continue until he provides his interrogators the answers they seek. See id., at 451.
Second, circumstances associated with the typical traffic stop are not such that the motorist feels completely at the mercy of the police. To be sure, the aura of authority surrounding an armed, uniformed officer and the knowledge that the officer has some discretion in deciding whether to issue a citation, in combination, exert some pressure on the detainee to respond to questions. But other aspects of the situation substantially offset these forces. Perhaps most importantly, the typical traffic stop is public, at least to some degree. Passersby, on foot or in other cars, witness the interaction of officer and motorist. This exposure to public view both reduces the ability of an unscrupulous policeman to use illegitimate means to elicit self-incriminating statements and diminishes the motorist’s fear that, if he does not cooperate, he will be subjected to abuse. The fact that the detained motorist typically is confronted by only one or at most two policemen further mutes his sense of vulnerability. In short, the atmosphere surrounding an ordinary traffic stop is substantially less “police dominated” than that surrounding the kinds of interrogation at issue in Miranda itself, see 384 U. S., at 445, 491-498, and in the subsequent cases in which we have applied Miranda.
In both of these respects, the usual traffic stop is more analogous to a so-called “Terry stop,” see Terry v. Ohio, 392 U. S. 1, (1968), than to a formal arrest. Under the Fourth Amendment, we have held, a policeman who lacks probable cause but whose “observations lead him reasonably to suspect” that a particular person has committed, is committing, or is about to commit a crime, may detain that person briefly in order to “investigate the circumstances that provoke suspicion.” United States v. Brignoni-Ponce, 422 U. S. 873, 881 [95 S Ct 2574 45 L Ed 2d 607] (1975). “[T]he stop and inquiry must be ‘reasonably related in scope to the justification for their initiation.’ ” Ibid, (quoting Terry v. Ohio [392 US] at 29.) Typically, this means that the officer may ask the detainee a moderate number of questions to determine his identity and to try to obtain information confirming or dispelling the officer’s suspicions. But the detainee is not obliged to respond. And, unless the detainee’s answers provide the officer with probable cause to arrest him, he must then be released. The comparatively nonthreatening character of detentions of this sort explains the absence of any suggestion in our opinions that Terry stops are subject to the dictates of Miranda. The similarly noncoercive aspect of ordinary traffic stops prompts us to hold that persons temporarily detained pursuant to such stops are not “in custody” for the purposes of Miranda. [Berkemer, 468 US at 437-440 (citations omitted).]
Both defendant and the trial court improperly considered this case to be one involving a custodial interrogation requiring Miranda protections. Given the circumstances that justified the Terry stop, Officer Doxtader was permitted to temporarily detain defendant and make a reasonable inquiry into possible criminal activity. The officer’s questions were asked immediately after the stop, were minimal in number, and were posed in an attempt to gather information confirming or dispelling the officer’s suspicions. Defendant voluntarily answered the officer’s questions regarding the presence of controlled substances in the vehicle ánd his use of methamphetamine. Officer Doxtader’s brief questioning was within the scope of the stop and confirmed the officer’s suspicions concerning the presence of a controlled substance without subjecting defendant to a custodial interrogation. Consequently, the trial court erred by suppressing defendant’s roadside statement.
V THE STATEMENTS AT THE POLICE DEPARTMENT
Lastly, the prosecution challenges the trial court’s ruling that defendant’s statements made at the police station during a custodial interrogation and after he was advised of and waived his Miranda rights must be suppressed as the fruit of an illegal roadside interrogation.
As discussed in part IX Officer Doxtader was not required to advise defendant of his Miranda rights at the time of the roadside questioning because defendant was not in custody for purposes of Miranda. Consequently, the trial court’s holding that defendant’s second set of statements was subject to suppression because of the taint of his earlier, illegally obtained statements was erroneous.
Even assuming that defendant’s first roadside statements were illegally obtained in violation of Miranda, defendant’s second set of statements at the police department was lawfully obtained. The second confession was given approximately 45 minutes after the first confession, in an interrogation room at the police department after defendant had been advised of and waived his Miranda rights. There is no indication in the record that the second confession was obtained illegally or involuntarily. The subsequent giving of Miranda warnings removed any taint given that a reasonable person in defendant’s shoes “ ‘could have seen the station house questioning as a new and distinct experience,’ and ‘the Miranda warnings could have made sense as presenting a genuine choice whether to follow up on the earlier admission.’ ” Coomer v Yukins, 533 F3d 477, 491 (CA 6, 2008), quoting Missouri v Seibert, 542 US 600, 616; 124 S Ct 2601; 159 L Ed 2d 643 (2004). The trial court erred by suppressing defendant’s statements given at the police station.
Reversed and remanded for further proceedings. Jurisdiction is not retained.
O’Connell and Meter, JJ, concurred with Fitzgerald, EJ.
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The Court orders that the May 3, 2011, opinion is hereby amended. The opinion contained the following clerical errors:
The defendant’s last name was misspelled. The correct spelling is “Vettraino.”
On page 3, the slip opinion states, “It is undisputed that Comerica provided the remaining $142,000 requested, and that this amount, but only this amount, was paid to Florence, leaving a shortfall of $142,557.27.” The shortfall amount should correctly be $114,557.27.
In all other respects, the May 3, 2011, opinion remains unchanged. | [
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ON REMAND
Before: DONOFRIO, RJ., and SAWYER and OWENS, JJ.
PER CURIAM.
This case is once again before us, now on remand by the Michigan Supreme Court. In our original opinion, we concluded that the circuit court did not possess the jurisdiction to try defendant on a misdemeanor charge when the accompanying felony charge had been dismissed before the beginning of trial. People v Reid, 288 Mich App 661; 795 NW2d 159 (2010). The Supreme Court, in lieu of granting leave to appeal, reversed our decision and remanded the matter to us to consider issues previously raised by defendant but not addressed in our original opinion. People v Reid, 488 Mich 917 (2010). We consider those issues and now affirm defendant’s conviction of operating a motor vehicle while intoxicated (OWI).
Defendant first argues that the trial court erred by denying his motion to suppress the result of his blood alcohol test as well as his motion to dismiss. We disagree.
Defendant’s motion to suppress was based on an argument that he was deprived of his right under MCL 257.625a(6) to have an independent chemical test performed on the blood sample. We disagree. We review a trial court’s decision to admit or exclude evidence for an abuse of discretion. People v Lukity, 460 Mich 484, 488; 596 NW2d 607 (1999).
MCL 257.625a(6)(d) provides that a defendant in an OWI case be given a “reasonable opportunity” to obtain an independent analysis of his or her blood sample:
A chemical test described in this subsection shall be administered at the request of a peace officer having reasonable grounds to believe the person has committed a crime described in [MCL 257.625c(l)]. A person who takes a chemical test administered at a peace officer’s request as provided in this section shall be given a reasonable opportunity to have a person of his or her own choosing administer 1 of the chemical tests described in this subsection within a reasonable time after his or her detention. The test results are admissible and shall be considered with other admissible evidence in determining the defendant’s innocence or guilt. If the person charged is administered a chemical test by a person of his or her own choosing, the person charged is responsible for obtaining a chemical analysis of the test sample.
In this case, a sample of defendant’s blood was drawn following his arrest on November 13, 2005. The sample was destroyed by the state police crime lab in February 2008 pursuant to a policy providing for the destruction of samples two years after their receipt unless there is a request to preserve the samples longer. There is no indication that, at any time during the more than two-year period that the crime lab was storing defendant’s blood sample, defendant made a request for an independent analysis that was denied. While it is true that defendant may not have been particularly motivated to have an independent test of his blood sample performed until after he was actually charged with a crime, he was charged on August 3, 2007. While this was almost two years after his initial arrest, it was still approximately six months before the blood sample was actually destroyed. We conclude that defendant had more than an ample opportunity to have his blood sample independently tested and, therefore, the trial court did not abuse its discretion by denying defendant’s motion to suppress the test results.
This brings us to a second argument that defendant raises under this issue: whether the delay in charging defendant violated his right to due process of law. We review this question de novo. People v Cain, 238 Mich App 95, 108; 605 NW2d 28 (1999). For a defendant to be entitled to dismissal on this basis, the defendant must show that the delay caused “actual and substantial prejudice to the defendant’s right to a fair trial and an intent by the prosecution to gain a tactical advantage.” People v Crear, 242 Mich App 158, 166; 618 NW2d 91 (2000), overruled in part on other grounds by People v Miller, 482 Mich 540, 561 n 26 (2008). We are not persuaded that defendant has made such a showing in this case.
Defendant argues that there was prejudice because of his inability to obtain an independent analysis of his blood sample. But as already discussed, the sample was not destroyed until approximately six months after defendant was eventually charged. Defendant had more than two years to obtain independent testing of the blood sample, including for approximately six months after he was actually charged. Any prejudice from failing to obtain an independent test stemmed from defendant’s failure to promptly request such a test, not because the delay in charging him precluded him from requesting a test.
Defendant also argues that the prosecution gained a tactical advantage as a result of the delay in bringing charges because the prosecutor knew that the Michigan State Police would have already destroyed the videotape of the traffic stop, thus depriving defendant of potentially exculpatory evidence from the videotape. But this argument also fails. First, defendant merely speculates that this was the reason for the delay. Indeed, defendant is unable to establish that a videotape ever existed. The arresting officer, Trooper Christopher Bommarito, testified that he could not recall whether the police car that he was driving that evening had a video camera. On the basis of the fact that there was a blank space under “video” on his police report, he concluded that there “might not have been a video” because the normal practice is to write the car number in that spot if the car is equipped with video equipment. He further testified that, even if a video had existed, it would have been taped over after 60 days. A second officer, Trooper Korey Rowe, who arrived at the scene at approximately the time defendant’s vehicle was stopped, did have video equipment in his car. But that video was presumably turned in and subsequently taped over under the 60-day-rotation policy.
But defendant does not show that the prosecution deliberately waited to bring charges so that the tapes would be unavailable. Indeed, the prosecutor did not wait merely two months to bring charges, but almost two years. Not only is it mere speculation that the videotape would have been helpful to defendant and further speculation that the prosecutor waited to bring charges until any such tape would have been reused under the 60-day-rotation policy, that speculation falls apart in light of the fact that the prosecutor then waited an additional 18 months or so to bring charges. It would seem that if the prosecutor’s motivation in delaying the charges was to wait for any videotape to be reused, the charges would have been brought much sooner than was the case.
For these reasons, we conclude that defendant has not shown a due process violation arising from the delay in charging him.
Next, defendant argues that the jury’s verdict that he was intoxicated was against the great weight of the evidence. We disagree. Because defendant did not move for a new trial, his unpreserved great-weight-of-the-evidence argument is reviewed for plain error. People v Musser, 259 Mich App 215, 218; 673 NW2d 800 (2003). A verdict is against the great weight of the evidence if the evidence preponderates so heavily against the verdict that it would be a miscarriage of justice to allow it to stand. Id. at 218-219.
In this case, there was substantial evidence of defendant’s guilt. Trooper Bommarito testified regarding defendant’s physical abilities, including defendant’s failing of field sobriety tests, at the time of the traffic stop. Additionally, a lab technician testified regarding the results of the blood tests, the level of alcohol and drugs in defendant’s blood system, and the effects that amount of alcohol and drugs would have had on defendant’s ability to drive. In light of this evidence, the jury could reasonably have concluded that defendant was guilty.
Defendant next argues that he was unfairly prejudiced when the prosecutor was permitted to amend the information after the jury was empaneled. Specifically, defendant argues that the prosecutor should not have been allowed to change the theory of the case from operating a motor vehicle while under the influence of alcohol to operating “while under the influence of alcohol and/or a controlled substance” because defendant had prepared his defense to defend against alcohol charges only, with a blood alcohol content of only 0.02 percent. We disagree.
Defendant concedes that he did not object in the trial court to the amendment and, therefore, we review this issue for plain error. People v Corines, 460 Mich 750, 763-764; 597 NW2d 130 (1999). The record does reflect that, after the jury was sworn but before opening statements, the prosecutor moved to amend the information to state “while under the influence of alcohol and/or a controlled substance.” But the record also reflects that, when the trial court read the information to the prospective jurors at the beginning of jury selection, the information stated “while under the influence of a controlled substance.” Therefore, the amendment was to add the claim regarding alcohol, not to add a claim regarding a controlled substance. Because defendant’s argument is premised on adding the claim of a controlled substance and this did not happen, there is no plain error to correct.
Finally, defendant argues that the trial court erred by instructing the jury on intoxication. At trial, however, defense counsel expressly approved the instruction given. Therefore, this issue is waived. People v Carter, 462 Mich 206, 214-215; 612 NW2d 144 (2000).
Affirmed.
DONOFRIO, EJ., and SAWYER and OWENS, JJ., concurred.
MCL 257.625(1) | [
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The Court orders that the motion for clarification of the April 5, 2011, opinion is hereby granted. The last paragraph of the opinion is amended to state: “Reversed and remanded to the Michigan Tax Tribunal for entry of judgments consistent with this opinion. We do not retain jurisdiction.”
The Reporter’s Office shall make the change to the opinion during the publishing process.
In all other respects, the opinion remains unchanged. | [
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PER CURIAM.
In this dispute over the proper application of the tax-benefit rule, defendant, the Department of Treasury, appeals as of right the Court of Claims’ order denying its motion for summary disposition, granting plaintiffs’ motion for summary disposition, reversing the Department’s decision and order of determination, and compelling the Department to refund plaintiffs $174,214, plus interest. We hold that although the Court of Claims correctly ruled that the Income Tax Act (ITA), MCL 206.1 et seq., necessarily incorporates the federal tax-benefit rule, the rule was not applicable in this case. Therefore, we reverse the opinion and order of the Court of Claims.
I. BACKGROUND
This case finds its genesis in plaintiffs’ attempt to recover their lost investment in the Pupler Distributing Company, an organization later discovered to be a Ponzi scheme. Between 1998 and 2002, plaintiffs loaned over $4,000,000 to Pupler and, in return, received interest payments of $4,346,680. Plaintiffs reported and paid federal and state taxes on the interest payments for the years 1998 through 2002.
In late 2002, plaintiffs discovered that Pupler was a Ponzi scheme with no legitimate business purpose. Pupler’s interest payments to plaintiffs ceased at that time, with Pupler owing plaintiffs $5,108,500 in outstanding loans. As a result, plaintiffs claimed a theft-loss deduction of $5,108,500 for this lost investment on their 2002 federal tax return pursuant to 26 USC 165, and reduced their federal tax liability accordingly. Notably, the theft-loss deduction is taken “below the line” (i.e., after the determination of adjusted gross income). Consequently, because Michigan tax liability is based on the federal definitions of adjusted gross income, the deduction had no effect on plaintiffs’ Michigan income tax liability.
On November 14, 2002, an involuntary petition was filed in the United States Bankruptcy Court against Pupler pursuant to chapter 7 of the bankruptcy code, 11 USC 701 et seq. The bankruptcy trustee subsequently demanded that plaintiffs return the $4,346,680 in interest payments they had received from Pupler, plus a 10 percent premium on the interest earned. Plaintiffs eventually entered into a settlement agreement with the bankruptcy trustee permitting them to offset the repayment of interest against their lost investment in Pupler. However, because the amount of plaintiff s interest repayment plus the premium totaled more than the lost investment, plaintiffs submitted a check in the amount of $350,000, representing the difference in the two figures.
Based on this transaction, plaintiffs reported a theft-loss recovery of $4,200,160 (the estimated total amount of their recovered lost investment) on their 2004 federal income tax return. Notably, a theft-loss recovery is added “above the line” and therefore is included in the calculation of a taxpayer’s adjusted gross income. The report of the theft-loss recovery, therefore, had significant Michigan tax liability implications for plaintiffs because, as previously noted, the theft-loss deduction (for their lost principal investment) claimed by plaintiffs in 2002 was taken “below the line” and consequently provided plaintiffs no Michigan tax benefit. Thus, in order to avoid paying taxes twice on the same income, plaintiffs deducted the amount of the theft-loss recovery ($4,200,160) from the adjusted gross income of their 2004 Michigan income tax return. Plaintiffs based this action on the federal “tax benefit rule.” Under this adjustment, plaintiffs claimed a Michigan tax refund of $171,348, plus interest.
The Department subsequently audited plaintiffs’ 2004 income tax return and issued a notice of intent to assess on the ground that the tax-benefit rule did not apply and, therefore, the theft-loss recovery deduction was improper. Consequently, the Department denied plaintiffs’ tax refund claim and found an income tax deficiency of $2,866, plus interest, for the 2004 tax year. At the request of plaintiffs, an informal conference with the Department was held on November 14, 2006. At the conclusion of the conference, the hearing referee recommended that the federal tax-benefit rule be incorporated into Michigan law and that the assessment be canceled. Two years later, however, the director of tax policy overruled that recommendation and affirmed the assessment.
Plaintiffs paid the assessed tax and interest before initiating suit in the Court of Claims on January 28,2009. In their complaint, plaintiffs requested an order requiring the Department to apply the tax-benefit rule and claim-of-right doctrine and to issue a tax refund. The Department answered in due course, and plaintiffs filed their motion for summary disposition under MCR 2.116(0(10) (no genuine issue of material fact).
According to plaintiffs, since the federal theft-loss deduction provided no Michigan income tax benefit, the theft-loss recovery was not includable in plaintiffs adjusted gross income under the tax-benefit rule because the ITA specifically incorporates definitions and deductions of the Internal Revenue Code. The Department responded that because plaintiffs failed to prove remission of their interest payment from Pupler to the trustee, who in any event did not have authority to require such a payment, and alternatively, because the ITA did not provide for the application of the tax-benefit rule to theft losses, the court should grant the Department summary disposition under MCR 2.116(I)(2) (opposing party entitled to judgment) and dismiss plaintiffs’ complaint.
In a 10-page opinion and order, the Court of Claims held that the tax-benefit rule was applicable based on an apparent ambiguity in the law. Specifically, the court explained:
Based simply on the plain language of the Act itself, it appears that the tax benefit rule must be recognized in Michigan. After all, the Act adopts by reference the definitions and principles contained in federal law and the Internal Revenue Code, and the Internal Revenue Code, in turn, incorporates the tax benefit rule. Defendant, however, points to the fact that the Legislature in certain circumstances, explicitly provided in the Act for adjustments to one’s taxable income to account for deductions that may be taken on one’s federal taxes but not on one’s Michigan income tax returns, such as state, city, and property tax refunds. Noting that the Legislature thus knew how to provide for such adjustments when it wanted to, but that it did not provide for such an adjustment based on Michigan’s non-recognition of the Theft Loss Deduction, Defendant argues that clearly the Legislature did not intend to adopt the tax benefit rule in Michigan’s Income Tax Act in such circumstances. This is an equally viable interpretation. [Emphasis in original.]
Noting that such an ambiguity must be construed in plaintiffs’ favor, the court found that “the Michigan Income Tax Act itself provides for the recognition of the tax benefit principle.” Additionally, the court rejected the Department’s argument that plaintiffs failed to remit their interest repayment to the trustee since plaintiffs had offset their interest repayment by the amount of their lost investment. Accordingly, the court granted summary disposition to plaintiffs, reversed the Department’s decision and order of determination, and canceled plaintiffs’ December 26, 2008, final bill for taxes due. Plaintiffs were therefore entitled to a refund of $174,214, plus interest. The instant appeal ensued.
II. ANALYSIS
On appeal, the Department reiterates its challenge to plaintiffs’ eligibility for a tax refund. The Court reviews de novo an appeal from an order granting a motion for summary disposition. Dressel v Ameribank, 468 Mich 557, 561; 664 NW2d 151 (2003). A motion for summary disposition pursuant to MCR 2.116(0(10) should be granted when the moving party is entitled to judgment as a matter of law because there is no genuine issue of material fact. Maiden v Rozwood, 461 Mich 109, 120; 597 NW2d 817 (1999). A genuine issue of material fact exists when reasonable minds could differ after drawing reasonable inferences from the record. West v Gen Motors Corp, 469 Mich 177, 183; 665 NW2d 468 (2003). In reviewing this issue, the Court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence and construe them in a light most favorable to the nonmoving party. Corley v Detroit Bd of Ed, 470 Mich 274, 278; 681 NW2d 342 (2004). Issues of statutory interpretation are also questions of law that we review de novo. USAA Ins Co v Houston Gen Ins Co, 220 Mich App 386, 389; 559 NW2d 98 (1996).
A. PLAINTIFFS’ PAYMENT TO THE TRUSTEE
Before reaching the merits of the applicability of the tax-benefit rule, we first address the Department’s preliminary contention that plaintiffs are not entitled to a refund since they failed to remit to the bankruptcy trustee interest payments received from Pupler. The flaw of this argument is the failure to acknowledge that plaintiffs’ actual repayment to the trustee of $350,000 was the difference between the Pupler interest payments and plaintiffs’ lost investment. Further, as the lower court observed, the Department failed to submit any evidence calling into question the estimation of plaintiffs’ accountant that plaintiffs recovered only $4,200,120 of their lost investment. An opposing party’s allegations without documentary support are insufficient to create a genuine issue of material fact. Quinto v Cross & Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996).
Additionally, we reject the Department’s claim that the bankruptcy trustee lacked the legal authority to recover the interest payments from plaintiffs. In making this argument, the Department asserts that the trustee was only entitled to recover interest payments made within 90 days of the filing of the bankruptcy petition since the trustee found that no fraudulent transfers were made to plaintiffs. See 11 USC 547. The record reveals no such finding by the trustee, however. Instead, the trustee determined that plaintiffs were without fraudulent transfer liability because they had no net “Ponzi Profits.” In other words, the trustee’s determination pertained to the effect of plaintiffs’ offsetting their lost investment against the repayment of their interest payments as opposed to any fraudulent transfers per se.
And in any event, it is well established that in the absence of a defense under 11 USC 548(c) a bankruptcy trustee may recover the full amount paid to Ponzi scheme investors under 11 USC 548(a)(1)(A), because the question of intent to defraud is not debatable. See, e.g., Fisher v Sellis (In re Lake States Commodities, Inc), 253 BR 866, 877-878 (ND Ill, 2000); In re Taubman, 160 BR 964, 983-984 (SD Ohio, 1993); In re Agricultural Research & Technology Group, Inc, 916 F2d 528, 536 (CA 9, 1990); In re Baker & Getty Fin Servs, Inc, 98 BR 300, 308 (ND Ohio, 1989). As the Department launches no attack on the trustee’s right to recover under that latter section, its challenge to the trustee’s legal authority must fail.
B. THE TAX-BENEFIT RULE
We now turn to the central issue in this case: whether the tax-benefit rule permitted plaintiffs to deduct their theft-loss recovery in calculating their tax liability. This inquiry requires interpretation and application of the ITA. Thus, we begin by examining the specific language of the ITA to give effect to the Legislature’s intent. Renny v Dep’t of Transp, 478 Mich 490, 495; 734 NW2d 518 (2007). Where the language is unambiguous, judicial construction is neither required nor permitted. Id.
1. DOES THE ITA RECOGNIZE THE TAX-BENEFIT RULE?
The ITA subjects the “taxable income” of every individual other than a corporation to a state income tax. MCL 206.51(1). Notably, the ITA expressly incorporates federal principles in calculating taxable income so that terms in the ITA have the same meaning as when used in a comparable context in federal law. MCL 206.2 provides, in relevant part:
(2) Any term used in this act shall have the same meaning as when used in comparable context in the laws of the United States relating to federal income taxes unless a different meaning is clearly required. Any reference in this act to the internal revenue code shall include other provisions of the laws of the United States relating to federal income taxes.
(3) It is the intention of this Act that the income subject to tax be the same as taxable income as defined and applicable to the subject taxpayer in the internal revenue code, except as otherwise provided in this act.
Both “adjusted gross income” and “taxable income” are defined in the Internal Revenue Code (IRC) as gross income minus allowable deductions. 26 USC 62; 26 USC 63. The ITA, in turn, defines “taxable income” as “adjusted gross income as defined in the internal revenue code” minus certain specified adjustments. MCL 206.30(1).
The federal provision under which plaintiffs seek to deduct their theft-loss recovery is the tax-benefit rule. As noted earlier, that rule provides that “[g]ross income does not include income attributable to the recovery during the taxable year of any amount deducted in any prior taxable year to the extent such amount did not reduce the amount of tax imposed by this chapter.” 26 USC 111(a).
Instructive in applying the tax-benefit rule are the cases of Preston v Dep’t of Treasury, 190 Mich App 491; 476 NW2d 455 (1991), and Cook v Dep’t of Treasury, 229 Mich App 653; 583 NW2d 696 (1998). In Preston, the Court looked to the Legislature’s statement of intent in MCL 206.2(3) and concluded that Michigan income tax taxpayers should receive a deduction for a net operating loss (NOL) even though the ITA did not expressly provide for such a deduction. The Court explained that “[b]ecause the Internal Revenue Code defines adjusted gross income to include a deduction for an NOL, it, therefore, follows that the Michigan Income Tax Act allows an NOL deduction . . . .” Preston, 190 Mich App at 495.
Cook followed the reasoning of Preston, but concluded that the taxpayers in that case were not entitled to a deduction. At issue in Cook was whether oil and gas expenses are deductible even though oil and gas proceeds are exempt from tax under the ITA. Cook, 229 Mich App at 660. Relying on Preston, the Court determined that MCL 206.2(3) requires that a Michigan taxpayer’s taxable income be “calculated in the same manner as it would be under the federal IRC, in the absence of an express provision of the Michigan ITA requiring a different result.” Cook, 229 Mich App at 660. Applying this rationale, the Court held that even though the IRC permitted deductions for oil and gas expenses, a deduction for these expenses was not proper under the Michigan ITA because the applicable accounting rule in the IRC disallowed deductions for income wholly exempt from taxes imposed by the IRC. Id. at 658-660.
From these cases, it is clear that taxable income in Michigan is to be calculated using the definitions in the IRC. Indeed, this is precisely what the plain language of MCL 206.2(3) mandates. This is, of course, different than saying taxable income in a Michigan tax return is identical to taxable income in a federal tax return.
To determine whether the ITA recognizes the federal tax-benefit rule, then, we must turn to the relevant definitions. Regarding taxable income, the ITA directs that we look to the IRC’s definition of adjusted gross income. MCL 206.30(1). That definition provides that the starting point in calculating adjusted gross income is gross income. 26 USC 62. This definition is key because the tax-benefit rule pertains directly to the calculation of gross income. 26 USC 111(a); Allstate Ins Co v United States, 936 F2d 1271, 1275 (CAFed, 1991). Therefore, it follows that since the tax-benefit rule is one part of the calculus in determining a taxpayer’s federal adjusted gross income, the ITA’s own definition of taxable income necessarily permits plaintiffs to invoke the provisions of the tax-benefit rule if they are applicable to their circumstances.
2. DOES THE TAX-BENEFIT RULE APPLY HERE?
As previously noted, the plain language of the tax-benefit rule permits a taxpayer to exclude from gross income any income that is recovered during the taxable year that was previously deducted in a prior taxable year as long as that previous deduction did not reduce the taxpayer’s tax liability under the IRC. 26 USC 111(a). Here, plaintiffs seek to deduct their theft-loss recovery (i.e., the amount of their investment in Pupler recovered in bankruptcy) on their Michigan tax return. The problem is that the lost investment was not previously deducted on any prior Michigan tax return. And “in order for an amount to be excluded from gross income [under the tax-benefit rule], it must have previously been claimable as a deduction.” John Hancock Fin Servs, Inc v United States, 378 F3d 1302, 1306 (CA Fed, 2004). Thus, by its very terms, the tax-benefit rule does not permit the deduction plaintiffs now seek.
Plaintiffs point out that because they previously claimed a theft-loss deduction on their 2002 federal tax return, the tax-benefit rule is applicable in calculating their 2004 Michigan tax liability because they received no Michigan tax benefit for the deduction. This argument, however, ignores that the theft-loss deduction in 2002 was taken only in calculating plaintiffs’ federal tax return and reducing their 2002 federal tax liability for that year. Indeed, it is because the theft-loss deduction did result in a reduced tax that plaintiffs could not invoke the tax-benefit rule in calculating their 2004 federal tax return. For somewhat similar reasons, because the ITA does not provide for a theft-loss deduction, the tax-benefit rule does not apply by its very terms. Consequently, plaintiffs’ attempt to transpose their 2002 federal theft-loss deduction to their 2004 Michigan tax return is improper because it is not specific figures from a federal tax return but rather the IRC’s calculations that the ITA incorporates to determine income subject to tax.
Finally, we need to address the Department’s argument that the ITA’s implicit recognition of the federal tax-benefit rule renders other provisions of the ITA, in particular MCL 206.30(l)(s), surplusage or nugatory. MCL 206.30(l)(s) permits a deduction for state and city income tax and property tax refunds to the extent that they were included as adjusted gross income on the federal return. According to the Department, this is an application of the tax-benefit rule since a Michigan taxpayer receives no Michigan tax benefit for his federal deductions of these local taxes made in the prior year’s federal tax return.
The deduction permitted in MCL 206.30(l)(s), however, would be an exception to the rule enunciated in the analysis above since it would permit a federal deduction to trigger the tax-benefit rule to a Michigan tax return. Notwithstanding, in this respect the benefit of MCL 206.30(l)(s) is not an application of the tax-benefit rule as implicitly recognized by MCL 206.2, since the tax-benefit rule recognized by MCL 206.2 looks to previous deductions on a Michigan tax return in calculating income subject to state tax. Thus, MCL 206.2’s recognition of the tax-benefit rule does not render MCL 206.30(l)(s) surplusage or nugatory as the Department claims, nor does it create an ambiguity in the law as the Court of Claims ruled.
Nevertheless, the fact that the ITA specifically permits a taxpayer to use a deduction from federal tax returns in calculating Michigan adjusted gross income in certain circumstances (i.e., state and city taxes) and not in others (i.e., the theft-loss deduction) strongly implies that the Legislature did not intend to permit application of the tax-benefit rule to the situation at hand. See American Federation of State, Co & Muni Employees v Detroit, 267 Mich App 255, 260; 704 NW2d 712 (2005) (“Michigan recognizes the maxim ‘expressio unius est exclusio alterius; that the express mention in a statute of one thing implies the exclusion of other similar things.’ ”). In short, the tax-benefit rule is inapplicable in this case.
III. CONCLUSION
In view of the foregoing analysis, we hold that although the ITA necessarily incorporates the federal tax-benefit rule, the rule was not applicable in this case. Plaintiffs were not entitled to deduct their theft-loss recovery from their 2004 Michigan tax return. We are aware that because of our ruling today, plaintiffs will receive no Michigan tax benefit for their losses in a Ponzi scheme and, in fact, must pay additional taxes because of their theft-loss recovery. The proper forum to address this problem, however, is the Legislature and not this Court. Casco Twp v Secretary of State, 472 Mich 566, 603; 701 NW2d 102 (2005) (opinion by YOUNG, J.).
The opinion and order of the Court of Claims is hereby reversed.
No costs, a public question being involved.
Murphy, C.J., and Whitbeck and Murray, JJ., concurred.
A “Ponzi” or “Ponzi scheme” is defined as “a swindle in which a quick return on an initial investment paid out of funds from new investors lures the victim into bigger risks.” Random, House Webster’s College Dictionary (2d ed, 1997). It is named after Charles Ponzi, who was the organizer of such a scheme during 1919 and 1920. Id.
See MCL 206.30.
Plaintiffs also reported a claim-of-right deduction of $4,346,680 on their federal tax return to account for their interest repayment. When reduced by the theft-loss recovery, plaintiffs claimed a net deduction on their federal taxes of $146,520 for the bankruptcy transaction.
The tax-benefit rule provides that “[g]ross income does not include income attributable to the recovery during the taxable year of any amount deducted in any prior taxable year to the extent such amount did not reduce the amount of tax imposed by this chapter.” 26 USC 111(a).
The ITA was subsequently amended to provide for such a deduction. MCL 206.30(l)(o) and (p).
Michigan law does not provide for a,theft-loss deduction. This is so because the theft-loss deduction is taken below the line and consequently is not included in the ITA’s definition of adjusted gross income. Neither party disputes this point. | [
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DONOFRIO, EJ.
In this first-party, no-fault-insurance action, defendant, Allstate Insurance Company, appeals as of right the trial court’s order awarding plaintiff, Shirley Augustine, $327,090.60 for attorney fees and interest. The sole issue on appeal is attorney fees. Defendant maintains that, on remand, the trial court abused its discretion by awarding attorney fees to plaintiff. Because, on remand, the trial court failed to follow the directive of this Court, did not comply with the law-of-the-case rule, and did not properly apply Smith v Khouri, 481 Mich 519; 751 NW2d 472 (2008), we vacate the award of attorney fees and remand for rehearing and redetermination in accordance with this opinion.
I. FACTS AND PROCEDURAL HISTORY
This is the second time this matter is before this Court. See Augustine v Allstate Ins Co, unpublished opinion per curiam of the Court of Appeals, issued August 21, 2008 (Docket No. 276537) {Augustine I). In the first appeal, defendant challenged the trial court’s award of attorney fees in the final judgment. Id. at 1. This Court vacated the award and remanded the case for further proceedings in light of Smith, which was decided after defendant filed its appeal. Augustine I, unpub op at 1, 3. The Augustine I Court set out the substantive facts of the case as follows:
Plaintiff was seriously injured in an auto accident and sought first-party, no-fault benefits from her insurer, defendant, to pay for the permanent attendant care that she now requires. Defendant paid the benefits for two years but ceased payments over a dispute regarding plaintiffs refusal to provide more detailed documentation of the nature of her care. Plaintiff brought the instant suit and was victorious, recovering $371,700 of the $929,000 that she sought, plus interest in the amount of $42,524. Plaintiff subsequently sought attorney fees pursuant to MCL 500.3148(1) due to defendant’s “unreasonable delay” in making benefit payments. The trial court awarded attorney fees in the amount of $312,625 based upon a finding that plaintiffs attorneys had done 543.75 hours of work at $500 per hour and 51.25 hours at $300 per hour.[ ] [Id. at 1.1
Defendant appealed the final judgment, challenging the reasonableness of the award of attorney fees. After the briefs were filed, our Supreme Court decided Smith, 481 Mich at 522 (opinion by TAYLOR, C.J.), which delineated the steps a trial court must take when considering a request for attorney fees. Augustine I, unpub op at 2. This Court held that “[i]n light of the procedure set out by the Smith Court, which the trial court naturally did not follow, we must vacate the award of attorney fees and remand to the trial court to apply the procedure outlined in Smith.” Id. at 3.
In ruling in the first appeal, this Court provided specific instructions to be followed on remand, explicitly outlining the procedural steps set out in Smith for determining a reasonable attorney-fee award. Augustine I, unpub op at 2-3. This Court explained that “in determining the hourly rate, the focus is on initially finding a reasonable fee, i.e., the ‘fee customarily charged in the locality for similar legal service.’ ” Id. at 3, citing Smith, 481 Mich at 530 (opinion by TAYLOR, C.J.). It further indicated that “if warranted, the court can increase [the] rate based upon the relevant factors under Wood [v DAIIE, 413 Mich 573, 588; 321 NW2d 653 (1982)] and MRPC 1.5(a).” Id. at 3. This Court vacated the trial court’s award of attorney fees, remanding the case for the trial court “to make specific findings, consistent with Smith, on each attorney whose fees plaintiff sought to recover . ...” Id. It also explicitly instructed that, on remand, “the trial court should take care in not relying upon previous awards to these attorneys without first determining whether those other awards were for work on cases similar to this one.” Id.
A. ON REMAND
On remand, the trial court granted defendant’s request for an evidentiary hearing regarding attorney fees. Defendant requested that its expert be given the opportunity to review the entire litigation file that plaintiffs attorneys relied on in support of their itemization of fees. Defendant argued that it needed to see if all the work that was attributed to the attorneys was reflected in the file in order to test the accuracy of the billings against the alleged work product. Plaintiff maintained that the request for the file went far beyond what was argued during the first appeal and that she feared that defendant would publish the contents of the file. Though defendant was willing to accept the file with redactions under a protective order, plaintiff argued that it was improper to allow defendant access to the attorneys’ work product and privileged communications. Plaintiff contended that the entire file was privileged and that without the privileged information there would be nothing left for defendant’s expert to review other than the billing summary. The trial court ruled that defendant could not see the litigation file unless it was used at the evidentiary hearing to refresh the recollection of an attorney witness, in which case the file would then be made available.
B. EVIDENTIARY HEARING
On October 9, 2009, the trial court conducted an evidentiary hearing on fees. It was established that the law firm of Liss, Seder & Andrews gave plaintiff the option of paying an hourly fee of $500 or entering into a contingency-fee arrangement for representation. The $500 hourly fee was based on factors such as the law firm’s experience, track record, commitments made to other clients, and limited resources, and the difficulty of handling catastrophic no-fault-insurance cases. Plaintiff chose to enter into a contingency-fee arrangement.
Plaintiffs trial attorney, Nicholas Andrews, prepared the billing summary as part of his trial preparation and completed the summary after the trial. Liss, Seder & Andrews did not have an “office procedure or methodology” for keeping track of the time expended on cases on a daily basis. Senior partner Arthur Liss testified that he never made his time entries contemporaneously with his work. Andrews testified that he may have used an Excel spreadsheet or office notes to assist in the preparation of a billing summary. The minimum time increment for billing was 0.25 hours. Plaintiff s attorneys indicated that a significant amount of the time that the firm actually expended on the case was not billed and emphasized that these types of cases required extensive discussion between the attorneys in the office to strategize. The trial court admitted into evidence in support of the firm’s claim for 625.25 hours the firm’s billing summary, a listing of the dates of service, the identification of each of the four lawyers who provided a service, a brief description of the service provided, and a time entry. Liss and Andrews testified regarding their expertise, experience, trial results, and other fee awards that they had each received. Plaintiff also produced letters from four attorneys that had been sent to plaintiffs attorneys regarding the fees they charged and were awarded in similar cases. Though the trial court recognized the letters as being self-serving, the trial court admitted the letters into evidence over defendant’s objection because they were records kept in the ordinary course of business.
Defense counsel James Borin testified for the defense. The trial court admitted Borin’s law firm’s billing statement that reflected hourly charges totaling 252.8 hours. The trial court also admitted a survey of the hourly rates of approximately 208 attorneys authorized to conduct mediation in Oakland County during the relevant time. The trial court also admitted the State Bar of Michigan’s 2007 Economics of Law Practice survey on hourly billing rates. Defendant also produced Thomas H. Blaske, who testified as an expert regarding attorney fees. Blaske provided testimony regarding plaintiffs counsel’s practice, hourly rates, and allegedly excessive charges based on plaintiffs counsel’s billing summary alone. He also stated that he was unable to provide a complete analysis of the reasonableness of plaintiffs attorneys’ services because he did not have plaintiffs litigation file to cross-check the services enumerated.
C. OPINION OF THE TRIAL COURT
On December 30, 2009, the trial court issued an opinion and order that was later reduced to a judgment. The trial court acknowledged the remand order from this Court and then proceeded to perform an analysis of the evidence submitted. The trial court addressed the reasonableness of the hourly fee and, in making that determination, relied on the factors set forth in Wood, 413 Mich at 588, Crawley v Schick, 48 Mich App 728, 737; 211 NW2d 217 (1973), and MRPC 1.5 as referred to in Smith, 481 Mich at 529-532 (opinion by TAYLOR, C.J.). The trial court commented on the arguments of the attorneys, the witnesses testimony, and generally on the character of the evidence regarding each party’s view of the reasonable local fee that should be used. The trial court opined that these cases (the underlying action for attendant-care services) are among the most complex civil cases. The trial court observed that Andrews had a long relationship with the client, having represented her in a previous attendant-care dispute with the same carrier, and had obtained good results in both cases. In summary, the trial court held that there was no dispute with regard to the costs incurred and billed, that the fee arrangement was contingent, that Blaske was well recognized as an expert, but that his opinion on fees in Oakland County based on the mediator pool survey would not be credited, that the charge of $500 an hour was reasonable, and that the reasonable number of hours was 537.5. Ultimately, the trial court awarded $250,000 in attorney fees. This appeal followed.
II. DISCOVERY
First, defendant argues that the trial court committed error requiring reversal by denying defendant’s discovery request for plaintiffs entire litigation file. Generally, we review the grant or denial of a discovery motion for an abuse of discretion. Linebaugh v Sheraton Mich Corp, 198 Mich App 335, 343; 497 NW2d 585 (1993). An abuse of discretion is not simply a matter of a difference in judicial opinion, rather it occurs only when the trial court’s decision is outside the range of reasonable and principled outcomes. Saffian v Simmons, 477 Mich 8, 12; 727 NW2d 132 (2007).
Whether the attorney-client or work-product privilege may be asserted is a question reviewed de novo by this Court. Leibel v Gen Motors Corp, 250 Mich App 229, 236; 646 NW2d 179 (2002); Koster v June’s Trucking, Inc, 244 Mich App 162, 168; 625 NW2d 82 (2000). Whether a party has waived a privilege is also a question of law that this Court reviews de novo. Leibel, 250 Mich App at 240. Once we determine whether the privilege is applicable, this Court then reviews whether the trial court’s order was an abuse of discretion. Reed Dairy Farm v Consumers Power Co, 227 Mich App 614, 618; 576 NW2d 709 (1998).
“It is well settled that Michigan follows an open, broad discovery policy that permits liberal discovery of any matter, not privileged, that is relevant to the subject matter involved in the pending case.” Id. at 616, citing MCR 2.302(B)(1). This is true “whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of another party.” Cabrera v Ekema, 265 Mich App 402, 407; 695 NW2d 78 (2005), citing MCR 2.302(B)(1). However, “Michigan’s commitment to open and far-reaching discovery does not encompass fishing expedition[s].” VanVorous v Burmeis ter, 262 Mich App 467, 477; 687 NW2d 132 (2004) (quotation marks and citation omitted). “Allowing discovery on the basis of conjecture would amount to allowing an impermissible fishing expedition.” Id.
MCR 2.302(B)(1) limits discovery to matters that are not privileged. “The attorney-client privilege attaches to direct communication between a client and his attorney as well as communications made through their respective agents.” Reed Dairy Farm, 227 Mich App at 618. “The scope of the attorney-client privilege is narrow, attaching only to confidential communications by the client to his advisor that are made for the purpose of obtaining legal advice.” Id. at 618-619. “Although either [the attorney or the client] can assert the privilege, only the client may waive the privilege.” Kubiak v Hurr, 143 Mich App 465, 473; 372 NW2d 341 (1985).
This Court has also recognized the common-law privilege protecting the disclosure of attorney work product. Messenger v Ingham Co Prosecutor, 232 Mich App 633, 638; 591 NW2d 393 (1998). The work-product doctrine protects from discovery the notes, working documents, and memoranda that an attorney prepares in anticipation of litigation. Leibel, 250 Mich App at 244. MCR 2.302(B)(3)(a) provides:
Subject to the provisions of subrule (B)(4), a party may obtain discovery of documents and tangible things otherwise discoverable under subrule (B)(1) and prepared in anticipation of litigation or for trial by or for another party or another party’s representative (including an attorney, consultant, surety, indemnitor, insurer, or agent) only on a showing that the party seeking discovery has substantial need of the materials in preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.
“Thus, if a party demonstrates the substantial need and undue hardship necessary to discover work product, that party may discover only factual, not deliberative, work product.” Leibel, 250 Mich App at 247 (quotation marks and citation omitted). Like the attorney-client privilege, a party may waive work-product protections. Id. at 248.
The trial court did not directly address the issue of privilege in its ruling and defendant acknowledges that it was not seeking information protected by the attorney-client privilege. The trial court simply held that the file was not available to defendant unless a question was asked of an attorney witness at the evidentiary hearing and the file was necessary to refresh the attorney witness’s recollection.
The nature of a request for discovery in a claim such as that presented here for attorney fees allowable pursuant to MCL 500.3148(1) must be carefully scrutinized. A request for discovery that constitutes an attempt to invade the attorney-client relationship or to discover the mental impressions and strategies generally employed by opposing counsel must be rejected. But the reasonableness of an attorney-fee claim cannot be assessed in a vacuum. At the time of the discovery request, defendant had been provided a simple, albeit lengthy, billing statement without any corroboration of the time reflected. Defendant knew that plaintiffs attorneys’ law firm did not maintain a time-billing procedure and that lawyers of the firm did not make contemporaneous time entries. Further, defendant knew that the summary billing statement presented in support of an attorney-fee award was a retrospective exercise based on memory and possibly some office notes or Excel spreadsheets. Defendant could only compare dates from its own counsel’s billing statement with plaintiffs summary to determine if there was a comparable match. If there were logs, reports, summaries, or spreadsheets that would tend to corroborate the billing statement, they could be provided with the redaction of any impressions or thoughts on future work or strategies. In other words, counsel for plaintiff could provide a copy of the litigation file with all items that include the mental impressions, thoughts, or strategies of counsel broadly and completely redacted. The “sanitized” file would clearly be useful in corroborating and validating time claims to determine a reasonable attorney fee. Carefully redacting the litigation file would assuage the trial court’s concern that there was nothing to stop defendant’s attorney from obtaining strategy information from the litigation file that could be used in subsequent cases against plaintiffs attorneys. The trial court’s failure to even entertain such a procedure seems highly unreasonable and therefore an abuse of discretion.
A review of the evidentiary hearing causes concern regarding the likelihood that an honest and fair determination of fees could be awarded on this record. Blaske testified as an expert but he could not offer a complete analysis of the reasonableness of plaintiffs conduct, charges, or time on the billing summary without some materials from which to extrapolate. Starkly, the litigation file was noticeably absent. Notwithstanding defendant’s attempt to serve a subpoena for the file by certified mail before the evidentiary hearing, plaintiff refused the mail. During the evidentiary hearing, neither Liss nor Andrews referred to the litigation file, and both denied having reviewed any of it in preparation for the hearing. As a result, the testimony was replete with speculation, conjecture, and a denial of knowledge. Liss testified at the evidentiary hearing that the billing statement did not refresh his recollection of what he did or the time spent on any listed service. Both of plaintiffs lead counsel lacked any specific memory of the time spent on any series of billable events. This is curious. In the end, all that one could reasonably glean from the testimony of plaintiffs attorneys concerning the summary billing statement was that they submitted it, therefore they believed that it was correct, and in fact, they believed that it was an underestimate of the time spent on the matter.
The burden of proving the reasonableness of a request for attorney fees rests with the party requesting it. Smith, 481 Mich at 528-529 (opinion by TAYLOR, C. J.). Here, in the absence of any meaningful discovery, no genuine inquiry could be made of the party requesting the fees and concomitantly no real challenge could be made by the party opposing the fee request. Under these circumstances, defendant has met its burden of showing the need for review of properly redacted trial-preparation materials as contemplated by MCR 2.302(B)(3)(a) because it has demonstrated a substantial need for the materials and a lack of other reasonable avenues for obtaining the information. The failure of the trial court to grant discovery when defendant agreed to redacted materials and a protective order as provided in the rule is not a principled outcome because it denied defendant a fair opportunity to be meaningfully heard on the issue.
III. DETERMINATION OF ATTORNEY FEES
Interpreting the meaning of a court order involves questions of law that are reviewed de novo. Silberstein v Pro-Golf of America, Inc, 278 Mich App 446, 460; 750 NW2d 615 (2008). This Court also reviews de novo the question of law whether the trial court followed this Court’s ruling on remand. Schumacher v Dep’t of Natural Resources, 275 Mich App 121, 127; 737 NW2d 782 (2007). Similarly, this Court reviews de novo the determination whether the law-of-the-case doctrine applies and to what extent it applies. Kasben v Hoffman, 278 Mich App 466, 470; 751 NW2d 520 (2008).
This Court generally reviews for an abuse of discretion a trial court’s decision to award attorney fees and the determination of the reasonableness of the fees. In re Temple Marital Trust, 278 Mich App 122, 128; 748 NW2d 265 (2008); Hines v Volkswagen of America, Inc, 265 Mich App 432, 438; 695 NW2d 84 (2005). Again, an abuse of discretion occurs when the trial court’s decision is outside the range of reasonable and principled outcomes. Saffian, 477 Mich at 12.
“[T]he decision whether to admit or exclude evidence is reviewed for an abuse of discretion.” Elezovic v Ford Motor Co, 472 Mich 408, 419; 697 NW2d 851 (2005). “Evidentiary errors are not a basis for vacating, modifying, or otherwise disturbing a judgment unless declining to take such action would be inconsistent with substantial justice.” Miller v Hensley, 244 Mich App 528, 531; 624 NW2d 582 (2001).
This Court “review[s] the trial court’s factual findings for clear error.” Brandt v Brandt, 250 Mich App 68, 72; 645 NW2d 327 (2002). There is clear error when there is “no evidentiary support for [the factual findings] or where there is supporting evidence but the reviewing court is nevertheless left with a definite and firm conviction that the trial court made a mistake.” Hill v City of Warren, 276 Mich App 299, 308; 740 NW2d 706 (2007). “This Court affords great deference to the special opportunity of the trial court to judge the credibility of the witnesses who appeared before it.” Lumley v Univ of Mich Bd of Regents, 215 Mich App 125, 135; 544 NW2d 692 (1996).
A. LAW-OF-THE-CASE DOCTRINE
Defendant argues that the trial court abused its discretion by awarding attorney fees on remand because it failed to comply with this Court’s remand directive. Under the law-of-the-case doctrine, this Court’s determination of an issue in a case binds both the trial court on remand and this Court in subsequent appeals. Grievance Administrator v Lopatin, 462 Mich 235, 260; 612 NW2d 120 (2000). On remand, the trial court may not take action that is inconsistent with the judgment of this Court. Id. “[T]he trial court is bound to strictly comply with the law of the case, as established by [this Court], according to its true intent and meaning.” Kasben, 278 Mich App at 470 (quotation marks and citation omitted). “Thus, a question of law decided by an appellate court will not be decided differently on remand or in a subsequent appeal in the same case.” Driver v Hanley (After Remand), 226 Mich App 558, 565; 575 NW2d 31 (1997). “This rule applies ■without regard to the correctness of the prior determination.” Id. “Where the trial court misapprehends the law to be applied, an abuse of discretion occurs.” Bynum v ESAB Group, Inc, 467 Mich 280, 283; 651 NW2d 383 (2002).
In remanding the case in the first appeal, this Court explicitly directed “the trial court to make specific findings, consistent with Smith, on each attorney whose fees plaintiff sought to recover----” Augustine I, unpub op at 3. This Court clearly ordered the trial court to complete a Smith analysis to determine the award of attorney fees. In Smith, 481 Mich at 537 (opinion by TAYLOR, C.J.), our Supreme Court outlined very specific steps for determining reasonable attorney fees. First, the trial court should “determine the fee customarily charged in the locality for similar legal services,” which shall be made using “reliable surveys or other credible evidence.” Id. To establish the customarily charged fee, the fee applicant must present “something more than anecdotal statements . . . .” Id. at 532. Next, the trial court “should multiply that amount by the reasonable number of hours expended in the case.” Id. at 537. Finally, the trial court “may consider making adjustments up or down to this base number in light of the other factors listed in Wood and MRPC 1.5(a).” Id. The trial court “should briefly indicate its view of each of the factors.” Id.
Given the remand directive, the trial court’s award of attorney fees was an abuse of discretion under the law-of-the-case doctrine because the trial court failed to make specific findings consistent with Smith. It did not comply with the first step in the Smith analysis, which is to determine the fee customarily charged in the locality for similar legal services. Though the trial court discussed the evidence presented regarding the fee customarily charged in the locality for similar legal services, it did not conclude that $500 an hour was the fee customarily charged. As stated in Smith, 481 Mich at 531-532 (opinion by TAYLOR, C.J.):
The reasonable hourly rate represents the fee customarily charged in the locality for similar legal services, which is reflected by the market rate for the attorney’s work. The market rate is the rate that lawyers of similar ability and experience in the community normally charge their paying clients for the type of work in question. We emphasize that the burden is on the fee applicant to produce satisfactory evidence-in addition to the attorney’s own affidavits-that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation. The fees customarily charged in the locality for similar legal services can be established by testimony or empirical data found in surveys and other reliable reports. But we caution that the fee applicant must present something more than anecdotal statements to establish the customary fee for the locality. Both the parties and the trial courts of this state should avail themselves of the most relevant available data. For example, as noted earlier, in this case defendant submitted an article from the Michigan Bar Journal regarding the economic status of attorneys in Michigan. [Quotation marks, citations, and footnote omitted.]
In the instant case, the trial court apparently failed to credit the Michigan Bar Journal article in its calculus of the appropriate hourly rate. The Michigan Bar Journal article not only ranks fees by percentile, it differentiates fee rates on the basis of locality, years of practice, and fields of practice. Further, the record was silent in drawing any comparisons between no-fault-insurance litigation and other complex areas of litigation. The trial court simply accepted the testimony that the area of the law was complex. This is undoubtedly so, however, the trial court excluded from its analysis evidence of other complex areas of litigation that may rival no-fault-insurance litigation in complexity and for which a published fee is established. Also, amazingly absent from the testimony, evidence of anecdotal experiences, and other statements was any substantive evidence that real, actual clients have paid $500 an hour in similar circumstances. Ultimately, the language of the trial court’s opinion and order indicates that it simply found that $500 an hour was a reasonable fee in a first-party, no-fault-insurance case on the basis of its review of the criteria set forth in Crawley, 48 Mich App at 737, and MRPC 1.5. But, importantly, the trial court did not find that $500 an hour was the fee customarily charged in the locality for similar legal services. The trial court then multiplied the rate of $500 an hour by the reasonable number of hours expended, but did not make the determination whether an upward or downward adjustment was appropriate on the basis of the Wood and MRPC 1.5(a) factors as our Supreme Court discussed in Smith, 481 Mich at 537 (opinion by TAYLOR, C.J.).
Not only did the trial court fail to make specific findings consistent with Smith generally, but it also failed to make findings regarding each attorney whose fees plaintiff sought to recover. The trial court’s opinion and order indicated, “[o]ther attorneys in the office were involved at various time [sic] and they will be discussed later,” but the trial court never addressed them later in the opinion. The only attorneys that the trial court highlighted were Andrews and Liss. In the first award of attorney fees, the trial court discussed the rate of $300 an hour for attorneys Karen Seder and Jay Schrier. Augustine I, unpub op at 1. Presumably these were the “other attorneys.” But, on remand, the trial court failed to refer to Seder and Schrier, and the trial court curiously did not include the rate of $300 an hour in its attorney-fee calculation.
The law-of-the-case doctrine “applies without regard to the correctness of the prior determination,” and this Court is bound by the decision on a question of law made by a panel of this court in the first appeal. Driver, 226 Mich App at 565. While plaintiff highlights cases regarding the applicability of Smith and the failure to address Smith, these references to no-fault-insurance attorney-fee cases, interesting as they may be, are wholly irrelevant. Smith is controlling as the law of the case, and the trial court was required to follow this Court’s remand directive to make findings consistent with Smith. But, even were it not the law of this case as a result of Augustine I, the trial court should have applied Smith, because the framework outlined in Smith is the proper standard to be applied in cases brought pursuant to MCL 500.3148(1) when a party seeks hourly attorney fees. Thus, the trial court abused its discretion because it misapprehended the law to be applied, the award of attorney fees was inconsistent with our remand directive, and the trial court did not properly apply Smith.
B. ATTORNEY LETTERS IN SUPPORT OF FEE CALCULATION
Defendant also contends that the trial court erred by admitting, over defendant’s relevance and hearsay objections, four letters written by attorneys who had litigated catastrophic no-fault-insurance cases in which letters they discussed their hourly fees. “ ‘Hearsay’ is a statement, other than the one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” MRE 801(c). In Int’l Union, United Auto, Aerospace & Agricultural Implement Workers of America v Dorsey (On Remand), 273 Mich App 26, 41-42; 730 NW2d 17 (2006), quoting People v Katt, 468 Mich 272, 290-291; 662 NW2d 12 (2003), we stated:
[I]n order to be admissible under the exception found in MRE 803(24), “a hearsay statement must: (1) demonstrate circumstantial guarantees of trustworthiness equivalent to the categorical exceptions, (2) be relevant to a material fact, (3) be the most probative evidence of that fact reasonably available, and (4) serve the interests of justice by its admission.” There is no complete list of factors to consider when determining whether a statement has “ ‘ “particularized guarantees of trustworthiness.” ’ ” [Citation omitted.]
Because there is no complete list of factors to consider when determining whether a statement has particularized guarantees of trustworthiness, the trial court should consider the totality of the circumstances. Dorsey, 273 Mich App at 42. Any factors that detract from or add to the reliability of the statement should be taken into consideration. Id.
At the hearing, plaintiff argued that the four letters from the attorneys should be admitted under the “catch-all” exception because they were inherently reliable. Instead of articulating the reason that the letters were inherently reliable, plaintiff simply argued:
[Y]our Honor, you’re the gatekeeper of evidence. We do not have a juror [sic]. As the gatekeeper of all evidence in any case, you can make the determination both of reliability and what weight to give any particular document. As you said earlier, this is essentially a bench trial, and I think that you can use the catch-all to make that determination.
The trial court responded, “[a]nd that’s exactly what I’m going to do. I will accept these in evidence based upon that, the same way I will not entertain any objection to [defendant’s Oakland County courthouse compilation of fees for mediators] . . . because I think they fall in the same class . ...”
The trial court abused its discretion by admitting the letters into evidence because they were not admissible under MRE 803(6) or (24). The letters were hearsay because they contained statements that were not made by any declarant testifying at the trial or hearing and were offered in evidence to prove the truth of the matter asserted. MRE 801(c). The letters were not admissible under MRE 803(6) because they were not business records. Rather, the letters were nothing more than responses to solicitations by plaintiffs counsel in form and content for use in supporting the demand for an attorney fee of $500 an hour. The attorneys solicited had all referred similar cases to plaintiffs attorneys’ law firm. Similarly, the letters were not admissible under MRE 803(24) because they did not satisfy the elements of this exception. At the evidentiary hearing, there was no evidence offered to demonstrate that there existed circumstantial guarantees of trustworthiness equivalent to the categorical exceptions in MRE 803(1) to (23). Considering the totality of the circumstances, the letters were not sufficiently trustworthy because they were prepared exclusively for litigation, they were all favorable to plaintiff, the attorneys who wrote the letters had reason to exaggerate because it might ben efit their attorney-fee awards in the future, and there was no independent evidence presented to support the attorneys’ claims that their rates were $500 an hour. Despite the fact that the letters tended to establish a material fact, they were not the most probative evidence regarding that fact that the plaintiff could have produced through reasonable efforts.
C. HOURS AND FUNCTION
Defendant also argues that the trial court abused its discretion by assessing the number of hours allowed for the attorney-fee calculation. “The fee applicant bears the burden of supporting its claimed hours with evidentiary support.” Smith, 481 Mich at 532 (opinion by TAYLOR, C.J.). “The fee applicant must submit detailed billing records, which the court must examine and opposing parties may contest for reasonableness.” Id.
Because of the meager state of the record, the trial court’s finding that plaintiff’s attorneys expended 537.5 hours instead of the 595 hours claimed is not subject to meaningful review. The evidentiary hearing established only that plaintiff claimed the amount of hours listed. While the billing summary supported the hours plaintiff’s attorneys claimed they expended, the testimony provided in its support was so overwhelmingly lacking in substance and description that any statement of hours spent on a particular task is suspect for accuracy. Notably, plaintiff had the burden of supporting the claim for fees. But plaintiff did not demonstrate by a document, an example, or with specific testimony that a billable item was performed in the amount of time listed or, for that matter, even completed. The billing summary alone did not explain the work that was actually performed by plaintiff’s attorneys, as shown by the fact that the billing summary did not refresh Liss’s memory regarding what work he did on a particular entry. While defendant was able to cross-examine plaintiff’s attorneys with regard to the time they spent on the case and presented an expert who rendered an opinion on some of the hours expended as they appeared on the face of the document, defendant’s cross-examination was substantially limited by the absence of litigation materials.
Our review of the record reveals that plaintiff requested attorney fees in her complaint. Considering the fact that plaintiff’s counsel requested attorney fees from the very outset of the underlying claim, we are befuddled by the fact that plaintiff’s attorneys claim they had no billing protocol to account for those fees and did not set one up. In today’s technological world, it would be but a minute task to set up a spreadsheet detailing the date of the service, the service provided, the time expended on the task, and the amount charged for the specific service that could be updated and summed at any time. Indeed, it would seem a handwritten ledger might even do. Plaintiff’s attorneys allege that they are top-tier attorneys with exceptional experience in their field. We do not challenge this point. But we do find it inconceivable that attorneys of this caliber and experience would be unaware of the requirements of Smith and would not keep adequate records in support of their claims for attorney fees, especially considering the amount of time and talent expended on this case. As a result of these deficiencies, plaintiff did not and could not point to any documentary support for the work performed and the amount of time spent on any task in the absence of counsel’s file. Consequently, counsel for defendant was effectively handcuffed by the re fusal of discovery and plaintiffs strategy of not bringing her counsel’s file to the evidentiary hearing.
On the basis of the evidence presented, the trial court made the finding that the billings were unreasonable in certain areas. Indeed, we afford great deference to the special opportunity of the trial court to judge the credibility of the witnesses at the evidentiary hearing. Lumley, 215 Mich App at 135. But because so many areas went unexplored and remained undocumented after the hearing, we must conclude that the trial court’s finding of the hours expended by plaintiffs attorneys was clearly erroneous. Hill, 276 Mich App at 308. We question the value of an evidentiary hearing where the evidence reviewed was restricted and the areas explored so narrow. A hearing on remand will necessarily require expansion. Because we have found that the trial court clearly erred in its assessment of the number of hours allowed for the attorney-fee calculation, we conclude that the trial court’s calculation of attorney fees on this record was erroneous. See id.
D. SMITH, WOOD, AND MRPC 1.5(a) FACTORS
The Wood factors and the MRPC 1.5(a) factors used for determining attorney-fee awards overlap and are both set forth in Smith, 481 Mich at 530-531 (opinion by TAYLOR, C.J.). According to Smith, the six factors to be considered in determining a reasonable attorney fee that were set out in Wood are
“(1) the professional standing and experience of the attorney; (2) the skill, time and labor involved; (3) the amount in question and the results achieved; (4) the difficulty of the case; (5) the expenses incurred; and (6) the nature and length of the professional relationship with the client.” [Smith, 481 Mich at 529 (opinion hy TAYLOR, C.J.), quoting Wood, 413 Mich at 588 (citations omitted).]
The Smith Court also set out the eight factors listed in Rule 1.5(a) of the Michigan Rules of Professional Conduct to be considered in determining a reasonable attorney fee, as follows:
“(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
“(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
“(3) the fee customarily charged in the locality for similar legal services;
“(4) the amount involved and the results obtained;
“(5) the time limitations imposed by the client or by the circumstances;
“(6) the nature and length of the professional relationship with the client;
“(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
“(8) whether the fee is fixed or contingent.” [Smith, 481 Mich at 530 (opinion by TAYLOR, C.J.), quoting MRPC 1.5(a).]
In Smith, the Supreme Court endeavored to “fine-tune” the multifaceted and intersecting approach for determining fee awards set out in both Wood and MRPC 1.5(a). Smith, 481 Mich at 530 (opinion by TAYLOR, C.J.). In order to promote greater consistency in attorney-fee awards, Smith directed that a trial court should begin its analysis by first applying factor 3 under MRPC 1.5(a) (“the fee customarily charged in the locality for similar legal services”) and then multiplying that number by the reasonable number of hours expended as determined by factor 1 under MRPC 1.5(a) and Wood factor 2 (“the reasonable number of hours expended in the case”), in that order. Smith, 481 Mich at 530-531 (opinion by TAYLOR, C.J.). And then, our Supreme Court directed that the trial court should consider the remaining Wood and MRPC factors. Id. at 531. Our Supreme Court reminded trial courts to discuss the Wood and MRPC 1.5(a) factors in a manner sufficient “to aid appellate review ....” Id.
A meaningful application of the factors is more than a recitation of those factors prefaced by a statement such as “after careful review of the criteria the ultimate finding is as follows . . . .” Similarly, an analysis is not sufficient if it consists merely of the recitation of the factors followed by a conclusory statement that “the trial court has considered the factors and holds as follows ...” without clearly setting forth a substantive analysis of the factors on the record. The trial court should consider the interplay between the factors and how they relate to the client, the case, and even the larger legal community.
Here, the trial court acknowledged the fee-consideration factors, but provided little analysis or insight into the application of those factors to the client or the case. By way of example, the trial court noted that the fee agreement was contingent. MRPC 1.5(a)(8). Aside from that observation, the trial court presented no other information and did not explain the import of the fact that the fee agreement was contingent in the context of its determination of fees. It might be an insightful exercise for a trial court to look at what the fee would have been on such a basis and compare that to the fee actually being sought.
The trial court also commented that the attorney achieved “good” results from this litigation as well as from a prior dispute involving the same insurance carrier. In its discussion of Wood factor 3 (“the amount in question and the results achieved”), in assessing attorney fees, this Court has stated that a reasonable fee is proportionate to the results achieved. The trial court may in its discretion adjust fees upward or downward. Schellenberg v Rochester, Mich, Elks Lodge No 2225, 228 Mich App 20, 44-45; 577 NW2d 163 (1998). Rather than making a blanket announcement that the result of the litigation was “good,” the trial court was charged with evaluating the results obtained in the context of the claim presented. For example, in the instant case, plaintiff claimed $929,000 in attendant-care services at a rate of $25 an hour. The jury awarded $371,700 for those services. At $929,000 and $25 an hour, the total hours claimed would amount to 37,160 hours. The amount awarded, $371,700, when compared to 37,160 hours produces an effective hourly rate of just over $10 an hour. At the time of the termination of benefits when plaintiff refused to provide an update regarding the need for and the amount of the attendant-care services required, defendant was paying $18 an hour for attendant-care services. While this mathematical review may not necessarily reflect the jury’s analysis of the case, the jury may have determined a higher rate for services, but fewer hours, such an analysis may be beneficial when determining an attorney-fee rate with an upward or downward departure.
The trial court also commented that counsel had a long relationship with the client, having represented her in a previous attendant-care dispute with the same carrier. The nature and length of the professional relationship with the client is considered in both MRPC 1.5(a)(6) and Wood factor 6. Smith, 481 Mich at 529-530 (opinion by TAYLOR, C.J.). A long and storied professional relationship has many implications. While we do not endeavor to paint with a broad brush, practicality compels us to point out that knowledge gained in previous litigation involving the same attorney, client, and opposing insurance carrier may result in certain efficiencies. Further, it is not uncommon in the practice of law to provide discounted fees to repeat clients for these same reasons. Fairness dictates that under these and similar circumstances, the trial court may want to consider whether any services performed were unnecessarily duplicative.
When a trial court entertains a discussion of attorney-fee factors and analyzes those factors by way of a searching inquiry into the record evidence, the parties benefit by receiving a true and fair attorney-fee award. Additionally, in the event of a challenge, the appellate process will be enhanced because we will have the opportunity for meaningful review. Our discussion is not exhaustive, and is only provided as a representative method that trial court’s may consider in performing attorney-fee analysis in accordance with our Supreme Court’s directives in Smith, 481 Mich at 530-531 (opinion by TAYLOR, C.J.).
IV CONCLUSION
We conclude that the trial court abused its discretion by failing to provide defendant limited discovery in order to allow a meaningful examination of the issue of an award of attorney fees pursuant to MCL 500.3148(1). The trial court also abused its discretion because it misapprehended the law to be applied and the award of attorney fees was inconsistent with our remand directive. The trial court abused its discretion by admitting the four letters by the attorneys into evidence because they were neither admissible under MRE 803(6) nor admissible under 803(24). And, the trial court clearly erred in its award of attorney fees because the assessment of the work performed and the number of hours expended both fail for want of evidentiary support.
We vacate the trial court’s award of attorney fees and remand this case to the trial court for rehearing and redetermination in accordance with this opinion. We direct the trial court to make specific findings, consistent with Smith, for each attorney whose fees plaintiff sought to recover. We refer this matter, on remand, to the Honorable Nanci J. Grant, the trial judge assigned in this matter, rather than a visiting judge.
Defendant may tax costs as the prevailing party pursuant to MCR 7.219. We do not retain jurisdiction.
Cavanagh and Stephens, JJ., concurred with Donofrio, EJ.
Notwithstanding a contingency-fee agreement, plaintiff sought attorney fees on an hourly basis. Of the $312,625 the trial court awarded, $287,250 represented the actual attorney fees ordered. Augustine I, unpub op at 2 (“ ‘[T]he Court will allow 543.75 hours at $500.00 per hour and 51.25 hours at $300.00 per hour for a total of $287,250.00.’ ”).
We are not unmindful of this Court’s opinion in Univ Rehab Alliance, Inc v Farm Bureau Gen Ins Co of Mich, 279 Mich App 691; 760 NW2d 574 (2008), in which this Court rejected the applicability of Smith in the context of an award of attorney fees based on an unreasonable delay in paying no-fault-insurance benefits. But that case is distinguishable on its facts. While the plaintiff in Univ Rehab and plaintiff in the instant case both retained counsel under a contingent-fee agreement, only the plaintiff in Univ Rehab sought to recover an attorney-fee award pursuant to that agreement. Plaintiff here sought recovery of attorney fees on an hourly basis, rejecting her own contingency-fee agreement. Univ Rehab rejected the applicability of Smith to contingent-fee awards under MCL 500.3148(1), stating that “a reasonable attorney fee is determined by considering the totality of the circumstances. While a contingent fee is neither presumptively reasonable nor presumptively unreasonable, multiplying the reasonable number of hours worked by a reasonable hourly rate is not the preferred method.” Univ Rehab, 279 Mich App at 700. Certainly, the Wood and MRPC 1.5(a) factors as reflected in Smith would be considered under the totality of the circumstances in an evaluation of the reasonableness of a fee request based on a contingency-fee agreement. Unlike in Smith, the trial court is not required to first establish a base rate in its analysis of the reasonableness of the fee request based on a contingency-fee agreement. Here, plaintiff has rejected her contingency-fee agreement and seeks to have an hourly rate employed in the determination of a reasonable attorney fee. This is a completely different situation than the situation presented in Univ Rehab. Plaintiff here sought to recover an award of attorney fees on an hourly basis under MCL 500.3148(1). And while we conclude that the Smith, 481 Mich at 537 (opinion by Taylor, C. J.), analysis is controlling and should be applied here because it is the law of the case, we similarly conclude that it is the appropriate analysis and should be applied under these and similar circumstances where plaintiffs seek recovery of attorney fees on an hourly basis pursuant to MCL 500.3148(1). | [
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Per CURIAM.
In this action for breach of contract and fraud, defendant, Jovica Ristich, appeals as of right the trial court’s January 25, 2010, order denying defendant’s motion to set aside a default and entering a default judgment in favor of plaintiff Huntington National Bank. We affirm.
i
On October 1, 2009, plaintiff filed a complaint against defendant alleging two counts of breach of contract and one count of fraud. Plaintiff alleged that defendant breached (1) a June 2009 personal loan agreement in which defendant obtained approximately $55,000 in financing for a 2008 BMW 6 Series automobile and (2) a June 2009 personal credit-line agreement in which defendant obtained $25,000. According to plaintiff, defendant did not grant it a security interest in the BMW pursuant to the loan agreement, and he misrepresented his yearly income on his applications for the loan and credit line.
On October 5, 2009, defendant was personally served with a copy of the summons and complaint. Nine days later, defendant, proceeding in propria persona, moved the trial court for an evidentiary hearing and a stay of the proceedings. Defendant asserted that he believed the FBI, the United States Secret Service, and a special agent were investigating him for “the same allegations contained in the Complaint in this case.” Defendant also asserted that
if he [were] required to answer the Complaint and compelled to proceed in [the] cause of action, his responses could be utilized against him if charged by the U.S. Attorney’s Office and this obligation would violate his fifth amendment rights guaranteed under the United States Constitution and art 1, § 17 of the Michigan Constitution of 1962.
Defendant, therefore, requested that the trial court conduct an evidentiary hearing and stay the proceedings to “protect his constitutional rights.” He did not file an answer to the complaint.
Plaintiff subsequently requested, and the county clerk entered, a default against defendant “for failure to plead or otherwise defend as provided by law.” Plaintiff then moved for findings of fact and a default judgment against defendant. Plaintiff also filed a response to defendant’s motion for an evidentiary hearing and a stay of the proceedings, arguing that it was entitled to have defendant respond to the complaint and to a discovery record of his assertion of the privilege against self-incrimination in response to each question plaintiff asked. Plaintiff argued that defendant could not make a blanket assertion of the privilege against self-incrimination by refusing to file an answer and that defendant had failed to “provide support in the record” to warrant an evidentiary hearing.
At a January 4, 2010, hearing, the trial court denied defendant’s motion for an evidentiary hearing and a stay of the proceedings because a default had been entered against him. The court opined that the arguments defendant raised in his motion were insufficient, stating that defendant could not “just wave a magic wand because he’s been indicted and say I’m immune from civil process.” The court instructed defendant to answer the complaint and answer each allegation specifically and to raise the privilege against self-incrimination in response to each paragraph that he believed he could not answer so that the court could determine whether it was a sufficient response to the complaint. Finally, the court instructed defendant to move the court in writing if he wished to set aside the default.
Thereafter, plaintiff again moved for findings of fact and a default judgment against defendant. Defendant moved to set aside the default, arguing that manifest injustice would result if the court allowed the default to stand because his motion for an evidentiary hearing and a stay of the proceedings constituted “other action permitted by law” under MCR 2.108(A)(1) and a defense under MCR 2.603(A)(1). Defendant also submitted an affidavit of meritorious defense. In the affidavit, defendant stated: “I have a meritorious defense to Plaintiffs complaint in that I dispute the amount of the debt owed.”
At a January 25, 2010, hearing, the trial court denied defendant’s motion to set aside the default. The court stated that “there may be” good cause to set aside the default, but “it’s not been fleshed out or put forth to me by way of affidavit.” The court held that defendant had not provided a meritorious defense, stating that
the only affidavit that we do have from [defendant] only says that he has a meritorious defense and that he disputes the amount of debt owed.. .. [I]t’s not sufficient in terms of an affidavit setting forth what the defense to the claim is, simply to make a general denial.
The court concluded that defendant had defrauded plaintiff and entered a default judgment in plaintiffs favor in the amount of $86,423.06, plus interest. Defendant moved for reconsideration, and the court denied the motion on March 18, 2010.
n
Defendant argues that the trial court erred when it denied his request to set aside the default and granted the default judgment. Specifically, defendant argues that his motion to stay the proceedings was equivalent to a request for an extension of time to file an answer. We disagree.
We review defendant’s unpreserved claim for plain error affecting his substantial rights. See Kern v Blethen-Coluni, 240 Mich App 333, 336; 612 NW2d 838 (2000). As a general rule, “[a] defendant must serve and file an answer or take other action permitted by law or [the Michigan Court Rules] within 21 days after being served with the summons and a copy of the complaint.” MCR 2.108(A)(1). MCR 2.603(A)(1) requires a court clerk to enter a default of a defendant when the defendant fails “to plead or otherwise defend as provided by [the Michigan Court Rules].” But, under MCR 2.108(E), “[a] court may . .. extend the time for serving and filing a pleading ... if [a] request is made before the expiration of the period originally prescribed” and the court’s authority to do so is not limited by another rule. Under MCR 2.119(A)(1)(b) and (c), a motion must “state with particularity the grounds and authority on which it is based” and “state the relief or order sought.”
Defendant moved for an evidentiary hearing and stay of the proceedings. However, the motion did not state that he was seeking an extension of time to file an answer, nor did it state the grounds or authority on which the trial court could extend the time for filing an answer, i.e., MCR 2.108(E). Therefore, we cannot conclude that defendant moved for an extension of time to file an answer, which would have shielded him from default in the event that he did not file an answer within 21 days after being served with the summons and complaint. See MCR 2.108(A)(1); MCR 2.603(A)(1).
According to defendant, moving for a stay of the proceedings is equivalent to moving for an extension of time under MCR 2.108(E) because both motions request the same relief: more time to file an answer. But defendant has not identified any legal rule supporting the assertion that the two motions are equivalent. Moreover, defendant’s argument, which focuses on the factual circumstances of his case, ignores a significant distinction between a motion for a stay of the proceedings and a motion for an extension of time to file an answer. While a defendant might assume that a motion to stay the proceedings extends the time for filing an answer, nothing in the motion notifies the trial court of the defendant’s desire to extend the time, as a motion under MCR 2.108(E) does. The trial court could assume that the defendant fully intends to answer within 21 days of service. For this reason, motions to stay the proceedings and to extend the time for filing an answer should not be treated synonymously. In order to request an extension of time for filing an answer, a defendant must file a motion pursuant to MCR 2.108(E), particularly requesting the extension. See MCR 2.119(A)(1).
Accordingly, we hold that the trial court did not plainly err by denying defendant’s motion to set aside the default and granting the default judgment in plaintiffs favor and properly rejected defendant’s claim that a motion to stay the proceedings was the equivalent of a motion for an extension of time to file an answer.
nr
Defendant further argues that the trial court should have granted his motion to set aside the default because he took “other action permitted by law” under MCR 2.108(A)(1) and “otherwise defend[ed]” himself under MCR 2.603(A)(1) by filing a motion for an evidentiary hearing and a stay of the proceedings, wherein he invoked the constitutional privilege against self-incrimination. Again, we disagree.
Defendant preserved this issue by raising it in bis motion to set aside the default. See Detroit Leasing Co v Detroit, 269 Mich App 233, 237; 713 NW2d 269 (2005). We review issues of law, including the interpretation and application of court rules and constitutional issues, de novo. Henry v Dow Chem Co, 484 Mich 483, 495; 772 NW2d 301 (2009); Champion v Secretary of State, 281 Mich App 307, 309; 761 NW2d 747 (2008). We review for an abuse of discretion a trial court’s decision on a motion to set aside a default and whether to grant a default judgment. Saffian v Simmons, 477 Mich 8, 12; 727 NW2d 132 (2007). A trial court abuses its discretion when it reaches a decision that falls outside the range of principled outcomes. Corporan v Henton, 282 Mich App 599, 605-606; 766 NW2d 903 (2009).
The United States and Michigan Constitutions provide for a privilege against self-incrimination. US Const, Am V; Const 1963, art 1, § 17. “The privilege against self-incrimination under the Michigan Constitution is no more extensive than the privilege afforded by the Fifth Amendment of the United States Constitution.” Phillips v Deihm, 213 Mich App 389, 400; 541 NW2d 566 (1995). The privilege allows a person to decline to testify against himself or herself during a criminal trial in which the person is a defendant. Allen v Mich Basic Prop Ins Co, 249 Mich App 66, 74; 640 NW2d 903 (2001). It also allows a person “ ‘not to answer official questions put to him in any other proceeding, civil or criminal, formal or informal, where the answers might incriminate him in future criminal proceedings.’ ” Id., quoting Phillips, 213 Mich App at 400. A person may invoke the privilege despite the fact that criminal proceedings have not been instituted or even planned. People v Guy, 121 Mich App 592, 609-610; 329 NW2d 435 (1982).
Our Supreme Court has long recognized that “a defendant may not be required in his answer to state facts which would tend to criminate” him. People ex rel Moll v Danziger, 238 Mich 39, 44; 213 NW 448 (1927). Nonetheless, although the constitutional privilege against self-incrimination must be protected, the constitutional right of a plaintiff in a civil case to have his day in court must also be protected. Id. at 48. “The assertion of a constitutional right should not deprive a party of his day in court. If it did, a constitutional right is but a shadow and its assertion only serves to ensnare the one asserting it.” Id. at 50. For this reason, our Supreme Court has held that a defendant in a civil action may assert the privilege against self-incrimination in the answer to the complaint when he or she believes that responding to particular paragraphs or allegations in the complaint calls for an incriminating response. Id. at 51; see also Albert v Chambers, 335 Mich 111, 115-116; 55 NW2d 752 (1952) (citing Danziger). The Court, however, was careful to note that a defendant “is not the sole judge” of determining whether an allegation in a complaint calls for an incriminating response. Danziger, 238 Mich at 51. The Court stated:
When a question is propounded (a question which the witness declines to answer upon the ground that it may tend to criminate him) it belongs to the court to consider and to decide whether any direct answer to it can implicate the witness. If this be decided in the negative, then he may answer it without violating the privilege which is secured to him by law. If a direct answer to it may criminate himself, then he must be the sole judge [of] what his answer would be. The court cannot participate with him in this judgment, because they cannot decide on the effect of his answer without knowing what it would be; and a disclosure of that fact to the judges would strip him of the privilege which the law allows, and which he claims. It follows necessarily, then, from this statement of things, that, if the question be of such a description that an answer to it may or may not criminate the witness, according to the purport of that answer, it must rest with himself, who alone can tell what it would be, to answer the question or not. If, in such a case, he say upon his oath that his answer would criminate himself, the court can demand no other testimony of the fact. [Id. (quotation marks and citation omitted).]
Although a defendant in a civil action may raise the privilege against self-incrimination in his or her answer to the complaint, we have not discovered any Michigan law excusing a defendant who invokes the privilege from filing an answer. To the contrary, our Supreme Court’s opinion in Danziger suggests that the invocation of the privilege does not excuse the obligation to file an answer. See id. at 48 (“The constitutional rights of the defendant must be protected, hut the constitutional rights of the plaintiff to his day in court must likewise be protected.”). The Court indicated that in its “answer defendant may assert its constitutional right to decline to answer such paragraphs ... as call for an answer which . . . violates such rights.” Id. at 51 (emphasis added). The Danziger Court’s statement suggests that a defendant must answer the complaint paragraph for paragraph, asserting the privilege when he or she feels it is necessary.
The United States Court of Appeals for the Fourth Circuit directly addressed this issue in North River Ins Co v Stefanou, 831 F2d 484 (CA 4, 1987). The court noted that the privilege against self-incrimination applies at the pleading stage of civil actions. Id. at 486. It emphasized that “a proper invocation of the privilege [does not] mean that a defendant is excused from the requirement to file a responsive pleading.” Id. Rather, a defendant “is obliged to answer those allegations that he can and to make a specific claim of the privilege as to the rest.” Id. The court also stated that the “strategy” used by a defendant to invoke the privilege against self-incrimination cannot “effectively [negate] a fair balancing of his interests against the interests of those pursuing a claim against him, and the interests of society in the expeditious resolution of litigation.” Id. As for the effect of a defendant’s invocation of the privilege in an answer to the complaint, federal appellate courts have held that a defendant’s proper invocation of the privilege in an answer is treated as a specific denial. See, e.g., Rogers v Webster, 776 F2d 607, 611 (CA 6, 1985); Nat’l Acceptance Co of America v Bathalter, 705 F2d 924, 929 (CA 7, 1983).
We agree with the federal courts that have addressed this issue and hold that a defendant desiring to invoke the privilege against self-incrimination at the pleading stage of a civil action is not excused from filing a timely answer to the complaint unless otherwise provided by law. A defendant must answer the allegations in the complaint that he or she can and make a specific claim of privilege to the rest. A defendant’s proper invocation of the privilege in an answer will be treated as a specific denial.
In this case, defendant did not file an answer to plaintiffs complaint within 21 days after being served with the summons and complaint. Rather, defendant moved for an evidentiary hearing and a stay of the proceedings, asserting that his responses to the complaint could be self-incriminating. Defendant’s failure to invoke the privilege against self-incrimination in an answer to plaintiffs complaint was an improper invocation of the privilege. See Danziger, 238 Mich at 48-51; North River Ins Co, 831 F2d at 486.
Moreover, defendant’s failure to answer the complaint violated MCR 2.108(A)(1). Defendant argues that his motion for an evidentiary hearing and a stay of the proceedings constituted “other action permitted by law” under MCR 2.108(A)(1). MCR 2.108(A)(1) requires a defendant to “serve and file an answer or take other action permitted by law or [the Michigan Court Rules] within 21 days after being served.” But defendant has not provided us with any legal basis on which to conclude that filing a motion for an evidentiary hearing and a stay of the proceedings constitutes other action permitted by law under the court rule. Other than a motion to extend the time for filing an answer under MCR 2.108(E), this Court has recognized only certain actions as altering the time for filing an answer, such as motions for summary disposition under MCR 2.116, to strike, and for a more definite statement. MCR 2.108(C)(1) and (4); Belle Isle Grill Corp v Detroit, 256 Mich App 463, 470-471; 666 NW2d 271 (2003) (citation omitted). This Court has characterized such motions as “attacks on the pleadings.” Belle Isle Grill, 256 Mich App at 470. A motion for an evidentiary hearing and a stay of the proceedings does not attack a pleading. Therefore, we are not persuaded that such a motion is sufficient to extend the time for answering the complaint.
Defendant further argues that the default was improperly entered because he “otherwise defend[ed]” himself under MCR 2.603(A)(1) by filing the motion for an evidentiary hearing and a stay of the proceedings. A court clerk must enter a default “[i]f a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend.. . .” MCR 2.603(A)(1). This Court has previously interpreted MCR 2.603(A)(1) as meaning that a party must not be defaulted if the party pleads or, as an alternative to filing a responsive pleading, otherwise defends the action. In Marposs Corp v Autocam Corp, 183 Mich App 166, 168; 454 NW2d 194 (1990), the defendant filed motions for summary disposition and a change of venue. The trial court denied both motions. Id. The defendant filed an application for leave to appeal the court’s denial of its motion for a change of venue but not the denial of its motion for summary disposition. Id. The defendant did not file an answer and was defaulted. Id. This Court held that the defendant was required to file a responsive pleading within 21 days after the denial of its motion for summary disposition under MCR 2.108(A)(1), which it had not done. Id. at 168-169. Nonetheless, the trial court erred by concluding that the defendant was properly defaulted. Id. at 170. The defendant otherwise defended itself under MCR 2.603(A)(1) by its actions. Id.
We conclude, however, that defendant’s motion for an evidentiary hearing and a stay of the proceedings cannot be characterized as otherwise defending an action under MCR 2.603(A)(1). Defendant has not provided us with any legal basis for such a conclusion. Furthermore, the essence of defendant’s motion was not defensive; rather, the essence of the motion was to postpone the proceedings indefinitely, i.e., for as long as the possibility that he could be criminally indicted existed. Nothing in defendant’s motion demonstrated that he was intending to defend or was defending the action. Finally, defendant’s suggestion that he defended himself by raising self-incrimination concerns in his motion fails because, as articulated earlier, the proper method for invoking the privilege against self-incrimination is through a responsive pleading.
Defendant did not file an answer as required by MCR 2.108(A)(1), and his motion for an evidentiary hearing and stay of the proceedings did not constitute other action permitted by law or a defense to the action. Therefore, we must conclude that defendant was properly defaulted.
rv
Under some circumstances, a default may be set aside, even when it was initially properly entered. But we cannot conclude that the trial court in this case abused its discretion by declining to set aside the default and granting plaintiff a default judgment. As indicated, we review for an abuse of discretion a trial court’s decision on a motion to set aside a default and whether to grant a default judgment. Saffian, 477 Mich at 12. “ ‘ [Although the law favors the determination of claims on the merits, it has also been said that the policy of this state is generally against setting aside defaults and default judgments that have been properly-entered.’ ” Shawl v Spence Bros, Inc, 280 Mich App 213, 221; 760 NW2d 674 (2008), quoting Alken-Ziegler, Inc v Waterbury Headers Corp, 461 Mich 219, 229; 600 NW2d 638 (1999). When there has been a valid exercise of the trial court’s discretion, “appellate review is sharply limited.” Alken-Ziegler, 461 Mich at 227.
Under MCR 2.603(D)(1), “[a] motion to set aside a default or a default judgment, except when grounded on lack of jurisdiction over the defendant, shall be granted only if good cause is shown and an affidavit of facts showing a meritorious defense is filed.” (Emphasis added.) Our Supreme Court has recognized that “ ‘good cause’ and a ‘meritorious defense’ are separate requirements that may not be blurred and that a party must have both,” but “trial courts should base the final result on the totality of the circumstances.” Shawl, 280 Mich App at 237.
Good cause can be shown by: (1) a substantial defect or irregularity in the proceedings upon which the default was based, (2) a reasonable excuse for failure to comply with the requirements which created the default, or (3) some other reason showing that manifest injustice would result from permitting the default to stand. [Id. at 221 (quotation marks and citations omitted).][ ]
While courts of this state have indicated that establishing “manifest injustice” is a third way to show good cause, see, e.g., Shawl and the cases cited therein, our Supreme Court has attempted to clarify the manifest-injustice factor of the good-cause test, stating: MCR 2.603(D)(1) requires an affidavit of facts establishing a meritorious defense. The purpose of an affidavit of meritorious defense is to inform the trial court whether the defaulted defendant has a meritorious defense to the action. Cramer v Metro Savings Ass’n (Amended Opinion), 136 Mich App 387, 398; 357 NW2d 51 (1983). Such an affidavit requires the affiant to have personal knowledge of the facts, state admissible facts with particularity, and show that the affiant can testify competently to the facts set forth in the affidavit. Miller v Rondeau, 174 Mich App 483, 487; 436 NW2d 393 (1988).
“The first two prongs of the Honigman & Hawkins[ ] ‘good cause’ test are unremarkable and accurately reflect our decisions. It is the third factor, ‘manifest injustice,’ that has been problematic. The difficulty has arisen because, properly viewed, ‘manifest injustice’ is not a discrete occurrence such as a procedural defect or a tardy filing that can be assessed independently. Rather, manifest injustice is the result that would occur if a default were to be allowed to stand where a party has satisfied the ‘meritorious defense’ and ‘good cause’ requirements of the court rule. When a party puts forth a meritorious defense and then attempts to satisfy ‘good cause’ by showing (1) a procedural irregularity or defect, or (2) a reasonable excuse for failure to comply with the requirements that created the default, the strength of the defense obviously will affect the ‘good cause’ showing that is necessary. In other words, if a party states a meritorious defense that would be absolute if proven, a lesser showing of ‘good cause’ will be required than if the defense were weaker, in order to prevent a manifest injustice.” [Id. at 235, quoting Alken-Ziegler, 461 Mich at 233-234.]
In regard to a showing of good cause, defendant did not in this case specifically assert that a substantial defect or irregularity in the proceedings existed or that he had a reasonable excuse for failing to file a timely answer to the complaint. Rather, in his motion to set aside the default, defendant argued that “manifest injustice would result if the default were allowed to stand because Defendant would not have been given a fair opportunity to litigate and/or respond to the Plaintiffs complaint.” Defendant also stated that his motion for an evidentiary hearing and a stay of the proceedings constituted other action permitted by law under MCR 2.108(A)(1) and a defense to the action under MCR 2.603(A)(1). But, as explained, there was no legal basis on which defendant could have concluded that his motion could be characterized as an action permitted by law that extended the time for filing an answer or that it constituted a defense. Further, Michigan law permitted defendant to invoke the constitutional privilege against self-incrimination in an answer to the complaint. See Danziger, 238 Mich at 51. Given that defendant could have invoked the privilege in an answer, it is not unreasonable to say that no manifest injustice would result from permitting the default to stand. Accordingly, we cannot conclude that the trial court abused its discretion by holding that defendant failed to show good cause for not filing an answer.
Furthermore, even if defendant’s reading of the law at the time this case commenced could be construed as a reasonable excuse for failing to file an answer, the trial court did not abuse its discretion by holding that defendant failed to submit an affidavit of facts establishing a meritorious defense. Although defendant submitted a document entitled affidavit of meritorious defense with his motion to set aside the default, the affidavit did not provide the trial court with any particular facts establishing a meritorious defense. See Miller, 174 Mich App at 487. Rather, defendant simply asserted that he had a meritorious defense because he disputed the amount of the debt owed to plaintiff. Merely contesting the amount of liability does not establish a meritorious defense. See Pinto v Buckeye Union Ins Co, 193 Mich App 304, 307; 484 NW2d 9 (1992) (stating that a defendant does not establish a meritorious defense where only the amount of liability is in dispute); Novi Constr, Inc, v Triangle Excavating Co, 102 Mich App 586, 590; 302 NW2d 244 (1980) (stating that a defendant’s conclusive statement that it has a meritorious defense because it does not owe an alleged amount of money, without any factual basis for the statement, is insufficient to establish a meritorious defense). Defendant failed to present any evidence, other than his own unsupported assertion, that he could defend against plaintiffs claim.
Because defendant failed to establish both good cause and a meritorious defense, the trial court did not abuse its discretion by declining to set aside the default and granting plaintiff a default judgment.
Affirmed.
BECKERING, EJ., and WHITBECK and M. J. KELLY, JJ., concurred.
The Shawl Court held that in determining whether a party has shown good cause, the trial court should consider the relevant factors from the following nonexhaustive list of factors:
(1) [W]hether the party completely failed to respond or simply missed the deadline to file;
(2) if the party simply missed the deadline to file, how long after the deadline the filing occurred;
(3) the duration between entry of the default judgment and the filing of the motion to set aside the judgment;
(4) whether there was defective process or notice;
(5) the circumstances behind the failure to file or file timely;
(6) whether the failure was knowing or intentional;
(7) the size of the judgment and the amount of costs due under MCR 2.603(D)(4);
(8) whether the default judgment results in an ongoing liability (as with paternity or child support); and
(9) if an insurer is involved, whether internal policies of the company were followed. [Shawl, 280 Mich App at 238-239.]
Id. at 221 & n 10, 229-230.
2 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), comment 7, p 662 (discussing GCR 1963, 520.4).
In determining whether a party has a meritorious defense, the trial court should consider, when relevant, whether the affidavit contains evidence that
(1) the plaintiff cannot prove or defendant can disprove an element of the claim or a statutory requirement;
(2) a ground for summary disposition exists under MCR 2.116(C)(2), (3), (5), (6), (7) or (8); or
(3) the plaintiffs claim rests on evidence that is inadmissible. [Shawl, 280 Mich App at 238-239.]
While it may be arguable in some cases that requiring a defendant to submit an affidavit of meritorious defense alleging specific facts would infringe on the constitutional privilege against self-incrimination, defendant has not raised such an argument, either before the trial court or now on appeal. Therefore, we decline to address it. | [
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WILDER, J.
Defendant was convicted by a jury of first-degree premeditated murder, MCL 750.316(l)(a), conspiracy to commit murder, MCL 750.157a, assault with intent to commit murder, MCL 750.83, and pos session of a firearm during the commission of a felony, MCL 750.227b. He was sentenced to life in prison for the first-degree murder and conspiracy convictions and 225 months to 40 years’ imprisonment for the assault conviction, with those sentences to be served concurrently but consecutively to a two-year term of imprisonment for the felony-firearm conviction. He appeals as of right. We affirm.
I. FACTUAL BACKGROUND
Defendant’s convictions arose from the fatal shooting of Bennie Peterson and the nonfatal shooting of Donteau Dennis on the east side of Detroit during the early morning hours of September 28, 2007. According to the prosecution’s evidence, codefendant Quonshay Douglas-Ricardo Mason persuaded Peterson and Dennis to leave Peterson’s house under the pretext that they were going to rob a drug addict who was carrying a large amount of cash to purchase drugs. Mason drove Peterson and Dennis, in Peterson’s minivan, to a house on Malcolm Street and told Dennis to purchase drugs in the house to use as bait in the robbery. Defendant and codefendant Kainte Hickey had followed Mason in defendant’s Jeep. After Dennis left Peterson’s minivan to purchase the drugs, Mason and defendant parked their vehicles so that the minivan was blocked in and could not be driven away. Mason then got out of the minivan and defendant got out of his Jeep, and the two of them went to the side of the minivan and began firing guns at Peterson, who was still inside. At the same time, Hickey emerged from defendant’s Jeep and fired several shots at Dennis as he crossed the street. Peterson was killed.
Officer Frank Senter arrived and found Dennis lying wounded in a backyard. Dennis remarked that he did not believe that he would survive and told Officer Senter that Hickey had shot him over a drug debt. Although Officer Senter did not recall hearing Dennis say anything about Peterson, defendant, or Mason, he stated that Dennis made additional statements that Officer Senter could not understand because of Dennis’s condition. Later, while Dennis was hospitalized, he gave a statement implicating defendant and Mason in the shooting attack on Peterson. At trial, Dennis again identified defendant and Mason as the persons who shot at Peterson inside the minivan.
II. SUFFICIENCY OF THE EVIDENCE
Defendant first argues that the evidence was insufficient to support his convictions. When a defendant challenges the sufficiency of the evidence in a criminal case, this Court considers whether the evidence, viewed in a light most favorable to the prosecution, would warrant a reasonable juror in finding that the essential elements of the crime were proved beyond a reasonable doubt. People v Nowack, 462 Mich 392, 399; 614 NW2d 78 (2000); People v Sexton, 250 Mich App 211, 222; 646 NW2d 875 (2002). “Circumstantial evidence and reasonable inferences arising from that evidence can constitute satisfactory proof of the elements of a crime.” Nowack, 462 Mich at 400 (quotation marks and citations omitted). “The credibility of witnesses and the weight accorded to evidence are questions for the jury, and any conflict in the evidence must be resolved in the prosecutor’s favor.” People v Harrison, 283 Mich App 374, 378; 768 NW2d 98 (2009).
A conviction of first-degree premeditated murder requires evidence that “the defendant intentionally killed the victim and that the act of killing was premeditated and deliberate.” People v Kelly, 231 Mich App 627, 642; 588 NW2d 480 (1998). Premeditation and deliberation require “sufficient time to allow the defendant to take a second look.” People v Anderson, 209 Mich App 527, 537; 531 NW2d 780 (1995).
A criminal conspiracy is a partnership in criminal purposes, under which two or more individuals voluntarily agree to effectuate the commission of a criminal offense. People v Justice (After Remand), 454 Mich 334, 345; 562 NW2d 652 (1997). The individuals must specifically intend to combine to pursue the criminal objective, and the offense is complete upon the formation of the agreement. Id. at 345-346. The intent, including knowledge of the intent, must be shared by the individuals. Id. at 346. Thus, there must be proof showing that “the parties specifically intended to further, promote, advance, or pursue an unlawful objective.” Id. at 347. Direct proof of a conspiracy is not required; rather, “proof may be derived from the circumstances, acts, and conduct of the parties.” Id.
The elements of assault with intent to commit murder are “(1) an assault, (2) with an actual intent to kill, (3) which, if successful, would make the killing murder.” People v Davis, 216 Mich App 47, 53; 549 NW2d 1 (1996) (quotation marks and citation omitted). The intent to kill may be proved by inference from any facts in evidence. People v Lawton, 196 Mich App 341, 350; 492 NW2d 810 (1992). A person is guilty of felony-firearm if the person possesses a firearm during the commission of a felony. MCL 750.227b.
A person who aids or abets the commission of a crime may be convicted as if he or she directly committed the crime. People v Izarraras-Placante, 246 Mich App 490, 495; 633 NW2d 18 (2001).
“To support a finding that a defendant aided and abetted a crime, the prosecution must show that (1) the crime charged was committed by the defendant or some other person, (2) the defendant performed acts or gave encouragement that assisted the commission of the crime, and (3) the defendant intended the commission of the crime or had knowledge that the principal intended its commission at the time he gave aid and encouragement.” [Id. at 495-496, quoting People v Turner, 213 Mich App 558, 568; 540 NW2d 728 (1995).]
Aiding and abetting describes all forms of assistance rendered to the perpetrator, including any words or deeds that may support, encourage, or incite the commission of a crime. People v Youngblood, 165 Mich App 381, 386; 418 NW2d 472 (1988).
In this case, Dennis testified that before they departed Peterson’s house, defendant was waiting in a Jeep on the street, positioning himself in a manner that prevented Dennis from seeing whether someone else was inside, and defendant then followed the minivan to Malcolm Street where Mason took Dennis and Peterson. At Malcolm Street, defendant and Mason aligned their respective vehicles so that the minivan was blocked in and could not be driven away. Hickey, whose presence in the Jeep had been concealed by defendant, got out of the Jeep and pursued Dennis with a gun while defendant and Mason both began shooting toward the minivan at Peterson. Viewed in a light most favorable to the prosecution, this evidence supports an inference that defendant, Mason, and Hickey were acting in concert according to a premeditated plan to kill Peterson and Dennis. Their plan involved enticing Peterson and Dennis to leave Peterson’s home under the pretext that they were going to commit a robbery. When they reached the intended location, they acted together to separate Dennis and Peterson so that Mason and defendant could shoot Peterson and Hickey could make a surprise attack on Dennis. This evidence supports defendant’s convictions for the first-degree murder of Peterson, conspiracy to commit murder, and aiding and abetting Hickey’s assault with intent to murder Dennis. In addition, the evidence that defendant was armed with a gun during these offenses supports his felony-firearm conviction.
Although defendant argues that Dennis was not a credible witness and gave inconsistent statements concerning defendant’s involvement, the credibility of his testimony was for the jury to resolve. It was within the jury’s province to determine that Dennis’s testimony was truthful, notwithstanding some discrepancies in his prior statements. Harrison, 283 Mich App at 378.
III. DISCOVERY VIOLATION
Defendant next argues that the prosecutor’s failure to disclose a transcript of Dennis’s prior statements given pursuant to an investigative subpoena violated his constitutional right to discovery. We disagree.
This Court reviews de novo a defendant’s claim of a constitutional due-process violation. People v Schumacher, 276 Mich App 165, 176; 740 NW2d 534 (2007). “There is no general constitutional right to discovery in a criminal case .. . .” Weatherford v Bursey, 429 US 545, 559; 97 S Ct 837; 51 L Ed 2d 30 (1977); see also People v Banks, 249 Mich App 247, 254; 642 NW2d 351 (2002). However, due process requires the prosecution to disclose evidence in its possession that is exculpatory and material, regardless of whether the defendant requests the evidence. Brady v Maryland, 373 US 83, 87; 83 S Ct 1194; 10 L Ed 2d 215 (1963); Schumacher, 276 Mich App at 176. In addition, MCR 6.201(A)(2) requires that a party in a criminal action, upon request, disclose “any written or recorded statement, including electronically recorded statements, pertaining to the case by a lay witness whom the party may call at trial. . ..” The prosecution concedes that the omission from the discovery materials of the transcript of Dennis’s statements given pursuant to the investigative subpoena violated MCR 6.201 but denies that the transcript contained exculpatory evidence that would render the omission a due-process violation.
When the omission of the transcript was discovered at trial, the trial court precluded the prosecution from using the transcript in its case-in-chief. At trial, defense counsel was given an opportunity to review the 30-page transcript. But defense counsel never argued in the trial court that the transcript contained any exculpatory material and, on appeal, does not identify any exculpatory material as well. Accordingly, there was no due-process violation.
The remaining question is whether the trial court abused its discretion by fashioning its remedy for the discovery violation. MCR 6.201(J); Banks, 249 Mich App at 252. When determining an appropriate remedy for a discovery violation, “the trial court must balance the interests of the courts, the public, and the parties in light of all the relevant circumstances . . . .” Banks, 249 Mich App at 252. An abuse of discretion occurs when the trial court’s decision is outside the range of reasonable and principled outcomes. Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006). Here, the trial court originally precluded the prosecutor from questioning Dennis regarding his statements given pur suant to the investigative subpoena. When defense counsel argued that disclosure of the transcript was essential to his cross-examination of Dennis, the trial court gave counsel the opportunity to review it. Defense counsel thereafter continued his cross-examination of Dennis. Under the circumstances, the trial court’s remedy was not an abuse of discretion.
IV JUROR MISCONDUCT
Next, defendant argues that a new trial is required because, following the dismissal of a juror, the trial court failed to question the remaining jurors to determine whether the dismissed juror may have said or done anything to taint the remaining jurors. Because defendant did not object to the trial court’s handling of the dismissed juror’s request to be excused and because defendant did not request that the court question the remaining jurors, this issue was not preserved. We review unpreserved claims for plain error affecting a defendant’s substantial rights. People v Carines, 460 Mich 750, 763-764; 597 NW2d 130 (1999); see also People v Miller, 482 Mich 540, 558-559; 759 NW2d 850 (2008) (stating that an unpreserved claim of an irregularity regarding the jury does not entitle a defendant to a new trial unless the defendant was denied the right to an impartial jury).
The United States and Michigan Constitutions guarantee a criminal defendant a fair trial by an impartial jury. US Const, Am VI; Const 1963, art 1, § 20. The trial court must take appropriate steps to ensure that jurors will not be exposed to information or influences that could affect their ability to render an impartial verdict based on the evidence admitted in court. MCR 6.414(B). However, “ ‘due process does not require a new trial every time a juror has been placed in a potentially compromising situation.’ ” People v Grove, 455 Mich 439, 472; 566 NW2d 547 (1997), quoting Smith v Phillips, 455 US 209, 217; 102 S Ct 940; 71 L Ed 2d 78 (1982); see also Miller, 482 Mich at 558-559.
In this case, a juror informed the trial court at the start of the second day of trial that she was too stressed and overwhelmed to continue. The trial court questioned her about what she may have said to the other jurors about her situation, and she indicated only that she had told them that she felt frustrated and had been unable to sleep. Without objection by any party, the trial court dismissed the juror without further questioning and continued the trial without questioning the remaining jurors. We disagree with defendant’s argument on appeal that the trial court was obligated to question the remaining jurors to determine whether the dismissed juror may have said or done anything to taint them. The trial court’s questioning of the dismissed juror did not reveal any information or circumstances to suggest that the remaining jurors had been exposed to improper influences or that their ability to render a fair and impartial verdict had been compromised. Under the circumstances, the trial court’s decision to proceed with the trial without questioning the remaining jurors was not plain error.
V ADMISSIBILITY OF NURSE OTSUJI’S “STATEMENTS”
At trial, Sergeant William Anderson testified regarding an interview of Dennis that was conducted in the hospital with the assistance of a nurse, Molly Otsuji. Dennis was unable to speak at the time of the interview, so Sergeant Anderson communicated with him by asking yes-or-no questions, to which Dennis responded by either squeezing the hand of Nurse Otsuji to indicate a “yes” response or by not squeezing her hand to indicate a “no” response. At trial, Sergeant Anderson testified regarding the substance of Dennis’s responses, as reported by Nurse Otsuji. Defendant now argues on appeal that Nurse Otsuji’s reports of Dennis’s responses to Sergeant Anderson’s questions were inadmissible hearsay and that the admission of her reports also violated his constitutional right of confrontation because she was not called as a witness at trial.
Although defendant objected to Sergeant Anderson’s testimony regarding Nurse Otsuji’s reports of Dennis’s responses on the ground that the statements were “double hearsay,” he did not raise an objection based on the Confrontation Clause or object to the prosecution’s failure to produce Nurse Otsuji at trial. Therefore, this issue is preserved only with respect to the hearsay question and not with respect to the constitutional issue. MRE 103(a)(1); People v Aldrich, 246 Mich App 101, 113; 631 NW2d 67 (2001). This Court reviews preserved evidentiary issues for an abuse of discretion. People v Katt, 468 Mich 272, 278; 662 NW2d 12 (2003). Unpreserved claims of constitutional error are reviewed for plain error affecting substantial rights. People v Pipes, 475 Mich 267, 274; 715 NW2d 290 (2006).
The Confrontation Clause, US Const, Am VI, states: “In all criminal prosecutions, the accused shall enjoy the right... to be confronted with the witnesses against him____” See also Const 1963, art 1, § 20. In Crawford v Washington, 541 US 36, 53-54; 124 S Ct 1354; 158 L Ed 2d 177 (2004), the United States Supreme Court held that the Sixth Amendment bars testimonial statements by a witness who does not appear at trial unless the witness is unavailable and the defendant had a prior opportunity to cross-examine the witness. A pretrial statement is testi monial if the declarant should have reasonably expected the statement to be used in a prosecutorial manner and the statement was made under circumstances that would cause an objective witness reasonably to believe that the statement would be available for use at a later trial. Id. at 51-52; People v Lonsby, 268 Mich App 375, 377; 707 NW2d 610 (2005).
Defendant argues that Nurse Otsuji’s reports to Sergeant Anderson were inadmissible hearsay, which is defined as “a statement, other than the one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” MRE 801(c); People v McLaughlin, 258 Mich App 635, 651; 672 NW2d 860 (2003). Defendant further argues that Nurse Otsuji’s reports were testimonial in nature and that he never had an opportunity to cross-examine her and, thus, the admission of those statements violated his constitutional right of confrontation. The prosecution responds that Nurse Otsuji’s reports were admissible under the “language conduit” rule, under which an interpreter is considered an agent of the declarant, not an additional declarant, and the interpreter’s statements are regarded as the statements of the declarant without creating an additional layer of hearsay. See Hernandez v State, 291 Ga App 562, 566; 662 SE2d 325 (2008), United States v Cordero, 18 F3d 1248, 1252-1253 (CA 5, 1994), and State v Patino, 177 Wis 2d 348, 370-371; 502 NW2d 601 (Wis App, 1993).
The language-conduit rule has been applied in the context of a Confrontation Clause challenge to testi mony of a translator’s statements. In Hernandez, 291 Ga App at 567-568, the Georgia Court of Appeals held that a defendant does not have a constitutional right to confront a translator because the statements of the translator are considered to be the statements of the declarant. The court held that because the translator’s statements were considered to be the statements of the declarant, who in that case was the defendant, the statements did not implicate the Confrontation Clause because a defendant has no right to confront himself. Id. In determining whether statements made through an interpreter are admissible under the language-conduit rule, a court should consider (1) whether actions taken after the conversation were consistent with the statements translated, (2) the interpreter’s qualifications and language skill, (3) whether the interpreter had any motive to mislead or distort, and (4) which party supplied the interpreter. United States v Nazemian, 948 F2d 522, 527-528 (CA 9, 1991); see also People v Gutierrez, 916 P2d 598, 600-601 (Colo App, 1995).
In this case, Nurse Otsuji’s reports to Sergeant Anderson regarding Dennis’s hand-signal responses fall within the language-conduit rule. Although Nurse Otsuji was not interpreting a foreign language, she was conveying Dennis’s statements by reporting whether he used the signal to indicate “yes” or used the signal to indicate “no.” In this sense, Nurse Otsuji functioned as an interpreter by relaying Dennis’s responses to Sergeant Anderson. Further, there is no indication that any of the considerations set forth in Nazemian, 948 F2d at 527-528, militate against application of the language-conduit rule in this case. Defendant does not assert that Nurse Otsuji was not qualified to assist in the manner that she did, nor does he impute to her any motive to mislead or distort. Although Sergeant Anderson requested Nurse Otsuji’s assistance, there is no indication that he purposely selected her for any reason other than that she was immediately available. Thus, Nurse Otsuji’s reports did not constitute an additional layer of hearsay because what she was reporting were the statements actually made by Dennis. Additionally, although the statements that Dennis made with Nurse Otsuji’s assistance in response to Sergeant Anderson’s questions qualify as testimonial statements, defendant did not have a constitutional right to confront Nurse Otsuji because what she reported were properly considered to he Dennis’s statements. Defendant had a full opportunity to cross-examine Dennis, thus satisfying his Confrontation Clause rights.
For these reasons, defendant has failed to establish that Nurse Otsuji’s reports were inadmissible hearsay, and he has also failed to establish a plain constitutional error. See Cordero, 18 F3d at 1252-1253 (holding that a defendant who did not object to an interpreter’s statements failed to establish a plain error affecting the defendant’s substantial rights).
VI. JUDICIAL BIAS
Defendant argues that a pattern of rulings and remarks by the trial court establish that the court was biased against him. Because defendant did not raise any claim of judicial bias in the trial court, this issue is not preserved. Therefore, we review this issue for plain error affecting defendant’s substantial rights. Carines, 460 Mich at 763-764.
A criminal defendant is entitled to a “neutral and detached magistrate.” People v Cheeks, 216 Mich App 470, 480; 549 NW2d 584 (1996) (question marks and citation omitted). A defendant claiming judicial bias must overcome “a heavy presumption of judicial impartiality.” People v Wells, 238 Mich App 383, 391; 605 NW2d 374 (1999). In general, this Court applies the following analysis to determine whether a trial court’s comments or conduct deprived the defendant of a fair trial:
“Michigan case law provides that a trial judge has wide discretion and power in matters of trial conduct. This power, however, is not unlimited. If the trial court’s conduct pierces the veil of judicial impartiality, a defendant’s conviction must be reversed. The appropriate test to determine whether the trial court’s comments or conduct pierced the veil of judicial impartiality is whether the trial court’s conduct or comments ‘were of such a nature as to unduly influence the jury and thereby deprive the appellant of his right to a fair and impartial trial.’ ” [People v Conley, 270 Mich App 301, 307-308; 715 NW2d 377 (2006), quoting People v Collier, 168 Mich App 687, 689; 425 NW2d 118 (1988) (citations omitted).]
Judicial rulings, as well as a judge’s opinions formed during the trial process, are not themselves valid grounds for alleging bias “unless there is a deep-seated favoritism or antagonism such that the exercise of fair judgment is impossible.” Wells, 238 Mich App at 391. Comments that are critical of or hostile to counsel and the parties are generally not sufficient to pierce the veil of impartiality. Id.
In this case, defendant’s reliance on various evidentiary rulings does not establish support for his claim of judicial bias. The trial court allowed the prosecutor to present the prior statement of Peterson’s girlfriend, Yolanda Bishop, but not any portion that implicated defendant. The court thereafter denied defendant’s motion for a mistrial with respect to this matter because no portion of the statement implicating defendant was received. Further, the trial court allowed the prosecutor to use Dennis’s prior state ment for rehabilitative purposes after the defense attorneys attacked Dennis’s credibility. However, the use of Dennis’s prior statement in this manner was consistent with MRE 801(d)(1) (prior consistent statement of declarant admissible to rebut an express or implied charge against the declarant of recent fabrication or improper influence or motive). Although defendant asserts that the trial court improperly allowed the prosecutor to ask a question of Lekeitha Boutire — who went with Mason to Peterson’s house on September 28, 2007 — regarding defendant’s motive to harm Peterson, without a possible foundation, the record discloses that the trial court specifically instructed the prosecutor to establish her testimony. In accordance with this instruction, the prosecutor elicited that defendant had threatened both Boutire and Peterson at a gas station. In sum, the record discloses that the trial court provided principled reasons, grounded in the evidence and the law, for its evidentiary rulings. Its rulings do not reflect a deep-seated favoritism or antagonism to the extent that the exercise of fair judgment was not possible.
Defendant also argues that it was improper for the trial court to comment that there was no evidence of a robbery or intended robbery on the date of the offense. We agree with defendant that the trial court’s statement was factually inaccurate given that Dennis admitted that he and Peterson left with Mason to “hit a lick,” which he understood to mean to commit a robbery. However, the court’s inaccurate statement did not deprive defendant of a fair trial. The statement was made in response to defense counsel’s opening statement characterizing Dennis as a thug, thief, robber, and “stick up man.” There was no evidence that Dennis had any history of involvement in theft crimes, and the trial court explained to the jury that the attorneys’ statements were not evidence. Considering the limited con text in which the court’s statements were made, they were not sufficient to pierce the veil of judicial impartiality and deprive defendant of a fair trial.
We also reject defendant’s argument that the trial court’s decision to schedule the case for trial on March 19, 2008, only 34 days after defendant’s preliminary examination, demonstrates that the court was biased against defendant. The trial date was selected to enable defendant and his two codefendants to be tried jointly. Although defendant asserts that his trial counsel did not have time to prepare for trial, there was no objection to the trial date or any request for an adjournment, and the record discloses that defense counsel was well prepared at trial. Defense counsel’s cross-examination of prosecution witnesses displayed a thorough knowledge of the differences between their trial testimony and any prior testimony and statements they had given, as well as the details of the police investigation. Defendant does not explain what else counsel could have done if he had more time to prepare.
In sum, the record does not support defendant’s claim that the court was biased against him.
VII. EFFECTIVE ASSISTANCE OF COUNSEL
Defendant last argues that he is entitled to a new trial because he was deprived of the effective assistance of counsel. A claim of ineffective assistance of counsel is a mixed question of fact and constitutional law. People v LeBlanc, 465 Mich 575, 579; 640 NW2d 246 (2002). Because defendant did not raise a claim of ineffective assistance of counsel in the trial court, pursuant to People v Ginther, 390 Mich 436, 443; 212 NW2d 922 (1973), our review of this issue is limited to mistakes apparent on the record. People v Mack, 265 Mich App 122, 125; 695 NW2d 342 (2005). To establish ineffective assistance of counsel, defendant must show (1) that defense counsel’s performance was below an objective standard of reasonableness under prevailing professional norms and (2) that there is a reasonable probability that, but for counsel’s errors, a different outcome would have resulted. People v Pickens, 446 Mich 298, 309; 521 NW2d 797 (1994); People v Odom, 276 Mich App 407, 415; 740 NW2d 557 (2007).
Defendant argues that defense counsel was ineffective because he failed to provide defendant a copy of the discovery materials. First, the record does not indicate what efforts defense counsel may have made to share the discovery materials with defendant, whether by providing him a personal copy of the materials or by conveying the substance of the information to defendant during discussions about the case. Thus, defendant has not established an objectively unreasonable error. Second, although defendant asserts that he could have better assisted counsel in preparing for the case or in deciding what strategy to pursue had counsel shared the discovery materials before trial, he does not explain what he actually would have done differently, either before or at trial, if he had received any discovery materials sooner. Thus, defendant has also failed to establish that he was prejudice by counsel’s alleged deficiency.
Defendant also argues that defense counsel was ineffective because he failed to request the addict-informant jury instruction, CJT2d 5.7, with respect to Dennis’s testimony, because the first statement Dennis gave that implicated defendant was the statement he made while he was medicated in the hospital. CJI2d 5.7 is a cautionary instruction that advises a jury that testimony given by an addict-informant should be examined closely and considered with special scrutiny. A use note to the instruction provides that it is “to be used where the uncorroborated testimony of an addict informant is the only evidence linking the accused with the alleged offense.”
In this case, the mere fact that Dennis was medicated when he gave a statement in the hospital did not make him an addict-informant. We also disagree with defendant’s contention that counsel should have requested a modified version of CJI2d 5.7, reformulated as a “medicated witness” instruction. The special circumstances that would have warranted a cautionary instruction for an addict-informant did not come into play merely because Dennis was receiving physician-ordered medication for his injuries when he gave his statement. Further, the trial court instructed the jury on the various factors it should consider in evaluating a witness’s testimony generally, such as whether the witness had any motivation for testifying the way he or she did, whether the witness had an interest in the outcome of the case, whether the witness had something to gain, whether there was any relationship between the witness and any of the parties, whether the witness’s testimony was corroborated by other direct or circumstantial evidence, whether the witness made any statements outside of court that were different from the statements made in court, and the witness’s demeanor while testifying. Because the addict-informant instruction was not applicable, and the instructions given by the court were sufficient to enable the jury to properly consider Dennis’s testimony, defense counsel was not ineffective when he failed to request a modified version of CJI2d 5.7.
Affirmed.
WHITBECK, EJ., and O’CONNELL, J., concurred with Wilder, J.
Defendant was tried jointly with codefendants Kainte Deshawn Hickey and Quonshay Douglas-Ricardo Mason, who were similarly convicted of first-degree premeditated murder, conspiracy to commit murder, assault with intent to commit murder, and felony-firearm. Codefendant Hickey was also convicted of being a felon in possession of a firearm, MCL 750.224Í. We affirmed in codefendants’ consolidated appeals in an unpublished opinion per curiam, issued March 8, 2011 (Docket Nos. 285253 and 285254).
Defendant does not challenge the admissibility of Dennis’s hand-signal “statements” to Nurse Otsuji.
We are not bound by the decisions of federal courts or courts of other states, but we may consider them to be persuasive authority. Abela v Gen Motors Corp, 469 Mich 603, 606-607; 677 NW2d 325 (2004); K & K Constr, Inc v Dep’t of Environmental Quality, 267 Mich App 523, 559 n 38; 705 NW2d 365 (2005).
Wayne Circuit Judge Leonard Townsend conducted the trial in this matter, although a different judge of the circuit, Judge David Allen, sentenced defendant. | [
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PER CURIAM.
Jeanette Sharp sustained injuries when she fell from a crumbling curb. Sharp sued the city of Benton Harbor, averring that it had breached a statutory duty to maintain the curb that caused her fall. Benton Harbor moved for summary disposition on the basis of governmental immunity. The circuit court denied Benton Harbor’s motion, and Benton Harbor now appeals as of right. For the reasons set forth in this opinion, we affirm.
Late in the evening of May 7, 2007, Sharp walked home near the intersections of Cross and Pearl Streets located in the city of Benton Harbor. Sharp described that as she stepped onto a curb abutting the street, “the curb like crumbled, and I fell to the ground.” The curb was neither at the corner nor within a crosswalk. A grass verge separated the curb from the sidewalk. Benton Harbor acknowledges jurisdiction over the curb where Sharp fell.
Sharp filed this action alleging negligent maintenance of the “roadway and curbing.” Benton Harbor moved for summary disposition under MCR 2.116(C)(10), contending that because the curb did not fall within the definition of “highway” in MCL 691.1401(e), governmental immunity barred Sharp’s claim. The circuit court denied Benton Harbor’s motion, relying on Meek v Dep’t of Transp, 240 Mich App 105; 610 NW2d 250 (2000), overruled in part on other grounds Grimes v Dep’t of Transp, 475 Mich 72, 73-76 (2006).
We review de novo a circuit court’s summary disposition ruling, Spiek v Dep’t of Transp, 456 Mich 331, 337; 572 NW2d 201 (1998), as well as its decision concerning the applicability of governmental immunity, Linton v Arenac Co Rd Comm, 273 Mich App 107, 112; 729 NW2d 883 (2006). “In reviewing a motion under MCR 2.116(C)(10), this Court considers the pleadings, admissions, affidavits, and other relevant documentary evidence of record in the light most favorable to the nonmoving party to determine whether any genuine issue of material fact exists to warrant a trial.” Walsh v Taylor, 263 Mich App 618, 621; 689 NW2d 506 (2004); see also MCR 2.116(G)(5).
We first consider whether the circuit court properly applied Meek to the facts of this case. In Meek, this Court held that “the barrier curb must be considered part of the improved portion of the highway designed for vehicular travel and comes within the highway exception to governmental immunity.” Meek, 240 Mich App at 113. Sharp urges that Meek applies here and controls the outcome of this case. Benton Harbor counters that the Supreme Court overruled Meek’s central holding in Grimes, 475 Mich at 72, and that a curb defect does not fall within the exception to governmental immunity set forth in MCL 691.1402(1).
We find Sharp’s reliance on Meek misplaced because that case concerned the portion of MCL 691.1402(1) detailing the highway maintenance duties of state and county road commissions, rather than municipalities. Likewise, we reject Benton Harbor’s position that Nawrocki v Macomb Co Rd Comm, 463 Mich 143; 615 NW2d 702 (2000), dictates the outcome of this case. In Nawrocki, the Supreme Court considered “the extent, if any, to which the highway exception accords protection to pedestrians injured by a condition within the improved portion of the highway designed for vehicular travel.” Id. at 148. The Supreme Court observed that “[t]he structure of MCL 691.1402(1)... is critical to its meaning.” Id. at 159. The Court continued:
Thus, we begin by observing that the first and second sentences of the highway exception clause apply to all governmental agencies having jurisdiction over any highway. In contrast, the third and fourth sentences address more specifically the duty and resulting liability of the state and county road commissions. Therefore, while we are constrained to construe the highway exception as a whole, it is necessary to parse each sentence of the statutory clause to ascertain the scope of the exception, as determined by the stated policy considerations of the Legislature. [Id. at 159 (footnote omitted).]
Our Supreme Court explained that the fourth sentence of MCL 691.1402(1) applies only to state and county road commissions, and “expressly provides that the limited duty [to repair and maintain] does not extend to ‘sidewalks, crosswalks, or any other installation outside of the improved portion of the highway designed for vehicular travel.’ ” Id. at 161. Our Supreme Court held that the state’s and county road commissions’ duties arise only in the “improved portion of the highway,” as reflected by the plain language of the fourth sentence. Id. at 168. But because the fourth sentence of MCL 691.1402(1) lacks applicability to highways maintained by municipal corporations, Nawrocki affords Benton Harbor no basis for summary disposition.
The first two sentences of the highway exception to governmental immunity apply to Benton Harbor’s duties in this case:
Except as otherwise provided in section 2a, each governmental agency having jurisdiction over a highway shall maintain the highway in reasonable repair so that it is reasonably safe and convenient for public travel. A person who sustains bodily injury or damage to his or her property by reason of failure of a governmental agency to keep a highway under its jurisdiction in reasonable repair and in a condition reasonably safe and fit for travel may recover the damages suffered by him or her from the governmental agency. [MCL 691.1402(1).]
Benton Harbor argues that the circuit court incorrectly denied summary disposition because the following definition of “highway” set forth in MCL 691.1401(e) does not extend to a curb: “[A] public highway, road, or street that is open for public travel and includes bridges, sidewalks, trailways, crosswalks, and culverts on the highway. The term highway does not include alleys, trees, and utility poles.”
We now consider whether a curb comes within the definition of “a public highway, road, or street”; an issue of first impression in Michigan. Well-established principles guide our statutory construction efforts. When construing a statute, this Court must ascertain and effectuate the Legislature’s intent as expressed in the words of the statute. Bloomfield Charter Twp v Oakland Co Clerk, 253 Mich App 1, 10; 654 NW2d 610 (2002). In discerning legislative intent, we endeavor to give effect to every word, phrase, and clause in the statute. People v Hill, 269 Mich App 505, 515; 715 NW2d 301 (2006). We construe an act in a manner that harmonizes its provisions, thereby carrying out the legislative purpose. Id.
In defining the term “highway,” the Legislature set forth examples of structures both included within and excluded from the statutory meaning: “ ‘Highway’ means a public highway, road, or street that is open for public travel and includes bridges, sidewalks, trailways, crosswalks, and culverts on the highway,” but “does not include alleys, trees, and utility poles.” MCL 691.1401(e). The question before us is whether the Legislature intended that the word “highway” encompasses curbs. “When used in the text of a statute, the word ‘includes’ can be used as a term of enlargement or of limitation, and the word in and of itself is not determinative of how it is intended to be used.” Frame v Nehls, 452 Mich 171, 178-179; 550 NW2d 739 (1996). In Frame, the Supreme Court interpreted the term “includes” in a limited fashion, “[i]n light of the statute’s text and legislative history.” Id. at 180.
“[C]ontext matters, and thus statutory provisions are to be read as a whole.” Robinson v Lansing, 486 Mich 1, 15; 782 NW2d 171 (2010). We find that the Legislature’s decision to list structures both included within and excluded from the definition of “highway” signals that yet-unidentified structures could fall within the definition of “highway.” Alternatively stated, the Legislature intended as illustrative rather than exhaustive the list of structures it “included” within the definition of “highway.” By setting forth examples of structures both falling under and outside the definition of “highway,” the Legislature contemplated that neither list should be considered complete. Our conclusion comports with the Supreme Court’s characterization of the definition of “highway” in MCL 691.1401(e) as “broad.” Nawrocki, 463 Mich at 182 n 37.
We further consider context in ascertaining whether a curb comes within the meaning of a “highway.” Random House Webster’s Unabridged Dictionary (2d ed, 1998), p 490, defines a curb as “a rim, esp. of joined stones or concrete, along a street or roadway, forming an edge for a sidewalk.” Here, the curb travelled along the road and formed an edge for the road itself. Indisputably, passengers entering and exiting parked vehicles often step on curbs. Curbs routinely serve as the frames for travel on public roads and in this sense are integral components of a road. The statutory context also supports that a curb falls within the definition of “highway” expressed in § 1401(e). Each of the five structures expressly identified within the statutory definition of a highway represents a governmentally constructed object that facilitates public travel on a system of public roads. Vehicles and pedestrians travel on bridges, trailways, crosswalks, and sidewalks; culverts maintain the structural integrity of portions of the road on which cars and people travel. Abrogating immunity for governmental agencies having jurisdiction over these structures fosters the statutory purpose of making highways “reasonably safe and fit for travel.” MCL 691.1402(1). By contrast, the items specifically excluded from the purview of MCL 691.1401(e), “alleys, trees, and utility poles,” do not contribute to or assist the public’s ability to travel. Because the inclusion of curbs within the statutory definition of “highway” comports with legislative intent, we hold that governmental immunity does not bar a claim against a municipality arising from a defective curb.
For the purpose of our construction of Michigan’s governmental tort liability act, we recognize the limited precedential value inherent in decisions from other jurisdictions. See People v Bartlett, 231 Mich App 139, 146; 585 NW2d 341 (1998) (“Notably, the interpretations that other jurisdictions give to similar or identical language is of limited value in determining what the Michigan Legislature intended ....”). Nonetheless, we find worth mentioning that the analyses in several decisions of other state courts express similar views of a curb’s function in a highway system. “A curb separated from the sidewalk by a grass strip is a feature of the road, not the sidewalk.” Levin v Devoe, 221 NJ Super 61, 65; 533 A2d 977 (1987). “[T]he term ‘street’ certainly includes a raised curb on public property at the edge of a roadway . . . .” Humphries v Trustees of Methodist Episcopal Church of Cresco, Iowa, 566 NW2d 869, 873 (Iowa, 1997). “A curb and gutter falls under the definition of ‘[hjighway defects’ or defects on ‘other public grounds.’ ” VanCleve v City of Marinette, 2003 WI 2, ¶ 22; 258 Wis 2d 80, 92; 655 NW2d 113 (2003), quoting Wis Stat 81.17. In Skelly v Village of Port Chester, 6 AD2d 717; 174 NYS2d 562, 563 (1958), New York’s Supreme Court, Appellate Division, construed a municipal law requiring pre-suit notice of any injury sustained “in consequence of any street, highway, bridge, culvert, sidewalk or crosswalk being defective, out of repair, unsafe, dangerous or obstructed.” The court opined that “it would require a strained and unrealistic construction or interpretation” of the municipal law “to hold that the curb, which was the dividing line between the part of the street or highway intended for vehicular traffic and the sidewalk, the part intended for the use of pedestrians, was not part of the highway, or part of the street, or part of the sidewalk.” Id. at 563-564.
We conclude that the curb framing Cross Street constitutes an integral part of the road, and that Benton Harbor bore responsibility for maintaining Cross Street’s curb in reasonable repair. Consequently, the circuit court properly denied Benton Harbor’s motion for summary disposition.
Affirmed. Plaintiff being the prevailing party may assess costs. MCR 7.219(A).
Shapiro, EJ., and Fitzgerald and Borrello, JJ., concurred. | [
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SAAD, J.
Defendant, Merck Sharp & Dohme Corporation, appeals by leave granted the trial court’s order that denied its motion for summary disposition. For the reasons set forth below, we reverse and remand for further proceedings.
I. NATURE OF THE CASE
Michigan’s Attorney General claims that because Merck misrepresented the safety and efficacy of its prescription pain reliever Vioxx in its marketing and because Michigan reimbursed providers who prescribed or dispensed Vioxx, Michigan would not have incurred such expenses but for Merck’s fraudulent activity. The state now claims a right to recover these sums under the Medicaid False Claim Act (MFCA), MCL 400.601 et seq., but Merck counters that Michigan’s Legislature immunized it from liability in suits that seek to adjudicate a drug’s safety when the federal Food and Drug Administration (FDA) has approved the drug. The Attorney General maintains that the statute only exempts drugmakers in traditional products-liability actions in which an end user of the drug, i.e., a consumer, is injured by the ingestion of the drug. Merck argues that, regardless of the label that the Attorney General gives this lawsuit, the claims and ultimate right to recovery center on the safety and efficacy of a drug that the FDA has approved and the immunity statute, therefore, bars the claims.
Michigan’s immunity statute is the only one of its kind in the United States, and the claims made by the parties raise an issue of first impression under Michi gan law. We hold that when, as here, the drug in question was approved by the FDA, the state’s suit to recover Medicaid money premised on fraud by the drug company in its representations regarding the safety and efficacy of the drug is barred by MCL 600.2946(5), which exempts drug companies from prodücts-liability suits regarding FDA-approved drugs.
II. FACTS AND PROCEEDINGS
Merck is the manufacturer of the prescription pain reliever Vioxx. In May 1999, the FDA approved Vioxx for the treatment of osteoarthritis, the management of acute pain in adults, and the treatment of primary dysmenorrhea. Subsequent clinical trials and independent studies showed an increased risk of heart attack in persons who used Vioxx. In 2004, Merck voluntarily removed Vioxx from the market.
On August 21, 2008, the Michigan Attorney General filed this action under the MFCA and alleged that Merck made false and deceptive statements about the safety and efficacy of Vioxx. Plaintiffs relied on § 7 of the MFCA, which provides, in pertinent part:
(1) A person shall not make or present or cause to be made or presented to an employee or officer of this state a claim under the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b, upon or against the state, knowing the claim to be false.
(2) A person shall not make or present or cause to be made or presented a claim under the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b, that he or she knows falsely represents that the goods or services for which the claim is made were medically necessary in accordance with professionally accepted standards. [MCL 400.607(1) and (2).]
Vioxx had been prescribed to Medicaid beneficiaries from 1999 until 2004, when it was taken off the market. Plaintiffs alleged that, as early as 2000, Merck knew that Vioxx was associated with an increased risk of heart attack and Merck concealed or misrepresented the scientific data from clinical trials that demonstrated this risk. Plaintiffs asserted that if Merck had been truthful about the safety and efficacy of Vioxx, they would not have paid all or part of the cost of Vioxx prescribed to Michigan Medicaid beneficiaries, which cost them more than $20 million. Plaintiffs also sought recovery under a theory of unjust enrichment.
Merck moved for summary disposition pursuant to MCR 2.116(C)(8) and argued that plaintiffs’ claims constitute a “product liability action” pursuant to MCL 600.2945(h) and are therefore barred by MCL 600.2946(5), which provides that a manufacturer or seller of a drug is not liable in a “product liability action” if the drug was approved for safety and efficacy by the FDA and labeled in compliance with FDA standards. Merck relied on Duronio v Merck & Co, Inc, unpublished opinion per curiam of the Court of Appeals, issued June 13, 2006 (Docket No. 267003), in which this Court affirmed a trial court’s grant of summary disposition in favor of Merck in a similar case. In Duronio, the plaintiff asserted a fraud claim and a violation of the Michigan Consumer Protection Act (MCPA), MCL 445.901 et seq., on the basis of allegations that Merck misrepresented or concealed the risks associated with Vioxx.
In a product liability action against a manufacturer or seller, a product that is a drug is not defective or unreasonably dangerous, and the manufacturer or seller is not liable, if the drug was approved for safety and efficacy by the United States food and drug administration, and the drug and its labeling were in compliance with the United States food and drug administration’s approval at the time the drug left the control of the manufacturer or seller.
Here, the trial court denied Merck’s motion for summary disposition. The court disagreed in part with the Duronio panel’s interpretation of the phrase “products-liability action.” The court ruled that plaintiffs’ claims do not constitute a products-liability action because, unlike a products-liability action, plaintiffs’ claims under the MFCA and their theory of unjust enrichment do not require proof of a defective or unsafe product. The court also examined the legislative intent underlying MCL 600.2946(5) and concluded that the Legislature did not intend to foreclose actions under the MFCA.
III. ANALYSIS
Merck argues that this is a products-liability lawsuit, which is barred under MCL 600.2946(5). Merck maintains that the trial court erred by construing “product liability action” by considering legislative intent and public policy concerns instead of the plain language of MCL 600.2945(h) and this Court’s interpretation of it in Duronio. Merck argues that the statute defines “product liability action” broadly enough to encompass plaintiffs’ claims. Merck also contends that even if public-policy implications are relevant, the trial court erred in its analysis. MCL 600.2946(5) does not bar all claims against pharmaceutical manufacturers in the hypothetical situations posed by the court. Claims involving ineffective drugs, or the ineffective performance of drugs, would be permitted as long as the safety of the drugs was not implicated. Merck also argues that allowing plaintiffs’ claims to proceed would subvert the legislative intent by leaving pharmaceutical manufacturers exposed to high-stakes litigation, while shielding them from smaller claims brought by individuals such as the Duronio plaintiff. Merck contends that the trial court improperly focused on the labels of plaintiffs’ claims, rather than their substance.
Plaintiffs distinguish their case from a products-liability action, which they describe as a specialized branch of tort law involving the sale of defective products to individual consumers or end users. Plaintiffs argue that their case differs because they seek reimbursement for money paid by a third party that never bought or used the product. Plaintiffs maintain that the immunity granted by statute does not expand the traditional scope of products-liability litigation beyond consumers who sue manufacturers. Plaintiffs also argue that Duronio is not controlling and that the Court should focus on the different purposes of the MFCA and the products-liability statute.
This Court reviews a trial court’s grant of summary disposition de novo. Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). A motion under MCR 2.116(C)(8) tests the legal sufficiency of a claim on the basis of the pleadings alone. Id. at 119-120. The motion is properly granted if the claim is so unenforceable as a matter of law that no factual development could possibly justify recovery. Id. at 119. This Court also reviews de novo as a question of law the interpretation and application of a statute. Health Care Ass’n Workers Compensation Fund v Dir of the Bureau of Worker’s Compensation, 265 Mich App 236, 243; 694 NW2d 761 (2005).
In 1995, the Legislature amended MCL 600.2946 to provide immunity for products-liability claims against a manufacturer or seller of a drug that was approved for safety and efficacy by the FDA and labeled in compliance with FDA standards. MCL 600.2946(5); Taylor v Gate Pharm, 468 Mich 1, 6-7; 658 NW2d 127 (2003). MCL 600.2946(5) states, in pertinent part:
In a product liability action against a manufacturer or seller, a product that is a drug is not defective or unreasonably dangerous, and the manufacturer or seller is not liable, if the drug was approved for safety and efficacy by the United States food and drug administration, and the drug and its labeling were in compliance with the United States food and drug administration’s approval at the time the drug left the control of the manufacturer or seller.
In interpreting this provision, our Supreme Court in Taylor stated that “the Legislature has determined that a drug manufacturer or seller that has properly obtained FDA approval of a drug product has acted sufficiently prudently so that no tort liability may lie. ” Taylor, 468 Mich at 7 (emphasis added).
The central issue is whether plaintiffs’ claims constitute a “product liability action” within the meaning of MCL 600.2946(5). Plaintiffs assert that it is not, but a court is not bound by a party’s choice of labels. Johnston v City of Livonia, 177 Mich App 200, 208; 441 NW2d 41 (1989). Rather, we determine the gravamen of a party’s claim by reviewing the entire claim, and a party cannot avoid dismissal of a cause of action by artful pleading. Maiden, 461 Mich at 135. MCL 600.2945 defines “product liability action” and “production” as follows:
(h) “Product liability action” means an action based on a legal or equitable theory of liability brought for the death of a person or for injury to a person or damage to property caused by or resulting from the production of a product.
(i) “Production” means manufacture, construction, design, formulation, development of standards, preparation, processing, assembly, inspection, testing, listing, certifying, warning, instructing, marketing, selling, advertising, packaging, or labeling. [MCL 600.2945(h) and (i).]
As this Court explained in McElhaney v Harper-Hutzel Hosp, 269 Mich App 488, 493; 711 NW2d 795 (2006),
[t]he primary goal of judicial interpretation of statutes is to ascertain and give effect to the intent of the Legislature. The first step is to examine the plain language of the statute itself. The Legislature is presumed to have intended the meaning it plainly expressed. If the statutory language is clear and unambiguous, appellate courts presume that the Legislature intended the meaning plainly expressed, and further judicial construction is not permitted. [Citations omitted.]
Pursuant to the plain language of the statute, the claims asserted by the Attorney General constitute a “product liability action” subject to the immunity provision of MCL 600.2946(5) if (1) the action is based on a legal or equitable theory of liability, (2) the action is brought for the death of a person or for an injury to a person or damage to property, and (3) that loss was caused by or resulted from the manufacture, construction, design, formulation, development of standards, preparation, processing, assembly, inspection, testing, listing, certifying, warning, instructing, marketing, selling, advertising, packaging, or labeling of a product.
Here, it is clear that elements (1) and (3) are met. Plaintiffs’ action is clearly based on a legal or equitable theory of liability. Plaintiffs allege that Merck is liable for violating MCL 400.607 of the MFCA and under the equitable principle of unjust enrichment. Further, plaintiffs allege that their loss was caused by the marketing and advertising of Vioxx. Plaintiffs claim that Merck made deceptive statements about the safety and efficacy of Vioxx and that they would not have paid all or part of the cost of Vioxx prescribed to Michigan Medicaid beneficiaries had Merck not made the allegedly false and deceptive statements. Moreover, plaintiffs specifically allege that these deceptive statements came in the form of marketing and advertising.
With regard to the second element, the question is whether plaintiffs’ claims were brought for the death of a person or for injury to a person or damage to property. Plaintiffs have made no allegation of a death or physical injury to a person, but seek money damages for alleged “Medicaid overpayments wrongfully received by Defendant.” There is no published authority interpreting MCL 600.2946(5) in this context. However, generally, “ ‘[a] person whose property is diminished by a payment of money wrongfully induced is injured in his property.’ ” Reiter v Sonotone Corp, 442 US 330, 340; 99 S Ct 2326; 60 L Ed 2d 931 (1979), quoting Chattanooga Foundry & Pipe Works v City of Atlanta, 203 US 390, 396; 27 S Ct 65; 51 L Ed 241 (1906) (city induced to pay more than the value of the item received). We also find persuasive the analysis in the unpublished opinion in Duronio. In Duronio, the plaintiff sought money dam ages for the purchase price of Vioxx and costs related to expenses for a medical consultation recommended by the FDA and Merck in connection with Merck’s voluntary withdrawal of Vioxx from the market. Duronio, unpub op at 1-2. The plaintiff alleged fraud and violation of the MCPA, claiming “that Merck disseminated information to the general public that concealed or downplayed potential cardiovascular risks and falsely implied that Vioxx provided superior pain relief to over-the-counter medications, and that Merck’s pharmaceutical representatives misled prescribing physicians regarding the safety of Vioxx for their patients.” Id. at 1.
The trial court granted Merck’s motion for summary disposition in Duronio and ruled that, in substance, the plaintiffs claim was a products-liability claim, as defined in MCL 600.2945(h), and therefore Merck was immune from suit under MCL 600.2946(5). Duronio, unpub op at 2. This Court affirmed and agreed that the plaintiffs claim was a products-liability action within the meaning and scope of MCL 600.2945(h). The panel specifically ruled that the plaintiffs claim for money damages was based on a theory of liability “for ‘damage to property’ caused by or resulting from the production” of Vioxx:
Because plaintiff did not allege any injury to his person, the trial court could only find a legal or equitable theory falling within the scope of MCL 600.2945(h) if plaintiffs action could be characterized as one for “damage to property” caused by or resulting from the production of Vioxx....
MCL 600.2945(h) does not use the word “damages,” but rather requires an “action based on a legal or equitable theory of liability brought for the death of a person or for injury to a person or damage to property caused by or resulting from the production of a product.” Examined in context, we reject plaintiffs claim that “damage to property” only encompasses physical damage to property. The phrase is broad enough to include both physical damage to an object and injury or harm to rights or interests associated with an object, so long as the damage is caused by or results from the production of the product. ...
The fact that the alleged injury in this case is in the form of monetary loss does not preclude application of MCL 600.2945(h). Money itself is a form of property, Garr[a]s v Bekiares, 315 Mich 141, 148-149; 23 NW2d 239 (1946), and a consumer’s expenditure of money for overvalued goods can constitute an injury to property. [Duronio, unpub op at 4-5.]
In addition to holding that the plaintiffs claim for reimbursement was a claim for damage to property, the Duronio panel looked beyond the plaintiffs “fraud” label for his claim and ruled that “the safety and efficacy of Vioxx [was] essential to his monetary loss claim.” Id. at 6. Therefore, the plaintiffs claim was barred under MCL 600.2946(5):
[P]laintiff presented the claim as arising from misrepresentations and omissions, and denied that the alleged concealed risks of using Vioxx ever materialized for him, but it is clear that the safety and efficacy of Vioxx is essential to his monetary loss claim.
Because plaintiff brought the claim for damage to property (money) caused by or resulting from the production (marketing, selling, advertising, packaging, or labeling) of Vioxx, plaintiffs pleaded common-law fraud claim for a refund of the cost of purchasing Vioxx is, in substance, a product liability action within the meaning of MCL 600.2945(h). Assuming for purposes of our review that plaintiffs request to have Merck pay for a medical consultation is actionable in tort, plaintiffs alleged loss of a right or interest in money to obtain a medical consultation constitutes damage to property within the meaning of MCL 600.2945(h). Any additional claim for lost income or expenses to obtain the medical consultation is merely a pecuniary loss flowing from that injury. Citizens for Pretrial Justice v Goldfarb, 415 Mich 255, 268; 327 NW2d 910 (1982).
The trial court properly determined that plaintiffs common-law fraud claim is, in substance, a product liability action subject to the absolute defense established by MCL 600.2946(5). [Duronio, unpub op at 6.][ ]
We hold that plaintiffs’ allegations fall within the statutory definition of “product liability action” because plaintiffs have asserted legal and equitable theories of liability for damage to property resulting from the production of a product. MCL 600.2945(h). Pursuant to the ordinary meaning of the phrase as examined by this Court in Duronio, plaintiffs’ claim of monetary loss based on alleged misrepresentations regarding the safety and efficacy of Vioxx constitutes a claim for “damage to property.”
We agree with Merck that nothing in the statute limits its application to claims brought by consumers and that the statute in no way precludes a claim pursued under the MFCA or described as an action for unjust enrichment. Again, by its own terms, MCL 600.2946(5) applies to actions “based on a legal or equitable theory of liability,” which includes the claims at issue here. If the plain language of the statute results in an outcome that the Legislature now deems improper, it is for the Legislature, not this Court, to narrow the application of the statute by amending or redrafting its terms.
Like the plaintiffs allegations in Bur onto, plaintiffs’ claims here are indisputably based on Merck’s representations about the safety and efficacy of Vioxx. Although a claim under the MFCA does not require proof of an unsafe product, in this case the safety and efficacy of Vioxx is central to plaintiffs’ claims, as plaintiffs’ counsel acknowledged at oral argument. Viewing the complaint in its entirety, the substance of plaintiffs’ claims concerns the safety and efficacy of Merck’s drug and Merck’s representations in that regard. Because the FDA approved the safety and efficacy of Vioxx, plaintiffs’ claims are barred by MCL 600.2946(5).
For these reasons, we hold that the trial court erred when it failed to apply the plain language of MCL 600.2945(h) and MCL 600.2946(5). Further, because plaintiffs’ lawsuit constitutes a “product liability action” under the controlling statutory language, Merck is not liable under the terms of the statute and the trial court erred by denying Merck’s motion for summary disposition.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
Sawyer, EJ., concurred with Saad, J.
To assert a claim under the MFCA against a pharmaceutical company that has undertaken the rigorous and required process to obtain FDA approval for a prescription drug appears to he an interpretation of the act not intended by the Legislature, but in light of our ruling that the Attorney General’s suit is barred by MCL 600.2946(5), we need not address this issue of first impression under Michigan law.
A plethora of lawsuits followed the removal of Vioxx from the market, resulting in billions of dollars in settlements and jury awards under various legal theories.
MCL 600.2945(h) states: “ ‘Product liability action’ means an action based on a legal or equitable theory of liability brought for the death of a person or for injury to a person or damage to property caused by or resulting from the production of a product.”
MCL 600.2946(5) states, in pertinent part:
There is no dispute that the FDA approved Vioxx and its labeling before the drugs left Merck’s control.
Unpublished cases are not binding on this Court, MCR 7.215(C)(1), but we may view them as persuasive when there is limited caselaw on the issue, Dyball v Lennox, 260 Mich App 698, 705 n 1; 680 NW2d 522 (2004).
The Court in Duronio did not decide whether the plaintiffs MCPA claim was also a products-liability action and therefore also barred by the immunity provision in MCL 600.2946(5). Duronio, unpub op at 7. Eather, this Court ruled that the trial court correctly dismissed the plaintiffs MCPA claim because an exemption within the MCPA statute applied, MCL 445.904(l)(a). Id. | [
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JANSEN, J.
Plaintiffs commenced this declaratory judgment action in the circuit court to challenge an administrative rule promulgated by defendant, the Department of Environmental Quality (DEQ). The circuit court determined that the challenged rule fell within the scope of the DEQ’s statutory rulemaking authority, that it was rationally related to the DEQ’s statutory mandate to protect Michigan’s waters from pollution, and that it was neither arbitrary nor capricious as a matter of law. The court accordingly granted summary disposition in favor of the DEQ and dismissed plaintiffs’ claims. Plaintiffs now appeal as of right, arguing that the challenged rule exceeds the scope of the DEQ’s statutory rulemaking authority that the rule violates the intent of the Legislature, that the rule is arbitrary and capricious, and that the circuit court therefore erred by granting summary disposition in favor of the DEQ. For the reasons set forth in this opinion, we affirm.
I. BASIC PACTS AND PROCEDURAL HISTORY
A. STATUTORY BACKGROUND
The Federal Water Pollution Control Act, commonly known as the Clean Water Act (CWA), 33 USC 1251 et seq., “is a comprehensive water quality statute designed to ‘restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.’ ” PUD No 1 of Jefferson Co v Washington Dep’t of Ecology, 511 US 700, 704; 114 S Ct 1900; 128 L Ed 2d 716 (1994), quoting 33 USC 1251(a). By enacting the CWA, Congress sought to eliminate “the discharge of pollutants into the [nation’s] navigable waters” and to attain “an interim goal of water quality which provides for the protection and propagation of fish, shellfish, and wildlife . . . .” 33 USC 1251(a)(1) and (2). “Toward this end, the [CWA] provides for two sets of water quality measures.” Arkansas v Oklahoma, 503 US 91, 101; 112 S Ct 1046; 117 L Ed 2d 239 (1992). These two types of water quality measures are known as “effluent limitations,” 33 USC 1311, and “water quality standards,” 33 USC 1313.
“ ‘Effluent limitations’ are promulgated by the EPA and restrict the quantities, rates, and concentrations of specified substances which are discharged from point sources.” Arkansas, 503 US at 101. The “primary means for enforcing” these effluent limitations is the National Pollutant Discharge Elimination System (NP-DES). Id. In particular, “[t]he [CWA] prohibits the ‘discharge of any pollutant’ into ‘navigable waters’ from any ‘point source,’ except when authorized by a permit issued under the [NPDES].” Sierra Club Macki nac Chapter v Dep’t of Environmental Quality, 277 Mich App 531, 534; 747 NW2d 321 (2008), quoting 33 USC 1311(a), 33 USC 1342, and 33 USC 1362(12); see also Arkansas, 503 US at 102. “Section 402 [of the CWA] establishes the NPDES permitting regime, and describes two types of permitting systems: state permit programs that must satisfy federal requirements and be approved by the EPA, and a federal program administered by the EPA.” Arkansas, 503 US at 102.
“Before a state desiring to administer its own program can do so, the [EPA’s] approval is required and the state must demonstrate, among other things, adequate authority to abate violations through civil or criminal penalties or other means of enforcement.” Ringbolt Farms Homeowners Ass’n v Town of Hull, 714 F Supp 1246, 1253 (D Mass, 1989). Once the EPA approves a state’s request to administer its own NPDES program, that state’s NPDES program is administered pursuant to state law rather than federal law. Id. In other words, the EPA’s authorization of a state-administered NPDES program is “ ‘not a delegation of Federal authority,’ ” but instead allows the state-administered program to function “ ‘in lieu of the Federal program.’ ” Id. (citation omitted); see also Sierra Club, 277 Mich App at 556 (ZAHRA, J., dissenting). A state that administers its own NPDES program may adopt discharge standards and effluent limitations that are more stringent than the federal standards and limitations. 40 CFR 123.1(i)(l); West Virginia Highlands Conservancy, Inc v Huffman, 625 F3d 159, 162 (CA 4, 2010); see also 40 CFR 123.25(a). However, a state’s discharge standards and effluent limitations may not be less stringent than the federal standards and limitations. 33 USC 1370.
In 1973, the EPA granted Michigan the authority to administer its own NPDES program. Sierra Club, 277 Mich App at 535; see also United States v Bay-Houston Towing Co, Inc, 197 F Supp 2d 788, 801 (ED Mich, 2002). Part 31 of Michigan’s Natural Resources and Environmental Protection Act (NREPA), MCL 324.3101 et seq., governs the protection of water resources in this state. Under Part 31 of the NREPA, “the DEQ is responsible for issuing NPDES permits in Michigan and ensuring that those permits comply with applicable federal law and regulations.” Sierra Club, 277 Mich App at 535-536.
B. THE FEDERAL CAFO RULE
As explained previously, the CWA requires an individual to seek and obtain an NPDES permit before he or she may discharge pollutants into the nation’s navigable waters from any “point source.” Id. at 534; see also Arkansas, 503 US at 102. The CWA defines the term “point source” as “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged.” 33 USC 1362(14) (emphasis added). Concentrated animal feeding operations (CAFOs) are “large-scale industrial operations that raise extraordinary numbers of livestock.” Waterkeeper Alliance, Inc v Environmental Protection Agency, 399 F3d 486, 492 (CA 2, 2005). The federal regulations promulgated under the CWA define and categorize CAFOs depending on the number of animals that they stable or confine. Sierra Club, 277 Mich App at 535; see also 40 CFR 122.23(b).
The EPA first promulgated regulations for CAFOs in the 1970s. Waterkeeper, 399 F3d at 494. These initial regulations, “very generally speaking, defined the types of animal feeding operations that qualify as CAFOs, set forth various NPDES permit requirements, and established effluent limitation guidelines for CAFOs.” Id. Thereafter, in 2001, the EPA “proposed to ‘revise and update’ the first set of CAFO regulations.” Id. (citation omitted). The EPA published a proposed new rule for CAFOs and received numerous public comments. Id. at 494-495. Ultimately, in 2003, the EPA promulgated its final CAFO rule (the 2003 Federal CAFO Rule), which was codified within 40 CFR parts 9, 122, 123, and 412. National Pollutant Discharge Elimination System Permit Regulation and Effluent Limitation Guidelines and Standards for Concentrated Animal Feeding Operations (CAFOs), 68 Fed Reg 7176 (February 12, 2003); see also Waterkeeper, 399 F3d at 495.
Among other things, the 2003 Federal CAFO Rule as originally promulgated provided that all CAFO owners or operators “must either apply for an individual NPDES permit or submit a notice of intent for coverage under an NPDES general permit.” 40 CFR 122.23(d)(1); see also Waterkeeper, 399 F3d at 495. The federal rule also contained an exception to this requirement for “CAFOs that have successfully demonstrated no potential to discharge ....” NPDES Permit Regulation and Effluent Guidelines and Standards for CAFOs, 68 Fed Reg at 7182 (emphasis added); see also former 40 CFR 122.23(d)(2).
C. THE MICHIGAN CAFO RULE
In light of the EPA’s promulgation of the 2003 Federal CAFO Rule, “Michigan promulgated its own administrative rules specific to the NPDES for CAFOs, which the EPA reviewed.” Sierra Club, 277 Mich App at 536 (footnote omitted). Michigan’s CAFO regulations are codified within Mich Admin Code, R 323.2102, R 323.2103, R 323.2104, and R 323.2196. Sierra Club, 277 Mich App at 536 n 18. Like the 2003 Federal CAFO Rule as originally promulgated, the Michigan regulations provide that “[a]ll CAFO owners or operators shall apply either for an individual NPDES permit, or a certificate of coverage under an NPDES general permit[.]” Rule 2196(l)(b); see also Sierra Club, 277 Mich App at 536-537. Also like the 2003 Federal CAFO Rule as originally promulgated, the Michigan regulations provide an exception to this requirement for CAFO owners and operators who have “received a determination from the department, made after providing notice and opportunity for public comment, that the CAFO has ‘no potential to discharge[.]’ ” Rule 2196(l)(b); see also Sierra Club, 277 Mich App at 536-537.
D. THE WATERKEEPER DECISION
In 2003 and 2004, various plaintiffs sought review of the 2003 Federal CAFO Rule in the United States Court of Appeals for the Second Circuit. See Waterkeeper, 399 F3d at 490, 497. Among these plaintiffs was a group of farming organizations that challenged the permitting scheme established by the federal rule. In particular, these plaintiffs argued that the EPA had exceeded its statutory jurisdiction by requiring all CAFOs, including those that were not actually discharging pollutants into the navigable waters, “to either apply for NPDES permits or otherwise demonstrate that they have no potential to discharge.” Id. at 504.
The United States Court of Appeals began by observing that § 1342(a)(1) of the CWA authorizes the EPA to issue NPDES permits for “the discharge of any pollutant or combination of pollutants.” Id. (emphasis in original); see also 33 USC 1342(a)(1). “In other words,” the Waterkeeper court continued, “unless there is a ‘discharge of any pollutant,’ there is no violation of the [CWA], and point sources are, accordingly, neither statutorily obligated to comply with EPA regulations for point source discharges, nor are they statutorily obligated to seek or obtain an NPDES permit.” Water-keeper, 399 F3d at 504. The Waterkeeper court then considered § 1362(12) of the CWA, which defines the phrase “discharge of any pollutant” as “ ‘(A) any addition of any pollutant to navigable waters from any point source, [or] (B) any addition of any pollutant to the waters of the contiguous zone or the ocean from any point source other than a vessel or other floating craft.’ ” Waterkeeper, 399 F3d at 504-505, quoting 33 USC 1362(12). On the basis of the language of § 1342(a)(1), as well as the definition of “discharge of any pollutant” set forth in § 1362(12), the court rejected the EPA’s argument that it had statutory authority to promulgate rules requiring all CAFOs to seek and obtain an NPDES permit — even those CAFOs that were not actually discharging pollutants into the navigable waters:
[I]n the absence of an actual addition of any pollutant to navigable waters from any point, there is no point source discharge, no statutory violation, no statutory obligation of point sources to comply with EPA regulations for point source discharges, and no statutory obligation of point sources to seek or obtain an NPDES permit in the first instance. [Waterkeeper, 399 F3d at 505.]
The Waterkeeper court further disagreed with the EPA’s argument that it was statutorily authorized to require the plaintiffs to seek and obtain NPDES permits because “all CAFOs have the potential to discharge pollutants.” Id. (emphasis in original). Relying in part on Natural Resources Defense Council v Environmental Protection Agency, 859 F2d 156, 170 (CA DC, 1988), the Waterkeeper court ruled that “the Clean Water Act gives the EPA jurisdiction to regulate and control only actual discharges — not potential discharges, and certainly not point sources themselves.” Waterkeeper, 399 F3d at 505 (emphasis in original). So, too, did the Waterkeeper court reject the EPA’s argument that it had authority to require the plaintiffs to seek and obtain an NPDES permit because the term “point source” “is defined to mean not only ‘any discernible, confined and discrete conveyance’ from which pollutants ‘are’ discharged, but also ‘any discernible, confined and discrete conveyance’ from which pollutants ‘may be’ discharged.” Id., quoting 33 USC 1362(14) (emphasis in original). The Water-keeper court noted that “while point sources are statutorily defined to include potential dischargers, effluent limitations can, pursuant to 33 U.S.C. § 1311(e), be applied only to ‘point sources of discharge of pollutants,’ i.e. those point sources that are actually discharging.” Waterkeeper, 399 F3d at 505 (emphasis in original).
In the end, the Waterkeeper court determined that the challenged provisions of the 2003 Federal CAFO Rule exceeded the scope of the EPA’s statutory rule-making authority as conferred by the CWA. The court ruled that even though the plaintiffs had the potential to discharge, the EPA lacked authority to require them to seek and obtain an NPDES permit because they were not actually discharging pollutants into the navigable waters. Id. at 505-506. The Waterkeeper court therefore struck down the challenged provisions of the 2003 Federal CAFO Rule that required all CAFOs to either (1) seek and obtain an NPDES permit (irrespective of whether they actually discharge pollutants) or (2) demonstrate that they have no potential to discharge.
E. PROCEEDINGS IN THE NEWAYGO CIRCUIT COURT
On October 22, 2007, plaintiffs commenced the present action by filing a complaint for declaratory relief in the Newaygo Circuit Court. Relying in part on the Waterkeeper decision, plaintiffs alleged that Mich Admin Code, R 323.2196 (Rule 2196) violated the language of the CWA. Plaintiffs suggested that the federal and Michigan NPDES programs were intended to be coextensive and that the DEQ’s authority to promulgate rules requiring CAFOs to obtain NPDES permits was therefore naturally constrained by the language of the CWA itself. Plaintiffs also alleged that Rule 2196 exceeded the scope of the DEQ’s statutory rulemaking authority under Part 31 of the NREPA. Plaintiffs pointed out that, like the 2003 Federal CAFO Rule partially struck down in Waterkeeper, Rule 2196 purported to require all CAFOs to either (1) seek and obtain an NPDES permit (irrespective of whether they actually discharge pollutants), or (2) demonstrate that they have no potential to discharge. Relying on the rationale of Waterkeeper, plaintiffs alleged that the DEQ was without authority to promulgate any regulation requiring them to seek and obtain NPDES permits because they did not actually discharge any pollutants into the waters of Michigan. Plaintiffs asserted that, like the CWA, Part 31 of the NREPA authorizes administrative rulemaking with regard to actual discharges only. Lastly, plaintiffs alleged that by promulgating Rule 2196, the DEQ had violated the intent of the Legislature as expressed through § 229(a) of SB 1086, which ultimately became 2006 PA 343. Among other things, plaintiffs requested that the circuit court (1) declare that the DEQ exceeded its statutory rulemaking authority by promulgating Rule 2196, (2) declare that Rule 2196 was arbitrary and capricious, (3) declare that Rule 2196 violated the intent of the Legislature to the extent that it purported to regulate CAFOs that did not actually discharge pollutants, (4) vacate Rule 2196, and (5) enjoin the DEQ from promulgating similar rules in the future.
On December 26, 2007, in lieu of filing an answer, the DEQ moved for summary disposition pursuant to MCR 2.116(C)(4) on the ground that the circuit court lacked jurisdiction over the present suit because plaintiffs had failed to exhaust certain requirements set forth in Michigan’s Administrative Procedures Act (APA), MCL 24.201 et seq. The DEQ pointed out that, prior to filing the present declaratory judgment action in circuit court, plaintiffs had formally requested from the DEQ a declaratory ruling pursuant to § 63 of the APA, MCL 24.263. Specifically, plaintiffs had requested “a ruling declaring that... [Rule 2196], which requires ... [CAFOs] in the state of Michigan to apply for and obtain ... [NPDES] permits, is not applicable to CAFOs that have not had and do not propose to have an actual discharge of pollutants ----” On August 24, 2007, the DEQ granted plaintiffs’ request and issued a ruling in which it declared that “large CAFOs must apply for and obtain coverage under Michigan’s NPDES permitting system unless the DEQ makes a determination that the CAFO has sufficiently demonstrated ‘[n]o [potential to [discharge’ pursuant to [Rule 2196].”
In its motion for summary disposition, the DEQ contended that rather than commencing the instant declaratory judgment action in circuit court, § 63 of the APA, MCL 24.263, had required plaintiffs to seek judicial review of the DEQ’s declaratory ruling pursuant to Chapter 6 of the APA, MCL 24.301 et seq., which governs judicial review in contested cases. See MCL 24.263 (providing that “[a] declaratory ruling is subject to judicial review in the same manner as an agency final decision or order in a contested case”). However, relying in part on Michigan Ass’n of Home Builders v Dep’t of Labor & Economic Growth Dir, 276 Mich App 467, 480-481; 741 NW2d 531 (2007), vacated in part on other grounds 481 Mich 496 (2008), the circuit court determined that plaintiffs’ request to the DEQ had, in reality, been a challenge to the validity of Rule 2196 rather them a request for a ruling on the applicability of Rule 2196 to “an actual state of facts” within the meaning of MCL 24.263. The court noted that, in responding to plaintiffs’ request, the DEQ had not considered the rule’s applicability to any given set of facts, but had merely reiterated what the plain language of Rule 2196 already clearly required — namely, that all large CAFOs must either seek and obtain an NPDES permit or satisfactorily demonstrate that they have no potential to discharge. The court observed that plaintiffs’ request for a declaratoiy ruling had raised “merely... a question of law” with “no need for factual development,” and noted that although MCL 24.263 would have authorized the DEQ to issue a declaratory ruling concerning the applicability of Rule 2196 to a particular set of facts, there was no statutory authority permitting the DEQ to make rulings or pronouncements concerning the “substantive validity” of its own rule. Instead, the court concluded that the proper mechanism for challenging the substantive validity of Rule 2196 was an action for declaratory relief in the circuit court. Accordingly, the circuit court denied the DEQ’s motion for summary disposition and allowed the instant declaratory judgment action to go forward.
On October 3, 2008, plaintiffs moved for summary disposition pursuant to MCR 2.116(C)(10), arguing that it was beyond genuine factual dispute that Rule 2196 was an invalid regulation and that they were entitled to judgment as a matter of law. In particular, plaintiffs argued that the DEQ’s promulgation of Rule 2196 violated the language of the CWA, as interpreted in the Waterkeeper decision, and that it exceeded the scope of the DEQ’s statutory rulemaking authority under Part 31 of the NREPA. Plaintiffs also argued that Rule 2196 was arbitrary, capricious, and inconsistent with the intent of the Legislature.
The DEQ opposed plaintiffs’ motion and sought summary disposition in its favor pursuant to MCR 2.116(I)(2). The DEQ argued that the reasoning of the Waterkeeper decision was inapplicable to the present controversy and that the validity of Rule 2196 was purely a matter of state law. The DEQ claimed that it had full authority to promulgate Rule 2196 pursuant to §§ 3103 and 3106 of the NREPA, MCL 324.3103 and MCL 324.3106, and that these sections authorized it “to establish permit requirements that are more stringent and have greater specificity than [the] federal regulations.” The DEQ also argued that Rule 2196 was neither arbitrary nor capricious, and that it fell squarely within the subject matter of Part 31 of the NREPA. Lastly, the DEQ pointed out that § 229(a) of SB 1086, which plaintiffs had referred to in support of their motion for summary disposition, was vetoed by Governor Granholm on August 15, 2006, and therefore never became part of 2006 PA 343, the DEQ appropriations act for fiscal year 2007.
The circuit court held oral argument on November 24, 2008. Plaintiffs’ counsel pointed out that his clients were not currently discharging pollutants and had no present plans to discharge pollutants, and therefore argued that the DEQ was without authority to require them to seek and obtain an NPDES permit. He explained his position by way of an analogy, remarking that the DEQ’s application of Rule 2196 to his clients was “something akin to the Secretary of State asking all potential drivers to get a driver’s license even if they are not going to use one.” Counsel argued that neither the CWA nor the NREPA authorized the DEQ to promulgate Rule 2196. Although plaintiffs’ counsel seemed to acknowledge that §§ 3103 and 3106 of the NREPA confer broad rulemaking authority on the DEQ, he argued that the language of § 3103, like the relevant language of the CWA at issue in Waterkeeper, “doesn’t talk about potential or hypothetical... [discharges], it talks about actual [discharges]; it uses an active voice.” He also argued that even though § 3106 specifically grants the DEQ authority to regulate municipal, industrial, and commercial discharges, it does not mention “agricultural” discharges. Thus, he contended that under the doctrine expressio unius est exclusio alterius, § 3106 does not authorize the DEQ to regulate “agricultural” discharges.
Counsel for the DEQ asserted that because the EPA had granted Michigan authority to administer its own NPDES program, the validity of the Michigan CAFO regulations was to be assessed solely according to Michigan law — not federal law. For this reason, counsel contended that “the Waterkeeper decision is really irrelevant in this matter.” Counsel argued that the NREPA’s grant of rulemaking authority to the DEQ was “broad enough” to encompass Rule 2196, even if the language of the CWA examined in the Waterkeeper decision did not grant the EPA similarly broad powers. Counsel for the DEQ also argued that both § 3103 and § 3106 of the NREPA provided “a solid legal foundation for [Rule 2196]” and that “Rule 2196 complies with... NREPA’s underlying legislative purposes.” With respect to plaintiffs’ contention that § 3106 does not allow the DEQ to regulate “agricultural” discharges because it mentions only municipal, industrial, and commercial discharges, counsel for the DEQ argued that CAFOs are clearly “commercial” operations and that the term “commercial” in § 3106 is expansive enough to encompass large-scale, for-profit agricultural activities such as those carried on by plaintiffs. Lastly, counsel argued that Rule 2196 was not arbitrary and capricious and that it was amply supported by the existing administrative record. He cited several studies, documents, and findings contained in the administrative record to demonstrate the serious environmental effects of CAFO discharges into the waters of this state. The circuit court took the matter under advisement.
On January 20, 2009, the circuit court issued a thoughtful and detailed opinion denying plaintiffs’ motion for summary disposition and granting summary disposition in favor of the DEQ. Judge Anthony A. Monton reasoned in pertinent part:
The plaintiffs advance three arguments to support their claim that Rule 2196 is invalid: (1) the rule violates federal law, because it is contrary to the Clean Water Act and regulations promulgated by the EPA; (2) the rule violates state law, because it exceeds the scope of its enabling act which is Part 31 of the Natural Resources Environmental Protection Act; and (3) the rule is arbitrary and capricious.
As previously discussed, Michigan created its own NPDES program using state law, NREPA, for its authority. Federal law clearly contemplates that states may run their own programs, provided the regulations are at least as stringent as the federal program. 40 CFR Sec. 123.25.
The Waterkeeper decision held that the federal enabling act, the Clean Water Act, was not broad enough to regulate potential discharges of animal waste. The effect of this decision would prohibit regulating potential discharges in states where the EPA enforces the NPDES program and in states running their own programs under state enabling statutes that contain the same limitations as the Clean Water Act,
Michigan runs its own program under an enabling statute that is clearly more expansive than the federal Clean Water Act. For example, the scope of the Clean Water Act is limited to discharges into navigable waters in contrast to the broader scope of Michigan law, which includes discharges into all surface and underground waters. MCL [3]24.3103(1). This distinction, by itself, does not give the DEQ authority to regulate potential discharges, but it does serve to give it authority to regulate discharges that would not be covered by the Clean Water Act.
The fact that the DEQ adopted portions of federal regulations struck down by the Waterkeeper decision does not necessarily mean that the corresponding state regulation is invalid. Michigan used its own enabling statute and followed its own Administrative Procedures Act to [promulgate] Rule 2196, which took almost two years to complete. The EPA approved Rule 2196, and this approval represents its determination that the rule does not violate the federal Clean Water Act. Jurisdiction to challenge this determination is vested exclusively with the United States Court of Appeals under 33 USC 1369(b), and no such challenge has been filed. As a result, the real question in this case involves whether or not Rule 2196 complies with Michigan law.
The plaintiffs argue that Rule 2196 does indeed violate state law. The parties agree that this regulation must pass a three-part test to be valid: (1) the rule must be within the subject matter of its enabling statute; (2) the rule must comply with the legislative intent underlying the enabling statute; and (3) the rule must not be arbitrary and capricious. Dvfklstra v DNR. 198 Mich App 482, 484 [499 NW2d 367] (1993). The parties also agree that NREPA is the applicable enabling act for Rule 2196 and that the rule fulfills the first prong of the three-part test. The parties disagree about whether the rule is consistent with NREPA’s legislative intent and whether it is arbitrary and capricious.
[Sections 3103 and 3106 of NREPA provide the authority to adopt Rule 2196[.]
Section 3103 of NREPA plainly and broadly gives the DEQ the authority to pass regulations designed to protect the water resources of Michigan from waste disposal, and this term is fairly interpreted to include the process of collecting, storing, and removing waste from a CAFO. See MCL 691.1416(j). There is no real dispute that CAFOs generate a large amount of waste, and the improper disposal of the waste can pollute Michigan’s waters. The language of these sections clearly contemplate[s] that, in appropriate circumstances, the DEQ may assert its regulatory authority before there is an actual discharge of waste into the waters.
The plaintiffs note that the legislature, in sections 3109 and 3112 of NREPA, requires a permit when someone actually discharges waste or an oceangoing vessel actually discharges ballast waters into Michigan’s waters. They argue that these provisions of NREPA suggest that DEQ’s authority to require a permit starts only if there has been an actual discharge of waste. I disagree. Regulatory enabling statutes establish the general boundaries within which an administrative agency may act, and, in this case, sections 3103 and 3106 set these boundaries. The fact that the legislature may prescribe specific things that the agency must do within these boundaries does not negate the broad grant of authority.
The plaintiffs argue that a budget bill for the 2007 fiscal year (2006 PA. 343) demonstrates ... the legislative intent that only actual discharges from CAFOs should be regulated. This funding bill purported to prohibit the DEQ from expending funds to implement a program requiring CAFOs to obtain a NPDES permit, unless they are actually discharging pollutants into the water. In Governor Granholm’s veto message, she correctly noted that this portion of the legislation was invalid, because it attempted to amend another statute by reference. The legislature is certainly free to modify NREPA to limit its broad grant of authority to the DEQ, but, a budget bill for the 2007 fiscal year does not accomplish this result. It was noted by the DEQ that the legislature did not impose a similar restriction on the expenditure of funds for the 2008 fiscal year.
Lastly, the plaintiffs contend that Regulation 2196 is invalid, because it is arbitrary and capricious. In Dvkstra. the Court of Appeals expressed the principle that a rule is neither arbitrary [n]or capricious if it is rationally related to the purpose of the statute. Id, 491. For this prong of the three-part test, great deference must be given to the judgment of the administrative agency, and any doubts about meeting this part of the test must be resolved in favor [of] the agency. Id.
The practical effect of Rule 2196 is to expand the DEQ’s regulations from CAFOs that make actual discharges, to all CAFOs, except those that are able to demonstrate no potential to discharge. To satisfy the third prong of the test, the DEQ must provide evidence in its administrative record to support its finding that the expanded rule is reasonably related to protecting water resources from pollution.
The plaintiffs claim that the DEQ’s sole basis for adopting Rule 2196 was to comply with the [2003 Federal CAFO Rule] so that Michigan could maintain its NPDES program. The Waterkeeper decision invalidated the EPA’s version of this rule; thus, the plaintiffs claim that the record is devoid of any rationale [sic] basis to support it. This argument requires that the administrative record supporting the rule be evaluated.
During the process of adopting rule 2196, the DEQ submitted a regulatory impact statement which supported its claim that the expanded rule was needed to protect the environment. It noted that previously, 30 CAFOs in Michigan had illegal discharges of animal waste into Michigan’s water resources. The number of these discharges, by itself, was reason for the DEQ to examine whether the old rule was adequately protecting the environment. The DEQ also noted that illegal discharges of animal waste adds [sic] disease- causing organisms such as E Coli to the water and that such waste causes the depletion of dissolved oxygen in water which can be fatal to aquatic life.
Additionally, the DEQ cited the studies and findings relied on by the EPA to expand the scope of its regulation to include potential discharges. Federal Register, Vol. 68, No. 29 (February 12, 2003), pp. 7234-7250. In these findings, the EPA explained the characteristics of animal waste which cause water pollution; it described how animal waste from CAFOs can makes [sic] its way into water resources; it revealed its statistics regarding the number of previous illegal discharges from CAFOs; and it did a cost/benefit analysis to support its claim that an expanded rule was necessary.
The EPA described several characteristics of animal waste that can adversely affect water quality: (1) it contains nitrogen and phosphorous which can cause eutrophication (excessive plant growth and decay) of water, leading to the depletion of oxygen and resultant reduction in water quality and aquatic life, which has been documented as a leading stressor in the Great Lakes; (2) the nitrogen from animal waste contains nitrates which can contaminate drinking water supplies; and (3) animal waste contains pathogens which are disease-causing organisms, and more that 150 pathogens found in such waste pose a risk to humans.
The EPA noted that land application of the waste (spreading manure on the ground or injecting it into the soil) is not the only method by which CAFOs have polluted water. It found that the improper storage of animal waste can result in spills onto the land, or leaks from storage areas can result in waste entering the underground and surface water.
In support of the need to expand the scope of regulations over CAFOs, the EPA stated the following:
... “A literature survey conducted for the proposed rule identified more than 150 reports or discharges to surface waters from hog, poultry, dairy, and cattle operations. Over 30 separate incidents of discharges from swine operations between the years 1992 and 1997 in Iowa alone were reported by the State’s Department of Natural Resources. The incidents resulted in fish kills ranging from about 500 to more than 500,000 fish killed per event. Fish kills or environmental impacts have also been reported by agencies in other States, including Nebraska, Maryland, Ohio, Michigan and North Carolina.”
Id.. 7237. The studies and findings referenced by the EPA provide additional support to the DEQ’s contention that there is a rational basis to regulate potential discharges from CAFOs.
The plaintiffs correctly claim that certain CAFOs pose no risk to pollute water resources, and they should not be ensnared into a costly, complex regulatory scheme to address an environmental risk that does not exist. Rule 2196 reasonably deals with this fact by providing a method for CAFOs to be exempted from the permit requirement i[f] they pose no potential to discharge, and the DEQ states that two of the plaintiffs in this case have already received the benefit of this exemption.
In sum, I make the following rulings: (1) DEQ’s Rule 2196 does not violate the federal Clea[n] Water Act; (2) the enabling act for this rule, Part 31 of NREPA, provides the DEQ the legal authority to regulate potential discharges of animal waste from CAFOs; and (3) the rule is rationally related to the DEQ’s responsibility under NREPA to protect Michigan’s water resources from pollution. I grant summary disposition in favor of the DEQ.
II. STANDARDS OF REVIEW
We review de novo the circuit court’s decision to grant or deny a motion for summary disposition. Spiek v Dep’t of Transp, 456 Mich 331, 337; 572 NW2d 201 (1998). The scope of an administrative agency’s statutory rulemaking authority and whether an agency has exceeded that authority are questions of law that we review de novo. Consumers Power Co v Pub Serv Comm, 460 Mich 148, 157; 596 NW2d 126 (1999); In re Com plaint of Pelland Against Ameritech Mich, 254 Mich App 675, 682; 658 NW2d 849 (2003). Whether an administrative rule is arbitrary and capricious is a question of law, as is the question whether a rule comports with the intent of the Legislature. See Chesapeake & Ohio R Co v Pub Serv Comm, 59 Mich App 88, 99; 228 NW2d 843 (1975); see also Blank v Dep’t of Corrections, 222 Mich App 385, 407-408; 564 NW2d 130 (1997). Statutory interpretation is a question of law that we review de novo on appeal. In re Complaint of Rovas Against SBC Mich, 482 Mich 90, 102; 754 NW2d 259 (2008).
III. DISCUSSION
Plaintiffs argue that the circuit court erred by denying their motion for summary disposition and by granting summary disposition in favor of the DEQ. Specifically, plaintiffs assert that Rule 2196 exceeds the scope of the DEQ’s statutory rulemaking authority under the NREPA, that Rule 2196 is inconsistent with the intent of the Legislature, and that Rule 2196 is arbitrary and capricious. We disagree with plaintiffs in all respects.
A. GENERAL PRINCIPLES
In Michigan, the rulemaking authority of a state administrative agency “derives from powers that the Michigan Legislature has granted.” Wolverine Power Supply Coop, Inc v Dep’t of Environmental Quality, 285 Mich App 548, 557; 777 NW2d 1 (2009). “It is firmly established that the [L]egislature may authorize the adoption by an administrative agency, charged with the administration of a particular enactment, of rules and regulations designed to effectuate the purposes of the enactment.” Sterling Secret Service, Inc v Dep’t of State Police, 20 Mich App 502, 513; 174 NW2d 298 (1969). At the same time, however, it is well settled that “[a] statute that grants power to an administrative agency must be strictly construed and the administrative authority drawn from such statute must be granted plainly, because doubtful power does not exist.” In re Procedure & Format for Filing Tariffs Under the Mich Telecom Act, 210 Mich App 533, 539; 534 NW2d 194 (1995).
To be enforceable, administrative rules must be constitutionally valid, procedurally valid, and substantively valid. LeDuc, Michigan Administrative Law (2001), § 4:30, p 214. To determine the substantive validity of an administrative rule, Michigan courts employ a three-part test: (1) whether the rule is within the subject matter of the enabling statute, (2) whether it complies with the legislative intent underlying the enabling statute, and (3) whether it is arbitrary or capricious. Luttrell v Dep’t of Corrections, 421 Mich 93, 100; 365 NW2d 74 (1984); see also Ins Institute of Mich v Comm’r of Fin & Ins Servs, 486 Mich 370, 385; 785 NW2d 67 (2010). Administrative rules “are valid so long as they are not unreasonable; and, if doubt exists as to their invalidity, they must be upheld.” Sterling Secret Service, 20 Mich App at 514; see also Toole v State Bd of Dentistry, 306 Mich 527, 533-534; 11 NW2d 229 (1943).
The construction of a statute by a state administrative agency charged with administering it “ ‘is always entitled to the most respectful consideration and ought not to be overruled without cogent reasons.’ ” In re Complaint of Rovas, 482 Mich at 103, quoting Boyer-Campbell Co v Fry, 271 Mich 282, 296; 260 NW 165 (1935). Even so, “ ‘[r]espectful consideration’ is not equivalent to any normative understanding of ‘deference’ as the latter term is commonly used . ...” In re Complaint of Rovas, 482 Mich at 108. Indeed, an administrative agency’s interpretation “is not binding on the courts, and it cannot conflict with the Legislature’s intent as expressed in the language of the statute at issue.” Id. at 103; see also Ins Institute of Mich, 486 Mich at 385. Thus, even a longstanding administrative interpretation cannot overcome the plain language of a statute. Kinder Morgan Mich, LLC v City of Jackson, 277 Mich App 159, 173; 744 NW2d 184 (2007). The Michigan courts have never adopted the Chevron deference doctrine, which is followed by the federal courts. In re Complaint of Rovas, 482 Mich at 111; see also Kinder Morgan, 277 Mich App at 172.
B. INAPPLICABILITY OF FEDERAL LAW
On appeal, plaintiffs appear to have abandoned their argument that Rule 2196 is violative of the CWA. However, lest there be any lingering confusion on the subject, we wish to make clear that the scope of the DEQ’s statutory authority to promulgate administrative rules concerning NPDES permitting in Michigan is purely a matter of state law. As explained earlier, the EPA granted Michigan the authority to administer its own NPDES program in 1973. Once the EPA has approved a state’s request to administer its own NP-DES program, that state’s NPDES program is administered pursuant to state law rather than federal law. Ringbolt Farms, 714 F Supp at 1253; see also Sierra Club, 277 Mich App at 556 (ZAHRA, J., dissenting). The DEQ’s administration of Michigan’s NPDES permitting system is governed by and carried out pursuant to Part 31 of the NREPA. Sierra Club, 277 Mich App at 535-536. We reiterate that although a state’s discharge standards and effluent limitations may not be less stringent than the federal standards and limitations, 33 USC 1370, a state that administers its own NPDES program may adopt discharge standards and effluent limitations that are more stringent than the federal standards and limitations, 40 CFR 123.1(i)(l); West Virginia Highlands, 625 F3d at 162.
C. WHETHER RULE 2196 IS WITHIN THE SUBJECT MATTER OF THE NREPA
In order to determine whether the DEQ exceeded its statutory rulemaking authority in this case, we must begin with the first prong of the Luttrell test. This requires us to ask whether Rule 2196 falls within the subject matter of the NREPA, see Luttrell, 421 Mich at 100, and is essentially a question of statutory construction, see Wolverine Power, 285 Mich App at 557-558.
Our primary goal when interpreting a statute is to ascertain and give effect to the intent of the Legislature. Frankenmuth Mut Ins Co v Marlette Homes, Inc, 456 Mich 511, 515; 573 NW2d 611 (1998). “ ‘[T]he Legislature’s intent must be gathered from the language used, and the language must be given its ordinary meaning.’ ” Id. (citation omitted). The Legislature is presumed to have intended the meaning that it plainly expressed, Rowland v Washtenaw Co Rd Comm, 477 Mich 197, 219; 731 NW2d 41 (2007), and clear statutory language must be enforced as written, Fluor Enterprises, Inc v Dep’t of Treasury, 477 Mich 170, 174; 730 NW2d 722 (2007). We presume that every word of a statute has some meaning and must avoid any interpretation that would render any part of a statute surplus-age or nugatory. Hoste v Shanty Creek Mgt, Inc, 459 Mich 561, 574; 592 NW2d 360 (1999). As far as possible, effect should be given to every sentence, phrase, clause, and word. Pohutski v Allen Park, 465 Mich 675, 683-684; 641 NW2d 219 (2002).
Under Part 31 of the NREPA the DEQ has broad powers to regulate the discharge of pollutants into the waters of the state, to set standards concerning water pollution, to issue permits regarding the discharge or potential discharge of pollutants into Michigan’s waters, and to compel compliance with those permits. See MCL 324.3103(1); MCL 324.3106; MCL 324.3112(1). In order to allow the DEQ to effectively perform its duties with regard to the control of water pollution under Part 31, the Legislature has expressly conferred various rulemaking powers upon the DEQ. See, e.g., MCL 324.3103(2); MCL 324.3103(3); MCL 324.3106; MCL 324.3107; MCL 324.3111; MCL 324.3112(6); MCL 324.3131(1). While many of the rulemaking powers conferred by Part 31 of the NREPA plainly do not apply in this case, the DEQ contends that it was authorized to promulgate Rule 2196 pursuant to the rulemaking authority set forth in §§ 3103 and 3106. The circuit court concurred with the DEQ, ruling that “sections 3103 and 3106 of NREPA provide the authority to adopt Rule 2196[.]” We agree that the DEQ had authority to promulgate Rule 2196 under the rulemaking provision of § 3103(2), but conclude that the DEQ lacked authority to do so under the rulemaking provision of § 3106.
There are two separate rulemaking provisions set forth in § 3103. Those provisions state in pertinent part:
(2) The [DEQ] shall enforce this part and may promulgate rules as it considers necessary to carry out its duties under this part... .
(3) The [DEQ] may promulgate rules and take other actions as may be necessary to comply with the federal water pollution control act... and to expend funds available under such law for extension or improvement of the state or interstate program for prevention and control of water pollution. [MCL 324.3103(2) and (3).]
Section 3103(2) contains a broad and general grant of rulemaking authority, authorizing the DEQ to promulgate any rules “as it considers necessary to carry out its duties under this part.” MCL 324.3103(2). The term “this part” in § 3103(2) clearly means Part 31 of the NREPA, which confers several “duties” upon the DEQ. In particular, the Legislature has given the DEQ the duty to “protect and conserve the water resources of the state” and to “control. .. the pollution of surface or underground waters of the state and the Great Lakes, which are or may be affected by waste disposal of any person.” MCL 324.3103(1). The Legislature has also charged the DEQ with the duty to “establish pollution standards for lakes, rivers, streams, and other waters of the state in relation to the public use to which they are or may be put, as it considers necessary,” to “issue permits that will assure compliance with state standards to regulate municipal, industrial, and commercial discharges or storage of any substance that may affect the quality of the waters of the state,” to “set permit restrictions that will assure compliance with applicable federal law and regulations,” and to “take all appropriate steps to prevent any pollution the [DEQ] considers to be unreasonable and against public interest in view of the existing conditions in any lake, river, stream, or other waters of the state.” MCL 324.3106. Under the plain language of § 3103(2), the DEQ has authority to promulgate rules that it considers necessary to carry out any of these enumerated duties. MCL 324.3103(2). It is well settled that “an administrative agency may make such rules and regulations as are necessary for the efficient exercise of its powers expressly granted . . . .” York v Detroit (After Remand), 438 Mich 744, 767; 475 NW2d 346 (1991).
Accordingly, the question becomes whether the subject matter of Rule 2196 is encompassed by, or falls within, any of the abovementioned statutory duties. We answer this question in the affirmative. Unlike the ERA, which is limited by the plain language of the CWA to regulating the “discharge of pollutants” or the “discharge of any pollutant,” see 33 USC 1311(e); 33 USC 1342(a)(1); Waterkeeper, 399 F3d at 504-505, the DEQ has much broader duties and powers with respect to the regulation of water pollution under Part 31 of the NREPA. For instance, as explained earlier, the DEQ has the duty to “protect and conserve the water resources of the state,” MCL 324.3103(1), and to “take all appropriate steps to prevent any pollution the [DEQ] considers to be unreasonable and against public interest in view of the existing conditions in any. .. waters of the state,” MCL 324.3106. Unlike the provisions of the CWA examined in Waterkeeper, these statutory duties do not speak of “discharges” at all; nor do they implicate only present or actual pollution. Indeed, the duty to “take all appropriate steps to prevent any pollution the [DEQ] considers to be unreasonable and against public interest,” id. (emphasis added), clearly grants the DEQ authority to forestall potential pollution even before any discharge of pollutants ever occurs. The primary definition of the verb “prevent” is “to keep from occurring^]” Random House Webster’s College Dictionary (1997). As more fully explained in the dictionary, “[t]o PREVENT is to stop something effectually by forestalling action and rendering it impossible[.l” Id. (emphasis added). These definitions confirm that § 3106 confers upon the DEQ the responsibility of forestalling and rendering impossible any water pollution that it considers to be unreasonable and against the public interest, even before such pollution ever occurs. We consequently reject plaintiffs’ argument that “section 3106 speaks only to actual discharges.”
It is well established that an agency may exercise some discretion concerning the rules that it promulgates, as long as the ultimate rules are consistent with the legislative scheme. See Bunce v Secretary of State, 239 Mich App 204, 217; 607 NW2d 372 (1999); see also Argo Oil Corp v Atwood, 274 Mich 47, 52; 264 NW 285 (1935). Here, the DEQ has chosen to carry out its duties under Part 31 of the NREPA by requiring all CAFOs to either (1) seek and obtain an NPDES permit (irrespective of whether they actually discharge pollutants) or (2) satisfactorily demonstrate that they have no potential to discharge. Rule 2196 furthers the DEQ’s statu tory duty to “prevent any pollution the [DEQ] considers to be unreasonable and against public interest,” MCL 324.3106, by preventing all CAFO discharges before they occur, except as otherwise allowed under the terms of an NPDES permit. Moreover, as the circuit court correctly noted, Rule 2196 applies only to CAFOs that have a real potential to discharge pollutants, providing a complete exemption for CAFOs which establish that they truly pose “no potential to discharge.” Rule 2196(l)(b). In sum, because Part 31 of the NREPA confers upon the DEQ the duty to “prevent any pollution” of the state’s waters, MCL 324.3106, the DEQ had the statutory authority to promulgate Rule 2196 under the rulemaking provision of § 3103(2).
In contrast, the rulemaking provision of § 3106 is plainly inapplicable to the present controversy. That provision grants the DEQ authority to promulgate rules “restricting the polluting content of any waste material or polluting substance discharged or sought to be discharged ....” MCL 324.3106 (emphasis added). In other words, it grants the DEQ power to promulgate rules concerning the actual content or composition of waste and other polluting substances that are discharged into Michigan’s waters. Purely by way of example, the rulemaking provision of § 3106 would authorize the DEQ to promulgate rules setting the maximum amount of mercury that could be contained in any waste effluent or the maximum number of harmful bacteria that could be contained in every gallon of discharged waste. However, the provision simply does not contain any language authorizing the DEQ to promulgate rules concerning the types of point-source dischargers (CAFOs, for example) that must seek and obtain NPDES permits. As explained earlier, “[a] statute that grants power to an administrative agency must be strictly construed and the administrative authority drawn from such statute must be granted plainly, because doubtful power does not exist.” In re Procedure & Format for Filing Tariffs, 210 Mich App at 539. An agency may not expand its rulemaking authority beyond that which the Legislature has delegated to it. Jackson v Secretary of State, 105 Mich App 132, 139; 306 NW2d 422 (1981).
We conclude that Rule 2196 is within the scope of Part 31 of the NREPA and that the DEQ had authority, under § 3103(2), to promulgate Rule 2196 in furtherance of its statutory duty “to prevent any pollution” of the waters of the state. MCL 324.3106. We also conclude that, because the powers conferred upon the DEQ by Part 31 of the NREPA are broader than the powers conferred upon the EPA by the CWA, the reasoning of the Waterkeeper decision does not apply in this case. As the DEQ acknowledges in its brief on appeal, the effect of the Waterkeeper decision has been to “ma[ke] the Michigan CAFO Rule more stringent than the federal rule.” But as noted earlier, Michigan is perfectly free to adopt NPDES permitting and discharge standards that are more stringent than the federal requirements. 40 CFR 123.1(i)(l); West Virginia Highlands, 625 F3d at 162.
D. WHETHER RULE 2196 COMPLIES WITH THE LEGISLATURE’S INTENT
We must next determine whether Rule 2196 comports with the legislative intent underlying Part 31 of the NREPA. See Luttrell, 421 Mich at 100. We conclude that it does. Plaintiffs’ primary argument in this regard is that the Legislature intended to limit the DEQ’s rulemaking powers to the regulation of actual or imminent discharges of waste or pollutants. In support of their argument, plaintiffs cite MCL 324.3110 (requiring the certification of wastewater treatment facility operators for any “entity that discharges liquid wastes into any surface water or groundwater”), MCL 324.3111 (requiring an annual report from any person “who discharges to the waters of the state”), MCL 324.3113(1) (requiring a person who intends to make a new or increased discharge to file an application describing the “proposed point of discharge” and “the estimated amount to be discharged”), and MCL 324.3120(1) (setting forth fees that must accompany an application for a permit “authorizing a discharge into surface water”). Plaintiffs argue that “[n]one of these requirements apply [sic] to a person that ‘might’ discharge.” Plaintiffs additionally contend that, with the possible exception of MCL 324.3112(6) (requiring “all ocean going vessels engaging in port operations” to seek and obtain a permit), there are no provisions of Part 31 of the NREPA that extend NPDES permit requirements to point sources which are not actively discharging but which merely have the potential to discharge. We concede that many of the statutory sections relied on by plaintiffs are phrased in terms of present discharges. But plaintiffs’ arguments wholly disregard the Legislature’s specific command that the DEQ “take all appropriate steps to prevent any pollution the department considers to be unreasonable and against public interest in view of the existing conditions in any . . . waters of the state.” MCL 324.3106 (emphasis added). The Legislature has declared that “[a]ll words and phrases shall be construed and understood according to the common and approved usage of the language[.]” MCL 8.3a. As we have already explained, the common and approved meaning of the verb “prevent” is “to keep from occurring,” or “to stop something effectually by forestalling action and rendering it impossible.” Random House Webster’s College Dictionary (1997). Accordingly, and for the reasons already stated, § 3106 confers upon the DEQ broad powers to preempt or forestall the pollution of the waters of this state before any pollutants are ever discharged in the first instance.
Plaintiffs also argue that Rule 2196 violates the Legislature’s intent as expressed in § 229(a) of SB 1086, which ultimately became 2006 PA 343. As passed by the Michigan House of Representatives and Michigan Senate, § 229(a) provided in pertinent part that the DEQ “shall not implement or enforce administrative rules, policies, guidelines, or procedures that. . . [r]equire a farm to obtain a [NPDES] permit under part 31 of the [NREPA] ... if the farm has not been found by the [DEQ] to have a regulated discharge of pollutants into waters of this state.” However, while Governor Granholm signed SB 1086, she exercised her line-item veto authority with respect to the language contained in § 229(a), stating in her veto message to the Michigan Senate that “boilerplate section[] 229 ... [is] legally unenforceable, as [it] attempts] to amend [the NREPA] by reference.” 2 Public & Local Acts of Michigan (Session of 2006), Vetoes, p 2472. Because Governor Granholm vetoed the language contained in § 229(a), and because that language was not “re-passed . .. over the executive veto,” Const 1963, art 5, § 19, by two-thirds of the members elected to and serving in both houses of the Legislature, the language contained in § 229(a) never became law, Const 1963, art 4, § 33. Indeed, following the governor’s veto “[t]he Legislature took no further action to carry out its earlier expressed intention[.]” Oakland Schools Bd of Ed v Superintendent of Pub Instruction, 392 Mich 613, 618; 221 NW2d 345 (1974).
Notwithstanding the fact that § 229(a) of SB 1086 never became part of the final DEQ appropriations act for fiscal year 2007, plaintiffs maintain that the language contained in § 229(a) was still indicative of the Legislature’s intent to limit the DEQ’s authority to require certain CAFOs to seek and obtain NPDES permits. However, the Michigan Constitution sets forth the sole means by which the Legislature’s intent may be expressed: (1) three readings in each house, (2) enactment, and (3) gubernatorial approval or passage over the governor’s veto. Const 1963, art 4, § 26; Const 1963, art 4, § 33; see also Craig v Larson, 432 Mich 346, 365; 439 NW2d 899 (1989) (LEVIN, J., concurring in part and dissenting in part). Because the language of § 229(a) was vetoed by the governor and was not reenacted over her veto, that language cannot be cited as evidence of the Legislature’s intent.
All told, the Legislature has conferred upon the DEQ broad powers to regulate the pollution of Michigan’s waters, MCL 324.3103(1); MCL 324.3106, and to promulgate any rules that it “considers necessary to carry out its duties” under Part 31 of the NREPA, MCL 324.3103(2). It cannot be gainsaid that most CAFOs, by virtue of their sheer size and number of animals, accumulate great amounts of waste that must either be stored or ultimately discharged. While plaintiffs claim that they have no present plans to discharge pollutants into Michigan’s waters, there is always a possibility that large CAFOs will be forced to discharge some or all of their animal waste and that these discharges may eventually find their way into the “waters of this state.” MCL 324.3106. Likely aware of these possibilities, the Legislature not only empowered the DEQ to regulate actual or present discharges, but also charged the DEQ with the duty to “take all appropriate steps to prevent any pollution the [DEQ] considers to be unreasonable and against public interest in view of the existing conditions in any . . . waters of the state.” Id. (emphasis added). In order to carry out this duty, the DEQ has found it necessary to require all CAFOs to either (1) seek and obtain an NPDES permit (irrespective of whether they actually discharge pollutants), or (2) demonstrate that they have no potential to discharge. Rule 2196. The circuit court did not err by concluding that Rule 2196 comports with the intent of the Legislature.
E. WHETHER RULE 2196 IS ARBITRARY AND CAPRICIOUS
The final question, then, is whether Rule 2196 is arbitrary and capricious. See Luttrell, 421 Mich at 100. “Arbitrary means fixed or arrived at through an exercise of will or by caprice, without consideration or adjustment with reference to principles, circumstances or significance, and capricious means apt to change suddenly, freakish or whimsical[.]” Nolan v Dep’t of Licensing & Regulation, 151 Mich App 641, 652; 391 NW2d 424 (1986); see also Bundo v City of Walled Lake, 395 Mich 679, 703 n 17; 238 NW2d 154 (1976). In general, an agency’s rules will be found to be arbitrary only if the agency “had no reasonable ground for the exercise of judgment.” American Trucking Associations, Inc v United States, 344 US 298, 314; 73 S Ct 307; 97 L Ed 337 (1953).
Plaintiffs argue that Rule 2196 is arbitrary and capricious for several reasons. First, plaintiffs contend that the DEQ arbitrarily modeled Rule 2196 on the 2003 Federal CAFO Rule, even after the DEQ knew or should have known that the Waterkeeper court had struck down the challenged federal regulation. Second, plaintiffs contend that Rule 2196 “violates common sense” because it is similar to a rule “requiring a 10 year old ... to obtain a driver’s license.” Third, plaintiffs assert that the DEQ “flip-flopped on its earlier stated position” by promulgating Rule 2196 after the election of Governor Granholm. Lastly, plaintiffs argue that the DEQ acted arbitrarily by promulgating Rule 2196 without considering any “alternative options.” We disagree in all respects.
It is true, by and large, that the DEQ modeled the language of Rule 2196 on the 2003 Federal CAFO Rule. It is also true that the DEQ went forward with the finalization of Rule 2196 even after the United States Court of Appeals for the Second Circuit had struck down the analogous provisions of the 2003 Federal CAFO Rule in Waterkeeper. But it does not necessarily follow that Rule 2196 is arbitrary and capricious. After the Waterkeeper decision, the DEQ determined that Rule 2196 was still necessary as a means to protect Michigan’s waters from CAFO-originated pollution. Indeed, in its regulatory impact statement, the DEQ had identified two different environmental studies to sup port its proposed promulgation of Rule 2196. The Waterkeeper decision did nothing to invalidate the findings of these studies or to otherwise undermine their reliability. Instead, the Waterkeeper decision was based entirely on the federal court’s interpretation of the language of the CWA — language unlike that contained in Part 31 of the NREPA. The fact that the DEQ proceeded undeterred with its plans to promulgate Rule 2196 on the basis of the environmental studies cited in its previously published regulatory impact statement does not render the rule arbitrary or capricious. Again, we note that federal law allows Michigan to adopt discharge standards and effluent limitations that are more stringent than the federal NPDES standards and limitations. 40 CFR 123.1(i)(l).
We also reject plaintiffs’ assertion that Rule 2196 is arbitrary and capricious because the DEQ promulgated it without considering any “alternative options.” Contrary to plaintiffs’ argument in their brief on appeal, the DEQ has not “repeatedly state[d]” that “the only reason for [Rule 2196] is the federal mandate[.]” As Judge Monton aptly observed in his detailed opinion, the DEQ carefully considered whether Rule 2196 was needed to deter ongoing illegal discharges of animal waste into the waters of this state. Given that numerous CAFOs without NPDES permits had already discharged waste into Michigan’s waters, the DEQ concluded that it was reasonable and necessary to require all CAFOs to seek and obtain an NPDES permit or to satisfactorily demonstrate that they have no potential to discharge. We perceive no evidence that the DEQ failed to consider all of its available options.
Nor can we agree with plaintiffs’ contention that Rule 2196 “violates common sense” because it is akin to a rule “requiring a 10 year old ... to obtain a driver’s license.” As explained earlier, CAFOs generate large amounts of animal waste and pose known risks to Michigan’s water resources. Rule 2196 is rationally related to the Legislature’s purpose to prevent the pollution of the waters of this state. See Dykstra v Dep’t of Natural Resources, 198 Mich App 482, 491; 499 NW2d 367 (1993); Binsfeld v Dep’t of Natural Resources, 173 Mich App 779, 787; 434 NW2d 245 (1988).
Finally, we fully acknowledge that counsel for the DEQ stated at oral argument before the circuit court that the promulgation of Rule 2196 was motivated, at least in part, by a change of administrations in Lansing. But Rule 2196 is not arbitrary and capricious merely because the DEQ changed its position with regard to CAFOs following the election of Governor Granholm. Administrative agencies such as the DEQ are part of the executive branch of state government. In re Complaint of Rovas, 482 Mich at 97. The executive power of the state is vested exclusively in the governor. Const 1963, art 5, § 1. The Framers of the Michigan Constitution desired to give the Governor “real control over the executive branch,” House Speaker v Governor, 443 Mich 560, 562; 506 NW2d 190 (1993), including the power to appoint the heads of departments like the DEQ, Const 1963, art 5, § 3, and to supervise the affairs of each principal department, Const 1963, art 5, § 8. For our constitutional framework to operate as it was intended, each newly elected governor must possess the power and ability to manage the bureaucracy, to supervise the administrative agencies, and to influence those agencies’ rulemaking decisions through his or her appointments and directives. It would be illogical, indeed, to conclude that an administrative rule is arbitrary and capricious merely because it differs from a prior rule that was promulgated under a previous administration.
On the facts before us, we simply cannot conclude that Rule 2196 is arbitrary or capricious. Rule 2196 is a regulation of general applicability that the DEQ intends to apply to all CAFOs of a certain size. Accordingly, it is not “apt to change suddenly, freakish or whimsical[.]” Nolan, 151 Mich App at 652. Nor is there any evidence that the DEQ was motivated by caprice, prejudice, or animus or that Rule 2196 was promulgated without reference to adequate principles or standards. See id. Instead, it strikes us that Rule 2196 was promulgated deliberatively, with reference to sufficient standards, and without improper motives. We recognize that plaintiffs are unhappy with Rule 2196, which will certainly impose new costs and requirements. But a rule is not arbitrary or capricious merely because it displeases the regulated parties. See Binsfeld, 173 Mich App at 786-787. Nor is a rule arbitrary or capricious simply because it causes some inconvenience or imposes new or additional requirements. See Nolan, 151 Mich App at 652. Although Rule 2196 may displease plaintiffs, we conclude that it is rationally related to the Legislature’s purpose to prevent the pollution of the waters of this state and that it is therefore neither arbitrary nor capricious. Dykstra, 198 Mich App at 491.
F. SCOPE OF THE ADMINISTRATIVE RECORD
Lastly, plaintiffs suggest that the DEQ has improperly attempted to bolster Rule 2196 by citing certain justifications for the rule that are not contained in the administrative record. It is true, at least in the federal context, that an agency must typically defend its actions on the basis of justifications contained in the administrative record rather than post hoc rationalizations developed during litigation. See, e.g., Securities & Exchange Comm v Chenery Corp, 332 US 194, 196-197; 67 S Ct 1575; 91 L Ed 1995 (1947). However, this issue is not properly before us because it is not contained in plaintiffs’ statement of the questions presented. MCR 7.212(C)(5); Mettler Walloon, LLC v Melrose Twp, 281 Mich App 184, 221; 761 NW2d 293 (2008); McGoldrick v Holiday Amusements, Inc, 242 Mich App 286,298; 618 NW2d 98 (2000). We therefore decline to address it further.
IV CONCLUSION
Rule 2196 does not exceed the scope of the DEQ’s statutory rulemaking authority. The rule falls squarely within the scope of Part 31 of the NREPA, is consistent with the underlying legislative intent, and is not arbitrary or capricious. We conclude that the DEQ was fully authorized to require CAFOs to either (1) seek and obtain an NPDES permit (irrespective of whether they actually discharge pollutants) or (2) satisfactorily demonstrate that they have no potential to discharge. The circuit court properly denied plaintiffs’ motion for summary disposition and granted summary disposition in favor of the DEQ.
In light of our conclusions in this case, we need not consider the remaining arguments raised by the parties on appeal.
Affirmed. No taxable costs pursuant to MCR 7.219, a public question having been involved.
HOEKSTRA, PJ., and BECKERING, J., concurred with Jansen, J.
In contrast, “ ‘[w]ater quality standards’ are, in general, promulgated by the States and establish the desired condition of a waterway.” Arkansas, 503 US at 101; see also 33 USC 1313. Water quality limitations serve to “supplement effluent limitations ‘so that numerous point sources, despite individual compliance with effluent limitations, may be further regulated to prevent water quality from falling below acceptable levels.’ ” Arkansas, 503 US at 101, quoting Environmental Protection Agency v State Water Resources Control Bd, 426 US 200, 205 n 12; 96 S Ct 2022; 48 L Ed 2d 578 (1976).
The Michigan Administrative Code defines and categorizes CAFOs in a similar manner, according to the number of animals that they stable or confine. See Mich Admin Code, R 323.2102(i).
The DEQ’s determination that a CAFO has “no potential to discharge” is made pursuant to Rule 323.2196(4).
The United States Court of Appeals has exclusive jurisdiction over challenges to the EPA’s promulgation of “any effluent limitation” under the CWA. 33 USC 1369(b)(1); see also Central Hudson Gas & Electric Corp v Environmental Protection Agency, 587 F2d 549, 555 (CA 2, 1978).
In the wake of the Waterkeeper decision, the EPA has made certain changes to the federal CAFO regulations. See Revised National Pollutant Discharge Elimination System Permit Regulation and Effluent Limitations Guidelines for Concentrated Animal Feeding Operations in Response to the Waterkeeper Decision, 73 Fed Reg 70418 (November 20, 2008).
The language of § 229(a) of SB 1086 provided in pertinent part that the DEQ “shall not implement or enforce administrative rules, policies, guidelines, or procedures that. .. [r]equire a farm to obtain a [NPDES] permit under part 31 of the [NREPA] ... if the farm has not been found by the [DEQ] to have a regulated discharge of pollutants into waters of this state.”
We perceive no error in the circuit court’s ruling on this matter. As the circuit court properly concluded, plaintiffs did not truly request “a declaratory ruling as to the applicability to an actual state of facts of a... rule... of the agency” within the meaning of MCL 24.263. Instead, and more accurately, what plaintiffs actually requested was a simple declaration that Rule 2196 was invalid. As Dean LeDuc has explained in his treatise on Michigan administrative law, MCL 24.263 “empowers an agency to issue a declaratoiy ruling only as to the applicability of a rule, not as to its validity.” LeDuc, Michigan Administrative Law (2001), § 8:13, p 576 (emphasis added). “The reason for this is obvious, an agency is unlikely to find its own rules invalid and those rules are presumed to be valid anyway. Courts will ultimately determine the validity of a rule.” Id. Because plaintiffs sought to challenge the validity of Rule 2196 rather than its applicability to a particular state of facts, they were not required to ask the DEQ for a declaratory ruling under MCL 24.263 in the first instance, and were instead entitled to directly commence this declaratory judgment action in the circuit court pursuant to MCL 24.264. Nor did the exhaustion requirement of MCL 24.264 apply to plaintiffs given that they sought to challenge the validity of Rule 2196 rather than its applicability. See LeDuc, § 8:13, p 577. “The exhaustion requirement of [MCL 24.264] (requiring resort first to the submission of a [request for a] declaratory ruling) applies only when a plaintiff wishes to challenge the applicability of a rule to an actual state of facts.” Id.
Administrative rules are presumed to be constitutional. Toole v State Bd of Dentistry, 306 Mich 527, 533; 11 NW2d 229 (1943). Plaintiffs do not argue that Rule 2196 is constitutionally or procedurally invalid. Instead, plaintiffs argue only that Rule 2196 is substantively invalid.
Chevron, USA, Inc v Natural Resources Defense Council, Inc, 467 US 837; 104 S Ct 2778; 81 L Ed 2d 694 (1984).
Under Chevron, the federal courts will defer to an administrative agency’s interpretation of a statute that it is charged with administering— even if that interpretation differs from what the courts believe to be the best interpretation — so long as the particular statute is ambiguous on the point at issue and the agency’s construction is reasonable. Chevron, 467 US at 843-844; see also Nat’l Cable & Telecom Ass’n v Brand X Internet Servs, 545 US 967, 980; 125 S Ct 2688; 162 L Ed 2d 820 (2005).
In contrast, the rulemaking authority conferred by § 3103(3) is much more limited, granting the DEQ power to promulgate rules “necessary to comply with the [CWA]....” MCL 324.3103(3). Although the challenged provisions of Rule 2196 parallel similar provisions that were contained in the 2003 Federal CAFO Rule as originally promulgated, the United States Court of Appeals for the Second Circuit has struck down these provisions as inconsistent with the language of the CWA. Waterkeeper, 399 F3d at 506. In light of the Waterkeeper decision, it cannot be said that Rule 2196 is “necessary to comply with the [CWA]” within the meaning of § 3103(3). We therefore conclude that the rulemaking authority conferred by § 3103(3) is inapplicable in this case.
The term “[w]aters of the state” includes groundwater and all other watercourses and waters within the state of Michigan. MCL 324.3101(z).
Given our conclusion that the rulemaking provision of § 3106 does not apply in this case, we need not consider plaintiffs’ argument that, under the doctrine expressio unius est exclusio alterius, § 3106 does not authorize the DEQ to regulate “agricultural” discharges. Moreover, in light of our conclusion that the DEQ was authorized to promulgate Rule 2196 under the rulemaking provision of § 3103(2), we need not determine whether the authority to promulgate Rule 2196 was “necessarily implied” or “reasonably required for the execution of the powers expressly delegated” by any other section of Part 31 of the NREPA. Jackson, 105 Mich App at 139; compare LeDuc, § 4:03, pp 151-152.
“The governor may disapprove any distinct item or items appropriating moneys in any appropriation bill. The part or parts approved shall become law, and the item or items disapproved shall be void unless re-passed according to the method prescribed for the passage of other bills over the executive veto.” Const 1963, art 5, § 19.
“No law shall be revised, altered or amended by reference to its title only. The section or sections of the act altered or amended shall be re-enacted and published at length.” Const 1963, art 4, § 25.
Under the APA, an agency that proposes to promulgate a rule must complete and submit a “regulatory impact statement.” MCL 24.245(3) and (4). | [
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PER CURIAM.
In this property tax action, petitioner appeals as of right three orders of the Michigan Tax Tribunal (MTT) granting summary disposition to respondent and setting the taxable value of certain transferred properties. We reverse.
The facts of this case are not in dispute. Petitioner is the taxpayer for several parcels of real estate for which ownership was transferred in December 2004. Under the Michigan Constitution and applicable property tax statutes, a transfer of ownership allows the taxable value of a parcel of real estate, normally allowed to increase no more than five percent a year, to be set at the state equalized valuation (SEV) for the next tax year. This is referred to by the parties as “uncapping.” It is triggered by the owner’s filing a property transfer affidavit, which notifies the assessor of the transfer. MCL 211.27a(3). In this case, property transfer affidavits were timely filed in January 2005, but respondent failed to uncap the taxable values of the property for the 2005 tax year. In October 2006, respondent sent petitioner letters stating that the taxable values should have been uncapped for 2005 and that petitioner would be getting revised tax bills for 2005. The letters also stated that the 2006 taxable values would be adjusted by the December board of review. However, the December board of review took no action.
Petitioner appealed in the MTT, arguing that respondent had unlawfully uncapped the 2005 value. The parties agreed to consent judgments in February 2007 in which they stipulated that the 2005 taxable values of the parcels would be returned to their pretransfer rates and that the 2006 taxable values would not be adjusted. In each consent judgment, respondent “reserve[d] its right to petition the March 2007 (or any year thereafter) board of review for uncapping relief regarding the subject property.” Shortly thereafter, respondent filed appeals with the March board of review, which then uncapped the taxable value of the parcels for tax year 2007 on the basis of the 2004 transfer.
Petitioner again filed appeals in the MTT, and both parties moved for summary disposition. Specifically, petitioner argued that under MCL 211.27a(3), the taxable value could only be uncapped in the tax year immediately following the transfer. After that, petitioner argued, the value could only change “by either the rate of inflation or 5 percent, whichever is less, until the year after ownership ... is transferred again.” The MTT ruled that the March board of review was authorized to uncap the 2007 assessments under MCL 211.29 and MCL 211.30. The MTT noted that MCL 211.27b allows later adjustments to the taxable value if the assessor is not notified of the transfer; thus, uncapping under MCL 211.27a(3) was not strictly limited to the year following the transfer.
Petitioner moved for reconsideration and rehearing, but the MTT denied the motion. Petitioner now appeals as of right.
Petitioner first argues that the MTT committed a legal error by holding that it was permissible to uncap the 2007 and 2008 taxable values of petitioner’s real property even though the transfer of those parcels of property occurred three years before the uncapping. Petitioner asserts that this legal error was the result of a misinterpretation of several statutory provisions, including MCL 211.27a and MCL 211.30. We agree.
In the absence of fraud, review of a decision by the MTT is limited to determining whether the tribunal erred in applying the law or adopted a wrong principle. Its factual findings are conclusive if supported by competent, material, and substantial evidence on the whole record. Const 1963, art 6, § 28; Continental Cablevision of Mich, Inc v City of Roseville, 430 Mich 727, 735; 425 NW2d 53 (1988). Substantial evidence must be more than a scintilla of evidence, although it may be substantially less than a preponderance of the evidence. Jones & Laughlin Steel Corp v City of Warren, 193 Mich App 348, 352-353; 483 NW2d 416 (1992). Additionally, the MTT’s holding was dependent on statutory interpretation and the application of constitutional principles. Statutory interpretation is a question of law that is considered de novo on appeal. Esselman v Garden City Hosp, 284 Mich App 209, 216; 772 NW2d 438 (2009). This Court also reviews constitutional issues de novo. Harvey v Michigan, 469 Mich 1, 6; 664 NW2d 767 (2003).
Petitioner contends that this dispute is controlled by MCL 211.27a, which provides as follows:
(1) Except as otherwise provided in this section, property shall be assessed at 50% of its true cash value under section 3 of article IX of the state constitution of 1963.
(2) Except as otherwise provided in subsection (3), for taxes levied in 1995 and for each year after 1995, the taxable value of each parcel of property is the lesser of the following:
(a) The property’s taxable value in the immediately preceding year minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions. For taxes levied in 1995, the property’s taxable value in the immediately preceding year is the property’s state equalized valuation in 1994.
(b) The property’s current state equalized valuation.
(3) Upon a transfer of ownership of property after 1994, the property’s taxable value for the calendar year following the year of the transfer is the property’s state equalized valuation for the calendar year following the transfer.
(4) If the taxable value of property is adjusted under subsection (3), a subsequent increase in the property’s taxable value is subject to the limitation set forth in subsection (2) until a subsequent transfer of ownership occurs. If the taxable value of property is adjusted under subsection (3) and the assessor determines that there had not been a transfer of ownership, the taxable value of the property shall be adjusted at the July or December board of review. Notwithstanding the limitation provided in [MCL 211.53b(l)] on the number of years for which a correction may be made, the July or December board of review may adjust the taxable value of property under this subsection for the current year and for the 3 immediately preceding calendar years. A corrected tax bill shall be issued for each tax year for which the taxable value is adjusted by the local tax collecting unit if the local tax collecting unit has possession of the tax roll or by the county treasurer if the county has possession of the tax roll. For purposes of [MCL 211.53b], an adjustment under this subsection shall be considered the correction of a clerical error.
On appeal, petitioner argues that that, when read together, MCL 211.27a(2) and (3) unambiguously provide that a property’s taxable value can only be uncapped in the year following the transfer of that property. Petitioner essentially argues that when a taxpayer correctly files a property transfer affidavit, the relevant authority has one year to uncap the property for tax purposes. Pursuant to this argument, if the property is not timely uncapped, it may not be uncapped until the next time it is transferred. Alternatively, petitioner asserts that should this Court determine that MCL 211.27a is an ambiguous statute, it must be interpreted favorably to the taxpayer.
At oral argument, respondent appeared to concede that MCL 211.27a was ambiguous because, in the present case, it was not possible to comply with MCL 211.27a(2) without violating MCL 211.27a(3). However, respondent asserted that the ambiguity was without consequence because this dispute is governed by MCL 211.29 and MCL 211.30. MCL 211.29(2) provides as follows:
[The March board of review], of its own motion, or on sufficient cause being shown by a person, shall add to the roll the names of persons, the value of personal property, and the description and value of real property liable to assessment in the township, omitted from the assessment roll. The board shall correct errors in the names of persons, in the descriptions of property upon the roll, and in the assessment and valuation of property. The board shall do whatever else is necessary to make the roll comply with this act.
MCL 211.30(4) provides as follows:
At the request of a person whose property is assessed on the assessment roll or of his or her agent, and if sufficient cause is shown, the board of review shall correct the assessed value or tentative taxable value of the property in a manner that will make the valuation of the property relatively just and proper under this act.... The board of review, on its own motion, may change assessed values or tentative taxable values or add to the roll property omitted from the roll that is liable to assessment if the person who is assessed for the altered valuation or for the omitted property is promptly notified and granted an opportunity to file objections to the change at the meeting or at a subsequent meeting.
According to respondent, these statutes demonstrate that the Legislature granted the March board of review broad power to ensure that the tax rolls comply with the General Property Tax Act (GPTA), MCL 211.1 et seq. Pursuant to MCL 211.30, the March board of review was permitted, on its own motion, to modify the assessed values or tentative taxable values of the property in question as long as petitioner was notified and provided an opportunity to file an objection. In further support of this argument, respondent cites State Tax Commission Bulletin No. 9 of 2005, in which the tax commission opined on a hypothetical scenario that was analogous to the facts of this case. While administrative interpretations are entitled to respectful consideration, however, they are not binding on this court. In re Complaint of Rovas against SBC Mich, 482 Mich 90, 117; 754 NW2d 259 (2008).
The GPTA unambiguously provides the method for calculating a property’s taxable value. When statutory language is clear and there is no ambiguity, this Court is not permitted to engage in judicial construction. Gateplex Molded Prod, Inc v Collins & Aikman Plastics, Inc, 260 Mich App 722, 726; 681 NW2d 1 (2004). MCL 211.27a(2) provides that a property’s taxable value is the lesser of the property’s current SEV or the “[t]he property’s taxable value in the immediately preceding year minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions.” The formula provided in MCL 211.27a(2) applies unless the property was transferred in the previous year, in which case MCL 211.27a(3) provides that “the property’s taxable value for the calendar year following the year of the transfer is the property’s state equalized valuation for the calendar year following the transfer.” It is undisputed that petitioner’s property was transferred in 2004. The tax year at issue in the present case is 2007. Therefore, because the parcels in question were not transferred in 2006, the unambiguous language of MCL 211.27a(2) provides that the 2007 taxable value is of each parcel the lesser of (1) the parcel’s 2006 taxable value, minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions, or (2) the parcel’s 2007 SEV
We conclude that the MTT erroneously concluded that MCL 211.30 permitted the uncapping of petitioner’s property for the tax years in question. In doing so, we acknowledge that MCL 211.29 and 211.30 do grant broad power to the March board of review to ensure that the assessment roll complies with the provisions of the GPTA. However, we further conclude that while the March board of review possesses broad power, that power must be limited by the other provisions of the GPTA. In other words, while the March board of review may modify assessed values and tentative taxable values to be consistent with a provision of the GPTA, it may not make a modification that will contradict an express GPTA provision. Our conclusion is required by a well-established principle of statutory interpretation: this Court must avoid interpreting a statute in a way that would render statutory language nugatory. Robinson v City of Lansing, 486 Mich 1, 21; 782 NW2d 171 (2010). If the March board of review was statutorily permitted to uncap a property’s value for a year that was not immediately subsequent to a year of transfer, MCL 211.27a(2) and (3) would essentially be rendered meaningless. As a result, taxpayers would be subject to perpetual uncertainty. Further, we are not persuaded by the language of MCL 211.27b(l), which addresses a circumstance in which the taxable value of a property is not uncapped as a result of a transferee failing to report the property transfer. There is no allegation in this case that petitioner failed to follow the proper protocol after the property transfer. Rather, for reasons that are unclear, respondent merely failed to uncap the property in a timely manner.
We note that our holding is limited to the specific facts of this case. As stated earlier, respondent entered a consent agreement regarding the 2005 taxable value. As a result, we offer no opinion regarding whether the March board of review would have been permitted to retroactively uncap the taxable value for the year immediately following the transfer of the property.
Finally, because we conclude that the MTT erred, it is unnecessary to address whether principles of res judicata or collateral estoppel precluded respondent from petitioning the March board of review.
Reversed and remanded to the Michigan Tax Tribunal for entry of judgments consistent with this opinion. We do not retain jurisdiction.
Fort Hood, EJ., and Borrello and Stephens, JJ., concurred. | [
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O’CONNELL, EJ.
Intervening defendant-appellant, Dart Bank, appeals as of right the trial court’s order granting receiver-appellee, Thomas Woods, a lien over certain property. The issue on appeal is whether the trial court erred by imposing the costs of the receivership on appellant by granting the lien given that appellant neither consented nor objected to the receivership. We affirm.
i. facts and procedural history
The original parties in this case stipulated to the appointment of appellee as receiver over certain property in DeWitt. The receivership order authorized appellee to take immediate possession of the property in order to sell it and to make any expenditure necessary for the upkeep and repair of the property. The property required substantial repairs, totaling approximately $20,000, which appellee borrowed by authority granted in the receivership order. Market conditions rendered appellee unable to sell the property.
The receivership order also prohibited anyone with actual notice of the order from interfering with appellee’s possession and management of the property. Appellant was not a party to this case at the time of the order and thus did not stipulate to it. Appellant foreclosed on the property on June 5, 2008. Appellant was not aware of the receivership order before beginning the foreclosure process but learned of the order before the foreclosure sale. Specifically, appellant received a copy of the original receivership order on April 18, 2008, and does not dispute that appellee served it with a copy of the amended order on April 28, 2008. Appellant was the only bidder at the foreclosure sale and purchased the property for $169,312.50. Appellant subsequently appraised the property at $245,000. Appellee eventually filed a motion to void the foreclosure and hold appellant in contempt for violating the receivership order’s prohibition on interfering with appellee’s possession of the property. The trial court denied the motion but extended the redemption period to give appellee additional time to sell the property at a better price than that paid by appellant.
After determining that he could not find a buyer for any amount close to $245,000, appellee moved to dissolve the receivership and to have the trial court order appellant to pay the costs of the receivership. The trial court essentially granted this motion by placing a lien on the property to be paid whenever the property is sold. The court noted that it had ordered appellee to sell the property and that appellant did not ask the court to set that order aside. Further, the court stated that it would not be able to find receivers in the future if it did not pay them.
II. AUTHORITY TO IMPOSE RECEIVERSHIP COSTS
Whether the trial court had authority to place a lien on the property to collect the costs of receivership is a question of law, which we review de novo on appeal. See Attica Hydraulic Exch v Seslar, 264 Mich App 577, 588; 691 NW2d 802 (2004).
Appellant first argues that a receiver has no greater rights than the original owner of the property, citing Gray v Lincoln Housing Trust, 229 Mich 441, 446-447; 201 NW 489 (1924). Appellant contends that allowing appellee to recover his costs essentially grants him greater rights than the original owner would have had. However, the cited case stands for the proposition that appellee cannot destroy the bank’s right to payment under the mortgage. The case does not resolve the issue at hand.
Both parties cite Bailey v Bailey, 262 Mich 215, 219; 247 NW 160 (1933), in which our Supreme Court ruled that a mortgagee was liable for receivership expenses when the mortgagee consented to appointment of the receiver and “availed themselves of any possible advantage of the receivership.” Appellant attempts to distinguish Bailey because it did not consent to the receivership in the present case. However, the Bailey Court also acknowledged that “[administration expenses are incurred on the theory that they benefit the parties ultimately entitled to the property” and that “ ‘the property becomes chargeable with the necessary expenses incurred in taking care of and saving it, including the allowance to the receiver for his services.’ ” Id. at 220 (citation omitted). Therefore, the Bailey Court based its decision not only on the mortgagee’s consent but also on the fact that the mortgagee benefited from the receivership.
Our Supreme Court addressed a similar issue in Fisk v Fisk, 333 Mich 513; 53 NW2d 356 (1952). In that case, the Court held:
In a case such as this, the primary purpose of a receivership is to preserve and protect the property involved in the controversy. This being so it logically follows that he who ultimately establishes his right to the property thus held is the one who benefits from the property having been protected and preserved. For this reason the general rule followed by the courts is that a receiver’s compensation and the expenses necessarily incurred by him in preserving and caring for the property under the order of a court of competent jurisdiction are primarily a charge on and should be paid out of the fund or property in his hands, regardless of the ultimate outcome of the principal suit. [Id. at 516 (citations and quotation marks omitted).]
The Court remarked that exceptions include cases in which the trial court does not have proper jurisdiction or it was improper to appoint a receiver. Id. The defendant in Fisk agreed to the appointment of the receiver and therefore, the Court concluded, could not object to the receiver being paid by a charge against the property held by him. Id. at 516-517.
This Court discussed a trial court’s authority to order an intervening party to pay the costs of a receivership in Attica, 264 Mich App at 588-594. The Court first discussed MCR 2.622(D), which allows the trial court to direct that the party who moved for appointment of the receiver pay the receiver’s costs. That rule is inapplicable in this case, as it was in Attica, because appellant did not move for appointment of the receiver and, in fact, did not become a party until after the receiver was appointed. See id. at 591.
The Court then considered Fisk, stating:
Although Fisk does hold that the party who benefited from the receivership is responsible for the receivership expenses, Fisk defines a party who benefits as one who “ultimately establishes his right to the property ... having been protected and preserved.” [Id. at 592, quoting Fisk, 333 Mich at 516.]
The Attica Court concluded that Bailey similarly held that mortgagees could not contest the receivership expenses when they benefited “as the parties ultimately entitled to the property.” Attica, 264 Mich App at 593.
Appellant would read these cases as holding that any party who does not seek a receivership is not required to pay for it. It is true that the parties who were forced to pay in Bailey and Fisk each consented to the receivership, but the Court did not focus on that fact alone, as explained in Attica. It was also important that those parties ended up in possession of the property that had been preserved by the efforts of the receivers. Indeed, in Attica the key point that allowed the Department of Environmental Quality (DEQ) to avoid paying the receiver’s costs was that the DEQ’s interest was purely regulatory — that is, it would never take possession of the property that had been preserved by the receivership. Id. at 592-593. The Attica Court held on the basis of that fact that the DEQ did not fit Fisk's definition of a party who benefits from a receivership. Id. at 593.
Appellant in the present case is situated similarly to the DEQ in Attica to the extent that it became a party only after the receiver was appointed and did not consent to the receivership. Unlike the DEQ, though, appellant ultimately established its right to the property. Therefore, under Fisk and Attica, because appellant benefited from the receivership, it may be held responsible for the receivership expenses.
Affirmed.
K. E Kelly and Ronayne Krause, JJ., concurred with O’Connell, EJ.
The original stipulated order appointing appellee was entered April 10, 2008. An amended order was entered on April 28, 2008.
Appellant does not contest the validity of appellee’s expenses. Rather, appellant contests only whether the trial court could properly place a lien on the property for those costs.
Gray involved an attempt by a receiver to prevent a plaintiff from recovering on a breach-of-contract claim. Gray, 229 Mich at 444-446. | [
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PER CURIAM.
Plaintiff appeals as of right the trial court’s order granting defendant’s motion for summary disposition under MCR 2.116(C)(7) (statute of limitations), (C)(8) (failure to state a claim), and (C)(10) (no genuine issue of material fact). Defendant cross-appeals, arguing that the trial court made an improper finding of fact when deciding its motion. We affirm.
I. FACTS AND PROCEEDINGS
This action arose from defendant’s termination of plaintiffs employment in June 2007. In May and June 2007, defendant was in the process of establishing a laboratory for the manufacture of an equine botulism vaccine. The manufacture of this vaccine is regulated by federal and state agencies to avoid safety hazards and security breaches pertaining to the botulism organism used in the manufacturing process. Plaintiff had been selected as the Select Agent Program Alternate Responsible Official in defendant’s Lansing facility. Under applicable regulations, no one could be admitted to the restricted laboratory areas (the Bot suite) without the presence and authorization of plaintiff or the primary responsible official. However, these restrictions were not to be in effect until defendant actually received the botulism agent in October 2007.
Plaintiff alleged that she was terminated from her employment with defendant in June 2007 in retaliation for her compliance with a state Department of Labor deputy boiler inspector, A1 Ladd. Plaintiff had escorted Ladd through the facility when he arrived for an unannounced inspection on May 3, 2007. The inspector discovered an unregistered boiler in the facility and issued a citation requiring defendant to bring the boiler into conformity with state regulations. When the inspector returned on May 14, 2007, defendant’s mainte nance manager, A1 Meredith, informed plaintiff that Meredith, not plaintiff, would escort Ladd through the facility for the inspection. Meredith instructed plaintiff not to talk to Ladd and to channel all communications through Meredith. Nonetheless, plaintiff accompanied Ladd to the Bot suit and cooperated with him when he asked questions about another unregistered boiler.
Plaintiff filed this action in May 2009, alleging a claim for retaliatory discharge in violation of public policy because she was terminated for complying with her statutory duty to grant Ladd access to the facility to inspect the boilers. Defendant moved for summary disposition under MCE 2.116(C)(7), (8), and (10), arguing that there was no genuine issue of material fact that plaintiffs claim arose under the Whistleblowers’ Protection Act (WPA), MCL 15.361 et seq., that plaintiff had failed to state a cognizable claim independent of the WPA, and that plaintiffs claim was untimely under the WPA’s 90-day limitations period, MCL 15.363. Plaintiff denied that she was engaged in protected activity under the WPA and maintained that she had pleaded a valid claim for retaliatory discharge contrary to public policy. The trial court agreed with defendant and granted its motion.
II. STANDARD OF REVIEW
This Court reviews de novo a trial court’s ruling on a motion for summary disposition. Doe v Roman Catholic Archbishop of the Archdiocese of Detroit, 264 Mich App 632, 638; 692 NW2d 398 (2004). When reviewing a motion under MCE 2.116(C)(7), a reviewing court must consider all affidavits, pleadings, and other documentary evidence submitted by the parties and construe the pleadings and evidence in favor of the nonmoving party. Id. “Absent a disputed question of fact, the determina tion whether a cause of action is barred by a statute of limitation is a question of law that this Court reviews de novo.” Id.
A motion brought under MCR 2.116(C)(8) tests whether the complaint states a claim as a matter of law. Teel v Meredith, 284 Mich App 660, 662; 774 NW2d 527 (2009). In reviewing the motion, the court accepts as true all well-pleaded allegations and construes them in a light most favorable to the nonmoving party. Id. The motion should be granted if no factual development could possibly justify discovery. Id.
A motion under MCR 2.116(C)(10) tests the factual support for a claim and should be granted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Driver v Naini, 287 Mich App 339, 344; 788 NW2d 848 (2010). The nonmoving party may not rest on the allegations in the pleadings, but must set forth, through documentary evidence, specific facts demonstrating a genuine issue for trial. Id.
III. ANALYSIS
The WPA provides a remedy for an employee who suffers retaliation for reporting or planning to report a suspected violation of a law, regulation, or rule to a public body. MCL 15.362; MCL 15.363; Shallal v Catholic Social Servs of Wayne Co, 455 Mich 604, 610; 566 NW2d 571 (1997). The WPA provides that an employer shall not discharge or otherwise retaliate against an employee because the employee “reports or is about to report... a violation or a suspected violation of a law or regulation” or because “an employee is requested by a public body to participate in an investigation, hearing, or inquiry held by that public body.” MCL 15.362. A prima facie case under the WPA arises when (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 adverse employment decision. Shaw v City of Ecorse, 283 Mich App 1, 8; 770 NW2d 31 (2009).
The underlying purpose of the WPA is protection of the public. Dolan v Continental Airlines/Continental Express, 454 Mich 373, 378; 563 NW2d 23 (1997). The statute “meets this objective by protecting the whistle-blowing employee and by removing barriers that may interdict employee efforts to report violations or suspected violations of the law.” Id. at 378-379. The WPA is a remedial statute and must be liberally construed to favor the persons that the Legislature intended to benefit. Chandler v Dowell Schlumberger, Inc, 456 Mich 395, 406; 572 NW2d 210 (1998). The WPA provides the exclusive remedy for such retaliatory discharge and consequently preempts common-law public-policy claims arising from the same activity. Dudewicz v Norris Schmid, Inc, 443 Mich 68, 70, 78-79; 503 NW2d 645 (1993), overruled in part on other grounds by Brown v Detroit Mayor, 478 Mich 589, 595 n 2 (2007). However, if the WPA does not apply, it provides no remedy and there is no preemption. Driver v Hanley (After Remand), 226 Mich App 558, 566; 575 NW2d 31 (1997).
The WPA imposes a 90-day limitations period for a civil action arising from a violation of the act. MCL 15.363(1). In determining whether a statute of limitations applies, this Court looks to the true nature of a complaint, reading the complaint as a whole and looking beyond the parties’ labels to determine the exact nature of the claim. Adams v Adams (On Reconsideration), 276 Mich App 704, 710-711; 742 NW2d 399 (2007). Accordingly, a plaintiff asserting a claim for termination in violation of public policy that arises from circumstances that establish a claim for relief under the WPA will be subject to the WPA’s exclusive remedy and will not be permitted to evade the 90-day limitations period by recasting the claim as a public-policy claim.
Plaintiff argues that she was not engaged in protected activity under the WPA with respect to the boiler inspection because she was not requested by a public body to participate in an “investigation” or “inquiry” as those terms are used in the WPA. The WPA defines a “public body” as including “[a] state officer, employee, agency, department, division, bureau, board, commission, council, authority, or other body in the executive branch of state government.” MCL 15.361(d)(¿). The deputy boiler inspector, as a state officer, thus falls within the definition of a public body under the WPA. However, plaintiff characterizes Ladd’s boiler inspection as a “routine inspection” that cannot be classified as an investigation or inquiry under the WPA. The WPA does not define the terms “investigation” or “inquiry.” Terms that are not defined in a statute must be given their plain and ordinary meanings, and it is appropriate to consult a dictionary for definitions. Halloran v Bhan, 470 Mich 572, 578; 683 NW2d 129 (2004).
Black’s Law Dictionary (8th ed), p 844, defines “investigate” as “[t]o inquire into (a matter) systematically” or “[t]o make an official inquiry.” It defines “inquiry” in the context of parliamentary law as “[a] request for information, either procedural or substantive” and in the context of international law as fact-finding. Id. at 808. Random House Webster’s College Dictionary (2000) defines “inquiry” as “1. a seeking or request for truth, information, or knowledge. 2. an investigation, as into an incident. 3. a question; query.” The general dictionary definition of “inquiry” meshes with the legal dictionary’s definition of the term “administrative search,” which is defined in Black’s Law Dictionary (8th ed), p 1378, as “[a] search of public or commercial premises carried out by a regulatory authority for the purpose of enforcing compliance with health, safety, or security regulations.” The activity of an administrative search thus involves an inquiry as defined in Random House Webster’s College Dictionary as a seeking or request for truth, information, or knowledge. Reading these definitions together, and in view of the WPA’s delineation of protected activity, it is apparent that the term “inquiry” in the WPA encompasses an administrative search such as the inspection carried out here by the boiler inspector. Thus, plaintiff was engaged in protected activity when she cooperated with Ladd’s inspection, and her claim was therefore subject to the WPA’s exclusive remedy. Dudewicz, 443 Mich at 70. Accordingly, plaintiff failed to plead a cognizable public-policy claim independent of the WPA.
Plaintiffs reliance on Messenger v Dep’t of Consumer & Indus Servs, 238 Mich App 524; 606 NW2d 38 (1999), in support of her argument that the boiler inspection was not an investigation within the meaning of the WPA is misplaced. In Messenger, the plaintiff, a licensed physician, was prosecuted for and acquitted of manslaughter for withdrawing life support from his infant son. Id. at 527. The plaintiff presented a request under the Freedom of Information Act (FOIA), MCL 15.321 et seq., for information that the defendant, the Department of Consumer and Industry Services, had compiled regarding the plaintiffs prosecution. Messenger, 238 Mich App at 527. The defendant contended that the information was exempt from disclosure under the Public Health Code (PHC), specifically MCL 333.16238(1), which classified as confidential any information obtained in an investigation before the issuance of an administrative complaint. Messenger, 238 Mich App at 527-528. This Court held that the FOIA exemption did not apply because there had not been an investigation within the meaning of MCL 333.16238(1), explaining:
The PHC does not expressly define the term “investigation.” In the absence of a statutory definition of a term, a court may consult dictionary definitions to determine the common meaning of a word. Popma v Auto Club Ins Ass’n, 446 Mich 460, 470; 521 NW2d 831 (1994); Weisman v US Blades, Inc, 217 Mich App 565, 568; 552 NW2d 484 (1996). Random House Webster’s College Dictionary (2d ed.), p 668, defines an “investigation” as “the act or process of investigating or the condition of being investigated” or “a searching inquiry for ascertaining facts; detailed or careful examination.” Similarly, to “investigate” is “to search or examine into the particulars of; examine in detail.” Id. Further, §§ 16221 and 16233 of the PHC, MCL 333.16221, 333.16233, instruct that, during the course of an investigation, the department may hold hearings, take testimony, and administer written, oral, and practical tests to a licensee as investigatory tools.
Applying the general principles of statutory construction and the common meaning of “investigation” to the facts of this case, we find that defendant’s conduct did not amount to an “investigation” as contemplated by the PHC. Defendant did not engage in a searching inquiry for ascertaining facts, nor did it conduct a detailed or careful examination of the events surrounding plaintiffs alleged misconduct. Rather, by its own admission, defendant conducted only an “administrative review,” a “monitoring and a preliminary compilation of information,” a “preliminary review,” and a “preliminary information gathering process ... limited to non-intrusive measures” that preceded a “formal field investigation.” Indeed, defendant’s passive efforts at collecting information concerning the manslaughter charges filed against plaintiff consisted of nothing more than obtaining documents from public agencies and monitoring the criminal proceeding. On this record, we find that defendant’s conduct is properly classified as that which precedes a formal “investigation” and does not rise to the level of an “investigation” as contemplated by the PHC. [Id. at 534-535 (citations omitted).]
Plaintiff contends that the boiler inspector’s visits did not rise to the level of an investigation because they did not involve “a searching inquiry for ascertaining facts” or “a detailed or careful examination of the events surrounding” alleged misconduct. However, we are not persuaded that this Court’s construction of the term “investigation” as used in the PHC, MCL 333.16238(1), requires a similarly restrictive interpretation of the terms “investigation” and “inquiry” as used in the WPA. Whereas the WPA’s inclusions of protected persons must be construed broadly, Chandler, 456 Mich at 406, exemptions from disclosure under the FOIA must be narrowly construed, Booth Newspapers, Inc v Univ of Mich Bd of Regents, 444 Mich 211, 232; 507 NW2d 422 (1993). Moreover, the WOPA’s protection is not limited only to persons who participate in investigations, but extends to employees who are requested by a public body to participate in “an investigation, hearing, or inquiry held by that public body.” MCL 15.362 (emphasis added). Indeed, the Messenger Court’s construction of the term “investigation” as used in the PHC builds on the term “inquiry”; an investigation encompasses “a searching inquiry for ascertaining facts; detailed or careful examination.” This is consistent with the Black’s Law Dictionary definition of “investigation” as including an “official inquiry” and to “systematically” inquire into a matter. Read together, these definitions suggest a hierarchy of governmental acquisition of information, with probing or formal investigations being required to apply the FOIA exemption and with less intrusive and less formal inquiries being sufficient to come within the scope of the WPA.
The boiler inspector’s inspection fits the definition of “inquiry” in the WPA. Accordingly, an employee who participates in an investigation or inquiry, which includes an administrative search or inspection, is a protected person under the WPA. Consequently, plaintiffs action was subject to the WPA’s exclusive remedy and was therefore barred by the 90-day limitations period in that act. Dudewicz, 443 Mich at 70; MCL 15.363.
Accordingly, summary disposition was proper under MCR 2.116(C)(7), because plaintiffs claim was untimely, and also under MCR 2.116(C)(8) and (10), because plaintiff failed to plead or support a claim that was not subject to the WPA’s exclusive remedy. Because we conclude that the WPA was plaintiffs exclusive remedy, it is unnecessary to consider the merits of plaintiffs public-policy theory.
We also disagree with plaintiffs argument that summary disposition was premature because discovery was not yet complete. “A motion under MCR 2.116(C)(10) is generally premature if discovery has not been completed unless there is no fair likelihood that further discovery will yield support for the nonmoving party’s position.” Liparoto Constr, Inc v Gen Shale Brick, Inc, 284 Mich App 25, 33-34; 772 NW2d 801 (2009). Plaintiff argues that further discovery could reveal evidence to support her claim that her termination was motivated by her cooperation with the boiler inspector. However, that was not the basis for the trial court’s summary disposition decision. Plaintiff has not demonstrated a fair likelihood that further discovery could reveal anything to refute the trial court’s correct conclusion that plaintiffs exclusive remedy was under the WPA and her claim was thus subject to that act’s 90-day limitations period.
IV DEFENDANT’S CROSS-APPEAL
Defendant argues on cross-appeal that the trial court improperly made a finding of fact that plaintiff was terminated because of her participation in the boiler inspector’s investigation. Defendant challenges the following emphasized statement that appears in both the trial court’s original and amended opinions:
Plaintiff was requested by a public body to participate in an investigation regarding the boilers in the laboratory. Because Plaintiff’s employment was terminated due to her participation in the investigation, her exclusive remedy was under the WPA. Plaintiff waited almost two years to file her claim and is therefore, barred by the 90-day statute of limitations for a WPA claim.
A court may not make a finding of fact or weigh credibility when ruling on a motion for summary disposition. Skinner v Square D Co, 445 Mich 153, 161; 516 NW2d 475 (1994). Read in context, however, it is apparent that the challenged statement was not an improper finding of fact, but a summary of plaintiffs allegations. When deciding a motion for summary disposition under MCR 2.116(C)(8), a court must accept as true all well-pleaded allegations. Teel, 284 Mich App at 662. Similarly, when deciding a motion under MCR 2.116(C)(10), a court must view the evidence and all reasonable inferences arising from the evidence in a light most favorable to the nonmoving party. Driver, 287 Mich App at 344.
Plaintiff alleged that her cooperation with Ladd was the reason defendant terminated her employment. For purposes of defendant’s motion, the trial court was obligated to accept that allegation as true to determine whether the gravamen of plaintiffs complaint involved a termination for participating in an investigation or inquiry, which would bring her claim within the WPA. Viewed in this manner, defendant has failed to establish that the trial court’s statement was improper.
Affirmed.
OWENS, EJ., and O’CONNELL and METER, JJ., concurred. | [
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SAAD, J.
This Court granted plaintiffs application for leave to appeal a trial court order that denied plaintiffs motion to compel discovery. For the reasons set forth below, we affirm.
I. NATURE OF THE CASE
Plaintiff, Isidore Steiner, D.RM., EC., claims that defendant, Dr. Marc Bonanni, a former employee of the corporation, breached his employment contract with plaintiff and misappropriated property of the corporation. Plaintiff maintains that defendant stole its patients in violation of a clause in the employment agreement that prohibited defendant from soliciting or servicing any patients of the corporation after he left its employment. After defendant left the employment of plaintiff, plaintiff sued defendant and sought disclosure of defendant’s patient list to prove its case and damages. Defendant objected to disclosure pursuant to the Health Insurance Portability and Accountability Act (HIPAA), 42 USC 1320d et seq., and state law regarding physician-patient privilege. This discovery dispute requires us to decide whether federal or state law controls and whether disclosure would violate the nonparty patients’ privacy rights.
By its language, HIPAA asserts supremacy in this area, but allows for the application of state law regarding physician-patient privilege if the state law is more protective of patients’ privacy rights. In the context of litigation that, as here, involves nonparty patients’ privacy, HIPAA requires only notice to the patient to effectuate disclosure whereas Michigan law grants the added protection of requiring patient consent before disclosure of patient information. Because Michigan law is more protective of patients’ privacy interests in the context of this litigation, Michigan law applies to plaintiff’s attempted discovery of defendant’s patient information. And, because Michigan law protects the very fact of the physician-patient relationship from disclosure, absent patient consent, the trial court properly rejected plaintiff’s efforts to obtain this confidential information, and we affirm the trial court’s ruling.
II. FACTS AND PROCEEDINGS
On July 6, 1999, plaintiff and defendant entered into an employment agreement that contained a noncompetition and nonsolicitation clause. Among other things, the clause in issue prohibited defendant from inducing, soliciting, diverting, servicing, or taking away patients from plaintiff for a three-year period following the termination of the employment agreement. Defendant resigned from plaintiff in July 2007. Thereafter, plaintiff filed a lawsuit against defendant for breach of contract, conversion, fraud, and misrepresentation, and seeking an accounting. An essential component of plaintiffs claim for damages is that, after he left the practice, defendant treated plaintiffs patients in violation of the employment agreement.
During discovery, plaintiff sent defendant a set of interrogatories, one of which requested the names, addresses, and telephone numbers for every patient treated by defendant since he resigned. Plaintiff claims that it cannot protect its contractual rights to its patients without discovery of which of its former patients are now patients of defendant. Defendant objected to the interrogatory on the ground that such disclosure would violate HIPAA and Michigan’s physician-patient privilege, and the trial court issued a qualified protective order in which the parties agreed to conduct their litigation in compliance with HIPAA and agreed to maintain all privileges. Because defendant failed to fully respond to plaintiffs interrogatories, plaintiff filed a motion to compel. In response, defendant argued that the information requested is protected by Michigan’s statutory physician-patient privilege, which, he argued, contains more stringent requirements than HIPAA. The trial court denied plaintiffs motion to compel production of the patients’ names, and ruled that the names of the nonparty patients are privileged under Michigan law.
III. ANALYSIS
A. STANDARDS OF REVIEW
We review de novo a trial court’s decision about the application of the physician-patient privilege. Baker v Oakwood Hosp Corp, 239 Mich App 461, 468; 608 NW2d 823 (2000). If the privilege does apply, we review for an abuse of direction a trial court’s order regarding disclosure. Id. An abuse of discretion occurs when a trial court chooses a result that falls outside the range of reasonable and principled outcomes. Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006). Whether HIPAA preempts Michigan law is a question of law, which is reviewed de novo. Hines v Volkswagen of America, Inc, 265 Mich App 432, 438; 695 NW2d 84 (2005).
B. DISCUSSION
Plaintiff argues that the trial court erred by holding that the names, addresses, and telephone numbers of the nonparty patients that defendant allegedly wrongfully took from plaintiff are privileged and protected from disclosure by Michigan law, under MCL 600.2157 and Baker, 239 Mich App 461, because HIPAA applies and permits disclosure.
HIPAA is the federal statute and associated regulations that govern the retention, use, and transfer of information obtained during the course of the physician-patient relationship. In re Petition of Attorney General for Investigative Subpoenas, 274 Mich App 696, 699; 736 NW2d 594 (2007). “Under HIPAA, the general rule pertaining to the disclosure of protected health information is that a covered entity may not use or disclose protected health information without a written authorization from the individual as described in 45 CFR 164.508, or, alternatively, the opportunity for the individual to agree or object as described in 45 CFR 164.510.” Holman v Rasak, 486 Mich 429, 438-439; 785 NW2d 98 (2010). However, 45 CFR 164.512 “enumerates several specific situations in which ‘[a] covered entity may use or disclose protected health information without the written authorization of the individual, as described in [45 CFR] 164.508, or the opportunity for the individual to agree or object as described in [45 CFR] 164.510 ....’” Holman, 486 Mich at 439, quoting 45 CFR 164.512. Included within those situations is disclosure for judicial and administrative proceedings, which allows a provider or other covered entity to disclose the protected information in response to an order or in response to a subpoena or discovery request if the provider receives satisfactory assurance that notice was provided to the patient or that reasonable efforts were made to secure a qualified protective order. 45 CFR 164.512(e). As our Supreme Court also explained in Holman:
Under HIPAA, “[a] standard, requirement, or implementation specification” of HIPAA “that is contrary to a provision of State law preempts the provision of State law” unless, among other exceptions, “[t]he provision of State law relates to the privacy of individually identifiable health information and is more stringent than a standard, requirement, or implementation specification adopted under” HIPAA. 45 CFR 160.203 (emphasis added). “Contrary” means either that “[a] covered entity would find it impossible to comply with both the State and federal requirements” or that “[t]he provision of State law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of” HIPAA. 45 CFR 160.202. “More stringent,” in this context, means “provides greater privacy protection for the individual who is the subject of the individually identifiable health information.” 45 CFR 160.202. [Holman, 486 Mich at 440-441.]
Plaintiff maintains that Michigan law is less stringent than HIPAA because it can be informally waived and that, therefore, MCL 600.2157 is preempted by HIPAA as a matter of law.
We first observe that, under Michigan law, the privilege belongs to the patient and only the patient may waive it. Baker, 239 Mich App at 470. The purpose of the physician-patient privilege is to protect the confidential nature of the physician-patient relationship. Swickard v Wayne Co Medical Examiner, 438 Mich 536, 560; 475 NW2d 304 (1991); Gaertner v Michigan, 385 Mich 49, 53; 187 NW2d 429 (1971). These principles are particularly important in a context, as here, wherein a plaintiff seeks the names, addresses, and telephone numbers of nonparty patients, many of whom are unlikely to know the lawsuit is pending.
MCL 600.2157 provides, in part, that,
[e]xcept as otherwise provided by law, a person duly authorized to practice medicine or surgery shall not disclose any information that the person has acquired in attending a patient in a professional character, if the information was necessary to enable the person to prescribe for the patient as a physician, or to do any act for the patient as a surgeon.
When interpreting a statute, this Court must give effect to the Legislature’s intent as expressed in the language of the statute by analyzing the words, phrases, and clauses according to their plain meaning. Bukowski v Detroit, 478 Mich 268, 273-274; 732 NW2d 75 (2007). The language of MCL 600.2157 states that physicians “shall not” disclose information obtained from patients for purposes of medical treatment, except as otherwise provided in the law. The use of the word “shall” denotes mandatory action. Wolverine Power Supply Coop, Inc v Dep’t of Environmental Quality, 285 Mich App 548, 561; 777 NW2d 1 (2009). This type of mandatory language is not found in HIPAA. Instead, HIPAA provides that a physician may disclose protected health information in response to a subpoena or discovery request when adequate assurances are given from the requesting party that the patients have been notified and informed of their right to deny the request. 45 CFR 164.512(e). Thus, the language of HIPAA allows for permissive disclosure, whereas Michigan law generally prohibits disclosure.
There are no exceptions under Michigan law for providing random patient information related to any lawsuit. Unlike HIPAA, MCL 600.2157 does not provide for disclosure in judicial proceedings. Also, HIPAA, unlike Michigan law, makes disclosure exceptions for public-health activities; victims of abuse, neglect, or domestic violence; and for health-oversight activities. 45 CFR 164.512(b), (c), and (d).
Plaintiff argues that because the privilege may be waived involuntarily under MCL 600.2157, it is less stringent than HIPAA. Under MCL 600.2157, the privi lege may be waived if a patient pursues a medical-malpractice claim and calls his or her physician as a witness, if the heirs of a patient contest the patient’s will, or if the beneficiaries of a life insurance policy of a deceased patient provide the necessary documents to the life insurer when the insurer is examining a claim for benefits. Relying on Law v Zuckerman, 307 F Supp 2d 705, 711 (D Md, 2004), plaintiff contends that HIPAA should apply here because these waiver possibilities “can force disclosure without a court order, or the patient’s consent.” In Law, the United States District Court for the District of Maryland held, “If state law can force disclosure without a court order, or the patient’s consent, it is not ‘more stringent’ than the HIPAA regulations.” Id. The Law court ruled, in a case of first impression, that HIPAA preempted Maryland state law and governed all ex parte communications between defense counsel and the patient’s treating physician. Id. at 709. However, the key component in analyzing HIPAA’s so-called “more stringent” requirement is the ability of the patient to withhold permission and to effectively block disclosure. Id. at 711. Under MCL 600.2157, a patient or his representative can withhold permission by not engaging in acts that waive the privilege. In this way, the patient may indeed block disclosure. Moreover, HIPAA also covers instances in which the patient’s consent is not necessary in order to warrant disclosure. A patient’s protected health information may be disclosed without the patient’s written consent or authorization in a judicial or administrative proceeding in response to a court order, or in response to a subpoena or discovery request without a court order, if the party seeking the information has given the patient notice and an opportunity to object. 45 CFR 164.512(e)(l)(ii)(A) and (B). Thus, disclosure under HIPAA may be made without judicial order, much like some disclosures under MCL 600.2157. Additionally, unlike HIPAA, MCL 600.2157 does not authorize disclosure under a qualified protective order. For these reasons, we do not find persuasive the argument that automatic waiver of the privilege under some circumstances makes Michigan law less stringent than HIPAA.
We further note that the policy behind the Law standard on stringency supports the application of Michigan law. The Law court opined that the main concern regarding the disclosure of patient medical information is that the patient is in a position to authorize the disclosure. Law, 307 F Supp 2d at 711. This policy has also been repeatedly expressed by this Court and the Michigan Supreme Court. See Baker, 239 Mich App at 470; Gaertner, 385 Mich at 53; Swickard, 438 Mich at 560-561. Here, protecting the interests of the nonparty patients is of utmost importance. The nonparty patients who defendant allegedly treated confided in defendant with personal information, including the fact that they were treated at all, which should not be disclosed without their consent. Moreover, these patients are not in a position to waive their rights. Nothing in the record shows that they are aware of this case or were given the right to decide the issue. Thus, the public policy underlying both HIPAA and Michigan’s physician-patient privilege supports applying Michigan law, specifically because there are only limited exceptions to Michigan’s general nondisclosure requirement and there is no Michigan rule for nonconsensual disclosure of nonparty patients in judicial proceedings as in HIPAA. Therefore, on this issue, Michigan law is more stringent than HIPAA and HIPAA does not preempt MCL 600.2157.
Applying MCL 600.2157, we affirm the trial court’s holding that the names, addresses, and telephone numbers are privileged. In Schechet v Kesten, 372 Mich 346, 350-351; 126 NW2d 718 (1964), our Supreme Court held that the physician-patient privilege protects the names of patients who were not parties to the case. The Court ruled that the physician-patient privilege
imposes an absolute bar. It protects, “within the veil of privilege,” whatever .. . “was disclosed to any of his senses, and which in any way was brought to his knowledge for that purpose.” Such veil of privilege is the patient’s right. It prohibits the physician from disclosing, in the course of any action wherein his patient or patients are not involved and do not consent, even the names of such noninvolved patients. [Id. at 351 (citation omitted).]
In Dorris v Detroit Osteopathic Hosp Corp, 220 Mich App 248, 249; 559 NW2d 76 (1996), the plaintiff sued a hospital and alleged that she refused a particular drug that was subsequently administered to her. After she received the drug, the plaintiffs blood pressure dropped. Id. The plaintiff requested the name of her roommate in the hospital because she claimed that the roommate was present when she refused the drug. Relying on Schechet, this Court held the name of the nonparty roommate was protected by the physician-patient privilege. Id. at 251-252.
Similarly, in Popp v Crittenton Hosp, 181 Mich App 662; 449 NW2d 678 (1989), this Court relied on Schechet and held that the plaintiff was not entitled to the name and medical records of a nonparty patient. In Dierickx v Cottage Hosp Corp, 152 Mich App 162, 164-165; 393 NW2d 564 (1986), the plaintiffs brought a medical-malpractice action claiming that their firstborn daughter suffered central-nervous-system damage because of the defendants’ negligence. The defendants requested the medical records of the plaintiffs’ two youngest children, one of whom appeared to have a disorder similar to that of the eldest daughter, to determine if the central-nervous-system damage could have been genetic. Id. at 165. This Court held that the two younger children had not placed any disorder in controversy, and therefore did not waive the privilege. Id. at 167. This Court in Baker, 239 Mich App at 463, with the support of the above-cited cases, held that “the physician-patient privilege is an absolute bar that prohibits the unauthorized disclosure of patient medical records, including when the patients are not parties to the action.”
Thus, Schechet and its progeny fully support our holding that the names, addresses, and telephone numbers requested by plaintiff are privileged under Michigan law. These cases clearly state that nonparty names and other related medical information is “within the veil of privilege.” Schechet, 372 Mich at 351 (quotation marks and citation omitted). The nonparty patients in this case have not waived the privilege by putting their medical condition in controversy. Dierickx, 152 Mich App at 167. Additionally, much like the nonparty patient in Dorris, the patients in this matter likely are not aware of the pending lawsuit. Because we hold that HIPAA does not preempt Michigan law on this issue and that, under MCL 600.2157, plaintiff is not entitled to the requested nonparty-patient information, we hold that the trial court did not abuse its discretion when it denied plaintiffs motion to compel discovery.
Affirmed.
Sawyer, EJ., and Fitzgerald, J., concurred with Saad, J.
However, Michigan law does provide for some exceptions other than the waivers specifically stated in MCL 600.2157. See People v Keskimaki, 446 Mich 240, 247, 254-255; 521 NW2d 241 (1994) (If after an accident a sample of a person’s blood is withdrawn for the purpose of medical treatment, that sample shall be admissible in a criminal prosecution. An accident is often unexpected and undesired by at least one of the parties involved, but not necessarily all.); People v Johnson, 111 Mich App 383, 390-391; 314 NW2d 631 (1981) (Communications between a physician and a patient, however confidential they may be, are held not to be privileged if they have been made in the furtherance of an unlawful or criminal purpose.); Osborn v Fabatz, 105 Mich App 450, 455-456; 306 NW2d 319 (1981) (Communication between a person and a physician that is for the purpose of a lawsuit, and not for treatment or advice regarding treatment, is not protected by the physician-patient privilege.).
We further note that nothing in the protective order supports a conclusion that HIPAA controls.
To support its request for defendant’s patient list, plaintiff says it cannot press its claim that defendant stole its patients without knowing the identity of defendant’s patients and that, unless the courts grant such discovery, it cannot enforce its contractual right to protect its valuable patient list from poaching by any unscrupulous ex-employee, such as plaintiff regards defendant. To this, we say that it is not our role to address either the wisdom of a physician’s efforts to restrict with whom a patient may consult or the appropriate business or legal means by which a corporation can effectively protect its practice. Instead, our limited role is to decide whether the names, addresses, and telephone numbers of nonparty patients are protected from disclosure by law.
We also reject plaintiffs assertion that defendant did not timely raise this claim of privilege under MCL 600.2157. MCR 2.310(C)(2) generally requires that a party to whom a request for the production of documents is served must make a written response within 28 days after service of the request. Plaintiff submitted the interrogatories on April 7, 2009, and defendant timely objected to plaintiffs interrogatories on May 5, 2009. Defendant stated that “HIPAA, as well as medical privilege, precludes Defendant from releasing the information sought in this request.” Defendant’s response clearly stated that he objected to the disclosure of the requested information and gave a sufficient reason for the objection. Therefore, defendant’s reply was timely and his objection stated adequate grounds in accordance with MCR 2.310(C)(2). | [
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PER CURIAM.
In this action to set aside a sheriffs foreclosure sale, plaintiff appeals as of right the circuit court’s order granting summary disposition in favor of defendants under MCR 2.116(C)(10) (no genuine issue of material fact). We affirm the order of the circuit court.
On appeal, plaintiff asserts that the sheriffs deed on mortgage foreclosure (Sheriffs Deed) executed by Matthew J. Chodak fraudulently misrepresents that Chodak is a “deputy sheriff.” According to plaintiff, Chodak is not a sheriff, an undersheriff, or a deputy sheriff, as required by the Michigan mortgage foreclosure statute, MCL 600.3216, because he did not request to be, and was not actually, properly appointed by Sheriff Michael J. Bouchard and no such appointment was filed with the Oakland County Clerk’s office, as required by the statute governing the appointment of an undersheriff or a deputy sheriff, MCL 51.73. We disagree.
We review de novo a trial court’s decision on a motion for summary disposition. Silberstein v Pro-Golf of America, Inc, 278 Mich App 446, 457; 750 NW2d 615 (2008). Evidence must be examined “in the light most favorable to the nonmoving party.” Id. “Summary disposition should be granted only where the evidence fails to establish a genuine issue regarding any material fact.” Id. at 457-458.
The Michigan Supreme Court has held that statutory foreclosures will only be set aside if “very good reasons” exist for doing so. Markoff v Tournier, 229 Mich 571, 575; 201 NW 888 (1925). “ 4[I]t would require a strong case of fraud or irregularity, or some peculiar exigency, to warrant setting a foreclosure sale aside.’ ” Sweet Air Investment, Inc v Kenney, 275 Mich App 492, 497; 739 NW2d 656 (2007), quoting United States v Garno, 974 F Supp 628, 633 (ED Mich, 1997). “Statutory foreclosures are a matter of contract, authorized by the mortgagor, and ought not to be hampered by an unreasonably strict construction of the law.” White v Burkhardt, 338 Mich 235, 239; 60 NW2d 925 (1953).
Under MCL 600.3216, a sheriffs foreclosure sale “shall be made by the person appointed for that purpose in the mortgage, or by the sheriff, undersheriff, or a deputy sheriff of the county, to the highest bidder.” Concerning appointment of deputy sheriffs by the sheriff, MCL 51.70 provides that
[e]ach sheriff may appoint 1 or more deputy sheriffs at the sheriffs pleasure, and may revoke those appointments at any time. Persons may also be deputed by a sheriff, by an instrument in writing, to do particular acts, who shall be known as special deputies and each sheriff may revoke those appointments at any time.
Similarly, concerning appointments, MCL 51.73 provides that
[ejvery appointment of an under sheriff, or of a deputy sheriff, and every revocation thereof, shall be in writing under the hand of the sheriff, and shall be filed and recorded in the office of the clerk of the county, and every such under sheriff or deputy shall, before he enters upon the duties of his office, take the oath prescribed by the twelfth article of the constitution of this state.[ ] But this section shall not extend to any person who may be deputed by any sheriff to do a particular act only.
In this case, plaintiff argues that Chodak could not have lawfully conducted the foreclosure sale given that he was not properly appointed as a deputy sheriff because there is no written and recorded appointment on file with the Oakland County Clerk’s office. In support of his argument, plaintiff cites four cases that deal with either appointment by someone other than a sheriff or situations in which no written instrument memorializes an appointment. This case is factually distinguishable in that it does not involve appointment by an undersheriff or someone acting on behalf of the sheriff, but instead concerns whether Chodak was appointed for purposes of MCL 51.70 when he signed the “Agreement to Serve and/or Execute Civil Process for the Oakland County Sheriffs Office” (Agreement).
While plaintiff is correct that Chodak was not properly appointed as a deputy sheriff under the requirements set forth in MCL 51.73, Chodak was properly deputized as a special deputy under MCL 51.70. In this case, there is a written instrument, i.e., the Agreement, that was signed by Sheriff Bouchard. According to the terms of the Agreement, “Civil Process” includes, but is not limited to, “selling lands on the foreclosure of a mortgage by advertisement; executing deeds and performing all related services required on sale of property . . ..” In this way, the Agreement prescribes the particular acts to be performed. Therefore, the Agreement constitutes the necessary written instrument for purposes of deputizing a special deputy. As a result, Chodak qualifies as a special deputy, and the provisions of MCL 51.73 requiring filing and recording of an appointment are inapplicable.
Plaintiff also argues that MCL 51.70 and MCL 51.73 require appointment by the sheriff of an individual, who can be monitored, and were not intended to allow the sheriff to appoint a corporation, which may delegate its duties to unaccountable third parties. Plaintiff notes that the Agreement is between Sheriff Bouchard and County Civil Process Services, Inc., of which Chodak is the president, but the Sheriffs Deed has only Chodak’s name on it. However, plaintiff points to no authority to support this proposition concerning the intent of the Legislature in enacting these provisions of the sheriffs’ statute. “An appellant may not merely announce his position and leave it to this Court to discover and rationalize the basis for his claims, nor may he give only cursory treatment with little or no citation of supporting authority.” People v Kelly, 231 Mich App 627, 640-641, 588 NW2d 480 (1998). Additionally, plaintiffs fears concerning a contractor’s unilateral delegation of authority to “anybody of its choosing” are unfounded in light of language in the Agreement requiring that any employee of the contractor who performs a duty of the sheriffs office must be a “Special Deputy ... in accordance with the DEPUTIZATION ADDENDUM.” Similarly, the deputization addendum (Addendum) requires that any employees of the contractor must request to be appointed as a “Special Deputy pursuant to MCL 51.70, with the powers of deputy sheriff.” Therefore, even if plaintiff had supported his argument concerning the intent behind MCL 51.70 and MCL 51.73 with citations of authority, this argument could not succeed because the terms of the Agreement and Addendum preserve the emphasis on accountability of particular individuals and thereby prevent the haphazard delegation and appointment schemes that plaintiff raises as concerns. Furthermore, while plaintiff correctly points out that, under the Addendum to the Agreement, the contractor must request that the sheriff appoint a specific individual as a special deputy to serve as deputy sheriff, this requirement deals with deputization of a contractor’s employees, not the contactor himself (in this case, Chodak), who has signed a contract with the sheriff.
Additionally, plaintiff points out that the copy of the oath attached to defendants’ brief on appeal has no liber or page number, thereby giving no indication that the oath was filed with the Oakland County Clerk’s office as claimed by defendants. This argument is unpersuasive because MCL 51.70 does not require an oath to be recorded for deputization of a special deputy.
Defendants assert that Chodak is a special deputy charged with a specific task and that Chodak qualifies as a deputy sheriff when carrying out this task. We agree. MCL 51.70 allows for deputization of persons “to do particular acts.” If such persons were without statutory authorization to carry out those acts, an absurd result would be reached: authority “to do particular acts” would be granted by MCL 51.70, but then revoked under MCL 600.3216 because of a technicality. In this case, the technicality would be that a person may be deputized as a special deputy to carry out particular acts under MCL 51.70, but would be unable to carry out those acts under MCL 600.3216 because a special deputy would not qualify as a deputy sheriff. Additionally, the Addendum expressly states that a special deputy has the powers of a deputy sheriff. Therefore, Chodak, performing his specifically assigned functions in his capacity as a special deputy, qualifies as a deputy sheriff. As a result, his acts of conducting the foreclosure sale and executing the Sheriffs Deed are valid under the foreclosure statute. For these reasons, plaintiffs argument that Chodak declared himself to be a deputy sheriff, not a special deputy, in his oath is without merit.
Under these circumstances, there is no genuine issue of material fact concerning whether Chodak was properly appointed pursuant to the Agreement or whether the foreclosure sale and Sheriffs Deed were valid. Therefore, plaintiff has failed to show the requisite “strong case of fraud or irregularity, or some peculiar exigency,” to overturn the foreclosure sale. Sweet Air Investment, 275 Mich App at 497.
Affirmed.
Talbot, EJ., and Sawyer and M. J. Kelly, JJ., concurred.
The reference is to the 1835 Michigan Constitution. The oath now appears in Const 1963, art 11, § 1.
Chodak signed the Agreement on behalf of County Civil Process Services, Inc. | [
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MARKEY, J.
In this divorce action, plaintiff appeals by right the trial court’s child support order. We conclude that the trial court erred as a matter of law by deviating from the Michigan Child Support Formula (MCSF), MCL 552.605(2). For the reasons stated in this opinion, we vacate the order for child support in the judgment of divorce and remand for reconsideration without deviation from the MCSF in light of the parties’ income as affected by the marital-property division. Defendant cross-appeals, contending that the trial court’s award of temporary spousal support was inequitable, that the trial court’s award of attorney fees was inadequate, and that the trial court erred by not ordering plaintiff to pay for uninsured medical expenses defendant incurred during the pendency of this action. We affirm these dispositional rulings by the trial court.
I. FACTS AND PROCEEDINGS
The parties were married in December 1993 when they were both in their twenties. The marriage produced two children: a son was born in July 1995, and a daughter was born in April 1997. Plaintiff filed for divorce on February 14, 2008, and the judgment of divorce was not entered until November 4, 2009. The parties separated before the complaint for divorce was filed when they purchased a separate residence for defendant a short distance from the marital home. The parties’ son resided with his father and the daughter lived with her mother. Although initially each child visited regularly with the other parent, the son soon had a falling-out with his mother and no longer visited. Defendant never sought a court order to enforce parenting-time rights, but she sought counseling to resolve relationship issues between them.
Both parties’ formal education ended with their graduation from high school. After they were married, plaintiff formed a farm corporation with his parents (Ewald Farms). Plaintiff held a 14 percent interest in the farm corporation and served as its president. Although defendant was a stay-at-home mother, she also worked on the family farming business in the fields and doing bookkeeping and other paperwork. Throughout the marriage, plaintiff farmed and managed the farm corporation. After the parties separated, plaintiff continued farming, and defendant was able to find short-term employment through an employment agency.
During the marriage, the parties’ received rental income from Ewald Farms on 365 acres of farmland the parties were able to acquire. Plaintiff also received a small salary from the family farming operation, and many of the family’s living expenses were paid by the farm corporation. After trial, the court issued a written opinion on July 23, 2009, addressing disputed issues. The trial court determined that the net value of the marital farmland was $808,106, and that plaintiffs 14 percent interest in Ewald Farms was worth $181,185. The parties’ other assets included the two residences and assorted personal property. The parties do not dispute the valuation of the marital property or its division.
In its July 2009 opinion, the trial court noted that to the extent that its rulings favored defendant, it did so because it found that plaintiff was more at fault than defendant for the breakdown of the marriage relationship. The trial court divided the marital property by awarding plaintiff his interest in Ewald farms and awarding defendant 259 of the parties’ 365 acres or 64 percent of the marital farmland. The court gave plaintiff the right to purchase defendant’s land from her by paying defendant its net worth of $518,000 within three months of the entry of the judgment.
The court also ruled that the established custodial environment would continue and awarded the parties joint legal custody of the two children: The son would live primarily with his father, and the daughter would live primarily with her mother. Addressing parenting time, the court observed that the parties’ son “has been alienated from his mother in the course of these proceedings and has been very defiant about visiting with her.” Consequently, the trial court continued the terms of a stipulated order regarding custody and parenting time entered April 3, 2009. That order provided plaintiff parenting time with his daughter, but defendant’s parenting time with her son was “held in abeyance until the [son’s] counselor recommends parenting time, or until the parties agree otherwise, or until further order of the Court.”
Regarding child support, in its July 2009 opinion the court imputed a minimum-wage, annual gross income of $15,600 to defendant. The court determined that plaintiff had an annual gross income of $73,970, consisting of a $24,700 farming salary, $36,202 land rentals, and approximately $13,000 in personal expenses paid by the farm corporation. The trial court opined that using this income data the MCSF would require plaintiff to pay defendant, including ordinary medical expenses, $618 a month when two children are being supported and $383 a month for one child. The court recognized that its martial-property division “deprives [plaintiff] of much of the property that he had been farming” and that the income of each of the parties would change significantly. Therefore, the court stated “either party may petition for a support review at that time.”
Plaintiff moved for clarification and reconsideration regarding the farmland buyback. Plaintiff further sought reconsideration of child support on the basis that he would incur debt to exercise the farmland buyback while defendant would receive $518,000 capable of being invested to produce income. Plaintiff also requested recalculation of child support because defendant did not exercise parenting time with the parties’ son. In response, the trial court issued a supplemental decision on September 24, 2009, in which it ruled that child support would be calculated as if the parities’ son spent significant overnight time with defendant. The trial court’s deviation from the MCSF had the net effect of reducing defendant’s obligation and increasing plaintiffs child support obligation. The court ruled that plaintiff was at fault for the estrangement between the mother and son and that plaintiff “should not be permitted to profit from the acts and behavior in which he engaged which alienated [the son] from his mother.” The court also observed that, in light of its other rulings, plaintiff was financially able to pay the amount of support ordered and that defendant needed that support. The trial court concluded, “[a]s a matter of equity, taking all matters into consideration, and considering the record as a whole, which record supports the finding that [plaintiff] acted wrongfully in alienating [the son] from his mother, the Court deviates from the formula guidelines . . . .” The court then stated:
While there are two minor children, support shall be paid as if each parent had 103 days parenting time with the child in the custody of the other parent, even recognizing that such is not in [fact] the [case]. Therefore, the support while there are two children shall be in the amount of $571.00 per month child support and ordinary medical in the amount of $47.00 per month payable by Mr. Ewald to Mrs. Ewald. When there is one child remaining, Mr. Ewald shall pay child support in the amount of $618.00 per month child support and ordinary medical in the amount of $23.00 per month.. .. Thus, until [the son] emancipates, the Court orders an amount equal to that which Mr. Ewald would be required to pay if [the son] visited his mother regularly. When [the son] emancipates, Mr. Ewald will no longer be legally obligated for [the son’s] child support, and thereafter the ordinary guidelines will be followed.
The trial court’s supplemental decision referred to an attached “guideline calculations” that provided that the child support amounts were calculated on the premise that each parent had on average 182.5 overnights. The “guideline calculations” provide that plaintiff pay the same amount of support for two minor children as the court ordered in its supplemental decision, but for only one child, they require plaintiff to pay $867 each month, plus $23 for ordinary medical expenses.
The judgment of divorce was entered November 4, 2009. It reiterated the trial court’s rulings from its July 2009 opinion regarding the division of marital property, the terms on which plaintiff could purchase defendant’s share of the farmland, and temporary spousal support through the date of the transfer of the farmland to defendant. The judgment also included the court’s ruling that defendant was responsible for medical expenses she incurred for elective, uninsured surgery but awarded her an additional $2,500 in attorney fees over what plaintiff had already paid. The judgment provided that defendant’s parenting time with the parties’ son be “held in abeyance until such time as (1) the parties agree otherwise, (2) [the son’s] mental health counselor/therapist recommends parenting time, or (3) further Order of this Court.”
A uniform child support order attached to the judgment provides that plaintiff pay defendant when two children are covered by the order, $571 plus $47 ordinary medical ($618/month), and when only one child is covered by the order, $867 plus $23 ordinary medical ($890/month). The support effective date was July 23, 2009.
II. CHILD SUPPORT
A. STANDARD OF REVIEW
A trial court must presumptively follow the MCSF when determining the child support obligation of parents. MCL 552.605; Burba v Burba (After Remand), 461 Mich 637, 645; 610 NW2d 873 (2000); Stallworth v Stallworth, 275 Mich App 282, 284; 738 NW2d 264 (2007). This Court reviews de novo as a question of law whether the trial court has properly applied the MCSF. Burba, 461 Mich at 647; Peterson v Peterson, 272 Mich App 511, 516; 727 NW2d 393 (2006). The trial court’s factual findings underlying its determination regarding child support are reviewed for clear error. MCR 2.613(C); Stallworth, 275 Mich App at 284. The trial court’s discretionary rulings permitted by statute and the MCSF are reviewed for an abuse of that discretion. Borowsky v Borowsky, 273 Mich App 666, 672; 733 NW2d 71 (2007). An abuse of discretion occurs when a court selects an outcome that is outside the range of reasonable and principled outcomes. Stallworth, 275 Mich App at 284. A trial court abuses its discretion when it relies on a legally improper reason for departing from the MCSF in establishing a parent’s child support obligation. Burba, 461 Mich at 649.
B. ANALYSIS
This case presents an issue of first impression: whether a parent’s actions that cause a child to refuse to visit the other parent would render it “unjust or inappropriate” under MCL 552.605(2) to apply the “parental time offset” of 2008 MCSF 3.03, so as to permit deviation from the MCSF. We conclude that the answer is no because the Support and Parenting Time Enforcement Act (the act), MCL 552.601 et seq., read as a whole, does not provide for enforcement of parenting-time rights by adjusting child support obligations. Consequently, a parent’s alleged interference with the parenting-time rights of the other parent is not a circumstance that would permit deviation from the MCSF under MCL 552.605(2).
Trial courts must presumptively follow the MCSF when determining parents’ child support obligations. Burba, 461 Mich at 645; Stallworth, 275 Mich App at 284. The Legislature provides criteria for deviation in § 5 of the act, MCL 552.605(2):
Except as otherwise provided in this section, the court shall order child support in an amount determined by application of the child support formula developed by the state friend of the court bureau as required in section 19 of the friend of the court act, MCL 552.519. The court may enter an order that deviates from the formula if the court determines from the facts of the case that application of the child support formula would be unjust or inappropriate and sets forth in writing or on the record all of the following:
(a) The child support amount determined by application of the child support formula.
(b) How the child support order deviates from the child support formula.
(c) The value of property or other support awarded instead of the payment of child support, if applicable.
(d) The reasons why application of the child support formula would be unjust or inappropriate in the case.
The criteria for deviating from the MCSF are mandatory. Burba, 461 Mich at 644. “The trial court, when it deviates from the formula, must first state the level of child support it would have ordered had it followed the formula . . . .” Id. at 645; MCL 552.605(2)(a). Defendant contends that the trial court complied with this criterion by its statement regarding child support in its July 2009 opinion. If true, the trial court’s compliance was not meticulous. The Legislature has required trial courts “to meticulously set forth [the statutory] factors when deviating. Anything less fails to fulfill the statutory procedure.” Burba, 461 Mich at 646.
The trial court also erred as a matter of law by deviating from the MCSF in order to punish plaintiff rather than determining each parent’s fair share of child support in light of their combined net income available for child support. 2008 MCSF 3.01(B). “Except as otherwise permitted by MCL 552.605, courts must order child support in the amount determined by applying this formula. Unless rebutted by facts in a specific case, the law presumes that this formula (or ‘guideline’) sets appropriate levels of support.” 2008 MCSF 1.01(B).
Guidance for deviations is found in 2008 MCSF 1.04(D) and 1.04(E):
1.04(D) In exercising its discretion to deviate, the court may consider any factor that it determines is relevant.
1.04(E) Deviation Factors
Strict application of the formula may produce an unjust or inappropriate result in a case when any of the following situations occur:
(1) The child has special needs.
(2) The child has extraordinary educational expenses.
(3) A parent is a minor.
(4) The child’s residence income is below the threshold to qualify for public assistance, and at least one parent has sufficient income to pay additional support that will raise the child’s standard of living above the public assistance threshold.
(5) A parent has a reduction in the income available to support a child due to extraordinary levels of jointly accumulated debt.
(6) The court awards property in lieu of support for the benefit of the child (§4.03).
(7) A parent is incarcerated with minimal or no income or assets.
(8) A parent has incurred, or is likely to incur, extraordinary medical expenses for either that parent or a dependent.
(9) A parent earns an income of a magnitude not fully taken into consideration by the formula.
(10) A parent receives bonus income in varying amounts or at irregular intervals.
(11) Someone other than the parent can supply reasonable and appropriate health care coverage.
(12) A parent provides substantially all the support for a stepchild, and the stepchild’s parents earn no income and are unable to earn income.
(13) A child earns an extraordinary income.
(14) The court orders a parent to pay taxes, mortgage installments, home insurance premiums, telephone or utility bills, etc. before entry of a final judgment or order.
(15) A parent must pay significant amounts of restitution, fines, fees, or costs associated with that parent’s conviction or incarceration for a crime other than those related to failing to support children, or a crime against a child in the current case or that child’s sibling, other parent, or custodian.
(16) A parent makes payments to a bankruptcy plan or has debt discharged, when either significantly impacts the monies that parent has available to pay support.
(17) A parent provides a substantial amount of a child’s day-time care and directly contributes toward a significantly greater share of the child’s costs than those reflected by the overnights used to calculate the offset for parental time.
(18) Any other factor the court deems relevant to the best interests of a child.
Although 2008 MCSF 1.04(D) provides that “the court may consider any factor that it determines is relevant” when exercising its discretion to deviate, and 2008 MCSF 1.04(E)(18) provides for a catch-all “best interests” of the child factor, notably absent from the list of possible factors justifying deviation is any mention of the violating or obstructing of a parenting-time order. Likewise, there is no mention in the act that abatement of child support is an appropriate or available method of enforcing court-ordered parenting time. Rather, a parent who has been denied parenting time may obtain “makeup parenting time,” MCL 552.642, or a parent violating a parenting-time order may be found in contempt of court. A court may then impose various sanctions, including fines, jail, or probationary terms and conditions. MCL 552.644(2). As this Court observed in Rzadkowolski v Pefley, 237 Mich App 405, 409; 603 NW2d 646 (1999), the act “does not contemplate the suspension of child support as a remedy when the custodial parent has frustrated visitation.” The Rzadkowolski Court applied a strict separation between parenting-time rights (visitation) and the parent’s obligation of support. The Court held:
Defendant had a duty to support his child. MCL 722.3; MSA 25.244(3). That duty was not abrogated by the fact that [the] plaintiff left the state without permission of the court. To the contrary, [the] defendant’s remedy was to seek enforcement of his visitation rights, not to withhold his child support payments. [Rzadkowolski, 237 Mich App at 409.]
The parenting-time offset at issue in this case is based on the premise that as “a parent cares for a child overnight, that parent should cover many of the child’s unduplicated costs, while the other parent will not have to spend as much money for food, utility, and other costs for the child.” 2008 MCSF 3.03(A)(1). The MCSF manual sets forth a mathematical formula for determining the offset utilizing each parent’s base child support obligation and average number of overnights. 2008 MCSF 3.03(A)(2). “An offset for parental time generally applies to every support determination whether in an initial determination or subsequent modification, whether or not previously given.” 2008 MCSF 3.03(B). Moreover, the MCSF requires that the offset be calculated on the basis of actual overnights even if that is contrary to an existing order regarding parenting time. 2008 MCSF 3.03(C)(4) provides:
Credit a parent for overnights a child lawfully and actually spends with that parent including those exercised outside the terms of the currently effective order. This may happen by agreement, or when one parent voluntarily foregoes time granted in the order. Do not consider overnights exercised in violation of an order.
(a) If a parent produces credible evidence that the approximate number exercised differs from the number granted by the custody or parenting time order, credit the number according to the evidence without requiring someone to formally petition to modify the custody or parenting time order.
(b) When the most recent support order deviated based on an agreement to use a number of overnights that differed from actual practice, absent some other change warranting modification, credible evidence of changed practices only includes an order changing the custody or parenting time schedule.
The record in this case shows that the parties acceded to their son’s desire to not visit his mother. The trial court adopted the parties’ agreement as its order regarding defendant’s parenting time, providing that it be held “in abeyance until such time as (1) the parties agree otherwise, (2) [the son’s] mental health counselor/therapist recommends parenting time, or (3) further Order of this Court.” Consequently, plaintiff could not have violated the court’s parenting-time order. Further, the evidence in the record is insufficient to support the trial court’s determination that the son’s “estrangement” from his mother was plaintiffs fault and that plaintiff engaged in “acts and behavior ... which alienated [the son] from his mother.” While the divorce proceeding damaged the relationship between mother and son, there is no evidence that plaintiff acted intentionally to encourage the son’s attitude toward defendant. We therefore conclude that the trial court also erred by deviating from the MCSF on the basis of a clearly erroneous finding of fact.
In sum, we conclude the trial court erred because the Support and Parenting Time Enforcement Act does not provide for the enforcement of parenting-time rights by adjusting child support obligations. Other means exist to protect and enforce parenting time. See MCL 552.642 (makeup parenting time); MCL 552.644(2) (contempt sanctions). Michigan cases hold that parental rights (parenting time) are separate from parental obligations (child support). See Rzadkowolski, 237 Mich App at 409; see also In re Beck, 488 Mich 6, 8, 16; 793 NW2d 562 (2010), holding that a parent’s obligation of support continued after parental rights were terminated because “parental rights are distinct from parental obligations,” and the parent’s duty of support had not been “modified or terminated by a court of competent jurisdiction.” In addition, the MCSF specifically directs that the parenting-time offset be based on the actual overnights a child spends with a parent. 2008 MCSF 3.03(C)(4). This subsection of the MCSF recognizes that a parent may voluntarily not exercise rights to parenting time, as happened here. In reviewing the list of possible reasons for deviating from the formula that are set forth in 2008 MCSF 1.04(E), all relate to the economic support of the child, either the child’s needs or a parent’s ability to provide support. None of the listed factors suggests that purported interference with parenting-time rights may serve as a circumstance justi fying deviation. In fact, the effect of the trial court’s deviation here is to increase the support available for one child at the expense of the support available to the other. So, for all the foregoing reasons, we hold that plaintiffs alleged complicity in alienating the parties’ son from his mother is not a circumstance that renders the MCSF “unjust or inappropriate” within the meaning of MCL 552.605(2).
Because we vacate the child support provisions in the judgment of divorce and remand for reconsideration without deviation from the MCSE] we briefly note that the trial court recognized that its division of the martial property would have a significant effect on each party’s income so that reconsideration of the amount of child support would be appropriate. The MCSF requires that defendant’s income include what is or could be earned from her assets if they were invested. See 2008 MCSF 2.01(C)(5)(income includes interest and dividends); 2008 MCSF 2.06(A)(“To the extent a parent’s assets could be (but are not) used to generate regular income, a parent’s income includes an imputed reasonable and regular investment return on those assets____”). Plaintiffs debt expense to continue his farming operation must be deducted from his gross income to determine his “net income” from his farming operation. 2008 MCSF 2.01(C)(2); 2008 MCSF 2.01(E); see also Borowsky, 273 Mich App at 675-677 (applying the 2004 MCSF). Consequently, on remand, the trial court shall reconsider child support in light of the effect of the marital-property division on the parties’ income and potential income.
III. SPOUSAL SUPPORT
A. STANDARD OP REVIEW
The award of spousal support is within the discretion of the trial court. MCL 552.23(1); Berger v Berger, 277
Mich App 700, 726; 747 NW2d 336 (2008). The trial court’s underlying factual findings are reviewed for clear error. MCR 2.613(C). A reviewing court may determine a finding is clearly erroneous only when, on the basis of all the evidence, it is left with a definite and firm conviction that a mistake has been made. Beason v Beason, 435 Mich 791, 805; 460 NW2d 207 (1990). The appellant has the burden to persuade the reviewing court that a mistake has been committed, failing which the trial court’s findings may not be overturned. Id. at 804. If the trial court’s findings are not clearly erroneous, the reviewing court must then decide whether the dispositional ruling was fair and equitable in light of the facts. Sparks v Sparks, 440 Mich 141, 151-152; 485 NW2d 893 (1992). The trial court’s dispositional ruling must be affirmed unless the reviewing court is firmly convinced that it was inequitable. Id.
B. ANALYSIS
Defendant has not shown that any of the trial court’s findings were clearly erroneous or that the trial court’s dispositional ruling was unfair or inequitable in light of the facts. Id. So, the trial court’s dispositional ruling must be affirmed. Berger, 277 Mich App at 727.
We conclude that most of the spousal-support factors indicate that spousal support is not necessary. Although the marriage lasted a number of years, the parties are still both relatively young, with identical educational levels; each worked at farming all his and her adult life, and each enjoys good health and the ability to work. Although defendant was a stay-at-home mother, she also worked for the farm. The trial court found that the fault of the marital breakdown lay with plaintiff, but this is but one of many factors for the court to consider. Sparks, 440 Mich at 158; Berger, 277 Mich App at 726-727. In light of the significant award of property to defendant and the other factors noted above, defendant has not established that the award of temporary spousal support pending the distribution of martial property was inequitable. Defendant may invest the $518,000 cash award from the marital-property division to earn income, reduce her living expenses by paying off her mortgage, or fund education or training to pursue higher-paying employment opportunities. Defendant has not presented a persuasive argument that the trial court’s dispositional ruling on spousal support was inequitable.
In light of the award of substantial income-producing property to defendant and the fact that both parties are able to support themselves, the trial court did not abuse its discretion by ordering only temporary spousal support through the date that the marital-property division was implemented. Defendant has not established clearly erroneous factual findings or presented a convincing argument that the trial court’s dispositional ruling was inequitable.
IV ATTORNEY FEES
A. STANDARD OF REVIEW
Attorney fees are not recoverable as of right in a divorce action but may be awarded to enable a party to carry on or defend the action. MCL 552.13; MCR 3.206(C)(1). A party seeking attorney fees must establish both financial need and the ability of the other party to pay. MCR 3.206(C)(2)(a); Woodington v Shokoohi, 288 Mich App 352, 370; 792 NW2d 63 (2010). This Court reviews a trial court’s decision to grant or deny attorney fees for an abuse of discretion; the court’s findings of fact on which it bases its decision are reviewed for clear error. Reed v Reed, 265 Mich App 131, 164; 693 NW2d 825 (2005). The trial court abuses its discretion when its decision results in an outcome that falls outside the range of reasonable and principled outcomes. Smith v Smith, 278 Mich App 198, 207; 748 NW2d 258 (2008). “The party requesting the attorney fees has the burden of showing facts sufficient to justify the award.” Woodington, 288 Mich App at 370. This would include proving both financial need and the ability of the other party to pay, Smith, 278 Mich App at 207, as well as the amount of the claimed fees and their reasonableness, Reed, 265 Mich App at 165-166.
B. ANALYSIS
Defendant argues that the trial court erred by awarding her only part of the attorney fees she incurred during the divorce proceeding. The record is not clear, but it appears that plaintiff paid for about half of the attorney fees defendant incurred through entry of the judgment of divorce. Defendant asserts that plaintiff should pay all her attorney fees. This is a close question. The record establishes defendant’s financial need, at least through the implementation of the marital-property division, and that plaintiff had the ability to pay. The trial court denied defendant’s request for the full payment of attorney fees because of the property division and its effect on the parties’ income. Considering that we have already determined that the trial court did not clearly err by denying spousal support, we could find in favor of defendant on the basis that a party should not be required to invade assets to satisfy attorney fees when the party is relying on those same assets for support. Woodington, 288 Mich App at 370, citing Gates v Gates, 256 Mich App 420, 438-439; 664 NW2d 231 (2003).
On the other hand, defendant failed to present evidence in the trial court to establish the amount and reasonableness of the attorney fees claimed. Reed, 265 Mich App at 165-166. Consequently, we remand this issue to the trial court for defendant to provide the evidence necessary to meet her burden of proof with respect to her need and plaintiffs ability to pay, Smith, 278 Mich App 207, and the amount of the fees claimed and their reasonableness, Reed, 265 Mich App at 165-166.
V MEDICAL EXPENSES
Defendant last asserts error regarding certain medical expenses. We conclude that this claim fails because defendant presents it as a mere conelusory statement without citation to the record, legal authority, or any meaningful argument. See MCR 7.212(C)(7); Prince v MacDonald, 237 Mich App 186, 197; 602 NW2d 834 (1999). Even if we were to reach the merits of defendant’s claim, we would affirm. The expenses that defendant asks plaintiff to pay resulted from a purely elective medical procedure for which there was no health insurance coverage. The trial court did not abuse its discretion by ruling that defendant’s uninsured, voluntary medical expenses were her own responsibility. Defendant has not shown any clear error in the trial court’s findings of fact, and the court’s dispositional ruling is fair and equitable. Sparks, 440 Mich at 151-152.
VI. CONCLUSION
We affirm the trial court’s dispositional rulings regarding spousal support and medical expenses. For the reasons stated in this opinion, we vacate the order for child support in the judgment of divorce and remand for reconsideration without deviation from the MCSF in light of the parties’ income as affected by the marital-property division, and for determination of the attorney fee issue. We do not retain jurisdiction. No taxable costs pursuant to MCR 7.219, neither party having prevailed in full.
Sawyer, EJ., and Fort Hood, J., concurred with Markey, J.
Plaintiff was awarded a five-year right of first refusal if he did not meet the purchase deadline and defendant sought to sell the property.
The act was formerly known as the Support and Visitation Enforcement Act, but was renamed the Support and Parenting Time Enforcement Act. See MCL 552.601, as amended by 1996 PA 25, effective June 1, 1996.
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SHAPIRO, J.
These consolidated appeals each involve a foreclosure instituted by Mortgage Electronic Registration Systems, Inc. (MERS), the mortgagee in both cases. The sole question presented is whether MERS is an entity that qualifies under MCL 600.3204(l)(d) to foreclose by advertisement on the subject properties, or if it must instead seek to foreclose by judicial process. We hold that MERS does not meet the requirements of MCL 600.3204(l)(d) and, therefore, may not foreclose by advertisement.
I. BASIC FACTS AND PROCEDURAL HISTORY
In these cases, each defendant purchased property and obtained financing for their respective properties from a financial institution. The financing transactions involved loan documentation (“the note”) and a mortgage security instrument (the “mortgage instrument”). The original lender in both cases was Homecomings Financial, LLC.
Each note stated, in part, the amount of the loan, the interest rate, methods and requirements of repayment, and the identity of the lender and the borrower. Each mortgage instrument provided the mortgagee the right to foreclosure on the property in the event of default on the loan. The lender, though named as the lender in the mortgage instrument, was not designated therein as the mortgagee. Instead, the mortgage instrument stated that MERS “is the mortgagee under this Security-Instrument” and it contained several provisions addressing the relationship between MERS and the lender, including:
“MERS” is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument.
This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ii) the performance of Borrower’s covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower does hereby mortgage, warrant, grant and convey to MERS (solely as nominee for Lender and Lender’s successors and assigns) and to the successors and assigns of MERS, with power of sale, the following described property ....
... Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument, but, if necessary to comply with law or custom, MERS (as nominee for Lender and Lender’s successors and assigns) has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.
Defendants defaulted on their respective notes. Thereafter, MERS began nonjudicial foreclosures by advertisement as allegedly permitted under MCL 600.3201 et seq., purchased the property at the subsequent sheriffs sales, and then quitclaimed the property to plaintiffs as respective successor lenders. When plaintiffs subsequently began eviction actions, defendants challenged the respective foreclosures as invalid, asserting, inter alia, that MERS did not have authority under MCL 600.3204(l)(d) to foreclose by advertisement because it did not fall within any of the three categories of mortgagees permitted to do so under that statute. The district courts denied defendants’ assertions that MERS lacked authority to foreclose by advertisement and their conclusions were affirmed by the respective circuit courts on appeal. We granted leave to appeal in both cases.
II. ANALYSIS
A. STANDARD OF REVIEW
We review de novo decisions made on motions for summary disposition, Coblentz v City of Novi, 475 Mich 558, 567; 719 NW2d 73 (2006), as well as a circuit court’s affirmance of a district court’s decision on a motion for summary disposition. First of America Bank v Thompson, 217 Mich App 581, 583; 552 NW2d 516 (1996). We review all affidavits, pleadings, depositions, admissions, and other evidence submitted by the parties in the light most favorable to the party opposing the motion, in this case, defendants. Coblentz, 475 Mich at 567-568.
We also review de novo questions of statutory interpretation and the proper application of statutes. Id. at 567.
The primary goal of statutory interpretation is to give effect to the intent of the Legislature. This determination is accomplished by examining the plain language of the statute. Although a statute may contain separate provisions, it should be read as a consistent whole, if possible, with effect given to each provision. If the statutory language is unambiguous, appellate courts presume that the Legislature intended the meaning plainly expressed and further judicial construction is neither permitted nor required. Statutory language should be reasonably construed, keeping in mind the purpose of the statute. If reasonable minds could differ regarding the meaning of a statute, judicial construction is appropriate. When construing a statute, a court must look at the object of the statute in light of the harm it is designed to remedy and apply a reasonable construction that will best accomplish the purpose of the Legislature. [ISB Sales Co v Dave’s Cakes, 258 Mich App 520, 526-527; 672 NW2d 181 (2003) (citations omitted).]
B. MERS BACKGROUND
The parties, in their briefs and at oral argument, explained that MERS was developed as a mechanism to provide for the faster and lower-cost buying and selling of mortgage debt. Apparently, over the last two decades, the buying and selling of loans backed by mortgages after their initial issuance had accelerated to the point that those operating in that market concluded that the statutory requirement that mortgage transfers be recorded was interfering with their ability to conduct sales as rapidly as the market demanded. By operating through MERS, these financial entities could buy and sell loans without having to record a mortgage transfer for each transaction because the named mortgagee would never change; it would always be MERS even though the loans were changing hands. MERS would purportedly track the mortgage sales internally so as to know for which entity it was holding the mortgage at any given time and, if foreclosure was necessary, after foreclosing on the property, would quitclaim the property to whatever lender owned the loan at the time of foreclosure.
As described by the New York Court of Appeals in MERSCORP, Inc v Romaine, 8 NY3d 90, 96; 828 NYS2d 266; 861 NE2d 81(2006):
In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system.
The initial MERS mortgage is recorded in the County Clerk’s office with “Mortgage Electronic Registration Systems, Inc.” named as the lender’s nominee or mortgagee of record on the instrument. During the lifetime of the mortgage, the beneficial ownership interest or servicing rights may be transferred among MERS members (MERS assignments), but these assignments are not publicly recorded; instead they are tracked electronically in MERS’s private system. In the MERS system, the mortgagor is notified of transfers of servicing rights pursuant to the Truth in Lending Act, but not necessarily of assignments of the beneficial interest in the mortgage.
The sole issue in this case is whether MERS, as a mortgagee, but not a noteholder, could exercise its contractual right to foreclose by means of advertisement.
C. MCL 600.3204(l)(d)
Foreclosure by advertisement is governed by MCL 6Q0.3204(l)(d), which provides, in pertinent part:
[A] party may foreclose a mortgage by advertisement if all of the following circumstances exist:
(d) The party foreclosing the mortgage is either the owner of the indebtedness or of an interest in the indebtedness secured by the mortgage or the servicing agent of the mortgage.
The parties agree that MERS was neither the owner of the indebtedness nor the servicing agent of the mortgage. Therefore, MERS lacked the authority to foreclose by advertisement on defendants’ properties unless it was “the owner ... of an interest in the indebtedness secured by the mortgage . . . .” MCL 600.3204(l)(d).
The question, then, is what is required to be the “owner ... of an interest in the indebtedness secured by the mortgage.” According to Black’s Law Dictionary, to “own” means “[t]o have a good legal title; to hold as property; to have a legal or rightful title to . . . .” Black’s Law Dictionary (6th ed), p 1105. The dictionary defines an “interest” as “[t]he most general term that can be employed to denote a right, claim, title, or legal share in something.” Id., p 812. “Indebtedness” is defined as “[t]he state of being in debt. . . [t]he owing of a sum of money upon a certain and express agreement.” Id., p 768.
In each of these cases, a promissory note was exchanged for a loan. Thus, reasonably construing the statute according to its common legal meaning, ISB Sales Co, 258 Mich App at 526-527, the defendants’ indebtedness is solely based on the notes because de fendants owed monies pursuant to the terms of the notes. Consequently, in order for a party to own an interest in the indebtedness, it must have a legal share, title, or right in a note.
Plaintiffs’ suggestion that an “interest in the mortgage” is sufficient under MCL 600.3204(l)(d) is without merit. This is necessarily so, because the indebtedness, i.e., the note, and the mortgage are two different legal transactions providing two different sets of rights, even though they are typically employed together. A “mortgage” is “[a] conveyance of title to property that is given as security for the payment of a debt or the performance of a duty and that will become void upon payment or performance according to the stipulated terms.” Black’s Law Dictionary (7th ed), p 1026. The mortgagee has an interest in the property. See Capital Mtg Corp v Mich Basic Prop Ins Ass’n, 111 Mich App 393, 397; 314 NW2d 635 (1981) (referring to the “mortgagee’s interests in the property”). The mortgagor covenants, pursuant to the mortgage, that if the money borrowed under the note is not repaid, the mortgagee will retain an interest in the property. Thus, unlike a note, which provides evidence of a debt and represents the obligation to repay, a mortgage represents an interest in real property contingent on the failure of the borrower to repay the lender. The indebtedness, i.e., the note, and the mortgage are two different things.
Applying these considerations to the present cases, it becomes obvious that MERS did not have the authority to foreclose by advertisement on defendants’ properties. Pursuant to the mortgages, defendants were the mortgagors and MERS was the mortgagee. However, it was the plaintiff lenders that lent defendants money pursuant to the terms of the notes. In each case, MERS, as mortgagee, only held an interest in the property as security for the note, not an interest in the note itself. MERS could not attempt to enforce the note nor could it obtain any payment on the loan on its own behalf or on behalf of the lender. Moreover, each mortgage specifically clarified that, although MERS was the mortgagee, MERS held “only legal title to the interests granted” by the relevant defendant in the mortgage. Consequently, MERS’s interest in each mortgage represented, at most, an interest in the relevant defendant’s property. MERS was not referred to in any way in the notes and only Homecomings held the notes. The record evidence establishes that MERS owned neither the notes, nor an interest, legal share, or right in the notes. The only interest MERS possessed was in the properties through the mortgages. Given that the notes and the mortgages are separate documents, providing evidence of separate obligations and interests, MERS’s interest in the mortgages did not give it an interest in the debts.
Moreover, plaintiffs’ analysis ignores the fact that the statute does not merely require an “interest” in the debt, but rather it requires that the foreclosing party own that interest. As already noted, to own means “[t]o have a good legal title; to hold as property; to have a legal or rightful title to . . ..” Black’s Law Dictionary (6th ed), p 1105. None of these terms describes MERS’s relationship to the notes. Plaintiffs’ claim — that MERS was a contractual owner of an interest in the notes pursuant to the agreements between MERS and the lenders — misstates the interests created by the agreements. Although MERS stood to benefit if the debt was not paid — it could become the owner of the property — it was to receive no benefit if the debt was paid. MERS had no right to possess the debt, or the money paid on it. Likewise, it had no right to use or convey the notes. Its only “right to possess” was the right to possess the property if and when foreclosure occurred. Had the lender decided to forgive the debt in the notes, MERS would have had no recourse; it could not have sued the lender for any financial loss. Accordingly, it owned no financial interest in the notes. Indeed, it is uncontested that MERS is wholly without legal or rightful title to the debt and that there are no circumstances under which it is entitled to receive any payments on the notes.
The dissent relies on the language in the mortgage instruments to suggest a contractual basis to find that MERS had an ownership interest in the loans. However, the fact that Homecomings gave MERS authority to take “any action required of the Lender” did not transform MERS into an owner of an interest in the notes. Trustees have the authority to take action on behalf of a trust; they can even be authorized to take “any” action. Nevertheless, such authority does not give them an ownership interest in the trust. Moreover, the provision on which the dissent relies (but does not fully quote) contains language limiting MERS to taking action on behalf of the lenders’ equitable interest in the mortgage instruments. The relevant language provides that the borrower “understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument” and gives MERS “the right: to exercise any or all of those interests . . . and to take any action required of Lender including, but not limited to, releasing and canceling this Security Instrument.” (Emphasis and underlining added.) Thus, the contract language expressly limits the interests MERS owns to those granted in the mortgage instrument and limits MERS’s right to take action to those actions related to the mortgage instrument. Nothing in this language permits MERS to take any action with respect to the debt, or provides it any interest therein.
Finally, even assuming that the contract language did create such a right, Homecomings cannot grant MERS the authority to take action when the statute prohibits it. Regardless of whether Homecomings would like MERS to be able to take such action, it can only grant MERS the authority to take actions that our Legislature has statutorily permitted. Where the Legislature has limited the availability to take action to a specified group of individuals, parties cannot grant an entity that falls outside that group the authority to take such action. Here, the Legislature specifically requires ownership of an interest in the note before permitting foreclosure by advertisement.
The contention that the contract between MERS and Homecomings provided MERS with an ownership interest in the notes stretches the concept of legal ownership past the breaking point. While the term may be used very loosely in some popular contexts, such as the expression to “own a feeling,” such use refers to a subjective quality or experience. We are confident that such a loose and uncertain meaning is not what the Legislature intended. Rather, the Legislature used the word “owner” because it meant to invoke a legal or equitable right of ownership. Viewed in that context, although MERS owns the mortgages, it owns neither the related debt nor an interest in any portion of the debt, and is not a secondary beneficiary of the payment of the debt.
The dissent’s conclusion that MERS owns an interest in each note because whether it ultimately receives the property depends on whether the note is paid, similarly distorts the term “interest” from a legal term of art to a generalized popular understanding of the word. It maybe that MERS is concerned with (i.e., interested in) whether the loans are paid because that will define its actions vis-a-vis the properties, but being concerned about whether someone pays his or her loan is not the same as having a legal right, or even a contingent legal right, to those payments.
Plaintiffs are mistaken in their suggestion that our conclusion that MERS does not have “an interest in the indebtedness” renders that category in the statute nugatory. We need not determine the precise scope of that category, but, by way of example, any party to whom a note has been pledged as security by the lender has “an interest in the indebtedness” because, under appropriate circumstances, it owns the right to the repayment of that loan.
Plaintiffs also argue that MERS had the authority to foreclose by advertisement as the agent or nominee of Homecomings, who held the notes and an equitable interest in the mortgages. However, this argument must also fail under the statute because the statute explicitly requires that, in order to foreclose by advertisement, the foreclosing party must possess an interest in the indebtedness. MCL 600.3204(l)(d). It simply does not permit foreclosure by advertisement in the name of an agent or a nominee. If the Legislature intended to permit such actions, it could have easily included “agents or nominees of the noteholder” as parties that could foreclose by advertisement. Indeed, had the Legislature intended the result suggested by plaintiffs, it would have merely had to delete the word “servicing.” The law is clear that this Court must “avoid a construction that would render any part of the statute surplus-age or nugatory.” Wickens v Oakwood Healthcare Sys, 465 Mich 53, 60; 631 NW2d 686 (2001). Thus, the Legislature’s choice to permit only servicing agents, and not all agents, to foreclose by advertisement must be given effect.
Similarly, we reject plaintiffs’ reliance on Jackson v Mtg Electronic Registration Sys, Inc, 770 NW2d 487 (Minn, 2009). Jackson, a Minnesota case, is inapplicable because it interpreted a statute that is substantially different from MCL 600.3204. The statute at issue in Jackson specifically permits foreclosure by advertisement if “a mortgage is granted to a mortgagee as nominee or agent for a third party identified in the mortgage, and the third party’s successors and assigns[.]” Jackson, 770 NW2d at 491, quoting Minn Stat 507.413(a)(1). Thus, the Minnesota statute specifically provides for foreclosure by advertisement by entities that stand in the exact position that MERS does here. Indeed, the Minnesota statute is “frequently called ‘the MERS statute....’” Id. at 491. Our statute, MCL 600.3204(l)(d) makes no references to nominees or agents. Rather, it requires that the party foreclosing be either the mortgage servicer or have an ownership interest in the indebtedness. The Jackson statute also revolves around the mortgage, unlike MCL 600.3204(l)(d), which uses the term indebtedness, which, as discussed previously, is a reference to the note, not the mortgage. Thus, Jackson has no application to the case at bar. Moreover, the Minnesota statute demonstrates that if our Legislature had intended to allow MERS to foreclose by advertisement, it could readily have passed a statute including language like that included in Minnesota.
D. analysis beyond the language of the statute
Plaintiffs suggest that, despite the plain language of the statute, the Legislature did not create three discrete categories of entities that could foreclose by advertisement. Instead, plaintiffs assert that the Legislature envisioned a continuum of entities: those that actually own the loan, those that service the loan, and some ill-defined category that might be called “everything in between.” However, courts may not “rewrite the plain statutory language and substitute our own policy decisions for those already made by the Legislature.” DiBenedetto v West Shore Hosp, 461 Mich 394, 405; 605 NW2d 300 (2000). Thus, without any language in the statute providing for a “continuum,” let alone an analysis of what it constitutes, we find no merit in this position.
Plaintiffs also raise a straw man argument by citing this Court’s decision in Davenport v HSBC Bank USA, 275 Mich App 344; 739 NW2d 383 (2007), where we observed that “[o]ur Supreme Court has explicitly held that ‘[o]nly the record holder of the mortgage has the power to foreclose’ under MCL 600.3204.” Davenport, 275 Mich App at 347, quoting Arnold v DMR Fin Servs, Inc (After Remand), 448 Mich 671, 678; 532 NW2d 852 (1995). However, the facts in Davenport do not reflect that the party who held the note was a different party than the party who was the mortgagee. Davenport, 275 Mich App at 345. Indeed, the fact that the Court used the term “mortgage” interchangeably with “indebtedness,” id. at 345-347, rather than distinguishing the two terms, indicates that the same party held both the note and the mortgage. Because the instant cases involve a situation where the noteholder and the mortgage holder are separate entities, the general proposition set forth in Davenport does not apply. There is nothing in Davenport holding that a party that owns only the mortgage and not the note has an ownership interest in the debt.
We also note that Arnold, the Supreme Court case relied on in Davenport, was interpreting a previous version of MCL 600.3204, which was substantially revised when the Legislature adopted the version we must apply in this case. The statute as it existed when Arnold was decided included a provision stating:
“To entitle any party to give a notice as hereinafter prescribed, and to make such a foreclosure, it shall be requisite:
“(3) That the mortgage containing such power of sale has been duly recorded; and if it shall have been assigned that all the assignments thereof shall have been recorded.” [Arnold, 448 Mich at 676, quoting MCL 600.3204(3).]
This requirement, that a noteholder could only foreclose by advertisement if the mortgage it holds is duly recorded, is no longer part of the statute and does not apply in this case. The version of the statute interpreted in Arnold also lacked the language, later adopted, and operative in this case, specifically permitting foreclosure by advertisement by the owner of the note. Moreover, the language that the Legislature chose to adopt in the amended statute appears to reflect an intent to protect borrowers from having their mortgages foreclosed on by advertisement by those who did not own the note because it would put the borrowers at risk of being foreclosed but still owing the noteholder the full amount of the loan.
Under MCL 440.3602(l)(ii), an instrument is only discharged when payment is made “to a person entitled to enforce the instrument.” Those parties listed in MCL 600.3204(l)(d) — the servicer, the owner of the debt, or someone owning an interest in the debt — would all be persons entitled to enforce the instrument that reflects the indebtedness. As previously noted, MERS is not entitled to enforce the notes. Thus, if MERS were permitted to foreclose on the properties, the borrowers obligated under each note would potentially be subject to a double recovery for the debt. That is, having lost their property to MERS, they could still be sued by the noteholder for the amount of the debt because MERS does not have the authority to discharge the note. MERS members may agree to relinquish the right of collection once foreclosure occurs, but even if they were to do so within MERS, that would not necessarily protect the borrower in the event a lender violated that policy or the note was subsequently transferred to someone other than the lender.
These risks are, however, not present in a judicial foreclosure. MCL 600.3105(2) provides:
After a complaint has been filed to foreclose a mortgage on real estate or land contract, while it is pending, and after a judgment has been rendered upon it, no separate proceeding shall be had for the recovery of the debt secured by the mortgage, or any part of it, unless authorized by the court.
Thus, once a judicial foreclosure proceeding on the mortgage has begun, a subsequent action on the note is prohibited, absent court authorization, thereby protecting the mortgagor from double recovery. See Church & Church, Inc v A-1 Carpentry, 281 Mich App 330, 341-342; 766 NW2d 30 (2008), aff'd in part and vacated in part on other grounds 483 Mich 885 (2009); United States v Leslie, 421 F2d 763, 766 (CA 6, 1970) (“[I]t is the purpose of the statute to force an election of remedies which if not made would create the possibility that the mortgagee could foreclose the mortgage and at the same time hold the maker of the note personally liable for the debt.”).
Given that this risk of a double recovery only occurs when the mortgage holder and the noteholder are separate, the Legislature limited foreclosure by advertisement to those parties that were entitled to enforce the debt instrument, resulting in an automatic credit toward payment on the instrument in the event of foreclosure.
While MERS seeks to blur the lines between itself and the lenders in this case in order to position itself as a party that may take advantage of the restricted tool of foreclosure by advertisement, it has, in other cases, sought to clearly define those lines in order to avoid the responsibilities that come with being a lender. For example, in Mtg Electronic Registration Sys, Inc v Nebraska Dep’t of Banking & Fin, 270 Neb 529; 704 NW2d 784 (2005), the Nebraska Department of Banking and Finance asserted that MERS was a mortgage banker and, therefore, subject to licensing and registration requirements. Id. at 530. MERS successfully maintained that it had nothing to do with the loans and did not even have an equitable interest in the property, holding only “legal title to the interests granted by Borrower . ...” Id. at 534 (quotation marks omitted). The court accepted MERS’s argument that it was not a lender, but merely a shell designed to make buying and selling of loans easier and faster by disconnecting the mortgage from the loan. Id. at 535. Having separated the mortgages from the loans, and disclaimed any interest in the loans in order to avoid the legal responsibilities of a lender, MERS nevertheless claims in the instant cases that it can employ the rights of a lender by foreclosing in a manner that the statute affords only to those mortgagees who also own an interest in the loan. But as the Nebraska court stated in adopting MERS’s argument, “MERS has no independent right to collect on any debt because MERS itself has not extended credit, and none of the mortgage debtors owe MERS any money.” Id.
The separation of the note from the mortgage in order to speed the sale of mortgage debt without having to deal with all the “paper work” of mortgage transfers appears to be the sole reason for MERS’s existence. The flip side of separating the note from the mortgage is that it can slow the mechanism of foreclosure by requiring judicial action rather than allowing foreclosure by advertisement. To the degree that there were expediencies and potential economic benefits in separating the mortgagee from the noteholder so as to speed the sale of mortgage-based debt, those lenders that participated were entitled to reap those benefits. However, it is no less true that, to the degree that this separation created risks and potential costs, those same lenders must be responsible for absorbing the costs.
III. CONCLUSION
Defendants were entitled to judgment as a matter of law because, pursuant to MCL 600.3204(l)(d), MERS did not own the indebtedness, own an interest in the indebtedness secured by the mortgage, or service the mortgage. MERS’s inability to comply with the statutory requirements rendered the foreclosure proceedings in both cases void ah initio. Thus, the circuit courts improperly affirmed the district courts’ decisions to proceed with eviction on the basis of the foreclosures of defendants’ properties.
In both Docket Nos. 290248 and 291443, we reverse the circuit courts’ affirmance of the district courts’ orders, vacate the foreclosure proceedings, and remand for further proceedings consistent with this opinion. We do not retain jurisdiction. Defendants, as the prevailing parties, may tax costs. MCR 7.219(A).
SERVITTO, J., concurred with SHAPIRO, J.
Residential Funding Co LLC v Saurman, unpublished order of the Court of Appeals, entered May 15, 2009 (Docket No. 290248); Bank of New York Trust Co v Messner, unpublished order of the Court of Appeals, entered July 29, 2009 (Docket No. 291443).
In Docket No. 290248, the district court granted summary disposition under MCR 2.116(0(10). In Docket No. 291443, the district court granted summary disposition under MCR 2.116(I)(2) (“If it appears to the court that the opposing party, rather than the moving party, is entitled to judgment, the court may render judgment in favor of the opposing party.”).
We note that, in these eases, MERS disclaims any interest in the properties other than the legal right to foreclose and immediately quitclaim each property to the true owner, i.e., the appropriate lender.
Though the lenders do not hold legal title to the mortgage instruments, they do have an equitable interest therein. See Aiton v Slater, 298 Mich 469, 480; 299 NW 149 (1941); Atwood v Schlee, 269 Mich 322; 257 NW 712 (1934). The lenders’ equitable interest in the mortgages does not, however, translate into an equitable interest for MERS in the loans.
The dissent’s analogy between MERS’s ability to “own an interest” in the notes and an easement-holder’s ownership of an interest in land without owning the land is unavailing. An easement holder owns rights to the land that even the landholder cannot infringe upon or divest him or her of, see Dobie v Morrison, 227 Mich App 536, 541; 575 NW2d 817 (1998) (noting that a fee owner cannot use the burdened land in any manner that would interfere with the easement holders’ rights), while the interest the dissent contends that MERS “owns” would be equal to or less than that of the noteholders and the noteholders could completely divest MERS of the alleged interest by forgiving the notes without MERS having any recourse. Accordingly, the analogy fails.
In addition, while we reject plaintiffs’ overly broad reading of Davenport for the reasons just stated, we note that even under their reading, plaintiffs would merely have to obtain an assignment of the mortgage from MERS before initiating foreclosure proceedings.
The dissent’s observation that, had Homecomings remained the mortgagee, it would have had the right to foreclose by advertisement does not change the outcome because the statutory language provides that it is Homecomings’ additional status as the noteholder that would give it that right. The question before us is whether a mortgagee that is not a noteholder has the right to foreclose by advertisement.
The dissent’s assertion that MCL 600.3105(2) provides for an election of remedies that prevents this double recovery is erroneous, because that statute governs only judicial foreclosures, not foreclosures by advertisement. MCL 600.3105(2) requires the filing of a complaint, something that does not occur in foreclosure by advertisement. Absent a complaint, there would be neither a time during which a complaint would be “pending” nor any judgment that could be “rendered upon it” that would prohibit the filing of any “separate proceeding... for the recovery of the debt secured by the mortgage . ...” See also Cheff v Edwards, 203 Mich App 557, 560; 513 NW2d 439 (1994) (holding that “foreclosure by advertisement is not a judicial action”). Consequently, the prohibitions expressed in MCL 600.3105(2) would not apply to foreclosure by advertisement and, therefore, would not protect borrowers from double recovery if MERS were permitted to foreclose by advertisement. | [
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PER CURIAM.
Plaintiff appeals as of right the trial court’s order of no cause of action entered pursuant to a jury verdict on plaintiffs action for fire insurance proceeds. We affirm.
Plaintiff brought this suit in August 2007, seeking damages for breach of contract. In February 2007, plaintiff, his girlfriend, and his friend escaped from a fire in plaintiffs home in Flint. Plaintiff had purchased the home and made payments to the mortgage company until the previous spring. The home was insured under a homeowner’s and fire insurance policy with defendant. The home was in foreclosure, and plaintiff did not anticipate being able to pay the redemption amount because he had been out of work for some time and owed large sums for child support. After the fire, plaintiffs friend lived in the damaged home for several weeks. A sample taken at the scene by the Flint police was analyzed by the state police and tested negative for accelerants. Defendant nonetheless denied plaintiffs claim, suspecting that plaintiff had a “guilty connection” to the fire. After a four-day trial, the jury found this to be true and returned a verdict of no cause of action.
The only issue on appeal is the admissibility of the testimony of Lewis Draper. Draper was called by defendant as an expert in the cause and origin of fires. On the morning of trial, plaintiff filed a motion in limine to exclude Draper’s testimony. After reviewing Draper’s deposition taken five days previously, the trial court concluded that the testimony was admissible under MRE 702 and Daubert v Merrell Dow Pharm, Inc, 509 US 579, 593-594; 113 S Ct 2786; 125 L Ed 2d 469 (1993). MRE 702 provides:
If the court determines that scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise if (1) the testimony is based on sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case.
MCL 600.2955(1) provides additional standards that the court must examine in determining the admissibility of expert testimony.
On appeal, we review a trial court’s ruling admitting or excluding expert testimony for an abuse of discretion. Mulholland v DEC Int’l Corp, 432 Mich 395, 402; 443 NW2d 340 (1989); Clerc v Chippewa Co War Mem Hosp, 267 Mich App 597, 601; 705 NW2d 703 (2005). An abuse of discretion occurs when the court’s ruling is outside the range of reasonable and principled outcomes. Smith v Khouri, 481 Mich 519, 526; 751 NW2d 472 (2008). Under MRE 103(a)(1), error may not be predicated on a ruling admitting or excluding evidence unless a substantial right is affected. A close evidentiary ruling ordinarily cannot be an abuse of discretion. Morales v State Farm Mut Auto Ins Co, 279 Mich App 720, 729; 761 NW2d 454 (2008); Lewis v LeGrow, 258 Mich App 175, 200; 670 NW2d 675 (2003).
We conclude that the trial court did not abuse its discretion by admitting Draper’s testimony. A former detective sergeant in the Michigan State Police Fire Marshal Division, Draper had investigated about 2000 fires and testified as an expert 115 times. Plaintiffs main criticism was of Draper’s methodology, which allegedly deviated from a set of guidelines known as NFPA 921, which was issued by the National Fire Protection Association. This guide states that samples should be taken to confirm the presence of an ignitable liquid and that the investigator should not rely solely on visual interpretation of an irregular fire pattern to term a fire incendiary because such patterns may have other causes. NFPA 921, § 6.17.8.2.2 to 6.17.8.2.5. However, NFPA 921 also states in § 1.3 that deviations from its procedures are not necessarily wrong, but need to be justified.
Draper’s testimony showed that he did not rely on visual interpretation alone. He used the scientific method, consistently with NFPA 921, to examine the structure and pinpoint the origin of the fire as a rear bedroom occupied by plaintiff and his girlfriend. Draper eliminated other causes, such as the electrical system. He did not take samples because he was not called to investigate until three weeks after the fire. In the meantime, the scene had been disturbed by public safety officials, an insurance adjuster, plaintiff, and plaintiffs friend who continued to live there. Draper testified that the fire burned out of the bedroom and into the hallway, charring through several layers of flooring and melting an aluminum strip between the bedroom and the hall. Temperatures of 1200 degrees Fahrenheit would have been required to melt the aluminum strip in this manner, and this would not have occurred in the absence of an accelerant. Further, Draper testified that plaintiffs only suggestion regarding the cause of the fire, the tipping of a candle to ignite the carpet, was very unlikely and would not have accounted for the damage observed. Draper testified that several situations mentioned in NFPA 921 in which burn patterns might “mimic” those of ignitable liquids, such as “flashover” or whole-room involvement, were not present here.
The trial court did not abuse its discretion by admitting Draper’s testimony. The court properly applied the tests of reliability in MRE 702, MCL 600.2955, and Daubert and adequately performed its “gatekeeper” function in assessing the proposed expert testimony. Draper explained how and why his methodology deviated from NFPA 921, and the court had sufficient basis to determine that his opinion testimony was admissible under MRE 702.
Affirmed.
Whitbeck, RJ., and O’Connell and Wilder, JJ., concurred. | [
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PER CURIAM.
Defendant appeals as of right his convictions by a jury of three counts of child sexually abusive activity, MCL 750.145c(2). Defendant was sentenced as an habitual offender, fourth offense, MCL 769.12, to 7 to 22 years’ imprisonment for each of the three convictions. We affirm.
i
Defendant advertised in a newspaper for models. The 17-year-old victim responded to the advertisement, and she and her father met with defendant at his gymnasium. Defendant requested that the victim’s parents sign a release stating, “I understand my daughter is under ... 18 years of age and that my daughter will [be] performing nudity in [an] R- and X-rated capacity.” The release, which the parents signed, also provided, “I also understand that [my daughter] has full permission to make her own decisions and will have our full support.” However, defendant advised the victim’s parents that no X-rated photographs would be taken of her until she was 18 years old and that any photographs taken beforehand could not be distributed. The victim was “anxious to start the process as quick as possible” so that she could start making money.
Defendant prohibited the victim’s parents from attending the photography session scheduled for the day after they signed the release. Rather than photographing her at the gymnasium or the beach, as was the victim’s initial understanding, defendant drove her to see his remodeled studio and then took her to his nearby home.
At defendant’s home, defendant showed the victim a pornographic magazine and indicated to her that, when nude photographs are taken, “you have to have this kind of attitude.” Defendant offered the victim alcohol, but she declined. Defendant subsequently began taking photographs of her — first clothed and then unclothed. The victim testified that she allowed the unclothed pictures because defendant told her that she could earn approximately $18,000 by the time she was 18 years old.
Later in the photography session, defendant “pulled down his pants,” “pulled out his penis,” and “forced it” into her mouth. Defendant said “this will help you relax and get over your nervousness.” Without informing the victim, defendant recorded this sexual act using the video feature on his cellular telephone. The victim testified that she did not want to perform this act, but she did it because she “was scared” and thought it was going to help her modeling career.
The victim testified, “Then he takes the rest of his clothes off and put me on top of him and he makes me do 69.” Next, the victim testified that defendant “wanted to do doggy style.” Again, without informing the victim, defendant recorded these acts using the video feature on his cellular telephone. Defendant took additional photographs afterward, and the victim explained that she did not run away because she was scared of defendant, who had told her “he was a black belt,” and she was afraid he would not give her a ride home. Although defendant warned the victim not to tell her family what happened, the victim told her mother, who called the police.
n
A
Defendant argues that the statute under which he was convicted is unconstitutionally void for vagueness. He first argues that, in contravention of federal and state principles of substantive due process, MCL 750.145c does not adequately inform the public of the conduct proscribed. Specifically, defendant avers that MCL 750.145c, which provides a defendant with an affirmative defense as long as the defendant proves by a preponderance of the evidence that the child was emancipated by operation of law, is fatally defective. Defendant also argues that MCL 750.145c is overbroad because it infringes on the fundamental right of consenting individuals to engage in recreational or expressive sexual intercourse. Defendant argues that MCL 750.145c cannot survive strict scrutiny because it is a total ban on capturing, by way of video or other media, consensual and otherwise legal sexual acts involving individuals who have reached the age of consent. “The constitutionality of a statute is a question of law, reviewed de novo on appeal.” In re McEvoy, 267 Mich App 55, 68; 704 NW2d 78 (2005).
“The ‘void for vagueness’ doctrine is derived from the constitutional guarantee that the state may not deprive a person of life, liberty, or property, without due process of law. US Const, Am XIV; Const 1963, art 1, § 17.” State Treasurer v Wilson (On Remand), 150 Mich App 78, 80; 388 NW2d 312 (1986). This Court indicated in People v Heim, 206 Mich App 439, 441; 522 NW2d 675 (1994):
A statute may be challenged for vagueness on three grounds: (1) it is overbroad and impinges on First Amendment freedoms; (2) it does not provide fair notice of the conduct proscribed; or (3) it is so indefinite that it confers unstructured and unlimited discretion on the trier of fact to determine whether an offense has been committed.
As stated by the Court in People v Brian Hill, 269 Mich App 505, 524-525; 715 NW2d 301 (2006):
In testing a statute challenged as unconstitutionally vague, the entire text of the statute should be examined and the words of the statute should be given their ordinary meanings. Judicial constructions of the statute should also be considered. In general, a criminal defendant may not defend on the basis that a statute is unconstitutionally vague where the defendant’s conduct is fairly within the constitutional scope of the statute. Statutes are presumed to be constitutional and are so construed unless their unconstitutionality is clearly and readily apparent. [Citations omitted.]
To afford proper notice of the conduct proscribed, a statute must give a person of ordinary intelligence a reasonable opportunity to know what is prohibited. People v Sands, 261 Mich App 158, 161; 680 NW2d 500 (2004).
MCL 750.145c(2) provides:
A person who persuades, induces, entices, coerces, causes, or knowingly allows a child to engage in a child sexually abusive activity for the purpose of producing any child sexually abusive material, or a person who arranges for, produces, makes, or finances, or a person who attempts or prepares or conspires to arrange for, produce, make, or finance any child sexually abusive activity or child sexually abusive material is guilty of a felony ... if that person knows, has reason to know, or should reasonably be expected to know that the child is a child or that the child sexually abusive material includes a child or that the depiction constituting the child sexually abusive material appears to include a child, or that person has not taken reasonable precautions to determine the age of the child.
MCL 750.145c(l)(m) defines “child sexually abusive material” as follows:
“Child sexually abusive material” means any depiction, whether made or produced by electronic, mechanical, or other means, including a developed or undeveloped photograph, picture, film, slide, video, electronic visual image, computer diskette, computer or computer-generated image, or picture, or sound recording which is of a child or appears to include a child engaging in a listed sexual act....
A “child” is “a person who is less than 18 years of age, subject to the affirmative defense created in [MCL 750.145c(6)] regarding persons emancipated by operation of law.” MCL 750.145c(l)(b). MCL 750.145c(6) provides: “It is an affirmative defense to a prosecution under this section that the alleged child is a person who is emancipated by operation of law under section 4(2) of 1968 PA 293, MCL 722.4, as proven by a preponderance of the evidence.” According to MCL 722.4(2), emancipation by operation of law occurs under any of the following circumstances:
(a) When a minor is validly married.
(b) When a person reaches the age of 18 years.
(c) During the period when the minor is on active duty with the armed forces of the United States.
(d) For the purposes of consenting to routine, nonsurgical medical care or emergency medical treatment to a minor, when the minor is in the custody of a law enforcement agency and the minor’s parent or guardian cannot be promptly located. The minor or the minor’s parent shall remain responsible for the cost of any medical care or treatment rendered pursuant to this subdivision. An emancipation pursuant to this subdivision shall end upon the termination of medical care or treatment or upon the minor’s release from custody, whichever occurs first.
(e) For the purposes of consenting to his or her own preventive health care or medical care including surgery, dental care, or mental health care, except vasectomies or any procedure related to reproduction, during the period when the minor is a prisoner committed to the jurisdiction of the department of corrections and is housed in a state correctional facility operated by the department of corrections or in a youth correctional facility operated by the department of corrections or a private vendor under section 20g of 1953 PA 232, MCL 791.220g; or the period when the minor is a probationer residing in a special alternative incarceration unit established under the special alternative incarceration act, 1988 PA 287, MCL 798.11 to 798.18. This subdivision applies only if a parent or guardian of the minor cannot promptly be located by the department of corrections or, in the case of a youth correctional facility operated by a private vendor, by the responsible official of the youth correctional facility.
Pursuant to the ordinary language of MCL 722.4, emancipation by operation of law occurs when a minor is legally married, an individual reaches 18 years of age, if the minor is on active duty in the military, or for certain medical purposes when the minor is in the custody of a law enforcement agency or a prisoner committed to the jurisdiction of the Michigan Department of Corrections. Brian Hill, 269 Mich App at 524-525. We conclude that this language is not vague, but rather provides specific criteria that must be met for a minor to be considered emancipated by operation of law. MCL 722.4(2); Sands, 261 Mich App at 161. We reject defendant’s argument that the preponderance-of-the-evidence standard is misleading because it implies that a defendant could present enough evidence to convince a court that the child has been emancipated, such as in this case where the victim’s parents signed a release permitting her to engage in adult activities. The preponderance-of-the-evidence standard simply provides the applicable burden of proof — it does not change the criteria that must be proven by a preponderance of the evidence. Hence, MCL 750.145c clearly provides “a person of ordinary intelligence a reasonable opportunity to know what is prohibited” and what circumstances must exist in order for the affirmative defense of emancipation by operation of law to be applicable. Sands, 261 Mich App at 161. Accordingly, defendant’s challenge that MCL 750.145c does not provide fair notice of the conduct proscribed fails. Id. Consequently, the trial court did not err when it concluded that defendant’s vagueness argument on this ground was without merit. People v Beam, 244 Mich App 103, 105; 624 NW2d 764 (2000).
B
Defendant next argues that MCL 750.145c(2) is unconstitutionally overbroad. We disagree. “An overbroad statute is one which is likely to ‘chill’ constitutionally protected behavior.” People v Hicks, 149 Mich App 737, 742; 386 NW2d 657 (1986), citing Broadrick v Oklahoma, 413 US 601; 93 S Ct 2908; 37 L Ed 2d 830 (1973). But the challenged statute does not hinder any constitutionally protected behavior.
The United States Supreme Court has held that “[t]he prevention of sexual exploitation and abuse of children constitutes a government objective of surpassing importance” and “the use of children as subjects of pornographic materials is harmful to the physiological, emotional, and mental health of the child.” New York v Ferber, 458 US 747, 757-758; 102 S Ct 3348; 73 L Ed 2d 1113 (1982). As a result, the Supreme Court held that where the law provides fair notice of the conduct proscribed and combats the production of materials that depict child sexually abusive activity, the materials do not enjoy the protection of the First Amendment. Id. at 764. Further, MCL 750.145c does not impinge on any privacy interest because the statute does not criminalize consensual sexual activity engaged in by persons between 16 and 18 years of age, but only criminalizes the recording or photographing of such activity. Accordingly, contrary to defendant’s arguments, MCL 750.145c is not unconstitutionally overbroad.
c
Next, defendant asserts that the trial court erred when it denied defendant’s motion to suppress certain evidence. Defendant argues that he did not freely and voluntarily consent to police officers entering his home during their investigation. In addition, defendant asserts that he was in custody and subjected to interrogation in his home, and that accordingly, there was a Miranda violation when he requested counsel and the officers ignored his request. Defendant also contends that Sergeant Michael Kasher and Officer Jim Davis of the Norton Shores police department admitted violating the sequestration order at the suppression hearing by speaking with each other about the case and asserts on that basis that the trial court should have excluded their testimony. Further, defendant argues that the trial court abused its discretion by giving little weight to the substantial polygraph testimony offered by defendant. Consequently, defendant maintains that all statements made and evidence seized after police officers entered his home should have been suppressed.
We review a trial court’s findings of fact during a suppression hearing for clear error, “giving deference to the trial court’s resolution of factual issues.” People v Frohriep, 247 Mich App 692, 702; 637 NW2d 562 (2001). “A finding of fact is clearly erroneous if, after a review of the entire record, an appellate court is left with a definite and firm conviction that a mistake has been made.” People v Swirles (After Remand), 218 Mich App 133, 136; 553 NW2d 357 (1996). However, we review “de novo the trial court’s ultimate decision on a motion to suppress.” Frohriep, 247 Mich App at 702. We also review de novo whether a defendant was “ ‘in custody’ ” at the time the defendant made statements to the police. People v Herndon, 246 Mich App 371, 395; 633 NW2d 376 (2001) (citation omitted). “[T]rial courts have discretion to order sequestration of witnesses and discretion in instances of violation of such an order to exclude or to allow the testimony of the offending witness.” People v Nixten, 160 Mich App 203, 209-210; 408 NW2d 77 (1987) (citations omitted). Thus, we review such decisions for an abuse of discretion. People v Solak, 146 Mich App 659, 669; 382 NW2d 495 (1985). A trial court abuses its discretion when it selects an outcome that was not in the range of reasonable and principled outcomes. People v Babcock, 469 Mich 247, 269; 666 NW2d 231 (2003). We also review for an abuse of discretion the trial court’s consideration of polygraph-examination results in weighing a defendant’s credibility. See People v Cress, 468 Mich 678, 694; 664 NW2d 174 (2003).
The entry by police officers into a person’s home without a warrant and without consent or exigent circumstances is illegal. People v Dillard, 115 Mich App 640, 641; 321 NW2d 757 (1982). As stated by the Court in People v Brown, 127 Mich App 436, 440-441; 339 NW2d 38 (1983):
Individuals are constitutionally protected from being subjected to unreasonable searches and seizures. All evidence obtained in violation of this protection is inadmissible in a state court. A warrantless search and seizure is per se unreasonable unless shown to fall within one of the various exceptions to the warrant requirement. Consent is one such exception. When consent is alleged, the burden is on the prosecution to prove by clear and positive evidence that the consent was unequivocal and specific, freely and intelligently given. Whether a consent is valid is a question of fact to be decided upon the evidence and all reasonable inferences drawn from it. The totality of the circumstances must be examined. ... Conduct itself can, under proper circumstances, be sufficient to constitute consent. [Citations omitted.]
“ [WJhether consent was given is primarily a question of credibility.” Id. at 443. “ ‘[I]f resolution of a disputed factual question turns on the credibility of witnesses or the weight of the evidence, we will defer to the trial court, which had a superior opportunity to evaluate these matters.’ ” People v Sexton (After Remand), 461 Mich 746, 752; 609 NW2d 822 (2000) (citation omitted). In addition, a defendant has a right against self-incrimination and to counsel, pursuant to the Fifth Amendment of the United States Constitution, US Const, Am V In Miranda, 384 US at 444, the United States Supreme Court held:
[T]he prosecution may not use statements, whether exculpatory or inculpatory, stemming from custodial interrogation of the defendant unless it demonstrates the use of procedural safeguards effective to secure the privilege against self-incrimination. By custodial interrogation, we mean questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way. As for the procedural safeguards to be employed, unless other fully effective means are devised to inform accused persons of their right of silence and to assure a continuous opportunity to exercise it, the following measures are required. Prior to any questioning, the person must be warned that he has a right to remain silent, that any statement he does make may be used as evidence against him, and that he has a right to the presence of an attorney, either retained or appointed.
Miranda warnings are not required unless an individual is subjected to custodial interrogation. People v M L Hill, 429 Mich 382, 384-391; 415 NW2d 193 (1987). In determining whether a person is effectively “in custody,” the pertinent inquiry is whether there is restraint on freedom of movement in any significant way such as of the degree associated with a formal arrest. People v Mayes (After Remand), 202 Mich App 181, 190; 508 NW2d 161 (1993). Custody must be determined on the basis of how a reasonable person in the suspect’s situation would perceive his or her circumstances and whether the reasonable person would believe that he or she was free to leave. Id.-, see also People v Roark, 214 Mich App 421, 423; 543 NW2d 23 (1995). Whether an individual is effectively “in custody” is based on the totality of the circumstances. Roark, 214 Mich App at 423.
Statements made by a defendant during a custodial interrogation are inadmissible unless the defendant voluntarily, knowingly, and intelligently waived his or her right against self-incrimination. People v Garwood, 205 Mich App 553, 555-556; 517 NW2d 843 (1994). Voluntariness is determined by examining the totality of the circumstances surrounding a statement to establish if it was the product of an essentially free and unconstrained decision by its maker. People v Cipriano, 431 Mich 315, 333-334; 429 NW2d 781 (1988). Volunteered statements as well as evidence voluntarily given are admissible. Miranda, 384 US at 478; People v Oswald (After Remand), 188 Mich App 1, 7; 469 NW2d 306 (1991).
With regard to the sequestration of witnesses, one of “the purposes of the sequestration of a witness is to prevent him from ‘coloring’ his testimony to conform with the testimony of another.” People v Stanley, 71 Mich App 56, 61; 246 NW2d 418 (1976). Officer Davis and Sergeant Kasher each clearly testified that their testimony was not colored to conform with the testimony of the other. In light of this record evidence, we conclude that the trial court’s decision to not exclude the testimony of Officer Davis and Sergeant Kasher was not outside the range of reasonable and principled outcomes. As a result, the trial court did not abuse its discretion. Furthermore, defendant’s argument related to the polygraph examinations is not persuasive. The results of a polygraph examination should only be considered “with regard to the general credibility of the examinee[,] not as to the truth or falsehood of any particular statement.” People v Barbara, 400 Mich 352, 413; 255 NW2d 171 (1977). Thus, the trial court was entitled to use its discretion in considering how much weight to give the polygraph examinations. And matters of credibility are best resolved by the trial court. Sexton, 461 Mich at 752. Thus, the trial court’s decision to give little weight to the polygraph examinations is not outside of the range of reasonable and principled outcomes.
This issue involved disputed factual questions, which turned on the credibility of the witnesses or the weight of the evidence. In such circumstances, this Court “ ‘will defer to the trial court, which had a superior opportunity to evaluate these matters.’ ” Id. (citation omitted). Here, the trial court ultimately concluded that the officers’ version of the events was closer to the truth. The officers testified that defendant’s consent to their entry of his home was unequivocal and specific, as well as freely and intelligently given. Their testimony is supported by defendant’s conduct — he opened the door further and stepped backward for the officers to enter. In addition, based on the officers’ testimony, defendant was not deprived of his freedom of movement in any significant way while the officers were interviewing him. A reasonable person in defendant’s position would believe that he was free to leave, and therefore defendant was clearly not in custody. See Herndon, 246 Mich App at 395-396; Mayes, 202 Mich App at 190. Moreover, the officers testified that defendant never requested his counsel. Because defendant was not in custody and never even requested counsel, there was no Miranda violation. In addition, according to the officers, defendant’s statements to the police were voluntary and defendant voluntarily gave them the evidence. Thus, defendant’s statements and the evidence obtained were admissible, Miranda, 384 US at 478; Oswald, 188 Mich App at 7, and the trial court did not err by denying defendant’s motion to suppress.
D
Finally, defendant argues that the trial court abused its discretion when it declined to make a downward departure from defendant’s sentencing guidelines range on the basis of the mitigating circumstances in the case. The minimum sentencing guidelines were scored at 84 to 280 months’ imprisonment on each count. But defendant was sentenced to a minimum sentence of 7 years, or 84 months, on each count. Therefore, defendant was sentenced within the minimum guidelines range. Although there was no downward departure from the guidelines range, the trial court sentenced defendant at the very bottom of the guidelines range. Based on the record before us, the trial court correctly considered the totality of the circumstances and determined that a downward departure from the guidelines range was not justified. Under the circumstances and considering that there was no error in the scoring of the guidelines or reliance on inaccurate information, we affirm defendant’s sentence. MCL 769.34(10); People v Conley, 270 Mich App 301, 316; 715 NW2d 377 (2006).
Affirmed.
Sawyer, EJ., and Whitbeck and Wilder, JJ., concurred.
Furthermore, none of the circumstances set forth in MCL 722.4(2), which relate to emancipation by operation of law, existed in this case. Defendant does not argue on appeal that his conduct fell outside the confines of MCL 750.145c(2). As set forth by this Court in Brian Hill, 269 Mich App at 525, “a criminal defendant may not defend on the basis that a statute is unconstitutionally vague where the defendant’s conduct is fairly within the constitutional scope of the statute.”
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PER CURIAM.
Jessicca Sherry, a minor, by her next friend, Renee Sherry, appeals as of right the trial court’s order granting summary disposition in favor of defendants the East Suburban Football League (ESFL), the Macomb Youth Football Club (MYFC), Julie Lange, Stephanie Vallie, Jane Doe 1, and Jane Doe 2. We reverse the trial court’s order granting summary disposition to defendants and remand the case for further proceedings consistent with this opinion.
Plaintiff sustained injuries while performing a stunt, called a full extension cradle, at “Spirit Day,” a camp for cheerleaders of the ESFL. At the time, plaintiff cheered on the junior varsity team for the Macomb Mustangs, a team organized through the MYFC. The MYFC is a nonprofit organization and franchise member of the ESFL. Stephanie Vallie served as cheer coordinator for the Macomb Mustangs, and Julie Lange served as coach for the junior varsity cheerleading team. According to plaintiff, her injuries occurred as a result of defendants’ negligence and gross negligence in, among other things, failing to properly train and supervise the cheerleaders.
Defendants moved for summary disposition pursuant to MCR 2.116(C)(8) and (10), contending that there was no evidence that defendants were grossly negligent or engaged in reckless misconduct, so that they could not be held liable for plaintiffs injuries. The trial court, quoting Gibbard v Cursan, 225 Mich 311; 196 NW 398 (1923), overruled by Jennings v Southwood, 446 Mich 125; 521 NW2d 230 (1994), agreed that plaintiff must demonstrate reckless misconduct and that, because she failed to do so, summary disposition in defendants’ favor was appropriate. In denying plaintiffs motion for reconsideration, the trial court relied on RitchieGamester v City of Berkley, 461 Mich 73, 94; 597 NW2d 517 (1999), to find that plaintiffs argument lacked merit.
I. APPLICABLE STANDARD OF CARE
Plaintiff first argues that the trial court erred by applying the reckless-misconduct standard of care adopted in Ritchie-Gamester. According to plaintiff, ordinary negligence principles apply, and genuine issues of material fact remain regarding whether defendants acted negligently in the supervision of plaintiff. We agree.
We review de novo decisions on motions for summary disposition. Latham v Barton Malow Co, 480 Mich 105, 111; 746 NW2d 868 (2008). Summary disposition under MCR 2.116(C)(10) is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Rose v Nat’l Auction Group, 466 Mich 453, 461; 646 NW2d 455 (2002). In reviewing the trial court’s decision, “we consider the affidavits, pleadings, depositions, admissions, and other documentary evidence submitted by the parties in the light most favorable to the party opposing the motion.” Id. The general standard of care is a question of law for the courts, and thus subject to review de novo. Moning v Alfono, 400 Mich 425, 438; 254 NW2d 759 (1977).
In Ritchie-Gamester, the Michigan Supreme Court set out to decide “the proper standard of care among coparticipants for unintentional conduct in recreational activities.” 461 Mich at 77. The undisputed facts of the case were that the defendant, a 12-year-old girl, while skating backwards during an open-skating period at an ice rink, ran into the plaintiff and knocked her to the ground, causing serious injury to the plaintiffs knee. Id. at 75. The Court stated:
[W]e join the majority of jurisdictions and adopt reckless misconduct as the minimum standard of care for coparticipants in recreational activities. We believe that this standard most accurately reflects the actual expectations of participants in recreational activities.. .. [W]e believe that participants in recreational activities do not expect to sue or be sued for mere carelessness. A recklessness standard also encourages vigorous participation in recreational activities, while still providing protection from egregious conduct. Finally, this standard lends itself to commonsense application by both judges and juries. [Id. at 89.]
Unlike the claim in Ritchie-Gamester, plaintiffs claim in this case is not against a coparticipant. Therefore, the reckless-misconduct standard adopted in Ritchie-Gamester is inapplicable. The Court in RitchieGamester was careful, in fact, to note the limited reach of its holding. In addition, the justifications that the Supreme Court cited for adopting the reckless-misconduct standard do not support extending the standard to coaches and organizations. Coaches and organizations can expect to be sued for their carelessness, and holding coaches and organizations to an ordinary negligence standard of care does not discourage vigorous participation in recreational activities. Had plaintiff brought her claim against other cheerleaders, who may properly be considered coparticipants in the recreational activity of cheerleading, then, perhaps, the reckless-misconduct standard announced in Ritchie-Gamester would apply. Nothing in RitchieGamester, however, precludes ordinary-negligence claims against coaches and organizations involved in recreational sports.
The case of Behar v Fox, 249 Mich App 314, 316-318; 642 NW2d 426 (2002), in which a panel of this Court applied the reckless-misconduct standard from RitchieGamester to a soccer coach, is distinguishable from the case at hand. In Behar, the plaintiffs sued the defendant, their son’s soccer coach, after he collided with or kicked their son in the knee during a soccer scrimmage, resulting in a torn anterior cruciate ligament. Id. at 315. The plaintiffs contended that the ordinary-negligence standard should apply, but this Court disagreed. Id. at 316. This Court stated, “the mere fact that [the] plaintiffs’ minor son was injured in a collision with an adult coach rather than with a larger child coparticipant is of insufficient distinction to take this case out of the realm of the Ritchie-Gamester standard.” Id. at 318. It further noted that the defendant “was as much a ‘coparticipant’ in the scrimmage as he was a coach.” Id. Thus, although the reckless-misconduct standard applies in cases where a coach is acting as a coparticipant, the ordinary-negligence standard remains applicable in typical failure-to-supervise cases.
Further, in several cases involving recreational activities, this Court has held nonparticipating parties to an ordinary-negligence standard in the absence of an applicable immunity statute. See Woodman v Kera, LLC, 280 Mich App 125, 127-130; 760 NW2d 641 (2008), aff'd 486 Mich 228 (2010); Tarlea v Crabtree, 263 Mich App 80; 687 NW2d 333 (2004). The gross-negligence standard applies in cases involving coaches of publicly sponsored athletic teams who are entitled to governmental immunity, id. at 83-89, and the reckless-misconduct standard applies in cases alleging negligence on the part of coparticipants in recreational activities, Ritchie-Gamester, 461 Mich at 89. Defendants, however, cite no authority to support their position that the reckless-misconduct standard announced in Ritchie-Gamester, or any other heightened standard, applies in cases alleging negligence on the part of nonparticipating coaches and organizations involved in privately sponsored recreational activities.
A prima facie case of negligence requires the establishment of four elements: (1) a duty owed by the defendant to the plaintiff, (2) a breach of that duty, (3) causation, and (4) damages. Henry v Dow Chem Co, 473 Mich 63, 71-72; 701 NW2d 684 (2005). Having determined that ordinary care is the appropriate standard of care in this case, the next question is whether genuine issues of material fact remain regarding whether defendants’ conduct fell below that standard. In ordinary negligence cases, whether the defendant has breached his or her duty of care owed to the plaintiff is dependent on foreseeability. Laier v Kitchen, 266 Mich App 482, 494; 702 NW2d 199 (2005). The question is whether the defendant’s action or inaction created a risk of harm to the plaintiff, and whether the resulting harm was foreseeable. Schuster v Sallay, 181 Mich App 558, 563; 450 NW2d 81 (1989).
Here, there remain genuine issues of material fact regarding whether defendants exercised ordinary care under the circumstances. Viewing the evidence in the light most favorable to plaintiff, it cannot be said as a matter of law that defendants provided proper supervision of the stunting station or that plaintiffs injuries were unforeseeable. Although a coach was supposed to be positioned at the stunting station, no coach was present when plaintiff suffered her injury. Without proper supervision, the girls in plaintiffs group who were in high school became inattentive and engaged in horseplay. Although a coach was notified, she simply threatened the high school girls with running laps if they dropped plaintiff. Despite this threat, the high school girls continued horsing around and were not counting properly to ensure their synchronization. The girls then attempted to execute an advanced cheerleading stunt with plaintiff, who had never before performed the maneuver. On the whole, we find that reasonable minds could differ regarding whether an individual exercising ordinary care would foresee that a young girl without proper supervision or training would become injured in an attempt to execute an advanced cheerleading stunt with a group of high school girls on a grass football field.
Defendants argue that, applying any standard of care, plaintiff cannot establish the requisite element of causation. We disagree. Reasonable minds could differ regarding whether it is foreseeable that unsupervised, high school girls assisting in the execution of difficult cheerleading stunts will become inattentive to the point of creating a risk of harm. Exercising due care, perhaps defendants would have maintained supervision at the stunting station, removed the girls who were incapable of focusing, or introduced only those stunts that were appropriate given the cheerleaders’ ages and skill lev els. Thus, we are unable to conclude as a matter of law that defendants did not cause plaintiffs damages. At the very least, questions of fact remain, and summary disposition in defendants’ favor was improper.
II. FAILURE TO CONSIDER THE AFFIDAVIT OF PLAINTIFF’S EXPERT
Plaintiff next challenges the trial court’s refusal to consider the affidavit of plaintiffs expert witness. “[T]he decision whether to admit or exclude evidence is reviewed for an abuse of discretion.” Elezovic v Ford Motor Co, 472 Mich 408, 419; 697 NW2d 851 (2005). A trial court’s decision on a motion for reconsideration is also reviewed for an abuse of discretion. Tinman v Blue Cross & Blue Shield of Mich, 264 Mich App 546, 556-557; 692 NW2d 58 (2004). “An abuse of discretion occurs when the decision results in an outcome falling outside the range of principled outcomes.” Barnett v Hidalgo, 478 Mich 151, 158; 732 NW2d 472 (2007). We hold that the trial court did not abuse its discretion when it refused to consider the affidavit for the reason that the affidavit lacked notarization.
To be valid, an affidavit must be (1) a written or printed declaration or statement of facts, (2) voluntarily made, and (3) confirmed by the oath or affirmation of the party making it, taken before a person having authority to administer such oath or affirmation. Detroit Leasing Co v Detroit, 269 Mich App 233, 236; 713 NW2d 269 (2005). Because an affidavit lacking notarization is invalid, a trial court need not consider it. Id. Although plaintiff points out that defendants never contested the affidavit’s validity, plaintiff cites no legal authority that would preclude a trial court from refusing sua sponte to consider an invalid affidavit.
Plaintiff also argues that, although notarization was lacking, plaintiffs expert signed the affidavit and swore to its validity. That the affidavit comported with some elements required for validity, however, is not a basis to ignore that the affidavit failed to comport with all elements required for validity.
Finally, plaintiff argues that the trial court should have admitted the affidavit because she was prejudiced by its exclusion. To support this argument, plaintiff cites the harmless-error rule — where a trial court considers a defective affidavit on a motion for summary disposition, a challenging party must show prejudice resulting from the defect, or any error is harmless. Hubka v Pennfield Twp, 197 Mich App 117, 119-120; 494 NW2d 800 (1992), rev’d in part on other grounds 443 Mich 864 (1993). Plaintiff distorts the harmless-error rule. In Hubka, the trial court committed an error when it considered defective affidavits in ruling on a motion for summary disposition. In such case, reversal is appropriate only if the error resulted in prejudice. Here, however, the trial court properly refused to consider the defective affidavit — i.e., the trial court did not err. Any prejudice plaintiff may have suffered is a result of her own failure to see that the affidavit comported with the requirements for admission. Because the trial court did not err by refusing to consider the affidavit, plaintiff cannot claim prejudice resulting from that decision.
III. FAILURE TO RULE ON PLAINTIFF’S MOTION IN LIMINE
Plaintiff next argues that the trial court erred by refusing to hear her motion in limine to preclude any undisclosed witnesses and evidence from use or admission at trial. We agree.
We review a trial court’s evidentiary decisions for an abuse of discretion. People v Martzke, 251 Mich App 282, 286; 651 NW2d 490 (2002). However, because the trial court never ruled on plaintiffs motion in limine, there is no decision for us to review. Village of Hickory Pointe Homeowners Ass’n v Smyk, 262 Mich App 512, 516-517; 686 NW2d 506 (2004). We can, however, consider the trial court’s failure to hold a hearing on plaintiffs motion in limine.
The trial court never heard plaintiffs motion in limine, scheduled for the same day as defendants’ motion for summary disposition. Likely the trial court found it unnecessary to rule on the motion in limine considering that it decided to grant defendants’ motion for summary disposition — there would be no trial. After the trial court granted defendants’ motion for summary disposition, plaintiff filed a motion for reconsideration, in part, requesting an inference that defendants’ witnesses would be adverse, since defendants had failed to produce the names of any coach or other personnel who witnessed plaintiff’s fall. In denying plaintiffs motion for reconsideration, the trial court indicated that plaintiff waived her right to assert any ongoing discovery issues.
Plaintiff argues that she did not waive her right to assert any ongoing discovery issues because she filed a motion in limine, which was pending for hearing when the trial court granted defendants’ motion for summary disposition. She raised the issue regarding defendants’ abusive discovery tactics again in her motion for reconsideration. We agree with plaintiff. Waiver is defined as the intentional or voluntary relinquishment of a known right. Quality Prod & Concepts Co v Nagel Precision, Inc, 469 Mich 362, 374; 666 NW2d 251 (2003). There is simply no indication that plaintiff intentionally or voluntarily waived her right regarding a claim of discovery abuse. Quite the opposite, her course of conduct showed her strong desire to exercise such a right. Accordingly, waiver is not a valid ground for the trial court’s refusal to rule on plaintiffs motion in limine.
Defendants argue that the trial court did not abuse its discretion by refusing to hear plaintiffs motion in limine because, given that the trial court granted defendants’ motion for summary disposition, there would be no trial. Because we find that the trial court erred by granting defendant’s motion for summary disposition, however, defendants’ argument lacks merit.
There now being no valid ground for refusing to rule on the motion in limine, the trial court is instructed to consider the same. Accordingly, we remand the case for consideration of plaintiffs motion.
IV JUDGMENT UNDER MCR 2.116(I)(2)
In her last argument on appeal, plaintiff argues that the trial court erred by refusing to enter judgment as a matter of law in her favor as an opposing party under MCR 2.116(I)(2). We review de novo a trial court’s decision to grant or deny summary disposition. Rossow v Brentwood Farms Dev, Inc, 251 Mich App 652, 657; 651 NW2d 458 (2002). “The trial court appropriately grants summary disposition to the opposing party under MCR 2.116(1) (2) when it appears to the court that the opposing party, rather than the moving party, is entitled to judgment as a matter of law.” Id. at 658.
Plaintiff asserts the following undisputed facts, which she contends entitled her to judgment as a matter of law under MCR 2.116(I)(2): (1) no coach was present at the stunting station; (2) the girls stunting with plaintiff were reprimanded by a coach for engaging in horseplay; (3) despite being on notice of the risks, the coach walked away; (4) the MYFC supervisors were not supervising plaintiff at the time of the incident; and (5) defendants did not make it known that stunting would be incorporated into Spirit Day’s curriculum. Plaintiff further argues that an expert opined that defendants were negligent and even grossly negligent. According to plaintiff, an adult could have prevented plaintiffs injuries. Therefore, she argues, the trial court erred by granting summary disposition in favor of defendants, and should have granted judgment as a matter of law in favor of plaintiff under MCR 2.116(1)(2). We disagree.
Even assuming that the facts set forth above are undisputed, genuine issues of material fact remain regarding whether defendants failed to exercise the appropriate level of care to ensure plaintiffs safety. Given that ordinary negligence rather than reckless misconduct is the appropriate test in this case, certainly plaintiff has set forth sufficient evidence to survive defendants’ motion for summary disposition. It remains the case, however, that plaintiff must prove (1) duty, (2) breach, (3) causation, and (4) damages before judgment may enter in her favor. The bare conclusions regarding negligence or gross negligence made by plaintiffs expert, who was not present on the day in question and whose affidavit was ruled invalid by the trial court, were insufficient to unequivocally establish breach and causation. Rather, questions of fact remain.
Reversed and remanded for further proceedings. We do not retain jurisdiction.
CAVANAGH, EJ., and JANSEN and SERVITTO, JJ., concurred.
We refer to Jessicca as plaintiff.
The trial court had entered a consent order dismissing all claims against defendant Carol Bommarito on November 10, 2009. Accordingly, Bommarito is not a party in the instant appeal notwithstanding the fact that defendants’ appellate counsel’s appearance includes Bommarito. The order also dismissed count III of plaintiffs complaint alleging violation of the Michigan Consumer Protection Act, MCL 445.901 et seq.
In a half extension, two bases each hold one of the flier’s feet at their chest level and a third base stands in back as a spotter. In a full extension, the bases extend their arms straight, lifting the flier above their head level. To finish the extension, the bases catch the flier in a cradle. | [
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METER, EJ.
Respondent appeals as of right an order granting petitioner, TD, relief from the registration requirements of the Sex Offenders Registration Act (SORA), MCL 28.721 et seq. The trial court found that, as applied to TD, registration under the SORA is cruel or unusual punishment under Michigan’s Constitution. We reverse.
In 2007, a jury found that TD had committed second-degree criminal sexual conduct (CSC II) as defined in MCL 750.520c(l)(d)(ii) (sexual contact aided or abetted by one or more persons and involving force or coercion). The incident underlying TD’s juvenile adjudication occurred in 2006 when he was 15 years old. TD and another male classmate approached a female classmate at school. The case report indicates that TD punched the victim in the back and grabbed at her breast. He then held the victim in a chokehold and pulled her shirt up to expose her breast. TD’s accomplice pulled on the victim’s belt. In an incident report, the victim relayed that she felt threatened and scared during the attack, and she stated that TD let her go after she bit him on the arm.
After a dispositional hearing, TD was detained in a youth home and placed on probation. TD participated in a community-based treatment program, as well as group and individual therapy. TD successfully completed his treatment and was released from probation.
Subject to certain exemptions, the SORA provides that juveniles who have been adjudicated as responsible for a “listed offense,” see MCL 28.722(e), must register on the public sex-offender registry, MCL 28.722(a)(iii); MCL 28.723. CSC II is a listed offense. MCL 28.722(e)(ix). CSC II committed under 750.520c(l)(d)(ii) is not subject to any exemptions pertaining to juvenile offenses, and thus TD had to fully register under the act after reaching age 18. See MCL 28.728(3)(a).
Shortly after reaching age 18, TD petitioned the trial court for certain relief from the SORA’s registration requirements under MCL 28.728c. MCL 28.728c(3) states, “This section is the sole means by which an individual may obtain judicial review of his or her registration requirements under this act.” However, TD fell within the statute’s mandatory prohibition against granting relief from the registration requirements. MCL 28.728c(14) states that “[t]he court shall not grant a petition filed under this section if any of the following apply----” The statute then lists specific instances in which the offender is not eligible for relief from the SORA’s registration requirements. Juveniles adjudicated responsible for CSC II committed under 750.520c(l)(d)(ii) are not eligible for relief. MCL 28.728c(14)(c)(ii).
The trial court recognized that, under the statute, it did not have discretion to grant TD’s request. However, TD also challenged the constitutionality of the SORA’s registration requirements, and the trial court agreed that the statute was unconstitutional as applied to TD. TD argued, and the trial court agreed, that the statute results in cruel or unusual punishment under the Michigan Constitution, see Const 1963, art 1, § 16, as applied to. him.
We review de novo constitutional issues. In re Ayres, 239 Mich App 8, 10; 608 NW2d 132 (1999). The party challenging a statute as unconstitutional bears the burden of proof, and statutes are presumed constitutional. Id. “[T]he courts have a duty to construe a statute as constitutional unless its unconstitutionality is clearly apparent.” Id.
In arguing that the SORA results in cruel or unusual punishment as applied to him, TD specifically relies on expert testimony provided at the evidentiary hearing on his petition for relief. TD’s expert testified that juvenile offenders can be successfully rehabilitated and pose a low risk of recidivism. TD argues that it is cruel or unusual to subject a rehabilitated, nondangerous juvenile offender such as himself to the stigma of public registration as a sex offender.
Before this Court is obligated to evaluate whether a punishment is cruel or unusual, it must first determine whether the challenged governmental action is actually a form of punishment. Id. at 14. This Court has previously considered whether the SORA imposes punishment. In People v Pennington, 240 Mich App 188, 191-192; 610 NW2d 608 (2000), this Court considered a challenge to the SORA in which the defendant argued that it violated the constitutional prohibition against ex post facto laws. This Court held that the SORA’s registration requirements are not punishment and, therefore, do not violate the prohibition of ex post facto laws. Id. at 193. Pennington adopted the reasoning of Lanni v Engler, 994 F Supp 849 (ED Mich, 1998), and Doe v Kelley, 961 F Supp 1105 (WD Mich, 1997), two federal cases holding that the SORA is directed at protecting the public and that it has no punitive purpose. Pennington, 240 Mich App at 193-197. People v Golba, 273 Mich App 603; 729 NW2d 916 (2007), also addressed whether the registration requirements of the SORA constituted punishment. In Golba, this Court held that requiring the defendant to register as a sex offender on the basis of judicially found facts did not implicate the defendant’s right to a jury trial because the SORA does not impose a penally or punishment. Id. at 620-621. Golba noted that the SORA promotes awareness of potentially dangerous individuals to members of a community and that this protection of the community is a legitimate governmental interest. Id. at 620.
This Court has also considered whether the SORA’s registration requirements constitute punishment as applied to juveniles. In Ayres, 239 Mich App at 21, this Court concluded that the SORA does not impose punishment. In that case, the 14-year-old respondent was found responsible for CSC II and was ordered to register as a sex offender pursuant to the SORA. Id. at 9-10. The respondent challenged this requirement, claiming that it violated the constitutional prohibition against cruel or unusual punishment. Id. at 10. The Ayres Court adopted the reasoning of the courts in Lanni and Kelley, quoting language from both indicating that the registration requirements are regulatory and not punitive. Id. at 14-18. The Ayres Court noted that the SORA “ ‘does nothing more than create a mechanism for easier public access to compiled information that is otherwise available to the public only through arduous research in criminal court files.’ ” Id. at 15, quoting Kelley, 961 F Supp at 1109.
At first blush, Ayres appears controlling in this case because Ayres specifically addressed a challenge by a juvenile to the SORA’s registration requirements and rejected the defendant’s challenge to the SORA as cruel or unusual under the Michigan Constitution. Ayres, 239 Mich App at 21. However, even though the Ayres respondent was required by the SORA to register as a sex offender, at the time of that opinion juvenile offenders were required to register on a database used only by law enforcement and not available to the public. Id. at 18-19. Since Ayres, the SORA has been amended to require some juvenile sex offenders to register on the public database upon reaching the age of majority. MCL 28.728. This change casts doubt on the holding of Ayres, because the Ayres Court partly based its conclusion that the SORA does not impose punishment on the fact that juveniles were not required to register publicly. Ayres, 239 Mich App at 18-19.
This Court questioned the holding in Ayres in In re Wentworth, 251 Mich App 560; 651 NW2d 773 (2002). The juvenile respondent in Wentworth was found responsible for CSC II. Id. at 561. On appeal, the respondent argued that the SORA’s registration requirements violated her due process rights and her right to privacy. Id. at 563, 566. After rejecting the respondent’s constitutional challenges to the SORA, this Court stated, in dicta, that “the recent amendment of the statute removing . . . confidentiality safeguards [for juveniles] raises questions about the continuing validity of our holding in Ayres” concerning the issue of cruel or unusual punishment. Id. at 569.
In People v Dipiazza, 286 Mich App 137, 146; 778 NW2d 264 (2009), the Court stated that the “essential underpinning of the conclusion in Ayres that the registration requirement imposed by SORA does not punish was the fact that strict statutory guidelines protected the confidentiality of registration data concerning juvenile sex offenders.” The Dipiazza Court noted that “[t]his premise is no longer valid. ...” Id. The Court thus went on to determine anew whether, in light of the specific facts of Dipiazza, the SORA registration requirements were punishment as applied to a juvenile. Id. at 147-153.
In Dipiazza, the defendant was adjudicated under the Holmes Youthful Trainee Act (HYTA), MCL 762.11 et seq., for attempted third-degree criminal sexual conduct. Id. at 140. When he was 18, the defendant had a consensual sexual relationship with someone who was “nearly 15.” Id. The defendant and the younger person were later married. Id. at 140 n 1. Under the HYTA, all proceedings regarding the criminal charge and disposition are closed to the public as long as the defendant fulfills certain requirements. Id. at 141-142. The defendant successfully completed his HYTA program and his case was dismissed, leaving him with no conviction on his record. Id. at 140. The SORA was amended, effective October 1, 2004, to exclude individuals such as the defendant in Dipiazza from the public-registration requirements. Id. at 143. The defendant’s offense had occurred before that date, however, and he thus challenged the SORA registration requirements as applied to him, arguing that the requirements constituted cruel or unusual punishment. Id. at 140-141.
The Court analyzed whether the registration requirements constituted punishment under the facts of that case. Id. at 147. It used the test adopted in Ayres, stating the following: “ [Determining whether government action is punishment requires consideration of the totality of circumstances, and particularly (1) legislative intent, (2) design of the legislation, (3) historical treatment of analogous measures, and (4) effects of the legislation.” Id. at 147 (quotation marks and citations omitted); see also Ayres, 239 Mich App at 14-15. Applying these factors to the present case, we find that the SORA does not impose punishment.
Concerning the first factor, we note that the Legislature expressly set forth its intent with regard to the SORA in MCL 28.721a:
The legislature declares that the sex offenders registration act was enacted pursuant to the legislature’s exercise of the police power of the state with the intent to better assist law enforcement officers and the people of this state in preventing and protecting against the commission of future criminal sexual acts by convicted sex offenders. The legislature has determined that a person who has been convicted of committing an offense covered by this act poses a potential serious menace and danger to the health, safety, morals, and welfare of the people, and particularly the children, of this state. The registration requirements of this act are intended to provide law enforcement and the people of this state with an appropriate, comprehensive, and effective means to monitor those persons who pose such a potential danger.
The Dipiazza Court held that the Legislature’s expressed intent was not indicative of a punitive statute because the statute was not meant to “chastise, deter, or discipline” offenders, but to assist in the prevention of and protection against future criminal sexual acts. Dipiazza, 286 Mich App at 148. However, the Dipiazza Court nevertheless reasoned that the expressed legislative intent did not favor viewing the defendant’s regis tration as nonpunitive because “[t]he implied purpose of SORA, public safety, is not served by requiring an otherwise law-abiding adult to forever be branded as a sex offender because of a juvenile transgression involving consensual sex during a Romeo and Juliet relationship.” Id. at 149. The Dipiazza Court also emphasized that if the defendant had been assigned to youthful trainee status after October 1, 2004, he would not have been subject to the public-registration requirements. Id.
The facts in this case are different. This case did not involve a consensual relationship, TD did not have his conviction discharged under the HYTA, and, unlike in Dipiazza, there was no pending or recent amendment that would affect TD’s registration obligations and make them appear inequitable. TD committed a predatory sexual offense and poses a more serious danger to the community than the defendant in Dipiazza. We find that the first factor, legislative intent, weighs in favor of finding the registration requirements to be nonpunitive because the Legislature specifically set forth a nonpunitive intent in the statute.
When determining whether governmental action is punishment, the next factor to be considered is the design of the legislation. Id. at 147. The Dipiazza Court recognized that the federal courts, in Kelley, 961F Supp at 1109, and Lanni, 994 F Supp at 853, found that the registration requirements were purely regulatory and remedial and that they did not impose any requirement or inflict suffering, disability, or restraint on the registered offender. Dipiazza, 286 Mich App at 149. The Dipiazza Court disagreed with that assessment, indicating that the SORA created public access to records that were previously sealed and in this way caused the loss of rights or privileges. Id. at 150. The Court stated:
Because MCL 762.14 is designed to prevent youthful trainees from suffering a disability or losses of privileges and rights except with respect to requiring registration, and because there was no public dissemination of the sex offender registry at the time, it seems clear the Legislature did not intend to punish youthful trainees by requiring them to register. The dissemination of nonpublic information through SOBA, however, had the opposite effect. The later SOBA amendment removing those assigned to trainee status after October 1, 2004, appeared to rectify that issue. [Id. at 150-151.] [ ]
This reasoning does not apply to the present case. TD was not subject to the guarantees contained in the HYTA against civil disability or the loss of a right or privilege, and his record was never nonpublic according to MCR 3.925(D)(1), which states “Records of the juvenile cases, other than confidential files, must be open to the general public.” The second factor, the design of the legislation, weighs in favor of finding that the SORA’s registration requirements do not constitute punishment because the notification scheme is regulatory and remedial and does not cause a punitive release of previously sealed information.
This Court next considers the historical treatment of analogous measures when determining whether governmental action is punishment. Dipiazza, 286 Mich App at 147. With regard to this factor, the Dipiazza Court stated:
However, no analogous measure exists, nor is there an historical antecedent that relates to requiring a defendant to register as a sex offender when the defendant was a teenager engaged in consensual sex and the defendant was assigned to youthful trainee status after October 1, 1995, but before October 1, 2004. [Id. at 151.]
The Dipiazza Court’s analysis was limited to the specific facts in that case. Therefore, the reasoning and analysis do not apply to TD; his offense was factually distinct.
In Ayres, this Court distinguished public registration from historical punishments such as branding, shaming, and banishment because public registration “ ‘does nothing more than provide for compilation of and public accessibility to information that is already a matter of public record.’ ” Ayres, 239 Mich App at 15, quoting Kelley, 961F Supp at 1110. Ayres further noted that the registration requirement does not impose any suffering, restraint, or obligation and stated:
“The notification provisions themselves do not touch the offender at all. While branding, shaming and banish ment certainly impose punishment, providing public access to public information does not.... And while public notification may ultimately result in opprobrium and ostracism similar to those caused by these historical sanctions, such effects are clearly not so inevitable as to be deemed to have been imposed by the law itself.” \Ayres, 239 Mich App at 16, quoting Kelley, 961 F Supp at 1110.]
We agree with this analysis and find that factor three, the historical treatment of analogous measures, weighs in favor of finding that the SORA’s registration requirements are not punishment because they are not equivalent to historical practices such as branding, shaming, and banishment. Ayres, 239 Mich App at 15-16.
Finally, to determine whether the SORA imposes punishment this Court must consider the effects of the legislation. Dipiazza, 286 Mich App at 147. The public sex offender registry (PSOR) states that its purpose is “to better assist the public in preventing and protecting against the commission of future criminal sexual acts by convicted sex offenders.” See id. at 151 (quotation marks and citation omitted). The Dipiazza Court concluded that registration was an unfair branding under the facts of that case because the defendant was not dangerous and because he had no true conviction by virtue of the HYTA. Id. at 152. The Court also concluded that the defendant had been unable to find employment because of his status as a registered sex offender and as a result had suffered emotional and financial consequences. Id. at 152-153.
TD’s offense did not involve a consensual act, and he was not subject to the HYTA like the defendant in Dipiazza. Accordingly, much of the reasoning in Dipiazza is inapplicable. Moreover, in analyzing the effects of the legislation, the Ayres Court examined Kelley and noted that certain consequences of public registration such as harassment, assault, job loss, eviction, and dislocation are only indirect results of public registration and are not consequences imposed by the law itself. Ayres, 239 Mich App at 16, citing Kelley, 961 F Supp at 1110-1112. “ ‘Actions taken by members of the public, lawful or not, can hardly be deemed dispositive of whether legislation’s purpose is punishment.’ ” Ayres, 239 Mich App at 16, quoting Kelley, 961 F Supp at 1111. We adopt this reasoning and conclude that any consequences flowing from registration are not punishment in the present case.
Because the applicable factors weigh against a conclusion that the registration requirements of the SORA. constitute punishment as applied to TD, we hold that the trial court erred in its ruling. We note that the majority of the binding precedent holds that the SORA does not impose punishment, and the Dipiazza Court’s holding to the contrary appears confined to the specific facts of that case.
TD makes several additional arguments for upholding the trial court’s conclusion that the SORA’s registration requirements are unconstitutional as applied to this case. TD’s arguments have no merit. TD first argues that the SORA’s mandatory prohibition against granting relief from the registration requirements to certain offenders violates the doctrine of separation of powers. We note, initially, that the separation-of-powers doctrine does not mandate complete separation, and overlap between the functions and powers of the branches is permissible. People v Conat, 238 Mich App 134, 146; 605 NW2d 49 (1999). We further conclude that the statutory requirement that trial courts not grant relief from registration to offenders convicted of certain delineated offenses does not violate the doctrine of separation of powers. The SORA’s requirement that certain offenders not be granted relief from registration is well within the Legislature’s power; indeed, the Legislature does not have to grant any sex offender relief from registration. See O’Donnell v State Farm Mut Auto Ins Co, 404 Mich 524, 542; 273 NW2d 829 (1979) (discussing the Legislature’s power to make choices affecting society). Moreover, courts may still pass on constitutional questions pertaining to the SORA, as we do in our opinion today.
Next, TD argues that the SORA’s registration requirements do not bear a rational relationship to any legitimate governmental interest. Rational-basis review “tests only whether the legislation is reasonably related to a legitimate governmental purpose.” TIG Ins Co, Inc v Dep’t of Treasury, 464 Mich 548, 557; 629 NW2d 402 (2001). The SORA was enacted pursuant to the state’s police powers to prevent and protect against the commission of criminal sexual acts by convicted sex offenders, MCL 28.721a, and its purpose involves a legitimate governmental interest, see Golba, 273 Mich App at 620 (“SORA is a remedial regulatory scheme furthering a legitimate state interest of protecting the public[.]”). Further, a statute is constitutional “if the legislative judgment is supported by any set of facts, either known or which could reasonably be assumed, even if such facts may be debatable.” TIG Ins, 464 Mich at 557 (quotation marks and citation omitted). It is rational to require registration of sex offenders to enable the public to protect themselves, even if the risk of recidivism could be considered low in some cases.
TD next argues that the law is arbitrary and capricious. However, TD has waived this argument by failing to provide pertinent legal citations indicating under what circumstances a court may invalidate a statute for being arbitrary and capricious. See In re Contempt of Barnett, 233 Mich App 188, 191; 592 NW2d 431 (1998) (discussing waiver). At any rate, the Legislature made reasoned policy decisions in crafting the law, and we find nothing arbitrary or capricious in its wording.
Lastly, certain amici curiae have filed a brief to argue that the SORA’s registration requirements should be found unconstitutional as applied to TD because they are contrary to numerous public policies. Policy decisions, however, are for the Legislature. In re Juvenile Commitment Costs, 240 Mich App 420, 440; 613 NW2d 348 (2000).
Reversed.
M. J. KELLY, J., concurred with METER, EJ.
The Legislature amended SORA. effective July 1, 2011. 2011 PA 17. Accordingly, some of the statutory citations used in this opinion will change after that date.
As stated in In re Wentworth, 251 Mich App 560, 564; 651 NW2d 773 (2002): “In 1999, in response to a federal mandate, the Legislature amended the SORA, adding public notification provisions.... A juvenile offender is initially exempt from inclusion within the public database; however, for CSC II violations, that exemption ends when the individual becomes eighteen years old.”
As noted in Dipiazza, 286 Mich App at 141, the “HYTA is essentially a juvenile diversion program for criminal defendants under the age of 21.”
The HYTA specifically mandates that individuals given youthful trainee status “shall not suffer a civil disability or loss of right or privilege ....” MCL 762.14(2); see also Dipiazza, 286 Mich App at 150. The HYTA then lists registration under the SOBA as an exception to this mandate. MCL 762.14(3); see also Dipiazza, 286 Mich App at 150. The Dipiazza Court viewed this exception as an explicit recognition that the SORA’s registration requirements cause a disability and a loss of a right or privilege, at least as applied to a youthful trainee. Id.
According to MCR 3.925(E)(2)(c), TD’s juvenile record must be destroyed when he becomes 30 years old. However, the fact remains that the record will have been public before that time.
The Dipiazza Court also stated:
That defendant is suffering a disability and a loss of privilege is further confirmed by the fact that there are not strict limitations on public dissemination as there were in Lanni. The Lanni court noted that the registry limited searches so that a person living in a particular zip code can only search that zip code on the registry. Lanni, [994 F Supp] at 853. Consequently, the court in Lanni concluded that a law designed to punish a sex offender would not contain such strict limitations on dissemination. Id. Searches on the sex offender registry are no longer limited, however, to the searcher’s zip code, but rather the registry provides a searcher with information about every person registered as a sex offender living in every zip code in the state. [Dipiazza, 286 Mich App at 151.]
We do not find that this change in the ability to search the registry transforms the SOBA into a punitive scheme.
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MURPHY, C. J.
In this case, intervening defendant, the Wayne Circuit Court (WCC), argued that its judges have the exclusive authority to make the determination with respect to the assignment or selection of a deputy circuit court clerk (hereafter “court clerk”) to serve in a judge’s courtroom, as reflected in Local Administrative Order No. 2005-06 (LAO 2005-06). Plaintiff, American Federation of State, County and Municipal Employees, Council 25 (hereafter “the union”), contended that the assignment is solely governed and controlled by the collective-bargaining agreement (CBA) between the union and defendant, Wayne County (hereafter “the county”), as implemented by the Wayne County Clerk (hereafter “the county clerk”) and as interpreted in an underlying arbitration ruling that was entered before the adoption of LAO 2005-06. The county declined to take a stance on the merit of the arguments posed by the WCC and the union did not offer its own resolution of the issues presented. The trial court, sitting by assignment, sided with the union, entering an order granting summary disposition in favor of the union and denying the WCC’s competing motion for summary disposition. We agree with the position proffered by the WCC. Accordingly, we reverse the trial court’s order and remand for entry of an order granting summary disposition in favor of the WCC.
I. FACTS AND PROCEDURAL HISTORY
On March 30, 2007, the union filed a “complaint to compel” against the county, alleging that the union is a labor organization for purposes of the public employment relations act (PERA), MCL 423.201 et seq., that it represents employees engaged in public employment in Wayne County, that the county is the “public employer” of these employees for purposes of PERA, and that the union and the county entered into the CBA at issue, effective December 1, 2000. According to the union, the CBA covered various classifications of county employ ees, including court clerks, and the CBA provided the procedure for processing and adjusting grievances, culminating in binding arbitration upon an impasse. The union alleged that in 2002 it filed two grievances on behalf of court clerks after the county failed to post and fill a court clerk vacancy in a juvenile court courtroom in accordance with the CBA. The union specifically complained that the county failed to comply with the CBA, as construed by the union, when it did not fill the position on the basis of seniority and improperly limited the pool of applicants. The union maintained that the arbitrator issued an opinion and award in December 2004, finding in favor of the union and the grieving employees with respect to the grievances and interpretation of the CBA. The union alleged that the county had refused since January 2007 to comply with the arbitrator’s ruling, posting and filling court clerk vacancies in certain courtrooms without regard to seniority and absent consideration of the appropriate applicant pool. In its prayer for relief, the union requested that the trial court order the county to comply with the arbitration ruling and to repost and refill the vacancies in accordance with the ruling and the CBA.
The arbitrator’s written ruling and the CBA provide additional details and enlightenment. We initially note that under the CBA, §10.04, Step 5F, there could be no appeal from the arbitrator’s decision if rendered in a manner consistent with the arbitrator’s jurisdiction and authority as provided under the CBA, and the decision was deemed final and binding “on the Employer, on the employee or employees, and the Union.” Pursuant to §§ 17.01 and 17.02(A) of the CBA, when there exists an intradepartmental job vacancy resulting from the creation of a new position, a transfer, a resignation, a termination, a retirement, or other means, “an employee who holds the same classification and has completed one (1) year of service within the division may exercise his or her seniority for the selection of a job.” The CBA also provides, under § 17.02(G), that “[a] senior employee deemed not qualified for a job ... shall have recourse to the grievance procedure.” These CBA sections are general in scope and not specifically tailored to court clerks or any other particular employment classification. In its written ruling, the arbitrator concluded:
Per the contract language!)] a vacant position is to be awarded to the employee, in the section of the division having the vacant position, who (1) holds the same classification, (2) has completed one year of service within the division and (3) elects to exercise his or her seniority. Under the CBA, subordination of seniority is permitted only upon a determination that a senior employee is not qualified for a job. There is no contention in this matter that any of the court clerks lack the knowledge, skills and ability required to serve in any courtroom at the [Lincoln Hall of Justice] LHJ. Absent some ambiguity in the contract language at issue, the claim of a past practice is unavailing to modify a clear promise.
The County opines that prior to the instant matter the Union had not grieved or protested the County’s restriction of the applicant pool for court clerk vacancies in judge-led courtrooms; thus, it may he found that the Union has acquiesced in the County’s practice. One of the rules of contract interpretation related to the use of custom and practice is that a party’s failure to file grievances or to protest past violations of a clear contract rule does not bar that party, after notice to the violator, from insisting upon compliance with the clear contract requirement in future cases. I conclude there is no basis for finding the Union acquiesced in the County’s practice such that it should be held that the parties have, by their conduct, amended the CBA language on filling vacancies. I further conclude that the County violated the CBA when it limited the pool of court clerks who could apply for the ... position.
... I believe the foregoing discussions about what is required by Article 17 and particularly section [17.02(A) compel] a determination that the County violated the CBA by filling the position at issue with an employee who had less seniority than other interested applicants. Given the findings and conclusions above, the grievances must be granted.
By way of further background, in April 2005, the WCC’s chief judge penned a letter that was delivered to the county clerk, indicating that the WCC would not abide by the arbitrator’s ruling. The chief judge enclosed a draft of a LAO that would supersede the arbitration award and be implemented unless the WCC and the county clerk could come to a consensual resolution. The chief judge noted that the WCC had not been aware of the arbitration proceedings until after the arbitrator’s ruling was entered and that the time-honored practice over the past 30 years had been to allow the judges to choose the courtroom clerks to be assigned to their particular courtrooms. When no consensual resolution could be reached, the WCC promulgated LAO 2005-06, which was issued on June 2, 2005.
LAO 2005-06 provided that upon written request of the chief judge or the court administrator, the county clerk shall be responsible for assigning a court clerk to perform clerk functions in a presiding judge’s or referee’s courtroom, that the judge or referee assigned to a particular courtroom shall notify the county clerk of the person from the appropriate pool of interested, eligible clerks whom the judge or referee approves, and that the county clerk “shall then assign that person to perform court clerk functions in that courtroom.” Additionally, LAO 2005-06 provided that the county clerk “shall not permanently assign to any courtroom or transfer from any courtroom a court clerk without the prior written consent of the presiding courtroom judge or ref eree____” It further stated that on the written request of the court administrator, the county clerk shall remove a court clerk previously assigned to a courtroom and assign a different court clerk consistent with the procedures in LAO 2005-06. Finally, LAO 2005-06 provided that it superseded the arbitration ruling discussed above and that, where not in conflict with LAO 2005-06, all other terms and conditions of the county’s civil service rules and the CBA shall prevail. Under LAO 2005-06, seniority does not govern the assignment of a court clerk to a judge’s or referee’s courtroom. LAO 2005-06 expressly indicated that the WCC was acting pursuant to its constitutional authority to direct the county clerk, sitting as the clerk of the circuit court, “to perform noncustodial ministerial duties pertaining to court administration....” The order further explained that, for purposes of efficiently and properly administering justice, the WCC had the authority to control its courtrooms and, more particularly, a presiding judge or referee had the authority to control his or her courtroom, which included control over the selection of a court clerk to work in the courtroom.
On June 8, 2005, the Michigan Supreme Court’s State Court Administrative Office (SCAO) prepared a letter addressed to the chief judge of the WCC, which advised the chief judge that LAO 2005-06 conformed to the requirements of MCR 8.112(B) and was being accepted and filed. On July 27, 2006, the chief judge of the WCC entered an order regarding LAO 2005-06 that was directed at the county clerk. The order indicated that it had come to the attention of the chief judge that the county clerk “may decline to follow the dictates of LAO 2005-06 in light of [the] arbitrator’s ruling. . . and the terms of [the CBA].” The order mandated the county clerk to comply with LAO 2005-06, noting, once again, that the WCC and its judges control the court rooms under the judicial branch’s constitutional powers. Subsequently, grievances were filed by the union in 2007 when court clerks complained that the process of assigning them to certain courtrooms was not in accordance with their seniority status, the CBA, and the arbitration ruling. Instead, the assignment process was being governed by LAO 2005-06 and without regard to seniority.
In the instant litigation, which was commenced while the grievances were pending, the union filed a motion for summary disposition, arguing that the chief judge of the WCC lacked the authority to overturn and reject the CBA and the arbitrator’s ruling. The union also contended that the arbitration award had to be enforced because it drew its essence from the CBA. The county filed a response to the union’s motion for summary disposition and made its own request that the court enter an order granting summary disposition in favor of the county. In September 2008, an order was entered allowing the WCC to intervene as a party defendant. In November 2008, an order was entered allowing the union to supplement its previous motion for summary disposition and giving the county and the WCC an opportunity to respond to any supplemental motion. In February 2009, and before any further motions or responses were filed pertaining to summary disposition, the WCC formally filed an answer to the union’s complaint. At the same time, the WCC filed a counterclaim and a cross-claim for declaratory judgment.
In the combined counterclaim/cross-claim, the WCC noted the history already recited by us and also indicated that court clerks are members of the union, that the WCC is not the employer of the court clerks, that the WCC had not been a party to the CBA, that the WCC was not a party to the arbitration proceedings, and that the WCC was not aware of the arbitration proceedings until after the arbitrator’s ruling was issued. Count I of the counterclaim/cross-claim requested a court declaration that, under common-law contract principles, the CBA did not bind the WCC. Count II of the counterclaim/cross-claim requested a court declaration that, under common-law principles governing arbitrations, the arbitration award did not bind the WCC. Count III of the counterclaim/cross-claim requested a court declaration that LAO 2005-06 and the chief judge’s subsequent enforcement order directing the county clerk to abide by LAO 2005-06 were presumptively valid, that the trial court lacked subject-matter jurisdiction to otherwise consider the validity of LAO 2005-06 and the chief judge’s enforcement order, and that the county clerk was required to follow LAO 2005-06 and the enforcement order. Count IV of the counterclaim/cross-claim requested, in the alternative, a court declaration that LAO 2005-06 and the chief judge’s enforcement order controlled the assignment of court clerks to serve in courtrooms notwithstanding any contrary provisions in the CBA and the arbitration award.
Subsequently, the union filed a supplemental motion for summary disposition in regard to its complaint, the WCC filed its own motion for summary disposition, the union filed an additional motion for summary disposition, but this time with respect to the WCC’s counterclaim against the union, and the parties filed responses to the competing motions for summary disposition. We shall explore the nature of the summary disposition arguments in the context of our analysis of the issues on appeal. The trial court heard oral arguments on the motions and took them under advisement. In June 2010, in open court, the trial court rendered its ruling from the bench. The trial court held that the CBA and the arbitration ruling governed and controlled the matter, suggesting that the WCC should have involved itself in the arbitration proceedings and criticizing the WCC for changing the rules and nullifying the CBA and the arbitration award. The trial court opined that the county and the WCC were constructively coemployers of the court clerks and that they should have presented a united bargaining front relative to the arbitration proceedings and interpretation of the CBA. The trial court indicated that it would not be appropriate for a WCC judge, nor any judge, to be able to dictate who serves the judge as his or her courtroom clerk, analogizing it to a judge’s dictating which assistant prosecutor from the prosecutor’s office must handle a criminal case over which the judge is presiding. The court stated that if a judge is assigned a court clerk pursuant to the CBA and the arbitrator’s ruling and the assignment turned problematic, a change could be worked out, just like in any other department under the county’s umbrella. The trial court found that court clerks assigned to courtrooms did not serve a core function to the extent that a judge should control the decision to employ a court clerk in his or her courtroom. The court concluded that LAO 2005-06 could not prevail over the arbitrator’s ruling, which was never appealed, and that the arbitration decision was enforceable. The order entered by the trial court provided that, for the reasons stated on the record, the union’s motion for summary disposition to enforce the arbitration award was granted and the WCC’s competing motion for summary disposition was denied.
The WCC filed a claim of appeal, and on the WCC’s motion, this Court granted a stay pending this appeal or further order of the Court. AFSCME Council 25 v Wayne Co, unpublished order of the Court of Appeals, entered July 20, 2010 (Docket No. 298655). Thereafter, this Court granted the WCC’s motion for clarification, directing the county clerk to assign, court clerks to courtrooms in accordance with the procedure being utilized immediately before the trial court’s summary disposition ruling. AFSCME Council 25 v Wayne Co, unpublished order of the Court of Appeals, entered November 5, 2010 (Docket Nos. 298655 and 300515 ). The Supreme Court then denied an application for leave to appeal, but directed this Court “to decide this case on an expedited basis, in light of the importance of the issues . .. .” AFSCME Council 25 v Wayne Co, 488 Mich 1008 (2010).
II. ANALYSIS
A. STANDARD OF REVIEW
We review de novo a ruling on a motion for summary disposition, Coblentz v City of Novi, 475 Mich 558, 567; 719 NW2d 73 (2006), constitutional issues, Adair v Michigan, 486 Mich 468, 477; 785 NW2d 119 (2010), the proper interpretation and application of a statute, id., the construction of a court rule, Estes v Titus, 481 Mich 573, 578-579; 751 NW2d 493 (2008), and questions of law generally, Oakland Co Bd of Co Rd Comm’rs, 456 Mich 590, 610; 575 NW2d 751 (1998). We disagree with the union’s argument that we should employ appellate-review standards applicable to arbitration proceedings or those found in the arbitration section of the CBA. As explained in detail later in this opinion, the WCC was not a party to, and did not participate in, the arbitration proceedings, and thus it had standing to independently attack the arbitration award outside the confines of an appeal of the arbitra tion award. Accordingly, this case does not entail an “appeal” of the arbitrator’s ruling; rather, we are effectively addressing an appeal of a ruling in a declaratory judgment action, wherein the trial court declared as a matter of law that the arbitration ruling governed the assignment of court clerks to WCC courtrooms and not LAO 2005-06. Rulings in declaratory judgment actions are reviewed de novo on appeal. Toll Northville Ltd v Northville Twp, 480 Mich 6, 10; 743 NW2d 902 (2008).
B. DISCUSSION
1. COMMON-LAiy CONTRACT-RELATED LEGAL PRINCIPLES
We begin our analysis with a brief discussion of whether the WCC was bound by the CBA and the CBA-based arbitration ruling under common-law principles associated with contract formation and liability. The WCC was not a party to the CBA, it did not execute the document, and the WCC was not a party in the arbitration proceedings. “It goes without saying that a contract cannot bind a nonparty.” Equal Employment Opportunity Comm v Waffle House, Inc, 534 US 279, 294; 122 S Ct 754; 151 L Ed 2d 755 (2002). Arbitration, which is a matter of contract, cannot be imposed on a party that was not legally or factually a party to the agreement wherein an arbitration provision is contained. St Clair Prosecutor v AFSCME, 425 Mich 204, 223; 388 NW2d 231 (1986); Hetrick v David A Friedman, DPM, PC, 237 Mich App 264, 267; 602 NW2d 603 (1999). In Genesee Co Prosecuting Attorney v City of Flint, 64 Mich App 569, 571; 236 NW2d 146 (1975), this Court stated:
The issue is whether the plaintiff lacked capacity to attack the arbitration award. One not a party to an arbitration is not bound by the award. Ford Motor Co v Wayne Circuit Judge, 247 Mich 538; 226 NW 218 (1929). It follows that a non-participant has standing to attack an arbitration award that makes determinations concerning its property or contractual rights. We agree with this well established rule. See Orion Shipping & Trading Co v Eastern States Petroleum Corp, 312 F2d 299 (CA 2, 1963)..., Sloan v Journal Publishing Co, 213 Or 324; 324 P2d 449 (1958), Carpenters’ Union v Citizens’ Committee to Enforce Landis Award, 333 Ill 225; 164 NE 393 (1928). We, therefore, conclude that the plaintiff has the legal capacity to maintain this action.[ ]
As acknowledged by the WCC, nonsignatories of arbitration agreements can still be bound by an agreement pursuant to ordinary contract-related legal principles, including incorporation by reference, assumption, agency, veil-piercing/alter ego, and estoppel. Thomson-CSF, S A v American Arbitration Ass’n, 64 F3d 773, 776 (CA 2, 1995); see also E I DuPont de Nemours & Co v Rhone Poulenc Fiber & Resin Intermediates, SAS, 269 F3d 187,198 (CA 3, 2001). We find that there was no documentary evidence indicating that the WCC had entered into a separate contractual relationship with anyone wherein the arbitration clause or any of the CBA language was incorporated by reference, nor was there any evidence that the WCC had engaged in conduct suggesting assumption of arbitration obligations or that the county was acting as the WCC’s agent for purposes of collective bargaining and arbitration. Thomson-CSF, 64 F3d at 777. Furthermore, there was no evidence supporting imposition of a veil-piercing/alter-ego theory, given an absence of any fraud or indication that the WCC dominated and controlled the county relative to contract negotiations and arbitration. Id. In regard to estoppel, the federal court in El DuPont, 269 F3d at 200, stated that “courts prevent a non-signatory from embracing a contract, and then turning its back on the portions of the contract. . . that it finds distasteful.” The court indicated that a party may be estopped from asserting that the lack of a signature on a written contract precludes enforcement of a certain clause when the party has consistently maintained that other provisions in the same contract should be enforced to benefit the party. Id. We are not prepared to invoke the estoppel theory, when the union fails to make an estoppel argument, and when the reason that the WCC rejected the CBA in regard to the arbitration of issues affecting court clerk assignments was of constitutional magnitude, rather than simply because the relevant CBA sections were distasteful. Additionally, we question whether the WCC “embraced” unchallenged sections of the CBA, as opposed to having merely accepted those sections as not infringing on judicial powers. In the context of collective bargaining and the circumstances of this case, it would be nonsensical to demand that the WCC reject the entire CBA, including sections that were not constitutionally offensive, as a prerequisite to later raising a nonsignatory defense.
In sum, there is no basis to conclude under common-law principles that the WCC was bound by the CBA and the arbitration award.
2. PERA AND INTRODUCTION TO THE INHERENT-JUDICIAL-POWERS DOCTRINE
We continue our analysis with a discussion of whether the CBA and the arbitration award govern the dispute and prevail by operation of PERA. PERA pro vides that “[a] public employer shall bargain collectively with the representatives of its employees ... and may make and enter into collective bargaining agreements with those representatives.” MCL 423.215(1) (emphasis added). The union maintains, without citation of authority, that the county is the “public employer” of court clerks for purposes of PERA. The WCC contends that the county and the county clerk are coemployers of court clerks, citing Judicial Attorneys Ass’n v Michigan, 459 Mich 291, 297-300; 586 NW2d 894 (1998), and Lapeer Co v Teamsters Local 214, 1995 MERC Lab Op 181. Neither the WCC nor the union assert that the WCC is the “public employer” of court clerks. The trial court stated that the county and the WCC are constructively coemployers of court clerks. The named parties to the CBA and the arbitration proceedings were the union and the county, not the WCC.
We need not determine which entity is properly designated as the public employer of court clerks for purposes of PERA, or whether court clerks have multiple public employers, because the question is irrelevant in regard to resolution of the particular issues in this case given the circumstances presented. In St Clair Prosecutor, 425 Mich at 207-208, the Court addressed multiple questions, including “whether the circuit court had jurisdiction to decide the arbitrability of an assistant prosecuting attorney’s . . . removal from office under a collective bargaining agreement entered into by the county and the union without the participation of the prosecuting attorney[, and] whether the prosecutor is a coemployer with the county . .. .” The Court found that the county prosecuting attorney and the county were coemployers of assistant prosecuting attorneys for purposes óf PERA; that while a public employer may not refuse to bargain under PERA, there was no evidence that the union requested the prosecuting attorney to engage in collective bargaining; and that there was no evidence that the prosecuting attorney waived the right to bargain or acquiesced in such a waiver. Id. at 208. The Court held, in part, that the prosecuting attorney was not required to arbitrate the removal of the assistant prosecuting attorney under the collective-bargaining agreement executed by the county and the union, when the prosecuting attorney did not sign the agreement. Id. at 208, 237 (“[T]he prosecutor is not bound by an arbitration clause to which he was, in effect, not a party.”).
Here, with respect to the CBA, there is no dispute that the WCC did not sign the document. Furthermore, there was no documentary evidence showing or suggesting that the WCC was asked or rejected a request to execute the CBA or engage in underlying CBA negotiations, that the WCC was actually involved in negotiations, or that the WCC designated the county as its representative relative to collective bargaining in order to protect its own interests. Moreover, there was no documentary evidence submitted to the trial court indicating that the WCC waived any claimed right to collectively bargain with the union, that the WCC acquiesced in any such waiver, or that the WCC expressed its consent to or approval of the pertinent provisions contained in the CBA.
With respect to the arbitration proceedings, there was no documentary evidence showing or suggesting that the WCC participated in the proceedings, that the WCC and the county joined forces in defending against the arbitrated grievances, or that the WCC designated the county as its representative relative to the arbitration proceedings. Additionally, there was no documen tary evidence submitted to the trial court indicating that the WCC waived any claimed right to participate in the arbitration proceedings, that the WCC acquiesced in any such waiver, or that the WCC approved of or adopted the arbitrator’s award. In sum, there was no evidence whatsoever that the WCC had any association with or connection to the CBA and the arbitration proceedings. Indeed, the WCC’s chief judge indicated in her letter to the county clerk that the WCC had not been aware of the arbitration proceedings until after the arbitrator’s decision was issued.
The union argues that PERA requires parties to collectively bargain on matters concerning the terms and conditions of employment, which includes setting placement, transfer, appointment, and promotion criteria that would necessarily affect the assignment of court clerks to the WCC’s courtrooms. And the CBA encompassed requisite matters by, in part, including provisions on the filling of vacancies, which mandated recognition and contemplation of minimum-service time and seniority. Therefore, according to the union, PERA demands that we honor the act with a holding that the CBA and the arbitrator’s ruling govern the assignment of court clerks and prevail over LAO 2005-06 and any statutes to the contrary.
“The legislature may enact laws providing for the resolution of disputes concerning public employees, except those in the state classified civil service.” Const 1963, art 4, § 48. “Acting pursuant to this explicit constitutional authorization, PERA was enacted by the Legislature in 1965.” Local 1383, Int’l Ass’n of Fire Fighters, AFL-CIO v City of Warren, 411 Mich 642, 651; 311 NW2d 702 (1981). PERA provides public employees the right to form and join labor organizations, along with the right to negotiate with public employers in good faith regarding hours, wages, and other terms and conditions of employment. Id. We have held that “PERA was intended by the Legislature to supersede conflicting laws and is superimposed even on those institutions which derive their powers from the Constitution itself.” Central Mich Univ Faculty Ass’n v Central Mich Univ, 404 Mich 268, 279; 273 NW2d 21 (1978).
In City of Warren, 411 Mich 642, a promotion provision in a collective-bargaining agreement entered into under PERA conflicted with provisions of a city charter and the firefighters and police officers civil service system act, MCL 38.501 et seq. However, the Supreme Court held that “the contract provision governing promotions entered into under PERA [was] valid and enforceable.” City of Warren, 411 Mich at 649. The Court noted that it had “consistently held that PERA prevails over conflicting legislation, charters, and ordinances in the face of contentions by cities, counties, public universities and school districts that other laws or the constitution carve out exceptions to PERA.” Id. at 655. In Kalamazoo Police Supervisors’ Ass’n v City of Kalamazoo, 130 Mich App 513, 524; 343 NW2d 601 (1983), this Court also acknowledged that “if there is a conflict between PERA and another statute, charter provision or constitutional provision affecting mandatory bargaining subjects, the provisions of PERA and Const 1963, art 4, § 48, must dominate . ...”
MCL 423.215(1) provides, in part:
Except as otherwise provided in this section, for the purposes of this section, to bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any question arising under the agreement, and the execution of a written contract, ordinance, or resolution incorporating any agreement reached if requested by either party, but this obligation does not compel either party to agree to a proposal or require the making of a concession. [Emphasis added.]
“The subjects included within the phrase ‘wages, hours, and other terms and conditions of employment’ are referred to as ‘mandatory subjects’ of bargaining.” Central Mich Univ, 404 Mich at 277. “Once a specific subject has been classified as a mandatory subject of bargaining, the parties are required to bargain concerning the subject. ...” Id. Promotion and appointment criteria, including seniority, as well as grievance procedures, are mandatory subjects of collective bargaining. Id. at 278; Detroit Police Officers Ass’n v Detroit, 391 Mich 44, 55; 214 NW2d 803 (1974).
We agree that the provisions in the CBA that address intradepartmental job transfers and assignments, setting forth seniority and minimum-service criteria, and that address grievance procedures, including arbitration, do concern conditions of employment and are mandatory subjects of collective bargaining. Generally speaking, under the caselaw already cited, a PERA-based contract prevails in most instances even when in conflict with other authorities. However, the WCC invoked its constitutional powers as part of the judiciary in promulgating LAO 2005-06 and in rejecting and failing to heed the CBA and the arbitration ruling. Some of the PERA caselaw already discussed, while not involving the judicial branch’s inherent constitutional powers, suggests that PERA may prevail over conflicting constitutional provisions; again, PERA is grounded in the Michigan Constitution. The union itself does not make this argument, and it states that PERA prevails over inconsistent laws, “save the Constitution.”
We hold that a PERA-based contract and related arbitration award that infringe on the judicial branch’s inherent constitutional powers cannot be enforced to the extent of the encroachment. See Second Judicial Dist Court Employees & Judge v Hillsdale Co, 423 Mich 705, 717; 378 NW2d 744 (1985) (“Each branch of government has inherent power to preserve its constitutional authority.”). We have not been directed to any cases that suggest that if honoring PERA impinges on the judiciary’s inherent constitutional authority, PERA governs and prevails. The inherent-powers doctrine, which has been recognized for over 120 years, “is derived from the separation of governmental powers set forth principally in Const 1963, arts 4-6, relating to the authorities of the legislative, executive, and judicial branches of government, and Const 1963, art 3, § 2 . . . .” 46th Circuit Trial Court v Crawford Co, 476 Mich 131, 140; 719 NW2d 553 (2006) (opinion by MARKMAN, J.). The “doctrine is rooted in the constitutional command that the judicial power of this state is vested exclusively in ‘one court of justice[’] [under] Const 1963, art 6, § l.” Id. at 145.
In 74th Judicial Dist Judges v Bay Co, 385 Mich 710; 190 NW2d 219 (1971), the plaintiff district court judges sought, in part, injunctive relief prohibiting MERC from conducting hearings on a charge of unfair labor practices leveled against a judge, and the trial court permanently enjoined MERC from proceeding. Our Supreme Court, in reversing the trial court’s order, held that PERA provisions empowering MERC to act did not encroach on “the constitutional and inherent powers of the judiciary” and that MERC could properly exercise its jurisdiction under PERA. Id. at 729. While under the circumstances presented in 74th Judicial Dist Judges there was no infringement on the judicial branch’s inherent powers, the Court’s analysis implicitly, yet strongly, indicated that if such an infringement does occur, PERA will not control.
The proposition that PERA must bow to the judiciary’s inherent constitutional powers was made abundantly clear in In re Petition for a Representation Election Among Supreme Court Staff Employees, 406 Mich 647; 281 NW2d 299 (1979). In that case, a union, acting pursuant to PERA, petitioned for an election among certain Michigan Supreme Court clerical employees and proposed a bargaining unit comprised of those employees. MERC issued a finding that it had jurisdiction over the matter and ordered an election. MERC also rejected a separation-of-powers argument, observing that clerical employees did not exercise the powers of any branch of the government. Id. at 662. Our Supreme Court held:
This is a case of first impression. No Michigan or foreign opinion has been cited to us, nor did our research reveal any, where a quasi-judicial agency assumed to bring the Supreme Court before it for adjudication. However, those are the facts of this case... . MERC ... has attempted to take jurisdiction over the Michigan Supreme Court to determine a union representation election proceeding in which this Court would be a defendant.
We hold that Const 1963, art 3, § 2, headed separation of powers of government, precludes MERC’s assumption of such jurisdiction over the Michigan Supreme Court. [Id. at 660-661.]
Although it concerned a dispute between the legislative and executive branches of government, this Court’s decision in Beadling v Governor, 106 Mich App 530, 536-537; 308 NW2d 269 (1981), makes clear that the separation-of-powers doctrine prevails over PERA: “While the constitution expressly permits the Legislature to enact laws for the resolution of disputes involving public employees, Const 1963, art 4, § 48, that provision is inapplicable in this situation since it would otherwise substantially impair the separation of powers clause.”
In Irons v 61st Judicial Dist Court Employees Chapter of Local No 1645,139 Mich App 313, 321; 362 NW2d 262 (1984), this Court recognized the principle that application of PERA to the courts cannot occur if it would “violate the constitutional mandate of separation of powers.”
Accordingly, if indeed application of PERA impinges on the judiciary’s inherent constitutional powers, PERA cannot prevail. We also emphasize that the sections in the CBA generally governing the filling of vacancies and intradepartmental assignments are not rendered null and void by our ruling today. Rather, they are still wholly applicable, except that we ultimately carve out, for reasons set forth later in this opinion, a small exception with respect to the placement of a court clerk in a courtroom in order to preserve the judiciary’s constitutional authority. Before analyzing whether there was an unconstitutional infringement of the judicial branch’s authority with respect to the assignment of court clerks to WCC courtrooms under the CBA and the arbitration ruling, we shall first examine additional statutory arguments.
3. ADDITIONAL STATUTORY PROVISIONS AND CONSIDERATIONS
We begin by providing some background regarding the county clerk and the judicial branch and the interrelationship between the two. “There shall be elected for four-year terms in each organized county a. .. county clerk. . . whose duties and powers shall be provided by law.” Const 1963, art 7, § 4. “The clerk of each county organized for judicial purposes . . . shall be clerk of the circuit court for such county.” Const 1963, art 6, § 14. Consistently with this constitutional provision, MCL 600.571(a) provides that “[t]he county clerk of each county shall... [b]e the clerk of the circuit court for the county.” In Lapeer Co Clerk v Lapeer Circuit Court, 469 Mich 146, 156; 665 NW2d 452 (2003), the Michigan Supreme Court noted that, “[u]nder our Constitution, the county clerk serves in the unique posture of being both an executive officer and an officer of the judicial branch.” The Court held:
The constitutionally created office of the clerk of the circuit court must have the care and custody of the court records and can perform noncustodial ministerial functions of the court. The custodial function requires that the clerk act as guardian of the records, providing for their safekeeping. The clerk’s noncustodial ministerial duties are directed by the Court, as the determination of the precise noncustodial ministerial duties to be performed is a matter of court administration entrusted exclusively to the judiciary under Const 1963, art 3, § 2 and Const 1963, art 6, §§ 1, 5. [Id. at 170-171.]
The union cites MCL 600.579(1) in support of the argument that the county clerk has the authority to make court clerk assignments to courtrooms absent approval and acceptance by WCC judges. MCL 600.579(1) provides:
In counties having a population of more than 1,000,000 or that shall hereafter attain a population of more than 1,000,000 and that have adopted civil service under Act No. 370 of the Public Acts of 1941, as amended, being sections 38.401 to 38.428 of the Compiled Laws of 1948, the county clerk shall appoint or promote from the classified eligible list of the civil service a chief deputy circuit court clerk and at least 1 deputy circuit court clerk for each acting circuit judge in the county.
We take judicial notice under MRE 201 that Wayne County has a population that exceeds 1,000,000, and it has adopted the county employees’ civil service act, MCL 38.401 et seq., as reflected in Molis Estate v Wayne Co Bd of Auditors, 373 Mich 172, 174; 128 NW2d 473 (1964). As argued by the union, MCL 600.579(1) does not reference any requirement that a judge or court approve the county clerk’s appointment or promotion of a court clerk to serve a circuit court judge. On the other hand, MCL 600.571(c) provides that the county clerk shall “[ajppoint in counties with more than 1 circuit judge or having more than 100,000 population but less than 1,000,000 a deputy for each judge and approved by the judge to attend the court sessions.” (Emphasis added.) In general, the “disjunctive term ‘or’ refers to a choice or alternative between two or more things,” Yankee Springs Twp v Fox, 264 Mich App 604, 608; 692 NW2d 728 (2004), and Wayne County certainly has more than one circuit court judge. We also note the language in MCL 50.63, which provides that “[e]ach county clerk shall appoint 1 or more deputies, to be approved by the circuit judge,. . . and the deputy or deputies . .. may perform the duties of. . . clerks.” (Emphasis added.) This provision concerns the general hiring of deputy clerks, which apparently requires judicial approval.
We decline to rule that MCL 600.579(1), which does not reference the need for judicial approval, resolves the dispute in favor of the union, considering that, for the same reasons that we rejected the union’s PERA argument, the judicial branch’s inherent constitutional powers take precedence over the statute. A fundamental and indisputable tenet of law is that a constitutional mandate cannot be restricted or limited by the whims of a legislative body through the enactment of a statute. Stanhope v Village of Hart, 233 Mich 206, 209; 206 NW 346 (1925) (“The provisions of the Constitution clearly point decision herein, and we find no occasion to go to statutory provisions on the same subject[;][t]he Constitution controls . . . .”); see also Mudel v Great Atlantic & Pacific Tea Co, 462 Mich 691, 710; 614 NW2d 607 (2000) (stating that a statute cannot contravene “the dictates of our state or federal constitution”).
We also decline to rule that either MCL 50.63 or MCL 600.571(c), which incorporate a judicial-approval requirement, supports the WCC’s position to the extent that it resolves the case and makes it unnecessary to reach the constitutional issues. See Booth Newspapers, Inc v Univ of Mich Bd of Regents, 444 Mich 211, 234; 507 NW2d 422 (1993) (“[W]e will not reach constitutional issues that are not necessary to resolve a case.”). First, there is some obvious tension between MCL 600.579(1) and MCL 600.571(c), and MCL 50.63 does not technically concern the assignment of a previously hired court clerk to a courtroom. More importantly, even if we determined that the judicial-approval provisions in MCL 50.63 and MCL 600.571(c) controlled over or irrespective of MCL 600.579(1), there would still arise a conflict between those statutes and the PERA-based CBA. And as reflected already in this opinion, PERA can supersede, dominate, and prevail over conflicting legislation. City of Warren, 411 Mich at 655; Central Mich Univ, 404 Mich at 279; Kalamazoo Police Supervisors’ Ass’n, 130 Mich App at 524. Overall, placing any reliance on the statutes is problematic, and the Michigan Constitution provides a clear path in resolving the dispute.
The union also places reliance on MCL 38.415 and 38.416, which are provisions contained in the county employees’ civil service act, and which, according to the union, do not give any authority to the WCC or any court to dictate the assignment of a court clerk to a courtroom or the removal of a court clerk from a courtroom. Regardless of whether the union is accurately construing these statutes, to the extent that they infringe on the judicial branch’s inherent constitutional powers, they also succumb to the primacy of the Michigan Constitution.
4. APPLICATION OF THE INHERENT-JUDICIAL-POWERS DOCTRINE
Having found, generally speaking, that the judiciary’s inherent constitutional powers take precedence over PERA and the other statutory provisions cited by the union, we must now determine whether the act of assigning or selecting a court clerk for courtroom duty is a power that actually falls within the inherent-powers doctrine, so that the judiciary ultimately has the exclusive authority to make the decision regardless of seniority, the CBA, and the arbitration award. We find that Judicial Attorneys Ass’n, 459 Mich 291, and Lapeer Co Clerk, 469 Mich 146, control our analysis and demand that we hold in favor of the WCC.
In Judicial Attorneys Ass’n, 459 Mich at 294, our Supreme Court found that MCL 600.593a(3) to (10) and “parallel provisions of [MCL 600.591, 600.837, 600.8271, 600.8273, and 600.8274] of 1996 PA 374, concerning employees of the circuit, probate, and district courts, are unconstitutional.” 1996 PA 374 provided that Wayne County or a local judicial council created under the act became the employer of WCC employees, rather than the State Judicial Council abolished by the act. Judicial Attorneys Ass’n, 459 Mich at 294. The Court noted that the option to create a local judicial council as the employer had already expired. Id. at n 1. The Court found that the statutory provisions constituted an unconstitutional invasion of the judicial branch’s authority to control its internal operations. Id. at 301, 304.
The Court began its analysis by stating that “the separation of powers doctrine does not require so strict a separation as to provide no overlap of responsibilities and powers” and that “[i]f the grant of authority to one branch is limited and specific and does not create encroachment or aggrandizement of one branch at the expense of the other, a sharing of power may be constitutionally permissible.” Id. at 296-297. The critical questions, as viewed by the Court, were whether the “judicial branch’s powers necessarily include the administrative function of controlling those who work within the judicial branch, and, if so, whether the legislatively prescribed sharing of personnel functions delineated in [MCL 600.593a] is sufficiently limited and specific so as not to encroach on the exercise of the constitutional responsibilities of the judicial branch.” Id. at 297. Here, with respect to setting the criteria for purposes of a court clerk assignment and in regard to an assignment decision, there is no sharing of power with the judicial branch, where the CBA, as agreed to by the union and the county (legislative branch), exclusively governs the process. MCL 600.593a(5), which was struck down as unconstitutional in Judicial Attorneys Ass’n, preserved a limited role for the chief judge of the WCC in those aspects of decision-making relative to court personnel, yet the Supreme Court still found the statutory scheme constitutionally flawed. Judicial Attorneys Ass’n, 459 Mich at 302. Again, in the case at bar, the WCC does not even play a limited role in the assignment process and determination.
The Court in Judicial Attorneys Ass’n observed that it was well established that the management of court personnel “falls within the constitutional authority and responsibility of the judicial branch” and that “[t]he power of each branch of government within its separate sphere necessarily includes managerial administrative authority to carry out its operations.” Id. at 297. The Court also observed:
Despite the complications of the trial court environment, the case law, taken as a whole, has come to strongly affirm that the fundamental and ultimate responsibility for all aspects of court administration, including operations and personnel matters within the trial courts, resides within the inherent authority of the judicial branch.
“... Employing and managing personnel to carry out day-to-day operations is one of the most basic administrative functions of any branch of government. This Court has already suggested that, pursuant to the doctrine of separation of powers, one branch of government should not be subject to oversight by another branch in personnel matters____”
We agree with plaintiffs and the Court of Appeals majority that [MCL 600.593a(3)] is not a sufficiently limited exercise by one branch of another branch’s power, and therefore that it impermissibly interferes with the judiciary’s inherent authority to manage its internal operations. ...
.. . The judicial branch is constitutionally accountable for the operation of the courts and for those who provide court services .... [Id. at 299-302 (citations omitted).]
Here, we hold that the assignment or selection of a particular court clerk to serve in a judge’s courtroom clearly falls under the umbrella of the judiciary’s administrative and managerial authority to carry out the court’s day-to-day internal operations and to control personnel matters with regard to an individual, a court clerk, who indisputably is providing court services.
The union attempts to make a distinction between the WCC’s having control over the operation and function of the courtroom, which power the union concedes is beyond dispute, and the WCC’s having control over personnel who perform duties in the courtroom. Stated otherwise, the union accepts that a WCC judge can direct the activities of a court clerk once the clerk is assigned to the judge’s courtroom, but argues that the judge does not have the authority to determine which particular court clerk is assigned to the courtroom in the first place. We disagree and hold that the judicial branch’s inherent constitutional powers encompass both the selection of a court clerk to work in a courtroom and the control over the clerk in the courtroom after the selection is made. Controlling a court’s personnel matters and its daily internal operations, which are powers held by the judicial branch as indicated in Judicial Attorneys Ass’n, necessarily include deciding which court clerk will be assigned to work with a judge in the judge’s courtroom. We find that it would be constitutionally unsound to conclude that a judge can dictate the activities of a court clerk once the court clerk is assigned to the judge’s courtroom, but that the judge can have no relevant say in regard to which court clerk will work with the judge on a day-to-day basis in conducting the business of the court.
We reject the trial court’s analogy that allowing the WCC to govern the court-clerk-assignment determina tion is akin to a judge’s dictating which assistant prosecutor from the prosecutor’s office must handle a criminal case over which the judge is presiding. A court clerk who is performing court functions on behalf and at the direction of a judge simply does not have the same status as a party or attorney who is merely appearing before a judge to argue a case. A prosecutor is not performing work or providing court services for the benefit of the judge and persons appearing in the court.
Under the CBA, as interpreted by the arbitrator, a WCC judge is effectively deprived of any meaningful voice with respect to which court clerk serves in his or her courtroom. A judge has no formally recognized control over the assignment or removal decision; there is an absence of empowerment granted to the judiciary. We acknowledge that the CBA requires the placement of a qualified clerk in a courtroom, but there is no procedural mechanism that requires the county clerk, the county, or the union to take into consideration a judge’s input with regard to whether a court clerk is qualified. If a judge attempted to demand that the county clerk remove a court clerk deemed unqualified by the judge, or if a judge sought to prevent the assignment of a court clerk to his or her courtroom on the basis that the clerk was unqualified, the judge could be wholly ignored without any legal consequences or ramifications. Even when, in the spirit of cooperation, a county clerk works with a judge and respects the judge’s wishes, a disgruntled court clerk can invoke the grievance procedures, possibly culminating in arbitration. And a judge or the WCC, not being a party to the CBA and, under the union’s argument, not having constitutional authority to interfere with CBA procedures, could not become involved in the grievance procedures. At oral argument, when asked what the WCC could do if the county clerk found a court clerk qualified for assignment to a courtroom but the judge to whom the court clerk is to be assigned thinks differently, the union’s counsel responded that the WCC could file a lawsuit. Aside from the fact that such a suit would be overly burdensome on the judiciary, we fail to see how the WCC could succeed in the litigation if the union’s stance controlled, given its position that the WCC has no right to play a role in the assignment of court clerks. We conclude that a judge has the exclusive constitutional authority to select a court clerk who the judge opines is the best suited to assist the judge in effectively and efficiently operating the judge’s courtroom.
Furthermore, Lapeer Co Clerk, 469 Mich 146, lends further support for our conclusion. In Lapeer Co Clerk, id. at 149, our Supreme Court held that a county clerk, serving as clerk of the circuit court, “must have the care and custody of the court records” and “is to perform ministerial duties that are noncustodial as required by the court.” Reviewing historical instances in which circuit court clerks, i.e., county clerks, have been assigned noncustodial, ministerial tasks, the Court stated:
Court clerks [have] ... computed amounts due on bonds, generated transcripts, filed transcripts, entered and docketed judgments, advertised writs of judgment, certified and filed stipulations, received court papers, transmitted certified copies of proceedings to the Supreme Court, certified various court documents, and accepted court filings. Court clerks could not undertake nonministerial functions, such as assessing damages in a contested action, exercising any judicial power over individuals, or taking complaints and issuing warrants. In addition, it was well understood that these noncustodial ministerial functions were subject to change. [Id. at 158-159 (citations omitted).]
The Court further ruled that “the judiciary is vested with the constitutional authority to direct the circuit court [county] clerk to perform noncustodial ministerial duties pertaining to court administration as the Court sees fit.” Id. at 164. The constitutional authority “includes the discretion to create duties, abolish duties, or divide duties between the clerk and other court personnel, as well as the right to dictate the scope and the form of the performance of such noncustodial ministerial duties.” Id.
We find that the directives contained in LAO 2005-06, which required the county clerk to assign a court clerk to a presiding judge’s courtroom on the basis of the judge’s selection of a clerk from the appropriate pool, constitute noncustodial ministerial tasks relative to the division of duties and the scope and the form of performances within the circuit court. As such, LAO 2005-06 was a proper exercise of the WCC’s exclusive judicial authority under the Michigan Constitution, and it was permissible because it concerned “internal court management,” MCR 8.112(B)(1).
We find additional support for our position in Rutledge v Workman, 175 W Va 375; 332 SE2d 831 (1985), wherein the West Virginia Supreme Court of Appeals considered whether an elected circuit court clerk could remove and replace a deputy circuit court clerk when a judge entered an order prohibiting the change. The elected circuit court clerk had acknowledged that there was statutory authority requiring court approval before her initial hiring decision, but argued that “she has absolute, complete, and unfettered discretion to fire, assign, and reassign personnel in the office of the circuit clerk.” Id. at 377. Similar to the Michigan Constitution, the West Virginia Constitution provided for a unitary court system. Id. at 379, citing W Va Const, art VIII, § 1 et seq. The court, examining New Jersey caselaw that had addressed the issue, stated:
The New Jersey courts have decided cases on this subject and their reasoning is persuasive. The county clerk is the New Jersey equivalent of the West Virginia circuit court clerk. Because these clerks are elected, they have a hybrid status — half county official: half judicial officer. Nevertheless, these clerks are fully answerable to the judicial system. When a conflict arose between the assignment judge, the chief administrator of New Jersey’s county judicial system, and county officials, the court upheld the judge’s constitutional power to administer the judiciary. The court stated:
“The power of the assignment judge to select and assign as his assistants those who satisfy his needs from the coterie of county employees stems from the inherent power of the courts as implemented by R. l:33-3(b). And although these assistants may remain county employees for the purpose of payment of their remuneration, they nevertheless serve under the control and direction of the assignment judge in the unclassified category and at his pleasure.” Matter of Court Reorganization Plan; etc., 161 N.J. Super. 483, 391 A.2d 1255, 1260 (App. Div. 1978) aff’d o.b. 78 N.J. 498, 396 A.2d 1144 (1979).
And since this power to regulate the conduct of the courts is constitutional, it transcends any legislative directives. 161 N.J. Super. 483, 391 A.2d at 1260. In the same manner, the West Virginia Constitution mandates that we, and the circuit court judges administer the judicial system with dispatch. Although the circuit court clerks are more than our minions, the constitution’s mandate for effective justice guides their action as well as ours. They must aid the administration of justice or face censure. {Rutledge, 175 W Va at 379-380.]
The West Virginia court also relied on W Va Const, art VIII, § 9, which established the office of the clerk of the circuit court under the judicial article, to conclude that the circuit court clerk’s duties must be analyzed in the framework of the judicial system. Rutledge, 175 W Va at 380. In Michigan, the county clerk’s role as clerk of the circuit court was also established under the judicial article, Const 1963, art 6, § 14, and the relationship between the clerk of the circuit court and the judicial branch in Michigan is comparable to the relationship between the two that exists in West Virginia. See Lapeer Co Clerk, 469 Mich 146.
Later, in State ex rel Core v Merrifield, 202 W Va 100, 109; 502 SE2d 197 (1998), the West Virginia Supreme Court of Appeals upheld that part of a general order which provided that each circuit judge had the ultimate authority to “select and assign as his Courtroom Clerk that individual whom most satisfies his needs from the coterie of deputy clerks.”
We wholeheartedly agree with the analysis and conclusion reached by the West Virginia and New Jersey courts.
5. ALLEGED INFRINGEMENT ON THE POWERS OF THE LEGISLATIVE BRANCH AND ASSOCIATED CASES
The union asserts that LAO 2005-06 violates the separation-of-powers doctrine in that it infringes on the constitutional authority of the county, as a legislative branch of government, to have control over the employment conditions of court clerks as bargained for in the CBA. We first note that the county itself has not voiced such an infringement. Regardless, we do not agree that the assignment of a court clerk to a WCC courtroom is a subject matter falling within the powers of the legislative branch; it is patently a judicial matter. Assuming that the county’s role in generally setting the work conditions and duties of court clerks through collective bargaining is of constitutional magnitude relative to the powers of the legislative branch, the judicial branch must nonetheless be permitted to take control over particular matters when necessary to satisfy constitutional demands, even if closely related to legislative matters. And any incursion by the judiciary into the county’s general constitutional territory that results from our ruling that grants the judiciary control over courtroom assignments is “sufficiently limited and specific so as not to encroach on the exercise of the constitutional responsibilities of the [legislative] branch.” Judicial Attorneys Ass’n, 459 Mich at 297. The CBA is an expansive document covering myriad matters of employment conditions pertaining to court clerks, as well as other union members, none of which bargained-for conditions are affected by our ruling, except for the criteria on filling vacancies, and then only to the extent that the matter concerns a courtroom assignment. The WCC has made it clear that, aside from this minimally intrusive yet constitutionally mandated exception, it would honor the provisions in the CBA. The union attempts to support its position by citation of Wayne Circuit Judges v Wayne Co, 386 Mich 1; 190 NW2d 228 (1971), 74th Judicial Dist Judges, 385 Mich 710, Bartkowiak v Wayne Co, 341 Mich 333; 67 NW2d 96 (1954), Sabbe v Wayne Co, 322 Mich 501; 33 NW2d 921 (1948), Bischoff v Wayne Co, 320 Mich 376; 31 NW2d 798 (1948), and Beadling, 106 Mich App 530. These cases do not require a different outcome here because they are either factually or legally distinguishable and thus not pertinent to the specific legal questions that we have addressed today, or they actually support the WCC’s position, or they are not as closely on point as Lapeer Co Clerk, 469 Mich 146, and Judicial Attorneys Ass’n, 459 Mich 291, wherein our Supreme Court has embraced recognition of the judicial branch’s constitutional powers.
III. CONCLUSION
We hold that under the judicial branch’s inherent constitutional authority the WCC’s judges have the exclusive authority to make the determination with respect to the assignment or selection of a particular court clerk to serve in a judge’s courtroom. Promulgation of LAO 2005-06 constituted a proper exercise of the WCC’s authority, and the WCC was not bound by the CBA, nor the arbitrator’s ruling, on the narrow issue of courtroom assignments.
We reverse and remand for entry of judgment in favor of the WCC. We do not retain jurisdiction. Considering that our Supreme Court directed us to decide this case on an expedited basis in light of the important issues at stake, we order that this opinion, i.e., our judgment, is to take immediate effect pursuant to MCR 7.215(F)(2). No taxable costs are awarded.
Stephens and M. J. Kelly, JJ., concurred with Murphy, C.J.
This opinion applies equally to judges and referees, but we shall, for the most part, refer solely to judges throughout the opinion for ease of reference.
Docket No. 300515 pertained to a related contempt proceeding that we need not explore for purposes of this opinion.
The union does not claim that the WCC lacked standing to litigate the issues presented. Moreover, we find that the WCC has standing, given that the CBA and the arbitration award concern the WCC’s courtroom rights and affect its substantial interest in internal court operations. See Lansing Sch Ed Ass’n v Lansing Bd of Ed, 487 Mich 349, 372; 792 NW2d 686 (2010).
Michigan Employment Relations Commission.
The fact that the WCC was not involved in negotiating the PERA-based CBA does not mean that we forego a PERA analysis and simply conclude that PERA is irrelevant. There is no argument that the CBA is generally invalid, unenforceable, or 'undeserving of recognition. Therefore, we must determine whether PERA principles demand enforcement of the entire CBA.
We are not suggesting that if a court is indeed a party to a collective-bargaining agreement, it can later refuse to honor its own agreement on the basis that the court’s constitutional powers are invaded by implementation of the agreement.
“The powers of government are divided into three branches: legislative, executive and judicial. No person exercising powers of one branch shall exercise powers properly belonging to another branch except as expressly provided in this constitution.” Const 1963, art 3, § 2.
Const 1963, art 6, § 1, provides:
The judicial power of the state is vested exclusively in one court of justice which shall be divided into one supreme court, one court of appeals, one trial court of general jurisdiction known as the circuit court, one probate court, and courts of limited jurisdiction that the legislature may establish by a two-thirds vote of the members elected to and serving in each house.
The parties apparently accept that the county clerk was bound by the CBA and the arbitration ruling, and the county clerk has not intervened in the suit.
MCL 38.415 provides:
Whenever possible, vacancies shall be filled by promotion. Promotion shall be made from among employees qualified by training and experience to fill the vacancy, and whose length of service entitles them to consideration. The commission shall, for the purpose of promotion, rate such employees so qualified on the basis of their service record if maintained, experience in the work involved in the vacant position, training and qualification for such work, seniority and war service ratings. Seniority shall be controlling only when other factors are equal. Only 1 name, the highest on the list of ratings, shall be certified. The appointing authority shall then appoint the person so qualified forthwith, or elect to malee an original appointment, in which event the procedure for original appointments hereinbefore provided shall be followed.
MCL 38.416 provides, in part, that “[a]ny officer or employee in the classified civil service may be removed, suspended or reduced in rank or compensation by the appointing authority, after appointment or promotion is complete, by an order in writing, stating specifically the reasons therefor.”
Section 14.01 of the CBA provides that, “[t]o the extent they are not in conflict with other provisions of this Agreement, the existing Wayne County Civil Service Rules ... are incorporated by reference into this Agreement.”
We emphasize, however, that this opinion should not be read as a ruling that all remaining provisions of the CBA are constitutionally acceptable, because those provisions are not before us. Further, while we are only concerned with the assignment of court clerks to courtrooms, nothing in this opinion should be interpreted as necessarily limiting its potential application to court clerk assignments. | [
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PER CURIAM.
Defendant was charged with first-degree premeditated murder, MCL 750.316(l)(a), carrying a concealed weapon, MCL 750.227, possession of a firearm by a felon, MCL 750.224f, and possession of a firearm during the commission of a felony, MCL 750.227b. Relying on People v Bender, 452 Mich 594; 551 NW2d 71 (1996), the trial court suppressed defendant’s custodial statement and thereafter granted de fendant’s motion to dismiss the information. The prosecution appeals as of right. We reverse the order suppressing defendant’s statement, vacate the dismissal of the information, and remand. This opinion shall have immediate effect pursuant to MCR 7.215(F)(2).
I. FACTS AND PROCEEDINGS
Defendant was charged with first-degree murder and the weapons offenses in connection with the February 6, 2009, shooting death of Nate Henson outside the front door of Club Xclusive in Flint. Defendant was arrested at approximately 10:30 a.m. on February 26, 2009. Between the date of the charged offense and defendant’s arrest, defendant had over 20 contacts with an attorney, Frederick Blanchard, to discuss the matter. Shortly after defendant was arrested, defendant’s family members made a payment to Blanchard between 11:00 a.m. and noon on February 26, to secure his services as counsel for defendant. Blanchard then contacted the police station several times to advise the police that he was defendant’s attorney and wanted to speak to defendant. No one advised defendant that Blanchard had attempted to contact him. Defendant submitted to a police interview at approximately 10:00 or 11:00 p.m. that night. Defendant gave a statement to Sergeant Mike Angus in which he admitted shooting the victim, but claimed that he had acted in self-defense. Angus testified that he was not aware of Blanchard’s attempt to reach his client. Angus received the message the following day.
Defendant moved to suppress his statement on the basis of Bender, 452 Mich 594, because the police failed to inform him that his “retained counsel had been attempting to contact him.” The trial court found that, despite all the contacts between defendant and Blanchard, “the record is clear that [Blanchard] was not retained until around noon that day.” The trial court also found that the record supported Blanchard’s assertions that he had repeatedly attempted to contact defendant or reach Angus before defendant made his statement to Angus. The trial court agreed that Bender controlled and specifically cited Justice CAVANAGH’s opinion at 452 Mich 614. The trial court determined that the instant case was indistinguishable from Bender, and that Justice CAVANAGH’s opinion controlled, stating:
[T]he Court [in Bender] affirmed the trial court’s suppression of the Defendant’s [sic] statement after the police failed to inform [the defendants] that counsel had been retained for them and of counsel’s attempt to contact them. It seems to me that fits exactly in that situation, of this box, the Bender box, if you want to call it that.
The trial court thereafter granted defendant’s motion to quash because, without the statement, the evidence was insufficient to bind defendant over for trial. This appeal followed.
II. ANALYSIS
This Court reviews a trial court’s findings of fact at a suppression hearing for clear error and reviews de novo questions of law and the trial court’s ultimate decision whether to suppress the evidence. People v Frohriep, 247 Mich App 692, 702; 637 NW2d 562 (2001).
The prosecution initially argues that Bender was incorrectly decided and should be overruled. However, only the Supreme Court has the authority to overrule its own decisions. Paige v Sterling Hts, 476 Mich 495, 524; 720 NW2d 219 (2006). Until it does so, “all lower courts and tribunals are hound by that prior decision and must follow it even if they believe that it was wrongly decided.. . Id. Therefore, this Court is bound to follow Bender, as was the trial court. But, importantly, the lead opinion in Bender cited by the trial court that was authored by Justice CAVANAGH and joined by Justices LEVIN and MALLETT was not the majority opinion in Bender. Rather, as our Supreme Court stated in People v Sexton, 458 Mich 43, 53; 580 NW2d 404 (1998), the “ultimate holding” of the Bender Court was stated in the opinion by Chief Justice BRICK-LEY, joined by Justices LEVIN, CAVANAGH, and MALLETT. Id. at 53-54, citing Bender, 452 Mich at 620-621 (opinion by Brickley, C.J.). The trial court, therefore, improperly relied on Justice CAVANAGH’s opinion in Bender, because it was not the majority opinion. Sexton, 458 Mich at 53.
The trial court also relied on this Court’s opinion in People v Leversee, 243 Mich App 337, 346-347; 622 NW2d 325 (2000), that also incorrectly referred to Justice CAVANAGH’s lead opinion as the majority opinion. In Leversee, this Court explained that it is not necessary that an attorney or family member speak directly to the interrogating officer. Rather, it is sufficient if an attorney contacts a “police” station to communicate the attorney’s desire to speak to a client because “ ‘the police, as an entity, have the fundamental responsibility to establish and maintain adequate procedures that will allow an attorney to communicate with a suspect and the interrogating officers without unreasonable delay.’ ” Id., quoting Bender, 452 Mich at 617-618 n 24 (CAVANAGH, J.). This discussion is merely dicta because it does not go to the holding of the case where the panel found that although the admission of the defendant’s statement to the police was error, the error was harmless because of the overwhelming evidence of the defendant’s guilt. Leversee, 243 Mich App at 347. Statements and comments in an opinion concerning a rule of law or debated legal proposition that are not essential to the disposition of the case constitute obiter dicta and lack the force of a binding adjudication. McNally v Wayne Co Bd of Canvassers, 316 Mich 551, 558; 25 NW2d 613 (1947). Accordingly, we conclude that the language relied on by defendant creating a “police entity” is not binding and has no precedential value. People v Borchard-Ruhland, 460 Mich 278, 286 n 4; 597 NW2d 1 (1999). Moreover, we question the wisdom of treating a police or sheriffs department as a monolithic entity to the extent that an inquiry to “one person” will be treated as notice to all.
The rule applicable to this case is the prophylactic rule outlined by Chief Justice BRICKLEY in Bender in his majority opinion:
The right to counsel and the right to be free of compulsory self-incrimination are part of the bedrock of constitutional civil liberties that have been zealously protected and in some cases expanded over the years. Given the focus and protection that these particular constitutional provisions have received, it is difficult to accept and constitutionally justify a rule of law that accepts that law enforcement investigators, as part of a custodial interrogation, can conceal from suspects that counsel has been made available to them and is at their disposal. If it is deemed to be important that the accused be informed that he is entitled to counsel, it is certainly important that he be informed that he has counsel. [Bender, 452 Mich at 621 (emphasis added).]
Thus, the crux of the question presented here is whether, under the facts presented, it can be shown that the police actually concealed the fact that defendant had counsel available to him and that counsel was at his disposal. Id. To answer this question, we must first scrutinize the relationship between defendant and Blanchard. In Grace v Center for Auto Safety, 72 F3d 1236, 1242 (CA 6, 1996), the United States Court of Appeals for the Sixth Circuit stated that whether an attorney-client relationship exists focuses on a client’s subjective belief that he or she is consulting the attorney in his or her professional capacity and the client’s intent to seek the attorney’s professional legal advice. Here, contrary to the trial court’s determination, the record contains a plethora of evidence that demonstrates that an attorney-client relationship between defendant and Blanchard existed before defendant’s statements to Angus.
Blanchard testified that in the early part of February, he and defendant “had discussed him retaining me but it hadn’t been finalized” because Blanchard had not been paid. They had many conversations. Blanchard’s cell phone records showed over 20 phone calls between defendant and him from February 21 to February 26, 2009. When Blanchard became aware of information about Crime Stoppers, he and defendant “had a conversation and I told him that he should turn himself in and subsequent to that he said okay, see what they, you know, want to do and so I called the local Crime Stoppers number.”
Blanchard called the local Crime Stoppers phone number on February 20, at 4:48 p.m. The call went to Officer Jermaine Reese’s voice mailbox. Blanchard left a message that he was an attorney and Reese should contact him about “my bringing Mr. Crockran.” Blanchard agreed that the message stated, “I was Mr. Crockran’s attorney. I requested a call back so that I could arrange for his surrender.” Reese testified that he received a voicemail message on the Crime Stoppers phone line from Blanchard stating that he believed that defendant had been on Crime Stoppers, that Angus was in charge of the case, and requesting a return phone call.
On February 26, 2009, at 10:34 a.m., defendant called Blanchard and said that the police were downstairs at defendant’s house. Blanchard advised defendant to go downstairs, peacefully turn himself in, hand the cell phone to the police officer, and say that Blanchard wanted to speak with him. Before Blanchard could speak to the police, the phone went dead. The call lasted approximately two minutes. Blanchard called one of defendant’s family members and reported that defendant had been arrested and “that the terms of the agreement need to be finalized.” A family member “made the arrangements” and Blanchard received the initial funds in Flint between 11:00 a.m. and noon. When Blanchard was asked when he was “retained on this matter,” he responded, “Well, the terms were discussed sometime the 22nd/23rd of February. When did I actually receive money? It was . . . between eleven and twelve on the 26th of February.”
Without a doubt, defendant demonstrated a subjective intent to consult Blanchard in his professional capacity and seek legal advice about his alleged involvement in this matter before his arrest. The record shows that defendant and Blanchard had more than 20 contacts in less than one week immediately preceding his arrest. The record is plain that Blanchard advised defendant with regard to the Crime Stoppers issue and even called the Crime Stoppers’ phone number indicating that he was in a position to bring defendant in to the police to surrender and face the charges.
Further, the record is plain that defendant demonstrated a subjective intent to consult Blanchard in his professional capacity and seek legal advice about his alleged involvement in this matter both at the exact time of his arrest and following his arrest. Defendant testified that when he became aware of the fact that the police were present and wanted to take him into custody on February 26, 2009, he called Blanchard. Blanchard told defendant that he wanted to speak with the police. According to defendant, he had a phone in his hand while he was going down the stairs to tell the police that Blanchard wanted to speak with them, but when he got to the end of the stairs, the arresting officer threw defendant on the floor, grabbed the phone, and hung it up. Defendant’s testimony indicates that he repeatedly referred to “my” lawyer when he spoke to the police.
Q. Did you mention to the police officers the reason you had the phone in your hand?
A. Yes, I did. I told ’em my lawyer was on the phone.
Q. And that was before you were taken into custody?
A. Yes, sir.
Defendant further testified that after the police placed him in the back of a vehicle, he asked an officer standing nearby if he could call his attorney. The officer told defendant to wait until Angus came out of the house. Defendant stated that when Angus came outside, defendant asked him if he could call his lawyer, but Angus did not respond. They went across the street to buy gas. Defendant “asked him again can I see my— can I talk to my lawyer?”
Under the facts presented at the evidentiary hearing by both defendant and Blanchard, we conclude that an attorney-client relationship existed pursuant to the test set out in Grace, 72 F3d at 1242. The trial court clearly erred when it found that Blanchard was not defendant’s lawyer because he had not been paid and used this faulty analysis in its determination about the existence of an attorney-client relationship between defendant and Blanchard. While payment for services is important to the determination whether an attorney had been retained, it is but one consideration in whether an attorney-client relationship existed. And here, where voluminous evidence shows an attorney-client relationship, it overwhelms the fact that defendant had not paid Blanchard for his services before his arrest.
Because the facts indicate that defendant and Blachard had an established attorney-client relationship as shown by their conduct during the week leading up to defendant’s arrest as well as at the time of his arrest, there is no doubt that defendant was aware that he had counsel immediately following his arrest during transport and in the hours following his arrest at the police station. Again, defendant was actually speaking to his counsel at the time the police took him into custody. At that time his counsel explicitly told defendant that he wanted to speak with the police. Defendant even relayed that message to the arresting officer. However, during the arrest the phone went dead and the arresting officer did not speak to defendant’s counsel. Defendant certainly knew that his counsel wanted to talk to the police and knew that that did not happen. Under these circumstances we cannot see how it could be shown that the police concealed the fact that defendant had counsel available to him and that counsel was at his disposal. Bender, 452 Mich at 621 (opinion by BRICKLEY, J.). Defendant was clearly aware that he had counsel and that his counsel wanted to speak to the police. That Blanchard repeatedly called the police station after defendant’s arrest but never reached defendant or Angus is of no consequence to our determination because defendant already knew that he had counsel and that his counsel was available to him. Id. In fact, defendant testified that later in the day at the police station Angus came to his holding cell just before the interview. Angus asked defendant to come with him, and defendant “asked him where we going? And he said we come to talk to you.” According to defendant, defendant asked him again if he could have his lawyer, stating, “I need my lawyer.” Defendant testified that Angus did not respond and took him to the interview room next door. This is further evidence that defendant was aware that counsel was available to him and that counsel was at his disposal. Id. Under these facts, we conclude that there has been no violation of Bender and suppression was not warranted.
While not explicitly raised, under these circumstances, we are compelled to point out that once the Sixth Amendment right to counsel has attached a defendant may still validly waive that right to counsel even if the interrogation was initiated by the police. Montejo v Louisiana, 556 US 778; 129 S Ct 2079; 173 L Ed 2d 955 (2009). Montejo reflects a recent change in the law. Previously, in Michigan v Jackson, 475 US 625; 106 S Ct 1404; 89 L Ed 2d 631 (1986), overruled by Montejo, 556 US at 797, the United States Supreme Court held that once the Sixth Amendment right to counsel attached, a defendant could not validly waive that right to counsel in custodial interrogation initiated by the police. Jackson, 475 US at 636. The holding in Jackson was expressly overruled in Montejo. Montejo, 556 US at 797. The United States Supreme Court held that the right to counsel may be validly waived in custodial interrogation after the Sixth Amendment right to counsel has attached, even if the interrogation was initiated by the police. Id. at 794-796.
Defendant admitted that he received his Miranda rights and understood them before the interrogation. According to defendant, during the interview, he asked Angus if he knew Blanchard and if defendant needed him. Defendant testified that Angus told him that if he “lawyered up,” it would be “a problem.” Defendant also testified that he told Angus that at the time of his arrest, he was on the phone with Blanchard. Defendant agreed that he was willing to talk to Angus and tell him his side of what happened. Defendant asked Angus if he needed a lawyer, but never said he wanted to stop talking to Angus and wanted an attorney. Angus videotaped the entire two-hour conversation. Angus testified that defendant did not say that he wanted an attorney present and said that he would talk without an attorney present. After reviewing the record, we see no error with this police-initiated interrogation. Montejo, 556 US at 794-796.
Reversed, vacated, and remanded. This opinion shall have immediate effect pursuant to MCR 7.215(F)(2). We do not retain jurisdiction.
WILDER, RJ., and Saad and DONOFRIO, JJ., concurred.
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PER CURIAM.
A jury convicted defendant of child sexually abusive activity, MCL 750.145c(2), and using a computer to commit that offense, MCL 750.145d(l)(a), punishable under MCL 750.145d(2)(f). The trial court sentenced him to 30 months’ to 20 years’ imprisonment for each conviction, to be served concurrently.
I. BASIC FACTS
Defendant is a resident of Portland, Indiana. In a website chat room, defendant, identifying himself as “steelmanoo,” began to communicate with Nancy Popham, an Ohio resident, who identified herself as “carriebear_94.” Popham is a member of Perverted Justice, a group dedicated to identifying Internet “predators.” When defendant contacted Popham, she asked his “asi” (age, sex, and location), and defendant responded “lol [laugh out loud] 57/m[male]/Indiana.” Popham responded, “lol im 14 f [female] mi [Michigan].” Defendant wrote that he had looked at the profile for carriebear_94 and that she was “cute.” The profile for carriebear_94 indicated that she was a 14-year-old girl. Although the website expressly barred persons under 18 from entering the chat room, the website did not have an age-verification program.
Defendant soon steered the discussion toward sexual activity, and for over a one-month period, defendant on a daily basis broached topics including engagement in oral sex, group sex, and bestiality. At trial, defendant maintained that he did not believe Popham was 14 and asserted that he was merely role-playing with an adult. In any event, defendant and Popham soon discussed plans to meet in person. Defendant wrote to Popham that he wanted to meet her in a public place because “there are times guys are set up to pick up young ladys and i want to have a good time up there and not end up in jail.” Defendant and Popham eventually agreed to camping one weekend when Pophams’s “mother” was out of town, and defendant made online reservations for a campsite near Grand Rapids. Around the time they were discussing the camping trip, Popham told defendant that she liked to drink Mike’s Hard Lemonade, but “you wouldn t get that for me cauz its alcohol.” Defendant responded that he would not know what any beverage was if it were in a glass.
On October 16, 2008, Popham provided defendant her “address” at which defendant could pick her up to go camping, and defendant indicated that he was leaving his home at 11:30 a.m. Popham requested another member of Perverted Justice, Valentina Cardinas, to call defendant and pose as a 14-year-old girl. Cardinas called defendant four times and spoke with him three times. During one phone call, defendant told Cardinas that he was near Grand Rapids and asked for directions. Cardinas offered to obtain a Google map and indicated that she would call him back in five minutes. Cardinas again called defendant and he was still lost, but eventually he located the address Popham had provided. Defendant asked Cardinas if there was a red car in the driveway, and she answered that she would be right out. The police then arrested defendant at the house. During a police interview, defendant claimed that he planned to camp, fish, and have fun, not to have sex. A police search of defendant’s vehicle revealed a six-pack of Mike’s Hard Lemonade and a bottle of bourbon.
II. TERRITORIAL JURISDICTION
A. STANDARD OF REVIEW
We review de novo issues of law and statutory interpretation. People v McCuller, 479 Mich 672, 681; 739 NW2d 563 (2007).
B. ANALYSIS
In People v Gayheart, this Court noted that
until 2002, the common-law rule in Michigan, which drew heavily on the United States Supreme Court’s decision in Strassheim [v Daily, 221 US 280, 285; 31 S Ct 558; 55 L Ed 735 (1911)], was that the state could not exercise territorial jurisdiction over criminal conduct committed in another state unless that conduct was intended to have, and did in fact have, “a detrimental effect within the state.” [People v Gayheart, 285 Mich App 202, 208; 776 NW2d 330 (2009), quoting People v Blume, 443 Mich 476, 477; 505 NW2d 843 (1993).]
In 2002, however, the Legislature enacted MCL 762.2, which provides:
(1) A person may be prosecuted for a criminal offense he or she commits while he or she is physically located within this state or outside of this state if any of the following circumstances exist:
(a) He or she commits a criminal offense wholly or partly within this state.
(b) His or her conduct constitutes an attempt to commit a criminal offense within this state.
(c) His or her conduct constitutes a conspiracy to commit a criminal offense within this state and an act in furtherance of the conspiracy is committed within this state by the offender, or at his or her instigation, or by another member of the conspiracy.
(d) A victim of the offense or an employee or agent of a governmental unit posing as a victim resides in this state or is located in this state at the time the criminal offense is committed.
(e) The criminal offense produces substantial and detrimental effects within this state.
(2) A criminal offense is considered under subsection (1) to be committed partly within this state if any of the following apply:
(a) An act constituting an element of the criminal offense is committed within this state.
(b) The result or consequences of an act constituting an element of the criminal offense occur within this state.
(c) The criminal offense produces consequences that have a materially harmful impact upon the system of government or the community welfare of this state, or results in persons within this state being defrauded or otherwise harmed.
“The language of MCL 762.2 has broadened the scope of Michigan’s territorial jurisdiction over criminal matters, significantly expanding upon the common-law rule . . . .” Gayheart, 285 Mich App at 209. “Michigan now has statutory territorial jurisdiction over any crime where any act constituting an element of the crime is committed within Michigan even if there is no indication that the accused actually intended the detrimental effects of the offense to be felt in this state.” Id. at 209-210 (quotation marks and citation omitted).
Gayheart also explained that, in applying MCL 762.2, the trial court must initially decide, in its role as a gatekeeper, “whether the facts to be offered by the prosecution, if proven, would be legally adequate to confer jurisdiction.” Id. at 211. Along these lines, defendant argues on appeal that the prosecution presented insufficient record evidence to support a criminal prosecution under MCL 762.2. Defendant specifically argues that, in regard to the offenses, there was “[n]o [ejvidence of Partial Commission,” “[n]o Evidence of Michigan Attempt or Conspiracy,” “[n]o qualifying ‘Victim,’ ” and “[n]o Production of Substantial and Detrimental Effects.”
MCL 750.145c(2) provides, in part that
[a] person who persuades, induces, entices, coerces, causes, or knowingly allows a child to engage in a child sexually abusive activity for the purpose of producing any child sexually abusive material, or a person who arranges for, produces, makes, or finances, or a person who attempts or prepares or conspires to arrange for, produce, make, or finance any child sexually abusive activity or child sexually abusive material is guilty of a felony ....
The prosecution charged defendant with attempting, preparing, or conspiring to arrange for child sexually abusive activity.
We conclude that the facts offered by the prosecution and proved to the jury were clearly adequate to confer jurisdiction. We also conclude that the prosecution presented more than sufficient evidence to allow a rational jury to conclude that defendant prepared and attempted to commit child sexually abusive activity and that defendant used a computer and the Internet to commit this crime. With respect to a criminal offense, the word “preparation” “ ‘consists in devising or arranging means or measures necessary for its commission, while attempt is direct movement toward commission after preparations are made.’ ” People v Thousand, 241 Mich App 102, 115; 614 NW2d 674 (2000), rev’d in part on other grounds 465 Mich 149 (2001), quoting Black’s Law Dictionary (5th ed). Defendant claims that “the only possible attempt here would have to be an attempt to commit the crime of preparing to arrange [, as] . . . those preparations and arrangements, were made in Indiana, not in Michigan.” Defendant’s argument is misplaced. Defendant admits that while in Indiana he used his computer to commit child sexually abusive activity. Defendant, however, fails to acknowledge he also prepared to commit child sexually abusive activity while in Michigan, not Indiana. MCL 762.2(2) (a) provides that Michigan has jurisdiction over any crime in which any act constituting an element of the crime is committed within Michigan. MCL 750.145c(2) “ ‘does not actually require conduct involving a minor., Rather, it only requires that the defendant prepare to arrange for child sexually abusive activity. The statute does not require that those preparations actually proceed to the point of involving a child.’ ” People v Adkins, 272 Mich App 37, 46; 724 NW2d 710 (2006), quoting Thousand, 241 Mich App at 117 (emphasis omitted). There is evidence that defendant acted consistently with the preparations he had made to commit child sexually abusive activity. He drove into Michigan to a location where he intended to meet a child whom he believed to be under the age of 18. There is substantial evidence that he intended to take a girl under the age of 18 to a reserved campsite and engage in behavior wrongful under MCL 750.145c(2). Since preparation to arrange for child sexually abusive activity is an element of MCL 750.145c(2), we reject defendant’s contention that Michigan lacked territorial jurisdiction for his prosecution under MCL 762.2.
With regard to defendant’s conviction for violating MCL 750.145d(l)(a), defendant asserts that the evidence of territorial jurisdiction is even more lacking because preparation using the Internet is required. Defendant contends that because all of his computer activity took place in his home in Indiana, the police never recovered a laptop or smart phone from his vehicle in Michigan, and defendant engaged in no online discussions with carriebear_94 on the date he drove into Michigan, Michigan did not have territorial jurisdiction over him as it related to the charge of using the Internet to commit child sexually abusive activity. But defendant ignores MCL 750.145d(6), which provides: “A violation or attempted violation of this section occurs if the communication originates in this state, is intended to terminate in this state, or is intended to terminate with a person who is in this state.”
While defendant’s Internet communication originated in Indiana, not Michigan, the communication was intended to terminate in Michigan. Defendant viewed the profile information associated with the moniker “carriebear_94” indicating that she was from Michigan. During their initial chat, carriebear_94 informed defendant that she was from Michigan. During a time when defendant believed that carriebear_94’s mother would be out of town, defendant informed carriebear_94 that he would come to Michigan to meet her and have fun. Defendant reserved a campsite for them in Michigan. Defendant stocked his truck with alcohol and drove to Michigan where he then went to carriebear_94’s house for the purpose of picking her up to engage in prohibited acts in Michigan, the intended result of the Internet communications. The record evidence supports the fact that although the Internet communications originated elsewhere, defendant clearly intended them to terminate in Michigan. MCL 750.145d(6). Because there is no doubt that defendant intended that his Internet communications terminate in Michigan, MCL 750.145d(6), we also reject defendant’s contention that Michigan lacked territorial jurisdiction under MCL 762.2 to prosecute defendant for his violation of MCL 750.145d(l)(a).
III. INEFFECTIVE ASSISTANCE OF COUNSEL
A. STANDARD OF REVIEW
There was no hearing in the trial court, and this Court’s review of the issue is limited to the existing record. People v Ginther, 390 Mich 436, 443; 212 NW2d 922 (1973); People v Wilson, 242 Mich App 350, 352; 619 NW2d 413 (2000). The questions presented by a claim of ineffective assistance of counsel are mixed questions of law and fact; findings of fact by the lower court are reviewed for clear error, and questions of constitutional law are reviewed de novo. People v LeBlanc, 465 Mich 575, 579; 640 NW2d 246 (2002).
B. ANALYSIS
To establish ineffective assistance of counsel, a defendant must show that (1) counsel’s performance was below an objective standard of reasonableness under prevailing professional norms, (2) there is a reasonable probability that, but for counsel’s error, the result of the proceedings would have been different, and (3) the resultant proceedings were fundamentally unfair or unreliable. People v Toma, 462 Mich 281, 302-303; 613 NW2d 694 (2000). “Effective assistance of counsel is presumed, and the defendant bears a heavy burden of proving otherwise.” People v Solmonson, 261 Mich App 657, 663; 683 NW2d 761 (2004).
Defendant argues that his trial counsel was ineffective by failing to present to the jury the factual question whether Michigan had territorial jurisdiction. As stated in Gayheart, 285 Mich App at 211-212,
assuming that the exact location of a boundary line is not at issue in the case, the trier of fact must next determine as a factual matter whether the alleged act, consequence, or other condition that would confer territorial jurisdiction under MCL 762.2 did in fact occur within the state of Michigan. The clear majority rule in this country is to require the trier of fact to find beyond a reasonable doubt that the alleged act, consequence, or other condition that would confer jurisdiction has in fact occurred within the territorial jurisdiction of the court when the matter is placed in issue.
Defendant supports his argument by noting that the jury, while deliberating, asked, “What constitutes a crime in this case to be tried in Kent County?” and “Why specifically is this case being tried in Kent County?” Contrary to defendant’s claim, we find that only the second question relates to territorial jurisdiction. The trial court stated:
The second question I answered as follows, and this will be made part of the record. “This question appears to address the issue of venue. You must be satisfied that at least some of the activity involved in each count you are considering took place in Kent County for there to be venue in Kent County. Why a case is being tried somewhere is not an element of the offense and is not something you need to consider.”
The trial court asked if either counsel wished to “amplify the record,” and both replied, “[n]o, your honor.”
Initially we conclude that the trial court’s instruction likely satisfied Gayheart’s requirement that the trier of fact determine whether MCL 762.2 was satisfied. The trial court expressly required that the juiy “be satisfied that at least some of the activity involved in each count you are considering took place in Kent County....” This instruction essentially enabled the jury to acquit defendant had it accepted defense counsel’s claim at trial that no criminal activity occurred in Kent County. Thus, we are not convinced that the trial court failed to adequately instruct the jury in regard to territorial jurisdiction under MCL 762.2. Likewise, we are not convinced that there was a reasonable probability that the result of the proceeding would have been different had the jury been instructed on every circumstance allowing criminal prosecutions under MCL 762.2. As in Gayheart, we conclude that “sufficient evidence [was] presented at trial from which a rational jury could have found beyond a reasonable doubt that defendant committed at least one essential element” of preparing to engage in child sexually abusive activity and using a computer to do so and reversal is not required. See Gayheart, 285 Mich App at 219. Accordingly, defendant is not entitled to relief on the basis of his claim of ineffective assistance of counsel.
We also reject defendant’s argument that venue was improper in Kent County because the “alleged ‘essential acts’ took place in Indiana.” This argument simply reiterates defendant’s territorial-jurisdiction argument. Further, defendant fails to articulate any strategic reason that the trial should have been conducted in Ottawa County rather than Kent County. “The decision whether or not to move for a change of venue constitutes a matter of trial strategy.” People v Anderson, 112 Mich App 640, 646; 317 NW2d 205 (1981). Last, defendant has not presented or articulated any prejudice arising from the failure to conduct the trial in Ottawa County rather than Kent County. Thus, there is no evidence that the result of the proceedings would have been different. See also People v Houthoofd, 487 Mich 568, 593-594; 790 NW2d 315 (2010) (noting that a venue error is not a constitutional structural error, that the matter is subject to a harmless error analysis under MCL 769.26, and that MCL 600.1645 explicitly provides that no judgment shall be voided solely on the basis of improper venue). Accordingly, defendant has failed to overcome the heavy burden for establishing ineffective assistance of counsel. Solmonson, 261 Mich App at 663.
IV OPPORTUNITY TO PRESENT A DEFENSE
A. STANDARD OF REVIEW
Questions of law are reviewed de novo. Brown v Loveman, 260 Mich App 576, 591; 680 NW2d 432 (2004).
B. ANALYSIS
“Under the Due Process Clause of the Fourteenth Amendment[ ] criminal prosecutions must comport with prevailing notions of fundamental fairness. We have long interpreted this standard of fairness to require that criminal defendants be afforded a meaningful opportunity to present a complete defense.” California v Trombetta, 467 US 479, 485; 104 S Ct 2528; 81 L Ed 2d 413 (1984).
Defendant argues that the trial court improperly denied his claim of an affirmative defense that the “victim” in this instant case was actually an adult. Defendant notes that in 2002 PA 629, the Legislature amended MCL 750.145c to provide an affirmative defense if the alleged child is a person who is emancipated by law under MCL 722.4. MCL 750.145c(6). Defendant specifically argues that the trial court denied him the right to present a defense when it precluded him from establishing that the alleged child-victim was actually more than one adult. We disagree.
“An affirmative defense is one that admits the doing of the act charged, but seeks to justify, excuse or mitigate it. . . .” People v Mette, 243 Mich App 318, 328; 621 NW2d 713 (2000) (citations and quotation marks omitted). “An affirmative defense does not negate selected elements or facts of the crime.” Id. at 329 (citations and quotation marks omitted). MCL 750.145c(2) requires that the prosecution establish that the “person knows, has reason to know, or should reasonably be expected to know that the child is a child ... or that person has not taken reasonable precautions to determine the age of the child.” MCL 750.145c(2). Defendant does not concede this element of the offense, but maintains that he was communicating with an adult. Thus, defendant is not entitled to assert an affirmative defense. Mette, 243 Mich App at 328-329. Further, defendant interprets MCL 750.145c(6) far too broadly. Reading MCL 750.145c in its entirety, it is clear the Legislature only intended to provide an affirmative defense to those persons who at least believed that the alleged child they intended to engage in sexual activity was younger than 18 and emancipated. Defendant did not seek to admit evidence that the “alleged child” was under 18 years and emancipated. Rather, defendant sought to establish only that the “alleged child” was over the age of 18. Accordingly, defendant did not seek to establish the affirmative defense afforded by the Legislature under MCL 750.145c(6).
We affirm.
MARKEY, EJ., and D0N0FRI0, J., concurred.
ZAHRA, J., did not participate because he was appointed to the Michigan Supreme Court, effective January 14, 2011, before the release of this opinion.
Both parties employed this descriptive term in their briefs on appeal.
Also, MCL 767.45(l)(c) provides in relevant part that “[n]o verdict shall be set aside or a new trial granted by reason of failure to prove that the offense was committed in the county or within the jurisdiction of the court unless the accused raises the issue before the case is submitted to the jury.” There was no mention here that the offense was not committed in the court’s jurisdiction, and review is likely limited to plain error affecting defendant’s substantial rights. People v Carines, 460 Mich 750, 764; 597 NW2d 130 (1999).
In regard to the first question, which does not address territorial jurisdiction, the trial court answered:
As to the first question, the defendant is charged with soliciting, conspiring to commit an offense under the law. Either an actual person below the age of 18 must have been involved or the defendant must have believed someone below the age of 18 was involved. To put it another way, either the person who communicated [as] Carrie Bearie 94 was under the age of 18 or the defendant believed the person was under the age of 18. The burden of demonstrating this, as is the case for all elements of the offenses charged on the government, must be shown beyond a reasonable doubt.
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RONAYNE Krause, J.
LaToya Felicia Wheeler, as personal representative of the estate of Domonique Daquan Wheeler, deceased, appeals as of right the order granting defendant’s motion for summary disposition of plaintiffs claims alleging wrongful death, nuisance, and loss of consortium. We affirm.
This case arises from the tragic drowning death of five year old Domonique Wheeler. On the night of Domonique’s death, his mother, LaToya Wheeler, took Domonique and five other children, including her infant son, to defendant’s Comfort Inn hotel to celebrate Domonique’s sixth birthday, which was the next day. The group checked into two adjoining rooms and swam in the hotel’s pool before they took a short break to eat pizza. LaToya had become overwhelmed by watching the children, and she contacted various cousins and friends in an attempt to summon help. Unfortunately, no one else arrived.
The pool was three feet deep at its shallowest point and sloped down to five feet in the middle. The hotel had no staff monitoring the pool area, but signs prominently stated that there was no lifeguard present. Because none of the children was more than five feet tall and only two could actually swim, LaToya instructed the children to stay in the shallow areas of the pool and not go into the middle where the pool was its deepest. There were no ropes or floatation devices strung across the pool, but LaToya did state that she saw a “flotation doughnut with a rope on it” somewhere in the pool area.
While the older children swam, LaToya remained on the pool deck, watching her infant son. Despite doing her best to watch both her baby and the older children in the water, at some point LaToya lost sight of Domonique. When LaToya’s attention was brought back to the pool, she discovered her son lying on the bottom, near the five-foot-deep area. LaToya did not see Domonique move to the deeper area of the pool nor did she see him struggling or having a difficult time staying afloat.
Upon realizing that Domonique was in trouble, LaToya began to scream for help and one of the other children pulled Domonique from the water. Domonique had been underwater from anywhere between one and five minutes, according to the emergency medical services records and an autopsy report, and was not breathing when he was pulled from the pool. Someone, most likely a guest of the hotel, tried to revive him through CPR. By this time the hotel’s front-desk personnel had been alerted and 911 had been called. Comfort Inn’s desk manager attempted to use the hotel’s automated external defibrillator machine on Domonique, but neither she nor anyone else at the hotel that evening knew how to operate it. When ambulance personnel arrived they also attempted to resuscitate Domonique, but they were unsuccessful.
The Ingham County Health Department conducted an inspection of defendant’s swimming pool in response to Domonique’s death. The report found that the pool and the pool area were mostly in compliance, including properly posted depth markers, properly posted signage warning that there was no lifeguard, and proper other safety equipment on hand. The report found a few minor concerns (such as the need to add a drinking fountain), but it notably ordered defendant to “install lifelines as required.” However, because the water did not exceed five feet in depth, lifelines were not actually required, Mich Admin Code, R 325.2132(10), and the inspectors confirmed that the order to install lifelines should not have been in the report. The inspectors also confirmed that no lifeguard was required at defendant’s pool and that the pool did have proper “no lifeguard on duty” signage.
LaToya, as the personal representative of Domonique’s estate, filed claims against defendant Central Michigan Inns, Inc., the owner of the Comfort Inn where Domonique drowned, including wrongful death, nuisance, and loss of consortium. Defendant moved for summary disposition, arguing that it had no duty to protect Domonique because the pool was an open and obvious danger. The trial court agreed and granted summary disposition in defendant’s favor. Plaintiff moved for reconsideration, arguing that the wrongful-death claim was premised on a negligence theory, not a premises-liability theory, and that the open and obvious danger doctrine therefore did not apply. The trial court granted reconsideration on that basis. Defendant again moved for summary disposition, arguing that it had no duty to supervise Domonique under the circumstances. The trial court agreed and again granted summary disposition in defendant’s favor. Plaintiff now appeals.
This Court reviews a trial court’s grant or denial of summary disposition de novo. Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). A motion under MCR 2.116(0(10) tests the factual sufficiency of the complaint. Maiden, 461 Mich at 120. When reviewing a motion under MCR 2.116(0(10), the Court considers all the evidence submitted by the parties in the light most favorable to the nonmoving party. Maiden, 461 Mich at 120. Summary disposition will be granted only where the evidence fails to establish a genuine issue regarding any material fact. Id.
Plaintiff argues, correctly, that the open and obvious danger doctrine does not apply to ordinary negligence claims and landowners owe a duty to exercise reasonable care to protect children from dangerous conditions on their premises notwithstanding the presence of the children’s parents. Woodman v Kera, LLC, 280 Mich App 125, 154; 760 NW2d 641 (2008) (opinion by TALBOT, J.). However, although “[ljandowners owe minor invitees the highest duty of care,” this duty arises in the context of premises liability claims only. Id., citing Bragan v Symanzik, 263 Mich App 324, 335; 687 NW2d 881 (2004). Woodman stated that such a duty pertains to a premises-liability claim, and not a negligence claim. Woodman, 280 Mich App at 154. Terms such as “premises possessor” and “dangerous condition on the land” relate to the elements of a premises liability, rather than ordinary negligence, claim. Because plaintiff herself stated that her cause of action sounded in ordinary negligence, rather than premises liability, the portions of Woodman on which she relied are irrelevant. “A party may not take a position in the trial court and subsequently seek redress in an appellate court that is based on a position contrary to that taken in the trial court.” Holmes v Holmes, 281 Mich App 575, 587-588; 760 NW2d 300 (2008) (quotation marks and citation omitted).
The trial court correctly recognized that property owners generally owe no duty to supervise minor children of guests on their property. In Bradford v Feeback, 149 Mich App 67; 385 NW2d 729 (1986), the plaintiffs’ minor child had been injured while playing on the defendants’ property. While Bradford was mostly a premises-liability case, the plaintiffs argued, among other things, that the “defendants had a duty to supervise and control the children of guests invited onto the property.” Id. at 71. This Court disagreed, explaining that “as a matter of public policy, property owners should not be charged with the duty of supervising and controlling children of guests who have been invited onto the property.” Id. at 71-72. Public policy would be further contravened if defendant businesses like the Comfort Inn who operate their pools in compliance with all relevant rules and regulations were required to have staff present to supervise and control minor guests on their premises.
The trial court also properly relied on Stopczynski v Woodcox, 258 Mich App 226; 671 NW2d 119 (2003), which adopted and explained the dissenting opinion in Pigeon v Radloff, 215 Mich App 438; 546 NW2d 655 (1996), lv den and ordered to have no precedential force or effect 451 Mich 885 (1996). Like the case here, Stopczynski involved a wrongful-death claim based on the decedent’s drowning death in the defendant’s pool. The plaintiff brought a negligence claim, arguing that the defendant had a duty to protect and supervise the decedent while she used the pool because of her status as a guest and a minor. This Court held that defendant landowners have an affirmative duty to supervise minor guests only when a minor guest is unaccompanied by a parent and the defendant has voluntarily assumed a duty to supervise the child. Stopczynski at 236, quoting Pigeon at 448-450 (SAWYER, EJ., dissenting). Domonique was accompanied by his mother and she was present to supervise him at all times on the day in question, and defendant did nothing to indicate that it had voluntarily assumed a duty to protect and watch Domonique.
This Court has mentioned that recreational facilities “may” have a duty to supervise children simply because of their age. Dillon v Keatington Racquetball Club, 151 Mich App 138, 142; 390 NW2d 212 (1986). However, this Court mentioned that possibility as only being a possibility, and moreover it did so in dicta. In a much earlier case, a panel of this Court indicated that whether the owners of a trailer park had a duty to provide a lifeguard or lifesaving equipment at a small lake on their property should be a question for the jury, and it discussed the concept of negligence. Kreiner v Yezdbick, 22 Mich App 581, 587; 177 NW2d 629 (1970). But, again critically, Kreiner discussed that duty in the context of the defendants’ duty to make their premises reasonably safe for their invitees, so while this Court did not say so explicitly, Kreiner appears to have also been a premises-liability case. Id. In further contrast to the case at bar, this Court recently imposed possible liability on a recreational organization, on a negligence theory, for failing to properly supervise cheerleaders, one of whom was allegedly injured as a result. Sherry v East Suburban Football League, 292 Mich App 23; 807 NW2d 859 (2011). Notably, the minors in Sherry were unaccompanied by their parents, and the defendants had assumed responsibility for supervising the minors.
Plaintiffs reliance on Woodman is misplaced because her case sounds in ordinary negligence and not premises liability. Defendant had no duty to supervise under the circumstances of this case. We need not consider defendant’s additional arguments
Affirmed.
K. F. Kelly, EJ., and M. J. Kelly, J., concurred with Ronayne Krause, J.
Because plaintiff has not presented any arguments on appeal pertaining to the trial court’s dismissal of her nuisance and loss-of-consortium claims, we likewise decline to discuss them.
Plaintiff did not provide pinpoint citations or other clear articulation of the specific reasoning in Woodman on which she relied. Our review revealed that the only plausibly applicable portions of Woodman discussed premises-liability concepts. Furthermore, that discussion is not binding on this Court because the two concurring opinions in Woodman did not explicitly agree with or discuss those legal principles. See People v Sexton, 458 Mich 43, 65; 580 NW2d 404 (1998).
This Court was free to adopt the reasoning in the dissent because our Supreme Court had ordered Pigeon to have no precedential force or effect. Stopczynski, 258 Mich App at 232. | [
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Per Curiam.
Plaintiff appeals as of right the parties’ divorce judgment. We affirm.
Plaintiff and defendant had been married for more than 40 years. During their marriage, they accumulated substantial assets together. Extensive discovery was conducted, and eventually the parties entered into a property-settlement agreement (PSA) on August 25, 2009. The PSA divided all the parties’ assets, including all retirement accounts. The value of defendant’s individual retirement account (IRA) was calculated using his February 2009 IRA statement, which had been disclosed during discovery. However, by the time the parties negotiated and signed the PSA in August, the value of the IRA had increased by nearly $1.4 million.
Thereafter, plaintiff moved to enter a divorce judgment consistent with the terms of the PSA. In plaintiffs proposed judgment, the following language appeared in the “Retirement Account” section:
An amount shall be transferred from [defendant’s] IRA to [plaintiffs] IRA such that, immediately upon such transfer, the amount remaining in [defendant’s] IRA will be equal to the sum of (i) the amount in [plaintiffs] IRA at the time immediately preceding the transfer plus (ii) the amount transferred from [defendant’s] IRA to [plaintiffs] IRA plus (iii) $307,955.
The effect of this language would have been that the increase in the value of defendant’s IRA was taken into account for the property settlement. Defendant opposed the inclusion of this language and argued that plaintiff was not entitled to share in the increase in his IRA. This provision was not included in the final judgment.
Included in the PSA was a full-disclosure provision. Although the disclosure provision was not spelled out at length in the PSA, it was spelled out in the divorce judgment, which each party signed. Plaintiff argued that the full-disclosure provision required defendant to have informed plaintiff of the increase in value of the IRA.
The trial court concluded that defendant had no duty to disclose the increase in value of the IRA. The court reasoned that defendant had provided plaintiff with a copy of the February 2009 IRA statement and plaintiff could have calculated the present value by applying current market values to the stocks listed in the IRA. The court also found that the PSA could not be adjusted to take into account the increase in the value of the IRA because the parties had used fixed dollar amounts when they negotiated the division of the retirement accounts.
On appeal, plaintiff argues that because each party, under the retirement-accounts section of the PSA, was awarded half the total value of the retirement accounts and the value of defendant’s IRA rose, she is entitled to share in the increase in value.
We review this issue de novo. See MacInnes v MacInnes, 260 Mich App 280, 283; 677 NW2d 889 (2004). When a court interprets a contract, the entire contract must be read and construed as a whole. Duval v Aetna Cas & Surety Co, 304 Mich 397, 401; 8 NW2d 112 (1943). All the parts must be harmonized as much as possible, and each word of the contract must be given effect, if possible. Id. Also, courts may not change or rewrite plain and unambiguous language in a contract under the guise of interpretation because “the parties must live by the words of their agreement.” Harbor Park Market, Inc v Gronda, 277 Mich App 126, 130-131; 743 NW2d 585 (2007).
Property-settlement agreements are, as a general rule, final and cannot be modified. Zeer v Zeer, 179 Mich App 622, 624; 446 NW2d 328 (1989). It is well settled that property-settlement agreements are enforceable and that a court is bound by the terms of the agreement in the absence of fraud, duress, mutual mistake, or severe stress that prevented a party from understanding in a reasonable manner the nature and effect of the act in which he or she was engaged. Keyser v Keyser, 182 Mich App 268, 269-270; 451 NW2d 587 (1990). Parol evidence is generally not admissible to vary or contradict the terms of a clear and unambiguous contract. Hamade v Sunoco, Inc (R & M), 271 Mich App 145, 166-167; 721 NW2d 233 (2006).
The terms in the retirement-accounts section of the PSA were clear. The parties used fixed values for all the retirement accounts. Defendant was to retain his IRA, and plaintiff was to retain all other retirement accounts. To equalize the value each was receiving, defen dant was required to transfer approximately $1.4 million to plaintiff. Because the terms were unambiguous, the trial court was bound by them, Keyser, 182 Mich App at 269-270, and the parties were required to live up to the terms of their agreement, Harbor Park Market, 277 Mich App at 130-131.
Also, when looking at the PSA as a whole, there is no indication that the parties intended to take into account market fluctuations when dividing the retirement accounts. In the investment-property section, the PSA indicated that the investment accounts would be “divided evenly in kind,” which arguably took into account market fluctuations. There was no such language in the retirement-accounts section.
This case bears some similarities to Marshall v Marshall, 135 Mich App 702; 355 NW2d 661 (1984). In Marshall, the plaintiff owned 28 percent of the stock in a company. Id. at 704-705. Before the divorce, another company had entered into a purchase agreement for the stock. Id. at 705. The purchase agreement allowed for the stock price to be adjusted for certain factors. Id. As part of the property-settlement agreement, the plaintiff was awarded the stock. Id. at 704. In exchange, the plaintiff was required to pay the defendant $25,000 within 30 days of the down payment for the stock-purchase agreement and an additional $202,000. Id. at 705. The plaintiffs payment obligation was conditioned on the sale of the stock under the stock-purchase agreement. Id. at 705-706.
The sale went through; however, the price of the stock decreased. Id. at 706. Thus, the plaintiff received less than had originally been contemplated by the parties. Id. The plaintiff argued that the $25,000 and $202,000 payments should have been reduced in proportion to the decrease in stock price. Id. at 706, 709. The trial court agreed and modified the payment. Id. at 706, 710. The Court of Appeals, however, reversed. Id. at 711. The Court stated that the property-settlement agreement only conditioned payment on the sale of the stock, which did in fact occur. Id. 709. The Court noted that nothing in the property-settlement agreement addressed what would happen if the price of the stock decreased. Id. The Court also stated:
[T]he burden of presenting evidence to support reformation of the property settlement agreement was on the plaintiff who sought reformation. If the mistake is with respect to an extrinsic fact, reformation is not allowed even though the fact is one which probably would have caused the parties to make a different contract. The reason for this rule is that the court does not make a new contract for the parties.
In the instant case, the only mistake of the parties was with respect to the final purchase price of the stock. Because this information was extrinsic to the property settlement agreement, we do not grant reformation. Stated another way, there was no mistake as to the instrument actually entered into.
It must be assumed that the parties considered the risks of the property settlement agreement that they made, especially in light of testimony that the parties knew the purchase price of the stock could be adjusted. Therefore, we do not believe the trial court had the power to make a new contract for the parties by modifying the property settlement agreement. Hence, we hold the trial court’s finding of mutual mistake to be clearly erroneous. [Id. at 710-711.]
In the present case, the increase in value of the IRA was an extrinsic fact not contained in the agreement. There was no mistake regarding the agreement actually entered into. Therefore, the parties must be held to their agreement.
Moreover, there was no violation of a duty to disclose. The values of the retirement accounts were stated in fixed terms. It is well known that stocks fluctuate on a daily basis. The parties were free to fix the values of the accounts at any time. They could have fixed the value at the time the divorce complaint was filed or at the time the divorce judgment was entered. They could have expressly provided that the division of the retirement accounts was subject to modification for market fluctuations. However, they did not do any of this. They negotiated the PSA and established the value of all the accounts, including defendant’s IRA. Defendant’s IRA was calculated using his February 2009 account statement. Plaintiff had a copy of the statement and was capable of calculating the current market value of the stocks contained in the IRA. By way of her argument today, plaintiff essentially asks us to rewrite the agreement to her advantage, and we cannot do so. Harbor Park Market, 277 Mich App at 130-131.
Affirmed.
OWENS, PJ., and Mamey and Meter, JJ., concurred. | [
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SAAD, J.
Plaintiff appeals the trial court’s order that granted defendant’s motion to attach assets jointly owned by plaintiff and his current wife. Plaintiff also appeals the trial court’s spousal support income withholding order that withholds 50 percent of plaintiffs earnings. For the reasons set forth below, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
I. FACTS AND PROCEEDINGS
The parties were divorced pursuant to a judgment entered on September 13, 2005. The divorce judgment contained a provision setting child support and spousal support/alimony for a specified period. During the divorce proceedings, plaintiff acquired a home at 413 South Madison in Bay City, and the divorce judgment awarded the home to plaintiff. Plaintiff remarried in 2005 and, thereafter, recorded a quitclaim deed, deeding the South Madison house jointly to himself and his new wife.
When the divorce judgment was entered, plaintiff was the owner and operator of Bay County Abstract, Inc., which he was also awarded in the divorce judgment. As a result of a downturn in the housing market, Bay County Abstract ceased operations, plaintiff filed for Chapter 7 bankruptcy and stopped making alimony and child support payments. Defendant then moved to enforce the divorce judgment. The trial court entered orders on June 22, 2007, and September 25, 2007, ordering the release of funds from plaintiffs individual retirement accounts to pay child support and alimony that plaintiff owed defendant. Plaintiff remained delinquent in his payments to defendant, and she filed another motion to enforce the judgment. In an April 3, 2009, order, the trial court directed the liquidation of plaintiffs 401(k) account and ordered that the proceeds be paid to defendant. The court later issued a written opinion and lien ordering the attachment of the South Madison house in order to satisfy the divorce judgment. The court also ordered that 50 percent of plaintiffs current income be withheld to pay his spousal support obligation.
II. ANALYSIS
A. SOUTH MADISON HOME
Plaintiff argues that the trial court erred when it ordered the attachment of the South Madison home jointly owned by plaintiff and his new wife as tenants by the entirety in order to provide for payments to defendant as spousal support. As this Court explained in Reed v Reed, 265 Mich App 131, 150; 693 NW2d 825 (2005),
[i]n granting a divorce judgment, the trial court must make findings of fact and dispositional rulings. Sands v Sands, 442 Mich 30, 34; 497 NW2d 493 (1993). The trial court’s factual findings will not be reversed unless they are clearly erroneous, i.e., if this Court is left with the definite and firm conviction that a mistake has been made. Id.; Draggoo v Draggoo, 223 Mich App 415, 429; 566 NW2d 642 (1997). If this Court upholds the tried court’s findings of fact, it must then decide whether the dispositional ruling was fair and equitable in light of those facts. Sparks v Sparks, 440 Mich 141, 151-152; 485 NW2d 893 (1992). The trial court’s dispositional ruling is discretionary and will be affirmed unless this Court is left with the firm conviction that it was inequitable. Id. at 152; Draggoo, supra at 429-430.
This Court reviews de novo issues of statutory interpretation. Vyletel-Rivard v Rivard, 286 Mich App 13, 20; 777 NW2d 722 (2009). The goal of statutory interpretation is to give effect to the intent of the Legislature. Kuznar v Raksha Corp, 481 Mich 169, 176; 750 NW2d 121 (2008). If statutory language is unambiguous, the Legislature is presumed to have intended the plain meaning of the statute. Fleet Business Credit, LLC v Krapohl Ford Lincoln Mercury Co, 274 Mich App 584, 591; 735 NW2d 644 (2007). An unambiguous statute must be enforced as written. Fluor Enterprises, Inc v Dep’t of Treasury, 477 Mich 170, 174; 730 NW2d 722 (2007).
In ordering attachment of the South Madison house, the trial court relied on Wood v Savage, 2 Doug 316 (Mich, 1846), and held that “if a person is indebted at the time the transfer is made that asset remains available for use by [defendant] despite it being held as Tenants by the Entirety.” However, Wood predates the applicable statute, MCL 600.2807(1), which provides, “A judgment hen does not attach to an interest in real property owned as tenants by the entirety unless the underlying judgment is entered against both the husband and wife.” As this Court explained in Walters v Leech, 279 Mich App 707, 711-712; 761 NW2d 143 (2008),
[our] longstanding common law provides that, when a deed is conveyed to a husband and wife, the property is held as a tenancy by the entirety. Morgan v Cincinnati Ins Co, 411 Mich 267, 284; 307 NW2d 53 (1981) (opinion by Fitzgerald, J.). In a tenancy by the entirety, the husband and wife are considered one person in the law. Id. They cannot take the property in halves. Id. Rather, the property is seised by the entirety. Id. The consequence is that neither the husband nor the wife can dispose of the property without the assent of the other and the whole property must remain to the survivor. Id. Therefore, at the heart of a tenancy by the entirety is the right of survivorship, meaning that when one party dies, the other party automatically owns the whole property. 1 Cameron, Michigan Real Property Law (3d ed), § 9.14, p 328.
As a general proposition under the common law, property that is held as a tenancy by the entirety is not liable for the individual debts of either party. Id. at § 9.16, p 330; Rossman v Hutchinson, 289 Mich 577, 588; 286 NW 835 (1939) (stating that “[entireties property is liable to execution for joint debts of husband and wife”). Our Legislature codified this proposition with respect to judgment liens in MCL 600.2807. MCL 600.2807 became effective September 1, 2004, and provides that “[a] judgment lien does not attach to an interest in real property owned as tenants by the entirety unless the underlying judgment is entered against both the husband and wife.” MCL 600.2807(1).
Therefore, though Michigan law grants the trial court in a divorce case broad discretion to do equity regarding the disposition of property, within the outline of those factors articulated by our Supreme Court in Sparks v Sparks, 440 Mich 141, 159-160; 485 NW2d 893 (1992), Michigan’s Legislature made it clear in MCL 600.2807 that a judgment lien does not attach to property owned as tenants by the entirety unless the judgment is against both the husband and wife. The underlying judgment here is the divorce judgment, which was not entered against plaintiff and his current wife. Accordingly, even the broad discretion afforded the court to make dispositional rulings is circumscribed by the clear legislative mandate to protect property held as a tenancy by the entirety from lien attachments unless the underlying debt is the debt of both husband and wife. Therefore, the property here could not be attached by judgment lien to satisfy the divorce judgment, and we reverse the trial court’s order granting defendant’s motion on this issue.
B. INCOME WITHHOLDING
We affirm the trial court’s income withholding order in the amount of 50 percent of plaintiffs salary. Under the Federal Consumer Credit Protection Act, specifically 15 USC 1673(b), the federal limit on withholding is usually 50 percent of disposable income, but may be increased to as much as 65 percent. Though plaintiff may have experienced financial troubles that made it difficult for him to meet his obligations, he failed to comply with the court’s orders to pay child support or spousal support for a significant length of time and, therefore, we affirm the trial court’s order.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
Meter, EJ., and Wilder, J., concurred with Saad, J.
In light of this holding, we need not decide whether the amount of the hen was correct. | [
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Per Curiam.
These consolidated appeals arise from a fire that engulfed the home of plaintiffs insureds. In Docket No. 295232, plaintiff appeals by right the grant of summary disposition in favor of the defendants, utility companies. We affirm the summary disposition on the ground that plaintiff failed to present sufficient evidence to create an issue of cause in fact. In Docket No. 296102, defendants appeal by right the trial court’s determination that their motion for case evaluation sanctions was untimely. We reverse the trial court’s determination and remand for further consideration of the motion for case evaluation sanctions.
On the day of the fire at issue, plaintiffs insured saw smoke and heard a hissing noise near his home. He ran between the house and the garage and found the back of his house engulfed in flames. There was a ball of fire in the location of the gas meter. Plaintiffs experts subsequently opined that the fire originated outside of the house near the gas meter. In contrast, defendants’ investigator determined that the fire originated four or five feet west of the meter. Plaintiff sued defendants, alleging negligence and breach of contract claims. The trial court granted summary disposition in favor of defendants on both claims. Plaintiff moved for reconsideration, which the trial court denied. After the trial court denied the motion for reconsideration, defendants filed a motion for case evaluation sanctions under MCR 2.403(0). The trial court found the motion to be untimely.
I. SUMMARY DISPOSITION — DOCKET NO. 295232
This Court conducts a de novo review of the trial court’s decision on summary disposition. Latham v Barton Malow Co, 480 Mich 105, 111; 746 NW2d 868 (2008). A summary disposition motion under MCR 2.116(C)(10) tests the factual support for a claim and should be granted if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Corley v Detroit Bd of Ed, 470 Mich 274, 278; 681 NW2d 342 (2004). When deciding a summary disposition motion, a court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence in the light most favorable to the opposing party. Id.
A plaintiff asserting a negligence claim has the burden of establishing “(1) duty; (2) breach of that duty; (3) causation, both cause in fact and proximate causation; and (4) damages.” See Romain v Frankenmuth Mut Ins Co, 483 Mich 18, 21-22; 762 NW2d 911 (2009). In the present case, the parties dispute at least two of the elements of plaintiffs negligence claim: whether plaintiff established that defendants had a duty with regard to the gas meter and whether any breach of that duty was the cause in fact of the fire. We need not decide the duty issue because the record demonstrates that, even if defendants had a duty with regard to the meter, plaintiff failed to present sufficient evidence to establish an issue of fact as to whether the meter caused the fire.
Defendants had the initial burden of presenting documentary evidence to support their summary disposition motion. Coblentz v City of Novi, 475 Mich 558, 568-569; 719 NW2d 73 (2006). Defendants met this burden by submitting the deposition testimony of their investigator. The investigator testified that the area of the meter had less charring than other areas, which indicated that the fire likely originated some distance from the meter. The investigator further testified that the first material to ignite was probably natural gas emanating from the insured’s fuel line.
The burden then shifted to plaintiff to present evidence to establish a genuine issue with regard to whether the gas meter was the cause of the fire. MCR 2.116(G)(4); see also Coblentz, 475 Mich at 568-569. The trial court found that plaintiff had failed to present sufficient evidence to create a question of fact, finding that plaintiffs evidence was akin to the evidence our Supreme Court rejected in Skinner v Square D Co, 445 Mich 153, 162; 516 NW2d 475 (1994). In Skinner, our Supreme Court explained the plaintiffs burden relating to causation: “causation theories that are mere possibilities or, at most, equally as probable as other theories do not justify denying defendant’s motion for summary judgment.” Id. at 172-173.
We agree with the trial court’s well-reasoned opinion. None of the documents submitted by plaintiff confirm the status of the meter either prior to the fire or at the moment the fire originated. Rather, the documents confirm the undisputed fact that the fire destroyed the meter. Similarly, the expert testimony submitted by plaintiff fails to meet the Skinner standard. Plaintiffs expert reported that the natural gas meter was destroyed during this fire and could not be eliminated as a cause of the fire. The statement that the meter “could not be eliminated” as a cause of the fire does not allow a factfinder to infer that the meter was the cause in fact of the fire. Instead, a factfinder would have to speculate that the meter caused the fire. As explained in Skinner, speculation is insufficient to create an issue of fact. 445 Mich at 172-173; see also Ghaffari v Turner Constr Co (On Remand), 268 Mich App 460, 464-465; 708 NW2d 448 (2005) (“Speculation and conjecture are insufficient to create an issue of material fact.”). The expert’s deposition testimony does not salvage the equivocation in his report.
Given that plaintiff failed to establish a factual issue regarding cause in fact for the negligence claim, plaintiff also failed to establish sufficient support for the contract claim. To avoid summary disposition on the contract claim, plaintiff had the burden of presenting evidence to establish that the alleged damages were the direct, natural, and proximate result of the alleged breach of contract. Alan Custom Homes, Inc v Krol, 256 Mich App 505, 512; 667 NW2d 379 (2003). The trial court properly granted summary disposition in favor of defendants on both of plaintiffs claims.
II. CASE EVALUATION SANCTIONS — DOCKET NO. 296102
This Court reviews de novo a trial court’s decision to grant case evaluation sanctions. Peterson v Fertel, 283 Mich App 232, 235; 770 NW2d 47 (2009). The trial court’s decision in this case turned on the interpretation of a court rule, which is a question of law that this Court reviews de novo. Haliw v Sterling Heights, 471 Mich 700, 704; 691 NW2d 753 (2005).
MCR 2.403 provides the framework for case evaluation in Michigan. A party that has rejected a case evaluation must pay the opposing party’s actual costs if the verdict in the case is more favorable to the opposing party than the case evaluation, after adjustments as described in MCR 2.403(O)(3). See MCR 2.403(O)(l). The recoverable costs include reasonable attorney fees “for services necessitated by the rejection of the case evaluation.” MCR 2.403(O)(6).
The following portions of the rule are pertinent to this appeal:
(1) If a party has rejected an evaluation and the action proceeds to verdict, that party must pay the opposing party’s actual costs unless the verdict is more favorable to the rejecting party than the case evaluation. However, if the opposing party has also rejected the evaluation, a party is entitled to costs only if the verdict is more favorable to that party than the case evaluation.
(2) For the purpose of this rule “verdict” includes,
(a) a jury verdict,
(b) a judgment by the court after a nonjury trial,
(c) a judgment entered as a result of a ruling on a motion after rejection of the case evaluation.
(8) A request for costs under this subrule must be filed and served within 28 days after the entry of the judgment or entry of an order denying a timely motion for a new trial or to set aside the judgment. [MCR 2.403(0).]
In Peterson, 283 Mich App at 237, this Court considered whether a ruling on a medical-malpractice plaintiffs motion for reconsideration, filed before the plaintiff rejected the case evaluation, was a “verdict” for purposes of MCR 2.403. The Court held that the trial court’s denial of the motion for reconsideration was a verdict within the meaning of MCR 2.403(O)(2)(c). Id. The Court noted that the objective of the plaintiffs motion for reconsideration was “to call attention to the trial court’s alleged error in granting the motion for summary disposition, to urge the reversal of that decision, to keep the action alive against the defendants and, at its essence, to continue the litigation toward trial.” Id. at 238.
In the present case, the case evaluation was held in August 2009. The trial court issued its summary disposition order on October 13, 2009. On November 3, 2009, plaintiff filed a motion for reconsideration of the summary disposition order. The trial court denied plaintiffs motion for reconsideration the following day. Defendants filed their motion for case evaluation sanctions on November 19, 2009, which was 37 days after the entry of summary disposition, but was only 16 days after the trial court denied plaintiff’s motion for reconsideration.
The trial court found defendants’ motion for sanctions untimely on the ground that a motion for recon sideration is not equivalent to a motion for a new trial or to set aside judgment for purposes of the 28-day rule in MCR 2.403(0) (8). We disagree. As the Peterson Court indicated, a motion for reconsideration corresponds to a motion for a new trial or to set aside a judgment. Although the three motions have different labels and are used at different procedural points in litigation, all three have the same purpose: to rescind a dispositive ruling or judgment issued by the trial court. See MCR 2.119(F) (motion for reconsideration); MCR 2.610(A) (motion to set aside judgment); MCR 2.611 (motion for new trial). All three motions must be filed within 21 days after the issuance of the ruling or judgment. MCR 2.119(F)(1); MCR 2.610(A)(1); MCR 2.611(B). The 21-day limit on these motions will expire before the 28-day limit on motions for case evaluation sanctions, so a party seeking case evaluation sanctions may elect to hold the motion for sanctions until learning whether the opposing party has filed any dispositive motions. See Brown v Gainey Transp Servs, Inc, 256 Mich App 380, 384; 663 NW2d 519 (2003) (the logic of MCR 2.403(O)(8) is to enable a party to await pending dispositive motions after trial).
We hold that when a trial court has entered a summary disposition order that fully adjudicates the entire action, MCR 2.403(O)(8) requires a party to file and serve a motion for case evaluation sanctions within 28 days after entry of a ruling on a motion for reconsideration of the order. Accordingly, we reverse the trial court’s finding that defendants’ motion for case evaluation sanctions was untimely, and we remand for further consideration of defendants’ motion.
We affirm the grant of summary disposition in favor of defendants in Docket No. 295232. We reverse the trial court’s denial of case evaluation sanctions in Docket No. 296102, and we remand for further proceedings consistent with this opinion. We do not retain jurisdiction.
O’Connell, EJ., and K. E Kelly and Ronayne Krause, JJ., concurred.
Defendants argue that the trial court erred in admitting the testimony of plaintiffs expert. Because we have affirmed the summary disposition, we need not address defendants’ argument. | [
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PER CURIAM.
Plaintiff, the city of Riverview, appeals as of right a Court of Claims’ order dismissing this case for lack of jurisdiction. Because the Court of Claims correctly determined that it lacked jurisdiction to decide a Headlee Amendment case, we affirm.
i
The Court of Claims’ opinion and order dismissing this case included a concise statement of the underlying facts:
This case arises from the Michigan Department of Environmental Quality’s (“the MDEQ’s”) issuance of National Pollutant Discharge Elimination System permits (“NPDES permits”) for storm water discharges from municipal separate storm sewer systems. Plaintiff seeks money damages as well as declaratory relief based on Plaintiffs assertion that the challenged permits violate the first and second sentences of Article 9, Section 29 of the Michigan Constitution, commonly known as the Headlee Amendment.
Plaintiff is a municipality, and is the owner and operator of a small municipal separate storm sewer system.
In 1990, the U.S. Environmental Protection Agency (“the EPA”) [promulgated a Phase I Stormwater Program to address bodies of water impaired by pollution and that, therefore, do not meet water quality standards. The Phase I Program concerned medium and large municipal separate storm sewer systems, and required the owners and operators of such systems, through the use of NPDES permits, to implement programs and practices to control polluted stormwater runoff. Permits were issued in 2003 in connection with the Phase One Stormwater Program.
In 1999, the EPA issued the Phase II Stormwater Program, expanding the program to certain small municipal separate storm sewer systems. In compliance with these federal programs, in 2003 Michigan implemented a Phase II Stormwater Program for owners and/or operators of small municipal separate storm sewer systems. In 2007, Michigan began the procedure for issuance of NPDES permits. Following periods for public comment and a series of meetings held with stakeholders, the MDEQ issued two NPDES permits (a Jurisdictional General Permit and a Watershed General Permit) in May 2008.
In May 2009, Plaintiff filed [City of Riverview v MDEQ] Case No. 09-712-CZ, in the Ingham County Circuit Court (still pending), alleging violations of the Headlee Amendment and various state statutes, and seeking declaratory and injunctive relief. In August, 2009, Plaintiff filed the present case, seeking money damages and declaratory relief!.] Plaintiff presumably filed this second action because this Court has exclusive jurisdiction to hear claims against the state seeking money damages.
Defendants moved for summary disposition in the Court of Claims on the ground that the Court of Claims lacked subject-matter jurisdiction. The court noted that the caselaw did not squarely resolve the issue, then reviewed the applicable constitutional and statutory authorities and concluded that it lacked jurisdiction.
ii
Plaintiffs sole issue on appeal is whether the Court of Claims erred as a matter of law when it dismissed, for lack of jurisdiction, plaintiffs Headlee Amendment “maintenance of support” (MOS) complaint seeking money damages under Const 1963, art 9, § 29 for unfunded mandates by defendant MDEQ. This issue was raised in and decided by the Court of Claims and thus it is preserved for appellate review. Fast Air, Inc v Knight, 235 Mich App 541, 549; 599 NW2d 489 (1999). Further, “a challenge to subject-matter jurisdiction may be raised at any time, and presents a question of law that we review de novo.” Adams v Adams (On Reconsideration), 276 Mich App 704, 708-709; 742 NW2d 399 (2007). Statutory interpretation likewise presents a question of law, calling for review de novo. See Thompson v Thompson, 261 Mich App 353, 358; 683 NW2d 250 (2004).
hi
A court must be vigilant in respecting the limits of its jurisdiction. Straus v Governor, 230 Mich App 222, 227; 583 NW2d 520 (1998). The Legislature vested the Court of Claims with “exclusive” jurisdiction over “all claims and demands, liquidated and unliquidated, ex contractu and ex delicto,” brought against “the state and any of its departments, commissions, boards, institutions, arms, or agencies.” MCL 600.6419(l)(a). But MCL 600.6419(4) adds that the Court of Claims chapter of the Revised Judicature Act does not deprive the circuit court of jurisdiction over certain actions, including “actions against state agencies based upon the statutes of this state in such case made and provided, which expressly confer jurisdiction thereof upon the circuit court....” At issue is whether the broad statutory grant of jurisdiction to the Court of Claims extends to Headlee Amendment claims, or whether constitutional or statutory law confines such cases to other fora.
The Headlee Amendment to the Michigan Constitution, enacted by voter initiative in 1978, places certain limits on the Legislature’s authority to impose costs on local units of government. It provides, in pertinent part, as follows:
The state is hereby prohibited from reducing the state financed proportion of the necessary costs of any existing activity or service required of units of Local Government by state law. A new activity or service or an increase in the level of any activity or service beyond that required by existing law shall not be required by the legislature or any state agency of units of Local Government, unless a state appropriation is made and disbursed to pay the unit of Local Government for any necessary increased costs. [Const 1963, art 9, § 29.]
The Headlee Amendment additionally grants this Court original jurisdiction to hear and decide Headlee Amendment claims: “Any taxpayer[ ] of the state shall have standing to bring suit in the Michigan State Court of Appeals to enforce the provisions of Sections 25 through 31, inclusive, of this Article ...Const 1963, art 9, § 32.
The statutory grant of jurisdiction to the Court of Appeals recognizes the constitutional grant of jurisdiction to the Court of Appeals and adds a grant of jurisdiction to the circuit court: “An action under section 32 of article 9 of the state constitution of 1963 may be commenced in the court of appeals, or in the circuit court in the county in which venue is proper, at the option of the party commencing the action.” MCL 600.308a(l). MCL 600.308a(l) does not treat the constitutional grant to the Court of Appeals of original jurisdiction to decide Headlee Amendment claims as granting exclusive jurisdiction. MCL 600.308a(5) further provides, “The court of appeals may refer an action to the circuit court or to the tax tribunal to determine and report its findings of fact if substantial fact finding is necessary to decide the action.” It seems significant that this latter provision envisions a role for the Tax Tribunal, which joins the Court of Claims as a forum not mentioned in the language of MCL 600.308a(l) addressing jurisdiction over Headlee Amendment claims; however, the explanation is that Headlee Amendment issues are apt at times to be of a sort over which the Tax Tribunal, whose membership is configured “to relate primarily to questions concerning the factual underpinnings of taxes,” Romulus City Treasurer v Wayne Co Drain Comm’r, 413 Mich 728, 737; 322 NW2d 152 (1982), is particularly competent to review.
Returning to the language of Const 1963, art 9, § 29 quoted earlier in this opinion, the first of the two sentences quoted relates to maintenance of support (MOS) of existing required activities or services, while the second sets forth a prohibition on unfunded mandates (POUM) in connection with newly required activities or services. See Judicial Attorneys Ass’n v Michigan, 460 Mich 590, 595; 597 NW2d 113 (1999). Actions alleging a violation of this constitutional provision must carefully distinguish between MOS and POUM claims. MCR 2.112(M).
Plaintiff asserts both kinds of claim, but concedes that the Court of Claims lacks jurisdiction over the POUM claim on the ground that such a claim cannot include a claim for damages. Plaintiff contends, however, that the Court of Claims has jurisdiction concurrent with that of the circuit court over MOS claims.
In Wayne Co Chief Executive v Governor, 230 Mich App 258; 583 NW2d 512 (1998), this Court stated as follows:
We hold that money damages are neither a necessary nor proper remedy in a suit in which a violation of the second sentence of § 29 of the Headlee Amendment [a POUM claim] is established. We further hold that the Court of Claims lacks subject-matter jurisdiction to hear Headlee Amendment claims, because money damages are, at best, an aberrant remedy for a violation of § 29 and the Court of Claims does not have subject-matter jurisdiction absent a claim for money damages. [Id. at 261-262.]
Defendants cite the latter holding, whereby this Court marginalized the relevance of damages in connection with Headlee Amendment claims and stated broadly that the Court of Claims lacks jurisdiction to hear Headlee Amendment claims. But plaintiff points out that Wayne Co Chief Executive concerned a POUM claim only, which rendered any implication therein that the Court of Claims’ lack of jurisdiction to hear Headlee Amendment cases extended to MOS claims mere dicta.
Oakland Co v Michigan, 456 Mich 144; 566 NW2d 616 (1997), originated in the Court of Claims, see id. at 148, and raised a MOS claim, id. at 152. A three-member plurality of the Supreme Court remanded the case to the Court of Claims for further proceedings, id. at 168 (KELLY, J., joined by CAVANAGH and Boyle, JJ.), but expressly declined to reach the question “whether the Court of Claims has jurisdiction over this claim,” id. at 167.
Livingston Co v Dep’t of Mgt & Budget, 430 Mich 635; 425 NW2d 65 (1988), also concerned a MOS claim originally brought in the Court of Claims, id. at 638-639, and the Supreme Court expressed no concern over the participation of that tribunal, but apparently jurisdiction was not challenged in that case.
A matter that a tribunal merely assumes in the course of rendering a decision, without deliberation or analysis, does not thereby set forth binding precedent. See Rory v Continental Ins Co, 473 Mich 457, 482; 703 NW2d 23 (2005) (implications, in dicta and without analysis, that public policy requires treating “adhesion contracts” specially did not establish any such rule); People v Douglas (On Remand), 191 Mich App 660, 662; 478 NW2d 737 (1991) (assumptions made by this Court and the parties in a prior opinion that were not properly raised as issues for legal determination before the Court have no precedential value.) Because in both Oakland Co and Livingston Co the Supreme Court assumed, without deciding, that jurisdiction was proper in the Court of Claims, those cases do not squarely answer that question for present purposes.
We conclude that this case is best resolved by building on the dicta in Wayne Co Chief Executive, 230 Mich App at 261-262, concerning the ancillary nature of monetary relief in Headlee Amendment cases and the role of the Comb of Claims. Anticipating the pronouncement in Wayne Co Chief Executive, id. at 261, that “money damages are, at best, an aberrant remedy for a violation of § 29” of the Headlee Amendment, our Supreme Court observed in Durant v Michigan, 456 Mich 175, 204; 566 NW2d 272 (1997), that “monetary relief typically will not be necessary in future § 29 cases ... .” Accordingly, the Court of Claims’ status as the tribunal specially authorized to award damages against the state does not make it a natural forum for Headlee Amendment cases, including MOS claims that include a prayer for damages. Further, the statutory grant of jurisdiction to the Court of Claims specifies claims and demands ex contractu and ex delicto, meaning contract or tort claims. As defendants point out, the underlying Headlee Amendment action is not one sounding in contract or tort, but is instead a constitutional claim.
We additionally opine that the constitutional and legislative grant of jurisdiction to the Court of Appeals and the circuit court should be construed to exclude other tribunals. Again, the Michigan Constitution confers jurisdiction for Headlee Amendment claims on the Court of Appeals, Const 1963, art 9, § 32, which the Legislature recognized and broadened by providing that “[a]n action under section 32 of article 9 of the state constitution of 1963 may be commenced in the court of appeals, or in the circuit court in the county in which venue is proper, at the option of the party commencing the action.” MCL 600.308a(l). Plaintiff maintains that the latter language seems permissive, using the word “may” and including no statement that the jurisdiction thus authorized is exclusive. But the language of exclusivity does not naturally comport with language authorizing a taxpayer to select one of two tribunals in which to commence an action. Further, if a taxpayer bringing a Headlee MOS action can bypass the tribunals consti tutionally and statutorily authorized for such cases and proceed in the Court of Claims, arguably the taxpayer could also proceed in the Tax Tribunal, or, if the damages sought are below the jurisdictional limitation, the district court. When a specific statutory provision differs from a related general one, the specific one controls. Gebhardt v O’Rourke, 444 Mich 535, 542-543; 510 NW2d 900 (1994). Accordingly, the specific grant of jurisdiction to the Court of Appeals and the circuit court should thus be understood to operate as an exception to the general grant of jurisdiction to the Court of Claims to decide claims against the state.
Comporting with this reasoning is our Supreme Court’s recognition of “the maxim expressio unius est exclusio alterius; that the express mention in a statute of one thing implies the exclusion of other similar things.” Bradley v Saranac Community Sch Bd of Ed, 455 Mich 285, 298; 565 NW2d 650 (1997). The specification of the Court of Appeals and the circuit court as tribunals authorized to decide Headlee Amendment claims impliedly excludes other tribunals.
rv
The Court of Claims properly determined that it lacked jurisdiction to decide a Headlee Amendment case.
Affirmed. Defendants, being the prevailing parties, may tax costs pursuant to MCR 7.219.
DONOFRIO, EJ., and BORRELLO and BECKERING, JJ., concurred.
That a municipality constitutes a “taxpayer” for purposes of vindicating its taxpayers’ rights appears not in doubt. See Ferndale Sch Dist v Royal Oak Twp Sch Dist No 8, 293 Mich 1, 9; 291 NW 199 (1940) (“In litigation brought by a city the taxpayer is heard through the accredited representative of the city ....”) (quotation marks and citation omitted).
The Court concluded that monetary damages were appropriate in that case, owing to the state’s “prolonged recalcitrance” in connection with the underlying dispute. Id.
Likewise the specific grant of jurisdiction to the Tax Tribunal to decide claims for property tax refunds, MCL 205.731(b), or that of the district court to decide claims for damages not exceeding $25,000, MCL 600.8301(1). | [
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PER CURIAM.
Defendant appeals by right the circuit court’s order changing primary physical custody of the parties’ minor son from her to plaintiff. We reverse and remand for farther proceedings consistent with this opinion.
I. FACTS
The parties divorced in 2007. The judgment of divorce awarded primary physical custody of the parties’ two daughters to plaintiff, who lived in Michigan, but awarded primary physical custody of the parties’ son to defendant, who lived in Virginia. The parties initially agreed to this division of parental responsibilities and also agreed that all three children would be together during the summers, residing alternately with each party.
In July 2010, plaintiff moved for a change of custody to allow the parties’ son to live with him and join the parties’ two daughters under his physical custody. In asserting a change of circumstances, plaintiff alleged that defendant tended to neglect the boy, that defendant had subjected the boy to erratic changes of residence, improper lan guage, and improper discipline tactics, and that defendant routinely entertained various overnight male visitors. Plaintiff additionally asserted that the boy wanted to live with him, and that it would be best if the child were united with his sisters.
At the hearing on the motion, defendant testified that she had two boarders living in her house, a police officer and a member of the Air Force. Defendant stated that she screened the boarders through their respective organizations and also obtained and checked their personal references. Defendant explained that she needed the income from the boarders to help satisfy her child-support obligations. Asked about the interaction between the boarders and the child, defendant replied, “Really none.”
The circuit court found that the circumstances had changed insofar as defendant had taken in boarders and the child was getting older. Concerning the boarders, the court described their presence as “a big change,” and elaborated, “[W]hen you come home you close that door, you have your space and your privacy and you let your hair down and relax. And I think that’s kind of hard to do when there’s ... a stranger in the home. That’s a huge difference in my opinion.” Concerning the child’s age, the court explained, “[W]hen they reach the age of 11, 12, 13 year[s] old,... the needs of a child change and the desires of a child chang[e], deep felt desires and needs.”
The court then declared that an established custodial environment existed with defendant, and recited its attendant duty to weigh the statutory best-interest factors to determine whether clear and convincing evidence warranted a change. After applying the factors, the court determined that clear and convincing evidence established that the child’s best interests would be served if plaintiff acquired primary physical custody.
II. STANDARDS OF REVIEW
All custody orders must be affirmed on appeal unless the circuit court’s factual findings were against the great weight of the evidence, the court committed a palpable abuse of discretion, or the court made a clear legal error on a major issue. MCL 722.28; Berger v Berger, 277 Mich App 700, 705; 747 NW2d 336 (2008). “When a court incorrectly chooses, interprets, or applies the law, it commits legal error that the appellate court is bound to correct.” Fletcher v Fletcher, 447 Mich 871, 881; 526 NW2d 889 (1994) (opinion by BRICKLEY, J.).
III. CHANGE OF CIRCUMSTANCES
Before modifying a child custody order, the circuit court must determine that the moving party has demonstrated either proper cause or a change of circumstances sufficient to warrant reconsideration of the custody decision. MCL 722.27(l)(c); Vodvarka v Grasmeyer, 259 Mich App 499, 508-509; 675 NW2d 847 (2003). To establish a change of circumstances, the moving party must prove, by a preponderance of the evidence, that “since the entry of the last custody order, the conditions surrounding custody of the child, which have or could have a significant effect on the child’s well-being, have materially changed.” Vodvarka, 259 Mich App at 513.
As explained previously, the circuit court determined that a change of circumstances had occurred on the alternative bases that the child was entering his teenage years and thus had changing needs and interests, and that defendant had taken two boarders into her house.
Concerning the child’s age, Vodvarka advises that “over time there will always be some changes in a child’s environment, behavior, and well-being,” and thus that “the evidence must demonstrate something more than the normal life changes (both good and bad) that occur during the life of a child ....” Id. The fact that a child is growing up, the fact that a child has started high school, and the fact that the child faces scheduling changes related to school and extracurricular activities “are the type of normal life changes that occur during a child’s life and that do not warrant a change in the child’s custodial environment.” Shade v Wright, 291 Mich App 17, 29; 805 NW2d 17 (2010). We conclude that, under the reasoning of Vodvarka and Shade, the circuit court committed clear legal error in determining that the child’s changes in needs and desires in the ordinary course of growing up constituted a change of circumstances sufficient to warrant a reevaluation of the custody arrangement.
Concerning the presence of two boarders in defendant’s house, the circuit court concluded that this had resulted in “a big change” or “huge difference,” and supposed that it compromised the child’s “space,” “privacy,” and ability to let his “hair down and relax.” But those ramifications on the child’s life were not in evidence. Instead, the record evidence established that there was effectively no interaction between the child and the boarders. As defendant elaborated:
[T]he police officer works full time during the day, he’s also a volunteer for the fire department and he loves to go to the fires and emergencies and so he’s gone most of the time, we rarely see him.
The [Air Force member] works during the day full time and then he stays in his room mostly. They don’t hardly even use the house, they just stay up in their rooms. I told them they’re welcome to [use the house], but they don’t.
The circuit court expressed no doubts concerning defendant’s description of how her boarders conducted themselves, and there was no evidence to contradict it. Indeed, the only evidence concerning the boarders suggested that their presence in the house was a matter of minimal consequence to the child. The circuit court’s determination that the boarders’ presence in the home constituted a change of circumstances sufficient to warrant a reevaluation of the custody arrangement was manifestly against the great weight of the evidence.
The circuit court erred by concluding that there was a change of circumstances sufficient to revisit the custody arrangement in this case. We therefore reverse and remand this case to the circuit court with instructions to restore defendant’s primary physical custody of the subject child. Because we have reversed on this ground, we need not consider defendant’s challenges to the circuit court’s best-interests determination.
Beversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
SAAD, EJ., and JANSEN and K. E KELLY, JJ., concurred.
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MURRAY, J.
Two seats were up for election in 2010 on the Highland Park School District Board of Education, one of which was held by plaintiff, Robert Davis. Plaintiff, with Debra J. Humphrey and defendant, Clifford Chatman, was one of seven candidates vying for the school board positions. When plaintiff finished in third place behind defendant, he sought and obtained a judgment granting a writ of quo warranto. As a consequence, defendant’s election victory was invalidated and plaintiff was placed into office. Defendant appeals as of right both the order granting plaintiff leave to file the complaint of quo warranto and the judgment granting a writ of quo warranto. We affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
On January 20, 2010, defendant signed an affidavit of identity with the Highland Park clerk in order to run for one of two school board positions in the upcoming election. Both terms were to commence July 1, 2010. In accordance with election requirements, defendant claimed on the affidavit of identity that he was a lifetime resident of Wayne County and resided on January 20, 2010, at 56 Louise in Highland Park. On May 4, 2010, the school board election was held, and Humphrey and defendant won the two positions. Plaintiff finished in third place, 23 votes behind defendant (201 votes compared to 178 votes).
Plaintiff, believing that defendant did not reside at 56 Louise and therefore did not meet the residency requirements to be on the ballot for election as a school board member, took steps to initiate quo warranto proceedings against defendant and sought a temporary restraining order (TRO) to prevent defendant from tampering with his residency records. The court granted plaintiffs application for leave to file a complaint for quo warranto and held an evidentiary hearing on the application.
An evidentiary hearing was held over three days where both parties presented witnesses and submitted exhibits. The crux of the matter was whether defendant resided at 56 Louise for 30 days prior to the February 9, 2010, filing deadline. Plaintiffs proofs, which intended to show that the house was unoccupied during the relevant times, primarily involved witnesses’ observations of the property, the status of the utilities for the property, and defendant’s own address filings with the state.
Plaintiffs eyewitnesses who testified about the condition of the house were John Holloway, Ralph Kinney, and plaintiff himself. Holloway, a retired police chief for the city of Highland Park who lived four houses away from 56 Louise, stated that he saw snow accumulate throughout the winter and first saw signs of occupancy in April 2010. Plaintiff also traveled by the premises over a hundred times (many of which were between January 20 and February 9, 2010) and never saw any lights or other signs of occupancy. For his part, Kinney testified that over the course of a three-week period in May, he never saw any people but did note that televisions or lights were on at nighttime and that the same two vehicles would be present in front of the house regardless of when he visited. Both plaintiff and Kinney testified that they never saw garbage taken to the curb on the neighborhood’s garbage pickup day. Furthermore, plaintiff testified that, after a May 11, 2010, school board meeting, he followed defendant to a residence located at 17315 Lincoln Drive in Southfield.
Plaintiff also presented evidence that the house lacked the necessary and usual utilities that a home would need in order to be habitable. Pashko Memcevic, a DTE Energy employee, testified that the last known customer for 56 Louise was Bianca Heard and that the service was terminated on October 13, 2008. Thus, DTE was not actively supplying electricity or gas to 56 Louise. Memcevic also testified that DTE’s records showed no gas usage during this entire time, but Memcevic acknowledged that it was because DTE was unable to obtain any readings.
Furthermore, plaintiff presented the testimony of Khalaila Hines, an employee in the Highland Park Water Department. According to Hines, the water to 56 Louise was turned off on November 25, 2008, and her records showed no water activity any time after the shutoff. Hines indicated, however, that even though there should have been no water being supplied to 56 Louise, it would have been possible for water to be supplied illegally if someone had the proper tools and turned the water on at the street.
Plaintiff also relied on the addresses that defendant used in some state records to show that defendant did not reside at 56 Louise. Although defendant changed his voting registration to reflect the 56 Louise address on January 20, 2010, defendant’s concealed weapons permit and vehicle registration still reflected, as of the evidentiary hearing, an address of 17315 Lincoln Drive in Southfield.
Defendant, on the other hand, claimed that he, indeed, started residing at 56 Louise in late October 2009. Regarding his prior residential history, defendant testified that he had lived at 17315 Lincoln Drive in Southfield from June 2008 through November 2008, 231 Ferris in Highland Park from November 2008 through April 2009,11745 Ten Mile Road #202 in Warren from April 2009 through October 2009, and finally at 56 Louise in Highland Park in October 2009. Defendant acknowledged that there was no furnace in 56 Louise, so in order to keep warm he and his landlord/roommate, Chaka Powell, used two electric space heaters. As proof of his tenancy, defendant offered into evidence a lease he signed that commenced on January 1, 2010. Defendant explained that there was no lease agreement for the first couple months that he resided on Louise because he was on “hard times.”
While defendant indicated that he started living at 56 Louise in late October 2009, he was not evicted from his Warren apartment until December 28, 2009. Defendant explained that although he had already moved out two months earlier, the Warren apartment complex had to procure this judgment in order for their records to reflect that defendant had vacated the premises.
Before the end of January 2010 or early February 2010, there was no regular mail delivery to 56 Louise. Mark Harvey, the postal carrier for that area, testified that he would hold on to mail addressed to that house because he thought the home was vacant. However, in late January or early February, Harvey was informed by his supervisor to resume delivery because the homeowner had requested it. Harvey explained that, in addition to the home looking like it was vacant, there was no mailbox present to deliver to until after the request to resume delivery occurred. Also of note, Harvey only met defendant for the first time a month before the hearing, which would correlate approximately to the first week of May 2010.
At the conclusion of the evidentiary hearing on June 9, 2010, the trial court summarized the evidence it had received and noted that “[t]he Court has driven by the house yesterday.... [T]he house is boarded up, it does not appear to be lived in from the outside.” Ultimately, the court concluded that defendant did not reside at 56 Louise during the relevant time period:
We know from the — both the water people, the water board, and from the DTE Energy, there’s no gas, no electricity, there’s no water at this house.
So the Court finds that this house is not inhabitable by anyone in the world in its present condition. So this Court finds that Mr. Chatman was not a resident. He had changed his address. He used that address, but he’s not inhabiting that house, and residing there within the meaning of the laws. So the Court will grant the TRO.
Nine days later, on June 18, 2010, defendant moved to disqualify the trial court on the basis that he imper missibly acquired personal knowledge when he drove past 56 Louise. At a hearing on June 28, 2010, the court denied the motion, stating that “[t]he fact that I drove by wasn’t the basis of my decision.” Afterward, defendant moved for Wayne Circuit Court Chief Judge Virgil Smith to disqualify the trial court, but Chief Judge Smith denied the motion because defendant failed to show that the trial judge exhibited any bias.
On June 30, 2010, the trial court entered a judgment granting a writ of quo warranto, ordering that defendant was not entitled to hold the school board position and that all votes cast for him were null and void. Furthermore, the judgment declared that plaintiff, having the next highest vote total, was the duly elected winner of the election. The trial comb also denied defendant’s request for a jury trial, concluding that a determination on the matter had already been made and, in any event, the court did not believe that defendant had a right to a jury trial for this equitable action.
Two weeks into plaintiffs new term, this court entered an order that (1) stayed that portion of the judgment recognizing plaintiff as one of the election winners and (2) ordered that the board seat was to remain empty pending the appeal. Davis v Chatman, unpublished order of the Court of Appeals, entered July 15, 2010 (Docket No. 299021). The Supreme Comb later denied plaintiffs application for leave to appeal this order. Davis v Chatman, 487 Mich 859 (2010). The instant appeal ensued.
II. ANALYSIS
A. LEAVE TO APPLY FOR QUO WARRANTO
Defendant first argues that the trial court erred when it granted plaintiffs application for leave to proceed by quo warranto. “A court’s decision whether to grant or deny an application for leave to proceed by quo warranto is reviewed for an abuse of discretion.” Barrow v Detroit Mayor, 290 Mich App 530, 539; 802 NW2d 658 (2010). A trial court abuses its discretion when its decision falls outside the range of reasonable and principled outcomes. Maldonado v Ford Motor Co, 476 Mich 372, 388; 719 NW2d 809 (2006).
“Quo warranto” is a “common-law writ used to inquire into the authority by which a public office is held or a franchise is claimed.” Black’s Law Dictionary (9th ed). Quo warranto is the only appropriate remedy for determining the proper holder of a public office, see People v Tisdale, 1 Doug 59 (Mich, 1843), overruled in part on other grounds, Petrie v Curtis, 387 Mich 436, 438-441; 196 NW2d 761 (1972), and Layle v Adjutant General, 384 Mich 638, 641; 186 NW2d 559 (1971), including who is the proper holder of the position of school board member, Williams v Lansing Bd of Ed, 69 Mich App 654, 659; 245 NW2d 365 (1976). Both the statute and court rule permit a party to bring an action for quo warranto if the Attorney General declines to bring such a suit — as was the case here. MCL 600.4501; MCR 3.306; see, also, Barrow, 290 Mich App at 540-541.
Initially, we reject defendant’s argument that plaintiff was required to provide notice before seeking leave to file for quo warranto. Neither the relevant court rule (MCR 3.306) nor the statute (MCL 600.4501) contains a notice requirement, and our Supreme Court has found that fact dispositive of this issue:
It will be observed that the statute does not require notice. There appears to be no necessity for notice. It is the initial step in the proceeding. Its object is to obtain permission to take out a summons in quo warranto. Leave of the court is required by the statute to prevent an extravagant use of the writ unless there is some real basis for it. Failure to give notice to the defendant does not deprive him of any substantial right. He has his full day in court after leave is granted and summons is served on him. To require notice results in giving the defendant two flings at his defense. If defendant he given notice of the application he will make the same showing that he afterward does on the merits. If the matter is of such a character that the circuit judge would like to hear from defendant before granting leave, he may always make an order requiring him to show cause why leave should not be granted. [Ferzacca v Freeman, 240 Mich 682, 684-685; 216 NW 469 (1927).]
While defendant counters that the subsequent enactment of MCR 3.306 abrogated Ferzacca, conspicuously absent from that court rule is any mention of notice. Thus, the rationale of Ferzacca is still controlling. The notice to which defendant was entitled — and did receive — was service of the application after the court granted plaintiff permission to file the pleading.
Alternatively, defendant urges this Court to find the order granting leave to file for quo warranto deficient on public policy grounds since the application was “unverified” and did not contain supporting affidavits. We decline this invitation, however, since once again neither the relevant statute nor court rule imposes such requirements. If these or other requirements are to be placed into the rules, it would be either by legislation or through the Supreme Court’s rulemaking authority. See People v Jackson, 487 Mich 783, 797 n 31; 790 NW2d 340 (2010). It would not be through this Court’s decision-making.
In any event, this Court has previously stated that the most important considerations in granting leave to file quo warranto are (1) whether an appropriate application was made to the Attorney General and (2) whether the application disclosed sufficient apparent merit to justify further inquiry by quo warranto proceedings. Grand Rapids v Harper, 32 Mich App 324, 329; 188 NW2d 668 (1971). It is undisputed that plaintiff made the appropri ate application to the Attorney General, who in turn declined to pursue the matter, MCR 3.306(B)(3)(b), which granted plaintiff the ability to file this action. See also MCL 600.4501. Additionally, plaintiffs application disclosed sufficient facts concerning defendant’s putative residence justifying further inquiry into defendant’s residency status. Accordingly, the trial court’s granting leave to file the application was well within the range of principled and reasonable outcomes and so cannot be overturned on appeal.
B. THE COURT’S VIEWING THE PREMISES
Defendant next argues a new hearing is in order because the trial court viewed the premises at 56 Louise without notice to any party. Although our review of a trial court’s decision to view a scene is for an abuse of discretion, Gorelick v Dep’t of State Hwys, 127 Mich App 324, 335; 339 NW2d 635 (1983), defendant did not raise this issue until subsequently requesting the trial court’s disqualification. Mindful that review of this unpreserved issue may nonetheless be appropriate in the interests of justice, Travis v Preston (On Rehearing), 249 Mich App 338, 348; 643 NW2d 235 (2002), we conclude that reversal is not warranted since it is abundantly clear that the court’s viewing of the premises played no role in its decision. MCR 1.105.
MCR 2.513(B) specifically allows for a trial court sitting as a trier of fact to “view property or a place where a material event occurred.” According to current caselaw, however, this authority may not be exercised without prior notice to the parties and may constitute an abuse of discretion if the court relies on its own observations (done without notice to the parties) in rendering its decision. See Travis, 249 Mich App at 349. In this case, although it is undisputed that the trial court failed to provide notice of its visit, the court was crystal clear in explaining that its observations had no effect on its decision. And the facts found by the trial court were based on an abundance of evidence that was independent of the drive-by view of the house. For starters, a number of witnesses testified that the home was at least partially boarded-up, a fact confirmed by photographs. In addition, our review of the record reveals that the court based its decision in large part on the home’s lack of utilities. Finally, although not dis-positive, we note that defendant did not dispute the trial court’s observations that the home was boarded-up and from the outside appeared vacant. Consequently, the court had abundant evidentiary support for its decision, and its viewing of the residence did not affect defendant’s substantial rights. MCR 1.105.
Before moving on, we note that defendant failed to submit an affidavit as required by MCR 2.003(D) when requesting the court’s disqualification under MCR 2.003(C)(1)(c). Thus, he has waived the issue of disqualification. See Law Offices of Lawrence J Stockier, PC v Rose, 174 Mich App 14, 22-23; 436 NW2d 70 (1989) (the failure to follow the proper procedure in requesting disqualification constitutes a waiver). Even were we to consider this argument as unpreserved, however, reversal would not be appropriate since — as previously noted — the record reveals no prejudice from the court driving by the premises. See Kern v Blethen-Coluni, 240 Mich App 333, 336; 612 NW2d 838 (2000).
C. REQUEST FOR JURY TRIAL
We likewise find meritless defendant’s argument that the trial court erred in denying his request for a jury trial. As this claim involves the interpretation and application of a court rule, our review of this issue is de novo. CAM Constr v Lake Edgewood Condo Ass’n, 465 Mich 549, 553; 640 NW2d 256 (2002). We construe court rules using the same legal principles governing statutory interpretation, the cardinal rule of which requires enforcement of the meaning expressed in the court rule where its plain language is clear and unambiguous. Id. at 553-554.
While a trial court may hear a quo warranto proceeding or permit the matter to proceed to a jury trial, a party has the right to demand a jury trial of this issue. MCR 2.508(B)(1); MCR 3.306(E); see, also, St Joseph Twp v City of St Joseph, 373 Mich 1, 5-6; 127 NW2d 858 (1964). The right to a jury trial in a civil action is permissive and not absolute. Const 1963, art 1, § 14; Marshall Lasser, PC v George, 252 Mich App 104, 107-108; 651 NW2d 158 (2002). Further, a party may waive a jury trial demand by agreement “in writing or on the record____” MCR 2.509(A)(1). Here, it is undisputed that the parties did not enter into a written agreement to waive the jury demand. However, defendant fully participated in the proceedings at which no jury was present, which is noteworthy since this Court has construed the “on the record” language of MCR 2.509(A)(1) to “encompassG an expression of agreement implied by the conduct of the parties.” Marshall Lasser, 252 Mich App at 107. To determine whether the conduct of the parties justifies the inference of a waiver, we look to the totality of the circumstances. Id. at 108.
Instructive to our inquiry is Marshall Lasser. There, this Court rejected the plaintiffs argument that the trial court erred in proceeding with a bench trial on the issue of damages in the absence of an express withdrawal of the jury demand. Id. at 106. Noting that the parties’ conduct at five evidentiary hearings on this issue was active and vigorous, we explained that the plaintiffs argument ran contrary to its behavior during the proceedings below:
Both parties were given notice that the court would be deciding the damage issue. The defendant and the plaintiffs representative were present and both were represented by counsel. There is no indication in the record that plaintiff or defendant ever objected to the bench trial, nor is there any indication that either party proceeded under protest. Under the circumstances of this case, we believe both parties’ acquiescence to the bench trial evidenced an agreement to waive the secured right. [Id. at 109.]
Similar to the plaintiff in Marshall Lasser, we conclude that defendant’s conduct clearly implied acquiescence to a bench trial and amounted to a waiver of defendant’s jury demand. The following colloquy on the first day of the hearing is illustrative of this conclusion:
The Court: You’re asking for a TRO -
[Plaintiff’s CounseI\: Actually, what I would like to do, yes, your Honor, but I’d also like to preserve some evidence today so that we don’t have to call these witnesses forward again on the basic factual issue [of] whether or not [defendant] was an actual resident of the city of Highland Park prior to the election.
We really have no alternative but to ask this Court for a ruling on this, because just relying upon the city clerk or the Secretary of State would not be fruitful, we need the equitable jurisdiction of this Court to actually grant the writ of quo [warranto],
I would ask that the Court either grant the writ today or at least preserve the testimony on the factual issue so that we would be in a position to then ask the Court to grant the writ at a later time.
The Court: What witnesses do you have here today?
[Plaintiff’s Counsel]: We have six witnesses, people who lived in the neighborhood, and also we have officials from the city of Highland Park as to just the basic things as to whether water or electric is being supplied to the premises; the clerk from the city of Southfield to show the voting records there. All of these witnesses are rather quick, but it’s necessary to preserve this testimony.
The Court: Okay.
Any comment?
[.Defense Counself My submission to the Court, and I hope that [plaintiffs counsel] is in agreement, I think he is, is that basically, Judge, the issues in this case are pretty simple.
The allegation that is raised by the Plaintiff is that the Defendant did not reside in the city of Highland Park and that he filed a false affidavit.
We have four witnesses to testify. I think that we’ll adequately show that he did reside consistent with the law, and I would ask the Court to try to resolve this matter today so we can go forward.
I think [plaintiffs counsel] is in agreement. I didn’t receive a copy of the complaint, but apparently the com plaint was filed, but there will be no additional issues in my mind and I believe in ¡plaintiff’s counsel’s] that would be presented to the Court that will be presented today [sic].
We’ll fully present our issues to the Court, and I believe ¡plaintiff’s counsel] will as well. So we’re prepared to go forward and we’d ask the Court to hear testimony and at that time I would ask the Court to dismiss the petition. [Emphasis added.]
Thereafter, the parties participated in a three-day hearing in which both presented evidence, and plaintiff continued to make clear that he was seeking not only a TRO, but also a writ of quo warranto. At no time did defendant object that the matter was proceeding without a jury. On the contrary, defendant requested that the court resolve the matter and dismiss the petition. Thus, we conclude that defendant’s failure to object to the evidentiary hearing combined with his voluntary participation in the procedure, during which he requested that the court resolve the issues at hand, amounted to a waiver of his demand for a jury trial.
D. JUDGMENT GRANTING WRIT OF QUO WARRANTO
This brings us to defendant’s argument that the trial court erred when it granted a writ of quo warranto. We review for an abuse of discretion a trial court’s decision in a quo warranto proceeding. Attorney General ex rel Selby v Macdonald, 164 Mich 590, 594; 129 NW 1056 (1911); see also Voorhies v Walker, 227 Mich 291, 294; 198 NW 994 (1924). But a trial court’s findings of fact will not be disturbed unless they are clearly erroneous. Christiansen v Gerrish Twp, 239 Mich App 380, 387; 608 NW2d 83 (2000). Clear error exists if, after a review of the entire record, the reviewing court is left with the definite and firm conviction that a mistake was made. Johnson v Johnson, 276 Mich App 1, 10-11; 739 NW2d 877 (2007) (opinion by FORT HOOD, J.).
As noted earlier in this opinion, actions for quo warranto inquire into the authority by which a public office is held. Barrow, 290 Mich App at 540. If such actions are brought against a person for usurpation of office, then the trial court’s judgment may determine the right of the defendant to hold the office. MCL 600.4505.
The office in question is a position on the Highland Park School District Board of Education. MCL 168.302, part of the Revised School Code, provides the requirements to run for a position on a school board: “An individual is eligible for election as a school board member if the individual is a citizen of the United States and is a qualified and registered elector of the school district the individual seeks to represent by the filing deadline.” MCL 168.10 defines “qualified elector” as “a person who possesses the qualifications of an elector ... and who has resided in the city or township 30 days.” “Residence” is defined by MCL 168.11 as the “place at which a person habitually sleeps, keeps his or her personal effects, and has a regular place of lodging.” Thus, in order to be eligible to seek election for the Highland Park School District Board of Education, at a minimum, defendant had to have been habitually sleeping and lodging in Highland Park as of January 10, 2010, i.e., 30 days before the February 9, 2010, filing deadline.
After reviewing the evidence, the trial court explained the basis for its finding that defendant failed to satisfy the residency requirement:
We had testimony from the third witness, Mr. Pashko Memsevic [sic] from DTE Energy. He said that there hasn’t been any official service to that address since October of 2008. That means the house didn’t have any gas, didn’t have any electricity, which is necessary to make the house inhabitable. He said there’s — when I questioned, there’s about one day of unauthorized usage.
And we had the testimony from Mrs. Hines, from the City of Highland Park Water Department. There’s — there hasn’t been any water service since November 2008.
In order to be a resident, you have to actually live in the city, sleep there, et cetera. We know from the — both the water people, the water board, and from the DTE Energy, there’s no gas, no electricity, there’s no water at this house.
Considering the trial court’s superior ability to judge credibility, we cannot conclude that the court erred in holding that defendant had failed to satisfy the statutory residency requirements in light of the evidence. MCR 2.613(C); Glen Lake-Crystal River Watershed Riparians v Glen Lake Ass’n, 264 Mich App 523, 531; 695 NW2d 508 (2004).
Although defendant claims he satisfied the residency requirements based on his testimony and that of his witnesses, the testimony of his witnesses was inconsistent on the question of when he began residing at 56 Louise. For example, one neighbor claimed, consistently with the testimony of the owner of the residence, that defendant moved in sometime in October 2009. Another neighbor testified, however, that she did not see defendant moving furniture into the home until almost two months later. Similarly, a postal carrier indicated that he withheld mail addressed to defendant because the residence appeared vacant and was without a mailbox until late January or early February 2010, when mail service was requested.
Besides the inconsistent testimony on the issue of when defendant began his residency, conflicting evidence was also presented on the home’s utility usage during the period in question. Specifically, while defen dant and the owner of the premises asserted their use of electric space heaters during this time frame, utility company representatives testified that the residence had been without electricity, water, and gas since October 2008. Utility records for this period indicated a negligible amount of electricity usage. And, the photographs admitted into evidence revealed 56 Louise to be, at best, a partially boarded-up house that according to other evidence had little, if any, foot traffic during the relevant period. Even reviewing the “cold record” from the evidentiary hearing, we can conclude that there was significant evidence pointing to the conclusion that defendant did not reside at 56 Louise on or before January 10, 2010. As a result of this evidence, we can unequivocally hold that the trial court’s findings of fact on this point were not clearly erroneous, and we are not in the position to second-guess what evidence or witnesses were more credible. Consequently, the trial court did not abuse its discretion in issuing the writ of quo warranto.
E. JUDGMENT NAMING PLAINTIFF THE ELECTION WINNER
Finally, we arrive at the most difficult question raised in this case — whether the trial court erred by declaring plaintiff a duly elected member of the school board. This issue involves a question of statutory interpretation, which we review de novo. Univ of Mich Regents v Titan Ins Co, 487 Mich 289, 297; 791 NW2d 897 (2010).
Defendant and the amicus curiae, the Wayne County Board of Canvassers, argue that the remaining members of the Highland Park School District Board of Education should appoint a replacement. It is generally true that when a school board member’s seat becomes vacant, MCL 168.311(1) empowers the remaining school board members to fill the vacant office by appointment. Specifically, that section provides: “If less than a majority of the offices of school board member of a school district become vacant, the remaining school board members shall fill each vacant office by appointment.” MCL 168.311(1). A vacancy triggering the procedure in MCL 168.311(1) occurs when, inter alia, a court declares a school board member’s election or appointment void. MCL 168.310(2)(f). Relying on these provisions, defendant claims that the trial court lacked authority to declare plaintiff the election winner when defendant had already filed his acceptance and taken his oath of office on May 10, 2010 — nearly two months before the court entered its judgment.
This is a sound argument, but is complicated by MCL 168.302(b), which expressly provides that the term of office for a school board member elected in May (as defendant was here) does not begin until July 1 immediately following the election. Thus, notwithstanding defendant’s acceptance of office and taking the oath, defendant did not assume office prior to the trial court’s order of June 30, 2010. Defendant was therefore not a “school board member” when his election was held void. Buttressing this conclusion is the fact that MCL 168.310(1) requires the administration of the oath of office before the member-elect enters upon the duties of office. See, also, Davis v Wheeler, 483 Mich 949, 950; 766 NW2d 808 (2009) (YOUNG, J., concurring). Also noteworthy is that the trial court’s judgment at no point created a vacancy since it declared plaintiff the election winner before the term of office commenced. And even though this Court stayed the trial court’s judgment, Davis v Chatman, unpublished order of the Court of Appeals, entered July 15, 2010 (Docket No. 299021), such an action does not fall under any of the enumerated contingencies that qualify as creating a vacancy under MCL 168.310(2)(a) through (i). Consequently, since defendant was not a member of the school board at the time of the court’s order, MCL 168.311(1) by its very terms could not supply the Highland Park School District Board of Education with the authority to fill the position created by the writ of quo warranto.
Instead, governing the case are the remedy provisions of the quo warranto statute, MCL 600.4505. Specifically, MCL 600.4505 provides:
(1) In actions brought against persons for usurpation of office, the judgment may determine the right of the defendant to hold the office. If a party plaintiff alleges that he is entitled to the office, the court may decide which of the parties is entitled to hold the office.
(2) If judgment is rendered in favor of a party who is averred to be entitled to the office, he is entitled, after taking the oath of office, and executing any official bond which is required by law, to take the office. [Emphasis added.]
Notably, the fact that a person has yet to assume office is not a bar to this statute’s application. In re Servaas, 484 Mich 634, 643 n 15; 774 NW2d 46 (2009) (opinion by WEAVER, J.) (rejecting the notion that a quo warranto action “may only be brought for ‘claims that an officer is currently exercising an invalid title to office’ ”) (citation omitted).
The action brought and decided in this case is precisely the scenario MCL 600.4505(1) contemplates. Plaintiff alleged that defendant was not entitled to office, and the court determined that defendant had failed to satisfy the residency requirements, thereby rendering his election void. Since plaintiff was the runner-up to defendant in the election, the court properly decided that plaintiff was entitled to hold office. The judgment granting the writ of quo warranto complied with the applicable law.
III. CONCLUSION
For the foregoing reasons, we hold that the trial court properly granted plaintiffs petition for leave to file for quo warranto and likewise did not err in granting a writ of quo warranto, determining defendant’s election void and finding plaintiff entitled to the office of Highland Park school board member.
Affirmed.
No costs, a public question having been involved. MGR 7.219.
FORT Hood, PJ., and Gleicher, J., concurred with Murray, J.
The affidavit was filed on January 21, 2010.
While DTE was not actively supplying electricity, its records showed that there was some unauthorized usage. From October 14,2009, until March 17, 2010, there were 60 kilowatt-hours consumed, with 59 of those being consumed after December 10, 2009. According to Memcevic, this was a negligible amount of electricity, only enough to only constitute three hours of usage.
This sworn testimony directly conflicts with defendant’s sworn statement in his affidavit of identity that he was a lifelong resident of Wayne County. Warren is in Macomb County, while Southfield is in Oakland County.
Powell had purchased the home in January 2009 through a foreclosure sale from a bank.
Defendant cites Valentine v Malone, 269 Mich 619; 257 NW 900 (1934), and People v Eglar, 19 Mich App 563; 173 NW2d 5 (1969), but both predate the current rule, MCR 2.513(B).
MICE 2.003(C)(1)(c) requires disqualification of a judge where the judge “has personal knowledge of disputed evidentiary facts concerning the proceeding.”
Plaintiff claims that defendant waived his right to a jury trial by failing to pay the appropriate fee at the time the demand was filed, as required by MCR 2.508(B)(1). Although the register of actions does not reflect the payment of a fee, we conclude that this matter was otherwise waived for the reasons stated in this opinion.
Like Marshall Lasser, the fact that this matter proceeded under the label of “evidentiary hearing” is of no moment as we are not bound by labels; to hold otherwise would elevate form over substance. See Lockwood v Revenue Comm’r, 357 Mich 517, 558; 98 NW2d 753 (1959).
Powell, the owner of the house, testified that he did not illegally divert any utilities into 56 Louise.
In its amicus curiae brief, the Wayne County Board of Canvassers asserts that because defendant filed an acceptance of the office to which he was elected in accordance with MCL 168.309, he was a member of the board upon the administration of his oath. That section, however, refers to a “member-elect” and fails in any way to contradict the instruction in MCL 168.302(b) about when the term of office begins.
Contrary to the Wayne County Board of Canvassers’ argument, Attorney General ex rel Cook v Burhans, 304 Mich 108; 7 NW2d 370 (1942), and Gallagher v Keefe, 232 Mich App 363; 591 NW2d 297 (1998), are inapposite as both vacancies occurred after the officeholder had “acted as such,” Cook, 304 Mich at 110, or had actually “held office,” Gallagher, 232 Mich App at 371.
Even if the provisions of MCL 168.311 applied to this case and were in conflict with MCL 600.4505, the latter section would control because it is the more specific statute addressing the circuit court’s remedial power in a quo warranto case. Driver v Naini, 287 Mich App 339, 351-352; 788 NW2d 848 (2010). | [
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METER, J.
Petitioner appeals by leave granted from a circuit court order that affirmed respondent’s declaratory ruling that its jurisdiction as set forth in MCL 324.32502, a provision of the Natural Resources and Environmental Protection Act (NREPA), MCL 324.101 et seq., extends to the natural ordinary high-water mark produced by the action of water against the shore. We agree with petitioner that respondent has misconstrued MCL 324.32502 and that respondent’s jurisdiction extends instead to the specific elevations delineated in the statute. Accordingly, we reverse.
Petitioner wishes to construct a home on land that he owns on the shore of Lake Michigan at the Indiana border. According to his site plans, the house will be built at a minimum elevation of 585 feet above sea level, roughly 150 feet away from the water’s edge. The property lies within a critical dune area, so petitioner applied to respondent, the Michigan Department of Environmental Quality (MDEQ), for a permit under part 353 of NREPA, MCL 324.35301 et seq. Respondent refused to issue the permit, insisting that petitioner was also required to obtain a permit under part 325 of NREPA, also known as the Great Lakes submerged lands act (GLSLA), MCL 324.32501 et seq. Petitioner argues that MCL 324.32502 does not give respondent jurisdiction over the land on which he wishes to build.
The key statutory provision provides:
The lands covered and affected by this part are all of the unpatented lake bottomlands and unpatented made lands in the Great Lakes, including the bays and harbors of the Great Lakes, belonging to the state or held in trust by it, including those lands that have been artificially filled in. The waters covered and affected by this part are all of the waters of the Great Lakes within the boundaries of the state. This part shall be construed so as to preserve and protect the interests of the general public in the lands and waters described in this section, to provide for the sale, lease, exchange, or other disposition of unpatented lands and the private or public use of waters over patented and unpatented lands, and to permit the filling in of patented submerged lands whenever it is determined by the department that the private or public use of those lands and waters will not substantially affect the public use of those lands and waters for hunting, fishing, swimming, pleasure boating, or navigation or that the public trust in the state will not be impaired by those agreements for use, sales, lease, or other disposition. The word “land" or “lands" as used in this part refers to the aforesaid described unpatented lake bottomlands and unpatented made lands and patented lands in the Great Lakes and the bays and harbors of the great lakes lying below and lakeward of the natural ordinary high-water mark, but this part does not affect property rights secured by virtue of a swamp land grant or rights acquired by accretions occurring through natural means or reliction. For purposes of this part, the ordinary high-water mark shall be at the following elevations above sea level, international Great Lakes datum of 1955: Lake Superior, 601.5 feet; Lakes Michigan and Huron, 579.8 feet; Lake St. Clair, 574.7 feet; and Lake Erie, 571.6 feet. [MCL 324.32502 (emphasis added).]
Petitioner requested a declaratory ruling from respondent to address the shoreline elevation along Lake Michigan that constitutes the limit of respondent’s jurisdiction for purposes of MCL 324.32502. Respondent’s declaratory ruling stated that its jurisdiction is based on the natural ordinary high-water mark (NOHWM), which is distinct from the ordinary high-water mark (OHWM). The OHWM for Lake Michigan is statutorily set at 579.8 feet of elevation above sea level, but respondent, citing Glass v Goeckel, 473 Mich 667, 693; 703 NW2d 58 (2005), ruled that the NOHWM is found at the point where the “presence and action of the water is so continuous as to leave a distinct mark either by erosion, destruction of terrestrial vegetation, or other easily recognized characteristic.” Respondent ruled that the NOHWM is coterminous with the public trust that applies to littoral lands.
Petitioner appealed in the Ingham Circuit Court, arguing that the Legislature expressly limited respondent’s jurisdiction to lands lakeward of 579.8 feet in elevation. The circuit court upheld the declaratory ruling, finding respondent’s interpretation of the statute more logical than petitioner’s proposed interpretation. This appeal followed.
Statutory interpretation is a question of law that we review de novo. In re Complaint of Rovas Against SBC Mich, 482 Mich 90, 102; 754 NW2d 259 (2008). An agency’s interpretation is not binding on a court. Id. at 103. However, “the construction given to a statute by those charged with the duty of executing it is always entitled to the most respectful consideration and ought not to be overruled without cogent reasons.” Id. (quo tation marks and citations omitted). Still, the agency’s interpretation may not conflict with the intent of the Legislature as statutorily expressed, and “respectful consideration” does not mean “deference.” Id. at 103, 108.
Respondent has jurisdiction to require permits under part 325 of the GLSLA concerning lands “lying below and lakeward of the natural ordinary high-water mark . . . .” MCL 324.32502. Because there is no provision defining the phrase “natural ordinary high-water mark,” statutory interpretation is necessary. The main goal of statutory interpretation is to give effect to the intent of the Legislature. Kuznar v Raksha Corp, 481 Mich 169, 176; 750 NW2d 121 (2008). When statutory language is unambiguous, the Legislature is presumed to have intended the plain meaning of the statute. Fleet Business Credit, LLC v Krapohl Ford Lincoln Mercury Co, 274 Mich App 584, 591; 735 NW2d 644 (2007).
Unless defined in the statute, each word or phrase in a statute should be given its plain meaning. Brackett v Focus Hope, Inc, 482 Mich 269, 276; 753 NW2d 207 (2008). “A lay dictionary may be consulted to define a common word or phrase that lacks a unique legal meaning.” Id. This Court should also presume that each statutory word or phrase has some meaning and thus avoid rendering any part of a statute nugatory. See Robinson v City of Lansing, 486 Mich 1, 21; 782 NW2d 171 (2010). The various parts of the statute must be read in the context of the whole statute to produce a harmonious whole. See, e.g., Henry v Dow Chem Co, 484 Mich 483, 495; 772 NW2d 301 (2009), and Haliw v Sterling Hts, 471 Mich 700, 706; 691 NW2d 753 (2005).
Again, the statute at issue states, in part:
This part shall be construed so as to preserve and protect the interests of the general public in the lands and waters described in this section____The word “land” or “lands” as used in this part refers to the aforesaid described unpatented lake bottomlands and unpatented made lands and patented lands in the Great Lakes and the bays and harbors of the great lakes lying below and lakeward of the natural ordinary high-water mark, but this part does not affect property rights secured by virtue of a swamp land grant or rights acquired by accretions occurring through natural means or reliction. For purposes of this part, the ordinary high-water mark shall be at the following elevations above sea level, international Great Lakes datum of 1955: Lake Superior, 601.5 feet; Lakes Michigan and Huron, 579.8 feet; Lake St. Clair, 574.7 feet; and Lake Erie, 571.6 feet. [MCL 324.32502 (emphasis added).]
The parties agree that the “natural ordinary high-water mark” constitutes the limit of respondent’s jurisdiction under part 325. However, they differ regarding the proper interpretation of that phrase. In its declaratory ruling, respondent stated that the elevations specified in the last sentence of MCL 324.32502 are not used to express the NOHWM, only the OHWM. Respondent concluded that the NOHWM must be different from the OHWM because otherwise the word “natural” would be rendered superfluous. Respondent noted that the statute exempts from its jurisdiction lands formed by reliction. The declaratory ruling explained that reliction is the gradual recession of water in a sea, lake, or stream, leaving permanently dry land. Thus, land that has become permanently dry is not subject to respondent’s jurisdiction. Respondent argued that this idea is incompatible with a rigid determination that its jurisdiction extends to a certain elevation.
Respondent’s declaratory ruling went on to state that the purpose of MCL 324.32502 was to protect the rights contained in the public trust and, therefore, that the NOHWM in the statute is the same as the “ordinary high-water mark” discussed by the Supreme Court in Glass. Respondent noted the language in the statute stating that it “shall be construed so as to preserve and protect the interests of the general public in the lands and waters described in this section” and to ensure that the “public trust in the state will not be impaired ... MCL 324.32502. Respondent indicated that because the Glass Court held that the public trust is not limited by the elevations specified in MCL 324.32502, and because that statute is intended to preserve the public trust, respondent’s jurisdiction should not be limited to the specified elevations, either.
We cannot agree with respondent’s interpretation. A number of considerations lead us to conclude that the circuit court erred by affirming respondent’s declaratory ruling. First, it strains credulity and common sense to conclude that phrases as similar as “natural ordinary high-water mark” and “ordinary high-water mark,” employed within the same statutory paragraph, were intended by the Legislature to encompass the very different meanings that respondent sets forth.
Second, respondent’s interpretation would pose serious difficulties concerning why the statutory elevations were included in MCL 324.32502 in the first instance. Respondent contends that the elevations are relevant for regulating activities such as dredging, beach maintenance, and the mowing and removal of vegetation. See MCL 324.32512, MCL 324.32501(b), MCL 324.32512a(3), MCL 324.32513(2)(b), and MCL 324.32516. However, most of these “uses” for the elevations were added many years after the elevations were codified. See 2003 PA 14 and 1968 PA 57 (amending former MCL 322.702 to add the elevations). Although one of the uses cited by respondent was in effect in 1968, before the 1968 amendment that added the elevations, the language containing the elevations was proposed in 1967. See former MCL 322.712 through 322.715, as added by 1968 PA 3, and HB 2621 of 1967 (enacted as 1968 PA 57). It again strains credulity to conclude that the Legislature included the elevations in the proposed statute for purposes that were not yet in existence.
Third, had the Legislature meant to apply respondent’s definition to the NOHWM, it could easily have added language explicitly doing so. Indeed, the Inland Lakes and Streams Act (ILASA), enacted two years before the amendments of the GLSLA that added the elevations were introduced, defined the phrase “ordinary high-water mark” in this manner. Former MCL 281.732(b), as added by 1965 PA 291; see MCL 324.30101(m).
Fourth, petitioner argues persuasively that the reference to reliction in the statute tends to negate respondent’s interpretation. MCL 324.32502 states that “this part does not affect property rights secured by virtue of a swamp land grant or rights acquired by accretions occurring through natural means or reliction.” If the NOHWM were independent of the listed elevations and defined in accordance with respondent’s interpretation, then the “reliction exception” would be superfluous because relicted lands would, by definition, fall outside the boundary of the NOHWM as defined by respondent.
Fifth, that the Glass Court held that the public trust is not limited by the elevations in MCL 324.32502 does not give us license to apply respondent’s definition to the NOHWM in the instant case. The Glass Court stated:
Moreover, the [GLSLA] never purports to establish the boundaries of the public trust. Rather, the GLSLA estab lishes the scope of the regulatory authority that the Legislature exercises, pursuant to the public trust doctrine. Indeed, most sections of the act merely regulate the use of land below the ordinary high water mark. [GZass, 473 Mich at 683.]
In other words, the scope of respondent’s regulatory authority under the GLSLA is not automatically equivalent to the scope of the public trust. We conclude that the pertinent statutory wording and the legislative history make clear that the scope of respondent’s regulatory authority under the GLSLA should be defined using the listed elevations.
Finally, we conclude that the term “natural” in the statute has an alternative, and reasonable, purpose. The ILASA provides guidance regarding how this adjective should be applied in the context of the present case. Former MCL 281.7320b), as added by 1965 PA 291, stated:
“Ordinary high water mark” means the line between upland and lake or stream bottom land which persists through successive changes in water levels, and below which the presence and action of the water is so common or recurrent as to mark upon the soil a character, distinct from that which occurs on the upland, as to the soil itself, the configuration of the surface of the soil and the vegetation. In case of an inland lake for which a level has been established by law, it means the high established level. In case of permanent removal or abandonment of a dam resulting in the water returning to its natural level it means the natural ordinary high water mark. [Emphasis added.]
The current version of the ILASA contains similar language in MCL 324.30101(m). The ILASA uses the phrase “natural ordinary high water mark” to refer to the specifically defined “[ojrdinary high water mark” as it would exist without alteration by humans. In addition, Random House Webster’s College Dictionary (1997) defines “natural” as “existing in or formed by nature....” When considering MCL 324.32502, it is logical to conclude that the Legislature, in defining the phrase “ordinary high-water mark” using specific elevations and, within the same paragraph, modifying that phrase with the adjective “natural,” intended the phrase “natural ordinary high-water mark” to refer to the specified elevations as measured by the land in its natural state, unaltered by humans. We adopt this logical conclusion.
In light of the foregoing considerations, we reverse the decision of the circuit court.
Reversed and remanded for further proceedings. We do not retain jurisdiction.
MURPHY, C.J., concurred with METER, J.
The MDEQ became part of the Michigan Department of Natural Resources and Environment on January 17, 2010. Executive Order No. 2009-45. For purposes of this case, however, the parties have continued referring to respondent as the MDEQ.
“Littoral” refers to land along a lake or seashore, while “riparian” properly refers only to land along rivers. Thies v Howland, 424 Mich 282, 288 n 2; 380 NW2d 463 (1985). Historically, however, the term “riparian” has often been used to refer to both types of land. Id.; see also Glass, 473 Mich at 672 n 1.
The dissent reasons that the phrase “ordinary high-water mark” was employed in other sections of the GLSLA when the Legislature enacted MCL 324.32502 in 1995; we note, however, that the elevations were actually added in 1968 and so any credible argument based on this line of reasoning should use 1968 as a reference point.
A party that filed an amicus curiae brief makes certain arguments concerning how and when the elevations should be measured. We leave this question for another day, when the issue is ripe for review and has been fully briefed by the parties to the appeal. | [
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HOEKSTRA, J.
In this action for third-party benefits under the no-fault act, MCL 500.3101 et seq., plaintiff appeals as of right the trial court’s order granting summary disposition to defendant under MCR 2.116(C)(10). We reverse and remand the case to the trial court for further proceedings.
I. BASIC FACTS AND PROCEDURAL HISTORY
In July 2004, plaintiff, a pedestrian at the time, was hit by a vehicle driven by defendant. Plaintiff was knocked backwards. She fell on her back and hit her head on the cement. At the time of the accident, plaintiff lived with Harrietta Johnson, her ex-mother-in-law. Neither woman owned a vehicle. Defendant had a no-fault insurance policy with Allstate Property and Casualty Insurance Company.
Plaintiff sued Allstate and defendant. In the first-party claim against Allstate, plaintiff alleged that Allstate had failed to pay personal protection insurance benefits, including expenses for attendant care and replacement services. In the third-party claim against defendant, plaintiff alleged that the accident caused her to sustain a serious impairment of body function. She asserted that she suffered injuries to her lumbar, thoracic, and cervical spine, including a herniated disk at L5-S1 (between the fifth lumbar and the first sacral vertebrae). She also asserted that she suffered a traumatic brain injury, which aggravated a preexisting seizure disorder. Plaintiff further claimed that defendant was required to pay her expenses for replacement services that Harrietta rendered more than three years after the date of the accident. The claims against Allstate and defendant were severed. The case against defendant was stayed, while the case against Allstate proceeded.
In the action for first-party benefits, Allstate moved for summary disposition on plaintiffs claim that she was entitled to benefits for attendant care and replacement services. The trial court granted the motion, concluding that plaintiff had failed to show that the care and services provided by Harrietta after the accident were either reasonable or necessary or that she incurred any expenses for the care and services. However, this Court reversed. Johnson v Allstate Prop & Cas Ins Co, unpublished opinion per curiam of the Court of Appeals, issued November 9, 2010 (Docket No. 292401). It held that genuine issues of material fact existed regarding how often Harrietta provided care and services to plaintiff, whether the care and services were causally connected to the injuries plaintiff suffered in the accident, whether the care and services were reasonably necessary, and whether plaintiff incurred any expenses for the care and services Harrietta rendered. Id. at 4-5.
Before this Court reversed the trial court’s order in the first-party action, defendant moved in this case for summary disposition under MCR 2.116(0(10) on plaintiffs claim for economic and noneconomic damages. The trial court granted the motion. First, the trial court held that expenses for replacement services were not allowable expenses because the phrase “allowable expenses” is defined in MCL 500.3107(l)(a) and expenses for replacement services are addressed in a separate subsection of the statute. Thus, it concluded that plaintiff was not entitled to excess benefits for “allowable expenses.” In addition, the trial court held that, in light of its order granting summary disposition to Allstate, plaintiff was not entitled to excess benefits from defendant. It explained that because it previously held that plaintiff had failed to provide reasonable proof that any expenses for services rendered by Harrietta were reasonable and necessary, plaintiff was prevented from relitigating the issue under the doctrine of collateral estoppel.
Second, the trial court held that plaintiff was not entitled to noneconomic damages because she had not suffered a serious impairment of body function. It concluded that there was not a valid dispute about the extent of plaintiffs injuries because the medical records showed no traumatic brain injury or lasting spinal damage. The trial court also concluded that plaintiff had not suffered an impairment of a body function. It explained that the medical records established that plaintiff suffered from a seizure disorder and degenerative back problems before the accident and that no changes were observed in medical examinations after the accident. It further concluded that even if plaintiff could show an impairment of body function, she failed to show that the impairment affected her ability to lead her normal life. The court reasoned that plaintiff was subject to significant limitations before the accident and that the quality of her life after the accident had not drastically changed.
II. EXPENSES FOR REPLACEMENT SERVICES
On appeal, plaintiff argues that the trial court erred by holding that expenses for replacement services rendered more than three years after the date of the motor vehicle accident are not compensable damages in third-party actions.
A. STANDARD OF REVIEW
We review de novo a trial court’s decision on a motion for summary disposition. Moser v Detroit, 284 Mich App 536, 538; 772 NW2d 823 (2009). Summary disposition is proper under MCR 2.116(C)(10) if “there is no genuine issue as to any material fact, and the moving party is entitled to judgment... as a matter of law.” We also review de novo issues of statutory interpretation. Ward v Mich State Univ (On Remand), 287 Mich App 76, 79; 782 NW2d 514 (2010).
B. APPLICABLE NO-FAULT STATUTES
With the enactment of the no-fault act, “the Legislature abolished tort liability generally in motor vehicle accident cases and replaced it with a regime that established that a person injured in such an accident is entitled to certain economic compensation from his own insurance company regardless of fault.” Kreiner v Fischer, 471 Mich 109, 114; 683 NW2d 611 (2004), overruled by McCormick v Carrier, 487 Mich 180; 795 NW2d 517 (2010). The benefits that an injured person is entitled to receive from his or her own insurance company are listed in MCL 500.3107 (§ 3107). Subsection (1) of that statute provides:
Except as provided in subsection (2), personal protection insurance benefits are payable for the following:
(a) Allowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation. Allowable expenses within personal protection insurance coverage shall not include charges for a hospital room in excess of a reasonable and customary charge for semiprivate accommodations except if the injured person requires special or intensive care, or for funeral and burial expenses in the amount set forth in the policy which shall not be less than $1,750.00 or more than $5,000.00.
(b) Work loss consisting of loss of income from work an injured person would have performed during the first 3 years after the date of the accident if he or she had not been injured....
(c) Expenses not exceeding $20.00 per day, reasonably incurred in obtaining ordinary and necessary services in lieu of those that, if he or she had not been injured, an injured person would have performed during the first 3 years after the date of the accident, not for income but for the benefit of himself or herself or of his or her dependent. [MCL 500.3107(1).]
In addition, a no-fault insurer must pay survivor’s loss benefits to the dependent survivors of a deceased insured. See MCL 500.3108(1). Survivor’s loss benefits, which are payable for no more than three years after the date of the accident, may not exceed $20 a day for a dependent and may not exceed a certain sum in a 30-day period. MCL 500.3108(1) and (2).
The Legislature, however, did not abolish all tort liability in motor vehicle accident cases. See MCL 500.3135(3); Kreiner, 471 Mich at 115. An injured person may recover certain limited economic damages from a negligent operator or owner of a motor vehicle. See MCL 500.3135(3)(c); Kreiner, 471 Mich at 114 n 2. MCL 500.3135(3) states:
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 [MCL 500.3101] was in effect is abolished except as to:
(c) Damages for allowable expenses, work loss, and survivor’s loss as defined in [MCL 500.3107 to MCL 500.3110] in excess of the daily, monthly, and 3-year limitations contained in those sections.[ ]
C. ANALYSIS
The issue in the present case is whether the excess “damages for allowable expenses” that an injured per son may recover in a third-party action pursuant to MCL 500.3135(3)(c) include expenses for services commonly known as replacement services that are rendered more than three years after the date of the accident. Resolution of this issue requires interpretation of § 3107(1).
The goal of statutory interpretation is to ascertain and give effect to the intent of the Legislature. Tevis v Amex Assurance Co, 283 Mich App 76, 81; 770 NW2d 16 (2009). The first criterion in determining legislative intent is the language of the statute. Id. If the language is unambiguous, the Legislature is presumed to have intended the meaning clearly expressed, and a court must enforce the statute as written. Ameritech Publishing, Inc v Dep’t of Treasury, 281 Mich App 132, 136; 761 NW2d 470 (2008). “Identical terms in different provisions of the same act should be construed identically____” Cadle Co v City of Kentwood, 285 Mich App 240, 249; 776 NW2d 145 (2009); see also Capitol Props Group, LLC v 1247 Ctr Street, LLC, 283 Mich App 422, 434; 770 NW2d 105 (2009) (“If the statute defines a term, that definition controls.”). Judicial construction of a statute is appropriate only when the language is ambiguous. Capitol Props Group, 283 Mich App at 434.
The Legislature defined “allowable expenses” as those expenses “consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.” MCL 500.3107(l)(a). This definition does not specifically describe expenses for replacement services. Replacement-services expenses, however, are specifically addressed in subdivision (c) of § 3107(1). The question then is whether this separate treatment of replacement-services expenses means that replacement-services expenses are expenses separate and distinct from allowable expenses or whether they are merely a category of allowable expenses.
As just stated, allowable expenses are those expenses “consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.” MCL 500.3107(l)(a) (emphasis added). In Griffith v State Farm Mut Auto Ins Co, 472 Mich 521, 534-535; 697 NW2d 895 (2005), the Supreme Court stated that the terms “recovery” and “rehabilitation” referred to restoring an injured person to the condition he or she was in before sustaining the injuries. Then, recognizing that the term “care” must have a meaning broader than “recovery” and “rehabilitation,” and yet not so broad as to render those terms nugatory, the Griffith Court held that “care” referred to “those products, services, or accommodations whose provision is necessitated by the injury sustained in the motor vehicle accident.” Id. at 535. It explained that “ ‘[c]are’ is broader than ‘recovery’ and ‘rehabilitation’ because it may encompass expenses for products, services, and accommodations that are necessary because of the accident but that may not restore a person to his preinjury state.” Id.
Considered within the definition of “care” in § 3107(l)(a) provided by the Supreme Court in Griffith, replacement services are services for the “care” of an injured person. Replacement services are those services performed by another that the injured person would have performed for his or her benefit or the benefit of dependents had the person not been injured. MCL 500.3107(l)(c). Consequently, replacement services are services that are needed as the result of an injury sustained in the motor vehicle accident. See Griffith, 472 Mich at 535. For example, in this case, plaintiff claims that before the accident she prepared her own meals, but since the accident and because of the back injury she sustained in the accident, she is no longer able to cook and Harrietta does so for her. If a person injured in a motor vehicle accident cooked his or her food before being injured, but because of the injury sustained is no longer able to cook, any expense incurred in paying someone to cook for him or her is a replacement-service expense. But the expense is also conceptually an “allowable expense” because the cooking service is “care” as defined in Griffith-, it was necessitated by the injury sustained in the accident. Because replacement services are services for the “care” of an injured person, we conclude that replacement-services expenses are not separate and distinct from allowable expenses; rather, they are merely one category of allowable expenses.
A question remains, however, concerning why the Legislature separately addressed replacement-services expenses in § 3107(l)(c). The answer, we believe, is that the Legislature included subdivision (c) in § 3107(1) to place limits on the amount of expenses for replacement services that a no-fault insurer must pay. MCL 500.3107(l)(a) contains no daily or yearly limits on the amount of allowable expenses that a no-fault insurer is required to pay. But a no-fault insurer is only required to pay $20 a day for replacement services for those services performed in the first three years after the date of the accident. MCL 500.3107(l)(c). Also, this explanation of the Legislature’s decision to include subdivision (c) in § 3107(1) is consistent with the fact that the expenses in the subdivision are not labeled “replacement services expenses.” Rather, subdivision (c) only refers to “[ejxpenses” and then describes services that have become known as replacement services. Because the expenses are not specifically named, it is reasonable to conclude that the expenses are simply one category of allowable expenses that are subject to a limit on recovery that is not applicable to other allowable expenses.
Our conclusion that replacement-services expenses are a category of allowable expenses is also supported by the inclusion of the phrase “allowable expenses, work loss, and survivor’s loss” in four provisions of the no-fault act. See MCL 500.3110(4); MCL 500.3116(4); MCL 500.3135(3)(c); MCL 500.3145Ü). These provisions contain general rules regarding the recovery of economic losses. For example, MCL 500.3110(4) provides that “[pjersonal protection insurance benefits payable for accidental bodily injury accrue not when the injury occurs but as the allowable expense, work loss or survivors’ loss is incurred.” If replacement-services expenses are a category of allowable expenses, then the phrase “allowable expenses, work loss, and survivor’s loss” refers to all economic losses for which the no-fault act permits recovery. We find nothing in the language of the no-fault act to suggest an intent by the Legislature to exclude replacement-services expenses from general rules applying to the recovery of economic losses.
In conclusion, because replacement-services expenses are “allowable expenses,” and because MCL 500.3135(3)(c) did not abolish tort liability for “[d]am-ages for allowable expenses... in excess of the daily, monthly, and 3-year limitations contained in [MCL 500.3107 to 500.3110],” we hold that damages for replacement-services expenses that are in excess of the daily and three-year limitations contained in MCL 500.3107(l)(c) may be recovered in a third-party action. Accordingly, we reverse the trial court’s order granting defendant summary disposition on plaintiffs claim for excess replacement-services expenses.
III. SERIOUS IMPAIRMENT OF BODY FUNCTION
Plaintiff also argues on appeal that the trial court erred by granting summary disposition on her claim that she suffered a serious impairment of body function.
“A person remains subject to tort habihty for noneconomic loss caused by his or her ownership, maintenance, or use of a motor vehicle only if the injured person has suffered death, serious impairment of body function, or permanent serious disfigurement.” MCL 500.3135(1). The Legislature defined a “serious impairment of body function” as “an objectively manifested impairment of an important body function that affects the person’s general ability to lead his or her normal life.” MCL 500.3135(7). Three prongs must be met to establish the threshold injury: “(1) an objectively manifested impairment (2) of an important body function that (3) affects the person’s general ability to lead his or her normal life.” McCormick, 487 Mich at 195. In McCormick, our Supreme Court held that it had previously incorrectly interpreted MCL 500.3135(7) and established new standards for determining whether a person has suffered a serious impairment of body function. Id. at 214-216.
Plaintiff claims that the trial court erred by determining as a matter of law that she had not suffered a serious impairment of body function because there was a factual dispute concerning the nature and extent of the injuries she suffered to her lumbar spine in the motor vehicle accident.
Whether a person has suffered a serious impairment of body function is a question of law for the court if the court finds that (1) there is no factual dispute about the nature and extent of the injuries or (2) if there is a factual dispute, the dispute is not material to the determination whether the person suffered a serious impairment of body function. MCL 500.3135(2)(a); McCormick, 487 Mich at 192-194. A material dispute is one that is “ ‘significant or essential to the issue or matter at hand’ it need not be outcome determinative. McCormick, 487 Mich at 194, quoting Black’s Law Dictionary (8th ed).
After reviewing plaintiffs medical records, we conclude there was a dispute concerning whether plaintiff s injuries from the motor vehicle accident included a herniated disk at L5-S1. According to two MRIs, plaintiff suffered a herniated disk. A June 2005 MRI revealed “a moderate sized broad based central disc herniation” at L5-S1. In addition, an August 2006 MRI showed “a right paracentral disk herniation” at L5-S1. Although plaintiff suffered from back problems before the motor vehicle accident, the scans and x-rays taken of plaintiffs back before the accident showed only degenerative changes; they did not reveal a herniated disk. Dr. James Whelan, plaintiffs primary-care physician, stated that plaintiffs October 2006 surgery was necessitated by injuries sustained in the accident.
However, other medical records indicated that plaintiff did not suffer a herniated disk. In a September 2006 office note, Dr. Farook Kidwai, the surgeon who performed plaintiffs surgery, wrote that he had reviewed an MRI of plaintiffs lumbosacral spine and it revealed a “bulging of the disc” at L5-S1. Kidwai also wrote that he told plaintiff that any surgery would involve decompression. In addition, in his surgical report, Kidwai stated that there were “severe degenerative changes” and a “considerable bulging of the disc at L5-S1.” Kidwai’s report made no mention of a herniated disk. Further, Dr. William Boike, who performed an independent medical evaluation of plaintiff, concluded after reviewing the August 2006 MRI and Kudwai’s surgical report that plaintiff did not have a herniated disk.
In determining that there was no valid dispute about the nature and extent of the injuries plaintiff sustained in the motor vehicle accident, the trial court failed to acknowledge the two MRIs that showed that plaintiff had a herniated disk at L5-S1. It did so even after defense counsel stated at the hearing on the motion for summary disposition that there was a dispute regarding whether plaintiff actually had a herniated disk. Because the trial court failed to account for the evidence suggesting that plaintiff suffered an objectively manifested injury, we reverse the trial court’s order granting summary disposition to defendant on plaintiffs claim that she suffered a serious impairment of body function. All further inquiries into whether plaintiff suffered a threshold injury must be answered using the new standards announced by the Supreme Court in McCormick.
Reversed and remanded for further proceedings.
Shapiro, EJ., and Talbot, J., concurred with Hoekstra, J.
We recognize that “disk” is sometime referred to in plaintiffs medical records using the commonly accepted alternate spelling “disc.”
The Supreme Court in McCormick overruled the Kreiner Court’s interpretation of the definition of “serious impairment of body function” in MCL 500.3135(7). See McCormick, 487 Mich at 194-209.
In addition, MCL 500.3135(3) provides that tort liability was not abolished for intentionally caused harm, damages for noneconomic loss when the person has suffered death, serious impairment of body function, or permanent serious disfigurement, or damages up to $500 to motor vehicles if the damages are not covered by insurance. MCL 500.3135(3)(a), (b), and (d).
The only other provision in the no-fault act in which the term “allowable expenses” appears is § 3107.
We note that our conclusion also agrees with how our Supreme Court and this Court have viewed the allowable expenses that are recoverable in third-party actions. In Kreiner, 471 Mich at 114 n 2, the Supreme Court wrote: “An injured person may file a tort claim against the party at fault seeking to recover excess economic losses (wage losses and replacement expenses beyond the daily, monthly, and yearly maximum amounts). MCL 500.3135(3)(c).” (Emphasis in original.) In addition, in Swantek v Auto Club of Mich Ins Group, 118 Mich App 807, 809; 325 NW2d 588 (1982), this Court stated, “The right of action against the tortfeasor for excess economic loss exists in all categories in which the insurer’s liability is limited by the statute: work loss, funeral cost, and replacement services.”
In addition, the model civil jury instruction on economic loss in an action for third-party benefits, M Civ JI 36.06, states that the plaintiff has the burden of proving sustained damages and the trial court is instructed to “insert those applicable economic loss damages suffered by the plaintiff in excess of compensable no-fault benefits for which plaintiff seeks recovery— e.g., work loss during the first three years in excess of no-fault benefits, all work loss beyond three years, excess replacement service expenses, etc.”
In their respective briefs on appeal, the parties dispute the effect the trial court’s order granting summary disposition to Allstate on plaintiff’s first-party claim for expenses for replacement services has on plaintiffs third-party claim. Because this Court reversed the trial court’s order and it is unknown whether plaintiff is entitled to benefits from Allstate for replacement services rendered within three years of the date of the accident, we decline to address whether plaintiff can recover excess benefits from defendant if she is not entitled to collect benefits from Allstate. The underlying factual basis of the parties’ controversy does not currently exist, and it may never exist again.
Plaintiff has abandoned any claims that as a result of the accident she suffered a brain injury, that her seizure disorder was aggravated, or that she sustained impairments to her cervical or thoracic spine.
The Court in McCormick stated that its reading of MCL 500.3135(2) was “not necessarily inconsistent” with the Kreiner Court’s interpretation the statute’s plain language. McCormick, 487 Mich at 194 n 8.
Whether plaintiff had a herniated disk or a bulging disk is relevant because Boike testified that a bulging disk is not a traumatic injury and that it would not have been caused by a motor vehicle accident.
Both parties have filed supplemental briefing regarding McCormick. However, any application of the standards announced in McCormick should first be undertaken by the trial court. | [
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M. J. Kelly, PJ. Defendant
Jeffrey Paul Gioglio appeals as of right his jury convictions of two counts of criminal sexual conduct in the second degree (CSC II) and one count of attempted CSC II. See MCL 750.520c(l)(a). The trial court sentenced him to serve 80 to 270 months in prison for his first CSC II conviction, 60 to 270 months in prison for his second CSC II conviction, and 18 to 90 months in prison for his conviction of attempted CSC II. On appeal, defendant argues that he did not have the assistance of counsel that the United States Constitution guaranteed him. And the record of the trial proceedings strongly suggests that he did not receive the kind of vigorous representation that one would expect in a trial that could — and did — result in a lengthy prison sentence. Indeed, after reviewing the trial record in light of the evidence adduced at the hearing on defendant’s motion for a new trial, we conclude that the trial court erred, as a matter of law, when it summarily concluded that this case did not implicate United States v Cronic, 466 US 648; 104 S Ct 2039; 80 L Ed 2d 657 (1984), and instead analyzed defendant’s motion solely under the test stated in Strickland v Washington, 466 US 668; 104 S Ct 2052; 80 L Ed 2d 674 (1984). Defendant’s trial counsel failed to subject the prosecution’s case to any meaningful adversarial testing. Therefore, prejudice must be presumed under Cronic. Accordingly, we reverse defendant’s convictions and remand for a new trial.
I. PROCEDURAL HISTORY
The prosecutor charged defendant with three counts arising from alleged sexual contact between defendant and his niece, TB, who was approximately six years old at the time of the events at issue. The prosecutor charged him with two counts of CSC II for his conduct, which included causing TB to touch his penis. The prosecutor also charged him with one count of attempting to commit CSC II for an incident where TB’s mother discovered TB sitting on defendant’s lap in her underclothes.
A. THE TRIAL
The trial began on the same day that the parties selected their jury. The prosecuting attorney, Christine Bourgeois, opened the case by giving a short summary of the evidence that she proposed to offer. She stated that, in May 2004, TB’s mother walked into her daughter’s room and saw TB “straddling” defendant’s lap on a chair and “rocking” and she could see that defendant “had an erect penis.” The prosecution then explained that the evidence would show that this was not the only incident; TB would testify about two other incidents where he touched TB or had TB touch him “for a sexual purpose.” She stated that TB would give the “specifics on exactly what happened” and that there would also be corroborating evidence. Based on the evidence she planned to present, she asked the jury to find defendant guilty. Defendant’s trial counsel, Susan Prentice-Sao, elected not to give an opening statement, but reserved it for later.
The prosecution’s first witness testified that she was TB’s physical education instructor for the 2008 to 2009 school year. The instructor testified that there was an incident in gym class where several students told her that TB had been telling other students that “her uncle had raped her.” The instructor stated that she notified various persons and that, as a result, child protective services became involved. Prentice-Sao did not object to the instructor’s testimony about what TB purportedly told other students, and did not cross-examine the instructor.
The prosecution next called TB to testify. She testified that she was born in 1998 and that in 2004 she and her family lived at her grandmother’s house in Kalamazoo along with defendant. She said, without objection, that defendant came to live with her after it was learned that his father “did some bad stuff to football players.” She stated that while living at her grandmother’s home, defendant “raped” her.
TB stated that on one occasion defendant kissed her on the lips and all over her body; he “French-kissed” her. On another day, defendant was mowing the lawn and when he finished he got her and took her behind the “air conditioning vent-type thing” and “stuck his private area out from — out from under his — he un zipped his pants and stuck his private up” and then made her “touch it and lick it.” She said that she licked it once and that he said “[TB] you’re doing it” while she licked it. She said she did not tell anyone at the time because she did not know any better. TB said that, on another day, he took her behind the couch, had her unzip her pants, and kissed her “private area.” He “pulled down my pants and underwear, and then kissed my private area.”
As for the final incident, TB testified that defendant sat on the desk chair in her room and asked her to sit on his lap. She “was sitting with [her] legs spread apart on his lap facing him.” She was wearing her nightgown and socks and he was about to make her touch his penis. She knew this because he “folded down his pants and boxers and stuck up his penis and — and before he was — he was trying to stick up his penis,” but her mother walked in.
TB testified that she finally told a girl at school and her gym teacher because she could not hold it in any longer. She did not tell her mother about the other incidents until after someone came to her school to speak to her about the incidents. After Bourgeois finished her direct examination, Prentice-Sao informed that court that she had no questions for TB.
HB testified next that she was defendant’s half-sister and TB’s mother. She stated that she and her family were living with her adoptive mother when her half-brother “came into a bind” and she took him into her home.
HB said that she has a sleep disorder and that her daughter normally stays in the living room with her when she sleeps. She said she awoke because she could not hear TB playing and got up to look for her. She found TB in her room with defendant: “[TB] was in her underwear, and [defendant] was on her desk chair in his pajama bottoms and [TB] was straddling him. And I walked in, and I told [defendant] to get the heck out of my house.” She said that when defendant got up she noticed that he had an erection. HB said that defendant tried to blame the incident on TB, stating that “it was her fault.” HB said she did not report the incident at that time because she thought she could handle it. After the incident came to light, she told an officer that defendant told her at the time that TB “wanted it.”
HB also said that she knew about a prior incident where her mother mentioned that she saw TB and defendant behind the air conditioner outside and TB had her pants undone. She said she put precautions in place to prevent any further problems but kicked him out after the incident in the bedroom.
At the close of direct examination, Prentice-Sao cross-examined HB. She asked her about what her mother noticed on the day TB was outside by the air conditioner with defendant. HB responded that her mother told her that she saw TB with her zipper undone. Prentice-Sao then asked about the visibility around the area where the compressor unit was in the yard. She then elicited testimony about the nature and frequency of HB’s discussions with TB about good touches and bad touches before the incidents at issue.
On redirect examination, HB agreed that she talked to TB about good touches and bad touches a couple of times and was surprised that TB never told her about defendant’s actions.
HB’s adoptive mother, SC, testified next. She said that she was living with HB and HB’s family in Kalamazoo. Defendant moved in with them on Labor Day weekend in 2003. SC said that there is an air-conditioning unit outside in an area that is difficult to see from anywhere in the house and that is also concealed from the neighbors. She testified that defendant would often play with TB and that he was willing to play with her on a more “childlike level.” She recalled that there was a time when TB came in from playing outside with defendant and had her zipper down.
She stated that, at some point in the spring or summer of 2004, she received a call at work from her daughter. Her daughter told her that something happened between TB and defendant; specifically, HB told her that she believed defendant “acted sexually toward [TB].” SC stated — without objection — that, although she did not initially have suspicions about defendant, “it was something I was always wary of because I knew [defendant’s] history of having been abused as a child.” She further stated that she decided to question TB and defendant individually to find out what happened.
SC testified that TB responded to her questions as though she did not know what she was talking about. She got the impression “that nothing had happened — or at least nothing that [TB] perceived to have happened.” When Bourgeois asked SC about her reaction given the “allegations [that] have surfaced,” she testified that TB must have felt that “she had to protect him, that he had probably told her that it was not something she should tell anyone else, that other people wouldn’t understand.” Prentice-Sao did not object to this question and answer and Bourgeois immediately asked SC whether she really knew that and SC agreed that it was just her guess.
SC testified that defendant denied that there had been any inappropriate touching, but that “he and [TB] loved each other and that [TB] had told him she loved him and they wanted to get married and have children.” He appeared to believe that this was a possibility. She said she explained to him that it was inappropriate, wrong, and illegal, but he “didn’t seem to understand that”:
And I said, you know, Jeffrey, even if she was — even if she was 16 years old and was begging you for sex, it would be wrong and illegal because you’re an adult and she’s a child. And he was just — -seemed totally unahle to see that line of what was appropriate and what was not.
She said he just kept saying “but we love each other.” She stated that she took her time with him to ensure that he understood her but “felt pretty certain that I had not gotten through to him, which is why I determined that he couldn’t stay in our house.” SC testified that she contacted defendant’s case manager and told her that there needed to be other arrangements for his living situation, and the caseworker arranged for him to move into an adult foster home. She said that she asked defendant if he understood why he had to leave and he said “yeah, ’cause you’re afraid of what might happen between me and [TB].”
Again, Prentice-Sao did not object to any of this testimony. Moreover, after the close of SC’s direct examination, she informed the court that she had no questions for SC.
Detective Christina Ellis testified that she interviewed defendant about the accusations against him. He said that the accusations were “bull crap.” He admitted that his sister walked in on him at a time when TB was sitting on his lap, but he denied that there was “inappropriate conduct.” He told her that his family was always trying to get him in trouble and that his sister was trying to get him in trouble because “she did not like the mentally handicapped.” He told her that he left the house because he and TB’s father got into a heated argument and that had TB not walked in on them, TB’s father might not be here today.
Ellis said that, in her experience, it is sometimes difficult for the accused to admit what he or she has done, so she decided to help defendant admit what he had done by putting some blame on TB. When she told him that TB had a crush on him and wanted to marry him, “he giggled — almost seemed kind of pleased about that.” He also stated that TB had tried to kiss him and, when asked whether TB might have kissed him when he was sleeping and he “didn’t realize it was [TB] so he kissed her back,” he told her that that “probably” happened. She said she told him she believed that, whatever had happened, it happened because “they cared so much about each other,” and defendant agreed that “he did care a great deal about [TB].” He nodded in agreement when she told him it was her opinion that he only did what he did because he thought “what he was doing was the right thing because they had grown so close” and he was “simply trying to show [TB] his love for her.”
Ellis said that she then told him that she knew “that he had been abused when he was younger. And so I explained to him the cycle of abuse and that sometimes when a child is abused — ” At this point Prentice-Sao objected to the relevance of the testimony. The trial court sustained the objection and instructed the jury that it was not to consider during its deliberations whether defendant had been abused. Ellis said that when she asked defendant whether he did these things to TB in order to express his love, he responded, “possibly, yes, but he couldn’t really remember.”
On cross-examination, Prentice-Sao asked Ellis whether defendant ever said he touched TB or had TB touch him, and she admitted that he did not ever say that. She also admitted that uncles do love their nieces and that it would not be unusual for an uncle to say so.
Bourgeois’s last witness was a mental health therapist, Connie Black-Pond. The trial court qualified her, without objection or voir dire, as an expert in the assessment and treatment of children and adults who have been sexually abused. Black-Pond testified generally about certain characteristics and behaviors that are common in children who have been sexually abused. Specifically, she testified about why it is that sexually abused children might not disclose the abuse until long after it has occurred, that when they do first disclose the abuse they might minimize it and often have trouble relating the details. Finally she testified that abused children might show a range of emotions when describing how they were abused and might even seem detached when describing the abuse.
On cross-examination, Prentice-Sao got Black-Pond to admit that women can be abusers as well as men. She also got her to admit that children are capable of lying. She then asked Black-Pond to describe the types of signs that would reveal that a child is lying. Black-Pond testified that children who are lying “often provide descriptions of events that actually tend not to change over time.” She also stated that the child’s description of the events might lack context and some of the emotional qualities that normally accompany descriptions of abuse, such as the “quality of relationships” and “worries the children have.”
On redirect examination, Black-Pond testified that her evaluations “are not intended to determine if children are telling the truth or lying.” In any event, she stated, the percentage of children that make false allegations is “very small.” Indeed, the research shows that about “two percent of — of the disclosures [are] potentially false.”
Prentice-Sao did not object to Black-Pond’s testimony on redirect — including the testimony that there was, in effect, a 98% chance that TB’s allegations were true. She also did not examine Black-Pond any further.
After Black-Pond testified, Bourgeois rested the prosecution’s case. Prentice-Sao then rested her case without presenting any witnesses and without making an opening statement.
In closing, Bourgeois summarized TB’s testimony and then told the jury that TB’s testimony alone satisfied the elements of each of the charges at issue; “So if you believe [TB], the defendant’s guilty.” Bourgeois then went on to state why it is that the jury should believe TB. And specifically she noted that children normally lie to get out of trouble, not to get into trouble; and TB had to endure the trouble of relating what happened to her to a police officer, a forensic interviewer, a prosecutor, the court, 12 strangers, and anyone else who happened to be in the court. Bourgeois, however, apparently forgot to change her closing statement to reflect the realities of the trial, because she stated that the fact that TB endured cross-examination was further evidence that she was telling the truth:
She underwent a cross-exam. Most adults would have had difficulty simply talking about sexual acts, let alone coming in here being cross-examined, talking about it in front of all these people; yet she went through that.
She had a lot of fun doing that, didn’t she? You saw her reaction when I asked her how it felt. She was on the verge of tears and didn’t quite react. She had a lot of fun.
Bourgeois then used Black-Pond’s expert testimony as a possible explanation as to why TB might have waited so long to disclose the abuse. She also noted that TB was credible because her testimony was not rehearsed: “If she had zipped through everything and been real factual and real clear on it, wouldn’t we have thought it was rehearsed? If everything she said matched exactly what grandma and mom said, wouldn’t we have thought they all sat down and colluded and planned this for some reason?” Finally, Bourgeois stated that the “United States Constitution claims justice for all,” including “the small victims, even when we don’t want to believe that these things happen.” And she closed her remarks by asking the jury to find defendant guilty.
Prentice-Sao began her closing remarks by noting that Black-Pond admitted that children lie. She also reminded the jury that defendant had to move into an adult foster home after he was kicked out of the home and that HB kicked him out around the time that she became pregnant. She then stated that TB “testified with robotic and rehearsed precision. There was no evidence of any inconsistencies. No evidence that her story evolved or changed in any way” Prentice-Sao also said she thought that TB showed a lack of emotions and suggested that this was because there was no abuse. She also argued that the adults were not very credible because there were inconsistencies in their statements. Finally she noted that there did not appear to be any trigger that might have caused TB to suddenly reveal the abuse so many years later and, as such, there was reasonable doubt as to whether defendant was guilty
In rebuttal, Bourgeois argued that TB’s testimony was consistent because she told it to the jury just once — and the inconsistencies with the adults was to be expected when relating events that occurred so long ago. Bourgeois then reminded the jury that Black-Pond had said that studies show that only 2% of children falsely report sexual abuse. She also noted that there was a trigger — gym class. And that, even though we do not know exactly what the trigger was, it is consistent with the types of things that happen in gym. Finally, Bourgeois reminded the jury that TB was in fact quite emotional: “But we saw her feelings. We saw her tear up. It looked like she was on the verge of tears. She didn’t have a word to say how she felt about it. It was five years earlier. But it clearly traumatized her. We saw that trauma.”
The jury then retired to deliberate at 11:32 a.m. At 1:30 p.m., the jury returned a verdict of guilty on all three counts. This appeal followed.
B. THE MOTION FOR A NEW TRIAL
In October 2009, Bourgeois wrote to the court administrator and expressed concerns about Prentice-Sao’s handling of defendant’s trial. She alleged that PrenticeSao had confided in her that defendant had admitted guilt and wanted to testify. Bourgeois said that Prentice-Sao said she was going to call defendant to the stand and ask him whether he engaged in the conduct at issue, which she expected he would deny. Bourgeois stated that she told Prentice-Sao that she could not ask him that question under the rules of ethics. PrenticeSao also told her that she could not bring herself to question a child sexual assault victim. Finally, Bourgeois stated that, after sentencing, Prentice-Sao “greeted me with a big smile, a thumbs-up, and the statement ‘He’s toast!’ ”
The court administrator asked Prentice-Sao to respond to Bourgeois’s claims in writing. In a letter dated November 12, 2009, Prentice-Sao responded to the accusations made by Bourgeois. Prentice-Sao admitted that she told Bourgeois that defendant had made some admissions but claimed that she did not state “which admissions were made” and did not state “that he admitted all of the charges as laid out in the police report.” Prentice-Sao also stated that she told Bourgeois that she did not plan to question the child because then Bourgeois might not “go overboard preparing her for trial.” She said she actually chose not to question TB because TB revealed new information on direct examination that might have led to new charges. She also stated that it would not have been possible to impeach the child because she
did not have a history of lying, having problems in school, or being difficult at home. She did not have a prior criminal record. She was not snotty or robotic. The whole time she testified the jury sat on the edge of their seats, looked horrified, and paid attention. I know this, because I watched the jury throughout her entire testimony.
Prentice-Sao also did not deny that she smiled and gave Bourgeois a thumbs-up after defendant’s sentencing; rather, she admitted that this was “possible,” but “I don’t remember.” However, if she did that, she imagined that it was because she “was just happy that the case was over.” Likewise, if she said he was “toast,” which she did not remember, then she imagined that she said that because it was “accurate” considering his sentence.
In November 2009, defendant’s new counsel moved for a new trial premised on ineffective assistance of counsel. Specifically, defendant’s new counsel argued that defendant was deprived of the assistance of counsel under the test stated in Cronic, because Prentice-Sao completely failed to advocate on his behalf, and because her representation was constitutionally ineffective under the test stated in Strickland. The trial court held a hearing on the motion in February 2010.
At the hearing, Bourgeois testified that she was assigned to prosecute the charges against defendant. After the close of the case, she sent a memorandum to the court administrator. She sent the letter because she had concerns about Prentice-Sao’s handling of defendant’s case and, after speaking with “some people in the office,” she was instructed to notify the court administrator. In her 17 years as a prosecutor, she had never before sent such a letter; indeed, she never even made a verbal complaint.
Bourgeois stated that she had concerns after a few events that occurred during trial. It struck her when Prentice-Sao did not cross-examine the victim because “the victim gave differing testimony than anything that we had seen in any of the reports.”
Bourgeois also testified that, after her expert reviewed the file, the expert expressed concern that defendant would need special services in prison should he be convicted. Because she expected defendant to be convicted, she approached Prentice-Sao about seeking those services, but it “was at that point that [PrenticeSao] told me that he wasn’t innocent [and] that he had told her that he had done it.” Bourgeois acknowledged that Prentice-Sao claimed that this discussion arose during plea negotiations, but stated that this was incorrect.
Prentice-Sao also “made it very clear to me on multiple occasions that she could not question a child sexual assault victim.” Bourgeois stated that PrenticeSao might have told her this as many as a “dozen times.” Prentice-Sao also said that defendant “made her sick” and told Bourgeois that “she couldn’t stand to look at him.” Prentice-Sao even told her at trial that defendant “was downstairs and she knew that he wanted to talk to her, but that she wasn’t going down[,] that he made her sick.” Bourgeois testified that she had seen Prentice-Sao “mimic” defendant’s speech impediment on “two or three occasions.” Bourgeois testified that, after defendant’s sentencing, Prentice-Sao gave Bourgeois “a big thumbs up with a big smile and said, He’s toast.” She stated that Prentice-Sao did not seem disappointed, but had a “happier voice.” She also did not believe that Prentice-Sao was being sarcastic or flippant; she believed her. Based on Prentice-Sao’s handling of the trial, Bourgeois stated that she felt as though “we had both just prosecuted him.”
Prentice-Sao testified that she had practiced criminal, bankruptcy, estate planning, and family law for five years. She stated that this was the first case where she had an opportunity to work with Bourgeois as a prosecutor. And her interactions with Bourgeois were “challenging” and not “professional.” She felt that Bourgeois was condescending towards her and stated that Bourgeois once told her that the case was “too big” for her to handle. She said that Bourgeois tried to tell her how to proceed with her case and asked her about the details of her defense. She said that she gave Bourgeois “snotty” responses that were not genuine. She did not try to “dissuade” Bourgeois from thinking that she did not know what she was doing. In the end, Prentice-Sao testified that Bourgeois misinterpreted her statements — that she misunderstood things that she “meant to be snotty” and took them to heart.
Prentice-Sao testified that she did have discussions with Bourgeois about his admissions, but that those conversations occurred during plea negotiations. She said that Bourgeois wanted to know if he would be able to admit to the elements of the crime and she told her “possibly.” She also noted that defendant had made some general admissions in the police reports, but she denied that she ever told Bourgeois that defendant had admitted that he did it.
Prentice-Sao stated that she has had occasion to question children in her past practice and would not hesitate to question a child if necessary. She said she “aggressively” spoke with defendant about accepting a plea deal because TB was such a compelling witness:
[TB’s] statements to the police and the forensic experts and prosecutors had been consistent, but not consistent to the point of being of — showing signs of coaching. Her language, vocabulary didn’t show signs of coaching. It was age appropriate. And I had spoken with ... the prosecutor who charged the case and who did the initial interview with [TB] ... and had learned that she thought that the testimony of [TB] was extremely strong; one of the best child witnesses that she had ever interviewed and one of the best sexual assault victims that she had ever interviewed.
At trial, Prentice-Sao decided not to cross-examine TB because she testified about additional details concerning the events and thought that these details could lead to more serious charges: “My concern was that if I did anything to highlight those incidences, Chris Bourgeois would become aware and amend the felony complaint to include CSC one, which is a life offense.” She thought that by avoiding the cross-examination, Bourgeois was “going to miss the boat and not amend the complaint.” She also did not want to alienate the jury because it was clear to her that they were “on the edge of their seats” and “looked like they were believing her.” Indeed, on cross-examination, Prentice-Sao stated that she herself “believed the child.” Finally, she stated that she wanted to be able to argue that TB’s testimony was “rehearsed and coached”; so she could not highlight that TB’s story “had expanded.”
Prentice-Sao testified that she was not sure if defendant would testify because he had an unpredictable personality. However, in case he did testify, she wanted to reserve her opening statement so that she could give a statement before he testified. Ultimately, defendant decided not to testify after her advice. She said that she had concerns about his mental abilities and his mental health and that he was emotional, unpredictable, and easily upset. Thus, she was worried about how he would hold up under cross-examination. She was even concerned that he might reveal his penis to the jury. Because defendant agreed not to testify and she did not have any further proofs, she no longer had a need for an opening statement; this was the reason that she did not give an opening statement.
Prentice-Sao also testified generally about the advocacy that she performed on defendant’s behalf outside the actual trial. She noted that she wrote him letters, spoke with him on the phone, spoke with his treatment team at Spectrum Health, and arranged for a forensic interview. She stated that she did not “know what else I could have done differently.”
When asked whether she disregarded defendant’s request to visit with her at any point during the trial, Prentice-Sao stated that she did not “know when there would have been time to speak with me or to disregard him.” She also stated that she did not remember ever giving Bourgeois a thumbs-up or saying that defendant was “toast.”
In March 2010, the trial court issued an opinion and order denying defendant’s motion for a new trial. The trial court — without explaining its reasoning — first determined that the “case does not contain the type of circumstances which call for an analysis under Cronic.” It then examined defendant’s claim of ineffective assistance under the test stated in Strickland. The trial court determined that “it was reasonable for defense counsel to waive an opening statement” and to not “question the minor victim.” Because Prentice-Sao’s reasons were logical and reasonable, the trial court ruled that defendant failed to overcome the presumption that his attorney’s “actions constituted sound trial strategy.” The trial court also rejected defendant’s contention that his trial counsel violated the rules of professional conduct or exhibited hostility towards him.
In its opinion, the trial court recognized that there was conflicting testimony, but did not resolve the conflicts through findings of fact. It did find that there was “animosity and a lack of respect” between Bourgeois and Prentice-Sao but did not state how that finding applied to the claims of ineffective assistance of counsel; it merely stated that the actions did not “rise to the level of ineffective assistance of counsel.” Finally, the trial court determined that defendant failed to establish a reasonable probability that the outcome of the trial would have been different but for his trial counsel’s actions.
This appeal followed.
II. THE RIGHT TO COUNSEL
A. STANDARDS OF REVIEW
This Court reviews de novo questions of constitutional law such as whether a defendant was deprived of his constitutional right to the assistance of counsel. People v Bryant, 483 Mich 132, 138, 768 NW2d 65 (2009). However, to the extent that the trial court made findings of fact related to a defendant’s claim that he was denied the effective assistance of counsel, this Court reviews those findings for clear error. People v LeBlanc, 465 Mich 575, 579; 640 NW2d 246 (2002).
B. THE CRONIC AND STRICKLAND TESTS
The United States and Michigan constitutions protect the right of an accused to have the assistance of counsel. US Const, Am VI; Const 1963, art 1, § 20. The right to have the assistance of a lawyer is a fundamental component of our criminal justice system: “Their presence is essential because they are the means through which the other rights of the person on trial are secured.” Cronic, 466 US at 653. “That a person who happens to be a lawyer is present at trial alongside the accused, however,” is not enough to guarantee the right; this is because the right “envisions counsel’s playing a role that is critical to the ability of the adversarial system to produce just results.” Strickland, 466 US at 685. Por that reason, the right to counsel includes the right to the effective assistance of counsel. Id. at 686. That is, an accused is “entitled to be assisted by an attorney, whether retained or appointed, who plays the role necessary to ensure that the trial is fair. ” Id. at 685 (emphasis added). Where an accused’s counsel’s conduct “so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result,” the accused has not received the effective assistance of counsel. Id. at 686.
When examining a claim of ineffective assistance of counsel under either the United States or Michigan constitutions, Michigan courts generally apply the test stated in Strickland. People v Frazier, 478 Mich 231, 243; 733 NW2d 713 (2007) (“Most claims of ineffective assistance of counsel are analyzed under the test developed in Strickland ....”); see also People v Hoag, 460 Mich 1, 5; 594 NW2d 57 (1999). This test takes into account the “variety of circumstances faced by defense counsel” and the wide “range of legitimate decisions regarding how best to represent a criminal defendant.” Strickland, 466 US at 689. In order to warrant relief, the defendant must show that his or her trial counsel’s performance fell below an objective standard of reasonableness and that it is reasonably probable that the result of the proceeding would have been different had it not been for counsel’s error. Frazier, 478 Mich at 243, citing Strickland, 466 US at 687, 690, 694. Further, the defendant must overcome a “strong presumption” that his or her trial counsel’s action was a matter of trial strategy. Strickland, 466 US at 489. Although Michigan courts will generally apply Strickland to ineffective-assistance claims, under certain rare situations, Michigan courts will presume prejudice under the test stated in Cronic. See Frazier, 478 Mich at 243.
In Cronic, the Court recognized that a defendant receives the kind of support envisioned by the Sixth Amendment where the defendant’s trial counsel subjects the prosecution’s case to “meaningful adversarial testing” even though he or she “made demonstrable errors.” Cronic, 466 US at 656. However, “if the process loses its character as a confrontation between adversaries, the constitutional guarantee is violated.” Id. at 656-657. The Court further recognized that there were circumstances involving trial counsel’s performance that were so likely “to prejudice the accused that the cost of litigating their effect in a particular case is unjustified.” Id. at 658. In such cases, prejudice is presumed.
The Court in Cronic identified three situations warranting a presumption of prejudice: where the defendant was completely denied the assistance of counsel at a critical stage, where the defendant’s trial counsel “entirely fails to subject the prosecution’s case to meaningful adversarial testing,” and where the circumstances under which the defendant’s trial counsel functions are such that “the likelihood that any lawyer, even a fully competent one, could provide effective assistance is so small that a presumption of prejudice is appropriate without inquiry into the actual conduct of the trial.” Id. at 659-660.
In the present case, we conclude that Prentice-Sao’s performance implicates the second exception stated in Cronic — the failure to meaningfully test the prosecution’s case.
C. CRONIC: MEANINGFUL ADVERSARIAL TESTING
In Cronic, the Supreme Court recognized that, where a defendant’s trial counsel “entirely fails to subject the prosecution’s case to meaningful adversarial testing, then there has been a denial of Sixth Amendment rights that makes the adversary process itself presumptively unreliable.” Cronic, 466 US at 659. In order to meet the requirements of this exception, a defendant must show that his or her counsel’s “failure” was “complete”; that is, he must show that his counsel “entirely” failed to subject the prosecutor’s case to meaningful adversarial testing. Bell v Cone, 535 US 685, 697; 122 S Ct 1843; 152 L Ed 2d 914 (2002). Where a defendant does not argue that his counsel failed on the whole to subject the prosecution’s case to meaningful adversarial testing, but instead argues that discrete acts at specific points in the trial were inadequate, the proper test is that stated in Strickland. Id. at 697-698. “For purposes of distin guishing between the rule of Strickland and that of Cronic, this difference is not of degree but of kind.” Id. at 697; see also Moss v Hofbauer, 286 F3d 851, 860-861 (CA 6, 2002) (listing cases where courts have found that Cronic applied). Nevertheless, even in cases where a defendant has the benefit of adversarial testing, his trial counsel’s performance can be “so inadequate that, in effect, no assistance of counsel is provided.” Cronic, 466 US at 654 n 11 (quotation marks and citation omitted).
In this case, Prentice-Sao did not make an opening statement and did not present any witnesses or evidence. Accordingly, the extent of her adversarial testing was limited to reacting to Bourgeois’s examination of her own witnesses, to her cross-examination of Bourgeois’s witnesses, and to her closing statement. And although an attorney might offer meaningful testing of a prosecution’s case through objections, cross-examination, and closing arguments alone, this is not such a case.
Prentice-Sao did not cross-examine TB’s physical education instructor concerning the circumstances giving rise to the allegations in this case. By failing to address this evidence, she permitted an inference that TB’s allegations came about spontaneously rather than out of circumstances tending to suggest fabrication. Further, she did not object to the instructor’s hearsay testimony.
Prentice-Sao also did not cross-examine TB, whose testimony constituted the primary evidence against defendant on all three charges. She failed to cross-examine her even though TB’s testimony at trial differed from that of her mother concerning the acts underlying the attempt charge and differed from her earlier accounts. She also did not test TB’s memory, or ability to distinguish between innocuous contact and contact done for a sexual purpose. Prentice-Sao also failed to object when TB offered testimony that defendant came to live with her family after his father did something “bad” to football players. Thus, Prentice-Sao allowed Bourgeois to present her most damaging evidence without any challenge whatsoever.
As for TB’s mother, Prentice-Sao did cross-examine her. However, she did not cross-examine her about the context surrounding the time she allegedly walked in on defendant while TB was straddling his lap, which was by far the most damaging testimony. Nor did she challenge her credibility by asking her pointed questions about her relationship with her half-brother. Instead, she asked some tangential questions about what her mother might have seen on the day defendant allegedly took TB behind the air conditioning unit. She did establish that HB had had discussions with TB about good touches and bad touches but failed to relate that testimony to the case in any meaningful way. Accordingly, HB’s testimony, which corroborated and provided context to TB’s testimony, was left unchallenged.
Prentice-Sao then allowed TB’s grandmother, SC, to testify without objection that she knew defendant had been abused as a child. She also provided testimony that strongly suggested that defendant had a propensity to commit inappropriate sexual acts — also without objec tion. Indeed, she was allowed to testify that she kicked defendant out of her home because, despite her efforts to make him understand that his behavior was “wrong” and “illegal,” he could not appreciate the “line of what was appropriate and what was not” and, for that reason, he could not be trusted around TB. PrenticeSao also allowed SC to testify that defendant had a case manager and that, after she kicked him out of her home, his case manger got him into an adult group home. Prentice-Sao nevertheless felt no need to cross-examine SC about any of this testimony.
Detective Ellis testified next about her interview with defendant. She stated that she tried to manipulate defendant into admitting that he committed the charged acts and suggested that she knew he was guilty. Indeed, she stated that she tried to help him admit his guilt by placing some of the blame on TB and by suggesting that his conduct was just his special way of showing how much he loved TB. Prentice-Sao allowed this testimony to go virtually unchallenged — her only objection was when Ellis began to testify that she knew that defendant had been abused and began to talk about the “cycle of abuse.” And while the objectionable character of this line of questioning is obvious, Prentice-Sao had already allowed similar testimony that defendant had been abused — possibly sexually — and might have a propensity to act in the same way. Moreover, on cross-examination, Prentice-Sao’s questions were limited and not particularly useful to the defense; she got Ellis to admit that defendant never specifically admitted to doing the charged acts and to admit that uncles may love their nieces and might say as much. Yet the fact that uncles sometimes express love to their nieces is a matter of common sense, and that rejoinder did nothing to mitigate the harm caused by the testimony that defendant agreed that he might have kissed TB back if she kissed him first and agreed that anything that might have happened between him and TB happened because he loved her. Taken in light of SC’s testimony that defendant — a grown man — purportedly said he wanted to marry TB and have children with her, this testimony was tantamount to an admission of guilt even in the absence of an admission to the specific acts.
Bourgeois’s final witness was Black-Pond, who testified generally about some behaviors exhibited by children who have been abused. Bourgeois offered this testimony to explain why TB’s reports of abuse might have been delayed, why she might have trouble relating the details of the abuse, and why her emotional response might not be what the jury would expect. Although Black-Pond offered no substantive evidence regarding the events at issue — indeed she admitted that she had not met TB and only knew about the case through written reports — Prentice-Sao saved her most extensive cross-examination, such as it was, for this witness.
On cross-examination, Prentice-Sao got Black-Pond to admit that women can be abusers, a fact that was completely irrelevant to the case at hand. She also got her to admit that children can and do lie, which is also a matter of common sense. Finally, she got Black-Pond to describe some signs that a child’s allegations might be false. Whatever good that this cross-examination might have produced was, however, quickly undone when Black-Pond testified on redirect that literature showed that only 2% of all allegations of abuse by children are false. That is, although Prentice-Sao got Black-Pond to admit that children might make false allegations and got her to describe some possible signs that TB’s allegations might be false, she also allowed her to testify — without any objection — that there was a 98% chance that TB’s allegations were true. After this particularly prejudicial testimony, both the prosecution and defense rested.
In her closing, Prentice-Sao’s argument focused on reasonable doubt. She argued that TB’s testimony appeared robotic and rehearsed and suggested that it was insufficient for the jury to find defendant guilty beyond a reasonable doubt. She made this argument despite the fact that Bourgeois already characterized TB’s testimony in her closing as emotional, which, if true, would have been readily apparent to the jury, and despite the fact that the prosecution’s expert testified that the vast majority of allegations of abuse made by children are true. She also suggested that the jury could not believe HB’s corroborating testimony because there were inconsistencies between her version and that of TB. But she failed to discuss the inconsistencies at any length and failed to address Black-Pond’s testimony that child victims will often get details wrong. It is also difficult to see how she could make this argument after she failed to explore the inconsistencies through cross-examination of the witnesses. Further, Prentice-Sao admitted after the trial that TB was an excellent witness, did not appear robotic or rehearsed, and that it was obvious to her at the time that the jurors not only believed her but were on the edge of their seats throughout her testimony.
Examining Prentice-Sao’s handling of the defense as a whole, we conclude that she completely failed to submit the prosecution’s case to the meaningful adversarial testing contemplated under the Sixth Amendment to the United States Constitution and the Michigan Constitution. “While a criminal trial is not a game in which the participants are expected to enter the ring with a near match in skills, neither is it a sacrifice of unarmed prisoners to gladiators.” Cronic, 466 US at 657 (quotation marks and citation omitted). Here, Prentice-Sao threw defendant into the ring with no defense whatsoever. She permitted Bourgeois to present a parade of damaging — and sometimes highly improper— testimony with virtually no objection and with no meaningful adversarial testing. She also mounted the feeblest of defenses imaginable under the circumstances: a defense that was undermined by her failure to bring out the flaws in the testimony of the prosecution’s witnesses on cross-examination and that apparently was not supported by the actual events at trial. Indeed, the prosecutor herself characterized defendant’s trial as one in which there were two prosecutors. It is, therefore, no wonder that the jury returned a verdict of guilty on all counts after only two hours of deliberation and in a timespan that likely even included a break for lunch.
Defendant may very well be guilty and might deserve a lengthy prison term, but our constitutions do not reserve the right to the effective assistance of counsel to only those defendants who are actually innocent; rather, the integrity of our criminal justice system demands that every defendant receive effective assistance of counsel. In this case, it is clear that PrenticeSao’s performance was so inadequate that, in effect, defendant had no assistance of counsel at all. See Cronic, 466 US at 654 nil; see also Rickman v Bell, 131 F3d 1150, 1157 (CA 6, 1997) (stating that the defendant’s trial counsel’s total failure to actively advocate for his client’s cause coupled with his expressions of contempt for the defendant amounted to the provision of a second prosecutor rather than a defense counsel, which warranted reversal under Cronic). Accordingly, prejudice must be presumed under Cronic and defendant is entitled to a new trial.
D. STRICKLAND
On appeal, defendant also argues that Prentice-Sao’s total failure to challenge the prosecutor’s case warrants the reversal of his convictions under the test stated in Strickland. Although we agree that Prentice-Sao’s conduct of the defense was deficient in several respects, defendant does not address the specific instances he claims deprived him of a fair trial under the test stated in Strickland. Instead, he merely refers to the examples cited in his discussion of Cronic. These include Prentice-Sao’s alleged betrayal of his confidences and her decision not to cross-examine TB. However, given the record as it now stands, defendant likely cannot meet the prejudice prong of that test. See Strickland, 466 US at 694 (“The defendant must show that there is a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different.”). As Justice Stevens once noted, the failure to offer any meaningful adversarial testing makes a prejudice analysis difficult: “a proper Strickland inquiry is difficult, if not impossible, to conduct when counsel has completely abdicated his role as advocate, because the abdication results in an incomplete trial record from which a court cannot properly evaluate whether a defendant has or has not suffered prejudice from the attorney’s conduct.” Bell, 535 US at 718 (Stevens, J., dissenting). This is a case in point. By abdicating her ethical obligation to vigorously defend the accused — whether consciously or otherwise— Prentice-Sao created a record that gives the impression of overwhelming guilt. This problem was further exacerbated by the trial court’s failure to make specific findings of fact after the hearing on defendant’s motion for a new trial and specifically its declining to resolve the credibility dispute between Bourgeois and PrenticeSao.
At the hearing, Bourgeois gave credible testimony that Prentice-Sao thought defendant was guilty and had expressed a strong dislike — even contempt — for him; she had said he made her “sick” and had stated that she could not even stand to “look at him.” She also testified that Prentice-Sao refused to meet with her client on one occasion because of her dislike for him. Bourgeois even saw Prentice-Sao mimic his speech impediment. She stated that Prentice-Sao had repeatedly — at least eight times, and perhaps as many as a dozen times — told her that she could not cross-examine TB. And Prentice-Sao testified that TB had not appearred to be lying and that she herself had believed TB. This evidence strongly suggests that Prentice-Sao’s decision not to cross-examine TB had nothing to do with reasonable trial strategy; rather, it suggests that Prentice-Sao chose not to cross-examine TB because she believed TB was truthful and, for that reason, did not deserve to be put through a cross-examination on behalf of her guilty client. If that was the case, then Prentice-Sao’s decision necessarily fell below an objective standard of reasonableness under prevailing professional norms. But the trial court did not make the findings necessary to resolve this issue.
Similarly, the trial court did not find whether Prentice-Sao actually told Bourgeois that her client was guilty and did not find whether Prentice-Sao expressed an unbecoming enthusiasm after the trial court gave defendant a lengthy sentence by giving Bourgeois a thumbs-up and exclaiming, “He’s toast.” The ascertainment of these facts would have gone a long way to aiding this Court in determining whether PrenticeSao’s individual decisions to object to testimony, to cross-examine witnesses, and to pursue the closing argument that she did were legitimate and reasonable efforts on behalf of her client.
This evidence also tends to suggest that Prentice-Sao had an intractable bias against her own client that made it impossible for her to make sound professional decisions on his behalf. Where an attorney has an actual conflict of interest that affects his or her ability to advocate on behalf of a defendant and that conflict actually causes the attorney to take an action that was not in the defendant’s best interest, the defendant is entitled to a new trial without a further showing of prejudice. See Mickens v Taylor, 535 US 162, 168; 122 S Ct 1237; 152 L Ed 2d 291 (2002). We conclude that an attorney’s strong bias against his or her own client constitutes such a conflict of interest. See United States v Swanson, 943 F2d 1070, 1074 (CA 9, 1991) (noting that an attorney who adopts the view that his client is guilty and acts on that belief fails to function in any meaningful sense as the government’s adversary). Yet the trial court did not make the findings necessary to resolve this matter either. Nevertheless, given our determination that Prentice-Sao failed to subject the prosecution’s case to any meaningful adversarial testing, we do not need to determine whether defendant’s inadequate representation also warrants relief under Strickland. Nor do we need to remand this case back to the trial court for more specific findings or for a clear resolution of the credibility dispute between Bourgeois and Prentice-Sao.
III. RESPONSE TO THE DISSENT
As already explained, the present case implicates the “meaningful adversarial testing” prong of the test stated in Cronic. Our dissenting colleague faults us for applying this test because she believes that this test cannot apply in any case where a defendant’s trial counsel took any action on behalf of his or her client— however meaningless that action might have been. But the United States Supreme Court did not state that the Cronic test applied only to those situations where there was no adversarial testing whatsoever-, rather, it very clearly stated that there had to be a total failure to subject the prosecution’s case to “meaningful adversarial testing.” Cronic, 466 US at 659 (emphasis added). That is, the Supreme Court recognized that there might be extreme cases where, although the defendant’s trial counsel took some actions on behalf of his or her client, the actions were so few and so ineffectual that it was tantamount to having no lawyer present at all. See id. at 654 nil. And a court reviewing such a case would be justified in presuming prejudice. Id. at 659-660.
Further, in order to determine whether a defendant’s trial counsel subjected the prosecutor’s case to meaningful adversarial testing, a reviewing court must necessarily evaluate the actions actually taken on the defendant’s behalf — one simply cannot determine whether a defense was meaningful without evaluating the totality of the acts taken in furtherance of the defense. A trial lawyer might offer meaningful testing through pretrial procedures. However, consulting with other professionals, reviewing the law, and generally familiarizing oneself with the evidence do not constitute meaningful pretrial testing. In this case — as with the majority of cases — the true testing must take place before the jury. For these reasons, we carefully examined every action taken on defendant’s behalf at trial to determine whether those actions, when viewed as a whole, amounted to “meaningful adversarial testing.” We concluded that — as a matter of law — those acts did not meet that minimum threshold. It is clear that this is where we part company with our learned colleague: the dissent would conclude that an occasional objection, some limited and rather benign questioning on cross-examination, and a feckless closing statement that was contradicted by the evidence actually presented were sufficient to remove this case from application of the test stated in Cronic. We simply cannot agree.
The dissent also rebukes us for failing to properly apply Strickland. But as the dissent acknowledges, we did not apply Strickland. We noted that defendant presented a claim of error under Strickland and we explained that that claim would likely fail, but we chose not to address it given our resolution of defendant’s claim under Cronic. We also explained that it would be difficult to even analyze this case under Strickland given that the prosecution’s case was not subjected to meaningful adversarial testing. As should be obvious, where a defendant’s trial lawyer fails to put on a meaningful defense, the evidence of guilt will invariably appear overwhelming. That is the reason for a presumption of prejudice. And, contrary to the dissent’s claim, we did not “ignore” Bell by adopting the minority position on this point. Rather, we simply demonstrated that this rather unremarkable observation was not novel. In any event, notwithstanding that observation, we plainly applied Bell, which requires a showing that the failure to offer meaningful testing was “complete.” See Bell, 535 US at 697. Respectfully, it is the dissent that disregards the Supreme Court’s guidance by effectively omitting the Court’s reference to “meaningful” testing and instead asserting that any testing — even meaningless testing — is sufficient to preclude analysis under Cronic.
Given that we did not apply Strickland, it is also difficult to respond to the accusation that we failed to properly defer to the trial court’s findings and credibility determinations. To this accusation we can only offer that one cannot defer to findings that were never made. As can be seen from the dissent’s lengthy quotation of the trial court’s opinion, the opinion is devoid of any relevant findings. The trial court did state that it “was reasonable for defense counsel to waive an opening statement,” that it was “reasonable for defense counsel not to question the minor victim,” and that the court did “not find that such actions rise to the level of ineffective assistance of counsel,” but those statements are conclusions of law — not findings. The only statement that could constitute a relevant finding is the court’s admission that Prentice-Sao and Bourgeois had “different views about the discussions [and] events” at issue and that there was “animosity and a lack of respect between the attorneys.” However, contrary to the dissent’s assertion, this did not resolve the credibility dispute between Prentice-Sao and Bourgeois and did not amount to a finding that Prentice-Sao did or did not take a specific action for any particular reason or that she made a specific statement. Thus, there was no relevant finding on this matter to which this Court could defer. Given the serious allegations against Prentice-Sao, one might be tempted to infer that the trial court must have made a finding in favor of Prentice-Sao in order to reach the result that it did, but even if we were inclined to apply Strickland to this case, unlike the dissent, we would not be inclined to make such inferences. Rather, we would feel compelled to remand this matter for more definite findings.
We recognize that the presumption of prejudice under Cronic will apply only in the most extraordinary of cases. We believe that this is such a case. And, because this is such an extreme case, we find it difficult to believe that this conclusion will be the occasion for a flood of new Cronic claims. Whatever the faults in our system, we have no difficulty concluding that the vast majority of criminal defense lawyers not only subject the prosecution to meaningful adversarial testing, but also do so in a professional and effective way. This was one of those rare trials where that was not the case.
rv CONCLUSION
Defendant’s trial counsel entirely failed to subject the prosecution’s case to “meaningful adversarial testing.” Cronic, 466 US at 659. Therefore, he did not receive the assistance for his defense that is guaranteed by the United States and Michigan Constitutions. Accordingly, we must reverse his convictions and remand for a new trial.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
BORRELLO, J., concurred with M. J. KELLY, EJ.
The instructor’s testimony was hearsay within hearsay and quite possibly objectionable. See MRE 801; MRE 802; People v Rodriquez (On Remand), 216 Mich App 329, 332; 549 NW2d 359 (1996) (noting that testimony by teachers relating what the victim allegedly told them was inadmissible hearsay).
As can be seen from the record, Prentice-Sao very carefully avoided denying these claims and instead professed that it was “possible,” but that she did not remember. For that reason, we cannot understand the dissent’s assertion that Prentice-Sao outright denied having smiled, gestured, and exclaimed, “He’s toast!”
We find it troubling that, even when read from a transcript, PrenticeSao’s testimony appears impish and contrived; it seems that she was unable or unwilling to appreciate the gravity of the moment.
On appeal, defendant cites specific moments where Prentice-Sao failed to test the prosecution’s case, including the decision to not cross-examine TB. However, it is clear that defendant cites these incidents as evidence that Prentice-Sao failed to test the prosecution’s case as a whole. We do not take these examples as proof that defendant’s claim is really one premised on individual failings that should be analyzed under Strickland. To be thorough, we shall examine every action taken by Prentice-Sao at trial to determine whether, as a whole, those actions can be said to amount to meaningful adversarial testing of the prosecutor’s case.
It is noteworthy that Prentice-Sao completely failed to cross-examine any of defendant’s family members about his mental limitations and how those limitations might have affected his ability to effectively communicate despite clear record evidence that she was aware of those limitations. Had she done so, she might have limited the harm caused by SC and Ellis’s testimony that tended to suggest that defendant admitted to having inappropriate feelings for TB and engaged in the sexual conduct at issue. See People v Yost, 278 Mich App 341, 365-366; 749 NW2d 753 (2008) (holding that it was prejudicial error for the trial court to prevent the defendant from presenting evidence concerning her intellectual limitations because the implications of the defendant’s statements could not be fully evaluated without understanding those limitations).
Although we believe Prentice-Sao’s deficient handling of this case is evident on the record alone, we find it particularly noteworthy that Bourgeois felt compelled to report Prentice-Sao: the first time she so felt compelled in her 17-year career. Prosecutors are not known for challenging the fairness of the trials they prosecute and the fact that Bourgeois did so is — besides an act of courage — compelling evidence that defendant did not receive proper representation at trial. It is troubling that our dissenting colleague sees fit to traduce the prosecutor for this.
Prentice-Sao failed to object to hearsay, failed to object to testimony that defendant had been abused and had a case manager, failed to object to suspect expert testimony concerning the veracity of sexual abuse allegations by children, failed to cross-examine several witnesses, provided inadequate cross-examination of others, failed to make an opening statement, and presented a defense attacking TB’s credibility in her closing even though she herself testified that TB was an excellent witness and did not appear to be coached or rehearsed. Had defendant properly raised each of these shortcomings, we would conclude that these failings warranted a new trial in the aggregate without the need for a remand, even if no one error warranted relief on its own. LeBlanc, 465 Mich at 591.
In point of fact, there is no minority test in Bell. In his dissent, Justice Stevens did not express disagreement with the requirement that the failure must be entire in order to implicate Cronic. He merely expressed his disagreement with the majority’s conclusion that the record showed that the defendant’s trial counsel did offer some level of meaningful adversarial testing. See Bell, 535 US at 716-717 (Stevens, J., dissenting).
The court did briefly note that Prentice-Sao took some basic steps to prepare for trial and acknowledged her background working with children, but these findings did not resolve any of the disputes about the evidence that were material to determining whether Prentice-Sao was ineffective.
While we noted that Prentice-Sao’s testimony at the hearing appeared contrived, we did not make a specific finding or credibility determination. Instead, our analysis focused on the record and the actions actually taken by Prentice-Sao on her client’s behalf. | [
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PER CURIAM.
In this case involving personal injury insurance coverage, defendants Nicolas Andrzejewski and his parents, Darrell L. Andrzejewski and Kristen Andrzejewski, appeal as of right the trial court’s grant of summary disposition under MCR 2.116(C)(10) in favor of plaintiff, Auto Club Group Insurance Association. We affirm.
Nicolas Andrzejewski was 13 years old at the time of the incident in which defendant Matthew Volk, also 13 years old, was injured. The injury occurred on March 28, 2008, during the course of a basketball game on “Teen Night” at the Grandville YMCA.
Nick and Matt were on opposing teams in a half-court game where the number of players on each team varied from four to seven per team and there was no restriction on substitutions. Matt and Nick guarded each other throughout the game. Matt claimed that Nick was “playing dirty” and that Nick had grabbed his shirt eight or ten times during the game. Matt also said that Nick grabbed his arm four or five times to take the ball away, elbowed him four or five times, threw the basketball hard at his chest twice, and unsuccessfully tried to trip him three to five times. Matt did not recall how he was injured. Nick claims that Matt pushed him in the back as he bent over to pick up a ball. Nick testified that he “got mad” and put Matt in a headlock. As Matt struggled to get out, he fell forward and hit his head on the ground. Matt’s friends stated that Nick threw a punch at Matt. Matt’s friends also stated that Nick then put Matt in a headlock, picked Matt up, and threw Matt onto the gym floor. After Matt’s head hit the floor, he began to have a seizure.
Matt was taken by ambulance to the emergency room. He suffered an acute head injury with associated seizures, two hematomas on his head, soft-tissue injuries, a bruised or fractured iliac crest of his hip bone, photophobia, and postconcussion syndrome.
As a result of this incident, the prosecutor filed a delinquency petition requesting the Kent Circuit Court, Family Division, to take temporary custody of Nick, as a juvenile who violated Michigan’s aggravated-assault statute, MCL 750.81a(l). Jurisdiction was subsequently transferred to Ottawa County, where Nick and his family lived at the time. A plea of nolo contendere was entered for Nick and the referee entered a juvenile adjudication and disposition, ordering that Nick be made a temporary ward of the court, be placed in the Ottawa County Juvenile Detention Center for 10 to 14 days, and serve 56 hours of community service.
In 2009, Matt, by his next friend, Lori Volk, his mother, filed suit against Nick and his parents (hereafter defendants). The complaint alleged that Nick was overly aggressive and acted intentionally, recklessly, carelessly, negligently, unlawfully, and maliciously toward Matt. Defendants were insured under a homeowner’s insurance policy issued by plaintiff, which included liability insurance coverage.
Plaintiff is currently defending the underlying tort action brought by Matt and his mother against defendants under a reservation of rights set forth in a letter dated August 24, 2009. Plaintiffs reservation-of-rights letter set forth three separate grounds for denying coverage for the claims asserted against defendants: (1) there was no “occurrence” as defined in the policy; (2) the “intentional acts” exclusion set forth in ¶ 5 of the exclusions under part II, liability coverage was applicable; and (3) the “criminal acts” exclusion set forth in ¶ 10 of the exclusions under part II, liability coverage was applicable.
Plaintiff brought the present action seeking a declaratory judgment regarding its obligations under the policy and filed a motion for summary disposition. The circuit court granted the motion, finding that Nick’s actions were criminal in nature and intentional, as those terms were used within the insurance policy. The circuit court subsequently entered a declaratory judgment. Defendants now appeal, arguing that the trial court erred and that Nick’s actions were not criminal in nature or intentional. We disagree.
A trial court’s decision on a motion for summary disposition is reviewed de novo on appeal. Latham v Barton Malow Co, 480 Mich 105, 111; 746 NW2d 868 (2008). This Court reviews the motion by considering the pleadings, admissions, and other evidence submitted by the parties in the light most favorable to the nonmoving party. Id. Summary disposition is properly granted only if there is “no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law.” Id. A genuine issue regarding a material fact exists “when reasonable minds could differ on an issue after viewing the record in the light most favorable to the nonmoving party.” Allison v AEW Capital Mgt, LLP, 481 Mich 419, 425; 751 NW2d 8 (2008).
The guidelines for enforcing exclusionary clauses are summarized in Century Surety Co v Charron, 230 Mich App 79, 83; 583 NW2d 486 (1998):
Exclusionary clauses in insurance policies are strictly construed in favor of the insured. Coverage under a policy is lost if any exclusion in the policy applies to an insured’s particular claims. Clear and specific exclusions must be given effect because an insurance company cannot be liable for a risk it did not assume.
When reviewing an exclusionary clause, this Court must read the contract as a whole to effectuate the overall intent of the parties. Pacific Employers Ins Co v Mich Mut Ins Co, 452 Mich 218, 224; 549 NW2d 872 (1996). Where the language is clear and unambiguous, the insurance policy must be enforced as written. Century Surety Co, 230 Mich App at 82-83.
The policy states (bold in original):
We will pay damages for which an insured person is legally liable because of bodily injury.. . caused by an occurrence covered by this Policy.
We will defend any suit with lawyers of our choice or settle any claim for these damages as we think appropriate. We will not defend or settle: any suit unless it arises from an occurrence covered by this Policy ....
“Occurrence” is defined in the Auto Club policy as follows:
1. Occurrence means an accident, including injurious exposure to conditions, which results, during the policy term, in bodily injury or property damage.
2. Accident means a fortuitous event or chance happening that is neither reasonably anticipated nor reasonably foreseen from the standpoint of both any insured person and any person suffering injury or damages as a result.
The pertinent exclusions provided as follows:
BODILY INJURY AND PROPERTY DAMAGE NOT COVERED
Under Part II, we will not cover:
5. bodily injury or property damage resulting from an act or omission by an insured person which is intended or could reasonably be expected to cause bodily injury or property damage. This exclusion applies even if the bodily injury or property damage is different from, or greater than, that which is expected or intended.
10. bodily injury or property damage resulting from:
a. a criminal act or omission committed by anyone; or
b. an act or omission, criminal in nature, committed by an insured person even if the insured person lacked the mental capacity to:
(1) appreciate the criminal nature or wrongfulness of the act or omission; or
(2) conform his or her conduct to the requirements of the law; or
(3) form the necessary intent under the law.
This exclusion will apply whether or not anyone, including the insured person:
a. is charged with a crime;
b. is convicted of a crime whether by a court, jury or plea of nolo contendere; or
c. enters a plea of guilty whether or not accepted by the court[.]
We find that plaintiffs criminal-acts exclusion precludes coverage because Nick committed “an act. . . criminal in nature,” i.e., his intentional, nonconsensual contact with, and the resulting injury inflicted upon, Matt satisfies the elements of the misdemeanor crimes of aggravated assault, MCL 750.81a(l), or assault and battery, MCL 750.81. Moreover, by Nick’s own admission, he committed an intentional, unconsented, and harmful or offensive touching.
To the extent that defendants rely on the Michigan Supreme Court’s decision in Allstate Ins Co v McCarn (After Remand), 471 Mich 283; 683 NW2d 656 (2004), we find their argument without merit. In that case, the Supreme Court was interpreting an insurance contract provision that stated: “ ‘We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of, any insured person.’ ” Id. at 289. Under the particular language of the McCarn contract, that exclusion applied when the bodily injury or property damage was intended or occurred as a reasonable expectation of intentional or criminal acts or omissions. Unlike the language in McCarn that combined the two types of conduct into one paragraph, the contract language at issue here lays out distinct exclusions, including a separate paragraph for “intentional acts” as opposed to “criminal acts.” Thus, the McCarn decision’s two-pronged test based on the language of that particular joint exclusion does not apply in this case. Contrary to defendants’ contentions, there is no requirement here that a criminal act be “intended or . .. reasonably . . . expected to cause bodily injury or property damage.” To be excluded under the “criminal acts” exclusion, the bodily injury or property damage need only result from “a criminal act or omission” or “an act or omission, criminal in nature, committed by an insured person[.]” And further, the exclusion applies whether the insured person “is charged with a crime”; “is convicted of a crime whether by a court, jury or plea of nolo contendré”; or “enters a plea of guilty whether or not accepted by the court[.]” We conclude that the exclusion clearly applies, by its own terms, regardless of the actor’s intent or expectations.
Defendants argue that Nick’s actions cannot be considered “criminal in nature” because “the proceedings against Nick under the Juvenile Code were not criminal proceedings.” We agree that the proceeding against Nick was a delinquency, rather than a criminal, proceeding. MCL 712A.1(2) provides that “[ejxcept as otherwise provided [not applicable here], proceedings under this chapter are not criminal proceedings.” However, for a juvenile to be adjudicated a delinquent, the court must find that “the juvenile has violated any municipal ordinance or law of the state or of the United States,” MCL 712A.2(a)(l), such as the Michigan law against aggravated assault. The court in such a case must find that the juvenile committed an act that, if committed by an adult, would constitute the crime of aggravated assault. That act must, therefore, necessarily be in the nature of a crime, or “criminal in nature.” As stated by (now Chief) Justice YOUNG in his concurrence in People v Luckett, 485 Mich 1076, 1076-1077 (2010), “the activity underlying a juvenile adjudication is criminal in nature because it amounts to a violation of a criminal statute, even though that violation is not resolved in a ‘criminal proceeding.’ ” Therefore, this argument is without merit.
Affirmed.
Gleicher, EJ., and WHITBECK and OWENS, JJ., concurred.
Matthew Volk and his mother also brought suit against the YMCA of Greater Grand Rapids and Mark Ellermets (the father of one of Nick’s friends, who drove Nick to the game). However, the YMCA and Ellermets are not parties to this appeal. | [
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PER CURIAM.
Defendant, Lincoln Park Police Officer Dean Vann, appeals as of right the trial court’s order denying his motion for summary disposition based on governmental immunity. We reverse.
On April 5, 2007, Officers Malkowski and Vann received a police bulletin concerning a dark color Jeep traveling southbound on 1-75 and being driven at a high rate of speed on three tires and a rim. The vehicle was being driven by plaintiff. Sparks were flying off the vehicle as a result of its condition and speed. The officers were unable to stop the vehicle for three miles despite activating fights and sirens. A semitrailer in front of plaintiff slowed to a stop, and plaintiff then stopped his vehicle. Officer Malkowski positioned her vehicle behind plaintiff to prevent his escape. The officers approached plaintiffs vehicle, and Officer Malkowski gave verbal commands to plaintiff to exit his vehicle. Plaintiff looked at her and looked away. Officer Malkowski again commanded plaintiff to shut off the engine and exit the vehicle. After plaintiff failed to respond to three commands, Officer Malkowski opened the door and attempted to pull him out, but he kicked at her with his feet, assaulted her with his hands, and actively resisted her. Officer Vann of the K-9 unit advised that he was going to get his dog, Aegis. Officer Vann testified that he ordered plaintiff out of the vehicle and advised that he would deploy the dog, but plaintiff did not comply. The dog began to bark and bite at plaintiff who began to kick and swat at the dog. Officer Vann told plaintiff to stop engaging the dog, and he would call the dog off. After 15 seconds, Officer Vann called Aegis back to him.
While Officer Vann approached with the dog, Officer Malkowski heard plaintiff begin to spin the wheels on his car in an attempt to escape. She ran to the passenger side of the vehicle to remove the keys to prevent flight and injury to the officers. Plaintiff kicked at the dog and tried to avoid it by moving toward the center console. Officer Malkowski yelled at him to stop resisting and tried to grab plaintiffs coat to remove him from the vehicle. Once again, plaintiff began to strike Officer Malkowski and broke her glasses. At that point, two civilians ran up to her and asked if she needed assistance, and she accepted. The three pulled plaintiff from the car. Plaintiff was on his back with his hands beneath his body. He had to be rolled onto his stomach to be placed in handcuffs. During the incident, plaintiff looked straight ahead and did not verbally respond to commands. Although officers were aware of epilepsy that may cause seizures including involuntary movements, they were unaware of temporal lobe epilepsy and the staring spells that may accompany an episode of temporal lobe epilepsy. The officers did not notice any medical alert information on plaintiffs key chain.
Plaintiff asserted that he had no recollection of the incident, but testified that he now feared dogs and police officers and suffered from posttraumatic stress disorder. Although plaintiff acknowledged a history of epilepsy, he testified that the episodes he experienced caused him to “freeze.” He testified that he remembered driving on 1-75, hitting a pothole, and waking up in the back of a police vehicle. He passed out again in the back of the police vehicle and woke up in a holding cell. Plaintiffs neurologist, Dr. Eric Zimmerman, testified that although plaintiffs condition may cause him to “freeze,” it was common for a person coming out of a seizure to be agitated or combative.
Plaintiffs filed suit alleging abuse of process, gross negligence, intentional infliction of emotional distress, and malicious prosecution against Officers Malkowski and Vann and Lincoln Park Police Lieutenant Brian Hawk. The trial court granted defendants’ motion for summary disposition regarding defendants Malkowski and Hawk, concluding that they were entitled to immunity. The trial court held that there were factual issues regarding gross negligence and the intentional torts related to the conduct of Officer Vann. The trial court also held that the deployment of the dog was contrary to the Lincoln Park Police Department’s policies and proce dures for canine use. Defendant Vann appeals as of right the denial of his motion for summary disposition premised on governmental immunity. See MCR 7.202(6)(a)(v) and 7.203(A)(1).
The availability of governmental immunity presents a question of law that is reviewed de novo, and the decision to grant or deny summary disposition is also reviewed de novo. Willett v Waterford Charter Twp, 271 Mich App 38, 45; 718 NW2d 386 (2006). If there are no material facts in dispute or if reasonable minds could not differ regarding the legal effect of the facts, the issue of governmental immunity is resolved as an issue of law. Id. A governmental agency is immune from tort liability when performing a governmental function unless a statutory exception applies. Jackson Co Drain Comm’r v Village of Stockbridge, 270 Mich App 273, 282; 717 NW2d 391 (2006).
Officer Vann alleges that the trial court erred by denying summary disposition because he was entitled to summary disposition on the basis of governmental immunity. We agree.
In Odom v Wayne Co, 482 Mich 459, 468, 480; 760 NW2d 217 (2008), the Supreme Court concluded that lower-level employees are entitled to qualified immunity from tort liability for intentional torts when the acts were undertaken during the course of employment and the employee acted or reasonably believed that he or she was acting in the scope of his or her authority, the acts were performed in good faith or without malice, and the acts were discretionary, not ministerial. The good faith element is subjective in nature, and it protects a defendant’s honest belief and conduct taken in good faith with the cloak of immunity. Id. at 481-482. Discretionary acts are those that require personal deliberation, resolution, and judgment. “Granting immunity to an employee engaged in discretionary acts allows the employee to resolve problems without constant fear of legal repercussions.” Id. at 476.
A police officer’s determination regarding the type of action to take, whether an immediate arrest, the pursuit of a suspect, or the need to wait for backup assistance, constitutes discretionary action entitled to immunity. Ross v Consumers Power Co (On Rehearing), 420 Mich 567, 659-660; 363 NW2d 641 (1984). A police officer’s decisions regarding how to respond to a citizen, how to safely defuse a situation, and how to effectuate the lawful arrest of a citizen who resists are also clearly discretionary. See Oliver v Smith, 290 Mich App 678, 689-690; 810 NW2d 57 (2010). Once the decision to arrest is made, it must be performed in a proper manner. Ross, 420 Mich at 660. With regard to the execution of an arrest, “[a]n action may lie only if the officer has utilized wanton or malicious conduct or demonstrated a reckless indifference to the common dictates of humanity.” Dickey v Fluhart, 146 Mich App 268, 276; 380 NW2d 76 (1985). When addressing a claim of assault and battery that allegedly occurred during the making of an arrest, discretion must be reposed in the law enforcement officer concerning the means necessary to apprehend the alleged offender and to keep him secure after the apprehension. Firestone v Rice, 71 Mich 377, 384; 38 NW 885 (1888). Furthermore, “this discretion cannot be passed upon by a court or jury unless it has been abused through malice or wantonness or a reckless indifference to the common dictates of humanity.” Id. Accordingly, the trial court must address a preliminary question of law. Good faith means acting without malice. See Armstrong v Ross Twp, 82 Mich App 77, 85-86; 266 NW2d 674 (1978).
Police officers are not required to take unnecessary risks in the performance of their duties. See People v Otto, 91 Mich App 444, 451; 284 NW2d 273 (1979). Police officers work in a “milieu of criminal activity where every decision is fraught with uncertainty.” White v Beasley, 453 Mich 308, 321; 552 NW2d 1 (1996) (opinion by BRICKLEY, C.J.) (quotation marks and citation omitted). In light of the unusual and extraordinary nature of police work, it is improper to second-guess the exercise of a police officer’s discretionary professional duty with the benefit of 20/20 hindsight. Id.
In the present case, the intentional tort claims are barred by governmental immunity. See Odom, 482 Mich at 468, 480; Ross, 420 Mich at 659-660. Police dispatch received multiple 911 calls concerning a vehicle with sparks flying from the rear end. Upon receipt of the police bulletin of a vehicle travelling on the freeway on three tires and one rim at a rate of 80 miles per hour, Officers Malkowski and Vann pursued the vehicle driven by plaintiff. The officers were unable to stop the vehicle for three miles despite activating both lights and sirens until a semitrailer pulled in front of plaintiff and slowed to a complete stop. Plaintiff did not comply with verbal commands by Officer Malkowski to exit the vehicle and struck and kicked her when she attempted to extract him from the vehicle. Consequently, Officer Vann attempted to achieve cooperation by threatening to release the police dog Aegis. When plaintiff again did not cooperate, the dog was released. Plaintiff began to spin his wheels in attempt to flee and resisted and kicked the police dog. After 15 seconds, the dog was called off. Once again, plaintiff fought with Officer Malkowski who was only able to remove plaintiff from the vehicle and effectuate an arrest with the aid of two civilians.
Officer Vann’s actions were undertaken during the course of his employment, he acted within the scope of his authority, the acts were performed in good faith, and the decision regarding the type of action necessary to effectuate the arrest constituted discretionary action.
The trial court concluded that there were factual issues precluding summary disposition because of the use of the dog, the release of the dog into a confined space, and the violation of the department’s canine policies. An officer’s decision regarding the type of action necessary to effectuate an arrest is only actionable if the officer engaged in wanton or malicious conduct or demonstrated a reckless indifference to the common dictates of humanity. In the present case, the officers testified that plaintiff was repeatedly uncooperative. After viewing the assault of Officer Malkowski, Officer Vann made a decision to utilize the police dog. Officer Vann testified that the use of a police dog can aid certain situations, such as the use of a barking dog in instances of crowd control. When it became apparent that plaintiff would also resist the police dog, Officer Vann called the dog back after 15 seconds. Without the dog to contend with, plaintiff began to once again resist Officer Malkowski who was now present at the passenger side of the vehicle. The action taken was discretionary police judgment. The conclusion that the use of the police dog was contrary to police policies and procedures is not supported by the record. The Lincoln Park Police Department’s K-9 policy delineates the specific uses for the dog, but also allows for use of the dog for “any other assignment the handler feels the dog is capable of handling.” Therefore, the trial court erred by holding that factual issues prevented the application of qualified immunity for the intentional tort claims.
The trial court also erred by denying defendant Vann’s motion for summary disposition regarding the claim of gross negligence. A party’s choice of label for a cause of action is not dispositive. We are not bound by the choice of label because to do so “would exalt form over substance.” Johnston v City of Livonia, 177 Mich App 200, 208; 441 NW2d 41 (1989). A party cannot avoid the dismissal of a cause of action through artful pleading. Maiden v Rozwood, 461 Mich 109, 135; 597 NW2d 817 (1999). The gravamen of a plaintiffs action is determined by examining the entire claim. Id. The courts must look beyond the procedural labels in the complaint and determine the exact nature of the claim. MacDonald v Barbarotto, 161 Mich App 542, 547; 411 NW2d 747 (1987). A review of the amended complaint reveals that the claim of gross negligence is premised on the alleged assault of plaintiff. Elements of intentional torts may not be transformed into gross negligence claims. VanVorous v Burmeister, 262 Mich App 467, 483; 687 NW2d 132 (2004). Accordingly, the trial court erred by denying the motion for summary disposition of the gross negligence count for failure to state a claim. Id. at 483-484.
Reversed and remanded for entry of an order granting defendant Vann’s motion for summary disposition. We do not retain jurisdiction.
Sawyer, EJ., and Markey and Fort Hood, JJ., concurred.
The trial court granted summary disposition in favor of defendants Lincoln Park Police Officer Veronica Malkowski and Lincoln Park Police Lieutenant Brian Hawk, and that ruling is not at issue in this appeal. Plaintiffs are husband and wife. The claims raised by plaintiff Karen Norris are derivative of her husband’s claims. Therefore, the singular term “plaintiff” refers to Ronnie Norris only
Although this count was entitled “abuse of process”, it alleged assault and battery.
The trial court commented that the use of civilians was contrary to police policy. There was no evidence in the lower court record to verify that assertion. Furthermore, private persons may make an arrest for felonies committed in their presence or if summoned by a peace officer to assist the officer in making an arrest. See MCL 764.16.
In the deposition of Officer Vann, plaintiffs counsel asserted that Officer Vann should have attempted to remove plaintiff because he was taller and larger than Officer Malkowski, a petite female. Counsel also asserted that Officer Vann did not want to get his “hands dirty.” It is improper to second-guess the exercise of a police officer’s discretionary professional duty with the benefit of hindsight. White, 453 Mich at 321 (opinion by Brickley, C.J.). | [
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M. J. Kelly, J.
Petitioner, Alan A. May, acting as the conservator of the estate of Edward Carroll, appeals as of right the probate court’s opinion and order apportioning the fee for his services between Carroll’s estate and respondent, Auto Club Insurance Association. The order obliged Auto Club to pay $99 and Carroll’s estate to pay the remaining $6,816.70 of May’s fee. On appeal, May argues that the probate court erred to the extent that it determined that only $99 of the fee was for a reasonably necessary service for Carroll’s care and recovery under MCL 500.3107(l)(a). Because Carroll would not have needed a conservator but for the injuries he sustained in an automobile accident, May maintains that Auto Club must pay the full amount of the conservator’s fee as a reasonably necessary service for Carroll’s care. We agree that Auto Club was obligated to pay the entire fee for May’s services as a reasonably necessary expense for Carroll’s care. For that reason, we reverse.
I. BASIC FACTS AND PROCEDURAL HISTORY
Carroll was involved in an automobile accident in 1982 that left him seriously debilitated. In the petition for appointment of a conservator, it is stated that he suffered a closed head injury, and the guardian ad litem’s report indicates that Carroll was hospitalized for 2V2 years following the accident. Auto Club was Carroll’s no-fault insurer. For approximately 26 years, Auto Club paid $7000 to $8500 a month to Carroll’s wife for the 24-hour care she gave to Carroll. Carroll’s wife died in November 2008. Just before Mrs. Carroll’s death, the Carrolls’ daughter committed her father to a psychiatric ward. Upon his release, the daughter placed him in an adult foster care home.
Carroll’s daughter sought a formal guardianship, but he had concerns with her handling of his finances. A lawyer petitioned for the appointment of a conservator on Carroll’s behalf and, in December 2008, the probate court appointed May to be the conservator of Carroll’s estate.
On March 19, 2009, May petitioned for payment of his fee. He averred that Auto Club refused to pay his conservator fee of $6816.70. He attached an itemized billing to the petition and asked the court to approve the fee and order Auto Club to pay it. Auto Club opposed the petition, arguing that the fee was not for allowable expenses under MCL 500.3107(l)(a) of the no-fault act, MCL 500.3101 et seq., because it did not relate to Carroll’s care, recovery, or rehabilitation. In a subsequent reply, Auto Club indicated that Carroll had moved to an assisted living facility and that the conservator fee related to efforts to rent or sell Carroll’s residence, liquidate his personal property, and sell his car.
In its June 2009 opinion and order, the probate court stated that the majority of May’s claims involved “marshalling assets, paying bills, meetings, and administrative and legal services on Mr. Carroll’s behalf.” The court further noted that under MCL 500.3107(l)(a), personal protection benefits were payable for “allowable expenses,” which were expenses related to a person’s care, recovery, or rehabilitation. The court con- eluded that, although the majority of the fee related to conservator duties, the services it reflected were for the most part not related to Carroll’s care, recovery, or rehabilitation as required under MCL 500.3107(l)(a). The court determined that Auto Club was obligated to pay $99 dollars of the fee and that Carroll’s estate was liable for the remainder.
This appeal followed.
II. PERSONAL PROTECTION INSURANCE BENEFITS
A. STANDARD OF REVIEW
On appeal, we must determine whether the probate court erred when it concluded that the majority of May’s fee for serving as Carroll’s conservator did not constitute “reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation” under MCL 500.3107(l)(a). We must also determine whether May’s fee was, in the alternative, for replacement services under MCL 500.3107(l)(c), which would be barred because Carroll incurred the expenses more than three years after the date of his accident. This Court reviews de novo the proper interpretation of statutes such as MCL 500.3107. Griffith v State Farm Mut Auto Ins Co, 472 Mich 521, 525-526; 697 NW2d 895 (2005).
B. EXPENSES FOR CARE, RECOVERY, OR REHABILITATION
A person injured in an automobile accident is entitled to a variety of personal protection insurance benefits— often referred to as PIP benefits — from his or her insurance carrier under MCL 500.3107. An injured person is entitled to “all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.” MCL 500.3107(l)(a). In addition, the injured person is entitled to expenses, “not exceeding $20.00 per day, reasonably incurred in obtaining ordinary and necessary services” that he or she “would have performed during the first 3 years after the date of the accident, not for income but for the benefit of himself or herself or of his or her dependent.” MCL 500.3107(l)(c). At issue here is whether May’s services as a conservator were reasonably necessary for Carroll’s “care, recovery, or rehabilitation” under MCL 500.3107(l)(a) or whether May’s fee was for “ordinary and necessary services” that Carroll would have performed within the meaning of MCL 500.3107(l)(c).
Although this Court has not directly addressed whether a conservator’s services are compensable as services reasonably necessary for an injured person’s care, recovery, or rehabilitation, this Court has addressed whether services by a guardian were compensable under MCL 500.3107(l)(a). In Heinz v Auto Club Ins Ass’n, 214 Mich App 195, 196; 543 NW2d 4 (1995), the guardian and conservator of a person injured in an automobile accident sought to recover the fees and expenses associated with the guardianship under MCL 500.3107(l)(a). On appeal, the defendant insurer argued that MCL 500.3107(l)(a) applied only to medical care. Id. at 197. This Court determined that MCL 500.3107(l)(a) was not so limited:
In short, [MCL 500.3107(l)(a)] provides for the payment of expenses incurred for the reasonably necessary services for an injured person’s care. It is clear to us that if a person is so seriously injured in an automobile accident that it is necessary to appoint a guardian and conservator for that person, the services performed by the guardian and conservator are reasonably necessary to provide for the person’s care. Therefore, they are allowable expenses under [MCL 500.3107]. [Id. at 198.]
Because the question in Heinz involved only the fees charged by the guardian, the court’s references to conservators were arguably dicta. Nevertheless, the Heinz Court clearly concluded that the term “care,” as used in MCL 500.3107(l)(a), was not restricted to medical care alone. Rather, it concluded that the type of care provided by a guardian could constitute “care” for purposes of MCL 500.3107(l)(a). And we conclude that there is little basis for distinguishing the care provided by a guardian from that provided by a conservator.
MCL 700.5306 governs the appointment of a guardian for an incapacitated person. To appoint a guardian, a court must find that a person is incapacitated and “that the appointment is necessary as a means of providing continuing care and supervision of the incapacitated individual. .. .” MCL 700.5306(1) (emphasis added). Moreover, the guardian must “make provision for the ward’s care, comfort, and maintenance” and must “secure services to restore the ward to the best possible state of mental and physical well-being so that the ward can return to self-management at the earliest possible time.” MCL 700.5314(b). If the guardian’s ward does not have a conservator, the guardian may institute support proceedings and “[r]eceive money and tangible property .. . for the ward’s support, care, and education.” MCL 700.5314(d). If the ward has a conservator, the guardian must “pay to the conservator, for management as provided in this act, the amount of the ward’s estate received by the guardian in excess of the amount the guardian expends for the ward’s current support, care, and education” and must “account to the conservator for the amount expended.” MCL 700.5314(f).
A probate court may appoint a conservator if the court determines that the “individual is unable to manage property and business affairs effectively,” in relevant part because of “mental illness, mental deficiency, physical illness or disability,” MCL 700.5401(3)(a), and that the individual has “property that will be wasted or dissipated unless proper management is provided, or money is needed for the individual’s support, care, and welfare or for those entitled to the individual’s support, and that protection is necessary to obtain or provide money,” MCL 700.5401(3)(b). A probate court may also “appoint a conservator” for “an individual who is mentally competent, but due to age or physical infirmity is unable to manage his or her property and affairs effectively and who, recognizing this disability, requests a conservator’s appointment.” MCL 700.5401(4).
In the present case, May, as Carroll’s nominee, petitioned the probate court for a conservatorship for Carroll. He represented that Carroll could not manage his property and business affairs because of physical illness or disability resulting from a closed head injury. Similar to a guardianship, the conservatorship was necessary as part of Carroll’s care because he could no longer manage his own affairs as a result of a physical disability.
Auto Club makes two arguments against treating a conservatorship as “care” under Heinz. It argues that a conservatorship is really a replacement service under MCL 500.3107(l)(c) or that it no longer constitutes an “allowable expense” for a service for an injured person’s care under MCL 500.3107(l)(a) after our Supreme Court’s decision in Griffith. Neither of these arguments is availing.
C. REPLACEMENT SERVICES
As already noted, Heinz stands for the proposition that the term “care,” as used in MCL 500.3107(l)(a), is not limited to medical care. Under Heinz, the term “care” encompasses guardian services that, under MCL 700.5306(1), are for the purpose of providing “continuing care and supervision of the incapacitated individual . ...” In contrast, conservator services are for an individual who is unable to “manage property and business affairs.” While a guardianship would qualify as a service for a person’s care, a closer question is whether the service of managing property and business affairs is care.
This question is complicated by the definition of what have traditionally been recognized as replacement services: “ordinary and necessary services in lieu of those that... an injured person would have performed during the first 3 years after the date of the accident, not for income but for the benefit of himself or herself or of his or her dependent.” MCL 500.3107(l)(c) (emphasis added). Before the accident that caused the injury, the injured person would presumably have managed his or her own property and business affairs without compensation. Thus, the duties of a conservator could be construed to be a replacement service. However, this is not a situation involving ordinary living activities that can be performed by family, friends, or unskilled laborers. This is not a case in which Carroll might have been able to hire a family member or friend to write checks and pay his bills at his direction. Rather, Carroll is so incapacitated by his injuries that he cannot manage his own affairs and cannot offer direction to those who might act on his behalf; indeed, he had to have a lawyer petition a court to appoint and approve a conservator — complete with fiduciary responsibilities — to manage his affairs. Under these circumstances, the services provided transcend “ordinary” services akin to cooking, cleaning, or doing yard work and thus are not replacement services within the meaning of MCL 500.3107(l)(c). Instead, we conclude that the services are extraordinary professional services related to Carroll’s care. See In re Geror, 286 Mich App 132, 135-136; 779 NW2d 316 (2009) (holding that services provided by a lawyer to a disabled person were compensable under MCL 500.3107(l)(a) because the services had been pro vided to ensure that the disabled person was receiving necessary care and — as such — were also related to the injured person’s care.).
D. ALLOWABLE EXPENSES APTER GRIFFITH
After the decision in Heinz, our Supreme Court examined the type of expenses allowed under MCL 500.3107(l)(a) in Griffith. The Griffith Court addressed whether food expenses fall within the provisions of MCL 500.3107(l)(a) as expenses for an injured person’s “care.” Griffith, 472 Mich at 525. In that case, the insured was living at home but had been incapacitated as the result of an automobile accident. The Court held that whether an expense was allowable depended on whether it was causally connected to an accidental bodily injury arising out of an automobile accident under MCL 500.3105(1). Id. at 531. The Court determined that the plaintiff had failed to establish that the costs were for an accidental bodily injury given that his diet was not different from an uninjured person’s diet, was not part of a treatment plan, and was not related to his injuries. Id. at 531-532. Further, the Court held that whether these ordinary food expenses were allowable expenses under MCL 500.3107(l)(a) depended on whether they were reasonably necessary for an injured person’s care, recovery, or rehabilitation. The Court concluded that the care, recovery, or rehabilitation at issue had to be related to the injury. Id. at 534. The Court noted that recovery and rehabilitation were intended to restore a person to his or her preinjury state and were therefore necessary because of the injuries sustained. Id. at 534-535. As for care, the Court noted that some expenses might be necessary because of an accident but might not restore a person to his or her preinjury state. The Court concluded that the food expenses at issue were not related to the injured person’s care:
Griffith’s food costs here are not related to his “care, recovery, or rehabilitation.” There has been no evidence introduced that he now requires different food than he did before sustaining his injuries as part of his treatment plan. While such expenses are no doubt necessary for his survival, they are not necessary for his recovery or rehabilitation from the injuries suffered in the accident, nor are they necessary for his care because of the injuries he sustained in the accident. Unlike prescription medications or nursing care, the food that Griffith consumes is simply an ordinary means of sustenance rather than a treatment for his “care, recovery, or rehabilitation.” In fact, if Griffith had never sustained, or were to fully recover from, his injuries, his dietary needs would be no different than they are now. We conclude, therefore, that his food costs are completely unrelated to his “care, recovery, or rehabilitation” and are not “allowable expenses” under MCL 500.3107(l)(a). [Id. at 535-536.]
In this case, Carroll had a closed head injury that prevented him from being able to manage his own affairs — that is, Carroll’s need for a conservator was causally related to the injuries Carroll sustained in an accident. Admittedly, even if Carroll had not been in the accident, he would have needed to pay his bills and manage his accounts and assets. The question therefore becomes whether the conservator’s actions were needed for Carroll’s care, recovery, or rehabilitation from the injury. Unlike the situation in Griffith, petitioner here was not seeking payment of the actual expenses that Carroll would have incurred — such as the cost of food— nor was he seeking to recover the cost of engaging a real estate agent to sell Carroll’s home or the cost of advertisements. Those expenses would likely have been incurred regardless of the accident. Instead, the claim here is for the service of having a conservator manage these matters; and this would not have been necessary but for the accident-related injury. The conservator’s services here are more akin to attendant care provided by a nursing assistant who handles an injured person’s intimate hygiene needs; in that situation, although the injured person would normally have handled those needs on his or her own, as a result of the injury he or she is no longer able to do so. Because expenses incurred to have someone perform those hygiene services are reasonably incurred for the injured person’s care, recovery, or rehabilitation, the nursing assistant’s services are compensable under MCL 500.3107(l)(a). See Heinz, 214 Mich App at 198; Geror, 286 Mich App at 135-136. Similarly, because the need for the conservator was causally connected to Carroll’s injury and the expense is reasonably necessary for his care, it too is compensable under MCL 500.3107(l)(a). Accordingly, Griffith does not bar recovery of the conservator’s fee.
The expenses for the service the conservator provided were not expenses for ordinary and necessary replacement services — they were expenses incurred for Carroll’s care under MCL 500.3107(l)(a). For that reason, the probate court erred when it concluded that Auto Club was not liable to pay the full amount of the conservator’s fee.
Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction. As the prevailing party, petitioner may tax costs. MCR 7.219(A).
Beckering, EJ., and WHITBECK, J., concurred with M. J. Kelly, J.
This Court originally held this appeal in abeyance pending our Supreme Court’s decision in Wilcox v State Farm MutAuto Ins Co. See In re Carroll, unpublished order of the Court of Appeals, entered June 23, 2010 (Docket No. 292649). However, on November 9, 2010, the Supreme Court vacated its earlier order in Wilcox and denied leave to appeal. See Wilcox v State Farm Mut Auto Ins Co, 488 Mich 930 (2010).
We note that Auto Club raised the argument that the conservator’s fee was for replacement services under MCL 500.3107(l)(c) for the first time on appeal. Although this Court normally will not consider issues that were not properly preserved by raising them in the lower court, we “may overlook preservation requirements if the failure to consider the issue would result in manifest injustice, if consideration is necessary for a proper'determination of the case, or if the issue involves a question of law and the facts necessary for its resolution have been presented[.]” Smith v Foerster-Bolser Constr, Inc, 269 Mich App 424, 427; 711 NW2d 421 (2006). Because the facts are sufficient to determine this question of law, we shall address this issue.
This Court has addressed the recovery of conservator expenses in two other cases, but those cases are distinguishable from the issue present here. In In re Shields Estate, 254 Mich App 367; 656 NW2d 853 (2002), this Court noted the holding of Heinz. However, the issue in Shields concerned whether the holding applied to fees of a conservator who was appointed because of a minor’s status and not because of injuries incurred in an accident. Id. at 370-371. In Freeman v Colonial Penn Ins Co, 138 Mich App 444; 361 NW2d 356 (1984), the question was whether a conservator who managed the investments of his ward could collect work-loss benefits under MCL 500.3107(l)(b). The Freeman Court did refer to “ ‘work loss benefits’ for the replacement services of plaintiff,” id. at 447, but it was not addressing compensation for replacement services under MCL 500.3107(l)(c). | [
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On January 13, 2016, the Court heard oral argument on the application for leave to appeal prior to decision by the Court of Appeals. On order of the Court, the application is again considered, and it is denied, because we are not persuaded that the questions presented should be reviewed by this Court. | [
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reported below: 311 Mich App 560. | [
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The parties shall include among the issues to be briefed: (1) whether a healthcare provider has an independent or derivative claim against a no-fault insurer for no-fault benefits; (2) whether a healthcare provider constitutes “some other person” within the meaning of the second sentence of MCL 500.3112; and (3) the extent to which a hearing is required by MCL 500.3112.
Persons or groups interested in the determination of the issues presented in this case may move the Court for permission to file briefs amicus curiae. | [
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LARSEN, J.
This case involves the proper application of MCL 600.8301, which grants the district court “exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000.00.” For at least 160 years, Michigan courts have held that the allegations in the complaint establish the amount in controversy. We affirm that principle today.
This case arises out of a lawsuit for no-fault damages filed in the 36th District Court. Plaintiff, Linda Hodge, was struck by a car in Detroit and sustained serious injuries. She brought this suit for first-party no-fault benefits against defendant, State Farm Mutual Automobile Insurance Company, which insured the driver who struck her. She sought damages for her medical expenses, loss of wages, and attendant-care needs. In two separate parts of her complaint, Hodge stated that she sought damages “not in excess of $25,000.”
During discovery, State Farm came to believe that Hodge would present at trial proof of damages in excess of $25,000. Such proofs, in State Farm’s view, would take the “amount in controversy” above the district court’s jurisdictional limit. State Farm, therefore, filed a motion in limine, seeking to prevent Hodge from presenting evidence of claims exceeding $25,000 and to prevent the jury from awarding damages above that limit. The district court denied the motion.
At trial, Hodge did present proof of injuries exceeding $25,000, including more than $150,000 in attendant-care services alone. At the conclusion of the trial, the jury returned a verdict of $85,957. The district court then reduced its judgment for Hodge to $25,000 in damages and $1,769 in no-fault interest.
State Farm appealed in the Wayne Circuit Court, claiming that the amount in controversy exceeded the district court’s jurisdictional limit and that capping Hodge’s recovery at $25,000 could not cure the defect. The circuit court agreed and reversed the district court’s order of judgment.
The Court of Appeals initially denied plaintiffs application for leave to appeal. After this Court re manded for consideration as on leave granted, the Court of Appeals consolidated this case with another brought in district court by plaintiffs counsel that raised the same jurisdictional question. In the consolidated appeal, the Court of Appeals affirmed the circuit court’s decision, holding that although the district court’s jurisdiction “will most often be determined by reviewing the amount of damages or injuries a party claims in his or her pleadings,” the district courts here were divested of jurisdiction when the “pretrial discovery answers, the arguments of [plaintiffs] counsel before trial and the presentation of evidence at trial” pointed to damages in excess of $25,000.
The plaintiff in each of the consolidated cases sought leave to appeal in this Court. We initially granted leave to appeal in the companion case, Moody v Home Owners, and held this case in abeyance pending our decision in Moody. However, this Court subsequently granted the plaintiffs-appellants’ motion to dismiss their own appeal in Moody. We then vacated our abeyance order and granted leave to appeal in this case, limited to two issues:
(1) whether a district court is divested of subject-matter jurisdiction when a plaintiff alleges less than $25,000 in damages in his or her complaint, but seeks more than $25,000 in damages at trial, i.e., whether the “amount in controversy” exceeds $25,000 under such circumstances ... and, if not, (2) whether such conduct nevertheless divests the district court of subject-matter jurisdiction on the basis that the amount alleged in the complaint was made fraudulently or in bad faith.[ ]
The 1963 Michigan Constitution, art 6, § 1, establishes the circuit court as a “trial court of general jurisdiction” and authorizes the Legislature to establish courts of limited jurisdiction. The Legislature exercised this constitutional authority in 1968 by creating the district court. MCL 600.8301(1) establishes the district court’s limited jurisdiction:
The district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000.00.[ ]
The plain language of MCL 600.8301(1), read in conjunction with art 6, § 1 and MCL 600.605, establishes that, in civil actions where no other jurisdictional statute applies, the district court is limited to deciding cases in which the amount in controversy does not exceed $25,000. The district court, therefore, may not award damages in excess of that amount. The question before this Court is how to determine the “amount in controversy”: by the pleadings or by the proofs at trial?
Our cases have long held that courts are to determine their subject-matter jurisdiction by reference to the pleadings. As far back as 1855, when determining whether the circuit court or the justice of peace had jurisdiction over a dispute, this Court held that “jurisdiction must be determined. . . , where it depends on amount, by the sum claimed in the declaration or writ.” This “well settled” rule would apply, the Court surmised, even if the plaintiff presented proof of damages, or the jury returned a verdict, exceeding the court’s jurisdictional limit. Neither the parties nor our own research has revealed any case deviating from this common-law rule.
Nor is there any reason to believe that the Legislature intended to depart from this well-settled practice when it created the district court and established by statute the monetary limits on its jurisdiction. When the Legislature, without indicating an intent to abrogate the common law,
borrows terms of art in which are accumulated the legal tradition and meaning of centuries of practice, it presumably knows and adopts the cluster of ideas that were attached to each borrowed word in the body of learning from which it was taken and the meaning its use will convey to the judicial mind unless otherwise instructed.[ ]
Here, the statute neither defines the critical term, “amount in controversy,” nor in any other way suggests an intent to depart from the long-established rule that the pleadings determine the amount in controversy for purposes of the court’s subject-matter jurisdiction.
Thus, it is not quite right to say, as did the Court of Appeals, that nothing in MCL 600.8301(1), MCR 2.227(A)(1), or MCR 2.116(C)(4) “requires that a court limit its jurisdictional query to the amount in controversy alleged in the pleadings.” Instead, the statute and court rules are properly read as incorporating the long-settled rule that the jurisdictional amount is determined on the face of the pleadings.
Both the Court of Appeals and defendant urge that dictionary definitions of statutory terms support a contrary result. We find the cited references unhelpful. The Court of Appeals noted that Black’s Law Dictionary defines “amount in controversy” as “[t]he damages claimed or relief demanded by the injured party in a lawsuit.” But this definition is at least as consistent with the common-law rule as it is with the new rule espoused by the Court of Appeals. The dispute here is over how and when to determine the “damages claimed or relief demanded”: on the pleadings or on the proofs? As a method for determining the district court’s subject-matter jurisdiction, then, Black’s definition of “amount in controversy” is simply incomplete.
Defendant’s resort to the dictionary fares no better. MCR 2.227(A)(1) allows a court to transfer an action to another tribunal when it “determines that it lacks jurisdiction of the subject matter of the action.” Defendant cites multiple dictionaries for the proposition that “determines” implies the result of research or investigation. From this, defendant argues that a court may look beyond the pleadings to determine its jurisdiction. But the conclusion does not clearly follow from the premise. Even if “to determine” implies that inquiry will precede decision, neither the court rule nor com mon English usage conveys the sense that the inquiry need be prolonged. Just as government officials routinely “determine” age or identity by looking at photo ID, a court might well “determine” the jurisdictional amount by looking at the pleadings.
We are left, therefore, with the firm impression that in adopting MCL 600.8301, the Legislature intended to continue the longstanding practice of determining the jurisdictional amount based on the amount prayed for in the complaint. The Court of Appeals was aware of this “ancient” common-law rule, but thought it inapplicable because the plaintiff pleaded “a claim for relief ostensibly within the limits of the district court’s subject-matter jurisdiction but then plac[ed] in dispute through evidence and argument at trial an amount of damages much greater than the court’s jurisdictional limit.” We recognize, as did the Court of Appeals, the potential for “artful pleading” that the common-law rule creates, and we have our own concerns about the implications of the rule. But, absent a finding of bad faith, we do not believe that these concerns affect the district court’s jurisdiction, which has always been determined based on the amount alleged in the pleadings.
The common-law rule is marked not only by its longevity but by its simplicity. The ad damnum clause in the plaintiffs complaint is a straightforward mea sure of the court’s jurisdiction. And its accompanying limit on recovery should deter fully-informed plaintiffs from too-readily seeking to litigate a more valuable claim in district court. By contrast, the rule articulated by the Court of Appeals renders the district court’s jurisdiction contingent and uncertain and raises a host of new complications. The Court of Appeals believed that the district court in the instant case was divested of jurisdiction when the “pretrial discovery answers, the arguments of. . . counsel before trial, and the presentation of evidence at trial [] all showed that” what it deemed the “amount in controversy . . . far exceeded” the district court’s jurisdictional limit. But if plaintiffs proofs here were excessive, would proofs exceeding the jurisdictional limit by $1,000 be enough to divest the district court of jurisdiction? $100? $1? What would be the effect on the resources of the court system? If a plaintiff presented evidence over the jurisdictional cap on the last day of testimony, would the entire trial have to begin anew in the circuit court? Could a losing plaintiff conveniently “discover” and submit receipts above the jurisdictional amount on the last day of a trial that is not going his way? Would the district court be divested of subject-matter jurisdiction if a jury returned a verdict beyond the jurisdictional limit even though neither party had argued for that amount? What would happen if a plaintiff wished to present multiple theories of recovery? None of these questions attend the longstanding common-law rule.
We, therefore, hold what the jurisprudence of this state has long established: in its subject-matter jurisdiction inquiry, a district court determines the amount in controversy using the prayer for relief set forth in the plaintiffs pleadings, calculated exclusive of fees, costs, and interest. Hodge’s complaint prayed for money damages “not in excess of $25,000,” the jurisdictional limit of the district court. Even though her proofs exceeded that amount, the prayer for relief controls when determining the amount in controversy and the limit of awardable damages. Because there were no allegations, and therefore no findings, of bad faith in the pleadings, the district court had subject-matter jurisdiction over the plaintiffs claim.
We reverse the Court of Appeals’ decision that the district court lacked subject-matter jurisdiction, reinstate the judgment of the district court, and remand to the district court for further proceedings.
Young, C.J., and Markman, Zahra, McCormack, Viviano, and Bernstein, JJ., concurred with Larsen, J.
See Strong v Daniels, 3 Mich 466, 473 (1855).
Hodge v State Farm Mut Auto Ins Co, unpublished order of the Wayne Circuit Court, issued February 1, 2012 (Docket No. 10-012109-AV).
Hodge v State Farm Mut Auto Ins Co, 493 Mich 937 (2013).
Moody v Home Owners Ins Co, 304 Mich App 415, 430; 849 NW2d 31 (2014).
Id.
Moody v Home Owners Ins Co, 497 Mich 866 (2014).
Hodge v State Farm Mut Auto Ins Co, 853 NW2d 334 (Mich, 2014).
Moody v Home Owners Ins Co, 858 NW2d 462 (Mich, 2015).
Hodge v State Farm Mut Auto Ins Co, 497 Mich 957 (2015).
MCL 600.8101, as enacted by 1968 PA 154.
When the Legislature established the district court in 1968, it set the court’s jurisdictional limit at $3,000. See 1968 PA 154. The Legislature has twice raised the jurisdictional limit: to $10,000 in 1971, see 1971 PA 148, and to $25,000 in 1996, see 1996 PA 388.
“Circuit courts have original jurisdiction to hear and determine all civil claims and remedies, except where exclusive jurisdiction is given in the constitution or by statute to some other court or where the circuit courts are denied jurisdiction by the constitution or statutes of this state.”
The 1963 Michigan Constitution, art 6, § 1 dictates that the circuit court is to be the only court of general jurisdiction, but that the Legislature may establish courts of limited jurisdiction. The Legislature slightly restricted the circuit court’s jurisdiction in MCL 600.605 by removing the circuit court’s original jurisdiction in cases “where exclusive jurisdiction is given in the constitution or by statute to some other court. . . .” The Legislature granted such exclusive jurisdiction to the district court in MCL 600.8301(1). However, because the Legislature only has the authority to establish courts of limited jurisdiction, the district court’s jurisdiction is limited to the explicit grant of Chapter 83 of the Revised Judicature Act of 1961. See MCL 600.8301 et seq.
See Zimmer v Schindehette, 272 Mich 407, 409; 262 NW 379 (1935) (declaring void a judgment rendered by a justice of the peace that was in excess of his jurisdiction). See also Clohset v No Name Corp (On Remand), 302 Mich App 550, 567; 840 NW2d 375 (2013) (“We are cognizant of the fact that, generally speaking, a district court cannot render a judgment that exceeds its jurisdictional limit.”).
The 1850 Michigan Constitution, art 6, § 18, specified that “justices of the peace shall have exclusive jurisdiction to the amount of one hundred dollars . . . .” The 1908 Michigan Constitution had a similar clause. See Const 1908, art 7, § 16.
Strong, 3 Mich at 472. This rule appears to be even older than Strong. The Court in Strong noted that even before the adoption of the 1850 Constitution, at issue in that case, “it was never doubted, that the test of jurisdiction was the amount claimed in the plaintiffs writ.” Id. at 470.
Id. at 473 (“[T]he justice will not be ousted of his jurisdiction by the jury returning a verdict, or by proof of damages beyond his jurisdiction.”).
We note that the federal courts also apply this principle. See, e.g., St Paul Mercury Indem Co v Red Cab Co, 303 US 283, 288; 58 S Ct 586; 82 L Ed 845 (1938) (“The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that. .. the sum claimed by the plaintiff controls if the claim is apparently made in good faith.”). Several other states are in accord. See, e.g., Brunaugh v Worley, 6 Ohio St 597, 598 (1856) (“The jurisdiction of the court of common pleas depends upon the amount claimed in the petition.”); Wagner v Nagel, 23 NW 308, 309 (Minn, 1885) (“It is well settled in this court that where the jurisdiction of a court depends upon ‘the amount in controversy,’ this is determined by the amount claimed.”)', Sellery v Ward, 21 Cal 2d 300, 304; 131 P2d 550 (1942) (“Where the action is brought in good faith and the cause of action stated is within the jurisdiction of the court in which it is commenced, the mere fact that the judgment is for less than the jurisdictional amount of that court does not establish that it was without jurisdiction.”); Brannon v Pacific Employers Ins Co, 148 Tex 289, 294; 224 SW2d 466 (1949) (“It is a fundamental rule that in determining the jurisdiction of the trial court, the allegations of the petition made in good faith are determinative of the cause of action.”); Holmquist v Spinelli, 139 Conn 429, 431; 94 A2d 621 (1953) (“From the earliest times in this state, and in a long line of cases, it has been held that the amount of the matter in demand is to be discovered only by reference to the complaint.”); White v Marine Transport Lines, Inc, 372 So 2d 81, 84 (Fla, 1979) (“[T]he good faith demand of the plaintiff at the time of instituting suit determines the ability of the particular court to entertain the action.”).
Sekhar v United States, 570 US _, _; 133 S Ct 2720, 2724; 186 L Ed 2d 794 (2013), quoting Morissette v United States, 342 US 246, 263; 72 S Ct 240; 96 L Ed 288 (1952). See also In re Bradley Estate, 494 Mich 367, 377; 835 NW2d 545 (2013) (“[W]hen the Legislature chooses to employ a common-law term without indicating an intent to alter the common law, the term will be interpreted consistent with its common-law meaning.”); Alvan Motor Freight, Inc v Dep’t of Treasury, 281 Mich App 35, 41; 761 NW2d 269 (2008) (“[W]hen enacting legislation, the Legislature is presumed to be fully aware of existing laws, including judicial decisions.”).
“Pursuant to MCL 8.3a, undefined statutory terms are to be given their plain and ordinary meaning, unless the undefined word or phrase is a term of art.” People v Thompson, 477 Mich 146, 151; 730 NW2d 708 (2007). If a word or phrase is a term of art, it “shall be construed and understood according to [its] peculiar and appropriate meaning.” MCL 8.3a. Although the term “amount in controversy” was not specifically used in the 1850 or 1908 Constitutions, it has long been a part of our state’s legal lexicon and was used in nineteenth-century Court opinions to indicate the amount at stake in the suit. See, e.g., Olcott v Hanson, 12 Mich 452, 455 (1864) (opinion by Martin, J.); Truesdail v Ward, 24 Mich 117, 120 (1871) (opinion by Graves, J.). That amount was always determined based upon the amount claimed in the pleadings. See, e.g., Strong, 3 Mich at 470.
“The district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000.00.”
“When the court in which a civil action is pending determines that it lacks jurisdiction of the subject matter of the action, but that some other Michigan court would have jurisdiction of the action, the court may order the action transferred to the other court in a place where venue would be proper. If the question of jurisdiction is raised by the court on its own initiative, the action may not be transferred until the parties are given notice and an opportunity to be heard on the jurisdictional issue.”
“¶⅛ moyon [for summary disposition] may be based on one or more of these grounds, and must specify the grounds on which it is based: . . . The court lacks jurisdiction of the subject matter.”
Moody, 304 Mich App at 426.
When defining a legal term or phrase with a pedigree as long as “amount in controversy,” little is likely to be gained from defining the individual words it comprises. Thus, we find unpersuasive the Court of Appeals’ close examination of the individual words “amount” and “controversy.”
Id. at 430, quoting Black’s Law Dictionary (9th ed).
Id. at 432.
Id. at 433.
Id.
For example, an unscrupulous attorney might, without fully informing his client, limit his client’s recovery to $25,000 by filing in district court but then seek attorney fees based on the full amount of damages returned by the jury, thereby sacrificing his client’s interests to his own. In this regard, we remind the trial courts that an attorney is entitled to recover a reasonable fee for advising and representing a client in a personal protection insurance (PIP) action. MCL 500.3148(1). After calculating the baseline attorney fee figure, the trial court should consider, though is not limited to, a number of factors when determining a reasonable fee for such representation. Pirgu v United Servs Auto Ass’n, 499 Mich 269, 281; 884 NW2d 257 (2016). These factors are:
(1) the experience, reputation, and ability of the lawyer or lawyers performing the services,
(2) the difficulty of the case, i.e., the novelty and difficulty of the questions involved, and the skill requisite to perforin the legal service properly,
(3) the amount in question and the results obtained,
(4) the expenses incurred,
(5) the nature and length of the professional relationship with the client,
(6) the likelihood, if apparent to the client, that acceptance of the particular employment will preclude other employment by the lawyer,
(7) the time limitations imposed by the client or by the circumstances, and
(8) whether the fee is fixed or contingent. [Id. at 282.]
Factor (3) suggests that the fees awarded must be reasonable in light of the $25,000 limit on a plaintiffs recovery in district court.
This Court has held that a court will not retain subject-matter jurisdiction over a case “when . . . fraud upon the court is apparent” from allegations pleaded in bad faith. Fix v Sissung, 83 Mich 561, 563; 47 NW 340 (1890). In Fix, this Court dismissed the plaintiffs suit as being brought in bad faith because the amount claimed was “unjustifiable” and could not be proved. Id. However, beyond that holding, our cases give no indication of what would constitute bad faith sufficient to oust the court of jurisdiction. The Court of Appeals seemed concerned with plaintiffs filing in district court knowing that provable actual damages exceeded the $25,000 jurisdictional limit. See Moody, 304 Mich App at 431. We question, but do not decide, whether a fully-informed plaintiff acts in bad faith by filing a claim in district court, thereby limiting his own recovery to $25,000. In this case, defendant made no allegation of bad faith in the pleadings, and there has been no finding of bad faith by the district court.
Moody, 304 Mich App at 430-431.
See Krawczyk v Detroit Auto Inter-Ins Exch, 117 Mich App 155, 163; 323 NW2d 633 (1982) (“As a general rule, neither costs, attorney fees nor interest is considered in determining the jurisdictional amount.”), affirmed in part, reversed in part on other grounds, 418 Mich 231 (1983). | [
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Zahra, J.
(dissenting). I would peremptorily reverse the judgment of the Court of Appeals and remand this case to the St. Clair County Probate Court for entry of a judgment in defendant’s favor because the lower courts improperly applied the statutory presumption of ownership in the survivor of joint accounts set forth in MCL 487.703.
This case involves a dispute between siblings regarding the division of certain assets of their deceased mother’s estate. Leo and Dolores Soltys had three children, Kathleen Schmidlin, Marlene Harris, and Dennis Soltys. Leo and Dolores made Kathleen, defendant’s decedent, a joint account holder on various financial accounts beginning in 1992, and she remained a joint account holder with Dolores after Leo’s death in 2004. When Dolores died in 2007, Kathleen claimed the accounts to the exclusion of Marlene and Dennis, later adding defendant as a joint account holder. In 2009, Marlene and Dennis filed the instant lawsuit against Kathleen, seeking an equitable distribution of Dolores’s estate assets, including the funds in the joint accounts. Defendant responded by alleging that Dolores had intended to pass the joint accounts to Kathleen only, relying on MCL 487.703, which creates a statutory presumption of ownership in the survivor of a joint account absent evidence of fraud or undue influence.
After a bench trial, the probate court provided 17 factual findings in support of its conclusion that the two siblings had rebutted the statutory presumption created by MCL 487.703. The court thus ordered the joint accounts distributed equally among the parties.
Defendant appealed in the Court of Appeals. The panel found clear error in five of the probate court’s findings of fact, but affirmed the court’s judgment in favor of plaintiffs. Defendant filed an application for leave to appeal with this Court, and the Court issued a peremptory order that remanded the case to the Court of Appeals for application of the proper standard of review. On remand, the Court of Appeals again affirmed the probate court’s judgment for plaintiffs. Defendant again seeks leave to appeal in this Court.
The presumption created by MCL 487.703 is one of ownership and not intention. This Court has made clear that the mere fact that a person placed funds in a joint account is itself “cardinal” evidence that the depositor intended the funds to become jointly owned by the account holders and pass to the survivor upon the other holder’s death. In order to rebut this cardinal evidence of the depositor’s intent, a party must present “[Reasonably clear and persuasive proof’ that the deposits were not intended to become the property of the surviving account holder.
On remand, the Court of Appeals identified the following facts as “pertinent” to its conclusion that plaintiffs had provided reasonably clear and persuasive proof to rebut the statutory presumption of MCL 487.703:
(1) Dennis and Marlene both testified that their parents always told them that all of the children would be treated equally; (2) the inclusion of Kathleen’s name on the accounts was initially done at a time when no disharmony existed in the family; (3) Dolores had indicated that she “trusted” Kathleen and, in conjunction with this statement, indicated that Leo had wanted joint accounts in order to avoid probate; (4) defendant testified that Kathleen had told Marlene that there would be an equitable distribution of Dolores’s property; (5) Kathleen had been less than forthcoming about the accounts, had lacked credibility in certain other respects, and had told Marlene that she “maybe” would get half of the real estate even though Kathleen “was a signatory to deeds conveying essentially all of Dolores’s real estate to herself and Marlene;” (6) defendant testified that he believed that Kathleen had not spent any money from the accounts “because it was Dolores’s money;” and (7) Kathleen made statements indicating hesitation regarding whether she was meant to receive all the money from the accounts. [ ]
These factual findings that the Court of Appeals relied on are either ambiguous or irrelevant with respect to determining Dolores’s intent and, in my view, do not constitute reasonably clear and persuasive proof that Dolores did not intend the joint accounts to become the property of Kathleen only.
As for factual finding (1), Dolores’s statement that all her children would be treated equally does not necessarily indicate that she wanted her assets divided evenly, especially because those statements did not specifically pertain to her intent in creating the joint accounts. While the lower courts relied on inferences and speculation from Dolores’s statements, the fact that Dolores disinherited Dennis from her will shortly before her death is direct evidence that she did not intend that her assets be divided equally.
As for factual finding (2), the absence or existence of family harmony at the time the joint accounts were created is irrelevant in ascertaining Dolores’s intent, particularly given that the accounts were maintained during times of both family harmony and disharmony. What is relevant is the unambiguous testimony from Dolores’s attorney that Dolores understood ‘Row joint accounts worked.” Dolores thus understood that Kathleen would be entitled to sole ownership of the accounts and did nothing to change this, even in the periods of familial disharmony.
As for factual finding (3), it is pure conjecture that Dolores’s statement that she “trusted” Kathleen meant that she trusted Kathleen to divide the accounts equally. While Leo may have stated that he did not want his estate probated, it is Dolores’s intent that is relevant. In any event, a joint account is simply one way by which a party can avoid probate. The record demonstrates that Dolores understood how the joint accounts would operate upon her death. Dolores could have placed all three of her children on the accounts and still avoided probate, but she chose not to do so. A desire to avoid probate therefore says nothing at all about Dolores’s intention to distribute money to the other two children.
As for factual finding (4), whatever promises Kathleen might have made to Marlene about the funds in the accounts in no way evidences Dolores’s intent about how the joint accounts should be distributed.
As for factual finding (5), Kathleen’s alleged lack of credibility or dishonesty regarding the accounts is irrelevant to Dolores’s intent in creating the joint accounts, especially given that any dishonesty or manipulation occurred after the accounts were formed. Quite simply, even if Kathleen had been willing to subvert Dolores’s intent, that willingness would not constitute evidence of Dolores’s intent when she placed only Kathleen on the joint accounts.
Finally, as for factual findings (6) and (7), Kathleen’s belief regarding to whom the money belonged or hesitation in spending the funds in no way provides evidence of Dolores’s intent regarding any of her assets. The Court of Appeals confused the knowledge or actions of the survivor with the intent of the accounts’ creator.
In sum, I conclude that the evidentiary record in this case in no way supports a determination that reasonably clear and persuasive evidence was presented to overcome the statutory presumption of ownership in the survivor. While the lower courts relied on indirect assumptions and inferences regarding Dolores’s intent, the fact that Dolores placed only Kathleen on the joint accounts is strong direct evidence of her intent that Kathleen alone possess the assets of those accounts, especially considering the unambiguous testimony of Dolores’s attorney that Dolores understood how joint accounts operate. The vague statements made by Dolores about wanting to divide her property equally carry little weight, especially in light of her clear intent to disinherit Dennis by writing him out of her will less than two months before her death. Plaintiffs insist that Dolores intended to “treat” their children equally, but plaintiffs fail to appreciate that “fair treatment” does not necessarily require an equal distribution of the joint accounts.
By relying on speculative evidence to conclude that Dolores intended the accounts to be shared equally, the lower courts failed to give proper deference to the presumption created by MCL 487.703 and the eviden-tiary standard of reasonably clear and persuasive proof. This is troubling, because if the statutory presumption in MCL 487.703 can be so easily overcome, the presumption is rendered meaningless, erasing the security and certainty of the rights of a surviving account holder. Indeed, the presumption would be overcome in most disputes in which feuding siblings disagree about the intent of their parents, even if the parents might have placed funds in joint accounts precisely to avoid such disputes.
For these reasons, I agree with defendant that plaintiffs did not provide reasonably clear and persuasive proof to rebut the statutory presumption of ownership set forth in MCL 487.703, and I would therefore peremptorily reverse the judgment of the Court of Appeals and remand this case to the St. Clair County Probate Court for entry of a judgment in favor of the defendant regarding these accounts.
Markman, J., joined the statement of Zahra, J.
Kathleen died during these proceedings. Her estate, with her husband, David Schmidlin, as personal representative, was substituted as defendant.
Joint accounts are governed by MCL 487.703, which provides in relevant part:
"When a deposit has been made ... in the names of 2 or more persons, payable to either or the survivor or survivors, such deposit or any part thereof.. . made by any 1 of the said persons, shall become the property of such persons as joint tenants, . .. and may be paid to any 1 of said persons during the lifetime of said persons or to the survivor or survivors after the death of 1 of them ....
The making of the deposit in such form shall, in the absence of fraud or undue influence, be prima facie evidence ... of the intention of such depositors to vest title to such deposit and the additions thereto in such survivor or survivors.
In re Soltys Estate, unpublished opinion per curiam of the Court of Appeals, issued January 7, 2014 (Docket No. 311143).
In re Soltys Estate, 497 Mich 908 (2014).
In re Soltys Estate (On Remand), unpublished opinion per curiam of the Court of Appeals, issued February 24, 2015 (Docket No. 311143).
Jacques v Jacques, 352 Mich 127, 136-137 (1958).
Id. at 137.
Lau v Lau, 304 Mich 218, 224 (1943).
Soltys Estate (On Remand), unpub op at 4.
See Lau, 304 Mich at 221-223 (holding that the decedent’s statements during his lifetime that his estate would be evenly divided among his four children were insufficient to overcome the statutory presumption that ownership of the decedent’s joint accounts went to the survivor).
See Anderson v Lewis, 342 Mich 53, 60 (1955) (stating that a person’s mistaken belief about her rights in the joint account before and after the death of the decedent “cannot change the legal status of the joint account”). | [
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Leave to appeal denied at 498 Mich 921. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we vacate those parts of the Court of Appeals opinion holding that a plaintiff’s actions or conduct, as an objective matter, must advance the public interest to entitle a plaintiff to the protection of the Whistleblow-ers’ Protection Act (WPA), MCL 15.361 et seq., and that the plaintiff here failed to establish sufficient evidence of the necessary causal connection between his claimed protected activity and the alleged adverse employment action to avoid a judgment notwithstanding the verdict. In light of the Court of Appeals’ holding that, pursuant to Wurtz v Beecher Metro Dist, 495 Mich 242 (2014), the plaintiff is not an “employee” placed to bring a claim under the WPA, resolution of these other issues was unnecessary. In all other respects, leave to appeal is denied, because we are not persuaded that the remaining questions presented should be reviewed by this Court. The motion to expedite proceedings is denied as moot. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we remand this case to the Wayne Circuit Court for consideration of the defendant’s issue regarding the assessment of court costs. | [
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Leave to appeal denied at 498 Mich 919. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we reverse, in part, the judgment of the Court of Appeals, and we remand this case to the Tuscola Circuit Court to determine whether the court would have imposed a materially different sentence under the sentencing procedure described in People v Lockridge, 498 Mich 358 (2015). On remand, the trial court shall follow the procedure described in Part VI of our opinion. If the trial court determines that it would have imposed the same sentence absent the unconstitutional constraint on its discretion, it may reaffirm the original sentence. If, however, the trial court determines that it would not have imposed the same sentence absent the unconstitutional constraint on its discretion, it shall resen-tence the defendant. In all other respects, leave to appeal is denied, because we are not persuaded that the remaining questions presented should be reviewed by this Court. We do not retain jurisdiction. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we reverse in part the judgment of the Court of Appeals, we vacate the sentence of the Wayne Circuit Court, and, based on the prosecutor’s response confessing error and stating that the defendant is entitled to resentenc-ing, we remand this case to the trial court for resentencing. The Sentencing Information Report indicates that the trial court only scored the sentencing guidelines for the defendant’s violation of MCL 750.227. “Offense variables are properly scored by reference only to the sentencing offense except when the language of a particular offense variable statute specifically provides otherwise.” People v McGraw, 484 Mich 120, 135 (2009). The trial court erred in scoring offense variable 9, MCL 777.39, based on a finding that two to nine victims were placed in danger of physical injury or death in relation to the defendant’s violation of MCL 750.227. In all other respects, leave to appeal is denied, because we are not persuaded that the remaining questions presented should be reviewed by this Court. | [
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On April 6, 2016, the Court heard oral argument on the application for leave to appeal the June 11, 2015 judgment of the Court of Appeals. On order of the Court, the motion for immediate consideration and the defendant’s motion to dismiss the application for leave to appeal are considered, and they are granted. We vacate that part of the Court of Appeals judgment remanding the case to the Ionia Circuit Court for resentencing. | [
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Leave to appeal denied at 498 Mich 885. | [
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Summary disposition at 499 Mich 921. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we remand this case to the Livingston Circuit Court to determine whether the court would have imposed a materially different sentence under the sentencing procedure described in People v Lockridge, 498 Mich 358 (2015). On remand, the trial court shall follow the procedure described in Part VI of our opinion. If the trial court determines that it would have imposed the same sentence absent the unconstitutional constraint on its discretion, it may reaffirm the original sentence. If, however, the trial court determines that it would not have imposed the same sentence absent the unconstitutional constraint on its discretion, it shall resentence the defendant. In all other respects, leave to appeal is denied, because we are not persuaded that the remaining questions presented should be reviewed by this Court. We do not retain jurisdiction. | [
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Markman, J.
I would reverse the judgment of the Court of Appeals and reinstate the circuit court judgments granting the defendants’ motions for summary disposition and for sanctions. | [
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Leave to appeal denied at 499 Mich 869. | [
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PER CURIAM.
This case requires the Court to consider whether an arbitration clause included in invoices for plaintiffs’ artwork purchases applies to disputes arising from plaintiffs’ previous artwork purchases when the invoices for the previous purchases did not refer to arbitration. We agree with plaintiffs that the arbitration clause contained in the later invoices cannot be applied to disputes arising from prior sales with invoices that did not contain the clause. Each transaction involved a separate and distinct contract, and the facts do not reasonably support a conclusion that the parties intended for the arbitration clause to retroactively apply to the previous contracts.
Accordingly, we reverse that part of the Court of Appeals judgment that extends the arbitration clause to the parties’ prior transactions that did not refer to arbitration. We remand this case to the Court of Appeals for consideration of the issues raised in plaintiffs’ appeal that the Court did not address to the extent those issues relate to claims that are not subject to arbitration. In all other respects, leave to appeal is denied because we are not persuaded that the remaining question presented should be reviewed by this Court.
I. BASIC FACTS AND PROCEEDINGS
Defendant Park West Galleries, Inc. (Park West) sold art on various cruise ships traversing international waters. Plaintiffs purchased art from Park West on multiple occasions over the course of several years while on different cruise ships in different locations.
With each sale, Park West provided plaintiffs with a certificate of authentication and a written appraisal, both of which were signed by agents of defendants. All the purchases made by plaintiffs were also accompanied by a signed invoice under which the parties agreed to the terms of the transaction. By 2007, the invoices that Park West provided with plaintiffs’ pur chases contained an agreement to arbitrate all claims concerning the transaction, which provided in pertinent part:
ARBITRATION OF CLAIMS AND DISPUTES AND WAIVER OF JURY TRIAL. Any disputes or claims of any kind, including but not limited to the display, promotion, auction, purchase, sale or delivery of art, items, or appraisals shall be brought solely in non-binding arbitration and not in any court or to any jury... . All decisions respecting the arbitrability of any dispute shall be decided by the arbitrator(s).
However, prior invoices provided with plaintiffs’ purchases contained no such clause.
According to plaintiffs, years after they made their purchases, they discovered that the art purchased from Park West was not actually worth the represented value and that some of the art was forged. Plaintiffs filed the instant suit against defendants on September 28, 2011, asserting claims of breach of contract, breach of warranty of fitness, fraud, negligent misrepresentation, conspiracy, conversion, negligence, intentional infliction of emotional distress, violation of the sales of fine art act, violation of the Art Multiple Sales Act, and violation of the Michigan Consumer Protection Act.
On June 1, 2012, the trial court granted defendants’ first motion for summary disposition under MCR 2.116(C)(7) with respect to claims arising out of transactions with invoices that contained the arbitration clause. The trial court determined that the clause was enforceable and required arbitration of all disputes arising from the purchases described in those particular invoices. The trial court thus dismissed all claims brought by plaintiffs Audrey Mahoney and Patty Brown and some of the claims brought by plaintiffs David and Felice Oppenheim. The trial court declined to dismiss any of the claims brought by the Oppen-heims that involved purchases in which the invoices did not contain an arbitration clause, concluding that the arbitration clause in the later invoices did not extend to transactions with invoices that did not contain the clause.
Defendants filed a second motion for summary disposition under MCR 2.116(C)(7), alleging that the rest of the Oppenheims’ claims were barred by the statute of limitations. The trial court agreed in a September 6, 2013 order and opinion and dismissed the Oppen-heims’ remaining claims.
Mahoney, Brown, and the Oppenheims appealed in the Court of Appeals. Defendants cross-appealed, disputing the trial court’s ruling that not all the Oppen-heims’ claims were subject to arbitration. The Court of Appeals reversed in part, holding that the arbitration clause in invoices for the later-executed transactions extended to prior transactions for which the invoices did not contain the clause. Consequently, all the Oppenheims’ claims were deemed subject to arbitration and dismissed. Mahoney, Brown, and the Oppen-heims then filed an application for leave to appeal in this Court, arguing in relevant part that the Court of Appeals erred by concluding that all their claims are subject to arbitration.
II. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision on a motion for summary disposition brought under MCR 2.116(C)(7). Under MCR 2.116(C)(7), summary disposition is appropriate if a claim is barred because of “an agreement to arbitrate . . . .” Whether an issue is subject to arbitration is also reviewed de novo.
III. ANALYSIS
“Arbitration is a matter of contract.” Accordingly, we must apply the same legal principles that govern contract interpretation to the interpretation of an arbitration agreement. Our primary task in construing a contract is to give effect to the parties’ intentions at the time they entered into the contract, which requires an examination of the language of the contract accord ing to its plain and ordinary meaning. We must interpret and enforce clear and unambiguous language as it is written.
With these principles in mind, the pertinent issue for our review is whether the Court of Appeals erred by concluding that the arbitration clause included in the parties’ later invoices encompassed disputes arising from earlier transactions when the invoices for the earlier transactions did not contain the clause. We conclude that the Court of Appeals erred because “[a] party cannot be required to arbitrate an issue which he has not agreed to submit to arbitration,” and there is no evidence from which this Court can conclude that the parties’ intended to subject the earlier transactions to arbitration.
Michigan law requires that separate contracts be treated separately. Plaintiffs’ purchases were of unique pieces of art purchased on different cruise ships in various international waters on different dates. Each unique transaction, accompanied by a separate invoice, constituted a separate and distinct contract, capable of independent enforcement. The invoices pertaining to plaintiffs’ 2003 and 2004 purchases did not require any dispute arising from those purchases to be arbitrated; those invoices contained absolutely no reference to arbitration. There is, therefore, no basis on which to conclude that at the time of those purchases the parties intended to arbitrate any disputes that might arise.
Accordingly, disputes arising from plaintiffs’ 2003 and 2004 purchases are subject to arbitration only if the arbitration clause contained in the 2008 and 2009 invoices can be retroactively applied to the earlier transactions. Michigan law, however, has long recognized that contracts generally cannot be construed to operate retroactively, and there is no basis on which to find that the parties in the instant case intended for the later arbitration clauses to apply retroactively in contravention of this general principle. The Court of Appeals erroneously concluded that the phrase “[a]ny disputes or claims of any kind” contained in the arbitration clause was sufficiently broad to encompass disputes arising under prior contracts that did not contain the clause. However, it is significant that the plain language of the invoices that contained the arbitration clause does not refer to previous transactions between the parties let alone suggest that the clause was to apply to such transactions. Similarly, the 2003 and 2004 invoices do not indicate that the terms of a subsequent contract between the parties might apply to the 2003 and 2004 transactions. Having examined all the facts, we are unable to conclude that the parties intended the interpretation adopted by the Court of Appeals.
The Court of Appeals relied heavily on the proposition that Michigan courts “ ‘resolve all conflicts in favor of arbitration,’ ” and particularly on Kaleva-Norman-Dickson Sch Dist No 6 v Kaleva-Norman-Dickson Sch Teachers’ Ass’n, in which this Court stated:
“An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute....” Absent an “express provision excluding [a] particular grievance from arbitration” or the “most forceful evidence of a purpose to exclude the claim”,... the matter should go to arbitration[.]
A majority of the Court of Appeals panel determined that this language was controlling and resolved the issue in favor of defendants.
While this language recognized “[t]he policy favoring arbitration of disputes arising under collective bargaining agreements,” it does not remotely suggest that an arbitration agreement between parties outside the collective-bargaining context applies to any dispute arising out of any aspect of their relationship. That is, a general policy favoring arbitration cannot trump the actual intent and agreement of the parties. This is not to say that an arbitration clause in a later contract can never be applied to a previous contract, but the facts of this case do not provide for such retroactive application. Consequently, there is no basis on which to conclude that disputes arising from plaintiffs’ 2003 and 2004 purchases are subject to arbitration.
Moreover, the analysis in Kaleva is inapplicable to the factual circumstances of the instant case. In Kal-eva, the relevant arbitration provision was contained in a collective-bargaining agreement, the terms of which governed the plaintiffs employment with the defendant. There was no dispute that the collective-bargaining agreement containing the clause was applicable to the parties’ employment relationship, and the relevant issue was simply whether the plaintiffs particular grievance fell within the terms of the arbitration clause. In contrast, the arbitration clause in the instant case was extended from distinct contracts concerning separate transactions to disputes over earlier transactions with their own distinct contracts. Therefore, the facts and issues presented in Kaleva were very different from those presented here. Consequently, the analysis in Kaleva is not helpful in resolving the instant matter and does not compel the result reached by the Court of Appeals.
We are also not persuaded by the federal authority cited by the Court of Appeals. In those cases, the federal courts held that the terms of later-executed contracts applied to previous dealings between the same parties. See Levin v Alms & Assoc, Inc, 634 F3d 260 (CA 4, 2011), and Watson Wyatt & Co v SBC Holdings, Inc, 513 F3d 646 (CA 6, 2008). Those cases are distinguishable from the present case because the litigants’ transactions in the federal cases were ongoing and regular, evincing a steady and continuous business relationship. In the instant case, the parties’ transactions were sporadic and irregular, evincing nothing more than the execution of separate and distinct transactions that were distant in time. The inclusion of the arbitration clause in the later contracts at issue here did not put plaintiffs on notice that it was to apply to all previous contracts between the parties.
In sum, the undisputed facts do not reasonably support the conclusion that the parties intended for the arbitration clause contained in the invoices for some transactions to apply to separate and distinct prior transactions. There simply is no legal basis on which to retroactively insert an arbitration clause into the parties’ 2003 and 2004 contracts. Consequently, only plaintiffs’ claims arising from purchases for which the invoices included the arbitration clause are subject to arbitration.
IV. CONCLUSION
We disagree with the Court of Appeals’ conclusion that, by signing an invoice containing an arbitration clause, plaintiffs agreed to arbitrate not only disputes regarding transactions described in that invoice, but also disputes regarding past transactions, regardless of whether the invoices associated with the past trans actions included an arbitration clause. The plain language of plaintiffs’ 2003 and 2004 invoices makes no mention of arbitration, and there is no basis on which to conclude that the parties intended for the arbitration clause contained in their 2008 and 2009 invoices to retroactively apply to the earlier transactions.
Because we conclude that the only claims subject to arbitration are those arising from invoice agreements containing an arbitration clause, we reverse that part of the Court of Appeals judgment that applied the arbitration clause to the parties’ prior transactions completed without reference to arbitration. We remand this case to the Court of Appeals for consideration of the issues raised in plaintiffs’ appeal that the Court did not address to the extent those issues relate to claims that are not subject to arbitration. In all other respects, leave to appeal is denied, because we are not persuaded that the remaining question presented should be reviewed by this Court.
Young, C.J., and Markman, Zahra, McCormack, Viviano, Bernstein, and Larsen, JJ., concurred.
The action was originally filed by 12 plaintiffs, but most agreed to dismiss their claims, leaving only plaintiffs Audrey Mahoney, David Oppenheim, Felice Oppenheim, and Patty Brown.
The owners of Park West, Albert Scaglione and Albert Molina; the gallery director, Morris Shapiro; and Plymouth Auctioneering Services, Ltd., are also defendants in this matter. All defendants are in the same position for purposes of this appeal.
All the invoices for the 2007 and 2008 purchases made by Mahoney and Brown contained the arbitration clause, but only some of the invoices for the Oppenheims’ purchases did. The Oppenheims purchased four pieces of art from defendants: one in 2003, one in 2004, one in 2008, and one in 2009. The invoices for the Oppenheims’ purchases in 2003 and 2004 did not contain the arbitration clause, but the invoices for purchases made in 2008 and 2009 did.
MCL 442.321 et seq.
MCL 442.351 et seq.
MCL 445.901 et seq.
Beck v Park West Galleries, Inc, unpublished opinion per curiam of the Court of Appeals, issued March 3, 2015 (Docket No. 319463). The Court of Appeals majority adopted the reasoning of the dissent in a prior, virtually identical case involving different plaintiffs. Id. at 4-7, citing Cohen v Park West Galleries, Inc, unpublished opinion per curiam of the Court of Appeals, issued April 5, 2012 (Docket No. 302746) (Murray, J., dissenting in part).
While the Oppenheims, Mahoney, and Brown also argued in their application to appeal in this Court that the arbitration clauses themselves are invalid, we are not persuaded that this question should be reviewed by this Court. Consequently, for purposes of this opinion, hereafter the term “plaintiffs” will refer to the Oppenheims, because they are the only plaintiffs at issue in this appeal who purchased art covered by invoices that did not contain the arbitration clause.
Fane v Detroit Library Comm, 465 Mich 68, 74; 631 NW2d 678 (2001).
In re Nestorovski Estate, 283 Mich App 177, 184; 769 NW2d 720 (2009).
Kaleva-Norman-Dickson Sch Dist No 6 v Kaleva-Norman-Dickson Sch Teachers’Ass’n, 393 Mich 583, 587; 227 NW2d 500 (1975).
Miller-Davis Co v Ahrens Constr, Inc, 495 Mich 161, 174; 848 NW2d 95 (2014).
Frankenmuth Mut Ins Co v Masters, 460 Mich 105, 111; 595 NW2d 832 (1999).
Kaleva, 393 Mich at 587.
See Mich Nat’l Bank v Martin, 19 Mich App 458, 462; 172 NW2d 920 (1969). The Restatement of Contracts supports the notion that separate contracts are to be treated separately. For example, comment d regarding Restatement Contracts, 2d, § 231, pp 197-198, provides in relevant part:
The rules that protect parties whose performances are to be exchanged under an exchange of promises apply only when the promises are exchanged as part of a single contract. .. . [I]f one or more promises by each party are not part of the consideration for one or more promises by the other party, there are instead separate exchanges. ... In deciding whether there is a single contract rather than separate contracts, the court must look to the actual bargain of the parties ... to decide whether each promise on one side was sought and given as at least part of the exchange for each promise on the other side.
Similarly, comment b regarding Restatement, § 240, p 230, provides in relevant part:
If there are two separate contracts, one party’s performance under the first and the other party’s performance under the second are not to be exchanged under a single exchange of promises, and even a total failure of performance by one party as to the first has no necessary effect on the other party’s duty to perform the second.
See Hyatt v Grover & Baker Sewing-Machine Co, 41 Mich 225, 227; 1 NW 1037 (1879) (holding that a surety contract would only apply prospectively given that the contract did not specify retroactive application); Brockway v Petted, 79 Mich 620, 626; 45 NW 61 (1890) (stating that a surety contract only applies to future events unless otherwise provided in the contract).
Beck, unpub op at 7 (citation omitted).
Kaleva, 393 Mich at 592, quoting United Steelworkers of America v Warrior & Gulf Navigation Co, 363 US 574, 582-583; 80 S Ct 1347; 4 L Ed 2d 1409 (1960) (alteration in original).
Judge Hoekstra disagreed with the majority’s conclusion that the arbitration clause included in later invoices applied to disputes over the earlier transactions for which the invoices did not contain the arbitration clause.
Kaleva, 393 Mich at 591. | [
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Leave to appeal denied at 498 Mich 890. | [
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On order of the Court, leave to appeal having been granted and the briefs and oral arguments of the parties having been considered by the Court, we reverse the February 5, 2015 judgment of the Court of Appeals and we remand this case to the Calhoun Circuit Court for proceedings consistent with its judgment ordering a new trial. The Court of Appeals erred in applying People v Cress, 468 Mich 678 (2003), to an analysis of a successive motion filed pursuant to MCR 6.502(G)(2). Cress does not apply to the procedural threshold of MCR 6.502(G)(2), as the plain text of the court rule does not require that a defendant satisfy all elements of the test. The Court of Appeals erred in failing to give proper deference to the specific findings of the trial court that the defendant was entitled to a new trial. The defendant provided “a claim of new evidence that was not discovered before the first” motion for relief from judgment, MCR 6.502(G)(2), and we conclude that the trial court did not abuse its discretion in ordering a new trial on the facts of this case. In light of this disposition, we decline to address the other issues presented in our order granting leave to appeal. We do not retain jurisdiction.
McCormack, J., did not participate because of her prior involvement in this case as counsel for a party. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we remand this case to the Tuscola Circuit Court to determine whether the court would have imposed a materially different sentence under the sentencing procedure described in People v Lockridge, 498 Mich 358 (2015). On remand, the trial court shall follow the procedure described in Part VI of our opinion. If the trial court determines that it would have imposed the same sentence absent the unconstitutional constraint on its discretion, it may reaffirm the original sentence. If, however, the trial court determines that it would not have imposed the same sentence absent the unconstitutional constraint on its discretion, it shall resentence the defendant. In all other respects, leave to appeal is denied, because we are not persuaded that the remaining questions presented should be reviewed by this Court. The motion for an order adjourning the case is denied. We do not retain jurisdiction. | [
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reported below: 310 Mich App 584. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we remand this case to the Court of Appeals for consideration, as on leave granted, of the issues not addressed by that Court during its initial review of this case. With regard to the defendant’s challenge to costs, leave to appeal is denied, because we are not persuaded that the question presented should be reviewed by this Court prior to the completion of the proceedings ordered by the Court of Appeals. The motion to amend the application for leave to appeal is denied. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we remand this case to the Court of Appeals for consideration as on leave granted. | [
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Leave to appeal denied at 499 Mich 875. | [
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Leave to appeal denied at 499 Mich 870. | [
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On April 7, 2016, the Court heard oral argument on the application for leave to appeal the December 11, 2014 judgment of the Court of Appeals. On order of the Court, the application is again considered, and it is denied, because we are not persuaded that the questions presented should be reviewed by this Court. | [
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Leave to appeal denied at 498 Mich 872. | [
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Leave to appeal denied at 499 Mich 868. | [
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Leave to appeal denied at 499 Mich 857. | [
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Pursuant to MCR 7.305(H)(1), in lieu of granting leave to appeal, we vacate the sentence of the Muskegon Circuit Court for the defendant’s first-degree murder conviction, and we remand this case to the trial court for resentencing on that conviction pursuant to MCL 769.25 and MCL 769.25a. See Montgomery v Louisiana, 577 US _; 136 S Ct 718; 193 L Ed 2d 599 (2016); Miller v Alabama, 567 US 460; 132 S Ct 2455; 183 L Ed 2d 407 (2012). In all other respects, leave to appeal is denied, because the defendant has failed to meet the burden of establishing entitlement to relief under MCR 6.508(D). We do not retain jurisdiction. | [
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The parties shall include among the issues to be briefed: (1) whether MCL 450.4515(l)(e) constitutes a statute of repose, a statute of limitations, or both; and (2) when the plaintiffs’ cause of action accrued. | [
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Leave to appeal denied at 498 Mich 896. | [
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Leave to appeal denied 499 Mich 871. | [
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YOUNG, C.J.
Plaintiff appeals by leave the Court of Appeals’ opinion in Associated Builders & Contractors v City of Lansing. Plaintiff claims that the city of Lansing’s Ordinance 206.18(a) is unconstitutional under this Court’s 1923 decision Attorney General ex rel Lennane v Detroit and is an unlawful usurpation of state power. The Court of Appeals majority disagreed and ruled that subsequent changes to state law had caused Lennane to be “superseded.” The Court of Appeals erred by exceeding its powers for refusing to follow a decision from this Court that both applied and had not been overruled. Even so, we now take this opportunity to overrule Lennane because subsequent constitutional changes have undercut its viability. We therefore vacate the Court of Appeals’ decision but affirm the result for the reasons stated below.
FACTS AND PROCEDURAL HISTORY
Defendant, city of Lansing, enacted an ordinance requiring contractors working on city construction contracts to pay employees a prevailing wage. The ordinance states in relevant part:
No contract, agreement or other arrangement for construction on behalf of the City and involving mechanics and laborers, including truck drivers of the contractor and/or subcontractors, employed directly upon the site of the work, shall be approved and executed by the City unless the contractor and his or her subcontractors furnish proof and agree that such mechanics and laborers so employed shall receive at least the prevailing wages and fringe benefits for corresponding classes of mechanics and laborers, as determined by statistics compiled by the United States Department of Labor and related to the Greater Lansing area by such Department.[ ]
Plaintiff, a trade association, filed suit against Lansing, arguing that the ordinance is unconstitutional because municipalities do not have the authority to adopt laws regulating the wages paid by third parties, even where the relevant work is done on municipal contracts paid for with municipal funds. Plaintiff relies primarily on this Court’s 1923 Lennane decision, which held that, under this state’s 1908 Constitution, the city of Detroit could not enact an essentially analogous ordinance and related city charter provision. In response, defendant argued that the legal landscape, particularly the ratification of a new constitution in 1963, had changed so radically that Lennane was no longer relevant in determining the question at hand. The trial court granted summary disposition to plaintiff, ruling that Lennane made it clear that the regu lation of wages was a matter of state, not municipal, concern under the Michigan Constitution and the Home Rule Act, though it did take note of Lennane’s “archaic nature.”
The Court of Appeals panel reversed the lower court in a published, split decision. Although the panel majority stated that its opinion “neither overrule[s] Lennane nor deviate [s] from the rule of stare decisis,” the majority nevertheless ruled that changes in the legal landscape had, in fact, rendered Lennane obsolete and inapplicable. The panel stated that “the founda tion upon which Lennane stood has been rejected by our Supreme Court.” One judge dissented, arguing that the majority was unlawfully striking down a decision by this Court because Lennane had never been overruled—either implicitly or explicitly—or rendered inapplicable. The dissenting opinion stated:
[T]he Court’s conclusion in Lennane that this is a matter of state concern has never been overruled. Therefore . .. defendant’s powers ... do not extend to this ordinance until and unless the Supreme Court revisits its conclusion in Lennane, or the Legislature explicitly grants cities the power to adopt prevailing wage ordinances.[ ]
This appeal followed.
STANDARD OF REVIEW
This Court reviews de novo both questions of constitutional law and a trial court’s decision on a motion for summary disposition.
ANALYSIS
We take this opportunity to overrule Lennane. Len-nane’s conception of municipal power may or may not have been well-grounded in Michigan’s 1908 Constitution and the legal landscape of the time, but it is certainly incongruent with the state of our law as reflected in our current Constitution. We therefore conclude that Lennane has no continuing viability in light of the adoption of our 1963 Constitution.
The 1908 Constitution read in relevant part:
Under such general laws, the electors of each city and village shall have power to frame, adopt, and amend its charter,. .. and, through its regularly constituted authority, to pass all laws and ordinances relating to its municipal concerns, subject to the Constitution and general laws of this state.[ ]
Interpreting this constitutional provision, the Len-nane Court held that the regulation of wages paid to third-party employees working on municipal construction contracts was exclusively a matter of “state,” not “municipal,” concern. Quoting liberally from a 1919 case, Kalamazoo v Titus, the Lennane Court stated:
“The charter provision, the ordinance, the argument made for the city, indeed, the suit itself, reflect a popular interest in, and, we conceive, a popular misunderstanding about, the subject of home rule, so-called, in cities. There is apparent a widely spread notion that lately, in some way, cities have become possessed of greatly enlarged powers, the right to exercise which may come from mere assertion of their existence and the purpose to exercise them. Whether these powers are really inherent in the community, but their exercise formerly was restrained, or are derived from a new grant of power by the State, or may be properly ascribed to both inherent right and to a new grant, are questions which do not seem to bother very much the advocates of the doctrine that they in any event exist. On the other hand, there is expression of grave doubt whether, in the view of the law, there has been any enlargement or extension of the subjects of municipal legislation and control or of the powers of cities except as those subjects and powers are specifically enumerated and designated in the Constitution itself and in the home rule act.” [ ]
By quoting Titus at such length, the Lennane Court appears to have been posing itself a question: under the 1908 Constitution, what, exactly, are the default powers of municipalities? Do municipalities have all powers relating to local concerns that are not expressly denied, or can they wield only those powers expressly and explicitly granted? In concluding that a municipality’s powers did not include the power to enact laws regulating the wages paid to third-party employees working on municipal construction contracts, the Len-nane Court appears to have chosen the latter answer.
This conclusion finds no support in the 1963 Constitution. Article 7, § 22 of the 1963 Constitution provides:
Under general laws the electors of each city and village shall have the power and authority to frame, adopt and amend its charter, and to amend an existing charter of the city or village heretofore granted or enacted by the legislature for the government of the city or village. Each such city and village shall have power to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law. No enumeration of powers granted to cities and villages in this constitution shall limit or restrict the general grant of authority conferred by this sectionl -
Explaining these highlighted changes, the Address to the People states:
This is a revision of Sec. 21, Article VIII, of the present [1908] constitution and reflects Michigan’s successful experience with home rule. The new language is a more positive statement of municipal powers, giving home rule cities and villages full power over their own property and government, subject to this constitution and lawf[ ]
The 1963 Constitution also contained a new provision, Article 7, § 34:
The provisions of this constitution and law concerning counties, townships, cities and villages shall be liberally construed in their favor. Powers granted to counties and townships by this constitution and by law shall include those fairly implied and not prohibited by this constitution.[ ]
If it was ever the case, we conclude that, given the newly added language that expresses the people’s will to give municipalities even greater latitude to conduct their business, there is simply no way to read our current constitutional provisions and reach the conclusion that “there is . . . grave doubt whether. . . there has been any enlargement or extension of the subjects of municipal legislation and control or of the powers of cities except as those subjects and powers are specifically enumerated and designated in the Constitution itself and in the home rule act.” Under our current Constitution, there is simply no room for doubt about the expanded scope of authority of Michigan’s cities and villages: “No enumeration of powers granted to cities and villages in this constitution shall limit or restrict the general grant of authority conferred by this section.” Moreover, these powers over “municipal concerns, property and government” are to be “liberally construed.” In contrast, the Lennane Court briefly interpreted the more limited language in the 1908 Constitution—granting cities and villages the right to “pass all laws and ordinances relating to its municipal concerns”—decided upon a narrow conception of local authority, and declared, with scant analysis, that a prevailing wage law similar to this one was exclusively a matter of “state concern.”
But the wages paid to employees of contractors working on municipal contracts have a self-evident relationship to “municipal concerns, property, and government” if those words are even reasonably, if not liberally, construed. Those wage rates concern how a municipality acts as a market participant, spending its own money on its own projects. If a municipality has broad powers over local concerns, it certainly has the power to set terms for the contracts it enters into with third parties for its own municipal projects—including provisions relating to the wages paid to third-party employees. This way, the municipality controls its own money and presumably expresses its citizens’ preference as to what those who work on public projects should be paid. We see nothing in these municipal aims that falls outside the ambit of Article 7, § 22 of the 1963 Constitution.
Furthermore, Lennane’s holding appears to rest on an implicit dichotomy: if something is a matter of “state concern,” it cannot also be a matter of “local concern.” But this binary understanding does not comport with the plain language of the 1963 Constitution, which grants cities and villages broad powers over “municipal concerns, property and government” whether those powers are enumerated or not. The relevant constitutional language does not state that a matter cannot be a “municipal concern” if the state might also have an interest in it. While a binary understanding of state and local governmental power might have been common 100 years ago, the ratifiers of the 1963 Constitution do not appear to have worked under the same apprehension—instead, we are left with their words: “The provisions of this constitution and law concerning counties, townships, cities and villages shall be liberally construed in their favor.”
Thus, if Lennane’s holding was ever on firm constitutional ground, it no longer had sound footing after the people ratified the 1963 Constitution. We agree with the Court of Appeals majority that subsequent changes in the law have undercut Lennane’s foundations. Accordingly, we conclude that “changes in the law ... no longer justify the questioned decision.” Nor do we believe that any reliance interests affected by this Court’s overruling Lennane caution against our analysis. Reliance interests, while important to the rule of stare decisis, must fall to the wayside when this Court is addressing actual changes in the text of our constitutions. We therefore declare that Lennane has no continuing viability and repudiate its conception of municipal authority in light of the ratification of the 1963 Constitution. The rule in Lennane—that city and village governments may not enact ordinances or charter provisions governing the wages paid to third-party employees working on municipal construction contracts—is overruled.
Nonetheless, we also agree with Court of Appeals dissent’s following assessment of the binding nature of Lennane before the instant decision:
[T]he Court’s conclusion in Lennane that this is a matter of state concern has never been overruled. Therefore, even if we apply a “liberal construction” to defendant’s powers, they do not extend to this ordinance until and unless the Supreme Court revisits its conclusion in Lennane, or the Legislature explicitly grants cities the power to adopt prevailing wage ordinances.[ ]
While it is inarguable that developments over the past century have undercut the foundation upon which Lennane stood, its holding was never explicitly superseded by the ratifiers of the 1963 Constitution or by the Legislature, nor was it overruled by this Court. The Court of Appeals is bound to follow decisions by this Court except where those decisions have clearly been overruled or superseded and is not authorized to anticipatorily ignore our decisions where it determines that the foundations of a Supreme Court decision have been undermined. Thus, while we agree with the result of the Court of Appeals’ decision, we disapprove of its usurpation of this Court’s role under our Constitution.
CONCLUSION
Lennane, whatever its merits when it was decided, has been undercut by the adoption of the 1963 Constitution. We therefore overrule Lennane. Under our Constitution, cities and villages may enact ordinances relating to “municipal concerns, property and government,” including ordinances and charter provisions regulating the wages paid to third-party employees working on municipal construction contracts, “subject to the constitution and law.”
The Court of Appeals erred, however, by disregarding precedent from this Court that has not been clearly overruled by the Court or superseded by subsequent legislation or constitutional amendment. “[I]t is the Supreme Court’s obligation to overrule or modify case law if it becomes obsolete, and until this Court takes such action, the Court of Appeals and all lower courts are bound by that authority.” Because of this error, we vacate the Court of Appeals’ decision but affirm the result, for the reasons stated above.
Markman, McCormack, Viviano, Bernstein, and Larsen, JJ., concurred with YOUNG, C.J.
Associated. Builders & Contractors v City of Lansing, 305 Mich App 395; 853 NW2d 433 (2014).
Attorney General ex rel Lennane v Detroit, 225 Mich 631; 196 NW 391 (1923).
See Const 1963, art 7, §§ 22 and 34.
Lansing Ordinances, § 206.18a.
Lennane, 225 Mich at 641.
Most relevant to our analysis, Article 7, § 22 of the 1963 Constitution provides:
Under general laws the electors of each city and village shall have the power and authority to frame, adopt and amend its charter, and to amend an existing charter of the city or village heretofore granted or enacted by the legislature for the government of the city or village. Each such city and village shall have power to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law. No enumeration of powers granted to cities and villages in this constitution shall limit or restrict the general grant of authority conferred by this section.
MCL 117.4j. We decide this case under the Michigan Constitution, but the similar text of the Home Rule Act informs our decision. In relevant part, the Act states:
Each city may in its charter provide:
For the exercise of all municipal powers in the management and control of municipal property and in the administration of the municipal government, whether such powers be expressly enumerated or not; for any act to advance the interests of the city, the good government and prosperity of the municipality and its inhabitants and through its regularly constituted authority to pass all laws and ordinances relating to its municipal concerns subject to the constitution and general laws of this state.
Associated Builders, 305 Mich App at 398.
Id. at 411.
Id. It is because the panel below failed to give deference to the precedential authority of our opinions that we vacate the opinion of the Court of Appeals.
Id. at 421 (SAWYER, P.J., dissenting).
Dep’t of Transp v Tompkins, 481 Mich 184, 190; 749 NW2d 716 (2008).
Const 1908, art 8, § 21.
Lennane, 225 Mich at 638 (“The police power rests in the State.. .. While the municipality in the performance of certain of its functions acts as agent of the State it may not as such agent fix for the State its public policy. That power has not been delegated to these agents of the State. Unless delegated in some effective way the police power remains in the State.”).
Kalamazoo v Titus, 208 Mich 252; 175 NW 480 (1919).
Lennane, 225 Mich at 639, quoting Titus, 208 Mich at 260-261 (emphasis added; citation omitted).
The new language added is italicized.
2 Official Record, Constitutional Convention 1961, p 3393 (emphasis added).
Const 1963, art 7, § 34. The Address to the People for this provision explains:
This is a new section intended to direct the courts to give a liberal or broad construction to statutes and constitutional provisions concerning all local governments. Home rule cities and villages already enjoy a broad construction of their powers and it is the intention here to extend to counties and townships within the powers granted to them equivalent latitude in the interpretation of the constitution and statutes. [2 Official Record, Constitutional Convention 1961, p 3395 (emphasis added).]
Lennane, 225 Mich at 639.
Const 1963, art 7, § 22.
Const 1963, art 7, § 34.
Merriam-Webster’s Collegiate Dictionary (11th ed) defines “municipal” as “of, relating to, or characteristic of a municipality,” which is “a primarily urban political unit having corporate status and usu. powers of self-government.” The same dictionary defines “property” as “something owned or possessed” and defines “government” as “the act or process of governing . . . authoritative direction or control.” All three of these definitions are broad enough to encompass the conditions a municipality places in its municipality-funded construction contracts, including conditions as to what contractors on those projects pay their workers. These contracts clearly “relate to” the municipality in that they are public projects; they concern a municipality's own money and property, things that it clearly “owns or possesses”; and a municipality certainly has “authoritative direction or control” over its own public-works projects.
Nothing in this opinion should be interpreted to imply that municipalities are sovereign entities with extraconstitutional powers or the ability to negate legislative action. See Const 1963, art 7, § 22 (“Each .. . city and village shall have power to adopt resolutions and ordinances relating to its municipal concerns, property and government, subject to the constitution and law”) (emphasis added).
It is somewhat difficult to parse this aspect of Lennane's holding, because the Lennane Court never explains precisely why the wages paid to third-party employees working on municipal construction contracts are matters of state concern.
Indeed, in this very area of prevailing wages, the Legislature explicitly omits municipalities from its list of affected governmental “contracting agents” in the state prevailing wage statute, MCL 408.551(c). This drafting decision strongly suggests an independent local role for setting wage rates on municipal contracts. At the very-least, there is no evidence that the Legislature intended to preempt municipal authority in this area.
Along with Lennane, several older cases appear to adopt this binary conception of state and local governance. See, e.g., People ex rel Bd of Detroit Park Commissions v Detroit Common Council, 28 Mich 227, 240 (1873) (“Whoever insists upon the right of the State to interfere and control by cumpulsory [sic] legislation the action of the local constituency in matters exclusively of local concern, should be prepared to defend a like interference in the action of private corporations and of natural persons.”); Thomas v Wayne Co Bd of Supervisors, 214 Mich 72, 84; 182 NW 417 (1921) (“[Establishing and maintaining a tract index] is purely a matter of local concern. Neither the state as a whole nor any person other than a taxpayer of Wayne county [sic] has any interest in the matter.”). Since the passage of the 1963 Constitution, however, Michigan courts have not relied upon this archaic, binary conception of state and local power. See Airlines Parking, Inc v Wayne Co, 452 Mich 527, 539; 550 NW2d 490 (1996) (“[M]atters of local concern may also be matters of state concern.”). In the face of explicit textual direction to the contrary, we decline to impose such an anachronistic conception of state and local government on our current constitution.
Const 1963, art 7, § 34.
The Court of Appeals panel majority stated that “the foundation upon which Lennane stood has been rejected by our Supreme Court.” Associated Builders, 305 Mich App at 411. The panel majority relied on language from decisions of this Court, including Rental Prop Owners Ass’n of Kent Co v Grand Rapids, 455 Mich 246, 253-254; 566 NW2d 514 (1997) (“Home rule cites have broad powers to enact ordinances for the benefit of municipal concerns under the Michigan Constitution .... The home rule cities act is intended to give cities a large measure of home rule. It grants general rights and powers subject to enumerated restrictions.”) (citations omitted), Detroit v Walker, 445 Mich 682, 690; 520 NW2d 135 (1994) (“[I]t is clear that home rule cities enjoy not only those powers specifically granted, but they may also exercise all powers not expressly denied. Home rule cities are empowered to form for themselves a plan of government suited to their unique needs and, upon local matters, exercise the treasured right of self-governance.”) (citation omitted), and AFSCME v Detroit, 468 Mich 388, 410; 662 NW2d 695 (2003), quoting Walker, 445 Mich at 690 (“We have held that ‘home rule cities enjoy not only those powers specifically granted, but they may also exercise all powers not expressly denied.’ ”). While all of these cases use clear language acknowledging the broad grants of municipal authority in the 1963 Constitution and the Home Rule Act, none of them relate directly to the problem at issue in this case or purport to overrule Lennane. These cases support the point made by the panel. However, rather than rely primarily on the gloss in some of our past cases, we take this opportunity to overrule Lennane anchoring our decision on the text of the 1963 Constitution itself.
Robinson v Detroit, 462 Mich 439, 464; 613 NW2d 307 (2000). While the “first inquiry” in considering whether to overrule a prior decision of this Court is generally whether that prior decision was wrongly decided, Sington v Chrysler Corp, 467 Mich 144, 162; 648 NW2d 624 (2002), in cases such as this where the legal landscape has changed dramatically, it adds little to the inquiry to determine whether the prior decision was correctly decided under obsolete law. See Robinson, 462 Mich at 455 (concluding that Fiser v Ann Arbor, 417 Mich 461; 339 NW2d 413 (1983), “may have been proper when decided, but it is no longer ‘good law’ after Ross [v Consumers Power Co (On Rehearing), 420 Mich 567; 363 NW2d 641 (1984)]”). We note, however, that Lennane offered precious little textual analysis for its conclusion, so to the extent that the phrase “municipal concerns” remains unchanged between the 1908 and 1963 Constitutions, Lennane’s analysis of that term is not particularly illuminating.
Associated Builders, 305 Mich App at 421 (Sawyer, P.J., dissenting).
Although one can determine with relative ease whether a case was overruled by this Court, we acknowledge that it is not always so easy to determine whether a case has been “clearly overruled or superseded” by intervening changes in the positive law. At one end of the spectrum are situations in which the Legislature has entirely repealed or amended a statute to expressly repudiate a court decision. In such situations, lower courts have the power to make decisions without being bound by prior cases that were decided under the now-repudiated previous positive law. The other end of the spectrum is harder to define; however, as it relates to this case, because both the 1908 Constitution and the 1963 Constitution contain the phrase at issue in Lennane—“relating to its municipal concerns”—Lennane had not been clearly superseded, and the Court of Appeals was bound by it.
“While the Court of Appeals may properly express its belief that a decision of this Court was wrongly decided or is no longer viable, that conclusion does not excuse the Court of Appeals from applying the decision to the case before it.” Boyd v W G Wade Shows, 443 Mich 515, 523; 505 NW2d 544 (1993), overruled on other grounds by Karaczewski v Farbman Stein & Co, 478 Mich 28; 732 NW2d 56 (2007), itself overruled in part by Bezeau v Palace Sports & Entertainment, Inc, 487 Mich 455; 795 NW2d 797 (2010).
Const 1963, art 7, § 22.
Boyd, 443 Mich at 523.
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YOUNG, C.J.
In this race discrimination case, we must decide whether the trial court erred by denying defendant’s motion for judgment notwithstanding the verdict (JNOV) and determine the propriety of the admission of evidence of defendant’s mandatory reporting under MCL 380.1230b. We hold that the Court of Appeals did not err by affirming the trial court’s denial of defendant’s motion for JNOV on plaintiffs claim of discrimination under the Civil Rights Act (CRA), MCL 37.2101 et seq. Contrary to the Court of Appeals, we conclude that there was no direct evidence of discriminatory animus concerning the firing of plaintiff. This case turned on circumstantial evidence—on the credibility of plaintiffs proofs that suggested there were racial reasons for his treatment and on the credibility of defendant’s nonracial justifications for firing him. We conclude, based on the evidence presented and all the inferences that could be reasonably drawn from that evidence in favor of the jury’s liability verdict, that a reasonable jury could have concluded that defendant violated the CRA.
Finally, because MCL 380.1230b afforded defendant complete immunity from civil liability flowing from the mandatory disclosures compelled by this statute, we hold that the trial court erred by allowing the jury to consider evidence of defendant’s statutorily mandated disclosures of plaintiffs wrongdoing to other schools, and the Court of Appeals erred by affirming the trial court’s decision in that regard.
For these reasons, we reverse in part and affirm in part the judgment of the Court of Appeals, vacate the jury award for future damages, and remand to the trial court for further proceedings consistent with this opinion.
I. FACTS AND PROCEDURAL HISTORY
Defendant, National Heritage Academies, Inc., is a company that owns and operates a number of public, independently operated schools, including Linden Charter Academy (LCA) located in Flint, Michigan. The student body at LCA is predominantly black. Plaintiff, Craig Hecht, is a white teacher who had been employed by defendant at LCA for approximately eight years, most recently serving as a third-grade teacher.
We draw from the evidence adduced at trial the following narrative concerning the events that led to plaintiffs termination. On November 3, 2009, Lisa Code, a white library aide at LCA, entered plaintiffs classroom during class time to return a computer table she had borrowed. Upon her arrival, however, Code realized that she had brought back the wrong table— the one she borrowed was white, whereas the one she returned was brown. Noting her error, Code asked plaintiff if he would prefer to have a white table, like the one she borrowed, or the brown one she had returned. Plaintiff responded, “[Y]ou know I want a white table, white tables are better.” He continued, “[W]e can take all these brown tables and we can burn the brown tables.” Also present for this exchange was Floyd Bell, a black paraprofessional assigned to plaintiffs classroom. After hearing plaintiffs comments, Bell and Code both “called a foul” on plaintiff, in accordance with the school’s informal procedures for addressing inappropriate personal conduct. Plaintiff denied hearing either Bell or Code call a foul on him, but later acknowledged that his comments were meant to imply that “white” people are better than “brown” people.
Later that same day, Code reported the incident to Corrine Weaver, the dean of LCA. Weaver, in turn, reported the incident to her supervisor, Linda Caine-Smith, the principal of LCA, who initiated an investigation. Caine-Smith and Weaver each separately interviewed plaintiff, Bell, and Code and took written statements from all three. Although Code’s testimony at trial emphasized that plaintiff made the statements in front of a child, plaintiffs counsel also elicited testimony from Code that her November 4th written statement did not include that allegation.
When questioned, plaintiff provided varying explanations regarding what had happened. At first, plaintiff confirmed to Weaver the general discussion about white and brown tables, but he denied that he meant anything racial by his statements. The following day, plaintiff told Caine-Smith that he never said “brown should burn.” However, later that day, plaintiff sent Caine-Smith a written statement in which he admitted to saying, “white tables are better than brown tables” and “all brown tables should burn.” He also admitted that he involved a third-grade student in the “jok[e]” after he made the comments. Plaintiff subsequently met with Bell, apologized to him, and shook his hand.
At this point in the investigation, Caine-Smith contacted Courtney Unwin, defendant’s employee relations manager, to discuss plaintiffs conduct and Caine-Smith’s belief that plaintiff had lied during their initial conversation regarding the incident. Unwin then spoke directly to plaintiff, who, despite the admissions made in his earlier written statement, told her that his remark was simply a “tasteless joke,” denied involving a student in the joke, and claimed that none of his students heard the exchange. Unwin also claimed that plaintiff called her later that day, stated that he could not even remember saying anything about brown tables burning, and then justified his conduct by reference to racial banter he suggested was regularly engaged in by black teachers at LCA. Plaintiff claimed that he told Unwin he was just kidding around, that similar joking happened all the time at the school, and that he would do anything to make it better.
Caine-Smith and Unwin met to discuss plaintiffs comments in the classroom and his versions of the incident. They discussed several disciplinary options, including a final written warning and termination. After that meeting, Caine-Smith called plaintiff to her office and told him he was being placed on immediate leave pending further investigation. Instead of leaving the building, plaintiff went into a room in which Bell was tutoring students. Plaintiff asked the students to leave the room so that he and Bell could speak privately. He then asked Bell to change the statement he gave defendant. Bell declined the request and explained that he would not lie for plaintiff.
Plaintiff also tried to contact Code by calling both her home and cellular phones. Code did not answer either call, but plaintiff left a voicemail stating that he was “desperate” to speak to her. Code testified that plaintiff had never before tried to contact her. Code further testified that plaintiff never asked her to change her statement.
The following day, Bell told Caine-Smith that plaintiff had asked him to lie. After receiving this information, Caine-Smith worried that plaintiff had similarly contacted Code. When asked, Code told Caine-Smith about the voicemail, causing Caine-Smith to consult with Unwin again. After their discussion, both Caine-Smith and Unwin determined that plaintiff was interfering with the investigation, and they decided to terminate plaintiffs employment. Notably, while Un-win testified that she believed plaintiffs intent was for Bell to lie, plaintiffs counsel called attention to Un-win’s arguably contrary deposition testimony, in which she had previously testified that, to her knowledge, plaintiff did not ask anyone to lie. Plaintiffs employment was terminated that day. Subsequently, plaintiff was replaced by a white woman hired by defendant.
After being fired from LCA, plaintiff began taking substitute teaching jobs, while simultaneously applying for long-term, full-time employment as a teacher. Plaintiff testified that every time he got close to securing such employment, the prospective employer would request his employment record from defendant, as required by law, and, also as required by law, defen dant disclosed the fact that plaintiff was fired for his racially insensitive comments and his conduct during the investigation. Plaintiff testified that, because of these disclosures, he was unable to obtain full-time employment as a teacher. Plaintiff eventually obtained a nonteaching job as a machine operator, making approximately $14 per hour—considerably less than his salary with defendant.
In February 2010, plaintiff filed a complaint in the Genesee Circuit Court, alleging that defendant terminated his employment based on his race in violation of the CRA. Defendant moved for summary disposition, arguing, among other things, that it had legitimate nondiscriminatory reasons for firing plaintiff and that his misconduct was not “similar” to that of any other employee. The motion was denied by the trial court. Defendant does not challenge the denial of summary disposition in this appeal.
Before trial, defendant moved, in limine, to preclude plaintiff from presenting evidence of its mandatory disclosure of plaintiffs unprofessional conduct to other schools. Defendant argued that the disclosures were required by law, pursuant to MCL 380.1230b, and that the same statutory provision immunized the disclosing school from civil liability for the disclosures. On this basis, defendant argued that plaintiff should be precluded from admitting these disclosures or other information related to them as evidence to establish civil liability.
Plaintiff countered, arguing that the statute only shielded defendant from liability stemming directly from the disclosure, such as when a plaintiff sues for defamation. Plaintiff claimed that he was seeking to use the disclosures for a different purpose: not to establish liability for defamation, but to establish his future damages resulting from the alleged employment discrimination because the disclosures to prospective school employers precluded him from obtaining another teaching position. The trial court ruled that it would not limit the presentation of this disclosure evidence at trial, but it would consider jury instructions explaining the ways in which the evidence could be used.
At trial, plaintiff attempted to prove his CRA claim by establishing that the defendant applied different rules to white and black employees who engaged in racial banter: black employees were permitted to engage in such conduct without being reported or investigated, while plaintiff, a white employee, was subject to disciplinary investigation and escalation of punishment. Several witnesses testified about this issue.
One of these witnesses, Unwin, the LCA employee relations manager who was consulted on what course of action should be taken with plaintiff because of his racial comments and subsequent conduct during the investigation of those comments, testified that LCA had essentially a “zero tolerance” policy prohibiting any expression of negative racial “stereotyping” in the' workplace. Under the LCA antidiscrimination policy, it was mandatory that any such racial remarks be reported and investigated.
The testimony of defendant’s other managers involved in investigating and disciplining plaintiff permitted the jury to reach the conclusion that defendant’s policy was applied differently depending on the race of the employee involved. Weaver testified that, a few days before plaintiff was fired, she reminded her supervisor, Caine-Smith, that racial banter happens among black employees without consequence. Weaver testified that Caine-Smith acknowledged that fact and acquiesced in the differential racial application of the policy. By contrast, Caine-Smith, on cross-examination, contradicted Weaver, testifying that she never had this conversation with Weaver.
Additionally, Weaver testified about other instances of “racial banter” that had occurred at LCA in which she was the target of negative racial stereotyping comments from black employees. Weaver recalled that one time, Tim Jones, a black employee at LCA, made a negative racially stereotyping remark to her. This incident occurred when approximately 70 to 75 teachers and employees of defendant were on a bus ride back from a professional development meeting. Weaver stated that she was going to make fried pork chops for dinner, and Tim Jones responded by asking, “ ‘[W]hy would you be making pork chops; you’re white?’ ” Weaver did not report the incident, but testified that she called a foul on Jones. He faced no formal discipline for his comment.
Weaver also testified about an incident involving Kevelin Jones, another black employee of defendant. Weaver testified, “Well there was one time we had the Black History month and did the soul food thing; and Mr. [Kevelin] Jones made a comment to me about not eating it because I was white [.] ” Weaver testified that she called a foul on Kevelin Jones, but that he also received no other punishment for his racial comment. Additionally, Weaver noted that she heard the “ ‘n’ word” used by defendant’s employees “[a] couple of times,” and racial banter occurred regularly among her coworkers. None of this behavior resulted in reporting, investigation, or discipline. Moreover, Weaver admitted during questioning by plaintiffs counsel, as well as in her written statement, that she did not think plaintiff meant his comment to be racist. In addition, Weaver testified that when she first heard of the comment reported by Code, she also thought that it must have been a joke.
Plaintiff also testified during his case in chief and noted two additional instances of inappropriate racial commentary by black employees in the workplace. The first instance involved a black secretary at LCA, who called a student to accompany her by yelling, “ ‘hey, come here light skinned.’ ” The other instance involved a black employee stating that a school mural of the children’s cartoon character “Dora the Explorer” should be named “ ‘Laquisha,’ ” not “ ‘Dora,’ ” because the paint color used for her skin was so dark.
Plaintiff then testified regarding his posttermination difficulty in finding teaching employment. He noted that he had obtained long-term substitute teaching positions, but every time the school “caught wind” of the details of his firing because of the mandatory disclosure form defendant sent to each school, he was quickly let go.
At the conclusion of plaintiffs case in chief, defendant moved for a directed verdict, arguing that plaintiff had not shown that any other LCA teacher, or even any of defendant’s employees, ever engaged in the same or similar conduct. In fact, defendant argued, plaintiff even admitted that he was aware of no other instance of a teacher making a racial or racist remark in a classroom in the presence of children. Plaintiff responded by noting the testimony showing black employees made racial jokes but faced no discipline whatsoever. Plaintiff also cited the statement attributed to Caine-Smith regarding the rules about racial banter being different for black employees. Defendant repeated that the only instances of racial conduct that plaintiff could point to did not occur in front of children, and, therefore, plaintiff was not similarly situated to those employees. The trial court agreed with plaintiff and held that there were “a whole bunch of similarly situated educators” and, taking the evidence in the light most favorable to the nonmoving party, denied defendant’s motion.
Plaintiff then argued as follows in closing:
This man and his little family have groaned with the anguish of what happened here. Every time he tries to get on his feet, they kick him back down again with these [mandatory disclosures]. Every time he gets on his feet, they kick him back down. He gets a substitute teaching job at Flushing; and, after a short time there, they knock on his door and tell him, you can’t teach here any more because of the [mandatory disclosure], what it said about you; you can’t teach here any ?nore.[ ]
After deliberating, the jury returned a verdict in favor of plaintiff. On the verdict form, the jury found that plaintiff had proved that race was a factor in his termination and that plaintiff had shown $50,120 in past economic loss and $485,000 in future economic loss. The jury also found that plaintiff suffered emotional distress caused by his termination, but awarded nothing on that claim.
Shortly thereafter, defendant filed a motion for JNOV, a new trial, or remittitur. In its motion for JNOV, defendant asserted that plaintiff failed to present sufficient evidence to support his claim under the CRA. Defendant also argued that it was entitled to a new trial because the admission of evidence of the mandatory disclosures, despite the immunity granted by law, was inconsistent with substantial justice and that the jury’s verdict for future damages was unsupported by the evidence presented at trial. The trial court denied defendant’s motion.
Defendant appealed in the Court of Appeals, which affirmed the trial court judgment in a split, unpublished opinion. The majority held that plaintiff had presented sufficient direct evidence of discrimination in the form of Caine-Smith’s statement to Weaver. Additionally, the majority held that the McDonnell Douglas burden-shifting approach is inapplicable on appellate review, not only where, as here, direct evidence is offered, but also in general once the matter has been decided by a jury. The majority further held that, even if McDonnell Douglas were applicable, plaintiff had presented sufficient circumstantial evidence to prevail under the McDonnell Douglas framework. Finally, the majority held that the trial court did not err by allowing the presentation of evidence of defendant’s mandatory disclosures to the jury.
In dissent, Judge WILDER would have held that plaintiff failed to present any direct evidence of discrimination. The majority and dissent differed in their understanding of a critical portion of Weaver’s testimony. In that testimony, Weaver stated that Caine-Smith conveyed a message with the “ ‘point. . . that [racial banter] happens amongst African Americans and it’s not the other way around [.] ” The dissent rejected the majority position that this statement was direct evidence of discrimination because it required an inference to prove the existence of Caine-Smith’s discriminatory intent, and it could plausibly be interpreted as either discriminatory or benign. The dissent also would have concluded that plaintiff could not prove a circumstantial case of discrimination because, even assuming plaintiff could establish a prima facie case as required by McDonnell Douglas, defendant clearly rebutted the inference of discrimination with legitimate reasons for plaintiffs discharge from employment.
Defendant filed an application for leave to appeal the Court of Appeals decision. This Court granted leave to appeal, asking the parties to address
whether the Court of Appeals erred: (1) when it found sufficient direct evidence of racial discrimination on the basis of a witness’s interpretation or understanding of what the defendant’s representative said to her; (2) when it concluded that the burden-shifting analysis of McDonnell Douglas Corp v Green, 411 US 792; 93 S Ct 1817; 36 L Ed 2d 668 (1973), was not applicable and that there was sufficient circumstantial evidence that the plaintiff was similarly situated to African-American employees who had made race-based remarks in the past; and (3) when it held that the trial court did not abuse its discretion in admitting evidence of the defendant employer’s disclosures, which were mandated by MCL 380.1230b, to the plaintiffs prospective employers.[ ]
II. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decisions regarding motions for JNOV. “The appellate court is to review the evidence and all legitimate inferences in the light most favorable to the nonmoving party. Only if the evidence so viewed fails to establish a claim as a matter of law, should the motion be granted.” Issues relating to the admission of evidence are reviewed for an abuse of discretion. An abuse of discretion generally occurs only when the trial court’s decision is outside the range of reasonable and principled outcomes, but a court also necessarily abuses its discretion by admitting evidence that is inadmissible as a matter of law. Statutory interpretation is a question of law that we review de novo.
III. CIVIL RIGHTS ACT
This Court must determine whether the trial court erred by denying defendant’s motion for JNOV; that is, we must determine whether plaintiff presented sufficient evidence to support a jury verdict finding employment discrimination. Again, in reviewing a motion for JNOV we must construe all evidence and inferences from the evidence in the nonmoving party’s favor, and, “[i]f reasonable jurors could have honestly reached different conclusions, the jury verdict must stand.” To make this assessment, we must determine what a plaintiff is required to prove in an employment discrimination case.
MCL 37.2202(1) of the CRA provides:
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.. . race . . . .[ ]
The ultimate question in an employment discrimination case is whether the plaintiff was the victim of intentional discrimination. In our caselaw, we have interpreted the CRA to require “ 'but for causation’ or ‘causation in fact.’ ” We reaffirm that construction here.
There are multiple ways to prove that a plaintiff was the victim of unlawful discrimination. Direct evidence of intentional discrimination is a sure but rare method of challenging an employer’s decision. In this case, plaintiff did not have direct evidence of discrimination. But there remain multiple ways of proving the ultimate question of discrimination in a circumstantial evidence case. A plaintiff can attempt to prove discrimination by showing that the plaintiff was treated unequally to a similarly situated employee who did not have the protected characteristic. An employer’s differing treatment of employees who were similar to the plaintiff in all relevant respects, except for their race, can give rise to an inference of unlawful discrimination. In order for this type of “similarly situated” evidence alone to give rise to such an inference, however, our cases have held that the “comparable” employees must be “nearly identical” to the plaintiff in all relevant respects.
Plaintiff argues that he was treated differently than similarly situated black employees at the school. He argues that the black employees routinely engaged in racial banter, but were not disciplined. Yet he was fired for what he claims is nearly identical conduct—telling a racially charged joke. If this were the entirety of plaintiffs case, we question whether it would be sufficient to sustain the verdict. Defendant points out several factors that arguably distinguish plaintiffs conduct from that of other employees, notably that plaintiffs joke was told in a classroom full of students, which certainly raised the prospect that they might hear it, regardless of whether they actually did.
We need not decide this question, however, because the jury was not left with only this evidence from which to draw the inference that race was the “but for” cause of plaintiffs discharge. Defendant errs when it suggests that there are only two ways in which a plaintiff may meet its ultimate burden of demonstrating circumstances from which the fact-finder could conclude that race discrimination occurred: by proving that the plaintiff was replaced by a person of another race or by using the “similarly situated” method. A plaintiff is not so limited.
As stated earlier, during trial, the jury was presented with testimony from both Unwin and Caine-Smith about defendant’s employee conduct practices. Caine-Smith testified that defendant’s employee handbook precluded “inappropriate business conduct, which includes gambling, abusive profanity or threatening language, insubordination, or violation of discrimination or harassment policy, misuse of confidential information, conducting personal business during work time, excessive absenteeism or tardiness, showing disrespect for co-workers, improper use of [defendant’s] technology or [defendant’s other] resources.” Unwin noted that defendant also had a workplace harassment policy, which stated that defendant was “committed to providing a work environment that’s free from dis crimination and unlawful harassment.” Prohibited forms of harassment included any “verbal or physical conduct that insults or shows hostility or aversion toward an individual because of his or her race or color or any other legally protected characteristic.” She highlighted that examples of harassing conduct include, but are not limited to, “epithets, slurs, [and] negative stereotyping.” Further, Unwin stated that the school’s zero-tolerance policy required anyone who sees any such misconduct to “immediately notify [his or her] manager” and that “[a]nyone engaging in . . . unlawful harassment will be subject to . . . disciplinary action up to and including termination from employment.”
Thus, defendant provided a nondiscriminatory rationale for disciplining plaintiff: violation of the school’s employment policies. Despite these exacting rules dictating how harassing speech and negative racial stereotyping comments must be handled under defendant’s policies, the jury was also presented with evidence that the rules were not strictly applied to black employees engaged in such prohibited conduct. Weaver, herself, testified that she was the subject of racial banter that could easily be described as “negative stereotyping” from black employees on multiple occasions and that she heard black employees use the “ ⅛’ word” during her tenure at LCA. However, if there really were a zero-tolerance policy, the jury might well have thought it suspicious that none of those incidents involving black employees led her to follow the mandatory reporting requirement of defendant’s policy, and none resulted in any escalation of punishment as occurred with plaintiffs violation.
The inference that black employees were excepted from enforcement of defendant’s harassment policies could reasonably have been bolstered by plaintiffs testimony. Plaintiff testified that he heard one employee make a racially charged joke about a children’s cartoon character and another employee call a student to her side by saying “ ‘hey, come here light skinned.’ ” None of these instances of harassing conduct was ever met with reporting, investigation, or punishment by defendant. And yet, when plaintiff engaged in conduct violative of defendant’s policies, his misconduct was immediately reported and investigated, and plaintiff was ultimately terminated.
Particularly significant in this case, the jury was provided with evidence from which it could reasonably conclude that defendant’s own management decision-makers knew about and tolerated unequal enforcement of their policies. This trial provided the interesting situation wherein a defendant’s management employees explained that they were aware of conduct among black employees that violated the defendant’s zero-tolerance policy. This testimony could have allowed a reasonable jury to conclude that defendant applied a different standard based on race.
The critical testimony on this issue was offered by Weaver. On direct examination, plaintiffs counsel questioned Weaver as follows:
[Plaintiffs Counsel]: . . . Under oath [during your deposition], I asked you this: “Did you tell Ms. Caine-Smith that a lot of people made racial jokes?”
\Weaver]\ I did not say a lot. I said it happened, and that’s what’s in my deposition.
[Plaintiffs Counsel]: You said what happens?
[Weaver]: That there were racial comments made, yes.
[Plaintiffs Counsel]-. Okay. So you told Linda Caine-Smith that when you talked to her November 3rd; right?
[Weaver]: Yes.
[Plaintiffs Counsel]: Okay. This is November 3rd, a few days before [plaintiff] was fired?
[Weaver]: Um torn. Yes.
[Plaintiffs Counsel]: Now isn’t it a fact that, when you said that, Caine-Smith responded by saying, “It happens among African-Americans and it’s not the other way aroundright?
[Weaver]: Yes.[ ]
Thus, the jury was shown an exchange between two of defendant’s higher-level employees in which the dean, Weaver, reported to her supervisor, principal Caine-Smith, that conduct, which was at least in some respects similar to that for which plaintiff was being investigated, routinely occurred at the school. Caine- Smith responded by not only acknowledging the racial inconsistency, but, the jury might have concluded, by condoning it as well.
This point was further emphasized as Weaver’s testimony continued:
[Plaintiff's Counsel]: Okay. So there, a few days before [plaintiff] was fired, when you said to Caine-Smith racial jokes happen here, how Caine-Smith distinguished [plaintiffs] situation was that the racial jokes happened amongst African-Americans; right?
Weaver]: And that someone was offended, yes.
[Plaintiffs Counsel]-. Okay. So there was a distinction between Craig—there was a distinction Caine-Smith—Ms. Caine-Smith made between Craig and the other jokesters; and that distinction was racial; correct?
Weaver]: No
[Plaintiffs Counsel]-. Well didn’t Caine-Smith—
Weaver]: Oh, you’re saying because it—okay, I guess I could see where you would say that, yes.
[Plaintiffs Counsel]: Okay. So you would agree that the fact that Craig is white and the fact that the other jokesters were African-American, that was a factor that Caine-Smith seemed to be considering, right?
Weaver]: That’s what my statement says, yes.
[Plaintiffs Counsel]: And that’s the truth; isn’t it?
Weaver]: That’s not—no, I believe it was more about the offensiveness.
[Plaintiffs Counsel]: But race was still a factor?
[Weaver]: Race is a factor when it’s a racial comment,[ ]
On this testimony the jury could reasonably find that race was a “but for” cause in the decision to investigate plaintiff and escalate the punishment for his racial comments. This is true despite the arguable differences between plaintiffs racial comments and those of his black colleagues. Defendant argues that no reasonable inference of discrimination can be drawn here because plaintiffs jokes were told in a classroom and, in this case, someone was offended. These are certainly distinctions which, if credited by the jury, might reasonably have allowed it to find for defendant. But we note that when Weaver brought to Caine-Smith’s attention the fact that “racial jokes happen here,” Caine-Smith did not respond only by noting that in plaintiffs case someone was offended, or at all by saying that plaintiffs jokes were made in the presence of children. Instead, she responded by invoking race as a distinction. Taken together with the other evidence presented, a reasonable jury could infer that defendant violated the CRA, as evidenced by Weaver’s apparent concession that race was involved in the decision.
Nevertheless, defendant presented to the jury numerous nondiscriminatory reasons for its decision to terminate plaintiffs employment—evidence of plaintiffs multiple and inconsistent explanations for his in-classroom statement about his preference for white rather than brown tables, along with evidence that plaintiff had attempted to impede the investigations and had lied or been dishonest with Caine-Smith. These reasons, not race, defendant asserted, were the reasons why it decided to terminate plaintiff.
Plaintiff, however, presented sufficient evidence for a reasonable juror to reject as unbelievable these race-neutral reasons. The testimony of defendant’s witnesses contained numerous inconsistencies. First, in contradiction of Weaver’s testimony, Caine-Smith testified that Weaver never told her about the other racial comments made by black employees in the school. If the jury believed Weaver, it could reasonably have discredited Caine-Smith’s testimony. Moreover, Unwin’s admission that termination was a disciplinary option even before defendant became aware of any allegation of plaintiffs interference with the investigation could also have led the jury to conclude that plaintiff was being treated differently because of his race.
This conclusion is buttressed by plaintiffs positive teaching record at the school and the fact that defendant chose the highest form of punishment, termination, for a first offense, without even speaking with plaintiff to obtain his version of his postsuspension discussion with Bell. While the employee handbook allows for termination for a first offense, Unwin testified that the decision to terminate is normally dependent “on certain factors, including, but not limited to, the seriousness of the violation and whether it is a first time violation or a recurrence.” She also testified that such a termination would “follow 0 a thorough investigation . . . .” Unwin also acknowledged plaintiffs “good record” concerning race relations while working for defendant and that plaintiff had never before committed misconduct. In closing arguments, plaintiffs counsel highlighted these facts, arguing that “it just wasn’t reasonable to fire a person for this offense after such a perfect record, after such a record of good faith and fairness and respect in racial matters.” Given this, plaintiffs counsel further argued, defendant “fails on the reasonableness test; and, if [defendant] did not act reasonably, something else was afoot, something else was going on . . . While a jury may not second-guess an employer’s business decisions, and was in no way required to draw the inferences suggested by plaintiffs counsel, a reasonable jury could have used these facts to support a finding of discrimination.
With respect to the claim that plaintiff interfered with defendant’s investigation, Unwin admitted that plaintiff never explicitly asked Bell to lie, though she still believed he was asking Bell to lie. And the jury heard evidence that defendant did not even speak with plaintiff regarding his postsuspension discussion with Bell. Defendant only spoke with plaintiff about the initial incident, not about the subsequent allegations of interference, and terminated him after his first offense, despite his otherwise “good” record.
Of its varying rationales for terminating plaintiff, only one—the fact that plaintiffs racial banter occurred around students—was based on information that defendant received before deciding to investigate plaintiffs wrongdoing and escalate to warnings that suspension and termination could occur as a result. Like each of the other nondiscriminatory reasons provided by defendant, plaintiff disputed, albeit inconsistently, the accuracy of this allegation, claiming that none of the students was within earshot when he made his statement.
When considering this evidence as a whole, and by making all reasonable inferences in favor of plaintiff, a reasonable juror could have disbelieved defendant’s race-neutral reasons for plaintiffs termination and have believed instead that consideration of his race was the cause.
The jury, as the trier of fact and deliberative body charged to make credibility determinations, could have determined that the statements of Weaver and Caine-Smith established that race was a “but for” cause of their decision-making concerning plaintiff. That testimony, along with the evidence that defendant had a zero-tolerance policy, which required reporting, investigation, and punishment of all forms of negative racial stereotyping, that it failed to apply when black employees violated the policy, in addition to the speed with which defendant terminated plaintiff, was sufficient to allow a reasonable jury to conclude that race was the real reason defendant fired plaintiff.
Because when assessing a motion for JNOV we are required “to review the evidence and all legitimate inferences in the light most favorable to the nonmoving party,” we conclude that there was sufficient evidence of discriminatory intent before the jury. The jury’s verdict, finding a violation of the CRA, was supported by the totality of the evidence presented.
IV. MCL 380.1230b
Because we conclude that plaintiff did present sufficient evidence to support the jury’s ultimate finding of discrimination, we must next decide whether the trial court acted contrary to MCL 380.1230b by admitting evidence that defendant reported plaintiffs misconduct to his prospective employers.
Generally, “[a]ll relevant evidence is admissible, except as otherwise provided by the Constitution of the United States, the Constitution of the State of Michigan, the[] rules [of evidence], or other rules adopted by the Supreme Court. Evidence which is not relevant is not admissible.” Evidence may also be precluded by statute. MCL 380.1230b is such a statute.
MCL 380.1230b provides, in pertinent part:
(1) Before hiring an applicant for employment, a school district, local act school district, public school academy, intermediate school district, or nonpublic school shall request the applicant for employment to sign a statement that does both of the following:
(a) Authorizes the applicant’s current or former employer or employers to disclose to the school district... any unprofessional conduct by the applicant[ ] and to make available to the school district, local act school district, public school academy, intermediate school district, or nonpublic school copies of all documents in the employee’s personnel record maintained by the current or former employer relating to that unprofessional conduct.
(b) Releases the current or former employer, and employees acting on behalf of the current or former employer, from any liability for providing information described in subdi vision (a), as provided in subsection (3), and waives any written notice required under section 6 of the Bullard-Plawecki employee right to know act... .[ ]
(2) Before hiring an applicant for employment, a school district, local act school district, public school academy, intermediate school district, or nonpublic school shall request at least the applicant’s current employer or, if the applicant is not currently employed, the applicant’s immediately previous employer to provide the information described in subsection (l)(a), if any. The request shall include a copy of the statement signed by the applicant under subsection (1).
(3) Not later than 20 business days after receiving a request under subsection (2), an employer shall provide the information requested and make available to the requesting school district, local act school district, public school academy, intermediate school district, or nonpublic school copies of all documents in the employee’s personnel record relating to the unprofessional conduct. An employer, or an employee acting on behalf of the employer, that discloses information under this section in good faith is immune from civil liability for the disclosure. An employer, or an employee acting on behalf of the employer, is presumed to be acting in good faith at the time of a disclosure under this section unless a preponderance of the evidence establishes 1 or more of the following:
(a) That the employer, or employee, knew the information disclosed was false or misleading.
(b) That the employer, or employee, disclosed the information with a reckless disregard for the truth.
(c) That the disclosure was specifically prohibited by a state or federal statute.[ ]
Review of the plain language of this statute shows that it does three important things pertinent to this appeal: (1) it requires the applicant’s current or former employer or employers to disclose to another school district any unprofessional conduct by the applicant; (2) it requires an applicant for a teaching job to “[r]elease[] the current or former employer, and employees acting on behalf of the current or former employer, from any liability for providing [the] information”; and (3) it provides that an employer who discloses information in good faith “is immune from civil liability for the disclosure.” The statute, however, does not define the term “liability.”
Plaintiff did not argue that defendant’s disclosures were false or misleading, recklessly disregarded the truth, or otherwise violated state or federal statutes. Plaintiff does contend that “liability” in MCL 380.1230b(3) refers to the claim for which a plaintiff is seeking recovery. In other words, plaintiff argues he is not precluded from presenting evidence of the mandatory disclosure because he did not sue for the disclosure itself—he sued for a violation of the CRA and presented evidence of the adverse impact of the disclosure to establish future damages. Plaintiffs belief is that only a direct action for the disclosure, e.g., a defamation claim, is precluded by this statute, but the admission of evidence of the disclosures in a case such as this is permissible. On the other hand, defendant argues that plaintiffs position would eviscerate the protection provided by the statute and is clearly in contravention of the Legislature’s expressed intent, as evidenced by the broad language of immunity it provided.
Dictionary definitions of the term “liability” support defendant’s conclusion. Black’s Law Dictionary (10th ed) defines “liability” as “1. The quality, state, or condition of being legally obligated or accountable; legal responsibility to another or to society, enforceable by civil remedy or criminal punishment.... 2. A financial or pecuniary obligation in a specified amount. . . ,” More relevant, it further defines “civil liability’ as “1. Liability imposed under the civil, as opposed to the criminal, law. 2. The quality, state, or condition of being legally obligated for civil damages.” Applying these definitions of “liability” and “civil liability” to the statutory language, it is clear that the statute is sufficient in scope to preclude admission of the disclosure evidence. The admission of evidence and argument regarding the mandatory disclosures for the purpose of assessing damages allowed the jury to impose against defendant legal obligations arising from the disclosure. The trial court was required to enforce the broad grant of immunity against civil liability for these disclosures that the Legislature provided to defendant, and the trial court’s decision to admit this evidence violated MCL 380.1230b.
Additionally, this Court has previously interpreted the term “liability” and other liability-limiting statutes in a manner generally consistent with defendant’s position. In Hannay v Transp Dep’t, this Court held that the phrase “liable for bodily injury” contained in the vehicle exception to governmental immunity means being “legally responsible for damages flowing from a physical or corporeal injury to the body.” This Court thus interpreted the statutory phrase to permit recovery of economic and noneconomic damages arising from “bodily injury.” In MCL 380.1230b, the Legislature included no such limiting language (e.g., “bodily injury”), requiring simply that the job applicant release former employers from “any liability” and granting immunity from “civil liability” to the former employer. Thus, in accordance with the definition of “liable” used in Hannay, defendant is not “legally responsible for damages flowing from” the mandatory disclosure.
Another decision of this Court, In re Bradley Estate, is also helpful in deciding the instant case. In Bradley Estate, the petitioner became concerned about her brother’s mental health and successfully petitioned the probate court for his hospitalization, averring that her brother was a danger to himself and his family. After the probate court granted the petitions, which stated that a “ ‘peace officer shall take [the brother] into protective custody and transport him ... to [a community mental health contract facility],’ ” the petitioner immediately submitted the order to the respondent sheriffs department. The respondent sheriffs department failed to execute the court order, and nine days after the probate court order was entered, the brother committed suicide.
The petitioner, acting as personal representative for her brother’s estate, filed a lawsuit in circuit court against the sheriffs department for wrongful death, alleging gross negligence. The petitioner’s claim was dismissed on governmental immunity grounds. The petitioner did not appeal this dismissal, instead filing a petition for civil contempt in the original probate court, arguing that the sheriffs office violated the court’s order and that the sheriffs misconduct constituted contempt for which she was entitled to indemnification damages. The sheriffs department again argued that governmental immunity barred the suit, but the probate court denied the motion for summary disposition, holding that “ ‘ [governmental immunity does not insulate a contemnor from the contemnor’s refusal or negligence to obey a court order.’ ” The sheriffs department appealed in the circuit court, which reversed and remanded to the probate court for entry of an order granting summary disposition in favor of the sheriffs department because the circuit court concluded that the petitioner’s claim was based in tort and barred by governmental immunity. The Court of Appeals reversed the circuit court and held that the governmental tort liability act (GTLA) does not immunize governmental agencies from “ ‘tort-like’ ” damages in a contempt suit, even though the underlying facts “ ‘could have also established a tort cause of action . . . .’ ”
On appeal, this Court reversed the Court of Appeals. We held that the language in MCL 691.1407(1), stating that governmental agencies are immune from “tort liability ,” meant that governmental agencies were immune from “all legal responsibility arising from a noncontractual civil wrong for which a remedy may be obtained in the form of compensatory damages.” In reaching that conclusion, this Court held that, “[a]s commonly understood, the word ‘liability,’ refers to liableness, i.e., ‘the state or quality of being liable.’ To be ‘liable’ means to be ‘legally responsible [.] Construing the term liability along with the term ‘tort,’ it becomes apparent that the Legislature intended ‘tort liability’ to encompass legal responsibility arising from a tort.”
Bradley Estate supports our construction of MCL 380.1230b and our conclusion that the disclosure evidence should not have been admitted. Though plaintiffs lawsuit clearly raises a claim under only the CRA, the admission of evidence and argument regarding the mandatory disclosures for the purpose of assessing damages allowed the jury to impose on defendant “legal responsibility arising from” the disclosure. That is what the language of MCL 380.1230b(3) expressly precludes. As this Court noted in Bradley Estate, the label of the action does not control. The statute here clearly provides that no liability— meaning “all legal responsibility arising from a. . . civil wrong” —may come from the disclosures. The main difference between Bradley Estate and the instant case is that the Legislature’s intended scope of immunity is even broader under MCL 380.1230b. The Legislature did not limit the type of civil liability from which school employers are immune for their mandatory disclosures. Instead, it provided blanket protection from all civil liability. Given the plain language of the statute and our prior caselaw, we conclude that the trial court clearly erred by admitting this evidence. Its use at trial violated the statutory immunity for disclosing schools by allowing the jury to base damages on the disclosures.
We are left with one view of the statute—plaintiff was not allowed to present evidence concerning the effect of the disclosures to the jury, because, contrary to the Legislature’s prohibition, that admission permitted the jury to attribute liability to defendant flowing from the disclosure. The fact that the liability here is expressed in terms of damages plaintiff suffered as a result of the disclosures does not negate the fact that defendant is being held civilly liable for the statu torily mandated disclosures. The trial court erred by allowing plaintiff to present this evidence to the jury in light of the language of MCL 380.1230b(3). This error tainted the jury’s entire future damages award. We therefore vacate the jury’s award of future damages.
V. CONCLUSION
While the Court of Appeals erred by holding that plaintiff had presented sufficient direct evidence of discrimination to sustain the jury verdict, the Court of Appeals correctly held that plaintiff presented sufficient circumstantial evidence of discrimination to sustain the jury’s verdict. The trial court erred, however, by admitting evidence of defendant’s mandatory disclosures of plaintiffs unprofessional conduct because MCL 380.1230b provides complete immunity for those disclosures, and the Court of Appeals erred by upholding the admission of that evidence. For these reasons, we reverse in part the judgment of the Court of Appeals, vacate the jury award for future damages, and remand this case to the trial court for further proceedings consistent with this opinion.
Markman, Zahra, McCormack (as to Parts I, II, and III), Viviano, Bernstein (as to Parts I, II, and III), and LARSEN, JJ., concurred with YOUNG, C.J.
The Court of Appeals opinion explained the meaning of “fouls” within defendant’s professional conduct guidelines:
LCA employees created a “social contract” with each other, such that if an individual stated something that someone else found offensive or inappropriate, the person offended was to “call a foul” on the speaker. In response, the speaker was to give two “ups” to the person who called the foul, which are positive statements about the person. In this instance, Plaintiff testified that he did not give any “ups” to either Bell or Code because he did not hear any foul called. [Hecht v Nat’l Heritage Academies, Inc, unpublished opinion per curiam of the Court of Appeals, issued October 28, 2014 (Docket No. 306870), p 1 n 1.]
Weaver and Caine-Smith are both white.
[Plaintiffs Counsel]-. Where do you say [in your written statement] that Mr. Hecht said something to a child?
[Code): I didn’t, but then it must be—
[Plaintiffs Counsel]: Oh, you testified today that Mr. Hecht said to a child, the whites—brown should bum, white’s better. That’s what you said today. But on November 4th, you didn’t say that, did you?
[Code]: No, I didn’t include that.
[Plaintiffs Counsel): You didn’t refer to communication is with children at all, did ya?
[Code]: No, not in this.
[Plaintiffs Counsel]: You didn’t even state in here that a child had heard what Mr. Hecht said, correct?
[Code): Right. Correct.
On cross-examination, Bell testified that the only way to change his statement would be to “mak[e] it a lie.” Nevertheless, Bell acknowledged that Hecht had apologized and that Bell had not included the apology in his statement, because he “didn’t think it was sincere . .. .” Bell admitted it was his opinion that plaintiff had asked him to lie and that plaintiff did not explicitly ask him to lie. Plaintiffs counsel later argued to the jury that this evidence showed that plaintiff merely wanted Bell to include in his statement that plaintiff had apologized to him, not that plaintiff wanted Bell to lie.
When asked if plaintiff did anything to Code to obstruct the investigation, she answered, “Not to me, no.”
See MCL 380.1230b(2) (“Before hiring an applicant for employment, a school district, local act school district, public school academy, intermediate school district, or nonpublic school shall request at least the applicant’s current employer or, if the applicant is not currently employed, the applicant’s immediately previous employer to provide the information described in [MCL 380.1230b(l)(a), regarding unprofessional conduct], if any.”) (emphasis added).
MCL 380.1230b(3) (“Not later than 20 business days after receiving a request under subsection (2), an employer shall provide the information requested and make available to the requesting school district, local act school district, public school academy, intermediate school district, or nonpublic school copies of all documents in the employee’s personnel record relating to the unprofessional conduct.”) (emphasis added).
At trial, there was conflicting testimony regarding plaintiffs claim that he was denied subsequent teaching employment solely or predominantly because of the statutorily mandated disclosure of his “unprofessional conduct.” In fact, during cross-examination, plaintiff admitted that he likely would have obtained a position as a long-term substitute teacher had he not failed a drug test because it revealed the presence of unprescribed pain medication he received from his mother-in-law. Regardless of the actual cause of his difficulty in finding a teaching job, evidence of the statutorily mandated disclosures was presented to the jury as a cause of plaintiffs inability to obtain a teaching position.
As discussed later in this opinion, defendant did not adequately present the issue of the trial court’s denial of its motion for directed verdict in the Court of Appeals and, thus, failed to preserve the issue for review by this Court.
Emphasis added.
Hecht, unpub op at 1.
Id. at 3-5. The panel relied on testimony from Weaver’s deposition that was read into the record at trial. There was actually stronger testimony by Weaver, which we use in this opinion, that the Court of Appeals panel overlooked.
McDonnell Douglas Corp v Green, 411 US 792; 93 S Ct 1817; 36 L Ed 2d 668 (1973).
Hecht, unpub op at 5.
Id. at 6-7. The Court of Appeals determined that plaintiff had presented sufficient evidence that he was treated differently than black employees who had made racial remarks, but were not punished. Id.
Id. at 7-9.
Id. (Wilder, J., dissenting), at 2.
Id. at 2-5.
Id. at 5-6. The dissent did not address MCL 380.1230b.
Hecht v Nat’l Heritage Academies, Inc, 498 Mich 877 (2015).
Sniecinski v Blue Cross & Blue Shield of Mich, 469 Mich 124, 131; 666 NW2d 186 (2003).
Wilkinson v Lee, 463 Mich 388, 391; 617 NW2d 305 (2000).
Craig v Oakwood Hosp, 471 Mich 67, 76; 684 NW2d 296 (2004).
Saffian v Simmons, 477 Mich 8, 12; 727 NW2d 132 (2007).
Craig, 471 Mich at 76.
Koontz v Ameritech Servs, Inc, 466 Mich 304, 309; 646 NW2d 34 (2002).
Despite defendant’s current arguments before this Court regarding the trial court’s denial of its motion for directed verdict, we agree with the Court of Appeals majority that defendant did not appeal in that Court the denial of its motion for directed verdict. The phrase “directed verdict” was mentioned only four times in defendant’s Court of Appeals brief, and those references were cursory. These cursory statements did not adequately present for review the denial of the motion for directed verdict, particularly given that defendant filed its claim of appeal in the Court of Appeals “from the verdict returned on July 15, 2011, the Judgment entered on August 8, 2011, the Order Awarding Attorney Fees and Costs to Plaintiff entered on August 18, 2011, and the Order Denying Defendant’s Motion [flor JNOV, New Trial, or in the Alternative, Remit-titur ...” This failure to mention the denial of its motion for directed verdict in its claim of appeal in the Court of Appeals was significant given the cursory references to the issue in defendant’s Court of Appeals appellate brief. In its application for leave to appeal in this Court, defendant claims that it had “argued that the trial court erred by denying its motion for directed verdict and its JNOV motion.” Defendant does not provide any support for this assertion beyond noting that the dissenting Court of Appeals judge “disagreed that [defendant] was not appealing the trial court’s denial of its directed motion verdict [sic] in addition to the denial of its JNOV motion” and that “the standard of review for both was the same.” This is insufficient to adequately present the directed verdict issue in this Court. See Goolsby v Detroit, 419 Mich 651, 655 n 1; 358 NW2d 856 (1984). Because the issue is not properly before us, we will not address defendant’s directed verdict claims.
Wilkinson, 463 Mich at 391.
Morinelli v Provident Life & Accident Ins Co, 242 Mich App 255, 260-261; 617 NW2d 777 (2000). In other words, unless a plaintiffs case is wholly lacking evidence on an element of a claim, the jury is allowed to make reasonable inferences from the evidence and make credibility determinations. This is entirely consistent with our canon that credibility determinations he solely with the trier of fact. See Moll v Abbot Laboratories, 444 Mich 1, 47; 506 NW2d 816 (1993) (LEVIN, J., dissenting) (“It is well settled as a matter of both Michigan and federal civil procedure that it is for the trier of fact, generally the jury, to decide where reasonable persons can draw different inferences from undisputed facts.”); Vandenberg v Prosek, 335 Mich 382, 386; 56 NW2d 227 (1953) (“The weight that is to be given to the testimony of the witnesses is largely a matter to be left to the judgment of the jurors. While some of the witnesses’ testimony, if believed, would indicate that plaintiff had been contributorily negligent, the jurors might give this testimony such credence as they found it should have, under the circumstances, and in view of testimony to the contrary as to the essential facts.”).
Emphasis added. “MCL 37.2202(l)(a) draws no distinctions between ‘individual’ plaintiffs on account of race.” Lind v Battle Creek, 470 Mich 230, 232; 681 NW2d 334 (2004).
Reeves v Sanderson Plumbing Prod, Inc, 530 US 133, 153; 120 S Ct 2097; 147 L Ed 2d 105 (2000).
Matras v Amoco Oil Co, 424 Mich 675, 682; 385 NW2d 586 (1986).
The rarity of direct evidence in discrimination cases is one justification courts have offered for the creation of the McDonnell Douglas paradigm. See, e.g., Hazle v Ford Motor Co, 464 Mich 456, 462; 628 NW2d 515 (2001) (“In many cases ... no direct evidence of impermissible bias can be located.”); US Postal Serv Bd of Governors v Aikens, 460 US 711, 716; 103 S Ct 1478; 75 L Ed 2d 403 (1983) (“There will seldom be ‘eyewitness’ testimony as to the employer’s mental processes.”); Kline v Tennessee Valley Auth, 128 F3d 337, 348 (CA 6, 1997) (“It is the rare situation when direct evidence of discrimination is readily available, thus victims of employment discrimination are permitted to establish their cases through inferential and circumstantial proof.”).
Perhaps the best general definition of direct evidence is that it is evidence that proves impermissible discriminatory bias without additional inference or presumption. See Hazle, 464 Mich at 462. Nor did Caine-Smith’s statement have all of the hallmarks that surrounded the statement in DeBrow v Century 21 Great Lakes, Inc (After Remand), 463 Mich 534, 538; 620 NW2d 836 (2001)—a statement made by a decision-maker, to the plaintiff, at the meeting in which the plaintiff suffered the adverse employment decision, and evincing a causal nexus (stating the plaintiff was “ ‘getting too old for this s[***]’ ”). (Emphasis added.)
"Whether Weaver’s testimony about Caine-Smith’s acknowledgement of the unequal application of defendant’s antidiscrimination workplace policies constituted direct evidence of discrimination was a point of major dispute between the Court of Appeals majority and dissent. The majority erred by relying on the wrong section of Weaver’s testimony, wherein Weaver seemed to be speculating about Caine-Smith’s view that it was acceptable to give black employees engaging in prohibited racial banter a pass under defendant’s antidiscrimination policies. Weaver testified that she thought Caine-Smith’s “ ‘point was that it happens amongst African Americans and it’s not the other way around; and that this one was reported. Someone was offended and we had an obligation to follow up on it.’ ” That kind of speculative testimony about motivation may be circumstantial evidence, but it is never direct evidence of motivation because, as Judge Wilder explained in his dissent, Weaver’s testimony about what she believed Caine-Smith meant “is not direct evidence of discrimination because it did not recount an actual statement by Caine-Smith.” Hecht (Wilder, J., dissenting), unpub op at 3. In other words, Weaver was merely making an inference about what Caine-Smith intended to convey to Weaver, but Caine-Smith’s actual words were not provided to the jury in this exchange. To our knowledge, no court has accepted such speculative testimony as direct evidence of discrimination.
We conclude that even the Weaver testimony quoted later in this opinion (in which Weaver testified that Caine-Smith said, “ ‘It [the prohibited racial banter] happens among African-Americans and it’s not the other way around’ ”) does not constitute direct evidence of racial bias. The Weaver testimony is, however, potent circumstantial evidence of the employer’s potential racially biased decision-making, and ultimately, we conclude that there is sufficient circumstantial evidence to sustain this verdict.
Matras, 424 Mich at 683-684.
Town v Mich Bell Tel Co, 455 Mich 688, 695; 568 NW2d 64 (1997) (opinion by Brickley, J.).
Id. at 695-696.
Id. at 699-700.
Emphasis added.
Quotation marks omitted.
Plaintiffs testimony was corroborated by the testimony of that employee, Clarence Scott, a black employee, who admitted that he made this racially charged joke in front of nnmerons employees.
It is true that plaintiff did not himself report these incidents, and defendant might, perhaps justifiably, take umbrage at plaintiff seeking to hold it accountable for episodes that it might not have known about because plaintiff himself did not report them. But the question is not whether plaintiff reported these incidents. It is whether the jury could reasonably use these incidents (along with others) to draw an inference of discrimination. The jury might have reasonably inferred here that such remarks among black employees were so widespread and so uniformly tolerated that any reporting would have been futile, or even that these comments, when made by black employees, simply were tolerated and not reported.
It is important to note that these proofs challenge the credibility of defendant’s nondiscriminatory defense and need not be considered elements of a “similarly situated” case, which we have held requires that “all of the relevant aspects of [the plaintiffs] employment situation were nearly identical to those of [the comparative employee’s] employment situation.” Town, 455 Mich at 699-700 (opinion by Brickley, J.) (quotation marks omitted).
Emphasis added.
The jury could have interpreted this testimony in any number of ways. But, keeping in mind that all evidence and inferences must be weighed in plaintiffs favor, Wilkinson, 463 Mich at 391, nothing precluded the jury from viewing the testimony in this manner.
Emphasis added.
Matras, 424 Mich at 682.
Unwin testified that some offenses are “so serious that following a thorough investigation they could result in corrective action up to and including termination from employment for the first offense.”
In fact, plaintiff had already been suspended pending the remainder of defendant’s investigation before he allegedly tried to interfere with the investigation by contacting Bell and Code.
Wilkinson, 463 Mich at 391.
See Morinelli, 242 Mich App at 260-261 (“If reasonable jurors could have honestly reached different conclusions, the jury verdict must stand.”).
MRE 402; see also Waknin v Chamberlain, 467 Mich 329, 333; 653 NW2d 176 (2002).
People v Layher, 464 Mich 756, 761; 631 NW2d 281 (2001).
The statute defines “unprofessional conduct” as “1 or more acts of misconduct; 1 or more acts of immorality, moral turpitude, or inappropriate behavior involving a minor; or commission of a crime involving a minor. A criminal conviction is not an essential element of determining whether or not a particular act constitutes unprofessional conduct.” MCL 380.1230b(8)(b).
Plaintiff executed the statutory release before defendant provided any information to plaintiffs prospective employers.
Emphasis added.
MCL 380.1230b(3).
MCL 380.1230b(1)(b).
MCL 380.1230b(3).
Under MCL 380.1230b(3)(a) through (c), an employer that discloses the information in good faith has unqualified immunity from civil liability for the disclosure. The employer is presumed to be acting in good faith unless the evidence establishes one of the following:
(a) That the employer, or employee, knew the information disclosed was false or misleading.
(b) That the employer, or employee, disclosed the information with a reckless disregard for the truth.
(c) That the disclosure was specifically prohibited by a state or federal statute.
An employee can challenge the employer’s disclosures by presenting evidence to satisfy MCL 380.1230b(3)(a), (b), or (c), which then, and only then, operates to remove the good-faith presumption that entitles the employer to immunity. Because plaintiff has not pursued a challenge to defendant’s immunity under MCL 380.1230b(3)(a), (b), or (c), defendant is entitled to unqualified immunity because it is presumed to have acted in good faith. We further note that this provision demonstrates that the Legislature did not foreclose plaintiffs from introducing evidence of an employer’s disclosures in certain circumstances, but plaintiffs are permitted to do so only after establishing that the disclosures were made in bad faith.
The dissent makes a related, ostensibly compelling, argument: liability and damages are separate concepts as exemplified by the fact that we routinely bifurcate trial into liability and damage segments. There is just one problem with this argument. While we can conceptually analyze damages issues independently of liability questions, there can be no damages without liability. Period. A legislative decision completely to preclude liability necessarily precludes damages on that same basis. The dissent’s position is anchored in the argument that the “civil immunity’ granted by the statute depends on the source of the liability. We see no textual support for the dissent’s view that immunity under the statute depends on the claim underlying the liability.
“An undefined statutory term must be accorded its plain and ordinary meaning. A lay dictionary may be consulted to define a common word or phrase that lacks a unique legal meaning. A legal term of art, however, must be construed in accordance with its peculiar and appropriate legal meaning.” Brackett v Focus Hope, Inc, 482 Mich 269, 276; 753 NW2d 207 (2008) (citations omitted). If the definitions are the same in both a lay dictionary and legal dictionary, it is unnecessary to determine whether the phrase is a term of art, and it does not matter to which type of dictionary this Court resorts. Id.
Emphasis omitted.
Black’s Law Dictionary (10th ed), p 1054 (emphasis altered). Lay dictionaries are similarly uniform with their definitions of “liability” and consistent with the legal definition. See, e.g., The American Heritage Dictionary (2d College ed) (defining “liability” as “[t]he state of being liable. . . . Something for which one is liable; an obligation or debt”); Merriam-Webster’s Collegiate Dictionary (11th ed) (defining “liability as “the quality or state of being liable” and as “something for which one is liable; [especially] : pecuniary obligation”). These lay dictionaries do not define “civil liability.”
See also Mayfield v First Nat’l Bank of Chattanooga, 137 F2d 1013, 1019 (CA 6, 1943) (“Liability is a broad legal term which is usually held to include every kind of legal obligation, responsibility or duty, certainly all that are measured by money obligation.”).
MCL 691.1405 (“Governmental agencies shall be liable for bodily injury and property damage resulting from the negligent operation by any officer, agent, or employee of the governmental agency, of a motor vehicle of which the governmental agency is an owner .. .
Hannay v Transp Dep’t, 497 Mich 45, 51; 860 NW2d 67 (2014) (emphasis added).
See id.
MCL 380.1230b(1)(b).
MCL 380.1230b(3).
Contrary to the dissent, we do not believe that Henry v Dow Chem Co, 473 Mich 63; 701 NW2d 684 (2005), requires the opposite conclusion. In that case, the Court merely held that a plaintiff is required to prove an actual injury to person or property in order to prevail on a negligence claim, despite the fact that the elements of a negligence action are routinely noted as “(1) duty, (2) breach, (3) causation, and (4) damages.” Id. at 74. In other words, the damages sought in a negligence action must necessarily flow from an actual injury. But this distinction between “injury” and “damages” has no bearing on whether one can have damages without liability. As discussed, the plain language of MCL 380.1230b(3), unlike the elements of a negligence claim, contains no injury requirement. Therefore, our holding that the Legislature’s provision of “immunfity] from civil liability for the disclosure,” MCL 380.1230b(3), extends to preclude damages based on the disclosure, is simply unaffected by Henry’s discussion of injury in the negligence context.
Hannay, 497 Mich at 51, 60-62.
In re Bradley Estate, 494 Mich 367, 372; 835 NW2d 545 (2013).
Id.
Id. at 372-373.
Id. at 373.
Id. at 373-374.
Id. at 374.
Id. at 374-375 (alteration in original).
Id. at 375.
Id. at 375-376.
MCL 691.1407(1) (emphasis added).
Bradley Estate, 494 Mich at 385.
Id. (citations omitted; second alteration in original).
Id.
Id. at 386-387 (“Petitioner and the Court of Appeals interpret this passage from [Ross v Consumers Power Co (On Rehearing), 420 Mich 567, 647-648; 363 NW2d 641 (1984),] to mean that the label of the action controls in determining whether an action imposes tort liability and that, if the claim is not a traditional tort, then the GTLAis inapplicable and ‘tort-like’ damages are recoverable. Ross, however, made no such pronouncement and did not consider the meaning of‘tort liability,’ which is the question that is now before this Court. Instead, consistent with our holding in this case, Ross merely recognized that the GTLA does not bar a properly pleaded contract claim.”).
Bradley Estate, 494 Mich at 385.
MCL 380.1230b(3).
The breadth of the immunity afforded by this statute is underscored by the fact that the Legislature provided both complete civil immunity for disclosures and required that all new employees sign a statement that releases the school district from “any liability for providing information” concerning the employee’s unprofessional conduct to other school districts. MCL 380.1230b. As noted, plaintiff signed this statutory release before defendant provided the disclosures to prospective employers. This belt and suspenders approach to protecting the school districts of this state is a clear indication of the Legislature’s intent to preclude the type of liability imposed on defendant in this case. Defendant fulfilled its statutorily required duties under the statute and cannot be held liable therefor. Furthermore, even if we were to accept plaintiff’s interpretation of the statute, at least one of the release forms plaintiff signed pursuant to MCL 380.1230b(l)(b) provided that plaintiff would “release and hold harmless” defendant for any civil or criminal liability for providing information to prospective employers. Arguably, this release form would preclude plaintiff from receiving any remuneration from defendant for the disclosures. See Black’s Law Dictionary (10th ed) (defining “hold harmless” as “[t]o absolve (another party) from any responsibility for damage or other liability arising from the transaction”).
Defendant argued in its motion for JNOV that “the jury’s award of future economic losses” was excessive and based on the erroneous admission of defendant’s statutorily required disclosures. (Emphasis added.) As previously noted, the jury provided an itemized verdict with $485,000 in future damages. Because the trial court permitted the jury to base these future damages on the mandatory disclosures, contrary to MCL 380.1230b(3) (“An employer. . . that discloses information under this section in good faith is immune from civil liability for the disclosure.”), this award cannot stand as a matter of law. | [
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