MICHIGAN APPEALS REPORTS
CASES DECIDED
IN THE
MICHIGAN
COURT OF APPEALS
FROM
June 22, 2010, through September 9, 2010
CORBIN R. DAVIS
CLERK OF THE SUPREME COURT
VOLUME 289
FIRST EDITION
2012
Copyright 2012 by Michigan Supreme Court
The paper used in this publication meets the minimum
requirements of American National Standard for Information
Sciences—Permanence of Paper for Printed Library Materials,
ANSI Z39.48-1984.
COURT OF APPEALS
T
ERM
E
XPIRES
J
ANUARY
1
OF
C
HIEF
J
UDGE
WILLIAM B. MURPHY................................................................. 2013
C
HIEF
J
UDGE
P
RO
T
EM
DAVID H. SAWYER....................................................................... 2011
J
UDGES
MARK J. CAVANAGH ................................................................... 2015
KATHLEEN JANSEN ................................................................... 2013
E. THOMAS FITZGERALD.......................................................... 2015
HENRY WILLIAM SAAD.............................................................. 2015
RICHARD A. BANDSTRA ............................................................ 2015
JOEL P. HOEKSTRA..................................................................... 2011
JANE E. MARKEY......................................................................... 2015
PETER D. O’CONNELL ............................................................... 2013
WILLIAM C. WHITBECK............................................................. 2011
MICHAEL J. TALBOT .................................................................. 2015
KURTIS T. WILDER...................................................................... 2011
BRIAN K. ZAHRA.......................................................................... 2013
PATRICK M. METER.................................................................... 2015
DONALD S. OWENS..................................................................... 2011
KIRSTEN FRANK KELLY............................................................ 2013
CHRISTOPHER M. MURRAY...................................................... 2015
PAT M. DONOFRIO ...................................................................... 2011
KAREN FORT HOOD ................................................................... 2015
STEPHEN L. BORRELLO............................................................ 2013
ALTON T. DAVIS ........................................................................... 2015
1
DEBORAH A. SERVITTO............................................................. 2013
JANE M. BECKERING ................................................................. 2013
ELIZABETH L. GLEICHER......................................................... 2013
CYNTHIA DIANE STEPHENS.................................................... 2011
MICHAEL J. KELLY...................................................................... 2015
DOUGLAS B. SHAPIRO ............................................................... 2011
C
HIEF
C
LERK:
SANDRA SCHULTZ MENGEL
R
ESEARCH
D
IRECTOR:
LARRY S. ROYSTER
1
To August 25, 2010.
SUPREME COURT
T
ERM
E
XPIRES
J
ANUARY
1
OF
C
HIEF
J
USTICE
MARILYN KELLY......................................................................... 2013
J
USTICES
MICHAEL F. CAVANAGH............................................................ 2015
ELIZABETH A. WEAVER............................................................ 2011
1
MAURA D. CORRIGAN ............................................................... 2015
ROBERT P. YOUNG, J
R
. .............................................................. 2011
STEPHEN J. MARKMAN............................................................ 2013
DIANE M. HATHAWAY............................................................... 2017
ALTON THOMAS DAVIS ............................................................ 2011
2
C
OMMISSIONERS
MICHAEL J. SCHMEDLEN, C
HIEF
C
OMMISSIONER
SHARI M. OBERG, D
EPUTY
C
HIEF
C
OMMISSIONER
TIMOTHY J. RAUBINGER DANIEL C. BRUBAKER
LYNN K. RICHARDSON MICHAEL S. WELLMAN
KATHLEEN A. FOSTER GARY L. ROGERS
NELSON S. LEAVITT RICHARD B. LESLIE
DEBRA A. GUTIERREZ-M
C
GUIRE FREDERICK M. BAKER, J
R
.
ANNE-MARIE HYNOUS VOICE KATHLEEN M. DAWSON
DON W. ATKINS RUTH E. ZIMMERMAN
JÜRGEN O. SKOPPEK SAMUEL R. SMITH
ANNE E. ALBERS
S
TATE
C
OURT
A
DMINISTRATOR:
CARL L. GROMEK
C
LERK:
CORBIN R. DAVIS
C
RIER:
DAVID G. PALAZZOLO
1
To August 26, 2010.
2
From August 26, 2010.
TABLE OF CASES REPORTED
(Lines set in small type refer to orders appearing in the Special Orders
section beginning at page 801.)
P
AGE
A
AT&T Michigan, D’Andrea v .............................. 70
Ajax Paving Industries, Inc v Vanopdenbosch
Construction Co ............................................... 639
Alberto v Toyota Motor Corp ............................. 328
Auto Club Group Ins Co v Booth ....................... 606
B
Barksdale v Bert’s Marketplace ......................... 652
Bennett v Mackinac Bridge Auth ....................... 616
Bert’s Marketplace, Barksdale v ........................ 652
Booth, Auto Club Group Ins Co v ...................... 606
Boylan v Fifty Eight Limited Liability Co ......... 709
Broe Rehabilitation Services, Inc, State Farm
Mutual Ins Co v ............................................... 277
Bryant, People v ................................................... 260
Bryant, People v .................................................................... 801
Butler v Wayne County ....................................... 664
C
Campbell, People v .............................................. 533
Casab, River Investment Group, LLC v ............ 353
Cipriano v Cipriano ............................................. 361
i
P
AGE
Cunningham v Cunningham .............................. 195
D
DMK, In re ........................................................... 246
DaimlerChrysler Corp, Findley v ....................... 483
D’Andrea v AT&T Michigan ............................... 70
Dawe v Dr Reuven Bar-Levav & Associates,
PC (On Remand) ............................................. 380
Dendel, People v (On Second Remand) ............. 445
Department of Environmental Quality v Worth
Twp ................................................................... 414
Department of Human Services, Mackey v ....... 688
Department of Human Services, Schreur v ...... 1
Department of Transportation v Gilling ........... 219
Department of Treasury, Walter Toebe
Construction Co v ............................................ 659
Doe v Doe (On Remand) ..................................... 211
Dr Reuven Bar-Levav & Associates, PC, Dawe
v (On Remand) ..................................................... 380
E
Environmental Quality (Dep’t of) v Worth Twp .. 414
F
Farm Bureau General Ins Co of Michigan,
McNeel v ........................................................... 76
Fifty Eight Limited Liability Co, Boylan v ........ 709
Findley v DaimlerChrysler Corp ........................ 483
G
Gilling, Department of Transportation v .......... 219
H
Human Services (Dep’t of), Mackey v ............... 688
ii 289 M
ICH
A
PP
P
AGE
Human Services (Dep’t of), Schreur v ............... 1
I
In re DMK ............................................................ 246
In re Leix Estate .................................................. 574
J
Jaguar Trading Ltd Partnership v Presler ........ 319
Jilek v Stockson ................................................... 291
K
Kellogg Co, Wright v ........................................... 63
L
LaMeau v Royal Oak ........................................... 153
Leix Estate, In re ................................................. 574
M
Mackey v Department of Human Services ........ 688
Mackinac Bridge Auth, Bennett v ...................... 616
McElhaney, McLean v ......................................... 592
McLean v McElhaney .......................................... 592
McManus v Toler ................................................. 283
McNeel v Farm Bureau General Ins Co of
Michigan ........................................................... 76
Michigan Catastrophic Claims Ass’n, United
Services Automobile Ass’n v ........................... 24
P
Packowski v United Food & Commercial
Workers Local 951 ........................................... 132
People v Bryant .................................................... 260
People v Bryant ..................................................................... 801
People v Campbell ............................................... 533
T
ABLE OF
C
ASES
R
EPORTED
iii
P
AGE
People v Dendel (On Second Remand) .............. 445
People v Rose ....................................................... 499
People v Short ...................................................... 538
People v Terrell .................................................... 553
People v Wiggins .................................................. 126
Pineview Estates, LC, Vanderpool v ................... 119
Presler, Jaguar Trading Ltd Partnership v ....... 319
R
River Investment Group, LLC v Casab ............. 353
Rose, People v ...................................................... 499
Rose v Rose .......................................................... 45
Royal Oak, LaMeau v .......................................... 153
S
Schreur v Department of Human Services ....... 1
Short, People v ..................................................... 538
State Farm Mutual Automobile Ins Co, TBCI,
PC v .................................................................. 39
State Farm Mutual Ins Co v Broe
Rehabilitation Services, Inc ............................ 277
Stockson, Jilek v .................................................. 291
T
TBCI, PC v State Farm Mutual Automobile
Ins Co ................................................................ 39
Taylor Distributing Co, Inc, White v ................. 731
Terrell, People v ................................................... 553
Toler, McManus v ................................................ 283
Toyota Motor Corp, Alberto v ............................ 328
Transportation (Dep’t of) v Gilling .................... 219
Treasury (Dep’t of), Walter Toebe
Construction Co v ............................................ 659
iv 289 M
ICH
A
PP
P
AGE
U
United Food & Commercial Workers Local 951,
Packowski v ...................................................... 132
United Services Automobile Ass’n v Michigan
Catastrophic Claims Ass’n .............................. 24
V
Vanderpool v Pineview Estates, LC ................... 119
Vanopdenbosch Construction Co, Ajax Paving
Industries, Inc v ............................................... 639
W
Wayne County, Butler v ...................................... 664
Walter Toebe Construction Co v Department of
Treasury ........................................................... 659
White v Taylor Distributing Co, Inc .................. 731
Wiggins, People v ................................................. 126
Worth Twp, Department of Environmental
Quality v ................................................................ 414
Wright v Kellogg Co ............................................ 63
T
ABLE OF
C
ASES
R
EPORTED
v
C
OURT OF
A
PPEALS
C
ASES
SCHREUR v DEPARTMENT OF HUMAN SERVICES
Docket No. 285792. Submitted November 10, 2009, at Lansing. Decided
June 22, 2010, at 9:00 a.m.
Amanda Schreur filed a petition for review in the Bay Circuit
Court after a Department of Human Services hearing referee
entered an order that dismissed as untimely a request by
Schreur for a hearing regarding the department’s denial of
Schreur’s application for Medicaid disability benefits. The de-
partment had mailed Schreur a notice that it had denied the
application on June 10, 2005. The notice stated as the reasons
for the denial that Schreur’s disability was not expected to last
for at least 12 consecutive months and that it would not prevent
her from working in any substantial gainful employment. The
notice also contained several apparently incorrect references to
sections of the department’s program eligibility manual and
program administrative manual. The notice informed Schreur
that she could request a hearing within 90 days of the date of
the notice. Schreur filed her request for a hearing 368 days after
the date of the notice and 278 days after the expiration of the
90-day period in which to request a hearing. Schreur contended
that the notice she received was inadequate and ineffective to
start the 90-day period. The hearing referee disagreed with
Schreur and issued an order dismissing the request for a
hearing. The circuit court, William J. Caprathe, J., agreed with
Schreur and concluded that because the department’s notice did
not conform to the requirements of 42 CFR 431.210 and 42 CFR
431.221, the 90-day period did not begin to run and the request
for a hearing was timely. The court vacated the hearing referee’s
order and reinstated Schreur’s request for a hearing on the
substantive issue whether she is disabled. The department
appealed.
The Court of Appeals held:
1. Because Schreur was an applicant for benefits, not a recipi-
ent of benefits, the department was not required by the relevant
federal regulations to cite the specific provision supporting its
denial, and its failure to do so did not affect the validity of the
denial letter that the department sent or the timing of a request
S
CHREUR V
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EP
’
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H
UMAN
S
ERVICES
1
for a hearing. The information that the department provided to
Schreur regarding her application for benefits was sufficient under
the relevant federal regulations, and she was provided with a
reasonable amount of time to request a hearing as required under
the federal regulations. Schreur’s request for a hearing was
untimely under the circumstances. The circuit court erred by
ruling that the department was required to cite the specific
regulations in support of its decision and by ruling that Schreur
filed a timely request for a hearing.
2. The Michigan Administrative Code provides that appli-
cants such as Schreur are entitled to a hearing. The code does
not require the department to cite the specific provisions
supporting its denial when, as in this case, the denial of an
application for Medicaid benefits does not discontinue, termi-
nate, suspend, or reduce public assistance or services. Because
Schreur was not already a recipient of such benefits, the
department was not required to cite the specific provisions
supporting its denial, and its failure to do so did not affect the
validity of the denial letter or the timing of a request for a
hearing. Deference must be given, absent express guidance on
how long applicants have to request a hearing following a denial
of benefits, to the department’s determination that 90 days
from the date of the denial decision is a reasonable time limit on
requests for a hearing.
Reversed.
1. S
OCIAL
S
ECURITY —
M
EDICAID —
A
PPLICANTS —
D
ENIALS —
H
EARINGS —
N
OTICES
.
A state plan for administrating the Medicaid program must
provide for granting an opportunity for a fair hearing to any
individual whose application for medical assistance is denied or
is not acted upon with reasonable promptness; the agency must
inform the applicant, in writing at the time of the application, of
the right to a hearing, the method by which to obtain a hearing,
and that the applicant may represent himself or use legal
counsel, a relative, a friend, or other spokesman; the agency
must then allow the applicant a reasonable time to request a
hearing; the information provided need not conform with the
requirements for a notice of action provided in 42 CFR 431.210
and need not inform the applicant of the specific regulations
that support the agency’s decisions (42 USC 1396a[a][3]; 42
CFR 431.200, 431.206[b] and [c][1], 431.220[a][1], and
431.221[d]).
2 289 M
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2. S
OCIAL
S
ECURITY —
M
EDICAID —
A
PPLICANTS —
D
ENIALS —
H
EARINGS —
N
OTICES
.
The Michigan Administrative Code provides the right to a hearing to a
Medicaid applicant whose claim has been denied; the notice of such
denial need not cite the specific provisions supporting the denial, and
the applicant must be given a reasonable time within which to
request a hearing (Mich Admin Code, R 400.901, 400.903).
Foster, Swift, Collins & Smith, P.C. (by Richard C.
Kraus), for petitioner.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Joshua S. Smith, Assistant At-
torney General, for respondent.
Before: B
ORRELLO
,P.J., and W
HITBECK
and K. F. K
ELLY
,
JJ.
P
ER
C
URIAM
. Respondent, the Department of Human
Services (the Department) appeals by leave granted a
circuit court order that held that the Department failed
to provide proper notice to petitioner, Amanda Schreur,
of her right to request a hearing regarding a denial of
her application for Medicaid benefits. This Court also
granted the Department’s motion for a stay of the
benefit payments.
1
We reverse.
I. BASIC FACTS AND PROCEDURAL HISTORY
On April 29, 2005, Schreur filed an application for
Medicaid disability benefits. Schreur, then 24 years old,
had undergone back surgery in January 2005 to remove
a tumor from her spine. She claimed that she was
physically unable to work because she suffered from low
back pain and weakness. Schreur could not stand or
walk for more than a half-hour before her back got sore,
1
Schreur v Dep’t of Human Servs, unpublished order of the Court of
Appeals, entered November 10, 2008 (Docket No. 285792).
2010] S
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but she had no problem sitting for long periods. Previ-
ously, Schreur had worked at a day-care center. Schreur
sought benefits retroactively, in part, from January
2005 forward. It is undisputed that at the time of
Schreur’s application, she was not already a recipient of
Medicaid disability benefits.
On June 10, 2005, the Department mailed Schreur
notice that it had denied her application for Medicaid
benefits because her disability was not “expected to last
for at least 12 consecutive months” and would not
prevent her from “working in any substantial gainful
employment.” At the top of the form, there was a short
statement to the applicant: “If you do not understand
the information in this notice, please contact me imme-
diately. If you wish, you may meet with my manager and
me to discuss the action(s) taken on your application.”
(Presumably, “me” referred to the specialist who signed
and provided her contact information on the form.)
The notice also contained several “Manual Policy Ref-
erences.” On the line marked “PEM” (acronym for Pro-
gram Eligibility Manual), was typed “400 500 166.” On
the line marked “PAM” (acronym for Program Adminis-
trative Manual), was typed “110 115.” Below the Manual
Policy References was the following statement: “If your
application is being denied, you may apply for assistance if
your circumstances changes [sic].”
The backside of the notice further provided, “Proce-
dures For Requesting A Fair Hearing.” Specifically, the
notice stated:
If you believe this action is illegal, you may request a
hearing within 90 days of the date of this notice....All...
requests for a hearing must be made IN WRITING and
signed and dated by you.
***
4 289 M
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Complete the “Request for Hearing” section below or
any other written request. State that you want a hearing
on the decision made by the Agency and briefly explain
your reasons.
Immediately beneath this section was a form to fill out
to request a hearing.
Schreur did not request a hearing within 90 days.
Instead, she waited until June 13, 2006, to mail her
request for review of the Department’s decision to deny
her application. The Department received the request
on June 15, 2006. Therefore, Schreur filed her hearing
request 368 days after the date of the notice and 278 days
after expiration of the 90-day period for requesting a
hearing.
On December 14, 2006, an administrative hearing
was held regarding Schreur’s substantive claim of
disability and to determine whether Schreur’s hear-
ing request was timely. Schreur argued that her
hearing request was timely because the Department’s
denial notice contained incorrect citations to the
Department’s administrative and eligibility manuals,
which, she contended, made the notice inadequate
and ineffective to start the 90-day period to request a
hearing. More specifically, according to Schreur, the
citations to the Department’s policy manuals, PAM
and PEM, were not relevant to the denial of Schreur’s
application for assistance because they did not per-
tain to disability determinations. Indeed, the Depart-
ment concedes that manual item PEM 400 refers to
assets, PEM 500 refers to income, PEM 166 refers to
aged, blind, and disabled individuals, PAM 110 ex-
plains application filing and registration procedures,
and PAM 115 explains application processing. Rather
clearly, these manual items do not directly pertain to
disability determinations.
2010] S
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The Department explained that the notice is “a Word
document that workers often pre-fill...,andthey just
use the same [form] over and over again.” The Depart-
ment argued that the notice was adequate because it
explained the reason for the denial of the application:
that the impairment “has not lasted nor is expected to
last for at least 12 consecutive months and does not
prevent working in any substantial gainful employ-
ment.” According to the Department, the notice in-
formed Schreur of her right to a hearing and the 90
days she had to request a hearing. The Department
argued that the incorrect manual citations should have
prompted Schreur to request a hearing if she was
confused about the reason for the denial of her applica-
tion. In other words, according to the Department, the
incorrect citations should have simply been an addi-
tional basis to request a hearing.
Citing Mich Admin Code, R 400.902, R 400.903,
and R 400.904, the hearing referee explained that
“[a]ny hearing request which protests a denial, re-
duction, or termination of benefits must be filed
within 90 days of the mailing of the negative action
notice.” The referee rejected Schreur’s argument that
the Department’s failure to cite the correct policy
manual provisions underlying its decision to deny
Schreur’s Medicaid benefits application rendered the
notice provided insufficient or defective. The referee
reasoned that, although the Department was re-
quired to cite the specific provisions underlying its
decision, the failure to do so merely constituted an
additional ground on which to request a hearing to
contest the Department’s decision. The referee
stated, “[T]he 90 day period to request a hearing
applies to any issues connected with [the Depart-
ment]’s actions of which the claimant has been noti-
fied of [sic], and that would include an omission of the
6 289 M
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specific manual item(s) on which the action is based
on [sic].” The referee found that the notice explained
the specific reason for the denial and informed
Schreur of her right to request a hearing within 90
days. Accordingly, the hearing referee issued an order
dismissing Schreur’s request for a hearing as un-
timely.
Schreur then filed a petition for review in the Bay
Circuit Court. Schreur argued that the policy manual
citation errors in the notice made it inadequate and
defective and “tolled” the period that she had in which to
request a hearing. Schreur agreed with the circuit court’s
assessment of her position that, if the section for manual
references had said “PEM 260,” it would have been a
proper and adequate notice because PEM 260 covers
Medicaid disability and sets forth the regulations regard-
ing how a person is determined to be disabled under the
Department’s policy. Schreur readily acknowledged that
she could have filed a request for a hearing within 90 days,
but Schreur’s counsel had decided to rely on the citation
errors and waited a year to request a hearing in order to
give her client an advantage. More specifically, Schreur’s
counsel explained:
Part of the elements in defining disability are that you
have to have a severe impairment which has lasted or will
continue to last for a year. The younger a person, the more
chances are is, is that they are going to—are—they are
going to heal from that; they are going to be able to go back
to work; they are not going to be found disabled. It was in
the best interests of our client for us to wait, to be able to
make a determination of whether she was going to meet
that period of duration.
The Department reiterated its prior arguments and
also argued that Schreur had neither alleged nor estab-
lished any prejudice. The Department urged the circuit
court not to reward Schreur’s gamesmanship.
2010] S
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7
The circuit court agreed with Schreur’s position and
held that Schreur’s claim was timely. The circuit court
held that the 90-day period “begins at the point when
timely and adequate notice of denial has been provided
to an applicant.” But the circuit court concluded that
because the notice did not conform to the requirements
of 42 CFR 431.210 and 42 CFR 431.221, the statutory
90-day period had not begun to run. The circuit court
reasoned, “[I]f a person is going to lose their ability to
have a review because they didn’t respond within 90
days, it’s a technical argument against them; then the
technical aspect of the trigger not actually taking place
appropriately, I think is—is equally viable.” The circuit
court therefore vacated the hearing referee’s order and
reinstated Schreur’s request for a hearing on the sub-
stantive issue whether she was disabled. The Depart-
ment now appeals the circuit court’s holding and as-
serts that the circuit court’s interpretation of the
applicable law was erroneous.
II. NOTICE REQUIREMENTS
A. STANDARD OF REVIEW
The Department argues that because 42 CFR
431.221(d) unambiguously restricts an applicant’s right
to request a hearing to 90 days, the circuit court erred
when it held that Schreur timely filed a request for a
hearing. According to the Department, Schreur re-
ceived adequate notice that the Department denied her
application for Medicaid disability benefits and a non-
conforming notice does not permit an applicant to
exceed the 90-day limitation to request a hearing,
absent a showing of actual prejudice. The Department
adds that Schreur did not suffer any actual prejudice
from its failure to cite the precise departmental policies
underlying its denial; Schreur knew precisely why the
8 289 M
ICH
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1 [June
Department denied her application and that she had
90-days to request a hearing.
We review a circuit court’s review of an agency’s
decision for clear error,
2
but we review de novo ques-
tions regarding interpretation of statutes and adminis-
trative rules.
3
Although our review is de novo, “ ‘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.’ ”
4
“This standard requires
‘respectful consideration’ and ‘cogent reasons’ for over-
ruling an agency’s interpretation.”
5
“[T]he agency’s
interpretation is not binding on the courts, and it
cannot conflict with the Legislature’s intent as express
in the language of the statute at issue.”
6
B. PRINCIPLES OF STATUTORY INTERPRETATION
The goal of statutory interpretation is to give effect
to the intent of the Legislature.
7
The first step in
determining the intent of the Legislature is to examine
the language of the statute.
8
If the plain and ordinary
meaning of the language is clear, judicial construction is
2
Glennon v State Employees’ Retirement Bd, 259 Mich App 476, 478;
674 NW2d 728 (2003).
3
Detroit v Ambassador Bridge Co, 481 Mich 29, 35; 748 NW2d 221
(2008); United Parcel Serv, Inc v Bureau of Safety & Regulation, 277
Mich App 192, 202; 745 NW2d 125 (2007).
4
In re Complaint of Rovas Against SBC Mich, 482 Mich 90, 103; 754
NW2d 259 (2008), quoting Boyer-Campbell Co v Fry, 271 Mich 282, 296;
260 NW 165 (1935) (citation and quotation marks omitted).
5
In re Rovas Complaint, 482 Mich at 103.
6
Id.
7
Neal v Wilkes, 470 Mich 661, 665; 685 NW2d 648 (2004).
8
Halloran v Bhan, 470 Mich 572, 577; 683 NW2d 129 (2004).
2010] S
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neither necessary nor permitted.
9
The Legislature is
presumed to have intended the meaning it plainly
expressed.
10
We must enforce clear statutory language
as written.
11
The rules of statutory construction apply
with full force to administrative regulations.
12
We are to
presume that drafters of regulations know the rules of
grammar, and we must read regulatory language in its
grammatical context unless a different intent is clearly
expressed.
13
C. MEDICAID DENIAL AND RIGHT TO A HEARING
Schreur does not contest that the Department in-
formed her of the reasons for the denial of Medicaid
benefits and that the Department informed her of her
right to a hearing for review of that decision. Schreur
contends, rather, that the 90-day hearing-request period
did not bind her because the Department did not properly
cite the “specific provisions” supporting the denial. On the
surface, therefore, the salient question here would appear
to be whether the Department’s failure to cite the correct,
specific provisions supporting its denial consequently
failed to start the running of a hearing-request period. But
the underlying and more basic question relates to
Schreur’s status under both federal and state law. We
conclude that, because Schreur was an applicant for
benefits, not a recipient of benefits, the Department was
9
Nastal v Henderson & Assoc Investigations, Inc, 471 Mich 712, 720;
691 NW2d 1 (2005).
10
Rowland v Washtenaw Co Rd Comm, 477 Mich 197, 219; 731 NW2d 41
(2007).
11
Fluor Enterprises, Inc v Dep’t of Treasury, 477 Mich 170, 174; 730
NW2d 722 (2007).
12
Lansing Mayor v Pub Serv Comm, 470 Mich 154, 157; 680 NW2d 840
(2004).
13
Greater Bethesda Healing Springs Ministry v Evangel Builders &
Constr Mgrs, LLC, 282 Mich App 410, 414; 766 NW2d 874 (2009).
10 289 M
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not required to cite the specific provisions supporting its
denial. Consequently, its failure to do so did not affect the
validity of the denial letter that it sent or the timing for a
request for a hearing.
1. FEDERAL LAW
a. OVERVIEW
Medicaid is a cooperative program of the federal and
state governments that assists participating states in
providing medical services to the needy.
14
The program
is authorized under the Social Security Act,
15
which
directs participating states to promulgate Medicaid
program plans consistent with its provisions and the
applicable regulations codified in title 42 of the Code of
Federal Regulations. Although the federal and state
governments jointly finance Medicaid benefit programs,
the programs are administered by the states “[w]ithin
broad federal rules....”
16
In other words, while each
state “decides eligible groups, types and range of ser-
vices, payment levels for services, and administrative
and operating procedures,” their administration of
these services is governed by, and is within the confines
of, the statutes and applicable federal regulations.
17
Among other things, a state plan must “provide for
granting an opportunity for a fair hearing... to any
individual whose claim for medical assistance... is
denied or is not acted upon with reasonable prompt-
ness[.]”
18
Accordingly, a particular set of federal regula-
tions establishes certain notice and hearing procedures.
14
42 USC 1396.
15
42 USC 1396 et seq.
16
42 CFR 430.0.
17
Id.
18
42 USC 1396a(a)(3); see also 42 CFR 431.200.
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b. APPLICANTS VERSUS RECIPIENTS
The federal Medicaid rules provide:
(a) The State agency must grant an opportunity for a
hearing to the following:
(1) Any applicant who requests it because his claim for
services is denied or is not acted upon with reasonable
promptness.
(2) Any recipient who requests it because he or she
believes the agency has taken an action erroneously.
[
19
]
Thus, both applicants and recipients are, under the
delineated circumstances, entitled to a hearing. With
respect to the timing of a requested hearing, pursuant
to 42 CFR 431.221(d), “[t]he agency must allow the
applicant or recipient a reasonable time, not to exceed
90 days from the date that notice of action is mailed, to
request a hearing.” At first glance, this provision might
seem to indicate that both applicants and recipients are
entitled to a reasonable time, not to exceed 90 days, to
request a hearing. However, a closer review of the plain
language of 42 CFR 431.221(d) reflects that there is a
triggering event to the applicability of the 90-day pe-
riod: an agency must first mail a “notice of action.”
The regulations provide definitions for the terms
“notice” and “action.” The regulations define “notice”
as “a written statement that meets the requirements of
[42 CFR] 431.210.”
20
And the regulations define “ac-
tion” as “a termination, suspension, or reduction of
Medicaid eligibility or covered services.”
21
Further, 42
CFR 431.210 provides:
19
42 CFR 431.220 (emphasis added); see also 42 CFR 431.200.
20
42 CFR 431.201.
21
Id.
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A notice required under § 431.206(c)(2), (c)(3), or (c)(4)
of this subpart must contain—
(a) A statement of what action the State...intends to
take;
(b) The reasons for the intended action;
(c) The specific regulations that support, or the change
in Federal or State law that requires, the action;
(d) An explanation of—
(1) The individual’s right to request an evidentiary
hearing if one is available, or a State agency hearing; or
(2) In cases of an action based on a change in law, the
circumstances under which a hearing will be granted; and
(e) An explanation of the circumstances under which
Medicaid is continued if a hearing is requested.
And 42 CFR 431.206, titled “[i]nforming applicants and
recipients,” provides, in pertinent part:
(b) The agency must, at the time specified in paragraph
(c) of this section, inform every applicant or recipient in
writing—
(1) Of his right to a hearing;
(2) Of the method by which he may obtain a hearing;
and
(3) That he may represent himself or use legal counsel,
a relative, a friend, or other spokesman.
(c) The agency must provide the information required in
paragraph (b) of this section—
(1) At the time that the individual applies for Medicaid;
(2) At the time of any action affecting his or her claim;
(3) At the time a skilled nursing facility or a nursing
facility notifies a resident in accordance with §483.12 of
this chapter that he or she is to be transferred or dis-
charged; and
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(4) At the time an individual receives an adverse deter-
mination by the State with regard to the preadmission
screening and annual resident review requirements of
section 1919(e)(7) of the Act.
Reading all these definitions and provisions together,
it becomes evident that, unlike a recipient,anapplicant
for benefits will never receive a 42 CFR 431.210 notice
of action. That is, because an applicant has not yet
established a right to services, he or she can never be
subjected to an “action” in the form of “a termination,
suspension,orreduction of Medicaid eligibility or cov-
ered services.”
22
Moreover, we find it significant that 42
CFR 431.206(c)(2), (3), and (4), which describe particu-
lar instances in which a “notice” complying with 42
CFR 431.210 must be sent, do not apply to applicants,
but only to actions or events affecting recipients. Only
42 CFR 431.206(c)(1), which requires that “[t]he agency
must provide the information required in paragraph
(b)... [a]t the time that the individual applies for
Medicaid,”
23
covers applicants.
It is important to understand that these provisions
distinguish between those persons who are applicants
and those who are recipients and have already estab-
lished a right to services. The regulations make a
distinction between applicants and recipients in terms
of providing those individuals notice of agency deci-
sions. Applicants, because they by definition cannot
receive a 42 CFR 431.210 notice of action, are entitled
to a hearing with no particularized requirement regard-
ing the timing of that hearing. Recipients, by contrast,
are entitled to “a reasonable time, not to exceed 90 days
from the date that notice of action is mailed, to request
22
See 42 CFR 431.201 (defining “action”) (emphasis added); see also 42
CFR 431.200(b).
23
Emphasis added.
14 289 M
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a hearing.”
24
With this distinction in mind—as confus-
ing, circular, and internally contradictory as it might
be—we next turn to deciphering the separate rights and
responsibilities associated with applicants and recipi-
ents.
c. RIGHTS AND RESPONSIBILITIES REGARDING RECIPIENTS
Whenever a state agency terminates, suspends, or
reduces a recipient’s Medicaid eligibility or covered
services,
25
the agency must inform the recipient, in
writing, “(1) [o]f his right to a hearing; (2) [o]f the
method by which he may obtain a hearing; and (3)
[t]hat he may represent himself or use legal counsel, a
relative, a friend, or other spokesman.”
26
And this
writing—this notice of action—must contain:
(a) A statement of what action the State...intends to
take;
(b) The reasons for the intended action;
(c) The specific regulations that support, or the change
in Federal or State law that requires, the action;
(d) An explanation of—
(1) The individual’s right to request an evidentiary
hearing if one is available, or a State agency hearing; or
(2) In cases of an action based on a change in law, the
circumstances under which a hearing will be granted; and
(e) An explanation of the circumstances under which
Medicaid is continued if a hearing is requested.
[
27
]
24
42 CFR 431.221(d).
25
42 CFR 431.201 (defining “action”); see also 42 CFR 431.206(c)(2),
(3), and (4).
26
42 CFR 431.206(b).
27
42 CFR 431.210 (emphasis added).
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The recipient must then be given “a reasonable time,
not to exceed 90 days from the date that notice of action
is mailed, to request a hearing.”
28
d. RIGHTS AND RESPONSIBILITIES REGARDING APPLICANTS
Whenever a state agency denies an applicant’s re-
quest for services or does not act upon the request with
reasonable promptness, the state agency must grant
that applicant an opportunity for a hearing.
29
In keep-
ing with this hearing opportunity, the state agency
accordingly must inform the applicant, in writing, “(1)
[o]f his right to a hearing; (2) [o]f the method by which
he may obtain a hearing; and (3) [t]hat he may repre-
sent himself or use legal counsel, a relative, a friend, or
other spokesman.”
30
And, pursuant to 42 CFR
431.221(d), “[t]he agency must allow the applicant or
recipient a reasonable time...torequest a hearing.”
Notably, we repeat that, unlike the notice of action that
is sent to a recipient, the information provided to an
applicant need not adhere to the 42 CFR 431.210 notice-
of-action requirements. By its plain terms, 42 CFR
431.206(c)(1) only applies to applicants and, significantly,
42 CFR 431.210 does not cross-reference that subsection.
31
In other words, any information an applicant receives
with regard to his or her Medicaid application need not
conform with the notice requirements of 42 CFR
28
42 CFR 431.221(d) (emphasis added). See Grossi v Delaware Dep’t of
Health & Social Servs, Div of Social Servs, 1995 Del Super LEXIS 388, *4
(Del Super, August 8, 1995, No. 94A-08-016) (“[B]efore the 90 period [sic]
begins to run notice that adequately informs the medicaid recipient of the
agency’s decision must be mailed.”).
29
42 CFR 431.220(a)(1); see also 42 CFR 431.200.
30
42 CFR 431.206(b); 42 CFR 431.206(c)(1).
31
42 CFR 431.206(c)(1) states: “The agency must provide the informa-
tion required in paragraph (b) of this section...[a]t the time that the
individual applies for Medicaid[.]”
16 289 M
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431.210 because those requirements apply only to re-
cipients. Thus, in instances in which a decision is made
with regard to a Medicaid application, the agency is not
required to inform the applicant of the “specific regu-
lations that support” that decision.
32
Nor does the 42
CFR 431.221(d) definition of a “reasonable time” to
request a hearing—that is, that such time not exceed 90
days—apply to an applicant.
e. RIGHTS AND RESPONSIBILITIES REGARDING SCHREUR
i. SCHREUR’S STATUS AS AN APPLICANT
It is undisputed that before Schreur applied for Medic-
aid disability benefits, she was not already a recipient of
Medicaid benefits. Accordingly, by definition, when the
Department denied Schreur’s application for Medicaid
benefits, it did not perform an “action.” That is, a denial is
not “a termination, suspension, or reduction of Medicaid
eligibility or covered services.”
33
Therefore, any writing
that the Department sent to Schreur regarding its
denial would not have been a notice of action. Conse-
quently, the Department was not required to inform
Schreur of the specific regulations that supported its
denial decision. In other words, because the denial
letter that the Department sent to Schreur did not
constitute a notice of action, the denial was not defec-
tive for failing to meet the 42 CFR 431.210(c) content-
of-notice requirements, which require the Department
to cite the specific regulations in support of its decision.
ii. TIMING OF SCHREUR’S REQUEST FOR A HEARING
As an applicant, Schreur was not expressly bound by
the 90-day hearing-request limitation in 42 CFR
32
42 CFR 431.210(c).
33
42 CFR 431.201 (defining “action”).
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431.221(d) that governs a recipient’s opportunity to
request a hearing. She was, rather, allowed a “reason-
able time” to request her hearing.
34
However, the ques-
tion remains: if the Department was required to allow
Schreur a reasonable time to request a hearing, then
how long was that reasonable time?
Although the 90-day hearing-request limitation of 42
CFR 431.221(d) only expressly governs a recipient’s
opportunity to request a hearing, we nevertheless find
it a useful guide to gauge what constitutes a reasonable
time for an applicant to request a hearing. And in using
that 90-day period as a guide, we conclude that there
can be no legitimate argument that 368 days—more
than a year—after the date of the denial decision was a
reasonable time. Indeed, there can be no dispute that
368 days after the denial decision was clearly an unrea-
sonable time.
Moreover, we also reach this conclusion in light of the
fact that the Department, in keeping with its responsi-
bility to notify applicants “[o]f the method by which
[they] may obtain a hearing,”
35
specifically notified
Schreur that she had 90 days from the date of the denial
decision to request a hearing. Thus, the Department,
while perhaps failing to recognize the distinctions be-
tween an applicant and a recipient, nonetheless ex-
pressed its determination that 90 days was a reasonable
time limit on requests for a hearing, and we give
deference to the Department’s decision.
36
We also find it significant that at no time has Schreur
ever argued that the 90-day time limitation was unrea-
sonable or that she was unable to comply with it.
34
42 CFR 431.221(d).
35
42 CFR 431.206(b)(2).
36
See In re Rovas Complaint, 482 Mich at 103; Boyer-Campbell, 271
Mich at 296-297.
18 289 M
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Indeed, Schreur admits that she was aware of the
deadline and could have filed a request for a hearing
within 90 days. Yet she and her counsel purposefully
chose to disregard the deadline as a matter of strategy.
In sum, the information that the Department pro-
vided to Schreur regarding her application for ben-
efits was sufficient under the regulations and she was
provided with a reasonable amount of time to request
a hearing. Thus, under the circumstances, the neces-
sary conclusion is that Schreur’s request for a hear-
ing was untimely. Accordingly, we conclude that the
circuit court erred by ruling that the Department was
required to cite the specific regulations in support of
its decision and by ruling that Schreur timely filed
her request for a hearing.
2. MICHIGAN LAW
Consistently with the federal regulations, Michigan
also provides an applicant whose Medicaid claim has
been denied a right to a hearing.
37
An applicant’s right
to an opportunity to challenge a denial of services is
addressed generally in Mich Admin Code, R 400.901
and specifically in Mich Admin Code, R 400.903.
Rule 400.901, titled “Notice of right to hearing,”
states as follows:
An applicant, recipient, or licensee shall be informed in
writing at the time of application and at the time of any
action affecting his claim:
(a) Of his right to a hearing, as provided in R 400.903.
(b) Of the method by which he may obtain a hearing, as
provided in R 400.903.
37
See Detroit Base Coalition for the Human Rights of the Handicapped
v Dep’t of Social Servs, 431 Mich 172, 177; 428 NW2d 335 (1988).
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(c) That he may be represented by an authorized repre-
sentative, such as legal counsel, relative, friend, or other
spokesman or he may represent himself.
Moreover, Rule 400.903, titled “Right to hearing,” spe-
cifically addresses denials of applicants’ claims and
provides, in relevant part:
(1) An opportunity for a hearing shall be granted to an
applicant who requests a hearing because his claim for
assistance is denied or is not acted upon with reasonable
promptness, and to any recipient who is aggrieved by an
agency action resulting in suspension, reduction, discon-
tinuance, or termination of assistance.
[
38
]
Thus, under the Michigan Administrative Code, appli-
cants are entitled to a hearing. However, as with the
federal regulations, the question then becomes how
long applicants have to request such a hearing.
Only one section of the Michigan Administrative Code
provides any guidance on this question. Mich Admin
Code, R 400.904(4), titled, “Request for hearing; timeli-
ness,” provides: “A claimant shall be provided 90 days
from the mailing of the notice in R 400.902 to request a
hearing.” And Mich Admin Code, R 400.902(1) states:
In cases of proposed action to discontinue, terminate,
suspend, or reduce public assistance or services, the depart-
ment shall mail a timely notice before a proposed change
would be effective. Timely means that the notice is mailed
at least 10 days before the action would become effective. A
notice shall include the following:
(a) A statement of what action the department intends
to take.
(b) The reasons for the intended action.
(c) The specific regulations supporting the action.
38
Emphasis added.
20 289 M
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(d) An explanation of the individual’s right to request a
hearing.
(e) The circumstances under which assistance or service
is continued if a hearing is requested.
When read together, the plain language of Rule
400.904(4) and Rule 400.902(1) clearly states that the
90-day limitation on the ability to request a hearing
starts from the mailing of a notice of negative action “to
discontinue, terminate, suspend, or reduce public assis-
tance or services....”
39
And only those types of notice
of negative action are required to include “[t]he specific
regulations supporting the action.”
40
Again, it is undisputed that when Schreur applied for
Medicaid disability benefits, she was not already a
recipient of such benefits. Thus, the Department’s
decision to deny Schreur’s application for Medicaid
disability benefits would not “discontinue, terminate,
suspend, or reduce public assistance or services....”
Accordingly, the Department’s decision would not con-
stitute a “[n]otice of negative action” as Rule 400.902
defines such an action and would not trigger the run-
ning of a 90-day hearing-request period. Therefore,
under Michigan law, we conclude that the Department
was not required to cite the specific provisions support-
ing its denial. And its failure to do so did not affect the
validity of the denial letter that it sent or the timing for
a request for a hearing.
And, as we concluded under the federal provisions, in
the absence of express guidance on how long applicants
have to request a hearing following a denial of benefits,
we give deference to the Department’s determination
39
Mich Admin Code, R 400.902(1) (emphasis added).
40
Mich Admin Code, R 400.902(1)(c).
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that 90 days from the date of the denial decision was a
reasonable time limit on requests for a hearing.
41
3. THE DEPARTMENT’S POLICIES
The parties also cite several provisions of the Depart-
ment’s internal policies to support their respective
positions. However, a rule not enacted pursuant to the
procedures outlined in the Administrative Procedures
Act
42
does not have the force of law.
43
Thus, the parties’
reliance on the provisions of the Department’s internal
policies are persuasive only to the extent that we give
deference to the Department’s determination that 90
days from the date of the denial decision was a reason-
able time limit on requests for a hearing.
III. DUE PROCESS
Because Schreur was only an applicant and not a
Medicaid recipient, the procedural due process issues
outlined in Goldberg v Kelly
44
are not applicable to this
case. That the regulations treat applicants and recipi-
ents differently is not surprising. What process is due
requires a consideration of the government’s interest,
the private interest affected by the government’s ac-
tion, and the risk of an erroneous deprivation.
45
Here,
41
See In re Rovas Complaint, 482 Mich at 103; Boyer-Campbell, 271
Mich at 296-297.
42
MCL 24.201 et seq.
43
Faircloth v Family Independence Agency, 232 Mich App 391, 402; 591
NW2d 314 (1998).
44
Goldberg v Kelly, 397 US 254, 260; 90 S Ct 1011; 25 L Ed 2d 287 (1970)
(stating that “the constitutional issue to be decided” in that case was “the
narrow one whether the Due Process Clause requires that the recipient be
afforded an evidentiary hearing before the termination of benefits”).
45
Mathews v Eldridge, 424 US 319, 335; 96 S Ct 893; 47 L Ed 2d 18
(1976).
22 289 M
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the differing interests at stake account for the divergent
procedural safeguards. Medicaid applicants have not
secured, or otherwise shown, that they are entitled to
the welfare benefit. By contrast, Medicaid recipients are
statutorily entitled to, and are already receiving, those
benefits. Accordingly, the notice and hearing require-
ments with regard to recipients are more stringent than
those that apply to applicants.
We reverse.
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UNITED SERVICES AUTOMOBILE ASSOCIATION
v MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION
Docket No. 289579. Submitted May 11, 2010, at Lansing. Decided June
22, 2010, at 9:05 a.m.
United Services Automobile Association brought an action in the
Washtenaw Circuit Court against the Michigan Catastrophic
Claims Association, seeking reimbursement for personal protec-
tion insurance benefits it paid to its insured, Raoul Farhat, in
excess of the statutory threshold for indemnification under MCL
500.3104(2). Farhat was injured in an automobile accident in
Florida in 1996. Farhat had moved to Florida from Michigan in
1995. He purchased the vehicle that he was driving at the time of
the accident in Florida, and the vehicle was registered in Florida.
Farhat had requested that plaintiff add the vehicle to his Michigan
no-fault automobile insurance policy, but because of an underwrit-
ing error, the vehicle was inadvertently omitted from Farhat’s
insurance policy. After the accident, plaintiff retroactively re-
formed Farhat’s insurance policy to include coverage for the
vehicle. In the circuit court, plaintiff moved for summary disposi-
tion. Defendant responded that it was not required to indemnify
plaintiff because plaintiff had failed to make a premium payment
to defendant for the vehicle and because defendant is only required
to indemnify member insurers for losses associated with Michigan
vehicles that are registered in Michigan. The court, Timothy P.
Connors, J., denied plaintiff’s motion for summary disposition and
granted summary disposition to defendant, reasoning that because
plaintiff failed to make a premium payment to defendant for the
vehicle involved in the accident during the coverage period before
the accident, plaintiff could not reform the insurance policy to
include the vehicle after the accident in order to be reimbursed by
defendant. Plaintiff appealed.
The Court of Appeals held:
1. Indemnification is only required under MCL 500.3104(2)
when no-fault benefits were provided to a Michigan “resident.”
For purposes of the no-fault act, a resident is either someone who
lived in Michigan and was required to purchase a no-fault auto-
mobile insurance policy written in this state that provided the
24 289 M
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compulsory security requirements of MCL 500.3101(1) or someone
who did not live in Michigan but was nonetheless required to
register and insure his or her vehicle in this state. The evidence in
this case indicated that Farhat intended to live in Florida indefi-
nitely and that the bulk of his permanent connections were in
Florida at the time of the accident. Thus, he cannot be deemed a
resident on the basis of his domicile. Nor was Farhat required to
register the vehicle involved in the accident in Michigan because it
was not operated in Michigan. Because plaintiff did not pay
benefits pursuant to a policy written in Michigan that provided the
required security under MCL 500.3101(1) for a vehicle required to
be registered in Michigan, defendant was not required to indem-
nify plaintiff.
2. Whether plaintiff failed to make a premium payment to
defendant for the vehicle involved in the accident during the
coverage period before the accident was of no consequence because
the threshold requirement for indemnification, that the insured be
a resident of Michigan for purposes of the no-fault act, was not
met. Nonetheless, the circuit court correctly granted summary
disposition in favor of defendant, albeit for the wrong reason.
Affirmed.
Garan Lucow Miller, P. C . (by Caryn A. Gordon), for
plaintiff.
Dykema Gossett PLLC (by Joseph K. Erhardt and K.
J. Miller) for defendant.
Before: S
HAPIRO
,P.J., and J
ANSEN
and D
ONOFRIO
,JJ.
D
ONOFRIO
, J. Plaintiff appeals as of right an order of
the circuit court denying its motion for summary dis-
position and granting summary disposition to defen-
dant. Because the trial court properly concluded, albeit
for the wrong reason, that defendant was not required
to indemnify plaintiff for personal protection insurance
(PIP) benefits over the statutory threshold that plain-
tiff paid on behalf of its insured, Raoul Farhat, we
affirm.
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Raoul Farhat, M.D., is a physician who had been an
officer in the United States Army and affiliated with the
Michigan National Guard. Farhat said that he was
licensed to practice medicine in Michigan, Florida, and
California. Farhat was in an automobile accident on
August 9, 1996, in Florida. Farhat explained that he
was driving to work at an emergency room in a Florida
hospital in a convertible Chrysler LeBaron when the
accident occurred. Farhat stated that he had lived with
his ex-wife in Florida from some time in 1995 until the
accident, because they were trying to reunite in Florida
after their 1993 Michigan divorce. Farhat explained
that he owned a residence in Michigan through his
mother’s trust and that he grew up in Michigan and
lived with his wife in Michigan before their divorce.
In December 1995, Farhat insured the LeBaron
through his Michigan no-fault automobile insurance
policy with plaintiff. According to plaintiff, Farhat had
five vehicles insured by plaintiff, but the underwriting
department mistakenly omitted the LeBaron from his
policy. After the accident, plaintiff retroactively re-
formed Farhat’s insurance policy to include coverage on
the LeBaron. After Farhat won a judgment for PIP
benefits against plaintiff in the Washtenaw Circuit
Court, plaintiff sought to recover from defendant the
amount in excess of $250,000 that it paid on behalf of
Farhat.
The instant case involves plaintiff’s effort to recover
those benefits. It is plaintiff’s position that Farhat
properly insured the LeBaron under Michigan law
because Farhat intended to drive the vehicle in Michi-
gan and that Farhat had family and property in Michi-
gan, was licensed to practice medicine in Michigan, and
traveled to Michigan for obligations to the military, so
defendant was required to reimburse plaintiff for ben-
efits that it paid to Farhat. It is defendant’s position
26 289 M
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that it is permissible for it to review coverage decisions
and that Farhat should not have been insured under a
Michigan no-fault policy written by plaintiff for an
accident that occurred in Florida involving a vehicle
that was both purchased and registered in Florida.
In the trial court, at the hearing on plaintiff’s motion
for summary disposition, plaintiff stated that it was a
member of defendant association and that defendant
was required by statute, MCL 500.3104(2), to reim-
burse plaintiff for benefits that it paid to its insured
persons. Plaintiff further argued that the statute does
not mention any mechanism for defendant to refuse to
reimburse members if defendant determines that a
policy was not mandated. Plaintiff represented that it
paid $896,106.60 in no-fault benefits to or on behalf of
Farhat and that it was entitled to reimbursement from
defendant in the amount of $646,106.60. Defendant
responded at the hearing that it was not required to
reimburse plaintiff because plaintiff failed to make a
premium payment to defendant for the vehicle that was
involved in the accident. Defendant also argued that the
statute provides that it can only reimburse member
insurers for losses associated with Michigan vehicles
that are registered in Michigan.
The trial court denied plaintiff’s motion for summary
disposition and granted summary disposition to defen-
dant. The trial court stated that it was following the
holding of Liberty Mut Ins Co v Mich Catastrophic
Claims Ass’n, 248 Mich App 35; 638 NW2d 155 (2001).
The trial court reasoned that Liberty Mut indicated that
if an insurer did not make a premium payment to
defendant on a vehicle during the coverage period
before it was in an accident, the insurer could not
reform the insurance contract to include the vehicle
after the accident in order to be reimbursed by defen-
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dant.
1
The trial court did not address defendant’s
argument that it can only reimburse for Michigan
vehicles that are registered in Michigan. Plaintiff now
appeals as of right.
A trial court’s determination of a motion for sum-
mary disposition is reviewed de novo. Ormsby v Capital
Welding, Inc, 471 Mich 45, 52; 684 NW2d 320 (2004).
When reviewing a motion brought under MCR
2.116(C)(10), the court considers the affidavits, deposi-
tions, pleadings, admissions, and other evidence sub-
mitted by the parties in the light most favorable to the
nonmoving party. Rose v Nat’l Auction Group, 466 Mich
453, 461; 646 NW2d 455 (2002). Summary disposition is
appropriate if there is no genuine issue regarding any
material fact and the moving party is entitled to judg-
ment as a matter of law. Id.
Defendant association was created by the Legislature
in 1978 to respond to concerns that Michigan’s no-fault
law provision for unlimited PIP benefits placed too
great a burden on insurers, particularly small insurers,
paying “catastrophic” injury claims. In re Certified
Question (Preferred Risk Mut Ins Co v Mich Cata-
strophic Claims Ass’n), 433 Mich 710, 714; 449 NW2d
660 (1989). MCL 500.3104(1) provides for the creation
of the association and requires membership by specified
insurers. Defendant’s primary purpose is to indemnify
member insurers for losses sustained as a result of the
payment of PIP benefits beyond the “catastrophic”
level, which is established according to a sliding scale
depending on the date the policy in question was issued
1
Michigan no-fault insurers that provide the security required by MCL
500.3101(1) must be members of defendant. MCL 500.3104(1). Members
of defendant are required to make premium payments to defendant. MCL
500.3104(7)(d). Those premiums are based on the number of car years of
insurance that a member writes in Michigan. Id. Insurers usually pass
this per vehicle assessment on to their policyholders.
28 289 M
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or renewed. MCL 500.3104(2); In re Certified Question,
433 Mich at 714-715. Defendant “charges each of its
members a premium for the coverage it provides, which
is based on the number of car years of insurance the
member writes in Michigan.” In re Certified Question,
433 Mich at 716, citing MCL 500.3104(7)(d).
Our Supreme Court in In re Certified Question was
faced with a very similar situation. The question certi-
fied was the following:
“Does the Motor Vehicle Personal and Property Protec-
tion Act, Mich Comp Laws Ann §§ [500.3101 to
500.3179]...,require the Michigan Catastrophic Claims
Association to indemnify member insurers for losses paid
in excess of $250,000 to insureds who are not residents of
the State of Michigan but who were injured as a result of an
automobile accident occurring in the State of Michigan?”
[Id. at 713.]
Our Supreme Court held that MCL 500.3104(2) does
not require defendant to indemnify its member insurers
for losses paid to insureds who are not considered
residents of this state. The Court stated that for pur-
poses of the catastrophic claims provisions, “resident”
referred to those insureds who actually live within this
state and are required to purchase no-fault automobile
insurance policies written in this state that provide the
compulsory security requirements of MCL 500.3101(1),
and also to certain insureds who do not live within this
state but are nonetheless required to register, and thus
insure, their vehicles in this state. Id. at 719-720, 723.
Specifically, the Supreme Court held as follows:
[W]e conclude that [MCL 500.3104(2)] requires indem-
nification only when the member insurer has paid benefits
in excess of $250,000 under a policy which was written in
this state to provide the security required by [MCL
500.3101(1)] of the no-fault act for the “owner or registrant
of a motor vehicle required to be registered in this
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state....”[Defendant], whose policy of restricting indem-
nification to “residents of this state” is the subject of this
dispute, has acknowledged that for purposes of indemnifi-
cation under [MCL 500.3104(2)] it considers all owners or
registrants of motor vehicles required to be registered here
to be “resident[s] of the State for purposes of the Act,”
regardless of whether they actually live within this state.
10
With this acknowledgment in mind, we must conclude, in
answering the question as certified, that [defendant] is
required to indemnify member insurers only for losses paid
to “residents” of this state.
______________________________________________________
10
In its supplemental brief on appeal, [defendant] ac-
knowledges that there are situations in which persons who
do not actually live within this state are nonetheless
required to register and insure their vehicles in this state.
See, e.g., MCL 257.243(b)-(d).... In such cases, [defen-
dant] concedes, these insureds are “deemed to be” resi-
dents of this state by virtue of their purchase of compulsory
insurance coverage in this state pursuant to [MCL
500.3101(1)]:
“In assessing the validity of the Michigan-only restric-
tion, the Association urges the Court to focus not on the
physical location of the owner/registrant of the motor
vehicle, but on whether or not the vehicle is required,
because of the state of registration, to maintain security for
the payment of Michigan PIP benefits. If the owner or
registrant is required to maintain such security, the insurer
of the motor vehicle has paid an assessment to the Asso-
ciation on that policy. Indemnification for incurred no-fault
losses in excess of $250,000 under the policy is proper. The
owner or registrant, even though physically located outside
Michigan, appropriately is deemed a resident of the State
for purposes of the Act.”
______________________________________________________
[Id. at 719-720.]
In this case, plaintiff argues that Farhat was required
to insure the LeBaron in Michigan because of his
activity in the state. Defendant argues that Farhat
30 289 M
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could not have been required to register the LeBaron in
Michigan and in turn carry no-fault insurance in Michi-
gan and, therefore, Farhat was not a resident. As stated
above, our Supreme Court in In re Certified Question
concluded that defendant is not liable to indemnify all
insurance coverage that its members provide, but only
that coverage provided to residents according to MCL
500.3101(1). Thus, the question that must be answered
in the instant case is whether Farhat was a “ ‘resident[]
of the State for purposes of the Act,’ regardless of
whether [he] actually live[d] within this state.” Id. at
719 (citation omitted). In other words, In re Certified
Question interpreted the plain language of the cata-
strophic claims provisions as requiring indemnification
under MCL 500.3104(2) only when coverage was pro-
vided to “owners or registrants of motor vehicles re-
quired to be registered here . . . regardless of whether
they actually live within the state.” Id. at 719 (emphasis
added).
With regard to residency status, this Court has
concluded multiple times that a resident of Michigan
cannot be a nonresident under the no-fault act. Farm
Bureau Ins Co v Allstate Ins Co, 233 Mich App 38, 40;
592 NW2d 395 (1998); Wilson v League Gen Ins Co, 195
Mich App 705, 710; 491 NW2d 642 (1992). Thus, a
critical question is whether Farhat was a Michigan
resident; if he was, he was not a nonresident for these
purposes, regardless of his connections to Florida.
“Residence” and “domicile” are legally synonymous.
Cervantes v Farm Bureau Gen Ins Co of Mich, 272 Mich
App 410, 414; 726 NW2d 73 (2006). Many factors have
been considered with respect to the question of resi-
dency, and the determination varies according to the
factual circumstances. Id. at 414-415. The factors that
may be considered include, but are not limited to, the
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person’s intent; mailing address; the address listed on
the person’s driver’s license, tax returns, and other
documents; the location of bank accounts; maintenance
of a telephone number; and property ownership. Id.; see
also Witt v American Family Mut Ins Co, 219 Mich App
602, 605-606; 557 NW2d 163 (1996).
Farhat stated that he grew up in Michigan and lived
with his wife in Michigan before their 1993 Michigan
divorce. But Farhat moved to Florida in an effort to
reunite with his ex-wife in 1995. On June 13, 1995, Farhat
informed plaintiff that he had moved to Florida. Farhat
was working in Florida at the time of the accident. Farhat
purchased the LeBaron in Florida, registered it in Florida,
obtained Florida license plates for it, and never drove it in
Michigan. In June 1996, Farhat called plaintiff to request
a homeowner’s policy for his Florida home. Also, in June
1996, Farhat updated his billing address to Florida. On the
date of the accident, August 9, 1996, Farhat had a Florida
driver’s license. In early 1997, Farhat claimed a home-
stead exemption on his Florida home. While Farhat testi-
fied that he had a residence in Michigan through his
mother’s trust and had two cars garaged in Michigan, it
appears that Farhat’s intent at the time was to live in
Florida indefinitely and that the bulk of his permanent
connections were in Florida at the time of the accident. We
therefore conclude that Farhat was domiciled in Florida
and was not a resident of Michigan for purposes of the
no-fault act.
Accordingly, we must determine whether Farhat could
alternatively be deemed a resident of this state for pur-
poses of the act if his LeBaron was otherwise “required to
be registered” in Michigan. In re Certified Question, 433
Mich at 719. In order to determine if the LeBaron was
32 289 M
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required to be registered in Michigan, we look to the
applicable statutory language. MCL 257.216 states as
follows:
Every motor vehicle, recreational vehicle, trailer, semi-
trailer, and pole trailer, when driven or moved on a street or
highway, is subject to the registration and certificate of title
provisions of this act except the following:
(a) A vehicle driven or moved on a street or highway in
conformance with the provisions of this act relating to
manufacturers, transporters, dealers, or nonresidents.
And MCL 257.243(1) states as follows:
A nonresident owner, except as otherwise provided in
this section, owning any foreign vehicle of a type otherwise
subject to registration under this act may operate or permit
the operation of the vehicle within this state without
registering the vehicle in, or paying any fees to, this state if
the vehicle at all times when operated in this state is duly
registered in, and displays upon it a valid registration
certificate and registration plate or plates issued for the
vehicle in the place of residence of the owner.
MCL 257.216(a) and MCL 257.243(1) both discuss when
vehicles are required to be registered in this state, and
both indicate that nonresident owners are not required
to register their motor vehicles in Michigan. Thus,
Farhat, as a nonresident owner who had never driven
the LeBaron in Michigan, was not required to register it
in Michigan under either MCL 257.216(a) or MCL
257.243(1).
Next, we examine the compulsory-insurance require-
ment of MCL 500.3101(1), which provides in relevant
part:
The owner or registrant of a motor vehicle required to
be registered in this state shall maintain security for
payment of benefits under personal protection insurance,
property protection insurance, and residual liability insur-
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ance. Security shall only be required to be in effect during
the period the motor vehicle is driven or moved upon a
highway.
And finally, we consider MCL 500.3102(1), which pro-
vides:
A nonresident owner or registrant of a motor vehicle or
motorcycle not registered in this state shall not operate or
permit the motor vehicle or motorcycle to be operated in this
state for an aggregate of more than 30 days in any calendar
year unless he or she continuously maintains security for the
payment of benefits pursuant to this chapter.
Reading MCL 500.3101(1) and MCL 500.3102(1) in pari
materia with MCL 257.216(a) and MCL 257.243(1), the
LeBaron was not required to be registered in Michigan,
and because the vehicle was not operated in Michigan,
it was not required to be insured in Michigan.
The record reflects that plaintiff conducted an inves-
tigation that concluded that “Farhat was residing,
working and driving” the LeBaron in Florida on the
date of the accident and that the vehicle was registered,
titled, and used in Florida. At oral argument before us
in this appeal, plaintiff admitted the following facts
contained in the record:
• On June 13, 1995, Farhat told USAA he had moved
to Florida.
• Farhat purchased the LeBaron in Florida.
• The LeBaron was registered in Florida.
• The LeBaron had Florida license plates.
• The LeBaron was never driven in Michigan.
• Farhat had a Florida driver’s license on August 9,
1996.
• The accident occurred in Florida.
34 289 M
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• There is no testimony in Farhat’s deposition that he
had any intention of driving the LeBaron in Michigan.
• There is no testimony in Farhat’s deposition that
he ever drove the LeBaron in Michigan.
Given these facts, there is no evidence in the record
that the LeBaron, which was purchased, registered,
titled, and garaged in Florida, was going to be driven in
Michigan for any period in 1996 by Farhat, a nonresi-
dent who was living and working in Florida. Thus,
Farhat’s LeBaron was not required to be registered in
Michigan. Because Farhat was a nonresident and the
LeBaron was not required to be registered in Michigan,
MCL 500.3101(1) does not apply. In re Certified Ques-
tion, 433 Mich at 719-720, 723. Defendant need only
indemnify an insurer under MCL 500.3104(2) if the
insurer paid benefits pursuant to a policy written in
Michigan that provided the required security under
MCL 500.3101(1) for a vehicle required to be registered
in Michigan. In re Certified Question, 433 Mich at
719-720, 723. Thus, for all these reasons, we conclude
that defendant was not required to reimburse plaintiff.
Our conclusion is further supported by the holding in
Allied Prop & Cas Ins Co v Mich Catastrophic Claims
Ass’n, unpublished opinion per curiam of the Court of
Appeals, issued October 16, 2008 (Docket No. 277765).
2
In Allied Prop & Cas Ins Co, the Court also applied the
reasoning of In re Certified Question and likewise
determined that defendant was not required to reim-
burse the plaintiff for an accident in Texas involving an
uninsured Texas-registered vehicle because the insured
was not required to register his vehicle in Michigan
according to MCL 500.3101(1). Id. at 3. The Allied Prop
& Cas Ins Co Court noted the holding of In re Certified
2
While we understand that unpublished cases are not binding authority,
MCR 7.215(C)(1), we find the reasoning in this similar case instructive.
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Question in stating that defendant need only indemnify
an insurer under MCL 500.3104(2) if the insurer com-
pulsorily paid PIP benefits to residents of the state
under MCL 500.3101(1). Id.
The trial court in the instant case saw this action
differently, resolving it on the basis of the issue whether
defendant was required to indemnify plaintiff in light of
the fact that plaintiff had reformed its insurance con-
tract with Farhat after the accident. The trial court
stated that it was granting summary disposition to
defendant because it had to under Liberty Mut Ins Co,
specifically relying on the following language of Liberty
Mut Ins Co:
We conclude that the clear language of the statute does not
allow plaintiff to make a premium payment to cover a period
from August 1992 through March 1993 five years after the
accident and claim occurred and the covered period expired.
To allow reformation of an insurance policy and allow the
insurer to make a premium payment to [defendant] at the
time of reformation, and not during the applicable period of
coverage, would be an absurd interpretation of MCL
500.3104. If we were to accept plaintiff’s argument, we would
set a precedent by which an insurer could withhold premium
payments for policyholders who moved to Michigan, then,
upon a loss exceeding $250,000, the insurer could simply
reform the contract, submit the previously due premium
payments, and be reimbursed for claims paid in excess of
$250,000. Under that situation, [defendant] would be de-
prived of premiums for policies on which no claims are made,
thus defeating the “spread the risk” concept in insurance. We
decline to establish such a precedent. [Liberty Mut Ins Co,
248 Mich App at 46-47 (citations omitted).]
In the current case, indeed, Farhat’s policy omitted
the LeBaron involved in the accident. Farhat’s LeBaron
was not listed on the policy that plaintiff provided him
at the time of Farhat’s accident on August 9, 1996.
According to plaintiff’s own investigation, Farhat re-
36 289 M
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quested that the LeBaron be added to his automotive
policy after he purchased the vehicle in December 1995,
stating that it would be kept and used in Michigan. The
vehicle was insured from December 11, 1995, until
January 1, 1996. However, plaintiff apparently inad-
vertently failed to renew the LeBaron’s insurance in
January 1996 and, thus, the LeBaron was not included
on Farhat’s automobile insurance policy at the time of
the accident. Therefore, Farhat did not pay, and plain-
tiff did not collect, a premium for the applicable period
on the LeBaron and it was not included in plaintiff’s
premium payment to defendant.
But whether plaintiff did or did not receive the
premium required from Farhat is of no consequence for
the reason that the threshold requirement is not met—
defendant need only indemnify an insurer under MCL
500.3104(2) if the insurer paid benefits pursuant to a
policy written in Michigan that provided for the re-
quired security under MCL 500.3101(1) for a vehicle
required to be registered in Michigan. In re Certified
Question, 433 Mich at 719, 723.
3
We have concluded
that, as a matter of law, Farhat’s LeBaron was not
required to be registered in Michigan and, therefore,
MCL 500.3101(1) does not apply and defendant was not
required to reimburse plaintiff. Id. “ ‘A trial court’s
ruling may be upheld on appeal where the right result
[was] issued, albeit for the wrong reason.’ ” Hess v
Cannon Twp, 265 Mich App 582, 596; 696 NW2d 742
(2005), quoting Gleason v Dep’t of Transp, 256 Mich
App 1, 3; 662 NW2d 822 (2003). The trial court did not
3
Unlike United States Fidelity & Guaranty Co v Mich Catastrophic
Claims Ass’n (On Rehearing), 484 Mich 1; 795 NW2d 101 (2009), which
contested the reasonableness of the reimbursement for benefits provided
under a policy subject to indemnity, this action is concerned with
entitlement to indemnity in the first instance and not the benefits paid.
Therefore, United States Fidelity is not implicated.
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err when it denied plaintiff’s motion for summary
disposition and granted summary disposition to defen-
dant.
Affirmed. Defendant, being the prevailing party, may
tax costs pursuant to MCR 7.219.
38 289 M
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TBCI, PC v STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY
Docket No. 288853. Submitted April 6, 2010, at Detroit. Decided April 27,
2010. Approved for publication June 22, 2010, at 9:10 a.m.
TBCI, P.C., brought an action in the Oakland Circuit Court against
State Farm Mutual Automobile Insurance Company, seeking pay-
ment under the no-fault motor vehicle insurance act, MCL 500.3101
et seq., for health-care services allegedly provided to Eric Afful, State
Farm’s insured, following an automobile accident. State Farm had
refused to pay benefits, contending that Afful had submitted fraudu-
lent claims for the services. Afful had also brought a separate action
in the Wayne Circuit Court against State Farm after State Farm
denied his claims for the services. Following a jury trial in the Wayne
Circuit Court action, the Wayne Circuit Court entered a judgment of
no cause of action against Afful, consistent with the jury’s determi-
nation that Afful’s claim for benefits was fraudulent. State Farm then
moved for summary disposition in the Oakland Circuit Court action,
arguing that the judgment in the Wayne Circuit Court action barred
the action by TBCI under the doctrine of res judicata. The trial court,
Daniel P. O’Brien, J., agreed with State Farm and granted it summary
disposition, dismissing the action. TBCI appealed.
The Court of Appeals held:
Res judicata bars a subsequent action between the same parties
when the evidence or essential facts are identical. It is applicable
when the first action was decided on its merits, the second action
was or could have been resolved in the first action, and both
actions involved the same parties or their privies. The judgment in
the first case must have been final for the doctrine to apply. There
is no dispute that the judgment by the Wayne Circuit Court was a
final judgment on the merits and that the claims of TBCI were, or
could have been, resolved in that first lawsuit. The essential
evidence presented in the first action sustained the dismissal of
both actions. TBCI, although not a party to the first case, was in
privity with Afful. A privy of a party includes a person so identified
in interest with another that he or she represents the same legal
right. The Oakland Circuit Court properly dismissed TBCI’s suit.
Affirmed.
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Ihrie O’Brien (by Harold A. Perakis) for plaintiff.
Hewson & Van Hellemont, P.C. (by James F. Hewson
and Mark R. Richard)(Steven G. Silverman, of coun-
sel), for defendant.
Before: J
ANSEN
,P.J., and C
AVANAGH
and K. F. K
ELLY
,JJ.
P
ER
C
URIAM
. In this case brought under the no-fault
motor vehicle insurance act, MCL 500.3101 et seq.,
plaintiff, TBCI, P.C., a health-care provider, appeals as
of right the trial court’s order dismissing its complaint
that sought to recover first-party benefits. We affirm.
I. BASIC FACTS
On February 6, 2006, Eric Afful was allegedly injured
in an automobile accident. As a result, Afful claimed to
have received attendant-care services as well as other
medical treatment. However, Afful’s no-fault insurer,
defendant, State Farm Mutual Automobile Insurance
Company, refused to pay Afful’s claims for the services,
contending the claims he submitted were fraudulent.
Thus, Afful sued defendant in a separate litigation in
the Wayne Circuit Court.
1
The case went to trial and, on
May 15, 2008, the jury found that Afful’s claim for
attendant-care benefits was fraudulent. This barred
coverage for Afful’s claim under the exclusionary clause
of the policy. The relevant provision stated:
There is no coverage under this policy if you or any
other person insured under this policy has made false
statements with the intent to conceal or misrepresent any
material fact or circumstance in connection with any claim
under this policy.
1
Afful v State Farm Mut Auto Ins Co, unpublished judgment of the
Wayne Circuit Court, entered June 3, 2008 (Docket No. 06-630073-NF).
40 289 M
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Accordingly, a judgment of no cause of action was
entered against Afful on June 3, 2008.
Plaintiff also allegedly provided Afful with therapeu-
tic and rehabilitative services for his injuries from the
accident. Defendant also refused to pay for these ser-
vices, and plaintiff brought the present suit against
defendant for payment. Specifically, plaintiff alleged
that defendant owed it approximately $35,000 for the
services plaintiff had provided Afful. Plaintiff’s com-
plaint, filed in February 2007, alleged that defendant
had breached the insurance policy and that its failure to
pay the claim had violated the no-fault act. At the time
of the trial in the Wayne Circuit Court, the present
matter was pending in the Oakland Circuit Court.
After the judgment was entered in the Wayne Circuit
Court case, defendant in the present matter moved for
summary disposition. It argued that the Wayne Circuit
Court’s judgment barred plaintiff’s claim under the
doctrine of res judicata. Defendant contended that once
the jury found that Afful had committed fraud, there
was no longer any coverage under the policy and,
consequently, plaintiff’s claim failed. Plaintiff re-
sponded, in part, that the present claim was “an inde-
pendent cause of action” involving a claim for services
that “was not adjudicated in the Wayne County action.”
The trial court agreed with defendant, finding that the
core issue—whether there was coverage for Afful’s
claims—was common between the two suits and that
the decision of the jury in the Wayne Circuit Court
action, combined with the clear language of the policy,
decided the issue in defendant’s favor. The court rea-
soned:
[T]here is one issue that is identical between this and
the Wayne County case, to-wit whether there is valid
coverage by the defendant for the alleged insured.
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Looking at the—looking at the language, not having to
go to contract construction or anything else, but just using
the English language there is no coverage under this policy
if you have made false statements in connection with any
claim under this policy.
***
If an insured’s conduct is thus or so, or specifically
fraudulent, the whole coverage is spoiled....
***
I find that there is no question whatsoever but that the
jury declaration or adjudication in Wayne County navigates
the course of this proceedings [sic], any fraud spoils the
coverage....
Thus, the trial court granted summary disposition for
defendant and dismissed the action. This appeal fol-
lowed.
II. STANDARDS OF REVIEW
This Court reviews de novo a trial court’s decision on
a motion for summary disposition. Spiek v Dep’t of
Transp, 456 Mich 331, 337; 572 NW2d 201 (1998).
Further, questions concerning the correct interpreta-
tion and application of an insurance contract are re-
viewed de novo, Cohen v Auto Club Ins Ass’n, 463 Mich
525, 528; 620 NW2d 840 (2001), as are questions
concerning a trial court’s decision on the applicability of
res judicata, Begin v Mich Bell Tel Co, 284 Mich App
581, 598; 773 NW2d 271 (2009).
III. ANALYSIS
Plaintiff argues that the trial court erred by inter-
preting the policy’s exclusionary language in such a way
42 289 M
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that it voided all coverage under the policy, including
mandatory coverage for personal protection insurance
benefits. In plaintiff’s view, this interpretation of the
policy conflicted with the no-fault act’s mandatory-
coverage requirement, and it should have been declared
void as against public policy. Plaintiff also contends that
the language of the provision is ambiguous. We dis-
agree. In our opinion, it is unnecessary for us to reach
the substance of plaintiff’s arguments because its claim
was barred by res judicata.
“The doctrine of res judicata is intended to relieve
parties of the cost and vexation of multiple lawsuits,
conserve judicial resources, and encourage reliance on
adjudication, that is, to foster the finality of litigation.”
Id. at 599. Accordingly, “[r]es judicata bars a subse-
quent action between the same parties when the evi-
dence or essential facts are identical.” Eaton Co Bd of
Co Rd Comm’rs v Schultz, 205 Mich App 371, 375; 521
NW2d 847 (1994). It is applicable when “the first action
was decided on its merits, the second action was or
could have been resolved in the first action, and both
actions involve the same parties or their privies.” Solu-
tion Source, Inc v LPR Assoc Ltd Partnership, 252 Mich
App 368, 376; 652 NW2d 474 (2002) (citation omitted).
For the doctrine to apply, the judgment in the first case
must have been final. Richards v Tibaldi, 272 Mich App
522, 531; 726 NW2d 770 (2006).
Here, there is no serious dispute whether the judg-
ment in the first case was a final judgment on the
merits. The jury determined that Afful had submitted a
fraudulent claim for benefits, and a judgment pursuant
to the verdict was entered on June 3, 2008. Further,
there is no question whether plaintiff’s claims were, or
could have been, resolved in the first lawsuit. This is
because the essential evidence presented in the first
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case sustained dismissal of both actions. See Eaton Co
Rd Comm’rs, 205 Mich App at 375. Plaintiff, by seeking
coverage under the policy, is now essentially standing in
the shoes of Afful. Being in such a position, there is also
no question that plaintiff, although not a party to the
first case, was a “privy” of Afful. “A privy of a party
includes a person so identified in interest with another
that he represents the same legal right....”Begin, 284
Mich App at 599. As noted, the jury determined that
Afful submitted a fraudulent claim. The result under
the plain language of the exclusion provision inter-
preted in the first action is that Afful and his privies
were not entitled to coverage under the policy. Plaintiff
is simply attempting to relitigate precisely the same
issue in order to obtain coverage under the policy. The
trial court properly dismissed plaintiff’s suit to the
extent that it found its claim was barred by res judicata.
For this reason, plaintiff’s claim of appeal fails.
Affirmed.
44 289 M
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ROSE v ROSE
Docket No. 286568. Submitted January 5, 2010, at Grand Rapids.
Decided June 22, 2010, at 9:15 a.m.
Rebecca Ann Rose obtained a divorce from Wesley Allen Rose, Sr., in
the Ottawa Circuit Court, pursuant to a consent judgment entered
in 2006. At the time of the parties’ divorce, their most valuable
asset was Die Tron, Inc., of which defendant was the sole owner. In
the consent judgment, the parties agreed that defendant would
pay plaintiff spousal support in the amount of $230,000 a year for
20 years and that plaintiff would forgo any interest in Die Tron.
The judgment stated that the spousal-support obligation was
nonmodifiable. After the parties’ divorce, defendant ceded opera-
tional responsibility for Die Tron to David Rose, his son from a
prior marriage. In January 2008, defendant learned that the
company was failing, and his subsequent efforts to rescue the
company were unsuccessful. In April 2008, plaintiff moved to
enforce the judgment’s spousal-support provision. Defendant
countered with a motion to modify his support obligation and for
relief from the spousal-support provision under MCR 2.612. The
court, Jon H. Hulsing, J., denied defendant’s motion to modify the
judgment, citing the fact that the divorce judgment was nonmodi-
fiable by its terms. However, the court granted defendant’s motion
for relief from judgment under MCR 2.612(C)(1)(f) and reduced
defendant’s support obligation to $900 a month. Plaintiff appealed
by leave granted.
The Court of Appeals held:
The statutory right to seek modification of a spousal-support
provision under MCL 552.28 may be waived by the parties to a
divorce when the parties specifically forgo that right and agree in
a consent judgment that the spousal-support provision is nonmodi-
fiable. MCR 2.612(C)(1) authorizes a court to grant relief from a
final judgment in certain circumstances. When the parties to a
consent judgment have chosen to make the judgment nonmodifi-
able, a court considering granting relief from the judgment under
MCR 2.612(C)(1)(f), which permits a court to set aside a judgment
for any reason justifying relief other than those set forth in MCR
2.612(C)(1)(a) through (e), must strictly apply the factors limiting
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relief from a judgment. Specifically, relief may only be granted in
extraordinary situations not covered by MCR 2.612(C)(1)(a)
through (e), and courts must refrain from vacating the judgment if
doing so would detrimentally affect the substantial rights of the
opposing party. In this case, the divorce judgment contained a
clearly expressed nonmodifiable spousal-support provision. The
circuit court erred by failing to afford proper deference to that
binding agreement. The circuit court ruled that the spousal-
support provision was inequitable and unconscionable given Die
Tron’s demise. However, by entering a nonmodifiable support
provision in the divorce judgment, the parties waived their rights
to a judicial determination of equitable spousal support, and the
judgment cannot be deemed unconscionable on the basis of events
that occurred after the contract’s formation. Further, affording
defendant relief from the provision would detrimentally affect
plaintiff’s substantial right to enforcement of the contract. While
courts may have the power to set aside a judgment despite
prejudice to the opposing party in rare cases, such exceptional
circumstances were not present in this case. Die Tron’s failure was
tragic but hardly extraordinary.
Reversed and remanded.
J
UDGMENTS —
R
ELIEF FROM
J
UDGMENTS —
D
IVORCE —
C
ONSENT
J
UDGMENTS —
S
POUSAL
S
UPPORT —
N
ONMODIFIABLE
S
POUSAL
-S
UPPORT
P
ROVISION
.
The statutory right to seek modification of a spousal-support provi-
sion may be waived by the parties to a divorce when the parties
specifically forgo that right and agree in a consent judgment that
the spousal-support provision is nonmodifiable; when the parties
to a consent judgment have chosen to make the judgment non-
modifiable, a court considering granting relief from the judgment
must strictly apply the factors limiting relief from a judgment; the
motion may only be granted in extraordinary situations not
otherwise specifically enumerated by the court rule, and courts
must refrain from vacating the judgment if doing so would
detrimentally affect the substantial rights of the opposing party
(MCR 2.612[C][1][f]).
Speaker Law Firm, PLLC (by Liisa R. Speaker), for
plaintiff.
Wheeler Upham, P. C . (by Nicholas S. Ayoub), for
defendant.
46 289 M
ICH
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45 [June
Before: S
TEPHENS
,P.J., and G
LEICHER
and M. J. K
ELLY
,
JJ.
G
LEICHER
, J. In this postdivorce dispute over non-
modifiable spousal-support language in a divorce judg-
ment, plaintiff, Rebecca Ann Rose, appeals by leave
granted a circuit court order relieving defendant, Wes-
ley Allen Rose, Sr., from the judgment and reducing his
spousal-support obligation. We reverse and remand for
further proceedings.
I. UNDERLYING FACTS AND PROCEEDINGS
The parties, who wed in 1983, entered into a consent
divorce judgment in 2006. During the 22 years of the
parties’ marriage, they acquired substantial wealth.
The couple’s most valuable marital asset consisted of
stock that defendant owned in Die Tron, Inc., a tool and
die company in which defendant partially acquired an
interest in 1992. In 2000, defendant purchased the
entirety of Die Tron’s stock and became the company’s
sole owner. When the parties divorced, they valued
defendant’s interest in Die Tron at $6 million.
Defendant wished to avoid liquidating or selling Die
Tron in the course of the parties’ divorce, in part
because he hoped that David Rose, his son from a prior
marriage, would eventually buy the business. Instead of
converting defendant’s Die Tron holdings into cash, the
parties agreed that defendant would pay plaintiff spou-
sal support in the amount of $230,000 a year and that
plaintiff would forgo any interest in Die Tron. The
parties further agreed that plaintiff’s spousal support
would be nonmodifiable. The divorce judgment, which
the parties negotiated with the assistance of counsel,
includes the following relevant details concerning modi-
fication:
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B. The spousal support provided for herein shall be paid
directly to or for the benefit of plaintiff by defendant and
not through the Office of the Friend of the Court. The
parties intend that the spousal support provided for herein
shall be all of the spousal support that plaintiff shall
receive from defendant. Spousal support payments shall
automatically terminate upon plaintiff’s death or upon
defendant’s death.
***
D. It is the intention and understanding of the parties
that the spousal support obligations of the defendant be
non-modifiable regarding duration and amount, except:
1) If plaintiff has died, resulting in early termination as
provided herein;
(2) If defendant has died, since the parties have provided
for the continuation of plaintiff’s spousal support through
the assignment by defendant to plaintiff of his New En-
gland Life Insurance Company Variable Universal Life
Policy . . . , a significant part of the life insurance proceeds
of which are intended to secure to plaintiff adequate
spousal support in the event of defendant’s death.
This is the agreement of the parties, and it is the intention
of the parties that regardless of any change in circum-
stances or in the lifestyles of plaintiff or defendant, this
spousal support provision is to be non-modifiable.
After entry of the divorce judgment, defendant ceded
responsibility for Die Tron’s day-to-day operations to
David Rose. In January 2008, defendant learned that
David Rose had committed financial improprieties that
severely compromised Die Tron’s ability to remain
solvent. Defendant shared this information with plain-
tiff, who agreed to temporarily modify the spousal-
support payment schedule while defendant attempted
to rescue Die Tron. Defendant’s efforts proved unsuc-
cessful, and Die Tron ceased operation in March 2008.
In April 2008, plaintiff moved to enforce the divorce
48 289 M
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45 [June
judgment’s spousal-support provision. Defendant coun-
tered with a motion to modify his support obligation
and for relief from the spousal-support portion of the
divorce judgment under MCR 2.612.
The circuit court denied defendant’s motion to
modify the judgment, finding that the spousal-support
term “is non-modifiable and not subject to judicial
review.” After conducting an evidentiary hearing, the
circuit court granted defendant’s motion for relief from
judgment and reduced his spousal-support obligation to
$900 a month. This Court granted plaintiff’s applica-
tion for leave to appeal.
II. ANALYSIS
Plaintiff contends that because the parties clearly
and unambiguously agreed to forgo their statutory
right to petition for modification of spousal support, the
circuit court abused its discretion by partially relieving
defendant of his spousal-support obligation. A divorce
judgment entered by agreement of the parties repre-
sents a contract. Holmes v Holmes, 281 Mich App 575,
587; 760 NW2d 300 (2008). The “interpretation of a
contract is a question of law reviewed de novo on
appeal....”Reed v Reed, 265 Mich App 131, 141; 693
NW2d 825 (2005). Likewise, “[t]he proper interpreta-
tion and application of a court rule is a question of law,
which we review de novo.” Henry v Dow Chem Co, 484
Mich 483, 495; 772 NW2d 301 (2009). We review for an
abuse of discretion a circuit court’s ultimate decision to
grant or deny relief from a judgment. Yee v Shiawassee
Co Bd of Comm’rs, 251 Mich App 379, 404; 651 NW2d
756 (2002).
In Staple v Staple, 241 Mich App 562, 574; 616 NW2d
219 (2000), a special conflict panel of this Court consid-
ered whether parties to a divorce judgment may volun-
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tarily relinquish their statutory right to seek modifica-
tion of a spousal-support agreement “and instead
stipulate that their agreement regarding alimony is
final, binding, and nonmodifiable[.]” The Court in
Staple answered this question affirmatively, holding
that if divorcing parties negotiate a settlement in which
they clearly and unambiguously forgo their statutory
right to petition for modification of spousal support,
courts must enforce their agreement. Id. at 564, 581. In
this case, the parties agree that the holding in Staple
supplies the appropriate analytical starting point.
Staple recognized that for some divorcing parties,
“the general rule of finality is not always suitable....
In many situations, judgments of divorce must antici-
pate that circumstances will change for both the
spouses who require support and the spouses who must
provide that support.” Id. at 565. In the face of changed
circumstances, “flexibility in the form of modifiable
arrangements may be more important than final-
ity....”Id. Recognizing the need for flexibility in this
realm, our Legislature enacted MCL 552.28, which
grants circuit courts the authority to modify the
spousal-support award contained in a divorce judg-
ment.
1
This Court explained in Staple, 241 Mich App at
574-575, that the plain language of MCL 552.28 does
not preclude a party from waiving his or her right to
seek modification of a spousal-support award and that
Michigan courts often enforce agreements to waive
1
In MCL 552.28, the Legislature set forth that
[o]n petition of either party, after a judgment for alimony or other
allowance for either party or a child... and subject to [MCL
552.17], the court may revise and alter the judgment, respecting
the amount or payment of the alimony or allowance,...andmay
make any judgment respecting any of the matters that the court
might have made in the original action.
50 289 M
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45 [June
statutory rights. The Court observed that, “[m]ore
importantly,” longstanding caselaw holds that when
both parties waive their rights to seek spousal support
altogether, “neither party has the right to petition the
court” to modify that agreement by adding a provision
for spousal support when none previously existed. Id.at
575. In light of these legal principles, we concluded in
Staple that “the statutory right to seek modification of
alimony may be waived by the parties where they
specifically forgo their statutory right to petition the
court for modification and agree that the alimony
provision is final, binding, and nonmodifiable.” Id.at
578.
After announcing this holding, the Court in Staple
approvingly acknowledged the following “five public
policy reasons why courts should enforce duly executed
nonmodifiable alimony arrangements”:
(1) Nonmodifiable agreements enable parties to struc-
ture package settlements, in which alimony, asset divisions,
attorney fees, postsecondary tuition for children, and re-
lated matters are all coordinated in a single, mutually
acceptable agreement; (2) finality of divorce provisions
allows predictability for parties planning their postdivorce
lives; (3) finality fosters judicial economy; (4) finality and
predictability lower the cost of divorce for both parties; (5)
enforcing agreed-upon provisions for alimony will encour-
age increased compliance with agreements by parties who
know that their agreements can and will be enforced by the
court. [Id. at 579.]
The Court further emphasized that its decision “also
advance[d] the public policy of requiring individuals to
honor their agreements.” Id. at 579-580.
The circuit court determined that the instant judg-
ment’s nonmodifiable spousal-support language fully
complied with the requirements this Court identified in
Staple. The circuit court then considered whether, de-
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spite the parties’ covenant not to seek any modification
of spousal support, defendant had established a ground
for relief from the judgment under MCR 2.612(C). MCR
2.612(C)(1) authorizes a court to relieve a party from a
final judgment on the following grounds:
(a) Mistake, inadvertence, surprise, or excusable ne-
glect.
(b) Newly discovered evidence which by due diligence
could not have been discovered in time to move for a new
trial under MCR 2.611(B).
(c) Fraud (intrinsic or extrinsic), misrepresentation, or
other misconduct of an adverse party.
(d) The judgment is void.
(e) The judgment has been satisfied, released, or dis-
charged; a prior judgment on which it is based has been
reversed or otherwise vacated; or it is no longer equitable
that the judgment should have prospective application.
(f) Any other reason justifying relief from the operation
of the judgment.
A motion for relief from judgment under subrules (a),
(b), or (c) must be made within one year after the
judgment. MCR 2.612(C)(2).
The circuit court noted that “[a]t first glance” defen-
dant’s request for relief appeared unsupportable under
MCR 2.612(C)(1)(a) through (e), “[b]ut, on deeper
analysis, it does appear that there are some elements of
MCR [2.612(C)(1)(a)] and (b) at issue.” The court
continued that “while a downturn in business was
contemplated, it was not contemplated by any of the
parties that a family member would falsify financial
records that were relied upon by Defendant and third
parties” or that the business “would be involuntarily
closed.” According to the circuit court, these circum-
stances “contain an element of surprise.” The circuit
court further found that any “neglect” of the business
52 289 M
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45 [June
by defendant was “excusable” because defendant had
entrusted the business operations to his son. The court
detected no “undiscovered evidence” that existed at the
time the parties entered into the divorce judgment, but
added that David Rose began altering the books “within
months” thereafter. (Citation omitted.) The circuit
court finally found that “within twenty months after
the Judgment of Divorce was entered, the value of the
company was reduced to scrap value, after debts were
paid. As such, it appears that a significant mistake may
have been made in the valuation of the Company.”
Although the circuit court discovered some evidence
supporting “elements of MCR 2.612(C)(1)(a) and (b),”
the court recognized that because defendant filed his
motion more than a year after entry of the judgment,
those subrules did not apply. The circuit court then
considered whether defendant had demonstrated
grounds for relief under MCR 2.612(C)(1)(f), which
permits a court to set aside a judgment for any reason
justifying relief other than those listed in MCR
2.612(C)(1)(a) through (e).
This Court first considered the “exact parameters” of
subrule (f) in Kaleal v Kaleal, 73 Mich App 181, 189;
250 NW2d 799 (1977), and adopted an approach to the
subrule’s use consistent with federal precedent.
2
The
Court explained that federal courts generally grant
relief under this provision “ ‘where the judgment was
obtained by the improper conduct of the party in whose
favor it was rendered, or resulted from the excusable
default of the party against whom it was directed, under
circumstances not covered’ ” by the other clauses per-
mitting relief from a judgment “ ‘and where the sub-
stantial rights of other parties in the matter in contro-
2
Kaleal construed GCR 1963, 528.3(6). The language of MCR
2.612(C)(1)(f) mirrors that of former GCR 1963, 528.3(6).
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versy were not affected.’ ” Id. at 189, quoting 3
Honigman & Hawkins, Michigan Court Rules Anno-
tated (2d ed), p 189. In Lark v Detroit Edison Co,99
Mich App 280, 284; 297 NW2d 653 (1980), this Court set
forth a three-part test for ascertaining whether the
“extraordinary relief” envisioned in the predecessor of
MCR 2.612(C)(1)(f) is warranted:
(I) [T]he reason for setting aside the judgment must not
fall under subrules (1) through (5) [now subrules (a)
through (e)], (II) the substantial rights of the opposing
party must not be detrimentally affected if the [judgment]
is set aside, and (III) extraordinary circumstances must
exist which mandate setting aside the judgment in order to
achieve justice.
And in McNeil v Caro Community Hosp, 167 Mich App
492, 497; 423 NW2d 241 (1988), we specifically reiter-
ated that generally “relief is to be granted only where
the judgment was obtained by the improper conduct of
the party in whose favor it was rendered.”
In Heugel v Heugel, 237 Mich App 471; 603 NW2d
121 (1999), this Court affirmed a circuit court’s invoca-
tion of MCR 2.612(C)(1)(f) in setting aside the property
division and spousal-support terms of a divorce judg-
ment. In Heugel, the parties stipulated to the entry of a
divorce judgment after a 14-year marriage that had
produced one child. Id. at 473. The judgment awarded
the wife a property settlement primarily consisting of a
lump-sum payment of $50,000, and she received no
other spousal support. Id. at 473-474. The wife suffered
from “severe health problems” and claimed that she
had agreed to the property settlement because her
husband deceived her into believing that the couple
would remain together after the divorce. Id. at 475-477.
The circuit court set aside as “unconscionable” the
judgment’s property and spousal-support provisions,
54 289 M
ICH
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45 [June
concluding that the husband’s fraud tolled the one-year
time limit set forth in MCR 2.612(C)(2). The circuit
court also invoked MCR 2.612(C)(1)(f). Id. at 477.
This Court affirmed the circuit court’s reliance on
subrule (f), reasoning that, like its federal counterpart,
FR Civ P 60(b)(6), MCR 2.612(C)(1)(f)
provides the court with a grand reservoir of equitable
power to do justice in a particular case and vests power in
courts adequate to enable them to vacate judgments when-
ever such action is appropriate to accomplish jus-
tice....[W]e believe that a trial court may properly grant
relief from a judgment under MCR 2.612(C)(1)(f), even
where one or more of the bases for setting aside a judgment
under subsections a through e are present, when additional
factors exist that persuade the court that injustice will
result if the judgment is allowed to stand. [Id. at 480-481
(quotation marks and citation omitted).]
The Court in Heugel identified as “additional factor[s]”
supporting relief from the judgment the husband’s
“ ‘abuse[] [of] the unique nature of the husband-wife
relationship,’ ” leading the wife “to believe that the
entry of the divorce judgment was an irrelevant formal-
ity,” and the wife’s physical condition, which prevented
her from working. Id. at 481 (citation omitted). This
Court concluded that under the circumstances, relief
from the judgment under subrule (f) “is therefore
proper because the judgment was obtained by [the
husband’s] improper conduct.” Id. The Court further
observed that “plaintiff’s substantial rights are not
detrimentally affected” by relieving him from the judg-
ment “because he is not permitted to enforce an uncon-
scionable agreement.” Id. at 482.
Using Heugel as an analytical framework, the circuit
court in the instant case found that extraordinary
circumstances existed to justify relieving defendant
from the divorce judgment’s nonmodifiable spousal-
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support language. The circuit court identified the ex-
traordinary circumstances on which it relied:
• The business that provided a substantial income to
both parties no longer exists.
• Defendant is not responsible for the loss of the busi-
ness. Defendant was presented with false financial docu-
ments prepared by the Company’s president. When Defen-
dant was made aware of the Company’s dire financial
predicament, Defendant immediately took action to at-
tempt to salvage the business. This included meeting with
bankers, divesting an asset and reconfiguring rental agree-
ments.
• Plaintiff was and is aware that Defendant’s ability to
pay spousal support rested on the continued viability of the
Company. In fact, the checks for spousal support were
written by Die Tron. Defendant timely informed Plaintiff
of Die Tron’s financial instability. Plaintiff acknowledged
in the January, 2008 modification to the non-modifiable
spousal support provision of the Judgment that Defendant
“will be unable to make the required payments for a period
of time.”
• Defendant is no longer able to pay spousal support of
$230,000 per year, since he is now earning $52,000 per year.
• Defendant’s only ability to pay the ordered amount of
spousal support is through the liquidation of his assets.
Defendant’s assets amount to approximately $500,000 out
of which $79,000 is due and owing for spousal support as
noted above. Defendant also has $300,000 in a 401K plan.
The complete liquidation of Defendant’s estate will only
satisfy approximately three years of his spousal support
obligations. After the exhaustion of Defendant’s estate, he
will still owe spousal support for an additional 15 years,
which is 75% of the obligation.
• The above shows that it is impossible for Defendant to
comply with the spousal support provisions contained in
the Judgment of Divorce.
• Plaintiff has spent $870,718.19 since August, 2006.
Plaintiff has liquidated much of the cash value of a $6
56 289 M
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million life insurance policy that was designed to provide
her with continued spousal support in the event of Defen-
dant’s death. Defendant is not responsible for Plaintiff’s
choices in spending or business investments. Plaintiff has,
through unwise investments, nearly destroyed her estate.
Plaintiff would require that this Court allow the complete
destruction of Defendant’s estate to pay Plaintiff’s post
marital debt.
• In March, 2008 Plaintiff filed a motion to modify the
non-modifiable spousal support agreement.
The circuit court explained that plaintiff’s substan-
tial rights were not “detrimentally affected” by reduc-
ing defendant’s spousal-support obligation:
Plaintiff would have this Court determine that it is Plain-
tiff’s reliance on receiving $230,000 in spousal support that
must be analyzed. The Court disagrees. Spousal support is
equitable in nature. Plaintiff is only entitled to an equitable
amount of spousal support. Heugal [sic] is in accord when it
stated: “We cannot find that plaintiff’s substantial rights are
detrimentally affected because he is not permitted to enforce
an unconscionable agreement.” Id., at 482.
Likewise, Plaintiff argues that in lieu of 50% of Die
Tron, she received the spousal support provision. As men-
tioned, the appraisal value of Die Tron was not admitted
into evidence. But, the Court notes that upon liquidation of
the Company, Defendant received $150,000 of which one-
half went to pay debts associated with the Company.
Obviously, Die Tron was worth only scrap value. To claim
$230,000 a year for an additional 18 years to compensate
Plaintiff for 50% of a Company that is worth only scrap
value is not equitable.
The circuit court concluded that although relief from
a judgment under MCR 2.612(C)(1)(f) is generally
granted only “ ‘when the judgment was obtained by the
improper conduct of the party in whose favor it was
rendered’ . . . , in domestic relations actions, the court
must equitably divide the marital estate and set, if
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applicable, an equitable amount of support.” (Citation
omitted.) In light of the goal to equitably apportion the
marital estate, the circuit court opined that “this case is
an exception to the general rule,” reasoning that “noth-
ing in MCR 2.612(C)(1) limits the rule’s application to
misconduct of a party.” After relieving defendant from
his obligation to pay $230,000 in annual spousal sup-
port, the circuit court applied the factors analyzed in
Sparks v Sparks, 440 Mich 141, 159-160; 485 NW2d 893
(1992), and ruled that defendant must pay plaintiff
spousal support of $900 a month.
Well-settled policy considerations favoring finality of
judgments circumscribe relief under MCR 2.612(C)(1).
See Wayne Creamery v Suyak, 10 Mich App 41, 51; 158
NW2d 825 (1968). The first five grounds for vacating a
judgment, subrules (a) through (e), delineate narrow,
time-critical pathways for relief. Subrule (f) indisput-
ably widens the potential avenues for granting relief
from a judgment. But the competing concerns of finality
and fairness counsel a cautious, balanced approach to
subrule (f), lest the scale tip too far in either direction.
Thus, while permitting relief under this subrule for
“any other reason” justifying it, our courts have long
required the presence of both extraordinary circum-
stances and a demonstration that setting aside the
judgment will not detrimentally affect the substantial
rights of the opposing party. Cautious application of
MCR 2.612(C)(1) in divorce cases also advances the
policy considerations described in Staple, 241 Mich App
at 579-580.
It is equally well settled that contracts must be
enforced as written: “[W]hen parties have freely estab-
lished their mutual rights and obligations through the
formation of unambiguous contracts, the law requires
this Court to enforce the terms and conditions con-
58 289 M
ICH
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45 [June
tained in such contracts, if the contract is not contrary
to public policy.” Bloomfield Estates Improvement
Ass’n, Inc v City of Birmingham, 479 Mich 206, 213;
737 NW2d 670 (2007) (quotation marks and citation
omitted). The parties in this case negotiated a divorce
judgment containing unambiguous spousal-support ter-
minology prohibiting future modifications “regardless
of any change in circumstances or in the lifestyles of
plaintiff or defendant....” “A long line of case-law
reflects that divorcing parties may create enforceable
contracts.” Holmes, 281 Mich App at 595. When plain-
tiff and defendant included the clear and unambiguous
language in their divorce judgment making spousal
support nonmodifiable, both had representation by
counsel and presumably understood that, absent this
language, the circuit court possessed the authority to
revise spousal support if circumstances changed. In-
stead of opting for flexibility, the parties struck a
bargain favoring finality, benefiting both. Defendant
maintained full ownership of his business and the
ability to transfer its ownership to his son; plaintiff
obtained equitable and certain support. In striking
their deal, both parties deliberately risked that future
circumstances would render their contract inequitable.
Given the judgment’s clearly expressed, enforceable,
and nonmodifiable spousal-support wording, we con-
clude that the circuit court erred by failing to afford
proper deference to the parties’ binding agreement.
When the parties have expressly elected finality in lieu
of flexibility, a court considering relief under MCR
2.612(C)(1)(f) must strictly apply the factors limiting
relief from a judgment set forth in Kaleal, 73 Mich App
at 189, and subsequent cases. Those factors confine the
application of subrule (f) to extraordinary situations not
covered by subrules (a) through (e) and mandate that a
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court refrain from vacating a judgment if doing so
detrimentally affects the rights of the opposing party.
In this case the circuit court reasoned that because
spousal support is “equitable in nature,” plaintiff “is
only entitled to an equitable amount of spousal sup-
port.” Die Tron’s demise, in the circuit court’s estima-
tion, rendered “unconscionable” plaintiff’s enforcement
of the spousal-support agreement and, consequently,
did not detrimentally affect her substantial rights. We
reject this analysis for the simple reason that by enter-
ing into a divorce judgment with a nonmodifiable sup-
port provision, the parties conclusively waived their
rights to a judicial determination of equitable spousal
support. The circuit court’s invocation of its equitable
authority to modify spousal support pursuant to MCL
552.28 ignores and invalidates the parties’ election to
forgo flexibility and their explicit waiver of the right to
seek support modifications based on equitable consid-
erations. Rather, the parties’ carefully crafted compro-
mise reflects their willingness to accept that changed
circumstances might render this election unfair to one
or the other.
In Rory v Continental Ins Co, 473 Mich 457, 461; 703
NW2d 23 (2005), our Supreme Court underscored the
importance of the right to contract, emphasizing that
“the judiciary is without authority to modify unambigu-
ous contracts or rebalance the contractual equities
struck by the contracting parties because fundamental
principles of contract law preclude such subjective post
hoc judicial determinations of ‘reasonableness’ as a
basis upon which courts may refuse to enforce unam-
biguous contractual provisions.” In this case the parties
agreed to be bound by the judgment, not a circuit
court’s notion of fairness. Indisputably, affording defen-
dant relief from this freely negotiated, nonmodifiable
60 289 M
ICH
A
PP
45 [June
judgment would detrimentally affect plaintiff’s sub-
stantial right to enforcement of the contract. Accord-
ingly, the circuit court erred by failing to consider
plaintiff’s substantial right to enforcement of the par-
ties’ agreement, and in so doing neglected “to honor the
parties’ clearly expressed intention to forgo the right to
seek modification....” Staple, 241 Mich App at 568.
Because the circuit court incorrectly concluded that
setting aside the plain terms of the parties’ consent
judgment with respect to spousal support would not
detrimentally affect plaintiff’s substantial rights, the
circuit court abused its discretion by granting defen-
dant’s motion to set aside the judgment under MCR
2.612(C)(1)(f).
Moreover, we reject that Heugel operates as control-
ling authority in this case. Unlike in Heugel, the evi-
dence here does not suggest that the spousal-support
provision qualified as “unconscionable” when the par-
ties negotiated it. We know of no authority permitting a
court to find a contract unconscionable on the basis of
events that occurred long after the contract’s forma-
tion.
3
Furthermore, the parties’ divorce judgment in
Heugel apparently did not incorporate a nonmodifica-
tion clause. Consequently, in that case the circuit
court’s discretion to favor fairness when it construed
MCR 2.612(C)(1)(f) remained unconstrained by compet-
ing considerations of finality and freedom of contract.
Although we conclude that vacation of the spousal-
support term detrimentally affected plaintiff’s substan-
tial rights in this case, we recognize that in rare cases,
a circuit court’s “grand reservoir of equitable power to
3
“The determination of whether a given clause or contract is in fact
unconscionable is to be made at the time of its making rather than at
some subsequent point in time (e.g., at the time for performance)....”8
Williston, Contracts (4th ed), § 18:12, p 127.
2010] R
OSE V
R
OSE
61
do justice” may necessitate setting aside a judgment
despite prejudice to the opposing party. Heugel, 237
Mich App at 481 (quotation marks and citation omit-
ted). However, the record in this case does not support
the existence of truly exceptional circumstances. The
caselaw construing MCR 2.612(C)(1)(f) contemplates
that extraordinary circumstances warranting relief
from a judgment generally arise when the judgment
was obtained by the improper conduct of a party.
Heugel, 273 Mich App at 479; see also Altman v Nelson,
197 Mich App 467, 478; 495 NW2d 826 (1992). No such
misconduct occurred in this case. Moreover, the events
giving rise to Die Tron’s failure qualify as tragic, but
hardly extraordinary. As a seasoned business owner,
defendant undoubtedly understood that an economic
downturn or financial mismanagement could endanger
the solvency of his company. He nevertheless agreed
that plaintiff could receive nonmodifiable spousal sup-
port. We feel hard-pressed to conclude that a business
failure amounts to a circumstance so unexpected and
unusual that it may constitute a ground for setting
aside a final, binding, and nonmodifiable spousal-
support provision. “When a party makes a deliberate,
strategic choice to settle, she cannot be relieved of such
a choice merely because her assessment of the conse-
quences was incorrect.” United States v Bank of New
York, 14 F3d 756, 759 (CA 2, 1994). The extraordinary
circumstances cited by the circuit court simply do not
overcome the detrimental effect on plaintiff’s substan-
tial rights that would result from setting aside the
judgment.
Reversed and remanded for further proceedings con-
sistent with this opinion. We do not retain jurisdiction.
62 289 M
ICH
A
PP
45 [June
WRIGHT v KELLOGG COMPANY
Docket No. 290130. Submitted June 16, 2010, at Grand Rapids. Decided
June 22, 2010, at 9:20 a.m.
Dennis L. Wright brought an action in the Calhoun Circuit Court
against Kellogg Company, Wright’s former employer, alleging
violation of the Employee Right to Know Act (ERKA), MCL
423.501 et seq., after Kellogg refused to release to Wright notes
from a grievance investigation that Kellogg conducted after
Wright filed a grievance concerning a disciplinary action against
him. The court, Allen L. Garbrecht, J., granted summary
disposition in favor of Kellogg, determining that the notes were
exempt from disclosure under ERKA. Wright appealed.
The Court of Appeals held:
1. The ERKA definition of a “personnel record” in MCL
423.501(2)(c) includes a record that identifies the employee and
“is used or has been used, or may affect or be used relative to
the employee’s qualifications for employment, promotion,
transfer, additional compensation, or disciplinary action.”
Records limited to grievance investigations that are kept sepa-
rately and are not used for those purposes are excluded under
MCL 423.501(2)(c)(vi) from the ERKA definition of “personnel
record” and are not available to employees under the act.
2. The five-step grievance process in this matter was a
systematic or official inquiry into the matter that fell within the
plain meaning of the words “grievance investigations” in MCL
423.501(2)(c)(vi). The process was limited in scope and was not
used for original or new actions related to an employee’s
qualifications for employment, promotion, transfer, additional
compensation, or disciplinary action. The notes from the griev-
ance investigation of a disciplinary action fall within the
exclusion from the definition of “personnel record.” The trial
court did not err by granting summary disposition in Kellogg’s
favor on the basis of the grievance-investigation exclusion to the
definition of a personnel record.
Affirmed.
2010] W
RIGHT V
K
ELLOGG
C
O
63
M
ASTER AND
S
ERVANT —
E
MPLOYEE
R
IGHT TO
K
NOW
A
CT —
W
ORDS AND
P
HRASES —
P
ERSONNEL
R
ECORDS —
G
RIEVANCE
I
NVESTIGATIONS.
The Employee Right to Know Act excludes from the definition of
“personnel record” records limited to grievance investigations that
are kept separately and are not used relative to an employee’s
qualifications for employment, promotion, transfer, additional
compensation, or disciplinary action; a “grievance investigation” is
a systematic or official inquiry into a grievance that is not used for
original or new actions related to an employee’s qualifications for
employment, promotion, transfer, additional compensation, or
disciplinary action, so notes from a grievance investigation of a
disciplinary action fall within the grievance-investigation exclu-
sion (MCL 423.501[2][c][vi]).
Silverman, Smith & Rice, P.C. (by Robert W. Smith),
for plaintiff.
Miller Johnson (by Craig H. Lubben) for defendant.
Before: S
AWYER
,P.J., and B
ANDSTRA
and W
HITBECK
,JJ.
P
ER
C
URIAM.
Plaintiff, Dennis Wright, appeals as of
right from the trial court’s order granting summary
disposition in favor of defendant, Kellogg Company, and
dismissing Wright’s claim for a violation of the Em-
ployee Right to Know Act (ERKA).
1
We affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
Wright was a Kellogg employee for 35 years before
retiring in 2005. In November 2002, Wright received a
disciplinary action that included a 34-day suspension.
After the suspension, Wright filed a grievance concern-
ing the disciplinary action.
Wright was not satisfied with the grievance process
and later requested copies of his personnel records
related to the grievance procedure. On June 7, 2005,
1
MCL 423.501 et seq.
64 289 M
ICH
A
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63 [June
Kellogg’s human resources manager, Keith Sutton,
wrote a letter stating that the requested documents
were company property and not provided to employees.
On March 21, 2007, Wright’s then attorney wrote a
letter requesting Wright’s employment file. Heather
Hudson, counsel for Kellogg, responded in an e-mail
dated March 28, 2007. She stated that Kellogg had
previously sent Wright’s personnel record to another
attorney on behalf of Wright and that a follow-up
request asked for notes from grievance meetings or
other notes that management kept. According to
Hudson, ERKA did not require such notes to be
included with the personnel record and, therefore,
Kellogg did not release them. Wright then filed this
lawsuit claiming that Kellogg’s refusal to release
those notes with his personnel record was a violation
of ERKA.
Kellogg moved for summary disposition on both
procedural and substantive grounds. Procedurally,
Kellogg claimed that Wright’s complaint was im-
proper because he did not follow ERKA’s procedural
steps to first review his file and then ask for copies of
it. Substantively, Kellogg claimed that, under the
statutory definition of “personnel record,” the notes
from the grievance proceedings were not part of the
personnel record and therefore Kellogg did not have
to release the notes to Wright.
The trial court determined that the procedural
argument was moot and that Kellogg had waived the
argument because it did in fact provide Wright with a
copy of his personnel record. On the substantive
issue, the trial court determined that the notes “are
records maintained by management separately from
these grievance hearings, and...there’s no evidence
that they’ve been used as a part of any disciplinary
2010] W
RIGHT V
K
ELLOGG
C
O
65
action, and therefore they are exempt from disclo-
sure.” The trial court therefore granted Kellogg’s
motion for summary disposition. Wright now appeals.
(We note that Kellogg has not filed a cross-appeal
related to the trial court’s decision on the procedural
argument, and therefore this issue is not before us.)
II. INTERPRETING ERKA
A. STANDARD OF REVIEW
Wright argues that notes taken during a grievance
proceeding are considered personnel records for pur-
poses of ERKA and are not subject to exemption under
MCL 423.501(2)(c)(vi)or(viii). We review de novo a
trial court’s decision on a motion for summary disposi-
tion.
2
We also review de novo questions of statutory
interpretation.
3
B. STATUTORY PROVISIONS
ERKA defines “personnel record” as follows:
“Personnel record” means a record kept by the employer
that identifies the employee, to the extent that the record
is used or has been used, or may affect or be used relative
to that employee’s qualifications for employment, promo-
tion, transfer, additional compensation, or disciplinary ac-
tion. A personnel record shall include a record in the
possession of a person, corporation, partnership, or other
association who has a contractual agreement with the
employer to keep or supply a personnel record as provided
in this subdivision. A personnel record shall not include:
***
2
McDonald v Farm Bureau Ins Co, 480 Mich 191, 196; 747 NW2d 811
(2008).
3
Bronson Methodist Hosp v Allstate Ins Co, 286 Mich App 219, 223; 779
NW2d 304 (2009).
66 289 M
ICH
A
PP
63 [June
(vi) Records limited to grievance investigations which
are kept separately and are not used for the purposes
provided in this subdivision.
***
(viii) Records kept by an executive, administrative, or
professional employee that are kept in the sole possession
of the maker of the record, and are not accessible or shared
with other persons. However, a record concerning an
occurrence or fact about an employee kept pursuant to this
subparagraph may be entered into a personnel record if
entered not more than 6 months after the date of the
occurrence or the date the fact becomes known.
[
4
]
C. LEGAL STANDARDS
The main objective in interpreting a statute “is to
ascertain and give effect to the Legislature’s intent.”
5
When the Legislature does not define words, we are to
give them their plain and ordinary meaning.
6
“[W]here
a statute contains a specific statutory provision and a
related, but more general, provision, the specific one
controls.”
7
[T]he purpose of the ERKA is to establish an individual
employee’s right to examine the employee’s personnel
records, i.e., the documents that are being kept by the
employer concerning that employee. In the ERKA, the term
“personnel record” is generally defined, but certain materials
and information are identified that are excluded from the
definition, and are not available to the employee.
[
8
]
4
MCL 423.501(2)(c).
5
Wolverine Power Supply Coop, Inc v Dep’t of Environmental Quality,
285 Mich App 548, 558; 777 NW2d 1 (2009) (quotation marks and citation
omitted).
6
Id.
7
Id. at 559 (quotation marks and citation omitted).
8
Newark Morning Ledger Co v Saginaw Co Sheriff, 204 Mich App 215,
221; 514 NW2d 213 (1994).
2010] W
RIGHT V
K
ELLOGG
C
O
67
D. MCL 423.501(2)(c)(vi) OF ERKA
As set out earlier in this opinion, the general
statutory definition of “personnel record” in ERKA
includes a record that identifies the employee and “is
used or has been used, or may affect or be used
relative to that employee’s...disciplinary action.”
9
MCL 423.501(2)(c)(vi) excludes one subset of materials
and information from the general definition: “[r]ecords
limited to grievance investigations which are kept sepa-
rately and are not used for the purposes provided in this
subdivision.”
10
Therefore, these materials and informa-
tion are not available to employees.
Wright argues that the proceeding in question was
not a grievance “investigation,” but was a process of
appealing a disciplinary action. Therefore, he asserts,
whatever action Kellogg took was necessarily related to
a disciplinary action. Thus, according to Wright, all
notes associated with the disciplinary action at every
stage are part of his personnel record.
Black’s Law Dictionary defines “investigate” as “[t]o
inquire into (a matter) systematically” or “[t]o make an
official inquiry.”
11
It follows then that an investigation
is a systematic inquiry or an official inquiry. The
grievance process in this case was a five-step process
following Wright’s grievance over Kellogg’s disciplinary
actions. This five-step process was a systematic or
official inquiry into the matter and therefore falls with
the plain meaning of the words “grievance investiga-
tions.”
12
9
MCL 423.501(2)(c).
10
MCL 423.501(2)(c)(vi).
11
Black’s Law Dictionary (7th ed), p 830.
12
See Wolverine, 285 Mich App at 558.
68 289 M
ICH
A
PP
63 [June
Further, the exclusion for grievance-investigation
records is a specific statutory provision that controls
only the grievance process, as opposed to original disci-
plinary actions.
13
The grievance-investigation process is
limited in scope and is not used for original or new
actions related to an “employee’s qualifications for
employment, promotion, transfer, additional compensa-
tion, or disciplinary action.”
14
Therefore, notes from the
grievance investigation of a disciplinary action fall
within the exclusion under MCL 423.501(2)(c)(vi).
We note that Wright’s interpretation of the statute
would render the exclusion under MCL 423.501(2)(c)(vi)
virtually meaningless because a grievance of any item
listed in the general definition of “personnel record”
would not fall within the exclusion, thereby limiting the
exclusion only to grievances of issues already outside the
definition of “personnel record.”
E. MCL 423.501(2)(c)(viii) OF ERKA
Given our conclusions with respect to MCL
423.501(2)(c)(vi) of ERKA, we need not address Wright’s
arguments with respect to MCL 423.501(2)(c)(viii).
III. CONCLUSION
We affirm the trial court’s order granting summary
disposition in favor of Kellogg on the basis of the MCL
423.501(2)(c)(vi) grievance-investigation exclusion to
ERKA’s definition of “personnel record.”
13
See MCL 423.501(2)(c)(vi).
14
MCL 423.501(2)(c).
2010] W
RIGHT V
K
ELLOGG
C
O
69
D’ANDREA v AT&T MICHIGAN
Docket No. 288483. Submitted May 11, 2010, at Detroit. Decided June 29,
2010, at 9:00 a.m.
Eugene D’Andrea and Gina Liverpool, owners of a lot in a platted
subdivision in the city of Grosse Pointe Farms, brought an
action in the Wayne Circuit Court against AT&T Michigan,
alleging that defendant’s installation in 2005 of certain addi-
tional equipment on or in a six-foot easement for public utilities
on plaintiffs’ lot materially increased the burden on their
property and constituted a continuing trespass. Defendant
moved for summary disposition, noting that all the equipment
was installed within the confines of the easement and in
accordance with building permits issued by the city and Wayne
County. Defendant further maintained that the equipment was
lawfully placed in accordance with the Land Division Act (LDA),
MCL 560.101 et seq., which does not limit the amount or the size
of the equipment that defendant can install. The court, Kath-
leen Macdonald, J., agreed with defendant and granted its
motion for summary disposition. Plaintiffs appealed.
The Court of Appeals held:
The LDA does not address the rights and limitations of
defendant’s development of the utility easement in this case.
None of the provisions of the LDA addresses to what extent a
utility may develop or build on a public utility easement placed
on a subdivision lot. The trial court erred by dismissing the
trespass claim on the basis of the LDA. The trial court also erred
by granting summary disposition on the basis that defendant
obtained building permits because defendant failed to establish
that the city and the county had the legal authority to decide on
the nature, size, or scope of the equipment that a utility may
install in an easement or actually considered those questions
when they issued the permits. The order of summary disposition
must be reversed, and the matter must be remanded to the trial
court for further proceedings.
Reversed and remanded.
70 289 M
ICH
A
PP
70 [June
1. E
ASEMENTS —
T
RESPASS
.
Activities by the owner of the dominant estate that go beyond the
reasonable exercise of the use granted by an easement may
constitute a trespass to the owner of the servient estate.
2. E
ASEMENTS —
L
AND
D
IVISION
A
CT —
P
UBLIC
U
TILITY
E
ASEMENTS —
U
SE OF
P
UBLIC
U
TILITY
E
ASEMENTS
.
The Land Division Act does not define the extent to which a public
utility may use an easement for public utilities dedicated under the
act (MCL 560.190).
Richard R. Scarfone, P.C. (by Richard R. Scarfone),
for plaintiffs.
Albert Calille for defendant.
Before: S
AAD
,P.J., and H
OEKSTRA
and S
ERVITTO
,JJ.
S
AAD
,P.J. Plaintiffs appeal the trial court’s order that
granted summary disposition to defendant, AT&T
Michigan. For the reasons set forth in this opinion, we
reverse and remand for further proceedings consistent
with this opinion.
I. FACTS
Plaintiffs contend that AT&T’s installation of new
and additional utility equipment on an easement on
their property, a private residence in the city of Grosse
Pointe Farms, constitutes a continuing trespass. The lot
on which plaintiffs reside is part of a platted subdivision
that was recorded in 1948. The plat shows a dedication
of a six-foot “Easement for Public Utilities” at the back
of plaintiffs’ lot. In the 1970s, AT&T installed a “cross-
box cabinet” on the easement. In 2005, AT&T replaced
that cabinet with a new one and also added an addi-
tional aboveground cabinet and an underground cabi-
net. AT&T placed the aboveground cabinets on a con-
2010] D’A
NDREA V
AT&T M
ICH
71
crete slab and planted bushes around the site, but
declined plaintiffs’ request to move the cabinets off
their property.
In their complaint, plaintiffs alleged that AT&T’s
installation of the new cabinets in the utility easement
materially increased the burden on their property be-
cause the new cabinets are much larger and, thus,
further reduced plaintiffs’ useable backyard area by
almost half, and thereby diminished the market value of
the property. In its motion for summary disposition,
AT&T responded that plaintiffs cannot establish a
trespass claim because the cabinets were installed
within the confines of the utility easement. AT&T
further maintained that the easement was lawfully
dedicated in accordance with the Land Division Act
(LDA), MCL 560.101 et seq., and that the LDA does not
limit the number or size of utility cabinets AT&T may
install. AT&T also argued that its use of the easement
is lawful because the city of Grosse Pointe Farms and
Wayne County approved the installation of the equip-
ment by issuing building permits for the work. The trial
court agreed with AT&T’s arguments and explained:
I think this case is governed by the Land Division Act,
and it has its own limitations and rights of public utilities
to use this area as they need to. In addition to that, they got
permits, which I think also—I agree with you, that resolves
the issue of reasonableness. I don’t think that you would
get a permit to erect a ten foot structure. So your motion is
granted.
II. ANALYSIS
1
Though AT&T installed the equipment within the
confines of the utility easement, plaintiffs claim that
1
We review a trial court’s grant of a motion for summary disposition de
novo. Beattie v Mickalich, 284 Mich App 564, 569; 773 NW2d 748 (2009).
72 289 M
ICH
A
PP
70 [June
AT&T overburdened the easement and thus committed
a trespass on their private property. “A trespass is an
unauthorized invasion upon the private property of
another.” American Transmission, Inc v Channel 7 of
Detroit, Inc, 239 Mich App 695, 705; 609 NW2d
607 (2000). Our courts have held that “[a]ctivities by
the owner of the dominant estate that go beyond the
reasonable exercise of the use granted by the easement
may constitute a trespass to the owner of the servient
estate.” Schadewald v Brulé, 225 Mich App 26, 40; 570
NW2d 788 (1997).
2
As this Court explained in Anglers of
the AuSable, Inc v Dep’t of Environmental Quality, 283
Mich App 115, 129-130; 770 NW2d 359 (2009):
“[T]he use of an easement must be confined strictly to
the purposes for which it was granted or reserved.” [Black-
hawk Dev Corp v Village of Dexter, 473 Mich 33, 41; 700
NW2d 364 (2005)] (quotation marks and citation omitted).
Not surprisingly, these purposes are determined by the text
of the easement. Little v Kin, 468 Mich 699, 700; 664 NW2d
749 (2003) (Little II). “Where the language of a legal
instrument is plain and unambiguous, it is to be enforced
as written and no further inquiry is permitted. If the text of
the easement is ambiguous, extrinsic evidence may be
considered by the trial court in order to determine the
scope of the easement.” Id. (citation omitted).
Here, the language of the easement itself provides little
guidance with regard to whether AT&T may place
Summary disposition under MCR 2.116(C)(10) is proper when there is no
genuine issue regarding any material fact and the moving party is
entitled to judgment as a matter of law. West v Gen Motors Corp, 469 Mich
177, 183; 665 NW2d 468 (2003). Our Supreme Court has also held that
“[w]hen construing the LDA, we are mindful that our primary goal is to
ascertain and give effect to the Legislature’s intent.” Tomecek v Bavas,
482 Mich 484, 495-496; 759 NW2d 178 (2008).
2
The land served or benefited by an easement is called the dominant
estate and the land burdened by an easement is called the servient estate.
Schadewald, 225 Mich App at 36.
2010] D’A
NDREA V
AT&T M
ICH
73
additional equipment within its confines; the grant
merely states that it is an “Easement for Public Utili-
ties.”
AT&T contends, and the trial court ruled, that plain-
tiffs failed to establish a trespass because AT&T was
authorized to place equipment within the utility ease-
ment pursuant to the LDA. We disagree that the LDA
addresses the rights and limitations of AT&T’s devel-
opment of the utility easement in this case.
Were we to hold that the LDA applies, the LDA
simply does not address the issues raised by plaintiffs.
The LDA states that utility easements in subdivision
plats must comply with certain size and location re-
quirements (not applicable here), and the statute sets
forth limited guidelines with regard to how the ease-
ments may be used. MCL 560.139; MCL 560.190. How-
ever, these provisions merely state that public utility
easements must be equitably shared among the public
utilities, and the statute limits the uses servient prop-
erty owners may make of a utility easement. None of
the provisions address to what extent a utility may
develop or build on a public utility easement placed on
a subdivision lot. AT&T argues that the limited nature
of the guidelines, i.e., their silence on this point, sug-
gests that the Legislature intended that utilities have
the unfettered right to place equipment within a utility
easement, but nothing in the statute indicates that
MCL 560.190 was intended to define the extent to
which a public utility may use an easement. An appel-
late court cannot, and we will not, speculate about the
Legislature’s “intent beyond those words expressed in
the statute.” Lash v Traverse City, 479 Mich 180, 194;
735 NW2d 628 (2007). Moreover, we decline to infringe
on the private property rights of a landowner through
unsupported implication, particularly when there is a
74 289 M
ICH
A
PP
70 [June
complete absence of any legislative intent in the LDA to
give a public utility free reign to build on an easement
as it pleases. Because MCL 560.190 is simply silent on
the matter and cannot reasonably be construed to set
forth the rights or duties of AT&T with regard to its use
of the easement, we hold that the trial court erred when
it dismissed plaintiffs’ trespass claim on the basis of the
LDA.
We further hold that the trial court erred when it
granted summary disposition to AT&T on the ground
that AT&T obtained building permits from the city of
Grosse Pointe Farms and Wayne County before it placed
the additional crossbox cabinets on the easement. The
trial court ruled that the city and county would only
have issued building permits for “reasonable” construc-
tion within the easement and that this defeats plain-
tiffs’ trespass claim. However, AT&T provided no legal
basis, facts, or documentary evidence to establish that
the city or county has the legal authority to decide on
the nature, size, or scope of equipment a utility may
install in a utility easement or whether the city or
county actually considers those questions when it issues
a building permit. MCR 2.116(G)(3)(b). Therefore, this
part of the trial court’s ruling is unsupported by any
legal authority or evidence. Accordingly, it was error for
the trial court to dismiss plaintiffs’ trespass claim on
this basis.
Reversed and remanded for further proceedings con-
sistent with this opinion.
3
We do not retain jurisdiction.
3
Plaintiffs contend that they had an agreement with AT&T to con-
tinue discovery after AT&T filed its motion for summary disposition. The
trial court should address this matter on remand.
2010] D’A
NDREA V
AT&T M
ICH
75
McNEEL v FARM BUREAU GENERAL INSURANCE COMPANY
OF MICHIGAN
Docket No. 285008. Submitted September 9, 2009, at Grand Rapids.
Decided June 29, 2010, at 9:05 a.m.
Kathleen McNeel, individually, and Wakelin McNeel, as trustee of
the Kathleen McNeel Revocable Living Trust, brought an action in
the Mecosta Circuit Court on October 5, 2004, against Farm
Bureau General Insurance Company of Michigan, the insurer of a
house purchased by Kathleen and transferred to the trust that was
destroyed by fire on March 18, 2003. Defendant had investigated
the loss and had determined that the loss was not covered under
the policy’s increase-in-hazard provision, which provided that
defendant was not liable for losses occurring while the building “is
vacant beyond a period of sixty consecutive days or is unoccupied
beyond a period of six consecutive months.” Defendant claimed
that “nobody had lived in the house as a domicile since November
2001.” Between April 2003 and October 14, 2003, a series of letters
were exchanged and at least one meeting occurred between the
parties. In April 2003, defendant denied coverage. That denial was
withdrawn in a May 22, 2003, letter. A second formal denial was
communicated in a June 26, 2003, letter. Following further com-
munication, defendant indicated on October 14, 2003, that it
would continue its denial. Defendant moved for summary disposi-
tion on the basis that plaintiffs had failed to file their claim within
one year of the date that the claim was denied as required by the
policy and MCL 500.2833(1)(q). The court, Ronald C. Nichols, J.,
denied the motion, noting that there was a factual dispute with
regard to when the formal denial occurred. At the trial, defendant
abandoned the issue of when the formal denial occurred, present-
ing no evidence on the issue and making no request that the jury
determine the issue. The jury returned a verdict for plaintiffs,
concluding that the house had not been vacant at least 60
consecutive days before the loss and that it had been occupied at
least six consecutive months before the date of the fire. The court
issued a judgment for plaintiffs on the verdict. Plaintiffs moved for
case-evaluation sanctions, interest, and costs. The court deter-
mined that defendant’s denial was reasonable, but also concluded
that the decision in Griswold Props, LLC v Lexington Ins Co, 276
76 289 M
ICH
A
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Mich App 551 (2007), applied retroactively. Under Griswold,a
first-party insured is entitled to 12 percent penalty interest if a
claim is not timely paid, irrespective of whether the claim is
reasonably in dispute. Therefore, the court, in an amended opinion
and order, awarded 12 percent interest on $54,500 of the $69,500
judgment on the verdict retroactively beginning on July 13, 2003,
which was 60 days after the proof of loss was filed, with the
remainder of the award subject to interest accrued from the date of
the complaint. The court also granted plaintiffs attorney fees for
43 hours at $150 an hour. Defendant appealed and plaintiffs
cross-appealed.
The Court of Appeals held:
1. Defendant waived its affirmative statute-of-limitations de-
fense at trial by not seeking a jury finding regarding when the
formal denial occurred and by failing to present any evidence at
trial that the denial occurred anytime other than on October 14,
2003. This waiver, however, did not waive defendant’s right to
appeal the denial of its motion for summary disposition. Although
defendant waived any complaint of error on the issue at trial,
defendant could still argue on appeal that the trial should not have
occurred because the trial court improperly denied summary
disposition on the issue. Therefore, a proper issue on appeal was
whether the trial court correctly held that there was an outstand-
ing question of fact material to the determination of when the
formal denial that stopped the tolling under MCL 500.2833(1)(q)
occurred.
2. The trial court did not err by determining that there was a
question of fact regarding when the formal denial occurred. The
court considered an affidavit of plaintiffs’ representative stating
that, in a meeting on October 10, 2003, defendant’s representative
indicated that he would consider the claim in light of documents to
be submitted and would only make a decision about whether the
claim would be denied after he had done so. Although it is
reasonable to construe defendant’s representative’s subsequent
letter on October 14, 2003, and his affidavit in response to the
affidavit of plaintiffs’ representative as evidence of an unbroken
denial since June 2003, the affidavit of plaintiffs’ representative
created an inference that defendant again withdrew its formal
denial while it reinvestigated the claim and sent a subsequent
denial on October 14, 2003. The trial court properly left it up to the
jury to determine whether defendant’s representative made the
comments attributed to him in the affidavit of plaintiffs’ represen-
tative and whether those comments constituted a withdrawal of
defendant’s previous formal denial that was followed by a new
formal denial.
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3. The trial court’s jury instruction regarding the definition of
the term “unoccupied,” which was not defined in the policy, was
proper. While a dictionary defines “occupy” as “to live in,” “unoc-
cupied” as “[n]ot occupied,” and “vacant” as “[h]olding nothing:
empty,” the definitions together indicate that “unoccupied” means
“not lived in.” The instruction properly informed the jury that it
had to determine whether the house had not been lived in for more
than six consecutive months.
4. Because (1) the Griswold Court retroactively applied its
decision to the three consolidated cases before it and at least one
subsequent panel of the Court of Appeals determined the decision
to be retroactive, (2) the law that was overturned in Griswold
cannot be considered clear and uncontradicted, and (3) the factors
for prospective-only application set forth in Paul v Wayne Co Dept
of Pub Serv, 271 Mich App 617, 621 (2006), weigh in favor of
retroactive application, the trial court properly concluded that
Griswold applied retroactively to this case.
5. The record did not support the trial court’s determination
that plaintiffs’ counsel overbilled his hours by 46 percent. There-
fore, the court’s reduction based on that calculation was errone-
ous. Plaintiffs’ counsel’s billing records were legally sufficient, his
testimony supported his claims of the time spent, and no contrary
evidence was presented. The trial court abused its discretion in its
determination of reasonable attorney fees. The part of the judg-
ment that awarded attorney fees must be reversed and the matter
must be remanded for a new award of attorney fees.
Affirmed in part, reversed in part, and remanded.
K. F. K
ELLY
, J., dissenting, stated that there was no question of
material fact that defendant formally denied plaintiffs’ claim on
June 26, 2003. Under the plain and unambiguous language of
MCL 500.2833(1)(q), an insured must bring his or her claim within
one year after the insurer formally denies liability. The trial court
erred by denying defendant’s motion for summary disposition
because there was no dispute on the record that plaintiffs’ claim
had been formally denied in June 2003 and plaintiffs did not file
their complaint until well after June 2004. The affidavit by
plaintiffs’ representative did not create a question of fact regard-
ing when defendant formally denied plaintiffs’ claim. The parties’
further discussions and plaintiffs’ submissions of additional infor-
mation and requests to reconsider the denial did not operate to
rescind defendant’s June 26, 2003, formal denial. The majority
wrongly invoked the doctrine of judicial tolling, which the Su-
preme Court has explicitly rejected. The judgment and order of the
trial court should be reversed.
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I
NSURANCE —
P
ENALTY
I
NTEREST —
O
PINIONS BY
A
PPELLATE
C
OURTS —
R
ETROAC-
TIVE
A
PPLICATION OF
O
PINIONS
.
The decision in Griswold Props, LLC v Lexington Ins Co, 276 Mich
App 551 (2007), which held that a first-party insured is entitled to
12 percent penalty interest if a claim is not timely paid, irrespec-
tive of whether the claim is reasonably in dispute, applies retro-
actively.
Fabian, Sklar & King, P.C. (by Douglas G. McCray)
(Donald M. Fulkerson, of counsel), for plaintiffs.
Hopkins, Yeager & Smith, P.C. (by Scott E. Pederson
and E. Frederick Davison), for defendant.
Before: M. J. K
ELLY
,P.J., and K. F. K
ELLY
and S
HAPIRO
,
JJ.
S
HAPIRO
, J. This insurance-coverage dispute stems
from a fire on March 18, 2003, that completely de-
stroyed a farmhouse owned by the Kathleen McNeel
Revocable Living Trust (the Trust). Defendant appeals
as of right the trial court’s order granting plaintiffs the
$69,500 jury award, interest of $37,259.78 pursuant to
MCL 500.2006, and case-evaluation sanctions of
$19,818.34, and plaintiffs cross-appeal. We affirm the
part of the judgment based on the jury’s verdict, but
reverse the part of the judgment regarding attorney
fees and remand for entry of an order consistent with
this opinion.
I. BACKGROUND AND PROCEEDINGS
The property at issue, located at 10981 W. River
Road, Remus, Michigan (the Bundy farmhouse), was
purchased by Kathleen McNeel in the 1970s and trans-
ferred to the Trust in 1993. Defendant issued an
insurance policy to Kathleen McNeel, with the Trust as
an additional insured, covering three dwellings and
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their contents, including the Bundy farmhouse, which
policy was in effect when the Bundy farmhouse was
destroyed by arson
1
on March 18, 2003. Defendant
investigated the loss and determined that the loss was
not covered under the policy because “nobody had lived
in the house as a domicile since November 2001.”
Under the “Increase in Hazard” provision, the policy
provided that defendant was not liable for losses occur-
ring “[w]hile a described building, whether intended for
occupancy by owner or tenant, is vacant beyond a
period of sixty consecutive days or is unoccupied beyond
a period of six consecutive months.”
In April 2003, plaintiffs hired Stewart Shipper, a
public adjuster, to help them with their claim. In an
April 17, 2003, letter, Kathy Macdonald, defendant’s
adjuster, stated that she had spoken with members of
the McNeel family and they had indicated that no one
had resided in the dwelling for approximately 18
months and that there was no furniture in the
dwelling. The letter concluded, “[d]ue to the above we
are denying coverage for this claim.” Shipper re-
sponded with a May 12, 2003, letter stating that
members of the family disputed Macdonald’s state-
ments regarding residency, and he included a list of
personal property that was in the home at the time of
the fire. He concluded by stating that “your denial of
the claim is wrongful” and asking her to “reconsider
your denial and contact me for discussion of an
adjustment and payment by Farm Bureau Insur-
ance.” In a separate letter of the same date, Shipper
also sent in calculations of actual cash value. On May
13, 2003, Shipper submitted a “Sworn Statement in
1
The cause of the fire was “undetermined” because it could have been
accidental or suspicious. It was thought to have been set by a serial
arsonist in the area.
80 289 M
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Proof of Loss” signed by Wakelin McNeel, trustee of
the Kathleen McNeel Revocable Living Trust.
In a letter dated May 22, 2003, Macdonald stated: “In
response to your letter of May 12, 2003 we are continu-
ing our investigation into this matter. As soon as we
have completed this investigation we will be in contact
with you to discuss your client’s claim further.” On the
same date, Macdonald sent another letter, noting that
the sworn proof of loss was incomplete and that the
insured had to remedy this error within 15 days. The
letter stated in bold print, “This is not a denial of
your claim but rather a rejection of the Proof of
Loss which was incorrectly completed.” Shipper
timely resubmitted the information.
On June 16, 2003, Shipper wrote to Macdonald
stating:
I am following up on the telephone messages that I left
you on June 9th, June 13th and most recently, this morn-
ing. In your correspondence of May 12, 2003, you indicated
that you are continuing your investigation into this matter.
Please advise when you will be ready to speak with us to
adjust the claim.
On June 26, 2003, Macdonald wrote to Shipper and
stated, “After careful review of this matter along with
additional investigation, we feel that we are justified in
our denial of the above claim.” The letter stated that it
was “Farm Bureau’s position” that the dwelling had
been unoccupied for 18 months, as substantiated by
relatives of the insured and a neighbor.
The following day, June 27, 2003, Shipper wrote to
Jason Babka, Macdonald’s claims supervisor. The letter
confirmed that Shipper had “contact[ed Babka] to try to
correct a wrongful denial of the Insured’s claim” and that
Shipper had “agreed to provide certain information which
reflects on the meaning of vacancy and unoccupancy.” The
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letter enclosed excerpts from two insurance texts and
concluded, “Please review and advise.”
On June 30, 2003, Babka wrote back to Shipper. The
letter quoted from the definitions of unoccupied in a
third source, Fire, Casualty and Surety Bulletins
(FC&S), and concluded, “Based on the definitions pro-
vided, our investigation, and the policy language under
the increase in hazard, we must again respectfully deny
the claim for fire damage to 10981 W. River Rd in
Remus, Michigan of March 18, 2003.”
On July 21, 2003, Shipper faxed a letter to Babka
requesting page citations for the cited text and stating
that “[y]ou have denied the Insured’s claim based on an
FC&S reference.” On the same date, Babka sent a
response stating that the claim was not denied on the
basis of an FC&S definition and that “[t]he claim was
denied based on the facts of the loss and our investiga-
tion, as well as the applicable policy language.”
On September 24, 2003, Shipper wrote another letter
to Babka, which stated:
I have reviewed Farm Bureau’s claim denial with the
Insured. I am writing to ask for an appointment with you
to discuss Farm Bureau’s refusal to respond to the claim.
The attorneys that I have spoken to state that the control-
ling issue will likely be a determination as to whether the
house was abandoned. You may or may not decide to
continue to deny the claim, but you should understand the
reasons the Insured believes that the house was occupied.
We can meet at your office or another agreeable location. I
would like to arrange the meeting as soon as possible
because, in the face of your denial, I must soon recommend
an attorney for the future handling of this matter.
The record does not contain a response, but on
October 10, 2003, Shipper and Babka did meet. Accord-
ing to an affidavit signed by Shipper, at the meeting
Babka
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requested that I obtain and send him utility bills for the
subject property (which would indicate that the power had
been on, contrary to what one would expect in a
vacant/abandoned property) and evidence of payment of
property tax bills (which again would illustrate that the
property was not vacant/abandoned).... Mr. Babka indi-
cated he would consider the claim in light of the requested
documents, once submitted, and would only make a deci-
sion as to whether or not the claim would be denied after he
had done so. [Underlining in original; paragraph structure
altered.]
Defendant filed a responsive affidavit signed by Babka.
It stated, “Farm Bureau never contradicted its initial
denial of Plaintiff’s [sic] claim, that Farm Bureau’s
position never changed from the initial denial and that
I never conveyed to Mr. Shipper otherwise.”
Following up from the meeting, Shipper sent a letter
and facsimilie on October 14, 2003, attaching utility
bills and property tax receipts that he asserted, along
with the contractor’s remodeling estimates, “are indica-
tive of an intent to continue to operate and occupy the
property.” Babka responded with a letter of the same
date stating:
I have carefully reviewed the additional documents you
have submitted regarding this claim. Our findings still
indicate that the house was both vacant and unoccupied, as
we have previously outlined in our correspondence of June
30, 2003 and June 26, 2003. Based on this, we must
respectfully continue to deny your client’s claim.
Plaintiffs filed their complaint against defendant in
the Mecosta Circuit Court
2
on October 5, 2004. In April
2005, defendant moved for summary disposition for
failure to file within one year of the date the claim was
2
Although the Bundy farmhouse is actually in Isabella County, halfway
through the first day of trial, defendant stipulated that venue was proper
in Mecosta County.
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formally denied. MCL 500.2833(1)(q).
3
Plaintiffs op-
posed the motion. At a hearing on June 17, 2005, the
trial court denied the motion, noting that there was a
factual dispute about when the formal denial occurred
and specifically referring to Shipper’s and Babka’s
affidavits.
At trial, defendant abandoned the issue of when the
formal denial occurred; defendant presented no evi-
dence on the issue and did not request that the jury
make a determination. The jury returned a verdict for
plaintiffs, concluding that the farmhouse had not been
vacant at least 60 consecutive days before the loss and
that it “was occupied at least six consecutive months
prior to the loss date....” It awarded $3,000 for
furnishings, $7,000 for other personal property, and
$15,000 for lost rents. The trial court issued a judgment
on the verdict for $69,500, reflecting the $50,000 policy
limit on the building, the $10,000 policy limit on lost
rents, $3,000 for landlord furnishings, the $2,500 policy
limit for other personal property, and $4,000 for the
stipulated debris removal.
Plaintiffs moved for case-evaluation sanctions, inter-
est, and costs. With regard to the interest claim, defen-
dant acknowledged this Court’s decision in Griswold
3
MCL 500.2833(1)(q) provides:
(1) Each fire insurance policy issued or delivered in this state
shall contain the following provisions:
***
(q) That an action under the policy may be commenced only
after compliance with the policy requirements. An action must be
commenced within 1 year after the loss or within the time period
specified in the policy, whichever is longer. The time for commenc-
ing an action is tolled from the time the insured notifies the insurer
of the loss until the insurer formally denies liability. [Emphasis
added.]
84 289 M
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Props, LLC v Lexington Ins Co, 276 Mich App 551, 554;
741 NW2d 549 (2007), but objected to the interest claim
on the basis of the prior caselaw in Arco Indus Corp v
American Motorists Ins Co (On Second Remand, On
Rehearing), 233 Mich App 143; 594 NW2d 74 (1998).
The trial court concluded that defendant’s denial was
reasonable, but also concluded that Griswold applied
retroactively and awarded 12 percent interest on the
$54,500 of the award. On the attorney-fee issue, the
trial court ultimately issued an opinion that granted
plaintiffs 43 hours at $150 an hour in attorney fees. It
assessed 12 percent interest on the $54,500 retroac-
tively beginning on July 13, 2003, with the remainder of
the award subject to interest accrued from the date of
the complaint. Defendant appealed, and plaintiffs cross-
appealed.
II. SUMMARY DISPOSITION
Defendant first argues that the trial court erred by
denying its motion for summary disposition because plain-
tiffs’ suit was untimely even with the extension under
MCL 500.2833(1)(q). Plaintiffs contend that defendant
has waived its right to claim that the complaint was
untimely by failing to raise the issue at trial, but that even
if the issue was preserved, there was evidence of a genuine
issue of material fact regarding when defendant “formally
denie[d]” plaintiffs’ claim, making the trial court’s denial
of summary disposition appropriate.
We review de novo motions for summary disposition,
taking the facts in the light most favorable to the nonmov-
ing party. Dressel v Ameribank, 468 Mich 557, 561; 664
NW2d 151 (2003). We review the record and the documen-
tary evidence, but do not make findings of fact or weigh
credibility. Taylor v Lenawee Co Bd of Co Rd Comm’rs,
216 Mich App 435, 437; 549 NW2d 80 (1996).
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We agree with plaintiffs that defendant waived its
affirmative statute-of-limitations defense at trial. Defen-
dant did not seek a jury finding regarding when the formal
denial occurred and failed to present any evidence at trial
that the denial occurred anytime other than October 14,
2003. The defense made a tactical decision not to argue
this issue to the jury and focused solely on whether the
policy provided coverage. However, this waiver did not
waive defendant’s right to appeal the trial court’s denial of
summary disposition. Although defendant waived any
complaint of error on this issue at trial, defendant may
still argue on appeal that the trial should never have
occurred because the trial court improperly denied sum-
mary disposition on the issue. Thus, the issue is whether
the trial court was correct that there was an outstanding
question of fact material to the determination of when the
formal denial that stopped the tolling under MCL
500.2833(1)(q) occurred.
Given the language of the letters, we agree with
plaintiffs that the April 2003 denial was withdrawn by
the May 22, 2003, letters stating that “[t]his is not a
denial of your claim” and that “we are continuing our
investigation into this matter.” (Bold print omitted.)
However, we conclude that a second formal denial did
occur later. On June 26, 2003, Macdonald wrote to
Shipper and stated that “we feel that we are justified in
our denial of the above claim.” In his letter to Babka,
Shipper acknowledged the denial by stating that he was
attempting to “correct a wrongful denial....” The
subsequent correspondence back and forth between the
parties continued to mention a denial: “we must again
respectfully deny the claim”; “[y]ou have denied the
Insured’s claim”; “[t]he claim was denied”; “I have
reviewed Farm Bureau’s claim denial with the In-
sured”; and “[y]ou may or may not decide to continue to
deny the claim....”
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However, we do not believe that the trial court erred
by determining that there was a question of fact given
Shipper’s affidavit stating that he wrote Babka on
September 24, 2003, requesting a meeting and that the
two of them met on October 10, 2003. According to
Shipper’s affidavit, “Babka indicated he would consider
the claim in light of the requested documents, once
submitted, and would only make a decision as to
whether or not the claim would be denied after he had
done so.” (Emphasis added; underlining in original.)
The trial court properly concluded that this evidence
created a question of material fact about when the
formal denial occurred. Although it is reasonable to
construe Babka’s letter on October 14, 2003, and his
affidavit responding to the Shipper affidavit as evidence
of an unbroken denial since June 2003, Shipper’s affi-
davit presents evidence that creates a different
inference—that defendant again withdrew its formal
denial while it reinvestigated the claim. This inference
is even more reasonable considering defendant’s prior
course of conduct, having once before withdrawn a
denial of the claim. Taking this evidence in the light
most favorable to plaintiffs, Dressel, 468 Mich at 561,
Shipper’s affidavit and defendant’s previous with-
drawal of its formal denial provided sufficient evidence
to create a question of fact regarding whether Babka’s
alleged comments at the meeting with Shipper consti-
tuted another withdrawal of the denial, with a subse-
quent denial on October 14, 2003. The trial court
properly left it up to a jury to determine whether Babka
made the comments attributed to him in Shipper’s
affidavit and whether those comments constituted a
withdrawal of defendant’s previous formal denial fol-
lowed by a new formal denial. Accordingly, we conclude
that the trial court properly denied defendant’s motion
for summary disposition. This question was properly
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held for a jury determination, and defendant elected to
waive that determination.
4
We find no error.
III. OCCUPANCY
Defendant next argues that the trial court’s jury
instruction regarding occupancy was erroneous and
that the following instruction should have been given:
“One must consistently or habitually live there as a
customary and usual dwelling place or place of abode or
place of habitation. Mere supervision and periodic
checking or overnight visitations or storage or furniture
is not enough to satisfy an occupancy.” However, this
4
Despite the defense’s decision not to submit the issue to the jury,
defendant’s witnesses and counsel made several statements at trial that
seem inconsistent with its claim that the June denial remained in effect.
Although these statements are not relevant to our review of the summary
disposition ruling because they occurred after that ruling, defendant does
appear to have been trying to have it both ways. On the one hand, when
it moved for summary disposition, it argued to the court that it was
beyond question that the claim had been formally denied before October.
On the other hand, defendant sought to gain a tactical advantage at trial
by repeatedly telling the jurors, in an apparent appeal to their sense of
fair play, that the company had gone so far as to keep the claim open
through October.
Defense counsel argued in his opening statement that Babka “kept
this claim open...forreview for a period of April, 2003, to October of
2003” and later reiterated that Babka “kept it open for six months”
because he “wanted to be fair.” During trial, Macdonald testified that it
was her understanding that the claim was kept open until October of
2003. Babka testified that the reserve on the claim was not closed until
October 29, 2003, and that when that was done, the denial was a done
deal and he was not going back on the denial. Finally, in defendant’s
closing argument, counsel stated that Babka spent five months, i.e.,
through October, going over things with Shipper and that after that time
“those two agreed to disagree.”
We do not conclude that these statements constituted judicial admis-
sions. See Ortega v Lenderink, 382 Mich 218, 222-223; 169 NW2d 470
(1969). However, we do question whether the defense would have taken
this position at trial if the jury had in fact been permitted to decide the
date of formal denial.
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definition was never presented to the trial court. In-
deed, the definitions requested by defendant were en-
tirely different. Defendant’s trial brief defined “unoc-
cupied” as “ROUTINELY DEVOID OF HUMAN
PRESENCE.” (Bold print in original.) Defendant’s
proposed jury instructions stated, “[u]noccupied: means
not routinely characterized by the presence of human
beings, or nobody is living there.” Obviously, there was
no error in the trial court’s failure to give an instruction
that was never requested. Nevertheless, defendant ex-
pressed a general objection to the instruction. The
question becomes what standard of review applies to
this issue.
MCR 2.516(C) provides, “A party may assign as error
the giving of or the failure to give an instruction only if
the party objects on the record before the jury retires to
consider the verdict . . . , stating specifically the matter
to which the party objects and the grounds for the
objection.” Here, the entire objection was “we’re going
to go with the one jury instruction with respect to
occupancy. However, both of us have some misgivings
about it and each of us wants to preserve our right to, I
guess, contest it after the fact depending on who wins.”
Because the rule requires the objecting party to specifi-
cally state the grounds for the objection on the record,
and the record in this case lacks any statement of
grounds for the objection, this issue is unpreserved.
Accordingly, our review is for plain error affecting
defendant’s substantial rights. Hilgendorf v St John
Hosp & Med Ctr Corp, 245 Mich App 670, 700; 630
NW2d 356 (2001).
The trial court instructed the jury:
In determining whether the [Bundy] farmhouse was
vacant or unoccupied before the fire loss as alleged in this
case, you are instructed to use the following definitions:
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Vacant means the residence was completely empty and
was—and has insignificant furnishings or property to
support its intended purpose as a rental property.
Unoccupied. Unoccupied means operations or other
activities in the building are suspended but contents re-
main in the building and [sic] is not being lived in for a
period of six consecutive months.
Defendant argues on appeal that the definition of
“unoccupied” is improper. Because “unoccupied” is a
term used in the insurance policy, the question is one of
contract interpretation.
“[I]n reviewing an insurance policy dispute we must
look to the language of the insurance policy and inter-
pret the terms therein in accordance with Michigan’s
well-established principles of contract construction.”
Henderson v State Farm Fire & Cas Co, 460 Mich 348,
353-354; 596 NW2d 190 (1999).
First, an insurance contract must be enforced in accor-
dance with its terms. A court must not hold an insurance
company liable for a risk that it did not assume. Second, a
court should not create ambiguity in an insurance policy
where the terms of the contract are clear and precise. Thus,
the terms of a contract must be enforced as written where
there is no ambiguity.
While we construe the contract in favor of the insured if
an ambiguity is found, this does not mean that the plain
meaning of a word or phrase should be perverted, or that a
word or phrase, the meaning of which is specific and well
recognized, should be given some alien construction merely
for the purpose of benefiting an insured. The fact that a
policy does not define a relevant term does not render the
policy ambiguous. Rather, reviewing courts must interpret
the terms of the contract in accordance with their com-
monly used meanings. Indeed, we do not ascribe ambiguity
to words simply because dictionary publishers are obliged
to define words differently to avoid possible plagiarism. [Id.
at 354 (citations omitted).]
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The contract provision at issue provides that there is
no coverage “[w]hile a described building, whether
intended for occupancy by owner or tenant, is vacant
beyond a period of sixty consecutive days or is unoccu-
pied beyond a period of six consecutive months.” The
parties agree that “unoccupied” is not defined in the
policy. When terms are undefined, it is appropriate for
this Court to consult a dictionary for the common
definition. Halloran v Bhan, 470 Mich 572, 578; 683
NW2d 129 (2004).
5
“Vacant” is defined as “[h]olding
nothing: empty.” Webster’s New Basic Dictionary
(2007). “Unoccupied” is similarly defined as “[n]ot
occupied: empty.” Id. The most applicable definition of
“occupy” would appear to be “[t]o live in.” Id. Putting
those definitions together, “unoccupied” means not
lived in.
Using these definitions, we conclude that the trial
court’s jury instruction was proper. The trial court said
that “unoccupied” meant that the building had con-
tents but “is not being lived in....” It gave the
appropriate duration from the contract provision of “six
consecutive months.” Thus, the instruction informed
the jury that it had to determine whether the Bundy
farmhouse had not been lived in for more than six
consecutive months. We find no plain error. Hilgendorf,
245 Mich App at 700.
Defendant argues that this Court’s opinion in Vushaj
v Farm Bureau Gen Ins Co of Mich, 284 Mich App 513;
773 NW2d 758 (2009), is controlling on this issue. We
disagree. First, defendant’s contention that Vushaj
“should have been incorporated into a proper jury
instruction” defies logic because it ignores the fact that
5
Although Halloran relates to statutory interpretation, the rules are
the same for contract interpretation. See Citizens Ins Co v Pro-Seal
Service Group, Inc, 477 Mich 75, 82-85; 730 NW2d 682 (2007).
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Vushaj was not decided until after this appeal had
already begun. More important, the policy language at
issue in Vushaj is markedly different and distinguish-
able. The Vushaj policy precluded coverage if the house
was “vacant or unoccupied beyond a period of 30
consecutive days.” Id. at 519. The present policy ex-
empted coverage when the house “is vacant beyond a
period of sixty consecutive days or is unoccupied beyond
a period of six consecutive months.” Thus, the present
policy clearly separates the terms “vacant” and “unoc-
cupied” into different clauses with distinct time re-
quirements. Such a structure leads to the conclusion
that the two terms have different meanings.
[M]ost authorities have distinguished the terms “va-
cant” and “unoccupied.” The term “vacant” has been
construed to mean empty, deprived of contents, and with-
out inanimate objects. It implies entire abandonment, and
non-occupancy for any purpose. On the other hand “unoc-
cupied” has been held to mean without animate objects,
and implies that no actual use is being made of the
premises by anyone corporeally present or in possession.
[45 CJS, Insurance, § 1002, p 467.]
See also Garner, A Dictionary of Modern Legal Usage
(2d ed) (“[V]acant; unoccupied. These words are often
used in the context of insurance policies on buildings.
They are not synonymous: vacant means without inani-
mate objects, while unoccupied means without human
occupants.”). The necessity that “vacant” and “unoccu-
pied” have different meanings within the instant policy
is enhanced by the fact that each term has its own time
limit: vacant for 60 days; unoccupied for six consecutive
months. Vushaj simply had a single period that applied
to either term.
Furthermore, it is the definition of “unoccupied,” not
“occupied,” that is at issue. This difference is more than
academic. Defendant asserts that “[t]he plain meaning
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of the contract requires that someone be living in the
house as a legal abode for six months before the loss.”
Whether intentionally wrong or simply inartfully worded,
this is a misinterpretation of the policy language. There is
no requirement that the farmhouse be lived in “for six
months before the loss.” Rather, the house must be
unoccupied “beyond” (that is, for more than) six consecu-
tive months before a loss for the exclusion to take effect.
The house could have been unoccupied for six months, but
as long as it became occupied on the next day, the
exclusion would never be operative because the house was
not unoccupied for more than six months. As the policy is
currently phrased, even a single day of occupancy will
restart the counter on the six consecutive months. This
requirement further distinguishes Vushaj, because appli-
cation of Vushaj’s definition of “unoccupied” (“ ‘not rou-
tinely characterized by the presence of human beings’ ”)
Vushaj, 284 Mich App at 516, quoting Black’s Law Dic-
tionary (8th ed), would impermissibly render nugatory
the instant policy’s requirement that the there be a
“consecutive” period of no occupancy. See Klapp v United
Ins Group Agency, Inc, 468 Mich 459, 468; 663 NW2d 447
(2003) (“[C]ourts must also give effect to every word,
phrase, and clause in a contract and avoid an interpreta-
tion that would render any part of the contract surplusage
or nugatory.”). Because of the clear differences between
the instant policy and the policy that was interpreted in
Vushaj, we find Vushaj inapplicable.
Finally, defendant contends that there was insuffi-
cient evidence to create a jury question about occu-
pancy. However, defendant’s argument presupposes
that the definition given by the trial court was errone-
ous. Defendant has not argued on appeal that there was
insufficient evidence under the definition stated in the
jury instructions. Accordingly, our determination that
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there was no error in the definition given by the trial
court has disposed of this issue.
IV. RETROACTIVITY OF GRISWOLD
Defendant’s final claim on appeal is that the trial
court erred by concluding that this Court’s decision in
Griswold, 276 Mich App 551, applied retroactively. In
Griswold, this Court held that “a first-party insured is
entitled to 12 percent penalty interest if a claim is not
timely paid, irrespective of whether the claim is reason-
ably in dispute.” Id. at 554. Defendant argues that this
rule should be applied prospectively only because it
overruled clear and settled caselaw.
Whether a ruling applies retroactively is a question of
law that this Court reviews de novo. People v Maxson,
482 Mich 385, 387; 759 NW2d 817 (2008). “[T]he
general rule is that judicial decisions are to be given
complete retroactive effect. We have often limited the
application of decisions which have overruled prior law
or reconstrued statutes. Complete prospective applica-
tion has generally been limited to decisions which
overrule clear and uncontradicted case law.” Hyde v
Univ of Mich Bd of Regents, 426 Mich 223, 240; 393
NW2d 847 (1986) (citations omitted).
Rules determined in opinions that apply retroactively
apply to all cases “still open on direct review and as to
all events, regardless of whether such events predate or
postdate our announcement of the rule[s].” Harper v
Virginia Dep’t of Taxation, 509 US 86, 97; 113 S Ct
2510; 125 L Ed 2d 74 (1993). Rules determined in
opinions that apply prospectively only, on the other
hand, not only do not apply to cases still open on direct
review, but do not even apply to the parties in the cases
in which the rules are declared. See Pohutski v City of
Allen Park, 465 Mich 675, 699; 641 NW2d 219 (2002).
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With this understanding, it is clear that this Court has
already concluded that Griswold did not apply prospec-
tively only because it applied its holding to the three
cases consolidated in Griswold and ruled that the
plaintiffs in all three cases were entitled to penalty
interest, irrespective of whether the claims were rea-
sonably in dispute. Griswold, 276 Mich App at 566-567.
However, because there are no published opinions spe-
cifically holding that Griswold is fully retroactive,
6
we
have considered defendant’s claims. Nevertheless, we
conclude that Griswold is fully retroactive.
7
As previously noted, “[c]omplete prospective applica-
tion has generally been limited to decisions which
overrule clear and uncontradicted case law.” Hyde, 426
Mich at 240. Here, there was simply nothing “clear and
uncontradicted” about the “reasonable dispute” stan-
dard, particularly in light of the binding Michigan
Supreme Court precedent in Yaldo v North Pointe Ins
Co, 457 Mich 341, 348-349; 578 NW2d 274 (1998), that
had explicitly rejected the “reasonable dispute” stan-
dard as contrary to the language of the statute.
Moreover, even assuming that Griswold represented
a new rule, as opposed to a clarification of a previously
ambiguous state of the law, the three-factor test set
forth in Paul v Wayne Co Dep’t of Pub Serv, 271 Mich
6
There is an unpublished opinion so holding. Frans v Harleysville Lake
States Ins Co, unpublished opinion per curiam of the Court of Appeals,
issued September 23, 2008 (Docket No. 280173).
7
We note that, for the purposes of this case, it makes no difference
whether Griswold has full retroactivity or only limited retroactivity,
because full retroactivity makes it applicable to all cases then pending
and limited retroactivity applies “in pending cases where the issue had
been raised and preserved.” Stein v Southeastern Mich Family Planning
Project, Inc, 432 Mich 198, 201; 438 NW2d 76 (1989). Because the issue
was raised and preserved in this case, Griswold would apply even under
limited retroactivity.
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App 617; 722 NW2d 922 (2006), does not weigh in favor
of prospective application.
The threshold question in determining the application
of a new decision is whether the decision in fact clearly
established a new principle of law. If that question is
answered in the affirmative, then a court must weigh three
factors in deciding whether a judicial decision warrants
prospective application: (1) the purpose to be served by the
new rule, (2) the extent of reliance on the old rule, and (3)
the effect of retroactive application on the administration
of justice. [Id. at 621.]
There are multiple purposes served by the new rule.
First, it clarified an ambiguous state of the law. Second,
it was intended to give meaning to the statutory lan-
guage, which appears designed to deter, and limit the
length of, denials of justified claims. The “timely pay-
ment” purpose weighs heavily in favor of retroactive
application because prospective application removes the
incentive of limiting any further delay of payment with
regard to justified claims already in litigation when
Griswold was decided.
The second factor is the extent of reliance on the old
rule. It is true that the insurance industry relied heavily
on the Arco decision to delay payment in claims that
were reasonably in dispute. However, when an insur-
ance company truly has a complete defense, i.e., it is
ultimately determined that there is no coverage, the
company is relieved from any requirement to pay inter-
est. Additionally, given the ambiguous state of the law,
it is unclear how reasonable the reliance on Arco was,
given that it contradicted the Supreme Court’s prece-
dent in Yaldo. Thus, this factor does not seem to weigh
heavily in either direction.
The third factor, the effect of retroactive application
on the administration of justice, weighs in favor of
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retroactive application. Given the limited number of
cases to which this issue applies, applying the Griswold
decision retroactively will have little effect on the courts
and their caseloads.
Given that (1) the Griswold Court retroactively ap-
plied its decision to the three consolidated cases before
it and at least one subsequent panel of this Court
determined it to be retroactive, (2) the law that was
overturned can hardly be considered “clear and uncon-
tradicted,” and (3) the factors for prospective-only ap-
plication weigh in favor of retroactive application, we
conclude that the trial court properly ruled that Gris-
wold was to be applied retroactively and, therefore, was
applicable to this case.
V. ATTORNEY FEES
Plaintiffs argue in their cross-appeal that the trial
court erroneously and arbitrarily reduced their attor-
ney’s hours by 46 percent on the basis of a patently
erroneous premise that counsel had padded his billing.
8
Although this Court reviews de novo a trial court’s
decision to grant case-evaluation sanctions, the amount
awarded as reasonable attorney fees is reviewed for an
abuse of discretion. Peterson v Fertel, 283 Mich App 232,
235, 239; 770 NW2d 47 (2009). A trial court abuses its
discretion when its decision falls outside the range of
reasonable and principled outcomes. Id. at 235.
Plaintiffs’ counsel originally provided to the trial
court a two-page typed time sheet memorializing 115.4
hours that he had spent working on the case after the
case evaluation. Defendant objected, indicating that its
8
Plaintiffs have conceded that the reduction of their counsel’s hourly
rate from $350 to $150 was within the court’s discretion. Accordingly, the
issue on appeal is limited solely to the number of hours to which this rate
was applied.
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counsel “spent only 90.2 hours” for the same period
and, after objecting to several entries, stated that
“[g]iven these reductions, the total amount of attorney
time that could reasonably be awarded would be ap-
proximately 90 hours.” Defendant also requested an
evidentiary hearing “and a more exact accounting” of
the time indicated on the billing statement.
During the hearing for case-evaluation sanctions,
plaintiffs’ counsel justified his time, indicating that he
had worked on the case for only five hours from the case
evaluation until 10 days before the trial, when it be-
came clear that it was going to go to trial. He further
indicated that the case filled three bankers boxes be-
cause it was document-intensive and argued against
defendant’s assertion that it was a simple case:
It involved technical contract issues, definition of tech-
nical terms, occupancy and vacancy, which are not the
same thing as they are out there in the real world. When we
talked about an insurance contract earlier in the litigation,
it involved interpretation and doing battle over MCL
500.2833 regarding limitation issues. It’s a very technical
case.
Defendant’s counsel argued that he still believed that
plaintiffs’ counsel was only entitled to $9,000 (90 hours
times a rate of $100 an hour) and requested an eviden-
tiary hearing. He maintained that it was “a simple case
to try, not difficult at all in my mind” and that damages
had been agreed to so that the jury only had to decide
whether the farmhouse was vacant or unoccupied.
At the evidentiary hearing on attorney fees, plain-
tiffs’ counsel testified regarding his billing records. He
testified that he filled out his handwritten record of
time spent at the same time that the work was per-
formed. He also justified each of the items about which
he was questioned and testified that he had worked the
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hours listed. The trial court took issue with the time
plaintiffs’ counsel indicated for the trial. According to
the time records, plaintiffs’ counsel billed 46 hours for
the trial and trial preparation for July 23 through 26.
The trial court used 45 hours as the figure and deter-
mined that the time for the trial, including the jury’s
deliberations, was 17.5 hours. Plaintiffs’ counsel indi-
cated that there had been a great deal of trial prepara-
tion, but the trial court appeared flippant and told
plaintiffs’ counsel that the issue whether the house was
occupied or unoccupied did not require much time
because the trial court “figured that out in about five
minutes.” Plaintiffs’ counsel then argued that it was
clear that defendant’s counsel had spent approximately
as much time on the case as he had. The trial court
rejected this argument because plaintiffs’ counsel’s
records were not detailed enough.
The trial court issued its opinion and order, which
held, in relevant part:
Plaintiff’s [sic] attorney submitted a hand written
record of purported hours spent in preparation and actual
time spent at trial. The most objective criteria that the
Court has to determine the accuracy of the purported
hours is the actual time that the Court observed the
Plaintiff’s [sic] attorney at trial. Plaintiff’s [sic] attorney
recorded thirty-six (36) hours that he claims to have been
in trial, the Court’s records indicate that the actual trial
time was nineteen and one-half (19
1
/
2
) hours, an overstate-
ment of sixteen and one-half (16
1
/
2
) hours or forty-six
[percent] (46%).
Using the Plaintiff’s [sic] attorney records — claiming
that trial preparation totaled forty-three and one-half (43
1
/
2
)
hours — and using the above forty-six percent (46%) overage,
the Court determined the preparation hours to be twenty-
three and one-half (23
1
/
2
) hours, which reduces the hours of
preparation by twenty (20) hours. Hence the total hours that
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can be charged for attorney fees is forty-three (43) hours
(19
1
/
2
trial hours plus 23
1
/
2
hours of preparation)[.]
Plaintiffs argue that the basis for the reduction was
erroneous and unreasonable.
In determining a reasonable attorney fee, there is no
set formula, but multiple factors to consider. In re
Temple Marital Trust, 278 Mich App 122, 138; 748
NW2d 265 (2008). These factors include:
(1) the skill, time and labor involved; (2) the likelihood, if
apparent to the client, that the acceptance of the employment
will preclude other employment by the lawyer; (3) the fee
customarily charged in that locality for similar services; (4)
the amount in question and the results achieved; (5) the
expense incurred; (6) the time limitation imposed by the
client or the circumstances; (7) the nature and length of the
professional relationship with the client; (8) the professional
standing and experience of the attorney; and (9) whether the
fee is fixed or contingent. [Id. (citations omitted).]
Here, although the trial court discussed some other
factors at the hearing, in its opinion, the trial court
relied on a single factor—how much time it believed
plaintiffs’ counsel had actually spent on the case. How-
ever, given the testimony at the hearing and the infor-
mation on plaintiffs’ counsel’s time sheet, the trial
court’s calculation was erroneous. The time sheet indi-
cated, and plaintiffs’ counsel testified at the hearing,
consistently with the time sheet, that he did more than
the trial on the days listed for the trial—he also did
preparation for the next day of trial. Accordingly, the
trial court’s determination of a 46 percent overbilling
was inconsistent with the record, making its reduction
based on this calculation erroneous.
Further, the contention of defendant and the trial
court that the sole matter in dispute was the definitions
of “occupancy” and “vacancy” was erroneous because it
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ignored several outstanding issues that could have come
up at trial, for which plaintiffs’ counsel needed to be
prepared. There was an outstanding factual question
about when defendant could be deemed to have formally
denied the claim in order to trigger the statutory one-year
deadline. That defendant ultimately failed to address this
issue at trial is irrelevant. Plaintiffs still had to prepare to
fight this issue and present evidence and testimony rel-
evant to it because they had no way to know before the
trial that defendant was not going to address it.
The same is true with regard to the stipulations to
which defendant refers. These stipulations were made
during trial. For example, it was not until the end of the
second day of trial that defendant stipulated “a $4,000
debris removal amount” and a $50,000 cash value for the
dwelling. Even if the stipulations had been made the
morning of trial, it would not have changed the fact that
plaintiffs’ counsel had to be prepared to present evidence
on those issues. Moreover, even with these stipulations,
there were still outstanding issues regarding the amount
of lost rents, the value of landlord furnishings, and the
value of the owner’s other personal property that were left
to the jury to decide. Additionally, with plaintiffs present-
ing their case first, they had to put all their evidence
regarding the formal denial and the subsequently stipu-
lated values into evidence and assume that defendant was
going to counter it during its presentation of the evidence.
Again, just because defendant ultimately decided not to
address those issues or agreed to stipulate certain
amounts did not make the time plaintiffs’ counsel was
required to prepare for those disputed issues, including
the presentation of witnesses and documents at trial,
unreasonable or unnecessary.
Both defendant and the trial court made much of
the fact that plaintiffs’ counsel had not itemized his
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time in six-minute increments or used time slips, but
instead kept a running handwritten record indicating
clumps of time spent. Plaintiffs’ counsel testified that
he filled out his handwritten record contemporane-
ously with when the work was completed and that it
was not more detailed because he had a contingent-
fee arrangement with his clients. We conclude that
under Michigan law, the billing records submitted by
plaintiffs’ counsel were sufficient. Indeed, this Court
has held that descriptions such as “trial prep” and
“trial” in billing records are self-explanatory:
[I]n order for the trial court to arrive at a reasonable
attorney fee award, it must determine what services were
actually rendered. Although a detailed bill of costs is not
required, some documentation is needed to enable the trial
court to determine the proper amount to award....
Although plaintiff’s counsel did not list exactly what she
was doing with regard to her “trial” and “trial prep” submis-
sions,... lawyers generally know what other lawyers do
during “trial” and “trial prep”—review the pleadings, review
discovery responses, read depositions, prepare experts, pre-
pare lay witnesses, prepare for cross-examinations, prepare
opening and closing arguments, prepare exhibits, attend the
trial, and so forth. The list is quite extensive but well known,
i.e., there are no surprises....Itwould be unreasonable to
force lawyers, who do not even know if they will be entitled to
case evaluation sanctions at the time they are preparing for
and attending the trial, to record exactly what they were
doing at every “billable” moment. And, it is unnecessary. The
trial court can certainly consider the type of case, the length
of the trial, the difficulty of the case, the numbers and types
of witnesses, as well as other relevant factors, and determine
what services were necessitated by the rejection of the case
evaluation. We refuse to require an exhaustive and detailed
list of the precise service provided at every moment. [Young v
Nandi, 276 Mich App 67, 88-89; 740 NW2d 508 (2007),
vacated in part on other grounds 482 Mich 1007 (2008)
(citation omitted).]
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In sum, plaintiffs’ counsel’s billing records were
legally sufficient, his testimony supported his claims
of time spent, and no contrary evidence was pre-
sented. Although the trial court took issue with his
time claimed for the trial, plaintiffs’ counsel stated
that the listed time was not solely time spent in trial,
but included preparation for the next day’s presenta-
tion. There is simply nothing in the record to support
the trial court’s application of a 46 percent reduction
in hours billed to come up with a “reasonable” fee.
The trial court gave only mild consideration to the
complexity of the case, and even when it did so, it
disregarded the fact that plaintiffs had to be prepared
to argue all the issues, even if defendant ultimately
waived or stipulated with regard to them. Accord-
ingly, the trial court abused its discretion in its
determination of a reasonable attorney fee.
We therefore reverse the trial court’s assessment of
attorney fees and remand the issue back to the trial
court. On remand, the trial court should examine the
appropriate factors listed earlier in this opinion in
view of the evidence obtained at the previous hearing.
However, given the repeated representations of de-
fendant’s counsel that 90 hours was reasonable (in-
deed, he spent that many hours working on the case
after the case evaluation), we hold that the minimum
to which plaintiffs are entitled is $13,500 (the trial
court’s rate of $150 an hour times 90 hours).
Affirmed in part, reversed in part, and remanded for
additional proceedings consistent with this opinion.
Plaintiffs are entitled to costs under MCR 7.219. We do
not retain jurisdiction.
M. J. K
ELLY
,P.J., concurred.
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K. F. K
ELLY
,J.(dissenting). I respectfully dissent. In
my view, plaintiffs’ claim is time-barred under MCL
500.2833(1)(q), and the trial court erred by denying
defendant’s motion for summary disposition. Fur-
ther, the majority’s conclusion that a question of fact
exists regarding when the formal denial occurred is
erroneous because (1) it fails to apply the plain
language of MCL 500.2833(1)(q), (2) it applies the
long-discredited judicial tolling doctrine, and (3) it
implicitly applies the doctrine of equitable estoppel in
the absence of facts supporting its application. I
would reverse.
I. BASIC FACTS AND PROCEDURAL HISTORY
Plaintiffs’ property was destroyed by fire on March
18, 2003. Defendant’s policy provided coverage to the
property and its contents. Plaintiffs promptly notified
defendant of the loss.
On April 17, 2003, by certified mail, defendant’s
senior claims representative, Kathy Macdonald, wrote
to plaintiffs’ adjuster, Stewart Shipper of Associated
Adjusters, Inc., denying coverage for the claim, stating,
in relevant part:
Enclosed please find a copy of our Farm Bureau
Mutual Farmowners Policy with regards to the above
claim. Please note on page 10 #31 Increase in Hazard.
Unless otherwise provided in writing, we will not be
liable for loss occurring: b. while a described building,
whether intended for occupancy by owner or tenant, is
vacant beyond a period of sixty consecutive days or is
unoccupied beyond a period of six consecutive months.
In speaking with Maria McNeel and Wakelin McNeel
both indicated that no one has actually resided in the
dwelling for approximately 18 months. There was no
furniture in the dwelling to constitute occupancy.
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Due to the above we are denying coverage for this claim.
[Emphasis added.]
On May 12, 2003, Shipper wrote defendant, ac-
knowledging receipt of defendant’s denial of plain-
tiffs’ claim on the basis of “Increase in Hazard” but
contesting its conclusion that the property was unoc-
cupied or vacant. In addition, Shipper submitted a
list of personal property lost in the fire, as well as the
cash value of the listed property. In conclusion, he
requested defendant to “reconsider [its] denial[.]”
On May 22, 2003, Macdonald wrote to Shipper,
stating: “In response to your letter of May 12, 2003 we
are continuing our investigation into this matter. As
soon as we have completed this investigation we will be
in contact with you to discuss your client’s claim
further.” Also on May 22, 2003, by certified mail,
defendant rejected plaintiffs’ “Sworn Statement in
Proof of Loss”
1
and provided plaintiffs with an addi-
tional 15 days to resubmit the statement. Defendant
also specifically notified plaintiffs that “[t]his is not a
denial of your claim but rather a rejection of the Proof
of Loss which was incorrectly completed.” (Bold print
omitted.)
After additional investigation, defendant wrote to
Shipper on June 26, 2003, and denied plaintiffs’ claim:
After careful review of this matter along with additional
investigation, we feel that we are justified in our denial of
the above claim.
It is [defendant’s] position that the dwelling located
at 10981 W. River Rd., Remus, MI was vacant and
unoccupied at the time of the loss and for approximately
1
Presumably, the “Sworn Statement in Proof of Loss” referred to
Shipper’s earlier submission of the list of personal property lost in the
fire.
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1
1
/
2
years prior to this fire. This was substantiated to us
by relatives of the named insured along with neighbor’s
[sic] of this dwelling.
Due to these facts we cannot honor the above claim.
[Emphasis added.]
The following day, Shipper requested further recon-
sideration of defendant’s denial of plaintiffs’ claim,
continuing to contend that it was “wrongful.” This
request did not raise any factual dispute about the fire
or its cause, but was based solely on the interpretation
of the policy terms “vacant” and “unoccupied.” Of
particular note, Shipper’s letter specifically recognized
defendant’s denial of the claim.
Three days later, on June 30, 2003, defendant reaf-
firmed its earlier denial of plaintiffs’ claim:
[Defendant has] also reviewed your documentation re-
garding the definition of vacant.... Our investigation
indicates that the home did not sustain sufficient furnish-
ings to maintain it as a residence.
Based upon the definitions provided, our investigation,
and the policy language under the increase in hazard, we
must again respectfully deny the claim for fire damage to
10981 W. River Rd in Remus, Michigan of March 18, 2003.
[Emphasis added.]
On July 21, 2003, Shipper once again acknowledged
defendant’s denial “based on an FC&S
[2]
reference” but
requested information on how to locate the reference.
On the same day, defendant responded to the request,
stating:
This letter is in response to [y]our correspondence of
July 21, 2003. Your letter is incorrect in stating that we
have denied the insured’s claim based on a FC&S refer-
2
FC&S stands for “Fire, Casualty and Surety Bulletins.”
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ence. The claim was denied based on the facts of the loss
and our investigation, as well as the applicable policy
language.
On September 24, 2003, Shipper again wrote defen-
dant requesting further consideration. Notably, Shipper
once again acknowledged and recognized that the claim
had been denied, that defendant could continue to deny
the claim, and that the time limit to initiate litigation
was approaching:
I have reviewed Farm Bureau’s claim denial with the
Insured.
I am writing to ask for an appointment with you to
discuss Farm Bureau’s refusal to respond to the claim.
The attorneys that I have spoken to state that the
controlling issue will likely be a determination as to
whether the house was abandoned.
You may or may not decide to continue to deny the
claim, but you should understand the reasons the Insured
believes that the house was occupied.
We can meet at your office or another agreeable location.
I would like to arrange the meeting as soon as possible
because, in the face of your denial, I must soon recommend
an attorney for the further handling of this matter. [Em-
phasis added.]
On October 14, 2003, defendant again wrote Shipper
that it would continue to deny plaintiffs’ claim.
Plaintiffs filed their complaint against defendant on
October 5, 2004. In April 2005, defendant moved for
summary disposition for failure to file within one year
from the date of defendant’s denial of the claim. Plain-
tiffs argued that no formal denial of the claim pursuant
to MCL 500.2833(1)(q) had occurred before October 14,
2003, and that the complaint had therefore been timely
filed. Plaintiffs further argued that defendant waived
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any right it had to rely on purported denials before that
date because of defendant’s inconsistent conduct.
The trial court denied the motion, concluding that
there was a genuine issue of material fact regarding
when the denial occurred.
II. STANDARDS OF REVIEW
“Whether a period of limitations applies to preclude a
party’s pursuit of an action constitutes a question of law
that we review de novo.” Detroit v 19675 Hasse, 258
Mich App 438, 444; 671 NW2d 150 (2003). We also
review de novo a trial court’s ruling on a motion for
summary disposition. Benefiel v Auto-Owners Ins Co,
277 Mich App 412, 414; 745 NW2d 174 (2007). In
reviewing a motion under MCR 2.116(C)(7), we must
accept the plaintiff’s well-pleaded allegations as true,
and we must “look to the pleadings, affidavits, or other
documentary evidence to see if there is a genuine issue
of material fact.” Huron Tool & Engineering Co v
Precision Consulting Servs, Inc, 209 Mich App 365,
376-377; 532 NW2d 541 (1995). If no question of fact
exists, whether the plaintiff’s claim is barred by a
statute of limitations is a question for the court. Id.at
377. “However, if a material factual dispute exists such
that factual development could provide a basis for
recovery, summary disposition is inappropriate.” Id.
Further, this case also presents a question of statutory
construction, which this Court reviews de novo. People
v Williams, 475 Mich 245, 250; 716 NW2d 208 (2006).
III. SUMMARY DISPOSITION WAS IMPROPERLY DENIED
Defendant argues that the trial court erred by deny-
ing its motion for summary disposition. I agree. In my
view, when the plain language of MCL 500.2833(1)(q) is
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applied to the facts of this case, the necessary conclu-
sion is that plaintiffs’ claim was untimely filed as a
matter of law and the case should have been dismissed
under MCR 2.116(C)(7).
A. THE MEANING OF MCL 500.2833(1)(q)
Because it is my view that the majority fails to apply
the language of MCL 500.2833(1)(q), an explanation of
its meaning is necessary to understand the rule that
must be applied to the facts of this matter. The primary
goal of judicial interpretation of statutes is to ascertain
and give effect to the intent of the Legislature. Neal v
Wilkes, 470 Mich 661, 665; 685 NW2d 648 (2004). “If
the statutory language is clear and unambiguous, judi-
cial construction is neither required nor permitted, and
courts must apply the statute as written.” USAA Ins Co
v Houston Gen Ins Co, 220 Mich App 386, 389; 559
NW2d 98 (1996). Nothing will be read into a clear
statute that is not within the manifest intent of the
Legislature as derived from the language of the statute
itself. Roberts v Mecosta Co Gen Hosp, 466 Mich 57, 63;
642 NW2d 663 (2002), citing Omne Fin, Inc v Shacks,
Inc, 460 Mich 305, 311; 596 NW2d 591 (1999).
MCL 500.2833(1)(q) provides:
(1) Each fire insurance policy issued or delivered in this
state shall contain the following provisions:
***
(q) That an action under the policy may be commenced
only after compliance with the policy requirements. An
action must be commenced within 1 year after the loss or
within the time period specified in the policy, whichever is
longer. The time for commencing an action is tolled from the
time the insured notifies the insurer of the loss until the
insurer formally denies liability. [Emphasis added.]
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In other words, it is the rule in Michigan, under the
clear language of this provision, that fire insurance
policies provide a “mandatory limitation period [for
filing a lawsuit] of at least one year, with tolling, unless
a longer period is specifically set forth in the insurance
policy.” Randolph v State Farm Fire & Cas Co, 229 Mich
App 102, 106-107; 580 NW2d 903 (1998). Consistently
with common sense, the statute makes the centerpiece
for determining when the limitations period begins to
run the point at which an insurer has formally denied
liability. It is not surprising that the receipt of a formal
denial will “unequivocally impress[] upon the insured
that the extraordinary step of pursuing relief in court
must be taken,” Lewis v Detroit Auto Inter-Ins Exch,
426 Mich 93, 101; 393 NW2d 167 (1986), and the
statute, accordingly, embodies this concept.
Because the focus of the present dispute is when the
insurer formally denied liability, the relevant phrase of
the statute for purposes of this litigation is “until the
insurer formally denies liability.” “Until” means “[u]p
to the time of” and “[b]efore a specified time.”
3
The
American Heritage Dictionary, New College Edition
(1976). Black’s Law Dictionary (5th ed) defines “until”
as follows: “Up to time of. A word of limitation, used
ordinarily to restrict that which precedes to what im-
mediately follows it, and its office is to fix some point of
time or some event upon the arrival or occurrence of
which what precedes will cease to exist.” (Emphasis
added; citation omitted.) Thus, under the statute, the
one-year period is tolled “ ‘from the date of a specific
claim for benefits to the date of a formal denial of
3
While it should go without saying what the meaning of the word
“until” is, I offer the dictionary definition of the word here. This Court
may consult a dictionary to discern a word’s common meaning. Halloran
v Bhan, 470 Mich 572, 578; 683 NW2d 129 (2004).
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liability.’ ” Hudick v Hastings Mut Ins Co, 247 Mich
App 602, 607; 637 NW2d 521 (2001), quoting Lewis, 426
Mich at 101.
Our appellate courts have already parsed the mean-
ing of the term “formal denial.” “A denial of liability
need not be in writing to be formal, but it must be
explicit.” Mt Carmel Mercy Hosp v Allstate Ins Co, 194
Mich App 580, 587; 487 NW2d 849 (1992) (citation
omitted). Although the best formal notice is a writing,
notice may be sufficiently direct to qualify as formal
without being put into writing. Mousa v State Auto Ins
Cos, 185 Mich App 293, 295; 460 NW2d 310 (1990).
Accordingly, under this state’s jurisprudence, a “formal
denial” must be explicit and direct.
B. PLAINTIFFS’ CLAIM IS TIME-BARRED
Here, it is undisputed that the loss occurred on March
18, 2003. It is undisputed that defendant received the
proof of loss on March 19, 2003. And, as the majority
agrees, it cannot be disputed that defendant formally
denied liability on June 26, 2003.
4
On that date, defen-
dant informed plaintiffs in a letter that “we are justified
in our denial of [your] claim” and “we cannot honor
[your] claim.” At that point, pursuant to the clear and
unambiguous terms of MCL 500.2833(1)(q), the one-
year limitations period for bringing suit was no longer
tolled and the limitations period began to run.
Yet despite this formal denial, plaintiffs continually
attempted to have defendant reopen their case rather
than filing suit. Defendant, however, continued to refer
back to its previous formal denial. In its written state-
ments, defendant made the following explicit reasser-
tions of its denial:
4
In his affidavit filed in the trial court, Shipper also admits that on
“June 26, 2003...FarmBureau denied the claim.”
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June 30, 2003: “[W]e must again respectfully deny
the claim....”
July 21, 2003: “The claim was denied based on the
facts....”
Oct 14, 2003: “[W]e...continue to deny your client’s
claim.” (Emphasis added.)
Importantly, after each reiteration of defendant’s deci-
sion to deny plaintiffs’ claim, Shipper specifically and
unequivocally acknowledged that defendant had earlier
denied the claim. He repeatedly recognized the June 26,
2003, denial as early as June 27, 2003, and as late as
September 24, 2003, and even wrote to defendant: “[I]n
the face of your denial, I must soon recommend an
attorney for the further handling of this matter.”
Clearly, plaintiffs knew at this point that “the extraor-
dinary step of pursuing relief in court must be taken.”
Lewis, 426 Mich at 101.
Thus, it is undisputed on the record that plaintiffs
failed to file suit within one year of defendant’s June 26,
2003, formal denial of liability. Consequently, their
claim is time-barred, and summary disposition should
have been granted in defendant’s favor. The trial court
had before it all the written documentation affecting
the instant claim and, thus, the question presented was
merely a question of law. “[W]here written documents
are unambiguous and unequivocal, their construction is
for the Court to decide as a matter of law.” Mt Carmel,
194 Mich App at 588 (emphasis added);
5
see also Huron
5
In Mt Carmel, this Court held that the following letter from the
defendant insurance company constituted a formal denial of defendant
Naima Nafso’s claim for personal injury protection (PIP) benefits:
“Pursuant to our recent phone conversation, Mr. Amer Nafso
and Akram P. Najor live at 19214 Bauman; Detroit, MI 48203; and
are insured with State Farm, policy No. 532736261422.
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Tool, 209 Mich App at 377. And, as these documents
plainly and obviously showed, plaintiffs’ complaint,
filed more than a year after the formal denial, was
untimely filed under the statute. The trial court erred
by failing to properly apply the plain language of MCL
500.2833(1)(q) in the present matter. Summary dispo-
sition in defendant’s favor should have been granted.
C. SHIPPER’S AFFADAVIT DOES NOT CREATE A QUESTION OF FACT
The majority, however, contends that a question of
fact exists about when defendant formally denied plain-
tiffs’ claim because further discussions ensued between
the parties regarding the claim after the June 26, 2003,
denial letter. The majority relies on the affidavit of
Shipper, who attested that defendant’s agent allegedly
agreed to meet with him in September 2003 and “indi-
cated he would consider the claim in light of the
requested documents...andwould only make a deci-
sion as to whether or not the claim would be denied
after he had done so.” At the outset, assuming without
conceding that the affidavit is even relevant, it must be
noted that the statements of the claim adjuster are
unsubstantiated in the record, are internally inconsis-
tent, are merely self-serving allegations, and are even
“Therefore, a PIP claim for Naima Nafso must be filed with
that company.
“We are in receipt of Mr. Nafso’s application for benefits. We
must know if, if [sic] anyone is taking Mr. Nafso’s place in his
store; and is the store suffering a loss due to Mr. Nafso’s injuries?
“Please forward a copy of Mr. Nafso’s policy with Continental
Life Insurance Company.” [Mount Carmel, 194 Mich App at 587
(emphasis omitted).]
This Court held that the “language of denial in the letter was unambigu-
ous” and that the letter constituted a formal denial “as a matter of law.”
Id. at 588 (emphasis added).
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contradicted by Shipper’s own contemporaneous writ-
ings to defendant. There simply is no substantiating
evidence in the record that defendant indicated in
September 2003 that it formally rescinded its denial
6
and would only deny the claim after it had reviewed
certain requested documents other than plaintiffs’
claim adjuster’s unsubstantiated statements. Such bald
allegations, which are arguably also inadmissible hear-
say, without other support in the record, are insufficient
to create a genuine issue of material fact. See Town v
Mich Bell Tel Co, 455 Mich 688, 712 n 10; 568 NW2d 64
(1997) (R
ILEY
, J., concurring); MCR 2.116(G)(4). Rather,
the affidavit merely reflected a desire on Shipper’s part
to persuade defendant to settle the matter without a
lawsuit. In hindsight, this desire turned out to be
wishful thinking, and plaintiffs simply failed to assert
their rights in a timely manner as required by MCL
500.2833(1)(q). While plaintiffs may very well have a
cause of action against Shipper or their attorneys, or
both, for failing to file the instant matter within the
limitations period, the failure to file certainly cannot be
attributed to defendant.
Further, even if the affidavit created a factual
dispute in regard to the parties’ correspondence,
which it does not, it would nonetheless be irrelevant
given that defendant formally denied plaintiffs’ claim
in June 2003 and defendant never made any direct,
explicit formal rescission of that denial. The clear and
unambiguous language of MCL 500.2833(1)(q) directs
that the limitations period be tolled “until the insurer
6
As set forth in part I of this opinion, defendant first formally denied
plaintiffs’ claim on April 17, 2003, but expressly and completely rescinded
that denial in writing on May 22, 2003. The difference between the first
formal denial of liability on April 17 and the denial of liability on June 26,
2003, is that defendant never directly and unequivocally withdrew or
rescinded the June 26 denial.
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formally denies liability.” Shipper’s ongoing attempts
to settle the case without litigation were immaterial
and should not be a consideration under the plain
language of MCL 500.2833(1)(q). As previously noted,
that provision plainly states, in relevant part: “An
action must be commenced within 1 year after the
loss or within the time period specified in the policy,
whichever is longer. The time for commencing an
action is tolled from the time the insured notifies the
insurer of the loss until the insurer formally denies
liability.” MCL 500.2833(1)(q) (emphasis added). Ab-
solutely nothing in the plain language of this provi-
sion permits a court to create a question of fact out of
one party’s subsequent attempts to settle if it is clear
on the record that a formal denial had been made; the
express language of the statute makes no exception
for such behaviors or conduct. Nothing in the provi-
sion provides for any type of further tolling after the
formal denial. Thus, the parties’ further discussions
and plaintiffs’ continual unilateral submissions of
additional information and requests to reconsider the
denial did not operate, and could not have operated,
to rescind defendant’s formal denial of liability. The
majority’s conclusion that a question of fact exists
regarding when the formal denial occurred based on
events that happened after the formal denial, which it
admits occurred on June 26, 2003, ignores the stat-
ute’s plain and unambiguous language in order to
avoid the statute’s effect.
IV. THE MAJORITY WRONGLY INVOKES JUDICIAL TOLLING
In support of its position that a question of fact is
presented, the majority invokes the doctrine of judicial
tolling, thereby enabling litigants to evade the limita-
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tions period of MCL 500.2833(1)(q).
7
Litigants may
now easily avoid the consequences of a statutorily
mandated limitations period. Litigants can simply cre-
ate “questions of fact” by continually initiating further
discussions and submitting the same or additional docu-
mentation regarding the claim to insurers even after
the claim is formally denied. Our Supreme Court has
explicitly rejected these sorts of judicially created toll-
ing mechanisms that are contrary to the plain language
of a statute or contract. Devillers v Auto Club Ins Ass’n,
473 Mich 562; 702 NW2d 539 (2005); McDonald v Farm
Bureau Ins Co, 480 Mich 191; 747 NW2d 811 (2008). In
doing so, the Court noted, “Statutory... language
must be enforced according to its plain meaning, and
cannot be judicially revised or amended to harmonize
with the prevailing policy whims of members of this
Court.” Devillers, 473 Mich at 582. To do so is to
“legislate[] from the bench” and to act outside the
constitutional authority vested in the courts of this
state. Id. However, despite the Legislature’s clear direc-
tive and obvious intent that a claimant must bring his
or her claim within one year of a formal denial, the
majority’s contrary decision amends the statute, evis-
cerates the Legislature’s intent, and fails to honor
preexisting law.
7
Ironically, even under the majority’s interpretation of MCL
500.2833(1)(q), plaintiffs’ claim would still be barred. For example, the
limitations period began to run on June 26, 2003, when defendant
formally denied the claim, as the majority concedes. Even assuming
that the October 10, 2003, meeting resulted in a further tolling of the
one-year time limitation, 106 days had already passed during which
the period was not tolled. If the period again began to run on October
14, 2003, there only remained 259 days in which to file suit. Thus,
even under the majority’s reasoning, plaintiffs would still have had to
file by June 25, 2004—259 days from October 14, 2003, in order to be
timely. Plaintiffs, however, ultimately filed suit in October 2004.
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V. THE MAJORITY IMPLICITLY APPLIES EQUITABLE ESTOPPEL
Finally, although it is unclear from the majority’s
analysis, it appears that it may also be invoking the
doctrine of equitable estoppel to justify its desire to toll
the limitations period. By doing so, the majority is
simply interpreting plaintiffs’ actions after the June 26,
2003, denial letter in a way that alleviates the effect of
the formal denial of liability. “[E]quitable estoppel is a
judicially created exception to the general rule that
statutes of limitation run without interruption. It is
essentially a doctrine of waiver that extends the appli-
cable period for filing a lawsuit by precluding the
defendant from raising the statute of limitations as a
bar.” Cincinnati Ins Co v Citizens Ins Co, 454 Mich 263,
270; 562 NW2d 648 (1997). “Equitable estoppel arises
where one party has knowingly concealed or falsely
represented a material fact, while inducing another’s
reasonable reliance on that misapprehension, under
circumstances where the relying party would suffer
prejudice if the representing or concealing party were
subsequently to assume a contrary position.” Adams v
Detroit, 232 Mich App 701, 708; 591 NW2d 67 (1998). It
requires proof of “conduct clearly designed to induce
‘the plaintiff to refrain from bringing action within the
period fixed by statute.’ ” Lothian v Detroit, 414 Mich
160, 177; 324 NW2d 9 (1982), quoting Renackowsky v
Detroit Bd of Water Comm’rs, 122 Mich 613, 616; 81 NW
581 (1900). To invoke the doctrine, the plaintiff must
establish three elements: “(1) a false representation or
concealment of a material fact, (2) an expectation that
the other party will rely on the misconduct, and (3)
knowledge of the actual facts on the part of the repre-
senting or concealing party.” Cincinnati Ins Co, 454
Mich at 270. Thus, in the context of insurance claims,
the plaintiff must show that the defendant concealed a
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cause of action, misrepresented the time in which an
action must be brought, or induced the plaintiff to
refrain from bringing an action. Compton v Mich Mill-
ers Mut Ins Co, 150 Mich App 454, 458; 389 NW2d 111
(1986). None of these necessary elements are present
here and, thus, the doctrine of estoppel is inapplicable.
VI. CONCLUSION
To conclude, there is and was no question of material
fact that defendant formally denied plaintiffs’ claim on
June 26, 2003. There is and was no question that
defendant did not intend to pay on plaintiffs’ claim.
Under the plain and unambiguous language of MCL
500.2833(1)(q), an insured must bring his or her claim
within one year after the insurer formally denies liabil-
ity. The trial court erred by denying defendant’s motion
for summary disposition when there was no dispute on
the record that plaintiffs’ claim had been formally
denied in June 2003 and plaintiffs had not filed their
complaint until well after June 2004. The majority’s
decision compounds this error by reinvigorating the
doctrine of judicial tolling that our Supreme Court has
explicitly rejected and that will now only serve to invite
uncertainty for future litigants.
For these reasons, I dissent and would reverse the
judgment of the trial court.
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VANDERPOOL v PINEVIEW ESTATES LC
Docket No. 289359. Submitted May 5, 2010, at Detroit. Decided June 29,
2010, at 9:10 a.m.
Karen Vanderpool obtained a judgment against Martin Krause. On
July 14, 2007, she served Pineview Estates, L.C., and MKT
Leasing & Financing, L.L.C., with a wage garnishment petition
seeking payment of the judgment debt. On August 3, 2007, Krause
filed for bankruptcy in federal court. Pineview Estates and MKT
Leasing failed to respond to the writ of garnishment within the
14-day period provided by MCR 3.101(H). Vanderpool filed a
motion to show cause in the 67th District Court why Pineview
Estates and MKT Leasing had failed to respond and why they
should not be held responsible for Krause’s entire judgment debt.
When Pineview Estates and MKT Leasing failed to appear at the
show cause hearing, the district court, David J. Goggins, J.,
granted judgment in favor of Vanderpool for the entire amount of
Krause’s judgment debt. Pineview Estates and MKT Leasing
moved to set aside the judgment, arguing that Vanderpool’s
actions violated an automatic stay issued by the bankruptcy court.
The district court agreed, declared its earlier judgment void, and
set aside the writ of garnishment against Pineview Estates and
MKT Leasing that had been issued on the basis of that judgment.
Vanderpool appealed in the Genesee Circuit Court. The circuit
court, Judith A. Fullerton, J., set aside the district court’s order
that had set aside the judgment against Pineview Estates and
MKT Leasing, citing their failure to disclose under the 14-day rule
in MCR 3.101(H) and their failure to appear at the show cause
hearing. Pineview Estates and MKT Leasing appealed by leave
granted.
The Court of Appeals held:
1. The notice requirements of MCR 2.603 related to default
judgments were inapplicable because there was no entry of a
default and the judgment against Pineview Estates and MKT
Leasing was not styled as a default judgment.
2. By reinstating the district court’s original judgment, the
circuit court implicitly found that Pineview Estates and MKT
Leasing were in criminal contempt. Under MCR 3.101, a contempt
2010] V
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119
judgment against a garnishee is inextricably linked to enforcement
of the prior judgment against the debtor in light of the fact that
satisfaction of the judgment against the garnishee constitutes
satisfaction of the judgment against the debtor under MCR
3.101(O)(7). Vanderpool’s actions to obtain a judgment against
Pineview Estates and MKT Leasing after Krause’s bankruptcy
petition was filed were aimed at collecting on Krause’s prepetition
debt. Thus, satisfaction of the contempt judgment would have
violated the automatic stay issued by the bankruptcy court. While
Pineview Estates and MKT Leasing may have been properly found
in contempt of court, the district court erred by entering a
judgment against them in favor of Vanderpool for the amount of
Krause’s debt. The circuit court erred by later reinstating that
judgment.
Circuit court order vacated and case remanded to the district
court.
G
ARNISHMENT —
W
RITS OF
G
ARNISHMENT —
F
AILURE TO
R
ESPOND —
C
RIMINAL
C
ONTEMPT —
B
ANKRUPTCY —
E
FFECT OF
B
ANKRUPTCY
P
ETITION BY A
D
EBTOR
.
A criminal contempt judgment against a garnishee is inextricably
linked to enforcement of the prior judgment against the debtor;
after the debtor has filed a bankruptcy petition, a court may not
enter a contempt judgment against a garnishee in favor of the
creditor for the amount of the debtor’s judgment debt because
doing so would violate the automatic stay issued by the bankruptcy
court (11 USC 362; MCR 3.101).
Charles A. Grossmann for Karen Vanderpool.
Charles A. Forrest, Jr., for Pineview Estates, L.C.,
and MKT Leasing & Financing, L.L.C.
Before: C
AVANAGH
,P.J., and O’C
ONNELL
and W
ILDER
,
JJ.
P
ER
C
URIAM.
Garnishee defendants, Pineview Estates,
L.C., and MKT Leasing and Financing, L.L.C., appeal
by leave granted the Genesee Circuit Court’s order
reversing a district court order that had set aside a
judgment against garnishee defendants and directing
reinstatement of the judgment against garnishee defen-
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dants. We vacate the circuit court’s order and remand
this case to the district court for further proceedings.
Garnishee defendants first argue that the district
court should not have entered a default judgment
against them because plaintiff did not comply with the
procedural requirements pertaining to defaults and
default judgments. Garnishee defendants’ assertion in
this regard is inapposite because there was no default
judgment in this case. Plaintiff originally served gar-
nishee defendants with a wage garnishment petition on
July 14, 2007, for payment of a judgment debt owed by
defendant, Martin Krause. After garnishee defendants
failed to respond to that writ of garnishment within the
14-day period set by MCR 3.101(H),
1
plaintiff filed a
motion to show cause why garnishee defendants had
failed to respond and why garnishee defendants should
not be responsible for defendant’s entire judgment
debt. When garnishee defendants failed to appear at the
1
MCR 3.101(H) provides, in relevant part:
The garnishee shall mail or deliver to the court, the plaintiff,
and the defendant, a verified disclosure within 14 days after being
served with the writ.
***
(2) Periodic Garnishments.
(a) If not obligated to make periodic payments to the defendant,
the disclosure shall so indicate, and the garnishment shall be
considered to have expired.
(b) If obligated to make periodic payments to the defendant, the
disclosure shall indicate the nature and frequency of the garnish-
ee’s obligation. The information must be disclosed even if money is
not owing at the time of the service of the writ.
(c) If a writ or order with a higher priority is in effect, in the
disclosure the garnishee shall specify the court that issued the writ
or order, the file number of the case in which it was issued, the date
it was issued, and the date it was served.
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hearing on the motion to show cause on March 18, 2008,
the district court granted judgment in favor of plaintiff
for the amount of defendant’s judgment debt,
$10,997.05.
MCR 2.603(A)(2) requires notice of the entry of a
default to the defaulted party. It is undisputed that
there was no entry of a default in this case and,
accordingly, no notice of such an entry. Further, MCR
2.603(B)(1)(a)(ii) requires that notice of a request for
entry of a default judgment be given at least seven days
before entry of the default judgment if the relief sought
differs in kind or amount from that stated in the
pleadings. Plaintiff sought periodic garnishment pay-
ments in her writ of garnishment, but sought a lump-
sum judgment from garnishee defendants in her motion
to show cause. However, the judgment against gar-
nishee defendants was entered on the same day as the
hearing on the motion to show cause. The requirements
of MCR 2.603 were not followed because they did not
apply, and the judgment against garnishee defendants
was not styled as a default judgment. Because there was
no default judgment, garnishee defendants’ first claim
of error fails.
Garnishee defendants next argue that the circuit
court erred by reinstating the judgment after the dis-
trict court set it aside because, as the district court had
concluded in setting aside that judgment, defendant’s
bankruptcy filing automatically stayed all efforts to
collect his debts, including garnishment payments. We
agree. We review for an abuse of discretion a court’s
issuance of a contempt order. Porter v Porter, 285 Mich
App 450, 454; 776 NW2d 377 (2009). To the extent that
garnishee defendants’ argument involves the construc-
tion, interpretation, and application of the court rules,
we review those issues de novo as questions of law. ISB
122 289 M
ICH
A
PP
119 [June
Sales Co v Dave’s Cakes, 258 Mich App 520, 526; 672
NW2d 181 (2003); Kernen v Homestead Dev Co, 252
Mich App 689, 692; 653 NW2d 634 (2002).
Defendant filed for bankruptcy on August 3, 2007.
That filing resulted in an automatic stay preventing the
enforcement, against defendant or against property of
his estate, of a prior judgment. 11 USC 362. Neverthe-
less, the district court’s March 18, 2008, judgment
against garnishee defendants followed. The judgment
was entered on several grounds, including (1) that
garnishee defendants violated a court order by “not
paying to plaintiff” the sum of $10,997.05 pursuant to
an earlier garnishee disclosure from January 2007 and
(2) that garnishee defendants were served with a re-
quest for periodic garnishments and a garnishee disclo-
sure to which garnishee defendants “failed, neglected,
or otherwise refused to respond.” Even though the
district court later vacated this judgment against gar-
nishee defendants, rejecting the first ground for the
judgment because garnishee defendants were powerless
to make garnishment payments following the stay, the
circuit court reinstated the judgment on appeal because
garnishee defendants “did not disclose” under the 14-
day rule in MCR 3.101(H) and “ignored the show cause
issued.”
By reinstating the judgment, the circuit court implic-
itly found that garnishee defendants were in criminal
contempt. “[W]hen a court exercises its criminal con-
tempt power it is not attempting to force the contemnor
to comply with an order, but is simply punishing the
contemnor for past misconduct that was an affront to
the court’s dignity.” Porter, 285 Mich App at 455. Some
courts have concluded that a default judgment or con-
tempt finding against a garnishee defendant does not
relate to the defendant or the property of the defen-
2010] V
ANDERPOOL V
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INEVIEW
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123
dant’s estate, but instead creates an independent and
personal liability against the garnishee defendant, so
the default judgment or contempt finding does not
violate the automatic stay under 11 USC 362. In re
Sowers, 164 BR 256 (ED Va, 1994); In re Gray,97BR
930, 935-937 (ND Ill, 1989).
2
However, under MCR 3.101, a judgment against a
garnishee for contempt is inextricably linked to enforce-
ment of the prior judgment against the defendant or his
or her estate. Under MCR 3.101(S)(2), “[i]f the gar-
nishee fails to comply with the court order, the gar-
nishee may be adjudged in contempt of court.” MCR
3.101(O)(7) provides, “Satisfaction of all or part of the
judgment against the garnishee constitutes satisfaction
of a judgment to the same extent against the defen-
dant.” Reading these subrules together, if garnishee
defendants had satisfied the $10,997.05 contempt judg-
ment, the same amount of defendant’s outstanding
judgment debt would have been satisfied, thereby vio-
lating the automatic stay under 11 USC 362.
We find persuasive and adopt the bankruptcy court’s
analysis of MCR 3.101 in In re Feldman, 303 BR 137
(ED Mich, 2003). In that case, the creditor obtained a
default judgment against the debtor. Id. at 138. The
creditor subsequently served a writ of garnishment on
the debtor’s employer, who responded that the debtor
“worked for tips only so there was no way to garnish his
wages.” Id. In response, the creditor filed a motion to
review the employer’s business records. Id. Thereafter,
the debtor filed for bankruptcy in federal court. Id.
Meanwhile, the employer failed to appear at the state
court hearing to review its business records, and a
2
Lower federal court decisions are not binding on state courts, but may
be persuasive. Abela v Gen Motors Corp, 469 Mich 603, 607; 677 NW2d
325 (2004).
124 289 M
ICH
A
PP
119 [June
judgment was entered against the employer “for its
failure to comply with Michigan’s garnishment laws
and procedures.” Id. The bankruptcy court concluded
that the creditor’s postpetition actions to obtain a
judgment against the employer violated the stay be-
cause the actions were aimed at collecting on the
debtor’s prepetition debt. Id. at 139-140. The court
reasoned that “there would be no garnishment judg-
ment against the employer absent the underlying debt.”
Id. at 139. The court further reasoned that satisfaction
of all or part of the judgment against the employer
would satisfy the same amount of the prepetition judg-
ment against the defendant, and the defendant would
then owe the employer on the claim under MCR
3.101(O)(2). Id. at 140; see also MCR 3.101(O)(7).
In light of our conclusions, though the district court
may have properly found garnishee defendants to be in
contempt of court, the district court erred by entering a
judgment in favor of plaintiff for the amount of defen-
dant’s judgment debt. Therefore, we vacate the circuit
court’s order reinstating the judgment against gar-
nishee defendants and we remand this case to the
district court for further proceedings. We decline to
address garnishee defendants’ last argument challeng-
ing the amount of the contempt judgment. We do not
retain jurisdiction.
Garnishee defendants, being the prevailing parties,
may tax costs pursuant to MCL 7.219.
2010] V
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PEOPLE v WIGGINS
Docket No. 290017. Submitted May 12, 2010, at Lansing. Decided May
20, 2010. Approved for publication July 6, 2010, at 9:00 a.m.
Dale J. Wiggins pleaded no contest in the Gratiot Circuit Court to a
charge of attempting to arrange for child sexually abusive activity.
At sentencing, Wiggins asserted that the court should only assess
10 points for offense variable (OV) 12 (contemporaneous felonious
criminal acts), MCL 777.42, when calculating the recommended
minimum sentence range under the sentencing guidelines because
only one of the three additional charges initially brought against
him was classified in the guidelines as a crime against a person.
The court, Michelle M. Rick, J., examining the substance of the
charges, disagreed. Reasoning that all three of the additional
charges involved other persons, the court assessed 25 points for
OV 12. Defendant filed a delayed application for leave to appeal.
The Court of Appeals denied the application. In lieu of granting
leave to appeal, the Supreme Court remanded the case to the
Court of Appeals for consideration as on leave granted of whether
OV 12 was properly scored. 485 Mich 875 (2009).
The Court of Appeals held:
The sentencing court erred by considering the substance of the
crimes charged rather than the offense category definitions set
forth in the guidelines to determine whether the additional
charges initially brought against defendant involved crimes
against a person. “Crimes against a person” is a technical term as
used in the guidelines. Under MCL 777.5 and MCL 777.6, only
crimes with the offense category designated as “person” under
MCL 777.11 to MCL 777.18 can be considered crimes against a
person for purposes of scoring OV 12 and OV 13 (continuing
pattern of criminal behavior), MCL 777.43. Accordingly, only 10
points should have been assessed for OV 12. Defendant is entitled
to resentencing because the scoring error altered the appropriate
guidelines range and defendant’s minimum sentence was outside
that range.
Sentence vacated and case remanded for resentencing.
126 289 M
ICH
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126 [July
S
ENTENCES —
S
ENTENCING
G
UIDELINES —
O
FFENSE
V
ARIABLES
12
AND
13
—
O
FFENSE
C
ATEGORY
D
ESIGNATIONS —
C
RIMES
A
GAINST A
P
ERSON
.
“Crimes against a person” is a technical term as used in the
sentencing guidelines; only crimes with the offense category
designated as “person” in the sentencing guidelines can be con-
sidered crimes against a person for purposes of scoring offense
variable 12 (contemporaneous felonious criminal acts) and offense
variable 13 (continuing pattern of criminal behavior) (MCL 777.5;
MCL 777.6; MCL 777.42; MCL 777.43).
Ronald D. Ambrose and Michael A. Faraone P.C. (by
Michael A. Faraone) for defendant.
Before: S
HAPIRO
,P.J., and J
ANSEN
and D
ONOFRIO
, JJ.
P
ER
C
URIAM.
This case has been remanded for consid-
eration as on leave granted.
1
Defendant challenges the
sentence imposed for his conviction of attempting to
arrange for child sexually abusive activity, MCL
750.145c(2), based on a plea of no contest. We vacate
defendant’s sentence and remand for resentencing.
This appeal has been decided without oral argument.
MCR 7.214(E).
During sentencing, defendant argued that only 10
points should be assessed for offense variable (OV) 12
(contemporaneous felonious criminal acts) rather than
25 points. MCL 777.42. Defendant argued that OV 12
had been misscored because only one of the other three
initial charges against him, specifically an additional
charge of attempting to arrange for child sexually
abusive activity, is designated as a crime against a
person in the sentencing guidelines, while the other
charges of disseminating sexually explicit matter to a
minor are designated as crimes against public order.
The trial court disagreed, finding that all three of the
1
People v Wiggins, 485 Mich 875 (2009).
2010] P
EOPLE V
W
IGGINS
127
additional charges were crimes involving other persons,
namely the minor children involved. Defendant now
challenges that decision.
When calculating the appropriate guidelines minimum
sentence range, “[a] sentencing court has discretion in
determining the number of points to be scored, provided
that evidence of record adequately supports a particular
score.” People v Hornsby, 251 Mich App 462, 468; 650
NW2d 700 (2002). “Where effectively challenged, a sen-
tencing factor need be proved only by a preponderance of
the evidence.” People v Harris, 190 Mich App 652, 663;
476 NW2d 767 (1991); see also People v Drohan, 475 Mich
140, 142-143; 715 NW2d 778 (2006). We review sentencing
guidelines scoring decisions to determine whether the
sentencing court properly exercised its discretion and
whether the evidence adequately supported a particular
score. People v McLaughlin, 258 Mich App 635, 671; 672
NW2d 860 (2003). Any statutory interpretation concern-
ing the application of the sentencing guidelines presents a
question of law subject to review de novo on appeal. People
v Cannon, 481 Mich 152, 156; 749 NW2d 257 (2008).
The primary goal of statutory interpretation is to
ascertain and effectuate the intent of the Legislature.
People v Davis, 468 Mich 77, 79; 658 NW2d 800 (2003).
When construing a statute, we first examine the lan-
guage of the statute. Id. Where the language of the
statute is clear and unambiguous, further construction
is unnecessary and unwarranted and the statute will be
applied as written. Id. If the statute defines a term, that
definition controls. People v Schultz, 246 Mich App 695,
703; 635 NW2d 491 (2001). In addition, provisions must
be read in the context of the entire statute so as to
produce a harmonious whole, People v Couzens, 480
Mich 240, 249; 747 NW2d 849 (2008), and identical
language in various provisions of the same act should be
128 289 M
ICH
A
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126 [July
construed identically, People ex rel Simmons v Munising
Twp, 213 Mich 629, 633; 182 NW 118 (1921).
To calculate the appropriate guidelines range, a court
must determine the offense category and which offense
variables apply, score the offense variables, total the
points to determine the offender’s offense variable
level, and then assess points for the prior record vari-
ables to determine the offender’s prior record variable
level. MCL 777.21(1)(a) and (b); People v Morson, 471
Mich 248, 255; 685 NW2d 203 (2004). The court must
then use the resultant offense variable level and prior
record variable level with the applicable sentencing grid
to determine the recommended minimum sentence
range. MCL 777.21(1)(c); Morson, 471 Mich at 255.
MCL 777.5 provides:
The offense categories are designated in [MCL 777.11 et
seq.] as follows:
(a) Crimes against a person are designated “person”.
(b) Crimes against property are designated “property”.
(c) Crimes involving a controlled substance are desig-
nated “CS”.
(d) Crimes against public order are designated “pub
ord”.
(e) Crimes against public trust are designated “pub
trst”.
(f) Crimes against public safety are designated “pub saf”.
MCL 777.6 provides, “The offense descriptions in [MCL
777.11 et seq.] are for assistance only and the statutes
listed govern application of the sentencing guidelines.”
(Emphasis added.)
2
MCL 777.42(1) provides in perti-
nent part:
2
The “offense descriptions” are contained in a column separate from
the offense category designations in MCL 777.11 through MCL 777.18.
2010] P
EOPLE V
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IGGINS
129
Offense variable 12 is contemporaneous felonious crimi-
nal acts. Score offense variable 12 by determining which of
the following apply and by assigning the number of points
attributable to the one that has the highest number of
points:
(a) Three or more contemporaneous felonious crimi-
nal acts involving crimes against a person were commit-
ted ..................................................................... 25 points
***
(c) Three or more contemporaneous felonious criminal
acts involving other crimes were committed ........... 10 points
Pursuant to MCL 777.15g, two of the crimes used to
score OV 12 in this case, those involving disseminating
sexually explicit matter to a minor, MCL 722.675, are
specifically designated as “[c]rimes against public or-
der.” MCL 777.5(d). Under the plain statutory lan-
guage, the trial court should not have used those crimes
as concurrent offenses involving “[c]rimes against a
person” when scoring OV 12. The trial court erred
when it found that it was free to look at the substance
of the crime rather than the offense category designa-
tions under the guidelines themselves because the Leg-
islature used the term “involving crimes against a
person” instead of the phrase “categorized as crimes
against a person” in MCL 777.42. The trial court
essentially read MCL 777.42 as requiring the assess-
ment of 25 points for three contemporaneous “criminal
acts involving a person” or “criminal acts against a
person” and not, as the statute states, “criminal acts
involving crimes against a person.” “Crimes against a
person” is a technical term, at least as used in the
guidelines, and MCL 777.5 is essentially a definitional
section. In addition, under MCL 777.6, the statutes
listed in MCL 777.11 to MCL 777.18 govern the appli-
cation of the sentencing guidelines, including MCL
130 289 M
ICH
A
PP
126 [July
777.42. Given that identical language in various provi-
sions of the same act must be construed identically,
Simmons, 213 Mich at 633, we conclude that only
crimes with the offense category designated as “person”
under MCL 777.11 to MCL 777.18 can be considered
“crimes against a person” for purposes of scoring OV
12
3
pursuant to MCL 777.5 and MCL 777.6. In light of
the relevant statutory language, the trial court erred
when it assessed 25 points for OV 12. Only 10 points
should have been assessed for OV 12, using defendant’s
three other “crimes.”
The trial court’s calculations placed defendant in the
C-V cell on the sentencing grid for his class B offense,
with a corresponding minimum sentence range of 51 to
85 months. With only 10 points assessed for OV 12,
defendant’s total OV score of 40 points places him in the
C-IV cell on the sentencing grid, with a recommended
minimum sentence range of 45 to 75 months. MCL
777.63. Accordingly, defendant must be resentenced
because the scoring error altered the appropriate guide-
lines range, and defendant’s minimum sentence of 85
months in prison lies outside that range. See People v
Francisco, 474 Mich 82, 89-91; 711 NW2d 44 (2006).
We vacate defendant’s sentence and remanded for
resentencing. We do not retain jurisdiction.
3
We note that the same reasoning applies to scoring OV 13 (continuing
pattern of criminal behavior), MCL 777.43, although that offense vari-
able is not at issue in this case.
2010] P
EOPLE V
W
IGGINS
131
PACKOWSKI v UNITED FOOD AND COMMERCIAL WORKERS
LOCAL 951
Docket No. 282419. Submitted June 1, 2009, at Grand Rapids. Decided
July 8, 2010, at 9:00 a.m.
Mark Packowski brought an action in the Kent Circuit Court against
United Food and Commercial Workers Local 951, where he had
worked as a business agent and organizer, claiming that he was
wrongfully terminated in violation of Michigan public policy and
the union’s policy requiring just cause for discharging employees.
The court, Paul J. Sullivan, J., granted summary disposition under
MCR 2.116(C)(10) in favor of the union on Packowski’s claim that
he was wrongfully discharged in violation of public policy. In a
subsequent opinion and order, the court granted summary dispo-
sition under MCR 2.116(C)(4) in favor of the union on Packowski’s
claim that he was wrongfully discharged in violation of the union’s
just-cause policy, concluding that it lacked subject-matter jurisdic-
tion because the claim was preempted by the Labor-Management
Reporting and Disclosure Act (LMRDA), 29 USC 401 et seq.
Packowski moved for reconsideration, which the court denied.
Packowski appealed.
The Court of Appeals held:
There are three types of federal preemption: express preemp-
tion, conflict preemption, and field preemption. In this case,
conflict preemption precluded Packowski’s claim that he was
discharged in violation of the union’s just-cause policy. Under the
doctrine of conflict preemption, federal law preempts state law to
the extent that the state law conflicts with federal law or the
purposes and objectives of Congress. One of the purposes of the
LMRDA is to ensure union democracy. Wrongful-discharge claims
brought by discharged union employees who were in policymaking
or policy-implementing positions would undermine the LMRDA’s
purpose and goal of protecting democratic processes in union
leadership because such claims would infringe on the elected-
union leadership’s ability to implement the policies on which they
were elected. The circuit court correctly granted summary dispo-
sition in favor of the union under MCR 2.116(C)(4).
Affirmed.
132 289 M
ICH
A
PP
132 [July
B
ECKERING
,P.J., dissenting, would have held that Packowski’s
wrongful-discharge claim was not preempted by the LMRDA and
would vacate the circuit court’s orders granting summary dispo-
sition in favor of the union on that basis and denying Packowski’s
motion for reconsideration. Enforcing a union’s just-cause policy
does not conflict with the LMRDA’s objective of ensuring union
democracy because it was the choice of the elected-union leader-
ship to offer a just-cause employment contract. The majority’s
contrary holding will permit unions to offer employment contracts
with just-cause provisions that the employees have no ability to
enforce in state court, rendering such provisions virtually mean-
ingless.
A
CTIONS —
E
MPLOYMENT
L
AW —
W
RONGFUL
D
ISCHARGE —
J
UST
-C
AUSE
R
EQUIRE-
MENT FOR
D
ISCHARGE FROM
E
MPLOYMENT —
F
EDERAL
P
REEMPTION —
C
ONFLICT
P
REEMPTION —
L
ABOR
-M
ANAGEMENT
R
EPORTING AND
D
ISCLO-
SURE
A
CT
.
Under the doctrine of conflict preemption, federal law preempts
state law to the extent that the state law conflicts with the
purposes and objectives of Congress; the Labor-Management Re-
porting and Disclosure Act (LMRDA) preempts state-law
wrongful-discharge claims brought by discharged union employees
who were in policymaking or policy-implementing positions be-
cause those claims would undermine the LMRDA’s purpose of
ensuring union democracy by infringing on the elected-union
leadership’s ability to implement the policies on which they were
elected (29 USC 401 et seq.).
Farr Oosterhouse & Krissoff (by Joel E. Krissoff) for
plaintiff.
The Karmel Law Firm (by Jonathan D. Karmel) and
Keller, Vincent & Almassian, PLC (by Michael D. Al-
massian), for defendant.
Before: B
ECKERING
,P.J., and W
ILDER
and D
AVIS
,JJ.
W
ILDER
, J. Plaintiff, Mark Packowski, appeals by
right the circuit court’s order granting summary dispo-
sition for defendant, United Food and Commercial Work-
ers Local 951, under MCR 2.116(C)(4), and an order
denying plaintiff’s motion for reconsideration. Because we
2010] P
ACKOWSKI V
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OCAL
951 133
O
PINION OF THE
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OURT
agree with the circuit court that federal preemption
applies to plaintiff’s remaining claim, we affirm.
I
Defendant employed plaintiff as a business agent
and, later, as an organizer. In his complaint, plaintiff
alleged that he was demoted from business agent to
organizer in 1999 after he assisted in a federal Depart-
ment of Labor investigation of defendant’s election
activities. Plaintiff further alleged that he was treated
differently and excluded from staff events, such as
training, because he refused to contribute to defen-
dant’s legal defense fund. Plaintiff alleged that, for
these reasons, defendant subsequently terminated him
against public policy. In an amended complaint, plaintiff
also alleged that his termination violated defendant’s
just-cause policy, which prohibited defendant from dis-
charging employees except for just cause. The sole issue
before us on appeal is plaintiff’s claim that he was
terminated without just cause.
Plaintiff’s complaint alleged that he had worked for
defendant since 1995. According to the complaint,
plaintiff took a medical leave from work from Septem-
ber 10, 2001, to September 14, 2001. Plaintiff alleged
that he had returned to work for a half-day on Septem-
ber 14, but then a flareup of his health condition forced
him to leave work.
Defendant asserted below that it discharged plaintiff
on September 27, 2001, for being absent from work
without authorization. Defendant also asserted that it
terminated plaintiff for falsifying records, including his
daily itinerary and mileage records for September 14,
2001. Defendant admitted that it had an employment
policy that employees, including plaintiff, could only be
134 289 M
ICH
A
PP
132 [July
O
PINION OF THE
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OURT
terminated for just cause, but defendant denied that its
termination of plaintiff violated that policy.
Defendant also had employment policies and stan-
dards that governed automobile use and business mile-
age reporting. The policies prohibited reimbursement
for personal miles and required a monthly report speci-
fying business and personal miles. The policies required
accurate recordkeeping to ensure that defendant com-
plied with the law. Departmental staff who had orga-
nizing duties, such as plaintiff, were also required to
contact defendant by 9:00 a.m. every day to report their
itineraries to a supervisor and to promptly contact a
supervisor if any changes in itinerary occurred.
Defendant argued below that on or about September 9,
2001, plaintiff informed defendant by a voicemail message
of a flareup in his health condition, but he did not
communicate with defendant again regarding his condi-
tion or his resulting inability to work until September 14,
2001, when he faxed a note from his doctor indicating that
he would be absent from September 10 to September 14.
Defendant asserted that plaintiff reported that he was
going to work the second shift at the Wal-Mart store in St.
John’s, Michigan, on September 14. Defendant later de-
termined that plaintiff had not worked the full shift,
because he left to referee a football game, and that
plaintiff had failed to report a change in his itinerary.
Defendant also asserted that plaintiff claimed that he had
intended to stop at the Wal-Mart stores in Alma and Mt.
Pleasant, Michigan, after the game, but had not informed
defendant of this change in his itinerary, and, regardless,
defendant contended that plaintiff went home after the
game rather than to work as he had stated he would.
Defendant further maintained that plaintiff falsified his
mileage report for September 14, 2001, by overstating his
business miles.
2010] P
ACKOWSKI V
UFCW L
OCAL
951 135
O
PINION OF THE
C
OURT
II
After plaintiff filed this action, defendant filed sev-
eral motions for summary disposition. This appeal
involves defendant’s summary disposition motion re-
garding plaintiff’s cause of action for wrongful termi-
nation in violation of defendant’s just-cause policy.
Defendant contended below that this claim was pre-
empted by the Labor-Management Reporting and Dis-
closure Act (LMRDA), 29 USC 401 et seq. Defendant
argued that, under Finnegan v Leu, 456 US 431; 102 S
Ct 1867; 72 L Ed 2d 239 (1982), the primary purpose of
the LMRDA is to ensure union democracy. Thus, a
union president, elected by the rank-and-file members,
may terminate policymaking and policy-implementing
employees without violating the LMRDA because the
LMRDA does not restrict an elected union official’s
freedom to choose staff whose views reflect his or her
own (which would be the views on the basis of which he
or she was elected). Further, defendant argued that
courts from other jurisdictions, relying on Finnegan,
have held that the LMRDA preempts state-law
wrongful-discharge claims by policymaking and policy-
implementing employees, because such claims would
interfere with the elected union leader’s ability to
implement the policy upon which the union members
elected the leader.
Defendant also argued that plaintiff claimed that he
was terminated because he cooperated with the Depart-
ment of Labor’s investigation of defendant’s election
activities and that this claim directly implicated the
LMRDA’s regulatory scheme because 29 USC 521(a)
1
1
29 USC 521(a) provides:
The Secretary [of Labor] shall have power when he believes it
necessary in order to determine whether any person has violated
136 289 M
ICH
A
PP
132 [July
O
PINION OF THE
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authorizes such an investigation and 29 USC 412
2
provides for a civil action in federal court if there is
retaliation based on giving truthful testimony to the
Department of Labor. Thus, defendant argued, plain-
tiff’s exclusive remedy was to file a retaliation claim
under the LMRDA in federal court, and his state-law
claim interfered with and was preempted by federal law.
In response, plaintiff argued that his claim was not
preempted by the LMRDA, that the LMRDA did not
prohibit defendant from adopting a policy barring ter-
mination without just cause, and that he was not a
management-level employee to which the LMRDA and
caselaw interpreting the LMRDA would apply.
The circuit court granted defendant’s motion. The
circuit court concluded that plaintiff was a policy-
implementing employee of defendant and that, as such,
his state-law wrongful-termination claim, to the extent
that it relied on defendant’s just-cause policy, was
preempted by the LMRDA because it would interfere
with the union president’s authority to choose his own
or is about to violate any provision of this chapter (except
subchapter II of this chapter) to make an investigation and in
connection therewith he may enter such places and inspect such
records and accounts and question such persons as he may deem
necessary to enable him to determine the facts relative thereto.
The Secretary may report to interested persons or officials con-
cerning the facts required to be shown in any report required by
this chapter and concerning the reasons for failure or refusal to file
such a report or any other matter which he deems to be appropri-
ate as a result of such an investigation.
2
29 USC 412 provides:
Any person whose rights secured by the provisions of this
subchapter have been infringed by any violation of this subchapter
may bring a civil action in a district court of the United States for
such relief (including injunctions) as may be appropriate. Any such
action against a labor organization shall be brought in the district
court of the United States for the district where the alleged
violation occurred, or where the principal office of such labor
organization is located.
2010] P
ACKOWSKI V
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OCAL
951 137
O
PINION OF THE
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OURT
staff and would thereby jeopardize union democracy.
The circuit court denied plaintiff’s subsequent request
for reconsideration, determining that plaintiff had
merely reiterated the same arguments addressed in the
summary disposition motion and clarifying that sum-
mary disposition of plaintiff’s claim had been granted
under the substantive-preemption doctrine, not the
jurisdictional-preemption doctrine.
III
Plaintiff argues on appeal that the circuit court erred
by granting defendant’s motion for summary disposi-
tion and by holding that his claim of wrongful discharge
in violation of defendant’s just-cause policy was pre-
empted by the LMRDA. We disagree.
A
We review de novo a circuit court’s summary dispo-
sition decision. Willett v Waterford Charter Twp, 271
Mich App 38, 45; 718 NW2d 386 (2006). Issues of law,
such as federal preemption of state law, are reviewed de
novo. Detroit v Ambassador Bridge Co, 481 Mich 29, 35;
748 NW2d 221 (2008). Whether a court has subject-
matter jurisdiction is also an issue of law, reviewed de
novo. Fisher v Belcher, 269 Mich App 247, 252-253; 713
NW2d 6 (2005). We review the circuit court’s denial of
plaintiff’s motion for reconsideration for an abuse of
discretion. Churchman v Rickerson, 240 Mich App 223,
233; 611 NW2d 333 (2000).
Defendant moved for summary disposition under
MCR 2.116(C)(4), (8), and (10). The circuit court de-
cided the motion under subrule (C)(4). Summary dispo-
sition is appropriate when the trial court “lacks juris-
diction of the subject matter.” MCR 2.116(C)(4). For
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jurisdictional questions under MCR 2.116(C)(4), this
Court “ ‘determine[s] whether the affidavits, together
with the pleadings, depositions, admissions, and docu-
mentary evidence, demonstrate... [a lack of] subject
matter jurisdiction.’ ” L&LWine&Liquor Corp v
Liquor Control Comm, 274 Mich App 354, 356; 733
NW2d 107 (2007) (citations omitted).
B
The Supremacy Clause of the United States Consti-
tution gives Congress the authority to preempt state
laws. Ambassador Bridge, 481 Mich at 35-36. The
Supremacy Clause of the United States Constitution
provides:
This Constitution, and the Laws of the United States
which shall be made in Pursuance thereof; and all Treaties
made, or which shall be made, under the Authority of the
United States, shall be the supreme Law of the Land; and
the Judges in every State shall be bound thereby, any Thing
in the Constitution or Laws of any State to the Contrary
notwithstanding. [US Const, art VI, cl 2 (emphasis added).]
Under the Supremacy Clause, then, this Court is bound
by federal statutes, despite any state law to the con-
trary. In other words, this Court is bound to find
preemption when it exists because federal law is the
supreme law of the land. See Ambassador Bridge, 481
Mich at 36.
Whether a federal statute preempts a state-law claim
is a question of federal law. Allis-Chalmers Corp v
Lueck, 471 US 202, 214; 105 S Ct 1904; 85 L Ed 2d 206
(1985). When such questions of federal law are involved,
we are bound to follow the prevailing opinions of the
United States Supreme Court. Betty v Brooks & Per-
kins, 446 Mich 270, 276; 521 NW2d 518 (1994). If a
state-law proceeding is preempted by federal law, the
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state court lacks subject-matter jurisdiction to hear the
state-law cause of action. Ryan v Brunswick Corp, 454
Mich 20, 27; 557 NW2d 541 (1997), overruled in part on
other grounds by Sprietsma v Mercury Marine, 537 US
51; 123 S Ct 518; 154 L Ed 2d 466 (2002).
“Preemption occurs when a state law stands as an
obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.” Ambassador
Bridge, 481 Mich at 36 (quotation marks and citation
omitted). Preemption can also occur when a state or local
regulation prevents a private entity from performing a
function that Congress has tasked it with performing. Id.
There are three types of federal preemption: express
preemption, conflict preemption, and field preemption. X
v Peterson, 240 Mich App 287, 289; 611 NW2d 566 (2000).
Express preemption occurs when a federal statute clearly
states an intent to preempt state law or that intent is
implied in a federal law’s purpose and structure. Ryan,
454 Mich at 28. Under conflict preemption, a federal law
preempts state law to the extent that the state law directly
conflicts with federal law or with the purposes and objec-
tives of Congress. Id., citing Cipollone v Liggett Group,
Inc, 505 US 504, 516; 112 S Ct 2608; 120 L Ed 2d 407
(1992). Field preemption acts to preempt state law when
federal law so thoroughly occupies a legislative field that it
is reasonable to infer that Congress did not intend for
states to supplement it. Ryan, 454 Mich at 28.
A few of our sister states have considered analogous
situations, and analogous state-law claims, and have
found that the LMRDA conflict-preempted those claims.
While we are not bound by those decisions, we may follow
them if we find them persuasive. Mettler Walloon, LLC v
Melrose Twp, 281 Mich App 184, 221 n 6; 761 NW2d 293
(2008).
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One closely analogous case is Screen Extras Guild,
Inc v Superior Court, 51 Cal 3d 1017, 1024-1032; 275
Cal Rptr 395; 800 P2d 873 (1990), in which it was held
that California common law, which implied a covenant
of good faith and fair dealing in some employment
relationships, conflicted with the LMRDA and was
preempted. The plaintiff in Screen Extras was employed
by the union as a business agent and was discharged for
alleged dishonesty and insubordination. The plaintiff
sued for wrongful discharge, among other claims, and
alleged that the union breached a state-law covenant of
good faith and fair dealing. Id. at 1027. Analyzing
whether the plaintiff’s state-law cause of action con-
flicted with the LMRDA’s policy, the court relied on
Finnegan in holding that in order to ensure union
democracy, “Congress must have intended that elected
union officials would retain unrestricted freedom to
select business agents, or, conversely, to discharge busi-
ness agents with whom they felt unable to work or who
were not in accord with their policies.” Id. at 1025
(emphasis added).
The plaintiff in Screen Extras argued that her claims
for wrongful discharge in breach of contract, negligent
and intentional infliction of emotional distress, and
defamation were not preempted because she was termi-
nated as a result of her alleged incompetence and
dishonesty, not because of a policy disagreement with
the union’s elected officials. Id. at 1027. The court
found this distinction between a termination for policy
reasons and a “garden-variety” termination not impli-
cating policy unpersuasive because it was unworkable
in the real world and involved highly subjective deter-
minations. Id. at 1027-1028. “If a business agent, for
example, were discharged for failing to efficiently adopt
a new set of procedures for prioritizing routine tasks
which had been endorsed by elected officials, should
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that be characterized as a termination to facilitate
policy, or as a ‘garden-variety’ termination for ineffi-
ciency?” Id. at 1028. The court in Screen Extras noted
that it would be impossible to develop an objective test
to distinguish the two, and “every wrongful discharge
claim brought against a union by a business agent will
be cast in ‘garden-variety’ terms if that is all it takes to
survive preemption.” Id. Relying on Finnegan, the
court held that the plaintiff’s claim was preempted
because it conflicted with the LMRDA:
To allow a state claim for wrongful discharge to proceed
from the termination of a union business agent by elected
union officials would interfere with the ability of such
officials to implement the will of the union members they
represent. This would frustrate full realization of the goal
of union democracy embodied by the LMRDA, in contra-
vention of the supremacy clause. Consequently, the LM-
RDA and the supremacy clause preempt wrongful dis-
charge claims brought against labor unions or their
officials by former policymaking or confidential employees.
[Id. at 1031 (citations omitted).]
See also Tyra v Kearney, 153 Cal App 3d 921, 925-927;
200 Cal Rptr 716 (1984) (relying on Finnegan, 456 US
at 441, to hold that the plaintiff’s claim for wrongful
discharge, following termination from her position as a
business agent for a union after she had run against the
winning candidate, was preempted by the LMRDA’s
purpose of ensuring democratically governed unions
and union officials’ concomitant authority to select
business agents).
Also analogous is Vitullo v Int’l Brotherhood of Elec-
trical Workers, Local 206, 317 Mont 142; 75 P3d 1250
(2003), in which the plaintiff was a former assistant
business manager for a union local. The business man-
ager fired the plaintiff after the plaintiff had accepted a
nomination to run against the business manager in the
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next union election. Id. at 144. The plaintiff brought
a claim under Montana’s Wrongful Discharge From
Employment Act, which created a just-cause-for-
termination requirement and a probationary period.
See Mont Code 39-2-901 et seq. The court held that
the statutory claim conflicted with the LMRDA and
Finnegan and was therefore conflict-preempted. Vit-
ullo, 317 Mont 145-152. See also Smith v Int’l Broth-
erhood of Electrical Workers, Local Union 11, 109 Cal
App 4th 1637, 1648; 1 Cal Rptr 3d 374 (2003) (holding
that the plaintiff, a union organizer employee who
was discharged and brought a breach of contract
claim against the union, was a policymaking em-
ployee and that his breach-of-contract claim was
preempted by the LMRDA).
In another case finding preemption, Dzwonar v
McDevitt, 348 NJ Super 164, 167; 791 A2d 1020 (2002),
the plaintiff was discharged from her position as a
union arbitration officer for inappropriate behavior at
an arbitration proceeding and for involvement in dis-
putes with other union members. The plaintiff brought
an action under New Jersey’s Conscientious Employee
Protection Act, arguing that she was fired in retaliation
for objecting to a union official’s acts that allegedly
violated the LMRDA. Id. at 167-169. Although the
LMRDA contains no express provision limiting a state’s
right to protect union employees from retaliation in the
plaintiff’s circumstances, the court held that “such a
limitation may be inferred from” the LMRDA’s scope.
Id. at 170. Although the court adopted a preemption
exception for claims based on an employee’s unwilling-
ness to aid in the violation of a criminal statute, citing
Bloom v Gen Truck Drivers, Office, Food & Warehouse
Union, Local 952, 783 F2d 1356, 1360-1362 (CA 9,
1986) (discussed further later in this opinion), the court
held that the plaintiff’s claim was preempted because it
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was not based on an allegation that the union official’s
acts were criminal. Dzwonar, 348 NJ Super at 173-174.
“Rather, this case involves, at most, the federal regula-
tory scheme and the union’s own internal operating
policies.” Id. at 173.
We conclude that the reasoning in Screen Extras,
Tyra, Vitullo, Smith, and Dzwonar is persuasive. We
adopt that reasoning and apply it to this case. Conflict
preemption applies to preclude plaintiff’s state-law ac-
tion. The democratic purposes of the LMRDA would be
contravened by allowing a demoted or discharged busi-
ness agent or organizer to sue for wrongful discharge.
We decline to follow Young v Int’l Brotherhood of
Locomotive Engineers, 114 Ohio App 3d 499; 683 NE2d
420 (1996), a case in which the court concluded that
preemption was not applicable. The plaintiff in Young
was fired from her position as a union employee for
allegedly being insubordinate and uncooperative and
making derogatory remarks about the union president.
Id. at 503. Denying these allegations, the plaintiff
brought a breach-of-contract action based on her al-
leged 10-year contract with the union. Id. at 502-503.
The trial court granted summary judgment, and the
Ohio Court of Appeals reversed and remanded for trial,
which resulted in a judgment for the plaintiff and an
appeal by the union. Id. at 502. In the second appeal,
the court held that whether the plaintiff’s claim was
preempted by the LMRDA depended on whether the
plaintiff was a policymaking employee, which was an
issue of fact for the jury to resolve. Id. at 504-506.
Unlike the parties in Young, plaintiff and defendant
do not dispute the circuit court’s finding that plaintiff
was a policy-implementing employee. Therefore, Young
is distinguishable from the instant case. We also find
Young unpersuasive in that it concludes that the ques-
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tion of preemption is a jury question, despite the fact
that whether state law conflicts with federal law is more
properly characterized as a question of law. Ambassador
Bridge, 481 Mich at 35.
Other cases finding no conflict preemption are also
more easily distinguished from the instant case than
those cases finding preemption. In Bloom, 783 F2d at
1359-1360, the plaintiff was a union business manager
who sued the union for, among other claims, wrongful
discharge after he was terminated, allegedly because he
refused to falsify the union’s minutes to cover up an
unapproved expenditure. The plaintiff argued that his
claim was not preempted because he was an at-will
employee and because there was no federal statute
directly covering his employment. Id. at 1360. The
court held that the state had a strong interest in
preventing criminal actions such as embezzlement and
that the LMRDA supported the plaintiff’s position
because it expressly “saves both state criminal actions
and state-imposed responsibilities of union officers” in
29 USC 523(a) and 29 USC 524. Id. at 1361. The court
stated that there was an exception to preemption when
“a union employee bases a wrongful discharge action on
allegations that he was fired for refusing to violate state
law....” Id. at 1362 (emphasis added). The court
further determined that, because the plaintiff alleged
that he was fired for refusing to illegally alter minutes
and not for political reasons, the federal interest in
union democracy recognized in Finnegan was not im-
plicated and the state cause of action would not inter-
fere with that statutory purpose. Id. at 1362.
Similarly, in Montoya v Local Union III of the Int’l
Brotherhood of Electrical Workers, 755 P2d 1221, 1223
(Colo App, 1988), the plaintiff claimed that he was
discharged from his position as a union business man-
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ager for uncovering illegal union practices and refusing
to vote for the candidate that the business manager
favored. Because the court concluded that the business
manager could hire and fire his representatives and
assistants at any time and discharge would not affect
the plaintiff’s union membership, the plaintiff’s wrong-
ful discharge claims generally conflicted with LMRDA
and were preempted. Id. at 1223-1224. However, the
court held that the doctrine of preemption did not bar
the plaintiff’s wrongful discharge claim “insofar as he
allege[d] that he was discharged because he refused to
aid [the business manager] in his alleged criminal
misuse of union funds.” Id. at 1224.
Whereas Bloom and Montoya involved discharges for
the plaintiffs’ alleged refusal to commit or aid in com-
mitting a crime, plaintiff here was terminated for
failing to abide by legitimate policies, such as itinerary
and mileage recording, designed to comply with the
law.
3
Finally, we consider the decision in Ardingo v Local
951, United Food & Commercial Workers Union, un-
published opinion of the United States Court of Appeals
for the Sixth Circuit, issued May 29, 2009 (Docket No.
08-1078). In Ardingo, the Sixth Circuit held that the
LMRDA did not preempt a wrongful-termination claim
almost identical to the claim at issue in this case. For
the reasons stated below, we do not follow Ardingo.
4
3
We note that to the extent that plaintiff has a claim of being demoted
or fired in retaliation for participating in a Department of Labor
investigation, he has an action for that claim in federal court. 29 USC 412
provides for a civil action in federal court if there is retaliation based on
giving truthful testimony to the Department of Labor.
4
Although Ardingo did address a question of federal law, i.e. federal
preemption, we are not required to follow decisions of a United States
court of appeals. Abela v Gen Motors Corp, 469 Mich 603, 606; 677 NW2d
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The plaintiff in Ardingo was a business agent for the
same union that employed plaintiff in this case. The
same policy requiring that employees be terminated
only for just cause was in force. Id. at 2. After rumors
circulated that Ardingo might mount a campaign
against the union’s president, the union president in-
sinuated that Ardingo was a “pipeline to the Depart-
ment of Labor.” Id. Thereafter, Ardingo cooperated with
a Department of Labor investigation concerning finan-
cial irregularities in the union and then testified before
a grand jury concerning the same issues. Id. at 2-3.
Ardingo was then reassigned in rapid succession to jobs
in other states, ostensibly to assist with union organiz-
ing campaigns. Id. at 3. But the union was also experi-
encing substantial declines in revenue. Id. Later, Ard-
ingo, who earned $100,000 a year and had less seniority
than other similarly situated employees, was one of 10
employees who were discharged. Id. The union presi-
dent testified that the discharge of Ardingo was for
economic and other reasons. Ardingo argued that the
economic reasons were not the real reason for his
discharge, but a mere pretext, and that his discharge
was retaliatory and in violation of the just-cause policy.
Id. at 3-4.
The Sixth Circuit held that the LMRDA did not
preempt Ardingo’s state-law claim of discharge in vio-
lation of the just-cause policy. Ardingo, unpub op at
5-11. The court reasoned that “[t]he fact that the
LMRDA does not provide a cause of action to union
employees who have been fired for political reasons does
not mean that state law could never restrict a union
leader’s discretion to terminate a union employee.” Id.
at 10, citing Bloom, 783 F2d at 1360-1362. The court
325 (2004). In addition, Ardingo is unpublished, and was not recom-
mended for full-text publication. Ardingo, unpub op at 1.
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further reasoned that “[s]uch a question was not even
before the Finnegan Court. Therefore, it would be
wrong to say that Finnegan stands for the proposition
that the LMRDA gives union officials unlimited discre-
tion in employment matters.” Ardingo, unpub op at 11.
We disagree with Ardingo’s reasoning and decline to
follow it. While Finnegan did not absolutely decide the
question whether this exact claim is preempted by the
LMRDA, Finnegan was clear that at least one of the
purposes of the LMRDA is to promote union democracy
and ensure that the representatives whom union mem-
bers have elected are able to carry out the policies on
which they were elected. See Finnegan, 456 US at 442
(“[I]n enacting Title I of the Act, Congress simply was
not concerned with perpetuating appointed union em-
ployees in office at the expense of an elected president’s
freedom to choose his own staff. Rather, its concerns
were with promoting union democracy....”). Preemp-
tion applies when a state-law claim conflicts with the
purposes of federal law. Ambassador Bridge, 481 Mich
at 36. We believe that, in this case, plaintiff’s claim
would conflict with the efforts of elected union officials
to implement the policies on which they were elected
and, in that way, interfere with one of the purposes of
the LMRDA.
IV
In sum, the cases finding preemption under similar
circumstances are more numerous, more factually
analogous, and more persuasive than the cases finding
no preemption by the LMRDA of similar wrongful-
discharge claims. The cases finding preemption of state
common-law claims by the LMRDA illustrate that
wrongful-discharge claims brought by discharged or
demoted union employees who were in policymaking or
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policy-implementing positions would undermine one of
the purposes and goals of the LMRDA, namely, the
purpose and goal of protecting democratic processes in
union leadership. If union members cannot choose their
leaders, or if the chosen leaders cannot implement the
policies they were elected to implement, then the rights
of union members (as represented by their elected
leaders) would be thwarted, or at least diminished.
Accordingly, the circuit court correctly held that the
LMRDA preempts plaintiff’s claim of wrongful dis-
charge in violation of the union’s just-cause policy and,
because of federal preemption, the circuit court cor-
rectly held that it lacked subject-matter jurisdiction to
hear that claim. Ryan, 454 Mich at 27.
5
Affirmed. Defendant, being the prevailing party, may
tax costs pursuant to MCR 7.219.
D
AVIS
, J., concurred.
B
ECKERING
,P.J. (dissenting). Plaintiff claims that his
employment was terminated in violation of defendant’s
just-cause policy. I write separately because I respectfully
disagree with the majority’s conclusion that plaintiff’s
wrongful-discharge claim is preempted by the Labor-
Management Reporting and Disclosure Act (LMRDA), 29
USC 401 et seq. I would vacate the trial court’s orders
granting summary disposition to defendant and denying
plaintiff’s motion for reconsideration.
The trial court granted defendant summary disposi-
tion under MCR 2.116(C)(4), concluding that it lacked
subject-matter jurisdiction. As indicated by the major-
ity, this Court reviews de novo a trial court’s decision on
5
Because the circuit court correctly granted summary disposition, its
denial of plaintiff’s motion for reconsideration was not an abuse of
discretion.
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a motion for summary disposition, Maiden v Rozwood,
461 Mich 109, 118; 597 NW2d 817 (1999), and reviews
for an abuse of discretion its decision on a motion for
reconsideration, Churchman v Rickerson, 240 Mich App
223, 233; 611 NW2d 333 (2000). Whether a trial court
has subject-matter jurisdiction is a question of law,
which this Court reviews de novo. Fisher v Belcher, 269
Mich App 247, 252-253; 713 NW2d 6 (2005).
“Where the principles of federal preemption apply,
state courts are deprived of subject matter jurisdic-
tion.” Ryan v Brunswick Corp, 454 Mich 20, 27; 557
NW2d 541 (1997), overruled in part on other grounds
Sprietsma v Mercury Marine, 537 US 51; 123 S Ct 518;
154 L Ed 2d 466 (2002). In the absence of express
preemption, federal preemption may be implied in
the form of conflict or field preemption. Ryan, 454
Mich at 28. The majority concludes here that plain-
tiff’s wrongful-discharge claim under state law con-
flicts with the LMRDA and is, therefore, “conflict-
preempted.” “Conflict preemption acts to preempt
state law to the extent that it is in direct conflict with
federal law or with the purposes and objectives of
Congress.” Id.
In Finnegan v Leu, 456 US 431, 441; 102 S Ct 1867;
72 L Ed 2d 239 (1982), the United States Supreme
Court stated that when the LMRDA was enacted, its
“overriding objective was to ensure that unions would
be democratically governed, and responsive to the will
of the union membership as expressed in open, periodic
elections.” The Court further stated that “the ability of
an elected union president to select his own adminis-
trators is an integral part of ensuring a union adminis-
tration’s responsiveness to the mandate of the union
election.” Id. According to the majority in this case,
allowing plaintiff’s state claim for wrongful discharge to
proceed would conflict with the LMRDA’s purpose of
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ensuring union democracy and elected union officials’
authority to select staff members.
In Ardingo v Local 951, United Food & Commercial
Workers Union, unpublished opinion of the United
States Court of Appeals for the Sixth Circuit, issued
May 29, 2009 (Docket No. 08-1078), p 7, however, the
court concluded that “[t]here is no danger that [the
LMRDA’s] objective will be interfered with by a lawsuit
that seeks to vindicate an employee’s rights under a
just-cause employment contract.” Although this Court
is not required to follow decisions of a United States
court of appeals, Abela v Gen Motors Corp, 469 Mich
603, 606; 677 NW2d 325 (2004), and Ardingo is unpub-
lished, I find the Ardingo court’s reasoning persuasive.
See id. at 607. Like Ardingo, this case presents a unique
set of facts in that plaintiff is suing to enforce his
contractual rights under his just-cause employment
contract with defendant. None of the out-of-state cases
relied on by the majority involve a just-cause contract
provision. As noted by the Ardingo court, “when a
union chooses to offer a just-cause employment contract
to an employee, there is nothing in Finnegan or the
LMRDA that would prevent that contract from being
enforced.” Ardingo, unpub op at 10. Finnegan does not
stand for the proposition “that state law could never
restrict a union leader’s discretion to terminate a union
employee.” Id., citing Bloom v Gen Truck Drivers,
Office, Food & Warehouse Union, Local 952, 783 F2d
1356, 1360-1362 (CA 9, 1986) (holding that a wrongful-
discharge claim was not preempted by the LMRDA
when a business agent claimed to have been discharged
for refusing to violate state law). While the majority is
correct that the LMRDA was enacted to ensure that
unions are democratically governed and that elected
union officials have the ability to select staff members,
and, in that way, respond “to the mandate of the union
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election,” Finnegan, 456 US at 441, democratically
elected union officials may choose to offer an employee
a just-cause employment contract, omit a just-cause
provision from an employment contract, or tailor such a
provision by, for example, defining the term “just
cause” in the contract. Thus, enforcing a union’s just-
cause policy does not conflict with the LMRDA’s objec-
tive of ensuring union democracy. To hold otherwise
would permit unions to offer employment contracts
with just-cause provisions that the employees have no
ability to enforce, at least in state court, rendering the
provisions virtually meaningless.
1
I would hold that plaintiff’s wrongful-discharge claim
is not preempted by the LMRDA because his claim does
not directly conflict with the act or with any of its
purposes or objectives, see Ryan, 454 Mich at 28, and
would vacate the trial court’s orders granting summary
disposition to defendant on the basis of preemption and
denying plaintiff’s motion for reconsideration.
2
1
In footnote 3 of its opinion, the majority states that plaintiff may
bring a civil action in federal court under 29 USC 412 if he was
discharged in retaliation for participating in a Department of Labor
investigation. I note, however, that in general the LMRDA protects the
rights afforded union members because of their status as members, not
the rights afforded appointed union employees because of their status as
employees. See Finnegan, 456 US at 436-437.
2
Defendant claims on appeal that the just-cause provision of plaintiff’s
employment contract could only be enforced through arbitration. I will
not address this claim, as it is irrelevant to the question of preemption.
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LaMEAU v CITY OF ROYAL OAK
Docket Nos. 290059 and 292006. Submitted May 4, 2010, at Detroit.
Decided July 13, 2010, at 9:00 a.m.
Thomas LaMeau, personal representative of the estate of John M.
Crnkovich, deceased, brought an action in the Oakland Circuit Court
against the city of Royal Oak and two of its employees (Elden
Danielson and Bryan Warju), the Detroit Edison Company, and
Gaglio PR Cement Corporation, seeking damages resulting from the
wrongful death of Crnkovich. Crnkovich had died from injuries
received while operating a motor scooter on a city sidewalk that had
been constructed by Gaglio under the direction of Danielson and
Warju. Crnkovich had hit a guy wire strung across the path of the
sidewalk from a Detroit Edison utility pole to an anchor in the
ground. The guy wire and anchor had been in place before the
sidewalk was constructed, and the anchor had been embedded in an
asphalt section of the sidewalk during the construction. The city and
Gaglio filed motions for summary disposition in October 2008.
Danielson and Warju moved for summary disposition in December
2008. On January 5, 2009, the court, Colleen A. O’Brien, J., granted
the motions by the city and Gaglio with regard to the nuisance claims
against them, but denied their motions with regard to the individual
negligence claims against them. On January 7, 2009, the city again
moved for summary disposition, as did Danielson and Warju. On
January 26, 2009, the city appealed as of right the denial of its
October 2008 motion for summary disposition with regard to the
city’s claim that it was entitled to governmental immunity (Docket
No. 290059). Because the city’s appeal automatically stayed the
proceedings below, the city filed a motion on February 10, 2009,
seeking an order remanding the matter to the trial court to conduct
a hearing on pending motions for rehearing and summary disposi-
tion. The Court of Appeals entered an unpublished order to remand
in Docket No. 290059 on March 31, 2009. On April 29, 2009, the trial
court entered an opinion and order denying Danielson and Warju’s
December 2008 motion for summary disposition, which had alleged
that the claims against them were barred by governmental immunity.
The trial court also entered an opinion and order that denied a
motion for reconsideration filed by the city, Danielson, and Warju. On
May 11, 2009, Danielson and Warju appealed the denial of their
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motion for summary disposition (Docket No. 292006). The Court of
Appeals then granted Gaglio leave to appeal the denial of its October
2008 motion for summary disposition (Docket No. 289947) and
consolidated that appeal with the appeal in Docket No. 290059.
Unpublished order of the Court of Appeals, entered May 12, 2009
(Docket No. 289947). The Court of Appeals consolidated all three
appeals in an unpublished order, entered May 28, 2009 (Docket Nos.
289947, 290059, and 292006). On April 29, 2010, the Court of Appeals
entered an unpublished order that closed without prejudice the
appeal in Docket No. 289947 and deconsolidated that appeal from the
other two appeals.
The Court of Appeals held:
1. The highway exception to governmental immunity, MCL
691.1402(1), imposes a duty on municipalities to maintain highways
under their jurisdiction in reasonable repair. MCL 691.1401(e) de-
fines “highway” to mean a public highway, road, or street that is open
for public travel, and the definition includes bridges, sidewalks,
trailways, crosswalks, and culverts on the highway, but excludes
alleys, trees, and utility poles. The fact that a municipality does not
have a duty to maintain utility poles in reasonable repair, however,
does not relieve the municipality of its duty to maintain its sidewalks
in reasonable repair even when a utility pole causes a sidewalk’s state
of disrepair. The city had a duty to make reasonable repairs to its
sidewalk that were occasioned by the anchor and guy wire.
2. Once the city decided to construct the sidewalk in such a way
as to incorporate the guy wire and anchor into the sidewalk, the guy
wire and anchor were part of the sidewalk. MCL 691.1402(1) imposes
liability on municipalities for defects in sidewalks, even defects
occasioned by the presence of structures that municipalities would
normally not have a duty to maintain in reasonable repair. The city
had jurisdiction over the sidewalk, and it necessarily acquired juris-
diction over the anchor and guy wire to the extent that they were a
part of the sidewalk.
3. Under the totality of the circumstances, whether the city
had closed the sidewalk to the public was a question of fact.
4. The undisputed evidence showed that not only was the city
aware of the defective condition of the sidewalk for a period of 30 days
or longer before the injury occurred, its employees actually created
the defective condition. There was no dispute that the city had
adequate notice of the defect for purposes of the notice requirement
of MCL 691.1403.
5. The trial court did not err when it denied the city’s motion for
summary disposition that alleged that the city was immune from suit.
The city had a duty under the highway exception to rectify the defect
that it created.
154 289 M
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6. The evidence suggested that Danielson and Warju were
indifferent to the magnitude of the danger being created by
ordering that the sidewalk be paved before the anchor and guy
wire were moved. A reasonable jury could conclude that the
decision to incorporate the anchor and guy wire into the sidewalk
demonstrated a substantial lack of concern for whether an injury
would result. There was evidence from which a reasonable fact-
finder could conclude that Danielson’s and Warju’s efforts to have
the anchor and guy wire relocated were grossly deficient and that
their efforts to safeguard the public were inadequate. There was a
clear question of fact about whether Danielson and Warju were
grossly negligent and thus, under MCL 691.1407(2) and (7)(a), not
entitled to governmental immunity.
7. There was evidence from which a reasonable jury could con-
clude that Crnkovich’s conduct was “the” proximate cause of his
injuries, that is, the one most immediate, efficient, and direct cause of
his injuries. However, there was also evidence from which a reason-
able jury could conclude that the conduct of Danielson and Warju in
creating the hazard and then failing to rectify or mitigate the hazard
constituted the one most immediate, efficient, and direct cause of
Crnkovich’s injuries. There was also evidence from which a reason-
able jury could conclude that the failure to have barricades in place
was attributable to the conduct of Danielson and Warju or was not a
significant cause of Crnkovich’s injuries. The trial court did not err
when it denied Danielson and Warju’s motion for summary disposi-
tion that was based on their claim of governmental immunity.
Affirmed.
T
ALBOT
,P.J., dissenting, stated that in order to show that a
governmental agency failed to maintain a highway in reasonable
repair, a plaintiff must demonstrate that a defect existed in the
highway itself. The trial court erred by declining to award summary
disposition to the city because a question of fact did not exist
regarding whether the guy wire constituted a defect. MCL
691.1401(e) specifically excludes utility poles from the term “high-
way,” and it should not be suggested that any appendage extending
from a utility pole should be treated as an entity separate or
distinguishable from the utility pole. The majority’s effort to expand
the term “defect” to encompass the guy wire is contrary to the plain
meaning of the term and Michigan Supreme Court caselaw that has
explicitly restricted sidewalk defects to imperfections occurring in the
sidewalk itself. In addition, the highway exception to governmental
immunity does not include a duty to design or to correct defects
arising from the original design or construction of highways. Al-
though a question of fact may have existed regarding whether the
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conduct of Danielson and Warju rose to the level of gross negligence,
liability was precluded because it could not be reasonably concluded
that their conduct was “the” proximate cause of the injuries or
damage. Although the conduct attributable to these defendants could
be construed as having comprised “a” proximate cause of Crnkovich’s
injuries, their conduct was not “the” proximate cause. Crnkovich’s
own behavior, combined with that of Detroit Edison, comprised a
more direct and immediate cause of the injuries incurred than the
conduct attributable to Danielson and Warju. Therefore, any negli-
gence on their part was too remote to overcome the grant of
immunity afforded by MCL 691.1407. The trial court’s denial of
defendants’ motions for summary disposition that were based on
their assertion of governmental immunity should be reversed.
1. G
OVERNMENTAL
I
MMUNITY —
H
IGHWAY
E
XCEPTION —
S
IDEWALKS —
U
TILITY
P
OLES
.
A municipality must maintain its public highways, roads, and
streets, including the bridges, sidewalks, trailways, crosswalks,
and culverts on the highway, in reasonable repair; a municipality
does not have a duty to maintain in reasonable repair alleys, trees,
and utility poles; the fact that a municipality does not have a duty
to maintain utility poles in reasonable repair does not relieve the
municipality of its duty to maintain its sidewalks in reasonable
repair even when a utility pole causes a sidewalk’s state of
disrepair (MCL 691.1401[e], 691.1402[1]).
2. G
OVERNMENTAL
I
MMUNITY —
S
IDEWALKS
.
The governmental tort liability act imposes liability on municipali-
ties for injuries caused by defects in sidewalks over which they
have jurisdiction even if the defects are occasioned by the presence
of a structure that the municipality would normally not have a
duty to maintain in reasonable repair (MCL 691.1401[e],
691.1402[1]).
3. G
OVERNMENTAL
I
MMUNITY —
G
OVERNMENTAL
E
MPLOYEES —
G
ROSS
N
EGLI-
GENCE —
M
OTIONS AND
O
RDERS —
S
UMMARY
D
ISPOSITION
.
A plaintiff must present evidence sufficient for a reasonable finder of
fact to conclude that a governmental employee was grossly negli-
gent in order to survive a motion for summary disposition pre-
mised on the immunity afforded to governmental employees; the
court may decide the question as a matter of law if there is no
question of fact about whether the allegedly negligent conduct
rises to the level of gross negligence; evidence of ordinary negli-
gence does not create a material question of fact concerning gross
negligence; to find gross negligence, there must be evidence that
156 289 M
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the governmental employee engaged in conduct so reckless as to
demonstrate a substantial lack of concern for whether an injury
would result (MCL 691.1407[2][c], [7][a]).
4. G
OVERNMENTAL
I
MMUNITY —
G
OVERNMENTAL
E
MPLOYEES —
G
ROSS
N
EGLI-
GENCE —
P
ROXIMATE
C
AUSE OF
I
NJURY OR
D
AMAGE
.
A governmental employee is immune from tort liability if the employee
is acting (or reasonably believes that he or she is acting) within the
scope of the employee’s authority and if the governmental agency is
engaged in the exercise or discharge of a governmental function
unless the employee’s conduct amounted to gross negligence and that
gross negligence was the proximate cause of the injury or damage,
that is, the one most immediate, efficient, and direct cause of the
injury or damage (MCL 691.1407[2][c]).
Wigod, Falzon, McNeely & Unwin, P.C. (by Lawrence
C. Falzon and Kevin A. McNeely), for Thomas LaMeau.
Johnson, Rosati, LaBarge, Aseltyne & Field, P.C. (by
Marcia L. Howe and Michael E. Rosati), for the city of
Royal Oak, Elden Danielson, and Bryan Warju.
Before: T
ALBOT
,P.J., and F
ITZGERALD
and M. J. K
ELLY
,
JJ.
M. J. K
ELLY
, J. In this suit to recover damages for
wrongful death allegedly caused by a defective sidewalk,
defendants city of Royal Oak, Elden Danielson, and Bryan
Warju appeal as of right the trial court’s denial of their
motions for summary disposition premised on govern-
mental immunity. Because the trial court correctly deter-
mined that Royal Oak, Danielson, and Warju were not
entitled to governmental immunity, we affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
A. THE SIDEWALK AND ACCIDENT AT ISSUE
Bryan Warju testified at his deposition that he was an
engineering assistant under the supervision of Royal
Oak’s city engineer, Elden Danielson. Warju stated that
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he served as the field manager for Royal Oak’s
sidewalk-improvement project in the summer of 2005.
Warju said that he walked the area on the south side of
Normandy Street where a new sidewalk was to be
constructed and noticed a telephone pole’s guy wire
that crossed the path of the proposed sidewalk.
Skylan McBeth, who is a service planner with the
Detroit Edison Company, testified that a guy wire is a steel
cable that runs from a telephone pole to an anchor in the
ground. The wire pulls the pole in the direction opposite
the weight on the pole. McBeth said that a “down guy” is
a guy wire that runs in a direct line from the pole to the
ground. However, a “sidewalk guy” is a wire that runs
along a three-inch steel bar that juts out from the tele-
phone pole and then proceeds straight down from the end
of the bar to the anchor in the ground.
In May 2005, Warju informed various parties, including
defendants Gaglio PR Cement Corporation (Gaglio Ce-
ment) and Detroit Edison, about a preconstruction con-
ference to discuss the details of the 2005 summer
sidewalk-construction project. The letter indicated that
the conference would include a discussion concerning any
conflicts with utilities. Danielson averred that Detroit
Edison did not send a representative to this meeting, and
Warju stated in his affidavit that he would have discussed
the existence of the guy wire with the representative from
Detroit Edison had a representative gone to the meeting.
Danielson also averred that he spoke with various persons
from Detroit Edison and orally requested them to move
the guy wire to a safe location. However, no one from
Detroit Edison came to move the wire.
Rosalino Gaglio (Rosalino) testified that he was a
foreman with Gaglio Cement and that he visited the site
on Normandy Street where the sidewalk was to be
constructed. He stated that he saw the wire at issue and
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told Warju that the wire needed to be moved. Rosalino
said that Warju told him that he would contact Detroit
Edison and have it moved.
Salvatore Gaglio (Salvatore) testified that he was a
foreman with Gaglio Cement and that he had worked on
the project to pour a new sidewalk on Normandy Street in
2005. He stated that Royal Oak had set out the path of the
new sidewalk using stakes and paint. As they approached
the guy wire, he notified Royal Oak’s inspector about the
need to move the wire. He said that Warju told them to
just block it off, but Salvatore responded that they should
either block it off further back or stop the project until the
guy wire could be moved. Rosalino stated that he wanted
to leave 10 flags—which are 5-foot by 5-foot slabs of
concrete—open on either side of the guy wire. Thus, there
would have been 50 feet of unpaved land on either side of
the guy wire. However, Warju disagreed with this ap-
proach: “[H]e made us form it to the guy wire. He told me
not to form it like that. He told me go right up to the guy
wire and just leave one flag out.” Rosalino said that he did
as Warju asked, but warned that it was not a good idea
because “people could get hurt over here, with this wire
being here.” Salvatore also said that he warned Warju
many times about the hazard of cementing up to the wire.
At his deposition, Warju explained that he ordered Salva-
tore to pave up to the guy wire because he was on a
schedule: “Well, we are on a schedule to do the sidewalk.
We are coming down that street. We are not going to stop
and wait for nine months in this case for Detroit Edison to
relocate their wire along with other objects which are in
the way.”
Salvatore said that they had prepared the area around
the guy wire for cementing, but left it unpaved. Later
Warju instructed them to fill with asphalt the gap left at
the point where the guy wire was anchored to the ground.
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Salvatore said that he protested that the “wire still
[hadn’t] been moved,” but Warju replied, “[J]ust put it
there, and then next year when you guys come back, you
guys can fill it in with the concrete.” Salvatore said that he
warned Warju that if they put asphalt in there, people
were going to just “kick over our barricades and walk
through.” He said that Warju told him not to “worry about
it, we’ll just keep an eye on it.” Danielson testified that the
city does not have a policy that construction should be
halted because of a conflict with a utility; rather, the
proper procedure is to barricade the area.
According to an inspection report, Gaglio Cement
paved the area between the cement portions of the
sidewalk with asphalt on July 22, 2005. Photographs of
the anchor for the guy wire show that the anchor was
actually in the asphalt and the wire crossed the path of
the sidewalk at an angle to the telephone pole.
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Rosalino said that Warju made them surround the
area with barricades. He placed the barricades in such a
way that the sidewalk “wasn’t useable in between that
area.” Unfortunately, people kept taking the barricades
and throwing them. For that reason, he reemphasized
that Warju had to move the wire because the barricades
“are missing every day.” He said that Royal Oak even
sent others to barricade the location. Rosalino said that
the problem persisted even after they completed work-
ing for the summer and returned in the spring of 2006:
“And I told Bryan [Warju], it’s like that wire’s still
there, it’s been eight months now. I was like why is that
wire still there. I was like you gotta move that wire,
’cause they’re taking the barricades and we just put
more barricades there.”
Douglas Burg testified at his deposition that he
was a lineman with Detroit Edison and that he was
dispatched to Normandy Street on April 24, 2006,
regarding a report of a bicyclist who had struck a guy
wire. When he arrived there were no emergency
personnel and no injured person, but he noticed that
the plastic guard for the guy wire was on the ground
some feet from the guy wire. He reattached the guy
wire guard after tightening some of the lines. After
this, he called his dispatch center and instructed
them to have a service planner schedule a project to
move the guy wire as soon as possible. He wrote a
note that stated: “At the lead south of Normandy, 10
poles east of Crooks a guy ran into the down guy on
his bike. We looked at it and it does need a sidewalk
guy to stop decapitating pedestrians. Needs service
planning.” Burg said that he was so concerned about
the wire that, if he had had the right crew with him,
he would have asked for permission to move the wire
immediately.
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McBeth testified that he received a memo about a
potential problem with a guy wire on Normandy
Street. He acknowledged that the memo had stated
that the area needed a sidewalk guy in order for the
guy wire to stop decapitating pedestrians. McBeth
said that he got the memo on May 4, 2006, and went
to the site the same day. He said that he was
concerned about the guy wire and let his supervisor
know that the guy wire needed to be moved as soon as
possible. Indeed, McBeth said that he turned the job
package in the same day and told his supervisor that
he had short-dated it, meaning that it should be done
in two weeks rather than the normal six weeks, which
he thought was warranted by the seriousness of the
situation.
David Colling testified at his deposition that his
daughter Lara fell and injured herself while riding her
bicycle by the area of the guy wire at issue. He stated
that Lara had her accident in May 2006 before the
accident at issue here and that the accident happened
around four or five o’clock in the afternoon.
At approximately 11:00 p.m. on May 24, 2006, John
Crnkovich rode a small scooter equipped with a gas
motor down the sidewalk on the south side of Nor-
mandy Street. A bicyclist stated that he had ridden past
Crnkovich, who he thought was moving at a high rate of
speed given the high-pitched sound of the engine, on the
sidewalk going in the opposite direction. The bicyclist
said that when he got to the driveway of the adjacent
school, he heard a crash. He turned around and went
back, where he saw that Crnkovich had hit the guy
wire. He said that Crnkovich was bleeding from his
neck and was unresponsive. The bicyclist stated that a
motorist stopped and called for help. Crnkovich died
from his injuries.
162 289 M
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The pathologist who conducted the autopsy indicated
that Crnkovich, who was 35 years old and 253 pounds at
the time, had died from blunt-force trauma to his neck
and head. The pathologist specifically noted that Crnkov-
ich had “[s]eparation of C3 from C4 with transection of
the spinal cord.” The pathologist also noted that Crnkov-
ich had been under the influence of alcohol and marijuana
at the time of his death. According to a toxicology report,
Crnkovich had 0.13 g/dl of ethyl alcohol in a blood sample
from his femoral artery and 4 ng/ml of delta-9-
tetrahydrocannabinol and 13 ng/ml of delta-9-carboxy-
tetrahydrocannabinol in a blood sample from his heart.
B. PROCEDURAL HISTORY
In June 2007, Thomas LaMeau, the personal rep-
resentative of Crnkovich’s estate, sued Royal Oak
and Detroit Edison for damages arising out of Crnk-
ovich’s death. LaMeau amended the complaint to
state new claims and eventually to state claims
against Gaglio Cement, Danielson, and Warju. For the
first count of his third amended complaint, LaMeau
alleged that Detroit Edison had negligently placed,
maintained, and failed to move its utility pole and guy
wire and that this negligence caused Crnkovich’s
death. In the second count, LaMeau alleged that
Royal Oak had a duty to maintain its sidewalks in
reasonable repair and that it had breached that duty
by embedding the guy wire anchor in the sidewalk,
which breach caused Crnkovich’s death. LaMeau
alleged in the third count that Gaglio Cement had
breached its duty to perform its contract with Royal
Oak in a proper and workmanlike manner by building
an unsafe sidewalk that ultimately caused Crnkov-
ich’s death. LaMeau also alleged various nuisance
claims in counts 4 through 9. In counts 10 and 11,
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respectively, LaMeau alleged that Danielson and Warju
had been grossly negligent in planning and construct-
ing the sidewalk at issue and that their gross negligence
caused Crnkovich’s death.
Royal Oak moved for summary disposition of
LaMeau’s claims in October 2008. Royal Oak argued
that it was entitled to summary disposition because
LaMeau had failed to plead claims in avoidance of
governmental immunity. Specifically, Royal Oak argued
that the guy wire and anchor were part of the telephone
pole and, therefore, were expressly excluded from the
definition of a highway for purposes of the highway
exception to governmental immunity.
Gaglio Cement also moved for summary disposition
in October 2008. Gaglio Cement argued that LaMeau
had failed to allege that it breached a duty owed to
Crnkovich beyond the duty arising under its contract
with Royal Oak. It also argued that LaMeau’s claims
were barred because Crnkovich had been more than 50
percent at fault and had been under the influence of
alcohol and marijuana.
In December 2008, Danielson and Warju moved for
summary disposition, in part, on the ground that
LaMeau’s claims against them were barred by govern-
mental immunity. Specifically, they argued that their
actions with regard to the construction of the sidewalk
did not rise to the level of gross negligence and were not
“the” proximate cause of Crnkovich’s injuries.
On January 5, 2009, the trial court signed an
opinion and order in which it addressed the motions
by Royal Oak and Gaglio Cement. The trial court
granted the motions with regard to the nuisance
claims, but denied the motions with regard to the
individual negligence claims against Royal Oak and
Gaglio Cement.
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On January 7, 2009, Royal Oak again moved for
summary disposition, along with Danielson and Warju.
In this motion, Royal Oak and its employees argued
that LaMeau had failed to establish that the sidewalk
itself caused Crnkovich’s injuries. Rather, they argued,
Crnkovich’s own reckless behavior was the cause of his
injuries. They also argued that there were superseding
intervening causes that precluded LaMeau’s claims
against them:
1) [Crnkovich’s] careless and illegal behavior; 2) [De-
troit Edison’s] failure to respond to [Royal Oak’s] request
to relocate the wire...;3)Theunknown person(s) remov-
ing the barricades, barrels, and yellow safety tape and/or
sleeve; and, 4) Gaglio’s alleged failure to determine if the
barrels were in place on May 24, 2006.
Finally, Royal Oak, Danielson, and Warju argued that
Crnkovich’s wrongful conduct and intoxication barred
LaMeau from recovering as a matter of law.
Royal Oak appealed as of right the trial court’s
denial of its motion for summary disposition founded
on governmental immunity on January 26, 2009. This
Court assigned that appeal Docket No. 290059.
1
Royal
Oak’s appeal automatically stayed the proceedings
below. See MCR 2.614(D). On February 10, 2009,
Royal Oak filed a motion asking this Court to permit
the trial court to conduct a hearing on pending
motions for rehearing and summary disposition. This
Court entered an order for remand on March 31,
2009.
2
1
This Court granted Gaglio Cement leave to appeal the trial court’s
decision to deny its motion for summary disposition and consolidated
that appeal with the appeal in Docket No. 290059. LaMeau v Royal Oak,
unpublished order of the Court of Appeals, entered May 12, 2009 (Docket
No. 289947).
2
LaMeau v Royal Oak, unpublished order of the Court of Appeals,
entered March 31, 2009 (Docket No. 290059).
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On April 29, 2009, the trial court entered an opinion
and order denying Danielson and Warju’s motion for
summary disposition premised on governmental immu-
nity. In a separate opinion and order entered on the
same day, the trial court denied a motion for reconsid-
eration filed by Royal Oak, Danielson, and Warju.
Danielson and Warju appealed the trial court’s deci-
sion to deny their motion for summary disposition on
May 11, 2009. This Court assigned that appeal Docket
No. 292006.
3
II. GOVERNMENTAL IMMUNITY
A. STANDARDS OF REVIEW
On appeal, Royal Oak, Danielson, and Warju primarily
argue that the trial court erred when it determined that
LaMeau’s claims against them were not barred by govern-
mental immunity and, for that reason, denied their mo-
tions for summary disposition under MCR 2.116(C)(7),
(8), and (10). This Court reviews de novo a trial court’s
decision on a motion for summary disposition. Barnard
Mfg Co, Inc v Gates Performance Engineering, Inc, 285
Mich App 362, 369; 775 NW2d 618 (2009). This Court also
reviews de novo the proper interpretation of statutes.
State Farm Fire & Cas Co v Corby Energy Servs, Inc, 271
Mich App 480, 483; 722 NW2d 906 (2006).
A trial court properly grants summary disposition
under MCR 2.116(C)(7) when a claim is barred by
immunity granted by law. A party may support or
defend a motion under MCR 2.116(C)(7) by affidavits,
3
This Court consolidated the appeals in Docket Nos. 289947, 290059,
and 292006 in an unpublished order, entered May 28, 2009, but on April
29, 2010, entered an unpublished order that closed without prejudice the
appeal in Docket No. 289947 and deconsolidated that appeal from the
other appeals.
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depositions, admissions, or other documentary evi-
dence. Maiden v Rozwood, 461 Mich 109, 119; 597
NW2d 817 (1999). This Court reviews the evidence in
the light most favorable to the nonmovant to determine
whether a plaintiff’s claim is barred by immunity.
Zwiers v Growney, 286 Mich App 38, 42; 778 NW2d 81
(2009). If the submissions demonstrate that there is a
factual dispute as to whether immunity applies, sum-
mary disposition is not appropriate. Id.
A motion for summary disposition brought under MCR
2.116(C)(8) tests the “legal sufficiency of the complaint on
the allegations of the pleadings alone.” Feyz v Mercy Mem
Hosp, 475 Mich 663, 672; 719 NW2d 1 (2006). When
reviewing a motion under MCR 2.116(C)(8), this Court
accepts all well-pleaded allegations as true and construes
them in a light most favorable to the nonmovant. Maiden,
461 Mich at 119. Summary disposition under MCR
2.116(C)(8) is appropriate only when the claims alleged
are so clearly unenforceable that no factual development
could justify recovery. Maiden, 461 Mich at 119.
A motion brought under MCR 2.116(C)(10) tests the
factual sufficiency of the complaint. Maiden, 461 Mich at
120. A party may be entitled to summary disposition
under MCR 2.116(C)(10) if, “[e]xcept as to the amount of
damages, there is no genuine issue as to any material
fact....”This Court reviews a motion brought under this
subsection by considering the affidavits, pleadings, depo-
sitions, admissions, and other evidence submitted by the
parties in the light most favorable to the party opposing
the motion to determine whether there are genuine issues
of material fact. Maiden, 461 Mich at 120.
B. THE HIGHWAY EXCEPTION
Under the governmental tort liability act (GTLA),
MCL 691.1401 et seq., a governmental agency is “im-
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mune from tort liability if the governmental agency is
engaged in the exercise or discharge of a governmental
function.” MCL 691.1407(1). It is undisputed that
Royal Oak is a governmental agency, see MCL
691.1401(b) and (d), and that its construction of the
sidewalk at issue constituted the exercise of a govern-
mental function. Thus, unless one of the statutory
exceptions to immunity applies to this case, Royal Oak
is immune from tort liability arising from its construc-
tion of the sidewalk.
One exception to the immunity provided by MCL
691.1407(1) is the highway exception to governmental
immunity. Under MCL 691.1402(1), every “governmen-
tal agency having jurisdiction over a highway shall
maintain the highway in reasonable repair so that it is
reasonably safe and convenient for public travel.” Fur-
ther, 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. [Id.]
The Legislature provided that “highway” means “a
public highway, road, or street that is open for public
travel and includes bridges, sidewalks, trailways, cross-
walks, and culverts on the highway.” MCL 691.1401(e).
Hence, Royal Oak may be liable if it breached its duty
under MCL 691.1402(1) to keep the sidewalk in reason-
able repair.
Although Royal Oak concedes that it had a duty to
maintain the sidewalk at issue in reasonable repair, it
argues that the sidewalk itself was not defective.
Rather, the problem was with the placement of the
anchor for the guy wire and the guy wire that supported
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a nearby telephone pole. Because the guy wire and its
anchor are by definition not part of the highway, Royal
Oak argues that it cannot be held liable for the danger-
ous placement of the anchor and guy wire. Royal Oak
relies on MCL 691.1401(e) to support its contention
that the improper placement of the anchor and guy wire
at issue cannot give rise to liability because those
structures are never part of a highway.
1. DEFINITION OF “HIGHWAY”
MCL 691.1401(e) defines the term “highway” to
broadly include public highways, roads, and streets that
are “open for public travel....” It also clarifies that
certain structures that are “on the highway” are in-
cluded within the definition: “bridges, sidewalks, trail-
ways, crosswalks, and culverts....”Id. It also defines
highway as not including one type of thoroughfare—
“alleys”—and as not including “trees” and “utility
poles,” even though trees and utility poles will often be
located within the right-of-way of a highway. Id.
In this case, Crnkovich died when he struck a guy
wire that was strung across Royal Oak’s sidewalk and
connected to an anchor embedded in the sidewalk at
one end and a utility pole at the other end. Thus, the
question becomes whether the exclusion of utility poles
from the definition of “highway” insulates Royal Oak
from liability for paving the sidewalk through the
anchor and under the guy wire with insufficient clear-
ance for persons using the sidewalk.
The definition of the term “highway” has no opera-
tive effect outside the substantive provisions of the
GTLA—that is, the definition must be interpreted in
light of the provisions of the statute that impose liabil-
ity. MCL 691.1402(1) imposes a duty on municipalities
to maintain their highways “in reasonable repair....”
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Therefore, the definition of a highway is integral to
understanding what the municipality must maintain in
reasonable repair; it must maintain its public highways,
roads, and streets in reasonable repair, and it must
maintain the bridges, sidewalks, trailways, crosswalks,
and culverts that are associated with those highways in
reasonable repair. In contrast, a municipality does not
have a duty to maintain alleys in reasonable repair and
does not have a duty to maintain in reasonable repair
trees and utility poles that may be within the highway
right-of-way. However, the fact that a municipality does
not have a duty to maintain utility poles in reasonable
repair does not relieve the municipality of its duty to
maintain its sidewalks in reasonable repair even when a
utility pole causes the sidewalk’s state of disrepair.
Thus, assuming—without actually deciding—that the
anchor and guy wire constitute “utility poles” within
the meaning of MCL 691.1401(e), Royal Oak neverthe-
less had a duty to make reasonable repairs to its
sidewalk that were occasioned by the anchor and guy
wire.
4
Under these facts,
5
the anchor and guy wire were
part of the sidewalk. This case does not involve condi-
tions that are external to the sidewalk, such as snow,
ice, or an oil spill. See Buckner Estate v City of Lansing,
480 Mich 1243, 1244 (2008) (explaining that “the accu-
mulation, by itself, of ice and snow on a sidewalk,
regardless of whether it accumulated through natural
causes or otherwise, does not constitute a ‘defect’ in the
sidewalk”). This case involves a physical structure
4
For example, if a utility pole fell and seriously damaged a sidewalk,
the fact that the defect in the sidewalk was caused by a utility pole would
not relieve the municipality of any liability arising from its failure to
remedy the defect.
5
At oral argument, the parties acknowledged that this case involved
unique facts and an issue of first impression.
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in the sidewalk itself. Further, the structure is not a
fixture that was attached to the sidewalk after the
sidewalk’s construction. See Ali v Detroit, 218 Mich App
581, 589; 554 NW2d 384 (1996) (holding that the
definition of “highway” does not include fixtures, such
as a bus passenger shelter, that are “linked with the
sidewalk solely by its placement”). Rather, the anchor
and guy wire were in place before the construction of the
sidewalk. And Royal Oak decided to construct the
sidewalk in such a way as to incorporate the guy wire
and its anchor into the sidewalk. Once Royal Oak
decided to pave through the guy wire and anchor, the
fact that the anchor and guy wire were also attached to
a utility pole become irrelevant because the anchor and
guy wire were, at that point, part of the sidewalk.
6
For these reasons, we reject Royal Oak’s argument
that MCL 691.1402(1) must be narrowly construed to
exclude the defect at issue. Although this Court must
construe the exceptions to governmental immunity
narrowly, Nawrocki v Macomb Co Rd Comm, 463 Mich
143, 158; 615 NW2d 702 (2000), this Court is not at
liberty to ignore the plain language of the statute under
the guise of interpreting it narrowly, see Echelon
Homes, LLC v Carter Lumber Co, 472 Mich 192, 196;
694 NW2d 544 (2005), and MCL 691.1402(1) plainly
and unequivocally imposes liability on municipalities
for defects in sidewalks—even if the defect in the
sidewalk is occasioned by the presence of a structure
that the municipality would normally not have a duty to
maintain in reasonable repair.
6
By way of example, if Royal Oak’s contractors had left a work boot in
a freshly poured concrete slab with one half submerged and the other half
protruding above the level of the concrete, the boot would be part of the
sidewalk, so that Royal Oak would be liable for harms caused by the
failure to remedy the defect.
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2. JURISDICTION
Royal Oak also argues that it did not have jurisdic-
tion over the anchor and guy wire at issue. However,
Royal Oak admitted that it had jurisdiction over the
sidewalk and, once it chose to incorporate the anchor
and guy wire into its sidewalk, it necessarily acquired
jurisdiction over the anchor and guy wire to the extent
that they were part of the sidewalk. See MCL
691.1401(e); MCL 691.1402(1). Moreover, the fact that
Royal Oak did not have the equipment or expertise to
relocate the anchor and guy wire did not relieve it of its
duty to rectify the defective condition; had Royal Oak
wanted to avoid responsibility for the anchor and guy
wire, it could simply have elected not to incorporate
those structures into its sidewalk. Indeed, if Royal Oak
had followed the advice of its own contractor and left
several flags on either side of the anchor and guy wire
unpaved—or even left the flag at issue unpaved—Royal
Oak would have had no duty with regard to the anchor
and guy wire. See MCL 691.1401(e).
3. OPEN TO THE PUBLIC
Contrary to Royal Oak’s contention, the evidence did
not demonstrate that the sidewalk at issue was closed to
the public. See Pusakulich v Ironwood, 247 Mich App
80, 85-86; 635 NW2d 323 (2001) (noting that a govern-
mental agency can suspend its duty to keep a highway
in good repair by closing it to public traffic). Royal Oak
presented evidence that it had Gaglio Cement barricade
the flag at issue to prevent the general public from
using the sidewalk at the point where it crossed under
the guy wire. However, the evidence also showed that
the remainder of the new sidewalk was open to the
public and that Royal Oak ordered Gaglio Cement to
pave the missing sidewalk flag with asphalt. Likewise,
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the evidence showed that the barricades were routinely
moved or stolen from the location, and there was
evidence from which reasonable persons could conclude
that there were no barriers in place on the date at issue.
Under the totality of the circumstances, whether Royal
Oak had closed the sidewalk to the public is a question
of fact.
4. THE TWO-INCH RULE
Royal Oak also argues that LaMeau’s claims are
barred under MCL 691.1402a. However, our Supreme
Court recently explained that the limitations stated
under MCL 691.1402a(2) apply only to sidewalks that
are adjacent to a county highway. Robinson v City of
Lansing, 486 Mich 1, 21-22; 782 NW2d 171 (2010). In
this case, there was no evidence that the sidewalk at
issue was adjacent to a county highway. Therefore, MCL
691.1402a(2) does not apply to the street at issue.
Further, even if MCL 691.1402a(2) could be said to
apply under the facts of this case, the rebuttable infer-
ence provided under that statute applies only to “a
discontinuity defect” in a sidewalk. Because this case
does not involve a discontinuity defect, that presump-
tion does not apply.
5. NOTICE
Finally, Royal Oak argues that LaMeau’s claims are
barred under MCL 691.1403 because it did not have the
required 30-day notice of the defect. Specifically, Royal
Oak contends that LaMeau had to show that Royal Oak
had notice that the barricades were missing before the
accident at issue. Royal Oak’s argument that it had to
have notice that the barricades were missing is unper-
suasive. MCL 691.1403 requires notice of a defect in the
highway—not the absence of barricades warding trav-
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elers from the defect. The undisputed evidence in this
case showed that Royal Oak was not only aware of the
defective condition, its employees actually created the
defective condition. See Wilson v Alpena Co Rd Comm,
263 Mich App 141, 149; 687 NW2d 380 (2004) (noting
that a governmental agency’s employee’s knowledge of
a defect will be imputed to the agency). Further, knowl-
edge of the defect is “conclusively presumed when the
defect existed so as to be readily apparent to an ordi-
narily observant person for a period of 30 days or longer
before the injury took place.” MCL 691.1403. The
evidence in this case showed that the extreme danger
posed by the defective condition of the sidewalk—that
is, the anchor and guy wire—was “readily apparent” for
the requisite 30 days. And, in any event, there was
evidence that even after Royal Oak created the defec-
tive condition, its contractor repeatedly warned it about
the continuing hazard from the anchor and guy wire.
Finally, there was clear evidence that Royal Oak had
notice that a bicyclist had fallen after encountering the
guy wire over the sidewalk. Accordingly, there is no
dispute that Royal Oak had adequate notice of the
defect for purposes of MCL 691.1403.
6. CONCLUSION
Royal Oak had a duty under the highway exception to
rectify the defect that it created in the sidewalk after it
decided to pave the sidewalk through the anchor and,
thereby, incorporate the anchor and guy wire into the
sidewalk. MCL 691.1402(1). Therefore, the trial court
did not err when it denied Royal Oak’s motion for
summary disposition that alleged that Royal Oak was
immune from suit. Given the conclusion that Royal Oak
could be liable under MCL 691.1402(1) for the actual
defect at issue, the anchor and guy wire incorporated
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into the sidewalk, we decline to consider whether Royal
Oak could be liable under a failure-to-warn or
negligent-design theory.
C. IMMUNITY FOR GOVERNMENTAL EMPLOYEES
On appeal, Danielson and Warju argue that the trial
court also erred when it refused to dismiss LaMeau’s
claims against them on the ground that they were
entitled to governmental immunity. Under MCL
691.1407(2), certain classes of persons working for
governmental agencies are immune from tort liability if
all the following are true:
(a) The officer, employee, member, or volunteer is acting
or reasonably believes he or she is acting within the scope
of his or her authority.
(b) The governmental agency is engaged in the exercise
or discharge of a governmental function.
(c) The officer’s, employee’s, member’s, or volunteer’s
conduct does not amount to gross negligence that is the
proximate cause of the injury or damage.
The first two criteria are not at issue. Rather, Danielson
and Warju only argue that their actions did not amount
to gross negligence and, even if they did, their actions
did not amount to “the” proximate cause of Crnkovich’s
injuries.
1. GROSS NEGLIGENCE
In order to survive a motion for summary disposition
premised on the immunity afforded to governmental
employees, the plaintiff must present evidence suffi-
cient for a reasonable finder of fact to conclude that the
employee was grossly negligent. If there is no question
of fact about whether the allegedly negligent conduct
rises to the level of gross negligence, the court may
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decide the question as a matter of law. Evidence of
ordinary negligence will not be sufficient to survive a
motion for summary disposition. Maiden, 461 Mich 122-
123 (“[E]vidence of ordinary negligence does not create a
material question of fact concerning gross negligence.”);
see also Costa v Community Med Servs, Inc, 475 Mich
403, 411; 716 NW2d 236 (2006) (noting that the gross-
negligence exception applies to situations “in which the
contested conduct was substantially more than negli-
gent”). Rather, there must be evidence that the employee
engaged in “conduct so reckless as to demonstrate a
substantial lack of concern for whether an injury results.”
MCL 691.1407(7)(a); see also Maiden, 461 Mich at 123.
On appeal, Danielson and Warju frame the issue in
terms of their conduct after the construction of the
sidewalk at issue. That is, they argue that the evidence
concerning the steps that they took to barricade the
sidewalk and to get Detroit Edison to move the anchor
and guy wire did not show that their conduct rose to the
level of gross negligence; instead, they contend that “[i]f
such a minor level of negligence is sufficient to avoid
immunity, immunity for individuals based upon gross
negligence would be undermined, if not abrogated.”
However, the proper focus is not solely on the evidence
concerning the steps they took after creating the defect
in the sidewalk. Rather, the totality of their conduct—
including their actions leading to the creation of the
defect in the sidewalk as well as the steps they took to
remediate the defect—must be evaluated when deter-
mining whether their actions could be found to amount
to gross negligence. Indeed, if the defect had not been
created in the first instance, then there would have
been no need to remediate it.
Although the sidewalk project called for the place-
ment of the sidewalk through the area occupied by the
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anchor and guy wire, the decision to place the sidewalk
along this path was not inherently negligent—let alone
grossly negligent—given that the anchor and guy wire
could have been relocated.
7
Indeed, there was evidence
that another utility was able to timely move its own
anchor and guy wire. However, once Gaglio Cement began
to prepare the area and pour concrete flags, both Rosalino
and Salvatore Gaglio noticed that the anchor and guy wire
had not been relocated and informed Warju of the need to
move it. Nevertheless, Warju ordered them to proceed
with the project and told them to just block the area off.
Rosalino disagreed with this course and urged Warju to
leave a substantial distance—50 feet in either direction—
unpaved for safety purposes. Despite Rosalino’s protesta-
tion that people would get hurt, Warju told them to pave
right up to the anchor and guy wire and leave just one flag
unpaved.
Sometime later, Warju asked Salvatore to fill the miss-
ing flag with asphalt. Salvatore again warned Warju
against paving the area before the guy wire was relocated,
but Warju said, “[J]ust put it there, and then next year
when you guys come back, you guys can fill it in with the
concrete.” Salvatore said that he also warned Warju that if
they put asphalt in there, people were just going to “kick
over our barricades and walk through.” He said that
Warju told him not to “worry about it, we’ll just keep an
eye on it.”
When asked whether Warju could have halted the
project to await the relocation of the anchor, Danielson
7
By pointing out this fact, we do not mean to imply that the negligent
design of a highway or sidewalk might be actionable—it is now settled that
design defects are not actionable. See Hanson v Mecosta Co Rd Comm’rs,
465 Mich 492, 502-504; 638 NW2d 396 (2002). As already noted, this case
involves a physical defect in the surface of the sidewalk occasioned by the
incorporation of the anchor and guy wire into the sidewalk during construc-
tion; it does not involve a defect in the design or layout of the sidewalk.
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admitted that he could have done so, but explained that
there was no policy requiring that. Instead, he said the
proper procedure is to complete the project and barri-
cade the hazard area. Similarly, when asked to explain
why he did not leave the area unpaved, Warju ex-
plained: “Well, we are on a schedule to do the sidewalk.
We are coming down that street. We are not going to
stop and wait for nine months in this case for Detroit
Edison to relocate their wire along with other objects
which are in the way.”
The testimony concerning the events leading up to
the creation of the hazard strongly suggested that
Danielson and Warju were indifferent to the magnitude
of the danger being created. The anchor and guy wire
posed a clear danger even to pedestrians traversing the
paved portion of the sidewalk. Yet the danger increased
dramatically for persons moving at any speed greater
than a walk—the location of the fence on one side and
of wires and poles on the other made it difficult for any
person moving at such a speed to avoid the hazard, and
the height of the guy wire rendered anyone who failed
to avoid it in danger of sustaining a head or neck injury.
Given this evidence, Danielson and Warju should have
realized the seriousness of the hazard they were creat-
ing by ordering that the sidewalk be paved before
moving the anchor and guy wire. On the basis of this
evidence, a reasonable jury could conclude that the
decision to incorporate the anchor and guy wire into the
sidewalk demonstrated “a substantial lack of concern
for whether an injury results.” MCL 691.1407(7)(a);
Maiden, 461 Mich at 122-123 (stating that, in order to
survive a motion for summary disposition premised on
governmental immunity for governmental employees, a
plaintiff must adduce proof of conduct so reckless that it
demonstrates a substantial lack of concern for whether
an injury will result). Even if Danielson and Warju did
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not fully appreciate the danger, the evidence also
showed that they were repeatedly warned about the
danger posed by paving up to the anchor and guy wire,
yet ordered Gaglio Cement to proceed anyway.
Further, although there was evidence that Danielson
and Warju contacted Detroit Edison about moving the
anchor and guy wire, the evidence also suggested that
Danielson’s and Warju’s efforts in this regard were defi-
cient. Neither Danielson nor Warju ever formally re-
quested Detroit Edison to relocate the anchor and guy
wire. Warju did send a letter to Detroit Edison advising it
of a meeting concerning the project, and in the letter he
noted that any conflicts with utilities would be discussed
at the meeting, but he addressed the letter to a person
who was not located at the office to which the letter was
addressed and who was not responsible for resolving
utility conflicts. Likewise, although Danielson testified
that he contacted various Detroit Edison personnel about
moving the anchor and guy wire, he admitted that the
requests were oral, and the evidence showed that some of
these communications occurred during discussions about
other projects. In addition, there was evidence from which
one could conclude that Detroit Edison did not receive any
requests—oral or otherwise—to move the anchor and guy
wire. Thus, there was evidence from which a reasonable
fact-finder could conclude that the efforts to have the
anchor and guy wire relocated were not just deficient, but
grossly deficient.
The evidence also showed that Danielson’s and War-
ju’s efforts to safeguard the public from the hazard they
created were inadequate. Although there was evidence
that the sidewalk was barricaded at the point of the
hazard, there was also evidence that the barricades
were repeatedly moved or stolen. Rosalino testified that
he warned Warju over and over again about the problem
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with the barricades and told him that the guy wire had
to be moved; he even expressed exasperation over the
fact that the guy wire had not been moved after eight
months. Moreover, the photographs from the accident
at issue showed no sign of any barricade within the
vicinity of the anchor and guy wire. There was also
evidence that the general public was using the sidewalk
before the accident at issue. The evidence showed that
two bicyclists were injured while encountering the
hazard and that Royal Oak clearly had notice of one of
those accidents because its fire department responded
and generated a report about the guy wire at issue.
When the totality of the evidence and the testimony
concerning the events at issue is viewed in a light most
favorable to LaMeau, there is a clear question of fact
about whether Danielson and Warju were grossly neg-
ligent. The evidence showed that Danielson and Warju
created the hazard at issue by paving a path right up to
and including the anchor and guy wire notwithstanding
the evident serious danger. The evidence also showed
that their efforts to have the anchor and guy wire
moved were deficient and untimely, and that they
ignored the fact that the barricades were inadequate
and that the general public was using the sidewalk.
Taken together, this conduct could be found to be “so
reckless as to demonstrate a substantial lack of concern
for whether an injury results.” MCL 691.1407(7)(a).
Accordingly, the trial court did not err when it con-
cluded that there was evidence from which a finder of
fact could conclude that Danielson and Warju were
grossly negligent.
2. “THE” PROXIMATE CAUSE
Danielson and Warju also argue that, even assuming
that there is a question of fact about whether their
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conduct rose to the level of gross negligence, they are
nevertheless entitled to immunity because there is no
question of fact regarding whether their conduct was
“the” proximate cause of Crnkovich’s injuries. The
Legislature has provided that a governmental employee
is immune from tort liability unless his or her conduct
amounted “to gross negligence” and that gross negli-
gence was “the proximate cause of the injury or dam-
age.” MCL 691.1407(2)(c) (emphasis added). Our Su-
preme Court has held that the Legislature’s reference
to “the proximate cause”—as opposed to “a proximate
cause”—means that the employee’s gross negligence
must be more than just a proximate cause of the injury
in order to meet the requirements of the exception to
the governmental employee’s immunity. See Robinson v
Detroit, 462 Mich 439, 461-463; 613 NW2d 307 (2000).
Instead, a governmental employee is immune from tort
liability unless his or her conduct amounted to gross
negligence that was “the one most immediate, efficient,
and direct cause of the injury or damage ....” Id. at
462.
On appeal, Danielson and Warju argue that Detroit
Edison negligently failed to move the anchor and guy
wire after Warju and Danielson requested removal and
after receiving notice of the accident involving the
bicyclist. They also argue that Crnkovich himself was
largely at fault for his own accident. Specifically, they
note that Crnkovich illegally rode the motor scooter on
the sidewalk and that he did so at night, without
appropriate safety equipment, at a high rate of speed,
and while under the influence of alcohol and marijuana.
They also fault Gaglio Cement for not taking better
steps to ensure that the area was properly barricaded
and fault unknown persons for removing the barri-
cades. On the basis of this evidence, Danielson and
Warju contend that—even if their conduct were deemed
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grossly negligent—their conduct was clearly not the one
most immediate, efficient, and direct cause of Crnkovich’s
injuries.
In the present case, there was evidence from which a
reasonable jury could conclude that Crnkovich’s conduct
was the one most immediate, efficient, and direct cause of
his injuries. He elected to ride the motor scooter at night,
without protective gear, and after having ingested alcohol
and marijuana at some prior point. However, there was
also evidence from which a reasonable jury could conclude
that the conduct of Danielson and Warju in creating the
hazard at issue and then failing to rectify or mitigate the
hazard constituted the one most immediate, efficient, and
direct cause of Crnkovich’s injuries. Danielson and Warju
were responsible for the decision to pave the sidewalk
directly up to and including the anchor and guy wire. And
a reasonable jury could conclude that, had Warju halted
the project or followed Rosalino’s advice to leave 50 feet of
land unpaved on either side of the anchor and guy wire,
Crnkovich could not have operated his small motor
scooter on the unpaved land or that, if he had traversed
the unpaved land, he could not have had a catastrophic
collision with the anchor and guy wire. In addition, a
reasonable jury could conclude that it was Danielson’s and
Warju’s failure to formally request the relocation of the
anchor and guy wire that caused Detroit Edison to be
unable to move the anchor and guy wire in time to prevent
the accident. Indeed, the evidence supported an inference
that Detroit Edison was not aware of the changed circum-
stances involving the anchor and guy wire—namely, that
Danielson and Warju had paved through the anchor and
under the guy wire and, thereby, created a far more
hazardous condition than previously existed, a condition
that only then urgently required Detroit Edison’s inter-
vention. As for Gaglio Cement’s alleged failure to properly
barricade the site, the evidence showed that Gaglio Ce-
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ment contracted with Royal Oak under the supervision of
Danielson and Warju. There was also evidence that Sal-
vatore warned Warju that barricading the site would not
prevent injuries and that the barricades would likely be
removed. Rosalino also informed Warju about the problem
with the barricades and urged him to ensure that the guy
wire got relocated. From this, a reasonable jury could
conclude that the failure to have barricades in place was
attributable to the conduct of Danielson and Warju or was
not a significant cause of Crnkovich’s injuries.
In light of the evidence before the trial court, a
question of fact clearly existed regarding the one most
immediate, efficient, and direct cause of Crnkovich’s
injuries.
3. CONCLUSION
Considering the evidence presented to the trial court, a
reasonable jury could conclude that the acts of Danielson
and Warju in ordering the paving of the area up to and
including the anchor and guy wire, as well as their failure
to have the anchor and guy wire relocated and properly
barricaded, amounted to gross negligence. Likewise, a
reasonable jury could conclude that the one most imme-
diate, efficient, and direct cause of the injuries at issue was
Danielson’s and Warju’s grossly negligent conduct. MCL
691.1407(2)(c); MCL 691.1407(7)(a); Robinson, 462 Mich
at 462. Accordingly, the trial court did not err when it
denied Danielson and Warju’s motion for summary dispo-
sition premised on governmental immunity.
III. GENERAL CONCLUSION
The trial court correctly determined that Royal Oak,
Danielson, and Warju were not entitled to governmen-
tal immunity under the facts of this case. For that
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reason, it did not err when it denied their motions for
summary disposition on that basis.
Affirmed.
F
ITZGERALD
, J., concurred.
T
ALBOT
,P.J. (dissenting). I respectfully dissent from
the majority’s opinion and would reverse the trial
court’s denial of defendants’ motions for summary
disposition based on their assertion of governmental
immunity.
This lawsuit arises from an accident that occurred on
May 24, 2006, at 11:00 p.m., on a sidewalk of defendant
city of Royal Oak (the City). At that time, plaintiff
Thomas LaMeau’s decedent, John M. Crnkovich, died
of blunt-force head and neck trauma after striking a
guy
1
wire that was strung at an angle from a utility pole
of defendant Detroit Edison Company (DTE) across the
sidewalk and anchored on the opposite side of the
sidewalk. It is undisputed that, at the time of the
accident, the decedent was riding a motorized scooter,
without benefit of lights or a helmet, and had a blood
alcohol level of 0.13 g/dl in addition to the presence of
cannabinoids in his system. Defendant Gaglio PR Ce-
ment Corporation (Gaglio)
2
had a contract with the City
for installation of the sidewalk where this accident
occurred. Defendants Elden Danielson and Bryan
Warju are engineers employed by the City, involved in
the design, placement, and oversight of the construction
project for the sidewalk.
1
The parties and the record alternatively referred to this as a “guy
wire” or “guide wire.”
2
Gaglio filed an appeal in this matter (Docket No. 289947), which has
been closed without prejudice pending bankruptcy proceedings. LaMeau
v Royal Oak, unpublished order of the Court of Appeals, entered April 29,
2010 (Docket Nos. 289947, 290059, and 292006).
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This Court reviews de novo a trial court’s grant or
denial of a motion for summary disposition. Ardt v Titan
Ins Co, 233 Mich App 685, 688; 593 NW2d 215 (1999). A
motion for summary disposition brought pursuant to
MCR 2.116(C)(10) serves to test the factual sufficiency of
the claims. Corley v Detroit Bd of Ed, 470 Mich 274, 278;
681 NW2d 342 (2004). In accordance with MCR
2.116(C)(10), the moving party is entitled to a grant of
summary disposition upon a successful demonstration
that no genuine issue of material fact exists. Coblentz v
City of Novi, 475 Mich 558, 569; 719 NW2d 73 (2006).
Mere speculation and conjecture cannot give rise to a
genuine issue of material fact. Quinto v Cross & Peters
Co, 451 Mich 358, 371-372; 547 NW2d 314 (1996). A
motion for summary disposition brought in accordance
with MCR 2.116(C)(8) tests the legal sufficiency of the
allegations claimed in the pleadings. Feyz v Mercy Mem
Hosp, 475 Mich 663, 672; 719 NW2d 1 (2006). In contrast,
when deciding a motion under MCR 2.116(C)(7), a court
must consider the pleadings, admissions, affidavits, and
other documentary evidence within the record in the light
most favorable to the nonmoving party to determine
whether any genuine issue of material fact exists, which
would necessitate the conduct of a trial. See Amburgey v
Sauder, 238 Mich App 228, 231; 605 NW2d 84 (1999).
The issues raised by defendants concern the applica-
bility of governmental immunity. In general, govern-
mental agencies are deemed to be immune from tort
liability for actions taken in furtherance of their gov-
ernmental functions. MCL 691.1407(1). “[T]he immu-
nity conferred upon governmental agencies is broad,
and the statutory exceptions thereto are to be narrowly
construed.” Nawrocki v Macomb Co Rd Comm, 463
Mich 143, 158; 615 NW2d 702 (2000). A “governmental
function” has been defined to encompass “an activ-
ity... expressly or impliedly mandated or authorized
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by constitution, statute, local charter or ordinance, or
other law.” MCL 691.1401(f). The fact that the City’s
construction of a sidewalk comprises a governmental
function is not in dispute.
The City is immune from liability while engaged in a
governmental function, unless a statutory exception is
found to be applicable. The only exception alleged to be
at issue under the circumstances of this case is the
highway exception, MCL 691.1402(1), which provides,
in relevant part:
Except as otherwise provided in [MCL 691.1402a], 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.
Of particular relevance is the term “highway,” defined
in MCL 691.1401(e) as follows: “[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.”
As discussed by our Supreme Court in Buckner Estate
v City of Lansing, 480 Mich 1243, 1244 (2008): “The term
‘highway’ includes ‘sidewalks.’ MCL 691.1401(e). In order
to show that a governmental agency failed to ‘maintain [a]
highway in reasonable repair,’ a plaintiff must demon-
strate that a ‘defect’ exists in the highway.” (Citations
omitted.)
3
Because the parties do not dispute jurisdic-
3
“We treat the Supreme Court’s order as binding precedent....”
Gonzalez v St John Hosp & Med Ctr (On Reconsideration), 275 Mich App
290, 304 n 3; 739 NW2d 392 (2007).
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tion in this matter, the issue that must be resolved is
whether the guy wire strung across the sidewalk
comprises a “defect,” as contemplated by the statute.
Plaintiff contends that the guy wire was anchored
into the sidewalk and thus is part of its construction
and constitutes a defect. In contrast, the City argues
that the guy wire is part of the utility pole owned by
and under the jurisdiction of DTE, which is specifi-
cally excluded from the definition of the term “high-
way,” pursuant to MCL 691.1401(e). As such, neither
the pole nor the wire that extends from it is part of
the sidewalk and, therefore, comprises an exception
for purposes of immunity. In addition, the City cites
MCL 691.1402a, which provides, in relevant part:
(1) Except as otherwise provided by this section, a
municipal corporation has no duty to repair or maintain,
and is not liable for injuries arising from, a portion of a
county highway outside of the improved portion of the
highway designed for vehicular travel, including a side-
walk, trailway, crosswalk, or other installation. This sub-
section does not prevent or limit a municipal corporation’s
liability if both of the following are true:
(a) At least 30 days before the occurrence of the
relevant injury, death, or damage, the municipal corpo-
ration knew or, in the exercise of reasonable diligence,
should have known of the existence of a defect in a
sidewalk, trailway, crosswalk, or other installation out-
side of the improved portion of the highway designed for
vehicular travel.
(b) The defect described in subdivision (a) is a proximate
cause of the injury, death, or damage.
(2) A discontinuity defect of less than 2 inches creates a
rebuttable inference that the municipal corporation main-
tained the sidewalk, trailway, crosswalk, or other installa-
tion outside of the improved portion of the highway de-
signed for vehicular travel in reasonable repair.
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Specifically, the City contends that any “defect” must be
in the materials or construction actually comprising the
sidewalk, which plaintiff cannot demonstrate and has
not alleged. See MCL 691.1402a(2). Plaintiff responds
that MCL 691.1402a(2) is not applicable because a
“discontinuity defect” is not at issue. However, plaintiff
contends that MCL 691.1402a(1) does impose liability.
The initial matter to be resolved is whether the term
“defect” encompasses the current factual situation.
Contrary to the majority’s conclusion, I would find that
the trial court erred by declining to award summary
disposition to the City because a question of fact does
not exist regarding whether the guy wire constituted a
“defect.” As argued by the City, the fact that pursuant
to MCL 691.1401(e) “[t]he term highway does not
include alleys, trees, and utility poles” leads to an
implication in favor of the grant of summary disposi-
tion. “The goal of statutory interpretation is to discern
and give effect to the intent of the Legislature from the
statute’s plain language.” Houdek v Centerville Twp,
276 Mich App 568, 581; 741 NW2d 587 (2007). “[I]f the
language of the statute is clear and unambiguous, no
interpretation is necessary and the court must follow
the clear wording of the statute.” American Alternative
Ins Co, Inc v York, 470 Mich 28, 30; 679 NW2d 306
(2004). The relevant statutory language specifically
excludes utility poles, and it is disingenuous to suggest
that any appendage extending from a utility pole should
be treated as a separate or distinguishable entity.
Further, in Black’s Law Dictionary (8th ed), the word
“defect” is defined as “[a]n imperfection or shortcom-
ing, esp. in a part that is essential to the operation or
safety of a product.” In applying this definition, our
Supreme Court has explicitly restricted sidewalk de-
fects to imperfections occurring in the walkway itself.
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In Buckner Estate, 480 Mich at 1244, the Court stated:
“Because the accumulation, by itself, of ice and snow on
a sidewalk, regardless of whether it accumulated
through natural causes or otherwise, does not consti-
tute a ‘defect’ in the sidewalk, plaintiffs have not shown
that defendant violated its duty to ‘maintain’ the side-
walk in ‘reasonable repair.’ ” Further buttressing the
restrictive use of the term “defect” is the Court’s
emphasis on the meaning of the words “repair” and
“maintain.” Specifically:
“Maintain” and “repair” are not technical legal terms.
In common usage, “maintain” means “to keep in a state of
repair, efficiency, or validity: preserve from failure or
decline.” Webster’s Third New International Dictionary,
Unabridged Edition (1966), p 1362. Similarly, “repair”
means “to restore to a good or sound condition after decay
or damage; mend.” Random House Webster’s College Dic-
tionary (2000), p 1119. [Hanson v Mecosta Co Rd Comm’rs,
465 Mich 492, 502; 638 NW2d 396 (2002).]
This is consistent with our Supreme Court’s instruction
in Nawrocki that statutory exceptions to governmental
immunity “are to be narrowly construed.” Nawrocki,
463 Mich at 158. Thus, the majority’s effort to expand
the term “defect” to encompass the guy wire is contrary
to both its plain meaning and prior caselaw.
Interpretation by our Supreme Court of the language
comprising MCL 691.1402 precludes an alternative
level of analysis. Specifically, MCL 691.1402(1) pro-
vides, in relevant part:
[E]ach 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
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recover the damages suffered by him or her from the
governmental agency. [Emphasis added.]
Although the phrase “and in a condition reasonably safe
and fit for travel” indicates the potential for the impo-
sition of liability, our Supreme Court has determined
that this phrase cannot be read or applied separately
from the phrase “maintain the highway in reasonable
repair.” As discussed in Nawrocki:
The first sentence of the statutory clause, crucial in
determining the scope of the highway exception, describes
the basic duty imposed on all governmental agencies,
including the state, having jurisdiction over any highway:
“[to] maintain the highway in reasonable repair so that it
is reasonably safe and convenient for public travel.” This
sentence establishes the duty to keep the highway in
reasonable repair. The phrase “so that it is reasonably safe
and convenient for public travel” refers to the duty to
maintain and repair. The plain language of this phrase thus
states the desired outcome of reasonably repairing and
maintaining the highway; it does not establish a second
duty to keep the highway “reasonably safe.” [Nawrocki,
463 Mich at 160 (citation omitted).]
Because plaintiff failed to demonstrate the existence of
a “defect,” as that term is defined and applied, the trial
court erred by determining that a question of fact
existed because both the statutory language and case-
law preclude such a determination.
The majority also implies that immunity is not
available as a result of the City’s decision to construct
the sidewalk in the path of the guy wire, resulting in a
defective design. However, this Court has recently ad-
dressed design defects and the applicability of the
highway exception, noting, in relevant part:
With respect to design defects, the Supreme Court in
Hanson v Mecosta Co Rd Comm’rs [465 Mich at 502] held
that “the highway exception does not include a duty to design,
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or to correct defects arising from the original design or
construction of highways.” The Court explained, “Nowhere
in the statutory language is there a duty to install,to
construct or to correct what may be perceived as a dangerous
or defective ‘design.’ [Plunkett v Dep’t of Transp, 286 Mich
App 168, 183-184; 779 NW2d 263 (2009) (citation omitted).]
Specifically:
“[T]he focus of the highway exception is on maintaining
what has already been built in a state of reasonable repair
so as to be reasonably safe and fit for public... travel.”
The plain language of the highway exception to govern-
mental immunity provides that the road commission has a
duty to repair and maintain, not a duty to design or
redesign.[Id. at 184 (citation omitted).]
Hence, the majority’s implication that construction of the
sidewalk in the path of the guy wire comprised a design
defect precluding the applicability of governmental immu-
nity is inconsistent with previous rulings of this Court and
our Supreme Court.
4
As discussed in Hanson:
What the plaintiff sought in this case was to create a
duty to design, or redesign, the roadway to make it safer by
eliminating points of special danger or hazard. However,
there is no such design duty included in the statute.
Nowhere in the statutory language are there phrases such
as “known points of hazard” or “points of special danger.”
We emphasized in Nawrocki that the highway exception
does not permit claims based on conditions arising from
such points of hazard, and that the only permissible claims
are those arising from a defect in the actual roadbed itself.
[Hanson, 465 Mich at 503.]
Therefore, the majority’s attempt to broaden the meaning
of the statutory language is misplaced, given the Court’s
indication that a hazard is not the equivalent of a defect.
4
I would further contend that any distinctions between the factual
circumstances of this case and Plunkett regarding a sidewalk versus a
roadbed do not necessitate a different ruling.
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With reference to the claims pertaining to Danielson
and Warju, MCL 691.1407(2) delineates the circum-
stances permitting the invocation of governmental im-
munity by employees and provides:
Except as otherwise provided in this section, and with-
out regard to the discretionary or ministerial nature of the
conduct in question, each officer and employee of a govern-
mental agency, each volunteer acting on behalf of a govern-
mental agency, and each member of a board, council,
commission, or statutorily created task force of a govern-
mental agency is immune from tort liability for an injury to
a person or damage to property caused by the officer,
employee, or member while in the course of employment or
service or caused by the volunteer while acting on behalf of
a governmental agency if all of the following are met:
(a) The officer, employee, member, or volunteer is acting
or reasonably believes he or she is acting within the scope
of his or her authority.
(b) The governmental agency is engaged in the exercise
or discharge of a governmental function.
(c) The officer’s, employee’s, member’s, or volunteer’s
conduct does not amount to gross negligence that is the
proximate cause of the injury or damage.
This appeal concerns the applicability of MCL
691.1407(2)(c), regarding plaintiff’s assertions that the
actions of Danielson and Warju constituted gross negli-
gence and were the proximate cause of the injury,
thereby establishing liability.
In determining the applicability of immunity, gross
negligence is statutorily defined as “conduct so reckless
as to demonstrate a substantial lack of concern for
whether an injury results.” MCL 691.1407(7)(a); see,
also, Costa v Community Emergency Med Servs, Inc,
475 Mich 403, 411; 716 NW2d 236 (2006). “Simply
alleging that an actor could have done more is insuffi-
cient [to establish gross negligence] under Michigan
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law, because, with the benefit of hindsight, a claim can
always be made that extra precautions could have
influenced the result.” Tarlea v Crabtree, 263 Mich App
80, 90; 687 NW2d 333 (2004). Rather, gross negligence
implies the existence of “a willful disregard of precau-
tions” to address “safety and a singular disregard of
substantial risks.” Id.
Again, I cannot concur with the majority’s reasoning
and conclusion on this issue. While a question of fact
may exist regarding whether the conduct of these
defendants rose to the level of gross negligence, liability
is precluded, because it cannot be reasonably concluded
that their conduct could be construed as “the proximate
cause of the injury or damage.” Consistently with the
governmental tort liability act, government employees
may be held liable for grossly negligent conduct only if
the alleged conduct is “the” proximate cause of the
injury sustained. MCL 691.1407(2)(c). “[T]he proxi-
mate cause” is defined as “the one most immediate,
efficient, and direct cause preceding an injury.” Robin-
son v Detroit, 462 Mich 439, 459; 613 NW2d 307 (2000).
Consequently, it is insufficient if defendants’ actions
comprised simply “a” proximate cause. Tarlea, 263
Mich App at 92. Summary disposition may be granted
pursuant to MCR 2.116(C)(7) only if reasonable jurors
could not find that the governmental employees were
“the” proximate cause of the injuries. Robinson, 462
Mich at 463 (citation omitted).
Applying Robinson to the factual circumstances in
this case, the trial court erred by failing to grant
summary disposition in favor of Danielson and Warju. It
cannot reasonably be disputed that their actions in
designing and constructing the sidewalk to cross the
guy wire and their failure to ensure movement of the
obstruction in a timely manner by DTE arguably
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contributed to, and initiated, a chain of events that led
to the decedent’s injury. Consequently, the conduct
attributable to these defendants could easily be con-
strued as having comprised “a” proximate cause of the
decedent’s injuries. However, their actions were not
“the” proximate cause of the decedent’s injuries as that
phrase has been interpreted in Robinson. Despite
Danielson’s and Warju’s initial actions, the decedent did
not incur injury until he was traveling at night without
lights or a helmet at a potentially unsafe speed while
drunk and struck the guy wire, which DTE had failed to
relocate, despite the utility’s acknowledgement that
movement of the guy wire comprised a “rush job.”
Hence, the decedent’s own behavior, combined with
that of DTE, comprised a more “direct” and “immedi-
ate” cause of the injuries incurred than the actions
attributed to Danielson and Warju. Consequently, any
negligence on the part of Danielson and Warju was
simply too remote to overcome the grant of immunity
afforded by MCL 691.1407.
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CUNNINGHAM v CUNNINGHAM
Docket No. 285541. Submitted November 9, 2009, at Lansing. Decided
July 13, 2010, at 9:05 a.m.
Rosemarie Cunningham brought an action in the Livingston
Circuit Court seeking a divorce from James T. Cunningham.
Before the parties were married, defendant had been severely
injured while employed in construction work and sought ben-
efits under the Worker’s Disability Compensation Act, MCL
418.101 et seq. Defendant’s workers’ compensation claim was
not resolved for many years, and the parties were married while
the claim was pending. The claim was ultimately resolved five
years after the parties had married. Defendant received a
lifetime award of benefits and a lump-sum payment of $150,000
retroactive to the date of his injury. Defendant placed the award
into the parties’ joint savings account. The same year that
defendant received the retroactive award, the parties purchased
their second marital home using $90,000 from the retroactive
award, $25,000 from the sale of their first home, and $20,000
from plaintiff’s premarital retirement savings account. The
remaining $60,000 of defendant’s retroactive award was spent
over the remaining course of the parties’ marriage. In the
divorce action, the parties mediated the distribution of marital
property except with regard to distribution of the equity in the
marital home. The court, Carol S. Reader, J., concluded that the
$90,000 used from defendant’s retroactive award to purchase
the marital home was defendant’s separate property and not
subject to distribution as part of the marital estate. Plaintiff
appealed.
The Court of Appeals held:
1. Workers’ compensation benefits are marital property to
the extent that they compensate for wages lost during the
marriage, i.e., between the beginning and the end of the
marriage. The trial court erred by failing to calculate what
portion of defendant’s retroactive award was marital property
in light of the fact that the award included benefits for the first
five years of the parties’ marriage. Only that portion of defen-
dant’s retroactive award that compensated for wages lost dur-
2010] C
UNNINGHAM V
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UNNINGHAM
195
ing the years before the parties were married could properly
have been characterized as separate property.
2. Separate assets may lose their character as separate
property and transform into marital property, and thus become
subject to equitable division, if they are commingled with
marital assets and treated by the parties as marital property.
Defendant took no steps to maintain that portion of the
retroactive award that was his separate property when it was
awarded as separate property. Rather, he deposited the award
into a joint savings account and then further commingled
$90,000 of the award with some of plaintiff’s funds and other
joint funds in order to purchase a home with plaintiff. As a
result, the $90,000 lost any separate character that it may have
had, and the trial court erred by failing to include the $90,000
in the marital estate.
Reversed and remanded.
D
IVORCE —
P
ROPERTY
D
IVISIONS —
W
ORKERS
’C
OMPENSATION
B
ENEFITS —
M
ARI-
TAL
A
SSETS —
S
EPARATE
A
SSETS —
R
ETROACTIVE
A
WARDS OF
W
ORKERS
’
C
OMPENSATION
B
ENEFITS
D
URING THE
M
ARRIAGE FOR
P
REMARITAL
I
NJU-
RIES
.
Worker’s compensation benefits are marital property to the extent
that they compensate for wages lost during the marriage, i.e.,
between the beginning and the end of the marriage (MCL 552.19).
Halm, Christian & Prine, P. C . (by David E. Prine),
for Rosemarie Cunningham.
Trost & Wolfer, P. C . (by Richard M. Trost), for James
T. Cunningham.
Before: B
ORRELLO
,P.J., and W
HITBECK
and K. F. K
ELLY
,
JJ.
K. F
.
K
ELLY
, J. In this divorce action, we must decide
whether, and to what extent, workers’ compensation
benefits received during a marriage are to be consid-
ered marital property. We hold that such benefits are
marital property only to the extent that they compen-
sate for wages lost during the marriage. We further
conclude that the trial court erroneously awarded
196 289 M
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defendant, as his separate property, that portion of
his workers’ compensation award used as part of the
down payment on the parties’ second marital home.
We reverse and remand.
I. BASIC FACTS
The parties were married in October 1982. In No-
vember 2007, plaintiff filed for divorce. The parties
mediated the distribution of marital property, except
with regard to distribution of the equity in the marital
home. The home, the parties’ second, was purchased in
part with a portion of defendant’s workers’ compensa-
tion award received five years into the marriage.
A. THE WORKERS’ COMPENSATION AWARD
When defendant was 16, he suffered a severe and
permanently disabling injury while employed in con-
struction work. He broke his spine and became a
residual paraplegic. Although his physical abilities
were limited, he was able to return to work for a
period of time.
1
After the injury, defendant filed a claim
for benefits under the Worker’s Disability Compensation
Act (WDCA), MCL 418.101 et seq. Litigation related to the
compensation claim was lengthy and, while the claim was
pending, defendant married plaintiff in 1982.
The claim was ultimately resolved in 1987. Defendant
received a lifetime award of benefits, paid on a monthly
basis. At the time of divorce, defendant was receiving
$2,850 a month. The parties used the monthly benefits to
defray ongoing marital expenses. He was also awarded a
lump-sum payment of $150,000 retroactive to the date of
1
Defendant stopped working in 1998 or 1999 because his condition
worsened over time.
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UNNINGHAM
197
injury (hereinafter the “retroactive award”).
2
The entir-
eretroactive award was put into the parties’ joint savings
account.
B. THE MARITAL HOME
The same year defendant received the retroactive
award, the parties purchased the marital home that is
the subject of the present litigation. The home was
purchased with $90,000 from defendant’s retroactive
award; $25,000 in proceeds from the sale of the parties’
first home, which they had purchased together when
they married; and approximately $20,000 from plain-
tiff’s premarital 401K.
3
The remaining $60,000 of the
retroactive award remained in the parties’ joint savings
account and was spent during the rest of their 25-year
marriage. At the time of the divorce proceedings, the
home was valued at $252,000 and had an outstanding
mortgage of approximately $56,000.
C. THE TRIAL
At trial, defendant requested that the $90,000 he
contributed from the retroactive award to purchase the
marital home be awarded to him as his separate prop-
erty and not be included in the marital estate. Plaintiff
2
The exact contours of the award defendant received are unclear from the
record. Counsel for both parties referred to the award throughout the record
as a “redemption” and, alternatively, as a retroactive award. However,
whether defendant truly received a “redemption” award, as that term is
used in MCL 418.835 of the WDCA, is unclear. See Ellison v Detroit, 196
Mich App 722, 723; 493 NW2d 523 (1992) (stating that “[r]edemption is a
method of settling a case without necessarily admitting liability”). Nonethe-
less, it appears to be undisputed that defendant received a lump-sum award
retroactive to the date of injury after years of litigation. For this reason, we
simply refer to this lump-sum award as the retroactive award.
3
Plaintiff’s contribution of her premarital 401(k) to the down payment
on the home is not at issue in this appeal.
198 289 M
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countered that the entire retroactive award was prop-
erly included within the marital estate and asserted, in
particular, that because $90,000 of the retroactive
award had been commingled with other funds to pur-
chase the martial home, it was part of the marital estate
and subject to distribution.
At the close of the parties’ proofs, the trial court
awarded the marital home to defendant and ordered
that he pay plaintiff $53,000.
4
It found that $90,000 of
the retroactive award was defendant’s separate prop-
erty and not subject to distribution as part of the
marital estate. The court reasoned as follows:
[T]he injury happened when he was 16 years old. It took
over ten years of litigation to get any money. It only came
into the marriage, because it happened that that’s when
the lawsuit was settled. It has nothing to do when [sic] the
injury was or anything else and it was given to him for his
life, um, and for him to rely on that for life compensation.
***
Well, he can spend the money however he chooses and
he chose to use it for housing, okay. And she got the benefit
of having the house as well. But when the money was
awarded, in this case it seems, that there is a difference in
the fact that he wasn’t married when the incident hap-
pened at age 16 and only because it took so long in the
courts did he get an award while he was married.
***
4
It is somewhat unclear how the court arrived at this figure. However,
it appears the trial court subtracted the remaining mortgage amount
from the total value of the marital home, then subtracted defendant’s
retroactive award contribution, and divided that number by two:
$252,000 - $56,000 = $196,000.
$196,000 - $90,000 = $106,000.
$106,000/2 = $53,000.
2010] C
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199
It wasn’t given to him for himself and dependents at
that time, unless you can show a judgment that shows that.
But I think that’s a big difference in this case, because most
of the ones that I read have to do with a person having
compensation for themselves and their dependents and it’s
like that, but I don’t see that in this case....
This appeal followed.
II. STANDARDS OF REVIEW
In a divorce action, we review for clear error a trial
court’s factual findings related to the division of marital
property. Sparks v Sparks, 440 Mich 141, 151; 485
NW2d 893 (1992). A finding is clearly erroneous if we
are left with a definite and firm conviction that a
mistake has been made. Pickering v Pickering, 268
Mich App 1, 7; 706 NW2d 835 (2005). We address
questions of law de novo. Id.
III. WORKERS’ COMPENSATION BENEFITS AND
DIVORCE PROCEEDINGS
Plaintiff first argues that defendant’s entire retroac-
tive workers’ compensation award is marital property
subject to equitable division because it was received
during the marriage. We disagree. A spouse’s workers’
compensation award received during the marriage is
not necessarily marital property; rather, a benefit re-
ceived during marriage is marital property only if it
compensates for wages lost between the beginning and
the end of the marriage.
A. SEPARATE VERSUS MARITAL PROPERTY
In any divorce action, a trial court must divide
marital property between the parties and, in doing so, it
must first determine what property is marital and what
property is separate. Reeves v Reeves, 226 Mich App
200 289 M
ICH
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PP
195 [July
490, 493-494; 575 NW2d 1 (1997). Generally, marital
property is that which is acquired or earned during the
marriage, whereas separate property is that which is
obtained or earned before the marriage. MCL 552.19.
Once a court has determined what property is marital,
the whole of which constitutes the marital estate, only
then may it apportion the marital estate between the
parties in a manner that is equitable in light of all the
circumstances. See Byington v Byington, 224 Mich App
103, 110, 112-113; 568 NW2d 141 (1997). As a general
principle, when the marital estate is divided “each party
takes away from the marriage that party’s own separate
estate with no invasion by the other party.” Reeves, 226
Mich App at 494.
The categorization of property as marital or separate,
however, is not always easily achieved. While income
earned by one spouse during the duration of the mar-
riage is generally presumed to be marital property,
Byington, 224 Mich App at 112, there are occasions
when property earned or acquired during the marriage
may be deemed separate property. For example, an
inheritance received by one spouse during the marriage
and kept separate from marital property is separate
property. Dart v Dart, 460 Mich 573, 584-585; 597
NW2d 82 (1999). Similarly, proceeds received by one
spouse in a personal injury lawsuit meant to compen-
sate for pain and suffering, as opposed to lost wages, are
generally considered separate property. Washington v
Washington, 283 Mich App 667, 674; 770 NW2d 908
(2009); Pickering, 268 Mich App at 10. Moreover, sepa-
rate assets may lose their character as separate prop-
erty and transform into marital property if they are
commingled with marital assets and “treated by the
parties as marital property.” Pickering, 268 Mich App at
10-12, citing Wilson v Wilson, 179 Mich App 519, 521,
524; 446 NW2d 496 (1989). The mere fact that property
2010] C
UNNINGHAM V
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UNNINGHAM
201
may be held jointly or individually is not necessarily
dispositive of whether the property is classified as
separate or marital. See Korth v Korth, 256 Mich App
286, 292-293; 662 NW2d 111 (2003); Reeves, 226 Mich
App at 495-496.
B. WORKERS’ COMPENSATION BENEFITS AS MARITAL PROPERTY
The pertinent question in this appeal is whether, and
to what extent, defendant’s workers’ compensation
benefits are marital property, subject to division. While
the distinction between separate and marital property
has been well established, see Charlton v Charlton, 397
Mich 84, 93-94; 243 NW2d 261 (1976), the law regard-
ing the division of a workers’ compensation award in
divorce actions when the injury occurred before the
marriage has not been addressed.
“[T]he purpose of the WDCA is to compensate em-
ployees for work-related injuries.” Sweatt v Dep’t of
Corrections, 468 Mich 172, 189; 661 NW2d 201 (2003)
(opinion by M
ARKMAN
, J.). As our Supreme Court has
stated:
The act was originally adopted to give employers pro-
tection against common-law actions and to place upon
industry, where it properly belongs, not only the expense of
the hospital and medical bills of the injured employee, but
place upon it the burden of making a reasonable contribu-
tion to the sustenance of that employee and his dependents
during the period of time he is incapacitated from work.
This was the express intent of the legislature in adopting
this law. [Lahti v Fosterling, 357 Mich 578, 585; 99 NW2d
490 (1959).]
See also Totten v Detroit Aluminum & Brass Corp, 344
Mich 414, 418; 73 NW2d 882 (1955) (construing the act
as “ ‘providing that as against the employer[,] the
injured employee and his dependents have no rights
202 289 M
ICH
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PP
195 [July
and can enforce no liability except those provided in the
act’ ”) (citation omitted); Evans v Evans, 98 Mich App
328, 330; 296 NW2d 248 (1980) (construing the act as
benefiting both employees and their dependents). Thus,
under the act, a disabled worker is entitled to receive 80
percent of his or her after-tax average weekly wage.
MCL 418.351(1); Schmaltz v Troy Metal Concepts, Inc,
469 Mich 467, 469; 673 NW2d 95 (2003). In effect, this
benefit provides a disabled worker with earnings that
substitute for the earnings the worker would have made
had he or she not been disabled. Significantly, the
WDCA does not explicitly exempt these “substitute”
earnings from being considered marital property sub-
ject to division in a divorce proceeding.
Using the rationale that the WDCA is meant to assist
the worker and the worker’s dependents, this Court has
previously held that workers’ compensation benefits
received during the marriage are to be considered
marital assets. This Court first addressed the issue in
Evans. In that case, two months after the plaintiff filed
for divorce, he was injured at his employment. Several
years later, but before the divorce was finalized, he
received a workers’ compensation award of accrued
benefits. Evans, 98 Mich App at 329. The trial court
determined that the award was marital property and
awarded the plaintiff a
1
/
2
interest in the benefits. Id.
This Court affirmed, holding that “[s]ince the Worker’s
Disability Compensation Act was enacted to assist both
the worker and his dependents, i.e., his spouse, we
conclude that such benefits received during the course
of the marriage should be considered a marital asset.”
Id. at 330.
Two years after Evans was decided, this Court ad-
dressed the question whether a workers’ compensation
claim is properly characterized as a marital asset in
2010] C
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UNNINGHAM
203
Smith v Smith, 113 Mich App 148, 150-151; 317 NW2d
324 (1982). In Smith, the plaintiff’s work-related injury
occurred during the marriage. Id. at 151. The employer
made a redemption offer, also during the marriage, but
the plaintiff rejected it as too low. Id. The divorce was
finalized before the plaintiff was granted an award. Id.
The trial court classified the plaintiff’s workers’ com-
pensation claim as a marital asset, and this Court
affirmed, again reasoning that “[s]ince the Worker’s
Disability Compensation Act was promulgated to assist
both the worker and her spouse, the trial court did not
err when it included the compensation as part of the
marital assets.” Id. at 151. The Court noted that should
the workers’ compensation award be less than antici-
pated, the plaintiff could move to modify the divorce
settlement. Id. at 151 n 1. In effect, the Smith Court
concluded that a prospective award for an injury that
occurred during the marriage could be classified as
marital property.
No cases since Evans and Smith have substantively
addressed the classification of workers’ compensation
benefits in divorce proceedings.
5
While we agree with
the holdings of these cases in light of their particular
facts, they fail to resolve the question in this case in
which the injury occurred before the marriage but a
5
A more recent decision of this Court, LeevLee, 191 Mich App 73,
78-79; 477 NW2d 429 (1991), indicated that the trial court properly
characterized a workers’ compensation benefit received during the
marriage as marital property. There, the plaintiff’s injury and her receipt
of the workers’ compensation award both occurred during the marriage.
The central holding of Lee, however, was that the length of the parties’
marriage does not relieve a trial court of its duty to classify property as
separate or marital property. Id. at 78. Thus, no substantive analysis was
devoted to the issue of characterizing workers’ compensation benefits;
rather, the Lee Court, citing Smith, 113 Mich App at 150-151, as support,
merely indicated that the trial court did not err by categorizing the award
as marital property.
204 289 M
ICH
A
PP
195 [July
retroactive award was received during the marriage.
However, we find these cases’ rationales for concluding
that workers’ compensation benefits are marital prop-
erty to be persuasive and adopt the same reasoning
here. “It would indeed be a [strange] inversion of
statutory construction to hold that an act passed for the
benefit of a workman and his dependents places the
amounts paid under an award of the commission be-
yond the reach of the dependents it is supposed to help
support.” Petrie v Petrie, 41 Mich App 80, 83; 199 NW2d
673 (1972).
Moreover, we believe an additional consideration,
separate from the purpose of the WDCA, supports the
conclusion that workers’ compensation awards may be
classified as marital property: Workers’ compensation
benefits received by a spouse are synonymous with a
spouse’s earnings, and a spouse’s earnings accrued
during the course of a marriage are presumed to be
marital property. See Byington, 224 Mich App at 112.
This rationale recognizes that the authority to equita-
bly divide marital property, and to classify property as
separate or marital, derives not from the WDCA, but
from the statutes controlling divorce proceedings. MCL
552.1 et seq.; see Charlton, 397 Mich at 92. Given the
fact that workers’ compensation benefits are akin to
earnings, there can be no question that an award of
benefits may be considered marital property under
certain circumstances. Indeed, the statute directs that
“[t]he trial court should include all property that came
‘to either party by reason of the marriage’ as part of the
marital estate.” Pickering, 268 Mich App at 12, citing
MCL 552.19.
Absent from the jurisprudence on the issue is
whether a workers’ compensation award that is retro-
active to the date of an injury that preceded the
2010] C
UNNINGHAM V
C
UNNINGHAM
205
marriage but was received during the marriage is
properly classified as a marital asset. Because a spouse’s
earnings are classified as marital property only between
the beginning and end of the marriage, see Bone v Bone,
148 Mich App 834, 837-838; 385 NW2d 706 (1986), we
hold that workers’ compensation benefits are to be
considered marital property only to the extent that they
compensate for wages lost during the marriage, i.e.,
between the beginning and the end of the marriage.
Any workers’ compensation benefits awarded for peri-
ods before the marriage or after its dissolution are akin
to a party’s individual earnings and are to be considered
separate property because those earnings fall outside
the beginning and the end of the marriage. It is not
difficult to imagine factual circumstances in which a
spouse would receive workers’ compensation benefits
during the marriage covering a period before the mar-
riage. Such benefits would not be classified as marital
property, but as separate property. A court could, how-
ever, invade that property in appropriate circum-
stances. See MCL 552.23 and MCL 552.401.
C. DEFENDANT’S RETROACTIVE BENEFIT AWARD
In this case, the trial court erred by finding that the
retroactive award was defendant’s separate property. It
never calculated what portion of the award would have
theoretically been defendant’s separate property. In-
stead, it found that the entire retroactive award consti-
tuted defendant’s property, despite the fact that the
award included benefits for the first five years of the
parties’ marriage. Because a workers’ compensation
award for lost wages is marital property if it compen-
sates for wages lost during the marriage, only that
portion of defendant’s retroactive award that compen-
sated for wages lost before the marriage, i.e., from 1976
206 289 M
ICH
A
PP
195 [July
to October 1982, was properly characterized as separate
property. Accordingly, when defendant received the
$150,000 retroactive award five years into the mar-
riage, only the portion of it compensating for wages lost
before the parties’ marriage could have potentially been
considered his separate property.
IV. MARITAL HOME
Plaintiff next argues that the trial court erred by
finding that the portion of the retroactive award used to
purchase the marital home was defendant’s separate
property. In particular, plaintiff asserts that the $90,000
portion of the retroactive award lost its character as
separate property when it was deposited in a joint
account and used, along with other marital funds, to
purchase the marital home.
6
We agree.
Five years after the parties married, defendant re-
ceived a lifetime workers’ compensation award, as well
as a $150,000 lump-sum award retroactive to the date of
injury. At that point, the portion of the funds that
compensated defendant for wages lost before the mar-
riage was defendant’s separate property. However, de-
fendant took no steps to maintain those funds as his
individual property. Rather, he deposited those funds in
a joint account in which both parties regularly depos-
ited funds from their own earnings. Thereafter, he
commingled $90,000 of the retroactive award with
funds from plaintiff’s premarital retirement account, as
well as with the proceeds from the sale of the parties’
previous marital home, which had been purchased with
both parties’ savings. These monies were used to jointly
purchase the marital home, which the parties continued
6
The parties do not dispute that the remaining $60,000 of the
retroactive award used for various expenses over the course of the
marriage cannot be returned to defendant.
2010] C
UNNINGHAM V
C
UNNINGHAM
207
to live in for the duration of their marriage, approxi-
mately 20 years. Although the award of workers’ com-
pensation benefits derived from litigation predating the
parties’ marriage, and a portion of it is theoretically
traceable as defendant’s separate property, defendant’s
actions after receiving the funds established that he
intended to contribute $90,000 of those funds to the
marital purpose of acquiring a new home.
Defendant relies on Reeves to argue that separate
property that has been commingled to purchase prop-
erty is properly considered a separate asset and must be
returned to a party upon divorce. His reliance is mis-
placed. In Reeves, the defendant had purchased numer-
ous properties using his own funds before the parties’
marriage and, after the parties married, he continued to
make all payments on those properties using his own
funds. Reeves, 226 Mich App at 492. After three years of
marriage the parties divorced. On appeal, this Court
determined that the individual funds defendant used to
purchase the properties before the marriage were his
separate property not to be included in the marital
estate. Id. at 492-493, 495-497.
In this case, unlike in Reeves, defendant and plaintiff
jointly purchased the marital home by combining their
separate funds (assuming a portion of the $90,000 from
the retroactive award consisted of defendant’s premari-
tal lost wages) as well as some of their joint funds, for
the down payment. Moreover, and perhaps most signifi-
cantly, defendant, unlike the defendant in Reeves, did
not purchase the marital home individually and with
solely his own funds before the parties’ marriage. Nor
was the entire down payment on the home provided
solely from defendant. Rather, the parties in the instant
case were already married at the time of purchase,
purchased the home from their combined resources,
208 289 M
ICH
A
PP
195 [July
and continued to live in the marital home for nearly 20
years. The fact that the monies defendant used derived
from litigation predating the marriage is irrelevant.
The bottom line remains that defendant, during his
marriage to plaintiff, commingled his theoretically
separate funds with marital funds and some of plain-
tiff’s separate funds to jointly accomplish the marital
goal of purchasing a home. The actions and course of
conduct taken by the parties are the clearest indicia of
whether property is treated or considered as marital,
rather than separate, property. On this record, there is
no evidence from which to conclude that defendant
considered the funds his separate property or that it
retained its separate character. Thus, Reeves does not
dictate the conclusion that the $90,000 should be ex-
cluded from the marital estate. Rather, because defen-
dant commingled those monies with marital funds and
with plaintiff’s separate funds to purchase the marital
home, it lost any separate character it may have had
and should have been included in the marital estate.
See Pickering, 268 Mich App at 12-13. The trial court
erred by finding that defendant’s $90,000 portion of the
down payment constituted separate property and by
excluding it from the marital estate.
V. CONCLUSION
Workers’ compensation awards received during a
marriage are not necessarily marital property for pur-
poses of a divorce proceeding. Rather, courts must
determine what, if any, portion of the award compen-
sates for wages lost during the marriage. Workers’
compensation benefits are to be considered marital
property to the extent that they compensate for wages
lost during the marriage. See MCL 552.19.
2010] C
UNNINGHAM V
C
UNNINGHAM
209
In this case, however, while the pre-marriage portion
of defendant’s retroactive award was initially defen-
dant’s separate property, the trial court failed to recog-
nize that those funds lost any separate character they
may have had as a result of the parties’ course of
conduct with respect to the award. Therefore, on re-
mand, the trial court must consider the $90,000 defen-
dant contributed to the purchase of the home as part of
the marital estate. Further, after recognizing the par-
ties’ separate estates and the marital estate, the court
may consider whether invasion of either party’s sepa-
rate assets is appropriate. See MCL 552.23 and MCL
552.401. The court may hold additional hearings and
receive additional exhibits and testimony as, in its
discretion, it deems necessary.
Reversed and remanded for further proceedings not
inconsistent with this opinion. We do not retain juris-
diction.
210 289 M
ICH
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195 [July
DOE v DOE (ON REMAND)
Docket No. 285655. Submitted May 21, 2010, at Lansing. Decided July
13, 2010, at 9:10 a.m.
John Doe, individually, and Jane Doe, a minor, by her next friend,
John Doe, brought an action in the Wayne Circuit Court against
John Doe I (Matt DeFillippo), Henry Ford Hospital, Henry Ford
Health System, Inc., John Doe II (Timothy O’Connell), and
Superior Ambulance Service, seeking damages resulting from the
sexual abuse of Jane Doe by DeFillippo while she was being
transported in an ambulance driven by O’Connell. Both DeFillippo
and O’Connell were emergency medical technicians. DeFillippo
had pleaded guilty to a charge of third-degree criminal sexual
conduct and was incarcerated at the time the litigation was
initiated. The court, Michael F. Sapala, J., entered an order
dismissing DeFillippo from the litigation because plaintiffs had
failed to serve him notice of the action. Defendants filed a motion,
seeking, in part, summary disposition of plaintiffs’ claim of liabil-
ity premised on a failure to report child abuse in accordance with
MCL 722.623. The court denied summary disposition with regard
to that claim. Superior Ambulance and O’Connell sought leave to
appeal that order. The Court of Appeals granted leave to appeal in
an unpublished order, entered October 23, 2008 (Docket No.
285655). The Court of Appeals, O’C
ONNELL
,P.J., and T
ALBOT
,J.
(S
TEPHENS
, J., dissenting), affirmed in part, reversed in part, and
remanded the matter to the trial court for further proceedings,
holding, in part, that the trial court did not err by determining
that a genuine issue of material fact existed regarding whether
O’Connell breached a duty imposed under MCL 722.623. Unpub-
lished opinion per curiam, issued September 17, 2009 (Docket No.
285655). Plaintiffs sought leave to appeal in the Supreme Court,
and Superior Ambulance and O’Connell sought leave to appeal as
cross-appellants. The Supreme Court denied plaintiffs’ applica-
tion, vacated that part of the Court of Appeals’ judgment concern-
ing the reporting requirements under the Child Protection Law,
MCL 722.621 et seq., and remanded the case to the Court of
Appeals for reconsideration of the reporting requirements under
MCL 722.623(1)(a) and the effects of MCL 722.622(f), (t), and (u)
on those requirements in this case. In all other respects, Superior
2010] D
OE V
D
OE
(O
N
R
EMAND
) 211
Ambulance and O’Connell’s application for leave to appeal as
cross-appellants was denied. 486 Mich 851 (2010).
On remand, the Court of Appeals held:
The reporting requirements of MCL 722.623 are specifically
limited in accordance with the meanings attributed to the terms
“child abuse,” “person responsible for the child’s health or wel-
fare,” and “nonparent adult” provided in MCL 722.622(f), (u), and
(t). MCL 722.623(1)(a) mandates the reporting of suspected child
abuse to Children’s Protective Services by various enumerated
professional disciplines only if the perpetrator of the abuse is the
parent, legal guardian, teacher, teacher’s aide, clergyman, “or any
other person responsible for the child’s health or welfare,” includ-
ing a “nonparent adult,” as those terms are defined by MCL
722.622(u) and (t). The imposition of a duty to report suspected
child abuse is based not on the occurrence of such abuse, but on
the type of relationship the alleged perpetrator had with the minor
child. The statutory definitions encompassing the term “child
abuse” precluded the imposition of a reporting requirement on
defendants under the factual circumstances of this case. The trial
court’s denial of defendants’ motion for summary disposition
regarding the failure to report the suspected abuse in accordance
with MCL 722.623(1)(a) must be reversed.
Reversed.
C
RIMINAL
L
AW —
C
HILD
P
ROTECTION
L
AW —
C
HILD
A
BUSE —
R
EPORTING
R
EQUIRE-
MENTS
.
The purpose of the Child Protection Law is, in part, to require the
reporting of child abuse and neglect by certain persons; the act
requires the reporting of suspected child abuse to Children’s
Protective Services by various enumerated professional disciplines
only if the perpetrator is the parent, legal guardian, teacher,
teacher’s aide, clergyman, “or any other person responsible for the
child’s health or welfare,” including a “nonparent adult,” as those
terms are defined in the act; the duty to report is based not on the
occurrence of such abuse, but on the type of relationship the
alleged perpetrator had with the minor child (MCL 722.622[f],[t],
and [u]; MCL 722.623[1][a]).
Fieger, Fieger, Kenney, Johnson, and Giroux, P.C. (by
Victor S. Valenti), for John Doe and Jane Doe.
Cardelli, Lanfear & Buikema, P. C . (by Anthony F.
Caffrey III), and Williams, Montgomery & John, Ltd.
212 289 M
ICH
A
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211 [July
(by Alyssa M. Reiter), for Timothy O’ Connell and
Superior Ambulance Service.
ON REMAND
Before: O’C
ONNELL
,P.J., and T
ALBOT
and S
TEPHENS
,
JJ.
T
ALBOT
, J. This case returns to this Court on remand
from our Supreme Court “for reconsideration of the
reporting requirements under the Child Protection
Law, MCL 722.623(1)(a), and the effects of MCL
722.622(f), (t), and (u) on those requirements in this
case.” Doe v Doe, 486 Mich 851 (2010). After such
consideration, we reverse the trial court’s denial of
defendants’ motion for summary disposition
1
of plain-
tiffs’ claim of liability premised on a failure to report
child abuse in accordance with MCL 722.623.
To provide context, a brief summary of the factual
circumstances is provided. This case involved the trans-
port by ambulance of a minor female by two emergency
medical technicians (EMTs) to a psychiatric facility
following her attempted suicide and stabilization at a
general hospital. The driver of the ambulance was
Timothy O’Connell. The other EMT involved in the
transport was Matt DeFillippo, who traveled in the rear
of the ambulance with the minor and sexually molested
her. The question on remand is whether O’Connell
breached a statutory duty, given his suspicions that
DeFillippo was engaged in improper and illicit physical
contact with the minor, to report the incident of abuse
in accordance with MCL 722.623. Although O’Connell
did contact his supervisor while en route to seek in-
struction because of his suspicions and concerns regard-
1
As used in this opinion, “defendants” refers to defendants Timothy
O’Connell and Superior Ambulance Service.
2010] D
OE V
D
OE
(O
N
R
EMAND
) 213
ing his partner’s behavior, resulting in a police investi-
gation and charges brought against DeFillippo, plaintiff
contends that defendants also had a duty to report the
abuse in accordance with the strictures of the Child
Protection Law (CPL), MCL 722.621 et seq.
We review de novo a trial court’s decision to grant or
deny summary disposition. Hughes v Region VII Area
Agency on Aging, 277 Mich App 268, 273; 744 NW2d 10
(2007). Similarly, “[t]he proper interpretation of a
statutory provision is a question of law that this Court
reviews de novo.” Brown v Detroit Mayor, 478 Mich 589,
593; 734 NW2d 514 (2007). Because “[t]he primary goal
of statutory interpretation is to give effect to the intent
of the Legislature,” the “first step is to review the
language of the statute.” Id. “If the statutory language
is unambiguous, the Legislature is presumed to have
intended the meaning expressed in the statute and
judicial construction is not permissible.” Id.
The language of MCL 722.623 is clear and unambigu-
ous in mandating that EMTs report child abuse to
Children’s Protective Services. Specifically, MCL
722.623(1) provides, in relevant part:
An individual is required to report under this act as
follows:
(a) A physician, dentist, physician’s assistant, registered
dental hygienist, medical examiner, nurse, person licensed
to provide emergency medical care, audiologist, psycholo-
gist, marriage and family therapist, licensed professional
counselor, social worker, licensed master’s social worker,
licensed bachelor’s social worker, registered social service
technician, social service technician, a person employed in
a professional capacity in any office of the friend of the
court, school administrator, school counselor or teacher,
law enforcement officer, member of the clergy, or regulated
child care provider who has reasonable cause to suspect
child abuse or neglect shall make immediately, by telephone
214 289 M
ICH
A
PP
211 [July
or otherwise, an oral report, or cause an oral report to be
made, of the suspected child abuse or neglect to the depart-
ment. Within 72 hours after making the oral report, the
reporting person shall file a written report as required in
this act. [Emphasis added.]
While a reporting mandate appears to exist under the
language of MCL 722.623, this requirement is limited
by MCL 722.622, which provides definitions for some
terms “[a]s used in this act[.]”
The term “child abuse” is defined in MCL 722.622(f)
as
harm or threatened harm to a child’s health or welfare that
occurs through nonaccidental physical or mental injury,
sexual abuse, sexual exploitation, or maltreatment, by a
parent, a legal guardian, or any other person responsible for
the child’s health or welfare or by a teacher, a teacher’s
aide, or a member of the clergy. [Emphasis added.]
In turn, a “person responsible for the child’s health or
welfare” is defined in MCL 722.622(u) as encompassing
a parent, legal guardian, person 18 years of age or older
who resides for any length of time in the same home in
which the child resides, or, except when used in [MCL
722.627(2)(e) or MCL 722.628(8)], nonparent adult;oran
owner, operator, volunteer, or employee of 1 or more of the
following:
(i) A licensed or registered child care organization.
(ii) A licensed or unlicensed adult foster care family
home or adult foster care small group home....[Empha-
sis added.]
A “nonparent adult” is defined in MCL 722.622(t) to
mean
a person who is 18 years of age or older and who, regardless
of the person’s domicile, meets all of the following criteria
in relation to a child:
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(i) Has substantial and regular contact with the child.
(ii) Has a close personal relationship with the child’s
parent or with a person responsible for the child’s health or
welfare.
(iii) Is not the child’s parent or a person otherwise
related to the child by blood or affinity to the third degree.
[Emphasis added.]
Consequently, the statutory definitions specifically limit
the reporting requirements of MCL 722.623 in accordance
with the meanings attributed to the terms “child abuse,”
“person responsible for the child’s health or welfare,” and
“nonparent adult.” On the basis of these restrictive defi-
nitions, MCL 722.623(1)(a) mandates reporting of sus-
pected child abuse to Children’s Protective Services by the
enumerated professional disciplines only if the perpetra-
tor of the abuse has a very specific relationship with the
minor child. Specifically, MCL 722.623(1)(a) requires re-
porting of suspected child abuse only if the perpetrator is
the parent, legal guardian, teacher, teacher’s aide, clergy-
man, “or any other person responsible for the child’s
health or welfare,” including a “nonparent adult,” as
those terms are defined by MCL 722.622(u) and (t). In
other words, the imposition of a duty to report suspected
child abuse to Children’s Protective Services is based not
on the occurrence of such abuse, but on the type of
relationship the alleged perpetrator has with the minor
child. While such an outcome would seem to be contrary to
the normal usage or understanding of such phrases and to
the mandatory nature of MCL 722.623(1)(a), the statutory
definitions encompassing the term “child abuse” preclude
the imposition of a reporting requirement on defendants
under the factual circumstances of this case.
To explain this apparent discrepancy, we examine
both the stated purpose of the CPL and a previous
216 289 M
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decision by another panel of this Court. The CPL
indicates its purpose as follows:
An act to require the reporting of child abuse and
neglect by certain persons; to permit the reporting of child
abuse and neglect by all persons; to provide for the protec-
tion of children who are abused or neglected; to authorize
limited detainment in protective custody; to authorize
medical examinations....[Title of 1975 PA 238 (emphasis
added).]
In People v Beardsley, 263 Mich App 408, 413-414; 688
NW2d 304 (2004), a different panel of this Court
reconciled the purpose of the act with its definitional
limitations, stating, in relevant part:
This Court must give effect to the interpretation that
accomplishes the statute’s purpose. The preamble to the
CPL states that the purpose of the CPL is, in part, “to
require the reporting of child abuse and neglect by certain
persons.” The statute’s definition of “child abuse,” which
identifies parents and others responsible for a child’s
health and welfare, reflects the statute’s purpose of pro-
tecting children in situations where abuse and neglect
frequently go unreported, i.e., when perpetrated by family
members or others with control over the child. Hence,
reports are required to be made to the [Family Indepen-
dence Agency] rather than to the police, which would be
the appropriate agency to contact in the case of sexual
abuse involving a person without any familial contacts or
other authority over the child. Typically, parents, teachers,
and others who are responsible for the health and welfare
of a child will be the first to report instances of child abuse
by unrelated third parties. This act is designed to protect
children when the persons who normally do the reporting
are actually the persons responsible for the abuse, and thus
unlikely to report it. [Citation omitted.]
By way of this ruling, we wish to emphasize that the
absence of a statutory duty under MCL 722.623(1)(a) to
report this wrongdoing to Children’s Protective Ser-
2010] D
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vices does not affect the propriety or alleviate the moral
obligation of contacting law enforcement personnel to
seek an investigation of such reprehensible criminal
conduct.
2
Thus, on the basis of the limiting language of the
statutory definitions, we reverse the trial court’s denial
of defendants’ motion for summary disposition regard-
ing the failure to report the suspected abuse in accor-
dance with MCL 722.623(1)(a).
Reversed.
2
We note that in the present case a report was made to the police and
charges were filed against defendant DeFillippo. DeFillippo pleaded
guilty with regard to a charge of third-degree criminal sexual conduct
before this action was filed.
218 289 M
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DEPARTMENT OF TRANSPORTATION v GILLING
Docket Nos. 285369 and 287552. Submitted September 9, 2009, at
Lansing. Decided July 15, 2010, at 9:00 a.m.
The Department of Transportation brought a condemnation ac-
tion in the Lapeer Circuit Court against Lawrence P. Gilling and
others, seeking to acquire a multiacre parcel on highway M-24
as part of a road-widening project. The parcel was owned by the
Gilling family and two corporate entities and was used to
operate a retail nursery and landscaping businesses. After the
condemnation action was filed, defendants moved their busi-
nesses to an interim, leased site. In a separate administrative
proceeding under the act concerning relocation assistance for
persons displaced by acquisition of property for highways, MCL
252.141 et seq., plaintiff reimbursed defendants approximately
$147,000 for moving and relocation expenses for the move to the
interim site. Two years after plaintiff filed the condemnation
action, defendants purchased a new site and moved their
businesses there. In the condemnation action, defendants as-
serted that they were entitled to compensation for business-
interruption damages, including the costs and expenses of
relocating their businesses from the interim site to the new
location. Plaintiff argued that under MCL 252.143, reimburse-
ment for moving and relocation expenses was only available
through administrative proceedings and, thus, defendants were
not permitted to claim moving and relocation expenses in the
condemnation action. The court, Michael P. Higgins, J., dis-
agreed with plaintiff, concluding that administrative-
reimbursement proceedings constitute a supplementary scheme
for the recovery of moving and relocation expenses not other-
wise fully compensable under state condemnation law and that
defendants could present evidence of their moving and reloca-
tion expenses in the condemnation action as long as those
expenses were not duplicative of claims that had already been
reimbursed. During the trial, defendants moved to exclude the
testimony of a real estate broker who was prepared to testify
that defendants’ new location was available for sale before,
during, and after defendants’ move to the interim site. Plaintiff
argued that this evidence was relevant to the jury’s determina-
2010] D
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tion of just compensation because it indicated that defendants
had failed to mitigate their damages. The trial court granted
defendants’ motion and excluded the evidence, determining
that it was only collateral to the issue of just compensation.
While the trial was ongoing, the parties agreed to a just-
compensation award of approximately $736,000 for defendants’
building, fixtures, and some site improvements. The jury
awarded defendants an additional $585,000 for the taking of
their land and $519,550 that included their moving and reloca-
tion expenses. Plaintiff appealed, challenging the award of
moving and relocation expenses (Docket No. 285369). The
circuit court subsequently awarded defendants attorney fees
and expert witness fees. Plaintiff also appealed the award of
those fees (Docket No. 287552). The appeals were consolidated.
The Court of Appeals held:
1. Just compensation includes business-interruption damages.
Claims for business-interruption damages may include actual moving
and relocation expenses, but do not include lost profits resulting from
a business interruption. Thus, defendants could properly seek reim-
bursement for their business-interruption damages, including mov-
ing and relocation expenses, in the condemnation action.
2. The cost of moving fixtures, including trade fixtures, may be
included in an award for business-interruption damages. An item
is a trade fixture if it is constructively annexed to the property
because it is intended to be permanent, would lose value if
removed from the property, and enables and is essential to the
business. Defendants’ nursery stock was not a trade fixture.
Rather, it was the product of defendants’ businesses. The nursery
stock was intended to be sold, and its removal from the property
did not impair its value or the value of the property. The trial court
erred by allowing defendants to recover for the cost of moving
their nursery stock because the losses arising from the relocation
of the nursery stock were noncompensable lost profits.
3. The administrative-recovery statutes, MCL 252.141 et seq.,
MCL 213.321 et seq., and MCL 213.351 et seq., supplement, rather
than supplant, a property owner’s constitutional right to receive
just compensation for moving and relocation expenses as part of a
business interruption.
4. The trial court abused its discretion by excluding the
evidence concerning the availability of defendants’ permanent site
when they moved to the interim site. The evidence was central to
the issue of just compensation, and plaintiff should have the
opportunity to show that at least some of defendants’ moving
expense was unnecessary and argue that defendants may have
220 289 M
ICH
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219 [July
failed to mitigate their damages. Failure to grant a new trial would
be inconsistent with substantial justice.
Affirmed in part, reversed in part, and remanded.
1. E
MINENT
D
OMAIN —
J
UST
C
OMPENSATION —
B
USINESS
-I
NTERRUPTION
D
AMAGES
—
M
OVING AND
R
ELOCATION
E
XPENSES —
A
DMINISTRATIVE
R
ECOVERY
.
Just compensation for the taking of property includes business-
interruption damages; business-interruption damages may in-
clude moving and relocation expenses, but do not include lost
profits resulting from a business interruption (MCL 213.51 et
seq.).
2. E
MINENT
D
OMAIN —
J
UST
C
OMPENSATION —
B
USINESS
-I
NTERRUPTION
D
AM-
AGES —
M
OVING AND
R
ELOCATION
E
XPENSES —
F
IXTURES —
T
RADE
F
IXTURES
.
The cost of moving fixtures, including trade fixtures, may be included
in an award for business-interruption damages; an item is a trade
fixture if it is constructively annexed to the property because it is
intended to be permanent, would lose value if removed from the
property, and enables and is essential to the business.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Ronald W. Emery, Assistant
Attorney General, for plaintiff.
Steinhardt Pesick & Cohen, PC (by H. Adam Cohen,
Jerome P. Pesick, and Jason C. Long), for defendants.
Before: S
AAD
P.J., and W
HITBECK
and Z
AHRA
,JJ.
S
AAD
,P.J. These consolidated appeals arise out of a
condemnation proceeding brought by plaintiff, the Michi-
gan Department of Transportation (MDOT), to acquire a
multiacre parcel located on highway M-24 (also known as
Lapeer Road) in Lapeer County as part of a road-widening
project. In Docket No. 285369, MDOT appeals the trial
court’s judgment on the jury verdict in favor of defen-
dants, Lawrence P. Gilling, Margaret Gilling, Stephen L.
Gilling, Donna Gilling, Robert L. Gilling, Connie Gilling,
Gilling’s Nursery & Landscaping, Inc., and Gilling’s Ar-
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tistic Landscaping, Inc. (collectively, “Gilling”). In Docket
No. 287552, MDOT appeals the trial court’s postjudgment
order that awarded Gilling attorney fees and costs under
MCL 213.66.
I. CONDEMNATION: MOVING AND RELOCATION EXPENSES
1
The trial court ruled that business-interruption dam-
ages include moving and relocation expenses. The trial
court further held that the statutorily authorized
administrative-reimbursement proceedings constitute a
supplementary scheme for the recovery of moving and
relocation expenses not otherwise fully compensable un-
der state condemnation law. See MCL 252.143; MCL
213.328(1); MCL 213.355. We agree in part. First, we hold
that claims for business-interruption damages do not
allow for lost profits, but permit recovery of moving and
relocation expenses. However, although moving and relo-
cation expenses can include expenses for moving trade
fixtures, we hold that the trial court erred by classifying
defendants’ nursery stock as trade fixtures. We also hold
that the trial court abused its discretion when it excluded
key expert testimony that supported MDOT’s position
that Gilling was unreasonable in moving to an interim
location before moving to its final destination. Finally, we
hold that administrative-recovery schemes supplement
rather than supplant a property owner’s constitutional
right to recover just compensation for moving and reloca-
tion expenses as part of a business interruption. Accord-
ingly, we affirm in part, reverse in part, and remand for
further proceedings.
II. FACTS AND PROCEEDINGS
In September 2005, MDOT filed a complaint under
the Uniform Condemnation Procedures Act (UCPA),
1
Docket No. 285369.
222 289 M
ICH
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MCL 213.51 et seq., seeking to acquire a multiacre
parcel that was owned by members of the Gilling family
and two corporate entities and was used to operate a
retail nursery and landscaping businesses. MDOT ac-
quired the property to implement a road-widening
project on M-24. Gilling did not challenge the necessity
or public use supporting the taking. Therefore, the
primary issue was and is the amount of just compensa-
tion to which Gilling is entitled.
In September 2005, Gilling relocated its businesses to a
leased property site that Gilling found unsuitable as a
permanent location. In January 2006, Gilling submitted
to MDOT its claims for compensable items. Under MCL
213.55(3), if the property owner believes the good-faith
written offer made for the property by MDOT under MCL
213.55(1) is inadequate, the owner may submit a written
claim to MDOT that details the nature and substance of
property damage caused by the taking apart from the
value of the property taken and not described in the
good-faith written offer. An underlying premise of Gill-
ing’s claim is its assertion that its businesses had to be
relocated to an alternate site because the partial taking
left only a “small, inadequate remainder[.]” MDOT reim-
bursed Gilling approximately $147,000 for moving and
relocation expenses for the move to the interim site
pursuant to this administrative proceeding.
In September 2007, Gilling purchased another site
that was better suited to its purpose and relocated to
the new, permanent location. In the condemnation
proceedings before the trial court, Gilling claimed that
it was entitled to compensation for its business-
interruption damages, including the costs and expenses
of relocating its businesses from the interim site to the
permanent site. During Gilling’s subsequent motion to
exclude MDOT’s business-valuation expert witness
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from trial, MDOT admitted that it was statutorily
required to reimburse an owner for actual moving and
relocation expenses. MCL 252.143. But MDOT pointed
out that it had already reimbursed Gilling approxi-
mately $147,000 for moving and relocation expenses for
the move to the interim site in the administrative
proceeding. MDOT argued that the types of business-
interruption expenses sought by Gilling were actually
moving and relocation expenses. MDOT contended that
such expenses were properly sought administratively
rather than in condemnation proceedings.
In response, Gilling asserted that MDOT’s prior admin-
istrative payment was “totally irrelevant to MDOT’s duty
to appraise, and pay, [Gilling’s] constitutional business
interruption damages.” In other words, Gilling contended
that any statutory moving and relocation allowances did
not limit a landowner’s constitutional business-
interruption damages. It asserted that “an owner’s statu-
tory moving allowance, and constitutional business inter-
ruption damages, are distinct.” According to Gilling,
under the UCPA, “any amounts that MDOT already paid
in statutory moving costs are subtracted from the just
compensation estimate for business interruption.” Gilling
pointed out that its business-interruption appraisal had
already made an adjustment for the prior payment.
Therefore, according to Gilling, it was not seeking a
double payment. After reviewing the facts and proceed-
ings, the trial court denied Gilling’s motion to exclude
MDOT’s expert. The trial court agreed with MDOT that
“relocation costs are compensable under MCL 252.143
and are not part of the condemnation proceedings,” but
concluded that “business interruption damages are part of
these proceedings so long as they do not duplicate the
relocation costs.”
224 289 M
ICH
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219 [July
In a later motion in limine to prohibit MDOT from
presenting issues of law to the jury, Gilling explained that
its actual costs substantially exceeded MDOT’s adminis-
trative payments. Therefore, Gilling contended, it was not
seeking double payment. Rather, according to Gilling, it
was merely seeking additional payment for its business-
interruption costs caused by the need to relocate. Gilling
claimed that because of the inadequacy of MDOT’s just-
compensation payment, Gilling was unable to initially
secure a permanent location and therefore had to incur
additional costs in relocating again. Gilling stated that its
interim site was not appropriate for use as a permanent
site because of limited frontage, poor soil, and inadequate
storage. MDOT responded that Gilling was improperly
attempting to “ ‘lump’ all of [Gilling’s] moving, re-
establishment and relocation costs under the heading of
‘Business Interruption Damages.’ ” Although MDOT ac-
knowledged that some of Gilling’s claimed damages could
be considered business-interruption damages, it main-
tained that business-interruption damages did not include
moving and relocation expenses.
MDOT then moved in limine to exclude all evidence
of Gilling’s moving and relocation expenses. It argued
that MCL 252.143 specifically excludes such expenses
from condemnation actions. MDOT recognized that
there can be business-interruption expenses that do not
involve moving or relocation, which would be compens-
able as just compensation in a condemnation action.
But MDOT contended that any moving and relocation
expenses were not compensable in that same manner.
MDOT asserted that if Gilling believed that the original
administrative payment was insufficient to reimburse it
for the move to the interim site, then Gilling could have
administratively appealed that decision. Likewise,
MDOT stated that Gilling could seek administrative
2010] D
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payment of its moving and relocation expenses for the
second move.
In a written opinion, the trial court addressed both
Gilling’s motion in limine to prohibit MDOT from
presenting issues of law to the jury and MDOT’s motion
in limine to exclude all evidence of Gilling’s moving and
relocation expenses. According to the trial court, the
primary question before it was whether Michigan’s
administrative procedures for claiming moving and
relocation expenses were a property owner’s exclusive
means of obtaining reimbursement for such costs, or
whether those procedures were optional and in addition
to the statutory-condemnation and common-law rem-
edies. The trial court observed that the answer to this
question required interpretation of MCL 252.143,
which states: “Relocation and financial assistance al-
lowed under this act are independent of and in addition
to compensation for land, buildings or property rights
and shall not be the subject of consideration in condem-
nation proceedings.”
The trial court noted that the parties agreed that a
property owner could not claim damages in a condemna-
tion proceeding that duplicated his or her administrative
claims. And the trial court acknowledged that Michigan
caselaw made clear that business-interruption damages
are compensable in condemnation proceedings, separate
from administrative proceedings, provided that damages
could be proved with a reasonable degree of certainty.
Therefore, according to the trial court, the issue boiled
down to whether moving and relocation expenses could
legitimately be part of business-interruption damages.
Noting a lack of Michigan precedent on point, the trial
court examined caselaw from other jurisdictions. The trial
court determined that the case that appeared most di-
rectly on point was State ex rel Dep’t of Transp v Little,
226 289 M
ICH
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219 [July
100 P3d 707 (Okla, 2004). Indeed, after quoting the
Oklahoma Supreme Court’s reasoning in that case, the
trial court adopted that reasoning, id. at 716, concluding
that administrative reimbursement proceedings were “ ‘a
supplementary scheme of recovery under which...funds
can be used to reimburse a person displaced from a home,
business, or farm by a [government]...project for that
person’s moving and related expenses where such ex-
penses are not otherwise fully compensable under state
condemnation law.’ ” (Emphasis added.) The trial court
further noted that courts in Florida and Mississippi had
reached similar conclusions. Malone v Florida Dep’t of
Transp, Admin Div, 438 So 2d 857 (Fla App, 1983),
overruled in part by Sys Components Corp v Florida
Dep’t of Transp, 14 So 3d 967 (Fla, 2009); Mississippi
State Hwy Comm v Rives, 271 So 2d 725 (Miss, 1972).
Accordingly, the trial court granted Gilling’s motion to
prohibit MDOT from raising Gilling’s failure to present its
claims in the administrative proceedings and denied
MDOT’s motion to exclude evidence of Gilling’s moving
and relocation expenses, provided it did not duplicate
expenses previously reimbursed.
The parties agreed on the record to a just-compensation
award in the amount of approximately $736,000 for the
building, fixtures, and other site improvements on the
property. Therefore, the jury was only required to deter-
mine the just compensation for the land and, in keeping
with the trial court’s ruling, the amount to be awarded for
the moving and relocation expenses. The jury awarded
Gilling a total of $1,104,550: $585,000 in compensation for
Gilling’s land and an additional $519,550, which included
compensation for Gilling’s “printed materials at original
location,” “time and costs,” “first move costs,” “interim
costs,” “second move costs,” “reestablishment costs,” and
“property taxes increase[.]” MDOT now appeals the trial
court’s judgment on the verdict.
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III. MOVING AND RELOCATION EXPENSES AND JUST COMPENSATION
A. STANDARD OF REVIEW
MDOT does not challenge the $736,000 awarded as
just compensation for the building, fixtures, and other
site improvements on the property. Indeed, MDOT has
already paid that amount to Gilling. Further, MDOT
does not challenge the jury’s award of $585,000 as
compensation for Gilling’s land. MDOT contends, how-
ever, that the trial court erred by allowing the jury to
award $519,550 in moving and relocation expenses as
just compensation. According to MDOT, caselaw has
authorized recovery of business-interruption damages
as part of just compensation. But, according to MDOT,
except for detach-and-reattach expenses for fixtures,
business-interruption damages do not include inciden-
tal expenses for moving personal property and other
relocation expenses. MDOT argues that evidence of the
indirect expenses of the taking of a business is nothing
more than an attempt to recover lost profits, which
Michigan courts have made clear are explicitly excluded
from just compensation. MDOT states that recovery of
moving and relocation expenses is statutorily provided
as an administrative remedy, separate from just com-
pensation. We review de novo questions of statutory and
constitutional interpretation. Dep’t of Transp v
Tomkins, 481 Mich 184, 190; 749 NW2d 716 (2008);
Cardinal Mooney High Sch v Mich High Sch Athletic
Ass’n, 437 Mich 75, 80; 467 NW2d 21 (1991).
B. CONSTITUTIONAL JUST-COMPENSATION PRINCIPLES
1. OVERVIEW
“Private property shall not be taken for public use
without just compensation therefor being first made or
228 289 M
ICH
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secured in a manner prescribed by law.” Const 1963,
art 10, § 2. “[T]he goal of just compensation is to ensure
that the injured party is restored, at least financially, to
the same position it would have been in if the taking
had not occurred.” Dep’t of Transp v Frankenlust
Lutheran Congregation, 269 Mich App 570, 578; 711
NW2d 453 (2006). “ ‘The constitutional provision enti-
tling the owner of private property, taken for public use,
to just compensation, has uniformly been construed to
require full and adequate compensation.’ ” In re Grand
Haven Hwy, 357 Mich 20, 31; 97 NW2d 748 (1959),
quoting Comm’rs of Parks & Boulevards of Detroit v
Moesta, 91 Mich 149, 154; 51 NW 903 (1892).
Gilling cites four primary cases in support of its argu-
ment that a business owner may receive business-
interruption damages, including moving and relocation
expenses, as constitutional just compensation. They are
Grand Rapids&IRCovWeiden, 70 Mich 390; 38 NW
294 (1888), Grand Haven Hwy, 357 Mich 20, Detroit v
Hamtramck Community Fed Credit Union, 146 Mich App
155; 379 NW2d 405 (1985), and State Hwy Comm v Great
Lakes Express Co, 50 Mich App 170; 213 NW2d 239
(1973). MDOT attempts to distinguish and discount these
cases and argues that, except for expenses related to
fixtures, incidental expenses for moving and relocation
are not part of constitutionally required just compensa-
tion. Although we conclude that caselaw, including the
cases on which Gilling relies, establishes that a property
owner is allowed to recover moving and relocation ex-
penses as business-interruption damages, the trial court
erred by ordering MDOT to compensate Gilling for the
cost of relocating nursery stock, as these expenses are
properly classified as lost profits resulting from the inter-
ruption of business and not expenses caused by a business
interruption.
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2. GRAND RAPIDS&IRCOvWEIDEN
In Weiden, 70 Mich at 395, the Michigan Supreme
Court observed that the appellant property owners
were “using their property in lucrative business, in
which the locality and its surroundings had some
bearing on its value.” Therefore, the Court concluded
that the appellants were entitled to compensation for
their losses that resulted from the interruption of
their business in addition to the value of the property
itself:
Apart from the money value of the property itself, they
were entitled to be compensated so as to lose nothing by the
interruption of their business and its damage by the
change. A business stand is of some value to the owner of
the business, whether he owns the fee of the land or not,
and a diminution of business facilities may lead to serious
results. There may be cases when the loss of a particular
location may destroy business altogether, for want of access
to any other that is suitable for it. Whatever damage is
suffered, must be compensated. Appellants are not legally
bound to suffer for [the railroad’s] benefit. [The railroad]
can only be authorized to oust them from their possessions
by making up to them the whole of their losses.[Id.
(emphasis added).
2
]
The Court then reversed the jury’s verdict because it
failed to adequately compensate for business damages;
addressing the claims of one of the appellants, the Court
stated:
2
See also In re Slum Clearance, 332 Mich 485, 497; 52 NW2d 195
(1952), quoting In re Park Site on Private Claim 16, Detroit, 247 Mich 1,
3; 225 NW 498 (1929) (stating that “the owner of property taken may
recover for interruption of business”); Moesta, 91 Mich at 154 (stating
that in condemnation cases the remedy afforded is similar to an action in
tort “in which property rights have been interfered with without the
owner’s assent” and that “[i]n such cases damages for the interruption of
the owner’s business are allowed”).
230 289 M
ICH
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219 [July
It appeared affirmatively, and without contradiction,
that the actual expenses of moving [the] business reached
within a few dollars of all that [the jury] awarded for those
purposes and for his buildings and improvements. The
testimony shows that the buildings and improvements
were of considerable value. The verdict is not only grossly
unfair, but given without any reference to uncontradicted
testimony. Juries have no right to disregard facts, and
follow their own caprices. There is no reasonable ground on
which the verdict... can be sustained. [Id. (emphasis
added).]
Therefore, Weiden made clear that the appellant could
be compensated for the “actual expenses of moving his
business,” in addition to compensation for his buildings
and improvements. Id.
3. In re GRAND HAVEN HWY
In Grand Haven Hwy, 357 Mich at 24, the appellee
corporation sought damages for expenses occasioned by
business interruption and the expense of relocating its
machinery and equipment when the state took its
manufacturing property, thereby “forcing [the corpora-
tion] to move its entire productive facility to a new
location.” The state highway department, however,
argued that recent cases had denied recovery of losses
resulting from interruption of business, thereby repu-
diating former cases, like Weiden, that had allowed such
damages. Id. at 31, citing In re Condemnation of Lands
for Battle Creek Park Purposes, 341 Mich 412, 422; 67
NW2d 49 (1954), In re Slum Clearance, 332 Mich 485,
496; 52 NW2d 195 (1952), In re Edward J Jeffries
Homes Housing Project, 306 Mich 638; 11 NW2d 272
(1943), and In re Park Site on Private Claim 16, Detroit,
247 Mich 1, 3, 4; 225 NW 498 (1929). The Court then
explicitly held that the cases cited by the state were
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limited to repudiating recovery of lost profits, not any
and all expenses related to business interruption:
An examination of the... cases cited by [the state]
discloses that this Court held that the property owner
could not recover loss of profits because of damages caused
by business interruption, but did not repudiate Moesta or
Weiden in regards to expenses incurred by business inter-
ruption. To eliminate any doubt of this Court’s position, we
hold that the evidence introduced in this condemnation
proceeding showing expenses occasioned by business inter-
ruption was properly introduced for consideration as to
value and weight by the commissioners making the award.
[Grand Haven Hwy, 357 Mich at 31-32.]
The Grand Haven Hwy Court stated that the proof of
business interruptions “must not be speculative and
must possess a reasonable degree of certainty.” Id.at
32. The Court then examined the corporation’s evi-
dence regarding the costs that it incurred by having to
move to a new site. Id. at 32-33. The Court disagreed
with the state that the corporation’s evidence was
speculative, noting that the state’s own expert had
testified that the corporation’s management had spent
nearly a year engaging “ ‘in a large-scale project to
appraise various means of developing the new plant
required by the loss of land to the State,’ ” and that it
had “ ‘carefully undertaken a program of projecting
out-of-pocket costs...formaking’ ” the move. Id.at33.
The Court then quoted a letter written by the account-
ing firm hired by the corporation to review its plans for
moving its operations: “ ‘[The] accompanying summary
of estimated costs of relocating the productive facilities
of [the corporation] constitutes a reasonable estimate of
such costs on the basis of the various assumptions
made....’”Id. at 34 (emphasis added). By upholding
an award based on estimated relocation costs, the
Grand Haven Hwy Court made clear that a business
232 289 M
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owner was entitled to moving and relocation expenses
as just compensation as long as those expenses could be
shown with a reasonable degree of certainty.
4. DETROIT v HAMTRAMCK COMMUNITY FED CREDIT UNION
In Hamtramck Community Fed Credit Union, 146
Mich App at 157, the city of Detroit condemned the
defendant credit union’s land, and a jury awarded the
credit union $122,000 in business-interruption damages.
On appeal, the city argued that the evidence supporting
those damages was too speculative and conjectural. Id.
Citing Weiden and Grand Haven Hwy, this Court noted
that “[i]t has long been held that damages resulting from
business interruption are compensable in condemnation
cases provided the damages can be proven with a reason-
able degree of certainty.” Id. at 158. The Court then ruled
that the proofs introduced to support the credit union’s
claim for business-interruption damages were not too
speculative and conjectural. Id. More specifically, this
Court explained that the credit union’s proofs regarding
their business-interruption costs included evidence that it
was required to make two moves to relocate the business:
once to move to a temporary trailer while a new building
was being constructed and then again when it moved into
the new building. Id. at 159-160. The manager of the
credit union testified that “as a result of the double move,
the credit union spent substantial sums to relocate to the
trailer and then to its new permanent location. These
expenses made up the bulk of the claims for business
interruption damages.” Id. at 160. This Court found “no
error in the trial court’s refusal to strike [the credit
union’s] claim for business interruption damages.” Id.at
162-163. Therefore, by acknowledging that the credit
union’s moving and relocation expenses made up the bulk
of its claims for business-interruption damages, this Court
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confirmed that such costs were, in fact, properly compens-
able business-interruption damages.
5. STATE HWY COMM v GREAT LAKES EXPRESS CO
In Great Lakes Express, 50 Mich App at 178, the
defendant trucking company sought business-
interruption damages (as distinct from its claims for
fixture damages), arguing that the state’s partial taking
frustrated a needed expansion of its terminal facilities
to such an extent that it was necessary for the defen-
dant to relocate its entire business. This Court did not
resolve the issue, but simply held that “[i]t was for the
jury to decide whether relocation was necessary in this
situation where none of defendant’s facilities had been
physically damaged by the taking.” Id. at 178-179.
Therefore, this Court again impliedly recognized that
moving and relocation expenses fall under the category
of business-interruption damages.
6. In re SLUM CLEARANCE
Despite these cases, MDOT submits that in Slum
Clearance, the Michigan Supreme Court “answered the
question whether the jury should have been allowed to
consider as business interruption damages, business
losses arising from expenses due to efforts to relocate.”
MDOT contends that any attempt to seek indirect or
consequential damages in the form of moving and reloca-
tion expenses is merely a disguised attempt to seek
prohibited lost profits. See Slum Clearance, 332 Mich at
496 (concluding that the lower court “was not in error in
refusing to allow the jury to consider loss of profits as the
‘interruption of business’ in determining compensation.
Loss of profits is speculative, and not a proper element of
pecuniary loss or outlay.”).
234 289 M
ICH
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219 [July
However, contrary to MDOT’s interpretation, the ap-
pellant in Slum Clearance was not seeking damages for its
actual costs of relocating. Rather, the appellant sought lost
profits for the time during which it was constructing and
relocating to its new building. Id. Thus, Slum Clearance
stands only for the established proposition that lost profits
are not compensable as just compensation. Grand Haven
Hwy, 357 Mich at 31. It does not “answer[] the question”
whether a jury should be allowed to consider actual
moving and relocation expenses as business-interruption
damages. Contrary to MDOT’s contention, lost profits are
a category of claimed damages distinct from claims for
business-interruption damages. Thus, we conclude that
claims for business-interruption damages may include
actual moving and relocation expenses, exclusive of claims
for lost profits.
3
7. In re ACQUISITION OF LAND FOR CIVIC CTR AND
In re CONDEMNATION OF LANDS FOR BATTLE CREEK PARK
PURPOSES
MDOT also relies on In re Acquisition of Land For
Civic Ctr, 335 Mich 528; 56 NW2d 375 (1953), and
3
See Detroit/Wayne Co Stadium Auth v Drinkwater, Taylor & Merrill,
Inc, 267 Mich App 625, 658; 705 NW2d 549 (2005), stating:
Damages resulting from business interruption are compensable
in condemnation cases, provided the damages can be proven with a
reasonable degree of certainty. But damages related to lost profits are
not recoverable in a business interruption case. The stadium author-
ity does not dispute that relocation costs are proper business inter-
ruption damages. [Emphasis added; citations omitted.]
See also Detroit v Larned Assoc, 199 Mich App 36, 42; 501 NW2d 189
(1993), stating:
We hold only that to the extent this case is retried on a business-
interruption theory, damages for lost profits will not be allowed. With
respect to the remainder of [the] testimony (e.g., that concerning
rental expenses, advertising expenses, and the like), the jury was free
to either accept or reject it. [Citation omitted.]
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Condemnation for Battle Creek Park, 341 Mich at 422,
to argue that, as opposed to expenses for moving
fixtures, just compensation does not require reimburse-
ment for the incidental expenses of moving and relocat-
ing personal property. However, we find Acquisition of
Land For Civic Ctr distinguishable. In that case, the
Court did not address the category of damages at issue
in this case—business-interruption damages. Further,
this Court in Slum Clearance established that “trade
fixtures” can be distinguished from traditional fixtures
that are actually attached or annexed to the land and
that trade fixtures include items that might otherwise
be considered personal property. Slum Clearance, 332
Mich at 493.
In Slum Clearance, the appellant electroplating busi-
ness sought to recover for the cost of moving certain
chemical solutions and molten metal as “part of the
expense of moving its trade fixtures.” Id. at 490. The
Court acknowledged that the chemical solutions and mol-
ten metal were not actually annexed or affixed to the real
property and that such attachment was “[o]bviously...
not...possible.” Id. at 493. But, the Court stated, such
actual physical annexation is not a prerequisite to consid-
ering the removal of property in determining damages as
trade fixtures. Id. The Court explained that removal of the
chemical solutions and molten metal was essential to the
appellant’s electroplating business, and, therefore, “they
must be considered as trade fixtures, constructively an-
nexed to the real estate.” Id.
The Slum Clearance Court went on to point out that,
in other cases, items “ ‘specially adapted to the full
enjoyment of the realty’ ” were considered as fixtures.
Id., quoting Detroit Trust Co v Detroit City Serv Co, 262
Mich 14, 30; 247 NW 76 (1933). We note that in Detroit
236 289 M
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219 [July
Trust, 262 Mich at 29-30, for example, the Court held
that an ice and fuel business’s trade fixtures included
“ammonia compressors, aerating equipment, boilers,
motors and refrigerating units, freezing tanks, air com-
pressors, condensers, engines, oil tanks and pumps,
platform scales, scorching machines,...other machin-
ery for manufacturing ice[,]... spare motors, parts,
machinery, [and] equipment....”ButtheDetroit Trust
Court notably distinguished these items from horses,
wagons, trucks, automobiles, office furniture and equip-
ment, and other movable property, which “are of such a
character that they can be transported from place to
place without impairing their value....”Id. at 31. And
we note that in Colton v Mich Lafayette Bldg Co, 267
Mich 122, 127; 255 NW 433 (1934), the Court held that
the trade fixtures of a company that owned an office
building included “repair parts to [sic] elevator switch-
board, elevator rugs, window shades, awnings, double
doors and trim, base and shoe, red gum partitions,
storm doors, elevator uniforms, window curtains, rub-
ber matting, entrance mats, chain falls, Minneapolis
thermostats and clock, wall case and mirror, [and]
pump tanks for elevator [sic]....”Despite the appar-
ent movable quality of things like uniforms and rugs,
the Colton Court explained that
[t]hese articles could not be removed from the building or
transported from place to place without impairing their
value as well as the value of the building. This building was
erected for the purpose of renting stores and offices to the
public and in order to be rentable must have various
articles or accessories such as those listed above. [Id.]
Like the Detroit Trust Court, the Colton Court went on
to clarify that detached equipment and “unused sup-
plies consisting of such articles as paper towels, soap,
paint,...electric light bulbs,...pails, mops, vacuum
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cleaners, ladders, [an] electric grinder, [and a] drill
press” could not “be classed as fixtures or improve-
ments but are clearly personal property.” Id.
This body of caselaw distinguishes loss of profits result-
ing from damages caused by business interruption from
expenses incurred by business interruption. Grand Haven
Hwy, 357 Mich at 31-32; Slum Clearance, 332 Mich at
495-497. Only the latter expenses are compensable. The
cost of moving trade fixtures constitutes an expense
incurred as a result business interruption.
At issue here is whether the trees, bushes, and the
like that make up the inventory of a nursery business
are trade fixtures. We hold that they are not. A nursery
might successfully argue that unattached water pumps,
chemical fertilizers, and fertilizing equipment are trade
fixtures because they are used to produce or maintain
the products of the business, or it might establish that,
in operating the business, flower display racks and
freestanding counters designed for the space are trade
fixtures. Those items, while not necessarily attached to
the land or building, could be considered “construc-
tively annexed” to the property because they are in-
tended to be permanent, they would lose value if
removed from the building, and they enable and are
essential to the business of keeping and selling plant
material. Slum Clearance, 332 Mich at 493-494. In
contrast, Gilling’s inventory of trees and bushes are the
products of the business, they are specifically intended
to be sold and removed from the property, and their
removal does not impair their value or the value of the
property. See Detroit Trust, 262 Mich at 30. This move-
able inventory does not fall within the definition of a
“trade fixture” under any of the aforementioned cases
and, because it is more akin to personal property,
Gilling was not entitled to recover for the expense of
moving inventory.
238 289 M
ICH
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219 [July
The trial court should not have ruled that Gilling had
the right to recover for the cost of moving inventory in
the form of trees, shrubbery, etc. These plants are not
trade fixtures. Any losses arising from the movement of
the nursery products fall within the category of non-
compensable lost profits. We hold that Gilling was
entitled to just compensation for its business-
interruption damages, which included actual moving
and relocation expenses that could be proven with a
reasonable degree of certainty,
4
but did not include
expenses for the moving of nursery stock.
As discussed later, we remand for a new trial in which
MDOT will have the opportunity to present expert
testimony concerning the necessity of Gilling’s tempo-
rary relocation to the interim site before moving to its
permanent site in 2007. On remand, the trial court
should exclude evidence of the cost of moving the
nursery products that made up Gilling’s inventory.
C. SUPPLEMENTAL ADMINISTRATIVE-RECOVERY PROVISIONS
MDOT argues that state and federal statutes exclu-
sively govern recovery for moving and relocation ex-
penses. But our reading of the statutory language,
taken in light of the numerous condemnation cases we
have previously analyzed, leads us to the conclusion
that the administrative-recovery provisions supple-
ment, rather than supplant, a property owner’s consti-
tutional right to receive just compensation for moving
and relocation expenses as the result of a business
interruption.
The act concerning relocation assistance for persons
displaced by acquisition of property for highways pro-
4
See Grand Haven Hwy, 357 Mich at 32; Detroit/Wayne Co Stadium,
267 Mich App at 658.
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vides, “Relocation and financial assistance allowed under
this act are independent of and in addition to compensa-
tion for land, buildings or property rights and shall not be
the subject of consideration in condemnation proceed-
ings.” MCL 252.143 (emphasis added). Similarly, the relo-
cation assistance act provides, “Financial assistance and
reimbursement allowed under this act is independent of
and in addition to compensation for land, buildings or
property rights and shall not be considered in condemna-
tion proceedings.” MCL 213.328(1) (emphasis added).
Additionally, the act concerning allowances for moving
personal property from acquired real property provides:
“Moving allowances are independent of and in addition to
compensation for land, buildings or property rights. The
cost of moving personal property is not subject to consid-
eration in condemnation proceedings for the acquisition of
land, buildings or property rights.” MCL 213.355 (empha-
sis added).
A business owner’s right to engage in and continue his
or her business has long been recognized as a property
right.
5
Thus, each of these statutes makes clear that,
while certain moving and relocation expenses are statu-
torily recoverable in administrative proceedings, those
supplemental allowances are “independent of and in
addition to” constitutional compensation.
Indeed, as the trial court explained, cases from other
jurisdictions interpreting similar administrative-
5
See, e.g., People v Bennett (After Remand), 442 Mich 316, 329 n 17;
501 NW2d 106 (1993) (referring to “private institutions’ property rights
in conducting their businesses”); Bay City v State Bd of Tax Admin, 292
Mich 241, 259; 290 NW 395 (1940) (“The Constitution vests in every
citizen the right to engage in business. Such right is a property right and
is protected by the Constitution of 1908, art. 2, § 16.”); Glover v Mal-
loska, 238 Mich 216, 220; 213 NW 107 (1927) (“It would astound the
business world to hold that an established business is barren of property
rights of a pecuniary nature.”).
240 289 M
ICH
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219 [July
reimbursement schemes have held that those
administrative-reimbursement proceedings were “a
supplementary scheme of recovery under which...funds
can be used to reimburse a person displaced from a home,
business, or farm by a [governmental]...project for that
person’s moving and related expenses where such ex-
penses are not otherwise fully compensable under state
condemnation law.” Little, 100 P3d at 716 (emphasis
added). More specifically, the Oklahoma Supreme Court
explained in Little, 100 P3d at 716-717, that “the reloca-
tion assistance acts are not the exclusive remedy for
reimbursement of moving and related expenses in those
jurisdictions where such expenses are recoverable in a
condemnation proceeding,” stating that
we find nothing in the [federal Uniform Relocation Assistance
and Real Property Acquisition Act (FURA), 42 USC 4601 et
seq.] to indicate that the administrative scheme it creates was
designed to precede resort to the courts.... The federal
regulations implementing the FURA recognize that compen-
sation made under traditional eminent-domain principles of
state law may precede the filing of a FURA claim and, when
read in conjunction with [42 USC 4631(b)], implicitly ac-
knowledge that state law condemnation compensation may
include items that would also be compensable under the
provisions of the FURA. [Emphasis added.]
Courts in Florida
6
and Mississippi
7
have reached similar
conclusions.
We acknowledge that the administrative-reimburse-
ment provisions state that statutory relocation and mov-
6
Malone, 438 So 2d at 861 (stating that the FURA “was intended only
as a supplementary measure enabling recovery by displaced condemnees
of expenses not otherwise compensable under traditional eminent do-
main principles of state law”).
7
Rives, 271 So 2d at 728 (stating that the “legislative intent as
expressed in [the Relocation Assistance Program Act], when considered
in its entirety, was that the Act would provide compensation for items not
previously provable or recoverable as damages in an eminent domain
proceeding”).
2010] D
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ing allowances “shall not be the subject of consideration in
condemnation proceedings.” MCL 252.143; see also MCL
213.328(1) and MCL 213.355. But this does not mean that
constitutional moving and relocation expenses, as
business-interruption damages, may not be considered in
a condemnation proceeding. As Gilling points out, “no act
of the Legislature can take away what the Constitution
has given.” Silver Creek Drain Dist v Extrusions Div, Inc,
468 Mich 367, 374; 663 NW2d 436 (2003). Moreover, the
UCPA, which “provides standards for the acquisition of
property by an agency, the conduct of condemnation
actions, and the determination of just compensation,”
MCL 213.52(1), protects the state from property owners
seeking duplicative payments for moving and relocation
expenses: “A person is not entitled to a payment in
connection with the acquisition of all or part of that
person’s property under this act if that payment would be
duplicative of any grant or other payment received under
any state or federal statute or regulation.” MCL 213.63a.
Accordingly, we conclude that the trial court did not
err by finding that the administrative schemes are not
the exclusive remedy for a business owner to recover
moving and relocation expenses necessitated by a tak-
ing. Michigan cases have repeatedly authorized a busi-
ness owner to receive business-interruption damages,
including moving and relocation expenses, as constitu-
tional just compensation.
IV. EVIDENCE REGARDING PERMANENT SITE
A. STANDARD OF REVIEW
MDOT argues that even if the moving and relocation
expenses were properly considered as part of just com-
pensation, it was entitled to have just compensation
242 289 M
ICH
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219 [July
determined fairly. According to MDOT, the trial court
abused its discretion by excluding MDOT’s relevant
evidence showing that the permanent site to which
Gilling ultimately moved was available at the time that
Gilling moved to the allegedly unnecessary interim site.
MDOT argues that it was improperly denied the oppor-
tunity to show that the costs for the second move were
avoidable and unnecessary because Gilling could have
moved directly to its permanent site.
We review for an abuse of discretion a trial court’s
decision to admit or exclude evidence. Barrett v Kirt-
land Community College, 245 Mich App 306, 325; 628
NW2d 63 (2001). An abuse of discretion occurs when
the trial court’s decision results in an outcome falling
outside the range of principled outcomes. Woodard v
Custer, 476 Mich 545, 557; 719 NW2d 842 (2006).
B. THE BOWMAN TESTIMONY
MDOT asserts that the trial court abused its discre-
tion by precluding the testimony and exhibits of Robert
Bowman, a licensed real estate broker and sales agent,
who was prepared to testify that Gilling’s “permanent”
site was available for sale before, during, and after
Gilling’s move to its interim site. We agree. The trial
court’s decision to exclude evidence about the availabil-
ity of the permanent site constituted an abuse of
discretion, and MDOT is entitled to a new trial on this
basis.
The question whether the permanent site was avail-
able when Gilling moved to its interim site was central
to the issue of just compensation. Gilling sought ex-
penses for both the interim move and the move to the
permanent site. If the permanent site was available at
the time that Gilling moved to the interim site, serious
doubt would be cast on the reasonableness of Gilling’s
2010] D
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decision to temporarily relocate to the interim site
before moving to the permanent site. The trial court’s
expressed concern that the evidence would require
the jury to consider the costs and efficacy of Gilling’s
decision to move to a temporary site missed the point
because this is precisely the kind of question the jury
should have considered when deciding the extent to
which MDOT was obligated to compensate Gilling.
Gilling sought more than $500,000 for twice moving
the business, and it was, therefore, central to
MDOT’s case that it have the opportunity to show
that at least some of that expense was unwarranted.
Moreover, the trial court’s ruling deprived MDOT of a
vital defense because this evidence might have per-
suaded the jury that Gilling failed to mitigate its
damages when it rented a temporary, but ultimately
unsuitable, site while a suitable, permanent location
was available. Though Gilling asserts that the perma-
nent site required renovation and rezoning, which
would have made it less desirable at the time of the
taking, it was for the jury to weigh that evidence
against Bowman’s testimony to determine how to
fairly compensate Gilling for the taking.
The trial court’s exclusion of Bowman’s evidence
substantially prejudiced MDOT’s ability to present its
case and to present a valid defense to the jury and, thus,
undermined the jury’s verdict. The trial court’s exclu-
sion of MDOT’s proposed expert testimony on this vital
issue was an abuse of discretion because it unjustifiably
robbed MDOT of its most pertinent evidence on a key
question of the trial. See Novi v Robert Adell Children’s
Funded Trust, 473 Mich 242, 254; 701 NW2d 144
(2005). Therefore, failure to grant a new trial would be
inconsistent with substantial justice. MCR 2.613(A).
Accordingly, we reverse and remand for a new trial to
244 289 M
ICH
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219 [July
allow MDOT to introduce expert testimony on this
issue and to ensure substantial justice.
8
Affirmed in part, reversed in part, and remanded to
the trial court for further proceedings consistent with
this opinion. We do not retain jurisdiction.
8
In Docket No. 287552, MDOT challenges the trial court’s postjudg-
ment award of attorney fees. Our holding in Docket No. 285369 obviates
the need to address MDOT’s argument regarding the trial court’s award
of attorney fees.
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In re DMK
Docket No. 294776. Submitted May 12, 2010, at Grand Rapids. Decided
July 15, 2010, at 9:05 a.m.
A Children’s Protective Services employee, in response to a complaint
about the general well-being of DMK, a minor, visited the home of the
child’s father (respondent), accompanied by a police officer. The police
officer took respondent into custody after ascertaining that an
outstanding warrant authorized his arrest. The child, who resided
with respondent, was left in the care of Heather Bosack, the mother
of a different child of respondent. AK, the mother of DMK, had
previously been substantiated as a perpetrator of child neglect and
had been granted only supervised parenting time with the child. On
October 4, 2007, a petition seeking temporary custody of the child by
the Department of Human Services was filed in the Benzie Circuit
Court, Family Division. The court, Nancy A. Kida, J., conducted a
pretrial hearing on November 2, 2007. Neither respondent nor AK
was present or represented by counsel. The court authorized the
petition and continued the child’s placement with Bosack. In Decem-
ber 2007, the court appointed counsel for both parents. On February
14, 2008, the court exercised jurisdiction over the child in light of
AK’s admission regarding several allegations in the petition. Respon-
dent remained incarcerated at that time, and no arrangements for his
participation in the hearing had been made. A dispositional hearing
occurred on March 21, 2008, and a dispositional review hearing
occurred in June 2008. Respondent, who was still incarcerated, did
not attend either hearing in person or by telephone. Respondent
participated by telephone in an August 2008 dispositional review
hearing. Respondent attended a September 2009 review hearing and
an October 2008 permanency planning hearing by telephone. The
court thereafter authorized the department to file a termination
petition. The department filed a supplemental petition in November
2008, requesting termination of respondent’s parental rights pursu-
ant to MCL 712A.19b(3)(c)(i) and (ii), (h), and (j). On April 24, 2009,
AK voluntarily relinquished her parental rights to the child. A
termination hearing occurred on October 7, 2009. At the conclusion
of the hearing, the court terminated respondent’s parental rights
under MCL 712A.19b(c)(i) and (h) after determining that termina-
tion was in the child’s best interests. Respondent appealed, alleging,
246 289 M
ICH
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246 [July
in part, that the circuit court’s and the department’s failure to
involve him in most of the proceedings required the reversal of the
order terminating his parental rights.
The Court of Appeals held:
1. Respondent was deprived of the opportunity to participate
in all the proceedings conducted from November 2007 through
July 2008 because the prosecutor, the circuit court, and respon-
dent’s counsel all failed to adhere to the procedures described in
MCR 2.004(B) and (C). By the time the circuit court recognized
respondent’s right to participate in the proceedings, the court and
the department were ready to move on to the termination hearing.
Therefore, respondent missed the crucial period during which the
court was called upon to evaluate the parents’ efforts and decide
whether reunification of the child with respondent could be
achieved. Respondent suffered prejudice because he remained
absent during this critical time in the child-welfare proceedings.
Excluding respondent for a prolonged period of the proceedings
was not harmless error.
2. The department deliberately withheld services from respon-
dent with the circuit court’s approval. A court may not terminate
parental rights on the basis of circumstances and missing infor-
mation directly attributable to a parent’s lack of meaningful prior
participation. Because of respondent’s inability to participate,
there was a hole in the evidence on which the circuit court based
its termination decision. The circuit court’s order must be re-
versed and the matter must be remanded to permit the depart-
ment to provide the services it has neglected to provide and for
further proceedings.
3. The circuit court clearly erred by allowing the prosecutor to
introduce hearsay evidence to prove that MCL 712A.19b(3)(c)(i)
warranted termination. Because the circuit court assumed jurisdic-
tion on the basis of AK’s plea admitting allegations in the original
petition, the department then filed a supplemental petition, and the
circuit court proceeded to consider termination of respondent’s
parental rights on the basis of different circumstances than those
admitted by AK, the circuit court should have entertained only legally
admissible evidence, as required by MCR 3.977(F).
Reversed and remanded.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Colleen Kelly, Assistant Attorney
General, for petitioner.
2010] In re DMK
247
Law Office of Patrick Dougherty, PLC (by Patrick A.
Dougherty), for respondent.
Before: M
ARKEY
,P.J., and Z
AHRA
and G
LEICHER
,JJ.
P
ER
C
URIAM
. Respondent, the biological father of the
minor child involved, appeals as of right a circuit court
order terminating his parental rights to the child pur-
suant to MCL 712A.19b(3)(c)(i) and (h). Because the
Department of Human Services (DHS) refused to en-
gage respondent in the child protective proceedings, the
record remains entirely devoid of any evidence concern-
ing respondent’s ability to care for his child in the near
future, either personally or through placement with
relatives. Consequently, “a ‘hole’ in the evidence” pre-
cluded termination of respondent’s parental rights. In
re Rood, 483 Mich 73, 127; 763 NW2d 587 (2009)
(Y
OUNG
, J., concurring in part). We reverse and remand
for further proceedings.
I. BASIC FACTS AND UNDERLYING PROCEEDINGS
On October 1, 2007, Children’s Protective Services
(CPS) received a complaint about “the general well
being” of the minor. The child resided with respondent.
The child’s mother, AK, had previously been substanti-
ated as a perpetrator of child neglect and had been
granted only supervised parenting time with the child.
CPS worker Michael Visel and a police officer visited
respondent’s home on October 1, 2007, to investigate
the complaint. The officer ascertained that an outstand-
ing warrant authorized respondent’s arrest. When the
officer took respondent into custody, respondent ad-
vised that Heather Bosack, the mother of another child
of respondent, could care for the instant minor in his
248 289 M
ICH
A
PP
246 [July
absence. Respondent had earlier given Bosack a power
of attorney authorizing her to care for the child.
Three days later, Visel filed a petition seeking tem-
porary DHS custody of the child.
1
The petition alleged
that respondent (1) was incarcerated because of an
outstanding warrant, (2) was on parole for prior of-
fenses including home invasion, unlawful use of a motor
vehicle, and stealing and retaining a financial-
transaction device, (3) had additional convictions of
retail fraud, larceny, and domestic violence, (4) was
jailed in July 2007 for alcohol and marijuana use, and
(5) “is unable to care properly for [the child] due to his
current incarceration, legal troubles, lack of employ-
ment, unstable housing, lack of transportation and lack
of consistent progress even though many services were
intact for support.” The petition further averred: “Law
enforcement is currently investigating a separate com-
plaint that [respondent] sexually assaulted his three
year old niece....This investigation is pending.”
On November 2, 2007, the circuit court conducted a
pretrial hearing. Visel testified that respondent “right
now...isinJackson Correctional Facility awaiting a
parole board violation hearing with the Department of
Corrections.” Neither respondent nor AK appeared at
the hearing or had counsel present. The circuit court
authorized the petition and continued the child’s place-
ment with Bosack. In December 2007, the circuit court
appointed counsel for both parents.
2
1
The petition named as respondents both respondent and AK. AK
eventually relinquished her parental rights to the child and is not a party
to this appeal.
2
The circuit court appointed counsel for AK on December 7, 2007. On
December 10, 2007, respondent wrote a letter to the court seeking the
appointment of counsel, and the court appointed counsel for him on that
date.
2010] In re DMK 249
On February 14, 2008, the circuit court exercised
jurisdiction over the child in light of AK’s admission
with regard to several allegations in the petition. Re-
spondent remained incarcerated, and no arrangements
had been made for his participation in the hearing.
Respondent’s counsel represented that respondent was
“aware of the proceedings and is willing to do whatever
needs to be done, although he is going to be incarcer-
ated for the near to long-term future.” Visel expressed
that he would develop a parent-agency agreement and
service plan for AK. A potential service plan for respon-
dent was not mentioned by the court, respondent’s
counsel, or Visel. Notably, respondent’s counsel also did
not even propose that respondent participate in future
hearings by telephone.
On March 21, 2008, a dispositional hearing occurred.
Respondent was still incarcerated and no arrangements
had been made to enable him to participate by tele-
phone. The prosecutor represented that the DHS “has
entered into an initial service plan with the mother.”
The court inquired of DHS worker Matthew Dotson
whether anything in the service plan related to respon-
dent. Dotson responded negatively, confirming that
petitioner had not considered a plan for respondent
“because he’s still incarcerated at this time.” Respon-
dent’s counsel told the court that respondent hoped
that “when he gets out of prison he can get into a plan
himself.” Respondent also did not attend the June 2008
dispositional review hearing, either personally or by
telephone. The only mention made of him was the
court’s observation: “So there is probable cause to
believe that the legal father is [respondent]. He does
have an attorney. Apparently his attorney has been
getting some communication from him. And we did
discuss that he could be here by telephonic presence if
he requests that at future hearings.”
250 289 M
ICH
A
PP
246 [July
At the next dispositional review hearing, counsel and
the court discussed an “ex parte letter” respondent had
mailed to the court. The letter does not appear in the
circuit court record. The court announced that “based
on [counsel’s] statement, as well as the letter that we
recently got, we’re going to make sure that [respon-
dent] has the ability to participate in the future court
hearings.” At the August 2008 dispositional review
hearing, respondent participated by telephone. The
circuit court inquired whether respondent understood
“that we are not able to include you in any sort of a
plan, service plan, at this time because you are still
incarcerated,” and respondent answered affirmatively.
Respondent later advised the court that his first pro-
jected date to be released from incarceration was Octo-
ber 3, 2009. At the next review hearing in September
2009, virtually no mention was made of respondent,
despite his presence by telephone.
In October 2008, the circuit court held a permanency
planning hearing, which respondent again attended by
telephone. Dotson testified that he had not offered
respondent a service plan, but that respondent had
previously engaged in services:
Q.[Respondent’s Counsel.] As far as prior to this case
arising, are you aware of any services that [respondent]
participated in or took advantage of?
A. I believe he participated in services offered through
Grand Traverse County in the past. I can’t exactly say
what those were right off hand but do know there’s been
involvement from both Grand Traverse and Benzie County
with him.
Q. And as far as his completing those, is it your
understanding that he did all right as far as participation
wise?
A. Correct. I believe that’s why he received custody of
[the child].
2010] In re DMK 251
Q. And so at that point prior to this case arising, the
department’s position was that [respondent] was the
proper person for [the child] to be with?
A. Prior to our complaint or our initial complaint we
received, yes.
Respondent testified that the child had lived in his
care “off and on” from “the winter” of 2006 until July
or August 2007. At that point, AK “signed over custody”
to him, and he thereafter cared for the child. Respon-
dent explained that the child had special needs and
communicated through sign language, which respon-
dent had helped to teach him. Respondent expressed his
desire to care for the child and added, “I would be very
appreciative of any kind of help [the DHS] would give
and any kind of guidance that they would be able to help
me with and the goals that they would set down would
be more initiative for me to do the best I could do.” He
reiterated that he anticipated possible release from
prison at the end of 2009 or in early 2010.
The court authorized the DHS to file a termination
petition. The DHS filed a supplemental petition in No-
vember 2008, requesting termination of respondent’s pa-
rental rights pursuant to MCL 712A.19b(3)(c)(i) and (ii),
(h), and (j). On April 24, 2009, AK voluntarily relinquished
her parental rights to the child.
On October 7, 2009, a termination hearing occurred.
At the outset of the hearing, counsel disputed the
applicability of MCR 3.977(F)(1)(b), which envisions
that when considering the allegations in a supplemental
termination petition, the court may order termination
of parental rights only on the basis of “clear and
convincing legally admissible evidence....”Thecourt
ultimately ruled that it would require legally admissible
evidence to prove the allegations in subdivision (h), but
permitted the prosecutor to introduce any material and
252 289 M
ICH
A
PP
246 [July
relevant evidence relating to subdivision (c)(i). The
court also took judicial notice of “the court file and
documents.”
3
At the conclusion of the hearing, the court
terminated respondent’s parental rights under MCL
712A.19b(c)(i) and (h) and determined that termination
of respondent’s parental rights would serve the child’s
best interests.
II. ANALYSIS
A. RESPONDENT’S PARTICIPATION
Respondent raises three issues on appeal, one of
which we view as dispositive, specifically respondent’s
contention that the circuit court’s and the DHS’s fail-
ure to involve him in most of the proceedings demands
a reversal of the order terminating his parental rights.
The issues we address involve the application and
interpretation of court rules and statutes, which we
consider de novo. In re Mason, 486 Mich 142, 152; 782
NW2d 747 (2010).
Because the prosecutor, the court, and respondent’s
counsel all failed to adhere to the procedures described
in MCR 2.004(B) and (C), respondent was deprived of
the opportunity to participate in all proceedings con-
ducted from November 2007 through July 2008.
A child protective action such as this consists of a series
of proceedings, including a preliminary hearing at which
the court may authorize a petition for removal of a child
from his home, MCL 712A.13a(2), review hearings to
evaluate the child’s and parents’ progress, MCL 712A.19,
permanency planning hearings, MCL 712A.19a, and, in
some instances, a termination hearing, MCL 712A.19b.
Each proceeding generally involves different issues and
3
The court stated that it “did not rely on any past verbal evidence
particularly,” but did not elaborate on that statement.
2010] In re DMK 253
decisions by the court. Thus, to comply with MCR 2.004, the
moving party and the court must offer the parent “the
opportunity to participate in” each proceeding in a child
protective action.[Mason, 486 Mich at 154 (emphasis
added).]
By the time the circuit court recognized respondent’s
right to participate in these child protective proceed-
ings, “the court and the DHS were ready to move on to
the termination hearing.” Id. at 155. As in Mason,
respondent “missed the crucial, year-long review period
during which the court was called upon to evaluate the
parents’ efforts and decide whether reunification of the
children with their parents could be achieved.” Id.
4
The DHS highlights that respondent had represen-
tation by counsel at nearly all the child protective
proceedings and participated in the proceedings during
the year immediately preceding the termination of his
rights. The DHS thus opines that respondent cannot
demonstrate that his attendance at the adjudication or
the subsequent hearings would have affected the out-
come of the case. However, we conclude that respondent
endured prejudice because he remained absent during a
critical time in these child welfare proceedings. This
Court recognized in In re LaFlure, 48 Mich App 377,
390-391; 210 NW2d 482 (1973), that the facts gathered
during review hearings set the stage for the decisions
that follow:
The purpose of the review hearings provided for by the
statute is to determine whether the parents of a child in the
temporary custody of the court have managed to “reestab-
lish” a fit home or are likely to do so within the near future.
We do not see how such a determination may be intelli-
4
The respondent in Mason did not participate for the first year of the
proceedings. Here, the period of respondent’s absence was nine months,
but this minor distinction does not render Mason inapplicable.
254 289 M
ICH
A
PP
246 [July
gently made unless the court making the determination is
fully aware of the circumstances which prompted placing
the child in the temporary custody of the court and of all
subsequent circumstances, if any, which prompted keeping
the child in the temporary custody of the court.
In this case, respondent did not appear by telephone
at the adjudication, the dispositional hearing, or the
first three dispositional review hearings. These initial
hearings allow the parties to become familiar with the
parents’ abilities and deficits, the child’s needs, and the
efforts necessary for reunification. In a sense, the initial
dispositional hearings form the cornerstones of the
succeeding review hearings, the permanency planning
phase, and the ultimate decision to terminate parental
rights. Respondent’s incarceration does not alter that;
had he participated, he could have supplied the court
with highly relevant information about his son’s needs,
the child’s paternal family history, familial placement
options, and the nature of the services necessary to
achieve a permanency goal that would serve the child’s
best interests. The adjudicative and dispositional pro-
cesses embodied in Michigan law and our court rules
envision that early and meaningful parental participa-
tion facilitates the determination of the most beneficial
permanency goal. In summary, we reject the DHS’s
suggestion that excluding a parent for a prolonged
period of the proceedings can be considered harmless
error.
B. SERVICES
The DHS deliberately withheld services from respon-
dent, with the approval of the circuit court. The failure
to offer respondent any services clearly contravenes our
Supreme Court’s recent decision in Mason. In that case,
as here, the DHS had focused on attempting reunifica-
2010] In re DMK
255
tion with the mother “and, in doing so, disregarded
respondent’s statutory right to be provided services[.]”
Mason, 486 Mich at 159.
5
In Mason, the respondent’s
release from prison was “potentially imminent at the
time of the termination hearing.” Id. Here, at the
termination hearing respondent’s parole officer charac-
terized as “realistic” the likelihood that respondent
would be released from prison “next month.” According
to the Michigan Offender Tracking Information Sys-
tem, respondent was released from prison on November
3, 2009, less than a month after the termination hear-
ing. The Supreme Court in Mason concluded as follows:
The state failed to involve or evaluate respondent, but
then terminated his rights, in part because of his failure to
comply with the service plan, while giving him no oppor-
tunity to comply in the future. This constituted clear error.
As we observed in In re Rood, a court may not terminate
parental rights on the basis of “circumstances and missing
information directly attributable to respondent’s lack of
meaningful prior participation.” In re Rood, 483 Mich [at
119] (opinion by C
ORRIGAN
, J.); see also id. at 127 (Y
OUNG
,J.,
concurring in part) (stating that, as a result of the respon-
dent’s inability to participate, “there is a ‘hole’ in the
evidence on which the trial court based its termination
decision”). [Id. at 159-160.]
5
The Supreme Court in Mason, 486 Mich at 156, catalogued many
different statutory references to the DHS’s responsibility to provide
parental services throughout child protective proceedings and a
court’s authority to modify a case service plan: MCL 712A.18f(3)(d)
and (5), MCL 712A.19(6)(a) and (c), and MCL 712A.19(7)(a) and (b).
The Supreme Court emphasized in Mason, 486 Mich at 159, that the
circuit court had ignored the statutory language of MCL
712A.19a(6)(c), which envisions that a court need not order the DHS
“ ‘to initiate proceedings to terminate parental rights’ ” if “ ‘[t]he
state has not provided the child’s family, consistent with the time
period in the case service plan, with the services the state considers
necessary for the child’s safe return to his or her home, if reasonable
efforts are required.’ ” (Emphasis omitted.)
256 289 M
ICH
A
PP
246 [July
In conclusion, because we cannot meaningfully dis-
tinguish this case from Mason, we reverse and remand
for petitioner to provide the services that it, to this
point, has neglected to supply respondent and for
further proceedings.
C. EVIDENTIARY CONCERNS
Although our reversal of the circuit court’s termina-
tion order on other court rule and statutory grounds
renders unnecessary our consideration of additional
appellate issues, we note our concern with evidentiary
rulings of the circuit court that may recur on remand.
At the termination hearing, the circuit court erred
when it permitted the prosecutor to introduce evidence
otherwise inadmissible under the Michigan Rules of
Evidence.
The circuit court assumed jurisdiction on the basis of
AK’s plea admitting allegations in the original petition.
Petitioner then filed a supplemental petition. Because
the circuit court proceeded to consider termination of
respondent’s parental rights on the basis of different
circumstances than those admitted by AK, it should
have entertained only legally admissible evidence. MCR
3.977(F) instructs, in relevant part:
Termination of Parental Rights on the Basis of Different
Circumstances. The court may take action on a supplemen-
tal petition that seeks to terminate the parental rights of a
respondent over a child already within the jurisdiction of
the court on the basis of one or more circumstances new or
different from the offense that led the court to take
jurisdiction.
(1) The court must order termination of the parental
rights of a respondent, and must order that additional
efforts for reunification of the child with the respondent
must not be made, if
2010] In re DMK 257
(a) the supplemental petition for termination of paren-
tal rights contains a request for termination;
(b) at the hearing on the supplemental petition, the
court finds on the basis of clear and convincing legally
admissible evidence that one or more of the facts alleged in
the supplemental petition:
(i) are true; and
(ii) come within MCL 712A.19b(3)(a), (b), (c)(ii), (d), (e),
(f), (g), (i), (j), (k), (l), (m), or (n); and
(c) termination of parental rights is in the child’s best
interests. [Emphasis added.]
“If...termination is sought under a supplemental peti-
tion, the court considers legally admissible evidence and
must state its findings of fact and conclusions of law.”
Rood, 483 Mich at 101-102 (opinion by C
ORRIGAN
, J.).
The circuit court ruled that it would allow the
prosecutor to introduce hearsay evidence to prove that
MCL 712A.19b(3)(c)(i) warranted termination. This
ruling amounted to clear legal error. The prosecutor
introduced several documents, including a report writ-
ten by a social worker and another written by a parole
board hearing officer, consisting of or containing inad-
missible hearsay. Much of this inadmissible evidence
focused on an allegation that respondent had sexually
abused his niece. Notably, authorities never charged
respondent with this alleged act, which he vehemently
denied having committed. If proved by clear and con-
vincing evidence, such conduct could constitute a
ground for termination of respondent’s parental rights.
But the prosecutor made no effort to substantiate this
allegation with legally admissible evidence.
6
In future
6
Although certain police reports may qualify as admissible under MRE
803(8), the reports admitted here do not describe matters actually
observed by an officer and are replete with multiple levels of inadmissible
hearsay.
258 289 M
ICH
A
PP
246 [July
proceedings, we caution the circuit court to bear in
mind the appropriate evidentiary standards in MCR
3.977(F).
Reversed and remanded for further proceedings con-
sistent with this opinion. We do not retain jurisdiction.
2010] In re DMK
259
PEOPLE v BRYANT
Docket No. 280073. Submitted March 4, 2009, at Detroit. Decided July
20, 2010, at 9:00 a.m.
Ramon L. Bryant was convicted by a jury in the Kent Circuit Court,
H. David Soet, J., of first-degree criminal sexual conduct, armed
robbery, and possession of marijuana. He appealed, arguing that
he was deprived of his Sixth Amendment right to an impartial jury
drawn from a fair cross section of the community because there
was only one African-American in the jury venire of 42 people. The
Court of Appeals, S
MOLENSKI
,P.J., and S
AWYER
,J.(B
ORRELLO
,J.,
concurring in part and dissenting in part), affirmed in part in an
unpublished opinion per curiam, issued March 16, 2004 (Docket
No. 241442), and remanded the case to the trial court for the sole
purpose of conducting an evidentiary hearing regarding defen-
dant’s challenge to the jury venire. On remand, the trial court,
Dennis C. Kolenda, J., conducted evidentiary hearings and issued
an opinion that held that defendant’s Sixth Amendment right to
an impartial jury was not violated because African-Americans
were not underrepresented in the venire from which defendant’s
jury was selected and that Kent County’s jury-selection process, at
the time of defendant’s trial, did not systematically exclude
African-Americans. Defendant appealed.
The Court of Appeals held:
1. The selection of a jury from a representative cross section of
the community is an essential component of the Sixth Amendment
right to a jury trial. While the fair-cross-section requirement does
not entitle a defendant to a jury that mirrors the community, it
guarantees an opportunity for a representative jury by requiring
that jury wheels, pools of names, panels, or venires from which
juries are drawn not systematically exclude distinctive groups in
the community and thereby fail to constitute a fair cross section of
the community.
2. To establish a prima facie violation of the Sixth Amendment
fair-cross-section requirement, a defendant must show (1) that the
group alleged to be excluded was a distinctive group in the
community, (2) that the representation of this group in venires
from which juries were selected was not fair and reasonable in
260 289 M
ICH
A
PP
260 [July
relation to the number of such persons in the community, and (3)
that this underrepresentation was due to systematic exclusion of
the group in the jury-selection process. Once a defendant estab-
lishes a prima facie violation, the government may overcome the
right to a proper jury by proffering a significant state interest that
manifestly and primarily advances those aspects of the jury-
selection process that would result in the disproportionate exclu-
sion of a distinctive group.
3. Defendant satisfied the first prong of a prima facie violation
because African-Americans are a constitutionally cognizable group
for Sixth Amendment fair-cross-section purposes.
4. Although federal courts have applied three different tests,
the absolute-disparity test, the comparative-disparity test, and the
standard-deviation test, to measure whether representation of a
distinctive group in the jury pool was fair and reasonable, and the
United States Supreme Court has not specified the preferred
method, the Michigan Supreme Court has concluded that no
individual method should be used to the exclusion of the others
and that a case-by-case approach should be employed. Therefore,
provided that the parties proffer sufficient evidence, courts should
consider the results of all the tests.
5. While the absolute disparity of 6.03 percent in this case did
not indicate substantial underrepresentation, the Court of Appeals
has previously recognized that the absolute-disparity method is of
questionable usefulness when applied to a group that makes up a
small percentage of the population. The absolute-disparity test did
not control in this case because of the low percentage of African-
Americans who were eligible to vote in Kent County.
6. The comparative-disparity method yielded a calculation that
was indicative of the underrepresentation of African-Americans in
defendant’s venire. Between the absolute-disparity test and the
comparative-disparity test, the comparative-disparity test is the
most appropriate to measure underrepresentation in cases such as
this in which the percentage of African-Americans in the relevant
community is low. Therefore, the comparative-disparity test was
the most appropriate test to measure underrepresentation in this
case. Under the comparative-disparity test, defendant established
that African-Americans were underrepresented on the venire from
which his jury was selected.
7. The standard-deviation test is not typically used in Sixth
Amendment cases, and no court in the country has accepted the
test alone as determinative in Sixth Amendment challenges to
2010] P
EOPLE V
B
RYANT
261
jury-selection systems. Therefore, the test had little value in
measuring underrepresentation of African-Americans in Kent
County jury venires.
8. Systematic exclusion is exclusion inherent in the particular
jury-selection process used and is not shown by one or two
incidents of disproportionate venires.
9. The underrepresentation in this case was the result of a
problem with the computer program used to select jurors that
existed over a significant period. Because of the problem, under-
representation was inherent in the jury-selection process used.
Although the problem did not appear to be intentional, a party
need not show that the underrepresentation came as a result of
intentional discrimination.
10. Defendant established a prima facie violation of the Sixth
Amendment’s fair-cross-section requirement under the
comparative-disparity test. The prosecution failed to proffer any
significant state interest that would be advanced by the errors and
computer problem that resulted in the systematic underrepresen-
tation of African-Americans in Kent County jury venires. Defen-
dant’s convictions must be reversed and the matter must be
remanded for a new trial.
Reversed and remanded.
1. C
ONSTITUTIONAL
L
AW —
J
URY —
V
ENIRES —
F
AIR
C
ROSS
S
ECTION OF
C
OMMU-
NITY
.
The selection of a jury from a representative cross section of the
community is an essential component of the Sixth Amendment
right to a jury trial; while a defendant is not entitled to a jury that
mirrors the community, the fair-cross-section requirement guar-
antees an opportunity for a representative jury by requiring that
the jury wheels, pools of names, panels, or venires from which
juries are drawn not systematically exclude distinctive groups in
the community and thereby fail to constitute a fair cross section of
the community.
2. C
ONSTITUTIONAL
L
AW —
J
URY —
V
ENIRES —
F
AIR
C
ROSS
S
ECTION OF
C
OMMUNITY
—
P
RIMA
F
ACIE
C
ASE
.
A prima facie showing that a jury was not selected from a fair cross
section of the community is made when the defendant shows that
the group alleged to be excluded was a distinctive group in the
community, the representation of this group in venires from which
juries were selected was not fair and reasonable in relation to the
number of such persons in the community, and this underrepre-
sentation was attributable to systematic exclusion of the group in
262 289 M
ICH
A
PP
260 [July
the jury-selection process; systematic exclusion is exclusion inher-
ent in the particular jury-selection process utilized and is not
shown by one or two incidents of disproportionate venires; once a
defendant establishes a prima facie violation of the fair-cross-
section requirement, the government may overcome the right to a
proper jury by proffering a significant state interest that mani-
festly and primarily advances those aspects of the jury-selection
process that would result in the disproportionate exclusion of a
distinctive group.
3. C
ONSTITUTIONAL
L
AW —
J
URY —
V
ENIRES —
F
AIR
C
ROSS
S
ECTION OF
C
OMMU-
NITY
.
The United States Supreme Court has not specified the preferred
method for measuring whether representation of a distinctive
group in a jury venire is fair and reasonable; courts have applied
three different methods, the absolute-disparity test, the
comparative-disparity test, and the standard-deviation test, but,
because each test has been criticized, no individual method should
be used to the exclusion of the others, and a case-by-case approach
should be employed; provided that the parties proffer sufficient
evidence, courts should consider the results of all the tests in
determining whether representation was fair and reasonable.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, William A. Forsyth, Prosecuting At-
torney, and Timothy K. McMorrow, Assistant Prosecut-
ing Attorney, for the people.
Arthur James Rubiner for defendant.
Before: J
ANSEN
,P.J., and B
ORRELLO
and S
TEPHENS
,JJ.
B
ORRELLO
, J. Defendant appeals as of right the trial
court’s decision on remand, which found that defen-
dant’s Sixth Amendment right to an impartial jury
drawn from a fair cross section of the community was
not violated because African-Americans were not un-
derrepresented in the venire from which defendant’s
jury was selected and Kent County’s jury-selection
process, at the time of defendant’s trial, did not system-
2010] P
EOPLE V
B
RYANT
263
atically exclude African-Americans. For the reasons set
forth in this opinion, we reverse and remand for a new
trial.
I. FACTS AND PROCEDURAL HISTORY
Defendant was convicted of first-degree criminal
sexual conduct, MCL 750.520b(1)(e), armed robbery,
MCL 750.529, and possession of marijuana, MCL
333.7403(2)(d), by a jury in the Kent Circuit Court in
February 2002. He appealed, arguing, in part, that he
was deprived of his Sixth Amendment right to an
impartial jury drawn from a fair cross section of the
community because there was only one African-
American in the jury venire of 42 people. In an unpub-
lished opinion, we affirmed in part and remanded “for
the sole purpose of conducting an evidentiary hearing
regarding defendant’s challenge to the jury venire.”
People v Bryant, unpublished opinion per curiam of the
Court of Appeals, issued March 16, 2004 (Docket No.
241442), p 7.
On remand, the trial court held several evidentiary
hearings and issued a written opinion. The trial court
rejected defendant’s reliance on statistical estimates,
reasoning that they were not sufficient to prove under-
representation. The trial court made four holdings: that
“defendant has failed to sustain his burden of proving
that African-Americans were substantially underrepre-
sented among the prospective jurors to whom question-
naires were mailed in 2001-2002,” that “even if African-
Americans were numerically underrepresented from
June, 2001, through mid-Fall, 2002, among prospective
jurors, defendant has failed to establish that the cir-
cumstances were such that that underrepresentation
was unconstitutional as defined by the Supreme Courts
of the United States and Michigan,” that “even if there
264 289 M
ICH
A
PP
260 [July
was unconstitutional underrepresentation in the total
number of prospective jurors, there was no underrep-
resentation of African-Americans in the venire from
which defendant’s jury was selected,” and, finally, that
“any underrepresentation was the product of chance,
not any bias, even an innocent and accidental bias, in
the jury selection process. Hence, systematic exclusion
has not been proven.”
Defendant appeals again, arguing that he was denied
his Sixth Amendment right to be tried by an impartial
jury drawn from a fair cross section of the community
because there was only one African-American in the
jury venire of 42 people.
II. STANDARD OF REVIEW
We review de novo questions regarding systematic
exclusion of minorities from jury venires. People v
Hubbard (After Remand), 217 Mich App 459, 472; 552
NW2d 493 (1996).
III. ANALYSIS
The issue in this case is whether defendant was
denied his Sixth Amendment right to be tried by an
impartial jury drawn from a fair cross section of the
community because there was only one African-
American in the jury venire of 42 people.
The Sixth Amendment applies to the states through
the Due Process Clause of the Fourteenth Amendment.
Duncan v Louisiana, 391 US 145, 149; 88 S Ct 1444; 20
L Ed 2d 491 (1968). In addition, the Michigan Consti-
tution guarantees the right to trial by jury. Const 1963,
art 1, § 14. In Taylor v Louisiana, 419 US 522, 528; 95
S Ct 692; 42 L Ed 2d 690 (1975), the United States
Supreme Court stated “that the selection of a petit jury
2010] P
EOPLE V
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265
from a representative cross section of the community is
an essential component of the Sixth Amendment right
to a jury trial.” While the “fair-cross-section require-
ment does not entitle the defendant to a petit jury that
mirrors the community,” it “guarantees an opportunity
for a representative jury by requiring that jury wheels,
pools of names, panels, or venires from which juries are
drawn must not systematically exclude distinctive
groups in the community and thereby fail to constitute
a fair cross section of the community.” Hubbard, 217
Mich App at 472-473.
In Duren v Missouri, 439 US 357, 364; 99 S Ct 664; 58
L Ed 2d 579 (1979), the United States Supreme Court
articulated the showing that a defendant must make to
establish a prima facie violation of the Sixth Amend-
ment fair-cross-section requirement:
(1) that the group alleged to be excluded is a “distinc-
tive” group in the community; (2) that the representation
of this group in venires from which juries are selected is not
fair and reasonable in relation to the number of such
persons in the community; and (3) that this underrepre-
sentation is due to systematic exclusion of the group in the
jury-selection process.
Once a defendant establishes a prima facie violation of
the fair-cross-section requirement, “the government
may overcome the right to a proper jury by proffering a
significant state interest that manifestly and primarily
advances those aspects of the jury selection process that
would result in the disproportionate exclusion of a
distinctive group....”Hubbard, 217 Mich App at 473;
see also Duren, 439 US at 367-368.
As we observed in our previous opinion in this case,
defendant satisfied the first prong of Duren because
“African-Americans are considered a constitutionally
266 289 M
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260 [July
cognizable group for Sixth Amendment fair-cross-
section purposes.” Hubbard, 217 Mich App at 473.
The second prong of Duren “is satisfied where it has
been shown that a distinctive group is substantially
underrepresented in the jury pool.” Id. at 474. Although
it recently had the opportunity to specify the preferred
method of measuring if representation of a distinctive
group in the jury pool is fair and reasonable, the United
States Supreme Court has not done so. See Berghuis v
Smith, 559 US ___, ___; 130 S Ct 1382, 1393-1394; 176
L Ed 2d 249, 261 (2010) (“[W]e would have no cause to
take sides today on the method or methods by which
underrepresentation is appropriately measured.”). In
People v Smith, 463 Mich 199, 203; 615 NW2d 1 (2000),
our Supreme Court observed that federal courts since
Duren have applied three different tests to measure
whether representation of a distinctive group in the
jury pool is fair and reasonable: the absolute-disparity
test, the comparative-disparity test, and the standard-
deviation test. Recognizing that all three tests are
subject to criticism, our Supreme Court stated the
following regarding the appropriate method to measure
underrepresentation:
We thus consider all these approaches to measuring
whether representation was fair and reasonable, and con-
clude that no individual method should be used exclusive of
the others. Accordingly, we adopt a case-by-case approach.
Provided that the parties proffer sufficient evidence, courts
should consider the results of all the tests in determining
whether representation was fair and reasonable. [Id. at
204.]
Because the United States Supreme Court did not
adopt a specific test to measure underrepresentation in
Berghuis, we are bound to follow the case-by-case
approach articulated by our Supreme Court in Smith.
2010] P
EOPLE V
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RYANT
267
On remand, there was evidence offered regarding all
three tests. We will therefore address each test in turn.
The absolute-disparity test measures the difference
between the percentage of the distinctive group in the
population eligible for jury duty and the percentage of
that group who actually appear in the venire. Ramseur
v Beyer, 983 F2d 1215, 1231 (CA 3, 1992). This Court
has previously recognized that the absolute-disparity
method of measuring underrepresentation is of ques-
tionable usefulness when applied to a group that makes
up a small percentage of the population, Hubbard, 217
Mich App at 476-477, and in this case African-
Americans who were 18 years of age or older made up a
small percentage of the Kent County population when
defendant’s jury was selected. The evidence indicated
that 8.25 percent of eligible voters in Kent County were
African-American. This Court has stated that an abso-
lute disparity between 2 percent and 11.2 percent is
statistically insignificant and does not constitute sub-
stantial underrepresentation. Id. at 475; see also Ram-
seur, 983 F2d at 1232 (disparities of 2 percent to 11.5
percent do not constitute substantial underrepresenta-
tion). Populations that fall within this percentage range
can never be statistically significant because “the per-
centage disparity can never exceed the percentage of
African Americans in the community.” United States v
Rogers, 73 F3d 774, 776-777 (CA 8, 1996). Even if the
Kent County juror-selection system excluded all
African-Americans from jury service, a successful Sixth
Amendment fair-cross-section challenge would be im-
possible because the total percentage of African-
American voters in the Kent County population consti-
tutes a percentage that is less than that which is
considered statistically significant for Sixth Amend-
ment fair-cross-section purposes. See Hubbard, 217
Mich App at 477.
268 289 M
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260 [July
Dr. Paul Stephenson, chairman of the Department of
Statistics at Grand Valley State University, calculated
the absolute disparity in this case to be 6.03
1
percent;
however, he observed that an analysis of absolute dis-
parity is not a viable method of identifying or measur-
ing underrepresentation of the African-American com-
munity in this case for the reasons already explained in
this opinion. While the absolute disparity of 6.03 per-
cent in this case does not indicate substantial under-
representation, we conclude, like we did in Hubbard,
“that the absolute disparity test is an ineffective mea-
sure of acceptable disparity” because of the low percent-
age of African-Americans who were eligible to vote in
Kent County. Id. Thus, we decline to find the absolute-
disparity test controlling in this case.
The comparative-disparity test “measures the dimin-
ished likelihood that members of an underrepresented
group, when compared to the population as a whole, will
be called for jury service.” Ramseur, 983 F2d at 1231-
1232. The diminished likelihood is calculated by dividing
the absolute disparity by the percentage of the population
made up by the distinctive group in question. Dr. Stephen-
son applied the comparative-disparity test to the venire
from which defendant’s jury was chosen and calculated
the comparative disparity to be 73.1 percent. This means
that the venire for defendant’s trial had 73.1 percent
fewer African-Americans than could have been expected
in Kent County. In rendering his calculation, Dr. Stephen-
son relied on the 2000 United States Census, which
indicated that 8.25 percent of the population of Kent
County 18 years of age or older was African-American.
1
This number represents the percentage of Kent County African-
American residents who were 18 years of age or older (8.25 percent)
minus the percentage of African-Americans appearing in defendant’s
venire (2.22 percent).
2010] P
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In our previous opinion in this case, this Court
articulated its belief that the comparative-disparity test
was not controlling because of the fact that the popu-
lation of African-Americans in Kent County was small
and therefore a small change in the jury pool would
distort the proportional representation. Bryant, unpub
op at 3. We acknowledge the difficulties in applying this
method to a group that makes up a small percentage of
the population.
In choosing the appropriate test to apply in this
case, we are mindful that “[e]ach test is imperfect.”
Berghuis, 559 US at ___; 130 S Ct at 1393; 176 L Ed
2d at 261. We are further cognizant that some of the
concerns with applying the comparative-disparity
test to a group that makes up a small percentage of
the population also exist with applying the absolute-
disparity test, Hubbard, 217 Mich App at 476-477,
that courts typically apply the standard-deviation
test in Fourteenth Amendment cases, but not in Sixth
Amendment cases, and that no court in the country
has accepted application of the standard-deviation
test alone as determinative in Sixth Amendment
challenges to jury-selection systems, Smith, 463 Mich
at 204. We must apply some test to measure the
representation of African-Americans in defendant’s
venire, and the comparative-disparity method at least
yields a calculation that is indicative of the underrep-
resentation of African-Americans in defendant’s ve-
nire. We agree with the United States Court of
Appeals for the Eighth Circuit that as between the
absolute- and comparative-disparity tests, the
comparative-disparity test is most appropriate to
measure underrepresentation in cases in which the
percentage of African-Americans in the relevant com-
munity is low. Rogers, 73 F3d at 776-777. In Rogers,
the Eighth Circuit opined:
270 289 M
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260 [July
While...both [absolute and comparative disparity]
provide a simplified statistical shorthand for a complex
issue, the comparative disparity calculation provides a
more meaningful measure of systematic impact vis-a-vis
the “distinctive” group: it calculates the representation of
African Americans in jury pools relative to the African-
American community rather than relative to the entire
population. [Id. at 777.]
For the reasons we have just outlined, we conclude
that the comparative-disparity test is the most appro-
priate test to measure underrepresentation in this
case.
2
Seventy-three and one-tenth percent is a significant
comparative disparity and is sufficient to demonstrate
that the representation of African-Americans in the
venire for defendant’s trial was unfair and unreason-
able. See id. (holding that comparative disparity of
more than 30 percent satisfies the second prong of
Duren); see also Smith, 463 Mich at 219 (C
AVANAGH
,J.,
concurring) (stating that comparative disparities of 40
percent have been held to be borderline). In any event,
the comparative disparity in this case, 73.1 percent, is
substantially higher than the 30 or 40 percent that has
been deemed sufficient to demonstrate an unfair and
unreasonable representation of minorities in a jury
2
To the extent that the previous unpublished opinion in this case
concluded that the comparative-disparity test is not controlling, we find
that the law-of-the-case doctrine does not preclude this Court from
concluding, after remand, that the comparative-disparity test is the
appropriate test to measure underrepresentation under the facts of the
case. First, the law-of-the-case doctrine applies only if the facts remain
substantially or materially the same, People v Phillips (After Second
Remand), 227 Mich App 28, 32; 575 NW2d 784 (1997), and in this case
the trial court conducted several evidentiary hearings on remand, which
yielded significant expert testimony regarding each of the three tests.
Second, the law-of-the-case doctrine does not limit an appellate court’s
power, but is instead a discretionary rule of practice. Schumacher v Dep’t
of Natural Resources, 275 Mich App 121, 128; 737 NW2d 782 (2007).
2010] P
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venire. Thus, under the comparative-disparity test,
defendant has established that African-Americans were
underrepresented on the venire from which his jury was
selected.
On remand, there was some evidence regarding the
standard-deviation test, which explains the probability
that any disparity was the result of random chance.
Smith, 463 Mich at 219 (C
AVANAGH
, J., concurring).
Standard deviation is calculated “by multiplying the
number of prospective jurors in the jury pool by the
percentage of the distinct group in the population by
the percentage of the population that is not in the
distinct group, and then taking the square root of that
product.” Id. at 220. At one of the postremand eviden-
tiary hearings, Dr. Chidi Chidi, an expert presented by
defendant, testified that the appearance of one African-
American in the venire failed the standard-deviation
test. In a report that was admitted into evidence on
remand, Dr. Chidi calculated the standard deviation to
be 27.86. This figure is close to the standard deviation
of 29 condemned in Castaneda v Partida, 430 US 482,
496 n 17; 97 S Ct 1272; 51 L Ed 2d 498 (1977). However,
Dr. Stephenson’s opinion regarding use of the standard-
deviation test was that the “test uses a normal approxi-
mation of a binomial random variable. In this case, the
normal approximation is not valid, and therefore, the
standard deviation test is not appropriate.” Further-
more, our Supreme Court has noted that the standard-
deviation test is not typically used in Sixth Amendment
cases and that “ ‘no court in the country has accepted [a
standard-deviation analysis] alone as determinative in
Sixth Amendment challenges to jury selection sys-
tems.’ ” Smith, 463 Mich at 204, quoting United States
v Rioux, 97 F3d 648, 655 (CA 2, 1996). For these
reasons, we conclude that in this case, the standard-
272 289 M
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deviation test has little value in measuring the under-
representation of African-Americans in Kent County
jury venires.
The third prong of Duren requires proof that under-
representation of African-Americans “is due to system-
atic exclusion of the group in the jury-selection pro-
cess.” Duren, 439 US at 364. Systematic exclusion is
exclusion “inherent in the particular jury-selection pro-
cess utilized.” Id. at 366. Systematic exclusion is not
shown by one or two incidents of disproportionate
venires. Hubbard, 217 Mich App at 481. In Duren, the
United States Supreme Court concluded that underrep-
resentation of women in every weekly venire for nearly
a year constituted underrepresentation that was sys-
tematic. Id. at 366.
In this case, there was evidence of a significant
problem with the jury-selection process, and the pros-
ecution has conceded that this problem lasted for a
significant duration. The problem with the jury-
selection process in Kent County was twofold. First, the
Secretary of State provided Kent County with a list of
453,414 individuals who were eligible to vote in Kent
County, but the information technology department of
the Kent Circuit Court erroneously reduced this list to
only 118,000 individuals. Second, it is not disputed that
a computer program used in Kent County did not select
jurors at random across all zip codes, as it was supposed
to do. As a result of the problem with the computer
program, jurors were overselected from zip codes with
small minority populations and underselected from zip
codes with large minority populations. The prosecution
previously conceded that “there was indeed a problem
in the jury selection process in Kent County which
occurred from late 2001 to July 2002,” explaining:
2010] P
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“[I]n essence . . . a computer program used to select
potential jurors chose a disproportionately large number of
jurors from areas with lower zip codes, which had the
unintended effect of selecting fewer jurors from areas of
the county where African-Americans live. The assumption
is that this led to an artificial shortfall of African-American
jurors, though to what extent has never been determined.”
[Bryant, unpub op at 4.]
We find that the underrepresentation in this case was
the result of the system by which juries in Kent County
were selected because jurors from zip codes with small
minority populations were routinely overselected and
jurors from zip codes with large minority populations
were routinely underselected as the result of a glitch or
problem with the computer program that selected ju-
rors. Given this problem with the computer program,
underrepresentation was inherent in the jury-selection
process used in Kent County during the time that the
computer glitch existed. It is irrelevant that the prob-
lem with the computer program’s failing to randomly
select jurors across all zip codes does not appear to be
intentional. A party need not show that the underrep-
resentation of a distinctive group came as a result of
intentional discrimination. Duren, 439 US at 368 n 26.
Moreover, there was evidence that the error began in
April 2001 and persisted over a period of 16 months.
Terry Holtrop, the case-management manager for the
Kent Circuit Court, testified that he became aware in
April 2001 that there was a problem of underrepresen-
tation of minorities on Kent County juries. Gail Van-
Timmeren, the jury clerk for the Kent Circuit Court,
testified that it was “visually evident” that there were
not enough minorities coming in for jury duty and that
she had spoken to the administrator “over and over
again” about this. VanTimmeren asserted that on a
number of occasions, she handpicked individuals who
274 289 M
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260 [July
appeared to be African-American to be placed on a panel
from which a jury would be selected. She asserted that
“we significantly, in every single week, were not getting
minorities in, and something was wrong.”
There was also testimony and statistical evidence
3
presented by Dr. Stephenson that supports our conclu-
sion that the underrepresentation of African-Americans
on Kent County jury venires occurred over a significant
period. Dr. Stephenson examined census data and de-
termined that in the vast majority of the zip codes that
were overrepresented, there were a small number of
African-Americans, and that in the zip codes that were
underrepresented, there were a large number of
African-Americans. Furthermore, Dr. Stephenson testi-
fied that “the way that the process was performing did,
in effect, over the long run, create a situation where
black or African-Americans were going to be underrep-
resented, in my opinion, in the compilation of jury
venires.” Dr. Stephenson also provided data and statis-
tics that permit this Court to calculate the comparative
disparity for the three-month period of January
through March 2002 at 49.5 percent. This is higher
than the 30 percent found to satisfy the second prong of
Duren in Rogers, 73 F3d at 777.
In sum, we conclude that defendant has established a
prima facie violation of the Sixth Amendment’s fair-
cross-section requirement. Because defendant estab-
lished a prima facie violation, the burden shifts to the
prosecution to demonstrate that “a significant state
interest [is] manifestly and primarily advanced by those
aspects of the jury-selection process... that result in
3
The trial court’s conclusion that statistics are inadequate to demon-
strate underrepresentation is incorrect. In Duren, 439 US at 364, the
United States Supreme Court found that “[t]he second prong of the
prima facie case was established by petitioner’s statistical presentation.”
2010] P
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the disproportionate exclusion of” African-Americans.
Duren, 439 US at 367-368. The prosecution filed a brief
the day before oral argument in this case but failed to
proffer any significant state interest that would be
advanced by the errors and computer glitch that re-
sulted in the systematic underrepresentation of
African-Americans in Kent County jury venires. In fact,
we cannot conceive of any significant state interest that
could possibly justify the jury-selection process used in
Kent County during the time the computer glitch
systematically excluded African-Americans from jury
venires.
Reversed and remanded for a new trial before an
impartial jury that is drawn from a fair cross section of
the community. We do not retain jurisdiction.
276 289 M
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STATE FARM MUTUAL INSURANCE CO v
BROE REHABILITATION SERVICES, INC
Docket No. 289230. Submitted June 2, 2010 at Detroit. Decided July 22,
2010, at 9:00 a.m.
State Farm Mutual Insurance Company brought an action for
discovery against Broe Rehabilitation Services, Inc., in the Oak-
land Circuit Court. Plaintiff sought to obtain information about
the treatment that defendant had provided to several of its
insureds pursuant to MCL 500.3158(2) and 500.3159, which allow
a court to enter an order for discovery if there is a dispute
regarding an insurer’s right to discovery of facts about an injured
person’s history, condition, treatment, and dates and costs of
treatment. Defendant moved for summary disposition, arguing
that because there was no dispute between the parties, these
provisions did not apply and the court lacked jurisdiction over the
matter. The court, Nanci J. Grant, J., denied the motion, ruling
that the Insurance Code explicitly authorizes the relief plaintiff
sought and that an actual controversy existed despite the fact that
plaintiff was not seeking actual damages. Defendant moved for
reconsideration of this ruling, and plaintiff moved to compel
discovery. The court denied the former motion and granted the
latter, and defendant appealed.
The Court of Appeals held:
An insurance company has the right under MCL 500.3158(2)
and 500.3159 to demand copies of records from a physician,
hospital, clinic, or other medical institution about an insured
person’s history, condition, treatment, and dates and costs of
treatment in relation to that person’s claim. The services in
question need not have been billed, nor need payment be outstand-
ing, for an insurer to exercise this right. Rather, a refusal to
comply with a demand made under MCL 500.3158(2) gives rise to
the “dispute regarding an insurer’s right to discovery of facts”
required by MCL 500.3159 for entry of a discovery order. Because
this constitutes an actual dispute between the parties that can be
redressed by a discovery order, it is a dispute over which a court
has jurisdiction. An insured person is entitled to notice that the
insurer has sought this information.
2010] S
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ERVS
277
Affirmed in part; order compelling discovery vacated and case
remanded for further proceedings.
1. I
NSURANCE —
N
O
-F
AULT
—M
EDICAL
R
ECORDS —
D
ISCOVERY OF
M
EDICAL
R
ECORDS
.
An insurance company has the statutory right to demand copies of
records from a physician, hospital, clinic, or other medical institu-
tion about an insured person’s history, condition, treatment, and
dates and costs of treatment in relation to that person’s claim; the
services need not have been billed, nor need payment be outstand-
ing, for an insurer to exercise this right; a refusal to comply with
this demand gives rise to a dispute over which a court has
jurisdiction (MCL 500.3158[2], 500.3159).
2. I
NSURANCE —
N
O
-F
AULT
—M
EDICAL
R
ECORDS —
R
IGHT TO
D
ISCOVERY OF
M
EDICAL
R
ECORDS —
N
OTICE OF
D
ISCOVERY TO
I
NSUREDS
.
An insured person is entitled to notice that an insurer has sought
information under MCL 500.3158(2) from a physician, hospital,
clinic, or other medical institution about that person’s history,
condition, treatment, and dates and costs of treatment.
Hewson & Van Hellemont, P.C. (by James F. Hewson,
Christine M. Sutton, and Steven G. Silverman), for
plaintiff.
Law Offices of Richard R. Mannausa, PLC (by Rich-
ard R. Mannausa), for defendant.
Before: H
OEKSTRA
,P.J., and M
ARKEY
and D
AVIS
,JJ.
P
ER
C
URIAM
. Defendant appeals as of right an order
denying its motion for summary disposition and an
order denying reconsideration and granting plaintiff’s
motion to compel discovery. We affirm the denial of
summary disposition and the denial of reconsideration,
but we vacate the order compelling discovery and re-
mand the case for further proceedings.
Plaintiff, an insurance company, commenced this suit
with a “complaint for discovery” seeking medical
records for certain of its insureds who had been pro-
278 289 M
ICH
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277 [July
vided services by defendant. However, plaintiff is not
currently in litigation with any of these insured per-
sons, and it has, for the most part, paid the bills
defendant submitted. Rather, plaintiff’s purpose in
seeking these records is to ascertain whether defendant
billed improperly and what diagnoses were made and
what treatments defendant performed so that plaintiff
can determine whether present treatment by other
providers is reasonable and necessary.
1
Plaintiff filed its
“complaint for discovery” when defendant refused
plaintiff’s request for the medical records and to have
its employees submit to examinations under oath.
Defendant moved for summary disposition, arguing
that the court had no jurisdiction because there was no
dispute between the parties. The trial court disagreed,
as do we. Jurisdictional issues and questions of standing
are reviewed de novo. Estes v Titus, 481 Mich 573,
578-579; 751 NW2d 493 (2008); Nat’l Wildlife Federa-
tion v Cleveland Cliffs Iron Co, 471 Mich 608, 612; 684
NW2d 800 (2004). Statutory interpretation is a ques-
tion of law that is also considered de novo on appeal.
Detroit v Ambassador Bridge Co, 481 Mich 29, 35; 748
NW2d 221 (2008).
We agree with defendant that there is no such thing
as a “complaint for discovery,” but it has long been the
law in this state that it is the substance of the complaint
that controls. Group Ins Co of Mich v Czopek, 440 Mich
590, 605; 489 NW2d 444 (1992); see also Crown Tech-
nology Park v D&N Bank, FSB, 242 Mich App 538, 554;
619 NW2d 66 (2000) (stating that the Court would not
1
Defendant has a history of fraudulently billing for its services. See
Allstate Ins Co v Broe, unpublished opinion per curiam of the Court of
Appeals, issued August 21, 2008 (Docket No. 274809), pp 11-12. And
plaintiff was involved in an earlier lawsuit in which defendant’s allegedly
erroneous diagnosis resulted in years of allegedly incorrect treatment of
one of plaintiff’s insureds.
2010] S
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“rely[] on the superficial language of the complaint
while ignoring its substance”). What plaintiff sought in
essence in its complaint was a declaratory judgment
concerning the extent of the rights and responsibilities
of the parties under §§ 3158 and 3159 of the no-fault
act, MCL 500.3101 et seq., and the equitable relief of an
order compelling discovery.
The first section, MCL 500.3158, reads in relevant
part as follows:
A physician, hospital, clinic or other medical institution
providing, before or after an accidental bodily injury upon
which a claim for personal protection insurance benefits is
based, any product, service or accommodation in relation to
that or any other injury, or in relation to a condition
claimed to be connected with that or any other injury, if
requested to do so by the insurer against whom the claim
has been made, (a) shall furnish forthwith a written report
of the history, condition, treatment and dates and costs of
treatment of the injured person and (b) shall produce
forthwith and permit inspection and copying of its records
regarding the history, condition, treatment and dates and
costs of treatment. [MCL 500.3158(2).]
The second section, MCL 500.3159, reads in its entirety
as follows:
In a dispute regarding an insurer’s right to discovery of
facts about an injured person’s earnings or about his
history, condition, treatment and dates and costs of treat-
ment, a court may enter an order for the discovery. The
order may be made only on motion for good cause shown
and upon notice to all persons having an interest, and shall
specify the time, place, manner, conditions and scope of the
discovery. A court, in order to protect against annoyance,
embarrassment or oppression, as justice requires, may
enter an order refusing discovery or specifying conditions
of discovery and may order payments of costs and expenses
of the proceeding, including reasonable fees for the appear-
ance of attorneys at the proceedings, as justice requires.
280 289 M
ICH
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277 [July
The constitutional test for standing in Michigan re-
quires three elements:
First, the plaintiff must have suffered an injury in
fact—an invasion of a legally protected interest which is (a)
concrete and particularized, and (b) actual or imminent,
not conjectural or hypothetical. Second, there must be a
causal connection between the injury and the conduct
complained of—the injury has to be fairly traceable to the
challenged action of the defendant, and not the result of
the independent action of some third party not before the
court. Third, it must be likely, as opposed to merely
speculative, that the injury will be redressed by a favorable
decision. [Rohde v Ann Arbor Pub Sch, 479 Mich 336, 348;
737 NW2d 158 (2007) (brackets, quotation marks, and
citations omitted).]
Under the no-fault act, plaintiff has a statutory right
to demand copies of medical records from medical
providers who have provided treatment or services “in
relation to” an insured’s claim. MCL 500.3158(2). The
statute does not require that the services have been
billed or that payment be outstanding. Once defendant
had refused to comply with the statutory mandate, the
“dispute” required by MCL 500.3159 arose. Notably,
the statute requires a “dispute regarding an insurer’s
right to discovery of facts,” not a dispute about payment
of a claim or a dispute about an insured’s earnings,
history, condition, or treatment, as defendant argues. In
this case, there was a very concrete, actual dispute over
the extent of plaintiff’s statutory right to obtain the
records, caused by defendant’s refusal to comply with
MCL 500.3158, that can be redressed by a discovery
order from the trial court. This is very different from
the “minute and generalized” injury the plaintiffs al-
leged in Rohde, 479 Mich at 354.
Because there was an actual dispute between the
parties, the trial court did not err by concluding that it
2010] S
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ERVS
281
had jurisdiction to decide the case. See, e.g., Allstate Ins
Co v Hayes, 442 Mich 56, 65-68; 499 NW2d 743 (1993).
Additionally, we conclude that plaintiff met the “good
cause” requirement for the same reason that there is an
actual case or controversy. We further observe that,
given defendant’s history of fraud and alleged misdiag-
noses, plaintiff is not merely embarking on a fishing
expedition.
Nevertheless, we do not agree that the insureds are
not interested parties entitled to notice. Plaintiff as-
serts that the insureds’ policies require them to waive
any medical-records privilege when they file a claim for
benefits and thus that they have no interest in a cause
of action solely designed to obtain those records. We do
not believe that plaintiff’s conclusion necessarily fol-
lows from its premise. The insureds have presumably
waived any right to preclude plaintiff from accessing
those records, but given the potentially sensitive infor-
mation therein, we conclude that the insureds have an
interest in, at a minimum, simply knowing that plaintiff
has accessed them; furthermore, the insureds would
obviously be interested in knowing that plaintiff is
investigating the reasonableness and necessity of their
current treatment. The insureds have an interest and
must be given notice.
The trial court’s order denying summary disposition
is affirmed. The trial court’s order compelling discovery
is vacated. We remand for further proceedings consis-
tent with this opinion. We do not retain jurisdiction.
282 289 M
ICH
A
PP
277 [July
McMANUS v TOLER
Docket No. 290249. Submitted June 5, 2010, at Grand Rapids. Decided
July 27, 2010, at 9:00 a.m.
Claude McManus and his daughter, Valerie McManus-Zoerhof,
brought an action in the Kent Circuit Court against Kevin M.
Toler, seeking a declaratory judgment that there was no binding
contract between the parties for the sale of an American Express
Financial Advisors, Inc., franchise, to void or rescind the contract
if there was one, and damages for the breach of any such contract.
Defendant submitted an offer of judgment under MCR 2.405 to
plaintiffs “in the amount of $25,000.00 inclusive of interest and
costs in this matter.” Plaintiffs did not respond to the offer.
Following a bench trial, the court, Donald A. Johnston, J., ruled
that there was a valid contract for the sale of the franchise, that
defendant had not breached that contract, and that plaintiffs did
not have a valid cause of action. The Court of Appeals, D
ONOFRIO
,
P.J., and S
AWYER
and M
URPHY
, JJ., affirmed in an unpublished
opinion per curiam, issued July 1, 2008 (Docket No. 274407).
Before the appeal was filed, defendant had moved to assess fees
and costs against plaintiffs under MCR 2.405(D). Plaintiffs had
objected, arguing that defendant’s offer had not complied with the
court rule. The trial court disagreed and granted the motion. After
the Court of Appeals upheld the trial court’s ruling on the merits
of the case, the trial court entered an order assessing costs under
MCR 2.405 and ordering plaintiffs to pay defendant’s attorney fees
in the amount of $50,559.80. Plaintiffs moved for reconsideration,
which the trial court denied. McManus appealed.
The Court of Appeals held:
The offer-of-judgment rule, MCR 2.405, applies to offers of judg-
ment for a sum certain. Defendant’s offer to settle this case for
$25,000 was an offer for a sum certain. The fact that some of the
claims in this case were based in equity did not render the rule
inapplicable. Even if the rule does not apply to purely equitable
actions, it applies to cases such as this one involving both claims at
law and claims in equity in which the offer of judgment addresses
only monetary damages and the equitable claims are to be dismissed.
Affirmed.
2010] M
C
M
ANUS V
T
OLER
283
A
CTIONS —
O
FFER OF
J
UDGMENT —
S
UM
C
ERTAIN —
E
QUITABLE
C
LAIMS —
C
LAIMS
AT
L
AW
.
The offer-of-judgment rule applies to a case involving both claims at
law and claims in equity in which the offer of judgment addresses
only monetary damages of a sum certain and the equitable claims
are to be dismissed (MCR 2.405).
Wheeler Upham, P. C . (by Walter J. Russell), for
Claude McManus.
Law Weathers (by Michael J. Roth) for Kevin M.
Toler.
Before: S
AWYER
,P.J., and B
ANDSTRA
and W
HITBECK
,JJ.
P
ER
C
URIAM
. Plaintiff, Claude McManus,
1
appeals as
of right the circuit court’s final judgment entered on
September 22, 2008. We affirm.
The facts of this case were summarized in McManus
v Toler, unpublished opinion per curiam of the Court of
the Appeals, issued July 1, 2008 (Docket No. 274407).
Plaintiff owned and operated an American Express
Financial Advisors, Inc. (AEFA) franchise. He employed
his daughter and defendant. In 2002, AEFA offered
plaintiff a position as field vice president, but under
AEFA rules he would have had to divest himself of his
ownership interest in the franchise to take the position.
Plaintiff decided to sell the franchise to defendant, but
with his daughter acquiring a contingent joint owner-
ship interest when she acquired the licenses necessary
to own the franchise. This was written in a memoran-
dum. However, plaintiff’s daughter was not able to
1
Plaintiff Claude McManus is appealing. His daughter, Valerie
McManus-Zoerhof, was a plaintiff during the lower-court proceedings
and was a listed party on the final order assessing attorney fees and costs,
but she is not a party to this appeal. Therefore, when “plaintiffs” are
mentioned with regard to the lower-court proceedings, the reference is to
both parties, but “plaintiff” refers only to Claude McManus.
284 289 M
ICH
A
PP
283 [July
obtain her licenses within the agreed-upon period, even
though defendant gave her deadline extensions.
The parties ended up in court to determine if the
memorandum merely expressed an intent to contract or
was a legally enforceable contract. The trial court found
that there was a valid contract between the parties and
that defendant did not breach the contract. On appeal,
this Court affirmed the trial court’s findings. Plaintiff
accepts the facts as set forth in this Court’s July 1,
2008, opinion, although he does not agree with them.
On June 23, 2006, defendant submitted an offer of
judgment to plaintiffs. Plaintiffs never responded to the
offer. On October 25, 2006, the trial court entered a
verdict of no cause of action against plaintiffs and in
favor of defendant. Defendant subsequently moved to
assess fees and costs under MCR 2.405(D). On Novem-
ber 13, 2006, plaintiffs filed a response in opposition to
defendant’s motion, stating that the offer of judgment
did not comply with the requirements of MCR 2.405. On
the same day, the trial court held a hearing on defen-
dant’s motion. The court granted the motion, but gave
plaintiffs an opportunity to challenge the reasonable-
ness of the requested attorney fees. Plaintiffs did not
submit any additional briefing.
On September 11, 2008, defendant served plaintiffs
with a notice of presentment. Plaintiffs did not object.
On September 22, 2008, the trial court entered an order
assessing costs under MCR 2.405 and ordering plain-
tiffs to pay defendant’s attorney fees in the amount of
$50,559.80. On September 25, 2008, plaintiffs filed a
motion for reconsideration. On January 15, 2009, the
trial court denied plaintiffs’ motion. Plaintiff is appeal-
ing the order awarding costs and attorney fees.
Plaintiff first argues that defendant’s offer of judg-
ment was not for a sum certain and, therefore, did not
2010] M
C
M
ANUS V
T
OLER
285
comply with the requirements of MCR 2.405. Plaintiff
relies on Knue v Smith, 478 Mich 88; 731 NW2d 686
(2007), as analogous. We disagree.
We review de novo both the trial court’s interpreta-
tion of a court rule and its decision to award sanctions.
Ayre v Outlaw Decoys, Inc, 256 Mich App 517, 520; 664
NW2d 263 (2003). Generally, the rules governing statu-
tory interpretation apply equally to the interpretation
of court rules. Yudashkin v Holden, 247 Mich App 642,
649; 637 NW2d 257 (2001). If the plain meaning of the
language of the court rule is clear, “then judicial con-
struction is neither necessary nor permitted, and unless
explicitly defined, every word or phrase should be
accorded its plain and ordinary meaning, considering
the context in which the words are used.” Hyslop v
Wojjusik, 252 Mich App 500, 505; 652 NW2d 517 (2002).
MCR 2.405(A)(1) states:
“Offer” means a written notification to an adverse party
of the offeror’s willingness to stipulate to the entry of a
judgment in a sum certain, which is deemed to include all
costs and interest then accrued. If a party has made more
than one offer, the most recent offer controls for the
purposes of this rule.
Few cases have addressed the question of what con-
stitutes a “sum certain” for purposes of MCR 2.405(1).
In Knue, a quiet-title action, the Michigan Supreme
Court held that the plaintiffs’ offer of $3,000 to the
defendants in return for a quitclaim deed was not an
offer of a sum certain. Knue, 478 Mich at 90, 93 (opinion
by T
AYLOR
, C.J.); id.at97(Y
OUNG
, J., concurring). The
plaintiffs had filed an action to quiet title, stating that
they had acquired a strip of land through adverse
possession. The plaintiffs’ attorney sent the defendants
an offer for settlement under MCR 2.405. The plaintiffs
offered to pay the defendants $3,000 for a quitclaim
286 289 M
ICH
A
PP
283 [July
deed with the stipulation that the parties would dismiss
all claims “with prejudice and without costs....”Id.at
90 (opinion by T
AYLOR
, C.J.). The defendants replied
that the offer did not qualify as an offer of judgment
under MCR 2.405 and they did not accept it. The trial
court and the Court of Appeals determined that the
offer was for a sum certain under MCR 2.405. Id. at
90-92.
On appeal, the Michigan Supreme Court reversed.
The Court found that the plaintiffs’ offer fell outside
the scope of MCR 2.405(A)(1), and no costs or attorney
fees were awarded. The Court determined that the offer
of judgment rule does not apply to lawsuits when the
offer would not result in a judgment for a sum certain.
In his lead opinion, then Chief Justice T
AYLOR
stated:
[T]o be an “offer” the offer must propose to stipulate the
entry of a judgment in a sum certain. There is no latitude
given in this rule for offers of judgment that culminate in
something other than a “judgment for a sum certain.” That
is, it is nonconforming for the offer to require a reciprocal
exchange of cash for the execution of a recordable real
estate document culminating in a judgment of dismissal
with prejudice and without costs. For such an offer, the
offer of judgment rule is simply inapplicable and no con-
sideration of the distinctions between equity and law is
required to resolve this matter. [Id. at 93.]
Chief Justice T
AYLOR
determined that the plaintiffs’
offer of a quitclaim deed in exchange for $3,000 and a
judgment of dismissal was not for a sum certain because
it fell outside the scope of MCR 2.405(A)(1). Id.He
stated that the offer of judgment rule does not apply to
offers that are not for a sum certain. Id. Because the
plaintiffs’ offer did not meet the requirements of the
rule, they were not entitled to sanctions under the rule.
Id. at 93-94.
2010] M
C
M
ANUS V
T
OLER
287
Justices C
AVANAGH
and C
ORRIGAN
concurred with
Chief Justice T
AYLOR
. Justices Y
OUNG,
W
EAVER,
and
K
ELLY
concurred in the result. Justice Y
OUNG,
joined by
Justice W
EAVER,
stated that because “plaintiffs’ offer
required a quit claim deed in addition to the transfer of
$3,000, the offer could not be for a sum certain. There-
fore, MCR 2.405 does not apply to this case.” Id. at 97
(Y
OUNG
, J., concurring).
Knue is distinguishable from the present case be-
cause this case does not involve a reciprocal exchange or
a condition. In this case, defendant served plaintiffs
with a document titled “OFFER OF JUDGMENT.” A
footnote in defendant’s offer stated:
As a point of clarification, the $25,000.00 offer of judg-
ment represents an amount to be paid to the Plaintiffs in
addition to the original $300,000.00 purchase price for
acquiring certain clients from Mr. McManus. The amount
currently owing on the original purchase price is
$200,617.04 and requires monthly payments bearing inter-
est at the fixed rate of 7% amortized over a ten year period
commencing January 1, 2003 as set forth on the attached
amortization schedule.
Plaintiff argues that this footnote made the offer “con-
ditional” and not for a sum certain. We disagree. It is
clear from the language of defendant’s offer that the
offer was not conditional but for a sum certain of
$25,000. The footnote merely acknowledged the out-
standing balance on the business purchase and that the
offer of judgment did not affect the outstanding obliga-
tion under that agreement. We conclude that it is very
clear from the language of defendant’s offer that it was
an offer for a sum certain.
Additionally, both parties cite Hessel v Hessel, 168
Mich App 390; 424 NW2d 59 (1988), in their briefs.
Hessel is also distinguishable from this case. In Hessel,
288 289 M
ICH
A
PP
283 [July
168 Mich App at 395, this Court held that, in a divorce
proceeding, a proposed property settlement was not a
“sum certain.” The defendant offered the plaintiff real
estate, a car, household furnishings, and certificates of
deposit. The “[d]efendant valued the property he of-
fered [the] plaintiff at $143,200.” Id. The trial court
valued the same property at approximately $108,000.
Id. This Court held that a proposed property settlement
did not offer a sum certain; it offered a division of
marital property. Id. The Court reasoned that there was
no way that the defendant’s offer of the items could be
equated with a “sum certain.” Id. The Court noted that
even if the worth of the property were considered a
“sum” for purposes of MCR 2.405, it was still not
“certain.” Id.
In the case at bar, defendant’s offer was for a sum
certain. Therefore, it complied with the requirements of
MCR 2.405.
Plaintiff next argues that the circuit court should
have determined whether MCR 2.405 applies to actions
in equity. Plaintiff claims that in examining the rule, it
is clear that the intent of the rule is that it not apply in
equitable actions and because plaintiffs’ claim was
wholly in equity, defendant cannot recover under the
court rule. We disagree.
There is nothing in MCR 2.405 that states that the
rule does not apply to equitable actions. In Knue, the
lead opinion did not touch on the issue whether MCR
2.405 applied to actions seeking equitable relief. How-
ever, in her concurring opinion, Justice K
ELLY
stated, “I
would hold that the offer of judgment rule, MCR 2.405,
is inapplicable when equitable relief is sought.” Knue,
478 Mich at 94 (K
ELLY
, J., concurring). To the contrary,
in his dissent, Justice M
ARKMAN
stated that “[t]he
2010] M
C
M
ANUS V
T
OLER
289
language of MCR 2.405 does not differentiate between
legal and equitable claims.” Id. at 97 (M
ARKMAN
,J.,
dissenting).
In this case, plaintiff claims that the case was wholly in
equity. We disagree. Plaintiffs’ first amended complaint
alleged a breach of contract, stating: “WHEREFORE,
Plaintiffs respectfully request entry of a judgment in their
favor and against the Defendant that grants to Plaintiffs
damages to be determined by the Court caused by Defen-
dant’s breaches of contract along with applicable costs,
interest, and attorney fees.” It is clear from the language
of plaintiffs’ first amended complaint that plaintiffs’ case
was not wholly based in equity. Plaintiffs’ complaint asked
for monetary damages. The offer of judgment only offered
monetary damages. Even if the offer of judgment rule does
not apply to purely equitable actions, we conclude that, at
the minimum, it does apply to mixed law and equity
actions in which the offer of judgment only offers mon-
etary damages and the equitable claims are to be dis-
missed.
Affirmed.
290 289 M
ICH
A
PP
283 [July
JILEK v STOCKSON
Docket No. 289488. Submitted April 13, 2010, at Detroit. Decided July
29, 2010, at 9:00 a.m.
Joy A. Jilek, as personal representative of the estate of Daniel D. Jilek,
deceased, brought a medical-malpractice action in the Washtenaw
Circuit Court against board-certified family-medicine physician Car-
lin C. Stockson, M.D., EPMG of Michigan, P.C., which was Stockson’s
employer, Trinity Health-Michigan, and others, relating to Stock-
son’s treatment of Daniel at an urgent-care center. Plaintiff filed two
affidavits of merit, both of which asserted that the applicable stan-
dard of care was that of a board-certified emergency-medicine physi-
cian. In their answer to plaintiff’s complaint, Stockson and EPMG
denied that Stockson was practicing as an emergency-medicine
physician and submitted an affidavit of meritorious defense that
referred to the standard of care applicable to a family-medicine
physician. Following a motion by plaintiff, the court, David S. Swartz,
J., ruled that plaintiff’s affidavits were adequate. Shortly before trial,
Trinity Health-Michigan moved to bar one of plaintiff’s experts, a
board-certified emergency-medicine physician, from testifying, argu-
ing that the standard of care was that applicable to a family-medicine
physician, not an emergency-medicine physician. The court disagreed
and denied the motion. Trinity Health and another defendant filed an
emergency application for interlocutory leave to appeal, which the
Court of Appeals denied in an unpublished order, entered August 1,
2008 (Docket No. 286780). At trial, defense counsel contended that
the issue of what specialty governed the standard of care remained
unresolved. The trial court allowed the parties to present expert
testimony to the jury concerning their views of the relevant specialty
and standard of care. When instructing the jury at the close of proofs,
the trial court stated that the applicable standard of care was that of
a physician specializing in family practice and working in an urgent-
care center. The jury returned a verdict of no cause of action in favor
of Stockson and EPMG. Plaintiff appealed.
The Court of Appeals held:
1. The trial court erred by instructing the jury that the
standard of care was that of a family-medicine physician working
in an urgent-care setting. The applicable standard of care under
2010] J
ILEK V
S
TOCKSON
291
MCL 600.2169(1)(a) is that of the one most relevant medical
specialty. The record in this case established that the most
relevant medical specialty was emergency medicine. Although
Stockson was board-certified in family practice, the specialty she
was engaged in during the course of the alleged malpractice was
emergency medicine.
2. Even if the trial court’s jury instruction on the applicable
standard of care had been correct, reversal would be necessary in
this case. The proper standard of care is a matter of law and must
be determined before trial so that objections to expert witnesses
can be made and the parties can appropriately argue their proofs
under a single standard of care. The court’s earlier rulings in this
case led plaintiff to believe that the standard of care was that
applicable to emergency-medicine physicians. By either changing
the applicable standard of care at the end of the trial or withhold-
ing a decision on the applicable standard of care until the end of
the trial, the court seriously prejudiced plaintiff.
3. The trial court erred by excluding several practice guidelines
that plaintiff proffered as relevant to the standard of care. Al-
though practice guidelines, such as EPMG’s chest-pain guideline,
may not be used to establish the standard of care, they are
admissible when they are relevant to the standard of care at issue
and to the injury alleged.
Reversed and remanded for a new trial.
B
ANDSTRA
,P.J., dissenting, stated that because Stockson was
board-certified in family medicine, Stockson and EPMG were prop-
erly permitted to present expert testimony by board-certified family-
medicine specialists under MCL 600.2169 and the trial court properly
instructed the jury that the applicable standard of care was that of a
physician specializing in family practice. Plaintiff benefitted to the
extent that the jury was permitted to hear testimony from plaintiff’s
emergency-medicine experts. The trial court also properly excluded
the practice guidelines proffered by plaintiff, which were inadmissible
under controlling precedent. Even if the majority correctly identified
any trial errors, those errors did not result in a jury verdict that was
inconsistent with substantial justice. Accordingly, the verdict should
have been affirmed.
1. N
EGLIGENCE —
M
EDICAL
M
ALPRACTICE —
S
TANDARD OF
C
ARE —
P
HYSICIANS —
S
PECIALISTS —
B
OARD
-C
ERTIFIED
P
HYSICIANS
.
The applicable standard of care in a medical-malpractice action
against a board-certified physician is the one most relevant stan-
dard of practice or care, i.e., that standard of practice or care
applicable to the specialty engaged in by the physician during the
292 289 M
ICH
A
PP
291 [July
course of the alleged malpractice; the proper standard of care is a
matter of law and must be determined before trial (MCL
600.2169[1][a]).
2. N
EGLIGENCE —
M
EDICAL
M
ALPRACTICE —
S
TANDARD OF
C
ARE —
E
VIDENCE —
P
RACTICE
G
UIDELINES FOR
M
EDICAL
C
ARE
.
Practice guidelines, policies, and procedures adopted or used by
medical providers do not establish the standard of care at issue in
a medical-practice action, but they are admissible when they are
relevant to the standard of care and to the injury alleged.
Mark Granzotto, P. C . (by Mark Granzotto), and Davis
& Kuhnke, P. C . (by Peter A. Davis and Carol A. Ku-
hnke), for Joy A. Jilek.
Collins, Einhorn, Farrell & Ulanoff, P. C . (by Noreen
L. Slank), for Carlin C. Stockson and EPMG of Michi-
gan, P.C.
Before: B
ANDSTRA
,P.J., and B
ORRELLO
and S
HAPIRO
,JJ.
S
HAPIRO
, J. Plaintiff brought a wrongful-death suit
against Dr. Carlin Stockson and her employer/principal
EPMG of Michigan, P.C.
1
Plaintiff alleged that Dr.
Stockson was negligent in her evaluation, diagnosis,
and treatment of Daniel Jilek when she saw Jilek at the
Maple Urgent Care center on March 1, 2002.
2
The jury
returned a verdict of no cause of action in favor of Dr.
Stockson and EPMG.
For reasons the record does not explain, Jilek went
for treatment at Maple Urgent Care on March 1, 2002,
rather than to his primary doctor. According to the
1
EPMG stands for Emergency Physicians Medical Group.
2
Plaintiff also initially named Jilek’s family doctor as well as Trinity
Health-Michigan, the entity that operates the urgent-care center. Each
was dismissed before judgment, and they are not parties to this appeal.
However, certain actions by Trinity Health before the dismissal remain
relevant to the procedural posture of the case.
2010] J
ILEK V
S
TOCKSON
293
O
PINION OF THE
C
OURT
front desk form he completed, Jilek was complaining of
“continued sinus/respiratory congestion.” The triage
nurse documented a statement by Jilek that he had had
head and chest congestion for several months and,
though a course of antibiotics in December had resulted
in some improvement, he was not completely better.
Jilek’s blood pressure was elevated at triage. He was
seen by Dr. Stockson, who, in addition to the complaints
recorded at triage, noted “chest tightness” and “trouble
breathing” that were “[i]nterfering with [his] ability to
run.” Dr. Stockson also noted that Jilek was in “mod-
erate” distress. Plaintiff asserted that Dr. Stockson
failed to adhere to the standard of care for emergency
medicine, which plaintiff asserted required Dr. Stock-
son to further investigate the symptoms reported to her
by Jilek by taking a more detailed history, taking an
electrocardiogram (ECG), and referring Jilek for addi-
tional outpatient care by a cardiologist. Plaintiff further
asserted that if Jilek’s ECG had not been normal or he
had active chest tightness at the time of the examina-
tion, he should have been immediately transferred to
the emergency department at the hospital for further
testing before discharge. Plaintiff further claimed that
until any suspicion of cardiac involvement was appro-
priately ruled out, the standard of care required Dr.
Stockson not to prescribe albuterol and to instruct Jilek
to refrain from exercise.
Jilek died while exercising after albuterol use, five
days after his visit to Maple Urgent Care. The autopsy
revealed that Jilek had significant coronary-artery dis-
ease in his left anterior descending coronary artery and
that he died as a result of a heart attack caused by an
acute blood clot in that vessel, which formed in the
hours before his death. Plaintiff asserted that had Dr.
Stockson acted within the standard of care, Jilek’s
cardiac disease would have been discovered and timely
294 289 M
ICH
A
PP
291 [July
O
PINION OF THE
C
OURT
treated or she would not have prescribed what plaintiff
asserted was a contraindicated medication that precipi-
tated the heart attack.
There are three issues on appeal. First, plaintiff
asserts that the trial court erred by allowing the jury to
hear evidence on the standard of care applicable to
inapplicable specialties, incorrectly instructing the jury
on the applicable specialty, and failing to make a clear
pretrial ruling on the applicable specialty. Second,
plaintiff asserts that the trial court improperly excluded
evidence of practice guidelines issued by the American
College of Emergency Physicians, as well as policies,
procedures and guidelines used in the operation of the
urgent-care center. Third, plaintiff argues that the trial
court should have barred defendants’
3
experts from
testifying in light of defendants’ failure to answer
expert witness interrogatories. We agree with plaintiff
on the first two claims and, accordingly, reverse and
remand for a new trial. In light of our resolution of the
first two issues, we need not address the third.
I. STANDARD OF CARE
We find error requiring reversal in the trial court’s
instruction regarding the applicable standard of care.
We also find error requiring reversal in the manner by
which the trial court determined the standard of care.
With regard to the former, we conclude that the hybrid
standard of care fashioned by the trial court did not
comply with Woodard v Custer, 476 Mich 545, 560, 566;
719 NW2d 842 (2006), and that the trial court erred by
not determining what single recognized medical spe-
cialty constituted “the one most relevant specialty,”
3
Unless otherwise specified, the use of the term “defendants” through-
out this opinion refers to appellees Dr. Stockson and EPMG.
2010] J
ILEK V
S
TOCKSON
295
O
PINION OF THE
C
OURT
which in this case was emergency medicine. With re-
gard to the latter, we conclude that the trial court erred
by allowing experts in varying specialties to testify at
trial about their differing views of what medical spe-
cialty was being practiced at the time of the alleged
malpractice despite the fact that only testimony by
experts specializing in emergency medicine should have
been admitted.
The proper standard of care for purposes of MCL
600.2169(1)(a) is determined as a matter of law. Cox v
Flint Bd of Hosp Managers, 467 Mich 1, 16 n 16; 651
NW2d 356 (2002) (stating that this Court “erred in
holding that the standard of care was an evidentiary
matter reviewed for an abuse of discretion”). Accord-
ingly, as a question of law, we review this issue de novo.
Ross v Auto Club Group, 481 Mich 1, 7; 748 NW2d 552
(2008).
Plaintiff’s complaint alleged that Dr. Stockson
“breached the standard of practice or care in emergency
medicine....” Plaintiff filed two affidavits of merit.
Each asserted that the standard of care that applied to
Dr. Stockson was “that of a physician who is board
certified in emergency medicine.” One of the affidavits
further explained that “[w]hile Dr. Stockson was board
certified in family practice medicine, she was practicing
emergency medicine, and therefore, subject to the stan-
dard of care in emergency medicine.” One of these
affidavits was signed by Dr. Michael Sama, a board-
certified emergency-medicine physician. The other was
signed by Dr. Richard Birrer, who is board-certified in
both emergency medicine and family practice.
Defendants’ answer denied that Dr. Stockson was
practicing as an emergency-medicine physician, but did
not specify what standard of care applied other than an
undefined reference to “the standard of practice of [her]
296 289 M
ICH
A
PP
291 [July
O
PINION OF THE
C
OURT
profession....” The affidavit of meritorious defense
filed by Dr. Stockson and EPMG was signed by a
board-certified family practice doctor and referred to
“[t]he standard of care applicable to a physician prac-
ticing family medicine....”
Defendants filed affirmative defenses, including one
asserting that plaintiff’s affidavits of merit did not
comply with statutory requirements, and asserted that
“[d]efendants intend to file a Motion for Summary
Disposition upon this ground in the near future.”
However, defendants did not file such a motion. Plain-
tiff served affirmative-defense interrogatories asking
for the basis of this affirmative defense, i.e., asking in
what way the affidavits had been noncompliant. Defen-
dants did not answer this interrogatory. Therefore, in
March 2006, plaintiff filed a motion asking the trial
court to determine the validity of the affidavits of merit
and to strike defendants’ affirmative defense. Plaintiff’s
motion noted that the apparent basis of the affirmative
defense lay in the question of whether the standard of
care was that of emergency medicine or family practice.
Plaintiff further noted that if the affidavits were in fact
defective, then plaintiff would have to take curative
action and that plaintiff did not wish to allow defen-
dants to prejudice her claim by withholding information
regarding the alleged defect until the period of limita-
tions had run. Plaintiff’s brief stated:
[I]n the absence of any substantive or well-founded
objection to the affidavits, and because time is ticking on
the statute of limitations and statute of repose, plaintiff
must ask that the court review these issues now, while
there is time to cure any defect should the court agree with
defendants.
Defendants’ response to the motion continued their
effort to preserve a right to object to plaintiff’s affida-
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vits, but withhold the basis of that objection until the
period of limitations had run. Indeed, the response did
not assert any defect in the affidavits whatsoever nor
assert that plaintiff’s experts were not qualified by
reason of being in the wrong specialty. Defendants
mysteriously asserted only that “the adequacy of Plain-
tiff’s experts and therefore the adequacy of their Affi-
davit is subject to question” and sought to delay a
determination concerning that adequacy.
4
The trial
court, after hearing arguments, granted plaintiff’s mo-
tion, holding that “plaintiff’s affidavits of merit are
adequate and in compliance with the relevant court
rules and statutes, and as such... defendants’ [sic]
Stockson and EPMG’s affirmative defenses nos. 5 and
15 are hereby dismissed with prejudice.” The trial court
also directed defendants to answer plaintiff’s outstand-
ing interrogatories regarding affirmative defenses.
More than two years later and less than one month
from trial, nonappellee defendant Trinity Health-
Michigan moved to exclude plaintiff’s emergency-
medicine expert, Dr. Sama, from testifying on the grounds
that the applicable standard of care was family practice,
not emergency medicine.
5
Plaintiff’s counsel argued that
the standard of care was emergency medicine and that
4
The practice of challenging affidavits of merit and notices of intent only
after it is too late to cure the alleged defect, commonly known as “sandbag-
ging,” while tempting to the practitioner seeking to prevail for his or her
client does little for the reputation of the courts as a place where substantive
justice occurs. Given our Supreme Court’s recent decisions in DeCosta v
Gossage, 486 Mich 116, 118-119; 782 NW2d 734 (2010), Potter v McLeary,
484 Mich 397, 406; 774 NW2d 1 (2009), and Bush v Shabahang, 484 Mich
156, 161; 772 NW2d 272 (2009), the efficacy of such gamesmanship appears
to have been greatly reduced, if not eliminated.
5
Plaintiff’s other standard-of-care expert was board-certified in both
emergency medicine and family practice. However, like Dr. Sama, he had
opined in his affidavit and deposition that the relevant specialty was
emergency medicine.
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Dr. Sama was therefore properly qualified. At the con-
clusion of the argument, the trial court stated, “The
Court agrees with the plaintiff. Motion denied.”
6
Trinity Health requested a stay of the proceedings on
the eve of trial while it sought to appeal the trial court’s
ruling allowing plaintiff’s experts to testify. The trial court
denied the motion, citing prejudice to plaintiff and be-
cause the court had “determined that defendants’ claims
of error are without merit....”
7
On the morning of trial,
plaintiff and Trinity Health placed a settlement on the
record, and Trinity Health was dismissed from the case.
Despite the trial court’s ruling two years earlier
finding adequate an affidavit of merit that used an
6
Trinity Health filed a motion for reconsideration of the trial court’s
order denying its motion to exclude Dr. Sama’s testimony. The motion for
reconsideration offered a different analysis than did the original motion.
The original motion argued that Dr. Sama could not testify because the
applicable standard of care was family practice and he was not a family
practitioner. The motion for reconsideration asserted for the first time
that urgent-care medicine is a distinct specialty. The reconsideration
motion asked the court to consider materials attached to the motion
purporting to demonstrate the existence of an entity called the “American
Board of Urgent Care Medicine” as well as two other entities purporting
to be accrediting boards of urgent-care medicine. Under the court rules,
no response to the motion for reconsideration could be filed and no
hearing was held. The record received by this Court does not contain any
order granting or denying the motion for reconsideration. However, at a
July 30, 2008, hearing on other motions, the trial court stated, without
further explanation, that it had reviewed the motion for reconsideration
and that it was denied. Defendants, unlike Trinity Health, have never
argued either below or on appeal that there is a separate specialty board
in urgent-care medicine. The possible existence of such a specialty is
further discussed in n 10 of this opinion.
7
Six days later, the nonappellee defendants filed an emergency appli-
cation for leave to appeal in this Court, asking for a determination
whether the trial court erred by allowing plaintiff’s emergency-medicine
experts to testify. This Court denied the application “for failure to
persuade the Court of the need for immediate appellate review.” Jilek v
Trinity Health-Mich, unpublished order of the Court of Appeals, entered
August 1, 2008 (Docket No. 286780).
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emergency-medicine standard of care and the trial court’s
denial just a few weeks before trial of Trinity Health’s
motion to bar Dr. Sama from testifying, defendants’ coun-
sel took the position at trial that the issue of what
specialty governed the standard of care was still an
unresolved question. Its prior rulings notwithstanding,
the trial court allowed each party to argue its own view of
the relevant specialty and present standard-of-care ex-
perts from those varying specialties. During trial, defense
counsel interrupted the testimony of plaintiff’s experts
with objections, asserting, in the presence of the jury, that
plaintiff’s experts were opining on the basis of emergency-
medicine standards and that emergency-medicine stan-
dards were wholly irrelevant. The trial court did not rule
on these objections, instead stating that it was taking
them under advisement.
Not surprisingly, the issue came to a head when, at the
end of proofs, the attorneys and the trial court were
discussing jury instructions. Plaintiff argued that the trial
court’s denial of defendants’ pretrial motion to strike the
experts’ testimony necessarily implied a finding by the
court that the relevant specialty was emergency medicine.
Defendants argued that the pretrial ruling merely allowed
plaintiff to have its emergency-medicine experts testify
and left open the question of the applicable specialty for
the standard of care. In response to these arguments, the
trial court stated:
I have no problem with allowing emergency room phy-
sicians to testify to the standard of care in this case....I
don’t think it’s a problem. I think it’s appropriate.
But what we have is we have Doctor Stockson. She is a
family practitioner, board certified practicing in an urgent
care setting. That’s what she’s going to be evaluated at.
The trial court then instructed the jury that the
applicable standard of care was that of “a physician
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specializing in family practice and working in an urgent
care center....”This instruction plainly runs afoul of
the principles governing standards of care set forth in
Woodard, 476 Mich at 560. In Woodard, the Supreme
Court foreclosed the notion of multiple or hybrid stan-
dards of care and instead made clear that the sole
standard to be applied is that flowing from the one most
applicable medical specialty. Id. Specifically, the Woodard
Court held that expert witnesses must “match the one
most relevant standard of practice or care—the specialty
engaged in by the defendant physician during the course
of the alleged malpractice....”Id. The Court went on to
define “specialty” as “a particular branch of medicine or
surgery in which one can potentially become board certi-
fied.” Id. at 561. As there is no board certification titled
“family practice in an urgent-care center,” this cannot be
considered a specialty defining the most relevant standard
of care, let alone the “one most relevant” standard.
Defendants argued that the relevant standard of care
is controlled by the fact that Dr. Stockson is a board-
certified family practitioner. However, Dr. Stockson’s
residency and board certification as a family practitio-
ner would not be relevant to the standard of care if the
locus or substance of the medicine she was practicing at
the time of the alleged malpractice defined a different
specialty. This issue was resolved in Reeves v Carson
City Hosp (On Remand), 274 Mich App 622, 630; 736
NW2d 284 (2007), in which this Court concluded that a
physician, board-certified in family practice but practic-
ing in the emergency room, was held to the emergency-
medicine standard, not a family-practice one.
8
8
This was again confirmed in Gonzalez v St John Hosp & Med Ctr, 275
Mich App 290; 739 NW2d 392 (2007), in which we held that a resident is
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A review of the record reveals overwhelming support
for the conclusion that the controlling standard in this
case is that of emergency medicine, not family practice.
On the website for St. Joseph Mercy Hospital (SJMH),
the hospital affiliated with Maple Urgent Care, Dr.
Stockson’s medical specialty was listed as emergency
medicine. She was not listed in the hospital’s listing of
urgent-care physicians or family-medicine physicians.
Her office was located with the Emergency Physicians
Medical Group, and she was listed as a member of the
emergency department of the hospital. Her position
description indicated that she had primary responsibil-
ity for day-to-day management of the emergency de-
partment. She signed facility policy statements for
Maple Urgent Care that were titled “Emergency Ser-
vices Guideline[s].”
9
Moreover, the hospital represented
that its urgent-care facilities were routinely staffed by
physicians and nurses who were “trained to handle
emergency cases.” Dr. Stockson’s report on Jilek’s visit
was designated as an “EMERGENCY PHYSICIAN
RECORD,” and she signed his discharge instructions as
the “Emergency Physician.” Dr. Stockson testified at
her deposition that urgent care is not part of the
family-practice department and that she reported to the
chair of the emergency-medicine department, and de-
fendants admitted that urgent care was under the
emergency-services division of the hospital. There was
held to the standard of the specialty he or she is practicing in even though
the resident is not yet a specialist in any field.
9
Dr. Stockson argues that these are representations of the hospital and
that she did not request that she be so listed in the hospital’s materials
and did not print the guidelines. However, we do not rely on these listings
and items as admissions by Dr. Stockson. Rather, we view them as a
description of how the hospital and medical profession defined the
specialty of Dr. Stockson. We are unaware of any evidence in this case
that the hospital believed it erred in the manner in which it listed her or
its guidelines.
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also evidence that the parking lot at the urgent-care
location had parking spaces designated by signs for
emergency patients despite the fact that there was no
adjacent or nearby facility called an emergency room.
Accordingly, the evidence in the record indicates that,
regardless of Dr. Stockson’s family-medicine board cer-
tification and her ineligibility to be board-certified in
emergency medicine, the specialty she was engaged in
during the course of the alleged malpractice was emer-
gency medicine. See Woodard, 476 Mich at 560.
We also consider the nature of the term “urgent care”
itself. The word “urgent” is defined in various dictionaries
as “[c]ompelling immediate action; pressing,” American
Heritage Dictionary (2007); “[d]emanding immediate at-
tention,” Webster’s New Basic Dictionary (2007); and
“calling for immediate attention,” Merriam-Webster
<http://www.merriam-webster.com/dictionary/urgent>
(accessed July 28, 2010). These terms are far more con-
sistent with the scope of emergency medicine than they
are with the scope of family practice.
Defendants maintain that urgent-care centers also
serve as substitute primary caregivers for patients
seeking episodic rather than continuous care. This may
be true. However, defendants concede that this is also
true of hospital emergency rooms, but it does not allow
family practitioners practicing in an emergency room to
avoid the emergency-medicine standards. Indeed, in the
instant case, Jilek had a primary-care doctor but, for
some reason, elected to go instead to an urgent-care
facility on the day in question. As a matter of law, the
proper standard of care was that for emergency-
medicine specialists.
10
10
While we conclude that emergency medicine is “the one most
relevant specialty” in this case, and is the standard to be applied at
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Moreover, even if the trial court’s standard-of-care
instruction had been substantively correct, we would
nevertheless find it necessary to reverse and order a new
trial in this case. As set forth previously, plaintiff had
every reason to believe that the trial court had concluded
that the standard of care was that of emergency medicine.
By approving the affidavits of merit, the trial court implic-
itly made a determination of the relevant standard of
care.
11
This was confirmed only a few weeks before trial
when the court ruled that Dr. Sama, an emergency-
medicine expert, could testify about the standard of
care. Given that standard-of-care testimony may only
be given by experts in the relevant specialty, this ruling
necessarily rejected defendants’ argument that the
proper standard of care was for a family-practice phy-
sician in an urgent-care setting and adopted plaintiff’s
argument that the applicable standard of care was that
retrial, we do not foreclose the possibility that in a different case, given
appropriate evidence and findings, a trial court could conclude that there is
a specialty of “urgent-care medicine” and that it is the one most relevant
specialty. We note that in its motion for reconsideration in the trial court,
Trinity Health submitted documentation that there is a board certification
in a specialty called urgent-care medicine. The motion did not assert,
however, that this is a specialty or subspecialty recognized by the American
Board of Medical Specialties and so, on this record, we cannot determine
whether the organization referred to is “ ‘an officially recognized and legally
constituted body....’”Woodard, 476 Mich at 564. In any event, defendants
did not make that argument in either the trial court or this Court. In fact,
they have consistently stated their position that “[Dr. Stockson] cannot be
regarded as a ‘specialist’ in urgent care, because urgent care is not a board
certified practice....”Further, neither of defendants’ experts would have
qualified as an expert in urgent care since each conceded that less than 50
percent of his professional time in the year before the case arose was spent
in an urgent-care facility.
11
An affidavit of merit may satisfy the statute even when signed by an
unqualified expert if the attorney “reasonably believes” that the expert
meets the testimonial requirements. MCL 600.2912d(1). However, the
issue of reasonable belief was never raised by either party to the motion
concerning the affidavits of merit and played no role in the ruling.
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of emergency medicine. Thus, even assuming that the
trial court’s hybrid standard of care could have been
appropriate, the fact that the trial court changed the
standard of care at the end of trial created serious
prejudice to plaintiff.
The proper standard of care is a matter of law. Cox, 467
Mich at 16 n 16. The applicable specialty must be deter-
mined before trial so that objections to expert witnesses
can be made and the parties can appropriately argue their
proofs under a single standard of care. It is highly confus-
ing to juries, and prejudicial to the parties, to permit
argument throughout trial about what specialty was being
practiced. Waiting until the end of trial to determine the
applicable standard of care results in the jury hearing
standard-of-care evidence from experts who are not quali-
fied to so testify. The trial court erred as a matter of law by
either changing its pretrial ruling that the emergency-
medicine standard applied or, alternatively, by withhold-
ing a final decision on the relevant standard until the close
of proofs and permitting experts advocating dueling stan-
dards of care to testify to the jury.
Accordingly, we reverse the trial court’s decisions to
permit the jury to hear evidence concerning the standard
of care for family-practice physicians and to instruct the
jury that the applicable standard of care was that of a
family-practice physician working in an urgent-care cen-
ter. We remand for a new trial. The governing standard of
care to be employed at the new trial is that of emergency
medicine. The parties shall be granted reasonable time to
amend their expert witness lists and for any additional
necessary expert witness discovery.
II. ADMISSION OF GUIDELINES
Because we are remanding for a new trial, we must
address the admissibility of the guidelines proffered by
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plaintiff. Previously, the trial court excluded several
practice guidelines that plaintiff wished to admit as
relevant to the standard of care. These included inter-
nal guidelines and policies adopted by EPMG, SJMH,
and Maple Urgent Care. We conclude that to the degree
these documents are relevant and are not otherwise
infirm under the rules of evidence, they are admissible.
We specifically reject defendants’ reading of Gallagher v
Detroit-Macomb Hosp Ass’n, 171 Mich App 761; 431
NW2d 90 (1988), so as to bar the admission of all
internal guidelines in medical malpractice cases. We
also conclude that the trial court erred by excluding
practice guidelines promulgated by the American Col-
lege of Emergency Physicians.
We begin our analysis by noting that no statute bars
the admission of such guidelines, and we do not find any
legislative enactment of a privilege that would do so. By
contrast, the Legislature has created a statutory privi-
lege regarding peer-review investigations in MCL
333.20175(8). The Legislature has also established
statutory privileges with respect to probation reports,
MCL 791.229; accountant-client communications, MCL
339.732; penitent-clergy communications, MCL
600.2156; spousal testimony and communications, MCL
600.2162; journalistic sources, MCL 767.5a; physician-
patient communications, MCL 600.2157; psychologist-
patient communications, MCL 333.18237; social
worker-client communications, MCL 333.18513; and
student records and communications, MCL 600.2165;
among others. However, it has not created such a
privilege with respect to the guidelines or policies of
medical providers in place at the time a case arises.
In the absence of legislative support, defendants rely
on this Court’s opinion in Gallagher. However, defen-
dants ignore Gallagher’s recognition that “a hospital’s
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rules could be admissible as reflecting the community’s
standard where they were adopted by the relevant
medical staff and where there is a causal relationship
between the violation of the rule and the injury.” Id. at
767.
12
This principle clearly applies in this case and
should be the standard by which admission of internal
policies, guidelines, and procedures are governed in
medical malpractice cases.
Focusing the inquiry on relevancy is also consistent
with the cases on which Gallagher relied. The internal
policies were excluded in those cases because the plaintiffs
asserted that those policies defined the duty or even
created a duty beyond that set by law. By contrast,
plaintiff in this case does not argue that the policies
themselves set or defined the standard of care, only that
they may be considered relevant to the jury’s determina-
tion, in light of the expert testimony, of what that stan-
dard was. In Dixon v Grand TrunkWRCo, 155 Mich 169,
173; 118 NW 946 (1908), our Supreme Court held that the
railroad company’s internal rules regarding keeping
switches locked “do not fix the obligations and liability of
the defendant....”(Emphasis added.) Indeed, in Dixon,
the plaintiff specifically alleged that the defendant was
liable solely because its employees violated the company’s
internal regulation, and the plaintiff sought to have the
jury form ask: “ ‘Was defendant negligent in failing to
enforce its rule to lock switches?’ ” Id. at 174.
McKernan v Detroit Citizens’ Street-Railway Co, 138
Mich 519; 101 NW 812 (1904), concerned the speed of
12
We reject defendants’ suggestion that this statement was without
purpose and that we should conclude that Gallagher adopted an absolute
bar to admission of these materials despite their relevancy to the
standard of care and causation. Moreover, to the degree defendants argue
that their view of Gallagher is accurate and that we must adhere to it, we
note that Gallagher was decided in 1988 and we are not bound to follow
it under MCR 7.215(J)(1).
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operation of a trolley as it passed a firehouse. The
statutory speed limit was 20 miles an hour, but the
trolley company had an internal rule that the trolley’s
speed when passing a firehouse should not exceed 4
miles an hour. Id. at 523. The trial court excluded this
rule from evidence. The Supreme Court noted briefly
that the trolley company’s rule did not “add to the
defendant’s obligations to the public....”Id. at 524.
The issue was further discussed in Justice H
OOKER
’s
concurrence, in which he explained that internal rules
do not “make a new...standard of care, from which
the railroad cannot safely depart.” Id. at 527 (H
OOKER
,
J., concurring). He went on to say that an internal rule
might constitute some evidence tending to show negli-
gence, but the failure to observe the rule was not
negligence per se. Id. at 528. Finally, WilsonvWAFoote
Mem Hosp, 91 Mich App 90, 95; 284 NW2d 126 (1979),
like Dixon, held that internal rules “do not fix the
applicable standard of care” and “do not establish the
applicable standard of care.” (Emphasis added.)
13
Consistent with these cases, plaintiff does not assert
that the standard of care is “fixed” or “established” by
13
Defendants also refer us to two post-Gallagher cases: Buczkowski v
McKay, 441 Mich 96; 490 NW2d 330 (1992), and Zdrojewski v Murphy, 254
Mich App 50; 657 NW2d 721 (2002). Buczkowski involved a suit brought by
a man injured by shotgun ammunition fired by Walter McKay. The plaintiff
alleged that defendant, Kmart, sold ammunition to McKay while he was
intoxicated. Buczkowski, 441 Mich at 97-98. McKay fired the shotgun hours
later and miles away, and the plaintiff was hit by a ricochet while he was in
his backyard. Id. at 98-99. The Supreme Court concluded that a firearms
merchant had no duty to third persons injured by the firearm even if the
purchaser was intoxicated. Id. at 100. Since the Court found no duty as a
matter of law, it did not have to determine whether the jury could consider
Kmart’s internal rules to determine whether Kmart had acted negligently.
Zdrojewski is also inapplicable because the only rules at issue were external
rules established by the Joint Commission on Accreditation of Healthcare
Organizations and the Court found that they were admissible. Zdrojewski,
254 Mich App at 62-63.
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internal policies or guidelines. Defendants suggest that,
as a matter of public policy, all such policies should be
excluded, even if relevant, so as to avoid discouraging
their creation. Such an argument is better made to the
Legislature, which, if it wishes, can adopt such a privi-
lege. Moreover, we find no reference in any of the cases
we have reviewed, the record, or defendants’ briefs to
any empirical data that supports the speculative con-
clusion that medical providers will choose not to define
procedures and guidelines for their employees if it is
possible that those procedures may at some point be
considered as relevant, but not controlling, evidence in
a legal matter.
We also consider the opinions of sister jurisdictions.
Nearly all of the states that have published law on the
subject appear to follow the rule that internal policies
may be introduced as relevant to the standard of care
but, standing alone, do not fix or establish that stan-
dard. See Taylor v Lakeside Behavioral Health Sys,
opinion of the Tennessee Court of Appeals, issued
March 15, 2010 (Docket No. W2009-00914-COA-R3-
CV); Stone v Proctor, 259 NC 633; 131 SE2d 297 (1963);
Foley v Bishop Clarkson Mem Hosp, 185 Neb 89; 173
NW2d 881 (1970); Boland v Garber, 257 NW2d 384
(Minn, 1977); Williams v St Claire Med Ctr, 657 SW2d
590 (Ky App, 1983); Van Steensburg v Lawrence & Mem
Hosps, 194 Conn 500; 481 A2d 750 (1984); Happersett v
Bird, unpublished opinion of the Wisconsin Court of
Appeals, issued October 22, 1998 (Docket No. 97-
3726);
14
Wuest ex rel Carver v McKennan Hosp, 2000 SD
151; 619 NW2d 682 (2000); Moyer v Reynolds, 780 So 2d
205 (Fla App, 2001); Reed v Granbury Hosp Corp, 117
SW3d 404 (Tex App, 2003); Luettke v St Vincent Mercy
Med Ctr, unpublished opinion of the Ohio Court of
14
222 Wis 2d 624; 587 NW2d 457 (Table).
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Appeals, issued July 28, 2006 (Docket No. L-05-1190);
Riverside Hosp, Inc v Johnson, 272 Va 518; 636 SE2d
416 (2006); Jones v Nat’l Railroad Passenger Corp, 942
A2d 1103 (DC App, 2008); Peterson v Nat’l Railroad
Passenger Corp, 365 SC 391; 618 SE2d 903 (2005);
Unger v Allen,3PaD&C5th191(PAComPl,2006);
Caldwell v K-Mart Corp, 306 SC 27; 410 SE2d 21 (SC
App, 1991); Adams v Family Planning Assoc Med
Group, Inc, 315 Ill App 3d 533; 733 NE2d 766 (2000).
But see Monroe v Brown, unpublished opinion of the
Alaska Supreme Court, issued February 20, 1991
(Docket No. S-3326).
Having recognized that the question is one of rel-
evancy, we turn to the specific documents excluded by
the trial court. We conclude that several of them should
have been admitted and that several were properly
excluded. We will first review those documents that
were improperly excluded and then those that were
properly excluded.
Plaintiff’s proposed exhibit 27, “Process for Trans-
ferring Urgent Care Patients With Chest Pain to the
SJMH [Chest Pain Center],” was admissible, and the
trial court erred by excluding it. That policy provides,
“Adult patient with chest pain arrives at Urgent Care;
vital signs and ECG obtained.” This could be inter-
preted several different ways. First, it could be read as
indicating that all adult patients with chest pain arriv-
ing at the urgent-care center must have their vitals
taken and receive an ECG, in which case it was admis-
sible to support plaintiff’s claim that the standard of
care required that all patients complaining of chest pain
(including chest tightness) should be given an ECG. It
could also be interpreted as indicating that only those
adult patients who presented at the urgent-care center,
had their vitals taken, and received an ECG would be
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evaluated for transfer, in which case it was inapplicable
here because Jilek did not receive an ECG. Because the
document can be reasonably interpreted in a fashion
that is applicable to the instant case, its admissibility
would turn on the manner in which the parties’ experts
viewed it in light of the applicable standard of care.
Similarly, the trial court erred by excluding plaintiff’s
proposed exhibit 23, the American College of Emer-
gency Physicians’ “Clinical Policy for the Initial Ap-
proach to Adults Presenting with a Chief Complaint of
Chest Pain, With No History of Trauma.” Such external
guidelines have been previously found to be admissible.
Zdrojewski, 254 Mich App at 62-63. In addition, since
this policy was specifically adopted by SJMH for use in
its emergency department and urgent-care centers,
including Maple Urgent Care, at the time that Dr.
Stockson treated Jilek, it as also admissible under
Owens v Allis-Chalmers Corp, 414 Mich 413, 422-423;
326 NW2d 372 (1982), and Gallagher, 171 Mich App at
767.
15
Plaintiff’s proposed exhibit 24, an internal EPMG
document entitled “Introduction to EPMG’s Chest Pain
15
Defendants characterize the American College Emergency Physi-
cians’ policy as relating to patients presenting with primary complaints
of chest pain or respiratory difficulty. In fact, only one of the guidelines
provides that the “chief complaint” must be chest pain. The other
guidelines only state that the patient must complain of chest pain and
provide no requirement that it be the “primary” complaint. Moreover,
although the title indicates that it is related to those with a “chief
complaint,” the policy itself provides:
Published studies report that up to 7% of visits to the [emer-
gency department] involve complaints regarding chest pain. The
complaint of chest pain encompasses a wide variety of conditions
that range from insignificant to high risk in terms of threat to the
patient’s life. This policy strives to be broad and flexible enough to
cover the wide spectrum of identifiable causes of medically signifi-
cant chest pain.
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Guideline” was also wrongly excluded from evidence.
This document reflects EPMG’s adoption of the Ameri-
can College of Emergency Physicians’ guidelines and
defines a “Best Practice Guideline” that provides:
Patients with non-traumatic chest pain (or other
anginal equivalents) will not be sent home after a
single [ECG] or cardiac marker determination (un-
less other definitive studies have ruled out [a myo-
cardial infarction]).
Obviously, some patients with obvious chest wall pain or
other etiologies will not need an [ECG] or cardiac marker
determination, and may be safely sent home with neither of
these done. But, if a physician’s index of suspicion is high
enough to order an [ECG] to rule out ischemia, or a cardiac
marker to rule out cardiac injury, then a second set of cardiac
markers must be ordered at least four hours later — a single
cardiac marker determination does not rule out [a myocardial
infarction].
Defendants can certainly argue that Jilek’s chest pain
was not of the type to which this policy would be
relevant. However, as plaintiff presented evidence that
Jilek’s chest pain was of that type, the document was
relevant to the standard of care and thus admissible.
We affirm the trial court’s exclusion of proposed
exhibits 25, 26, and 29, all of which are SJMH
emergency-services policies for Maple Urgent Care.
Proposed exhibit 25 is captioned “Urgent Care Scope of
Care.” The document provides, “Patients are seen on a
first-come, first-serve basis except those who are expe-
riencing the following signs and symptoms: chest dis-
comfort such as tightness, heaviness, squeezing, pain
and/or pressure for any reason....” The policy pro-
Finally, it seems axiomatic that it is the responsibility of the health-care
professional to assign priority to the complaints of a patient rather than
simply assume that whatever the patient thinks is most important is in
fact so.
312 289 M
ICH
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291 [July
O
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OURT
vides that patients experiencing such symptoms “re-
ceive prompt evaluation by a [registered nurse] and/or
physician....” Inthis case, Jilek did not disclose his
chest tightness until he was seen by Dr. Stockson, so the
action called for in the document—prompt evaluation
by a physician—took place before the chest-pain com-
plaint was made. Further, there is no allegation in this
case that Jilek should have been seen sooner. Since the
policy only determines what order patients are seen in,
it is not implicated in this case. Similarly, plaintiff’s
proposed exhibit 26, another SJMH emergency-services
guideline, designated as guideline number 582, governs
patient check-in at the urgent-care clinic and is not
relevant as Jilek did not identify his chest tightness
until Dr. Stockson was already examining him. The
same is true of proposed exhibit 29, which is captioned,
“Pre-Physician Evaluation and Treatment” and desig-
nated as guideline number 585. This guideline ad-
dresses nursing care, not physician care.
Each of these three guidelines, however, states that
chest tightness falls within the type of chest pain
suggestive of cardiac involvement. Therefore, to the
extent that Dr. Stockson, who signed the guidelines
offered as proposed exhibits 26 and 29, testifies that
Jilek’s chest tightness was not suggestive of the need
for immediate assessment, the guidelines could be used
for purposes of impeachment. The same is true of
proposed exhibit 25, which defines the scope of care at
the facility where Dr. Stockson was medical director.
16
We also affirm the exclusion of plaintiff’s proposed
exhibit 31, SJMH patient care policy number 305.1, en-
titled “Patients—Screening, Stabilization and Transfer.”
16
If Dr. Stockson signed or adopted other internal policies and guide-
lines that are not substantively admissible, the same approach would
apply.
2010] J
ILEK V
S
TOCKSON
313
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This document sets forth guidelines for “Off-Campus
departments,” which include Maple Urgent Care. How-
ever, the document relates to the provision of emergency
care and screening regardless of the patient’s ability to
pay and does not include any medical guidelines relating
to chest pain.
In sum, we reject defendants reading of Gallagher as
standing for a wholesale exclusion of internal medical-
provider guidelines even when they are relevant to the
applicable standard of care and the injury. We hold,
consistently with Gallagher, that while internal policies
and guidelines do not in and of themselves set the
standard of care,
17
they should be admitted as long as
they are relevant to the applicable specialty’s standard
of care and to the injury alleged. Accordingly, we reverse
and remand for a new trial.
III. CONCLUSION
In sum, we conclude that the trial court erred in the
standard of care instruction given to the jury and by
excluding evidence of relevant policies, procedures, and
guidelines. These two errors are sufficient to require a
new trial. Accordingly, we reverse the judgment of no
cause of action and remand for a new trial. We do not
retain jurisdiction.
B
ORELLO
, J., concurred.
B
ANDSTRA
,P.J. (dissenting). I adamantly disagree
with my colleagues’ conclusion that a jury verdict in
favor of defendants, rendered after a lengthy trial
during which the jurors were presented with compre-
hensive testimony regarding the applicable standard of
17
Thus, violation of an internal policy or guideline is not negligence per
se.
314 289 M
ICH
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ANDSTRA
,P.J.
care and whether defendants violated it, should be
thrown out. I disagree with the majority’s conclusion
that the trial court erred in its determination of the
issues about which plaintiff complains on appeal and,
further, to the extent there were any errors, I do not
think that they warrant reversal.
The majority initially agrees with plaintiff’s argu-
ment that the trial court erred by concluding that the
applicable standard of care here was family medicine,
under MCL 600.2169. That statute specifically states
that “if the party against whom or on whose behalf the
testimony is offered is a specialist who is board certified,
the expert witness must be a specialist who is board
certified in that specialty.” MCL 600.2169(1)(a). Dr.
Carlin Stockson is a specialist board-certified in family
medicine, not emergency medicine. Thus, defendants
were properly allowed to present expert testimony in
defense of the claims against Dr. Stockson by board-
certified family-medicine specialists. Similarly, the trial
court did not err by instructing the jury that the
applicable standard of care was that of “a physician
specializing in family practice....”
1
1
I disagree with the majority in its conclusion that “Dr. Stockson’s...
board certification as a family practitioner would not be relevant to the
standard of care” because it is directly contrary to the clear statutory
directive that board certification is of paramount concern. Reeves v
Carson City Hosp (On Remand), 274 Mich App 622, 630; 736 NW2d 284
(2007), on which the majority relies, did not consider the statute in this
regard. Instead Reeves merely assumed, without any discussion whatso-
ever, that a board-certified family-medicine specialist working in the
emergency room of a hospital could be held to an emergency-medicine
standard of care. Moreover, common sense suggests there are large
differences between an urgent-care (or, as some call it, “doc in a box”)
facility such as that at issue here and a hospital emergency room such as
that in Reeves. See, e.g., Lutz v Mercy Mt Clemens Corp, unpublished
opinion per curiam of the Court of Appeals, issued December 20, 2005
(Docket No. 261465), p 3 (stating that “clearly it is unreasonable to
equate urgent care with emergency medicine”).
2010] J
ILEK V
S
TOCKSON
315
D
ISSENTING
O
PINION BY
B
ANDSTRA
,P.J.
Further, the trial court went on to specify for the jury
that the applicable standard of care was that of a
family-practice physician who was “working in an ur-
gent care center....” The jury had heard testimony
from experts presented by both sides regarding the
differences between an urgent-care facility and an
emergency room, as well as the standards Dr. Stockson
should have complied with as a family-medicine physi-
cian working in an urgent-care setting. To the extent
that Dr. Stockson was thus held to a higher standard of
care because of the place in which she practiced her
family medicine and to the extent that plaintiff was
allowed to present testimony from emergency-medicine
experts against Stockson, plaintiff’s case was strength-
ened, not weakened. In any event, the bottom line here
is that the jurors were presented with comprehensive
arguments and jury instructions that fairly presented
the standard-of-care question for their resolution. They
properly determined, after brief deliberations, that Dr.
Stockson had not been negligent in her care of her
patient.
The trial court also concluded that all of plaintiff’s
nine proposed documentary exhibits relating to guide-
lines and policies for the care of persons allegedly like
the deceased were to be excluded from consideration by
the jury. The majority finds fault with the trial court
with respect to only three of those documents, and it
does so only after concluding that it is either “not bound
to follow” the only Michigan precedent directly on
point, Gallagher v Detroit-Macomb Hosp Ass’n, 171
Mich App 761; 431 NW2d 90 (1988), or that the holding
of Gallagher should be ignored while dictum within
that precedent should be followed. I disagree with the
majority and conclude that binding precedent that
applied and reiterated the Gallagher holding cannot be
distinguished away. See Buczkowski v McKay, 441 Mich
316 289 M
ICH
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PP
291 [July
D
ISSENTING
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ANDSTRA
,P.J.
96; 490 NW2d 330 (1992), and Zdrojewski v Murphy,
254 Mich App 50; 657 NW2d 721 (2002). But, apart
from all of that, even if I were to agree with the
majority’s conclusion that the three documents were
improperly excluded, I would not conclude that it would
have made any difference in the outcome of the trial.
And that brings me to my chief concern. Perhaps not
surprisingly, the majority makes no mention of the
standard of review we must apply on this appeal of a
jury verdict:
An error in the admission or the exclusion of evidence,
an error in a ruling or order, or an error or defect in
anything done or omitted by the court or by the parties is
not ground for granting a new trial, [or] for setting aside a
verdict,...unless refusal to take this action appears to the
court inconsistent with substantial justice. [MCR
2.613(A).]
The majority makes no attempt to explain how the
errors it discerns from this record resulted in a jury
verdict that was “inconsistent with substantial justice.”
A fair reading of the lengthy record in this case
demonstrates the exact opposite. The decedent pre-
sented to Dr. Stockson complaining only of the kind of
respiratory problems that are commonplace during
Michigan winters, for which he had received partially
successful treatment from other caregivers over the
preceding months. His chief complaint was not chest
pain. In response, Dr. Stockson took some action, but
she failed to take other actions that plaintiff’s experts
later contended should have been taken. The jurors
heard lengthy testimony and argument from both sides
about whether Dr. Stockson acted appropriately as a
family-medicine specialist practicing in an urgent-care
setting. The jury determined, in response to the first
question presented on the verdict form, that Dr. Stock-
2010] J
ILEK V
S
TOCKSON
317
D
ISSENTING
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B
ANDSTRA
,P.J.
son was simply not negligent, and it rendered a verdict
in favor of defendants accordingly.
The rule governing our review recognizes that no
trial is perfect and allows us to disturb such a jury
verdict only if it is “inconsistent with substantial jus-
tice.” This is far from that kind of a case, and we should
affirm.
318 289 M
ICH
A
PP
291
D
ISSENTING
O
PINION BY
B
ANDSTRA
,P.J.
JAGUAR TRADING LIMITED PARTNERSHIP v PRESLER
Docket No. 290972. Submitted June 16, 2010, at Grand Rapids. Decided
August 3, 2010, at 9:00 a.m.
Jaguar Trading Limited Partnership, Wilford J. Presler, and Douglas
Cunningham were parties to an agreement that provided for
binding arbitration of any controversy or claim arising from the
agreement. A dispute arose and, on August 13, 2007, an arbitra-
tion award was rendered in favor of Jaguar. On August 12, 2008,
Jaguar, without filing a complaint or any other pleadings, filed in
the Ingham Circuit Court a form from the State Court Adminis-
trative Office titled “Binding Arbitration Award,” seeking confir-
mation of the arbitration award. Cunningham sought summary
disposition on the ground that no complaint had been filed.
Cunningham also argued that because Jaguar’s filing was made
one day before the expiration of the one-year period of limitations
set forth in MCR 3.602(I) for the filing of a complaint seeking
confirmation of an arbitration award, any further proceedings
were barred. Jaguar argued that under the court rule, a party
seeking confirmation of an arbitration award need only “file” the
award with the clerk of the appropriate court within one year after
the award was entered. The court, Joyce A. Draganchuk, J., denied
Cunningham’s motion and granted summary disposition in favor
of Jaguar, holding that the court rule allows a party seeking
confirmation of an arbitration award to initiate a proceeding by
filing the award with the clerk of the court. Cunningham appealed.
The Court of Appeals held:
1. An arbitration agreement, like the one in this case, that
provides that a judgment may be entered on the arbitration award
is a statutory arbitration agreement governed by the Michigan
arbitration act, MCL 600.5001 et seq. MCR 3.602 governs the
judicial review and enforcement of statutory arbitration agree-
ments.
2. To be effective, an arbitration award filed with a court must
be confirmed by the court. This confirmation must result in an
order of confirmation by the court. MCR 3.602(B)(1) requires a
party seeking an order under MCR 3.602 to first file a complaint if
no action is pending.
J
AGUAR
P
ARTNERSHIP V
P
RESLER
319
3. There is no authority within the Michigan arbitration act
for the commencement of a confirmation proceeding other than by
the filing of a complaint. Jaguar failed to properly initiate a civil
action by filing a complaint as required by both MCL 600.1901 and
MCR 2.101(B). Jaguar was entitled to neither confirmation of the
arbitration award nor summary disposition because it failed to
invoke the circuit court’s jurisdiction under the Michigan arbitra-
tion act by properly initiating a civil action through the filing of a
complaint.
4. Jaguar filed the arbitration award with the clerk of the
circuit court within one year after the award was rendered, thus
strictly complying with the time limitation of MCR 3.602(I).
Therefore, MCR 3.602(I) itself would not prohibit Jaguar from
filing a complaint in the circuit court for confirmation of the timely
filed award.
Reversed and remanded.
A
RBITRATION —
C
ONFIRMATION OF
A
RBITRATION
A
WARDS —
A
CTIONS —
C
OMPLAINTS
.
A party seeking confirmation of a statutory arbitration award under
MCR 3.602(I) and the Michigan arbitration act must, if there is no
action pending between the parties, file a complaint in the circuit
court in order to invoke the circuit court’s jurisdiction (MCL
600.5001 et seq.).
Timothy E. Dixon, Attorney at Law, PLC (by Timothy
E. Dixon), for Jaguar Trading Limited Partnership.
Douglas C. Cunningham, in propria persona.
Before: S
AWYER
,P.J., and B
ANDSTRA
and W
HITBECK
,JJ.
P
ER
C
URIAM
. Defendant Douglas Cunningham
1
ap-
peals as of right the trial court’s order denying his
motion for summary disposition, granting summary
disposition in favor of plaintiff pursuant to MCR
2.116(I)(2), and confirming an arbitration award in
favor of plaintiff. We reverse and remand.
1
Wilford John Presler was named as a defendant in the trial court, but
he did not appear and is not a party to this appeal. The term “defendant”
as used in this opinion refers solely to Douglas Cunningham.
320 289 M
ICH
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319 [Aug
The facts of the dispute in the underlying arbitration
matter are not at issue in this appeal. The sole issue is
whether plaintiff, as a party seeking confirmation of an
arbitration award under MCR 3.602(I) and the Michi-
gan arbitration act (MAA), MCL 600.5001 et seq., was
required to file a complaint in the circuit court in order
to invoke the circuit court’s jurisdiction. We conclude
that, because no action was pending between the par-
ties, plaintiff was required to file a complaint to initiate
a civil action under the MAA. See MCR 3.602. We
further conclude, however, that, pursuant to MCR
3.602(I), plaintiff timely filed the arbitration award
with the clerk of the court.
Plaintiff and defendant were parties to an agreement
that provided for binding arbitration of any controversy
or claim arising from the agreement. A dispute arose
between the parties, and, on August 13, 2007, an
arbitration award was issued, awarding plaintiff
$18,456.94, plus fees and costs. On August 12, 2008,
plaintiff filed Form MC 284, a form approved by the
State Court Administrative Office (SCAO) and titled
“Binding Arbitration Award,” in the trial court. On the
form, plaintiff checked boxes indicating that the basis
for binding arbitration was “[s]tatutory based on con-
tract”; that the nature of the claim arbitrated was
“[c]ommercial”; and that the total amount of the award
was $25,219.44. Plaintiff attached several documents to
the SCAO form, including the original arbitration
award and exhibits submitted in the arbitration pro-
ceedings. Plaintiff did not file a complaint or any other
pleadings.
Defendant, rather than filing an answer, sought
summary disposition on the ground that no complaint
had been filed. Defendant noted that MCR 3.602(B)(1),
which governs statutory arbitration under the MAA,
2010] J
AGUAR
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ARTNERSHIP V
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321
provides that a party seeking relief under the rule must
first file a complaint as in other civil actions. Defendant
further argued that because plaintiff’s filing was made
one day before the expiration of the one-year limita-
tions period set forth in MCR 3.602(I) for the filing of a
complaint seeking confirmation of an arbitration
award, any further proceedings were barred.
Plaintiff’s attorney filed an affidavit explaining that
he believed, on the basis of his reading of the MAA and
MCR 3.602 and his research concerning SCAO Form
MC 284, that he had followed the appropriate procedure
for seeking confirmation of an arbitration award. Plain-
tiff argued that under MCR 3.602(I), a party seeking
confirmation of an arbitration award need only “file”
the award with the clerk of the appropriate court within
one year after the award is rendered and that the
language in MCR 3.602(B)(1) relied on by defendant is
not applicable to confirmation requests under MCR
3.602(I). The trial court denied defendant’s motion and
instead granted summary disposition in favor of plain-
tiff under MCR 2.116(I)(2), holding that MCR 3.602(I)
allows a party seeking confirmation of an arbitration
award to initiate a proceeding by filing the award with
the clerk of the court.
This Court reviews de novo a trial court’s decision on a
motion for summary disposition. Ardt v Titan Ins Co, 233
Mich App 685, 688; 593 NW2d 215 (1999). A court may
grant summary disposition to the opposing party under
MCR 2.116(I)(2) if it determines that the opposing party,
rather than the moving party, is entitled to judgment.
Washburn v Michailoff, 240 Mich App 669, 672; 613
NW2d 405 (2000). The trial court in this case held that
plaintiff was entitled to judgment on the basis that no
genuine issue of fact remained. Summary disposition is
appropriate under MCR 2.116(C)(10) if there is no genu-
322 289 M
ICH
A
PP
319 [Aug
ine issue concerning any material fact and a party is
entitled to judgment as a matter of law. Lind v Battle
Creek, 470 Mich 230, 238; 681 NW2d 334 (2004).
The interpretation and application of a court rule
involves a question of law that this Court reviews de novo.
Associated Builders & Contractors v Dep’t of Consumer
& Indus Servs Dir, 472 Mich 117, 123-124; 693 NW2d 374
(2005); Greater Bethesda Healing Springs Ministry v
Evangel Builders & Constr Managers, LLC, 282 Mich
App 410, 412; 766 NW2d 874 (2009). The rules governing
the construction of statutes apply to the interpretation of
court rules. Rafferty v Markovitz, 461 Mich 265, 270; 602
NW2d 367 (1999); Greater Bethesda, 282 Mich App at
412. Clear and unambiguous language in a court rule
must be accorded its plain meaning and enforced as
written. Greater Bethesda, 282 Mich App at 412; Fleet
Business Credit, LLC v Krapohl Ford Lincoln Mercury
Co, 274 Mich App 584, 591; 735 NW2d 644 (2007).
When an arbitration agreement provides that judg-
ment may be entered on the arbitration award, as did
the parties’ agreement in this case, it falls within the
definition of statutory arbitration and is governed by
the MAA. MCL 600.5001(2); Wold Architects & Engi-
neers v Strat, 474 Mich 223, 225, 229; 713 NW2d 750
(2006). MCR 3.602 governs judicial review and enforce-
ment of statutory arbitration agreements. MCR
3.602(A); MCL 600.5021; Brucker v McKinlay Transp,
Inc, 454 Mich 8, 16-17; 557 NW2d 536 (1997).
Plaintiff contends that the plain and unambiguous
language of MCR 3.602(I) makes clear that a party
seeking confirmation of an arbitration award need not
file a complaint to invoke circuit-court jurisdiction.
MCR 3.602(I) provides:
Award; Confirmation by Court. An arbitration award
filed with the clerk of the court designated in the agreement
2010] J
AGUAR
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323
or statute within one year after the award was rendered may
be confirmed by the court, unless it is vacated, corrected, or
modified, or a decision is postponed, as provided in this rule.
[Emphasis added.]
Plaintiff maintains, on the basis of the emphasized
language, that a proceeding to confirm an arbitration
award is initiated simply by filing the arbitration award
with the clerk of the court. We disagree.
To be effective, a filed award must be “confirmed” by
the court. And this confirmation necessarily must re-
sult in an order of confirmation by the court. And, as
defendant notes, MCR 3.602(B)(1) requires a party
seeking any order under MCR 3.602 to first file a
complaint if no action is pending. As amended in 2007,
MCR 3.602(B)(1) provides:
(B) Proceedings to Compel or to Stay Arbitration.
(1) A request for an order to compel or to stay arbitra-
tion or for another order under this rule must be by
motion, which shall be heard in the manner and on the
notice provided by these rules for motions. If there is not a
pending action between the parties, the party seeking the
requested relief must first file a complaint as in other civil
actions.
[
2
]
[Emphasis added.]
The emphasized language is consistent with the
overall content of MCR 3.602, which makes clear that
any request for circuit-court relief in an arbitration
matter takes place within the context of a “civil action”
and is therefore subject to all the procedural require-
ments that apply to such an action.
3
As noted earlier,
MCR 3.602(B)(1), (J)(1), and (K)(1) provide for the
filing of complaints and motions in proceedings involv-
2
As plaintiff notes, in 2007 the emphasized language in MCR
3.602(B)(1) was also added to the subrules governing vacation and
modification of arbitration awards, MCR 3.602(J) and (K).
3
See also the 1985 staff comment to MCR 3.602: “Subrule(B)(1) requires
that a request to invoke court jurisdiction in an arbitration matter is to be
324 289 M
ICH
A
PP
319 [Aug
ing arbitration matters “as in other civil actions.”
Similarly, MCR 3.602(M) provides for the taxing of costs
“as in civil actions,” and MCR 3.602(N) provides for the
taking of appeals “as from order or judgments in other
civil actions.”
Pursuant to MCR 2.101(A), “[t]here is one form of
action known as a ‘civil action,’ ” and, under MCR
2.101(B), “[a] civil action is commenced by filing a com-
plaint with a court.” Furthermore, § 1901 of the Revised
Judicature Act (RJA), in which the MAA is located,
provides that “[a] civil action is commenced by filing a
complaint with the court.” MCL 600.1901. There is no
authority within the MAA for the commencement of a
confirmation proceeding other than by the filing of a
complaint as directed in MCL 600.1901.
4
Indeed, our
Supreme Court has noted that “[a]fter an arbitration
award is rendered, the successful party has one year to
commence a civil action requesting that the court
confirm the award and reduce it to judgment.” Gordon
Sel-Way, Inc v Spence Bros, Inc, 438 Mich 488, 501-502;
475 NW2d 704 (1991) (emphasis added).
5
As the Court
further explained:
made by filing a civil action, unless the matter arises in a pending action, in
which case a motion may be used.” (Emphasis added.)
4
See also 5 Longhofer, Michigan Court Rules Practice (5th ed), § 3602.8,
pp 107-108:
A party seeking confirmation of an award [under MCR 3.602(I)]
must file the award with the clerk of the court designated in the
agreement within one year after the award was rendered. In a
pending action, the filing of the award is coupled with the filing of a
motion seeking its confirmation. If no action is then pending, the
party seeking confirmation must file a complaint seeking that relief.
The award is attached to and filed with the complaint. Service of the
pleadings is made under MCR 2.105. MCR 2.116 is available for
summary disposition of the action. [Emphasis added; citations omit-
ted.]
5
The Supreme Court’s opinion in Gordon Sel-Way was released before
the most recent 2007 amendment of the court rule. However, the
rationale applied to the rule then still applies to the rule as written today.
2010] J
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In Michigan, “civil action” is broadly defined as an
action “commenced by filing a complaint with a court.”
MCR 2.101(B), MCL 600.1901.... The procedure to ob-
tain a money judgment on an arbitration award is governed
by the rules applicable to civil actions and commences with
the filing of a complaint with a court. MCR 3.602. [Id.at
509 (emphasis added).]
[
6
]
Plaintiff failed to properly initiate a civil action by
filing a complaint as required by both MCL 600.1901
and MCR 2.101(B). Indeed, plaintiff has failed to file
any pleading or make any official request in the circuit
court.
7
Having failed to invoke circuit-court jurisdiction
under the MAA by properly initiating a civil action
through the filing of a complaint, plaintiff was entitled
to neither confirmation of the arbitration award nor
summary disposition.
Defendant additionally argues that, because the one-
year limitations period of MCR 3.602(I) has expired,
further proceedings are barred, citing Huntington
Woods v Ajax Paving Indus, Inc (After Remand), 196
Mich App 71, 73; 492 NW2d 463 (1992). We disagree. In
Huntington Woods, the proponent of the arbitration
award sought its confirmation by properly filing a
complaint, but it did not do so within the one-year
period allowed by MCR 3.602(I). Id. at 73-74. Thus,
apparently no action whatsoever was taken seeking
confirmation of the award within the time limit of that
rule. In contrast, plaintiff here filed the arbitration
6
The Court in Gordon Sel-Way, 438 Mich at 490, concluded that MCL
600.6013 governs the interest on arbitration awards “from the date a
complaint is filed requesting confirmation of an award and continues
until the date judgment rendered on the award is satisfied.”
7
SCAO Form MC 284 does not contain any request for confirmation of
an existing arbitration award; rather, the form, which is captioned
“Binding Arbitration Award,” is simply a document that may be com-
pleted by an arbitrator for use as the arbitration award itself.
326 289 M
ICH
A
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319 [Aug
award with the clerk of the circuit court within one year
after the award was rendered, thus strictly complying
with the time limitation and the clear language of the
rule. Accordingly, MCR 3.602(I) does not itself prohibit
plaintiff from filing a complaint in the lower court for
confirmation of the timely filed award.
8
We reverse and remand for further proceedings con-
sistent with this opinion. We do not retain jurisdiction.
8
We have been presented with no argument apart from the rule
supporting the conclusion that a complaint might be otherwise time-
barred. On remand, the lower court may consider any such argument if
it is advanced.
2010] J
AGUAR
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327
ALBERTO v TOYOTA MOTOR CORPORATION
Docket No. 296824. Submitted May 13, 2010, at Detroit. Decided August
5, 2010, at 9:00 a.m.
Lilia Alberto, personal representative of the estate of Guadalupe
Alberto, deceased, brought an action in the Genesee Circuit Court
against Toyota Motor Corporation, Toyota Motor Engineering &
Manufacturing North America, Inc., Toyota Motor Sales U.S.A.,
Inc., and others, seeking damages in connection with a claim that
a defect in a 2005 Toyota Camry driven by the decedent led to the
sudden acceleration of the vehicle and thereby caused an accident
that resulted in the decedent’s death. Plaintiff noticed the video
depositions of Yoshima Inaba, the chairman and chief executive
officer of Toyota Motor Sales, and Jim Lentz, the president and
chief operating officer of Toyota Motor Sales. Toyota Motor Sales
moved for a protective order to prevent the depositions, claiming
that neither Inaba nor Lentz had participated in the design,
testing, manufacture, warnings, sale, or distribution of the 2005
Camry or the day-to-day details of vehicle production and that
neither officer had unique information pertinent to issues in the
case. Toyota Motor Sales also averred that plaintiff could not show
that the depositions were necessary to prevent injustice, because
the information sought could be obtained from those persons who
worked directly on the design, testing, and manufacture of the
vehicle. In response, plaintiff argued that the two corporate
officers possessed information relevant to the case. The court,
Archie L. Hayman, J., denied the motion, and Toyota Motor Sales
sought leave to appeal the order. The Court of Appeals entered an
unpublished order on March 10, 2010, that, in part, granted
Toyota Motor Sales’s motion for a stay of the depositions until
further order of the Court (Docket No. 296824). On March 11,
2010, the Court of Appeals entered an unpublished order that, in
part, granted the application for leave to appeal and continued in
full force pending the resolution of the appeal the order that
granted the stay of the depositions (Docket No. 296824). The order
also directed the parties to address specifically whether the apex-
deposition rule should or does apply to corporate defendants.
The Court of Appeals held:
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1. The apex-deposition rule applies in Michigan cases to
high-ranking officials in the public sector and to high-ranking
corporate officers in the private sector. The rule provides that
before a plaintiff may take the deposition of a high-ranking or
“apex” governmental official or corporate officer, the plaintiff
must demonstrate both that the governmental official or corpo-
rate officer possesses superior or unique information relevant to
the issues being litigated and that the information cannot be
obtained by a less intrusive method, such as by deposing
lower-level officials or employees. The rule applies as follows.
After the party opposing the deposition demonstrates by affida-
vit or other testimony that the proposed deponent lacks per-
sonal knowledge or unique or superior information relevant to
the claims at issue, the party seeking the deposition of the
high-ranking corporate officer or public official must demon-
strate that the relevant information cannot be obtained absent
the disputed deposition. This procedure does not shift the
burden of proof to the party seeking discovery because if the
defendant and the potential deponent make the requisite show-
ing, only then must the party seeking the deposition show that
the potential deponent has unique or superior knowledge of
issues relevant to the litigation and that that information
cannot be obtained by less intrusive means.
2. Neither Inaba nor Lentz had any actual knowledge, much less
a unique or superior knowledge, of the design, engineering, manu-
facturing, or testing processes that went into the building of the
vehicle, and both had only generalized knowledge of the sudden-
acceleration problem that had resulted in the recall of certain Toyota
vehicles, not including the vehicle driven by the decedent.
3. The trial court abused its discretion by denying Toyota
Motor Sales’s motion for a protective order to quash the deposi-
tions. The order denying the motion must be vacated, and the case
must be remanded to the trial court for reconsideration.
Vacated and remanded.
J
ANSEN
, J., dissenting, stated that, given Michigan’s existing
discovery rules that adequately protect high-ranking corporate
officers and their respective corporations from potential discov-
ery abuses, Michigan does not need a broad apex-deposition rule
to shield high-ranking corporate officers from abusive or bur-
densome discovery. The decisions in Fitzpatrick v Secretary of
State, 176 Mich App 615 (1989), and Hamed v Wayne Co, 271
Mich App 106 (2006), which involved attempts to depose high-
ranking governmental officials, were concerned with protecting
the public’s interest in the service of governmental employees
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and do not compel the creation of a new apex-deposition rule for
high-ranking corporate officers. Judge J
ANSEN
would also con-
clude that, under the existing rules of civil discovery, the trial
court properly denied the motion for a protective order to quash
the depositions. Plaintiff demonstrated a strong probability
that Inaba and Lentz possessed personal knowledge of particu-
lar information relevant to the litigation in this case. Their
depositions likely would have led to the discovery of relevant,
admissible evidence and would not have been annoying, embar-
rassing, oppressive, unduly burdensome, or unduly expensive.
There was no showing that the depositions would have been
abusive. Toyota Motor Sales failed to carry its burden to
establish that a protective order was warranted under MCR
2.302(C). The trial court’s order should be affirmed.
P
RETRIAL
P
ROCEDURE —
D
EPOSITIONS —
A
PEX
-D
EPOSITION
R
ULE —
C
ORPORATE
O
FFICERS
.
The apex-deposition rule applies in Michigan to high-ranking
officials in the public sector and to high-ranking corporate
officers in the private sector; the rule provides that, before a
plaintiff may take the deposition of a high-ranking or apex
governmental official or corporate officer, the plaintiff must
demonstrate both that the governmental official or corporate
officer possesses superior or unique information relevant to the
issues being litigated and that the information cannot be
obtained by a less intrusive method, such as by deposing
lower-level officials or employees; when the party opposing the
deposition demonstrates by affidavit or other testimony that the
proposed deponent lacks personal knowledge or unique or
superior information relevant to the claims at issue, the party
seeking the deposition must demonstrate that the relevant
information cannot be obtained absent the disputed deposition.
Hilborn & Hilborn, P.C. (by George Hilborn); Thomas
J. Murray & Associates (by Thomas J. Murray); Edgar F.
Heiskell, III; Bailey & Glasser, LLP (by Benjamin L.
Bailey, Eric B. Snyder, and Robert P. Lorea); Lewis &
Babcock (by A. Camden Lewis); and Bendure & Thomas
(by Mark R. Bendure) for Lilia Alberto.
Bowman and Brooke LLP (by Lawrence C. Mann,
Andrea L. Moody, and Carmen M. Bickerdt), for Toyota
Motor Sales U.S.A., Inc.
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Amicus Curiae:
Dickinson Wright PLLC (by Robert W. Powell, Phillip
J. DeRosier, and Michael D. Bossenbroek), and Hugh F.
Young, Jr., for Product Liability Advisory Council, Inc.
Before: S
AAD
,P.J., and J
ANSEN
and D
ONOFRIO
,JJ.
S
AAD
,P.J. Defendant Toyota Motor Sales U.S.A., Inc.,
1
appeals by leave granted the trial court’s order that
denied its motion for a protective order to quash the
depositions of two corporate officers, Yoshimi Inaba and
Jim Lentz. We vacate the trial court’s order and remand
this case for further proceedings.
I. FACTS AND UNDERLYING PROCEEDINGS
This is a personal-injury, products-liability suit
wherein plaintiff seeks to depose two high-ranking
Toyota corporate officers in connection with the claim
that a defect in a Toyota vehicle caused the accident
that resulted in the death of plaintiff’s decedent.
Plaintiff filed this wrongful-death action and claimed
that the decedent drove a 2005 Toyota Camry at a speed
of less than 25 miles an hour when the vehicle suddenly
accelerated to a speed in excess of 80 miles an hour.
Plaintiff also asserts that the decedent attempted un-
successfully to apply the vehicle’s brakes, but the ve-
hicle struck a tree, went airborne, and struck another
tree, and plaintiff’s decedent sustained fatal injuries.
Plaintiff noticed the video depositions of Yoshimi
Inaba, defendant’s chairman and chief executive officer,
1
The other named defendants were dismissed from plaintiff’s lawsuit
and are not parties to this appeal. References to “defendant” in the
singular throughout this opinion are to defendant-appellant Toyota
Motor Sales U.S.A., Inc., only.
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and Jim Lentz, defendant’s president and chief operat-
ing officer, pursuant to MCR 2.306 and MCR 2.315.
Defendant moved for a protective order pursuant to
MCR 2.302(C) to prevent the depositions, because de-
fendant says that neither Mr. Inaba nor Mr. Lentz
“participated in the design, testing, manufacture, warn-
ings, sale, or distribution of the 2005 Camry, or the
day-to-day details of vehicle production,” and that nei-
ther officer had “unique information pertinent to issues
in the case.” Defendant also avers that plaintiff could
not show that the depositions of Messrs. Inaba and
Lentz were necessary to prevent injustice, because the
information plaintiff sought could be obtained from
those persons who worked directly on the design, test-
ing, and manufacture of the vehicle at issue. Defendant
noted that Michigan adheres to the so-called “apex-
deposition rule” for high-ranking governmental offi-
cials, observed that various federal and state courts had
applied the apex-deposition rule to high-ranking corpo-
rate officers in addition to governmental officials, and
argued that Michigan should do so as well.
In response, plaintiff argues that while Michigan has
adopted the apex-deposition rule for public officials, it
has not applied the apex-deposition rule in connection
with high-ranking corporate officers, and that even if
Michigan were to adopt the apex-deposition rule for
corporate officers, it should not apply here. Plaintiff
contends that Mr. Lentz has been the “public face” of
Toyota as the company’s safety problems became widely
known and emphasized that Mr. Lentz had made nu-
merous public appearances and testified before Con-
gress regarding Toyota’s recent recalls of vehicles.
2
Plaintiff also noted that Mr. Inaba had testified before
Congress regarding Toyota’s efforts to complete its
2
The recent recalls do not involve the vehicle at issue here.
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current recalls and review its quality-control processes
and had said that he would be involved in the quality-
control review.
Though the trial court found that Messrs. Inaba and
Lentz were apex, or high-ranking, corporate officers,
the trial court held that Michigan’s caselaw and court
rules did not preclude the depositions from taking
place.
Defendant sought leave to appeal in this Court and
moved for immediate consideration and a stay of the
depositions. Ultimately, this Court granted defendant’s
application and continued in effect a prior order of the
Court that had stayed the depositions of Messrs. Inaba
and Lentz. The Court also ordered the appeal expedited
and directed the parties to “address specifically the
issue of whether the apex deposition rule should or does
apply to corporate defendants.” Alberto v Toyota Motor
Corp, unpublished order of the Court of Appeals, en-
tered March 11, 2010 (Docket No. 296824).
II. NATURE OF THE CASE AND THE APEX-DEPOSITION RULE
This appeal presents the question whether Michigan
should formally adopt the apex-deposition rule in the
corporate context. As used by other state and federal
courts, the apex-deposition rule provides that before a
plaintiff may take the deposition of a high-ranking or
“apex” governmental official or corporate officer, the
plaintiff must demonstrate both that the governmental
official or corporate officer possesses superior or unique
information relevant to the issues being litigated and
that the information cannot be obtained by a less
intrusive method, such as by deposing lower-ranking
employees. See, e.g., Baine v Gen Motors Corp, 141 FRD
332, 334-335 (MD Ala, 1991).
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Courts have applied the apex-deposition rule not to
shield high-ranking officers from discovery, but to se-
quence discovery in order to prevent litigants from
deposing high-ranking governmental officials as a mat-
ter of routine procedure before less burdensome discov-
ery methods are attempted. See, e.g., Sneaker Circus,
Inc v Carter, 457 F Supp 771, 794 n 33 (ED NY, 1978).
Courts have reasoned that giving depositions on a
regular basis would impede high-ranking governmental
officials in the performance of their duties, and thus
contravene the public interest. See, e.g., Union Savings
Bank v Saxon, 209 F Supp 319, 319-320 (D DC, 1962).
In essence, the apex-deposition rule prevents high-
ranking public officials from being compelled to give
oral depositions unless a preliminary showing is made
that the deposition is necessary to obtain relevant
information that cannot be obtained from another
discovery source or mechanism. Baine, 141 FRD at
334-336.
Premised on similar reasoning, several federal appel-
late and district courts have extended application of the
apex-deposition rule to high-ranking corporate execu-
tives. Generally, these cases hold that before a high-
ranking corporate executive may be deposed, the plain-
tiff must establish that the executive has superior or
unique information regarding the subject matter of the
litigation and that such information cannot be obtained
through a less intrusive method, such as by deposing
lower-ranking executives. See, e.g., Salter v Upjohn Co,
593 F2d 649, 651 (CA 5, 1979); Lewelling v Farmers Ins
of Columbus, Inc, 879 F2d 212, 218 (CA 6, 1989);
Thomas v Int’l Business Machines, 48 F3d 478, 482-484
(CA 10, 1995); Mulvey v Chrysler Corp, 106 FRD 364,
366 (D RI, 1985); Baine, 141 FRD at 334-336; Evans v
Allstate Ins Co, 216 FRD 515, 518-519 (ND Okla, 2003).
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State courts, including those in California and Texas,
have also adopted the apex-deposition rule in the cor-
porate context. For example, in Liberty Mut Ins Co v
San Mateo Co Superior Court, 10 Cal App 4th 1282,
1289; 13 Cal Rptr 2d 363 (1992), the California Court of
Appeal, relying on federal decisions such as Salter,
Mulvey, and Baine, adopted the apex-deposition rule in
the corporate context and held that the potential depo-
nent, the president and chief executive officer of Liberty
Mutual, could not be deposed absent a showing that the
officer had “unique or superior personal knowledge of
discoverable information.” The Liberty Mut court held
that absent such a showing, “the trial court should
issue the protective order and first require the plaintiff
to obtain the necessary discovery through less intrusive
methods.” Id. If after these less intrusive methods are
exhausted and the plaintiff makes a showing that the
apex officer has information relevant to the case, the
trial court may allow the deposition to proceed. Id.
Similarly, in Monsanto Co v May, 889 SW2d 274, 277
(Tex, 1994), the Texas Supreme Court, relying on
federal decisions such as Salter and Mulvey and on the
decision in Liberty Mut, adopted the apex-deposition
rule and held that the rule “presents a fair balance
between the right of a plaintiff to conduct discovery in
its case within the limits of the rules, and the right of
someone at the apex of the hierarchy of a large corpo-
ration to avoid being subjected to undue harassment
and abuse.”
The question posed by Toyota’s motion and the trial
court’s order is whether Michigan caselaw should take
into account the position within an organization of the
person sought to be deposed. Because Michigan’s court
rules contemplate such a rule and because our courts
have, in essence, applied the principles of the apex-
deposition rule to governmental officials, albeit, with-
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out using the aforementioned terminology, and because
there is no principled reason for not affording similar
safeguards to corporate defendants, we hereby adopt
the apex-deposition rule as explained more thoroughly
below.
III. ANALYSIS
We hold that the apex-deposition rule applies to
high-ranking officials in the public sector and to high-
ranking corporate officers in the private sector.
Michigan has a broad discovery policy that permits
the discovery of any matter that is not privileged and
that is relevant to the pending case. MCR 2.302(B)(1);
Reed Dairy Farm v Consumers Power Co, 227 Mich App
614, 616; 576 NW2d 709 (1998). However, Michigan’s
court rules acknowledge the wisdom of placing reason-
able limits on discovery. MCR 2.302(C) provides, in
part:
On motion by a party or by the person from whom
discovery is sought, and on reasonable notice and for good
cause shown, the court in which the action is pending may
issue any order that justice requires to protect a party or
person from annoyance, embarrassment, oppression, or
undue burden or expense, including one or more of the
following orders:
(1) that the discovery not be had;
(2) that the discovery may be had only on specified
terms and conditions, including a designation of the time or
place[.]
Michigan’s rules of discovery largely track the federal
discovery rules.
3
In the absence of Michigan precedent,
courts of this state routinely seek guidance from federal
3
FR Civ P 26(c) provides for the issuance of a protective order in
discovery proceedings.
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cases construing a similar federal rule. Brenner v Mara-
thon Oil Co, 222 Mich App 128, 133; 565 NW2d 1
(1997).
This Court has applied the apex-deposition rule,
while not referring to it as such, in two cases involving
governmental officials. In Fitzpatrick v Secretary of
State, 176 Mich App 615, 617-618; 440 NW2d 45 (1989),
this Court reversed the trial court’s order that denied
the defendant’s motion to quash the deposition of the
Secretary of State on the grounds that the Secretary of
State lacked personal knowledge of the relevant facts
and that the information sought could be obtained by
other means. More recently, in Hamed v Wayne Co, 271
Mich App 106, 109-110; 719 NW2d 612 (2006), this
Court reversed the trial court’s order that denied the
defendants’ motion to quash the depositions of the
Wayne County Executive and the Wayne County Sheriff
on the ground that the plaintiff had made no showing
that either official possessed relevant information that
could not be obtained through other methods.
We find that application of the apex-deposition rule
in the public sector and private corporate context is
consistent with Michigan’s broad discovery policy, Reed
Dairy Farm, 227 Mich App at 616, and with Michigan’s
court rules, which allow a trial court to control the
timing and sequence of discovery “for the convenience
of parties and witnesses and in the interests of justice,”
MCR 2.302(D), and to enter protective orders “for good
cause shown,” MCR 2.302(C). As noted, in Fitzpatrick,
176 Mich App at 617-619, this Court reversed the trial
court’s denial of a motion for a protective order to
preclude the taking of the deposition of the Secretary of
State. The Fitzpatrick Court did not specifically state
that the Secretary of State could be deposed if the
plaintiff could show that doing so would be necessary to
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prevent injustice. However, in Hamed, 271 Mich App at
112, this Court adopted the holding in Fitzpatrick and
clarified that depositions of governmental officials could
be taken upon a showing by the plaintiff that the
depositions were necessary “to prevent prejudice or
injustice[.]” These cases rely on the Michigan Court
Rules, see, e.g., Fitzpatrick, 176 Mich App at 617, and
Hamed, 271 Mich App at 109-110, and the analysis
employed in Fitzgerald and Hamed is consistent with
those federal and state court cases that have applied the
apex-deposition rule in the corporate context.
Recognizing that the highest positions within a ju-
ridical entity rarely have specialized and specific first-
hand knowledge of matters at every level of the complex
organization, courts have adopted the apex-deposition
rule in the corporate context to (1) promote efficiency in
the discovery process by requiring that before an apex
officer is deposed it must be demonstrated that the
officer has superior or unique personal knowledge of
facts relevant to the litigation, see Salter, 593 F2d at
651, and (2) prevent the use of depositions to annoy,
harass, or unduly burden the parties. See Lewelling,
879 F2d at 218; Baine, 141 FRD at 335-336. Of course,
no court has applied the apex-deposition rule to hold
that an apex or high-ranking corporate officer cannot
be deposed under any circumstances. And neither do
we. Rather, courts have applied the rule to ensure that
discovery is conducted in an efficient manner and that
other methods of discovery have been attempted before
the deposition of an apex officer is conducted. See, e.g.,
Salter, 593 F2d at 651-652; Liberty Mut, 10 Cal App 4th
at 1287-1289. Moreover, those cases adopting the apex-
deposition rule in the corporate context do not shift the
burden of proof, but merely require the party seeking
discovery to demonstrate that the proposed deponent
has unique personal knowledge of the subject matter of
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the litigation and that other methods of discovery have
not produced the desired information only after the party
opposing discovery has moved for a protective order and
has made a showing regarding the lack of the proposed
deponent’s personal knowledge and that other discovery
methods could produce the required information. Cf. Crest
Infinity II, LP v Swinton, 2007 OK 77, ¶ 17; 174 P3d 996,
1004 (2007) (declining to adopt a form of the apex-
deposition rule that shifts the burden to the party seeking
discovery on the ground that the burden of showing good
cause is statutorily placed on the party seeking discovery).
In other words, after the party opposing the deposition
demonstrates by affidavit or other testimony that the
proposed deponent lacks personal knowledge or unique or
superior information relevant to the claims in issue, then
the party seeking the deposition of the high-ranking
corporate officer or public official must demonstrate that
the relevant information cannot be obtained absent the
disputed deposition.
Application of the apex-deposition rule does not,
contrary to plaintiff’s argument, shift the burden of
proof to the party seeking discovery. If the defendant
and the potential deponent make the requisite showing
outlined above, only then must the party seeking the
deposition show that the potential deponent has unique
or superior knowledge of issues relevant to the litiga-
tion and that the information cannot be obtained by less
intrusive means, such as by deposing lower-level offi-
cials or employees. Moreover, nothing herein can or
should be read to preclude the deposition of high-
ranking public or corporate officials who possess rel-
evant personal knowledge of matters in issue that
cannot be obtained by other allowable discovery.
In adopting the apex-deposition rule, we recognize, as
have other courts, that an apex corporate officer, like a
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high-ranking governmental official, often has no par-
ticularized or specialized knowledge of the day-to-day
operations or the particular factual situations that lead
to litigation, and has far-reaching and comprehensive
employment duties that require a significant time com-
mitment. And, therefore, to allow depositions of high-
ranking governmental officials or corporate officers
without any restriction or conditions could result in the
abuse of the discovery process and harassment of the
parties. Accordingly, our adoption of the apex-
deposition rule should serve as a useful rule for trial
courts to use in balancing the discovery rights of the
parties.
IV. APPLICATION
We review for an abuse of discretion a trial court’s
decision on a motion for a protective order. Bloomfield
Charter Twp v Oakland Co Clerk, 253 Mich App 1, 35;
654 NW2d 610 (2002).
Defendant moved for a protective order on the
ground that neither Mr. Inaba nor Mr. Lentz had
unique, personal knowledge of facts relevant to the
litigation.
4
Plaintiff points to the fact that both Messrs.
Inaba and Lentz have made public appearances to
discuss Toyota’s safety difficulties and recall efforts.
But no evidence before us demonstrates that, during
4
We note that defendant also based its motion for a protective order on
the ground that plaintiff had engaged in no discovery efforts designed to
elicit the information she sought from Messrs. Inaba and Lentz. At the
time the trial court heard defendant’s motion, plaintiff had deposed a
former employee of defendant Toyota Motor Engineering & Manufactur-
ing North America, Inc., a company that had no involvement in the
design or manufacturing of the vehicle at issue. The fact that plaintiff has
engaged in other discovery, including the taking of depositions, since the
hearing on defendant’s motion, is irrelevant to the issue before us at this
time.
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those appearances, either officer demonstrated any
actual knowledge, much less a unique or superior
knowledge, of the design, engineering, manufacturing,
or testing processes that went into the building of the
vehicle, a 2005 Camry. The executives spoke in only
general terms about Toyota’s safety difficulties and
recall efforts.
5
In terms of plaintiff’s contention that Messrs. Inaba
and Lentz had general knowledge of the issues, the
instant case is analogous to In re Continental Airlines,
Inc, 305 SW3d 849 (Tex App, 2010). In Continental, the
plaintiffs filed suit following an accident involving a
Continental Airlines flight that injured 37 persons. Id.
at 851. The plaintiffs noticed the deposition of Larry
Kellner, Continental’s chief executive officer (CEO) and
chairman of the board of directors, arguing that Kellner
had unique or superior knowledge of discoverable infor-
mation regarding the accident. Id. The plaintiffs
pointed to the following facts: (1) Kellner briefed mem-
bers of the media immediately following the accident,
(2) Kellner repeatedly stated that he would learn the
cause of the accident in order to prevent future acci-
dents, (3) Kellner sent personal letters to the passen-
gers, (4) Kellner interviewed the pilots and gave com-
mendations to crew and flight members, and (5) Kellner
served on the board of directors of the Air Transport
Association of America (ATA), a safety organization,
and thus had knowledge regarding Continental’s imple-
mentation of the ATA’s policies. Id.
The trial court denied the defendant’s motion for a
protective order and granted the plaintiffs’ motion to
compel the deposition. Id. The defendant moved for a
writ of mandamus, asking the appellate court to compel
5
As stated earlier, the recall campaigns about which Messrs. Inaba and
Lentz spoke did not include the 2005 Camry.
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the trial court to set aside its order granting the motion
to compel the deposition. Id. at 850-851.
The appellate court reviewed the pertinent law and
the evidence, including statements made by other Con-
tinental employees in depositions and statements in
Kellner’s own affidavit, id. at 853-857, and found that
the defendant showed that Kellner did not have
“unique or superior knowledge regarding what oc-
curred before and during the accident or the cause of
the accident.” Id. at 858. The court noted that while
Kellner made public statements following the accident,
the information he provided was given to him by
another Continental employee; that Kellner was not
Continental’s representative with regard to the inves-
tigation by the National Transportation Safety Board
(NTSB); that Kellner had not received information
regarding the cause of the accident in his executive
briefs; and that Kellner did not serve as Continental’s
representative on the ATA’s safety committee. Id.
Furthermore, the Continental court found that the
plaintiffs had not demonstrated that less intrusive
methods were inadequate to obtain the discovery
sought, notwithstanding the fact that the plaintiffs in
Continental, unlike plaintiff here, had conducted exten-
sive discovery, including submitting 110 requests for
production and 74 interrogatories and taking 11 depo-
sitions. Id. at 859. The court noted that Continental had
asserted that the plaintiffs had not deposed Continen-
tal’s corporate representative, other individuals were
present when Kellner received information regarding
the accident, and other employees were more directly
involved in the NTSB investigation. Id. The court
reasoned that, while Kellner would be “best able to
address his own subjective intent in making his gener-
alized public statements following the accident,” Kell-
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ner’s “subjective intent in making the subject public
statements [did] not establish anything regarding neg-
ligence, proximate cause, or damages.” Id. The Conti-
nental court held that the trial court had abused its
discretion by compelling Kellner’s deposition, and di-
rected the trial court to set aside the order compelling
the deposition. Id. Here, in contrast, virtually no dis-
covery preceded the disputed efforts to depose Messrs.
Inaba and Lentz.
We note that the CEO in Continental was in a
position similar to that of the Toyota executives here,
Messrs. Inaba and Lentz. The Continental CEO had
generalized knowledge of the accident and served as the
airline’s public face in dealing with the media, but had
no particular knowledge of the cause of the accident.
The record reflects that Messrs. Inaba and Lentz had
only generalized knowledge of Toyota’s unintended
acceleration problems and had no unique or superior
knowledge of, or role in designing, the vehicle at issue or
in implementing manufacturing or testing processes.
The court’s reasoning in Continental is instructive and
applicable to the proposed deponents here.
V. CONCLUSION
We adopt the apex-deposition rule for high-ranking
corporate officers, as well as for governmental officials,
6
and therefore hold that the trial court abused its
discretion by denying defendant’s motion for a protec-
tive order to quash the depositions of Messrs. Inaba and
Lentz. We vacate the trial court’s order and remand this
case to the trial court for reconsideration in accordance
with this opinion.
6
Fitzpatrick, 176 Mich App at 617-618; Hamed, 271 Mich App at
109-110.
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OURT
Vacated and remanded. We retain jurisdiction.
D
ONOFRIO
, J., concurred.
J
ANSEN
,J.(dissenting). I cannot join the majority’s
announcement of a broad, new “apex-deposition rule”
shielding high-ranking corporate officers from certain
discovery in Michigan litigation. Nor can I conclude,
under existing principles of Michigan law, that the trial
court abused its discretion by denying defendant’s
1
motion for a protective order to quash the scheduled
depositions of Yoshimi Inaba and Jim Lentz. Accord-
ingly, I must respectfully dissent.
I
As explained by the majority, plaintiff noticed the
video depositions of Inaba, defendant’s chairman and
chief executive officer, and Lentz, defendant’s president
and chief operating officer, pursuant to MCR 2.306 and
MCR 2.315. Defendant moved for a protective order
under MCR 2.302(C), seeking to prevent the scheduled
depositions for the reason that neither Inaba nor Lentz
“participated in the design, testing, manufacture, warn-
ings, sale, or distribution of the 2005 Camry, or the
day-to-day details of vehicle production.” Defendant
also asserted that neither Inaba nor Lentz possessed
“unique information pertinent to the issues in this
case” and argued that the so-called “apex-deposition
rule” should be extended to shield high-ranking corpo-
rate officers from certain discovery in Michigan.
Plaintiff responded by arguing that although Michi-
gan’s courts had occasionally applied something similar
to the apex-deposition rule in the context of high-
1
I use the term “defendant” throughout this dissenting opinion to
refer to defendant-appellant Toyota Motor Sales U.S.A., Inc., only.
344 289 M
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ANSEN
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ranking governmental officials, the rule had never been
applied to shield corporate officers from discovery.
Plaintiff contended that Inaba and Lentz possessed
specific information relevant to this case and argued
that defendant’s motion for a protective order should
therefore be denied. In particular, plaintiff asserted that
Inaba and Lentz had failed to share with the govern-
ment and the public certain information in their pos-
session concerning the phenomenon of “sudden accel-
eration” in Toyota vehicles. Plaintiff pointed to a letter
from two congressmen alleging that Toyota had con-
cealed information regarding this sudden-acceleration
problem. Plaintiff also pointed to certain public state-
ments by Inaba suggesting that Toyota had saved $100
million by concealing information regarding sudden
acceleration and to certain portions of Inaba’s testi-
mony before Congress in which he testified that he was
personally involved in the quality-control review of
Toyota vehicles. Plaintiff argued that this evidence,
taken together, was sufficient to show that Inaba and
Lentz personally possessed information relevant to the
litigation and that their depositions were therefore
warranted. Plaintiff also argued that she could not
obtain the desired information by deposing other lower-
level employees because some of the information was
uniquely within the possession of Inaba or Lentz and
because several of the statements and representations
at issue had been made by Inaba or Lentz directly.
After oral argument, the trial court ruled that Inaba
and Lentz were high-ranking corporate officers, but
determined that Michigan law did not preclude plaintiff
from deposing them. Specifically, the court observed,
“[W]ith the documents [plaintiff] presented, it certainly
would appear that [Inaba and Lentz] are in the know as
to the issues that...[plaintiff is] concerned about in
this particular case; and so I do think it is appropriate
2010] A
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OTOR
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ANSEN
,J.
for [plaintiff] to depose them at this time.” For the
reasons that follow, I believe that the trial court’s ruling
on this issue was correct.
II
As an initial matter, I cannot join the majority’s
announcement of a broad, new apex-deposition rule
shielding high-ranking corporate officers from certain
discovery in Michigan civil litigation. The majority’s
announcement of this new rule is neither necessary nor
warranted on the facts of this case. It is well settled that
Michigan law already authorizes a trial court to enter
protective orders and restrict discovery in order to
prevent “annoyance, embarrassment, oppression, or
undue burden or expense....”MCR2.302(C); Eyde v
Eyde, 172 Mich App 49, 56; 431 NW2d 459 (1988).
Similarly, Michigan’s trial courts are already authorized
to restrict discovery that would be abusive, excessive, or
irrelevant, Hartmann v Shearson Lehman Hutton, Inc,
194 Mich App 25, 29; 486 NW2d 53 (1992), and to limit
discovery for the purpose of preserving a litigant’s
privacy rights, see Yates v Keane, 184 Mich App 80, 84;
457 NW2d 693 (1990). Within the confines of these
rules, Michigan’s trial courts have “broad discretion to
issue protective orders to prevent...potential
abuses[.]” Marketos v American Employers Ins Co, 185
Mich App 179, 197; 460 NW2d 272 (1990).
Because I believe that these existing principles of law
are already adequate to protect high-ranking corporate
officers and their respective corporations from potential
discovery abuses, I dissent from the majority’s adoption
of a broad apex-deposition rule in this case. I fully
acknowledge that, on occasion, certain litigants may
seek to depose high-ranking corporate officers who
truly lack personal knowledge of the relevant facts. At
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ANSEN
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times, such litigants may actually be driven by a desire
to annoy or embarrass the high-ranking corporate of-
ficers or to unnecessarily prolong the discovery process.
But more commonly, I suspect, such litigants are simply
mistaken about their belief that the high-ranking cor-
porate officers at issue personally possess any relevant
information. Whatever the litigants’ motivations, how-
ever, our present rules of civil discovery are more than
sufficient to curtail any undue burden, expense, or
annoyance that might result from such discovery re-
quests. See MCR 2.302(C). Given our existing discovery
rules, Michigan does not need a broad apex-deposition
rule to shield high-ranking corporate officers from
abusive or burdensome discovery. The new apex-
deposition rule announced by the majority today is
quite simply unnecessary.
Nor do I believe that the majority’s new apex-
deposition rule for corporate officers is merely a logical
outgrowth of this Court’s decisions in Fitzpatrick v
Secretary of State, 176 Mich App 615; 440 NW2d 45
(1989), and Hamed v Wayne Co, 271 Mich App 106; 719
NW2d 612 (2006). In Fitzpatrick, this Court reversed
the trial court’s order denying the defendant’s motion
to quash the deposition of the Secretary of State.
Fitzpatrick, 176 Mich App at 618-619. The Fitzpatrick
Court observed that the Secretary of State lacked
personal knowledge of the relevant facts and that the
information sought by the plaintiff could be obtained
through other means. Id. Similarly, in Hamed, this
Court reversed the trial court’s order denying the
defendants’ motion to quash the depositions of the
Wayne County Executive and the Wayne County Sher-
iff. Hamed, 271 Mich App at 110-112. The Hamed Court
based its holding on the fact that the plaintiff had not
established that the information she sought was not
available from other discovery sources, such as lower-
2010] A
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OTOR
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ANSEN
,J.
ranking county officials. Id. at 111-112. Defendant and
the majority appear to believe that this Court’s deci-
sions in Fitzpatrick and Hamed naturally lead to, and
somehow compel, the creation of a new apex-deposition
rule for high-ranking corporate officers.
However, a faithful reading of Fitzpatrick and Hamed
reveals a critical distinction between the circumstances
of those cases and the circumstances of the case at bar.
In Fitzpatrick and Hamed, this Court was concerned
with protecting the public’s interest in good govern-
ment. Both the Fitzpatrick Court and the Hamed Court
pointed out that the public has a strong interest in the
effective and efficient operation of governmental agen-
cies, and both panels suggested that allowing a litigant
to depose a high-ranking governmental official without
first making a showing of actual need might hinder the
effective functioning of that official’s office. See Fitz-
patrick, 176 Mich App at 617 (explaining that “the time
and exigencies of an agency head’s everyday business
would be severely impeded if every plaintiff filing a
complaint against an agency head, in his official capac-
ity, was allowed to take his oral deposition” and that
“[s]uch a procedure is against the public interest”);
Hamed, 271 Mich App at 111 (observing that “[t]he
purpose of this heightened scrutiny is to strictly limit
the intrusions that would burden the public official’s
efforts to advance the effective and efficient operation
of the public agency”). I agree with the statement of
plaintiff’s counsel at oral argument before this Court
that “the very purpose of the Fitzpatrick and Hamed
rule is to protect a public interest—the public interest
in the service of the [governmental] employee.” No such
public interest is implicated in the present case; there is
generally no public interest in the management and
operation of private corporations. I cannot conclude
348 289 M
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ANSEN
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that the rationale underlying this Court’s decisions in
Fitzpatrick and Hamed applies in the case at bar.
In sum, I believe that Michigan’s existing rules of
civil discovery are fully adequate to protect high-
ranking corporate officers and their respective corpora-
tions from potential discovery abuses, and I cannot
conclude that the majority’s creation of a new apex-
deposition rule for high-ranking corporate officers is in
any way compelled by this Court’s decisions in Fitz-
patrick and Hamed.
2
III
I also conclude that, under our existing rules of civil
discovery, the trial court properly denied defendant’s
motion for a protective order to quash the depositions.
“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.” Reed Dairy Farm
v Consumers Power Co, 227 Mich App 614, 616; 576
NW2d 709 (1998). Our civil discovery rules “should be
liberally construed to promote the discovery of the true
facts and circumstances of the controversy rather than
to aid in their concealment.” Dowood Co v Mich Tool
Co, 14 Mich App 158, 161; 165 NW2d 450 (1968).
Plaintiff, through her reliance on certain statements,
documents, and other evidence presented in the trial
2
Even under the apex-deposition rule adopted by the majority, I would
still conclude that plaintiff is entitled to depose Inaba and Lentz. “[T]he
apex deposition rule is intended to protect busy, high-level executives who
lack unique or personal knowledge” and “is bottomed on the apex
executive lacking any knowledge of relevant facts.” Minter v Wells Fargo
Bank, NA, 258 FRD 118, 126 (D Md, 2009). In light of the public
statements and representations made by Inaba and Lentz, it is clear that
they possessed at least some personal knowledge of the information
sought by plaintiff in this case.
2010] A
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OTOR
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ANSEN
,J.
court, demonstrated a strong probability that Inaba and
Lentz possessed personal knowledge of particular infor-
mation relevant to the litigation in this case. Specifi-
cally, plaintiff established a high likelihood that Inaba
and Lentz possessed relevant, personal knowledge con-
cerning the phenomenon of sudden acceleration in
Toyota vehicles and that they also had personal knowl-
edge of possible efforts to conceal or obscure the scope
and breadth of this problem. Thus, unlike the appel-
lants’ discovery requests in In re Hammond Estate, 215
Mich App 379, 386; 547 NW2d 36 (1996), plaintiff’s
requests to depose Inaba and Lentz did not amount to
mere “fishing expedition[s].” Instead, the record estab-
lishes that plaintiff had in mind certain specific matters
that she wished to pursue during the depositions. These
matters clearly would have been pertinent and material
to the present controversy. I recognize that the Toyota
Camry model driven by plaintiff’s decedent was appar-
ently not among the models subject to recall for sudden
acceleration. However, plaintiff was nonetheless en-
titled to ask Inaba and Lentz about their knowledge of
sudden acceleration in other, similar Toyota models. See
Savage v Peterson Distrib Co, Inc, 379 Mich 197, 202;
150 NW2d 804 (1967); McNamaravEWRoss Co, 225
Mich 335, 339-340; 196 NW 336 (1923). And even if
Inaba and Lentz only possessed knowledge pertaining
to sudden acceleration in unrelated Toyota models,
plaintiff was still entitled to ask them about this matter
in order to establish that defendant was on notice of the
problem of sudden acceleration in general. Dowood,14
Mich App at 161. I conclude that the depositions of
Inaba and Lentz likely would have led to the discovery
of relevant, admissible evidence. Domako v Rowe, 438
Mich 347, 359 n 10; 475 NW2d 30 (1991).
I also conclude that the depositions of Inaba and
Lentz would not have been annoying, embarrassing,
350 289 M
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ANSEN
,J.
oppressive, unduly burdensome, or unduly expensive
under MCR 2.302(C), which is primarily intended to
protect parties from discovery “abuses.” See Marketos,
185 Mich App at 197. The party opposing discovery of a
certain matter generally has the burden of showing why
the request for discovery should be denied. See Wilson v
Saginaw Circuit Judge, 370 Mich 404, 413; 122 NW2d
57 (1963). In the present case, there was simply no
showing that plaintiff’s depositions of defendant’s offic-
ers would have been “abus[ive].”
The standard for judging whether a protective order
should issue under MCR 2.302(C) surely cannot be a
subjective one. After all, no one generally wants to give
a deposition, and under a subjective standard it could
almost always be argued that a proposed deposition
would subject the deponent to “annoyance” or “embar-
rassment” within the meaning of MCR 2.302(C). In-
stead, the standard clearly must be an objective one.
Thus, Inaba’s and Lentz’s own beliefs that the sched-
uled depositions would be annoying, embarrassing, or
burdensome certainly were not sufficient for the issu-
ance of a protective order in this case.
Moreover, Inaba and Lentz made several public state-
ments and representations suggesting that they
uniquely possessed certain information that was rel-
evant to this litigation. And the very nature of these
public statements implied that other, lower-level em-
ployees did not have knowledge of the same facts. Given
the substance of Inaba’s and Lentz’s public statements,
and viewed objectively, I cannot say that plaintiff’s
depositions of Inaba and Lentz would have been any
more annoying, embarrassing, oppressive, or burden-
some than any other deposition of any other deponent
possessing relevant, discoverable information. While it
might be annoying, embarrassing, oppressive, or bur-
2010] A
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ANSEN
,J.
densome to depose high-ranking corporate officers
whose knowledge of the relevant facts is merely coex-
tensive with that of lower-level employees, the public
statements and representations made by Inaba and
Lentz in this case implied a unique, singular knowledge
concerning the phenomenon of sudden acceleration in
Toyota vehicles and the possible effort to conceal or
obscure this problem. Defendant failed to carry its
burden of establishing that a protective order was
warranted under MCR 2.302(C). See Wilson, 370 Mich
at 413.
Lastly, I wish to make clear my belief that high-
ranking corporate officers should be held to the same
civil discovery standards as any other deponent, wit-
ness, or party. Indeed, I believe that our law demands
this. It is clear to me that Judge Archie Hayman, the
trial judge in this case, carefully examined the evidence
presented in advance of his ruling and applied the same
standard to defendant and its officers as he would have
applied to any party appearing before him. This is
exactly what every trial judge should strive to do.
In sum, I cannot conclude that the trial court abused
its discretion by denying defendant’s motion for a
protective order to quash the depositions of Inaba and
Lentz. See Bloomfield Charter Twp v Oakland Co Clerk,
253 Mich App 1, 35, 38-39; 654 NW2d 610 (2002).
Because I believe that the trial court’s ruling was
correct, I would affirm.
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ANSEN
,J.
RIVER INVESTMENT GROUP, LLC v CASAB
Docket No. 290645. Submitted July 14, 2010, at Detroit. Decided August
10, 2010, at 9:00 a.m.
River Investment Group, L.L.C., brought an action in the Wayne
Circuit Court against Michigan Financial Investments, L.L.C.; the
principal of Michigan Financial, Romel E. Casab; and the Wayne
County Treasurer for unjust enrichment and conversion. Plaintiff
alleged that it purchased the site of a former gas station in the city
of Detroit and made significant investments in the property to
improve it and reopen it as a branded gas station. At the time that
plaintiff purchased the property, the Wayne County Treasurer had
already begun foreclosure proceedings as a result of taxes that had
not been paid by the previous owner. The treasurer held a
foreclosure sale and sold the property to Michigan Financial.
Plaintiff alleged that the treasurer failed to properly notify it of the
foreclosure proceedings and that defendants were unjustly en-
riched as a result of the improvements it made to the property
after the foreclosure. Michigan Financial and Casab filed a coun-
terclaim for trespass and to quiet title. Plaintiff also brought
related proceedings in the Court of Claims, which ordered that
plaintiff’s claim brought against the treasurer in that court be
joined with plaintiff’s circuit court action. The circuit court, Mary
Beth Kelly, J., granted partial summary disposition in favor of
Michigan Financial and Casab, concluding that under MCL
211.78l, the circuit court lacked jurisdiction over plaintiff’s claims.
Plaintiff sought interlocutory leave to appeal, which the Court of
Appeals denied in an unpublished order, entered December 15,
2004 (Docket No. 258214). Plaintiff and the treasurer reached a
settlement and the treasurer was subsequently dismissed from the
case. Following a bench trial, the circuit court, William J. Giovan,
J., entered judgment in favor of Michigan Financial on its coun-
terclaim. Plaintiff appealed.
The Court of Appeals held:
1. Plaintiff’s claim arose under MCL 211.78l because, as the
owner of an extinguished recorded or unrecorded interest in
property, plaintiff claimed injury resulting from a lack of notice of
the foreclosure proceedings, and plaintiff sought monetary dam-
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ages to compensate for that injury. MCL 211.78l(2) confers original
and exclusive jurisdiction in the Court of Claims over actions
arising under that section without regard to whether the defen-
dant is a governmental entity.
2. Plaintiff was not prejudiced by the circuit court’s alleged
failure to provide notice of entry of the final judgment in this case
until one day before the deadline for timely filing an appeal in light
of the fact that the Court of Appeals granted plaintiff’s application
for delayed leave to appeal.
3. Plaintiff waived its argument that the circuit court erred by
concluding that its motion for reconsideration was not timely filed
when plaintiff failed to identify the issue in its statement of
questions presented in its brief on appeal.
Affirmed.
C
OURTS —
C
OURT OF
C
LAIMS —
J
URISDICTION —
F
ORECLOSURES —
A
CTIONS FOR
R
ECOVERY OF
M
ONETARY
D
AMAGES
A
FTER
J
UDGMENT FOR
F
ORECLOSURE
.
The Court of Claims has original and exclusive jurisdiction over
actions for the recovery of monetary damages brought by the
owner of any extinguished recorded or unrecorded interest in a
parcel of property who claims after a judgment of foreclosure that
he or she did not receive any notice required under the General
Property Tax Act regardless of whether the defendant is a govern-
mental entity (MCL 211.78l).
Roger S. Canzano for River Investment Group,
L.L.C.
Thav, Gross, Steinway & Bennett, P. C . (by Barry A.
Steinway), for Romel E. Casab and Michigan Financial
Investments, L.L.C.
Before: S
AWYER
,P.J., and B
ANDSTRA
and W
HITBECK
,JJ.
P
ER
C
URIAM
. Plaintiff appeals by delayed leave
granted the trial court’s judgment in favor of
defendant/counterplaintiff, Michigan Financial Invest-
ments, L.L.C. (MFI). On appeal, plaintiff challenges the
trial court’s earlier order granting summary disposition
in favor of defendants, Romel E. Casab and MFI (here-
354 289 M
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inafter collectively referred to as “defendant”),
1
on
plaintiff’s unjust enrichment and conversion claims. We
affirm.
Plaintiff first argues that the trial court erred when
it concluded that the circuit court did not have jurisdic-
tion over plaintiff’s claims and, accordingly, granted
summary disposition in favor of defendant on plaintiff’s
claims. We disagree.
On appeal, a decision to grant a motion for summary
disposition is reviewed de novo. Hines v Volkswagen of
America, Inc, 265 Mich App 432, 437; 695 NW2d 84
(2005). When reviewing a motion for summary disposi-
tion under MCR 2.116(C)(10), this Court must consider
the record in the same manner as the trial court. Id.
Any court considering such a motion must consider all
the pleadings and the evidence in the light most favor-
able to the nonmoving party. Id. The motion tests
whether there exists a genuine issue of material fact.
MCR 2.116(C)(10). “Summary disposition is appropri-
ate if there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of
law.” Brown v Brown, 478 Mich 545, 552; 739 NW2d
313 (2007).
Issues of law are also reviewed de novo. Slaughter v
Blarney Castle Oil Co, 281 Mich App 474, 477; 760
NW2d 287 (2008). Whether a court has subject-matter
jurisdiction is a question of law. In re Petition by Wayne
Co Treasurer for Foreclosure of Certain Lands for
Unpaid Prop Taxes, 265 Mich App 285, 290; 698 NW2d
879 (2005).
Plaintiff’s property was foreclosed on by the Wayne
County Treasurer and sold to defendant. Plaintiff sued
1
Casab is the principal of MFI. Casab and MFI filed a joint brief on
appeal. The Wayne County Treasurer was dismissed from the case by
stipulation.
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defendant for unjust enrichment and conversion arising
from improvements plaintiff made to the property after
the foreclosure, but without notice of the foreclosure.
The trial court concluded that MCL 211.78l precludes
circuit court jurisdiction over the case. MCL 211.78l
provides, in relevant part:
(1) If a judgment for foreclosure is entered under [MCL
211.78k] and all existing recorded and unrecorded interests
in a parcel of property are extinguished as provided in
[MCL 211.78k], the owner of any extinguished recorded or
unrecorded interest in that property who claims that he or
she did not receive any notice required under this act shall
not bring an action for possession of the property against
any subsequent owner, but may only bring an action to
recover monetary damages as provided in this section.
(2) The court of claims has original and exclusive
jurisdiction in any action to recover monetary damages
under this section.
Plaintiff first argues that MCL 600.6419 and MCL
600.6437 specify that the Court of Claims has jurisdic-
tion only in actions against governmental entities.
Therefore, MCL 211.78l cannot be read to require
exclusive Court of Claims jurisdiction over plaintiff’s
action against defendant because defendant is not a
governmental entity.
This Court’s primary goal when considering statu-
tory language is to give effect to the intent of the
Legislature. Alvan Motor Freight, Inc v Dep’t of Trea-
sury, 281 Mich App 35, 39; 761 NW2d 269 (2008). If the
statutory language is unambiguous, the plain meaning
of the language must be applied. Id. A statutory provi-
sion is ambiguous if it irreconcilably conflicts with
another provision or if it is equally susceptible to more
than one meaning. Id. at 39-40. Every word or phrase
should be ascribed its plain and ordinary meaning. MCL
8.3a; Alvan Motor, 281 Mich App at 40. Finally, “it is
356 289 M
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important to ensure that words in a statute not be
ignored, treated as surplusage, or rendered nugatory.”
Robertson v DaimlerChrysler Corp, 465 Mich 732, 748;
641 NW2d 567 (2002).
MCL 600.6419(1) provides:
Except as provided in [MCL 600.6419a] and [MCL
600.6440], the jurisdiction of the court of claims, as con-
ferred upon it by this chapter, shall be exclusive. The state
administrative board is hereby vested with discretionary
authority upon the advice of the attorney general, to hear,
consider, determine, and allow any claim against the state
in an amount less than $1,000.00. Any claim so allowed by
the state administrative board shall be paid in the same
manner as judgments are paid under [MCL 600.6458] upon
certification of the allowed claim by the secretary of the
state administrative board to the clerk of the court of
claims. The court has power and jurisdiction:
(a) To hear and determine all claims and demands,
liquidated and unliquidated, ex contractu and ex delicto,
against the state and any of its departments, commissions,
boards, institutions, arms, or agencies.
(b) To hear and determine any claims or demands,
liquidated or unliquidated, ex contractu or ex delicto,
which may be pleaded by way of counterclaim on the part
of the state or any department, commission, board, insti-
tution, arm, or agency of the state against any claimant
who may bring an action in the court of claims. Any claim
of the state or of any department, commission, board,
institution, arm, or agency of the state may be pleaded by
way of counterclaim in any action brought against the
state, or any other department, commission, board, insti-
tution, arm, or agency of the state. [Emphasis added.]
MCL 600.6437 provides:
The court may order entry of judgment against the state
or any of its departments, commissions, boards, institu-
tions, arms or agencies based upon facts as stipulated by
counsel after taking such proofs in support thereof as may
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be necessary to satisfy the court as to the accuracy of such
facts and upon being satisfied that such judgment is in
accordance with applicable law. [Emphasis added.]
MCL 600.6419 confers jurisdiction over claims against
the state and its subunits in the Court of Claims.
Parkwood Ltd Dividend Housing Ass’n v State Housing
Dev Auth, 468 Mich 763, 767-768; 664 NW2d 185
(2003). MCL 600.6437 authorizes the Court of Claims to
“order entry of judgment against” the state and its
subunits. However, nothing in either statute states that
the Court of Claims may not exercise jurisdiction over
any other case, if the Legislature were to grant it
additional jurisdiction. See Parkwood, 468 Mich at 767
(“The jurisdiction of the Court of Claims is provided by
statute.”). MCL 211.78l(2) states that the Court of
Claims has jurisdiction “in any action to recover mon-
etary damages under this section.” Nothing in the
statutes cited by plaintiff precludes reading MCL
211.78l(2) as conferring jurisdiction in the Court of
Claims over an action arising under MCL 211.78l, and
plaintiff cites no authority for that proposition. There-
fore, assuming that this action arises under MCL
211.78l, plaintiff’s argument is unavailing.
Plaintiff relatedly argues that its action against de-
fendant does not arise under MCL 211.78l. Plaintiff
specifically asserts that this action is not an “action to
recover monetary damages under this section” for two
reasons. MCL 211.78l(2). First, plaintiff argues that
MCL 211.78l contemplates actions for the failure to
receive adequate notice of foreclosure, which plaintiff
does not attribute to defendant. Expanding on that
premise, plaintiff further argues that because MCL
211.78l only contemplates actions for failure of notice,
it only contemplates actions against the entity charged
with providing notice, not a private party such as
358 289 M
ICH
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defendant. Thus, plaintiff’s action is not an “action...
under this section.” MCL 211.78l(2).
MCL 211.78l(1) first contemplates an action by a
party “who claims that he or she did not receive any
notice required under” the General Property Tax Act
(GPTA), MCL 211.1 et seq. Plaintiff does claim that it
did not receive notice of the foreclosure proceedings.
Plaintiff argues that it does not allege any wrongdoing
on the part of defendant with respect to the lack of
notice; it is only a fact to explain why plaintiff continued
to make improvements to the property after it had been
sold to defendant. Nevertheless, the language of MCL
211.78l(1) is unambiguous: plaintiff is an owner of an
extinguished recorded or unrecorded interest in prop-
erty and claims injury from the fact that it did not
receive notice as required under the GPTA. See Alvan
Motor, 281 Mich App at 39 (no judicial construction
required where statutory language is unambiguous).
Next, MCL 211.78l(1) prohibits bringing “an action
for possession of the property against any subsequent
owner....” Defendant is the subsequent owner, but
plaintiff does not seek possession of the property from
defendant. MCL 211.78l(1) specifies that rather than
bring an action for possession, an aggrieved former
interested party “may only bring an action to recover
monetary damages....” Finally, MCL 211.78l(2) pro-
vides that the Court of Claims has “original and exclu-
sive jurisdiction” in such an action. Nothing in MCL
211.78l requires that an action under that section be
against a governmental entity.
2
2
To the extent that the intent of the Legislature was to provide jurisdic-
tion only over actions against governmental bodies, see the Court of Claims
Act, MCL 600.6401 et seq. (creating the Court of Claims for the purpose of
hearing actions against governmental bodies), the responsibility to alter the
statute lies with that branch of government, not with this Court. Hakari v
Ski Brule, Inc, 230 Mich App 352, 357-358; 584 NW2d 345 (1998).
2010] R
IVER
I
NVESTMENT
G
ROUP V
C
ASAB
359
Plaintiff next argues that because the Court of
Claims ordered plaintiff’s claim against the treasurer in
the Court of Claims joined with its claim against
defendant and the treasurer in the circuit court, this
conferred jurisdiction in the circuit court over plain-
tiff’s case. As noted earlier, MCL 211.78l(2) confers
exclusive jurisdiction in the Court of Claims over cases
arising under MCL 211.78l. Assuming, arguendo, that
the Court of Claims mistakenly transferred a case to the
circuit court, plaintiff has provided no authority for the
proposition that the order of joinder would override a
clear prescription of the Legislature. Further, the order
of joinder was with respect to plaintiff’s case against the
treasurer and has no relation to plaintiff’s claims
against defendant. This argument is unavailing.
Plaintiff also argues that the trial court erred when it
failed to provide notice of entry of the final judgment
until one day before the deadline to file a timely appeal.
However, plaintiff was not prejudiced by this alleged
delay because this Court granted plaintiff’s application
for delayed leave to appeal. River Investment Group
LLC v Casab, unpublished order of the Court of Ap-
peals, entered June 17, 2009 (Docket No. 290645).
Accordingly, this issue is moot.
Plaintiff next argues that the trial court erred when
it concluded that plaintiff’s motion for reconsideration
was not timely filed. This issue is waived because
plaintiff failed to state it in the statement of questions
presented in its brief on appeal. English v Blue Cross
Blue Shield of Mich, 263 Mich App 449, 459; 688 NW2d
523 (2004). Moreover, plaintiff’s arguments in its mo-
tion to reconsider were identical to its other arguments
on appeal, which we have concluded are unavailing.
Affirmed.
360 289 M
ICH
A
PP
353 [Aug
CIPRIANO v CIPRIANO
Docket Nos. 291377 and 292806. Submitted July 13, 2010, at Detroit.
Decided August 10, 2010, at 9:05 a.m.
Plaintiff, Mary Cipriano, and defendant, Salvatore Cipriano, were
granted a divorce in November 1993 in the Macomb Circuit Court,
George C. Steeh, J. Plaintiff was awarded 55 percent of the marital
property and $66,000 a year in periodic alimony to be paid in
monthly installments of $5,500. Following further proceedings in
the trial court and the Court of Appeals, the Court of Appeals,
F
ITZGERALD
,P.J., and S
AAD
and C
OOPER
, JJ., determined that plain-
tiff was also entitled to 55 percent, plus interest, of the increase in
the value during the marriage of defendant’s interest in Peter
Cipriano Enterprises (PCE). Unpublished opinion per curiam,
issued July 25, 2006 (Docket No. 259818). In 2006, the trial court,
Antonio P. Viviano, J., issued an amended supplemental judgment,
ordering defendant to pay plaintiff $485,155 for her interest in
PCE and the amount of interest that had accumulated on the asset
from June 1993 to September 30, 2006, which was $456,132. In
May 2007, defendant moved to amend the spousal support or the
property award or to allow him to make installment payments.
The parties then agreed to submit to binding arbitration. Follow-
ing the parties’ receipt of an excerpt of the arbitrator’s proposed
findings and awards, defendant sent a financial report to the
arbitrator and phoned him. In September 2008, the arbitrator’s
final award ordered defendant to pay plaintiff $485,155 in install-
ments, without interest on the award, and terminated defendant’s
spousal-support obligation effective May 2007. The arbitrator
granted credit for defendant’s alimony payments from May 2007
through September 2008 and determined that defendant would
continue to pay $5,500 a month until he paid an additional
$391,655 to satisfy the $485,155 award. Plaintiff moved to vacate,
modify, or correct the arbitration award, arguing that the arbitra-
tor had failed to follow the law-of-the-case doctrine, impermissibly
modified the spousal support retroactively, and altered the award
after the ex parte communications from defendant. On December
4, 2008, the trial court entered an order that denied plaintiff’s
motion and affirmed the arbitrator’s award. The Court of Appeals
granted plaintiff’s delayed application for leave to appeal that
2010] C
IPRIANO V
C
IPRIANO
361
order in Docket No. 291377. In June 2009, the trial court held a
hearing on defendant’s May 2007 motion to amend the spousal
support or property award or to allow him to make installment
payments and entered an order reducing defendant’s monthly
payments to $3,870, but not altering the total amount awarded.
Plaintiff appealed that order by leave granted in Docket No.
292806. The appeals were consolidated.
The Court of Appeals held:
1. The domestic relations arbitration act, MCL 600.5070 et
seq., contemplates that the parties will determine how they will
produce the information necessary to resolve their dispute and
does not impose procedural formalities that restrict this freedom.
The parties’ arbitration agreement in this case did not mention
the topic of ex parte communication with the arbitrator. The only
mention of the arbitration procedure was that the format for the
arbitration would be determined by the arbitrator, with the object
of expediting the hearing. Plaintiff did not show that the arbitra-
tor exceeded his powers by receiving defendant’s ex parte contacts.
According to the arbitration agreement, the arbitrator retained
the discretion to receive information from defendant in order to
expedite the proceedings. Plaintiff did not show that any miscon-
duct of the arbitrator prejudiced her rights or that the arbitration
award was procured by undue means. The arbitrator’s adjustment
of his proposed award from a lump sum to installment payments
and reduction of monthly spousal support to zero rather than the
$250 proposed in the excerpt did not result in a substantial
difference in the arbitration award by reason of a substantial error
of law. Both the preliminary award excerpt sent to the parties and
the final award greatly reduced the amount of spousal support,
and the final award did not change the total amount of the
property award. The trial court did not err by confirming the
arbitrator’s award despite defendant’s ex parte contacts.
2. MCL 552.603(2) allows the retroactive modification of sup-
port orders from the date that notice of a petition for modification
of support was given to the payer or recipient of support. The
retroactivity of a modification is a matter within the court’s
discretion, but the modification may not take effect before the time
the petition to modify was filed. Because defendant moved to
modify spousal support or the property award or to allow him to
make installment payments in May 2007, the arbitrator’s award
eliminating spousal support retroactively to May 2007 and con-
verting the $5,500 payments to installment payments to satisfy
the property award did not violate MCL 552.603(2).
362 289 M
ICH
A
PP
361 [Aug
3. The law-of-the-case doctrine does not apply to arbitration
proceedings. The parties agreed that the arbitrator would decide
the effect of the Court of Appeals’ prior decisions on the equities of
this matter regarding spousal support ordered and previously paid
during the pendency of the appeals process. The arbitrator’s award
terminating spousal support at the time of plaintiff’s receipt of an
additional property award was within the parameters of the
parties’ agreement. The arbitration award must be upheld because
plaintiff did not demonstrate that the arbitrator exceeded the
powers that the parties’ agreement granted to him. There was no
error of law evident on the face of the award that was so
substantial that, but for the error, the award would have been
substantially different.
4. MCR 3.602 governs the procedure for modifying arbitra-
tion awards. MCR 3.602(K)(1) required that a complaint to
modify the arbitration award be filed within 21 days after the
date of the arbitration award because there was no pending
action between these parties. Defendant moved to reduce the
monthly payments awarded by arbitration several months after
the award. MCR 3.602(K)(2) provides the grounds for modifica-
tion of an arbitration award. Neither defendant nor the trial
court referred to any of the provisions of MCR 3.602(K)(2) to
justify the modification of the award. Even though the trial
court did not change the total amount of the property award,
the matter had been submitted to binding arbitration and the
arbitrator specifically awarded plaintiff $5,500 in monthly
payments. The trial court erred by modifying the arbitrator’s
award without a timely complaint and without reference to
MCR 3.602(K)(2). The order of the trial court must be reversed,
and the case must be remanded to the trial court to reinstate
the $5,500 monthly payments awarded in arbitration.
Affirmed in part, reversed in part, and remanded.
1. A
RBITRATION —
D
OMESTIC
R
ELATIONS
A
RBITRATION
A
CT —
A
RBITRATION
A
WARDS —
V
ACATION OF
A
RBITRATION
A
WARDS.
A court must vacate an arbitration award when a party applies
under MCL 600.5081(2) if the award was procured by corruption,
fraud, or other undue means; if there was evident partiality by an
arbitrator appointed as a neutral, corruption of an arbitrator, or
misconduct prejudicing a party’s rights; if the arbitrator exceeded
his or her powers; or if the arbitrator refused to postpone the
hearing on a showing of sufficient cause, refused to hear evidence
material to the controversy, or otherwise conducted the hearing to
prejudice substantially a party’s rights; in order for a court to
2010] C
IPRIANO V
C
IPRIANO
363
vacate an arbitration award because of an error of law, the error
must have been so substantial that, but for the error, the award
would have been substantially different.
2. D
IVORCE —
S
POUSAL
S
UPPORT —
R
ETROACTIVE
M
ODIFICATION OF
S
POUSAL
S
UPPORT
.
Retroactive modification of a spousal-support order is a matter
within the discretion of the trial court; retroactive modification is
permissible from the date that notice of the petition for modifica-
tion was given to the payer or recipient of support; the modifica-
tion may not take effect before the time the petition to modify was
filed (MCL 552.603[2]).
3. A
RBITRATION —
L
AW-OF-THE
-C
ASE
D
OCTRINE
.
The law-of-the-case doctrine does not apply to arbitration proceed-
ings.
4. A
RBITRATION —
M
ODIFICATION OF
A
RBITRATION
A
WARDS —
C
OMPLAINTS TO
M
ODIFY
A
RBITRATION
A
WARDS
.
A party seeking modification of an arbitration award must file a
complaint to modify the award within 21 days after the date of the
award if there is no pending action between the parties (MCR
3.602[K][1]).
5. A
RBITRATION —
M
ODIFICATION OF
A
RBITRATION
A
WARDS
.
A court must modify or correct an arbitration award, on motion
made within 91 days after the date of the award, if (a) there is an
evident miscalculation of figures or an evident mistake in the
description of a person, a thing, or property referred to in the
award, (b) the arbitrator awarded on a matter not submitted to the
arbitrator and the award may be corrected without affecting the
merits of the decision on the issues submitted, or (c) the award is
imperfect in a matter of form, not affecting the merits of the
controversy (MCR 3.602[K][2]).
Allan W. Ben, P.C. (by Allan W. Ben and Joshua L.
Ben), for Mary Cipriano.
Musilli Brennan Associates, PLLC (by John F. Bren-
nan), for Salvatore Cipriano.
Before: S
AWYER
,P.J., and B
ANDSTRA
and W
HITBECK
,JJ.
364 289 M
ICH
A
PP
361 [Aug
P
ER
C
URIAM
. In this divorce case, plaintiff, Mary
Cipriano, appeals two orders of the Macomb Circuit
Court addressing an arbitrator’s award of property and
spousal support. In Docket No. 291377, Mary Cipriano
appeals by delayed application for leave to appeal
granted a December 4, 2008, order of the circuit court
denying her motion to vacate, modify, or correct the
arbitration award and confirming the arbitrator’s
award. In Docket No. 292806, Mary Cipriano appeals by
leave granted a June 15, 2009, order of the circuit court
reducing the amount of the monthly payment that the
arbitrator ordered defendant, Salvatore Cipriano, to
pay Mary Cipriano from $5,500 to $3,870, while not
changing the total amount awarded by the arbitrator.
Because the procedures used during arbitration and the
final arbitration award did not violate the parties’
arbitration agreement, we affirm the circuit court’s
order confirming the arbitrator’s award. But because
Salvatore Cipriano and the circuit court did not provide
any grounds under MCR 3.602(K)(2) to modify the
arbitration award, we reverse the circuit court’s order
reducing Salvatore Cipriano’s installment payments
and remand for the court to reinstate the $5,500
monthly payments.
I. BASIC FACTS
In November 1993, the trial court issued an order for
divorce, awarding 55 percent of the marital property to
Mary Cipriano and $66,000 a year to her in periodic
alimony that was to be paid in $5,500 monthly install-
ments. After several appeals in this Court and years of
further proceedings below, this Court determined that
Mary Cipriano was also entitled to 55 percent, plus
interest, of the increase in the value of Salvatore
Cipriano’s interest in Peter Cipriano Enterprises (PCE)
2010] C
IPRIANO V
C
IPRIANO
365
during the marriage.
1
In 2006, the trial court issued an
amended supplemental judgment, ordering Salvatore
Cipriano to pay Mary Cipriano $485,155 for her interest
in PCE and the amount of interest that had accumu-
lated on the asset from June 1993 to September 30,
2006, which was $456,132. In May 2007, Salvatore
Cipriano moved to amend the spousal support or the
property award or to allow him to make installment
payments. The trial court referred the matter to the
friend of the court for an evidentiary hearing to deter-
mine whether the additional property award to Mary
Cipriano would necessitate an adjustment in the ali-
mony “all the way back to the beginning.”
Rather than hold a hearing with the friend of the
court, the parties agreed to submit to binding arbitra-
tion. In September 2008, the arbitrator’s final award
ordered Salvatore Cipriano to pay $485,155 (Mary
Cipriano’s interest in PCE) in installments, without
interest on the award, and terminated his alimony
obligation effective May 2007. The arbitrator granted
credit for Salvatore Cipriano’s alimony payments from
May 2007 through September 2008, and determined
that Cipriano would continue to pay $5,500 a month
until he paid an additional $391,655 to satisfy the
$485,155 award.
Mary Cipriano moved to vacate, modify, or correct
the arbitration award, arguing that the arbitrator failed
to follow the law-of-the-case doctrine, impermissibly
modified spousal support retroactively, and altered the
award after ex parte communications from Salvatore
Cipriano. In December 2008, the trial court entered an
order confirming the arbitrator’s award and denying
Mary Cipriano’s motions. That order is the subject of
1
Cipriano v Cipriano, unpublished opinion per curiam of the Court of
Appeals, issued July 25, 2006 (Docket No. 259818),p2(Cipriano III).
366 289 M
ICH
A
PP
361 [Aug
the first appeal of these consolidated appeals. In June
2009, the trial court held a hearing on Salvatore Cipri-
ano’s motion to reduce the monthly payments. The trial
court reduced his monthly payments to $3,870, but did
not alter the total amount awarded. That order is the
subject of the second appeal of these consolidated ap-
peals.
II. OVERVIEW
Domestic-relations arbitration is governed by the
specific statutory scheme set forth in the domestic
relations arbitration act (DRAA).
2
Under the DRAA,
parties to a domestic-relations proceeding may stipulate
to submit their disputed issues to binding arbitration,
including issues of property division, alimony, child
support, custody, and visitation.
3
The purpose of arbi-
tration is to avoid protracted litigation. Because an
arbitration agreement narrows a party’s legal right to
pursue a claim in a particular forum,
4
the judiciary will
enforce an arbitration agreement to defeat an otherwise
valid claim.
5
The DRAA delineates the circumstances in which a
court must vacate an arbitration award. MCL
600.5081(2) provides:
If a party applies under this section, the court shall
vacate an award under any of the following circumstances:
(a) The award was procured by corruption, fraud, or
other undue means.
2
MCL 600.5070 et seq.
3
MCL 600.5071; Harvey v Harvey, 257 Mich App 278, 284; 668 NW2d
187 (2003).
4
Hendrickson v Moghissi, 158 Mich App 290, 298; 404 NW2d 728
(1987).
5
NuVision v Dunscombe, 163 Mich App 674, 684; 415 NW2d 234
(1987).
2010] C
IPRIANO V
C
IPRIANO
367
(b) There was evident partiality by an arbitrator ap-
pointed as a neutral, corruption of an arbitrator, or mis-
conduct prejudicing a party’s rights.
(c) The arbitrator exceeded his or her powers.
(d) The arbitrator refused to postpone the hearing on a
showing of sufficient cause, refused to hear evidence ma-
terial to the controversy, or otherwise conducted the hear-
ing to prejudice substantially a party’s rights.
In order for a court to vacate an arbitration award
because of an error of law, the error must have been so
substantial that, but for the error, the award would
have been substantially different.
6
III. EX PARTE COMMUNICATION
A. STANDARD OF REVIEW
Mary Cipriano argues that the trial court should
have vacated the arbitrator’s award because the arbi-
trator received communications from Salvatore Cipri-
ano after the arbitration hearing and before the arbi-
trator’s award. This Court reviews de novo a circuit
court’s decision to enforce, vacate, or modify an arbi-
tration award.
7
B. ANALYSIS
Mary Cipriano does not support her argument that the
trial court should have vacated the arbitrator’s award
because of Salvatore Cipriano’s ex parte contacts with the
arbitrator by specifying under which subdivision of MCL
600.5081(2) the award should have been vacated. On July
28, 2008, the arbitrator sent the parties an excerpt of his
6
Washington v Washington, 283 Mich App 667, 672; 770 NW2d 908
(2009).
7
Bayati v Bayati, 264 Mich App 595, 597-598; 691 NW2d 812 (2004).
368 289 M
ICH
A
PP
361 [Aug
findings and awards in an attempt to encourage them to
reach a settlement. The excerpt of the arbitrator’s awards
indicated that Salvatore Cipriano would pay a cash lump
sum of $485,155 and that his spousal support obligation
would be reduced from $5,500 a month to $250 a month
effective October 3, 2008. On August 6, 2008, the arbitra-
tor sent a letter to Salvatore Cipriano’s attorney, and
copies to the trial judge and Mary Cipriano’s counsel,
indicating that he had received a recent financial report
from Salvatore Cipriano with the words “Don’t kill the
goose” handwritten on the cover. According to the letter,
Salvatore Cipriano had also placed a three- to five-minute
phone call to the arbitrator, essentially stating that he
could not borrow one-half million dollars as the excerpt of
the arbitrator’s award provided. The arbitrator stated
that he listened, without response, to Salvatore Cipriano
and characterized his actions as disconcerting and inap-
propriate. On September 23, 2008, the arbitrator issued
his final award of $485,155 to Mary Cipriano, but made it
payable in monthly payments of $5,500 that began in May
2007, which is the date that the arbitrator determined
that spousal support payments should stop.
Citing Hewitt v Village of Reed City,
8
Mary Cipriano
argues that the law is “very clear” that “[a]n arbitra-
tor’s ex parte communications renders an arbitration
award void regardless of whether it affected the arbi-
trator’s partiality.” In Hewitt, the Michigan Supreme
Court did note:
The rule is very strict in excluding any communication
to an arbitrator, made ex parte after the case is submitted;
and when such communication, which may affect the
result, is made, it is not usual to enter into an inquiry as to
whether the arbitrator was in fact influenced by it or not.
[
9
]
8
Hewitt v Village of Reed City, 124 Mich 6; 82 NW 616 (1900).
9
Id.at8.
2010] C
IPRIANO V
C
IPRIANO
369
The Court went on to state, “[I]n laying down a rule
easy to follow, and which will afford protection in all
cases,... we think the safer rule is for the court to
enter into no examination as to whether the arbitrator
is in any way influenced by ex parte communications.”
10
However, in that case, the Court was considering an ex
parte communication that was contrary to the parties’
express stipulation to exclude all legal arguments or
briefs.
11
The Court concluded, “with some reluctance,”
that the ex parte communication was a violation of the
spirit of the terms of the parties’ agreement.
12
Here, the
parties made no provision in their arbitration agree-
ment regarding ex parte communications, and the ex
parte contacts did not involve legal argument.
Mary Cipriano suggests that there is a rule that ex
parte contact with the arbitrator must result in the
award’s being vacated. However, the cases she cites in
support of such a rule were based on ex parte contact
that violated agreements by the parties regarding the
procedures for their arbitration. Further, as Detroit v
Detroit Lieutenants’ & Sergeants’ Ass’n
13
alludes, it
would be difficult to reconcile imposing a bright-line
rule that requires the vacation of an arbitrator’s award
in these circumstances when, conversely, the standard
of review provides that an arbitration award may not be
vacated unless an error was so substantial that the
award would have been substantially different without
the error.
14
10
Id. at 8-9.
11
Id.at8.
12
Id.
13
Detroit v Detroit Lieutenants’ & Sergeants’ Ass’n, unpublished
opinion per curiam of the Court of Appeals, issued February 17, 2005
(Docket No. 250424), pp 2-3 (M
URRAY
,P.J., concurring).
14
Washington, 283 Mich App at 672.
370 289 M
ICH
A
PP
361 [Aug
To resolve Mary Cipriano’s argument regarding the
results of ex parte contact, the definitive question is not
whether there is a bright-line rule but, rather, whether
the ex parte contact violated the parties’ arbitration
agreement. The DRAA requires that parties first sign
an agreement for binding arbitration delineating the
powers and duties of the arbitrator.
15
Rather than
employ the formality required in courts, parties in
arbitration are able to shape the parameters and pro-
cedures of the proceeding.
16
The DRAA contemplates
that the parties will determine how they will produce
the information necessary to resolve their dispute.
17
The DRAA does not impose procedural formalities that
restrict this freedom.
18
In Miller v Miller, the Supreme Court ruled that it
was permissible for an arbitrator to gather information
by shuttling between the parties located in separate
rooms, questioning and listening to them, and review-
ing voluminous material the defendant submitted three
days after the hearing, before the arbitrator modified
the award and issued the final binding award.
19
Because
the DRAA allowed the parties to determine the proce-
dures to be used in their arbitration and the parties had
specifically agreed to allow the arbitrator to conduct the
hearing in two separate rooms, the Supreme Court
reversed the judgment of the Court of Appeals and
reinstated the arbitration award.
20
This case is similar to Miller because information
was obtained through contact with only one party and
15
MCL 600.5072(1)(e).
16
Miller v Miller, 474 Mich 27, 32; 707 NW2d 341 (2005).
17
Id.
18
Id.
19
Id. at 29, 35.
20
Id. at 33, 35.
2010] C
IPRIANO V
C
IPRIANO
371
the arbitrator modified the award after receiving addi-
tional information from that party. However, the par-
ties’ arbitration agreement here made no mention of ex
parte communication with the arbitrator. The only
mention of the arbitration procedure was, “The format
for the arbitration shall be determined by the arbitra-
tor[s], with the objective of expediting the hearing.”
Mary Cipriano has not shown that the arbitrator ex-
ceeded his powers, according to the arbitration agree-
ment, by receiving Salvatore Cipriano’s ex parte con-
tacts.
21
According to the parties’ agreement, the
arbitrator retained the discretion to receive information
from Salvatore Cipriano in order to expedite the pro-
ceedings.
Further, Mary Cipriano has not shown that any
misconduct of the arbitrator prejudiced her rights or
that the arbitration award was procured by undue
means.
22
A failure to disclose facts that might reason-
ably lead to an appearance of bias constitutes grounds
for vacating an arbitration award.
23
While Salvatore
Cipriano’s conduct was improper, the arbitrator re-
sponded promptly and decisively to disclose the contacts
and prevent further contact. The arbitrator adjusted his
planned award after Salvatore Cipriano’s contacts, but
explained that he was in the process of “reconsideration
of the overall equity and realistic effectuation of the
excerpt terms” a few days before receiving Salvatore
Cipriano’s communications.
Additionally, the arbitrator was already in possession
21
MCL 600.5081(2)(c); see Miller, 474 Mich at 30 (stating that an
arbitrator exceeds his or her powers if the arbitrator acts beyond the
material terms of the contract from which the arbitrator derives his or
her authority).
22
MCL 600.5081(2)(a),(b), and (d); Miller, 474 Mich at 30-31.
23
Albion Pub Sch v Albion Ed Ass’n/MEA/NEA, 130 Mich App 698,
701; 344 NW2d 55 (1983).
372 289 M
ICH
A
PP
361 [Aug
of annual financial reports from 2005, 2006, and 2007
when Salvatore Cipriano supplied him with the 2008
report. The arbitrator’s adjustment of his award from a
lump sum to installment payments and reduction of
monthly spousal support from $5,500 to zero rather
than $250 to begin in May 2007 rather than October
2008 did not result in a substantial difference in the
arbitration award by reason of a substantial error of
law.
24
Both the preliminary award detailed in the ex-
cerpt and the final award greatly reduced the amount of
spousal support, and the final award did not change the
total amount of the property award. Therefore, the trial
court did not err by confirming the arbitrator’s award
despite Salvatore Cipriano’s ex parte contacts.
IV. SPOUSAL-SUPPORT MODIFICATION
A. STANDARD OF REVIEW
Mary Cipriano argues that the trial court should
have vacated the arbitrator’s award because it was an
error of law to modify retroactively the spousal-support
payments beginning in May 2007 and to convert
spousal-support payments that had been made from
May 2007 to October 2008 into installment payments
for the property award. This Court reviews de novo a
circuit court’s decision to enforce, vacate, or modify an
arbitration award.
25
B. ANALYSIS
An arbitrator exceeds his or her powers if the arbi-
trator acts in contravention of controlling law.
26
Here,
24
Washington, 283 Mich App at 672.
25
Bayati, 264 Mich App at 597-598.
26
Miller, 474 Mich at 30.
2010] C
IPRIANO V
C
IPRIANO
373
the arbitrator’s award determined that monthly $5,500
payments to Mary Cipriano throughout the pendency of
the arbitration process, from May 2007 to October
2008, were installment payments for the ultimate prop-
erty award and that Salvatore Cipriano’s spousal-
support obligation was eliminated. Mary Cipriano con-
tends that this award was an impermissible retroactive
modification of spousal support according to MCL
552.603(2). MCL 552.603(2) provides:
Except as otherwise provided in this section, a sup-
port order that is part of a judgment or is an order in a
domestic relations matter is a judgment on and after the
date the support amount is due as prescribed in [MCL
552.605c], with the full force, effect, and attributes of a
judgment of this state, and is not, on and after the date
it is due, subject to retroactive modification. No addi-
tional action is necessary to reduce support to a final
judgment. Retroactive modification of a support pay-
ment due under a support order is permissible with
respect to a period during which there is pending a
petition for modification, but only from the date that
notice of the petition was given to the payer or recipient
of support.
Mary Cipriano argues that the clear language of
MCL 552.603(2) prohibits retroactive modification of
spousal support. However, the clear language of MCL
552.603(2) also allows for the retroactive modifica-
tion of support orders from the date of notice of a
petition for modification of support. The retroactivity
of a modification is a matter within the court’s
discretion; however, the modification may not take
effect before the time the petition to modify was
filed.
27
Salvatore Cipriano moved to modify the spousal
support or the property award or to allow him to make
installment payments in May 2007. Therefore, the
27
Varga v Varga, 173 Mich App 411, 417; 434 NW2d 152 (1988).
374 289 M
ICH
A
PP
361 [Aug
arbitrator’s award eliminating spousal support retroac-
tively to May 2007 and converting the $5,500 payments
to installment payments to satisfy the property award
did not violate MCL 552.603(2).
V. LAW-OF-THE-CASE DOCTRINE
A. STANDARD OF REVIEW
Mary Cipriano contends that the arbitrator exceeded
his powers by issuing an award in contravention of
controlling law because the award violated the law-of-
the-case doctrine. This Court reviews de novo a circuit
court’s decision to enforce, vacate, or modify an arbi-
tration award.
28
B. ANALYSIS
The law-of-the-case doctrine holds that an appellate
court’s ruling on a particular issue binds the appellate
court and all lower tribunals with respect to that
issue.
29
Mary Cipriano does not specify which award of
the arbitrator violated the appellate decisions in the
case, although it appears she is contesting modification
of the spousal-support award in light of the doctrine.
This Court previously upheld the trial court’s award of
$66,000 a year in alimony.
30
Additionally, the arbitra-
tor’s award did not provide for interest on the $485,155
property award, which was contrary to this Court’s
holding in Cipriano III.
However, the law-of-the-case doctrine does not apply
to arbitration proceedings. The law-of-the-case doctrine
binds the appellate court and all lower tribunals with
28
Bayati, 264 Mich App at 597-598.
29
Ashker v Ford Motor Co, 245 Mich App 9, 13; 627 NW2d 1 (2001).
30
The arbitration award extinguished this obligation.
2010] C
IPRIANO V
C
IPRIANO
375
respect to issues that the appellate court decides.
31
A
“tribunal” is “[a] court or other adjudicatory body.”
32
Arbitration is an alternative to resolving a dispute with
adjudication or litigation.
33
The purpose of arbitration
is to avoid protracted litigation, and an agreement to
arbitrate will be judicially enforced to defeat an other-
wise valid claim.
34
The fact that the relief granted in an
arbitration award could not have been granted by a trial
court is not grounds for vacating the award.
35
The
reason for the law-of-the-case rule is the need for
finality of judgment in litigation, and, in this case, the
parties agreed that arbitration was to provide a finality
of judgment.
36
Further, this Court has consistently held that arbi-
tration is a matter of contract and that the arbitration
agreement is the agreement that dictates the authority
of the arbitrators.
37
The DRAA requires that the parties
sign an agreement for binding arbitration delineating
the powers of the arbitrator. The act also contemplates
that the parties will discuss the scope of the issues with
the arbitrator.
38
Here, the parties agreed that the arbi-
trator would decide the “effect of the appellate court
decisions on the equities of this matter regarding spou-
sal support ordered and previously paid during the
pendency of the appeals process.”
31
Ashker, 245 Mich App at 13.
32
Black’s Law Dictionary (8th ed).
33
MCL 600.5001(1).
34
NuVision, 163 Mich App at 684.
35
MCL 600.5081(3).
36
Reeves v Cincinnati, Inc (After Remand), 208 Mich App 556, 560; 528
NW2d 787 (1995).
37
Miller, 474 Mich at 32, quoting Rowry v Univ of Mich, 441 Mich 1, 10;
490 NW2d 305 (1992).
38
MCL 600.5072(1)(e); Miller, 474 Mich at 32.
376 289 M
ICH
A
PP
361 [Aug
The arbitrator’s award terminating spousal support
at the time of Mary Cipriano’s receipt of an additional
property award was within the parameters of the par-
ties’ agreement. Mary Cipriano agreed that the arbitra-
tor could consider the fairness of spousal support paid
in light of this Court’s determination that she was
entitled to an additional property award. The arbitra-
tor’s award directly addressed this scope of authority.
Therefore, we uphold the arbitration award because
Mary Cipriano has not demonstrated that the arbitra-
tor exceeded the powers that the parties’ agreement
granted to him. There was no error of law evident on
the face of the award that was so substantial that, but
for the error, the award would have been substantially
different.
39
VI. MODIFICATION OF INSTALLMENT PAYMENTS
A. STANDARD OF REVIEW
Mary Cipriano argues that the trial court impermis-
sibly modified the arbitration award by reducing the
monthly amount that the arbitrator awarded. This
Court reviews de novo a circuit court’s decision to
enforce, vacate, or modify an arbitration award.
40
B. ANALYSIS
More than nine months after the arbitration award,
the trial court, on Salvatore Cipriano’s motion, reduced
the monthly $5,500 payments to Mary Cipriano to
$3,870 a month. Salvatore Cipriano argued that the
trial court had the equitable power to modify the
installment payments pursuant to MCL 600.6221 and
39
Washington, 283 Mich App at 672.
40
Bayati, 264 Mich App at 597-598.
2010] C
IPRIANO V
C
IPRIANO
377
that economic circumstances necessitated the modifica-
tion.
41
However, MCR 3.602 governs the procedure for
modifying arbitration awards. Because there was no
pending action between these parties, MCR 3.602(K)(1)
required that a complaint to modify the arbitration
award be filed within 21 days after the date of the
arbitration award. Salvatore Cipriano moved to reduce
the monthly payments awarded by arbitration several
months after the arbitration award.
Additionally, MCR 3.602(K)(2) provides the grounds
for modification of an arbitration award:
On motion made within 91 days after the date of the
award, the court shall modify or correct the award if:
(a) there is an evident miscalculation of figures or an
evident mistake in the description of a person, a thing, or
property referred to in the award;
(b) the arbitrator has awarded on a matter not submit-
ted to the arbitrator, and the award may be corrected
without affecting the merits of the decision on the issues
submitted; or
(c) the award is imperfect in a matter of form, not
affecting the merits of the controversy.
Salvatore Cipriano asked the trial court to invoke its
equitable powers in order to modify the monthly pay-
ments. Yet the court gave no grounds as a reason for
modifying the award. Significantly, neither Salvatore
Cipriano nor the trial court referred to any of the
provisions of MCR 3.602(K)(2) to justify modification of
the award. Even though the trial court did not change
the total amount of the property award, the matter had
been submitted to binding arbitration, and the arbitra-
41
MCL 600.6221 provides, “The judge may, on motion of either party,
following due notice to the other, alter the amounts and times of payment
of the installments from time to time when he may deem it advisable and
fair.”
378 289 M
ICH
A
PP
361 [Aug
tor specifically awarded $5,500 in monthly payments to
Mary Cipriano. The trial court erred by modifying the
award of the arbitrator without a timely complaint and
without reference to MCR 3.602(K)(2). We reverse this
order of the trial court and remand the case to the trial
court to reinstate the $5,500 monthly payments that
were awarded in arbitration.
Affirmed in part, reversed in part, and remanded. We
do not retain jurisdiction.
2010] C
IPRIANO V
C
IPRIANO
379
DAWE v DR REUVEN BAR-LEVAV & ASSOCIATES, PC
(ON REMAND)
Docket No. 269147. Submitted May 11, 2010, at Lansing. Decided August
12, 2010, at 9:00 a.m.
Elizabeth Dawe brought an action in the Oakland Circuit Court
against Dr. Reuven Bar-Levav & Associates, P.C., the estate of
Reuven Bar-Levav, M.D., and Leora Bar-Levav, M.D., after
Joseph Brooks, defendants’ former psychiatric patient, shot
plaintiff and others during a group-therapy session. Dawe
alleged that defendants committed common-law medical mal-
practice by negligently placing Brooks in her therapy group
when they knew or should have known that he was not a
suitable candidate for group therapy. Dawe also alleged that
defendants were liable under MCL 330.1946 because they had
failed to warn her that Brooks had made threatening state-
ments to defendants. Defendants moved for summary disposi-
tion, which the court, Charles W. Simon, J., denied. The court
also denied defendants’ later motion for a partial directed
verdict. The jury returned a verdict in Dawe’s favor. The court
subsequently denied defendants’ motions for judgment notwith-
standing the verdict and for a new trial. Defendants appealed,
and Dawe cross-appealed. The Court of Appeals, W
HITBECK
, C.J.,
and K. F. K
ELLY
,J.(S
MOLENSKI
, P.J., dissenting), reversed with
regard to the trial court’s denial of the motion for a directed
verdict, vacated the judgment, and remanded the case for entry
of an order dismissing Dawe’s claims. The Court of Appeals
reasoned that MCL 330.1946 limited a mental-health profes-
sional’s duty to warn and protect third parties and, therefore,
abrogated common-law claims for failure to warn or protect.
The Court of Appeals further held that Dawe had failed as a
matter of law to establish her claim that defendants violated
MCL 330.1946. 279 Mich App 552 (2008). Dawe sought leave to
appeal, and defendants sought leave to cross-appeal. The Su-
preme Court granted Dawe’s application and reversed, holding
that MCL 330.1946 did not abrogate a plaintiff-patient’s
common-law medical malpractice claim when the mental-health
professional’s separate duty arising out of his or her special
relationship with the patient would apply and no threat as
380 289 M
ICH
A
PP
380 [Aug
described in the statute had been communicated to the mental-
health professional. In lieu of granting defendants’ application
for leave to cross-appeal, the Supreme Court remanded the case
to the Court of Appeals for consideration of the remaining
issues raised on appeal in that court. 485 Mich 20 (2010).
On remand, the Court of Appeals held:
1. Defendants had a psychiatrist-patient relationship with
Dawe that imposed on them duties to protect her from harm by a
third party and to treat her within the standard of care applicable
to medical professionals. Because Dawe was among the class of
persons who could foreseeably be harmed by defendants’ decision
to place Brooks in group therapy, defendants owed Dawe a duty to
take reasonable precautions to ensure that patients assigned to
the group were suitable for group therapy. A reasonable jury could
have concluded that defendants proximately caused Dawe’s injury
by placing Brooks in the therapy group in breach of the applicable
standard of care. The trial court did not err by denying defendants’
motion for judgment notwithstanding the verdict.
2. The trial court did not err by allowing Dawe to present
evidence that permitted an inference that defendants failed to
properly treat Brooks because the evidence was relevant to Dawe’s
theory of the case.
3. The trial court’s erroneous instructions to the jury, which
intertwined Dawe’s statutory and common-law claims, did not
unfairly prejudice defendants in light of the strong evidence
supporting Dawe’s common-law claim, which made it unlikely that
the jury relied on a purported violation of MCL 330.1946 to
conclude that defendants breached the standard of care owed to
Dawe.
4. The verdict against Leora Bar-Levav was not against the
great weight of the evidence. There was evidence from which a
reasonable jury could have concluded that she participated to some
extent in placing Brooks in group therapy and breached the
standard of care by failing to perform additional assessments of
Brooks and his suitability for group therapy.
5. MCL 600.1483 caps the amount of noneconomic damages a
plaintiff may receive, but the cap is adjusted annually for inflation.
The trial court correctly applied the noneconomic damages cap in
effect on the date that the judgment for Dawe was entered rather
than the cap in effect when she filed suit.
6. The trial court did not abuse its discretion by refusing to
admit into evidence a manuscript written by Brooks given that the
manuscript arrived at defendants’ office several months after
2010] D
AWE V
B
AR
-L
EVAV &
A
SSOC
(O
N
R
EMAND
) 381
defendants’ treatment of Brooks had ended. Because there was no
evidence that the manuscript was written while Brooks was in
defendants’ care, it was not relevant to defendants’ decision to
place Brooks in group therapy. Moreover, the limited references to
the manuscript that Dawe’s counsel made during the trial were
minimally prejudicial and could not have had a controlling influ-
ence on the verdict.
7. The trial court erred when it concluded that Dawe was only
entitled to interest on a portion of the past noneconomic damages
found by the jury. The jury awarded Dawe past noneconomic
damages and future noneconomic damages in excess of the appli-
cable cap under MCL 600.1483. MCL 600.6013(1) excludes pre-
judgment interest on future noneconomic damages. The trial court
determined that Dawe was entitled to prejudgment interest on the
portion of her capped damages equal to the ratio of past noneco-
nomic damages to future noneconomic damages found by the jury.
MCL 600.1483(1), however, must be construed as requiring the
reduction of future noneconomic damages before past noneco-
nomic damages. When a jury finds that a plaintiff has past
noneconomic damages in excess of the applicable cap, the plaintiff
is entitled to prejudgment interest on the full amount of the
capped award under MCL 600.6013(1).
Award of prejudgment interest vacated and remanded for
recalculation of interest; affirmed in all other respects.
1. N
EGLIGENCE —
M
ENTAL
-H
EALTH
P
ROFESSIONALS —
P
ATIENTS —
C
OMMON
-L
AW
D
UTIES TO
P
ATIENTS —
D
UTY TO
W
ARN OR
P
ROTECT
P
ATIENTS
.
A psychiatrist-patient relationship is a special relationship that
imposes a duty on the psychiatrist to protect the patient from
harm by a third party and to treat the patient within the
standard of care applicable to medical professionals; when the
patient is among the class of persons who could foreseeably be
harmed by the psychiatrist’s decision to place a third party in
group therapy, the psychiatrist owes the patient a duty to take
reasonable precautions to ensure that the third party is suitable
for group therapy.
2. D
AMAGES —
I
NTEREST —
M
EDICAL
M
ALPRACTICE —
P
AST
N
ONECONOMIC
D
AM-
AGES —
F
UTURE
N
ONECONOMIC
D
AMAGES —
C
AP ON
N
ONECONOMIC
D
AM-
AGES
.
A plaintiff is entitled to prejudgment interest on an award for past
noneconomic damages, not on an award for future noneconomic
damages; when the jury finds that the plaintiff has past
noneconomic damages in excess of the applicable cap on non-
economic damages in a medical malpractice action, the plaintiff
382 289 M
ICH
A
PP
380 [Aug
is entitled to prejudgment interest on the full amount of the
capped award, regardless of whether the jury also awarded the
plaintiff future noneconomic damages; if the past noneconomic
damages do not exceed the cap, the plaintiff is entitled to
interest on the actual amount of past noneconomic damages
awarded (MCL 600.1483, MCL 600.6013).
Mark Granzotto, P. C . (by Mark Granzotto), and Haas
& Goldstein, P. C . (by Justin Haas), for plaintiff.
Collins, Einhorn, Farrell & Ulanoff, P.C. (by Noreen
L. Slank), for defendants.
ON REMAND
Before: W
HITBECK
,P.J., and F
ITZGERALD
and K. F.
K
ELLY
,JJ.
P
ER
C
URIAM
. This medical malpractice action returns
to this Court on remand from the Michigan Supreme
Court
1
with the direction that we evaluate the remain-
ing issues raised in defendants’ original appeal and
plaintiff’s cross-appeal.
2
In the original appeal, defen-
dants, Dr. Reuven Bar-Levav & Associates, the estate of
Dr. Reuven Bar-Levav, and Dr. Leora Bar-Levav, ap-
pealed as of right the jury verdict in favor of plaintiff,
Elizabeth Dawe, on various grounds. On cross-appeal,
Dawe appealed the trial court’s calculation of prejudg-
ment interest on the jury’s award and the trial court’s
refusal to permit the admission of certain evidence. We
vacate the award of prejudgment interest and remand
for recalculation of the interest consistently with this
opinion. In all other respects, we affirm.
1
Dawe v Dr Reuven Bar-Levav & Assoc, PC, 485 Mich 20; 780 NW2d
272 (2010).
2
This case was originally submitted to Judges S
MOLENSKI
,W
HITBECK
,
and K. F. K
ELLY
. Judge F
ITZGERALD
has been substituted as a panel
member for these proceedings on remand.
2010] D
AWE V
B
AR
-L
EVAV &
A
SSOC
(O
N
R
EMAND
) 383
I. BASIC FACTS
The basic facts were set out in our previous opinion
3
as follows:
This medical malpractice action arises out of a shooting
incident at defendants’ psychiatric office where Dawe re-
ceived treatment. On June 11, 1999, Joseph Brooks, who
was a former patient of Dr. [Reuven] Bar-Levav,
1
came to
the office, drew a handgun, and shot and killed Dr. Bar-
Levav. Brooks then proceeded to the back of the office and
fired into Dawe’s group therapy room. Brooks killed one
patient and wounded others, including Dawe. After firing
dozens of rounds into the room, Brooks committed suicide.
Dawe sued defendants, alleging that Brooks made
threatening statements to defendants in which he indi-
cated that he “fantasized about murdering” and that he
demonstrated his ability to carry out threats by coming to
defendants’ office with a handgun. Dawe further alleged
that a “manuscript” that Brooks delivered to defendants in
June 1999 “could be reasonably construed as a threat of
violence against other members who participated in his
group therapy sessions, including [Dawe].” Accordingly,
Dawe alleged that defendants were liable under two theo-
ries: statutory liability for failure to warn under MCL
330.1946, and common-law medical malpractice. With re-
spect to her common-law medical malpractice claim, Dawe
alleged that defendants breached their applicable standard
of care, which included “informing the police, warning
patients or others, and taking reasonable precautions for
the protection of patients when a doctor or health care
provider has information which could reasonably be con-
strued as a threat of violence against a patient or others,”
when defendants failed to warn Dawe and the police of
Brooks’s “threats” or take reasonable steps to protect
Dawe. Dawe also filed an affidavit of Meritorious Claim in
support of her complaint.
2
3
Dawe v Dr Reuvan Bar-Levav & Assoc, PC, 279 Mich App 552, 554-557;
761 NW2d 318 (2008), rev’d 485 Mich 20 (2010). We note that Dr. Reuven
Bar-Levav’s first name was misspelled in the previous opinion.
384 289 M
ICH
A
PP
380 [Aug
Defendants moved for summary disposition under MCR
2.116(C)(8) and (C)(10), arguing that there was no evidence
that Brooks expressed a threat to defendants about Dawe
specifically and, therefore, defendants owed no duty to
warn or protect Dawe under MCL 330.1946. Defendants
also noted that Dawe was not alleging malpractice with
regard to her individual care; rather, her only allegation
was a failure to fulfill the duty to warn, which was derived
solely from the statute.
In response, Dawe argued that it was significant that
she was defendants’ patient rather than merely a “third
person” to whom the statute applied. Dawe argued that her
special physician-patient relationship with defendants also
required them to treat her within the applicable standard
of care stated in her complaint. In other words, Dawe
argued that defendants owed both statutory and common-
law duties. Dawe further argued that she had presented a
genuine issue of material fact that defendants violated that
standard of care. In support of her motion, Dawe submitted
the affidavit of Dr. Mark Fettman, Dawe’s psychiatric
expert, who attested that a psychiatrist has a duty to take
reasonable precautions for the protection of patients. Ac-
cording to Dr. Fettman, included within this duty is the
requirement that the psychiatrist assess a patient to deter-
mine if the patient is a suitable candidate for group therapy
before placing the patient in a group. Dr. Fettman averred
that once a patient has been placed in group therapy, the
psychiatrist has a further duty to continually assess the
patient to ensure that the patient remains suitable for
group therapy. Dr. Fettman attested that defendants vio-
lated the applicable standard of care by placing Brooks in a
group session with Dawe and other patients.
The trial court ruled that summary disposition was not
appropriate because Dawe had stated a prima facie case
and there were genuine issues of material fact regarding
whether defendants violated MCL 330.1946 or the appli-
cable standard of care. Accordingly, the trial court denied
defendants’ motion.
At trial, Dawe argued that defendants breached their duty
to warn and that defendants breached their duty to provide
2010] D
AWE V
B
AR
-L
EVAV &
A
SSOC
(O
N
R
EMAND
) 385
Dawe with a safe clinical environment for her treatment.
Specifically, Dawe contended that defendants breached the
standard of care by placing Brooks in Dawe’s group therapy
sessions when they knew or should have known that Brooks
was a danger to the other group members.
After the close of Dawe’s proofs, defendants moved for a
partial directed verdict on Dawe’s claim of failure to warn
under MCL 330.1946, arguing that Dawe failed to establish
that Brooks communicated to defendants a threat of vio-
lence specifically against Dawe. Defendants also argued
that Dawe failed to present expert testimony concerning
the standard of care applicable under the statute; that is,
defendants noted that Dr. Fettman’s testimony applied
solely to defendants’ alleged duties when placing Dawe in
group therapy, not to defendants’ duty to warn. In re-
sponse, Dawe again argued that it was significant that she
was defendants’ patient, apparently on the basis that MCL
330.1946 did not even apply in cases where the victim was
a patient.
3
Nevertheless, the trial court denied the motion
on the ground that Dawe had stated a prima facie case
sufficient to survive a directed verdict.
After the six-day trial in September 2005, the jury
returned a verdict in favor of Dawe. Defendants moved for
a judgment notwithstanding the verdict (JNOV) and for a
new trial, raising several of the same issues now raised on
appeal; however, the trial court denied the motions. Defen-
dants now appeal.
______________________________________________________
1
Defendants discharged Brooks from their care on
March 19, 1999.
2
See MCL 600.2912d.
3
Dawe’s counsel specifically stated: “[T]his statute that
[defendants are] referring to is talking—it’s in establishing a
duty by someone that isn’t normally a patient. That doesn’t
exist here because Elizabeth Dawe was [a patient]....This
other statute is talking about if Elizabeth Dawe wasn’t a
patient[.]”
______________________________________________________
386 289 M
ICH
A
PP
380 [Aug
In their appeal, defendants argued: (1) that because the
record was devoid of evidence that Brooks communi-
cated to defendants a specific threat of physical violence
against Dawe, defendants had no duty to protect Dawe
from Brooks and Dawe’s claim under MCL 330.1946
failed as a matter of law, (2) that MCL 330.1946
preempted the common law and provided the only basis
for finding that defendants had a duty to warn or
protect Dawe, (3) that even if a common-law duty
survived the enactment of MCL 330.1946, defendants
had no duty in this case because Brooks’s actions were
unforeseeable, (4) that admission of irrelevant testi-
mony regarding Brooks’s own treatment confused the
jury and prejudiced defendants, (5) that the trial court’s
erroneous intertwining of Dawe’s statutory and
common-law claims contaminated the verdict, (6) that
Dawe’s lack of expert testimony required dismissal of
her statutory claim, (7) that the verdict against Dr.
Leora Bar-Levav was against the great weight of the
evidence, (8) that the mention of a manuscript written
by Brooks compromised the fairness of the trial, and (9)
that the trial court applied the incorrect noneconomic
damages cap. Dawe cross-appealed, arguing (1) that the
trial court erred when calculating prejudgment interest
and (2) that the trial court abused its discretion by
refusing to admit Brooks’s manuscript into evidence.
A majority of this Court (W
HITBECK
, C.J., and K. F.
K
ELLY
, J.) held that MCL 330.1946 abrogated a mental-
health professional’s common-law duty to warn or
protect third parties from dangerous patients. Accord-
ing to the majority, the statute also abrogated the
common-law duty to treat other patients within the
standard of care to the extent that that standard of care
required a mental-health professional to provide a safe
clinical environment for treatment. The majority held
that the term “third person,” as used in MCL 330.1946,
2010] D
AWE V
B
AR
-L
EVAV &
A
SSOC
(O
N
R
EMAND
) 387
refers to any person who is not the dangerous patient or
the mental-health professional, including the mental-
health professional’s other patients.
4
In sum, the ma-
jority concluded that the trial court erred by failing to
grant defendants a directed verdict because Dawe had
failed to present evidence from which a reasonable
fact-finder could have concluded that Brooks communi-
cated a threat of physical violence against Dawe to
defendants.
5
The majority reversed the trial court’s
denial of defendants’ motion for a directed verdict,
vacated the judgment against defendants, and re-
manded the matter for entry of an order dismissing
Dawe’s claims. The majority did not address defen-
dants’ remaining issues or those issues raised by Dawe
on cross-appeal.
6
In dissent, Judge S
MOLENSKI
concluded that MCL
330.1946 applies to patients who are “recipients,” as that
term is defined in MCL 330.1100c(12),
7
and because
Brooks was not a recipient, MCL 330.1946(1) did not
abrogate or modify defendants’ common-law duty to pro-
tect a third party from Brooks. Thus, Judge S
MOLENSKI
concluded that the statute did not abrogate or modify
Dawe’s common-law claim against defendants.
8
Dawe sought leave to appeal in the Michigan Su-
preme Court, and defendants sought leave to cross-
appeal. The Supreme Court reversed this Court’s deci-
sion, holding as follows:
4
Id. at 564-568.
5
Id. at 570-571.
6
Id. at 571.
7
A “recipient” is “an individual who receives mental health services
from the [Department of Community Health], a community mental
health services program, or a facility or from a provider that is under
contract with the department or a community mental health services
program.” MCL 330.1100c(12).
8
Dawe, 279 Mich App at 575-576 (S
MOLENSKI
,P.J., dissenting).
388 289 M
ICH
A
PP
380 [Aug
Although the Legislature partially abrogated a mental
health professional’s common-law duties, the language of
the statute expressly limits its own scope. The final sen-
tence of MCL 330.1946(1) states that “[e]xcept as provided
in this section, a mental health professional does not have
a duty to warn a third person of a threat as described in this
subsection or to protect the third person.” (Emphasis
added.) The type of threat described in subsection (1) is “a
threat of physical violence against a reasonably identifiable
third person....”MCL330.1946(1). Further, the patient
making the threat must have “the apparent intent and
ability to carry out that threat in the foreseeable future”
before a mental health professional’s duty under MCL
330.1946(1) is triggered. Therefore, MCL 330.1946(1) only
modified a mental health professional’s common-law duty
to warn or protect a third person when a “threat as
described in [MCL 330.1946(1)]” was communicated to the
mental health professional because the statute only places
a duty on mental health professionals to warn third per-
sons of or protect them from the danger presented by a
threat “as described” in MCL 330.1946(1). This statutory
duty only arises if three criteria are met: (1) a patient
makes a threat of physical violence, (2) the threat is against
a reasonably identifiable third person, and (3) the patient
has the apparent intent and ability to carry out the threat.
If these three criteria are not met, the mental health
professional’s duty under the statute is not triggered.
Thus, on its face, the statute does not completely abrogate
a mental health professional’s separate common-law spe-
cial relationship duty to protect his or her patients by
exercising reasonable care.
[
9
]
In lieu of granting defendants’ application for leave to
cross-appeal, however, the Supreme Court remanded
the matter to this Court for consideration of the re-
maining issues raised on appeal.
10
The Supreme Court
directed this Court’s “attention to the jury instructions,
9
Dawe, 485 Mich at 29-30.
10
Id. at 33-34.
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which may not have properly distinguished between the
statutory and common-law claims in this case.”
11
II. COMMON-LAW DUTY
A. STANDARD OF REVIEW
Defendants note that Dawe’s medical malpractice
claim was based on an alleged duty to protect her from
Brooks by not placing them in group therapy together.
Defendants argue that they did not have a common-law
duty to protect Dawe from Brooks’s criminal acts be-
cause (1) defendants’ relationship with Brooks ended
three months before the shooting and (2) their
psychiatrist-patient relationship with Dawe did not give
rise to a duty to protect her from the unforeseen acts of
third parties. Defendants also argue that they cannot be
liable for Brooks’s criminal acts because his criminal
acts were not the proximate cause of any breach of duty
on their part. Whether a defendant owes a duty to a
plaintiff is a question of law, which this Court reviews
de novo.
12
B. DEFENDANTS’ PROFESSIONAL DUTY TO DAWE
It is undisputed that defendants had an established
psychiatrist-patient relationship with Dawe, and a
psychiatrist-patient relationship is a “special” relation-
ship that imposes a duty to protect another from harm
by a third party.
13
In light of this relationship, defen-
dants owed a duty to treat Dawe within the standard of
11
Id.at34n8.
12
Fultz v Union-Commerce Assoc, 470 Mich 460, 463; 683 NW2d 587
(2004).
13
Dawe, 485 Mich at 22, 26-27; Murdock v Higgins, 454 Mich 46, 54;
559 NW2d 639 (1997); Graves v Warner Bros, 253 Mich App 486, 493-494;
656 NW2d 195 (2002).
390 289 M
ICH
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care applicable to medical professionals
14
and to protect
her from harm by a third party. In Williams v Cunning-
ham Drug Stores, Inc,
15
the Michigan Supreme Court
explained the rationale for the exception to the general
rule that there is no duty to aid or protect someone from
harm by a third party:
Social policy, however, has led the courts to recognize an
exception to this general rule where a special relationship
exists between a plaintiff and a defendant. Thus, a common
carrier may be obligated to protect its passengers, an
innkeeper his guests, and an employer his employees. The
rationale behind imposing a duty to protect in these special
relationships is based on control. In each situation one
person entrusts himself to the control and protection of
another, with a consequent loss of control to protect
himself. The duty to protect is imposed upon the person in
control because he is best able to provide a place of safety.
At some point in the course of Dawe’s treatment,
defendants decided to treat Dawe with group therapy
and to include Brooks in Dawe’s therapy group. The
decision to pursue a particular course of treatment
involves considerations of professional medical judg-
ment that implicate the duty to provide proper medical
care to a patient.
16
Moreover, while participating as a
patient in group therapy, Dawe entrusted her well-
being to defendants. Defendants alone controlled the
clinical environment; defendants determined when and
where the group would meet and determined which
patients, doctors, and therapists would participate in
the group. Dawe had neither the training nor access to
the relevant background information to evaluate
14
See Dyer v Trachtman, 470 Mich 45, 49-50, 54; 679 NW2d 311 (2004).
15
Williams v Cunningham Drug Stores, Inc, 429 Mich 495, 499; 418
NW2d 381 (1988).
16
See Dorris v Detroit Osteopathic Hosp Corp, 460 Mich 26, 46-47; 594
NW2d 455 (1999).
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whether a particular patient posed a danger to her. In-
stead, Dawe had to trust that defendants were acting in
her best interests and would use their training and
experience to ensure that each patient in the group was
suitable for group therapy. This is precisely the kind of
special relationship that gives rise to a duty to protect the
victim from harms inflicted by third parties.
17
Likewise, it
is foreseeable that a patient who is not healthy enough to
participate in group therapy may be or may become a
danger to the other members of the group. Therefore,
because Dawe was among the class of persons who could
foreseeably be harmed by defendants’ decision to place
Brooks into group therapy, defendants owed Dawe a duty
to take reasonable precautions to ensure that the patients
assigned to the group were sufficiently healthy to partici-
pate in group therapy.
18
Although it is for a court to decide the existence of a
duty,
the jury decides whether there is cause in fact and the
specific standard of care: whether defendants’ conduct in
the particular case is below the general standard of care,
including...whether in the particular case the risk of
harm created by the defendants’ conduct is or is not
reasonable.
[
19
]
17
See Williams, 429 Mich at 498-499.
18
Moning v Alfono, 400 Mich 425, 439; 254 NW2d 759 (1977) (noting
that a duty will not be imposed unless “it is foreseeable that the actor’s
conduct may create a risk of harm to the victim”); Graves, 253 Mich App
at 494-495 (noting that the duty of reasonable care extends to those
parties who are readily identifiable as being foreseeably endangered); see
also Bryson v Banner Health Sys, 89 P3d 800, 805 (Alas, 2004) (holding
that a treatment center, which placed a female client into a substance
abuse treatment group with another patient with known propensities to
commit violent sexual assaults, had a duty to protect its female client
“from danger in the course of her treatment—including foreseeable
danger from her fellow patients”).
19
Moning, 400 Mich at 438.
392 289 M
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Accordingly, it was for the jury to decide whether
defendants’ decision to place Brooks into group
therapy with Dawe fell below the general standard of
care applicable to medical professionals and whether
that decision was the cause of Dawe’s injuries.
C. FORESEEABILITY AS AN ELEMENT OF PROXIMATE CAUSE
Defendants also argue that Dawe failed to prove
proximate cause as a matter of law. Specifically,
defendants contend that criminal acts are not fore-
seeable and that Brooks’s criminal acts in particular
were too remote in time from defendants’ alleged
breach to constitute a proximate cause of Dawe’s
injuries.
In a medical malpractice action, the plaintiff must
prove that the defendant’s breach of the applicable
standard of care proximately caused the plaintiff’s
injuries.
20
Proximate cause is usually a factual issue
to be decided by the trier of fact, but if the facts
bearing on proximate cause are not disputed and if
reasonable minds could not differ, the issue is one of
law for the court.
21
“[L]egal cause or ‘proximate
cause’ normally involves examining the foreseeability
of consequences, and whether a defendant should be
held legally responsible for such consequences.”
22
In
order for negligence to be the proximate cause of an
injury, “ ‘the injury must be the natural and probable
consequence of a negligent act or omission, which
under the circumstances, an ordinary prudent person
ought reasonably to have foreseen might probably
20
Craig v Oakwood Hosp, 471 Mich 67, 86; 684 NW2d 296 (2004).
21
Jones v Detroit Med Ctr, 288 Mich App 466; 794 NW2d 55 (2010).
22
Skinner v Square D Co, 445 Mich 153, 163; 516 NW2d 475 (1994)
(citation omitted).
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occur as a result of his negligent act.’ ”
23
“There may be
more than one proximate cause of an injury.”
24
Courts in Michigan have long recognized that crimi-
nal acts by third parties can be foreseeable.
25
Further,
although the length of time between the shooting and
Brooks’s departure from defendants’ care is relevant to
whether defendants’ placement of Brooks into Dawe’s
group constituted a proximate cause of Dawe’s injuries,
it is not dispositive.
26
As Judge S
MOLENSKI
concluded in
his dissent from the original opinion, Dawe
presented evidence that defendants knew or should have
known that Brooks would form improper emotional attach-
ments to persons in his group therapy and that he might
seek out those persons long after the termination of his
participation in the group. Given this evidence, a reason-
able jury could conclude that defendants’ breach of the
23
Paparelli v Gen Motors Corp, 23 Mich App 575, 577; 179 NW2d 263
(1970), quoting Nielsen v Henry H Stevens, Inc, 368 Mich 216, 220; 118
NW2d 397 (1962).
24
Allen v Owens-Corning Fiberglas Corp, 225 Mich App 397, 401; 571
NW2d 530 (1997).
25
See Samson v Saginaw Prof Bldg, Inc, 393 Mich 393, 406-409, 409; 224
NW2d 843 (1975) (stating that whether the criminal acts of a patient-visitor
to the landlord’s premises were foreseeable was properly a jury question);
Hersh v Kentfield Builders, Inc, 385 Mich 410, 415; 189 NW2d 286 (1971)
(stating that whether the defendant employer knew or should have known
of its employee’s dangerous propensities, and therefore should be held liable
for the employee’s criminal assault, was a question for the jury); Davis v
Thornton, 384 Mich 138, 149; 180 NW2d 11 (1970) (stating that reasonable
persons might conclude that the defendant’s act of leaving his keys in an
unlocked car, which was later stolen and involved in an accident, was “not
too remote a cause of the plaintiff’s injuries and that the joyrider’s inter-
vention did not sever that causal connection”); Ross v Glaser, 220 Mich App
183; 559 NW2d 331 (1996) (holding that a father may be held civilly liable
for a murder committed by his son, who had a history of mental illness,
when the father provided a loaded gun to his son while the son was in an
agitated state).
26
See Mich Sugar Co v Employers Mut Liability Ins Co of Wisconsin, 107
Mich App 9, 15; 308 NW2d 684 (1981) (“Lapse of time does not foreclose the
cause of an injury from being its proximate cause.”).
394 289 M
ICH
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standard of care foreseeably included the possibility that
Brooks would return long after the conclusion of his
participation in group therapy and harm persons with
whom he formed these attachments. Therefore, the lapse of
time alone was insufficient to render Brooks’s actions
unforeseeable as a matter of law.
[
27
]
A reasonable jury could have concluded that defendants
proximately caused Dawe’s injury by placing Brooks in
the therapy group in breach of the applicable standard
of care; therefore, the trial court did not err by refusing
to grant defendants’ motion for JNOV on this basis.
28
III. DUTY OF CARE OWED TO BROOKS
Defendants argue that the trial court erred when it
permitted Dawe to elicit testimony concerning the duty
of care they owed to Brooks. Defendants point out that
Dawe’s medical malpractice claim was based on allega-
tions that she received substandard treatment by virtue
of Brooks’s inclusion in her group-therapy session.
Therefore, according to defendants, evidence regarding
their alleged improper treatment of Brooks likely con-
fused the jury and prejudiced defendants and they are
entitled to a new trial. We disagree.
Although Dawe initially argued that defendants had
a common-law duty to warn or protect her in light of
defendants’ relationship with Brooks, by the time of the
trial Dawe limited her claims to a statutory violation of
the duty imposed by MCL 330.1946 and a breach of the
duty arising out of defendants’ psychiatrist-patient
relationship with Dawe. As Judge S
MOLENSKI
concluded
in his dissent from the original opinion, Dawe
did not present evidence or argue that defendants failed to
properly treat Brooks. [Dawe] presented evidence that
27
Dawe, 279 Mich App at 589 (S
MOLENSKI
,P.J., dissenting).
28
See Nichols v Dolber, 253 Mich App 530, 532; 655 NW2d 787 (2002).
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Brooks had symptoms and exhibited behavior that indicated
that Brooks was not suitable for group therapy. [Dawe]
further presented evidence that Brooks was placed in group
therapy without first requiring him to go through a lengthy
period of individual treatment and taking proper medication.
Although this evidence permits an inference that defendants
failed to properly treat Brooks, the evidence was relevant to
[Dawe’s] theory of the case. MRE 401; MRE 402.
[
29
]
Therefore, there was no error warranting a new trial.
IV. JURY INSTRUCTIONS
A. STANDARD OF REVIEW
Defendants note that this Court has held that Dawe’s
statutory claim failed as a matter of law
30
and argue that
the trial court erroneously intertwined the statutory and
common-law claims when instructing the jury. Therefore,
defendants contend that a new trial is required because an
erroneous theory of liability was submitted to the jury and
the general verdict made it impossible to know how the
error affected the verdict. On appeal, this Court reviews
de novo claims of instructional error.
31
Reversal is not
required unless the failure to reverse would be inconsis-
tent with substantial justice.
32
B. ANALYSIS
Dawe originally sued under two separate theories of
liability: statutory liability for failure to warn under
29
Dawe, 279 Mich App at 590 (S
MOLENSKI
,P.J., dissenting).
30
Id. at 569-570 (W
HITBECK
, C.J.).
31
Cox v Flint Bd of Hosp Managers, 467 Mich 1, 8; 651 NW2d 356
(2002); Rose v State Farm Mut Auto Ins Co, 274 Mich App 291, 294; 732
NW2d 160 (2007).
32
MCR 2.613(A); Ward v Consolidated Rail Corp, 472 Mich 77, 84, 87;
693 NW2d 366 (2005).
396 289 M
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MCL 330.1946 and common-law medical malpractice
for failure to warn. But although Dawe presented MCL
330.1946 as a separate theory supporting liability, the
trial court did not instruct the jury that a breach of the
duty imposed by MCL 330.1946 could alone support a
verdict against defendants. Instead, the trial court
instructed the jury, “If you find that any of the Defen-
dants violated this statute before or at the time of the
occurrence, such violation is evidence of negligence
which you should consider, together with all of the
evidence, in deciding whether the Defendant was neg-
ligent.”
33
Further, the trial court instructed the jury
that “professional negligence or malpractice” means
the failure to do something which a psychiatrist of ordinary
learning, judgment or skill in this community or a similar
one would do, or the doing of something which is—a
psychiatrist of ordinary learning, judgment or skill would
not do under the same or similar circumstances you find to
exist in this case.
The only theory of liability before the jury was medical
malpractice. And the relevant inquiry, therefore, is
whether the trial court’s instruction caused such preju-
dice that it would be “inconsistent with substantial
justice” to refuse to grant defendants a new trial.
34
As Judge S
MOLENSKI
set forth in his dissent from the
original opinion,
[i]n his video trial deposition, Dr. Mark Fettman, who [was
Dawe’s] psychiatric expert, testified that a psychiatrist has
a duty to take reasonable precautions for the protection of
patients. Included within this duty is the requirement that
the psychiatrist assess a patient to determine if the patient
is a suitable candidate for group therapy before placing him
33
Emphasis added.
34
MCR 2.613(A); Case v Consumers Power Co, 463 Mich 1, 6; 615
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or her into a group. Once a patient has been placed in group
therapy, the psychiatrist has a further duty to continually
assess the patient to ensure that the patient remains
suitable for group therapy. Consistent with this testimony,
[Dawe’s] proofs largely consisted of evidence concerning
what defendants knew or should have known about
Brooks’s mental health and how defendants used that
information.
Testimony and records submitted to the jury established
that Brooks was institutionalized after he attempted sui-
cide in 1992. Dr. Joseph Gluski testified that Brooks was
referred to his practice after Brooks left the group home.
Gluski stated that he treated Brooks from April 1994 to
October 1995. Gluski testified that Brooks was on antipsy-
chotic medications when he arrived at the practice and that
he determined that Brooks should remain on antipsychotic
medications during treatment. Gluski acknowledged that
he wrote in Brooks’s chart that Brooks had mentally
slipped back into 1992, which was the year he tried to
commit suicide, around the time that he ceased taking his
medications. Gluski also testified that Brooks appeared to
misunderstand how he was being treated in group therapy
and thought that the others were conspiring against him.
Gluski stated that Brooks abruptly stopped treatment in
October 1995.
Gluski also described two incidents with Brooks return-
ing to his office after treatment was over. Gluski testified
that in the summer of 1996, Brooks called and asked to
have a meeting with Gluski and Anika Kirby, the therapist
who led Brooks’s group therapy sessions. At the meeting,
Brooks asked questions about Kirby’s ethnic background,
which was Finnish. Brooks had even brought a map of
Finland with him.
Gluski also testified about an incident that occurred in
the summer of 1997 or 1998. Gluski testified that Brooks
barged into his office before normal office hours and began
searching the office for Kirby. Gluski stated that Brooks
seemed agitated and thought he might get physical. Gluski
testified that Brooks seemed furious and made comments
about his treatment in group therapy. Gluski left the office
398 289 M
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and walked to a nearby restaurant, but Brooks followed
him and did not leave until Gluski called the police. Gluski
acknowledged that the police report indicated that Gluski
told the officer that Brooks had said, “You better run.” The
report also indicated that Brooks told him, “I want to get
your partner.”
Gluski testified that, after Brooks began treating with
defendants, [Dr. Reuven Bar-Levav] called about Brooks.
Gluski said he told [Bar-Levav] about the incidents with
Brooks and warned him that Brooks was dangerous. Gluski
said he also told [Bar-Levav] that, if [Bar-Levav] decided to
treat Brooks, Brooks should be in individual treatment for
one full year and needed to be on medication. Gluski stated
that he was so concerned that he called [Bar-Levav] the
next day to reiterate that [Bar-Levav] should be careful.
In addition to Gluski’s testimony, [Dawe] presented
evidence that, on October 19, 1998, Brooks came to defen-
dants’ office and told Joseph Froslie, who was a therapist at
the practice, that he had obtained a gun and driven to New
Hampshire with an intent to kill his ex-girlfriend’s mother
and then commit suicide. In response to this revelation,
Froslie asked Brooks to bring the gun in to the office, which
Brooks did. After Brooks brought the gun to the office,
Froslie contacted Dr. Leora Bar-Levav...,whowas [Dr.
Reuven Bar-Levav’s] daughter and also a psychiatrist at
[Dr. Reuven Bar-Levav’s] practice. [Dr. Leora Bar-Levav]
performed a general mental-status examination of Brooks.
Although [she] prescribed a two-week supply of medication
after this incident and claimed to have performed further
assessments of Brooks, the jury heard evidence that these
subsequent assessments were not documented and that no
one at defendants’ practice recalled ever having a specific
discussion about Brooks. Hence, the jury could have con-
cluded that no other steps were taken to ensure that
Brooks was not a danger to himself or others. Notwith-
standing these prior incidents, in December 1998, [Dr.
Reuven Bar-Levav] decided to place Brooks in group
therapy. Testimony established that [Bar-Levav] made the
decision after consulting with the other staff members.
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Froslie testified that Brooks exhibited some narcissistic
behavior and also had disturbances in social functioning.
James Stanislaw, another group therapist at the practice,
testified that Brooks had some symptoms that were consis-
tent with paranoid schizophrenia, including confused think-
ing and suspiciousness, and that he was not always appropri-
ate or responsive in group therapy. Froslie also indicated that
Brooks sometimes did not appear to understand the group
therapy process. Brooks was finally discharged from the
practice in March 1999 after [Dr. Reuven Bar-Levav] pre-
scribed medication to Brooks, which Brooks refused to
take.
[
35
]
The evidence provided compelling proof that defen-
dants knew or should have known that Brooks posed a
danger to the other patients in his therapy group and
that, therefore, defendants should not have placed
Brooks in the group. In contrast, the evidence tending
to support Dawe’s claim under MCL 330.1946 was quite
limited. It is unlikely that the jury relied on a purported
violation of MCL 330.1946 to conclude that defendants
breached the standard of care. Consequently, the erro-
neous instruction did not unfairly prejudice defendants,
and a new trial is not warranted on that basis.
36
V. VERDICT AGAINST DR. LEORA BAR-LEVAV
A. STANDARD OF REVIEW
Defendants argue that the evidence at trial indicated
that Dr. Leora Bar-Levav had limited interaction with
Brooks and did not participate in the decision to place
Brooks into group therapy. Even Dawe’s expert recog-
nized that Dr. Reuven Bar-Levav alone made the decision
to place Brooks into group therapy. Therefore, defendants
argue that the verdict against Dr. Leora Bar-Levav was
against the great weight of the evidence and that this
35
Dawe, 279 Mich App at 580-583 (S
MOLENSKI
,P.J., dissenting).
36
Case, 463 Mich at 6.
400 289 M
ICH
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Court should grant a new trial for each defendant or, at
least, JNOV for Dr. Leora Bar-Levav.
This Court may overturn a jury verdict that is
against the great weight of the evidence.
37
But a jury’s
verdict should not be set aside if there is competent
evidence to support it.
38
Determining whether a verdict
is against the great weight of the evidence requires
review of the whole body of proofs.
39
The issue usually
involves matters of credibility or circumstantial evi-
dence,
40
but if there is conflicting evidence, the question
of credibility ordinarily should be left for the fact-
finder.
41
Similarly, the weight to be given to expert
testimony is for the jury to decide.
42
B. ANALYSIS
As Judge S
MOLENSKI
set forth in his dissent from the
original opinion,
[a]t trial, Fettman testified that the applicable standard of
care required defendants to take steps to ensure that the
clinical environment was safe for [Dawe’s] treatment. Fett-
man stated that this required defendants to assess Brooks’s
suitability for group therapy before placing him in a therapy
group and to continuously assess him thereafter to determine
whether he remained suitable for group therapy. Fettman
testified that defendants breached the standard of care by
placing Brooks into a therapy group when there were clear
37
MCR 2.611(A)(1)(e); Wischmeyer v Schanz, 449 Mich 469, 485; 536
NW2d 760 (1995).
38
Wiley v Henry Ford Cottage Hosp, 257 Mich App 488, 498; 668 NW2d
402 (2003).
39
People v Herbert, 444 Mich 466, 475; 511 NW2d 654 (1993), overruled
in part on other grounds by People v Lemmon, 456 Mich 625, 627; 576
NW2d 129 (1998).
40
In re Robinson, 180 Mich App 454, 463; 447 NW2d 765 (1989).
41
Shuler v Mich Physicians Mut Liability Co, 260 Mich App 492, 519;
679 NW2d 106 (2004).
42
Guerrero v Smith, 280 Mich App 647, 669; 761 NW2d 723 (2008).
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signs that he was not suitable for group therapy and by failing
to continually assess and communicate about Brooks’s con-
tinued suitability for group therapy.
Although Fettman indicated that he understood the
evidence to show that [Dr. Reuven Bar-Levav] had the final
decision regarding the placement of Brooks in group
therapy, there was testimony that this decision was made
after receiving input from all the staff members. The jury
also heard evidence that [Dr. Leora Bar-Levav] performed
the assessment of Brooks after he disclosed that he had
traveled to New Hampshire to kill his ex-girlfriend’s
mother. There was also evidence that suggested that [Dr.
Leora Bar-Levav] failed to make any subsequent assess-
ments. Finally, evidence indicated that [she] participated in
several of Brooks’s group therapy sessions and yet failed to
make any of the continuing assessments that Fettman
testified would be required with a patient like Brooks.
[
43
]
From this evidence, a reasonable jury could have con-
cluded that Dr. Leora Bar-Levav did participate to some
extent in Brooks’s placement in group therapy. A reason-
able jury could also have concluded that Dr. Leora Bar-
Levav breached the standard of care by failing to perform
additional assessments of Brooks and by failing to con-
tinuously reevaluate whether Brooks should be in group
therapy. Finally, a reasonable jury could have concluded
that these breaches of the standard of care proximately
caused Dawe’s injuries. Therefore, there was competent
evidence to support the jury verdict against Dr. Leora
Bar-Levav.
VI. ADJUSTED DAMAGES CAP
A. STANDARD OF REVIEW
Under MCL 600.1483, Dawe’s noneconomic damages
are capped. However, the cap is adjusted annually for
43
Dawe, 279 Mich App at 590-591 (S
MOLENSKI
,P.J., dissenting).
402 289 M
ICH
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inflation, and defendants argue that the trial court
erred by applying the adjusted cap that was applicable
on the date of the verdict rather than the adjusted cap
that was applicable on the date Dawe commenced her
suit. The amount of the cap applicable to an award of
noneconomic damages is a matter of statutory interpre-
tation that this Court reviews de novo.
44
B. ANALYSIS
As Judge S
MOLENSKI
set forth in his dissent from the
original opinion,
MCL 600.1483(1) limits the total amount of noneconomic
damages that may be recovered by all plaintiffs as a result
of negligence arising out of an action alleging medical
malpractice. The cap was initially set at $280,000 for
injuries, such as those at issue in this case, that do not meet
the exceptions stated under MCL 600.1483(1)(a) to (c).
However, under MCL 600.1483(4), the state treasurer is
required to adjust this amount annually to reflect changes
in the consumer price index. Although the statute provides
for the annual adjustment of the cap, it does not address
how this adjustment affects suits that are pending but have
not yet been reduced to judgment.
In examining the applicability of the damages cap to
wrongful death actions arising from medical malpractice,
[the Michigan] Supreme Court noted that “[o]nly after the
court or jury has, in its discretion, awarded damages as it
considers fair and equitable does the court, pursuant to
[MCL 600.6304(5)], apply the noneconomic damages cap of
[MCL 600.1483].” Jenkins v Patel, 471 Mich 158, 172; 684
NW2d 346 (2004), citing MCL 600.6098(1) and MCL
600.6304(5). The Court further noted that the damages cap
does not impinge on the jury’s right to determine the
amount of damages, but rather only limits the legal conse-
44
Shinholster v Annapolis Hosp, 471 Mich 540, 548; 685 NW2d 275
(2004).
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quences of the jury’s finding by limiting the amount of the
judgment on the verdict. Id. at 173.
[
45
]
Therefore, the cap only applies to a judgment ren-
dered after a verdict.
46
The amount of the cap is the
amount in effect on the date the judgment is entered.
47
Accordingly, the trial court did not err by applying the
2005 cap.
VII. THE MANUSCRIPT
A. BACKGROUND
As Judge S
MOLENSKI
set forth in his dissent from the
original opinion,
48
[b]efore trial, defendants moved in limine to preclude
[Dawe] from eliciting testimony about or referring to a
document that the parties referred to as the “manuscript.”
The manuscript contained Brooks’s ramblings about [Dr.
Reuven Bar-Levav’s] therapy techniques and Brooks’s be-
lief that his therapists “used” him to benefit the other
members of the therapy group. In the manuscript, Brooks
wrote about his desire to seek revenge, but did not directly
threaten any one person or group. Brooks mailed the
manuscript to [Dr. Reuven Bar-Levav] one day before the
shooting. In their motion, defendants argued that evidence
and arguments concerning the manuscript should be pre-
cluded because the manuscript was not relevant. Specifi-
cally, defendants noted that the manuscript arrived after
Brooks’s placement in group therapy and contained no
threat within the meaning of MCL 330.1946. Defendants
45
Dawe, 279 Mich App at 596 (S
MOLENSKI
,P.J., dissenting).
46
Shivers v Schmiege, 285 Mich App 636, 650; 776 NW2d 669 (2009);
Velez v Tuma, 283 Mich App 396, 417; 770 NW2d 89 (2009).
47
Shivers, 285 Mich App at 650; Velez, 283 Mich App at 417; see also
Wessels v Garden Way, Inc, 263 Mich App 642, 652-654; 689 NW2d 526
(2004) (holding that the cap applicable to product liability actions is
determined by the date of the judgment).
48
Dawe, 279 Mich App at 592-594 (S
MOLENSKI
,P.J., dissenting).
404 289 M
ICH
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380 [Aug
also contended that there was no evidence that [Bar-Levav]
read it. For these reasons, defendants argued, it could not
be used to support any of [Dawe’s] claims and should not be
referred to or admitted into evidence. The trial court
denied defendants’ motion in limine.
At trial, defendants again moved to have the manuscript
excluded. The trial court agreed that the manuscript was
not relevant and also concluded that it was more inflam-
matory than probative. Therefore, the trial court excluded
the manuscript. In addition, the trial court specifically
precluded Dawe’s counsel from asking any questions about
the manuscript.
Although the trial court excluded the manuscript,
[Dawe’s] counsel had already commented on the manu-
script during his opening statement. Specifically, [Dawe’s]
counsel stated that Brooks sent
“a manuscript, priority mail, addressed to Dr. Bar-Levav. It
was received the next day. Maria Attard will tell you she
handed the package to Dr. Bar-Levav. She’s unsure if she
opened it or he opened it, but she is certain of one thing,
nobody reads his mail but him.
“At a later point in the day, Dr. Bar-Levav gave the
manuscript back to Maria and said he’s [sic] read it over
the weekend. The defendants will tell you that Dr. Bar-
Levav didn’t have any idea what was inside the package.
However, before the shooting took place, Mr. Baker will tell
you that he recalls hearing that a manuscript had been
received and he was advised that it was a confused docu-
ment based on something Brooks had read in Dr. Bar-
Levav’s book.
“This is not something he was advised of in a formal
meeting, Mr. Baker will tell you, but there was a buzz
around the office, people were talking about the manu-
script. What was in this manuscript, all the experts agree,
is a very troubled, very confused writing that demonstrated
a psychotic episode. The manuscript talks about revenge.
The manuscript talks about Brooks feeling that he was
being used in therapy.”
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[Dawe’s] counsel also stated that defendants “failed to
warn [plaintiff] that Brooks had made threats against her
group after receiving the manuscript....”
4
After the trial court’s ruling to preclude testimony
concerning the manuscript, there were two brief references
to the manuscript. First, a witness who testified by depo-
sition referred to the timing of the arrival of the package.
Second, [Dawe’s] counsel referred to the fact that the
manuscript had not been submitted to the jury. He stated:
“[B]ut you may have a question in your mind, where[’s]
the manuscript, and you have heard reference throughout
the trial, but it hasn’t come into evidence.
“Those are the decisions, as the Judge instructed you at
the beginning, he’s going to tell you at the end, were made
outside of your presence, and that’s without respect to
whether or not an attorney or myself wanted to actually
present this certain evidence. For legal reasons, sometimes
it doesn’t come into evidence. You can’t hold that against
us. And at the time when we thought it was coming in, we
told you you were going to see it, but that changed. But as
the Judge will tell you, if he makes certain decisions on
things, its not to be held against the attorneys.”
______________________________________________________
4
[Dawe’s] counsel also noted that if the jury found that
there was “no duty to warn about the manuscript,” but
nevertheless concluded that defendants had a “duty to
keep the clinic safe, then you must enter a decision of
negligence.”
______________________________________________________
B. DAWE’S CROSS-APPEAL
On cross-appeal, Dawe argues that the trial court
erred when it refused to permit admission of Brooks’s
manuscript because it was relevant. We review for an
abuse of discretion a trial court’s decision to admit or
exclude evidence.
49
49
Barrett v Kirtland Community College, 245 Mich App 306, 325; 628
NW2d 63 (2001).
406 289 M
ICH
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380 [Aug
Generally, all relevant evidence is admissible at trial.
Evidence is relevant if it has any tendency to make the
existence of a fact that is of consequence to the deter-
mination of the action more or less probable than it
would be without the evidence.
50
“Under this broad
definition, evidence is admissible if it is helpful in
throwing light on any material point.”
51
It is undisputed that the manuscript at issue arrived
long after the termination of Brooks’s relationship with
defendants’ practice. Therefore, the manuscript could
not serve as evidence that defendants breached the
applicable standard of care by placing Brooks into
Dawe’s therapy group or permitting him to remain in
the group. That is, because there was no evidence that
the manuscript was written while Brooks was under
defendants’ care, it may not have reflected Brooks’s
mental health at the time he was being treated. Hence,
it was not relevant to defendants’ decision to place
Brooks in group therapy. Therefore, the trial court did
not abuse its discretion by concluding that the manu-
script was not relevant.
C. DEFENDANTS’ APPEAL
Although the trial court excluded the manuscript
from evidence, defendants argue that they were preju-
diced by the references to Brooks’s manuscript that
Dawe’s counsel made at trial. As Judge S
MOLENSKI
recognized in his dissent from the original opinion,
defendants did not object to [Dawe’s] opening or closing
remarks. Further, when redacting the deposition testimony
of the witness at issue, defendants’ counsel specifically
50
MRE 401; People v Crawford, 458 Mich 376, 388-389; 582 NW2d 785
(1998).
51
People v Aldrich, 246 Mich App 101, 114; 631 NW2d 67 (2001).
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asked to have certain references to the manuscript re-
moved, which the trial court granted....
***
[T]aken as a whole, [Dawe’s] attorney’s remarks were
minimally prejudicial and could not have had a controlling
influence on the verdict. Wiley,[v Henry Ford Cottage
Hosp, 257 Mich App 488, 505; 668 NW2d 402 (2003)].
Furthermore, the trial court instructed the jury that the
attorneys’ comments were not evidence. This instruction
cured any minimal prejudice that these comments may
have had. Tobin [v Providence Hosp, 244 Mich App 626,
641; 624 NW2d 548 (2001)]. There was no error warranting
the requested relief.
[
52
]
VIII. PREJUDGMENT INTEREST
A. STANDARD OF REVIEW
On cross-appeal, Dawe argues that the purpose of
awarding a plaintiff prejudgment interest is to compen-
sate the plaintiff for the loss of the use of funds.
Therefore, she contends, when, as in this case, the jury
awards the plaintiff past noneconomic damages that
exceed the applicable statutory cap, the plaintiff is
entitled to prejudgment interest on the entire capped
amount. This Court reviews de novo questions of statu-
tory interpretation such as the proper application of
MCL 600.6013 and MCL 600.1483.
53
B. ANALYSIS
As Judge S
MOLENSKI
set forth in his dissent from the
original opinion,
54
52
Dawe, 279 Mich App at 594-595 (S
MOLENSKI
,P.J., dissenting).
53
Shinholster, 471 Mich at 548.
54
Dawe, 279 Mich App at 597-602 (S
MOLENSKI
,P.J., dissenting).
408 289 M
ICH
A
PP
380 [Aug
[w]hen rendering its verdict, the jury had to make specific
findings of fact regarding the amount of past economic
damages, past noneconomic damages, future economic
damages, and future noneconomic damages for [Dawe].
MCL 600.6305(1). Future damages are defined to be “dam-
ages arising from personal injury which the trier of fact
finds will accrue after the damage findings are made....”
MCL 600.6301(a). Noneconomic damages are defined as
“damages or loss due to pain, suffering, inconvenience,
physical impairment, physical disfigurement, or other non-
economic loss.” MCL 600.1483(3). In the present case, the
jury found that [Dawe] suffered a total of $600,000 in past
medical expenses
5
and $400,000 in past noneconomic dam-
ages. The jury also found that [Dawe] would suffer
$1,040,000 in future noneconomic damages. The verdict
form did not provide for future economic damages.
Once the jury awarded damages, [Dawe] was entitled to
interest on her money judgment. MCL 600.6013(1). Al-
though MCL 600.6013(8) provides that interest “is calcu-
lated on the entire amount of the money judgment, includ-
ing attorney fees and other costs” from the filing of the
complaint, MCL 600.6013(1) specifically excludes interest
“on future damages from the date of filing the complaint to
the date of entry of the judgment.” Hence, under a plain
reading of MCL 600.6013, [Dawe] would normally be
entitled to interest on the full amount of her past noneco-
nomic damages. However, in a medical malpractice action,
the trial court is required to reduce an award of damages to
“the amount of the appropriate limitation set forth in
[MCL 600.1483].” MCL 600.6304(5). Under MCL
600.1483(1), the total noneconomic damages recoverable
by [Dawe] could not exceed $371,800. Because the jury
found that [Dawe] suffered more than $1.4 million in total
noneconomic damages, the trial court had to reduce the
total award for noneconomic damages to $371,800. By its
plain terms, MCL 600.1483(1) applies to “the total amount
of damages for noneconomic loss recoverable by all plain-
tiffs....”However, the Legislature failed to address how
MCL 600.1483(1) should be applied to separate awards of
past and future noneconomic damages. This legislative
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silence poses no problem in cases where the jury finds either
past or future noneconomic damages but not both, or where
the combined total of past and future noneconomic damages
does not exceed the applicable cap.
6
However, where the jury
finds both past and future noneconomic damages whose
combined total exceeds the cap provided by MCL 600.1483, it
becomes essential to a proper determination of prejudgment
interest under MCL 600.6013(1) to first determine how the
cap applies to the individual awards of past and future
noneconomic damages.
Because MCL 600.1483 and MCL 600.6013 both relate
to the trial court’s entry of a judgment after a jury renders
a verdict, they must be read together as though constitut-
ing one law. State Treasurer v Schuster, 456 Mich 408, 417;
572 NW2d 628 (1998). Nevertheless, it is clear that the
statutes serve distinct purposes. The Legislature enacted
MCL 600.1483 to control increases in health care costs by
limiting the liability of medical care providers. Zdrojewski
v Murphy, 254 Mich App 50, 80; 657 NW2d 721 (2002). This
purpose is accomplished by limiting the amount of com-
pensation that a plaintiff may obtain for noneconomic
damages. In contrast, MCL 600.6013 serves two purposes:
(1) to compensate the prevailing party for the loss of the
use of funds awarded as a money judgment and for the
costs of bringing a court action and (2) to provide an
incentive for prompt settlement. Old Orchard by the Bay
Assoc v Hamilton Mut Ins Co, 434 Mich 244, 252-253; 454
NW2d 73 (1990), overruled on other grounds by Holloway
Constr Co v Oakland Co Bd of Co Rd Comm’rs, 450 Mich
608, 615-616 (1996). With regard to the latter purpose, [the
Michigan] Supreme Court explained that the “award of
statutory prejudgment interest...serves a distinct deter-
rent function by both encouraging settlement at an earlier
time and discouraging a defendant from delaying litigation
solely to make payment at a later time.” Old Orchard, [434
Mich] at 253. These purposes are accomplished under MCL
600.6013 by increasing the costs that a defendant will have
to pay if the plaintiff prevails. Although these statutes
appear to conflict, they can be construed together in a way
that substantially preserves the purpose of each.
410 289 M
ICH
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It must be noted that MCL 600.1483 does not limit all
forms of compensation that a defendant may be required to
pay after a verdict in favor of the plaintiff. The statute does
not limit economic damages and does not purport to limit
interest, attorney fees, or other costs. In contrast, MCL
600.6013 clearly requires compensation in the form of
interest on the entire amount of the money judgment,
which excludes future damages, but includes attorney fees
and other costs. See MCL 600.6013(8). Thus, MCL
600.6013 has broader application than MCL 600.1483.
Further, application of the cap provided by MCL 600.1483
directly and substantially affects the compensatory and
deterrent effects of MCL 600.6013, while application of
MCL 600.6013, which is based on the total damages,
attorney fees, and costs, only indirectly affects the purpose
of MCL 600.1483. Therefore, absent any guidance from the
statutory language, I conclude that MCL 600.1483 should
be construed in a way that minimizes its overall effect on a
plaintiff’s ability to receive the compensation required by
MCL 600.6013. See Denham v Bedford, 407 Mich 517,
528-529; 287 NW2d 168 (1980) (examining a prior version
of MCL 600.6013 and noting that the prejudgment interest
statute is remedial and entitled to liberal interpretation).
In the present case, the trial court determined that
[Dawe] would not be entitled to prejudgment interest on
the full amount of the capped noneconomic damages
award. Instead, the trial court determined that [Dawe]
would be entitled to interest on that portion of the capped
damages equal to the ratio of past noneconomic damages to
future noneconomic damages found by the jury. Applying
this formula to the $371,800 noneconomic damages cap,
the trial court concluded that $140,949.38 of the capped
amount represented past noneconomic damages and
$230,850.62 represented future noneconomic damages.
Although this solution appears equitable on its face, it is
clear from its application that it significantly undermines
the remedial purposes of MCL 600.6013. Future damages
include damages for harm that a plaintiff will suffer during
his or her remaining life. See Rickwalt v Richfield Lakes
Corp, 246 Mich App 450, 469; 633 NW2d 418 (2001); MCL
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600.6305(2). Further, future damages are reduced to a
present cash value and payable with the judgment. MCL
600.6306(1). Hence, a plaintiff will invariably receive
timely compensation for his or her future losses. In con-
trast, past damages reflect losses that the plaintiff has
already incurred and for which he or she has not yet
received any compensation. Yet, under the trial court’s
method, [Dawe] would receive less compensation for the
injuries she has already suffered solely on the basis that
she would at some point in the future suffer further losses.
Indeed, on this basis, the trial court more than halved the
amount of interest to which [Dawe] was entitled under
MCL 600.6013(1) for her past damages. This method of
applying MCL 600.1483 defeats the purpose of MCL
600.6013 without substantially furthering the purposes of
the damages cap.
This problem can be avoided only by construing MCL
600.1483 in such a way as to minimize its effect on the
application of MCL 600.6013. Hence, I construe MCL
600.1483(1) to reduce future noneconomic damages before
past noneconomic damages. Where the jury finds that the
plaintiff has past noneconomic damages in excess of the
applicable cap, as is the case here, the plaintiff will be
entitled to prejudgment interest on the full amount of the
applicable cap under MCL 600.6013(1). However, where
the past noneconomic damages do not rise to the level of
the applicable cap, the plaintiff will only be entitled to
interest on the actual amount of the past noneconomic
damages found by the jury. In this way, the plaintiff will be
fully compensated for the losses already suffered.
______________________________________________________
5
This amount was reduced by the trial to $44,338.28,
which was the amount of medical expenses for which
[Dawe] presented evidence at trial.
6
In cases where the jury finds only past noneconomic
damages, the plaintiff would clearly be entitled to prejudg-
ment interest on the full amount. MCL 600.6013(1). Like-
wise, in cases where the jury finds only future noneconomic
damages, the plaintiff would clearly not be entitled to any
prejudgment interest on that amount. Id. Finally, where a
412 289 M
ICH
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380 [Aug
jury finds both past and future noneconomic damages, but
the combined total does not exceed the cap provided by
MCL 600.1483, the trial court would not reduce the either
the past or future economic damages and the plaintiff
would be entitled to prejudgment interest on the full
amount of the past noneconomic damages.
______________________________________________________
In light of the foregoing, we conclude that the trial
court erred when it concluded that Dawe was only
entitled to interest on a portion of the past noneconomic
damages found by the jury. Therefore, we vacate the
award of interest and remand this case to the trial court
for recalculation of the interest.
IX. EXPERT TESTIMONY REGARDING DUTY UNDER MCL 330.1946
Because the Supreme Court did not disrupt our
decision that Dawe failed to present sufficient evidence
to establish a breach of duty imposed under MCL
330.1946,
55
we need not address defendants’ argument
that Dawe had the burden of presenting expert testi-
mony regarding that duty.
We vacate the award of prejudgment interest and
remand for recalculation of the interest consistent with
this opinion. In all other respects, we affirm. We do not
retain jurisdiction.
55
Id. at 569-570 (W
HITBECK
, C.J.).
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DEPARTMENT OF ENVIRONMENTAL QUALITY v
WORTH TOWNSHIP
Docket No. 289724. Submitted March 9, 2010, at Lansing. Decided
August 17, 2010, at 9:00 a.m.
The Department of Environmental Quality and the Director of the
Department of Environmental Quality brought an action seeking
injunctive relief in the Ingham Circuit Court against Worth
Township. Plaintiffs alleged that defendant lacked a sanitary-
sewerage system; that defendant relied on private septic systems;
that many of those septic systems were failing; and that as a result
of the failed septic systems, sewage with high levels of fecal
coliform and E. coli bacteria was being discharged into the waters
of the state, including Lake Huron. Plaintiffs claimed that defen-
dant was responsible for the discharges under part 31 of the
Natural Resources and Environmental Protection Act, MCL
324.3101 et seq., and asked the court to require defendant to
construct a sanitary-sewerage system. Defendant moved for sum-
mary disposition under MCR 2.116(C)(8) and (10). The court,
Joyce Draganchuk, J., denied the motion. Defendant sought inter-
locutory leave to appeal. The Court of Appeals denied the applica-
tion in an unpublished order, entered July 2, 2008 (Docket No.
282183). The parties subsequently filed cross-motions for sum-
mary disposition under MCR 2.116(C)(10). The circuit court
granted plaintiffs’ motion for summary disposition and denied
defendant’s motion for summary disposition. The circuit court
ordered defendant to take corrective action to cease the discharges
and set forth a time frame for defendant to design and construct
the project that defendant selected for the corrective action.
Defendant appealed.
The Court of Appeals held:
MCL 324.3109(2) does not impose liability on a municipality for
any unauthorized discharge that occurs within its jurisdiction, but
merely creates a rebuttable presumption that the municipality was
the source of the discharge. The statute imposes responsibility on
the municipality when the municipality’s actions lead to the
discharge. In this case, defendant rebutted the presumption by
414 289 M
ICH
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414 [Aug
establishing that it could not have been the source of the discharge
because it did not operate a sanitary-sewerage system.
Reversed and remanded for entry of a summary disposition
order in favor of defendant.
O’C
ONNELL
, J., dissenting, stated that he would affirm the
decision of the circuit court. Townships have historically been
entrusted to oversee the proper disposal of sewage within their
boundaries, and MCL 324.3109(2) continues to hold townships
responsible for the unauthorized discharge of raw human sewage
into state waters. If the majority’s interpretation were correct,
MCL 324.3109(2) would be unnecessary in light of MCL
324.3109(1), which separately prohibits a municipality from di-
rectly or indirectly discharging raw human sewage into the waters
of this state. MCL 324.3109(2) applies in this case because the
discharge occurred as a result of defendant’s failure to construct a
sanitary-sewerage system.
E
NVIRONMENT —
W
ATER
P
OLLUTION —
M
UNICIPAL
C
ORPORATIONS —
D
ISCHARGES
OF
R
AW
H
UMAN
S
EWAGE —
R
EBUTTABLE
P
RESUMPTIONS —
S
OURCES OF A
D
ISCHARGE
.
The unauthorized discharge of raw human sewage into the waters of
this state creates a rebuttable presumption that the municipality
in which the discharge originated was the source of the discharge;
the presumption is rebutted by evidence that the discharge did not
occur through the agency of the municipality or as a result of the
municipality that is, that no action of the municipality led to the
discharge (MCL 324.3109[2]).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Alan F. Hoffman, Assistant At-
torney General, for the Department of Environmental
Quality and the Director of the Department of Environ-
mental Quality.
The Hubbard Law Firm, P. C . (by Michael G. Wood-
worth), for Worth Township.
Amici Curiae:
The Hubbard Law Firm, P. C . (by Mark T. Koerner
and Peter A. Teholiz), for Citizens Voice for Property
Owners, Inc.
2010] DEQ
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415
Bauckham, Sparks, Lohrstorfer, Thall & Seeber, P. C .
(by John H. Bauckham), for the Michigan Townships
Association.
Before: O
WENS
,P.J., and S
AWYER
and O’C
ONNELL
,JJ.
S
AWYER
, J. In this case, we are asked to determine
whether Michigan’s Natural Resources and Environ-
mental Protection Act (NREPA)
1
empowers the Depart-
ment of Environmental Quality to require a township to
install a sanitary-sewerage system when there is a
widespread failure of private septic systems resulting in
contamination of lake waters. We hold that it does not.
Defendant is a common-law township in Sanilac
County along the shores of Lake Huron. It does not
operate a public sanitary-sewerage system. All the
residences and businesses within the township rely on
private septic systems for waste disposal. A problem has
developed with a number of those private septic systems
located on a strip of land approximately five miles long
that is between highway M-25 and Lake Huron. Some
of these septic systems are failing, resulting in effluent
being discharged into Lake Huron and its tributaries.
For the past several years, plaintiff DEQ, as well as the
county health department, has been pushing for defen-
dant to install a public sanitary-sewerage system. De-
fendant has declined to do so, concluding that such a
project would not be financially feasible.
Defendant’s refusal to pursue a sanitary-sewerage
project has resulted in the instant litigation to force it to
do so. The parties pursued cross-motions for summary
disposition, resulting in an order of the circuit court
granting summary disposition to plaintiffs, establishing
a time frame for defendant to design, begin construc-
1
MCL 324.101 et seq.
416 289 M
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tion on, and begin operating a sewerage system in-
tended to remedy the failing septic systems and result-
ing discharges.
2
The order also imposed a $60,000 fine
and awarded attorney fees. Defendant appeals this
order and we reverse.
The resolution of this case rests on the proper
interpretation and application of MCL 324.3109(2) and
MCL 324.3115. Like a motion for summary disposition,
we review a question of statutory interpretation de
novo. Bush v Shabahang, 484 Mich 156, 164; 772 NW2d
272 (2009). Plaintiffs depend on the first statute to
establish defendant’s responsibility for the discharge
from the private septic systems into the waters of Lake
Huron and then rely on MCL 324.3115 for the remedy
of requiring defendant to install and operate a public
sanitary-sewerage system. We are not persuaded that
MCL 324.3109(2) imposes the responsibility on defen-
dant that plaintiffs suggest it does.
MCL 324.3109 provides in pertinent part as follows:
(2) The discharge of any raw sewage of human origin,
directly or indirectly, into any of the waters of the state
shall be considered prima facie evidence of a violation of
this part by the municipality in which the discharge
originated unless the discharge is permitted by an order or
2
Technically speaking, the circuit court’s order does not specifically
compel the construction of a sanitary-sewerage system. Rather, it refers
to defendant’s obligation “to take necessary corrective action” and then
establishes a time frame for that action. The time frame refers to a
deadline for defendant to submit for the DEQ’s approval a “proposed
service area,” as well as deadlines for the design, approval by the DEQ,
construction, and the beginning of operations of “the project.” But, in
light of plaintiffs’ explicit statement that they view as the only practical
option the construction of a municipal-sewerage system, it seems rather
apparent that “the project” is a sanitary-sewerage system constructed
and operated by defendant. In any event, as discussed later in this
opinion, we conclude that no statutory authority grants plaintiffs the
power to determine the appropriate remedy.
2010] DEQ
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417
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rule of the department. If the discharge is not the subject of
a valid permit issued by the department, a municipality
responsible for the discharge may be subject to the rem-
edies provided in section 3115. If the discharge is the
subject of a valid permit issued by the department pursu-
ant to section 3112, and is in violation of that permit, a
municipality responsible for the discharge is subject to the
penalties prescribed in section 3115.
(3) Notwithstanding subsection (2), a municipality is
not responsible or subject to the remedies provided in
section 3115 for an unauthorized discharge from a sewer-
age system as defined in section 4101 that is permitted
under this part and owned by a party other than the
municipality, unless the municipality has accepted respon-
sibility in writing for the sewerage system and, with
respect to the civil fine and penalty under section 3115, the
municipality has been notified in writing by the depart-
ment of its responsibility for the sewerage system.
Defendant argues that MCL 324.3109 does not impose
responsibility on a municipality for any discharge that
occurs within its jurisdiction, but merely creates a
rebuttable presumption that the municipality was the
source of the discharge. We agree.
First, we must look to the meaning of “prima facie
evidence.” Because this is a legal term not defined by
the statute, we may consult a legal dictionary.
3
Black’s
Law Dictionary (5th ed), defines “prima facie evidence”
as follows:
Evidence good and sufficient on its face; such evidence
as, in the judgment of the law, is sufficient to establish a
given fact, or the group or chain of facts constituting the
party’s claim or defense, and which if not rebutted or
contradicted, will remain sufficient. Prima facie evidence is
evidence which, if unexplained or uncontradicted, is suffi-
cient to sustain a judgment in favor of the issue which it
supports, but which may be contradicted by other evidence.
3
Nuculovic v Hill, 287 Mich App 58, 67; 783 NW2d 124 (2010).
418 289 M
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414 [Aug
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Prima facie evidence is evidence that, until its effect is
overcome by other evidence, will suffice as proof of fact in
issue; “prima facie case” is one that will entitle party to
recover if no evidence to contrary is offered by opposite
party. Evidence which suffices for the proof of a particular
fact until contradicted and overcome by other evidence.
Evidence which, standing alone and unexplained, would
maintain the proposition and warrant the conclusion to
support which it is introduced. An inference or presump-
tion of law, affirmative or negative of a fact, in the absence
of proof, or until proof can be obtained or produced to
overcome the inference. [Citations omitted.]
This definition makes it abundantly clear that prima facie
evidence is rebuttable. Thus, MCL 324.3109(2) clearly
does not make a municipality automatically and conclu-
sively responsible for a discharge of raw sewage. Rather, it
merely creates the presumption that the municipality is
responsible until and unless the municipality is able to
establish that it did not violate part 31 of NREPA, MCL
324.3101 et seq., which deals with the protection of water
resources. Defendant advances a particularly compelling
argument that it is not the source of the violation: it does
not operate a sanitary-sewerage system that could be the
source of the discharge.
Second, we look to the meaning of the phrase “by the
municipality.” This phrase is key because it answers
plaintiffs’ contention that MCL 324.3109(2) imposes
responsibility for a discharge on a municipality without
regard to the source of the discharge. That is, plaintiffs
argue that any discharge of raw sewage within a mu-
nicipality constitutes prima facie evidence of a violation
by the municipality even if the municipality is not the
source of the discharge. We disagree. The word “by” has
many meanings. For its meaning as a nonlegal term, we
look to a layman’s dictionary rather than a legal one.
Horace v City of Pontiac, 456 Mich 744, 756; 575 NW2d
762 (1998). We find these definitions from the Random
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House Webster’s College Dictionary (1997) to be particu-
larly helpful: “10. through the agency of” and “12. as a
result or on the basis of[.]” Thus, MCL 324.3109(2)
imposes responsibility on the municipality not when the
violation merely occurs within the boundaries of the
municipality, but when the violation occurs “through
the agency of” the municipality or “as a result” of the
municipality, that is to say, when it is the actions of the
municipality that lead to the discharge.
The argument that the municipality must actually
cause the discharge is further buttressed by a third
factor. MCL 324.3109(3) explicitly states that a munici-
pality is not responsible for a discharge from a sewerage
system that is not operated by the municipality unless
the municipality has accepted responsibility in writing
for the sewerage system. If the purpose of subsection (2)
were to impose liability on a municipality merely be-
cause a discharge occurred within its boundaries, then
subsection (3) would be contradictory.
Indeed, an argument advanced by plaintiffs in an issue
that we need not reach, whether the state is obligated to
fund the sewerage system under the Headlee Amend-
ment
4
if defendant is compelled to construct one, fur-
ther reinforces this argument. Plaintiffs argue that the
obligation of a township to install a sanitary-sewerage
system predates the Headlee Amendment and, there-
fore, does not constitute a new local obligation that the
Headlee Amendment compels the state to fund. In
making this argument, plaintiffs look to the former
statute, MCL 323.6, which stated in pertinent part that
any
city, village or township which permits, allows or suffers
the discharge of such raw sewage of human origin into any
4
See Const 1963, art 9, §§ 25 and 29.
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of the waters of the state by any of its inhabitants or
persons occupying lands from which said raw sewage
originates, shall be subject only to the remedies provided
for in [MCL 323.7].
Assuming for the sake of argument that such a
remedy included the compulsory installation of a
sanitary-sewerage system,
5
while it would perhaps save
the state from being obligated to fund a sewerage
system in Worth Township if the current statute were
to continue to impose such an obligation, it only serves
to underscore that no such obligation exists. While part
31 of NREPA parallels the former act in many respects,
there are some very noticeable differences. First, while
former MCL 323.6(b) specifically referred to a “city,
village or township,” current MCL 324.3109 refers
more generally to “municipality,” a word that, as will be
discussed later in this opinion, carries a much broader
definition. But even more importantly, while former
MCL 323.6(b) specifically addressed the issue of a city,
village, or township that allowed a discharge to occur by
any of its inhabitants, there is no such language in the
current statute that links responsibility for the actions
of an inhabitant to a particular governmental body. It is
a basic rule of statutory construction that a change in
the use of words by the Legislature is intentional and
reflects a similar change in meaning.
6
So if, as plaintiffs
5
Given the lack of any clear mandate in former MCL 323.7 of such a
remedy, this would seem to be a great assumption indeed, particularly in
light of the failure of past panels of this Court to find any such obligation.
See, e.g., McSwain v Redford Twp, 173 Mich App 492, 499-500; 434
NW2d 171 (1988) (stating that “we do not believe defendant was required
by statute to install a sanitary sewer system under the instant circum-
stances”); Ahearn v Bloomfield Charter Twp, 235 Mich App 486, 494-495;
597 NW2d 858 (1999) (concluding that just because a township has
provided sanitary sewer service does not mean that it is under a
continuing duty to do so).
6
Bush, 484 Mich at 167.
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argue, the old statute did impose an obligation on a
township to install a sanitary-sewerage system in re-
sponse to an inhabitant discharging sewage, then it
follows that the change in wording of the statute
reflects an intent by the Legislature to remove such an
obligation.
7
For these reasons, we agree with defendant’s inter-
pretation of subsection (2). When an unauthorized
discharge occurs, the presumption arises that the mu-
nicipality within whose boundaries the event occurs is
responsible for the violation unless the municipality can
establish that the discharge did not occur as the result
of actions by the municipality. When, as here, the
municipality could not have been the source of the
discharge because it did not operate a sanitary-
sewerage system, it has overcome that presumption and
is not subject to the statutory remedies for a discharge.
In any event, even if we were to agree with plaintiffs
that MCL 324.3109(2) creates a responsibility by a
municipality for an unauthorized discharge of raw
sewage and the municipality is thus subject to the
remedies of § 3115, plaintiffs face another hurdle: the
definition of “municipality.” For purposes of part 31 of
NREPA, MCL 324.3101(m) supplies a particular defini-
tion of “municipality”: “this state, a county, city, village,
or township, or an agency or instrumentality of any of
these entities.” Thus, the state is as much a municipal-
ity as is defendant. And, by extension, the state bears as
7
Indeed, plaintiffs’ argument in this respect places them in a logical
corner. If the prior statute did impose a duty on a township to install a
sanitary-sewerage system in these circumstances, then the change in
statutory language of necessity did away with that duty. But if no such
duty existed under the previous statute and the current statute does
impose one, then the Headlee Amendment obligates the state, of which
the DEQ is an agency, to provide the funding in order for plaintiffs to
compel defendant to install such a system.
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much responsibility for the unauthorized discharges at
issue in this case as does defendant. And the state is as
liable to the remedies of § 3115 as is defendant. Thus,
even if we were to agree with plaintiffs that MCL
324.3109(2) imposes on a “municipality” the responsi-
bility of installing a sanitary-sewerage system to abate
a problem with the discharge of raw sewage, plaintiffs
offer no compelling reason why they should be permit-
ted to shift their own responsibility to install a sanitary
sewer onto defendant. Or, to put it another way, if
plaintiffs are entitled to prevail in this action, then we
see no reason why defendant could not counterclaim
against plaintiffs and prevail in a claim seeking to
require plaintiffs install the sewerage system.
Indeed, if the purpose of § 3109(2) is to impose
responsibility on a governmental unit, it would seem
that the legislative intent would be to make the DEQ
the primary responsible agency because the Legislature
had available to it the use of a term that did not include
the state, namely “local unit.” MCL 324.3101(l), defines
“local unit” to mean “a county, city, village, or township
or an agency or instrumentality of any of these enti-
ties.” The only difference between the definition of
“local unit” and “municipality” in § 3101 is the inclu-
sion of the phrase “this state” in the definition of
“municipality” and not in the definition of “local unit.”
The Legislature’s choice of “municipality” rather than
“local unit” in § 3109(2) must have been intentional,
8
and it must have been for the purpose of imposing
liability on the state as well as a local unit.
But the more logical explanation is that § 3109(2)
simply is not designed to establish responsibility for a
discharge without causation. If the Legislature in-
tended to, as plaintiffs suggest, impose responsibility on
8
See Bush, 484 Mich at 167.
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a governmental unit when an inhabitant causes a
discharge, why would it use a term that would simulta-
neously impose such responsibility on three or four
units of government
9
without any clear mandate about
which of those units had primary responsibility? But if
we interpret the statute as suggested by defendant,
then the statute creates the presumption that each of
those units of government is the cause of the discharge
and each avoids responsibility when it establishes that
it was not the source of the discharge.
In sum, we hold that MCL 324.3109(2) does not
impose blanket responsibility on a municipality for any
sewage discharge that occurs within its jurisdiction and
a corresponding obligation to remedy such discharges
without regard to cause. Rather, it merely creates the
presumption that such a discharge originated with the
municipality. But when, as here, the municipality, de-
fendant in this case, cannot have been the cause of the
discharge, it holds no responsibility for the discharge.
And, therefore, there is no basis to impose on defendant
the obligation to pursue the remedy desired by plain-
tiffs, the installation of a public sanitary-sewerage
system. The trial court should have granted summary
disposition to defendant, not to plaintiffs.
In light of our resolution of this issue, we need not
address the remaining issues raised by defendant.
The order of the circuit court granting summary
disposition to plaintiffs is reversed. The matter is re-
manded to the circuit court with instructions to enter
an order of summary disposition in favor of defendant.
We do not retain jurisdiction. Defendant may tax costs.
O
WENS
,P.J., concurred.
9
Under the term “municipality,” the state and the county would
always be responsible, as well as the city, village, or township.
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O’C
ONNELL
,J.(dissenting).
I would affirm the well-reasoned decision of the
learned trial judge.
I. FACTS
Defendant Worth Township is located in Sanilac
County along the western shore of Lake Huron. Be-
cause of its proximity to Lake Huron, the township has
long been a haven for vacationers. Years ago, significant
portions of the land in the township were divided into
small lots, and cottages were built on them. Increas-
ingly, these cottages are being upgraded to permanent,
year-round residences. Although the lots are small and
crowded, the township has never installed a sewerage
system. Instead, homeowners have relied on individual
septic systems to dispose of household sewage, even
though the lots are too small to safely and effectively
accommodate these systems. Unfortunately, after being
forced to rely for years on aging systems located on
small lots in an area with a high groundwater table,
many residents find that their septic systems are fail-
ing.
1
Both the township and the Michigan Department of
Environmental Quality (DEQ)
2
concede that a majority
of the septic systems in a three-to-five-mile area along
1
A septic system works by providing an area for household and human
waste to be broken down and disposed of safely in the soil. Waste initially
travels to a septic tank, where it is held for a couple of days to allow solids,
oils, water, and other particles to separate and to give bacteria an
opportunity to break down waste. Solids and sludge remain in the tank,
while partially treated wastewater flows out of the tank to a drainfield.
The drainfield consists of a series of perforated, interconnected pipes
lying in sand or gravel-filled trenches. The wastewater seeps out of the
perforations and into the soil, which acts as an additional filter to break
down and remove any remaining toxins in the water.
2
References herein to the DEQ include the Director of the DEQ.
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the shore of Lake Huron are old, undersized, and
failing. As a result, raw sewage from the failed septic
systems has been emptying into roadside ditches, storm
sewers, streams, and outfalls that empty into Lake
Huron. An approximately three-mile strip of the town-
ship’s Lake Huron shoreline has been included on
Michigan’s list of impaired waters because of the pres-
ence of raw human sewage in the water. Numerous
officials have testified that raw sewage in the township
is a risk to the health, safety, and welfare of the local
citizens and anyone who attempts to use the beaches or
drink the ground water in this distressed area.
Since being made aware of the problem, the DEQ has
attempted to work with the township to resolve it. In
April 2004, the township entered into a district-
compliance agreement with the DEQ. In the signed
contract, the township agreed to construct a municipal-
sewerage system by June 1, 2008. However, because of
a lack of funds, the township refused to honor the
agreement.
3
Consequently, sewage conditions in the
township remain a serious health hazard and an envi-
ronmental nightmare for those who live, travel, and
swim in the affected area. As a result of the township’s
refusal to honor its agreement with the DEQ and to
take responsibility for the discharge into Lake Huron of
raw sewage generated in the township, the DEQ filed
this case.
In its complaint, the DEQ alleges that these illegal
discharges are the result of the township’s refusal to
take responsibility for numerous failing on-site septic
3
One issue not properly raised before this Court is the township’s
breach of this agreement. I note that by signing the agreement, the
township admitted its responsibility to fix the problem. Further, it seems
obvious that enforcement of the agreement is one solution to this
persistent problem.
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systems in its jurisdiction. It claims that the township is
responsible for the discharge of human waste within its
boundaries under part 31 of the National Resources and
Environmental Protection Act (NREPA), MCL
324.3101 et seq. The DEQ requested that the court
grant injunctive relief to eliminate the discharges of
raw and partially treated sewage into the state’s water-
ways. Specifically, it requested that the court order the
township to build and operate a sewerage system.
The township claimed that neither the courts nor the
DEQ could impose liability on it for failing to provide a
municipal-sewerage system. Yet despite the township’s
insistence that it has no obligation to install a sewerage
system in the affected area, the township and the DEQ
agree that a comprehensive solution for this problem is
needed. Because of the pervasive number of failing
septic systems and the severity of the public-health
impact, merely requiring individual homeowners to
repair or replace the on-site septic systems would not
solve the problem. The lots are too small, and the area
too developed, to maintain a large number of septic
systems. Instead, it is clear that the municipality needs
to formulate a comprehensive plan to address the
issue.
4
4
It is also clear that the only comprehensive solution to the problem is
the construction and installation of a sewerage system. In fact, this is the
solution that the township decided to take to abide by the trial court’s
order to “take necessary corrective action to cease the illegal discharges
and comply with Part 31....”Further, it is clear that the township’s
reticence regarding the construction and installation of a sewerage
system does not stem from a philosophical objection to governmental
provision of utilities. Instead, the township fears that it cannot pay for
the construction and installation of a sewerage system, and it wants the
state or some other entity to foot the bill. It has indicated that it would
prefer to simply require individual landowners to use pump-and-haul
systems to dispose of their sewage and to condemn properties if the
landowners are unable to stop the leaching of sewage from their septic
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Following the filing of the complaint, the township
moved for summary disposition, asserting that under
MCL 324.3109 the township cannot be held liable for
the discharge of raw sewage of human origin from
private residences into state waters. In essence, the
township claimed that neither the court nor the DEQ
has the authority to order it to remedy the situation.
The trial court rejected the township’s arguments and
denied the motion, holding that although the state has
enforcement authority over water pollution, “that does
not eliminate the liability under [MCL 324.3109] that
falls squarely on the municipality in which the dis-
charge originated.” The court then continued:
The Plaintiff may indeed have exclusive enforcement,
[sic] authority or regulatory authority. But that does not
equate with the liability, and it doesn’t alter the clear and
unambiguous language of the statute that imposes liability.
Likewise, the Health Department may have jurisdiction
with respect to some aspects of the septic systems. But as to
enforcement and regulation of [MCL 324.3109], that power
lies with the Plaintiff with liability falling under the
statute on the Defendant.
[
5
]
The DEQ then filed a motion before the trial court
for summary disposition pursuant to MCR
2.116(C)(10), claiming that the undisputed facts en-
titled it to judgment as a matter of law against the
township for violating MCL 324.3109 and MCL
systems into the environment instead of paying for a sewerage system.
Yet given the pervasiveness of this problem, the inadequacy of using
pump-and-haul systems to address it indefinitely, and the lack of any
other feasible homeowner-initiated solution, it is conceivable that many
of the affected properties would be condemned if the township’s preferred
method of dealing with this situation were implemented.
5
Although the township applied for leave to appeal this ruling, this
Court denied the application. Dep’t of Environmental Quality v Worth
Twp, unpublished order of the Court of Appeals, entered July 2, 2008
(Docket No. 282183).
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324.3112. The trial court granted the DEQ’s motion,
finding that the uncontroverted evidence indicated that
numerous residences in the township had failing septic
systems, which caused raw human sewage to discharge
into state waters. The trial court also found that the
discharges violated part 31 of NREPA and that the
township was liable for the discharges under MCL
324.3109(2). The trial court’s excellent opinion from
the bench, which it adopted in its accompanying written
order, bears repeating in its entirety:
Well, really, when I look at these cross-motions together,
I see issues, there are legal issues, then there’s [sic] issues
that are factual issues. And I’m going to try to address all
of them. And starting first with the legal issues, several of
the arguments that are raised by the Defendant in its
motion for summary disposition are indeed arguments that
were previously made and ruled on by this Court in
September of 2007, when this Court ruled on the Defen-
dant’s motion for summary disposition at that time. And
the arguments were rejected at that time, and were re-
jected again when this Court denied the Defendant’s mo-
tion for reconsideration. Nevertheless, I will revisit them.
For purposes of clarification, [MCL 324.3109(1)] pro-
vides that a person shall not, directly or indirectly, dis-
charge into the waters of this state, a substance that is or
may become injurious to the — and then it lists the public
health, safety, welfare, the uses made of the water, the
value of the riparian lands, etcetera, etcetera.
[MCL 324.3109(2)] provides that if raw sewage of hu-
man origin is discharged, it is prima facie evidence of a
violation by the municipality in which the discharge origi-
nated. I agree with the Defendant, that a prima facie case
is the same as a rebuttable presumption. But what [MCL
324.3109(2)] does is it creates a presumption that raw
human sewage is injurious to public health, the uses of
water, etcetera, all of the things that are listed. And it
clearly imposes liability on the municipality in which the
discharge originated.
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Now, why would it do that? Well, probably because local
governments have the ability to construct and maintain
wastewater treatment systems to require home owners to
hook up to those systems, to adopt public health ordi-
nances, to institute condemnation proceedings, etcetera,
etcetera.
And the Plaintiff points out, and I agree, that this is
evidence in Judge O’Connell’s dissent in [Lake Isabella
Dev, Inc v Village of Lake Isabella, 259 Mich App 393; 675
NW2d 40 (2003)], where he observed that there have been
40 years of legislation designed to require local government
to manage its sewage because local government possesses
the resources, the information and the local accountability
to do so.
In my view, the plain language of the statute puts
liability on the municipality where the discharge origi-
nated. And had the legislature wanted to impose a different
scheme of liability, it could have said that the discharge of
raw human — sewage of human origin, pardon me, is
prima facie evidence of a violation by the municipality that
directly discharges it, or it could have said by the person
who discharges it. They said: “By the municipality in which
it originates.” Their language adds to the clear intent.
When you look at the possibility of what they could have
said, it lends further credence to [sic] the clear intent here
is to impose liability on the municipality where the dis-
charge originated. And, in fact, the statute goes on to
address those circumstances where the municipality can-
not be held responsible. So that is additional evidence of
the very clear intent here of the legislature. In my view, the
statute is unambiguous. It’s unambiguous in making a
municipality where the discharge originated subject to the
remedies in [MCL 324.3115].
Now, the Defendant argues, as it did in September 2007,
that strict liability cannot be imposed on the Township per
Lake Isabella Development versus Lake Isabella. The hold-
ings in Lake Isabella Development is [sic] that a rule
promulgated by the Department of Environmental Quality
did not comport with legislative intent because it imposed
liability on the municipality to take over operation and
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maintenance of a privately owned and built sewage system
if the owner fails to perform.
Now, DEQ did argue that the rule was an enforcement
mechanism for the strict liability imposed by [MCL
324.3109]. I don’t think this falls precisely under the strict
ruling and holding in the Lake Isabella Development case.
They did address the argument that was made by DEQ.
And the Court of Appeals said that liability under [MCL
324.3109] requires actual knowledge, constructive knowl-
edge, or disregard under [MCL 324.3115]. I agreed with the
Plaintiff, I read those requirements to be necessary for
criminal liability. [MCL 324.3115] contains no knowledge,
constructive knowledge or disregard requirement for civil
fine or for injunctive relief. But, nevertheless, this case is
not dependent on strict liability.
The Township of Worth was aware, and has been aware,
for many years, of the discharge of raw human sewage into
the waters of this state. The affidavit of Janice Putz,
P-U-T-Z, who was the Township supervisor of November
2000 to November 2004, supports that. She indicates that
she received many complaints from residents of sewage
either running in the ditches, gullies, or onto neighboring
properties. She personally investigated and personally ob-
served failing septic systems with raw sewage, gray in color,
a distinct foul sewage odor, flowing into residents’ lots into
drainage ditches.
Furthermore, the affidavit of Lynn Laughlin, L-A-U-G-
H-L-I-N, who was the zoning administrator, slash, ordi-
nance enforcement office, from October 2002 until Febru-
ary 2005, further supports this. She also received
complaints of sewer odor, as well as residents complaining
of unwanted discharges flowing onto their property. She
indicates that she would visit the site, personally, to verify
these complaints. And she formatted a sanitary complaint
form every time she received a complaint and recorded it.
She observed many instances of human sewage being
discharged into the Mill Creek and ultimately into Lake
Huron. She describes that there is an area of saturation of
human waste into the soil. And that when she walked on it,
the ground was saturated in sewage and was spongy. She
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actually documented failing septic systems on a map and
documented 30-plus leaching septic systems, and 30 to 40
homes that were pumping gray water onto the soil. She
noted one particularly bad area where four or five homes
had installed pumps and were pumping their bath, dish
water and laundry wastewater onto the property. She noted
on several occasions she witnessed trenches had been dug
along property lines to drain saturated septic fields to the
creek.
Furthermore, the affidavit of Grant Carman, C-A-R-M-
A-N, who is the environmental health director from 1970 —
well, he was with the Sanilac County Health Department
from 1970 to 2007, for much of that time, the environmental
health director, he said that for many years he observed
numerous instances in Worth Township where the discharge
of sewage of human origin is being made to the ground
surface into ditches, over the lake bluff and through perim-
eter drains and storm drains. This was due to failing septic
systems. That the failing septic systems existed right up to
the date of his retirement, which was in August of 2007. He
said he evaluated hundreds of septic systems in Worth Town-
ship in the area of concern, and 80 percent were in a state of
failure. They were either openly discharging to a ditch, or
discharging through a camouflage drain, or intermittently
flooded due to the high seasonal water table. In some in-
stances he said there was a direct discharge over the bluff to
Lake Huron. He noted these conditions on permits and
inspection reports.
Furthermore, the affidavit of Susan VanDyke, who says
that she was with the Sanilac County Health Department
from April 2002 to the present, as an environmental health
staff sanitarian, she observed numerous instances in Worth
Township where the discharge of sewage of human origin
was being made to the ground surface into ditches, again,
over the lake bluff, through perimeter drains and storm
drains. That has occurred and continues to occur due to
failing septic systems. She also says the failing septic
systems are prevalent in a densely populated region of
Worth Township, which is the area of concern. That these
failures have been documented in a complaint log, and in
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the Township files. She evaluated dozens of septic systems
in Worth Township that were failing. Eighty to 85 percent
were in the state of failure. They were openly discharging
into a ditch. She noted, again, those failed conditions on
permits and inspection reports.
Furthermore, there is a district compliance agreement
that was signed by the Department of Environmental
Quality and Worth Township on August 9, 2004. And that
district compliance agreement very clearly sets forth the
Township’s knowledge and awareness of the fact that
failing septic systems have caused raw sewage of human
origin to enter the waters of this state. And that action
needs to be taken to abate that situation.
Furthermore, Worth Township, itself, passed resolution
[sic] indicating — Resolution 2004-9: There are numerous
documented instances of failed sewage systems within the
densely populated area of Worth Township.
Further, the Ordinance notes that they are depositing
sewage directly to the surface and ground water and
creating a public health hazard. The resolution goes on to
acknowledge that [a] wastewater collection and treatment
system is going to be functional, and that action has to be
taken until it is functional.
Likewise, Resolution 2005-10 makes the very same
observations that there are failed sewage systems in Worth
Township. That sewage is being deposited directly to the
surface and groundwater, creating a public health hazard.
And that action has to be taken until a wastewater collec-
tion and treatment system is functional.
So even if strict liability is, in the view of the Court of
Appeals, not the case with the statute, Worth Township
had years of notice, years of knowledge that this was an
ongoing pervasive problem throughout the Township, that
there was a discharge into the waters of this state, and that
it created a hazard for human health.
Going on to the Defendant’s other legal argument[s],
and they’re made in response to the Plaintiff’s motion, the
Defendant, again, raises some issues that were previously
raised. And, essentially, the Defendant argues that given
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separation of powers, and the right to local self-
government, it cannot be compelled to build a public sewer
system, and that there is no authority to say that it can be
compelled. Well, I’m not going to compel Worth Township
to build a public sewer system. But there is, in fact,
authority. And it’s [People ex rel Stream Control Comm v
Port Huron, 305 Mich 153; 9 NW2d 41 (1943)]. The Steam
[sic] Control Commission ordered the City of Port Huron to
construct a sewage treatment plant. The trial court refused
to enforce that order because it used a balance test in
determining whether injunctive relief was appropriate, and
weighed out whether there would be greater harm to the
city to enforce the order than there would be to Plaintiff in
denying enforcement of the order. The Supreme Court
reversed that saying there’s no balancing done in the issue
of Public Health, even though the City claimed it didn’t
have the money. The Supreme Court ordered enforcement
of the Steam [sic] Control Commission’s order.
Now, I have been asked to take judicial notice with
regard to some underlying facts of that case. And I’m going
to decline that request, because the case is what it is. It is
the law. And I don’t think it’s appropriate to take judicial
notice or relevant to take judicial notice of underlying facts
in that case that may or may not be facts in that case.
Because the only pertinent aspect of that case is the
holding of the Supreme Court.
Furthermore, there is authority in NREPA for the relief
requested, which is to require that the discharge be
stopped, and that the problem be fixed. And that is that
[MCL 324.3115] provides that the Attorney General may
commence a civil action for appropriate relief, including a
permanent or temporary injunction. Further, it provides
that the Court has jurisdiction to restrain the violation and
require compliance. And I would note one other thing that
I really don’t think is dispositive by itself. But I think it is
something that bears mentioning. And that is that no one
has unilaterally told Worth Township that they had to
build a sewer system. Actually, the district compliance
agreement that was signed by the DEQ and Worth Town-
ship agreed to do just that. Worth Township agreed to a
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time table for construction of a sewage treatment system.
And, according to the affidavit of Janice Putz, that agree-
ment was signed after much discussion with the full
township board at open meetings. So Worth Township
reached the conclusion, after the entire process of open
meetings, and township legislative action, that that is what
was required to be done. Even the resolution that I
previously mentioned acknowledged that decision to build
a wastewater collection and treatment system. So they’ve
acknowledged the depth of the problem, and the need to
address it as a pervasive problem.
Finally, there is the argument that was raised in 2007,
and, again, now compelling Worth Township to comply
with NREPA that would violate the Headlee Amendment
[Const 1963, art 9, §§ 25 to 34]. This is not like [Delta Co v
Dep’t of Natural Resources, 118 Mich App 458; 325 NW2d
455 (1982), overruled in part by Livingston Co v Dep’t of
Management & Budget, 430 Mich 635; 425 NW2d 65
(1988),] where a general duty to avoid unlawful pollution
was changed to a more specific duty to construct a PVC
liner or a 2-foot clay backup on a bustling solid waste
landfill. There are no new or increased duties in this case.
The statute before Headlee in this case would have
required Worth Township to comply with the requirements
not to discharge raw sewage of human origin into any
waters of this state. The statute, after Headlee, remains the
same. The only thing that is changed is the mechanism of
enforcement. The mechanism of the statute before Headlee
was a hearing before a commission that could then order
compliance. The mechanism after Headlee is an action in
Circuit Court with a judge having the ability to order
compliance. Headlee is simply not implicated in this case.
Now, there are a couple factual arguments that the
Defendant makes. One is that there is no proof that the
contamination is of human origin. And the support they
have for that is an affidavit in which the affiant says that
there was no testing that appears to be done to determine
if it was of human origin. I would say that the evidence
here that it is of human origin isn’t just compelling, it’s
overwhelming, and it’s unrebutted. The evidence, as I
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already described, comes from numerous eye witness ac-
counts of people who have observed the failing septic
systems, and observed the raw sewage from those systems
running into the waters of this state. There is no other
method of disposal of human waste other than these septic
systems. And the Township itself has acknowledged their
failure. To say that there is no proof that the contamina-
tion is of human origin is almost preposterous.
The argument is also made that the contamination is
virtually non-existent as of 2008. The September 16, 2008
report of a sanitary wastewater survey conducted in Worth
Township shows that there is contamination to surface
water with fecal coliform and E. coli bacterial counts
succeeding [sic, exceeding] water quality standard[s].
The report goes on to indicate that 14 sites were
sampled for fecal coliform. And 36 percent were above the
water quality standard. Thirty-one sites were sampled for
E. coli, and 81 percent were above the water quality
standard for total body contact, which means that people
can’t swim in that water. Fifty-two percent were above the
water quality standard for partial body contact, which
means people can’t fish in that water. Of the 14 sewers
sampled that directly discharge into the Lake Huron, 36
percent had fecal coliform counts greater than Michigan’s
water quality standard.
I would say, again, with respect to that issue, the
evidence isn’t just compelling, it’s overwhelming, and it is
unrebutted, and it very clearly entitles the Plaintiff to
summary disposition under MCR 2.116(C)(10), and I am
granting the Plaintiff’s motion, and I’m denying the De-
fendant’s motion.
Pursuant to MCL 324.3115, the trial court then di-
rected the township to take necessary corrective mea-
sures in accordance with a given time schedule and to
pay fines and attorney fees. The township now appeals.
6
6
It is important to note that this is a civil case between a local unit of
government and the state for injunctive relief to resolve an environmen-
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II. ISSUE
On appeal, the township claims that it is not
responsible for the inadvertent discharge of raw
sewage from private septic systems within its bound-
aries.
7
In particular, the township makes the surprising
assertion that Michigan courts have no authority to
grant injunctive relief to resolve this dispute. Yet re-
markably, the majority opinion reverses the trial court
and concludes that MCL 324.3109(2) does not apply to
the township.
Historically, townships have been responsible for
addressing issues concerning the infrastructure
needed to provide proper utilities and access to prop-
erties within their boundaries. This includes the
responsibility for overseeing proper disposal of sew-
age generated by businesses and residences within
the township. Under the Michigan Constitution, a
township has the authority to grant public utilities
franchises within its constituted boundaries. Const
1963, art 7, § 19. Under the Township and Village
Public Improvement and Public Service Act, town-
ships have the authority to acquire property through
purchase, acceptance, or condemnation and to fi-
nance, construct, and maintain sanitary sewers and
tal and public-health crisis. It is not a criminal action; it is an action in
equity to remediate a serious problem in the township.
7
In its brief on appeal, defendant raises a separation-of-powers argu-
ment and alleges a Headlee Amendment violation, see Const 1963, art 9,
§§ 25 to 34. In my opinion, both arguments are meritless. MCL 324.3115
provides that the Attorney General may seek an injunction for appropri-
ate relief in this circumstance, and the trial court’s injunction simply
ordered the township to develop a comprehensive plan to remediate an
environmental and public-health crisis. Most importantly, it is the
responsibility of the township to remediate the problem. There exists no
Headlee Amendment violation because even before the Headlee Amend-
ment was implemented, the township had been responsible for remedi-
ating sewage problems within its boundaries.
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sewage disposal plants and equipment. MCL
41.411(1) and (3). Further, townships have the statu-
tory authority to adopt ordinances regulating public
health, safety, and welfare, including ordinances that
require individual property owners to hook up to a
public sanitary-sewerage system. MCL 41.181; MCL
333.12753(1); see also MCL 324.4301 et seq.
These historical obligations entrusted to a township
to oversee the proper disposal of sewage within its
boundaries are further reflected by MCL 323.1 et seq., a
former act establishing a state water resources commis-
sion and repealed by 1994 PA 451, which in turn
enacted the more comprehensive NREPA. Former MCL
323.6(a) stated, “It shall be unlawful for any person
directly or indirectly to discharge into the waters of the
state any substance which is or may become injurious to
the public health, safety, or welfare....”Former MCL
323.6(b) stated:
The discharge of any raw sewage of human origin,
directly or indirectly into any of the waters of the state
shall be considered prima facie evidence of the violation of
[MCL 323.6(a)] unless said discharge shall have been
permitted by an order, rule, or regulation of the commis-
sion. Any city, village or township which permits, allows or
suffers the discharge of such raw sewage of human origin
into any of the waters of the state by any of its inhabitants
or persons occupying lands from which said raw sewage
originates, shall be subject only to the remedies provided
for in [MCL 323.7].
The Legislature clearly intended that a local unit of
government, such as a township, be responsible for both
the direct and indirect discharge of human sewage
within its boundaries into state waters. The Legislature
further intended that a township be subject only to the
remedies provided by the act, and it gave the Attorney
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General’s office authority under former MCL 323.6(d)
to pursue an action to resolve the violations.
8
After MCL 323.1 et seq was enacted, it went through
several amendments and eventually was incorporated into
part 31 of NREPA, MCL 324.3101 et seq. When it incor-
porated the statute into NREPA, the Legislature did not
alter a township’s responsibility for the discharge of raw
sewage into state waters. MCL 324.3109 states:
(1) A person shall not directly or indirectly discharge
into the waters of the state a substance that is or may
become injurious to any of the following:
(a) To the public health, safety, or welfare.
(b) To domestic, commercial, industrial, agricultural,
recreational, or other uses that are being made or may be
made of such waters.
(c) To the value or utility of riparian lands.
(d) To livestock, wild animals, birds, fish, aquatic life, or
plants or to their growth or propagation.
(e) To the value of fish and game.
(2) The discharge of any raw sewage of human origin,
directly or indirectly, into any of the waters of the state
shall be considered prima facie evidence of a violation of
this part by the municipality in which the discharge
originated unless the discharge is permitted by an order or
rule of the department. If the discharge is not the subject of
a valid permit issued by the department, a municipality
responsible for the discharge may be subject to the rem-
edies provided in [MCL 324.3115].
[
9
]
8
MCL 323.6(d) stated:
Any violation of any provision of [MCL 323.6] shall be prima
facie evidence of the existence of a public nuisance and in addition
to the remedies provided for in this act may be abated according to
law in an action brought by the attorney general in a court of
competent jurisdiction.
9
MCL 324.3109(3) solely concerns a municipality’s responsibility for
an unauthorized discharge by a sewerage system that services, but is not
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MCL 324.3101(m) defines “municipality” as “this state,
a county, city, village, or township, or an agency or
instrumentality of any of these entities.” By defining a
“municipality” to include a township, the Legislature
chose not to alter the liability of the local unit of
government for the discharge of human sewage into
state waters within its boundaries.
10
MCL 324.3109 provides a methodology to resolve and
remediate any environmental problems that may occur
within a municipality. MCL 324.3109(1) imposes liabil-
ity for a direct discharge of raw sewage into the waters
of this state. MCL 324.3109(2) imposes liability on a
owned by, the municipality. Because no sewerage system even exists
within in the township, this subsection is wholly inapplicable to the
present case.
10
I disagree with the majority’s rationale that because it can identify
another entity that it believes should also hold some responsibility for the
discharges, the township should automatically be let off the hook. The
fact that another governmental entity, such as the state, a county, a city,
or a village, has overlapping jurisdiction over the area where the
discharge originated and could potentially be held liable for the discharge
is irrelevant to the fact that the township can also be held responsible for
a discharge of raw sewage within its borders and be subject to the
remedies set forth in MCL 324.3115. MCL 324.3115 permits the Attorney
General to file a civil suit against any appropriate party to compel
compliance with the statute and allows for injunctive relief. MCL
324.3115(1) states, in pertinent part:
The department may request the attorney general to com-
mence a civil action for appropriate relief, including a permanent
or temporary injunction, for a violation of this part or a provision
of a permit or order issued or rule promulgated under this part....
The court has jurisdiction to restrain the violation and to require
compliance. In addition to any other relief granted under this
subsection, the court, except as otherwise provided in this subsec-
tion, shall impose a civil fine of not less than $2,500.00 and the
court may award reasonable attorney fees and costs to the prevail-
ing party.
If the township believes that it is not the only municipality that should be
held responsible for these discharges, the appropriate solution is to seek
to add these additional entities as codefendants in this action.
440 289 M
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municipality, including a township, for any “discharge
of any raw sewage of human origin, directly or indi-
rectly, into any of the waters of the state” if the
discharge occurred within that municipality’s borders.
Through a process of questionable linguistics, unneces-
sary definitions, and rebuttable presumptions, the major-
ity concludes that MCL 324.3109(2) only applies to a
municipality if it is the discharging party. Yet if the
majority’s interpretation were correct, MCL 324.3109(2)
would be unnecessary in light of MCL 324.3109(1). MCL
324.3109(1), which the majority opinion fails to take into
consideration, prohibits a person from directly or indi-
rectly discharging human sewage into the waters of this
state. A “person,” for purposes of NREPA, includes a
governmental entity. MCL 324.301(h). It is MCL
324.3109(1), not MCL 324.3109(2), that applies to circum-
stances in which the actions of a municipality lead to a
discharge. MCL 324.3109(6) identifies remedies available
to address such a violation.
The purpose of MCL 324.3109(2) is to make the local
municipality responsible for any discharges within its
boundaries, even if the municipality did not actively
discharge the sewage in question. Although the major-
ity believes that the phrase “by the municipality” in
this subsection indicates that the municipality only
faces responsibility if its actions lead to the discharge, I
find this interpretation of the relevant phrase to be
incorrect. The majority correctly notes that Random
House Webster’s College Dictionary (1997) includes
“through the agency of” and “as a result or on the basis
of” among its definitions of the term “by.” However, the
proper application of these definitions to the phrase “by
the municipality” does not automatically lead to the
conclusion that the phrase indicates that some direct
action by the municipality causing the discharge must
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occur for the municipality to be held responsible. In-
stead, the evidence makes it quite clear that in this case,
the massive discharges of human waste into Lake
Huron have occurred “as a result” of the township; if
the township had a sewerage system, such discharges
would not occur. Regardless, I believe that a proper
reading does not require implementing such semantics;
the phrase “by the municipality” is simply used to
modify “violation,” in order to indicate the entity sub-
ject to liability for the discharge.
11
I also note that the phrase “prima facie evidence” in
MCL 324.3109(2) is modified by the phrase “of a violation
of this part....” This means that the discharge of raw
human sewage into state waters is prima facie evidence of
a violation of part 31. Part 31 includes MCL 324.3109(1),
which prohibits the discharge of a substance that is or
may become injurious to public health, safety, or welfare.
Accordingly, this prima facie evidence of a violation of part
31 is rebutted by a showing by the municipality that the
discharges are not injurious to public health, safety, or
welfare, e.g., that the discharges are nominal or will not
cause injury. Yet in this case, the discharges are pervasive,
extensive, and of such high concentrations that they are
clearly injurious to the public health, safety, or welfare.
In addition, the majority orders that on remand, the
trial court must enter an order of summary disposition in
favor of defendant. The majority appears to determine
that summary disposition is appropriate because any
prima facie evidence indicating that the township is re-
sponsible for discharges of human waste within its bor-
11
The majority mistakenly concludes that the DEQ is a municipality
under the definition set forth in MCL 324.3101(m). However, MCL
324.3101(d) indicates that part 31 of NREPA uses the term “department”
to refer to the DEQ. If the Legislature had wished to include the DEQ in
its definition of “municipality,” it is conceivable that it would have
included “the department” in its list of entities, but it did not.
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ders into state waters is thoroughly and completely rebut-
ted by the fact that the township does not operate any
sanitary system that could be the source of the discharge.
However, rebuttal of prima facie evidence of a violation
does not automatically mean that summary disposition in
favor of the opposing party is appropriate, especially in a
case like this, in which the evidence suggests that the
township is responsible for the ongoing discharge of
human waste into state waters by actively delaying the
construction of a sewerage system.
12
At the very least, the
majority should remand for additional fact-finding in-
stead of summarily granting summary disposition in
favor of the township.
In Lake Isabella, 259 Mich App at 414 (O’C
ONNELL
,J.,
dissenting), I noted that “local governments, through
forty years of legislation designed to require them to
manage their sewage, possess the resources, informa-
tion, and local accountability needed to take responsi-
bility” for an abandoned sewerage system. The same
rationale applies here. It has always been, currently is,
and, until the Legislature devises a new methodology to
remediate sewage problems, always will be the local
unit of government’s responsibility to provide a proper
and effective plan for sewage disposal within its bound-
aries. The township has no viable claim that another
governmental entity should bear the responsibility of
taking the necessary corrective action.
13
12
In addition, it is likely that the township also has some direct
responsibility for the leaching of human waste into state waterways. The
Worth Township office, located at 6903 Lakeshore Road, is located within
the affected area. The office presumably has a septic system, and it is
conceivable that waste from this township-owned septic system is leach-
ing into state waters.
13
In my opinion, Lake Isabella was wrongly decided. The Supreme
Court should grant leave and both reverse the present case and overrule
Lake Isabella.
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I would affirm and adopt as my own the well-
reasoned decision of the learned trial judge.
14
14
The majority effectively concludes that the state has no authority to
order local units of government to remediate sewage problems. The
unintended consequence of this decision is that no one is responsible for
the abominable and unsanitary conditions in Worth Township.
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PEOPLE v DENDEL (ON SECOND REMAND)
Docket No. 247391. Submitted October 29, 2009, at Lansing. Decided
August 24, 2010, at 9:00 a.m.
Katherine S. Dendel was convicted of second-degree murder in the
Jackson Circuit Court, Chad C. Schmucker, J. Experts for the
prosecution had testified that the deceased, Paul M. Burley,
defendant’s domestic partner, had died as the result of an insulin
injection, and the court determined that defendant had killed
Burley by injecting him with the insulin. The Court of Appeals,
B
ORRELLO
,P.J., and S
AAD
,J.(W
ILDER
, J., dissenting), in an unpub-
lished opinion per curiam, issued July 18, 2006 (Docket No.
247391), reversed the conviction and remanded the case to the
trial court for a new trial on the basis of defendant’s claim of
ineffective assistance of counsel. The Supreme Court reversed the
judgment of the Court of Appeals and remanded the case to the
Court of Appeals for consideration of defendant’s remaining issues
raised on appeal. 481 Mich 114 (2008). On remand, the Court of
Appeals, B
ORRELLO
,P.J., S
AAD
, C.J., and W
ILDER
, J., affirmed defen-
dant’s conviction in an unpublished opinion per curiam, issued
September 11, 2008 (Docket No. 247391). The Supreme Court, in
lieu of granting leave to appeal, vacated in part the judgment of the
Court of Appeals and remanded the case to the Court of Appeals
for reconsideration of defendant’s Confrontation Clause and hear-
say issues in light of the United States Supreme Court’s decision in
Melendez-Diaz v Massachusetts, 557 US ___; 129 S Ct 2527; 174 L
Ed 2d 314 (2009). 485 Mich 903 (2009).
On second remand, the Court of Appeals held:
1. The statements that Burley died with a glucose level of zero
that were contained in the toxicology report prepared by employ-
ees of AIT Laboratories after the medical examiner’s original
findings had been challenged were testimonial statements. The
toxicology testing was performed in anticipation of a criminal trial.
The authors of the statements were subject to confrontation under
the Sixth Amendment.
2. People v Lewis (On Remand), 287 Mich App 356 (2010), is
not factually analogous to this case and is not binding under the
principle of stare decisis. While the Court in Lewis ruled that the
2010] P
EOPLE V
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ENDEL
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N
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ECOND
R
EMAND
) 445
autopsy report involved in that case was not testimonial because it
was prepared pursuant to a legal duty, the statements in the
toxicology report in this case were not prepared pursuant to a legal
duty but were instead prepared in anticipation of a criminal trial.
In addition, the autopsy report in Lewis did not address the pivotal
issue in that case, while the cause of Burley’s death was a primary
factual question in this case.
3. The nontestifying lab technicians’ findings that Burley’s
glucose level was zero at the time of death was the fact on which
the testifying AIT employee based his opinion that an insulin
injection was a possible cause of Burley’s death. Although the
statement concerning a glucose level of zero had no independent
incriminating effect, it was an accusatory statement under
Melendez-Diaz because it supported the prosecution’s theory that
defendant killed Burley by injecting him with insulin. While the
glucose-level finding was purportedly the result of neutral scien-
tific testing, the Court in Melendez-Diaz ruled that such testing is
not exempt from the Confrontation Clause because of the possi-
bility of error or bias.
4. The technicians’ statement of a zero-glucose finding com-
ported with the factors indicating a testimonial statement subject
to the Confrontation Clause delineated in Davis v Washington, 547
US 813 (2006), and analyzed in People v Bryant, 483 Mich 132
(2009). The classifying of a statement as a fact in support of an
expert’s conclusion rather than the conclusion itself does not
negate evidentiary or Confrontation Clause concerns.
5. The glucose report was not admissible under the hearsay
exception for public records because the report was obtained in
response to the medical examiner’s request in the course of
investigating a suspicious death. In addition, Crawford v Wash-
ington, 541 US 36 (2004), provided that out-of-court statements
are not exempt from confrontation merely because they come
within a hearsay exception, including hearsay exceptions tradi-
tionally considered to be imbued with indicia of reliability.
6. Defendant’s Sixth Amendment right to confront witnesses
was violated when the testifying AIT employee was permitted to
give hearsay testimony that other persons in the AIT laboratory
had determined that Burley’s glucose level was zero at the time of
his death.
7. Defendant’s failure to object to the hearsay evidence was
reasonable in light of the state of law at the time of defendant’s
trial. Fundamental fairness requires that this issue be reviewed as
though it had been fully preserved. Therefore, the standard of
review is whether it is clear beyond a reasonable doubt that a
446 289 M
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rational jury would have found defendant guilty absent the error.
If it is beyond a reasonable doubt that the jury would have
convicted defendant on the basis of the untainted evidence, she is
not entitled to a new trial. In light of the medical examiner’s
testimony, defendant’s position at trial that Burley could have
taken insulin himself, and the circumstantial evidence surround-
ing Burley’s death, it is clear beyond a reasonable doubt that a
reasonable jury would have convicted defendant absent the inad-
missible evidence regarding the toxicological results. The Confron-
tation Clause error was harmless beyond a reasonable doubt, and
defendant is not entitled to a new trial.
Affirmed.
W
ILDER
, J., concurring, agreed that under Melendez-Diaz, the
statements concerning the toxicology testing preformed at AIT
Laboratories, and, in particular, the glucose levels obtained as the
result of the testing, were testimonial in nature and, therefore,
that the testimony concerning the testing violated defendant’s
Sixth Amendment right to confront witnesses. He disagreed,
however, that fundamental fairness requires imposition of the
legal fiction proposed by the majority and the conclusion that the
appropriate remedy for the violation should be a retroactive
application of the right of confrontation, treating defendant’s
posttrial objection on Confrontation Clause grounds as having
been made at trial and preserved, even though it actually was not.
1. C
ONSTITUTIONAL
L
AW —
C
ONFRONTATION
C
LAUSE —
R
IGHT TO
C
ONFRONT
W
ITNESSES —
T
ESTIMONIAL
S
TATEMENTS
.
The Sixth Amendment bars the admission of 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 testimonial if the
declarant should reasonably have 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.
2. C
ONSTITUTIONAL
L
AW —
C
ONFRONTATION
C
LAUSE —
R
IGHT TO
C
ONFRONT
W
ITNESSES —
N
EUTRAL
S
CIENTIFIC
T
ESTING
R
ESULTS
.
Findings that are alleged to be the result of neutral scientific testing
are not exempt from challenge under the Confrontation Clause
because of the possibility of error or bias with regard to such
findings (US Const, Am VI).
2010] P
EOPLE V
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ENDEL
(O
N
S
ECOND
R
EMAND
) 447
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Hank C. Zavislak, Prosecuting Attor-
ney, and Jerrold Schrotenboer, Chief Appellate Attor-
ney, for the people.
State Appellate Defender (by Valerie R. Newman) for
defendant.
ON SECOND REMAND
Before: B
ORRELLO
,P.J., and S
AAD
and W
ILDER
,JJ.
S
AAD
,J
.
In light of a recent United States Supreme
Court case that further defines the scope of the rights
granted under the Confrontation Clause, Melendez-
Diaz v Massachusetts, 557 US ___; 129 S Ct 2527; 174 L
Ed 2d 314 (2009), our Supreme Court remanded this
case for us to address whether the trial court violated
defendant’s confrontation rights when it admitted ex-
pert testimony that was based on a report prepared by
nontestifying forensic analysts. For the reasons set
forth in this opinion, we affirm defendant’s conviction
because, though we hold that a Confrontation Clause
violation occurred, the error was harmless beyond a
reasonable doubt.
I. FACTS AND PROCEEDINGS
The trial court convicted defendant of second-degree
murder, MCL 750.317, for causing the death of her
domestic partner, Paul Michael Burley. At trial, the
prosecution maintained that defendant injected Burley
with insulin because she was frustrated and over-
whelmed by the demands of attending to Burley’s
considerable medical needs. Defendant used insulin to
treat her own diabetes, and she knew that insulin
breaks down almost immediately upon death and can-
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not be detected in a dead body. Defendant took the
position at trial that Burley died from a morphine
overdose or, if he died from an insulin injection, he
committed suicide in order to relieve defendant of the
burden of caring for him.
In People v Dendel, unpublished opinion per curiam
of the Court of Appeals, issued July 18, 2006 (Docket
No. 247391) (Dendel I), we reversed defendant’s convic-
tion and remanded for a new trial on the basis of
defendant’s claim of ineffective assistance of counsel.
Our Supreme Court reversed and remanded this case
for us to consider defendant’s remaining issues raised
on appeal. People v Dendel, 481 Mich 114; 748 NW2d
859 (2008). In People v Dendel (On Remand), unpub-
lished opinion per curiam of the Court of Appeals,
issued September 11, 2008 (Docket No. 247391) (Dendel
II), we affirmed defendant’s conviction. Defendant
sought leave to appeal, and, in leau of granting leave to
appeal, the Supreme Court vacated in part this Court’s
judgment and remanded the case for reconsideration of
defendant’s Confrontation Clause and hearsay issues in
light of Melendez-Diaz. People v Dendel, 485 Mich 903
(2009).
II. OUR DECISION IN DENDEL II
Defendant’s hearsay and Confrontation Clause argu-
ments concern the testimony of Dr. Michael Evans. In
Dendel II, we summarized the relevant facts as follows:
Dr. Evans is a toxicologist at AIT Laboratories, and
president and [chief executive officer] of the company. He
manages the corporation and directs laboratory operations.
AIT Laboratories provides services to the clinical commu-
nity and hospitals throughout the county, as well as the
pharmaceutical industry by performing research to aid in
new drug development. The laboratory also performs fo-
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rensic toxicology testing in autopsy cases. Dr. Evans de-
scribed the logistics and procedures for autopsy testing at
the request of medical examiners’ offices.
Here, the laboratory performed a pane 1 autopsy test on
a sample of Burley’s blood, urine, and vitreous fluids at the
request of Dr. John Mayno from the Jackson County
Medical Examiner’s office. Dr. Evans explained that in
such cases, the technicians “proceed as if we have no
information” and “proceed without any preconceived no-
tion about what we’re going to look for in starting our
testing process.” He testified at length about the proce-
dures utilized in the lab, and the many substances that the
autopsy tests identify.
Dr. Evans testified generally about the relationship
between insulin and glucose levels, and the body’s response
to insulin. He explained the difficulty of testing for the
presence of insulin during an autopsy. Dr. Evans then
testified that the toxicology results showed that the level of
glucose in Burley’s system was zero. He opined that the
zero glucose level was consistent with Burley having been
injected with insulin. Defense counsel objected to the
admission of Dr. Evans’ testimony about the toxicology
results as lacking proper foundation because Dr. Evans did
not perform the autopsy test himself. Dr. Evans stated that
about fifteen people from his lab were involved in the
testing. The trial court ruled that an adequate foundation
had been laid for the admission of Dr. Evans’ testimony,
and that the toxicology results came within the exception
to the hearsay rule for business records. [Dendel II, unpub
op at 2.]
Defendant argued in Dendel II that the trial court
abused its discretion by admitting Dr. Evans’s testi-
mony about the results of toxicology tests of Burley’s
bodily fluids because Dr. Evans did not perform the
tests. Id. Citing Crawford v Washington, 541 US 36; 124
S Ct 1354; 158 L Ed 2d 177 (2004), defendant contended
that the admission of this hearsay testimony violated
her rights under the Confrontation Clause. Because
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defendant failed to preserve this issue with a timely
challenge to Dr. Evans’s testimony based on the Con-
frontation Clause, we reviewed the matter for plain
error affecting her substantial rights. Dendel II, unpub
op at 3. We concluded that the statements contained in
the toxicology report were not testimonial, and they
could be admitted without affording defendant an op-
portunity to cross-examine the analysts from the lab.
We distinguished the toxicology report from the labora-
tory report that was deemed inadmissible in People v
Lonsby, 268 Mich App 375; 707 NW2d 610 (2005):
“Defendant relies on Lonsby, supra, a sexual assault
case in which this Court ruled that the notes and labora-
tory report of a nontestifying serologist were testimonial in
nature, and were admitted in violation of the defendant’s
Sixth Amendment right to confront witnesses against him.
However, in Lonsby, this Court clarified:
“The critical point... is the distinction between an
expert who forms an opinion based in part on the work of
others and an expert who merely summarizes the work of
others. In short, one expert cannot act as a mere conduit
for the opinion of another.” [Lonsby, supra at 393 n 12,
quoting State v Williams, 253 Wis 2d 99, 113; 644 NW2d
919 (2002).]
This “critical point” makes Lonsby distinguishable from
the present case. Here, unlike in Lonsby, the witness did
not testify to subjective observations from the toxicologists
who performed the autopsy test. Dr. Evans did not specu-
late about any reasoning or judgment exercised by the
nontestifying toxicologists. Id. at 392. The zero-level of
glucose in Burley’s system was an objective result, and Dr.
Evans formed his own expert opinion on the basis of that
finding. And unlike the police crime lab serologist in
Lonsby, Dr. Evans was not employed by law enforcement.
He testified that the lab testing is performed without any
preconceived notions about what might be found, and
without any case background.
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Additionally, autopsy reports are not testimonial be-
cause they are public records prepared pursuant to a duty
imposed by law as part of the statutorily defined duties of
a medical examiner. See MCL 52.202(1)(a) (mandating a
medical examiner to conduct an autopsy when the de-
ceased’s death was unexpected), MCL 52.207 (mandating a
medical examiner to conduct an autopsy upon the order of
a prosecuting attorney). Therefore, the autopsy and toxi-
cology reports qualify as public records under MRE 803(8).
Thus, the toxicology results were not testimonial in nature,
and Dr. Evans’ testimony based on the results did not
violate defendant’s rights under the Confrontation Clause.
[Dendel II, unpub op at 3-4.]
After we issued our opinion in Dendel II, the United
States Supreme Court issued its decision in Melendez-
Diaz. Because this decision directly addressed the ques-
tion of a defendant’s confrontation rights in the context
of laboratory reports prepared by nontestifying wit-
nesses, our Supreme Court remanded Dendel to this
Court in order to reexamine Confrontation Clause
issues arising from Dr. Evans’s reliance on glucose-level
findings made by nontestifying personnel at AIT Labo-
ratories.
III. CONFRONTATION CLAUSE JURISPRUDENCE
To decide whether the admission of hearsay evidence
violated defendant’s due-process right to confront wit-
nesses, we must examine recent Supreme Court deci-
sions interpreting the Confrontation Clause. 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); People v McLaughlin, 258 Mich App 635,
651; 672 NW2d 860 (2003). Generally, hearsay is inad-
missible unless it comes within an exception to the
hearsay rule. McLaughlin, 258 Mich App at 651. Con-
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troversies over the admission of hearsay statements
may also implicate the Confrontation Clause, US Const,
Am VI, which guarantees a criminal defendant the right
to confront the witnesses against him or her. See also
Const 1963, art 1, § 20.
In Crawford, 541 US at 53-54, the United States
Supreme Court held that the Sixth Amendment bars
the admission of 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
testimonial if the declarant should reasonably have
expected the statement to be used in a prosecutorial
manner and if the statement was made under circum-
stances that would cause an objective witness reason-
ably to believe that the statement would be available for
use at a later trial. Id. at 51-52; Lonsby, 268 Mich App
at 377. In Davis v Washington, 547 US 813, 817-822;
126 S Ct 2266; 165 L Ed 2d 224 (2006), the Supreme
Court considered whether statements that a crime
victim made to a 911 emergency operator describing an
ongoing assault were testimonial statements subject to
confrontation under the Confrontation Clause. The
Court ruled that the statements were not testimonial.
Id. at 829. However, in the companion case, Hammon v
Indiana, police officers responding to a report of a
domestic disturbance questioned the alleged victim
regarding the assault that had just taken place. When
the police first arrived, the victim denied that any
assault had occurred, but when the officers questioned
her outside the defendant’s presence, she signed an
affidavit stating that the defendant had assaulted her.
Id. at 820-821. The Court concluded that these state-
ments were testimonial because they were made in
response to an investigation of possible criminal con-
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duct that had occurred in the past, rather than an
ongoing situation. Id. at 829-830.
The Supreme Court held that statements are not
testimonial “when made in the course of police interro-
gation under circumstances objectively indicating that
the primary purpose of the interrogation is to enable
police assistance to meet an ongoing emergency.” Davis,
547 US at 822. On the other hand, “[t]hey are testimo-
nial when the circumstances objectively indicate that
there is no such ongoing emergency, and that the
primary purpose of the interrogation is to establish or
prove past events potentially relevant to later criminal
prosecution.” Id. The Court in Davis further explained
that “in the final analysis [it is] the declarant’s state-
ments, not the interrogator’s questions, that the Con-
frontation Clause requires us to evaluate.” Id. at 822 n
1; see also People v Bryant, 483 Mich 132, 139-140; 768
NW2d 65 (2009), cert gtd 559 US ___; 130 S Ct 1685;
176 L Ed 2d 179 (2010).
In Bryant, 483 Mich at 140, our Supreme Court
observed that Davis differed from Crawford because, in
Davis (1) the victim was speaking about events as they
were happening, rather than describing past events, (2)
the victim was experiencing an ongoing emergency, (3)
the victim’s statements were made to help address the
ongoing emergency, rather than to disclose past events,
and (4) the victim made the statements frantically,
rather than in a tranquil or safe environment. The
Court in Bryant also set forth the factors that tended to
establish that the statements in Hammon were testi-
monial: (1) the statements were made in response to an
interrogation that was part of an investigation into
“ ‘possibly criminal past conduct,’ ” (2) the statements
were not made contemporaneously with an ongoing
emergency, and (3) the officer’s questions were not
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intended to learn what was happening, but what had
already happened. Id. at 141, citing Davis, 547 US at
829-830.
After we issued our opinion in Dendel II, the United
States Supreme Court issued its decision in Melendez-
Diaz. The prosecution had charged the defendant in
Melendez-Diaz with narcotics-trafficking offenses. In or-
der to prove that the substance in question was cocaine of
a certain quantity, the prosecution introduced into evi-
dence sworn certificates of state laboratory analysts docu-
menting the results of tests performed on the material
seized by the police. Melendez-Diaz, 557 US at ___; 129 S
Ct at 2531; 174 L Ed 2d at 320-321. Building on the
principles established in Crawford and Davis, a majority
1
of the Supreme Court determined that the certificates
constituted testimonial statements because they were
made under circumstances in which an expert witness
would anticipate their future use at trial and also
because they served as the “ ‘prima facie evidence of the
composition, quality, and the net weight’ of the ana-
lyzed substance” under the relevant Massachusetts
statutes. Id. at ___; 129 S Ct at 2532; 174 L Ed 2d at 321
(citation omitted). The Court concluded that, “[a]bsent
a showing that the analysts were unavailable to testify
at trial and that petitioner had a prior opportunity to
cross-examine them, petitioner was entitled to ‘ “be
confronted with” ’ the analysts at trial.” Id. at ___; 129
S Ct at 2532; 174 L Ed 2d at 322, quoting Crawford, 541
US at 54. In response to the dissenting justices, the
majority explained in a footnote that its ruling did not
require “that anyone whose testimony may be relevant
in establishing the chain of custody, authenticity of the
sample, or accuracy of the testing device” was required
1
Justice Scalia, joined by Justices Stevens, Souter, Thomas, and
Ginsburg.
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to testify in person; rather, it was “up to the prosecution
to decide what steps in the chain of custody are so
crucial as to require evidence; but what testimony is
introduced must (if the defendant objects) be intro-
duced live.” Melendez-Diaz, 557 US at ___ n 1; 129 S Ct
at2532n1;174LEd2dat322n1.
Responding to various other arguments raised by the
dissent and the prosecution, the Court rejected the asser-
tion that the analysts were not “accusatory” witnesses,
and therefore not subject to confrontation. The Court
commented that the Confrontation Clause “contemplates
two classes of witnesses”—those against the defendant
and those in his favor—omitting a third category of
witnesses who were “helpful to the prosecution, but
somehow immune from confrontation.” The Court was
not persuaded that the analysts’ statements were exempt
from the Confrontation Clause on the ground that the
statements were not independently sufficient to establish
the defendants’ guilt. Id. at ___; 129 S Ct at 2533-2534;
174 L Ed 2d at 323. The Court also was not persuaded by
the attempt of the prosecution and the dissent to distin-
guish the analysts’ statements from “ ‘conventional’ ” or
“ ‘typical’ ” ex parte testimony when the witness observed
the crime or human action related to it or when the
witness’s statements were given in response to interroga-
tion. Id. at ___; 129 S Ct at 2534-2536; 174 L Ed 2d at
324-325.
The Court in Melendez-Diaz also rejected the dis-
sent’s and the prosecution’s arguments that the reli-
ability of objective, neutral scientific testing obviated
the need for confrontation and that cross-examination
was an inferior method of challenging scientific testing.
The Court stated:
Respondent and the dissent may be right that there are
other ways—and in some cases better ways—to challenge
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or verify the results of a forensic test. But the Constitution
guarantees one way: confrontation. We do not have license
to suspend the Confrontation Clause when a preferable
trial strategy is available. Nor is it evident that what
respondent calls “neutral scientific testing” is as neutral or
as reliable as respondent suggests. Forensic evidence is not
uniquely immune from the risk of manipulation.... A
forensic analyst responding to a request from a law enforce-
ment official may feel pressure—or have an incentive—to
alter the evidence in a manner favorable to the prosecution.
[Id. at ___; 129 S Ct at 2536; 174 L Ed 2d at 326 (emphasis
added).]
The Court further commented that confrontation could
help “weed out” both fraudulent analysts and incompe-
tent analysts. Id. at ___; 129 S Ct at 2537; 174 L Ed 2d
at 326.
Finally, the Court in Melendez-Diaz addressed the
argument that the analysts’ affidavits were admissible
without subjecting the analysts to confrontation under
the business-records exception to the hearsay rules.
The Court concluded that the certificates were not
admissible as business records because they were more
akin to reports generated by law-enforcement officials.
Id. at ___; 129 S Ct at 2538; 174 L Ed 2d at 328. The
Court further commented that the prosecution misun-
derstood the relationship between the hearsay excep-
tion for business and official records and the Confron-
tation Clause. The Court stated:
Business and public records are generally admissible
absent confrontation not because they qualify under an
exception to the hearsay rules, but because—having been
created for the administration of an entity’s affairs and not
for the purpose of establishing or proving some fact at
trial—they are not testimonial. Whether or not they qualify
as business or official records, the analysts’ statements
here—prepared specifically for use at petitioner’s trial—
were testimony against petitioner, and the analysts were
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subject to confrontation under the Sixth Amendment. [Id.
at ___; 129 S Ct at 2539-2540; 174 L Ed 2d at 329-330
(emphasis added).]
The Court demurred to the dissent’s remaining asser-
tions that its holding drastically departed from prior
jurisprudence or that it would “commence the parade of
horribles” unfairly hampering prosecution of drug
charges. Id. at ___; 129 S Ct at 2542; 174 L Ed 2d at 332.
Several post-Melendez-Diaz cases have addressed
Confrontation Clause issues in the context of autopsy
reports or similar reports containing scientific data. In
People v Lewis, unpublished opinion per curiam of the
Court of Appeals, issued April 15, 2008 (Docket No.
274508), this Court had ruled that no Confrontation
Clause violation occurred when the medical examiner
testified with regard to an opinion based on an autopsy
report prepared by two nontestifying medical examin-
ers. The Supreme Court, in lieu of granting leave to
appeal, vacated in part the judgment of the Court of
Appeals and remanded the case to the Court of Appeals
for reconsideration of this issue in light of Melendez-
Diaz. People v Lewis, 485 Mich 878 (2009). On remand,
this Court ruled that the autopsy report was not testi-
monial. The Court distinguished the autopsy report
from the certificates in Melendez-Diaz because the
certificates were prepared for the sole purpose of pro-
viding prima facie evidence against the defendant at
trial, whereas the autopsy report was prepared pursu-
ant to a duty imposed by statute. People v Lewis (On
Remand), 287 Mich App 356, 362-363; 788 NW2d 461
(2010). The Court further commented that “unlike the
way the certificates in Melendez-Diaz were used, Dr.
[Carl] Schmidt [the testifying medical examiner]
formed independent opinions based on objective infor-
mation in the autopsy report and his opinions were
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subject to cross-examination.” Id. at 363. The Court
also noted that the autopsy report “was not outcome
determinative” because “ ‘[t]here is no dispute that a
crime was committed, and the autopsy did not aid in
establishing the identity of the perpetrator, which was
the central issue in this case.’ ” Id., quoting Lewis,
unpub op at 5. (The autopsy report was not necessary to
establish that the victim died of multiple stab wounds.)
In Commonwealth v Avila, 454 Mass 744, 760; 912
NE2d 1014 (2009), the Massachusetts Supreme Judicial
Court held that a substitute medical examiner could
testify about his own opinions and conclusions concern-
ing the cause of the decedent’s death, though his
opinions were based on findings set forth in an autopsy
report prepared by his predecessor, who did not testify
at trial. However, the court held that the substitute
medical examiner could not testify about the facts and
findings themselves on direct examination. Id. at 760-
761. The court explained that an expert without first-
hand knowledge of the facts at issue is permitted to
state an expert opinion based on facts assumed in
hypothetical questions or on data properly admitted
into evidence. Id. at 761. The court stated:
Expert opinion testimony of this nature does not offend
the confrontation clause as interpreted by the Supreme
Court of the United States in Crawford v. Washington, 541
U.S. 36, 124 S. Ct. 1354, 158 L. Ed. 2d 177 (2004) (Craw-
ford) (confrontation clause prohibits admission of testimo-
nial out-of-court statements unless declarant unavailable
and defendant had prior opportunity to cross-examine
declarant about statements), and most recently in
Melendez-Diaz v. Massachusetts, [557 US ___] 129 S. Ct.
2527, 174 L. Ed. 2d 314 (2009) (deeming certificates of
forensic laboratory analysis offered in evidence in lieu of
testimony as testimonial, and thus subject to Crawford,
because certificates were affidavits prepared for sole pur-
pose of serving as evidence at trial). [Id. at 762.]
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The Massachusetts Supreme Judicial Court held that
the trial court erred when it allowed the substitute
medical examiner to testify on direct examination re-
garding the findings in the autopsy report, but it
concluded that the unpreserved error “did not result in
a substantial likelihood of a miscarriage of justice”
because the erroneously admitted testimony was cumu-
lative of other properly admitted evidence. Id. at 763.
In State v Locklear, 363 NC 438; 681 SE2d 293
(2009), the state’s chief medical examiner, Dr. John
Butts, testified about the victim’s cause of death on the
basis of an autopsy report that he did not prepare. He
also testified about the identification of the victim on
the basis of forensic dentistry. The pathologist who
performed the autopsy, Dr. Karen Chancellor, and the
dentist who made the identification, Dr. Jeffrey Burkes,
did not testify. Id. at 451. The North Carolina Supreme
Court held that “[t]he admission of such evidence
violated defendant’s constitutional right to confront the
witnesses against him....” Id. at 452. However, the
court held that the error was harmless beyond a rea-
sonable doubt because the defendant’s guilt was estab-
lished by substantial admissible evidence, including his
own confession. Id. at 452-453.
Following Melendez-Diaz, at least two courts have
held that factual statements from nontestifying foren-
sic analysts may be used to support the conclusions and
opinions of testifying expert witnesses. In People v
Johnson, 394 Ill App 3d 1027; 915 NE2d 845 (2009), the
prosecution introduced evidence that the defendant’s
DNA matched a semen stain found at the crime scene.
The prosecution introduced the evidence through the
testimony of a DNA analyst, Charlotte Word, who
reviewed DNA testing conducted by others. Id. at 1029.
Ms. Word testified that she was able to determine from
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the notes and documentation in the laboratory folder
that the proper procedures were followed with the
appropriate control tests. Id. Brian Schoon, who per-
formed the tests, also testified, but the analysts who
prepared the defendant’s sample profile did not. Id. at
1030. The defendant argued that this violated his
Confrontation Clause rights because he did not have
the opportunity to cross-examine any of the analysts
who prepared the profile. Id. The court found no error,
stating:
Word, a Cellmark analyst, testified about the laborato-
ry’s procedures and practices regarding DNA testing,
though she did not participate in the testing. She used the
report that was prepared as the basis of her expert opinion
that the proper procedures were followed in the analysis.
Defendant’s attorney was able to cross-examine Word
about the basis of her opinion and called attention to the
fact that she did not participate in the testing and that she
assumed that the analysts properly documented each part
of the testing, as required by Cellmark. The same reason-
ing holds true for Schoon. He used the Cellmark report as
the basis for part of his opinion that the male DNA profiled
[sic] obtained from the crime scene matched defendant’s
DNA. The Cellmark report was not offered to prove the
truth of its contents, but was used as part of the bases for
two experts’ opinions. Accordingly, we find no Crawford
violation in this case, and thus, no error. [Id. at 1034.]
The court also noted that DNA analysis results are not
“accusatory” because they might lead to either incrimi-
natory or exculpatory results. Id. at 1035.
In Johnson, the Illinois court ruled that its analysis
under Crawford was not altered by the Supreme
Court’s decision in Melendez-Diaz. The court quoted
the footnote in Melendez-Diaz disclaiming the inference
that all persons involved in the chain of custody, au-
thenticity of the sample, or accuracy of the testing
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device were required to give live testimony. Id. at
1036-1037. The court also stated:
Significantly, the decision in Melendez-Diaz did not
reach the question of whether the analyst who conducted
the scientific tests must testify at a defendant’s trial, which
is the issue raised by defendant in the instant case. In
contrast with certificates presented at trial in Melendez-
Diaz, Word and Schoon each testified in person as to their
opinions based on the DNA testing and were subject to
cross-examination. [Id. at 1037.]
The court held that “the holding in Melendez-Diaz is
distinguishable from instances in which a witness tes-
tifies at trial about scientific analyses in which he or she
did not participate in the analysis....”Id. at 1038.
The court in Johnson relied substantially on a deci-
sion from the California Court of Appeal, People v
Rutterschmidt, 176 Cal App 4th 1047; 98 Cal Rptr 3d
390 (2009). In Rutterschmidt, two codefendants, Olga
Rutterschmidt and Helen Golay, were accused of fatally
drugging one of their victims, Kenneth McDavid, to
collect money from fraudulently obtained life insurance
policies. Golay, but not Rutterschmidt, objected on
Confrontation Clause grounds to the testimony of Jo-
seph Muto, the chief laboratory director of the Los
Angeles County Department of Coronor, who testified
about the presence and quantity of prescription drugs
and alcohol found in McDavid’s blood samples. The
court summarized Muto’s testimony regarding his in-
volvement in the testing as follows:
Muto offered expert testimony as to the results of the
toxicology analyses performed on samples of McDavid’s
blood. The testing was done under his supervision, and he
signed the two reports containing the testing results. As
the chief laboratory director, Muto had degrees and a
license in toxicology and was a certified blood-alcohol
analyst. He explained that in conducting toxicology analy-
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ses, criminalists in the laboratory performed tests on
samples of biological material taken during autopsies. Four
laboratory criminalists under his supervision performed
the testing on McDavid’s samples. Muto was familiar with
all the criminalists in the laboratory. With regard to every
toxicology report issued from his laboratory, he conducted
either an administrative review or a peer review. In the
former, before certifying the testing results, he would
review the entire case to verify compliance with proper
procedures and scientific standards, including quality con-
trol. As a peer reviewer, he acted as a second chemical
analyst to ensure a sufficient informational foundation for
the original analyst’s conclusions. All final reports go out
under his signature, reflecting that he examined the docu-
mentation and analytical work comprising the final report.
[Id. at 1071.]
Muto verified that the analyses were performed accord-
ing to laboratory procedures and that he reviewed the
reports. Id. at 1072.
The court in Rutterschmidt commented that there
was “no federal Supreme Court or California authority
for the proposition that Crawford precludes a prosecu-
tion scientific expert from testifying as to an opinion in
reliance upon another scientist’s report.” Id. at 1073.
The court rejected Golay’s argument that the Supreme
Court’s decision in Melendez-Diaz warranted a different
result. It distinguished the toxicological findings from
the sworn certificates in Melendez-Diaz on the ground
that the former were not sworn affidavits entered into
evidence. The court stated:
Here, in contrast, the toxicological findings were not
proved by means of an affidavit. As we have shown, Muto
testified as a qualified expert, subject to cross-examination,
that his review of data obtained under his supervision
supported his conclusion as to the presence of alcohol and
drugs in biological samples taken from McDavid’s body.
The Melendez-Diaz decision did not reach the question of
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whether such expert testimony runs afoul of Crawford.
Indeed, the lead opinion speaks for a court majority only on
the narrow basis set forth in Justice Thomas’s concurring
opinion—“that ‘the Confrontation Clause is implicated by
extrajudicial statements only insofar as they are contained
in formalized testimonial materials, such as affidavits,
depositions, prior testimony, or confessions.’ [Citations.]”
(Melendez-Diaz, supra, [557] U.S. at p. ___, 129 S. Ct. at p.
2543, [174 L Ed 2d at 333] (conc. opn. of Thomas, J.).)
Accordingly, the testimony challenged by defendant Golay
does not fall within the Melendez-Diaz majority’s holding.
[Id. at 1075.]
The court affirmed Golay’s conviction. Id. at 1087. On
December 2, 2009, the California Supreme Court
granted Golay’s petition for review, limited to the issue
whether Muto’s testimony violated Golay’s right to
confront witnesses and whether the decision in
Melendez-Diaz affected the decision. People v Rutter-
schmidt, 102 Cal Rptr 3d 281; 220 P3d 239 (2009).
We also take into consideration two cases decided
before Melendez-Diaz that addressed the issue of hear-
say evidence to establish objective data underlying an
expert’s opinion. In United States v Richardson, 537
F3d 951 (CA 8, 2008), a case involving DNA evidence
that linked the defendant to a firearm, the prosecution
called Alyssa Bance, a forensic scientist with the Min-
nesota Bureau of Criminal Apprehension. The court
summarized Bance’s testimony as follows:
Bance testified about DNA testing performed by an-
other scientist in the office, Jacquelyn Kuriger. Bance
testified that she personally “didn’t actually receive the
evidence in this case,” but instead “received the case file
with [Kuriger’s] notes and results.” Bance did, however,
perform a peer review, in which she “look[ed] for basically
everything down to that the i’s are dotted and the t’s are
crossed. And if there’s anything crossed out, are they
initialed.” Bance looked to make sure “everything is...
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complete from the start of the case in the analysis to the
end of the DNA results and the report.” Bance testified,
generally, the role of the peer reviewer is to “go through all
of the case notes and documentation” the initial scientist
did “to be sure that everything has been done properly and
documented properly.” Bance testified that “[t]he peer
reviewer in a DNA case also does a second independent
analysis of the DNA data and compares” it to the first
scientist’s review “to be sure that the two scientists agree
in all aspects of the DNA testing.” [Id. at 955-956.]
Bance “did not perform or witness any DNA testing of
the samples,” but “testified as to the tests Kuriger
performed and the procedures and controls Kuriger
used, as well as the results of Bance’s own independent
analysis of Kuriger’s data.” Bance “admitted her only
knowledge of the tests was from reviewing the paper-
work Kuriger generated, conducting a second indepen-
dent analysis of Kuriger’s data, and comparing her
analysis of the data with Kuriger’s analysis of the same
data.” Id. at 956. Reviewing the Confrontation Clause
issue under the plain-error standard for unpreserved
issues, the court concluded that the error, if any, was not
plain error. The court noted that neither the United
States Supreme Court nor the United States Court of
Appeals for the Eighth Circuit had addressed the ques-
tion whether DNA samples and related testimony were
testimonial. It commented that other federal courts had
ruled that DNA samples themselves are not testimo-
nial. Id. at 960. The Court further held:
Additionally, the admission of Bance’s testimony that
Richardson’s DNA evidence matched the DNA evidence
found on the gun was not in error. Richardson argues that
the tests and conclusions performed by Kuriger are testi-
monial; therefore Bance could not testify as to these
without violating the Confrontation Clause. Bance, how-
ever, testified as to her own conclusions and was subject to
cross-examination. Although she did not actually perform
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the tests, she had an independent responsibility to do the
peer review. Her testimony concerned her independent
conclusions derived from another scientist’s test results
and did not violate the Confrontation Clause. [Id. at 960.]
The Supreme Court denied certiorari in Richardson a
month before issuing its decision in Melendez-Diaz.
Richardson v United States, 556 US ___; 129 S Ct 2378;
173 L Ed 2d 1299 (2009).
In United States v De La Cruz, 514 F3d 121 (CA 1,
2008), the United States Court of Appeals for the First
Circuit rejected a defendant’s argument that his Con-
frontation Clause rights were violated when the chief
medical examiner for the state of New Hampshire, Dr.
Thomas Andrew, testified as an expert regarding the
victim’s cause of death. Dr. Andrew had not performed
the autopsy or conducted the toxicological tests, but he
relied on autopsy and toxicology reports prepared by
others. Id. at 132-133. The court ruled that autopsy
reports are not subject to Confrontation Clause rights,
stating as follows:
An autopsy report is made in the ordinary course of
business by a medical examiner who is required by law to
memorialize what he or she saw and did during an autopsy.
An autopsy report thus involves, in principal part, a careful
and contemporaneous reporting of a series of steps taken
and facts found by a medical examiner during an autopsy.
Such a report is, we conclude, in the nature of a business
record, and business records are expressly excluded from
the reach of Crawford.[Id. at 133.]
The court was “unpersuaded that a medical examiner is
precluded under Crawford from either (1) testifying
about the facts contained in an autopsy report prepared
by another, or (2) expressing an opinion about the cause
of death based on factual reports—particularly an au-
topsy report—prepared by another.” Id. at 134. The
Supreme Court denied certiorari in De La Cruz only
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four days after it issued its opinion in Melendez-Diaz.
De La Cruz v United States, 557 US ___; 129 S Ct 2858;
174 L Ed 2d 600 (2009).
Thus, at least one post-Melendez-Diaz case, Avila,
454 Mass 744, holds that statements asserting objective
scientific data are testimonial statements subject to
confrontation under the Sixth Amendment and, there-
fore, are not admissible absent an opportunity to cross-
examine the witness who produced the statement. At
least three post-Melendez-Diaz cases, including one
from this Court, Lewis (On Remand), 287 Mich App
356, Johnson, 394 Ill App 3d 1027, and Rutterschmidt,
176 Cal App 4th 1047, permit the introduction of such
statements if they form the factual basis of a testifying
expert witness’s opinion. We also have two pre-
Melendez-Diaz cases, Richardson, 537 F3d 951, and De
La Cruz, 514 F3d 121, that hold that hearsay state-
ments asserting objective scientific data are not testi-
monial under Crawford.
IV. APPLICATION OF MELENDEZ-DIAZ AND ITS PROGENY
We hold that the statements here are testimonial. We
would be bound by Lewis (On Remand), 287 Mich App
356, under the principle of stare decisis, MCR 7.215, if
Lewis were factually analogous. However, the Court in
Lewis ruled that the autopsy report was nontestimonial
because it was prepared pursuant to a legal duty. Here,
the AIT laboratory performed the glucose tests at the
request of the medical examiner, who asked for the
testing to investigate the possibility that Burley died of
an insulin injection. Dr. Bernardino Pacris, the medical
examiner, had originally concluded that Burley died of
natural causes, but he reopened the case when the
police informed him of suspicious circumstances that
raised the question whether defendant may have used
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her insulin to end Burley’s life. Dr. Pacris testified,
“After talking again with the police officer, I believe
there was an issue that insulin might have been given to
Mr. Burley.... We contacted AIT laboratory. We re-
quested tests to see if...itcanprovide us some light.”
He further acknowledged that he requested testing for
glucose, C-peptides, and insulin because he learned
about the possibility of insulin involvement in Burley’s
death. The medical examiner did not merely delegate to
the AIT laboratory an ordinary duty imposed by law: he
sought from the lab specific information to investigate
the possibility of criminal activity. Under these circum-
stances, any statements made in relation to this inves-
tigation took on a testimonial character. Although Dr.
Evans testified that toxicological testing is normally
performed without any case background and without
preconceived notions about what might be found, the
testing here was performed in anticipation of a criminal
trial, after the medical examiner’s original findings had
been challenged. The holdings in Crawford and
Melendez-Diaz caution that, under the Confrontation
Clause, defendant did not have to take Dr. Evans at his
word about the test results, but instead had the right to
show that “[f]orensic evidence is not uniquely immune
from the risk of manipulation” or that “[a] forensic
analyst responding to a request from a law enforcement
official may feel pressure—or have an incentive—to
alter the evidence in a manner favorable to the pros-
ecution.” Melendez-Diaz, 557 US at ___; 129 S Ct at
2536; 174 L Ed 2d at 326. For these reasons, the
statement that Burley died with a glucose level of zero
was a testimonial statement.
We further observe that in Lewis the cause of death
was not a central issue because there was no question
that the victim died from multiple stab wounds. Rather,
the pivotal issue in Lewis was whether the defendant
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was the person who inflicted the stab wounds. The
autopsy findings had no relevance to the issue of the
perpetrator’s identity. In contrast, Burley’s cause of
death is the primary factual question in this case.
Evidence regarding the glucose finding does not conclu-
sively prove defendant’s guilt, because questions re-
main about the significance of the result and there
remains the possibility that the death was suicide.
However, it supports the prosecution’s theory that
Burley died of an insulin injection.
Of the aforementioned cases, we find Avila, 454 Mass
744, to be the most persuasive, the most consistent with
the Supreme Court’s holding in Melendez-Diaz, and the
most factually analogous to this case. The court in Avila
held that statements in an autopsy report prepared by a
nontestifying medical examiner were subject to con-
frontation, notwithstanding that the statements served
as the facts underlying the testifying expert’s opinion.
Similarly, the court in Locklear, 363 NC 438, concluded
that statements in an autopsy report and forensic
dentistry report were subject to confrontation. These
holdings are fully consistent with Melendez-Diaz. Quot-
ing Crawford, 541 US at 51, the Supreme Court in
Melendez-Diaz explained that “ ‘ex parte in-court testi-
mony or its functional equivalent—that is, material
such as affidavits, custodial examinations, prior testi-
mony that the defendant was unable to cross-examine,
or similar pretrial statements that declarants would
reasonably expect to be used prosecutorially’ ” came
within the “ ‘core class of testimonial statements’ ”
subject to the Confrontation Clause. Melendez-Diaz,
557 US at ___; 129 S Ct at 2531; 174 L Ed 2d at 321
(emphasis added). The Court concluded that statements
certifying the results of qualitative and quantitative
analysis of the substance in question came within this
class because they were functionally equivalent to live,
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in-court testimony. Id. at ___; 129 S Ct at 2532; 174 L
Ed 2d at 321. The Court rejected the argument that the
analysts who prepared the statements were not “accu-
satory” witnesses in that they did not directly accuse
the defendant of wrongdoing. Id. at ___; 129 S Ct at
2533; 174 L Ed 2d at 323.
As noted, the Melendez-Diaz Court also rejected the
argument that “neutral scientific testing” obviated the
need for confrontation. The Court disagreed that pur-
portedly “neutral” testing was necessarily as neutral or
as reliable as the prosecution suggested, commenting
that forensic scientists are not immune from error or to
pressures to speed up their work or obtain a particular
result. Id. at ___; 129 S Ct at 2536-2537; 174 L Ed 2d at
325-326. The Court stated:
This case is illustrative. The affidavits submitted by the
analysts contained only the bare-bones statement that
“[t]he substance was found to contain: Cocaine.” At the
time of trial, petitioner did not know what tests the
analysts performed, whether those tests were routine, and
whether interpreting their results required the exercise of
judgment or the use of skills that the analysts may not have
possessed. While we still do not know the precise tests used
by the analysts, we are told that the laboratories use
“methodology recommended by the Scientific Working
Group for the Analysis of Seized Drugs.” At least some of
that methodology requires the exercise of judgment and
presents a risk of error that might be explored on cross-
examination. [Id. at ___; 129 S Ct at 2537; 174 L Ed 2d at
327 (citations omitted).]
And, as discussed, the Court in Melendez-Diaz rejected
the proposition that the certificates were business
records not subject to confrontation. The Court noted
that the certificates were more akin to police reports
because they were intended mainly for use in the
courts. Id. at ___; 129 S Ct at 2538; 174 L Ed 2d at 328.
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Here, the laboratory technicians’ finding that Bur-
ley’s glucose level was zero at the time of death was the
fact on which Dr. Evans based his opinion that an
insulin injection was a possible cause of his death.
Although the statement concerning a glucose level of
zero has no independently incriminating effect, it was
nonetheless an accusatory statement under Melendez-
Diaz because it supported the prosecution’s theory that
defendant had killed Burley by injecting him with
insulin. Although the glucose-level finding was purport-
edly the result of neutral scientific testing, the Court in
Melendez-Diaz ruled that such testing is not exempt
from the Confrontation Clause because of the possibil-
ity of error or bias. Id. at ___; 129 S Ct at 2536; 174 L Ed
2d at 326. There was no testimony concerning how such
tests are conducted or whether the tests of Burley’s
fluid samples were conducted in accordance with test-
ing protocols. Moreover, Dr. Evans gave no testimony to
establish that he directly supervised the tests or inde-
pendently verified that all testing protocols were ob-
served.
We also hold that the technicians’ statement of a
zero-glucose finding comports with the factors indicat-
ing a testimonial statement as delineated in Davis, 547
US 813, and analyzed in Bryant, 483 Mich 132. Their
involvement occurred only after the police advised the
medical examiner that defendant was suspected of
injecting Burley with insulin, prompting the medical
examiner to request toxicological analysis. Burley’s
autopsy and the subsequent toxicological testing were
not a neutral or objective investigation of an unex-
plained death, but a criminal investigation into whether
a homicide had occurred in the past. The technicians’
statements were not made contemporaneously with an
ongoing emergency, but in response to an inquiry about
past events. Bryant, 483 Mich at 141.
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We are unpersuaded that the federal circuit court
decisions in Richardson, 537 F3d 951, and De La Cruz,
514 F3d 121, counsel a different outcome. The courts in
those cases emphasized that the autopsy reports in
question only formed the factual bases for the experts’
conclusions and that the experts were not acting merely
as a conduit for another’s opinion. Theoretically, this
approach could provide a basis for distinguishing the
instant case from Melendez-Diaz, on the ground that
the certificates in Melendez-Diaz were a final statement
sufficient in themselves to establish an element of the
crime, whereas the glucose-level finding was only a
factual finding that Dr. Evans determined was consis-
tent with the prosecution’s theory of the cause of death.
While we recognize the distinction, we are unconvinced
that classifying a statement as a fact in support of an
expert’s conclusion rather than the conclusion itself
negates evidentiary or Confrontation Clause concerns.
Previously, we ruled that the glucose report was
admissible under the hearsay exception for public
records. However, the Supreme Court in Melendez-
Diaz, 557 US at ___; 129 S Ct at 2538; 174 L Ed 2d at
328, held that the cocaine-analysis certificates were not
public records or business records exempt from con-
frontation because they were more akin to police re-
ports. This holding applies by analogy to the glucose
report, which was obtained in response to a medical
examiner’s request in the course of investigating a
suspicious death. Moreover, under Crawford, out-of-
court statements are not exempt from confrontation
merely because they come within a hearsay exception,
including hearsay exceptions traditionally considered to
be imbued with indicia of reliability.
Furthermore, this case is distinguishable from Rich-
ardson, 537 F3d 951, because the testifying expert in
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Richardson had greater personal involvement in the
testing process than Dr. Evans had in the glucose
testing. In Richardson, a forensic scientist, Bance,
performed a peer review, verifying that Kuriger, an-
other scientist, conducted a thorough and proper analy-
sis. Id. at 955-956. Although Dr. Evans supervised the
AIT laboratory, he did not give any testimony regarding
his supervision of the glucose testing.
Finally, we are unpersuaded by the holding in Rut-
terschmidt, 176 Cal App 4th 1047, that the toxicological
findings were distinguishable from the certificates in
Melendez-Diaz because the certificates were sworn affi-
davits made expressly for trial. The salient concern in
Melendez-Diaz was that the prosecutor used hearsay
statements in lieu of live testimony to establish a
scientific fact that was key to the prosecution’s case,
denying the defendant the opportunity to cross-
examine the persons who performed the tests and
issued the certificates. The concern that this use of
hearsay implicates the Confrontation Clause is not
diminished when the statement is unsworn rather than
sworn.
We therefore conclude that defendant’s Sixth
Amendment right to confront witnesses was violated
when Dr. Evans was permitted to give hearsay testi-
mony that other persons in the AIT laboratory deter-
mined that Burley’s glucose level was zero at the time of
his death.
V. RELIEF
As noted, defendant failed to raise a timely objection
to Dr. Evans’s testimony on Confrontation Clause
grounds. However, the trial in this case took place
before Melendez-Diaz and Crawford were decided. The
applicable test when defendant was tried, enunciated by
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the Court in Ohio v Roberts, 448 US 56, 65; 100 S Ct
2531; 65 L Ed 2d 597 (1980), provided that out-of-court
statements made by unavailable witnesses could be
admitted without violating a defendant’s confrontation
right if there were sufficient indicia of reliability under
evidentiary hearsay rules. Under these circumstances,
an objection based on the Confrontation Clause would
have been futile. Furthermore, at the time of trial, MRE
703 did not require, as it now does, that the facts or data
“upon which an expert bases an opinion or inference
shall be in evidence.” Also, pre-Crawford/Melendez-
Diaz caselaw in Michigan tended to regard autopsy
reports and similar evidence as admissible hearsay
exempt from the Confrontation Clause.
2
Defense coun-
sel’s failure to object can be attributed to the absence of
any positive legal authority that Dr. Evans’s testimony
violated the Confrontation Clause. Accordingly, defen-
dant’s objection on hearsay grounds, but not under the
2
Because autopsy reports could be considered public records prepared
pursuant to the medical examiner’s duties, MCL 52.202(1) and 52.207,
they could be admitted into evidence pursuant to the hearsay exception
for public records, MRE 803(8). In People v Rode, 196 Mich App 58, 68;
492 NW2d 483 (1992), rev’d on other grounds sub nom People v Hana,
447 Mich 325 (1994), this Court held that the chief medical examiner
permissibly testified with regard to the observations recorded in a report
prepared by a subordinate medical examiner. Conversely, in People v
Shipp, 175 Mich App 332, 338-339; 437 NW2d 385 (1989), this Court held
that “conclusions and opinions contained in an autopsy report are not
admissible under MRE 803(6).” The Court in Rode, 196 Mich App at 68,
distinguished Shipp on the ground that the hearsay statements from the
report were limited to the medical examiner’s observations. A toxicolo-
gist’s determination of a decedent’s glucose level is more in the nature of
a factual observation than a conclusion or opinion: it is objective
numerical data obtained from standardized testing rather than a subjec-
tive judgment derived from personal observations or professional evalu-
ation. In this pre-Crawford, pre-Melendez-Diaz view of autopsy reports
and similar evidence, defense counsel had insufficient cause to believe
that an objection on Confrontation Clause grounds would have been
anything but futile.
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Confrontation Clause, was reasonable in light of the
state of the law at the time of her trial.
Fundamental fairness requires that this issue be
reviewed as though it were fully preserved. See People v
Shirk, 383 Mich 180, 196; 174 NW2d 772 (1970); People
v Townsend, 25 Mich App 357, 361-362; 181 NW2d 630
(1970); see also Lonsby, 268 Mich App at 394-395.
3
We
review preserved issues of constitutional error to deter-
mine whether they are harmless beyond a reasonable
doubt. “A constitutional error is harmless if ‘[it is] clear
beyond a reasonable doubt that a rational jury would
have found the defendant guilty absent the error.’ ”
People v Mass, 464 Mich 615, 640 n 29; 628 NW2d 540
3
We recognize that, in our prior opinion, we reviewed defendant’s
Confrontation Clause claim as an unpreserved constitutional error. How-
ever, because our Supreme Court vacated that part of the opinion, we are not
bound by that standard of review. See Black’s Law Dictionary (7th ed), p
1546 (stating that the meaning of “vacate” is “[t]o nullify or cancel; make
void; invalidate”). We further observe that, in Bryant, 483 Mich at 151-152,
our Supreme Court treated a similar claim as an unpreserved constitutional
error. However, the Court did not specifically rule that the plain-error rule
applies to all cases in which controlling authority postdates the trial and a
timely objection would have been pointless because of the state of the law at
the time of trial. Indeed, the Court in Bryant prefaced its discussion with the
phrase “[e]ven assuming that the error here is unpreserved” and later noted
that caselaw at the time of the defendant’s trial made it “completely
reasonable” that the defendant did not offer an objection pursuant to the
Confrontation Clause. Id. at 151 & n 17. The Bryant Court further opined
that, because Crawford was not decided until after the trial, the “defendant
cannot be faulted for failing to raise the Confrontation Clause issue at the
trial.” Id. at 151 n 17. Our reading of Bryant indicates that the Court
reviewed the issue under the plain-error rule merely to show that the
defendant was entitled to relief even if he had to meet the higher standard
of showing prejudicial error. However, we hold that under the circumstances
of this case, and because there was a clear violation of Melendez-Diaz,
defendant is not required to show her actual innocence or that the error
seriously affected the fairness, integrity, or public reputation of judicial
proceedings. Rather, as noted, this issue merits review as though the issue
had been preserved under the standard of harmless beyond a reasonable
doubt.
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(2001), quoting Neder v United States, 527 US 1, 18; 119
S Ct 1827; 144 L Ed 2d 35 (1999). In other words, if it
is beyond a reasonable doubt that the jury would have
convicted defendant on the basis of untainted evidence,
defendant is not entitled to a new trial.
The trial court specifically ruled, “I find that [Burley]
really died from having a zero glucose level.” This
wording suggests that the trial court considered the
zero-glucose finding in its holding. However, as our
Supreme Court observed in Dendel, 481 Mich 114,
ample other evidence supported defendant’s conviction.
Defendant argues that Dr. Evans should not have been
allowed to testify about the finding of no glucose in
Burley’s system after he died. But Dr. Pacris testified
before Dr. Evans, and he also noted that there was a
lack of glucose in Burley’s bodily fluids. As our Supreme
Court stated, “Dr. Pacris explained that, although the
glucose levels in a person’s bodily fluids drop immedi-
ately after the person dies, the complete lack of glucose
in Burley’s vitreous fluids was consistent with a finding
that Burley had been injected with insulin.” Id. at 126.
We further note that Dr. Pacris repeatedly attached
little importance to a failure to find glucose in Burley’s
blood after he died because “glucose drops instantly
once we die.” Moreover, Dr. Pacris testified that Burley
died of hypoglycemic shock, and he did not base his
conclusion on the toxicological data. As our Supreme
Court noted:
[Dr. Pacris] found acute tubular necrosis in the kidneys
and dead cells in the proximal tubules of the brain, which
are usually seen in people who have suffered hypoglycemic
shock. Dr. Pacris ultimately concluded that the cause of
death was complications from hypoglycemia, which can be
caused by an insulin injection. In reaching this conclusion,
he relied more on his anatomical findings and the circum-
stances surrounding the death rather than on the toxico-
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logical findings. Specifically, he relied on microscopic hy-
poxic changes in Burley’s brain in concluding that Burley
must have been comatose for at least 12 hours before he
died at 4:00 p.m. on April 2, 2002. He testified that hypoxic
changes to the brain, including red neurons on the hippoc-
ampus, are only manifested if the person has been coma-
tose for about 12 hours. [Id. at 126-127 (emphasis added).]
In her dissent, Justice K
ELLY
agreed that “[t]he process
by which Dr. Pacris determined the cause of death was
founded on an anatomical basis and the circumstances
surrounding the death rather than on toxicological
findings.” Id. at 142 (K
ELLY
, J., dissenting).
As our Supreme Court also observed, defense counsel
took the position at trial that “Burley had died either by
injecting himself with insulin or from the side effects of
numerous medications prescribed for him.” Id.at121
(majority opinion). The importance of the zero-glucose
finding is severely undermined by this defense, which
accepts the fact that Burley may have taken insulin and
merely avers that Burley injected it into himself. The
Supreme Court further stated in the opinion:
After defendant’s arrest, she told police detectives that
Burley had injected himself with insulin. During a later
interview with a police detective, defendant said, “That
poor dear, he killed himself for me.” She told the detective
that despite Burley’s severely impaired vision and prob-
lems with holding things, he could inject himself with
insulin. Defendant also told defense counsel that Burley
had killed himself by an insulin injection and that she
wanted him to pursue this theory of defense at trial.
Defendant also testified that Burley had mental problems
and that he had “talked suicide for 10, 15 years.” She had
informed two of Burley’s doctors of his suicidal intentions.
[Id. at 120-121.]
It makes little difference that the fact-finder heard
inadmissible testimony that Burley’s fluids showed a
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lack of glucose, which would suggest that insulin was
introduced into his system, in light of evidence that
defendant believed Burley could have taken insulin.
Moreover, evidence other than the scientific findings
played a significant role in defendant’s conviction:
[S]trong circumstantial evidence supported the theory
that defendant had given Burley an insulin injection.
Burley was difficult to care for because of his multiple
health problems, which included dementia. Defendant was
under a great deal of stress as Burley’s sole caregiver.
Frustrated by Burley’s demands, defendant had considered
giving him a shot of insulin, which she knew could be lethal
and would be difficult to detect in a deceased person. When
her caregiving situation became worse, defendant unsuc-
cessfully attempted to obtain assistance in caring for
Burley from several sources. Less than 24 hours before
Burley’s death, defendant became “quite tearful and up-
set” when the nurse assisting defendant terminated her
services because Burley had been uncooperative. Defen-
dant admitted that she was at her “wit’s end” in the middle
of that night when the police declined to take Burley away
after he caused a disturbance. In light of the facts leading
up to Burley’s death, the trier of fact could reasonably
conclude that this nighttime incident caused defendant to
finally snap and follow through with her idea to inject
Burley with insulin. This finding would be consistent with
Dr. Pacris’s testimony that hypoxic changes in Burley’s
brain indicated that he had fallen into a coma from
insulin-induced hypoglycemic shock at about 4:00 a.m.,
shortly after the police left.
The trier of fact could also infer that defendant’s actions
after Burley’s death demonstrated her guilty state of mind
and her attempt to cover up the crime. Defendant testified
that when she suspected that Burley might be dead, she did
not contact 911, but instead called a friend to come over.
Defendant lied to Burley’s family about his condition and
hid his death from the only persons who might have
questioned the cause of death and recalled her threat to
478 289 M
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445 [Aug
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PINION OF THE
C
OURT
inject him with insulin. Moreover, defendant managed to
have Burley’s body cremated before Burley’s family could
question the cause of death. She had also wanted Burley’s
body cremated without an autopsy being performed, but
was unable to prevent the autopsy. This circumstantial
evidence regarding defendant’s state of mind further sup-
ports the prosecution’s theory that defendant murdered
Burley. [Id. at 132-134.]
In light of Dr. Pacris’s testimony, defendant’s position at
trial, and the circumstantial evidence surrounding Bur-
ley’s death, we hold that it is clear beyond a reasonable
doubt that a reasonable jury would have convicted defen-
dant absent the inadmissible evidence regarding the toxi-
cological results. Accordingly, the Confrontation Clause
error was harmless beyond a reasonable doubt, and defen-
dant is not entitled to a new trial.
Affirmed.
B
ORRELLO
,P.J., concurred.
W
ILDER
,J.(concurring). I concur in the result reached
by the majority. I write separately to address the majori-
ty’s conclusion that defendant’s failure to object, on Con-
frontation Clause grounds, to the testimony of Dr. Michael
Evans, founder, president, chief executive officer, and
director of operations at AIT Laboratories,
1
was reason-
able given the then existing state of the law and that,
therefore, fundamental fairness requires that we treat
this issue as though it had been properly preserved.
“Due process requires fundamental fairness, which is
determined in a particular situation first by ‘consider-
ing any relevant precedents and then by assessing the
several interests that are at stake.’ ” In re Brock, 442
Mich 101, 111; 499 NW2d 752 (1993), quoting Lassiter
1
In this regard, Dr. Evans was more than a mere toxicologist at AIT.
2010] P
EOPLE V
D
ENDEL
(O
N
S
ECOND
R
EMAND
) 479
C
ONCURRING
O
PINION BY
W
ILDER
,J.
v Dep’t of Social Servs, 452 US 18, 25; 101 S Ct 2153; 68
L Ed 2d 640 (1981); see the observation in 16B Am Jur
2d, Constitutional Law, § 948, pp 448-449 (“That which
may, in one setting, constitute a denial of fundamental
fairness, shocking to the universal sense of justice, and
thus violative of due process may, in other circum-
stances and in the light of other considerations, fall
short of such denial.”). “This Court has said that due
process considerations include not only (1) the nature of
the private interest at stake, but also (2) the value of the
additional safeguard, and (3) the adverse impact of the
requirement upon the Government’s interests.” United
States v Ruiz, 536 US 622, 631; 122 S Ct 2450; 153 L Ed
2d 586 (2002).
The majority first concludes that under Melendez-
Diaz v Massachusetts, 557 US ___; 129 S Ct 2527; 174 L
Ed 2d 314 (2009), the statements concerning the toxi-
cological testing performed at AIT Laboratories and, in
particular, the glucose levels obtained as a result of the
testing, were testimonial in nature and that, therefore,
Dr. Evan’s testimony concerning the testing violated
defendant’s Sixth Amendment right to confront wit-
nesses. I agree. The majority then concludes that “fun-
damental fairness” requires retroactive application of
the rights of confrontation provided by the Confronta-
tion Clause as a remedy for the violation, so that
defendant’s posttrial objection to the offending state-
ments on Confrontation Clause grounds must be
treated as having been made at trial and preserved,
even though it actually was not.
I respectfully disagree that fundamental fairness
requires imposition of the legal fiction proposed by the
majority.
First, although defendant certainly has an interest in
confronting the incriminating statements against her,
480 289 M
ICH
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445 [Aug
C
ONCURRING
O
PINION BY
W
ILDER
,J.
there is little probative value to defendant in treating
the Confrontation Clause objection as preserved, even
though it actually was not, because there was more
than sufficient other evidence, to which no credible
challenge has been made, in support of the trial court’s
finding that defendant was guilty of second-degree
murder, MCL 750.317, beyond a reasonable doubt. In
other words, treating the admission of the statements
as something other than plain error, as we did in our
previous opinion,
2
makes no demonstrable difference
insofar as the outcome of the case is concerned.
Second, the interests of the people of the state of
Michigan
3
are impaired by limiting, through a legal
fiction, the consideration of evidence that the prosecu-
tion might have been able to “properly” introduce by
other means had it been placed on notice to consider
doing so with a contemporaneously raised objection.
4
In
this regard, like the prosecutor (as well as the defense
counsel and the circuit judge) so eloquently defended by
Justice B
LACK
in his concurring opinion in People v
Shirk, 383 Mich 180, 198-200; 174 NW2d 772 (1970),
the prosecutor in the instant case was a vigorous
advocate, within the rules as they then existed, in
seeking and obtaining defendant’s conviction of second-
2
People v Dendel (On Remand), unpublished opinion per curiam of the
Court of Appeals, issued September 11, 2008 (Docket No. 247391).
3
These interests are not expressly acknowledged by the majority in its
fundamental-fairness analysis.
4
The Supreme Court has observed:
“It is the duty of the public prosecutor to see that the person charged
with crime receives a fair trial, so far as it is in his power to afford him
one, and it is likewise his duty to use his best endeavor to convict persons
guilty of crime; and in the discharge of this duty an active zeal is
commendable, yet his methods to procure conviction must be such as
accord with the fair and impartial administration of justice....”[People
v Bahoda, 448 Mich 261, 266 n 6; 531 NW2d 659 (1995), quoting People
v Dane, 59 Mich 550, 552; 26 NW 781 (1886).]
2010] P
EOPLE V
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ENDEL
(O
N
S
ECOND
R
EMAND
) 481
C
ONCURRING
O
PINION BY
W
ILDER
,J.
degree murder. In my judgment, it would not accord
with due process, on the facts of this particular case, to
retroactively apply a Confrontation Clause analysis to
the laboratory evidence as though proper, contempora-
neous objections had been made.
I join the majority in affirming, but I would leave to
another day the question regarding under what circum-
stances fundamental fairness requires the retroactive
application of Melendez-Diaz v Massachusetts. I respect-
fully submit that this is not that case.
482 289 M
ICH
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445 [Aug
C
ONCURRING
O
PINION BY
W
ILDER
,J.
FINDLEY v DAIMLERCHRYSLER CORPORATION
Docket No. 291402. Submitted June 1, 2010, at Detroit. Decided August
24, 2010, at 9:05 a.m.
Torme C. Findley sought workers’ compensation benefits for injuries
allegedly sustained when she fell from a motorized cart driven by her
supervisor and, on a later date, when she tripped over a cord and fell.
The magistrate found that Findley’s testimony was not credible and
denied benefits. Findley appealed to the Workers’ Compensation
Appellate Commission (WCAC). The lead opinion, signed by one
commissioner, quoted the magistrate’s findings of fact, stated that
there was no reason to alter those findings, and affirmed the
magistrate’s denial of benefits. A second commissioner stated that he
concurred only with the result reached in the lead opinion without
further explanation. The third commissioner dissented, contending
that a remand was necessary to resolve a factual issue raised by
Findley. Findley sought leave to appeal, which the Court of Appeals
granted.
The Court of Appeals held:
Under MCL 418.247(8), in order for a decision of the WCAC to be
reviewable by the Court of Appeals, it must be a true majority
decision. A true majority decision is one in which a majority of the
commissioners agree regarding the material facts and the ultimate
outcome. There was no true majority decision in this case because a
majority of the commissioners did not agree regarding the material
facts. A concurrence in the result only does not shed light on the
factual findings and legal reasoning used by the WCAC. The matter
must be remanded for the WCAC to make adequate findings of fact.
Vacated and remanded.
W
ORKERS
’C
OMPENSATION —
A
PPELLATE
C
OMMISSION —
D
ECISIONS —
R
EVIEW —
M
AJORITY OF
W
ORKERS
’C
OMPENSATION
C
OMMISSIONERS —
N
ECESSITY
.
For a decision of the Workers’ Compensation Appellate Commission
to be reviewable by the Court of Appeals, it must be a true majority
decision; a true majority decision is one in which a majority of the
commissioners are in agreement regarding the material facts and
the ultimate outcome (MCL 418.274[8]).
2010] F
INDLEY V
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AIMLER
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HRYSLER
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ORP
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Slusky & Walt, P.C. (by Howard J. Slusky), and Daryl
C. Royal for Torme C. Findley.
Lacey & Jones LLP (by Gerald M. Marcinkoski) for
DaimlerChrysler Corporation.
Before: K. F. K
ELLY
,P.J., and W
ILDER
and G
LEICHER
,
JJ.
P
ER
C
URIAM
. Plaintiff appeals by leave granted an
order of the Workers’ Compensation Appellate Commis-
sion (WCAC), which affirmed the magistrate’s denial of
benefits.
1
We vacate and remand.
I. BASIC FACTS AND PROCEEDINGS
Plaintiff began her employment as an assembly-line
worker for defendant in 1999. On February 18, 2004,
plaintiff fell from a motorized cart driven by her supervi-
sor. She stated that she “flew up,” hit her head, and lost
consciousness. Plaintiff claims that her injuries include
shoulder and back pain, a closed-head injury, memory
problems, depression, and anxiety.
Plaintiff was off of work for two months. She returned
to work in April 2004 and worked through October 2004,
but testified that she was unable to do her assigned jobs.
Thereafter, plaintiff did not work until August 2005 be-
cause no work was available. When plaintiff returned to
work, she tripped over a cord and fell. She did not return
to work. Defendant sent her a letter regarding her ab-
sence from work, but plaintiff did not respond. Plaintiff
maintained that she did not receive the letter. Defendant
terminated plaintiff’s employment in September 2005
because of plaintiff’s failure to respond to the letter or
return to work.
1
Findley v DaimlerChrysler Corp, unpublished order of the Court of
Appeals, entered July 1, 2009 (Docket No. 291402).
484 289 M
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Plaintiff sought workers’ compensation benefits. She
alleged work injuries that occurred on February 18,
2004, October 15, 2004, and August 30, 2005. Magis-
trate Beatrice Logan presided over the November 2007
trial, at which plaintiff and her daughter testified. The
magistrate also considered plaintiff’s medical records,
as well as the deposition testimony of both parties’
medical witnesses, in a detailed and thorough written
opinion. The magistrate ruled, in pertinent part:
Plaintiff testified that on February 18, 2004, while she
was riding on the back of a cart being driven recklessly
inside the plant by her supervisor, she was thrown from the
cart when he made a turn. The fall caused and/or aggra-
vated injuries to her entire spine, bilateral shoulders,
bilateral upper extremities, and bilateral lower extremities.
She also sustained a closed head injury and developed
problems with anxiety, panic attacks and depression. Plain-
tiff said she “flew up, hit the concrete, passed out. The next
thing I remember I was in the hospital.” It is undisputed
that plaintiff was riding on an electric cart being driven by
a supervisor. Plaintiff weighs 180 pounds, 200 pounds or
240 pounds depending on the various records.
I do not find it credible that a plaintiff at 180 pounds
was thrown from a cart and flew through the air. According
to the records from St. John Macomb Hospital, the hospital
plaintiff was taken after the incident, plaintiff fell out of
the cart after the driver made a sharp turn. The records
also state the cart tipped over and plaintiff fell off. I reject
plaintiff’s claim that she was thrown into the air in favor of
the conclusion that she merely fell off the back of the cart
to the ground.
There were different statements regarding the loss of
consciousness by plaintiff. She testified that after hitting
her head, the next thing she remembers is being in St. John
Hospital. The St. John records state she said she may have
briefly loss [sic] consciousness when she hit the ground.
She said when she came to she recalls being surrounded by
a number of people at the plant. Plaintiff told Dr. Robert
2010] F
INDLEY V
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Bauer at Henry Ford Health System that she lost conscious-
ness for an unknown period of time, but awoke on the plant
floor in a supine position. Plaintiff told Dr. Sarala Vunnam
that she had a loss of consciousness for a few minutes when
she fell on carpet. Plaintiff told Dr. Rhonda Levy-Larson that
she was thrown from a fast moving cart onto concrete. She
said she did not actually remember landing and hitting her
head. She woke up in the hospital. She later said she remem-
bered hitting her head and “rolling”. She said she lost
consciousness for an unknown amount of time and woke up
in the hospital. Plaintiff told Dr. Van Horn that she does not
remember if she lost consciousness. I do not find plaintiff’s
testimony credible regarding a loss of consciousness as a
result of her fall from the electric cart. Based upon the
contradictions as to whether plaintiff actually lost conscious-
ness, I find that she did not lose consciousness.
Plaintiff began treating at Henry Ford Behavior Health
System (HFBHS) on March 3, 2004. Plaintiff’s initial diagno-
sis, based upon the history she provided, was adjustment
disorder with depressed mood. The records state there were
no attention problems noted; no concentration problems
noted and plaintiff denied any memory problems. However, it
appears that the longer plaintiff treated the more symptoms
she developed. Plaintiff returned to work in April, 2004 and
worked until October, 2004, with the exceptions of some short
lay-offs. She went off work again and returned in August,
2005. By August 6, 2004, her diagnosis was major depressive
disorder. Interestingly enough, the records state, on July 20,
2004, plaintiff had returned to work with restrictions and the
records state “Plaintiff refused repeated attempts to try to get
her to look at ways to channel anger. She keeps self in a
‘victim’ role.”
The HFBHS records for plaintiff on September 6, 2004,
state there were no attention problems noted or concen-
tration problems and plaintiff’s thought process was
logical/coherent.
The HFBHS records entry for October 15, 2004, states
plaintiff complained her co-workers are out to get her
because she accidentally almost hit one of her co-workers
with her car. She said the co-worker became upset and tried
486 289 M
ICH
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PP
483 [Aug
to cut her off in her car. She said the co-worker was told by
a supervisor to run her off the road. Plaintiff also men-
tioned that prior to the incident of February 18, 2004, there
was some jealousy of her skills as a laborer. Plaintiff felt
people were making threats and talking about her.
On November 23, 2004, the HFBHS records state plain-
tiff was driving and paying bills.
Plaintiff testified she had hallucinations, that she hears
voices, and see[s] shadows, but Dr. Nanette Colling noted
on January 14, 2005 that plaintiff had no auditory or visual
perceptual disturbances.
Dr. John Head, Jr. treated plaintiff from July 6, 2006 to
September 27, 2007, at the Northeast Guidance Center
(NGC). Dr. Head’s diagnosis was major depression with
psychotic features. Dr. Samet’s diagnosis was signs and symp-
toms suggestive of possible brain injury with Major Depres-
sion. Dr. Van Horn’s diagnosis was Adjustment Disorder
mixed with Anxiety and Depression. Dr. Head, Dr. Samet and
Dr. Van Horn found plaintiff disabled as a result of the
injuries she sustained on February 18, 2004. All three doctors
relied on the history of events as described by plaintiff.
Dr. Rhonda Levy-Larson evaluated plaintiff on September
25, 2006. Dr. Levy-Larson testified plaintiff could not sign her
name without looking at her driver’s license[]. Yet plaintiff
was seen at the NGC on September 12, 2006. The records
state plaintiff was pleasant and cooperative. She told Dr. Head
she had been down without her meds and was not sleeping
well without her meds. On October 10, 2006, plaintiff was at
NGC and told Dr. Head that she felt a little better and her
appetite was still poor at times. Dr. Head noted she appeared
depressed. There is nothing to indicate plaintiff was so
mentally disabled that she did not know who she was and
would have to refer to her driver’s license to write her name.
Dr. Michael Freedman evaluated plaintiff on January 5,
2007. Dr. Freedman testified plaintiff appeared for the evalu-
ation and could not recall where she lived, her age, her date of
birth, but she could recall the incident which caused her lack
of memory.
2010] F
INDLEY V
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AIMLER
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HRYSLER
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ORP
487
Dr. Yasmeen Ahmad evaluated plaintiff on September
21, 2006. When plaintiff arrived for the evaluation with Dr.
Ahmad, she had the history of the incident written on a
piece of paper along with her birth date, address, telephone
number, her sister’s name, and other information. How-
ever, Dr. Ahmad said plaintiff was oriented to month, day,
season, place and person.
Dr. Jeffrey E. Middeldorf evaluated plaintiff on October
11, 2005. At Dr. Middeldorf’s evaluation, plaintiff was able
to provide the doctor a verbal history of the incident and
treatment she had received. However, she was unable to
move her back, right shoulder and neck. Dr. Middeldorf’s
findings included gross symptom magnification.
Dr. Samet evaluated plaintiff on November 6, 2006. On
the date of Dr. Samet’s evaluation, plaintiff did not know
the current President Bush or President Clinton, did not
know the holiday coming up was Thanksgiving and did not
know the function of an ink pen. Plaintiff could not add
four plus four, or five plus five. Dr. Samet said plaintiff’s
ability to cooperate with the evaluation was very limited
and her presentation suggested an organic psychosis. On
November 7, 2006, the very next day, plaintiff treated at
the [NGC]. The NGC’s records for November 7, 2006, state
plaintiff was pleasant and cooperative. Plaintiff was given
medication samples with instructions. The NGC Consumer
Progress Note states:
“Ms. Findley’s Plan of Service Review was done today
by writer/therapist with input from Ms. Findley. She
wished to retain current goals/objectives but stated that
she hasn’t gone to a county clinic due to waiting period and
comfortability as Medicare insurance will not be effective
until 2007. Therapist has encouraged her many times to
see her previous primary care doctor who is familiar with
her physical condition as she states that she has chronic
pain particularity [sic] in legs, back, neck, and hand area
due to a car accident and injury on her job. Discussed level
of care and transitioning to groups next year in addition to
consultation again with a case manager due to inability to
get some prescriptions filled and not having medical insur-
ance. Ms. Findley was satisfied with the services received
488 289 M
ICH
A
PP
483 [Aug
during this review period ands [sic] states that she wants to
feel normal again physically as well as emotionally. She
needs to continue to work toward progression of treatment
goals/objectives.”
On November 7, 2006, there was no indication plaintiff
was in such an emotional state that she did not know of
President Bush or the day, month or year and would not
know the function of an ink pen. At the NGC plaintiff was
noted as being pleasant and cooperative and had input in
her service review.
Dr. Van Horn testified she was unable to do the complete
neuropsychological testing on January 24, 2007 and Feb-
ruary 14, 2007, as plaintiff was unable to cooperate with
them. However, plaintiff was at NGC on January 9, 2007
and February 6, 2007, and on both visits, she was listed as
“pleasant and cooperative”. Plaintiff’s behavior at NGC
was inconsistent with that she exhibited at Dr. Van Horn’s
attempted evaluations in January and February.
Plaintiff alleges she has problems with her memory
despite being able to provide a very detailed history of her
incident at work and her subsequent treatment. Dr. Head
testified plaintiff had problems with short term memory
and not her long term memory. Yet, plaintiff appeared at
the evaluation of Dr. Ahmad with her history, birth date,
address, telephone number, sister’s name, mother’s name
and the accident date and history written on a piece of
paper. It would appear that all of that information would be
in her long term memory. None of that information would
change to be short term. The history of the incident would
be in her long term memory and it was for the other
evaluators. Plaintiff’s birth date most certainly did not
change and would be long term memory as would her
address which could be considered short term memory
information only if she moved frequently and her address
was the same as when she was working. Her sister’s name,
her mother’s name and the accident date would all have
been the same and would be in her long term memory if I
accept Dr. Head’s explanation as to why she could remem-
ber some things and not remember others.
2010] F
INDLEY V
D
AIMLER
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HRYSLER
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ORP
489
Plaintiff was seen by Dr. Shlomo Mandel at Henry Ford
Hospital on October 26, 2005. Plaintiff, despite her claim of
difficulty with her memory, was able to tell Dr. Mandel that
on February 18, 2004, she “was thrown on to a concrete
from a fast moving cart” and she tripped over a cord in
2005 and fell to the ground. Plaintiff appears to have no
problem with her memory regarding the incident but she
has problems with her date of birth and other general
information. At trial, she had no problem with providing
information but at the [independent medical examinations
(IMEs)] she could not remember the same information she
easily provided at trial. Dr. Colling at NGC noted on
January 14, 2005, that plaintiff complained of memory
problems but she was able to remember her appointment.
Appointments would be in plaintiff’s short term memory
and not her long term memory bank. I do not accept Dr.
Head’s explanation rather I accept the testimony of Dr.
Ahmad that plaintiff may have had a mild concussion
which did not cause cognitive deficits.
Despite testifying she has problems with her memory,
plaintiff said she did not receive the letter from the
defendant requiring her to report to work. She said she
remembers being told that she would receive a certified
letter but she did not receive the letter. She was emphatic
that she did not receive the letter.
Because I find plaintiff’s testimony not credible, I find
she did receive the letter but at her own peril chose to
ignore the letter. [MCL] 418.301(5) states:
“(a) If an employee receives a bona fide offer of reason-
able employment from the previous employer, another
employer, or through the Michigan employment security
commission and the employee refuses that employment
without good and reasonable cause, the employee shall be
considered to have voluntarily removed himself or herself
from the work force and is no longer entitled to any wage
loss benefits under this act during the period of such
refusal.”
Plaintiff testified that had she received the letter she
would not have been able to work. Plaintiff’s explanation is
490 289 M
ICH
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PP
483 [Aug
not sufficient. Case law requires she first report to the
defendant and a determination has to be made if the offer
is for reasonable employment. I find plaintiff voluntarily
removed herself from the workforce when she failed to
respond to the defendant[’s] offer of employment. However,
assuming arguendo I found she did not receive the letter, I
would nevertheless find plaintiff not disabled because of
the many inconsistencies in her testimony and her exag-
gerated behavior at the IME’s.
Plaintiff complained of pain in her back which radiated
into her legs. She had pain in her shoulders which radiated
into her hands. She said standing, sitting and walking were
all painful. She said her arms would throb and ache with
pain all the time. Despite her complaints of constant pain,
she did not attend pain management although Dr. Colling
recommended several times that she consider pain man-
agement. I do not doubt plaintiff experiences pain however,
it is not as limiting as she described at trial.
Dr. Head, Dr. Van Horn and Dr. Samet found plaintiff’s
disability was caused by the incident of February 18, 2004,
based upon the history provided by plaintiff. Dr. Ahmad
disagreed plaintiff was disabled. Dr. Ahmad said a person
cannot have a closed head injury without a loss of con-
sciousness and it was clinically significant that the [elec-
troencephalogram (EEG)] and the CAT scan of plaintiff’s
brain were normal and plaintiff had not been started on
seizure medications by a neurologist. Dr. Head would only
testify that he had heard of cases where a person can have
a traumatic brain injury with a normal EEG, a normal
MRI, and a normal CAT scan. When Dr. Head was asked if
it was the exception rather than the rule, he answered he
was unsure of the ratio. There was no objective evidence
that plaintiff sustained a closed head injury. The doctors
that found plaintiff disabled relied on the history as pro-
vided by plaintiff and plaintiff’s responses at the IME’s was
grossly exaggerated, even at the IME’s requested by her
attorney.
Plaintiff testified she has limited use of her right upper
extremity, yet she appeared at trial pushing a walker with
both hands and appeared to have no difficulty using her
2010] F
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right upper extremity. She also sat and testified with no
apparent difficulty. It is not expected that the plaintiff has
to sit and squirm to establish she is disabled, but she was
apparently able to sit during the time she was on the
witness stand without any difficulty until the defense
attorney questioned her behavior on the stand as being
inconsistent with her testimony that she was unable to sit
for long period of time. Her response was she did not know
that she could stand while testifying.
I did not find plaintiff credible and her exaggerated
responses and behavior at the IME’s further lessened her
credibility. I therefore, accept the testimony of Dr. Ahmad,
Dr. Levy-Larson, Dr. Middeldorf and Dr. Freedman that
plaintiff was not disabled based upon the incident of
February 18, 2004. If I had found plaintiff sustained a work
related injury, I would have had a hard time finding her
physically or mentally disabled based upon the lack of
objective medical evidence.
Plaintiff apparently has some type of disability but she
has failed to sustain her burden of proof that the disability
was either caused or significantly aggravated by her em-
ployment with the defendant.
Benefits are denied. [Citations omitted.]
Plaintiff appealed to the WCAC. Plaintiff also filed a
“MOTION FOR ADDITIONAL TESTIMONY,” contend-
ing that the magistrate incorrectly stated that she had
used a walker at trial. Plaintiff sought to have the WCAC
either accept her affidavits to that effect or remand the
matter to the magistrate for further findings. Two WCAC
commissioners denied plaintiff’s motion without explana-
tion. The third commissioner dissented, opining that a
remand was warranted because the magistrate’s refer-
ence to the walker was not harmless given that the case
hinged on plaintiff’s credibility.
On March 12, 2009, the WCAC affirmed the magis-
trate’s denial of benefits. In the lead opinion, one
commissioner stated:
492 289 M
ICH
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483 [Aug
We find no reason to alter the magistrate’s findings. The
magistrate performed the necessary fact finding functions
with detail and clarity. The magistrate provided numerous
reasons to support her conclusion that she could not trust
plaintiff’s testimony. She then explained that she also could
not accept plaintiff’s experts’ opinions because the experts
relied on plaintiff’s exaggerated statements to form their
opinions. Plaintiff argues that we should substitute our
findings. We cannot, because to do so would clearly violate the
Isaac [v Masco Corp, 2004 Mich ACO 81,] standard. Plaintiff
provides nothing more than an alternative view of the facts.
A second commissioner concurred “in result only,” with-
out explanation. The third commissioner again dissented.
He was concerned that the magistrate’s assessment of
plaintiff’s credibility might have been influenced by an
inaccurate recall of plaintiff’s use of a walker at trial. He
opined that a remand was necessary to resolve any such
inaccuracy before the WCAC could properly render an
ultimate decision.
II. STANDARD OF REVIEW
Review under the Worker’s Disability Compensation
Act (WDCA), MCL 418.101 et seq., is limited. Rakestraw v
Gen Dynamics Land Sys, Inc, 469 Mich 220, 224; 666
NW2d 199 (2003). When substantial evidence on the
whole record does not exist to support the magistrate’s
factual findings, the WCAC may substitute its own find-
ings of fact for those of the magistrate. Mudel v Great
Atlantic & Pacific Tea Co, 462 Mich 691, 698-700; 614
NW2d 607 (2000). In contrast, in the absence of fraud, this
Court must treat findings of fact made by the WCAC when
acting within its powers as conclusive if there is any
competent supporting evidence in the record. MCL
418.861a(14).
This Court does not independently review whether
the magistrate’s findings of fact are supported by sub-
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stantial evidence. Mudel, 462 Mich at 700-701. Rather,
this Court’s review is complete once it is satisfied that
the WCAC has understood and properly applied its own
standard of review. Id. at 703-704. As long as the WCAC
did not “ ‘misapprehend or grossly misapply’ ” the
standard of substantial evidence and the record reflects
evidence supporting the WCAC’s decision, then this
Court must treat the WCAC’s factual decisions as
conclusive. Id. (citation omitted).
III. TRUE MAJORITY
Plaintiff argues that the WCAC’s decision should be
vacated because it did not reflect a true majority of the
WCAC panel. We agree.
In order for a decision of the WCAC to be final and
reviewable by this Court, it must be a true majority
decision. MCL 418.274(8) provides in pertinent part
that “[t]he decision reached by a majority of the as-
signed 3 members of a panel shall be the final decision
of the commission.” In Aquilina v Gen Motors Corp, 403
Mich 206; 267 NW2d 923 (1978), our Supreme Court
vacated an order of the Workers’ Compensation Appeal
Board (WCAB)
2
because it did not reflect a true major-
ity. Two of the board members concurred in the “con-
trolling opinion,” but did not issue separate opinions.
Id. at 209. A fourth board member dissented, and the
fifth member concurred in that dissent. Id. The Court
noted that because two of the board members merely
concurred in the result, the controlling opinion was not
a “majority decision” setting forth the board’s findings
of fact as required by the WDCA. Id. at 212. The Court
further emphasized that the board had to properly
2
When Aquilina was decided by the WCAB, the predecessor of the
WCAC, panels of the WCAB had five members.
494 289 M
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articulate its factual findings to facilitate appellate
review. Id. at 213. The Court ruled:
[W]e cannot discharge our reviewing responsibilities
unless a true majority reaches a decision based on stated
facts. A decision is not properly reviewable when some of
the majority concur only in the result and do not state the
facts upon which that result is based. We must ask the
board members to make a finding regarding all critical or
crucial facts as well as the result when they choose not to
sign the controlling opinion.
We would also encourage concurring board members to
articulate whether or not they agree with the legal stan-
dard and the rationale employed in reaching the decision.
While we are mindful that this process of articulation may
prove burdensome at times, it will most certainly assist the
appellate courts of this state in effectively discharging their
responsibilities in these matters. [Id. at 214.]
Stated more succinctly, a true majority decision is one in
which at least a majority of the commissioners agree
regarding the material facts and the ultimate outcome.
Defendant, however, posits that this requirement for
a true majority as set forth in Aquilina is no longer
valid because the standard of review for the WCAC
differs from that in effect for the WCAB when Aquilina
was decided. This argument is unavailing. As our Su-
preme Court noted in Mudel, 462 Mich at 698-699, the
WCAB previously employed de novo review of a magis-
trate’s decision. Now, the substantial evidence standard
governs the WCAC’s review of a magistrate’s findings.
Id. Under this standard, the WCAC engages in a quali-
tative and quantitative analysis of the whole record and
“need not necessarily defer to all the magistrate’s
findings of fact.” Id. at 702-703. Importantly, however,
our review of the WCAC’s findings remains the same as
our previous review of the WCAB’s findings—we must
determine if any competent evidence exists to support
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the WCAC’s findings. Id. at 700-703. Thus, the mere
fact that the WCAC’s standard for reviewing a magis-
trate’s decision has changed since Aquilina was decided
is simply not relevant to whether competent evidence
supports the WCAC’s findings. And, in determining
whether any competent evidence exists to support the
WCAC’s findings, “we cannot discharge our reviewing
responsibilities unless a true majority reaches a decision
based on stated facts.” Aquilina, 403 Mich at 214. To
allow otherwise would be to corrupt the integrity of the
administrative process. See Mudel, 462 Mich at 701.
Accordingly, the true-majority requirement articulated
in Aquilina continues to be valid.
In this case, one commissioner issued the lead opin-
ion. The second commissioner did not adopt the factual
findings of the lead opinion, did not make findings of his
own, and instead concurred in the result only. The third
commissioner dissented. Therefore, no true majority
decision existed because a majority of commissioners
did not agree regarding the critical facts of the matter.
A concurrence in result only is inadequate for appellate
review, as it does not shed light on the factual findings
and legal reasoning used by the majority in reaching its
ultimate conclusion. Thus, the decision was not a final
decision and is not properly reviewable under Aquilina.
Consequently, the matter requires remand.
3
3
Defendant’s reliance on Smith v Exemplar Mfg Co, unpublished
opinion per curiam of the Court of Appeals, issued January 31, 2008
(Docket No. 272749), is also unavailing. First, unpublished opinions are
not binding on this Court. Schaendorf v Consumers Energy Co, 275 Mich
App 507, 515; 739 NW2d 402 (2007). Further, Smith is obviously
distinguishable from the present situation. In Smith, this Court ruled
that it was apparent from the concurrence that, in all other respects, the
concurring WCAC commissioner agreed with the lead opinion and, as
such, “there clearly was a two-member majority.” Smith, unpub op at 2.
Because the concurrence in this case was in the result only, this Court
cannot conclude, as the Smith Court did, that the concurring WCAC
496 289 M
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On remand, we direct the WCAC to make adequate
findings of fact to facilitate the appellate review process.
This Court has previously ruled that the WCAC must
state the facts it adopted, not merely summarize the
magistrate’s findings, and must also explain its legal
reasoning:
In order for this Court to discharge its appellate func-
tion, the WCAB must sufficiently detail its findings of fact
so that the Court can separate the facts it found from the
law it applied....InKostamo [v Marquette Iron Mining Co,
405 Mich 105, 136; 274 NW2d 411 (1979)], our Supreme
Court noted:
“[C]onclusory findings [by the WCAB] are inadequate
because we need to know the path it has taken through the
conflicting evidence, the testimony it has adopted, the
standards followed and the reasoning used to reach its
conclusion.”
Having reviewed the WCAB’s opinion in this case, we
find that we cannot perform our appellate function. The
WCAB merely affirmed the referee’s decision and summa-
rized the expert testimony presented. It did not state which
testimony it adopted, the standards it followed, or the
reasoning it used to reach its conclusion. Id. Hence, we
vacate the WCAB’s opinion and remand this case to the
WCAB for further proceedings. [Williams v Chrysler Corp,
159 Mich App 8, 11-12; 406 NW2d 222 (1987).]
See also Lubic v Joba Constr Co, 429 Mich 865; 413
NW2d 424 (1987) (relying on Aquilina to remand to the
WCAB for specific findings of fact); Jamison v Frito-Lay
Inc, 424 Mich 874; 380 NW2d 42 (1986) (remanding to
the WCAB for adequate findings of fact sufficient to
permit appellate review).
Finally, plaintiff argues that the WCAC abused its
discretion by denying her request to remand the case
commissioner agreed with the factual findings and reasoning in the lead
opinion.
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for additional testimony to correct the magistrate’s
misstatement regarding her use of a walker. Although
we find no abuse of discretion at this juncture, if the
WCAC deems it necessary, it may remand the matter to
the magistrate. MCL 418.861a(12).
Vacated and remanded for further proceedings con-
sistent with this opinion. We do not retain jurisdiction.
498 289 M
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PEOPLE v ROSE
Docket No. 290936. Submitted June 15, 2010, at Lansing. Decided July 1,
2010. Approved for publication August 26, 2010, at 9:00 a.m.
A jury in the Allegan Circuit Court, George R. Corsiglia, J.,
convicted Ronald C. Rose of four counts of first-degree criminal
sexual conduct and two counts of disseminating sexually explicit
matter to a minor. Defendant appealed, arguing, in part, that he
was deprived of his constitutional right to confront the wit-
nesses against him when the court permitted one of the victims,
JB, who was eight years old, to testify from behind a screen that
prevented JB from being able to see the defendant, although the
defendant could see her.
The Court of Appeals held:
1. The trial court erroneously relied on MCL 600.2163a,
which allows the use of special arrangements necessary to
protect the welfare of a witness, when it allowed the use of the
witness screen because the statute makes no reference to
witness screens. The error, however, did not warrant relief. The
existence of the statute does not preclude trial courts from
using alternative procedures permitted by law or court rule to
protect witnesses. The relevant inquiries were whether the use
of the screen violated defendant’s right to confront the wit-
nesses against him and whether the use of the screen violated
defendant’s right to due process and a fair trial.
2. The trial court’s decision to permit use of the screen did
not violate defendant’s right to confront witnesses. Before a
witness screen is used, a trial court must determine that the
screen is necessary to protect a witness who would otherwise be
traumatized by the presence of the defendant and that the
emotional distress to the witness in the absence of the screen
would be more than de minimis. The trial court in this case
found that there was a high likelihood that testifying face to
face with defendant would cause JB significant psychological
harm and that she might not be able to testify at all in
defendant’s presence. Those findings were sufficient to warrant
limiting defendant’s right to confront JB face to face, especially
in light of the fact that use of the screen preserved the other
2010] P
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elements of defendant’s right of confrontation and thus ad-
equately ensured the reliability of the truth-seeking process.
3. With regard to due process, the use of a screen that prevents
a witness from being able to see the defendant is not inherently
prejudicial in terms of undermining the presumption of the
defendant’s innocence and the inferences a jury might draw from
the use of the screen. The record in this case did not support the
conclusion that use of the screen actually prejudiced defendant.
4. Although the prosecution failed to comply with a discovery
order, the trial court did not abuse its discretion by denying
defendant’s motion to preclude the prosecution’s expert witness
on child sexual abuse from testifying. The exclusion of a witness is
an extreme sanction that should not be employed if the trial court
can fashion a different remedy that will limit the prejudice to the
party injured by the violation while still permitting the witness to
testify. Defendant failed to establish that the trial court’s decision
to deny that sanction was outside the range of principled outcomes
under the circumstances presented.
5. The trial court did not abuse its discretion by denying
defendant’s alternative motions for a new trial or an evidentiary
hearing in light of a juror’s associations with members of JB’s
family. Defendant had the burden to establish that the juror was
not impartial or at least that the juror’s impartiality was in
reasonable doubt. Defendant presented no evidence that the juror
was partial or evidence of juror misconduct that prejudiced him.
Affirmed.
C
ONSTITUTIONAL
L
AW —
C
ONFRONTATION
C
LAUSE —
P
RESUMPTION OF
I
NNOCENCE —
W
ITNESSES —
F
ACE-TO
-F
ACE
C
ONFRONTATION —
S
CREENS TO
S
HIELD
W
IT-
NESSES
.
The use of a screen that prevents a witness from being able to see the
defendant is not inherently prejudicial; before it may allow the
taking of a witness’s testimony from behind a screen, the trial
court must make case-specific findings that the screen is necessary
to protect a witness who would otherwise be traumatized by the
presence of the defendant and that the emotional distress to the
witness in the absence of the screen would be more than de
minimis.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Frederick Anderson, Prosecuting At-
torney, and Judy Hughes Astle, Assistant Prosecuting
Attorney, for the people.
500 289 M
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A. Scott Grabel & Associates (by Scott Grabel) for
defendant.
Before: M
URRAY
,P.J., and S
AAD
and M. J. K
ELLY,
JJ.
P
ER
C
URIAM.
Defendant appeals as of right his convic-
tions by a jury of four counts of first-degree criminal
sexual conduct, MCL 750.520b, and two counts of
disseminating sexually explicit matter to a minor, MCL
722.675. The trial court sentenced defendant to serve
25 years to 50 years in prison for each of his convictions
of first-degree criminal sexual conduct and to serve 16
months to 24 months in prison for each of his convic-
tions of disseminating sexually explicit matter to a
minor. The court ordered that the sentences be served
concurrently and with 50 days of sentence credit for
time served on each. Because we conclude that there
were no errors warranting relief, we affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
The present case has its origins in allegations of
sexual abuse by JB against defendant, Ronald Carl
Rose. JB is the youngest of five children. At the time of
the trial, JB was eight years old. JB has a brother, RB,
who is approximately two years older than her and has
three older sisters who were each in their early twenties
at the time of the trial. Rose’s wife is JB’s oldest sister.
Rose and his wife had a home within five to six miles of
JB’s parent’s home in Allegan County. Although RB and
JB lived with their parents, they spent a significant
amount of time at Rose’s home and often stayed over-
night. In June 2007, JB revealed to her mother that Rose
had been sexually assaulting her for some time. After JB’s
revelations, RB also indicated that Rose had exposed him
to pornography and touched him inappropriately.
2010] P
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The prosecutor charged Rose with eight separate
crimes on the basis of these revelations. The first four
counts were for first-degree criminal sexual conduct
committed against JB: one count for digital-vaginal
penetration, one count for penile-vaginal penetration,
one count for penile-oral penetration, and one count for
penile-anal penetration. The prosecutor also charged
Rose with accosting a minor for immoral purposes and
with second-degree criminal sexual conduct. At trial,
the prosecutor argued that the accosting charge was
founded on Rose’s provision of alcohol to JB and that
the second-degree criminal sexual conduct charge was
founded on Rose’s touching of JB’s chest. However, the
prosecutor agreed to dismiss those charges after the
close of her proofs because JB had not testified that
Rose provided her with alcohol or touched her chest.
The last two charges were for disseminating sexually
explicit matter to JB and RB.
JB testified at trial about the timing and location of
the abuse that she suffered. She said that the abuse
occurred at Rose’s house in the bedroom and living
room. Sometimes her older sister was home, and some-
times she was even in the same room, but the sister did
not see the abuse because she was asleep when “we did
it in the back room.” Sometimes the abuse occurred at
night and sometimes during the morning.
She also described the nature of the abuse. She said
Rose put his private part by her private part—by both
the “back and the front.” She said he had tried to put
his private into her front private, but it just did not
work and she told him it hurt. She said she was
sideways on the bed and that white stuff came out of his
private part and got on her leg and the bed. JB said that
Rose “put his private in the back while I was on my
stomach.” She said he put it in her “bottom, but it
502 289 M
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didn’t go all the way in.” It hurt and she told him. She said
she knew that the white stuff came out again because she
could feel it on her leg. She said that, a lot of times, he put
his private into where her poop comes from.
She also testified that sometimes Rose would touch
her front private with his fingers. She said he tried to
make his finger go in, but it hurt. In addition, he
made her put her “mouth on him” more than once.
Sometimes he would touch his private part while she
put her mouth on it and would move it in her mouth.
He was lying on his back on the bed, and she was on
her knees.
Finally, JB testified that Rose would sometimes show
her and her brother movies: “They had girls on it and
that had the exact same thing that he did to me.” He
also showed them magazines that had pictures of people
with no clothes on. Rose told her that the movies were
about having sex, and he would watch the movies with
her and RB. He also sometimes had the movies on while
he was doing stuff to her.
RB also testified at trial. He said he did not like going
over to his older sister’s house when Rose was there
because he would show them bad stuff—videos and
magazines with naked people. He would put the videos
on, and the people in them would have sex. RB said that
Rose told them that the videos showed how babies were
made. Sometimes Rose would play with his penis in
front of them. Rose would have his pants halfway down
and would move his penis up and down. RB said that his
older sister was never home when this happened.
Rose’s defense was that he had been wrongfully ac-
cused. Specifically, he presented testimony—including the
testimony of two of JB’s older sisters—that suggested that
JB’s mother caused JB and RB to fabricate the allegations
2010] P
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in an effort to break up the marriage between Rose and
JB’s older sister.
The jury rejected Rose’s defense and returned a
verdict of guilty on each of the six remaining counts.
In October 2008, Rose moved for an evidentiary
hearing or a new trial. In his motion, Rose argued that
he was deprived of a fair trial when his trial counsel
failed to timely object to the prosecution’s failure to
produce a written summary of the proposed testimony
by its expert on child-sexual-abuse dynamics. He also
argued that his counsel unreasonably failed to call an
expert to rebut the medical testimony at trial. He
further claimed that his trial counsel unreasonably
failed to call a rebuttal witness, GA, who would have
testified that JB’s father told GA that he knew that
Rose had done nothing wrong. Rose also argued that
there was evidence that one of the jurors knew JB’s
aunts, GA and LB, as well as her uncle, BB. Rose alleged
that this juror had worked with BB and may have heard
things about the case at work. For these reasons, Rose
asked the trial court to order hearings on the issues or
grant a new trial.
In February 2009, the trial court issued an opinion
and order denying Rose’s motion for a new trial. The
trial court determined that the evidence did not dem-
onstrate grounds for relief on the basis of a juror’s
limited knowledge of a single witness, GA, who did not
actually testify at trial. Further, the court noted that
the affidavits proffered by Rose in support of his motion
did not show that the juror had engaged in misconduct.
Rather, the affidavits established the mere possibility
that the juror might have been exposed to prejudicial
remarks. This evidence, the trial court concluded, was
insufficient to warrant relief.
This appeal followed.
504 289 M
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II. USE OF A WITNESS SCREEN
A. STANDARDS OF REVIEW
Rose first argues that the trial court violated his
rights under the state and federal constitutions, as well
as MCL 600.2163a, when it permitted JB to testify from
behind a screen that prevented her from being able to
see Rose even though he could see her. Rose contends
that the use of a witness screen is inherently prejudicial
and that the United States Supreme Court has specifi-
cally disavowed the use of one-way screens to prevent a
witness from being able to see a defendant. He also
argues that the trial court failed to make the necessary
findings in order to use the alternative procedures
permitted under MCL 600.2163a and that, in any event,
the use of a screen is not permitted under that statute.
This Court reviews de novo questions of constitutional
law such as the right to confront witnesses. People v
Drohan, 475 Mich 140, 146; 715 NW2d 778 (2006).
However, this Court reviews for clear error the trial
court’s findings of fact underlying the application of
constitutional law. See People v Oliver, 464 Mich 184, 191;
627 NW2d 297 (2001). This Court also reviews de novo the
proper interpretation of a statute. People v Martin, 271
Mich App 280, 286-287; 721 NW2d 815 (2006).
B. THE TRIAL COURT’S FINDINGS
On the first day of trial, the prosecutor moved for
permission to use a screen during JB’s testimony. The
prosecutor stated that she made the motion because JB
had indicated that she was afraid to testify in Rose’s
presence. The trial court agreed to take testimony from
JB’s therapist.
Jill VanderBent testified that she supervised nine
therapists for Bethany Christian Services and that she
2010] P
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also counseled JB. VanderBent stated that she was treat-
ing JB for symptoms related to trauma, including night-
mares, bedwetting, difficulty concentrating, zoning out,
and anger outbursts. JB had also expressed fear about
having to come and testify in court—that she did not want
to see Rose and “was very fearful.” JB had even stated
that she feared that she could not testify in his presence.
VanderBent stated that it was her opinion that testifying
face to face might trigger some traumatic experiences and
cause “numbing, shutting down, not being able to speak
even.” She opined that if JB were to see Rose, it could be
traumatic for her, but the use of a screen that would
permit others to see her without JB being able to see Rose
would sufficiently safeguard her emotional and psycho-
logical well-being. Further, when asked whether JB
“would be psychologically and emotionally unable to tes-
tify if we didn’t have some sort of protection that goes
beyond re-configuring the courtroom,” VanderBent
opined that it was “a likely possibility, yes.”
On cross-examination, VanderBent continued to as-
sert the high potential for harm if JB were forced to
testify face to face with Rose:
Q. Okay. Now, what do you predict for her mental health
if she testifies? Or that she won’t be able to testify or that
she’ll be harmed? Can you clarify that?
A. Sure. The concern is with [JB] specifically because
she had indicated to me that she’s very fearful of seeing the
defendant. If she has to testify in his presence there’s
concern that that would be a trigger for her which could
cause her to exhibit some of these symptoms I had ex-
pressed; the numbing out, spacing out and possibly not
even being able to speak.
Q. Is she able to articulate this fear clearly?
A. Yes.
Q. Does she exhibit any symptoms of fear?
506 289 M
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A. Yes. She’s very fearful, very shaky, talks about being
very nervous, stomach aches.
Q. This is related to testifying?
A. In front of the defendant.
Q. Specifically in front of the defendant.
A. Correct.
Q. Would she suffer any permanent emotional damage
do you think?
A. That’s hard to say.
***
Q. Is there any particularly heightened effect on [JB] of
testifying versus say any other witness in a traumatic case?
A. Well I think the difference in this particular case is
that [JB] has expressed this fear of being in front of face to
face to the defendant. Some, you know, it varies based on
the child. However, because she has verbally expressed that
this is very scary for her, shows me that this is something
we need to try to prevent her from being so fearful. Because
if she’s too fearful and she becomes—her stress arousal
happens, she’s going to have a very difficult time express-
ing, verbalizing and accessing her memories.
Rose’s trial counsel objected to the prosecutor’s motion
for permission to use a screen on the grounds that the
prosecution had not met the requirements of MCL
600.2163a and because the use of the screen violated
Rose’s right to confront JB and was otherwise prejudicial.
Nevertheless, Rose’s trial counsel also argued that the
trial court had to use the standard set forth in MCL
600.2163a(17) when deciding whether to use a screen:
“The defendant asserts that that is the correct standard
for the use of a witness screen. It would be the same for
video recorded deposition testimony.” Rose’s trial counsel
did not suggest any alternatives to the use of the screen,
such as the methods stated under MCL 600.2163a(3), (4),
(14), (16), and (17).
2010] P
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After hearing the parties’ arguments, the trial court
found that there was “a high likelihood” that testifying
face to face with Rose would cause JB to “regress in her
therapy, have psychological damage” and could cause her
“to possibly not testify....” For that reason, the trial
court concluded that the criteria under MCL 600.2163a
had been met and that it was necessary to use a screen to
protect the welfare of the child. The trial court also
determined that Rose’s rights would be adequately pro-
tected because he would be able to see JB, as would the
jury, and he would be able to cross-examine her.
C. MCL 600.2163a
In this case, the trial court relied on MCL 600.2163a for
the authority to use a witness screen. Under MCL
600.2163a(15), if the trial court finds, on the motion of a
party, that “the special arrangements specified in subsec-
tion (16) are necessary to protect the welfare of the
witness, the court shall order those special arrange-
ments.” The special arrangements listed under MCL
600.2163a(16) include excluding unnecessary persons
from the courtroom during the witness’s testimony, rear-
ranging the courtroom to move the defendant as far from
the witness stand as is reasonable, and using a question-
er’s stand or podium. If the court finds that the witness
will be psychologically or emotionally unable to testify
even with the benefits of the protections afforded under
MCL 600.2163a(3), (4), (14), and (16), the court must
order the taking of a videorecorded deposition of the
witness in lieu of live testimony. MCL 600.2163a(17).
On appeal, Rose argues that the trial court erred to
the extent that it relied on MCL 600.2163a because it
failed to make the necessary findings under that statute
and because the statute does not specifically permit the
use of witness screens.
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As noted, MCL 600.2163a requires the trial court to
employ very specific protections, and none of these
protections includes the use of a witness screen. Thus,
the trial court could not have properly relied on MCL
600.2163a. Nevertheless, the trial court’s erroneous
reliance on MCL 600.2163a does not necessarily war-
rant relief. See People v Burton, 219 Mich App 278, 287;
556 NW2d 201 (1996) (“Additionally, even if it were
error to apply the statute, it does not necessarily follow
that defendant’s right to confrontation was violated.”).
The Legislature provided that the protections afforded
under MCL 600.2163a were “in addition to other pro-
tections or procedures afforded to a witness by law or
court rule.” MCL 600.2163a(19). Accordingly, while
trial courts may rely on MCL 600.2163a to afford
witnesses certain protections, the existence of this
statute does not preclude trial courts from using alter-
native procedures permitted by law or court rule to
protect witnesses. And trial courts have long had the
inherent authority to control their courtrooms, which
includes the authority to control the mode and order by
which witnesses are interrogated. MRE 611(a); People v
Banks, 249 Mich App 247, 256; 642 NW2d 351 (2002)
(“It is well settled in Michigan that a trial court has
broad discretion in controlling the course of a trial.”).
This inherent authority also includes the ability to
employ procedures that limit a defendant’s right to
confront his accusers face to face even when the provi-
sions of MCL 600.2163a do not apply. See Burton, 219
Mich App at 287-291. Thus, the trial court’s erroneous
reliance on MCL 600.2163a does not itself warrant
relief. Rather, the relevant inquiry is whether the trial
court’s decision to use a witness screen violated Rose’s
Sixth Amendment right to confront JB or violated
Rose’s basic right to due process and a fair trial. See
Burton, 219 Mich App at 287.
2010] P
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D. THE RIGHT TO CONFRONT WITNESSES FACE TO FACE
The United States Supreme Court first addressed
whether the use of a screen to shield a witness from
viewing the defendant while testifying violated a defen-
dant’s constitutional right to confront the witnesses
against him or her in Coy v Iowa, 487 US 1012; 108 S Ct
2798; 101 L Ed 2d 857 (1988). In Coy, the defendant was
arrested and charged with sexually assaulting two 13-
year-old girls while they were camping in their backyard.
Id. at 1014. On the prosecutor’s motion, the trial court
permitted the complaining witnesses to testify from be-
hind a screen. With adjustments to the lighting in the
courtroom, the defendant could dimly see the witnesses,
but the witnesses could not see the defendant. Id. at
1014-1015. On appeal in the United States Supreme
Court, the defendant argued that the trial court violated
his constitutional rights by permitting the screen because
the Confrontation Clause gave him the right to face-to-
face confrontation and because the screen eroded the
presumption of innocence. Id. at 1015.
Justice Scalia, writing the majority opinion, noted that
the Supreme Court has “never doubted . . . that the
Confrontation Clause guarantees the defendant a face-to-
face meeting with witnesses appearing before the trier of
fact.” Id. at 1016. He explained that the perception that
confrontation is essential to fairness “has persisted over
the centuries” because it “is always more difficult to tell a
lie about a person ‘to his face’ than ‘behind his back.’ ” Id.
at 1019. Moreover, Justice Scalia opined that the benefits
of face-to-face confrontation outweighed the potential
harms to the witness:
Thus the right to face-to-face confrontation serves much
the same purpose as a less explicit component of the
Confrontation Clause that we have had more frequent
occasion to discuss—the right to cross-examine the ac-
510 289 M
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cuser; both “ensur[e] the integrity of the factfinding pro-
cess.” The State can hardly gainsay the profound effect
upon a witness of standing in the presence of the person
the witness accuses, since that is the very phenomenon it
relies upon to establish the potential “trauma” that alleg-
edly justified the extraordinary procedure in the present
case. That face-to-face presence may, unfortunately, upset
the truthful rape victim or abused child; but by the same
token it may confound and undo the false accuser, or reveal
the child coached by a malevolent adult. It is a truism that
constitutional protections have costs. [Id. at 1019-1020
(citation omitted).]
Turning to the facts in the case before the Court,
Justice Scalia stated that it was “difficult to imagine a
more obvious or damaging violation of the defendant’s
right to a face-to-face encounter.” Id. at 1020. Although
he acknowledged that the Court had in the past stated
that the right to confront witnesses was not absolute,
Justice Scalia differentiated those prior holdings on the
ground that they did not involve the literal meaning of
the Confrontation Clause:
To hold that our determination of what implications are
reasonable must take into account other important inter-
ests is not the same as holding that we can identify
exceptions, in light of other important interests, to the
irreducible literal meaning of the Clause: “a right to meet
face to face all those who appear and give evidence at trial.”
Id. at 1020-1021 (citation omitted).
Justice Scalia did leave open the possibility that there
might be exceptions to the right to face-to-face confronta-
tion. Id. at 1021. Such an exception, he opined, would
“surely be allowed only when necessary to further an
important public policy.” Id. However, such an exception
was not established through a “legislatively imposed pre-
sumption of trauma.” Id. Rather, because there had been
no “individualized findings that these particular wit-
nesses needed special protection, the judgment here could
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not be sustained by any conceivable exception.” Id. For
these reasons, the Court reversed the judgment of the
Iowa Supreme Court and remanded the case for a
harmless-error review. Id. at 1022.
Although Justice O’Connor was one of the six justices
who signed Justice Scalia’s opinion, she wrote a concur-
rence to clarify that the use of procedures “designed to
shield a child witness from the trauma of courtroom
testimony” might be permissible under facts different
from those present in the case before the Court. Id. at
1022. Justice O’Connor acknowledged that the Con-
frontation Clause generally required that a witness face
the defendant. However, she explained that this re-
quirement was not absolute:
But it is also not novel to recognize that a defendant’s
“right physically to face those who testify against him,”
even if located at the “core” of the Confrontation Clause, is
not absolute, and I reject any suggestion to the contrary in
the Court’s opinion. Rather, the Court has time and again
stated that the Clause “reflects a preference for face-to-face
confrontation at trial,” and expressly recognized that this
preference may be overcome in a particular case if close
examination of “competing interests” so warrants. [Id. at
1024 (citations omitted).]
Justice O’Connor went on to state that she would
permit the use of a particular trial procedure that called
for something other than face-to-face confrontation if
that procedure were necessary to further “an important
public policy.” Id. at 1025. Moreover, although a mere
generalized legislative finding of necessity is insuffi-
cient to establish such a necessity, when a court “makes
a case-specific finding of necessity, as is required by a
number of state statutes, our cases suggest that the
strictures of the Confrontation Clause may give way to
the compelling state interest of protecting child wit-
nesses.” Id. at 1025 (citations omitted).
512 289 M
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Almost two years to the day after the decision in Coy,
the United States Supreme Court clarified whether and to
what extent there were exceptions to a defendant’s right
to confront witnesses face to face. See Maryland v Craig,
497 US 836; 110 S Ct 3157; 111 L Ed 2d 666 (1990). In
Craig, the defendant was charged with physically and
sexually abusing a six-year-old girl who attended a kinder-
garten and prekindergarten center owned and operated
by the defendant. Id. at 840. Before trial, the prosecution
moved to permit the child to testify by means of one-way
closed-circuit television. Id. The trial court permitted the
use of this procedure after first taking evidence and
finding, as required under the relevant state statute, that
the child witness and other child witnesses would suffer
serious emotional distress to the extent that the children
would not be able to reasonably communicate. Id. at
842-843. The Maryland Court of Appeals reversed the
defendant’s convictions because the prosecution’s show-
ing of necessity was insufficient under the decision in Coy.
Id. at 843.
Writing for the majority, Justice O’Connor noted that
the right guaranteed by the Confrontation Clause ensures
not only a personal examination of the witness, but also
that the witness will testify under oath, that the witness
will be subject to cross-examination, and that the jury will
have the opportunity to observe the witness’s demeanor.
Id. at 845-846. She explained that the benefits conferred
by this right could not be reduced to any one element of
confrontation:
The combined effect of these elements of confrontation—
physical presence, oath, cross-examination, and observation
of demeanor by the trier of fact—serves the purposes of the
Confrontation Clause by ensuring that evidence admitted
against an accused is reliable and subject to the rigorous
adversarial testing that is the norm of Anglo-American crimi-
nal proceedings. [Id. at 846.]
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This was even true of the core value of the Confronta-
tion Clause—the right to face-to-face confrontation. Id.
at 847 (“[W]e have nevertheless recognized that [face-
to-face confrontation] is not the sine qua non of the
confrontation right.”). “For this reason, we have never
insisted on an actual face-to-face encounter at trial in
every instance in which testimony is admitted against a
defendant.” Id. Rather, as
suggested in Coy, our precedents confirm that a defendant’s
right to confront accusatory witnesses may be satisfied absent
a physical, face-to-face confrontation at trial only where
denial of such confrontation is necessary to further an impor-
tant public policy and only where the reliability of the
testimony is otherwise assured. [Id. at 850.]
Turning to Maryland’s statutory procedure, Justice
O’Connor noted that it did prevent a child witness from
seeing the defendant as he or she testified. However, she
found it significant that the remaining elements of the
confrontation right were preserved: “The child witness
must be competent to testify and must testify under
oath; the defendant retains full opportunity for contem-
poraneous cross-examination; and the judge, jury, and
defendant are able to view (albeit by video monitor) the
demeanor (and body) of the witness as he or she
testifies.” Id. at 851. The presence of these elements
“adequately ensures that the testimony is both reliable
and subject to rigorous adversarial testing in a manner
functionally equivalent to that accorded live, in-person
testimony.” Id. Because the procedure leaves sufficient
safeguards in place, when the use of the procedure is
necessary to further an important state interest, its use
will “not impinge upon the truth-seeking or symbolic
purposes of the Confrontation Clause.” Id. at 852.
Therefore, Justice O’Connor stated, the critical inquiry
is whether use of the procedure is necessary to further
an important state interest. Id.
514 289 M
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Justice O’Connor reiterated that the Court had al-
ready recognized that the states have a compelling
interest in protecting minor victims of sex crimes from
further trauma and embarrassment. Id. And, on a
similar basis, she concluded that a “State’s interest in
the physical and psychological well-being of child abuse
victims may be sufficiently important to outweigh, at
least in some cases, a defendant’s right to face his or her
accusers in court.” Id. at 853. But the state may not
limit face-to-face confrontation unless the state makes
an adequate showing of necessity. Id. at 855. The
requisite finding is case-specific; the trial court must
hear evidence and determine whether the procedure “is
necessary to protect the welfare of the particular child
witness who seeks to testify.” Id. In order to warrant
dispensing with face-to-face confrontation, the trial
court must find that the emotional distress suffered by
the child would be both caused by the presence of the
defendant and more than de minimis distress caused by
nervousness, excitement, or reluctance to testify. Id. at
856. Applying these standards to the Maryland proce-
dure, Justice O’Connor determined that the statute’s
requirement that the trial court find that the child
would suffer serious emotional distress to the extent
that the child would not reasonably be able to commu-
nicate met the necessity requirements and, for that
reason, was consonant with the Confrontation Clause.
Id. at 856-857.
Following the decision in Craig, this Court adopted
the test stated in Craig and determined that trial courts
may limit a defendant’s right to face his or her accuser
in person and in the same courtroom. See Burton, 219
Mich App at 289 (holding that the trial court did not err
when it permitted a mentally and physically challenged
adult who was brutally physically and sexually as-
saulted to testify by way of closed-circuit television even
2010] P
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though the witness’s situation did not meet the require-
ments of MCL 600.2163a); People v Pesquera, 244 Mich
App 305, 309-314; 625 NW2d 407 (2001) (holding that
the trial court properly allowed the child victims of
sexual assault—ranging in age from four to six—to give
videotaped depositions in lieu of live testimony under
MCL 600.2163a); People v Buie, 285 Mich App 401,
408-410, 415; 775 NW2d 817 (2009) (adopting the test
stated in Craig for determining whether a trial court
may permit an expert witness to testify by way of
videoconferencing). In order to warrant the use of a
procedure that limits a defendant’s right to confront his
accusers face to face, the trial court must first deter-
mine that the procedure is necessary to further an
important state interest. Burton, 219 Mich App at 288.
The trial court must then hear evidence and determine
whether the use of the procedure is necessary to protect
the witness. Id. at 290. In order to find that the
procedure is necessary, the court must find that the
witness would be traumatized by the presence of the
defendant and that the emotional distress would be
more than de minimis. Id.
In this case, the trial court clearly found that the use
of the witness screen was necessary to protect JB when
it invoked MCL 600.2163a and stated that it was
“necessary to permit this to protect the welfare of this
child.” In making its findings, the trial court also clearly
referred to the fact that JB had expressed fear of Rose
and that, given her age, the nature of the offenses, and
her therapist’s testimony, there was “a high likelihood”
that testifying face to face with Rose would cause her to
“regress in her therapy, have psychological damage”
and could cause her “to possibly not testify....”These
findings were sufficient to warrant limiting Rose’s
ability to confront JB face to face. See Craig, 497 US at
856-857. In addition, aside from JB’s inability to see
516 289 M
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Rose, the use of the witness screen preserved the other
elements of the confrontation right and, therefore,
adequately ensured the reliability of the truth-seeking
process. Id. at 851-852. Consequently, the trial court’s
decision to permit JB to testify with the witness screen
did not violate Rose’s right to confront the witnesses
against him.
E. DUE PROCESS AND THE PRESUMPTION OF INNOCENCE
We shall next address Rose’s argument that the use
of the witness screen was inherently prejudicial and
violated his right to due process. Every defendant has a
due process right to a fair trial, which includes the right
to be presumed innocent. Estelle v Williams, 425 US
501, 503; 96 S Ct 1691; 48 L Ed 2d 126 (1976). Under
the presumption of innocence, guilt must be determined
solely on the basis of the evidence introduced at trial
rather than on “ ‘official suspicion, indictment, contin-
ued custody, or other circumstances not adduced as
proof at trial.’ ” Holbrook v Flynn, 475 US 560, 567; 106
S Ct 1340; 89 L Ed 2d 525 (1986) (citation omitted). For
that reason, courts must be alert to courtroom proce-
dures or arrangements that might undermine the pre-
sumption of innocence. Estelle, 425 US at 503-504.
However, not every practice tending to single out the
accused must be struck down. This is because the jurors
are understood to be “quite aware that the defendant
appearing before them did not arrive there by choice or
happenstance....”Holbrook, 475 US at 567. Notwith-
standing this, certain procedures are deemed to be so
inherently prejudicial that they are generally not per-
mitted at trial. See Illinois v Allen, 397 US 337, 344; 90
S Ct 1057; 25 L Ed 2d 353 (1970) (stating that “no
person should be tried while shackled and gagged
except as a last resort”); Estelle, 425 US at 504-505
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(stating that it violates a defendant’s due process right
to a fair trial to compel a defendant to wear identifiable
prison garb during trial). When determining whether a
particular procedure is inherently prejudicial, courts
examine whether there is an unacceptable risk that
impermissible factors will come into play. Holbrook, 475
US at 570; see also Estes v Texas, 381 US 532, 542-543;
85 S Ct 1628; 14 L Ed 2d 543 (1965) (stating that
questions of inherent prejudice arise when “a procedure
employed by the State involves such a probability that
prejudice will result that it is deemed inherently lacking
in due process”). One important factor in determining
whether a particular practice is inherently prejudicial is
whether the practice gives rise primarily to prejudicial
inferences or whether it is possible for the jury to make
a wider range of inferences from the use of the proce-
dure. Holbrook, 475 US at 569 (“While shackling and
prison clothes are unmistakable indications of the need
to separate a defendant from the community at large,
the presence of guards at a defendant’s trial need not be
interpreted as a sign that he is particularly dangerous
or culpable.”). If a particular procedure is not inher-
ently prejudicial, the defendant bears the burden of
showing that the procedure actually prejudiced the
trial. Id. at 572. However, when the procedure is inher-
ently prejudicial, it will not be upheld if the procedure
was not necessary to further an essential state interest.
Id. at 568-569.
Surprisingly few courts have had the opportunity to
address whether the use of a screen is inherently
prejudicial under due process. As discussed earlier, the
Court in Coy determined that the use of a screen
without particularized findings establishing the neces-
sity of its use violated the defendant’s right to confront
the witnesses against him. The Court did not address
whether the use of a screen is inherently prejudicial
518 289 M
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under due process. However, in his dissent, Justice
Blackmun did address this issue and determined that
the use of a screen was not inherently prejudicial:
Unlike clothing the defendant in prison garb, Estelle v
Williams, [425 US at 504-505] or having the defendant
shackled and gagged, Illinois v. Allen, 397 U.S. 337, 344
[905 S Ct 1057; 25 L Ed 2d 353] (1970), using the screening
device did not “brand [appellant]... ‘with an unmistak-
able mark of guilt.’ ” See Holbrook v Flynn, 475 U.S., at
571, quoting Estelle v Williams, 425 U.S., at 518 (B
RENNAN,
J., dissenting). A screen is not the sort of trapping that
generally is associated with those who have been convicted.
It is therefore unlikely that the use of the screen had a
subconscious effect on the jury’s attitude toward appellant.
See [Holbrook,] 475 U.S. at 570. [Coy, 487 US at 1034-1035
(Blackmun, J., dissenting).]
In contrast to this view, at least one state court has
held that the use of a screen is inherently prejudicial.
See State v Parker, 276 Neb 661; 757 NW2d 7 (2008),
mod 276 Neb 965 (2009). The court in Parker explained
that the use of a large screen to shield the victim from
the defendant’s view might have caused the jury to
conclude that the trial court placed the screen “because
the court believed her accusations were true.” Id. at
672. Even if this connection were discounted, the court
determined that there were no innocuous inferences
that the jury could have made concerning the screen
and numerous impermissible inferences:
Instead, more akin to prison garb or shackles, the screen
acted as a dramatic reminder of Parker’s position as the
accused at trial. The scene presented of the jurors watching
Parker as he was forced to look onto a large panel instead
of his accuser makes palpable the marks of shame and guilt
caused by this looming presence in the courtroom. Nor can
we ignore . . . the dramatic emphasis placed by the screen
upon the State’s key witness. In a case such as this, where
the jury’s assessment of the credibility of the accuser is so
2010] P
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crucial, the risk of these impermissible factors simply
cannot be overlooked. [Id. at 673.]
We do not agree that the use of a screen is inherently
prejudicial; rather, we agree with Justice Blackmun’s
conclusion that a screen is generally not the type of
device that brands a defendant with the mark of guilt,
such as wearing prison garb or being shackled and
gagged. Coy, 487 US at 1034-1035 (Blackmun, J., dis-
senting). We also do not agree with the assertion in
Parker, 276 Neb at 673, that the use of the screen can
never be associated with innocuous events or give rise
to a wider range of inferences beyond prejudicial ones.
See Holbrook, 475 US at 569 (noting that the presence
of guards does not necessarily give rise to impermissible
inferences). Although a juror might conclude that the
witness fears the defendant because the defendant
actually harmed the witness, a reasonable juror might
also conclude that the witness fears to look upon the
defendant because the witness is not testifying truth-
fully. A reasonable juror could also conclude that the
screen is being used to calm the witness’s general
anxiety about testifying rather than out of fear of the
defendant in particular. Likewise, anytime a child vic-
tim testifies against a defendant who is accused of
harming the child victim, the jury is going to reasonably
infer that the child has some fear of the defendant.
Finally, there are a variety of different screens and
screening techniques that may be employed to shield a
victim from having to see the defendant and, for that
reason, the potential for prejudice will vary depending on
the particular screen or screening technique employed.
Accordingly, we cannot conclude that the use of a
screen—no matter what its size or composition may be
and no matter how it was employed at trial—must in
every case be presumed to prejudice the defendant. See id.
at 569 (“However, ‘reason, principle, and common human
520 289 M
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experience,’ counsel against a presumption that any use of
identifiable security guards in the courtroom is inherently
prejudicial. In view of the variety of ways in which such
guards can be deployed, we believe that a case-by-case
approach is more appropriate.”) (citation omitted); see
also Carey v Musladin, 549 US 70, 72; 127 S Ct 649; 166
L Ed 2d 482 (2006) (holding that the state court did not
misapply federal law when it determined that it was not
inherently prejudicial for members of the public to wear
buttons with the victim’s image during the trial).
Moreover, the record in this case does not support the
conclusion that the screen actually prejudiced Rose’s trial.
There is no evidence in the record that discloses the
screen’s appearance—we do not know its size, shape, or
color or the nature of the materials used. In contrast to
the court in Parker, this Court also has no record evidence
concerning how the screen was stored in the courtroom or
placed before JB testified. See Parker, 276 Neb at 672-673
(placing emphasis on the fact that the screen at issue was
large and opaque and jutted curiously into the room and
noting the manner in which it was put in place before the
witness testified and concluding that, on the basis of the
nature of the screen actually used, all screens are inher-
ently prejudicial).
For this reason, we conclude that Rose has failed to
meet his burden to show that the use of the screen
prejudiced his trial. Holbrook, 475 US at 572.
Even if the use of a screen were inherently prejudi-
cial, a trial court could nevertheless require a screen if
its use were necessary to further an essential state
interest. Id. at 568-569; see also Parker, 276 Neb 673
(“Having determined that the screen was inherently
prejudicial, we subject the procedure to close judicial
scrutiny and consider whether it was justified by an
essential state interest specific to this trial.”). The
2010] P
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United States Supreme Court has already held that the
state has a compelling interest in protecting child wit-
nesses from the trauma of testifying when the trauma
would be the result of the defendant’s presence and would
impair the child’s ability to testify. See Craig, 497 US at
855-857. And the trial court in this case found that the use
of the screen was necessary in order to ensure that JB
would be able to testify. Thus, the question is whether the
trial court correctly determined that the use of the screen
itself—as opposed to some other technique for shielding
JB—was necessary under the facts of this case.
In Parker, the court recognized that the trial court had
determined that the use of the screen was necessary to
protect the child witness and ensure that she would be
able to testify accurately and completely. Parker, 276 Neb
at 673. However, the court still determined that the trial
court erred because it “had available another equally
effective method of protecting S.M. while procuring her
testimony that would not have been inherently prejudicial
to Parker’s due process rights.” Id. at 674. The court
explained that videorecording or closed-circuit television
would have been more effective because “the jury would
not usually be specifically aware that the child was being
shielded from the defendant. Instead, the jury could easily
infer that the accommodation was standard procedure for
children who, as common sense dictates, may be intimi-
dated by the courtroom environment.” Id. at 675.
We do not agree that a witness screen—even if assumed
to be inherently prejudicial—could not be used under any
circumstance because of the availability of videorecording
or closed-circuit television. It is true that, in the analogous
context of shackling, courts have held that, even if the
trial court makes the necessary findings in support of
using restraints, the defendant generally has the right to
have the minimum level of restraints necessary to main-
522 289 M
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tain safety and decorum and have held that the trial court
must take steps to minimize any prejudice from the use of
restraints. See DeLeon v Strack, 234 F3d 84, 87-88 (CA 2,
2000); United States v Brooks, 125 F3d 484, 502 (CA 7,
1997). Hence, the trial court had a duty to take steps that
adequately protected JB from the trauma of testifying
while minimizing the prejudice to Rose. Nevertheless, the
analysis in Parker assumes that video is always preferable
to the use of a screen because the use of video will always
be less prejudicial. Yet a reasonable juror could just as
easily infer that the child witness was recorded or inter-
rogated in a separate room to shield the child from the
defendant. This is especially true if the witness testifies
through closed-circuit television with the parties’ trial
counsel present with the witness; in such a case, it will be
patently obvious to the jury that the parties’ trial counsel
left the courtroom to interrogate the witness rather than
bring the witness into the courtroom. Thus, the concern
that the jury will infer that the court employed alternative
procedures to protect the witness from the defendant is
present for both the use of a screen and the use of video.
Likewise, use of video equipment deprives the jury of the
ability to see the witness in person and judge his or her
reactions without the distorting effects created by the use
of videorecording devices. For these reasons, even if the
use of a screen were inherently prejudicial, under some
circumstances a trial court might properly conclude that
the use of a physical screening method would safeguard a
defendant’s rights better than the use of closed-circuit
television or a recorded deposition. See Holbrook, 475 US
at 572. Because Rose has not presented any evidence that
the use of the screen occasioned more prejudice than an
alternative method—indeed Rose’s trial counsel did not
even suggest use of another method—we conclude that
Rose’s claim under due process would fail even if we were
to conclude that screens are inherently prejudicial.
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III. DISCOVERY SANCTION
A. STANDARDS OF REVIEW
Rose next argues that the trial court erred when it
denied his motion to preclude testimony by Thomas
Cottrell, who was the prosecution’s expert on child-
sexual-abuse dynamics. Specifically, Rose argues that
the trial court abused its discretion by failing to pre-
clude the testimony, even after it found that there had
been a discovery violation, on the sole basis that the
motion was untimely. Rose also argues that, to the
extent that the trial court properly denied his motion as
untimely, his trial counsel’s failure to make the motion
earlier constituted the ineffective assistance of counsel.
This Court reviews a trial court’s decision regarding
the appropriate remedy for a discovery violation for an
abuse of discretion. People v Davie (After Remand), 225
Mich App 592, 597-598; 571 NW2d 229 (1997). A trial
court abuses its discretion when it selects an outcome that
falls outside the range of reasonable and principled out-
comes. People v Yost, 278 Mich App 341, 379; 749 NW2d
753 (2008). When there has been no evidentiary hearing
and no findings of fact by the trial court, this Court
reviews de novo the entire record to determine whether
the defendant’s trial counsel’s representation constituted
the ineffective assistance of counsel. People v Riley (After
Remand), 468 Mich 135, 139; 659 NW2d 611 (2003).
B. DISCOVERY VIOLATION
On the day before trial was to begin, Rose’s trial
counsel moved to preclude Cottrell from testifying at
trial. Rose’s counsel argued that exclusion was appro-
priate because the prosecution had failed to comply
with the trial court’s earlier discovery order that re-
quired the prosecution to supply a written curriculum
524 289 M
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vitae for all expert witnesses as well as a written
summary of the expert’s proposed testimony and the
basis for that testimony. Rose’s counsel indicated that
the prosecution’s failure to comply with the discovery
order prevented him from evaluating the expert’s cre-
dentials or preparing for cross-examination.
On the second day of trial, the trial court addressed
Rose’s motion. The trial court found that the prosecu-
tion had not complied with the discovery order, but
nevertheless refused to preclude Cottrell from testify-
ing. The court found it noteworthy that the defense had
known about the proposed expert for months:
However, notice of Mr. Cottrell was given months ago and
I don’t—and there is no objection regarding Mr. Cottrell, as
an expert, in respect to that matter until the day before this
trial is commenced. This is a matter that could have been
addressed weeks ago, months ago, it wasn’t. So in this Court’s
opinion you waived that requirement. So that is denied. The
Court will allow Mr. Cottrell to testify consistent with the
decisions of the Supreme Court....
Rose has not argued that Cottrell’s testimony was
inadmissible or that Cottrell was not competent to
testify as an expert. Rather, Rose only argues that the
trial court should have sanctioned the prosecution for
failing to comply with the trial court’s discovery order
by precluding Cottrell from testifying—that is, Rose
argues that the trial court should have precluded oth-
erwise relevant and admissible testimony solely on the
basis that the prosecution failed to give Rose a written
copy of Cottrell’s curriculum vitae and proposed testi-
mony. Trial courts have the discretion to fashion an
appropriate remedy for a discovery violation. Davie, 225
Mich App at 597-598. “ ‘The exercise of that discretion
involves a balancing of the interests of the courts, the
public, and the parties.’ It requires inquiry into all the
relevant circumstances, including ‘the causes and bona
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fides of tardy, or total, noncompliance, and a showing by
the objecting party of actual prejudice.’ ” Id. at 598
(citations omitted). However, the exclusion of a witness
is an extreme sanction that should not be employed if
the trial court can fashion a different remedy that will
limit the prejudice to the party injured by the violation
while still permitting the witness to testify. Yost, 278
Mich App at 386.
Cottrell did not testify about the substantive facts of
this case; as he noted on cross-examination, he had not
interviewed any person related to the case and had not
reviewed any reports. Rather, his testimony was limited
to explaining certain behaviors commonly engaged in
by the perpetrators and victims of child sexual abuse.
Given the nature of this testimony, Rose’s trial counsel
did not require significant advance notice in order to
prepare for Cottrell’s cross-examination. Further, al-
though the prosecution failed to comply with the dis-
covery order, Rose’s trial counsel had notice months
before trial that the prosecution intended to have
Cottrell testify and could have requested the documen-
tation at any point before trial and remedied any
prejudice occasioned by the failure to submit the sum-
mary. Moreover, Rose’s counsel did not ask the trial
court to postpone Cottrell’s testimony in order to give
him more time to prepare; instead, he asked for the
extreme sanction of preclusion. There was also no
evidence that Rose’s trial counsel was actually unable
to effectively cross-examine Cottrell at trial. Given the
nature of the testimony, the fact that any minimal
prejudice could readily have been cured had Rose’s trial
counsel raised the issue earlier, and the absence of any
evidence of prejudice, we conclude that the trial court’s
decision to deny Rose’s motion to preclude Cottrell from
testifying was within the range of reasonable and
principled outcomes. Yost, 278 Mich App at 379.
526 289 M
ICH
A
PP
499 [Aug
C. INEFFECTIVE ASSISTANCE OF COUNSEL
Rose also argues on appeal that his trial counsel was
ineffective for failing to move to preclude Cottrell from
testifying earlier. “To establish ineffective assistance of
counsel, the defendant must first show: (1) that counsel’s
performance fell below an objective standard of reason-
ableness under the prevailing professional norms, and (2)
that there is a reasonable probability that, but for coun-
sel’s error, the result of the proceedings would have been
different.” Id. at 387.
On this record, Rose’s trial counsel’s decision not to
move to exclude Cottrell’s testimony earlier cannot be said
to fall below an objective standard of reasonableness. The
decision whether and when to make a motion are matters
of trial strategy and professional judgment that are en-
trusted to a defendant’s trial counsel. People v Traylor,
245 Mich App 460, 463; 628 NW2d 120 (2001). And Rose’s
trial counsel may reasonably have concluded that the trial
court would not grant a motion to exclude Cottrell’s
testimony at a point sufficiently in advance of trial to
correct the discovery violation. Instead, counsel may have
thought that the best point to make the motion was
immediately before trial when he could reasonably argue
that the deficient discovery would prevent him from
adequately preparing. Therefore, on this record, we can-
not conclude that the decision of Rose’s trial counsel fell
below an objective standard of reasonableness under pre-
vailing professional norms.
Likewise, given the limited nature of Cottrell’s testi-
mony and the trial court’s ability to fashion a less extreme
sanction, it is highly unlikely that the trial court would
have precluded Cottrell from testifying had his counsel
filed the motion earlier. See Yost, 278 Mich App at 386
(noting that trial courts should, when able, fashion a
remedy short of exclusion). Indeed, in its opinion and
2010] P
EOPLE V
R
OSE
527
order denying Rose’s motion for a hearing or new trial,
the court essentially asserted the same thing. Rose has
also not presented any evidence that, had his counsel had
more time to prepare, he might have more effectively
challenged Cottrell’s testimony on cross-examination. Ac-
cordingly, Rose has failed to show that his trial counsel’s
failure to seek preclusion earlier prejudiced his trial.
The trial court did not abuse its discretion when it
denied Rose’s motion to preclude Cottrell from testify-
ing, and Cottrell’s trial counsel was not ineffective for
failing to make the motion earlier.
IV. JUROR ISSUES
A. STANDARDS OF REVIEW
Finally, Rose argues that the trial court abused its
discretion when it denied his motion for a new trial on
the basis of a juror’s failure to disclose his familiarity
with JB’s family. In the alternative, he argues that the
trial court abused its discretion when it denied his
motion for an evidentiary hearing to explore this juror’s
knowledge and to evaluate whether his trial counsel
would have sought to dismiss the juror had he known of
the connection.
This Court reviews for an abuse of discretion a trial
court’s decision concerning whether to grant a motion
for a new trial. People v Brown, 279 Mich App 116, 144;
755 NW2d 664 (2008). This Court also reviews for an
abuse of discretion a trial court’s decision concerning
whether to hold an evidentiary hearing. People v Unger,
278 Mich App 210, 216-217; 749 NW2d 272 (2008).
B. NEW TRIAL OR EVIDENTIARY HEARING
On appeal, Rose argues that the trial court should
have granted him a new trial because there was evi-
528 289 M
ICH
A
PP
499 [Aug
dence that one of the jurors knew people who were
related to the victim and failed to disclose that infor-
mation to the court during voir dire. At the very least,
Rose contends, the trial court should have held an
evidentiary hearing to determine the full extent of the
juror’s knowledge and to learn whether his trial counsel
would have exercised a peremptory challenge had he
known that the juror knew members of the victim’s
extended family.
A criminal defendant has the right to be tried by an
impartial jury. People v Miller, 482 Mich 540, 547; 759
NW2d 850 (2008). A juror’s failure to disclose informa-
tion that the juror should have disclosed may warrant a
new trial if the failure to disclose denied the defendant
an impartial jury. Id. at 548. “The burden is on the
defendant to establish that the juror was not impartial
or at least that the juror’s impartiality is in reasonable
doubt.” Id. at 550.
During voir dire in the present case, the potential jurors
were asked if they knew any of the witnesses in the case,
who included several members of JB’s family. Each of the
witnesses from JB’s family was from her immediate
family. Juror No. 168 did not indicate that he knew any of
these witnesses. However, on the third day of trial, Juror
No. 168 brought to the trial court’s attention that he
might have known a potential witness.
Juror No. 168 told the court that he thought the
witness was GA, whom he had known in junior high
school approximately 40 years ago. Rose’s trial counsel
indicated that he did have a potential rebuttal witness
named GA. When asked, the juror told the court that he
had not had any contact with GA since junior high
school. The trial court then asked the juror whether he
would treat the witness any differently or whether he
would evaluate her testimony by the same standards as
2010] P
EOPLE V
R
OSE
529
every other witness. The juror responded that he would
treat her the same as any other witness. After this, the
trial court indicated that it was “satisfied there’s no
problem.”
After the verdict, Rose’s new counsel filed a motion for
a new trial and eventually submitted three affidavits in
support of that motion. The affidavits were by the victims’
aunts, GA and LB, and their uncle, BB.
1
In their affida-
vits, GA and LB averred that on the first day of trial
they went to lunch in a restaurant and discussed the
case in the presence of a person they later realized was
Juror No. 168. They both indicated that Juror No. 168
did not give any sign that he recognized them. In his
affidavit, BB averred that he had become acquainted
with Juror No. 168 at work before trial and that the
juror told him that he remembered BB’s family, but was
more familiar with BB’s sisters, GA and LB. From this
evidence and the fact that Juror No. 168 told the court
that he knew GA, Rose argues that it is clear that Juror
No.168 knew JB’s family and failed to spontaneously
disclose that information to the court. This, he further
argues, amounted to juror misconduct that warrants a
new trial.
Although these affidavits are evidence that Juror No.
168 might have known members of JB’s extended family
at one time, there was no evidence that Juror No. 168
actually knew any of the members of JB’s family who
were identified as potential witnesses before trial. It is also
undisputed that the potential jurors were not asked
whether they knew GA. Accordingly, there was no evi-
dence that the juror misled the court when he denied
knowing any of the potential witnesses. Further, the
juror’s own statements on the third day of trial and the
1
In the affidavits, the affiants used their formal names. However, for ease
of reference, we have referred to them by their initials as used at trial.
530 289 M
ICH
A
PP
499 [Aug
affidavits demonstrated that the juror’s knowledge of the
family was limited to decades-old interactions and limited
recent interactions at work. BB himself averred that
Juror No. 168 did not at first know him from work, but
only learned that BB was a member of the family after BB
approached him and disclosed this fact. Further, there was
no evidence that Juror No. 168 actually knew JB’s father
or his immediate family members. Finally, the mere fact
that Juror No. 168 might have known the victims’s aunts
and uncles to some limited degree did not establish that
the juror harbored any bias against or in favor of the
family. Absent evidence that Juror No. 168 was partial,
Rose has failed to establish the prejudice required in order
to warrant a new trial on the basis of Juror No. 168’s
failure to spontaneously bring up the fact that he knew
some members of JB’s family before the trial began. See
Miller, 482 Mich at 553-554. Accordingly, the trial court
did not err when it refused to grant Rose a new trial on the
grounds of juror misconduct.
For similar reasons, the trial court did not err when it
denied Rose’s motion to hold an evidentiary hearing
concerning whether and to what extent Juror No. 168
might have known members of JB’s family. In this case,
although there was evidence that Juror No. 168 might
have had some limited knowledge of the family, there was
no evidence that Juror No. 168 was partial. Instead, Rose
essentially invited the trial court to speculate that Juror
No. 168 might have had some bias on the basis of his
purported failure to disclose his knowledge of the family.
However, the mere possibility of prejudice is insufficient to
warrant relief. People v Nick, 360 Mich 219, 227; 103
NW2d 435 (1960). And absent more concrete evidence
tending to suggest bias, the trial court was well within the
range of principled outcomes when it declined Rose’s
motion for an evidentiary hearing.
2010] P
EOPLE V
R
OSE
531
Finally, we note that, in his motion for a new trial
and supporting affidavits, Rose argued that Juror No.
168 was potentially exposed to outside information
about the case. However, on appeal, Rose has not
addressed this argument by reference to law or facts.
Therefore, we conclude that Rose has abandoned these
alternative claims of juror impropriety. Martin, 271
Mich App at 315.
There were no errors warranting relief.
Affirmed.
532 289 M
ICH
A
PP
499 [Aug
PEOPLE v CAMPBELL
Docket No. 291345. Submitted July 7, 2010, at Detroit. Decided July 13,
2010. Approved for publication August 26, 2010, at 9:05 a.m.
Keith J. Campbell was charged in the Tuscola Circuit Court with
manufacturing marijuana and possession of marijuana with intent
to deliver, as well as misdemeanor possession of marijuana and
possession of a firearm during the commission of a felony. Defen-
dant claimed that the marijuana was for medicinal use. While the
charges were pending, the Michigan Medical Marihuana Act
(MMA), MCL 333.26421 et seq., became law. Defendant moved to
dismiss the charges under MCL 333.26428(a), which provides an
affirmative defense for marijuana-related charges. The court,
Patrick R. Joslyn, J., granted defendant’s motion, concluding that
the MMA should be retroactively applied, and the prosecution
appealed.
The Court of Appeals held:
Statutes are generally presumed to operate prospectively un-
less the Legislature expressly or impliedly indicated an intention
to give the statute retroactive effect. An exception exists for
remedial statutes, which operate in furtherance of an existing
remedy and neither create nor destroy existing rights. MCL
333.26428(a) created a new right by providing an affirmative
defense to a criminal defendant facing prosecution for crimes
related to the use of marijuana. Because the MMA created a new
right, it cannot be considered a remedial statute and must there-
fore be applied prospectively to crimes committed on or after its
effective date of December 4, 2008. Because defendant’s alleged
crime occurred before the MMA’s effective date, the defense it
provides was not available to him and the trial court abused its
discretion by dismissing the charges against him.
Reversed and remanded for reinstatement of charges.
C
RIMINAL
L
AW —
C
ONTROLLED
S
UBSTANCES —
M
ARIJUANA —
M
ICHIGAN
M
EDICAL
M
ARIHUANA
A
CT —
S
TATUTES —
E
FFECTIVE
D
ATES OF
S
TATUTES
.
The affirmative defense provided under the Michigan Medical Mari-
huana Act for defendants facing marijuana-related criminal
charges applies only to offenses committed on or after December 4,
2008 (MCL 333.26428).
2010] P
EOPLE V
C
AMPBELL
533
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Mark E. Reene, Prosecuting Attorney,
and Joel D. McGormley, Assistant Attorney General, for
the people.
Matthew R. Abel for defendant.
Before: O’C
ONNELL
,P.J., and M
ETER
and O
WENS
,JJ.
P
ER
C
URIAM.
Defendant was charged with manufactur-
ing marijuana, MCL 333.7401(2)(d)(iii), possession of
marijuana with intent to deliver, MCL 333.7401(2)(d)(iii),
possession of a firearm during the commission of a felony
(two counts), MCL 750.227b, and misdemeanor posses-
sion of marijuana, MCL 333.7403(2)(d). The trial court
granted defendant’s motion to dismiss after concluding
that the Michigan Medical Marihuana Act (MMA), MCL
333.26421 et seq., should be retroactively applied. Plaintiff
appeals as of right. We reverse and remand. This appeal
has been decided without oral argument pursuant to MCR
7.214(E).
The charges against defendant resulted from a search,
pursuant to a warrant, of his home and vehicle on Decem-
ber 3, 2007. Nine marijuana plants, two bags of dried
marijuana, and assorted drug paraphernalia were discov-
ered in the search. A shotgun was also recovered from
defendant’s home. Defendant stated to the police officers
who executed the warrant that the marijuana was for
medicinal use. While defendant’s criminal charges were
pending, the MMA was enacted and became effective on
December 4, 2008.
Defendant moved to dismiss the charges against him on
the basis of the MMA, which provides an affirmative
defense for a criminal defendant facing marijuana-related
charges. MCL 333.26428(a). The trial court granted de-
fendant’s motion despite the prosecution’s assertion that
534 289 M
ICH
A
PP
533 [Aug
defendant was not entitled to the defense because his
arrest occurred before the MMA became effective.
The sole issue on appeal is whether the MMA should
be retroactively applied. A trial court’s decision on a
motion to dismiss is reviewed for an abuse of discretion.
People v Stone, 269 Mich App 240, 242; 712 NW2d 165
(2005). Questions of statutory construction are re-
viewed de novo. People v Keller, 479 Mich 467, 474; 739
NW2d 505 (2007).
In reaching its decision, the trial court relied on
People v Wright, 40 Cal 4th 81; 51 Cal Rptr 3d 80; 146
P3d 531 (2006), a California Supreme Court case that
authorized retroactive application of a statute that
provided a new affirmative defense under that state’s
medical marijuana laws. We recognize that cases from
foreign jurisdictions, which are not binding, can be
persuasive. Hiner v Mojica, 271 Mich App 604, 612; 722
NW2d 914 (2006). However, the outcome in Wright is
inconsistent with Michigan law because the enactment
of the MMA affected substantive rights, as will be
discussed in more detail below. Accordingly, the trial
court abused its discretion by relying on Wright.
Generally, statutes are presumed to operate prospec-
tively unless the Legislature either expressly or im-
pliedly indicated an intention to give the statute retro-
active effect. People v Conyer, 281 Mich App 526, 529;
762 NW2d 198 (2008). There is a recognized exception
to this general rule for remedial or procedural statutes.
People v Russo, 439 Mich 584, 594; 487 NW2d 698
(1992). A statute is remedial if it operates in further-
ance of an existing remedy and neither creates nor
destroys existing rights. People v Link, 225 Mich App
211, 214-215; 570 NW2d 297 (1997).
We find our decision in Conyer instructive in the
resolution of this issue. Conyer, like the instant case,
2010] P
EOPLE V
C
AMPBELL
535
dealt with whether a newly enacted statute should be
applied retroactively. The Conyer Court concluded that
the statute in that case, MCL 780.972, which eliminated
the duty to retreat in certain situations, should only be
applied prospectively because it affected substantive
rights and the Legislature had not manifested an intent
that it be applied retroactively. Conyer, 281 Mich App at
531. The Conyer Court also recognized that the statute
could be considered at least partially remedial, but
maintained that retroactive application was not permis-
sible because the statute created a new substantive
right. Id. at 530.
Like the statute analyzed in Conyer, MCL 333.26428(a)
created a new right that did not exist before the enact-
ment of the MMA by providing an affirmative defense to a
criminal defendant facing prosecution for crimes related
to the use of marijuana. Because the MMA created a new
right, it cannot be considered a remedial statute. Link,
225 Mich App at 214-215. Consequently, the general
presumption for prospective application is controlling.
We reject defendant’s argument that MCL
333.26428(a) is subject to retroactive application because
there is an indication that the Legislature so intended.
The sections of the MMA that defendant relies on to
support this position, specifically MCL 333.26425 and
MCL 333.26429, do not relate to whether the affirmative-
defense provision should be retroactively or prospectively
applied. Instead, those sections provide a timeline for
actions to be taken by the Department of Community
Health to implement the registered-user provisions of the
MMA, as well as a self-executing alternative if the depart-
ment fails to take the necessary actions within the speci-
fied timeline. In no way does this language affect the
general presumption that statutes are to be prospectively
applied. In fact, it is this general presumption that negates
536 289 M
ICH
A
PP
533 [Aug
defendant’s additional argument that the Legislature, by
failing to include language that the MMA is to be applied
prospectively, indicated its intent for retroactive applica-
tion.
We also reject defendant’s argument that the trial
court’s decision was correct in light of the outcome in
People v Lowell, 250 Mich 349; 230 NW 202 (1930). In
Lowell, the defendant was charged with violating the
Michigan prohibition act. After the defendant engaged
in the illegal conduct, the act was amended to increase
the penalty. The Lowell Court upheld the trial court’s
decision to dismiss the charges after concluding that the
amendment constituted a repeal of the act that autho-
rized the prosecution against the defendant and deter-
mining that prosecution under the amended act would
unconstitutionally violate the Ex Post Facto Clause.
Defendant’s reliance on Lowell is misplaced because the
instant case does not involve the repeal of an existing
criminal statute. Indeed, the possession, manufacture,
and distribution of marijuana remain criminal acts, but
now there is an affirmative defense available in some
cases.
In light of our conclusions, we need not address the
remaining arguments raised on appeal.
Reversed and remanded for reinstatement of the
charges against defendant. We do not retain jurisdic-
tion.
2010] P
EOPLE V
C
AMPBELL
537
PEOPLE v SHORT
Docket No. 292288. Submitted June 15, 2010, at Lansing. Decided
August 26, 2010, at 9:10 a.m.
Reginal L. Short was charged in the Saginaw Circuit Court with various
weapons offenses after firearms were found in his vehicle when it was
searched incident to his arrest for driving without a license or
insurance. Defendant was secured in the back seat of the patrol car
when the police officer searched his vehicle. Defendant moved to
suppress the evidence of the weapons, arguing that the search
violated his Fourth Amendment rights. The court, Janet M. Boes, J.,
denied defendant’s motion following an evidentiary hearing, conclud-
ing that the search was lawful under New York v Belton, 453 US 454
(1981), and Thornton v United States, 541 US 615 (2004), which
allowed vehicle searches incident to the arrest of a recent occupant
even if there was no possibility the person arrested could gain access
to the vehicle. The United States Supreme Court decided Arizona v
Gant, 556 US ___; 129 S Ct 1710 (2009), the same day as defendant’s
hearing, narrowing the Belton rule. On reconsideration, the trial
court again denied defendant’s motion, concluding that while the
search might have been unlawful under Gant, the officer had acted
reasonably and in good faith in reliance on Belton. Defendant
appealed.
The Court of Appeals held:
Under Gant, police officers may search a vehicle incident to a
recent occupant’s arrest only when the arrestee is unsecured and
within reaching distance of the passenger compartment of the vehicle
or if it is reasonable to believe that evidence relevant to the crime of
arrest might be found in the vehicle. Although Gant applied retroac-
tively to this case because the case was pending when the court issued
Gant, the evidence obtained from the unlawful search need not be
automatically excluded. Under the good-faith exception to the exclu-
sionary rule, if the police officers acted in good-faith reliance on
caselaw existing at the time of the search, exclusion may not be an
appropriate remedy. In the present case, the vehicle search was lawful
under the law existing at the time of the search. Because it was
objectively reasonable for the officer to rely on the caselaw existing at
the time of the search, even though that caselaw was subsequently
538 289 M
ICH
A
PP
538 [Aug
overturned, the good-faith exception to the exclusionary rule applied,
and the trial court correctly denied defendant’s motion to suppress
the evidence.
Affirmed.
1. S
EARCHES AND
S
EIZURES —
A
RREST —
V
EHICLE
S
EARCHES
I
NCIDENT TO
A
RREST
.
Arizona v Gant, 556 US 332 (2009), which held that police officers
may search a vehicle incident to a recent occupant’s arrest only
when the arrestee is unsecured and within reaching distance of
the vehicle’s passenger compartment or if it is reasonable to
believe that evidence relevant to the crime of arrest might be
found in the vehicle, applies retroactively to cases pending at
the time the Court issued the opinion (US Const, Am XIV).
2. S
EARCHES AND
S
EIZURES —
F
OURTH
A
MENDMENT —
E
XCLUSIONARY
R
ULE —
G
OOD
-F
AITH
E
XCEPTION
.
The good-faith exception to the exclusionary rule applies to an
otherwise unlawful search when a police officer undertakes the
search in reasonable and good-faith reliance on caselaw in exist-
ence at the time of the search, even if the caselaw is subsequently
overturned (US Const, Am XIV).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Michael D. Thomas, Prosecuting At-
torney, and Randy L. Price, Assistant Prosecuting At-
torney, for the people.
James F. Piazza for defendant.
Before: M
URRAY,
P.J., and S
AAD
and M. J. K
ELLY,
JJ.
S
AAD,
J
.
The prosecutor charged defendant with car-
rying a dangerous weapon with unlawful intent, MCL
750.226; being a felon in possession of a firearm, MCL
750.224f; carrying a concealed weapon, MCL 750.227;
and possession of a firearm during the commission of a
felony (two counts), MCL 750.227b. Defendant appeals
by leave granted the trial court’s order that denied his
motion to suppress evidence. We affirm.
2010] P
EOPLE V
S
HORT
539
I. NATURE OF THE CASE AND ISSUE OF FIRST IMPRESSION
A disputed search of defendant’s vehicle after defen-
dant was arrested and placed in the back of a police car
raises a Fourth Amendment issue of first impression
under Michigan law that was left unresolved by our
Court’s recent opinion in People v Mungo (On Remand),
288 Mich App 167; 792 NW2d 763 (2010). In light of the
United States Supreme Court’s decision in Arizona v
Gant, 556 US 332; 129 S Ct 1710; 173 L Ed 2d 485
(2009), which overruled the well-established rule in
New York v Belton, 453 US 454; 101 S Ct 2860; 69 L Ed
2d 768 (1981), and its progeny, we must consider
whether an officer’s good-faith reliance on caselaw that
is later overturned may form a proper basis to avoid the
operation of the exclusionary rule. For the reasons
explained below, and pursuant to the reasoning of
rulings of the courts of appeals for the tenth and
eleventh federal circuits, we hold that the good-faith
exception applies and the trial court correctly denied
defendant’s motion to suppress.
II. FACTS AND PROCEEDINGS
Michigan State Police Trooper Jasen Sack testified at
the hearing on defendant’s motion to suppress evidence
of two weapons found in his vehicle. Trooper Sack
testified that on January 13, 2009, at around midnight,
he observed defendant’s vehicle traveling west on Web-
ber Street in Saginaw. As defendant turned north onto
Maplewood Avenue, Trooper Sack noticed that defen-
dant’s vehicle did not have a license plate. Trooper Sack
and his partner turned their patrol car around to
pursue defendant’s vehicle. As defendant pulled into
the parking lot of a convenience store and parked his
car, Trooper Sack followed and activated the patrol car’s
flashing lights. Trooper Sack stopped his patrol car
540 289 M
ICH
A
PP
538 [Aug
approximately 10 to 15 feet away from defendant’s ve-
hicle. According to Trooper Sack, defendant stepped out of
his vehicle, Trooper Sack alighted from his patrol car, and
defendant began to walk toward the troopers. Trooper
Sack asked defendant about his license plate, and defen-
dant said he did not have one. Trooper Sack testified that,
because defendant also stated that he did not have a
driver’s license or insurance, Trooper Sack placed defen-
dant under arrest for driving with no operator’s license
and no insurance. Trooper Sack handcuffed defendant
and placed him in the back of the patrol car.
Defendant offered testimony similar to Trooper Sack’s
except, according to defendant, he had exited his vehicle
and was walking toward the entrance of the convenience
store when he noticed that the troopers had followed him
into the parking lot. Defendant further testified that the
troopers asked him to come toward them and, after
answering some questions about his license and insur-
ance, he was arrested and placed in the back of the patrol
car. It is undisputed that Trooper Sack searched defen-
dant’s vehicle after defendant was handcuffed and placed
inside the patrol car. When he searched the inside of
defendant’s car, Trooper Sack found a rifle with a cut
stock, a .223 caliber assault rifle, and four or five ammu-
nition magazines.
Defendant moved to suppress evidence of the weapons
found in his vehicle on the ground that the search of his
vehicle violated his Fourth Amendment rights. Defendant
also sought to suppress evidence obtained during a subse-
quent search of his home. After taking testimony from
Trooper Sack and defendant on April 21, 2009, the trial
court denied defendant’s motion to suppress. The court
ruled that the search of defendant’s vehicle was constitu-
tional pursuant to Belton and Thornton v United States,
541 US 615; 124 S Ct 2127; 158 L Ed 2d 905 (2004). On
2010] P
EOPLE V
S
HORT
541
the day of the suppression hearing, the United States
Supreme Court decided Gant, which, in essence, narrowed
the application of Belton. The trial court reconsidered
defendant’s motion to suppress, but again denied the
motion on the ground that, while the search may have
been unconstitutional under Gant, when the trooper
conducted the search he had acted reasonably and in
good-faith reliance on Belton. Accordingly, the trial court
applied the good-faith exception to the exclusionary rule
and declined to suppress the evidence.
III. ANALYSIS
Defendant argues that Gant applies retroactively, the
search of his vehicle was unconstitutional pursuant to
Gant, and the trial court should not have applied the
good-faith exception to the exclusionary rule because
the exception does not or ought not apply to warrantless
searches under Michigan law. The prosecution acknowl-
edges that Gant applies retroactively to this case and
that, pursuant to Gant, the search of defendant’s ve-
hicle violated his Fourth Amendment rights. However,
the prosecution argues that, because Trooper Sack
relied on the longstanding rule in Belton and its prog-
eny that permitted him to conduct a search of the
vehicle incident to defendant’s arrest, the trial court
correctly applied the good-faith exception.
As this Court explained in People v Hyde, 285 Mich
App 428, 436; 775 NW2d 833 (2009), “[w]e review for
clear error a trial court’s findings of fact in a suppres-
sion hearing, but we review de novo its ultimate deci-
sion on a motion to suppress.” This Court also reviews
de novo whether an exclusionary rule applies. Id.
The parties are correct that, pursuant to the Su-
preme Court’s holding in Gant, the search of defen-
dant’s vehicle was unconstitutional. Under Belton and
542 289 M
ICH
A
PP
538 [Aug
its progeny, it was lawful for an officer to search a
vehicle “incident to the arrest of a recent occupant even
if there is no possibility the arrestee could gain access to
the vehicle at the time of the search.” Gant, 556 US at
341. However, the Court in Gant rejected this widely
accepted reading of Belton and ruled that, pursuant to
Chimel v California, 395 US 752; 89 S Ct 2034; 23 L Ed
2d 685 (1969), police officers may “search a vehicle
incident to a recent occupant’s arrest only when the
arrestee is unsecured and within reaching distance of
the passenger compartment at the time of the search.”
Gant, 556 US at 343. A vehicle search is also permissible
if it is “ ‘reasonable to believe evidence relevant to the
crime of arrest might be found in the vehicle.’ ” Id.,
quoting Thornton, 541 US at 632 (Scalia, J., concurring
in the judgment). As noted earlier, defendant was
handcuffed and secured in the back of the police car
when Trooper Sack conducted the search. Also, defen-
dant was arrested for operating a vehicle without a
license and without insurance, so the officers could not
reasonably have expected to find inside the vehicle any
evidence related to the reason for defendant’s arrest.
Accordingly, the search of defendant’s vehicle violated
the Fourth Amendment as interpreted in Gant.
The parties are also correct that Gant applies retro-
actively to this case under Griffith v Kentucky, 479 US
314, 328; 107 S Ct 708; 93 L Ed 2d 649 (1987) (“[A] new
rule for the conduct of criminal prosecutions is to be
applied retroactively to all cases, state or federal, pend-
ing on direct review or not yet final, with no exception
for cases in which the new rule constitutes a ‘clear
break’ with the past.”). Though Gant was decided well
after defendant’s arrest and the vehicle search, defen-
dant’s case was pending in the trial court when the
2010] P
EOPLE V
S
HORT
543
Supreme Court issued its opinion and, thus, defen-
dants’ holding in Gant applies. However, retroactive
application of Gant does not necessarily require sup-
pression of the disputed evidence. “[W]hether the ex-
clusion of evidence is an appropriate sanction in a
particular case is a separate issue from whether police
misconduct violated a person’s Fourth Amendment
rights.” People v Goldston, 470 Mich 523, 529; 682
NW2d 479 (2004). When there has been a violation of a
defendant’s Fourth Amendment rights, the exclusion-
ary rule generally bars the use of the disputed evidence
at trial, Mungo, 288 Mich App at 176, citing United
States v Leon, 468 US 897, 906; 104 S Ct 3405; 82 L Ed
2d 677 (1984), but our courts have also recognized that
exclusion is not an automatic remedy for an unlawful
search. As the Mungo Court explained:
The purpose of the exclusionary rule is to deter police
misconduct. [Leon, 468 US at 906]. In Leon, the United
States Supreme Court established a good-faith exception to
the exclusionary rule, noting that application of the exclu-
sionary rule requires weighing the benefits of the resulting
deterrence of police misconduct against the costs incurred
by preventing the introduction of otherwise valid evidence.
Id. at 906-907. The Leon Court concluded that circum-
stances could exist in which these costs could outweigh any
slight benefits gained by application of the exclusionary
rule. For example, if a law enforcement officer acted in good
faith and in an objectively reasonable manner on a search
warrant later found to be defective because of a judicial
error, excluding the evidence obtained in the search would
not operate to deter police misconduct. Id. at 920-921. The
Leon Court concluded that the exclusionary rule should be
applied on a case-by-case basis, and only if application
would deter police misconduct. Id. at 918. [Mungo, 288
Mich App at 176.]
Contrary to defendant’s position on appeal, this Court
has rejected the view “that the retroactivity doctrine
544 289 M
ICH
A
PP
538 [Aug
precludes application of the good-faith exception to the
exclusionary rule.” Id. at 182. Indeed, the fact that Gant
applies retroactively does not preclude the court from
considering the good-faith exception when it deter-
mines an appropriate remedy. Id.
The question of first impression presented here is
whether an officer’s good-faith reliance on caselaw may
prevent exclusion of the disputed evidence at trial. The
United States Court of Appeals for the Sixth Circuit has
not ruled on this question, and the federal district
courts in Michigan disagree on the matter. See United
States v Schuttpelz, unpublished opinion of the United
States District Court for the Eastern District of Michi-
gan, issued January 15, 2010 (Case No. 07-20410); 2010
WL 200827, at *4 (stating that even if the search would
have violated Gant, Belton “was the law of the land” at
the time of the search and the good-faith exception
applies); United States v Peoples, 668 F Supp 2d 1042,
1050-1051 (WD Mich, 2009) (declining to extend the
good-faith exception to include an officer’s good-faith
reliance on existing caselaw). This Court discussed but
did not decide this question in Mungo, 288 Mich App at
183:
Whether reliance on caselaw can form a basis to invoke
the good-faith exception to the exclusionary rule is a
significant legal question. The United States Supreme
Court has been silent on this issue. The Sixth Circuit and
Tenth Circuit courts of appeals have expanded the good-
faith exception to apply to a law enforcement officer’s
reliance on caselaw. In [United States v McCane, 573 F3d
1037 (CA 10, 2009)] and similarly in [United States v]
Lopez,
[
1
]
however, it was the clear and established law of
1
United States v Lopez, unpublished memorandum opinion of the
United States District Court for the Eastern District of Kentucky, issued
September 23, 2009 (Case No. 6:06-120-DCR); 2009 WL 3112127; 2009
US Dist LEXIS 87720 (Lopez III).
2010] P
EOPLE V
S
HORT
545
the circuit that law enforcement officers were vested with
the right to search a vehicle incident to a recent occupant’s
arrest. McCane, 573 F3d at 1041-1042 (citing several Tenth
Circuit opinions upholding searches without regard to the
nature of the offense and in which the defendant was
already restrained); Lopez III, 2009 WL 3112127 at *2,
2009 US Dist LEXIS 87720 at *7 (“Like its sister circuits
prior to Gant, the Sixth Circuit recognized as lawful under
Belton searches of vehicles conducted incident to an arrest
even in circumstances where the arrestee did not have
access to the passenger compartment of his car.”). See also
[United States v Grote, 629 F Supp 2d 1201, 1205 (ED
Wash, 2009)] (noting that at the time the defendant’s
vehicle was searched it was “well accepted in the Ninth
Circuit and elsewhere” that police could search a motor
vehicle incident to a lawful arrest “without regard to
whether an arrestee was secured or unsecured, and with-
out regard to whether evidence particular to the crime of
arrest might be found in the vehicle”).
Notwithstanding its acknowledgement of the probabil-
ity that the good-faith exception can be premised on an
officer’s reliance on existing caselaw in Michigan, the
Court in Mungo declined to rule on the question be-
cause Mungo involved an issue of first impression about
whether the rule in Belton could be extended “to a
vehicle search solely incident to a passenger’s arrest.”
Id. at 184 (emphasis added). The Mungo Court ex-
plained:
Given our conclusion that the law in this state on this
point was not established and clear, the search and seizure
of evidence from defendant’s vehicle could not, as a matter
of law, have been premised on law enforcement’s good-faith
reliance on caselaw. We therefore conclude that the good-
faith exception to the exclusionary rule has no application
in the present case. [Id.]
In contrast, when the troopers searched defendant’s
vehicle in this case, the law in this state and, indeed,
546 289 M
ICH
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PP
538 [Aug
throughout the country was well established and abun-
dantly clear: Under Belton and its progeny, the search of
defendant’s vehicle was lawful incident to defendant’s
arrest.
At the time Trooper Sack acted, the validity of the
search was clearly supported by settled caselaw that
was subsequently overruled by Gant. Again, the Court
in Belton ruled that “when a policeman has made a
lawful custodial arrest of the occupant of an automo-
bile, he may, as a contemporaneous incident of that
arrest, search the passenger compartment of that auto-
mobile.” Belton, 453 US at 460. In United States v
White, 871 F2d 41, 44 (CA 6, 1989), the Sixth Circuit
interpreted Belton as permitting the search of a vehicle
incident to an arrest “even after the arrestee has been
separated from his vehicle and is no longer within reach
of the vehicle or its contents.” Indeed, the court in
White specifically held, “[I]n this Circuit, our consistent
reading of Belton has been that, once a police officer has
effected a valid arrest, that officer can search the area
that is or was within the arrestee’s control.” Id.; see
also United States v Martin, 289 F3d 392, 399-400 (CA
6, 2002). Trooper Sack testified that he turned on the
flashing lights of his patrol vehicle as he followed
defendant into the convenience store parking lot. As the
Sixth Circuit opined in United States v Hudgins,52F3d
115, 119 (CA 6, 1995):
Where the officer initiates contact with the defendant,
either by actually confronting the defendant or by signal-
ing confrontation with the defendant, while the defendant
is still in the automobile, and the officer subsequently
arrests the defendant (regardless of whether the defendant
has been removed from or has exited the automobile), a
subsequent search of the automobile’s passenger compart-
ment falls within the scope of Belton and will be upheld as
reasonable. [Emphasis added.]
2010] P
EOPLE V
S
HORT
547
And, though defendant maintains that he was away
from his vehicle and walking toward the convenience
store when the troopers approached him, this does not
help his case because in Thornton, the Supreme Court
ruled that, as long as the arrestee was a recent occupant
of the vehicle, an officer may conduct a search of the
vehicle “even when an officer does not make contact
until the person arrested has left the vehicle.” Thorn-
ton, 541 US at 617. Thus, regardless of which version of
events is true, the search was clearly valid under
caselaw existing at the time of the search.
The majority in Gant recognized that Belton “has
been widely understood to allow a vehicle search inci-
dent to the arrest of a recent occupant even if there is
no possibility the arrestee could gain access to the
vehicle at the time of the search.” Gant, 556 US at 341.
Indeed, the Court observed that the Arizona Supreme
Court’s “reading of Belton has been widely taught in
police academies and...lawenforcement officers have
relied on the rule in conducting vehicle searches during
the past 28 years....”Id. at 349. Justice Breyer noted
the “considerable reliance” on the “bright-line rule that
permits a warrantless search of the passenger compart-
ment of an automobile incident to the lawful arrest of
an occupant—regardless of the danger the arrested
individual in fact poses.” Id. at 354-355 (Breyer, J.,
dissenting). Justice Alito further opined:
The Belton rule has been taught to police officers for
more than a quarter century. Many searches—almost cer-
tainly including more than a few that figure in cases now
on appeal—were conducted in scrupulous reliance on that
precedent. It is likely that, on the very day when this
opinion is announced, numerous vehicle searches will be
conducted in good faith by police officers who were taught
the Belton rule. [Id. at 359 (Alito, J., dissenting).]
548 289 M
ICH
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Thus, it is beyond dispute that, before Gant,itwas
broadly understood that the precise actions taken by
Trooper Sack to search defendant’s vehicle were consti-
tutionally sound.
Again, “[t]he purpose of the exclusionary rule is to
deter police misconduct.” Goldston, 470 Mich at 526.
Courts have long recognized that “where the officer’s
conduct is objectively reasonable, ‘excluding the evi-
dence will not further the ends of the exclusionary rule
in any appreciable way; for it is painfully apparent
that... the officer is acting as a reasonable officer
would and should act in similar circumstances.’ ” Leon,
468 US at 919-920, quoting Stone v Powell, 428 US 465,
539-540; 96 S Ct 3037; 49 L Ed 2d 1067 (1976) (White,
J., dissenting).
Excluding the evidence in this case does nothing to
“remov[e] incentives to engage in unreasonable
searches and seizures.” Goldston, 470 Mich at 529. In
light of the overwhelming majority of cases that have
explicitly approved conduct identical to that of the
trooper in this case, we hold that the trial court prop-
erly applied the good-faith exception to the exclusionary
rule. Indeed, “[t]he lack of deterrence likely to result
from excluding evidence from searches done in good-
faith reliance upon settled circuit precedent indicates
the good-faith exception should apply in this context.”
McCane, 573 F3d at 1044 n 5. Accordingly, we agree
with and adopt the reasoning of the United States
Court of Appeals for the Tenth Circuit in McCane, 573
F3d at 1044-1045:
Two inseparable principles have emerged from the
Supreme Court cases and each builds upon the underlying
purpose of the exclusionary rule: deterrence. First, the
exclusionary rule seeks to deter objectively unreasonable
police conduct, i.e., conduct which an officer knows or
should know violates the Fourth Amendment. See, e.g.,
2010] P
EOPLE V
S
HORT
549
Herring [v United States, 555 US 135, 141-146; 129 S Ct
695; 172 L Ed 2d 496 (2009); Illinois v Krull, 480 US 340,
348-349; 107 S Ct 1160; 94 L Ed 2d 364 (1987)]. Second, the
purpose of the exclusionary rule is to deter misconduct by
law enforcement officers, not other entities, and even if it
was appropriate to consider the deterrent effect of the
exclusionary rule on other institutions, there would be no
significant deterrent effect in excluding evidence based
upon the mistakes of those uninvolved in or attenuated
from law enforcement. See, e.g.,[Arizona v Evans, 514 US
1, 14-15; 115 S Ct 1185; 131 L Ed 2d 34 (1995)]; Krull, 480
U.S. at 351-52, 107 S.Ct. 1160; Leon, 468 U.S. at 916-17,
104 S.Ct. 3405. Based upon these principles, we agree with
the government that it would be proper for this court to
apply the good-faith exception to a search justified under
the settled case law of a United States Court of Appeals,
but later rendered unconstitutional by a Supreme Court
decision.
Just as there is no misconduct on the part of a law
enforcement officer who reasonably relies upon the mis-
take of a court employee in entering data, Evans, 514 U.S.
at 15, 115 S.Ct. 1185, or the mistake of a legislature in
passing a statute later determined to be unconstitutional,
Krull, 480 U.S. at 349-50, 107 S.Ct. 1160, a police officer
who undertakes a search in reasonable reliance upon the
settled case law of a United States Court of Appeals, even
though the search is later deemed invalid by Supreme
Court decision, has not engaged in misconduct. The refrain
in Leon and the succession of Supreme Court good-faith
cases is that the exclusionary rule should not be applied to
“objectively reasonable law enforcement activity.” [Leon,
468 US at 919]. Relying upon the settled case law of a
United States Court of Appeals certainly qualifies as objec-
tively reasonable law enforcement behavior.
The Eleventh Circuit also recently ruled “that the
exclusionary rule does not apply when the police con-
duct a search in objectively reasonable reliance on our
well-settled precedent, even if that precedent is subse-
550 289 M
ICH
A
PP
538 [Aug
quently overturned.” United States v Davis, 598 F3d
1259, 1264 (CA 11, 2010).
2
As the Court explained in
Davis:
The [Supreme] Court has gradually expanded this good-
faith exception to accommodate objectively reasonable po-
lice reliance on: subsequently invalidated search warrants,
Leon, 468 U.S. 897, 104 S.Ct. 3430; subsequently invali-
dated statutes, Illinois v. Krull, 480 U.S. 340, 107 S.Ct.
1160, 94 L.Ed.2d 364 (1987); inaccurate court records,
Arizona v. Evans, 514 U.S. 1, 115 S.Ct. 1185, 131 L.Ed.2d
34 (1995); and negligently maintained police records, Her-
ring, 129 S.Ct. 695, 172 L.Ed.2d 496. In each of its
decisions expanding the exception, the Court has concluded
that the unlawful police conduct at issue was neither
“sufficiently deliberate that exclusion [could] meaningfully
deter it” nor “sufficiently culpable that such deterrence
[would be] worth the price paid by the justice system.”
Herring, [555 US at 144] 129 S.Ct. at 702. [Id. at 1265.]
Like the officer in Davis, Trooper Sack did not inten-
tionally violate defendant’s rights and he cannot be
“held responsible for the unlawfulness of the search he
conducted.” Id. As discussed, at the time Trooper Sack
conducted the search, our courts adhered to the nearly
universally accepted reading of Belton that an officer
may search a vehicle incident to a lawful arrest. Law
enforcement officers are entitled to, and indeed must,
rely on court decisions that define appropriate police
conduct, and it is illogical to impose “the extreme
sanction of exclusion” when a clear rule of conduct is
later abrograted by the Supreme Court. Leon, 468 US at
916. Accordingly, though the well-settled interpretation
of Belton was changed by Gant, because it was objec-
2
As the court noted in Davis, 598 F3d at 1263, the Fifth Circuit ruled
in 1987 that evidence should not be excluded if an officer conducted a
search in good-faith reliance on caselaw from that circuit even if the
caselaw was later overturned. United States v Jackson, 825 F2d 853, 866
(CA 5, 1987).
2010] P
EOPLE V
S
HORT
551
tively reasonable for Trooper Sack to have relied on
that precedent, the good-faith exception to the exclu-
sionary rule applies and the trial court correctly denied
defendant’s motion to suppress.
Affirmed.
552 289 M
ICH
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538 [Aug
PEOPLE v TERRELL
Docket No. 286834. Submitted December 8, 2009, at Detroit. Decided
August 26, 2010, at 9:15 a.m.
Tion Terrell was convicted by a Wayne Circuit Court jury of assault
with intent to commit murder, being a felon in possession of a
firearm, and possession of a firearm during the commission of a
felony. Terrell was jointly tried with a codefendant who had
asserted his Fifth Amendment right not to testify at trial and who
was acquitted by the jury. After his conviction, Terrell moved for a
new trial on the basis of newly discovered evidence, specifically,
that a codefendant would testify that the victim had been armed
and that another codefendant, not Terrell, shot the victim. The
court, James A. Callahan, J., granted the motion, concluding that
although the proffered testimony of the codefendant was not
newly discovered, it had been unavailable to Terrell at the time of
his trial. The prosecution appealed by leave granted.
The Court of Appeals held:
1. A new trial is warranted on the basis of newly discovered
evidence when (1) the evidence itself, not merely its materiality, is
newly discovered, (2) the newly discovered evidence is not cumu-
lative, (3) the party could not, using reasonable diligence, have
discovered and produced the evidence at trial, and (4) the new
evidence makes a different result probable on retrial. A codefen-
dant’s posttrial or postconviction testimony, however, does not
constitute newly discovered evidence sufficient to warrant a new
trial when the defendant was aware of the evidence before trial.
Moreover, MCR 6.431(B) does not authorize the grant of a new
trial on the basis of such evidence because the evidence is not
newly discovered, but merely newly available. The rule applies
even when a codefendant invokes his or her Fifth Amendment
right to not testify.
2. The trial court should not have granted Terrell’s motion for
a new trial because the record revealed that he knew or should
have known before trial that his codefendant could have provided
material testimony. Thus, the evidence was only newly available,
not newly discovered, and therefore was not sufficient to warrant
a new trial.
2010] P
EOPLE V
T
ERRELL
553
Reversed and remanded.
S
HAPIRO
, J., concurring, concurred in the result because Terrell
did not provide an adequate basis for the trial court to grant his
motion. Because there was other evidence that Terrell acted in
self-defense, defense counsel made no attempt to interview the
codefendant, there was no attempt to call him as a witness, there
was no attempt to seek severed trials, and there was no offer of
proof, Terrell failed to show that the evidence was genuinely
unavailable, and the trial court should have denied the motion for
a new trial. Judge S
HAPIRO
would hold, however, that testimony of
a codefendant who asserted his or her Fifth Amendment privilege
at trial should not be categorically excluded but should be consid-
ered on a case-by-case basis.
C
RIMINAL
L
AW —
N
EW
T
RIAL —
N
EWLY
D
ISCOVERED
E
VIDENCE —
C
ODEFENDANT
’
S
T
ESTIMONY
.
A codefendant’s posttrial or postconviction testimony does not
constitute newly discovered evidence sufficient to warrant a new
trial when the defendant was aware of the evidence before trial;
such evidence is not newly discovered, but merely newly available,
even when the codefendant invoked his or her Fifth Amendment
right to not testify at trial (MCR 6.431[B]).
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, Kym L. Worthy, Prosecuting Attor-
ney, Timothy A. Baughman, Chief of Research, Train-
ing, and Appeals, and Thomas M. Chambers, Assistant
Prosecuting Attorney, for the people.
Marvin Barnett for defendant.
Before: M
ETER
,P.J., and B
ORRELLO
and S
HAPIRO
,JJ.
B
ORRELLO
, J. Following a jury trial, defendant Tion
Terrell
1
was convicted of assault with intent to commit
murder, MCL 750.83; being a felon in possession of a
firearm, MCL 750.224f; and possession of a firearm
1
Tion Terrell was tried with codefendant, Dana Hudson, who was
acquitted on all charges. Another codefendant, Reginald Myers, was
included on the felony information, but he was not tried with defendant
and Hudson.
554 289 M
ICH
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553 [Aug
O
PINION OF THE
C
OURT
during the commission of a felony (felony-firearm),
MCL 750.227b. The prosecution appeals by leave
granted an order granting defendant a new trial on the
basis of newly discovered evidence. The issue on appeal
is whether the posttrial statements of a codefendant
that exculpated the defendant constituted newly discov-
ered evidence sufficient to warrant a new trial when the
codefendant invoked his Fifth Amendment right not to
testify at trial. For the reasons set forth in this opinion,
we adopt the rule expressed by the majority of federal
circuit courts that when a defendant knew or should
have known that a codefendant could provide exculpa-
tory testimony, but did not obtain that testimony be-
cause the codefendant invoked the privilege against
self-incrimination, the codefendant’s posttrial state-
ments do not constitute newly discovered evidence, but
are merely newly available evidence. Accordingly, we
reverse the trial court’s order granting defendant a new
trial and remand this matter to the trial court.
I. FACTS AND PROCEDURAL HISTORY
This case arises from the nonfatal shooting of De-
shawn Evans on October 28, 2007. On that date, Evans
was on Yacama Street in Detroit, Michigan. Evans’s
friend, Dana Hudson, was sitting in Hudson’s car
having a friendly conversation with Evans. A few min-
utes later, another man, Reginald Myers, drove onto
Yacama Street, and Evans and Myers had an argument.
According to Evans, during or shortly after the argu-
ment with Myers, he received a telephone call from
Derrick Steward, whose nickname was “Twin.”
2
Twin
informed him that he could come over and retrieve his
2
At trial, Evans identified as “Twin” the individual who called him,
and asserted that he did not know Twin’s real name. However, subse-
quent testimony revealed that Twin’s real name is Derrick Steward.
2010] P
EOPLE V
T
ERRELL
555
O
PINION OF THE
C
OURT
cell phone charger. Evans testified that he left to retrieve
his charger and that as he left, he saw defendant, who was
also his friend, turning onto Yacama Street in a white
Impala. Although Evans asserted that he left to retrieve
the cell phone charger from a home on Coventry Street
3
and denied that he went to the home to obtain a gun, a
defense witness testified that Evans came to the home
and “basically asked everybody that was there” “for a
pistol, a gun.” The witness testified that Twin gave
Evans a gun. According to Evans, he returned to
Yacama Street about 30 to 45 minutes later. Evans
testified that when he returned, defendant hit him in
the face and head with a gun and then shot him twice,
and Myers also shot him in both thighs. Another
witness, who lived on Yacama Street, testified that after
the shooting, a man drove up in a car, approached the
victim, and asked: “ ‘What I want to know is where’s
the gun. I know he had a gun because I gave him one.’ ”
According to Evans, after they shot him, defendant and
Myers ran to Hudson’s car, and the men drove off, with
Hudson driving.
Defendant and Hudson were tried together. Defen-
dant was convicted of the offenses indicated earlier.
Hudson invoked his Fifth Amendment privilege against
self-incrimination and was acquitted.
Defendant moved for a new trial on the basis of newly
discovered evidence in the form of the testimony of
Derrick Steward.
4
The trial court held a hearing on
defendant’s motion. At the hearing, defendant pre-
3
The testimony referred to the street on which the home was located
both as Coventry and Covington.
4
Defendant’s motion for a new trial is not included in the lower court
record. We have gleaned defendant’s arguments in support of his motion
for a new trial from the relevant motion hearings and the prosecution’s
response to the motion.
556 289 M
ICH
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553 [Aug
O
PINION OF THE
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OURT
sented the testimony of Steward and the testimony of
defendant’s codefendant, Hudson, as well as affida-
vits signed by both men, in support of his motion. The
trial court ruled that the testimony of Steward would
have been cumulative and therefore did not warrant
a new trial. Defendant has not appealed the trial
court’s ruling in this regard. What is at issue on
appeal is the trial court’s granting of defendant’s
motion for a new trial on the basis of the testimony of
Hudson. At the hearing, Hudson acknowledged that
he and defendant were close friends and had known
each other since childhood. Hudson further testified
that he was present on October 28, 2007, when Evans
was shot and that he observed Evans in possession of
a chrome and silver, black-handled nine-millimeter
handgun before Evans was shot. According to Hud-
son, only ten minutes elapsed between the time
Evans initially left Yacama Street and the time he
returned. Hudson saw Evans approach defendant and
Myers and observed Evans pull the gun from under-
neath his shirt when he was about four feet away
from them. According to Hudson, defendant and
Evans struggled and fought over the gun, and the gun
fell to the ground. Hudson asserted that Myers, not
defendant, shot Evans with the gun that had fallen.
Hudson testified that he drove away in his car, alone,
after the shooting.
In granting defendant a new trial on the basis of
Hudson’s testimony, the trial court found that al-
though the testimony was not newly discovered evi-
dence, it was not available to defendant at the time of
trial:
The seminal issue in this case from the standpoint of the
Court is the unavailability, the impossibility of Mr. Dana
Hudson’s testimony, which is supportive of the fact that
Mr. Evans, at the time this incident occurred, was specifi-
2010] P
EOPLE V
T
ERRELL
557
O
PINION OF THE
C
OURT
cally armed and had drawn a handgun prior to this
shooting taking place....
***
Addressing the testimony of Mr. Hudson and the trial
testimony of the defendant, the obligation to disprove self-
defense is ostensibly that of the prosecution. It is not the
obligation of the prosecution to disprove, but in this particu-
lar case, the defendant was totally denied the opportunity of
presenting the testimony of Mr. Hudson which may have been
corroborative of the anticipated testimony of [defendant], had
he given testimony concerning self-defense. Because Mr.
Hudson had the right to assert his Fifth Amendment right
and therefore denied the defendant Terrell his testimony,
which clearly lent to the fact that Mr. Evans was armed at the
time, had brandished the handgun prior to the altercation
between he and Mr. Meyers [sic], and most importantly that
the shooting was not at the hands of [defendant], but at the
hands of Mr. Meyers [sic], bears directly upon the facts of this
particular case. Even though this may not have been newly
discovered evidence, it certainly was not available to the
defendant at the time this particular trial took place, it was
therefore incapable of the defendant Terrell to have pre-
sented that testimony and in the interest of justice the Court
grants the defendant Terrell a new trial.
In an opinion and order dated July 14, 2008, the trial
court granted defendant’s motion for a new trial on the
basis of Hudson’s testimony. This Court granted the
prosecution’s request for leave to appeal.
5
II. ANALYSIS
A. STANDARD OF REVIEW
We review for an abuse of discretion a trial court’s
decision to grant or deny a new trial. People v Miller,
5
People v Terrell, unpublished order of the Court of Appeals, entered
August 15, 2008 (Docket No. 286834). Defendant did not file a brief on
appeal.
558 289 M
ICH
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O
PINION OF THE
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OURT
482 Mich 540, 544; 759 NW2d 850 (2008). An abuse of
discretion occurs when the trial court’s decision is outside
the range of principled outcomes. People v Blackston, 481
Mich 451, 467; 751 NW2d 408 (2008). Underlying ques-
tions of law are reviewed de novo, People v Washington,
468 Mich 667, 670-671; 664 NW2d 203 (2003), while a trial
court’s factual findings are reviewed for clear error, MCR
2.613(C); People v Cress, 468 Mich 678, 691; 664 NW2d
174 (2003). “A trial court may grant a new trial to a
criminal defendant on the basis of any ground that would
support reversal on appeal or because it believes that the
verdict has resulted in a miscarriage of justice.” People v
Jones, 236 Mich App 396, 404; 600 NW2d 652 (1999),
citing MCR 6.431(B). Newly discovered evidence does not
require a new trial when it would merely be used for
impeachment purposes or when it relates only to a wit-
ness’s credibility. People v Davis, 199 Mich App 502, 516;
503 NW2d 457 (1993).
B. NEW TRIAL
A new trial is warranted on the basis of newly discov-
ered evidence when the defendant satisfies a four-part
test: “(1) ‘the evidence itself, not merely its materiality,
was newly discovered’; (2) ‘the newly discovered evidence
was not cumulative’; (3) ‘the party could not, using
reasonable diligence, have discovered and produced the
evidence at trial’; and (4) the new evidence makes a
different result probable on retrial.” Cress, 468 Mich at
692, quoting People v Johnson, 451 Mich 115, 118 n 6; 545
NW2d 637 (1996).
At issue in this case is whether Hudson’s testimony
satisfied the first element of this test, i.e., whether his
testimony was newly discovered. Hudson chose to invoke
his Fifth Amendment right not to incriminate himself and
therefore did not testify at trial. After trial, at which
defendant was convicted and Hudson was acquitted, Hud-
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son made statements that Evans possessed a gun and
struggled with defendant at the time of the shooting and
that Myers perpetrated the actual shooting of Evans, not
defendant. Defendant did not prepare a brief on appeal,
but argued before the trial court that Hudson’s posttrial
statements constituted newly discovered evidence. Ac-
cording to the prosecution, Hudson’s posttrial statements
did not constitute newly discovered evidence, but were
merely newly available evidence, which is not sufficient to
warrant a new trial. Relying on the majority of federal
circuit courts that have considered this issue, the prosecu-
tion argues that newly available evidence does not equate
with newly discovered evidence and, as a consequence, the
trial court’s order granting defendant a new trial on the
basis of Hudson’s statements should be reversed. For
reasons that we will explain more fully later, we agree
with the majority of federal circuit courts that have
decided this issue,
6
and we conclude that while Hudson’s
proffered testimony was newly available evidence, it was
not newly discovered evidence sufficient to warrant a new
trial. Accordingly, we hold that defendant has failed to
establish the first element in the four-part test set forth by
our Supreme Court in Cress to determine whether a new
trial is warranted on the basis of newly discovered evi-
dence.
Pursuant to FR Crim P 33,
7
nearly all the federal
circuits have articulated the same test to determine
whether a new trial is warranted on the basis of newly
discovered evidence.
6
Neither this Court nor our Supreme Court has decided this issue.
Therefore, it is proper to consider federal circuit court decisions as persua-
sive authority. Abela v Gen Motors Corp, 469 Mich 603, 607; 677 NW2d 325
(2004).
7
FR Crim P 33 states:
(a) Defendant’s Motion. Upon the defendant’s motion, the court
may vacate any judgment and grant a new trial if the interest of
justice so requires. If the case was tried without a jury, the court may
take additional testimony and enter a new judgment.
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Each [circuit] essentially requires that: (1) the evidence
be newly discovered after trial; (2) facts are alleged from
which the court can infer due diligence on the part of the
movant to obtain the evidence; (3) the evidence is material;
(4) the evidence is not merely cumulative or impeaching;
and (5) the evidence would likely result in an acquittal.
[United States v Owen, 500 F3d 83, 88 (CA 2, 2007).]
Thus, the test adopted by the federal courts in inter-
preting FR Crim P 33 essentially mirrors the test for a
new trial on the basis of newly discovered evidence that
our Supreme Court articulated in Cress. See Cress, 468
Mich at 692.
A majority of federal circuits have concluded that a
codefendant’s posttrial or postconviction willingness to
provide exculpatory testimony constitutes newly avail-
able evidence, not newly discovered evidence, and that
if the defendant knew or should have known of the
evidence before or during trial, the evidence was not
discovered after trial and a new trial is not warranted:
[A] decided majority of circuits have held that, when a
defendant is aware that his codefendant could provide
exculpatory testimony but is unable to obtain that testi-
mony because the codefendant invokes his privilege against
self-incrimination prior to and during trial, the codefen-
dant’s postconviction statement exculpating the defendant
is not “newly discovered evidence” within the meaning of
Rule 33. [Owen, 500 F3d at 88.]
(b) Time to File.
(1) Newly Discovered Evidence. Any motion for a new trial
grounded on newly discovered evidence must be filed within 3
years after the verdict or finding of guilty. If an appeal is pending,
the court may not grant a motion for a new trial until the appellate
court remands the case.
(2) Other Grounds. Any motion for a new trial grounded on any
reason other than newly discovered evidence must be filed within
14 days after the verdict or finding of guilty.
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Our review of the federal circuit court caselaw regard-
ing this issue confirms that most federal circuit courts
agree that newly available evidence is not synonymous
with newly discovered evidence sufficient to warrant a
new trial.
8
See, e.g., United States v Lofton, 333 F3d
874, 875-876 (CA 8, 2003) (holding that belated excul-
patory testimony by a codefendant who did not testify
at trial was not newly discovered evidence warranting
the granting of a new trial); United States v Jasin, 280
F3d 355, 368 (CA 3, 2002) (following “the majority rule
in concluding that a codefendant’s testimony known to
the defendant at the time of trial cannot be considered
‘newly discovered evidence’ under Rule 33, regardless
of the codefendant’s unavailability during trial because
of invocation of his Fifth Amendment privilege”);
United States v Theodosopoulos, 48 F3d 1438, 1448-
1449 (CA 7, 1995) (holding that evidence was not newly
discovered when the defendant was aware of the wit-
ness’s testimony during trial); United States v Glover,
21 F3d 133, 138 (CA 6, 1994) (holding that evidence was
not newly discovered when the defendant was aware of
the evidence before trial, but the witness asserted his
privilege against self-incrimination when called to tes-
tify at the defendant’s trial); United States v Muldrow,
19 F3d 1332, 1339 (CA 10, 1994) (holding that “[i]f a
former codefendant who originally chose not to testify
subsequently comes forward and offers testimony ex-
culpating a defendant, the evidence is not newly discov-
ered if the defendant was aware of the proposed testi-
mony prior to trial”); United States v Reyes-Alvarado,
963 F2d 1184, 1188 (CA 9, 1992) (affirming the view
8
See, generally, Note, Interpreting the phrase “newly discovered evi-
dence”: May previously unavailable exculpatory testimony serve as the
basis for a motion for a new trial under Rule 33?, 77 Fordham L R 1095
(2008).
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that when a defendant who chose not to testify subse-
quently comes forward to offer testimony exculpating a
codefendant, the evidence is not newly discovered);
United States v DiBernardo, 880 F2d 1216, 1224 (CA
11, 1989) (holding that newly available testimony of a
witness was not considered newly discovered evidence
when the defendant was aware of the evidence before
trial); United States v Metz, 652 F2d 478, 480 (CA 5,
1981) (holding that because defense counsel was aware
of the codefendant’s testimony before trial, that testi-
mony could not be considered newly discovered even if
the codefendant was unavailable to testify at their joint
trial because he invoked the Fifth Amendment).
In Owen, the United States Court of Appeals for the
Second Circuit based its decision that newly available
evidence did not constitute newly discovered evidence
on the defendant’s awareness of the evidence before
trial and the plain meaning of the word “discover”:
One does not “discover” evidence after trial that one
was aware of prior to trial. To hold otherwise stretches the
meaning of the word “discover” beyond its common under-
standing. See Webster’s Third New Int’l Dictionary 647
(2002) (defining “discover” as “to make known (something
secret, hidden, unknown, or previously unnoticed)”). We
are not inclined to expand the scope of Rule 33 beyond its
textual limits. See Jasin, 280 F.3d at 368 (noting that [the]
rule that codefendant’s testimony known to defendant at
trial cannot be newly discovered “is anchored in the plain
meaning of the text of Rule 33.... The unambiguous
language of Rule 33... contemplates granting of a new
trial on the ground of ‘newly discovered evidence’ but says
nothing about newly available evidence”)....[Owen, 500
F3d at 89-90.]
Other federal circuits that have rejected the notion
that newly available evidence constitutes newly discov-
ered evidence have recognized that a defendant’s
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awareness of the existence of evidence affects the de-
termination regarding whether evidence was newly
discovered or merely newly available. As the Sixth
Circuit noted in United States v Turns, 198 F3d 584,
587 (CA 6, 2000), “[t]he key to deciding whether evi-
dence is ‘newly discovered’ or only ‘newly available’ is
to ascertain when the defendant found out about the
information at issue. A witness’s shifting desire to
testify truthfully does not make that witness’s testi-
mony ‘newly discovered’ evidence.” Similarly, the Sixth
Circuit stated in Glover: “[The defendant] acknowl-
edges that he was well aware of [the witness’s] testi-
mony prior to trial....While [the witness’s] testimony
may have been newly available, it was not in fact ‘newly
discovered evidence’ within the meaning of Rule 33.”
Glover, 21 F3d at 138. In addition, in DiBernardo, the
Eleventh Circuit affirmed the denial of the defendant’s
motion for new trial, concluding that there was not
newly discovered evidence sufficient to warrant a new
trial: “Here, [the defendant was] well aware of [the
witness’s] proposed testimony prior to trial. Therefore,
the testimony cannot be deemed ‘newly discovered
evidence’ within the meaning of Rule 33.” DiBernardo,
880 F2d at 1224.
This Court similarly has a long history of rejecting
defendants’ claims that evidence that the defendant
knew existed before trial constituted newly discovered
evidence. As far back as People v Lewis, 31 Mich App
433, 437; 188 NW2d 107 (1971), this Court stated:
Defendant next claims a right to a new trial based on
newly-discovered evidence. Mr. Warren, a fellow inmate of
defendant at Jackson Prison before trial, issued a sworn
statement alleging that the trial testimony of one Mr. Fisk
was a complete fabrication. However, this sworn statement
also admits that defendant was well aware of Warren’s
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information prior to trial. This information cannot be
classified as newly discovered.
There are also legal policy considerations that sup-
port the conclusion that a codefendant’s posttrial testi-
mony does not constitute newly discovered evidence
when the defendant was aware of the evidence before
trial. The first of these legal policy considerations
involves the lack of reliability of a codefendant’s post-
trial statements and the concern that courts might
encourage perjury by granting a new trial to another
codefendant on the basis of such unreliable evidence. In
Jasin, the Third Circuit explained this policy consider-
ation:
Courts generally consider exculpatory testimony offered
by codefendants after they have been sentenced to be
inherently suspect. Indeed, “a court must exercise great
caution in considering evidence to be ‘newly discovered’
when it existed all along and was unavailable only because
a co-defendant, since convicted, had availed himself of his
privilege not to testify.” United States v. Jacobs, 475 F.2d
270, 286 n. 33 (2d Cir.1973). The rationale for casting a
skeptical eye on such exculpatory testimony is manifest.
“It would encourage perjury to allow a new trial once
co-defendants have determined that testifying is no longer
harmful to themselves. They may say whatever they think
might help their co-defendant, even to the point of pinning
all the guilt on themselves, knowing they are safe from
retrial. Such testimony would be untrustworthy and
should not be encouraged.” [Jasin, 280 F3d at 365, quoting
Reyes-Alvarado, 963 F2d at 1188.]
Although defendant’s codefendant in this case was
acquitted rather than convicted, the policy rationale
against encouraging perjury is no less applicable. Irre-
spective of whether a codefendant’s trial ends in an
acquittal or a conviction, the codefendant cannot be
retried, and in either case posttrial testimony from a
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codefendant would be equally untrustworthy. Hudson’s
testimony would be no more trustworthy than the
testimony of a codefendant who had been convicted.
Another legal policy consideration that supports the
conclusion that newly available evidence does not con-
stitute newly discovered evidence concerns the poten-
tial for defendants to engage in a form of legal games-
manship through “judicial sandbagging.” In Turns, the
Sixth Circuit explained this concern:
“Baumann’s evidence is not newly discovered because allow-
ing criminal defendants to raise such allegations [i.e., that an
uncalled witness’s proposed testimony is newly discovered
evidence] after a judgment of conviction has been entered...
would permit them to “sandbag” the fairness of the trial by
withholding or failing to seek material, probative evidence
and later attempting to collaterally attack their convic-
tions....” [Turns, 198 F3d at 588, quoting Baumann v
United States, 692 F2d 565, 580 (CA 9, 1982).]
Although the majority of federal circuit courts have
ruled that that a codefendant’s posttrial or postconviction
testimony did not constitute newly discovered evidence
sufficient to warrant a new trial when the defendant was
aware of the evidence before trial, the First Circuit has
reached a contrary conclusion on this issue. See United
States v Montilla-Rivera, 115 F3d 1060, 1066 (CA 1,
1997). In Montilla-Rivera, the First Circuit held that the
trial court erred by denying the defendant’s motion for
new trial, ruling that the posttrial testimony of codefen-
dants who did not testify at trial because they exercised
their Fifth Amendment privilege constituted newly dis-
covered evidence. In so ruling, the First Circuit stated that
its decision was based on years of precedent: “This circuit
has, for almost twenty years, held that the ‘newly discov-
ered’ language of Rule 33 encompasses evidence that was
‘unavailable.’ ” Id. at 1066, citing Vega Pelegrina v United
States, 601 F2d 18, 21 (CA 1, 1979). The First Circuit
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reasoned that the codefendants were not available to
testify given the defendant’s inability to compel their
testimony in light of their assertion of the Fifth Amend-
ment privilege and stated that “there seems little distinc-
tion between evidence which a defendant could not
present because he did not know of it and evidence which
he could not present because the witness was unavailable
despite exercising due diligence.”
9
Montilla-Rivera, 115
F3d at 1066.
We are not persuaded by the First Circuit’s minority
position regarding this issue. To the contrary, we are
persuaded by the majority of federal circuit courts that a
codefendant’s posttrial or postconviction testimony does
not constitute newly discovered evidence sufficient to
warrant a new trial when the defendant was aware of the
evidence before trial, and we hold that MCR 6.431(B)
10
does not authorize the grant of a new trial on the basis
of such evidence because it is not newly discovered, but
merely newly available. In so holding, we are mindful
that courts “must exercise great caution in considering
evidence to be ‘newly discovered’ when it existed all
along and was unavail[a]ble only because a co-
defendant, since convicted, had availed himself of his
privilege not to testify.” Jacobs, 475 F2d at 286 n 33.
Although neither this Court nor our Supreme Court has
9
As the Second Circuit observed in Owen, “the first prong of the First
Circuit’s Rule 33 test is broader than that of the other circuits, requiring
that ‘the evidence was unknown or unavailable to the defendant at [the]
time of trial.’ ” Owen, 500 F3d at 89, quoting Montilla-Rivera, 115 F3d at
1066.
10
MCR 6.431(B) governs motions for new trial and provides, in
relevant part:
Reasons for Granting. On the defendant’s motion, the court may
order a new trial on any ground that would support appellate reversal
of the conviction or because it believes that the verdict has resulted in
a miscarriage of justice. The court must state its reasons for granting
or denying a new trial orally on the record or in a written ruling made
a part of the record.
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issued an opinion regarding this issue, we note that our
Supreme Court has stated that the first prong of the test
to determine whether a defendant is entitled to a new trial
on the basis of newly discovered evidence is whether “ ‘the
evidence itself, not merely its materiality, was newly
discovered[.]’ ” Cress, 468 Mich at 692, quoting Johnson,
451 Mich at 118 n 6. This is consistent with the holding in
Owen that “[o]ne does not ‘discover’ evidence after trial
that one was aware of prior to trial. To hold otherwise
stretches the meaning of the word ‘discover’ beyond its
common understanding.” Owen, 500 F3d at 89-90.
We are aware of the fact that when a codefendant
invokes the privilege against self-incrimination and re-
fuses to testify, a defendant can be denied the benefit of
any potentially exculpatory testimony the codefendant
might have provided. See Owen, 500 F3d at 91. This is a
consequence of the Fifth Amendment privilege.
11
How-
ever, we stress that in such cases there exist proper
procedural remedies. As noted in Owen, a trial court
could grant a severance if it is persuaded that the
deprivation would cause the defendant prejudice. Id.
The court in Owen also noted that in the severed trial
the prosecutor could confer limited immunity on the
codefendant so that the codefendant might testify
truthfully and that, as a last resort, a defendant could
take the stand and convey his or her story. Id. at 92.
Indeed, pursuant to MCR 6.121(C), in this case, defen-
dant would have been entitled to a severance if he had
made a “showing that severance is necessary to avoid
prejudice to substantial rights of the defendant.” This is
not a case in which defendant had no clue of the
existence of Hudson’s testimony before trial. Our re-
11
Another consequence of invocation of the Fifth Amendment privilege
is that a defendant may not comment on a codefendant’s refusal to take
the stand. See Owen, 500 F3d at 92 n 6.
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view of the record leads us to conclude that defendant
was, or should have been, aware of Hudson’s testimony
before trial and that he should have engaged in due
diligence and employed the proper procedural avenues,
including trial severance and limited immunity for
Hudson, to secure Hudson’s testimony at trial.
12
Had he
done so, he would not have been denied the benefit of
any potentially exculpatory testimony that Hudson
could have offered. We decline to characterize Hudson’s
testimony as newly discovered evidence because to do so
would negate defendant’s duty to engage in due dili-
gence to secure the proffered testimony and effectively
condone defendant’s attempt at judicial sandbagging.
Having adopted the view of the majority of federal
circuits, we must determine what defendant knew about
the evidence at issue before and during trial. The Second
Circuit in Owen held that the pertinent inquiry is whether
the defendant knew or should have known that the
codefendant could offer material testimony regarding the
defendant’s role in the charged crime. Owen, 500 F3d at
91. Application of this test requires an examination of the
facts presented in this case to ascertain whether defen-
dant knew or should have known that his codefendant
had exculpatory information.
Examination of the record in the instant case reveals
that although Hudson testified at the hearing on defen-
dant’s motion for a new trial that he had never spoken
12
We observe that we would reach the same result in this case even if
we were to adopt the First Circuit’s reasoning because the record in this
case does not support a conclusion that “the witness was unavailable
despite [the defendant’s] exercising due diligence.” Montillo-Rivera, 115
F3d at 1066. With due diligence, defendant could have remedied the
potential denial of the benefit of Hudson’s exculpatory evidence by
seeking trial severance and asking the prosecutor to grant Hudson
limited immunity so that Hudson could testify truthfully without fear of
self-incrimination.
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with defense counsel about the case until it was over,
defendant knew or should have known that Hudson
could have offered material testimony regarding defen-
dant’s role in the charged crime. Defendant and Hud-
son had known each other since childhood. Hudson
testified that he and defendant were close friends.
According to Hudson, he was present with defendant at
the scene of the shooting. Even if Hudson and defen-
dant never had a conversation about Hudson’s testi-
mony before or during their trial, defendant was cer-
tainly aware at all times that Hudson had the ability to
provide his proffered testimony.
13
Therefore, the record
clearly leads us to conclude that defendant knew or
should have known before trial that Hudson could have
provided the testimony.
In holding that newly available evidence does not
constitute newly discovered evidence sufficient to war-
rant a new trial, we note that our holding does not
preclude the possibility that a codefendant’s posttrial or
postconviction exculpatory statements might qualify as
newly discovered evidence under MCR 6.431(B). There
may be cases in which such evidence does indeed
constitute newly discovered evidence. However, in this
case, defendant knew or should have known that his
codefendant could offer material testimony regarding
defendant’s role in the charged crime; therefore, defen-
dant cannot claim that he “discovered” that evidence
only after trial. Consequently, because defendant knew
or should have known that his codefendant could offer
material testimony about defendant’s role in the
charged crime, his inability or unwillingness to procure
that testimony before or during trial should not be
redressed by granting him a new trial.
13
No one asked Hudson if he had spoken to defendant about his
testimony before or during trial.
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Reversed and remanded to the trial court for further
proceedings consistent with this opinion. We do not
retain jurisdiction.
M
ETER
,P.J., concurred.
S
HAPIRO
,J.(concurring). I concur in the result in this
case because I do not believe that defendant provided an
adequate basis for the trial court to grant his motion for
a new trial pursuant to MCR 6.431(B), whether we
apply the test employed by the majority of federal
circuits or the test enunciated by the United States
Court of Appeals for the First Circuit. Therefore, I do
not believe we need to reach the question of which test
to apply. However, the majority having reached it, I
respectfully suggest that the more appropriate test is
that enunciated by the First Circuit.
In United States v Montilla-Rivera, 115 F3d 1060,
1066 (CA 1, 1997), the First Circuit held that “the
better rule is not to categorically exclude the testimony
of a codefendant who asserted his Fifth Amendment
privilege at trial under the first prong but to consider it,
albeit with great skepticism....”Thecourt recognized
that “[i]t is true that there is a greater need for caution
in considering [such] motions where the new evidence
comes from a codefendant who was ‘unavailable’ at trial
because he chose to exercise his privilege.” Id. Indeed,
the First Circuit did not order a new trial, but merely
directed that the trial court hold a hearing to hear the
“new” evidence, and further noted that even having
such a hearing is “[not] required in the usual course.”
1
1
In Montilla-Rivera, the court reversed the trial court’s denial of a
motion for a new trial, but only after a careful review of the facts and
circumstances of the case. Montilla-Rivera, 115 F3d at 1067-1068. First,
the court noted that although the evidence against the defendant was
sufficient, “[t]he evidence [was] thin....”Id. at 1064. Second, the court
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Id. at 1067. The First Circuit’s approach would not
open the floodgates for new trials on the basis of “newly
available” codefendant testimony. Rather, it would take
the prudent and limited step of not foreclosing the
possibility that justice may require the granting of a
new trial in a particular case involving newly available
evidence.
In this case, defendant is not entitled to a new trial
under the First Circuit’s test. First, there was other
evidence admitted that showed the victim was armed.
Thus, defendant was able to present evidence in sup-
port of his self-defense claim. Second, defense counsel
did not interview or attempt to interview the codefen-
dant, thus undercutting the likelihood that there was a
good-faith belief that he could offer exculpatory testi-
mony. Third, there was no request for severance or for
the codefendant’s trial to occur first, a mechanism that
might have avoided the Fifth Amendment problem.
Fourth, there was no attempt to call the codefendant at
trial and to require him to assert his Fifth Amendment
privilege outside the presence of the jury. Fifth, there
was no offer of proof at trial about what defendant
believed his codefendant could testify to if he did not
assert his Fifth Amendment privilege. These failures
noted that the defendant had “diligently attempted to secure [the
codefendants’] testimony....” Id. at 1065. The defendant’s attorney
tried on two separate occasions to interview the codefendants, but they
refused to speak with him. Id. at 1065 n 3. He also moved to have the two
codefendants subpoenaed to testify, and his client had “insisted that the
testimony would exculpate him rather than hurt him.” Id. At the
defendant’s trial, the codefendants informed the court that they would
not testify despite the defendant’s request, and the court noted that each
of the codefendants’ attorneys had advised his client not to testify
because the testimony might be incriminating with regard to other
transactions and because the codefendants were still awaiting sentenc-
ing. Id. at 1065. Finally, the court noted that the new testimony was
neither cumulative nor implausible. Id. at 1066.
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strongly suggest that the issue in this case related more
to the desirability of an appellate parachute rather than
the existence of known exculpatory testimony that was
genuinely unavailable before defendant’s conviction.
I agree with the majority that postconviction claims
of exculpatory testimony from a codefendant should be
viewed with a high degree of suspicion. However, that is
a matter best addressed on a case-by-case basis and not
with a bright-line rule. I also recognize that the major-
ity does not view the rule it adopts today as foreclosing
a case-by-case approach. Indeed, the majority makes
this clear by positing that “[t]here may be cases in
which [a codefendant’s posttrial or postconviction ex-
culpatory statement] does indeed constitute newly dis-
covered evidence.” I believe the majority and I are in
agreement that a trial court should not be precluded
from granting a new trial when the defendant made
appropriate efforts to obtain the testimony at trial and
the trial court, in an exercise of sound discretion after
hearing all the evidence, concluded that a miscarriage
of justice may have occurred. I am concerned, however,
that this critical exception to the rule otherwise exclud-
ing newly available evidence might be lost in subse-
quent cases. I believe that in order to assure that it is
not, the more prudent course would be to adopt the
First Circuit’s standard, which more explicitly provides
for the exception.
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In re LEIX ESTATE
Docket No. 291406. Submitted June 8, 2010, at Detroit. Decided August
26, 2010, at 9:20 a.m.
Carlton E. Leix and Melinda Triplett petitioned the Genesee County
Probate Court for the imposition of a constructive trust on certain
assets in the control of respondents, Melady A. and Jeffrey Perry.
Petitioners alleged that Carlton J. Leix had transferred the assets
to Melady Perry in violation of a 1982 agreement between Carlton
J. Leix and his wife, Viola Leix, to execute mutual wills. Carlton J.
and Viola Leix had executed identical wills, a revocable-trust
agreement, and an agreement to execute mutual wills in 1982. The
wills, trust, and agreement for mutual wills reflected an estate
plan calling for the establishment of a trust for the benefit of
Melady Perry for life, with the remainder to the issue of Carlton J.
and Viola Leix. Carlton E. Leix is the son of Carlton J. and Viola
Leix, and Melady Perry and Melinda Triplett are the daughters of
Arletta Cady, their deceased daughter. Viola Leix died in 1983.
Carlton J. Leix died in 2008 and, at that time, nearly all the
disputed assets were titled jointly in his and Melady Perry’s names
or named Melady Perry as the beneficiary. Petitioners moved for
summary disposition and, following a hearing on the motion, the
court, Jennie E. Barkey, J., granted summary disposition in favor
of Melady and Jeffery Perry, holding that the agreement to execute
mutual wills was valid and binding and that Carlton J. Leix’s
transfers of assets into joint ownership with Melady Perry after
Viola Leix’s death were not in breach of the agreement to execute
mutual wills because the agreement contained no restrictions
against transfers. Carlton E. Leix appealed.
The Court of Appeals held:
Implied limitations on the transfer of assets by the surviving
spouse in the case of an agreement to make mutual wills are not
recognized in Michigan. Nor does Michigan recognize a cause of
action for breach of an implied covenant of good faith and fair
dealing. A contract to make a mutual will is subject to the
following principles: (1) the main goal of contract interpretation is
to enforce the parties’ intent, (2) when the language of a document
is clear and unambiguous, interpretation is limited to the actual
574 289 M
ICH
A
PP
574 [Aug
words used, and parol evidence is inadmissible to prove a different
intent, (3) an unambiguous contract must be enforced according to
its terms, and (4) courts may not rewrite contracts on the basis of
discerned reasonable expectations of the parties. The agreement
did not restrict Carlton J. Leix from disposing of the assets as he
saw fit regardless of whether the transfers were made for the
purpose of avoiding the testamentary disposition.
Affirmed.
D
ECEDENTS
’E
STATES —
A
GREEMENTS TO
M
AKE
M
UTUAL
W
ILLS —
I
MPLIED
L
IMITATIONS ON
T
RANSFERS OF
A
SSETS —
I
MPLIED
C
OVENANTS OF
G
OOD
F
AITH AND
F
AIR
D
EALING
.
Michigan does not recognize a cause of action for breach of an
implied covenant of good faith and fair dealing and does not
recognize implied limitations on the transfer of assets by the
surviving spouse in the case of an agreement to make mutual wills.
Rizik & Rizik (by George F. Rizik, II) for Carlton E.
Leix.
Reid & James, P.C. (by Robert J. Reid and Robert
Brace Reid), for Melady A. and Jeffrey Perry.
Before: Z
AHRA
,P.J., and C
AVANAGH
and F
ITZGERALD
,JJ.
P
ER
C
URIAM.
This case concerns the disposition of
assets formerly owned by Carlton J. Leix (Carlton) and
his wife, Viola Leix. After Viola’s death, Carlton trans-
ferred the assets so that they were jointly owned with
their granddaughter, respondent-appellee Melady A.
Perry. Petitioner-appellant, Carlton E. Leix (appellant),
the son of Carlton and Viola, contended that the trans-
fers violated his parents’ agreement to execute mutual
wills. Appellant appeals as of right the judgment grant-
ing summary disposition pursuant to MCR 2.116(I)(1)
in favor of Melady and her husband, respondent-
appellee Jeffrey Perry (hereafter referred to jointly as
“respondents”), on the ground that the agreement to
execute mutual wills did not restrict Carlton from
making the transfers. We affirm.
2010] In re L
EIX
E
STATE
575
I
Carlton and Viola had two children, appellant and
Arletta Cady. Arletta was the deceased mother of Melady
and petitioner Melinda Triplett. On September 30, 1982,
Carlton and Viola executed identical wills, a revocable-
trust agreement, and an agreement to execute mutual
wills. The wills, trust, and agreement for mutual wills
reflected an estate plan that called for establishing a trust
for the benefit of Melady for life, with the remainder to the
issue of Carlton and Viola. Viola died on December 11,
1983.
Carlton executed amendments of the trust in July 1988
and October 2000.
1
He also transferred title to assets
that had been owned by Viola and him. For example,
Carlton withdrew money from bank accounts and, in
2001 and 2002, purchased annuities that named Melady
as the beneficiary. He added Melady as a joint owner on
a checking account in 1984, closed the account in 2006,
and then opened a new checking account with Melady
as a joint owner. In 1994, he conveyed real estate to
himself, Arletta, and Melady as joint tenants with rights
of survivorship.
In 2006, Melady became Carlton’s guardian and con-
servator. Carlton died in July 2008. At the time of Carl-
ton’s death, nearly all the assets were titled jointly in his
and Melady’s names or named Melady as the beneficiary.
After Carlton’s death, Melady received the money from
the annuities and placed some of it in certificates of
deposit in her name and in the name of her husband.
Appellant and Melinda brought this action in the pro-
bate court, requesting that the court impose a construc-
tive trust on certain assets in the control of respondents.
1
Appellant does not claim that the amendments of the trust breached
the agreement to execute mutual wills.
576 289 M
ICH
A
PP
574 [Aug
They alleged that Carlton transferred the assets in viola-
tion of his and Viola’s 1982 agreement to execute mutual
wills. They filed a motion for summary disposition pursu-
ant to MCR 2.116(C)(10) and, in support thereof, submit-
ted the deposition transcripts of (1) Michael James, the
attorney involved in drafting the original estate plan
documents, (2) Robert Reid, the attorney who drafted an
amendment of the trust, and (3) Melady. James could not
recall Carlton and Viola’s intent when executing the
original documents, and Reid was not involved with the
original documents. Melady testified about the family’s
relationships and the accounts, but stated that she had
never discussed Carlton’s estate plan with him.
Following a hearing on the motion, the trial court found
the agreement to execute mutual wills to be valid and
binding, that nothing in the agreement put any restric-
tions on what the surviving party could do with the
parties’ assets, and that Carlton’s transfer of assets dur-
ing his lifetime and his amendment of the trust did not
constitute a breach of the agreement.
2
The court there-
fore granted summary disposition in favor of respon-
dents.
II
Summary disposition pursuant to MCR 2.116(I)(1) is
appropriate if “the pleadings show that a party is
entitled to judgment as a matter of law, or if the
affidavits or other proofs show that there is no genuine
issue of material fact....”This Court reviews de novo
a trial court’s decision on a motion for summary dispo-
sition. Maiden v Rozwood, 461 Mich 109, 118; 597
NW2d 817 (1999).
2
The trial court relied on In re VanConett Estate, 262 Mich App 660;
687 NW2d 167 (2004), in support of its ruling.
2010] In re L
EIX
E
STATE
577
The parties do not dispute the trial court’s determi-
nation that Carlton and Viola’s agreement to execute
mutual wills is valid and that they agreed not to revoke
the wills that they executed. The agreement stated, in
pertinent part:
The parties agree that on the death of the survivor, all of
the property of which the survivor dies possessed is to be
held in trust for the benefit of their granddaughter, Melady
Cady, during her life. Upon the death of Melady Cady, the
Trustee shall divide the balance of this Trust into equal
separate shares so as to provide one (1) share for the issue
of Melady Cady, one (1) share for Arletta Cady or her issue
if she fails to survive said division, and one (1) share for
Carlton Leix or his issue if he fails to survive said division.
The parties also do not dispute that after Viola’s
death, Carlton transferred money in various accounts
so that Melady became a joint owner or beneficiary, and
thereby upon Carlton’s death she received the assets
directly, rather than as a lifetime beneficiary of a trust.
One of the effects of the transfers was to divest the trust
of assets that the contingent trust beneficiaries might
have received upon Melady’s death.
The issue presented is whether an agreement to
execute mutual wills limits a surviving spouse’s ability
to dispose of the assets that the parties held jointly as he
or she chooses.
An agreement to make mutual wills, or the execution of
wills in pursuance of such an agreement, does not bind the
testators to keep the property, covered thereby, for the
intended beneficiaries under such wills, or prevent them
from making such other disposition of it, either inter vivos
or by will, as they may desire and mutually agree, while
both or all still live. [Phelps v Pipher, 320 Mich 663, 670; 31
NW2d 836 (1948) (citation and quotation marks omitted).]
However, upon the death of one of the parties, the
agreement (not the will) is irrevocable. Id. at 669.
578 289 M
ICH
A
PP
574 [Aug
“Upon the death of one party to a contract to make
mutual will[s], the agreement underlying the will be-
comes irrevocable and right of action to enforce it [is]
vested in the beneficiaries.” Schondelmayer v Schondel-
mayer, 320 Mich 565, 572; 31 NW2d 721 (1948) (citation
and quotation marks omitted). Thus, when the agree-
ment to make mutual wills provides for the disposition
of specific real property to a particular party, that party
may obtain injunctive relief to prevent a surviving
spouse from disposing of the specified property in a
manner contrary to the agreement. Id.
As presented, the issue whether Carlton’s transfer of
assets breached his agreement with Viola involves two
considerations: (1) whether assets that are held jointly
by the contracting parties are subject to an agreement
to make mutual wills and (2) to what extent does an
agreement to make mutual wills restrict the surviving
spouse’s ability to transfer assets.
A
Respondents contend that In re VanConett Estate,
262 Mich App 660; 687 NW2d 167 (2004), controls this
case and establishes that “jointly held assets are not
subject to an agreement to make mutual wills.” In
VanConett Estate, Herbert and Ila VanConett (a married
couple) and Florence VanConett owned real property as
joint tenants with full rights of survivorship. Id. at 667.
After Florence’s death, Herbert and Ila continued to
hold the property as joint tenants with full rights of
survivorship. Id. This Court determined that Herbert’s
and Ila’s wills revealed a clear expression of their intent
to enter into a contract to dispose of their property in
the manner expressed in their wills and that the sur-
viving spouse’s will would become irrevocable after the
first spouse’s death. Id. at 664-665. After Ila’s death,
2010] In re L
EIX
E
STATE
579
Herbert transferred the real property to the defen-
dants. After Herbert’s death, his estate brought an
action to recover the property. This Court held that his
estate lacked standing to seek return of the real prop-
erty to the estate because the property was not covered
by the couple’s contact to make a will:
Property held as joint tenants with full rights of survivor-
ship automatically passes to the surviving tenant(s) at a
tenant’s death. 1 Cameron, Michigan Real Property Law (2d
ed), § 9.11, pp 306-307. Because title passed instantly at Ila’s
death, it would not have been part of her estate and would not
be covered by the couple’s contract to make a will. Therefore,
the estate has no right to seek its return. This is true even
though the VanConetts’ wills purported to apply to “all our
property, whether owned by us as joint tenants, as tenants in
common or in severalty.” Certainly, the VanConetts could not
destroy the survivorship right through their wills because a
will has no effect until the testator’s death. The VanConetts’
contract to make a will did not expressly indicate that the
couple wished to terminate their joint tenancy and destroy
the survivorship rights attached to it. No authority suggests
that merely expressing a desire to end a joint tenancy carries
out the task of terminating a joint tenancy with rights of
survivorship. Therefore, we conclude that the VanConetts’
wills did not terminate the survivorship rights of their joint
tenancy. The property passed to Herbert immediately at Ila’s
death and the estate lacked standing to seek its return to the
estate. [Id. at 667-668 (emphasis added).]
In other words, “the estate did not have standing to
bring a cause of action concerning the real property
because the real property passes outside the Van-
Conetts’ wills.” Id. at 662.
Respondents’ contention—that VanConett Estate indi-
cates that, in every instance, an agreement to make
mutual wills does not apply to property that the contract-
ing parties own jointly at the time the first testator
dies—is incompatible with decisions of the Michigan Su-
preme Court.
580 289 M
ICH
A
PP
574 [Aug
For example, in Schondelmayer, Charles and Cathrin
Schondelmayer jointly held title to real property as ten-
ants by the entirety. Schondelmayer, 320 Mich at 568. The
Court determined that they agreed to execute and did
execute a joint and mutual will. The will stated that the
survivor would pay the funeral expenses and just debts
and “ ‘thereafter become the sole owner of any and all
property owned by either or both of them. The said
survivor shall live as he or she has been accustomed, using
so much of the income or principal as may be necessary for
his or her comfort of [sic] convenience.’ ” Id. at 571. The
will then specified that each of the Schondelmayers’ three
sons was to receive a specific farm. Id. at 568, 571. Corna
Schondelmayer, the plaintiff, was to receive real estate
that included the home farm and the balance of the estate
after certain costs. After Charles’s death, the relationship
between Cathrin and the plaintiff deteriorated. Cathrin
claimed that she had the right to dispose of the property,
including the home farm, by will and also stated that she
intended to sell it. Id. at 573. The plaintiff sought specific
performance of his parents’ agreement to make a joint
and mutual will and an injunction restraining Cathrin
from disposing of the property in violation of the terms of
the joint mutual will. The Court concluded that Charles
and Cathrin had agreed that the will of the survivor would
dispose of the estate in accordance with the terms of their
joint and mutual will and that the agreement became
irrevocable upon Charles’s death. Id. at 571-572, 575. The
Court affirmed the trial court’s grant of injunctive relief,
concluding that the property that Charles and Cathrin
held jointly at the time of Charles’s death was subject to
the parties’ agreement to execute a mutual will. See also
Getchell v Tinker, 291 Mich 267; 289 NW 156 (1939)
(involving an agreement to devise specified real property
that the contracting parties owned jointly).
2010] In re L
EIX
E
STATE
581
Respondents’ contention that the agreement to make
mutual wills did not apply to the assets that were jointly
held by Carlton and Viola, and which therefore passed
to Carlton after Viola’s death, is unpersuasive. It is
difficult to reconcile the statement in VanConett Estate,
262 Mich App at 668, that property that passed in-
stantly at the death of the contracting party would not
be covered by the couple’s contract to make a will, with
the Supreme Court’s holdings in the cases cited earlier.
We therefore conclude that the holding in VanConett
Estate should be limited to the particular circumstances
in that case, in which the contract to make a will was
within the wills themselves.
B
In regard to whether an agreement to make mutual
wills restricts the surviving spouse’s ability to dispose of
assets absent express limitations in the agreement,
Michigan caselaw is not well developed. Appellant relies
on Schondelmayer, 320 Mich 565, Getchell, 291 Mich
267, and Carmichael v Carmichael, 72 Mich 76; 40 NW
173 (1888). However, those cases involved agreements
to convey specific property. Appellant does not claim
that the agreement in this case contained language
designating specific property or language prohibiting
the surviving spouse from transferring assets. Rather,
appellant asserts, “A corollary of the rule that the
surviving co-maker of an agreement to make a mutual
will is irrevocably bound by that agreement after the
death of the other co-maker, is that the surviving
co-maker cannot transfer assets in a manner that would
defeat the agreement.”
3
3
This Court’s decision in VanConett Estate, 262 Mich App at 665,
touched on that issue very briefly. Before the Court explained that the
contract did not apply to the real estate at issue, the Court considered the
582 289 M
ICH
A
PP
574 [Aug
The uncertainty in the law is reflected in an order
that the Supreme Court entered when it initially
granted leave to appeal in VanConett Estate. The order
directed the parties to address, in part,
whether the mere fact that Herbert and Ila VanConett
entered into a mutual will imposes restrictions on the surviv-
ing spouse’s power of disposal despite the absence of express
contractual or testamentary limitations on the power of
alienation, (3) the source and nature of such a restraint if it is
contended that Herbert VanConett was so restrained from
disposing of his estate, and (4) whether any secondary author-
ity in wills and estates law (e.g., hornbooks and treatises), or
practice in the field, supports the proposition that a mutual
will imposes restrictions on the surviving spouse’s power of
disposal in the absence of express contractual language or
testamentary limitations on the power of alienation. [In re
Vanconnett Estate, 474 Mich 999 (2006), vacated and lv den
sub nom In re VanConett, 477 Mich 969 (2006).]
The directive to consult secondary authority suggests
that the Court believed that the issue was unsettled in
Michigan.
Courts in other jurisdictions have differing views
concerning whether the surviving party to a contract to
make mutual wills is limited in the right to dispose of
property after the death of the first party. See Anno:
Right of party to joint or mutual will, made pursuant to
plaintiffs’ argument that Herbert received only a life estate and therefore
had no right to dispose of the property. This Court stated, “Unlike in
Quarton [v Barton, 249 Mich 474; 229 NW 465 (1930)], Herbert received a
fee simple estate in the couple’s property at Ila’s death; hence, he was free
to dispose of the property as he wished, and his beneficiaries were only
entitled to the remainder.” Id. Arguably, the statement supports the position
that absent limiting language in the agreement, an agreement to make a will
does not impose any limitations on a surviving spouse’s right to dispose of
property. However, because the Court ultimately concluded that the real
estate was not covered by the agreement, the Court’s statement that
Herbert was free to dispose of the property as he wished (evidently without
regard to any obligations from the agreement) was dictum.
2010] In re L
EIX
E
STATE
583
agreement as to disposition of property at death, to
dispose of such property during life, 85 ALR3d 8; 79 Am
Jur 2d, Wills, §§ 687-688, pp 736-738; 97 CJS, Wills,
§ 2056, pp 659-661. Some jurisdictions allow the surviv-
ing spouse in that circumstance to use the property for
support and ordinary expenditures, but not to give
away considerable portions of it or make gifts that
defeat the purpose of the agreement:
Where an agreement as to mutual wills does not define
the survivor’s power over the property, but merely provides
as to the disposition of the property at his or her death, the
survivor may use not only the income, but reasonable
portions of the principal, for his or her support and for
ordinary expenditures, and he or she may change the form
of the property by reinvestment, but must not give away
any considerable portions of it or do anything else with it
that is inconsistent with the spirit or the obvious intent
and purpose of the agreement.
. . . [T]he surviving spouse cannot make a gift in the
nature, or in lieu, of a testamentary disposition, or to
defeat the purpose of the agreement. [97 CJS, Wills, § 2056,
pp 660-661.]
Conversely, in other jurisdictions,
[t]he courts do not assume that the parties to a joint and
mutual will intended to restrict either party from disposing
of property in good faith by transfers effective during his or
her lifetime, unless a plain intention to this effect is
expressed in the will or in the contract pursuant to which
it was executed. Nothing short of plain and express words
to that effect in a contract to execute wills with mutual and
reciprocal provisions is sufficient to prevent one of the
testators from disposing of his or her property in good faith
during his or her lifetime, notwithstanding the death of the
other testator. [72 Am Jur 2d, Wills, § 688, p 738.]
Section 17 of the ALR annotation collects cases that
address the surviving spouse’s authority to dispose of
584 289 M
ICH
A
PP
574 [Aug
property when the agreement or will leaves to desig-
nated beneficiaries property that the survivor may own
at the time of the survivor’s death or contains similar
provisions. The annotation states in § 17[a] that such
provisions “have been construed by some courts as
indicating a desire on the part of the testators to give
the survivor full authority to dispose of the property
during the survivor’s lifetime.” 85 ALR3d, pp 50-51.
Section 17[b] of the annotation collects cases taking a
more limited view as well, including those “[h]olding
that the survivor could dispose of the property only for
such things as necessities or reasonable needs” and
rejecting claims “that the survivor was given full power
of disposition by the provision in a joint or mutual will
which left to the beneficiary, at the survivor’s death,
only that property which the survivor might own at his
death, or the like.” Id.at52.
As quoted in Murphy v Glenn, another treatise
states:
“A general covenant to devise, which does not refer to
specific property, does not prevent the promisor from
making conveyances during his lifetime. Such a covenant
has been held not to prevent him from making gifts during
his lifetime, if reasonable in amount and not made to evade
performance. If the contract provides for devising or be-
queathing all that the promisor owns at his death, he may
convey his property during his lifetime if such conveyance
is not in fraud of the rights of the promisee. A contract to
devise all of the property of which the promisor should die
possessed was held not to reserve to the promisor the right
to convey any considerable part of the property gratu-
itously.” [Murphy v Glenn, 964 P2d 581, 586 (Colo App,
1998), quoting1WPage, Wills, § 10.23 (Bowe-Parker rev
ed, 1960).]
In Murphy, 964 P2d at 586, the court cited eight cases
from other jurisdictions as supporting
2010] In re L
EIX
E
STATE
585
the proposition that a party who is bound by a contract to
make a will may make reasonable gifts during his or her
lifetime and use the property for reasonable living ex-
penses, but may not transfer the bulk of the estate in a way
contrary to the terms of the agreement embodied in a
mutual will.
In re Chayka Estate, 47 Wis 2d 102; 176 NW2d 561
(1970), provides an example of a court invalidating inter
vivos transfers of property to avoid commitments made
in a mutual will on the basis that the transfers breached
the covenant of good faith that accompanies every
contract. As indicated in the syllabus of the Wisconsin
Supreme Court, a husband and wife executed a joint,
mutual, and reciprocal will in which they bequeathed to
each other all their real and personal property and
provided that “after the decease of both of us, the whole
of said real estate and personal property of whatever
nature and wherever located that we may own at the
time of the decease of the survivor of us” was to go to a
specified beneficiary. Id. at 104. After the husband died,
the wife married the appellants. She conveyed parcels of
real property to herself and the appellant as joint
tenants, gave the appellant bonds as a gift, and trans-
ferred funds into a joint account in her and the appel-
lant’s names. After her death, the probate court ordered
the appellant to deliver the bonds and determined that
the properties the wife had placed in joint tenancy were
part of her estate. The Wisconsin Supreme Court re-
jected the appellant’s contention that the transfers
were valid, stating:
Appellant contends that Evelyn Flanagan Chayka com-
plied with her agreement with her first husband by leaving
unrevoked the will giving all of the property she possessed
at the time of her death to Robert W. Flanagan. This, as
another court has well stated it to be, is “a mere play upon
words.” What she in fact has done has stripped nearly all of
586 289 M
ICH
A
PP
574 [Aug
the flesh from the bones, leaving only a skeleton for
testamentary disposition to Robert W. Flanagan. This is a
compliance in form, not in substance, that breaches the
covenant of good faith that accompanies every contract, by
accomplishing exactly what the agreement of the parties
sought to prevent.
. . . The duty of good faith is an implied condition in
every contract, including a contract to make a joint will,
and the transfers here violate such good faith standard by
leaving the will in effect but giving away the properties
which the parties agreed were to be bequeathed at the
death of both to a designated party. The contract to make a
will, once partially executed and irrevocable, is not to be
defeated or evaded by what has been termed “completely
and deliberately denuding himself of his assets after enter-
ing into a bargain.”
8
8
“Should it be held that the promisor is always left free
to defeat the effect of his promise by completely and
deliberately denuding himself of his assets immediately
after entering into the bargain, it would seem that the
contracts could serve very little purpose other than that of
being either gambling devices or instruments of fraud and
would be unworthy of legal protection. * * * A party to such
a contract should be made to understand clearly that the
law does not permit a man to have his cake and eat it too.”
Sparks, Contracts to Make Wills, (1956), pages 51, 52. See
also: 94 C.J.S. Wills s 119, p. 881, stating: “Agreements
based on valuable consideration to make a particular
disposition of property will not be allowed to be defeated by
a conveyance to persons who are not bona fide purchasers,
during the lifetime of the promisor.”
[Chayka Estate, 47 Wis 2d at 107-108 (citations omitted).]
Similarly, in In re Erickson Estate, 363 Ill App 3d 279;
841 NE2d 1104 (2006), the court invalidated transfers
as being violative of the implied duty to act in good faith
2010] In re L
EIX
E
STATE
587
and contrary to the purpose of a joint and mutual will.
The husband and wife executed a joint and mutual will
in which each bequeathed to the survivor the entire
estate “as the survivor’s property absolutely,” and after
the survivor’s death, to specified children in specified
amounts. Id. at 280. The husband died first. Five days
before the wife’s death, she conveyed three tracts of real
property, each for $10, to two daughters and a grand-
son. A son filed a complaint to have the parcels returned
to the estate. The defendants argued that the agree-
ment gave the property to the survivor absolutely and
that she was free to dispose of it as she saw fit as long
as she did not revoke the joint and mutual will. After
noting that the contract underlying a joint and mutual
will becomes irrevocable upon the death of the first
testator, the Illinois Appellate Court stated:
Here, five days before her death, Lea attempted to
circumvent both the terms of the joint and mutual will and
her contractual obligations thereunder to dispose of her
property by essentially giving it away. Lea’s actions violate
the spirit and purpose of the joint and mutual will, as well
as the implied duty to act in good faith—a duty that is part
of every contract. See Bank One, Springfield v. Roscetti,
309 Ill.App.3d 1048, 1059-60, 243 Ill.Dec. 452, 723 N.E.2d
755, 764 (1999) (“Good faith requires the party vested with
contractual discretion to exercise it reasonably, and he may
not do so arbitrarily, capriciously, or in a manner inconsis-
tent with the reasonable expectation of the parties”). The
term “absolutely” does not give Lea the power to upset the
dispositive scheme.
We agree with defendants that Helms [v Darmstatter,34
Ill 2d 295; 215 NE2d 245 (1966)], Rauch [v Rauch, 112 Ill
App 3d 198; 445 NE2d 77 (1983)], and other decisions (see,
e.g., Orso v. Lindsey, 233 Ill.App.3d 881, 887, 174 Ill.Dec.
403, 598 N.E.2d 1035, 1039 (1992)) leave open the question
to what extent the surviving spouse may use the property
upon the death of the other testator: “It may well be that
they intended that the survivor should have the absolute
588 289 M
ICH
A
PP
574 [Aug
right to use the entire corpus for life, but only upon the
condition that the property owned by the survivor upon his
or her death would pass in accordance with the terms of the
joint will.” Helms, 34 Ill.2d at 301-02, 215 N.E.2d at 249.
Interesting questions remain as to whether Lea could have
sold some property to make a modest gift to a charity or to
travel the world. We need not analyze those possibilities,
and we need not decide whether Lea, after Charles’s death,
could have sold or given this property at a different time or
under different circumstances. The undisputed facts estab-
lish Lea disposed of the property five days before her death.
She received $10 for each parcel. No facts establish Lea
could have had any intention other than to circumvent the
dispositional scheme. These transfers are not permitted by
the will. [Id. at 284.]
In contrast, the approach adopted in Ohms v Church
of the Nazarene, Weiser, Idaho, Inc, 64 Idaho 262; 130
P2d 679 (1942), focused on enforcing the terms of
agreements to make wills as they are written. In that
case, the husband and wife made mutual, reciprocal,
and concurrent wills in which each bequeathed to the
survivor all real and personal property owned at the
time of his or her death, and in the event that the
spouse predeceased the testator, to the husband’s chil-
dren and grandchildren. The husband and wife also
executed a mutual contract in which they agreed that
all property owned by the last one dying should go to
the husband’s children and grandchildren. After the
husband died, the wife made other wills that conflicted
with the agreement. After being advised that she could
not will the challenged property to the church, she
revoked the inconsistent wills and instead deeded the
property to the church. After the wife’s death, her
husband’s children and grandchildren brought an ac-
tion to set aside the deed on the basis that the transfer
violated the purpose and intent of the couple’s contract.
The Idaho Supreme Court recognized that there were
2010] In re L
EIX
E
STATE
589
decisions supporting the view that the transfer was
invalid as a subterfuge, but ultimately concluded, “It is
better to give effect to the contract as made by the
parties than attempt construction by implication or
insertion by inference.” Id. at 682. “If it was the
intention of the parties that what each might receive
upon the death of the other should be kept intact and
passed on without any diminution thereof to Otto
Ohms’ children, the contract should have so stated,
which it did not.” Id. In addition to noting the absence
of any limitation in the parties’ agreement, the court
referred to other facts that bolstered the reasonable-
ness of validating the disposition (e.g., the support
provided by the church, the wife’s contribution to
retention of the property, the husband’s evident desire
that the realty be in a different category than other
property). However, the crux of the decision was the
recognition that “[c]ourts should construe contracts
according to the plain language used by the parties in
making them, and...should not, in this or any other
case, substitute what we may think the parties should
have agreed to for what their contract shows they did
agree to.” Id.
We reject appellant’s invitation to recognize implied
limitations on the transfer of assets by the surviving
spouse in the case of an agreement to make mutual
wills. With respect to other contracts, this Court has
explained:
The main goal of contract interpretation generally is to
enforce the parties’ intent. But when the language of a
document is clear and unambiguous, interpretation is
limited to the actual words used, and parol evidence is
inadmissible to prove a different intent. An unambiguous
contract must be enforced according to its terms. The
judiciary may not rewrite contracts on the basis of dis-
cerned “reasonable expectations” of the parties because to
590 289 M
ICH
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PP
574 [Aug
do so is contrary to the bedrock principle of American
contract law that parties are free to contract as they see fit,
and the courts are to enforce the agreement as written
absent some highly unusual circumstance, such as a con-
tract in violation of law or public policy. [Burkhardt v
Bailey, 260 Mich App 636, 656-657; 680 NW2d 453 (2004)
(citations and quotation marks omitted).]
These principles apply to a contract to make a mutual
will. Appellant acknowledges that the contract does not
expressly limit the parties from transferring assets.
Unlike some other jurisdictions, “Michigan does not
recognize a cause of action for breach of the implied
covenant of good faith and fair dealing.” Dykema Gos-
sett PLLC v Ajluni, 273 Mich App 1, 13; 730 NW2d 29
(2006) (citations and quotation marks omitted), vacated
in part on other grounds 480 Mich 913 (2007). Regard-
less of whether the transfers were made for the purpose
of avoiding the testamentary disposition, the agreement
did not restrict Carlton from disposing of the assets as
he saw fit.
4
Affirmed.
4
We need not consider appellant’s challenge to respondents’ assertion
that jointly held assets are not assets “possessed” by the decedent at the
time of his death. The complaint did not present this theory; rather, the
complaint concerned whether Carlton breached the agreement by dispos-
ing of the assets during his life. Moreover, the issue is inadequately
briefed by appellant. He raises it in his reply brief and only cites two
cases, neither of which addresses the meaning of “dies possessed.”
2010] In re L
EIX
E
STATE
591
M
C
LEAN v M
C
ELHANEY
Docket No. 290781. Submitted May 11, 2010, at Marquette. Decided
August 26, 2010, at 9:25 a.m.
Donald and Christine McLean, personal representatives of the
estate of their deceased daughter, Karen McLean, brought a
medical malpractice action in the Chippewa Circuit Court
against Robert B. McElhaney, M.D.; a community mental health
services agency, Hiawatha Behavioral Health; Maureen Phenix,
an employee of Hiawatha; and Samuel W. Harma, the chief
executive officer of Hiawatha. After defendants unsuccessfully
sought summary disposition, Hiawatha, Phenix, and Harma
moved for summary disposition on the grounds of governmental
immunity. The court, Nicholas J. Lambros, J., denied their
summary disposition motion, determining that they could not
invoke the defense of governmental immunity because by
providing mental health services to Karen McLean, they were
providing medical care or treatment to a patient and thus fell
under the “medical care or treatment” exception to governmen-
tal immunity, MCL 691.1407(4). Hiawatha, Phenix, and Harma
appealed.
The Court of Appeals held:
1. The trial court correctly concluded that, under the plain
language of MCL 691.1407(4), the exception to governmental immu-
nity is not limited to the care or treatment of physical illness or
disease alone, but includes the care or treatment of mental illness or
disease.
2. For the “medical care or treatment” exception to apply,
the decedent must have been a patient of the defendant. The
trial court correctly determined that Karen McLean had been a
patient of Hiawatha, Phenix, and Harma as required by MCL
691.1407(4). “Patient” includes a person who is under treat-
ment for a behavioral disorder. While Karen McLean was
formally terminated from treatment five weeks before she died,
plaintiffs alleged that she had telephoned and received advice
from Hiawatha’s mental health workers between the time of her
formal discharge from treatment and her death and had been
scheduled to begin outpatient treatment. The trial court prop-
592 289 M
ICH
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592 [Aug
erly concluded that the exception to governmental immunity
applied to Hiawatha and Phenix.
3. The trial court erred by applying the “medical care or
treatment” exception to Harma because plaintiffs did not allege
that Harma had provided medical care to the decedent. Because
the trial court did not determine whether Harma was entitled to
absolute immunity under MCL 691.1407(5) as the highest execu-
tive official of the agency or qualified immunity under MCL
691.1407(2), a remand was necessary to allow the trial court to
address whether Harma was entitled to immunity under either of
those provisions.
Affirmed in part, reversed in part, and remanded.
G
OVERNMENTAL
I
MMUNITY —
E
XCEPTIONS —
M
EDICAL
C
ARE OR
T
REATMENT
E
XCEPTION —
M
ENTAL
I
LLNESS OR
D
ISEASE
.
The “medical care or treatment” exception to governmental immu-
nity is not limited to the medical care or treatment of physical
illness or disease alone, but includes the care or treatment of
mental illness or disease (MCL 691.1407[4]).
White, Clark & Mock (by Daniel W. White) for Donald
and Christine McLean.
Johnson, Rosati, LaBarge, Aseltyne & Field (by
Christopher J. Johnson and Marcelyn A. Stepanski) for
Maureen Phenix, Samuel W. Harma, and Hiawatha
Behavioral Health.
Amicus Curiae:
Cohl, Stoker, Toskey & McGlinchey, P.C. (by Bonnie
G. Toskey), and Allan Falk, P.C. (by Allan S. Falk), for
the Michigan Association of Community Mental Health
Boards.
Before: W
HITBECK
,P.J., and S
AWYER
and B
ORRELLO
, JJ.
B
ORRELLO
,J
.
This case requires this Court to construe
the “medical care or treatment” exception to govern-
mental immunity, MCL 691.1407(4). Defendants appeal
as of right the trial court’s denial of their motion for
2010] M
C
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EAN V
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E
LHANEY
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summary disposition. In denying defendants’ motion,
the trial court concluded that the “medical care or
treatment” exception to governmental immunity ap-
plied and that plaintiffs’ claims against defendants were
therefore not barred by governmental immunity. For
the reasons set forth in this opinion, we affirm in part,
reverse in part, and remand.
I. FACTS AND PROCEDURAL HISTORY
Plaintiffs filed suit against defendants after the de-
cedent, who was their daughter, died at age 30. Plain-
tiffs are the decedent’s personal representatives. Defen-
dants include Hiawatha Behavioral Health (HBH), a
community mental health services agency; Maureen
Phenix,
1
a clinical social worker and employee of HBH;
and Samuel W. Harma, the chief executive officer of
HBH (collectively “defendants”). For approximately 12
years, plaintiffs’ decedent had suffered from a variety of
mental and physical illnesses, including major depres-
sion, bipolar disorder, borderline personality disorder,
anorexia nervosa, bulimia, and hypoglycemia. She had
also been an alcoholic for about five years and had an
extensive psychiatric history that included several sui-
cide attempts. Following her death, plaintiffs filed suit
against defendants,
2
asserting that the decedent died
“from cardiopulmonary arrest secondary to seizures
brought on by her withdrawal from alcohol” after she
“unsuccessfully attempt[ed] detoxification without as-
sistance or intervention by health care professionals.”
Plaintiffs’ complaint alleged ordinary negligence, gross
negligence, intentional misconduct, and civil con-
spiracy. The complaint also asserted that defendants
1
Defendant Maureen Phenix died on May 22, 2007.
2
Plaintiffs’ suit also included Robert B. McElhaney, M.D., as a defen-
dant, but he is not part of this appeal.
594 289 M
ICH
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592 [Aug
provided medical care or treatment to patients and
therefore, under MCL 691.1407(4), were not immune
from liability under the governmental immunity act.
HBH, Phenix, and Harma moved for summary dispo-
sition under MCR 2.116(C)(7) and (8).
3
In relevant part,
defendants argued that HBH and Phenix were entitled
to governmental immunity because they did not provide
plaintiffs’ decedent with “medical care or treatment”
under the “medical care or treatment” exception to
governmental immunity, MCL 691.1407(4), and plain-
tiffs’ decedent was not a patient at the time of her
death; that Phenix and Harma were not grossly negli-
gent, MCL 691.1407(2)(c); and that Harma was entitled
to absolute immunity under MCL 691.1407(5) as the
highest executive official of HBH. Defendants also
argued that the decedent’s own conduct, not their
conduct, was the proximate cause of her death.
Plaintiffs argued that defendants were not entitled to
governmental immunity because the “medical care or
treatment” exception to governmental immunity applied
since “medical care or treatment” includes mental health
care or treatment. Plaintiffs also argued that because the
“medical care or treatment” exception applies to employ-
ees or agents of governmental agencies, Harma was not
entitled to absolute immunity as the highest executive
3
This was defendants’ second motion for summary disposition. Defen-
dants and McElhaney first moved for summary disposition in 2004, arguing
that plaintiffs’ claims were barred by the statute of limitations. The trial
court granted the motion, and this Court affirmed. McLean v McElhaney,
269 Mich App 196; 711 NW2d 775 (2005), rev’d 480 Mich 978 (2007). Our
Supreme Court held the application for leave to appeal in abeyance pending
its decision in Mullins v St Joseph Mercy Hosp, 480 Mich 948; 741 NW2d
300 (2007). After Mullins was decided, our Supreme Court reversed this
Court’s opinion and remanded the “case to the Chippewa Circuit Court for
entry of an order denying the defendants’ motion for summary disposition
and for further proceedings not inconsistent with this order and the order in
Mullins.” McLean, 480 Mich at 978.
2010] M
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EAN V
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595
official of HBH under MCL 691.1407(5). Plaintiffs further
argued that even if, for some reason, the “medical care or
treatment” exception did not apply, Phenix was not im-
mune from suit because her conduct was grossly negligent
and her conduct was the proximate cause of the dece-
dent’s death.
The trial court denied defendants’ motion for summary
disposition, ruling that defendants were providing “medi-
cal care or treatment” to patients within the exception to
governmental immunity and that the decedent was a
patient under the exception. The trial court acknowledged
that the Legislature “could have been more specific in
what they said in this statute,” but concluded that mental
health care and treatment was included in the exception.
Thus, the trial court ruled that defendants did not have
governmental immunity. The trial court did not rule on
whether Harma was absolutely immune as the highest
executive official of HBH or whether Harma and Phenix
were grossly negligent. Following the trial court’s denial of
defendants’ motion, Harma moved for reconsideration,
and the trial court denied the motion.
II. STANDARDS OF REVIEW
This case involves the construction of MCL
691.1407(4). This Court reviews de novo the interpreta-
tion of a statute. Manske v Dep’t of Treasury, 282 Mich
App 464, 468; 766 NW2d 300 (2009). Similarly, the appli-
cability of governmental immunity is a question of law
that this Court reviews de novo. Herman v Detroit, 261
Mich App 141, 143; 680 NW2d 71 (2004). Furthermore,
we also review de novo a trial court’s grant or denial of a
motion for summary disposition. Maiden v Rozwood, 461
Mich 109, 118; 597 NW2d 817 (1999).
Defendants moved for summary disposition under
MCR 2.116(C)(7) and (8). Because the trial court’s
596 289 M
ICH
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592 [Aug
statements on the record and in its order denying sum-
mary disposition indicate that the basis for its ruling was
its determination that the “medical care or treatment”
exception to governmental immunity applied, we review
the trial court’s decision as a denial of defendants’ motion
under MCR 2.116(C)(7). A trial court may grant a motion
for summary disposition under MCR 2.116(C)(7) on the
ground that a claim is barred because of immunity
granted by law. To survive a motion raised under MCR
2.116(C)(7), the plaintiff must allege specific facts war-
ranting the application of an exception to governmental
immunity. Renny v Dep’t of Transp, 270 Mich App 318,
322; 716 NW2d 1 (2006), rev’d in part on other grounds
478 Mich 490 (2007). “The contents of the complaint are
accepted as true unless contradicted by documentation
submitted by the movant.” Maiden, 461 Mich at 119. In
deciding a motion brought pursuant to MCR 2.116(C)(7),
a court may consider the affidavits, pleadings, depositions,
admissions, and other documentary evidence submitted
by the parties. MCR 2.116(G)(5); Holmes v Mich Capital
Med Ctr, 242 Mich App 703, 706; 620 NW2d 319 (2000). If
the pleadings or documentary evidence reveal no genuine
issues of material fact, the court must decide as a matter
of law whether the claim is statutorily barred. Holmes,
242 Mich App at 706.
III. ANALYSIS
A. MEDICAL CARE OR TREATMENT EXCEPTION
TO GOVERNMENTAL IMMUNITY
The issue in this case is whether the “medical care or
treatment” exception to governmental immunity, MCL
691.1407(4), encompasses mental health care or treat-
ment or whether it is limited to care or treatment for
physical illness or disease. Resolving this question re-
quires this Court to construe MCL 691.1407(4). The
2010] M
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EAN V
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597
primary objective in construing a statute is to ascertain
and give effect to the Legislature’s intent. People v
Williams, 475 Mich 245, 250; 716 NW2d 208 (2006). If
the language of the statute is clear and unambiguous,
this Court must presume that the Legislature intended
the meaning clearly expressed and enforce it as written;
further judicial construction is neither permitted nor
required. Id.
The governmental immunity act, MCL 691.1401 et
seq., provides, in relevant part: “Except as otherwise
provided in this act, a governmental agency is immune
from tort liability if the governmental agency is en-
gaged in the exercise or discharge of a governmental
function.” MCL 691.1407(1). The immunity from tort
liability provided by the governmental immunity act is
expressed in the broadest possible language; it extends
to all governmental agencies and applies to all tort
liability when governmental agencies are engaged in
the exercise or discharge of governmental functions.
Nawrocki v Macomb Co Rd Comm, 463 Mich 143, 156;
615 NW2d 702 (2000). Further, the exceptions to gov-
ernmental immunity are to be narrowly construed.
Maskery v Univ of Mich Bd of Regents, 468 Mich 609,
614; 664 NW2d 165 (2003). Because the statutory
exceptions to governmental immunity are to be nar-
rowly construed, this Court must apply a narrow defi-
nition of the undefined phrase “medical care or treat-
ment” in MCL 691.1407(4). See Stanton v Battle Creek,
466 Mich 611, 618; 647 NW2d 508 (2002).
The “medical care or treatment” exception to govern-
mental immunity provides:
This act does not grant immunity to a governmental
agency or an employee or agent of a governmental agency
with respect to providing medical care or treatment to a
patient, except medical care or treatment provided to a
598 289 M
ICH
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592 [Aug
patient in a hospital owned or operated by the department
of community health or a hospital owned or operated by the
department of corrections and except care or treatment
provided by an uncompensated search and rescue opera-
tion medical assistant or tactical operation medical assis-
tant. [MCL 691.1407(4).]
In Briggs v Oakland Co, 276 Mich App 369, 373-374;
742 NW2d 136 (2007), this Court concluded that the
language in the “medical care or treatment” exception
to governmental immunity was clear and unambiguous,
and therefore the Court declined to examine the legis-
lative history behind the current language of the stat-
ute, which was enacted by a 2000 amendment. 2000 PA
318.
4
We likewise conclude that the language in the
“medical care or treatment” exception is plain and
clear. Therefore, in resolving the issue in this case, we
do not examine legislative history or references to
“medical care or treatment” or similar phrases in other
statutes for guidance in interpreting the exception.
5
Rather, we simply consider the plain and clear language
of the “medical care or treatment” exception itself.
The plain language of the exception uses the broad
phrase “medical care or treatment” and does not con-
tain any language restricting or limiting the exception
to medical care or treatment of physical illness or
disease alone. If the Legislature had intended to exclude
care or treatment for mental illness or disease from the
exception, it could have done so by specifically limiting
medical care or treatment to care and treatment for
physical disease or illness, by specifically excluding care
4
Although the statute was further amended after 2000, the relevant
language excepting from immunity those “providing medical care or
treatment” has remained unchanged since its adoption in 2000.
5
Only if “statutory language is ambiguous may we look outside the
statute to ascertain the Legislature’s intent.” People v Morey, 461 Mich
325, 330; 603 NW2d 250 (1999).
2010] M
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and treatment for mental conditions, or by defining
“medical care or treatment” in such a manner as to
exclude care or treatment of mental conditions. The
Legislature did not do so. Our obligation to narrowly
construe the “medical care or treatment” exception to
governmental immunity does not require this Court to
ignore the plain and broad language used by the Legis-
lature or the fact that the Legislature chose not to
exclude care or treatment for mental health infirmities.
“We ‘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.’ ” Bay Co
Prosecutor v Nugent, 276 Mich App 183, 189; 740 NW2d
678 (2007), quoting Roberts v Mecosta Co Gen Hosp, 466
Mich 57, 63; 642 NW2d 663 (2002). The absence of any
limiting language in the exception suggests a recogni-
tion of the interconnectedness of an individual’s physi-
cal and mental health, and this Court must not read a
limitation into the “medical care or treatment” excep-
tion that is not manifest from the plain language of the
statute itself. To do so would be tantamount to the
establishment of a judicially created exception or limi-
tation to the “medical care or treatment” exception to
governmental immunity that does not exist under the
plain and clear language of the statute.
There is additional language in the “medical care or
treatment” exception that also supports the conclusion
that the Legislature did not intend to limit the excep-
tion to the care or treatment of physical illness or
disease alone. MCL 691.1407(4) contains an exception
to the exception, which provides for governmental im-
munity for “medical care or treatment provided to a
patient in a hospital owned or operated by the depart-
ment of community health....” The website for the
Department of Community Health (DCH) indicates
that there are three state-operated psychiatric hospi-
600 289 M
ICH
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tals.
6
This exception to the exception clearly does not
apply in this case because there is no dispute that
plaintiff’s decedent was not a patient in a hospital
owned or operated by the DCH at the time of her death.
However, the plain language of the exception, by which
the Legislature specifically provided for immunity for
medical care or treatment provided to a patient in such
hospitals, is telling. The Legislature would have been
aware that the primary medical care provided by a
psychiatric hospital would be mental health care, al-
though the care and treatment of mental illness or
disease would in some cases require treatment for
physical conditions as well. The fact that the Legisla-
ture specifically provided for governmental immunity
for patients in psychiatric hospitals owned or operated
by the DCH supports the conclusion that the Legisla-
ture otherwise intended for the “medical care or treat-
ment” exception to apply to the medical care or treat-
ment of mental disease or illness.
In order for the “medical care or treatment” exception
to apply, plaintiffs’ decedent must have also been defen-
dants’ “patient.” MCL 691.1407(4). Relying on Saur v
Probes, 190 Mich App 636; 476 NW2d 496 (1991), defen-
dants contend that plaintiffs’ decedent was a “recipient,”
not a patient. In Saur, this Court held that the plaintiff-
patient did not fit into the statutory definition of the term
“recipient” in the Mental Health Code, in a prior version
of MCL 330.1700.
7
Saur, 190 Mich App at 641. However,
even if plaintiffs’ decedent had fit the current definition
6
See Department of Community Health, State-Operated Psychiatric
Hospitals <http://www.michigan.gov/mdch/0,1607,7-132-2941_4868_
4896_-14451--,00.html.>
7
The term “recipient” is now defined in MCL 330.1100c(12). It means,
as it did when Saur was decided, a person who receives mental health
services from a state or community mental health program. 1974 PA 258;
MCL 330.1100c(12). Although the Saur Court provided no reasoning for
2010] M
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601
of a “recipient” in the Mental Health Code, this would
not have precluded plaintiffs’ decedent from also being
a “patient” under the “medical care or treatment”
exception to governmental immunity. The two are not
mutually exclusive. Therefore, we are not persuaded by
defendants’ reliance on Saur.
The term “patient” is not defined in the governmen-
tal immunity act. Stedman’s Medical Dictionary (26th
ed) defines the word “patient” as “[o]ne who is suffer-
ing from any disease or behavioral disorder and is under
treatment for it.” This Court may consult dictionary
definitions of terms that are not defined by statute.
Woodard v Custer, 476 Mich 545, 561; 719 NW2d 842
(2006). The definition of the term “patient” in Sted-
man’s Medical Dictionary includes a person who is
under treatment for a behavioral disorder and supports
our holding that the plain language of MCL 691.1407(4)
(“medical care or treatment”) is broad enough to in-
clude the care or treatment of mental illness or disease.
In their complaint, plaintiffs asserted that the dece-
dent was under defendants’ care “from on or about
January 19, 1996 until December 13, 2000 when treat-
ment services were effectively discontinued although
not formally terminated until January 4, 2001.” Plain-
tiffs’ decedent died on February 14, 2001, which was
after she was formally terminated from treatment with
defendants. To survive defendants’ motion for sum-
mary disposition under MCR 2.116(C)(7), plaintiffs
must have alleged facts warranting the application of
an exception to governmental immunity. Renny, 270
Mich App at 322. Plaintiffs’ assertion that defendants’
treatment of the decedent was formally terminated on
its conclusion, there was no indication that the defendant in that case
provided services under contract with the state or a community mental
health program.
602 289 M
ICH
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January 4, 2001, which was approximately five weeks
before she died, suggests that decedent was not a
“patient” at the time of her death. However, elsewhere
in their complaint, plaintiffs asserted that after her
treatment was formally terminated, plaintiffs’ decedent
made more than 50 telephone calls to HBH’s crisis
intervention workers “seeking emergency counseling
for her deepening depression, feelings of hopelessness,
eating disorder and alcoholism.” During one of these
telephone calls, plaintiffs’ decedent advised the crisis
worker that she was feeling suicidal. The complaint also
asserted that employees of HBH “completed or ap-
proved an ‘Individual Plan of Service’ which indicated
that [the decedent] suffered from ‘major depression and
alcohol abuse.’ ” In addition, plaintiffs’ complaint as-
serted that plaintiffs’ decedent was scheduled to begin
outpatient therapy for mental illness on February 15,
2001.
8
Under these circumstances, plaintiffs established
an issue of fact regarding whether the decedent was a
“patient” under MCL 691.1407(4) at the time of her
death, notwithstanding their acknowledgement in the
complaint that the decedent was formally discharged
from treatment on January 4, 2001.
9
8
Elsewhere in the complaint, plaintiffs asserted that outpatient
therapy was scheduled to begin on April 15, 2001.
9
We observe that the definition of “patient” in Stedman’s Medical
Dictionary does not contain any requirement of a formal arrangement for
a person to be considered “under treatment.” Furthermore, because of
the nature of mental illness and addictions, there is often no discrete
event marking a person’s recovery from such a condition. Often, recovery
is a gradual and lifelong process, marked by progress and setbacks, that
requires continuous care and treatment. Although not in the context of a
mental illness or addiction, our Supreme Court has recognized that
“[p]atients are often discharged from hospitals when their conditions still
require active treatment under the daily direction or supervision of a
physician.” Tryc v Michigan Veterans’ Facility, 451 Mich 129, 137 n 8; 545
NW2d 642 (1996).
2010] M
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603
Although we hold that the trial court properly con-
cluded that the “medical care or treatment” exception to
governmental immunity includes care and treatment for
mental illness or disease and that plaintiffs’ decedent was
a “patient” under the exception, we hold that the trial
court erred by concluding that the exception applied to
Harma. While plaintiffs’ complaint contains factual alle-
gations that HBH and Phenix provided medical care to
plaintiff’s decedent, there were no factual allegations that
Harma did so. Therefore, while the trial court properly
concluded that the “medical care or treatment” exception
applied to HBH and Phenix, it erroneously concluded that
the exception also applied to Harma.
B. INDIVIDUAL IMMUNITY
In ruling that the “medical care or treatment” excep-
tion applied and that defendants were therefore not
immune from liability, the trial court did not rule on
whether Harma was individually immune under MCL
691.1407(5) as the chief executive officer of HBH, or
whether Harma and Phenix were entitled to individual
immunity under MCL 691.1407(2). In light of our holding
that the trial court erred by concluding that the “medical
care or treatment” exception applied to Harma given the
absence of any factual allegations in plaintiffs’ complaint
that Harma provided medical care or treatment to plain-
tiffs’ decedent, we remand this matter for the trial court to
address whether Harma was entitled to absolute immu-
nity under MCL 691.1407(5) or qualified immunity under
MCL 691.1407(2).
10
Odom v Wayne Co, 482 Mich 459,
10
We note that if the trial court determines that Harma was entitled to
absolute immunity under MCL 691.1407(5), it need not also determine
whether he was entitled to qualified immunity under MCL 691.1407(2).
See Nalepa v Plymouth-Canton Community Sch Dist, 207 Mich App 580,
587-589; 525 NW2d 897 (1994), result only aff’d 450 Mich 934 (1995).
604 289 M
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PP
592 [Aug
479-480; 760 NW2d 217 (2008). However, because the trial
court properly concluded that the “medical care or treat-
ment” exception applied to Phenix, there is no need for
the trial court to determine whether she was entitled to
qualified immunity under MCL 691.1407(2).
11
Affirmed in part, reversed in part, and remanded for
proceedings consistent with this opinion. No taxable
costs under MCR 7.219, neither party having prevailed
in full. We do not retain jurisdiction.
11
MCL 691.1407(2) applies only in the absence of other applicable
statutory provisions. Grahovac v Munising Twp, 263 Mich App 589, 597;
689 NW2d 498 (2004).
2010] M
C
L
EAN V
M
C
E
LHANEY
605
AUTO CLUB GROUP INSURANCE COMPANY v BOOTH
Docket No. 290403. Submitted April 13, 2010, at Detroit. Decided August
31, 2010, at 9:00 a.m.
Auto Club Group Insurance Company brought an action in the
Macomb Circuit Court against John A. Booth and Michael Bordo,
seeking a declaratory judgment that a homeowner’s insurance
policy issued by Auto Club to Booth did not provide coverage for
injuries received by Bordo when Booth shot him with a handgun
that Booth knew had a loaded magazine but thought did not have
a shell in the chamber. Auto Club conceded for purposes of a
motion for summary disposition that the shooting was accidental,
that Booth had not intended or expected injury to Bordo, and that
the injury was covered under the “occurrence/accident” portion of
the policy, but contended that coverage was excluded under the
policy’s criminal-act exclusion. Booth had pleaded no contest to a
misdemeanor charge of careless, reckless, or negligent discharge of
a firearm resulting in injury, MCL 752.861, and had been sen-
tenced to probation. The court, Peter J. Maceroni, J., denied Auto
Club’s motion for summary disposition and granted summary
disposition in favor of Booth and Bordo. The court applied the
two-pronged test in Allstate Ins Co v McCarn (After Remand), 471
Mich 283 (2004), and held that although Booth had committed an
intentional act, a reasonable person would not have expected
bodily harm to result when Booth pulled the trigger of what he
thought was an unloaded gun. Auto Club appealed.
The Court of Appeals held:
1. Although Booth pleaded no contest to the charge of violating
MCL 752.861, his no-contest plea alone did not provide conclusive
proof that he committed a crime. Nevertheless, the facts that
Booth admitted established that his conduct undisputedly consti-
tuted at least one criminal act. There was sufficient evidence to
establish Booth’s carelessness, which in turn was sufficient to
establish a misdemeanor under MCL 752.861.
2. McCarn was a plurality opinion and not binding under stare
decisis. Moreover, the criminal-act exclusion considered by the
Supreme Court in McCarn was notably different from the
criminal-act exclusion in Auto Club’s policy because Auto Club’s
606 289 M
ICH
A
PP
606 [Aug
policy did not contain the reasonable-expectation clause found in
the policy in McCarn. The trial court erred when it applied the
two-pronged test employed in McCarn to determine whether the
exclusion in Auto Club’s policy applied to the shooting by Booth.
Instead the criminal-act exclusion contained in Auto Club’s policy
did apply to Booth’s actions, and Auto Club was entitled to
summary disposition.
3. The criminal-act exclusion was not contrary to public policy
because the insurance policy language was clear and unambiguous
and Auto Club was free to limit its liability. The order granting
summary disposition in favor of Booth and Bordo must be re-
versed, and the case must be remanded for the entry of an order of
summary disposition in favor of Auto Club.
Reversed and remanded.
Hom, Killeen, Siefer, Arene & Hoehn (by Michael J.
Schaefer) and Gross & Nemeth, P.L.C. (by Mary T.
Nemeth), for Auto Club Group Insurance Company.
Femminineo Attorneys, P.L.L.C. (by David C. Fem-
minineo), for John A. Booth.
Thomas P. Casey, P.C. (by Thomas P. Casey), and
Bendure & Thomas (by Mark R. Bendure) for Michael
Bordo.
Before: M. J. K
ELLY
,P.J., and T
ALBOT
and W
ILDER
,JJ.
W
ILDER,
J. Plaintiff appeals as of right the trial court’s
order granting summary disposition in defendants’ fa-
vor and holding that defendants were entitled to cover-
age under defendant John Allen Booth’s homeowner’s
insurance policy. We reverse and remand for the entry
of summary disposition in plaintiff’s favor. This appeal
has been decided without oral argument pursuant to
MCR 7.214(E).
This dispute concerns coverage for a personal injury
that resulted from a shooting. According to deposition
testimony, defendant Michael Bordo had been living at
2010] A
UTO
C
LUB V
B
OOTH
607
Booth’s home and paying rent for approximately six
months. On the day of the shooting, Booth, Bordo, and
Bordo’s friends were socializing in the home. Booth,
who admitted that he was intoxicated, entered into a
conversation with Bordo about how much pain he could
endure. During the conversation, Booth went to his gun
safe and retrieved his automatic handgun. The ammu-
nition clip, containing 10 shells, was in the pistol. Booth
pulled back the slide, allegedly to make sure that the
gun was not loaded, and saw that no shell was in the
chamber. However, according to Booth, he inadvert-
ently loaded a shell from the ammunition clip into the
chamber when he released the slide mechanism. Booth
walked into the kitchen and pointed the gun at the
ceiling. Bordo could not see whether the gun contained
an ammunition clip. Booth grabbed Bordo’s left hand,
held it against the kitchen table, and placed the barrel
of the gun against Bordo’s left wrist. Booth testified
that he did not recall pulling the trigger, but admitted
that he must have done so. Bordo did not see Booth pull
the trigger, and did not immediately realize that he had
been shot. Bordo sustained substantial and permanent
damage to his wrist and hand.
Booth was charged with the felony of discharging a
firearm while under the influence of alcohol resulting in
a serious impairment of bodily function, MCL
750.237(3). He pleaded no contest to a reduced misde-
meanor charge of careless, reckless, or negligent dis-
charge of a firearm resulting in injury, MCL 752.861,
and received a sentence of two years’ probation.
Bordo filed suit against Booth, alleging that Booth
negligently caused Bordo’s injuries. Plaintiff then filed
this action for a declaratory judgment and moved for
summary disposition on the ground that Booth’s home-
owner’s policy with plaintiff did not cover Booth’s
608 289 M
ICH
A
PP
606 [Aug
actions. Plaintiff conceded for purposes of the motion that
the shooting was accidental, that Booth had not intended
or expected injury to Bordo, and that the injury was
covered under the “occurrence/accident” portion of plain-
tiff’s policy. Plaintiff argued, however, that regardless,
coverage was excluded under the policy’s “criminal act”
exclusion. Pursuant to MCR 2.116(I)(2), the trial court
granted summary disposition in favor of defendants. The
trial court reasoned that the criminal-act exclusion in the
instant policy contained language similar to the criminal-
act exclusion language in Allstate Ins Co v McCarn (After
Remand), 471 Mich 283; 683 NW2d 656 (2004) (McCarn
II), and that under the two-pronged test in McCarn II,
while an intentional act was committed in the instant
case, thus satisfying the first prong, the second prong of
McCarn II was not satisfied because, in the trial court’s
judgment, a reasonable person would not have expected
bodily harm to result when Booth pulled the trigger of
what he thought was an unloaded gun. This appeal
ensued.
Plaintiff argues that the trial court erred when it
determined that plaintiff’s criminal-act exclusion did not
preclude coverage and further argues that plaintiff was
entitled to summary disposition. We agree. We review
summary disposition decisions de novo. Rory v Continen-
tal Ins Co, 473 Mich 457, 464; 703 NW2d 23 (2005).
Summary disposition is appropriate if the record contains
no material factual issues and the moving party is entitled
to judgment as a matter of law. MCR 2.116(C)(10). We
consider the entire record, examining the evidence in the
light most favorable to the nonmoving party. Corley v
Detroit Bd of Ed, 470 Mich 274, 278; 681 NW2d 342
(2004). We also review de novo legal questions concerning
the interpretation of insurance contracts. Rory, 473 Mich
at 464.
2010] A
UTO
C
LUB V
B
OOTH
609
When deciding an insurance-coverage issue, we must
apply the terms of the policy. Frankenmuth Mut Ins Co
v Masters, 460 Mich 105, 111; 595 NW2d 832 (1999),
citing Upjohn Co v New Hampshire Ins Co, 438 Mich
197, 207; 476 NW2d 392 (1991). Unless the policy terms
are ambiguous, we will enforce the policy as written.
Masters, 460 Mich at 111. Here, neither party argues
that the terms of the exclusion at issue are ambiguous.
Accordingly, we apply the policy as written. Citizens Ins
Co v Pro-Seal Serv Group, Inc, 477 Mich 75, 82; 730
NW2d 682 (2007), citing Henderson v State Farm Fire
& Cas Co, 460 Mich 348, 353-354; 596 NW2d 190
(1999). “While exclusions are strictly construed in favor
of the insured, this Court will read the insurance
contract as a whole to effectuate the intent of the
parties and enforce clear and specific exclusions.” Ten-
neco Inc v Amerisure Mut Ins Co, 281 Mich App 429,
444; 761 NW2d 846 (2008). The insurance company has
the burden of demonstrating that an exclusion applies.
Heniser v Frankenmuth Mut Ins Co, 449 Mich 155, 161
n 6; 534 NW2d 502 (1995).
The relevant exclusions in plaintiff’s policy provide:
Under [liability insurance coverages], 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
610 289 M
ICH
A
PP
606 [Aug
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, includ-
ing 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[.]
Plaintiff asserts that Booth committed a criminal act,
that the criminal-act exclusion in ¶ 10 applies to
Booth’s criminal act, and that summary disposition in
its favor was warranted. While Booth pleaded no con-
test to a charge of violating MCL 752.861, his no-
contest plea alone does not provide conclusive proof
that Booth committed a crime. Akyan v Auto Club Ins
Ass’n, 207 Mich App 92, 98; 523 NW2d 838 (1994);
Akyan v Auto Club Ins Ass’n (On Rehearing), 208 Mich
App 271, 273-277; 527 NW2d 63 (1994). Nevertheless,
the facts admitted by Booth establish that his conduct
undisputedly constituted at least one criminal act.
MCL 752.861 provides, “Any person who, because of
carelessness, recklessness or negligence, but not wil-
fully or wantonly, shall cause or allow any firearm
under his immediate control, to be discharged so as to
kill or injure another person, shall be guilty of a
misdemeanor....”Therecord plainly established that
Booth had control of the gun and that the gun was
discharged. The record also established that at the time
2010] A
UTO
C
LUB V
B
OOTH
611
the gun was discharged, Booth’s actions were at least
careless. Booth testified that he knew that the gun had
a loaded magazine. He also admitted that he was
familiar with the firearm, which was his own, and that
he had had weapons training in the military and in
preparation for his license to carry a concealed weapon.
Booth admitted that he was told on numerous occasions
never to point a gun at someone and was also told to
always assume that a gun was loaded. He also admitted
that he decided to get his gun and hold the barrel
against Bordo’s wrist, acting on impulse, while intoxi-
cated. Booth admitted that he must have pulled the
trigger, although he did not remember doing so. Taken
together, these facts were sufficient to establish care-
lessness, which in turn was sufficient to establish a
misdemeanor under MCL 752.861.
1
Bordo argues that the trial court correctly applied
the two-pronged test in McCarn II and found that the
exclusion did not apply on the basis that Booth had
reasonably believed that the gun was not loaded. Bor-
do’s reliance on the McCarn II decision is unfounded.
In Allstate Ins Co v McCarn, 466 Mich 277, 279; 645
NW2d 20 (2002) (McCarn I), the insureds sought cov-
erage for an unintended shooting death that occurred
on their property. The death occurred when two teen-
aged boys were playing with a shotgun. One boy, mis-
takenly believing that the gun was unloaded, pointed
the gun at the other boy and intentionally pulled the
trigger, killing him. The personal representative of the
dead boy’s estate sued the insureds. The Court in
McCarn I addressed whether the shooting was a cov-
1
We also note that Bordo acknowledged that “Booth’s conduct in
discharging a firearm he did not believe was loaded, was negligent and
careless....”Thus, Bordo admitted that even if Booth’s actions were not
intentional, they were still criminal under MCL 752.861.
612 289 M
ICH
A
PP
606 [Aug
ered occurrence. Id. at 282. In McCarn II, a plurality of
our Supreme Court determined that coverage for the
shooting was not excluded under the policy’s criminal-act
exclusion. The plurality found that the exclusion’s lan-
guage directed it to use a two-pronged test. “There is no
insurance coverage if, first, the insured acted either inten-
tionally or criminally, and second, the resulting injuries
were the reasonably expected result of an insured’s inten-
tional or criminal act.” McCarn II, 471 Mich at 289-290
(opinion by T
AYLOR
, J.). While the plurality determined
that the first prong of the test had been met, it found that
the second prong had not been met because the shooter
believed that the gun was unloaded and thus believed the
gun could not fire. Id. at 291.
Defendants argue that this case presents legally iden-
tical facts and thus the trial court’s decision to find that
plaintiff’s criminal-act exclusion did not bar coverage was
correct. However, plurality opinions in which no majority
of the participating justices agree with respect to the
reasoning for the holding are not generally considered
authoritative interpretations that are binding under the
doctrine of stare decisis. See Negri v Slotkin, 397 Mich
105, 109; 244 NW2d 98 (1976). Moreover, as plaintiff
points out, the exclusion in McCarn II was significantly
different from the exclusion at issue here. In McCarn, the
pertinent criminal-act exclusion provided:
“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. This exclusion applies even if:
“a) such insured person lacks the mental capacity to
govern his or her conduct;
“b) such bodily injury or property damage is of a
different kind or degree than intended or reasonably ex-
pected; or
2010] A
UTO
C
LUB V
B
OOTH
613
“c) such bodily injury or property damage is sustained
by a different person than intended or reasonably expected.
“This exclusion applies regardless of whether or not
such insured person is actually charged with, or convicted
of a crime.” [McCarn II, 471 Mich at 289.]
Plaintiff argues that this “hybrid” criminal-act exclu-
sion is notably different from plaintiff’s “pure”
criminal-act exclusion and that the trial court erred
when it applied the two-pronged test in McCarn II to
determine whether the exclusion in the instant case
applied to the shooting. We agree. The exclusion in
McCarn II was significantly different from the criminal-
act exclusion here. Plaintiff’s policy exclusion for crimi-
nal acts does not contain the reasonable-expectation
clause found in McCarn II, and we conclude that it
applies to Booth’s actions.
Defendants also contend that, given the discussion in
McCarn II concerning the purpose and societal benefits
of insurance coverage, see McCarn II, 471 Mich at 292,
this Court should find that the criminal-act exclusion in
this case is overbroad, is against public policy, and
should be construed to provide coverage for Booth’s
negligent, but unintentional conduct.
However, this Court has previously rejected this
aspect of defendants’ arguments, in a case discussing
substantially similar exclusion language. See Auto Club
Group Ins Co v Daniel, 254 Mich App 1; 658 NW2d 193
(2002). The injured party in Daniel also contended that
public policy favored insurance coverage. Id. at 4-5. In
explicitly rejecting that contention, this Court con-
cluded:
The criminal act exclusion is not contrary to public
policy because the policy language is clear and unambigu-
ous and [the insurance company] is free to limit its liabil-
ity....Wefurther note that, as a matter of public policy, an
614 289 M
ICH
A
PP
606 [Aug
insurance policy that excludes coverage for a person’s
criminal acts serves to deter crime, while a policy that
provides benefits to those who commit crimes would en-
courage it. [Id.]
Our Supreme Court has determined that “the explicit
‘public policy’ of Michigan is that the reasonableness of
insurance contracts is a matter for the executive, not
judicial, branch of government.” Rory, 473 Mich at 476.
For these reasons, we conclude that the trial court
erred when it granted summary disposition to defen-
dants concerning the applicability of the criminal-act
exclusion contained in Booth’s homeowner’s insurance
policy. Plaintiff is entitled to summary disposition.
Reversed and remanded for further proceedings con-
sistent with this opinion. We do not retain jurisdiction.
2010] A
UTO
C
LUB V
B
OOTH
615
BENNETT v MACKINAC BRIDGE AUTHORITY
Docket No. 287628. Submitted February 3, 2010, at Lansing. Decided
August 31, 2010, at 9:05 a.m.
Ricky S. Bennett was injured while working as a painter on the
Mackinac Bridge. He initially sought workers’ compensation benefits
from his direct employer, Allstate Painting Company. Allstate did not
appear in the action, and the magistrate awarded Bennett an open
award of benefits. Bennett was unable to collect on the award from
Allstate, which did not have workers’ compensation insurance, and
he began a second action seeking benefits from his purported statu-
tory employers, American Painting Company, Inc., and the Mackinac
Bridge Authority. Citing the doctrine of res judicata, the magistrate
dismissed Bennett’s claims against American Painting and the au-
thority. The Workers’ Compensation Appellate Commission (WCAC)
affirmed in a 2-1 decision. Bennett sought leave to appeal, which the
Court of Appeals denied in an unpublished order entered December
29, 2008. Bennett then sought leave to appeal in the Michigan
Supreme Court. In lieu of granting leave, the Supreme Court re-
manded the case to the Court of Appeals for consideration as on leave
granted. 483 Mich 1031 (2009).
The Court of Appeals held:
1. Res judicata applies in workers’ compensation proceedings.
The Legislature did not, however, include in MCL 418.171 lan-
guage requiring the joinder of an injured employee’s direct and
statutory employers in a single action. The magistrate and the
WCAC erred by applying the judicially created doctrine of res
judicata to bar plaintiff’s action against his purported statutory
employers because doing so impermissibly subverted the intent of
the Legislature by effectively reading a rule of mandatory party
joinder into the text of MCL 418.171.
2. Although it may have been unwise for plaintiff to believe
that Allstate would have sufficient assets to pay his workers’
compensation benefits even though the company did not have
workers’ compensation insurance, it was not improper for
plaintiff to initially proceed against Allstate alone. MCL 418.863
allows an injured employee to present an order awarding
workers’ compensation benefits to the circuit court, and any
616 289 M
ICH
A
PP
616 [Aug
judgment the court renders in accordance with the award may
be executed against an employer that failed to purchase work-
ers’ compensation insurance or act as a self-insurer as required
by MCL 418.611.
3. An injured employee may not invoke the doctrine of res
judicata offensively against his or her statutory employers in a
subsequent proceeding if those statutory employers did not have
adequate notice of the previous proceeding against the direct
employer.
Reversed and remanded to the magistrate for reinstatement of
plaintiff’s claim.
W
ORKERS
’C
OMPENSATION —
R
ES
J
UDICATA —
J
OINDER OF
P
ARTIES —
S
TATUTORY
E
MPLOYERS —
D
IRECT
E
MPLOYERS
.
An injured employee may bring separate workers’ compensation
actions against his or her direct employer and statutory employer
without joining all potentially liable parties in one proceeding, and
the doctrine of res judicata may not be applied to bar the
employee’s action against his or her statutory employer even
though his or her direct employer has already been ordered to pay
benefits in a separate action (MCL 418.171).
Daryl Royal and Moher & Cannello, P. C . (by Timothy
S. Moher), for Ricky S. Bennett.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Morrison Zack, Assistant Attor-
ney General, for the Mackinac Bridge Authority.
Varga & Varga, P. C . (by Judith Fleming Varga), for
American Painting Company, Inc., and Amerisure In-
surance Company.
Before: K. F. K
ELLY,
P.J., and J
ANSEN
and Z
AHRA
,JJ.
J
ANSEN
, J. In this workers’ compensation case, plain-
tiff appeals as on leave granted
1
the decision of the
1
This appeal is before us on remand from our Supreme Court for
consideration as on leave granted. Bennett v Mackinac Bridge Auth, 483
Mich 1031 (2009).
2010] B
ENNETT V
M
ACKINAC
B
RIDGE
A
UTH
617
Workers’ Compensation Appellate Commission (WCAC)
affirming the magistrate’s dismissal of his claim against
defendants, the Mackinac Bridge Authority (the Author-
ity) and American Painting Company, Inc., on the ground
of res judicata. We reverse the decision of the WCAC and
remand this case to the magistrate for reinstatement of
plaintiff’s claim against defendants
2
consistent with this
opinion.
I
For more than 25 years, plaintiff worked as a
painter on the Mackinac Bridge. Throughout that
time, he worked for various employers. In May 2005,
plaintiff was working for Allstate Painting Company,
Inc. While at work on May 6 and 9, 2005, plaintiff
injured his right knee. Allstate did not have workers’
compensation insurance.
Although plaintiff was apparently aware that his em-
ployer lacked workers’ compensation insurance at the
time, he nonetheless filed a petition seeking benefits from
Allstate. Allstate did not appear in the action. On May 26,
2006, the magistrate granted plaintiff an open award of
benefits. Allstate did not appeal the magistrate’s decision.
However, plaintiff was unable to collect under the magis-
trate’s award.
Plaintiff thereafter filed the instant action seeking
benefits from American Painting and the Authority pur-
suant to § 171 of the Worker’s Disability Compensation
Act (WDCA),
3
MCL 418.171, the statutory employment
provision. MCL 418.171(1) provides:
2
Amerisure Insurance Company is involved in this appeal only indirectly
as American Painting’s insurer. We therefore use the term “defendants” to
refer to American Painting and the Authority only.
3
MCL 418.101 et seq.
618 289 M
ICH
A
PP
616 [Aug
If any employer subject to the provisions of this act, in
this section referred to as the principal,
[
4
]
contracts with
any other person, in this section referred to as the contrac-
tor, who is not subject to this act or who has not complied
with the provisions of [MCL 418.611], and who does not
become subject to this act or comply with the provisions of
[MCL 418.611] prior to the date of the injury or death for
which claim is made for the execution by or under the
contractor of the whole or any part of any work undertaken
by the principal, the principal shall be liable to pay to any
person employed in the execution of the work any compen-
sation under this act which he or she would have been
liable to pay if that person had been immediately employed
by the principal. If compensation is claimed from or pro-
ceedings are taken against the principal, then, in the
application of this act, reference to the principal shall be
substituted for reference to the employer, except that the
amount of compensation shall be calculated with reference
to the earnings of the person under the employer by whom
he or she is immediately employed. A contractor shall be
deemed to include subcontractors in all cases where the
principal gives permission that the work or any part
thereof be performed under subcontract.
Defendants requested, among other things, that the
magistrate dismiss plaintiff’s § 171 claim against them
because res judicata barred plaintiff’s second action. In
response, plaintiff argued that res judicata did not bar
his second action because no mandatory joinder of
parties exists in workers’ compensation cases, because
defendants had not been parties to the first action, and
because defendants were not in privity with Allstate.
The magistrate acknowledged that a plaintiff is not
generally required to bring all possible workers’ com-
pensation claims in one single action. Nevertheless, she
4
“Principals subject to workers’ compensation liability under [MCL
418.171] are commonly called ‘statutory employers.’ ” Smith v Park
Chem Co, 154 Mich App 180, 183; 397 NW2d 260 (1986).
2010] B
ENNETT V
M
ACKINAC
B
RIDGE
A
UTH
619
noted that a broad application of res judicata would bar
certain workers’ compensation claims that a plaintiff
could have brought, but did not bring, in the first action.
The magistrate concluded that plaintiff could have
brought his § 171 claim against defendants in the earlier
action:
The statutory employer theory was available for pursuit in
the original litigation against Allstate Painting...ifPlaintiff
had “exercised reasonable diligence” and added the alleged
statutory employers to that litigation. Plaintiff testified at his
first trial that he has worked painting the Mackinaw Bridge
for approximately 27 years and has worked for a number of
different employers, whether private companies or the State
of Michigan directly. That fact, in combination with Plaintiff’s
knowledge that Allstate Painting lacked Michigan Worker’s
Compensation Insurance coverage would give a reasonable
man pause to consider exploring the theory of statutory
employment to identify a contractor with insurance coverage.
Therefore, reasonable diligence by Plaintiff and his counsel
would have revealed that the State of Michigan and A[meri-
can] Painting had insurance coverage and could have and
should have been added to the original litigation.
Additionally, the litigation Plaintiff advanced against
Allstate Painting is the same transaction for which Plain-
tiff is now trying to advance against American Painting Inc.
and Mackinaw Bridge Authority....[T]he same facts are
being asserted in the case against American Painting and
Mackinaw Bridge Authority as were asserted against All-
state Painting. These facts arise out of the same time,
space, and origin. The only difference is the motivation.
Plaintiff admits in his brief that the motivation for
pursuing the current litigation against American Painting
and Mackinaw Bridge Authority is that Allstate Painting
has failed to pay benefits pursuant to the Open Award
authored by [the initial magistrate]. Plaintiff is now seek-
ing enforcement of the Order through Circuit Court. This
is not a sufficient legal explanation for Plaintiff’s failure to
add American Painting and Mackinaw Bridge Authority to
the original litigation against Allstate Painting.
620 289 M
ICH
A
PP
616 [Aug
“Res judicata bars every claim arising from the same
transaction that the parties, exercising reasonable dili-
gence, could have raised but did not.” Adair [v Michigan,
470 Mich 105, 123; 680 NW2d 386 (2004)]. For the reasons
outlined above, the pending litigation of Ricky S. Bennett
versus American Painting and Mackinaw Bridge Authority
is hereby dismissed pursuant to res judicata.
Plaintiff appealed the magistrate’s dismissal of his
claim to the WCAC, which affirmed in a 2-1 decision.
The WCAC majority agreed with the magistrate’s de-
termination that res judicata barred plaintiff’s action
against the alleged statutory employers:
We agree with the magistrate. The claims against the
direct employer and the statutory employers are virtually
the same. Both claims involve the same two alleged knee
injuries, occurring on the same two alleged dates. They
involve the same medical, disability and wage loss proofs.
Both claims seek weekly wage loss benefits and medicals
benefits for the same time periods. The claims against the
direct employer and the statutory employers certainly
would have made a convenient trial unit.
The plaintiff does not even argue there was an impedi-
ment to adding the statutory employers in the first litiga-
tion. He knew the direct employer was uninsured, but did
not add the statutory employers until he was unable to
collect against the uninsured employer. [Bennett v Macki-
nac Bridge Auth, 2008 Mich ACO 163, p 9.]
In his arguments to the WCAC, plaintiff relied on Viele
v DCMA, 167 Mich App 571; 423 NW2d 270 (1988),
modified in part on other grounds 431 Mich 898 (1988), in
which this Court ruled that res judicata did not bar the
plaintiff’s claim against his alleged statutory employers
even though his direct employer had already been ordered
to pay benefits after a separate hearing. However, the
WCAC majority distinguished the facts of the present case
from those presented in Viele:
2010] B
ENNETT V
M
ACKINAC
B
RIDGE
A
UTH
621
We do not believe Viele supports...plaintiff’s position.
Viele involved a situation where the plaintiff tried to
proceed against the direct employer and the statutory
employers. The Bureau [of Workers’ Disability Compensa-
tion] decided to proceed to trial against the direct employer,
even though the plaintiff had filed an amended petition
adding the statutory employers before trial. The Court
noted the plaintiff was not able to pursue the claims
against the statutory employers in [the] first trial. The
reason the plaintiff could not have “raised” the statutory
employment issue in the first trial was because the Bureau
bifurcated the issues by insisting on separate trials.
There is another reason we cannot accept [dissenting
Commissioner Martha M. Glaser’s] reasoned interpretation
of Viele. If the only reason the Court in Viele ruled in the
plaintiff’s favor was because proving statutory employment
required a bit more evidence than proving direct employ-
ment, then the Court would have been violating the “same
transaction” test outlined in Gose [v Monroe Auto Equip Co,
409 Mich 147; 294 NW2d 165 (1980)]. We do not believe the
decision in Viele was contrary to the Gose “same transaction”
test. To the contrary, the Viele decision cites and follows the
Gose standard. We believe [Commissioner Glaser’s] interpre-
tation of Viele forces Viele into conflict with Gose and the later
decision in Adair, by adopting a “same evidence” standard.
[Bennett, 2008 Mich ACO 163, at 9-10.]
WCAC Commissioner Glaser dissented, concluding
that plaintiff’s subsequent § 171 claim against defen-
dants was not identical to the claim raised against
Allstate in the first action:
[T]he instant claim is not identical for res judicata
purposes because the facts or evidence essential to [the]
maintenance of the two claims is not the same. In the
initial action against Allstate, plaintiff was required to
present evidence to prove that he was disabled as a result
of a work injury. In the instant action, plaintiff is required
first to present evidence to prove that either or both of
these defendants are statutory employers. [Id.at5.]
622 289 M
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Commissioner Glaser also disputed the WCAC majori-
ty’s determination that Viele was distinguishable:
Plaintiff cannot claim res judicata on the merits of the
case finding him to be compensably disabled, so he would
once again have to present evidence to prove compensabil-
ity. While some of the required evidence may overlap
between the two claims, they are not identical.
The Viele Court explained that the party seeking the
subsequent litigation would not be able to assert res
judicata to protect a previous award. However, if plaintiff
had not established a compensable disability in the first
case, defendants would be able to claim res judicata, so that
plaintiff would not be able to obtain a different result, by
filing multiple claims.
The Viele Court also relied on the absence of any
language in § 171 which could be read as mandating
joinder of the alleged statutory employers with the direct
employer. In fact, § 171 refers to a claim taken against the
principal and indicates that the “principal shall be substi-
tuted for reference to the employer...” [sic] This language
could be read as indicating a separate cause of action.
The Supreme Court modified Viele...but left standing
its holdings referenced above. Viele v DCMA, 431 Mich 898
(1988)[.] There are no subsequent, published Court of
Appeals decisions which deviate from Viele.[Id. at 5-6.]
Plaintiff filed an application for leave to appeal the
decision of the WCAC, which this Court initially denied.
Our Supreme Court then remanded the matter to this
Court for consideration as on leave granted.
II
Appellate review of WCAC decisions is limited.
Rakestraw v Gen Dynamics Land Sys, Inc, 469 Mich 220,
224; 666 NW2d 199 (2003). “In the absence of fraud, we
must consider the WCAC’s findings of fact conclusive if
there is any competent evidence in the record to support
them.” Id.; see also MCL 418.861a(14).
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On the other hand, questions of law in workers’ com-
pensation cases are reviewed de novo. MCL 418.861; MCL
418.861a(14); DiBenedetto v West Shore Hosp, 461 Mich
394, 401-402; 605 NW2d 300 (2000). We review de novo as
a question of law whether res judicata applies in a given
case. Ditmore v Michalik, 244 Mich App 569, 574; 625
NW2d 462 (2001). Questions of statutory interpretation
are also reviewed de novo on appeal. Brackett v Focus
Hope, Inc, 482 Mich 269, 275; 753 NW2d 207 (2008);
Rakestraw, 469 Mich at 224.
III
Much of the actual dispute in this case arises out of the
parties’ varying interpretations of this Court’s opinion in
Viele.InViele, 167 Mich App at 574, the plaintiff filed
separate petitions for workers’ compensation benefits
against his direct employer and his alleged statutory
employers. However, “[f]or reasons unclear from the
record,” the plaintiff’s claim against his direct employer
and his claim against his alleged statutory employers were
not consolidated, and the case initially proceeded to trial
against the direct employer only. Id. at 574-575. Following
trial, the direct employer was ordered to pay benefits. Id.
at 575. Shortly thereafter, the direct employer filed for
bankruptcy. Id.
The case subsequently proceeded to trial on plaintiff’s
§ 171 claim against his alleged statutory employers, and
plaintiff was again awarded benefits. Id. at 575-576. The
alleged statutory employers appealed the award to the
Workers’ Compensation Appeal Board (WCAB).
5
Id.at
576. The WCAB ruled that res judicata barred the subse-
quent trial on the plaintiff’s § 171 claim, as well as the
5
The WCAB was the “predecessor appellate body to the WCAC....”
Sell v Mitchell Corp of Owosso, 241 Mich App 235, 241; 615 NW2d 748
(2000). The WCAB has been eliminated. Former MCL 418.266.
624 289 M
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award of benefits emanating from that trial. Id. at 576-
577. Consequently, the WCAB ruled that the plaintiff
could collect benefits from his direct employer only, and
not from any of his alleged statutory employers. Id. at 577.
On appeal, this Court held that the WCAB had erred
by ruling that res judicata barred the subsequent pro-
ceedings on plaintiff’s § 171 claim. Id. at 578-579. This
Court reviewed the relevant text of § 171, which dis-
cusses the relationship between a statutory employer
and a direct employer. Id. at 580. On the basis of the
statutory text, the Viele Court held that a “statutory
employer is in privity with the direct employer and may
properly invoke the doctrine of res judicata defensively
to bar the relitigation of claims which could have been
raised in the prior action between the disabled person
and the direct employer, but were not.” Id. at 580.
However, despite the fact that the plaintiff’s statutory
employers were in privity with the plaintiff’s direct
employer, the Viele Court went on to explain:
Here, the claim which the alleged statutory employers
sought to bar was plaintiff’s claim against them under § 171.
This is not a claim which plaintiff could have raised in his
prior action against [the direct employer]. Thus, while the
alleged statutory employers may invoke the doctrine of res
judicata to bar the relitigation of plaintiff’s claim for disability
benefits to the extent that [the direct employer] was exoner-
ated from liability, they cannot invoke the doctrine to bar a
hearing on the issue of their own liability as statutory
employers. We, therefore, conclude that the WCAB applied
erroneous legal reasoning in ruling that the [subsequent]
hearing, and the decision emanating from that hearing, was
barred under the doctrine of res judicata. [Id. at 581.]
Turning to the present case, plaintiff argues that this
Court’s opinion in Viele is directly on point and should
control the outcome of this appeal. Plaintiff maintains
that the specific reasons underlying the bifurcation of
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the plaintiff’s claims in Viele were unimportant to the
outcome. Instead, plaintiff contends, the Viele Court held
as a matter of law that an injured employee is entitled to
proceed separately against his or her direct employer and
his or her alleged statutory employers and that an injured
employee necessarily cannot raise a § 171 claim in an
action brought against the direct employer only. Plaintiff
also notes the WCAC’s longstanding recognition that
there is no mandatory joinder of parties in workers’
compensation proceedings. On the basis of Viele, and
given the absence of a mandatory party-joinder rule in
workers’ compensation cases, plaintiff argues that he was
fully entitled to sue his direct employer first, reserving for
a later action any additional claim that he may have had
against his alleged statutory employers under § 171. He
further contends that, like the plaintiff in Viele, he neces-
sarily could not have raised his § 171 claim in the first
action, which was brought against Allstate only, and that
the doctrine of res judicata therefore did not preclude him
from raising the § 171 claim in his subsequent action
against defendants.
Defendants respond by contending that the Viele opin-
ion is distinguishable from the case at bar for several
reasons. First, they point out that unlike plaintiff’s § 171
claim in the instant case, which was not filed until after a
decision had already been rendered with respect to plain-
tiff’s claim against Allstate, the plaintiff’s § 171 claim in
Viele had been filed before the plaintiff’s claim against his
direct employer was litigated. Further, defendants suggest
that the plaintiff’s claim against his direct and alleged
statutory employers in Viele were not consolidated be-
cause the Bureau of Workers’ Disability Compensation
(Bureau)
6
mandated the bifurcation of the claims in that
case. Accordingly, they contend that the plaintiff in
6
The Bureau is now known as the Workers’ Compensation Agency.
626 289 M
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Viele was powerless to consolidate his direct-employer
and statutory-employer claims in one action. In con-
trast, defendants argue that there was no requirement
mandating the bifurcation of plaintiff’s claims in the
present case and that plaintiff consequently could have
consolidated his § 171 claim with his direct-employer
claim against Allstate, bringing all claims in one single
action. Defendants argue that because plaintiff could
have brought his § 171 claim in the first action but did
not, the doctrine of res judicata bars him from pursuing
his § 171 claim in this subsequent proceeding. They also
assert that plaintiff has offered no plausible or reason-
able explanation for failing to join his alleged statutory
employers in the first action against Allstate.
While some of this Court’s holdings in Viele are
unmistakable, others are not so clear. For example, as
noted previously, the Viele Court observed that the
plaintiff’s § 171 claim in that case was “not a claim
which plaintiff could have raised in his prior action
against [the direct employer].” Viele, 167 Mich App at
581. The parties do not agree concerning what, exactly,
the Viele Court meant by this statement. As explained
earlier, plaintiff interprets this statement as a broad
holding that injured employees are entitled to proceed
separately against their direct and statutory employers
and that such employees necessarily cannot raise a
§ 171 claim in an action brought against their direct
employers only. On the other hand, defendants argue
that the essential rationale for this statement—i.e., the
reason why the Viele Court stated that the plaintiff in
that case could not have raised his § 171 claim in the
first action against his direct employer—was that the
Bureau had bifurcated the claims in Viele contrary to
the plaintiff’s wishes. Defendants find support for their
argument in the WCAC majority’s opinion in this case,
which stated that “[t]he reason the [Viele] plaintiff
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could not have ‘raised’ the statutory employment issue
in the first trial was because the Bureau bifurcated the
issues by insisting on separate trials.” Bennett, 2008
Mich ACO 163 at 9.
The obvious problem with defendants’ argument
(and the WCAC majority’s statement) concerning this
issue is that the Viele Court’s opinion contained abso-
lutely no language to suggest that the Bureau man-
dated the bifurcation of the plaintiff’s claims in that
case. Indeed, the Viele Court specifically observed that
it was “unclear from the record” why the plaintiff’s
§ 171 claim against his alleged statutory employers had
not been consolidated with his claim against the direct
employer. Viele, 167 Mich App at 574-575. We seriously
doubt that the Viele Court would have characterized
this matter as “unclear from the record” if it had been
generally known, as defendants now assert, that the
Bureau prevented the plaintiff from consolidating his
claims by insisting on two separate trials.
The language of Viele’s footnote 2 belies defendants’
argument as well. In footnote 2, the Viele Court clearly
held that an injured worker is entitled to sue his or her
direct employer, alleged statutory employer, or both,
and that the decision to sue one of these entities instead
of the other is within the sole discretion of the injured
worker. Id. at 579-580 n 2. Specifically, the Court noted
that even though a plaintiff is entitled to only “one
award of compensation benefits for his disability under
the WDCA,” “[w]hether [a] plaintiff proceeds against
his direct employer or the statutory employer, if any,
has been viewed as being at the option of the disabled
employee.” Id. The Viele Court further suggested that a
judgment against a plaintiff’s direct employer generally
does not bar or terminate that plaintiff’s subsequent
claim against his or her potential statutory employer,
628 289 M
ICH
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616 [Aug
which is liable for the same injury. Id., citing 2 Restate-
ment Judgments, 2d, § 49, p 34. Thus, through the lan-
guage of footnote 2, the Viele Court appears to have
implicitly held that an injured employee may sue his or
her direct employer first, and may reserve for a subse-
quent proceeding any additional claim that he or she may
have against his or her alleged statutory employers under
§ 171. Whatever truth there may be to the proposition
that the Bureau insisted on bifurcating the plaintiff’s
claims in Viele, it simply does not appear that the Viele
Court considered this to have been decisive to the outcome
of that case.
Given the language of footnote 2, we are inclined to
adopt plaintiff’s broad reading of Viele. It strikes us that
the Viele Court endorsed plaintiff’s view, holding that an
injured employee is entitled to proceed separately against
his or her direct and statutory employers and that an
award of benefits against a plaintiff’s direct employer does
not bar that plaintiff from asserting a § 171 claim against
his or her statutory employer in a subsequent action. See
Viele, 167 Mich App at 580 n 2. There is simply no other
reasonable way to read the text of footnote 2. Neverthe-
less, for the reasons that follow, we need not definitively
decide which interpretation of Viele is correct. As we will
explain, there exist compelling reasons, wholly apart from
this Court’s opinion in Viele, to conclude that the doctrine
of res judicata does not bar plaintiff’s § 171 claim against
defendants in this case.
IV
It is true, of course, that res judicata (also known as
claim preclusion) applies in workers’ compensation
proceedings. Gose, 409 Mich at 159; Banks v LAB
Lansing Body Assembly, 271 Mich App 227, 229; 720
NW2d 756 (2006).
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The doctrine of res judicata applies where: (1) there has
been a prior decision on the merits, (2) the issue was either
actually resolved in the first case or could have been resolved
in the first case if the parties, exercising reasonable diligence,
had brought it forward, and (3) both actions were between the
same parties or their privies. [Paige v Sterling Hts, 476 Mich
495, 521-522 n 46; 720 NW2d 219 (2006).]
To be sure, the “broad application” of res judicata appli-
cable in Michigan workers’ compensation cases bars not
only “a second action...ifthesame question was actually
litigated in the first proceeding,” but also “those claims
arising out of the same transaction which plaintiff could
have brought, but did not.” Gose, 409 Mich at 160; see also
Adair, 470 Mich at 123-125.
It is equally true, however, that res judicata is a “judi-
cially created” doctrine, Pierson Sand & Gravel, Inc v
Keeler Brass Co, 460 Mich 372, 380; 596 NW2d 153
(1999), and must not be applied when its application
would subvert the intent of the Legislature, Riley v
Northland Geriatric Ctr (After Remand), 431 Mich 632,
642; 433 NW2d 787 (1988) (opinion by G
RIFFIN
, J.); Juncaj
vC&HIndus, 161 Mich App 724, 734; 411 NW2d 839
(1987), vacated on other grounds 434 NW2d 644 (1989);
see also Texas Instruments Inc v Cypress Semiconductor
Corp, 90 F3d 1558, 1568 (CA Fed, 1996) (observing that
“an administrative agency decision, issued pursuant to a
statute, cannot have preclusive effect when [the Legisla-
ture], either expressly or impliedly, indicated that it in-
tended otherwise”).
We conclude that application of res judicata to bar
plaintiff’s subsequent action in the present case would
subvert the intent of the Legislature because it would
effectively read a rule of mandatory party joinder into the
text of § 171. The WCAC has consistently recognized that
the WDCA does not require the joinder of parties in
workers’ compensation proceedings. See, e.g., Woodard v
630 289 M
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Sebro Plastics, Inc, 2002 ACO 263; Hubbard v Laidlaw
Transit Co, 2000 ACO 406. We agree with the WCAC’s
determination that the WDCA generally does not require
the joinder of parties, especially in the context of the
statutory employment provision of § 171.
Our primary responsibility when interpreting a statute
such as § 171 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).
The best evidence of the Legislature’s intent is the lan-
guage of the statute. Neal v Wilkes, 470 Mich 661, 665;
685 NW2d 648 (2004). Section 171 contains no language
mandating the joinder of parties. But it is clear that the
Legislature could have included such language had it
wanted to. For example, in several other statutes the
Legislature has expressly mandated the joinder of parties
as defendants. See, e.g., MCL 500.3172(3)(d) (mandating
the joinder of certain parties as defendants in “assigned
claims” litigation under the no-fault act); MCL
560.224a(1) (mandating the joinder of various parties as
defendants in actions to revise or vacate recorded plats
under the Land Division Act); MCL 600.3810(2) (mandat-
ing the joinder of chattel mortgagees, assignees, and
lienholders as defendants in nuisance-abatement actions
brought against vehicle owners under chapter 38 of the
Revised Judicature Act). Although none of these statutory
provisions is contained in the WDCA, these examples
make clear that the Legislature knows how to enact a
statute requiring the joinder of parties when it so desires.
See Risk v Lincoln Charter Twp Bd of Trustees, 279 Mich
App 389, 403-404; 760 NW2d 510 (2008).
Even more persuasive, the Legislature has on occa-
sion provided mechanisms for compelling the joinder of
parties in certain sections of the WDCA itself. Specifi-
cally, the Legislature has provided that when a voca-
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tionally disabled worker is employed under the provisions
of chapter 9 of the WDCA
7
and the vocationally disabled
worker files a claim for benefits against his or her
employer, the Second Injury Fund must be joined as a
party defendant upon motion of the employer. MCL
418.931(1). Likewise, another section of the WDCA
formerly provided that when an employee disabled by
an occupational disease filed a claim for benefits against
his or her “last employer,” the last employer could
compel the joinder of the disabled employee’s prior
employers as defendants under certain circumstances.
Former MCL 418.435.
8
In light of these current and
former provisions of the WDCA—both establishing
means to compel the joinder of parties in certain
situations—we view the Legislature’s omission of a
party-joinder provision from § 171 as “very strong evi-
dence of...legislative intent....”McSloy v Ryan,27
Mich 110, 115 (1873); see also Polkton Charter Twp v
Pellegrom, 265 Mich App 88, 103; 693 NW2d 170 (2005)
(noting that “[t]he omission of a provision in one part of
a statute that is included in another should be con-
strued as intentional”).
As the aforementioned statutory provisions demon-
strate, the Legislature knows how to (1) require the
joinder of parties outright and (2) prescribe methods by
which one party may compel the joinder of other parties.
7
MCL 418.901 et seq.
8
This version of MCL 418.435, permitting a disabled employee’s last
employer to compel the joinder of prior employers under certain circum-
stances, was amended by 1980 PA 357. MCL 418.435 now provides that
[t]he total compensation due shall be recoverable from the em-
ployer who last employed the employee in the employment to the
nature of which the disease was due and in which it was con-
tracted. If any dispute or controversy arises as to the payment of
compensation or as to liability for the compensation, the employee
shall make claim upon the last employer only and apply for a
hearing against the last employer only.
632 289 M
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Section 171 contains neither type of provision. Had the
Legislature wanted to require the joinder of direct and
statutory employers in a single action, it easily could have
done so by including language to that effect in the text of
§ 171. 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. Ac-
cordingly, we conclude that the Legislature intended to
allow an injured employee to bring separate actions
against his or her direct employer and statutory employer
without joining all potentially liable parties as defendants
in one single proceeding.
Res judicata and party joinder are naturally distinct
concepts. However, the ideas underlying these two con-
cepts are, at least to some extent, interrelated. See 2
Restatement Judgments, 2d, § 51, comment c, pp 51-52.
For instance, it has been suggested that one of the
essential purposes underlying a rule of mandatory party
joinder is to ensure that any ensuing judgment will have
res judicata effect. Patterson Enterprises, Inc, v
Bridgestone/Firestone, Inc, 812 F Supp 1152, 1155 (D
Kan, 1993). Similarly, application of the doctrine of res
judicata can work to create a de facto rule of compulsory
party joinder. See United States v Lacey, 982 F2d 410, 412
(CA 10, 1992); Drug Purchase, Inc v Dubroff, 485 F Supp
887, 890 (SD NY, 1980); see also Day v Kerkorian, 61 Mass
App 804, 812; 814 NE2d 745 (2004). This is because a
plaintiff who sues one party will be required to join as
defendants all other parties sharing the same interest in
the litigation in order to avoid the res judicata bar. Lacey,
982 F2d at 412.
This is precisely what has happened here. Given the
particular contractual relationship between statutory
employers and direct employers, it is beyond dispute
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that statutory employers are in privity with direct
employers for purposes of res judicata. MCL 418.171(1);
Viele, 167 Mich App at 580. Accordingly, application of
res judicata in a case such as this will essentially create
a de facto rule of mandatory party joinder, requiring an
injured employee who sues his or her direct employer to
join at the outset all possible statutory employers in the
same action in order to avoid the res judicata bar that
would otherwise inevitably result. One need not look
any further than the circumstances of the case at bar.
By applying the doctrine of res judicata to preclude
plaintiff’s subsequent action against his alleged statu-
tory employers, the magistrate and the WCAC majority
have read into § 171 a rule of compulsory party joinder
that finds no support in the statutory text.
For reasons already explained, we have concluded
that the Legislature intended to allow an injured em-
ployee to bring separate workers’ compensation actions
against his or her direct employer and statutory em-
ployer without joining all potentially liable parties in
one proceeding. Application of the judicially created
doctrine of res judicata in a case like this would imper-
missibly subvert this legislative intent. Riley, 431 Mich
at 642 (opinion by G
RIFFIN
, J.); Juncaj, 161 Mich App at
734. Consequently, we hold that the magistrate and the
WCAC erred by applying res judicata to bar this subse-
quent action against plaintiff’s alleged statutory em-
ployers under § 171. We reverse the decision of the
WCAC and remand this matter to the magistrate with
instructions to reinstate plaintiff’s § 171 claim against
American Painting and the Authority.
V
We wish to address briefly defendants’ suggestion
that because plaintiff knew Allstate was uninsured, it
634 289 M
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616 [Aug
was somehow improper or unreasonable for him to
proceed initially against Allstate only. As plaintiff’s
counsel pointed out at oral argument before this Court,
plaintiff apparently believed that although Allstate was
uninsured, it would still have sufficient assets to pay
any resulting award of workers’ compensation benefits.
However unreasonable this belief might seem with the
benefit of hindsight, it is clear that plaintiff was never-
theless entitled to proceed against his uninsured direct
employer without joining defendants in the first action.
It is true that employers who are subject to the WDCA
must either purchase workers’ compensation insurance
from an authorized insurer or operate as a self-insurer.
MCL 418.611(1); see also Wyrybkowski v Cobra Pre-
Hung Doors, Inc, 66 Mich App 555, 557; 239 NW2d 660
(1976). However, the WDCA does not prohibit an in-
jured worker from bringing a workers’ compensation
claim against an employer who is not insured and has
not complied with MCL 418.611. The Legislature has
specifically provided that an injured employee may
present an order awarding workers’ compensation ben-
efits to the circuit court, that the circuit court “shall
render judgment in accordance with the order unless
proof of payment is made,” and that the court’s judg-
ment “shall have the same effect as though rendered in
an action tried and determined in the court and shall be
entered and docketed with like effect.” MCL 418.863.
9
This Court has held that even if an employer has failed
to purchase workers’ compensation insurance or oper-
ate as a self-insurer in accordance with MCL 418.611,
such a judgment may be executed against the uninsured
employer’s assets. Wyrybkowski, 66 Mich App at 558-
9
The purpose of this statute is “to protect the interests of persons with
work[ers’] compensation awards by providing for prompt enforcement
through the judicial machinery of the circuit courts....”Wyrybkowski,
66 Mich App at 558.
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559. Thus, although it may have been unwise for
plaintiff to believe that Allstate would have sufficient
assets to pay his workers’ compensation benefits, there
was nothing inherently improper in plaintiff’s initial
decision to proceed against his uninsured direct em-
ployer only.
10
VI
We also wish to address defendants’ prediction that
our decision will result in severe prejudice on remand
because plaintiff will now be able to invoke the doctrine
of res judicata offensively against them. We do not share
defendants’ concerns. An injured employee may not
invoke the doctrine of res judicata offensively against
his or her statutory employers in a subsequent proceed-
ing if those statutory employers did not have adequate
notice of the previous proceeding against the direct
employer. Viele, 167 Mich App at 582; see also 2 Restate-
10
There has been some suggestion that the real reason plaintiff was
unable to collect from Allstate under the original magistrate’s award was
that Allstate filed for bankruptcy soon after the award was issued.
Indeed, WCAC Commissioner Glaser stated in her dissenting opinion
that “[p]laintiff, having won against Allstate [in the first action], was
unable to collect, due to a subsequent bankruptcy action.” Despite
Commissioner Glaser’s statement in this regard, we find no evidence in
the record to indicate that Allstate actually filed for bankruptcy. How-
ever, we wish to make clear that if Allstate did file for bankruptcy after
the original award was issued, this would provide an additional reason for
concluding that res judicata does not bar plaintiff’s § 171 claim against
defendants. Res judicata does not bar a subsequent action between the
same parties or their privies when the facts have changed or new facts
have developed. Labor Council, Michigan Fraternal Order of Police v
Detroit, 207 Mich App 606, 608; 525 NW2d 509 (1994). Assuming
arguendo that Allstate did file for bankruptcy after the original award
was issued, thereby effectively cutting off plaintiff’s ability to collect
under the award, this surely would have constituted a change in facts and
circumstances sufficient to overcome the applicability of res judicata in
this case. Id.
636 289 M
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616 [Aug
ment Judgments, 2d, § 83(2)(a), p 266. Unlike the
uncertain language from Viele discussed earlier, the
Viele Court’s holding on this issue was clear. Because
American Painting and the Authority did not have
adequate notice of plaintiff’s previous action against
Allstate, their concern is unfounded.
11
VII
Lastly, we turn to American Painting’s remaining ar-
gument that it does not qualify as plaintiff’s statutory
employer under § 171 because it did not have the requisite
contractual relationship with Allstate. Whether an entity
such as American Painting constitutes a “principal”
within the meaning of § 171 is a question of law. Woody v
American Tank Co, 49 Mich App 217, 230; 211 NW2d 666
(1973). Because this legal issue was not addressed or
decided by the WCAC, we lack the authority to consider it
on appeal. MCL 418.861a(14); Calovecchi v Michigan, 461
Mich 616, 626; 611 NW2d 300 (2000).
VIII
The magistrate and the WCAC erred by determining,
contrary to the intent of the Legislature, that res
judicata barred plaintiff’s subsequent action against
defendants. Plaintiff was entitled to seek benefits from
his direct employer first, reserving for a subsequent
proceeding any claim against his alleged statutory em-
ployers under § 171. We therefore reverse the decision
11
Nor will plaintiff be entitled to invoke the doctrine of collateral
estoppel (also known as issue preclusion) offensively against defendants
on remand. Allstate did not appear for trial or meaningfully defend itself
in the previous action. Accordingly, even if it is determined that defen-
dants are in privity with Allstate, they have not had a full and fair
opportunity to litigate the issues in this matter. See Monat v State Farm
Ins Co, 469 Mich 679, 682-684; 677 NW2d 843 (2004).
2010] B
ENNETT V
M
ACKINAC
B
RIDGE
A
UTH
637
of the WCAC and remand this matter to the magistrate
with instructions to reinstate plaintiff’s § 171 claim
against American Painting and the Authority.
Reversed and remanded to the magistrate for rein-
statement of plaintiff’s claim against defendants consis-
tent with this opinion. We do not retain jurisdiction. As
the prevailing party, plaintiff may tax costs pursuant to
MCR 7.219.
638 289 M
ICH
A
PP
616 [Aug
AJAX PAVING INDUSTRIES, INC v VANOPDENBOSCH
CONSTRUCTION CO
Docket No. 288452. Submitted March 2, 2010, at Detroit. Decided July 1,
2010. Approved for publication August 31, 2010, at 9:10 a.m.
Ajax Paving Industries, Inc., a contractor hired with regard to
roadway resurfacing operations in the city of Detroit, brought an
action in the Wayne Circuit Court against two of Ajax’s subcon-
tractors, Vanopdenbosch Construction Co. and Tenmile Creek
Excavating, LLC, seeking indemnification under the subcontracts
for Ajax’s costs resulting from the settlement of two underlying
lawsuits that sought to impose liability on Ajax for the work
performed pursuant to the subcontracts. The court, Isidore B.
Torres, J., granted summary disposition in favor of Ajax. Ajax then
moved for the entry of a judgment awarding it the costs of settling
the underlying lawsuits and the reasonable attorney fees and costs
associated with defending those actions. The court entered an
order for partial summary disposition that provided that each
defendant would be liable for one-half of the total amount Ajax
paid in the underlying lawsuits. The court also ordered an eviden-
tiary hearing to address the issue of costs and attorney fees.
Following that hearing, the court ruled that Ajax could recover
from Vanopdenbosch only those attorney fees and costs incurred
after the date Ajax provided Vanopdenbosch notice of the under-
lying actions. The court, further noting that Tenmile Creek had
already paid Ajax a higher amount for fees and costs and had been
dismissed from the action, determined that Ajax had been ad-
equately compensated and denied the motion for the entry of a
judgment regarding costs and fees. Vanopdenbosch appealed the
order granting summary disposition in favor of Ajax. Ajax cross-
appealed the order denying the motion for the entry of a judgment
regarding costs and fees.
The Court of Appeals held:
1. The indemnity provision contained in Vanopdenbosch’s sub-
contract was broad and provided that Vanopdenbosch would
indemnify Ajax not only for actions directly or indirectly caused,
occasioned, or contributed to by an act, omission, or fault of
Vanopdenbosch, but also for those actions that were “claimed” to
2010] A
JAX
P
AVING V
V
ANOPDENBOSCH
639
be directly or indirectly caused, occasioned, or contributed to by an
act, omission, or fault of Vanopdenbosch. There was nothing in the
provision requiring the party initiating an action or obtaining dam-
ages to claim that an incident was directly or indirectly caused or
contributed to by Vanopdenbosch. The language provided only that a
claim must be made and did not specify who must make the claim or
that the claim even need be proved. The trial court did not err by
determining under the facts of this case that the claims presented in
the underlying actions were covered by the parties’ subcontract. With
regard to the claim of trespass in the second underlying action, that
cause of action was properly construed as pertaining to Vanopden-
bosch, and, therefore, the indemnity provision in the subcontracts
applied to the claim. Summary disposition in favor of Ajax with
regard to the indemnity provision was thus appropriate.
2. The indemnity provision in the subcontract did not require
that Vanopdenbosch be put on notice of an underlying lawsuit or that
there be a tender of defense for the provision to apply. Ajax was
entitled to recover the entirety of the fees and costs from the
underlying lawsuits because the subcontract contained no notice or
tender-of-defense requirement and expressly provided for the recov-
ery of all fees and costs associated with defending the underlying
actions. The lack of notification of the underlying actions did not
preclude a finding that Vanopdenbosch was liable under the indem-
nification provision for the monies paid by Ajax to those involved in
the underlying lawsuits and the attorney fees and costs associated
with defending those lawsuits. The case must be remanded for a
determination regarding Ajax’s claimed attorney fees and costs and
for the entry of a judgment consistent with that determination. The
case must be affirmed in all other respects.
Affirmed and remanded.
Plunkett Cooney (by Ernest R. Bazzana) for Ajax
Paving Industries, Inc.
Berry, Johnston, Sztykiel & Hunt, P.C. (by Timothy J.
Clifford), for Vanopdenbosch Construction Co.
Before: S
ERVITTO
,P.J., and B
ANDSTRA
and F
ORT
H
OOD
,
JJ.
S
ERVITTO
,P.J. Defendant Vanopdenbosch Construc-
tion Co. appeals as of right the trial court’s order granting
640 289 M
ICH
A
PP
639 [Aug
summary disposition in plaintiff’s favor. Plaintiff, Ajax
Paving Industries, Inc., cross-appeals the trial court’s
order denying plaintiff’s motion for the entry of a judg-
ment regarding costs and fees. Because the trial court did
not err by granting summary disposition in plaintiff’s
favor on the basis of the parties’ indemnity contract, but
erred in its determination that costs and fees recoverable
pursuant to the indemnity contract were limited to those
incurred after the date Vanopdenbosch Construction Co.
was notified of the underlying lawsuits, we remand to the
trial court for a determination regarding the reasonable-
ness of plaintiff’s claimed attorney fees and costs and
entry of a judgment consistent with those findings, and
affirm in all other respects.
Plaintiff filed a complaint against defendants, Tenmile
Creek Excavating, LLC, and Vanopdenbosch Construction
Co., on May 21, 2007. According to plaintiff, the Michigan
Department of Transportation (MDOT) hired plaintiff as
a contractor with regard to roadway resurfacing in the city
of Detroit, and plaintiff entered into separate subcon-
tracts with both Tenmile Creek and Vanopdenbosch to
perform specific work on the resurfacing project. The
subcontracts each contained an indemnity clause whereby
Tenmile Creek and Vanopdenbosch agreed to indemnify
plaintiff and to hold it harmless for any actions associated
with or arising out of their respective work. The subcon-
tracts also required Tenmile Creek and Vanopdenbosch to
obtain, at their expense, workers’ compensation insur-
ance, general-liability insurance, and automobile insur-
ance, naming plaintiff as an additional insured party on
the policies.
Plaintiff alleged that it was named as a defendant in
a lawsuit that sought to impose liability on plaintiff
relating to the work performed by Tenmile Creek and
Vanopdenbosch pursuant to the parties’ subcontracts.
2010] A
JAX
P
AVING V
V
ANOPDENBOSCH
641
Specifically, a woman was allegedly injured when the
car in which she was a passenger struck a protruding
manhole cover located on the street where defendants
had performed resurfacing work pursuant to their
contracts with plaintiff. The injured passenger brought
suit against plaintiff and Wayne County, and the arbi-
tration of that matter ultimately resulted in an award
in the injured passenger’s favor of $40,000. Plaintiff
was thereafter named as a defendant in a lawsuit
initiated by Wayne County, which sought indemnity
from plaintiff concerning the prior lawsuit and, addi-
tionally, set forth a claim for trespass. Wayne County
settled its lawsuit against plaintiff for a payment of
$5,000. According to plaintiff, both defendants in the
instant lawsuit had refused to defend or hold plaintiff
harmless from the claims of the injured passenger and
Wayne County, thereby beaching the parties’ subcon-
tracts. Plaintiff also alleged that both defendants
breached the parties’ subcontracts by failing to secure
the required insurance coverage.
Plaintiff moved for summary disposition pursuant to
MCR 2.116(C)(10), asserting that the lawsuits at issue
were expressly covered by the parties’ contracts and
that there was no material question of fact that defen-
dants breached the parties’ agreements by failing to
indemnify plaintiff in the lawsuits and to obtain pri-
mary, rather than excess, general-liability-insurance
coverage. The trial court granted plaintiff’s motion for
summary disposition.
Thereafter, plaintiff moved for the entry of a judg-
ment, contending that because its motion for summary
disposition was granted, it was entitled to reimburse-
ment of the costs of settling the underlying two law-
suits, as well as its reasonable attorney fees and costs
associated with defending the two lawsuits. The trial
642 289 M
ICH
A
PP
639 [Aug
court entered an order for partial summary disposition
that provided that each defendant would be liable for
one-half of the total amount plaintiff paid in the under-
lying lawsuits ($45,000) and ordered an evidentiary
hearing to address the issue of costs and attorney fees.
1
The trial court ultimately ruled that plaintiff was
limited in its recovery from Vanopdenbosch to only
those attorney fees and costs incurred after the date
plaintiff provided Vanopdenbosch with notice of the
underlying proceedings—April 4, 2007. The trial court
determined that only $1,417.47 in attorney fees were
incurred after that date, but also noted that plaintiff
had already received $10,500 in fees and costs from
Tenmile Creek. As a result, the trial court ruled that
plaintiff had been more than adequately compensated
for attorney fees and costs and denied plaintiff’s mo-
tion. This appeal followed.
A motion for summary disposition under MCR
2.116(C)(10) is properly granted if no factual dispute
exists, thus entitling the moving party to judgment as a
matter of law. Rice v Auto Club Ins Ass’n, 252 Mich App
25, 31; 651 NW2d 188 (2002). In deciding a motion
brought under subrule (C)(10), a court considers all the
evidence, affidavits, pleadings, and admissions in the
light most favorable to the nonmoving party. Id. at
30-31. We also review de novo issues of contract inter-
pretation. Rory v Continental Ins Co, 473 Mich 457,
464; 703 NW2d 23 (2005).
On appeal, defendant
2
first contends that the trial
court erred by ruling that the injured passenger’s
1
The trial court entered a stipulated order for dismissal of Tenmile
Creek before the evidentiary hearing. Tenmile Creek therefore did not
participate in the hearing.
2
Because Tenmile Creek is not a party to this appeal, “defendant”
hereafter refers to Vanopdenbosch only.
2010] A
JAX
P
AVING V
V
ANOPDENBOSCH
643
claims were covered by the parties’ subcontract when
there was no indication that the work performed by
defendant caused the manhole cover to protrude above
the milled road surface. We disagree.
A contract must be interpreted according to its plain
and ordinary meaning. St Paul Fire & Marine Ins Co v
Ingall, 228 Mich App 101, 107; 577 NW2d 188 (1998).
When the language of the contract is clear and unam-
biguous, interpretation is limited to the actual words
used, and an unambiguous contract must be enforced
according to its terms. Burkhardt v Bailey, 260 Mich
App 636, 656; 680 NW2d 453 (2004). This Court applies
to indemnity contracts the same contract construction
principles that govern any other type of contract. Zahn
v Kroger Co of Mich, 483 Mich 34, 40; 764 NW2d 207
(2009). On appeal, this Court interprets an indemnifi-
cation provision in a manner that will serve to provide
a reasonable meaning to all the terms contained
therein. MSI Constr Managers, Inc v Corvo Iron Works,
Inc, 208 Mich App 340, 343; 527 NW2d 79 (1995). In
essence, an indemnification provision is to be construed
to effectuate the intentions of the parties to the con-
tract, which is determined through review of the con-
tract language, the situation of the parties, and the
circumstances involved in the initiation of the contract.
Triple E Produce Corp v Mastronardi Produce, Ltd, 209
Mich App 165, 172; 530 NW2d 772 (1995).
Plaintiff and defendant’s contract contained the fol-
lowing indemnity provision:
Subcontractor agrees to indemnify Ajax and MDOT and
to hold each of them forever harmless from and against all
suits, actions, legal or administrative proceedings, claims,
demands, damages, judgments, liabilities, interest, attor-
ney’s fees, costs and expenses of whatsoever kind or nature
whether arising before or after completion of Subcontrac-
tor’s work and in any manner directly or indirectly caused,
644 289 M
ICH
A
PP
639 [Aug
occasioned or contributed to, or claimed to be caused,
occasioned or contributed to, by any act, omission[,] fault
or breach of Subcontractor or of anyone acting under its
direction, control, or on its behalf in connection with or
incidental to the work of Subcontractor and regardless
whether directly or indirectly caused, occasioned or con-
tributed to, or claimed to be caused, occasioned or contrib-
uted to in part by a party indemnified hereunder or by
anyone acting under their direction, control, or on their
behalf.
This language is broad and provides for indemnity not
only for actions directly or indirectly “caused, occa-
sioned or contributed to” by an act, omission, or fault of
defendant, but also those actions that are “claimed”to
be “directly or indirectly caused, occasioned or contrib-
uted to” by an act, omission, or fault of defendant.
(Emphasis added.)
Apparently, defendant is of the belief that in the
underlying lawsuit there must have been an allegation
by plaintiff that defendant caused or contributed to the
accident in order for the indemnity provision to be
applicable. However, there is nothing in the provision
requiring the party initiating an action or obtaining
damages to claim that an incident was directly or
indirectly caused or contributed to by defendant. In-
stead, the language provides only that a claim must be
made—without specifying who must make the claim or,
more importantly, that the claim even need be proved.
As admitted by defendant, the scope of its work
under the subcontract included adjusting the manhole
cover. Though it is unclear what “adjustments” were
made, the adjustments were alleged to have been made
a short time before the accident. The injured party
alleged in her arbitration summary that an “Ajax pav-
ing subcontractor” adjusted the manhole cover and that
the cover protruded above the roadway, causing the
2010] A
JAX
P
AVING V
V
ANOPDENBOSCH
645
accident that led to her injuries. Because of the facts
that defendant made some adjustments and that the
accident in the underlying lawsuit was caused by the
protruding manhole cover, it could be asserted that the
lawsuit was “in any manner directly or indirectly
caused, occasioned or contributed to, or claimed to be
caused, occasioned or contributed to, by any act, omis-
sion[,] fault or breach of [Vanopdenbosch].” Thus, the
expansive and unambiguous indemnity provision was
triggered, and the trial court did not err by determining
that the injured passenger’s claim was covered by the
parties’ subcontract.
Defendant next contends that the trial court erred by
ruling that the claims of Wayne County fell within the
parties’ subcontract when there was no evidence that
these claims were caused by any action or omission of
defendant in connection with its structural work.
Again, we disagree.
Wayne County’s complaint against plaintiff con-
tained an allegation that “Wayne County is entitled to
common-law indemnity from Ajax Paving where the
evidence is undisputed that Ajax Paving and/or its
subcontractors caused the condition that [the injured
passenger] claims caused her injuries, and Wayne
County had no involvement in creating the condition.”
Because Wayne County’s complaint specifically alleged
that plaintiff or its subcontractors (including Vanop-
denbosch) caused the road condition leading to the
asserted injuries, the indemnity clause in plaintiff and
defendant’s agreement is applicable.
As defendant points out, Wayne County’s complaint
against plaintiff included a claim of trespass. This does
not, however, render the indemnity provision at issue
inapplicable. As previously indicated, Wayne County
and plaintiff settled their dispute by agreeing to a
646 289 M
ICH
A
PP
639 [Aug
$5,000 payment from plaintiff. This settled all of Wayne
County’s and plaintiff’s claims with no indication whether
the payment was intended to compensate Wayne County
for only the trespass claim, only the indemnity claim, or
both equally. Nevertheless, Wayne County’s complaint for
trespass specifically encompassed the actions of plaintiff
or its subcontractors in performing the roadwork. Wayne
County alleged that plaintiff proceeded with roadwork
without its consent, but also alleged that plaintiff removed
the asphalt around the manhole cover and that plaintiff
admitted that it “or its subcontractors” were at fault in
creating the condition causing the accident. Because de-
fendant admittedly entered onto the roadway and per-
formed work there, and because the allegations of trespass
included a claim that plaintiff or its subcontractors cre-
ated a condition that caused the accident, the trespass
cause of action could be construed as pertaining to defen-
dant, and the indemnity provision would still apply.
Defendant’s final argument on appeal is that the trial
court erred in its determination that defendant breached
its contractual duty to obtain insurance when it did, in
fact, obtain insurance coverage in favor of plaintiff on an
excess basis and when the contract did not specify that
insurance coverage was to be on a primary basis. Because
we have determined that summary disposition was appro-
priate in plaintiff’s favor on the basis of the indemnity
provision, we need not address this insurance issue. As
indicated by plaintiff, the insurance issue “provides an
alternate basis upon which to premise the grant of partial
summary disposition in favor of Ajax with respect to the
$22,500 amount (after setoff) that it paid to settle the
underlying actions.” An appropriate judgment having
been entered requiring defendant to pay one-half of the
amount plaintiff paid to the injured passenger, even if we
were to reverse the determination of the trial court on the
2010] A
JAX
P
AVING V
V
ANOPDENBOSCH
647
insurance issue, plaintiff would not be entitled to any
relief additional to that already received pursuant to the
indemnity provision.
Plaintiff’s sole issue on cross-appeal concerns the trial
court’s determination that defendant’s obligation to reim-
burse plaintiff for its fees and costs incurred in defending
the underlying actions was limited to those incurred after
the date plaintiff notified defendant of the actions. Accord-
ing to plaintiff, the parties’ contract expressly entitled
plaintiff to recover all costs and attorney fees, without
limitation, and in holding otherwise, the trial court did not
read and apply the contract as specifically written. Defen-
dant contends, however, that defendant was not made
aware of the lawsuits until 18 months after Wayne County
initiated its lawsuit. According to defendant, if it breached
the parties’ indemnity contract, then the breach could
only have occurred after notice was given of the underly-
ing lawsuits and plaintiff’s damages for the breach must
be, as the trial court correctly determined, limited to those
that arose naturally from the breach (i.e., those that were
incurred after the breach).
As previously indicated, the parties’ contract re-
quired defendant to
indemnify Ajax and MDOT and to hold each of them forever
harmless from and against all suits, actions, legal or admin-
istrative proceedings, claims, demands, damages, judgments,
liabilities, interest, attorney’s fees, costs and expenses of
whatsoever kind or nature whether arising before or after
completion of Subcontractor’s work and in any manner
directly or indirectly caused, occasioned or contributed to, or
claimed to be caused, occasioned or contributed to, by any act,
omission[,] fault or breach of Subcontractor....
Plaintiff asserted that defendant breached this contrac-
tual provision by failing to indemnify it concerning the
underlying lawsuits. It is undisputed that the action by
648 289 M
ICH
A
PP
639 [Aug
the injured passenger was initiated on October 12,
2005. It is also undisputed that neither defendant nor
its insurer was advised of that lawsuit or the lawsuit by
Wayne County until April 4, 2007. Notably, however,
there is no contractual provision in this matter requir-
ing that defendant be put on notice of an underlying
lawsuit or that there be a tender of defense for the
indemnification provision to apply. And, as previously
stated, a contract must be interpreted according to its
plain and ordinary meaning. When the contractual
language is clear and unambiguous, interpretation is
limited to the actual words used, and the contract is
enforced according to its unambiguous terms. St Paul,
228 Mich App at 107; Burkhardt, 260 Mich App at 656.
Because the contract itself contains no notice or tender-
of-defense requirement and expressly provides for the
recovery of all fees and costs associated with defending
the underlying litigation, without limitation, plaintiff is
entitled to recover the entirety of those fees and costs.
In support of its position otherwise, defendant asserts
that the duties to defend and to indemnify stated in the
subcontract are coextensive. However, the parties’ con-
tract contains no “duty to defend” provision. In addition,
the two concepts are not interdependent; they relate to
distinctly different matters. “Defend” means to “deny,
contest, or oppose (an allegation or claim).” Black’s Law
Dictionary (7th ed). “Indemnity,” however, is defined as a
“duty to make good any loss, damage, or liability incurred
by another.” Id. Because a person cannot oppose an
allegation or claim unless he or she is aware of the same,
it could be reasonably argued that one who desires to
trigger a contractual duty to defend must necessarily
tender notice of the litigation to the defender. The same
does not hold true for indemnification, however, because
indemnity contemplates reimbursement for injuries/
losses that have already been incurred.
2010] A
JAX
P
AVING V
V
ANOPDENBOSCH
649
Defendant’s reliance on certain authority suggesting
that fees and costs subject to reimbursement are limited
to those incurred only after a tender of a defense is
misplaced because the cited cases addressed contracts
that expressly established both a duty to indemnify and
a duty to defend. See, e.g., Hayes v Gen Motors Corp,
106 Mich App 188; 308 NW2d 452 (1981); Grand Trunk
W R Co v Auto Warehousing Co, 262 Mich App 345; 686
NW2d 756 (2004). Plaintiff’s reliance on Dep’t of
Transp v Christensen, 229 Mich App 417; 581 NW2d
807 (1998), is also misplaced because that case is
factually distinguishable from the matter at hand. Most
notably, in Christensen, a panel of this Court found the
existence of an implied contract for indemnification,
whereas, in the instant matter there is a specific,
unambiguous contract for indemnification that must be
enforced as written. Additionally, Christensen did not
address costs and fees recoverable under an indemnifi-
cation contract. Instead, it addressed the indemnifica-
tion of the amount MDOT paid as a result of a consent
judgment in the underlying action. Finally, while Chris-
tensen determined that there was no requirement that
a defense be tendered to the plaintiff because of a direct
conflict of legal interests between the parties, it did not
rule or announce that a tender of defense is required in
all indemnification matters in which a conflict of inter-
est is not present. The lack of notification in this matter
did not preclude a finding that defendant was liable
under the indemnification provision for the monies paid
by plaintiff to those involved in the underlying lawsuits,
and it does not preclude a finding that defendant is
liable for the attorney fees and costs associated with
defending the underlying actions.
Having determined that plaintiff is not limited in its
recovery of fees and costs to only those incurred after it
notified defendant of the underlying actions, we turn to
650 289 M
ICH
A
PP
639 [Aug
the amount of fees and costs that should be awarded. At
a hearing on plaintiff’s motion for the entry of a
judgment concerning costs and attorney fees, plaintiff
submitted that the total costs and fees incurred in the
defense of the underlying actions were $25,446. Plain-
tiff also acknowledged that it had already received
$10,500 of those fees and costs from Tenmile Creek and
later indicated that because of some erroneous calcula-
tions, and some agreements with defendant, it was
actually only seeking to recover $11,627 from defendant
as reimbursement for the remaining fees and costs.
While defendant challenged the reasonableness of some
of plaintiff’s fees, the trial court made no ruling on
these challenges. Remand is therefore necessary for the
trial court to consider and rule on any challenges to the
disputed fees and costs.
Remanded for a determination of plaintiff’s claimed
attorney fees and costs and for entry of a judgment
consistent with the trial court’s determination. This
matter is affirmed in all other respects. Plaintiff, being
the prevailing party, may tax costs pursuant to MCR
7.219. We do not retain jurisdiction.
2010] A
JAX
P
AVING V
V
ANOPDENBOSCH
651
BARKSDALE v BERT’S MARKETPLACE
Docket No. 290329. Submitted April 8, 2010, at Detroit. Decided August
31, 2010, at 9:15 a.m.
Laneeka Barksdale brought an action in the Wayne Circuit Court
against her employer, Bert’s Marketplace, and its manager, Jai-Lee
Dearing, alleging sexual harassment and retaliation. During the
jury trial, the court, John H. Gillis, Jr., J., stopped plaintiff’s
examination of one witness after half an hour, refused to allow
redirect examination of that witness, and denied plaintiff’s request
to make an offer of proof about what further testimony the witness
would have given had the court allowed more time. The court also
ruled inadmissible as hearsay the deposition testimony of another
witness for plaintiff. The jury returned a verdict of no cause of
action, and plaintiff appealed.
The Court of Appeals held:
MRE 611(a) provides that the trial court must exercise reasonable
control over the mode and order of interrogating witnesses and
presenting evidence so as to make the interrogation and presentation
effective for the ascertainment of the truth, avoid needless consump-
tion of time, and protect witnesses from harassment or undue
embarrassment. While the decisions of trial courts to limit the time
for examination of witnesses have been upheld, the trial court here
abused its discretion by imposing an arbitrary time limit on the
examination of a witness when the limit was not necessary to advance
any of the trial-management goals set forth in MRE 611(a). The trial
court further abused its discretion by refusing to permit plaintiff to
make an offer of proof in accordance with MRE 103(a)(2). These
errors were not harmless because they prejudiced plaintiff’s substan-
tial rights, and a new trial is required.
Reversed and remanded for a new trial.
1. W
ITNESSES —
E
XAMINATION —
T
IME
L
IMITS ON
E
XAMINATION —
A
RBITRARY
T
IME
L
IMITS
.
A trial court must exercise reasonable control over the mode and
order of interrogating witnesses and presenting evidence so as to
make the interrogation and presentation effective for the ascer-
tainment of truth, avoid needless consumption of time, and protect
652 289 M
ICH
A
PP
652 [Aug
witnesses from harassment or undue embarrassment; a trial court
abuses its discretion by imposing a time limit on the examination
of a witness that is arbitrary and not necessary to advance
trial-management goals (MRE 611[a]).
2. E
VIDENCE —
E
XCLUSION —
O
FFER OF
P
ROOF
.
A trial court’s need to complete witness testimony, however urgent,
does not absolve it from its obligation to permit an offer of proof in
accordance with MRE 103(a)(2) after the court has excluded evi-
dence.
I.A.B. Attorneys at Law, PLLC (by Felicia Duncan),
for plaintiff.
The Draper Law Firm (by David R. Draper and
Jonathan M. Colman) for defendants.
Before: M
ARKEY
,P.J., and Z
AHRA
and G
LEICHER
,JJ.
P
ER
C
URIAM.
In this action alleging sexual harass-
ment, MCL 37.2103(i); MCL 37.2202(1)(a), and retalia-
tion, MCL 37.2701(a), plaintiff, Laneeka Barksdale,
appeals as of right the trial court’s entry of a judgment
of no cause of action that effectuated the jury’s verdict.
We reverse and remand for a new trial.
Plaintiff worked as a waitress and bartender at
defendant Bert’s Marketplace from May 10, 2007, until
she resigned approximately two months later. During
this brief period of employment, plaintiff also worked at
Bert’s on Broadway. Bert Dearing owned both estab-
lishments. His son, defendant Jai-Lee Dearing, man-
aged Bert’s Marketplace. Plaintiff alleged that Jai-Lee
Dearing sexually harassed her by touching her inappro-
priately, commenting on her legs, and propositioning
her “as if she was a prostitute.” Plaintiff claimed that
after she reported Jai-Lee Dearing’s conduct to Bert
Dearing, defendants retaliated by not scheduling her
for work.
2010] B
ARKSDALE V
B
ERT
’
S
M
ARKETPLACE
653
Trial commenced on December 10, 2008, with jury
selection and arguments relating to several motions in
limine. According to the court reporter’s notes, these
preliminary events consumed 1 hour and 13 minutes of
the court’s time. On the second day of trial, counsel gave
brief opening statements during an abbreviated morning
session.
1
Plaintiff testified as the first trial witness. The
transcript of her direct and cross-examinations re-
quired fewer than 100 pages.
When trial resumed at 11:24 a.m. the next day, plaintiff
called Bert Dearing for examination. On the twenty-
fourth transcript page of Dearing’s examination, the trial
court announced, “It’s [defense counsel’s] turn, go
ahead....Time’s up.” Plaintiff’s counsel protested, “[L]et
me put on the record that I’m not finished with this
witness and if you would like for me to stop now even
though I haven’t done all of the testimony I need, I would
like to place that objection on the record so that on
appeal—” The trial court interrupted, advising plaintiff’s
counsel, “Each side gets a half hour with this witness.”
After defense counsel examined Dearing, plaintiff’s coun-
sel requested an opportunity to ask redirect questions,
which prompted the following colloquy:
[Plaintiff’s counsel]: Well, I’ve got kind of a couple
questions. I don’t get a redirect?
The Court: No, no. The rule is I announce the time and
when the time’s up, the questions stop.
[Plaintiff’s counsel]: Okay.
I just wanted to ask if I can make an offer of proof on the
record?
1
Opening statements began at 11:49 a.m. The transcript does not
reflect the times of the lunch recess that day, but plaintiff’s brief
identifies that the court recessed for lunch at 12:41 p.m. and resumed
proceedings at 2:16 p.m. The transcript also does not state at what time
the proceedings concluded that day.
654 289 M
ICH
A
PP
652 [Aug
The Court: No.
You’ve made an objection, that’s sufficient for appeal.
I’ve been taken up on appeal on this issue many, many
times. You’ve made an objection, that’s all you have to do.
Plaintiff then sought to introduce the deposition testi-
mony of Roy Lawhorn, who provided security for Bert’s
Marketplace. The trial court ruled that Lawhorn’s testi-
mony about plaintiff’s out-of-court statements constituted
inadmissible hearsay, and plaintiff opted not to read the
deposition. The defense called no witnesses. The jury
found that defendants had not sexually harassed or retali-
ated against plaintiff.
Plaintiff first challenges as improper the trial court’s
limitation of the total time for Bert Dearing’s examina-
tions. Plaintiff further asserts that the trial court erred in
a related fashion by denying her an opportunity to make
an offer of proof describing the testimony that counsel
would have elicited had the court permitted more time.
We review for an abuse of discretion a trial court’s exercise
of its power to control the interrogation of witnesses.
Alpha Capital Mgt, Inc v Rentenbach, 287 Mich App 589,
615; 792 NW2d 344 (2010). To the extent that our inquiry
requires an examination of the Michigan Rules of Evi-
dence, we consider de novo the legal issues presented. Id.
Pursuant to MRE 611(a), “[t]he court shall exercise
reasonable control over the mode and order of interro-
gating witnesses and presenting evidence so as to (1)
make the interrogation and presentation effective for
the ascertainment of the truth, (2) avoid needless
consumption of time, and (3) protect witnesses from
harassment or undue embarrassment.” In Hartland
Twp v Kucykowicz, 189 Mich App 591, 595; 474 NW2d
306 (1991), this Court emphasized that “[t]he mode and
order of admitting proofs and interrogating witnesses
rests within the discretion of the trial court.” The trial
court in Hartland Twp, on the fifth day of a trial,
2010] B
ARKSDALE V
B
ERT
’
S
M
ARKETPLACE
655
limited witness examinations to one hour each for direct
and cross-examinations, but later amended its ruling to
permit defense counsel more time with one expert wit-
ness. Id. at 596. On appeal, this Court held, “The record
shows that the trial court properly exercised its discretion
in limiting the time for examination of witnesses.” Id.
We again upheld a trial court’s decision to limit witness
examination in Alpha Capital Mgt. There, the trial court
permitted the plaintiff’s counsel around 4
1
/
2
hours for the
direct examination of a witness. Id. at 616. After the
witness’s testimony concluded, the court “limited the
entire time for additional witness examinations to 1
1
/
2
hours, 45 minutes for each side.” Id. at 617. We explained
in Alpha Capital Mgt, that “[u]nder the specific circum-
stances presented,” the trial court’s decision to limit the
examination of two witnesses did not amount to an abuse
of discretion. Id. at 618. Our decision rested on the
following dispositive findings:
The record reveals that counsel had adequate time to
develop the facts and issues at the center of the parties’
dispute. Moreover, the trial court permitted [Alpha Capital
Management, Inc.] more than three hours for its examination
of Burrell on the basis of counsel’s pledge that he could
complete the rest of the witness examinations in a half hour.
12
12
We emphasize our disapproval of utterly arbitrary
time limitations unrelated to the nature and complexity of
a case or the length of time consumed by other witnesses.
Here, however, because the trial court selected a time
limitation suggested by [Alpha Capital’s] counsel, the pe-
riod permitted did not qualify as arbitrary. And even if the
time period selected could be fairly characterized as arbi-
trary, by proposing one-half hour for all witnesses other
than Burrell, plaintiff’s counsel waived any possible error.
[Id. at 618 n 12.]
656 289 M
ICH
A
PP
652 [Aug
We find this case readily distinguishable from Alpha
Capital Mgt. The record reveals that counsel wasted no
time in picking a jury or delivering opening statements.
Plaintiff’s counsel conducted her examination of plain-
tiff expeditiously, without repetitive or irrelevant ques-
tions. Given this record, we discern no reasonable basis
for the trial court’s determination that limiting witness
examinations to 30 minutes for each side advanced the
trial-management goals set forth in MRE 611(a). The
record lacks any indication that curtailing counsel’s
time for witness examinations was necessary to “avoid
needless consumption of time” or to “protect witnesses
from harassment or undue embarrassment.” MRE
611(a)(2). Moreover, the trial court entirely failed to
explain how the severely restrictive time parameter it
selected “ma[d]e the interrogation and presentation [of
witnesses] effective for the ascertainment of the truth.”
Id. Accordingly, we conclude that the trial court abused
its discretion by imposing an “utterly arbitrary” time
limit “unrelated to the nature and complexity of [the]
case or the length of time consumed by other wit-
nesses.” Alpha Capital Mgt, 287 Mich App at 618 n 12.
Stated differently, by imposing an utterly arbitrary time
limit for witness examinations, the trial court selected
an outcome falling outside the range of principled
outcomes. Taylor v Kent Radiology, PC, 286 Mich App
490, 524; 780 NW2d 900 (2009).
The trial court further abused its discretion by ignor-
ing or misapplying MRE 103(a)(2) when it precluded
plaintiff’s counsel from presenting an offer of proof.
“The trial court’s need to complete witness testimony,
however urgent, does not absolve it from its obligation
to permit an offer of proof in accordance with MRE
103(a)(2).” Alpha Capital Mgt, 287 Mich App at 619.
The arbitrary 30-minute time limit prevented plaintiff’s
counsel from completing her examination of Bert Dear-
2010] B
ARKSDALE V
B
ERT
’
S
M
ARKETPLACE
657
ing and deprived her of any opportunity for reexamina-
tion. The trial court’s preclusion of allowing plaintiff to
offer any proof concerning potential additional areas of
inquiry further prejudiced plaintiff’s substantial rights.
MCR 2.613(A). Consequently, we cannot deem these
errors harmless.
Plaintiff lastly challenges the trial court’s decision to
exclude the portions of Lawhorn’s deposition testimony
relating to plaintiff’s statements that Jai-Lee Dearing
had sexually harassed her. Although we need not reach
this issue given our reversal of the judgment of no cause
of action, we note for purposes of guidance on remand
that we detect no error in the trial court’s conclusion
that Lawhorn’s challenged statements fall within the
category of inadmissible hearsay.
Reversed and remanded for a new trial. We do not
retain jurisdiction.
658 289 M
ICH
A
PP
652
WALTER TOEBE CONSTRUCTION COMPANY v
DEPARTMENT OF TREASURY
Docket No. 291764. Submitted July 14, 2010, at Detroit. Decided July 27,
2010. Approved for publication September 2, 2010, at 9:00 a.m.
Walter Toebe Construction Company petitioned the Tax Tribunal after
the Department of Treasury disallowed a single business tax credit
petitioner sought for taxes petitioner claimed to have paid on indus-
trial personal property. The parties agreed that the property had been
erroneously classified by the local assessor as commercial personal
property, but the Tax Tribunal affirmed the disallowance, noting that
the property had never been classified by the assessor as industrial
personal property and holding that this classification was required
under the Single Business Tax Act (SBTA), former MCL 208.1 et seq.,
before the credit could be claimed. Petitioner appealed.
The Court of Appeals held:
The Tax Tribunal correctly disallowed the credit. Former MCL
208.35d(6)(a) defined “industrial personal property” for which a tax
credit may be claimed as “property classified as industrial personal
property under [MCL 211.34c(3)],” a provision of the General Prop-
erty Tax Act. By using this language, the Legislature intended to
make the definition dependent on the assessor’s classification. Be-
cause the assessor never classified the property at issue as industrial
personal property, petitioner could not claim the credit.
Affirmed.
T
AXATION —
S
INGLE
B
USINESS
T
AX
A
CT —
C
LASSIFICATION OF
P
ROPERTY —
I
NDUSTRIAL
P
ERSONAL
P
ROPERTY
.
A taxpayer may claim a tax credit under the former Single Business
Tax Act for “industrial personal property,” which is defined as
property classified as industrial personal property under MCL
211.34c(3), a provision of the General Property Tax Act; property
meets this definition only if it has been classified by the assessor as
industrial personal property (former MCL 208.35d[6][a]).
Dickinson Wright PLLC (by Robert F. Rhoades and
Adam D. Grant) for petitioner.
W
ALTER
T
OEBE
C
ONSTR V
D
EP
’
TOF
T
REASURY
659
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Steven B. Flancher, Assistant
Attorney General, for respondent.
Before: S
HAPIRO
,P.J., and S
AAD
and S
ERVITTO
,JJ.
P
ER
C
URIAM.
Petitioner appeals as of right the order of
the Tax Tribunal granting respondent’s motion for
summary disposition. We affirm.
Petitioner is a Michigan corporation engaged in the
construction business. The local tax assessor classified a
portion of petitioner’s property as commercial personal
property for tax year 2006. The parties agree that the
property in question should have been classified as indus-
trial personal property and that the assessor simply erred
in the classification.
When filing its 2006 single business tax return, peti-
tioner claimed a tax credit of $17,810 for $118,731 in taxes
it claimed to have paid on industrial personal property.
Respondent sent a notice of adjustment, informing peti-
tioner that it was disallowing the credit because petitioner
had not attached any statement that the taxes had been
levied and paid or that the property was classified as
industrial personal property.
Petitioner, through its accountant, responded that it
had paid property taxes on the property at issue and that
the property fit the definition of “industrial personal
property” found in § 34c of the General Property Tax Act
(GPTA), MCL 211.34c.
The hearing referee found that “[i]ndustrial personal
property is defined by statute and not by an assessor.”
Because the property fit the definition in the GPTA, the
referee recommended allowing the credit, despite the
assessor’s classification.
660 289 M
ICH
A
PP
659 [Sept
Respondent rejected the hearing referee’s recommen-
dation. It asserted that the definition in the GPTA was
inapplicable and that the appropriate definition was that
found in the Single Business Tax Act (SBTA), former MCL
208.1 et seq.
1
Countering petitioner’s argument that the
SBTA definition had simply imported the GPTA defini-
tion, respondent noted that the SBTA definition re-
quires the property to be “classified as industrial per-
sonal property” under the GPTA. Former MCL
208.35d(6)(a). Because the property in question had
never been classified as industrial personal property,
according to respondent, it did not meet the SBTA
definition, and petitioner was ineligible for the credit.
Petitioner petitioned the Tax Tribunal for a redetermi-
nation of the decision. The Tax Tribunal agreed with
respondent’s argument and affirmed its decision. Peti-
tioner brings this appeal.
The sole issue on appeal is whether the Tax Tribunal
erred by holding that the since-repealed SBTA definition
of “industrial personal property” depended on the classi-
fication of the property by the tax assessor or whether it
only indicated that the SBTA imported the definition of
“industrial personal property” from the GPTA. We review
de novo questions of statutory interpretation and applica-
tion. People v Stone Transp, Inc, 241 Mich App 49, 50; 613
NW2d 737 (2000). Our goal in interpreting a statute is to
give effect to the Legislature’s intent. People v Borchard-
Ruhland, 460 Mich 278, 284; 597 NW2d 1 (1999).
Many sections of the SBTA imported definitions from
other statutes. For example, the SBTA defined a “United
States corporation” with reference to the Internal Rev-
enue Code, specifically 26 USC 7701(a)(3) and (4), by
using the words “as those terms are defined in,” rather
1
The SBTA was repealed by 2006 PA 325, effective December 31, 2007.
2010] W
ALTER
T
OEBE
C
ONSTR V
D
EP
’
TOF
T
REASURY
661
than “classified as.” Former MCL 208.3(1). Similarly,
the act defined “insurance company” with reference to
section 106 of the Insurance Code, MCL 500.106, again
with the words “as defined in,” not “classified as.” Former
MCL 208.5a. Throughout the act, “as defined in” or “as
defined by” were the phrases used to denote an adoption
of a statutory definition from another statute. See, e.g.,
former MCL 208.9(3)(g)(iii); 208.9(7)(c)(ii); 208.10(4);
208.19(5)(d); 208.31a(5)(d). Significantly, the word “clas-
sified” was never used for this purpose.
It follows, then, that if the Legislature, in drafting
the SBTA, had wished to import the definition of
“industrial personal property” from the GPTA, it would
have chosen to say, as it did throughout the SBTA,
“ ‘Industrial personal property’ means that term as
defined in section 34c of the general property tax act,”
or something similar. Instead, the Legislature chose to
define “industrial personal property” as “personal
property classified as industrial personal property un-
der section 34c of the general property tax act....”
Former MCL 208.35d(6)(a) (emphasis added); see also
former MCL 208.35f(6)(a) and 208.35g(6)(a). Section
34c of the GPTA contains not only a definition of
“industrial personal property,” but also imposes on
assessors a duty to classify property under that section.
MCL 211.34c(1) and (3)(c). The most reasonable infer-
ence to be drawn from the Legislature’s use of this
language is that it intended to allow respondent to rely
on the assessor’s classification of property under MCL
211.34c(1) and did not intend to require respondent to
make an independent assessment of whether taxpayers’
property met the definition in MCL 211.34c(3).
We are bound, when interpreting a statute, to give
effect to the Legislature’s intent. Because it is clear
from reading the SBTA that the Legislature intended to
662 289 M
ICH
A
PP
659 [Sept
make the definition of “industrial personal property”
dependent on the assessor’s classification, and because the
property at issue in this case was never classified as
industrial personal property by the assessor, we affirm the
decision of the Tax Tribunal disallowing the tax credit.
Petitioner argues that respondent’s interpretation of
the statute, which we adopt today, leads to an absurd
result. The tax credit at issue required a taxpayer to “file
within the time required the statement of personal prop-
erty described in section 19 of the general property tax act,
1893 PA 206, MCL 211.19....”Former MCL 208.35d(3).
Petitioner notes, correctly, that the deadline for filing the
statement of personal property is February 20, MCL
211.19(2), but the assessor has until March to classify the
property, MCL 211.34c(1). Petitioner argues that it would
therefore be impossible for a taxpayer to rely on the
assessor’s classification in making its statement of per-
sonal property, and therefore impossible to claim the tax
credit. However, the statement of personal property de-
scribed in MCL 211.19 does not require a taxpayer to
know or assert how its personal property should be
classified by the assessor. A taxpayer would then file its
single business tax return four months after the close of
its tax year. Former MCL 208.73(1). By this time, of
course, the taxpayer would have had the classification of
the property from the assessor, and there would be noth-
ing impossible about claiming the tax credit. Further, if
petitioner’s argument were correct, the GPTA would be
absurd regardless of the SBTA because the GPTA requires
the statement of personal property to precede the asses-
sor’s classification of property. But there is no absurdity or
impossibility in requiring this because the statement of
personal property does not require knowledge of the
assessor’s classification.
Affirmed.
2010] W
ALTER
T
OEBE
C
ONSTR V
D
EP
’
TOF
T
REASURY
663
BUTLER v WAYNE COUNTY
Docket No. 290361. Submitted April 14, 2010, at Detroit. Decided May
27, 2010. Approved for publication September 7, 2010, at 9:00 a.m.
Rosemary Butler and others representing a class consisting of
retirees of Wayne County who, before retirement, were repre-
sented by Michigan AFSCME Counsel 25, and its Locals 25, 101,
409, or 1659 and who purchased supplemental life insurance (SLI)
from the county upon retirement, brought an action in the Wayne
Circuit Court against the county and its retirement board, claim-
ing that defendants breached their contract to provide a fixed
flat-rate premium for the SLI of $2.36 per thousand dollars of
insurance a month when defendants switched to an age-rated-
premium structure for SLI coverage. The parties relied on two
documents that they stipulated as joint exhibits: the collective-
bargaining agreement between the county and the locals effective
December 1, 2000, to November 30, 2004 (the CBA), and the
Wayne County health and welfare benefit plan description effec-
tive December 1, 1990 (the plan). The parties also stipulated that
the CBA and the plan were the only documents governing the
dispute and that any prior collective-bargaining agreements were
to be considered for background purposes only. Although initially
disputed, the parties agreed by the time of trial that defendants
had a contractual obligation to make SLI available to retirees. The
court, Prentis Edwards, J., held that defendants were free to
increase the amount of the premium charged for SLI from $2.36
per thousand a month, in light of evidence that the premiums had
increased over time, determined that there was no evidence of an
agreement to provide subsides to retirees for the cost of SLI, and
concluded that the length, widespread knowledge, and consistency
of the practice of providing SLI at a flat-rate premium created a
reasonable expectation that the practice would continue, making
the practice binding on the parties. Defendants appealed the
holding that plaintiffs are entitled to a flat-rate-premium struc-
ture on the basis of a vested right created by the past practice of
the parties.
The Court of Appeals held:
664 289 M
ICH
A
PP
664 [Sept
1. The CBA expressly provided that SLI would, at some point,
be changed to an age-rated-premium structure and that retirees
would be eligible to transfer to that plan. The express language of
the CBA, as modified through the incorporation of the plan,
provided that there was no express contractual right to a flat-rate-
premium structure.
2. The past-practice doctrine is applicable in this case, al-
though in a limited context. The doctrine may only be used in this
case to establish that a contractual right to a flat-rate-premium
structure existed at the time of retirement as a result of a past
practice that modified the contract under which the retiree retired.
3. When a collective-bargaining agreement is ambiguous or
silent on the subject for which the past practice has developed,
there need only be tacit agreement that the practice would
continue. However, where a past practice is clearly contrary to
clear contract language, the unambiguous contract language con-
trols unless the past practice is so widely acknowledged and
mutually accepted that it amends the contract. The party seeking
to supplant the contract language must show that the parties had
a meeting of the minds with respect to the new terms or conditions
so that there was an agreement to modify the contract.
4. There is no merit to plaintiffs’ contention that there was no
provision contained in the CBA that related to how the SLI rate
would be calculated. Plaintiffs’ allegation of a past practice pro-
hibiting a change from a flat-rate-premium structure conflicts
with the express contract language. The unambiguous contract
language controls unless the past practice was so widely acknowl-
edged and mutually accepted that it amended the contract.
5. The SLI provision contained in the plan was not ambiguous.
The only way to read the CBA and the plan provisions to hold that
retirees are entitled to SLI requires interpreting the SLI provi-
sions related to “employees” as including “retirees.” Once “retir-
ees” are read into the plan’s SLI provisions, it becomes clear that
they are subject to the age-related-premium system that was to be
provided to employees “at the County’s option.” The union had
notice of these provisions. There was never a meeting of the minds
with regard to whether the flat-rate-premium structure was to
exist in perpetuity and, therefore, no agreement to modify the
contract.
6. Because the plan and the CBA expressly permitted defen-
dants, at their option, to implement an age-related-premium
structure, the fact that defendants inserted the language regard-
ing that option in 1991 but did not implement the change until
2007 did not, by itself, constitute a past practice that would amend
2010] B
UTLER V
W
AYNE
C
O
665
the CBA. The trial court erred when it concluded that there was a
past practice that amended the CBA to provide a contractual right
to a perpetual flat-rate-premium structure. The trial court’s
determination that plaintiffs are entitled to a flat-rate-premium
structure on the basis of a vested contract right must be reversed
and the case must be remanded to the trial court for the entry of
an order permitting defendants to change the SLI premium
structure to an age-rated structure.
Reversed and remanded.
1. M
ASTER AND
S
ERVANT —
P
ENSIONS —
V
ESTED
R
ETIREMENT
R
IGHTS —
P
AST
-
P
RACTICE
D
OCTRINE
.
Vested retirement rights may not be altered without the pensioner’s
consent; a retiree’s contractual rights vest, if at all, at the time of
retirement absent explicit contractual language to the contrary; a
retiree relying on the past-practice doctrine to show that a past
practice may have amended a contract covering the retiree before
the retiree retired must show that the past practice had modified
the contract under which the retiree retired; a claim based on the
past-practice doctrine must fail if any of the actions upon which
the retiree relies to assert a past practice occurred after the
retiree’s date of retirement.
2. C
ONTRACTS —
P
AST
-P
RACTICE
D
OCTRINE.
When a past practice of the parties to a contract is clearly contrary
to the clear language of the contract, the clear language controls
unless the past practice is so widely acknowledged and mutually
accepted that it amends the contract; the party seeking to supplant
the contract language must show that the parties had a meeting of
the minds with respect to the new terms or conditions so that
there was an agreement to modify the contract.
Miller Cohen, P.L.C. (by Bruce A. Miller), for plain-
tiffs.
Clark Hill PLC (by Reginald M. Turner, Paul W.
Coughenour, and Stephanie J. Clifford) for defendants.
Before: B
ANDSTRA
,P.J., and B
ORRELLO
and S
HAPIRO
JJ.
P
ER
C
URIAM
. This contract dispute arises from defen-
dants’ attempt to change the premium structure of
666 289 M
ICH
A
PP
664 [Sept
retiree supplemental life insurance (SLI) from a flat-
rate-premium structure to an age-rated-premium struc-
ture, which resulted in higher premiums for older
retirees. Defendants appeal as of right from the trial
court’s order after a bench trial holding that plaintiffs
are entitled to a flat-rate-premium structure on the
basis of a vested right created by the past practice of the
parties. We reverse and remand for entry of an order
permitting defendants to change the SLI premium
structure to an age-rated structure.
I. BASIC FACTS AND PROCEDURAL HISTORY
In this class-action lawsuit, plaintiffs are named
plaintiffs representing the class consisting of retirees of
defendant Wayne County (the county) who, before
retirement, were represented by Michigan AFSCME
Council 25, and its Locals 25, 101, 409, or 1659,
1
and
who purchased SLI from the county upon retirement.
The parties primarily rely on two documents, which
they stipulated as joint exhibits: the collective-
bargaining agreement between the county and AF-
SCME Locals 25, 101, 409, and 1659 effective December
1, 2000, to November 30, 2004 (the CBA), and the
Wayne County health and welfare benefit plan descrip-
tion effective December 1, 1990 (the Plan).
The county provides, at its expense, $20,000 of life
insurance coverage to current employees and $5,000 of life
insurance coverage to retirees. Employees or retirees who
wish to purchase SLI may do so at their own expense.
Plaintiff Nora Raymond retired in 1983. At retire-
ment, Raymond originally paid $8.74 a month for
1
The order that allowed the action to be maintained as a class action
also ordered that the name of the union be removed from the caption of
the pleadings.
2010] B
UTLER V
W
AYNE
C
O
667
$11,500 in SLI. Over time, this rate increased to $27.14
a month for the same amount of coverage. She never
objected to the increase in premiums and continued to
pay for coverage.
Plaintiff Rosemary Butler retired in 2002. She did
not discuss SLI when she met with her retirement
representative. She was, however, given a document
titled “As You Retire....Wayne County Retirees Fact
and Information Guide” that provided that “[s]upple-
mental life insurance can be continued at a maximum of
$11,500 by monthly payroll deduction, if applicable.”
Although she did not talk to anyone regarding SLI
premium rates, she “was under the impression” that
the premium rates were the same for retirees as for
active employees because the document indicated that
SLI was a continued benefit.
Before February 2005, the amount that retirees paid
in premiums for SLI matched the cost to the county for
the SLI. In February 2005, Prudential Insurance Com-
pany informed the county that the existing SLI pre-
mium rate of $2.36 per thousand dollars of insurance
coverage was insufficient. Rather than permit the liabil-
ity for the SLI to become unfunded and have the
policies cancelled, Jack Underwood, Director of Risk
Management for Wayne County, made the unilateral
decision to use excess funds contained in an Insurance
Continuation Fund (ICF), established to buy out the
county’s liability for basic life insurance for certain
retirees, to pay the difference “until a decision was
made as to whether or not the County was going to
notify retirees that they would now be going to an age
banded rate premium.”
When the ICF funds were depleted by August 2005,
Underwood unilaterally authorized the county to con-
tinue subsidizing the premium rate for retiree SLI from
668 289 M
ICH
A
PP
664 [Sept
the county’s general fund to prevent the policies from
being cancelled. Underwood had no authority to bind
the county to an obligation to pay the benefits. When
Underwood informed Carla Sledge, Chief Financial
Officer for Wayne County, that the policies would be
cancelled without the subsidization or a change in
premium rates, Sledge said that it was inappropriate for
the county to subsidize the “difference between the
$2.36 and the amount that would need to be paid for the
age-banded rate.”
Prudential, the insurance company providing SLI,
indicated that to properly fund the SLI, either a flat
rate of $5.44 would be required of all employees, or an
age-rated premium could be implemented, making costs
“equitable for all participants, so a younger employee
obviously would pay less premium than an older per-
son.” Rather than increasing the flat-rate premium to
cover the SLI cost, the county elected to switch to the
age-rated-premium structure, to become effective Janu-
ary 1, 2007. On October 12, 2006, Ronald Yee, on behalf
of defendants, authored a letter notifying retirees of the
new SLI premium rates and the age-rated-premium
structure. Raymond and Butler both received this letter
and, on the basis of the increased premium, elected to
discontinue their coverage.
Plaintiffs subsequently filed this class-action suit on
April 18, 2007, claiming that defendants breached their
contract to provide a fixed flat-rate premium of $2.36
per thousand dollars of insurance a month for SLI. On
April 25, 2008, plaintiffs filed their first-amended class-
action complaint for injunctive relief. Despite the fact
that the class clearly contained plaintiffs who retired
before the enactment of the CBA and the Plan, plain-
tiffs argued that when defendants notified retirees on
October 18, 2006, that defendants had changed to an
2010] B
UTLER V
W
AYNE
C
O
669
age-rated premium, “[t]his change was made in viola-
tion of Section 3 B supra of the various collective
bargaining agreements (Plan incorporated by refer-
ence)” and that “[d]efendants violated the provisions of
the Plan, and the collective bargaining agreements, by
creating age related categories in an arbitrary and
capricious manner that violated the provision of the
Plan.” Plaintiffs’ complaint did not address the fact
that at least one of the named plaintiffs retired under a
different contract
2
and simply provided that the Plan
was incorporated by reference into “various collective
bargaining agreements.”
At oral argument, plaintiffs indicated that there was
a joint stipulation that the CBA and the Plan were the
only documents governing the dispute and that refer-
ences to any prior collective-bargaining agreements
were for background purposes only. Accordingly, al-
though Raymond retired under a different collective-
bargaining agreement, she and all plaintiffs repre-
sented by her were bound by their counsel’s stipulation
and this Court has limited its analysis to rights estab-
lished under the CBA and the Plan.
Although initially disputed, by the time of trial, the
parties agreed that defendants had a contractual obliga-
tion to make SLI available to retirees. Thus, the only
issues left to be decided at trial were (1) whether defen-
dants could change the amount of the SLI premiums; (2)
whether defendants were required to continue to subsi-
dize plaintiffs’ SLI premiums; and (3) whether defendants
could change the structure of the SLI premium from a
flat-rate structure to an age-rated structure.
The trial court concluded that the “fundamental
question here is whether the Defendants are contractu-
2
Raymond retired in 1983, clearly before the enactment of the Plan.
670 289 M
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ally obligated to provide interminable SLI to the mem-
bers of the Plaintiffs’ class at a fixed flat rate premium
of $2.36 per thousand per month, in the absence of an
explicit or tacit agreement.” The trial court held that
defendants were free to increase the amount of the
premium charged for SLI from $2.36 per thousand a
month, in light of the evidence that the premiums had
increased over time. The trial court also determined
that there was no evidence of an agreement to provide
subsidies to retirees for the cost of SLI. Finally, the trial
court concluded that “[t]he length, wide spread knowl-
edge, and consistency of the practice of providing SLI at
a flat rate premium created a reasonable expectation
that the practice would continue,” making that practice
“binding on the parties.” The only issue on appeal is the
last of these decisions—that defendants are required to
provide SLI to plaintiffs at a flat-rate premium in
perpetuity and are prohibited from changing to an
age-rated-premium structure.
II. STANDARD OF REVIEW
When reviewing a trial court’s decision after a bench
trial, we review its findings of fact for clear error and
review de novo its conclusions of law. City of Flint v
Chrisdom Props, Ltd, 283 Mich App 494, 498; 770
NW2d 888 (2009).
We also review de novo a trial court’s interpretation
of a written contract. Coates v Bastian Bros, Inc, 276
Mich App 498, 503; 741 NW2d 539 (2007). “The initial
question whether contract language is ambiguous is a
question of law. If the contract language is clear and
unambiguous, its meaning is a question of law. Where
the contract language is unclear or susceptible to mul-
tiple meanings, interpretation becomes a question of
2010] B
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fact.” Port Huron Ed Ass’n v Port Huron Area Sch Dist,
452 Mich 309, 323; 550 NW2d 228 (1996) (citations
omitted).
III. ANALYSIS
Generally, “a mid-term unilateral modification that
concerns, not the benefits of active employees, but the
benefits of already retired employees” does not consti-
tute an unfair labor practice. Allied Chem & Alkali
Workers of America v Pittsburgh Plate Glass Co, 404 US
157, 160; 92 S Ct 383; 30 L Ed 2d 341 (1971). This is
because retirees “are neither ‘employees’ nor bargain-
ing unit members.” Id. at 176. However, “[u]nder
established contract principles, vested retirement
rights may not be altered without the pensioner’s
consent.” Id. at 181 n 20. Therefore, in order for plain-
tiffs to sustain their claim that defendants could not
unilaterally modify their SLI premiums from a flat-rate
premium to an age-rated premium, plaintiffs must
show that they had a contractual right to a flat-rate
premium in perpetuity and that that right was con-
tained in their contracts at the time they retired, so that
it could be deemed to be vested. Accordingly, before the
question of vesting arises, this Court must determine if
such a contractual right exists, whether by express
provision or past practice.
A. EXPRESS CONTRACTUAL RIGHT
The CBA’s only explicit reference to SLI is in article
29.16 and provides, “Supplemental life insurance is
available under a group plan at the option of the
employee.” It makes no mention of what the rate is or
how it will be calculated and also contains no reference
to SLI for retirees. However, article 29 of the CBA also
provides, “Except where it is in conflict with the express
672 289 M
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terms of this agreement, the Wayne County Health and
Welfare Benefit Plan (‘the Plan’) effective December 1,
1990 is hereby incorporated by reference.”
Section 3(B) of the Plan provides:
Supplemental life insurance is available under a group
plan at the option of the employee. Supplemental life
insurance will soon be age rated at the County’s option.
Age groupings for rates will be as follows: 29 and under, 30
to 34, 35 to 39, 40 to 44, 45 to 49, 50 to 54, 55 to 59, 60 to
64, 65 to 69, 70 and up. The rate that the employee pays for
supplemental life [insurance] will increase as the employee
grows older. Employees and retirees will, subject to the
terms and conditions of the life insurance company, be
eligible to transfer to the age rated group life insurance
plan. The amount of the life insurance available for any
individual and the life insurance policy provisions shall be
determined by the life insurance company.
Because § 3(B) is not in direct conflict with any provi-
sion of the CBA, it is incorporated through article 29.
Plaintiffs argue that § 3(B) of the Plan is inconsistent
with the CBA because article 44.01 of the CBA provides
that all fringe benefits not changed or covered by the
contract are to remain in full force and effect.
3
This
argument ignores that article 29.16 of the CBA
provides the right to SLI. Therefore, SLI is covered by
and, with the age-rated language in the Plan, arguably
changed by, the contract. Accordingly, article 44.01 is
3
Article 44.01 provides:
It is agreed that all established fringe benefits not changed or
covered in this Agreement that are now being received by all the
employees in the bargaining unit covered by this Agreement shall
remain in full force and effect. The Employer shall not establish
any benefit for the employees covered in this Agreement without
first negotiating such benefit with the Union.
2010] B
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inapplicable because it only applies to those benefits not
changed or covered by the CBA.
Because there is an express provision in the CBA that
SLI will, at some point, be changing to an age-rated-
premium structure and that retirees will be eligible to
“transfer” to that plan, we conclude that, under the
express language of the CBA as modified through the
incorporation of the Plan, there is no express contrac-
tual right to a flat-rate-premium structure.
B. PAST PRACTICE
Because the CBA does not contain an express right to
a flat-rate-premium structure, the only way plaintiffs
could have a vested right to a flat-rate-premium struc-
ture would be based on a past practice amending the
contract provisions.
1. APPLICABILITY OF THE DOCTRINE
Defendants argue that the past-practice doctrine is
inapplicable to retirees. We agree in part, but still find
the doctrine applicable in the present case.
“[A] past practice which does not derive from the
parties’ collective bargaining agreement may become a
term or condition of employment which is binding on
the parties.” Amalgamated Transit Union v Southeast-
ern Mich Transp Auth, 437 Mich 441, 454; 473 NW2d
249 (1991). In Port Huron, 452 Mich at 325, our
Supreme Court held:
In order to create a term or condition of employment
through past practice, the practice must be mutually
accepted by both parties. Where the collective bargaining
agreement is ambiguous or silent on the subject for which
the past practice has developed, there need only be “tacit
agreement that the practice would continue.” However,
674 289 M
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where the agreement unambiguously covers a term of
employment that conflicts with a parties’ past behavior,
requiring a higher standard of proof facilitates the primary
goal of the PERA
[
4
]
—to promote collective bargaining to
reduce labor-management strife. [Id. at 325-326 (citations
omitted).]
As previously noted, however, under Allied Chem, 404
US at 160, “a mid-term unilateral modification that
concerns, not the benefits of active employees, but the
benefits of already retired employees” does not consti-
tute an unfair labor practice, and retirees “are neither
‘employees’ nor bargaining unit members,” id. at 176.
Taking these holdings together, there is a strong infer-
ence that the past-practice doctrine cannot amend
retirees’ contracts.
First, a past practice creates “a term or condition of
employment....”Port Huron, 452 Mich at 325; Amal-
gated, 437 Mich at 454. However, retirees are, by
definition, no longer employed and cannot be consid-
ered employees. Allied Chem, 404 US at 176. Thus, a
change in retiree benefits cannot be deemed a change in
a term or condition of employment. Furthermore, the
standard of proof to permit a past practice to override
the express terms of a collective-bargaining agreement
is based on facilitating “the primary goal of the
PERA—to promote collective bargaining to reduce
labor-management strife.” Port Huron, 452 Mich at
326. Under Allied Chem, retirees are not bargaining-
unit members and, therefore, fall outside the labor-
management relationship. Allied Chem, 404 US at 176.
If the purpose of giving deference to contract provisions
over past practice is related to collective-bargaining
goals, the standard, and therefore the doctrine, would
4
Public employees relations act, MCL 423.201 et seq.
2010] B
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seem to have little relevance to those people who no
longer have any part to play in collective bargaining,
namely, retirees.
However, a past practice may have amended a con-
tract before someone’s retirement. Accordingly, we find
that the doctrine is applicable in this case, although in
a limited context. That is, the past-practice doctrine
may only be used to establish that a contractual right
existed at the time of retirement. Absent explicit con-
tractual language to the contrary, a retiree’s contrac-
tual rights vest, if at all, at the time of retirement. See
Winnett v Caterpillar, Inc, 553 F3d 1000, 1008-1012 (CA
6, 2009). Thus, the retiree must show that the past
practice had already established the right at the time of
retirement. Actions taken after a person’s retirement
that ultimately result in a finding of a past practice
would not create a vested contractual right for that
person because that person’s rights were fixed on the
basis of the contract that existed at the time of his or
her retirement. Thus, it is too broad to say that past
practice never applies to retirees. Rather, a retiree
relying on the past-practice doctrine must show that
the past practice had modified the contract under which
the retiree retired. If any of the actions upon which a
retiree relies to assert a past practice occurred after the
retiree’s date of retirement, the claim must fail.
2. EXISTENCE OF A PAST PRACTICE
“Where the collective bargaining agreement is am-
biguous or silent on the subject for which the past
practice has developed, there need only be ‘tacit agree-
ment that the practice would continue.’ ” Port Huron,
452 Mich at 325, quoting Amalgamated, 437 Mich at
454-455. However, where a past practice is clearly
contrary to clear contract language,
676 289 M
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the unambiguous contract language controls unless the
past practice is so widely acknowledged and mutually
accepted that it amends the contract. The party seeking to
supplant the contract language must show the parties had
a meeting of the minds with respect to the new terms or
conditions so that there was an agreement to modify the
contract. [Port Huron, 452 Mich at 312.]
Under this standard, we must first determine whether
there is a contract provision that provides for how SLI
premiums will be calculated and, if so, determine
whether that contract provision is directly contrary to
the past practice argued by plaintiffs.
As previously noted, the CBA’s only explicit refer-
ence to SLI provides that “[s]upplemental life insurance
is available under a group plan at the option of the
employee.” It makes no mention of what the rate is or
how it will be calculated. However, because the CBA
incorporates the Plan, it contains an express provision
that SLI will, at some point, be changing to an age-
rated-premium system and that retirees will be eligible
to “transfer” to that plan. Accordingly, plaintiffs’ con-
tention that there is no provision contained in the CBA
that relates to how the SLI rate will be calculated is
without merit.
In light of the existence of an express provision in the
CBA providing how the SLI rate will be calculated, plain-
tiffs’ allegation of a past practice prohibiting a change
from a flat-rate-premium structure is contrary to the
express contract language, making the Port Huron stan-
dard the applicable standard in this case. Accordingly, “the
unambiguous contract language controls unless the past
practice is so widely acknowledged and mutually accepted
that it amends the contract.” Id.
The trial court avoided the Port Huron standard of
requiring proof that “the parties had a meeting of the
2010] B
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minds with respect to the new terms or conditions so
that there was an agreement to modify the contract,”
id., by finding that the SLI provision contained in the
Plan was ambiguous. We disagree with the trial court
and hold that the provision is not ambiguous.
The trial court relied heavily on the fact that § 3(B) of
the Plan provides that “[t]he rate that the employee
pays... will increase” and that the section fails to
mention retirees even though both “[e]mployees and
retirees” are referenced with respect to the transfer
provision. (Emphasis added.) However, after consider-
ing the use of the term “employee” throughout the Plan
and the CBA as it relates to SLI, we disagree with the
trial court’s interpretation.
The CBA and the Plan both only provide that SLI “is
available under a group plan at the option of the
employee.” (Emphasis added.) Because SLI is expressly
terminated on the first day of retirement under § 6 of
the Plan,
5
and nothing within the CBA provides to the
contrary, indeed the CBA makes no provision for SLI for
retirees at all, unless the term “employee” also includes
“retirees” in the SLI provisions in the Plan, there is no
provision anywhere that requires the county to provide
SLI to retirees. Therefore, the only way to read the CBA
and the Plan provisions to hold that retirees are en-
titled to SLI requires interpreting the SLI provisions
related to “employees” as including “retirees.” Without
such an understanding, there would seem to be no
question that the county could unilaterally change how
the premiums were calculated; indeed it could have
5
Section 6 of the Plan, “Insurance Programs: Termination Date,”
provides that “[s]ubject to various provisions of labor agreements such
as... eligibility for retiree health and life insurance benefits, the
following health benefit programs shall terminate on the last day of the
month following a...retirement” and includes both life insurance and
SLI as benefits that are terminated.
678 289 M
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unilaterally decided to stop providing SLI to retirees
entirely, because there is no contractual requirement
that it provide SLI to “retirees”—only “employees.”
Similarly, the previous collective-bargaining agree-
ments provided by plaintiffs, such as the 1981 to 1984
collective-bargaining agreement under which Raymond
retired, also provide no express language for SLI for
retirees. For example, article XXVI, “Insurance,” § 1,
“Life Insurance Program,” subsection (C) of the 1981 to
1984 agreement provides: “The EMPLOYER shall
make available the facility of payroll deduction for a
(contributory) Supplemental Life Insurance Plan which
premiums shall be paid entirely by the participating
employees.” Although the chart for the contributory
plan provides a list of benefits and costs for “Active
Employees age 65 and over and employees who retire on
or after 11-1-64,” no actual contract clause provides for
SLI to be provided to retirees. The closest any provision
comes is that, for those employees who elect “The New
Plan,” upon retirement, “the New Plan terminates.
Everyone who is under the New Plan is also under the
Old Plan (active employees age 65 and over and employ-
ees who retired on or after November 1, 1964).” Thus,
reference is made that “the Old Plan” provides rates for
retirees, but no actual provision specifically provides
that retirees will be provided SLI at all. Accordingly,
even the previous collective-bargaining agreements
seem to rely on retirees’ inclusion within the provision
that SLI be provided to “employees.” Once “retirees”
are read into the Plan’s SLI provisions, it becomes clear
that they are subject to the age-rated-premium system
that will be implemented “at the County’s option.”
The trial court also found ambiguity in the fact that
the provision does not indicate when the change to an
age-rated-premium system will take place. We find no
2010] B
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ambiguity, because the clause explicitly provides when
the change will occur—it will occur “at the County’s
option.”
Although the trial court determined that there was
no evidence to indicate that SLI rates were ever the
subject of collective bargaining and noted that the Plan
provisions are not subject to the approval of the union,
it recognized that “if the union does not agree with a
provision of the Plan an attempt to change it may be
made through the collective bargaining process.” This
finding was consistent with the testimony of Richard
Johnson, staff representative at Michigan AFSCME
Council 25, who testified that “if there’s something in
the Plan that the union could not agree to then we
identify that or, or clarify it in the Collective Bargaining
Agreement.”
The record also contains evidence that the union
exercised its right to bargain for changes to the Plan,
because there are specific provisions related to insur-
ance that alter the terms of the Plan. For example,
although § 3(A) of the Plan only provides for $15,000 of
employer-paid group life insurance, article 29.16 of the
CBA provides that the amount is $20,000. The fact that
the union did not bargain for any changes to § 3(B) of
the Plan indicates its acceptance. Therefore, we con-
clude that the union did have notice of this provision,
could have bargained to change it and, having not done
so, is bound by it unless it can meet the burden of proof
for a past practice to the contrary set forth in Port
Huron.
Under Port Huron, 452 Mich at 312, plaintiffs’ asser-
tion that a flat-rate premium for SLI was a binding past
practice required a showing that plaintiffs and the
county “had a meeting of the minds with respect to” the
flat-rate premium’s existing in perpetuity “so that
680 289 M
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there was an agreement to modify the contract.” Id.
Plaintiffs were required to “submit proofs illustrating
that the parties had a meeting of the minds with respect
to the new terms or conditions—intentionally choosing
to reject the negotiated contract and knowingly act in
accordance with the past practice.” Id. at 329.
Although plaintiffs testified that they believed that
such an agreement existed, they provided no evidence
that defendants shared their belief. Indeed, the evidence
supports that there was never a meeting of the minds
on this issue.
Raymond testified that she was informed that she
could purchase supplemental life insurance and that
she “would have to pay 8 dollars and something or like
9 dollars a month.” Exhibit 2 to her deposition was a
letter that stated at the top, “Please do NOT destroy
this form letter. Consult it before you call the Retire-
ment Office.” Paragraph 9 of the letter provides:
The free $10,000 life insurance is reduced to $4,000
(Road Commission is reduced to $7,000). The most you can
carry in Supplemental Life Insurance is $11,500 @ $8.74
per month. The premium is deducted from your monthly
pension check.
Nothing in this letter indicates how the rate was
calculated or how future rates would be calculated.
Butler testified that at her meeting with the retire-
ment representative she did not discuss SLI coverage
and was not told what the premium for SLI would be.
Plaintiffs rely on the document provided to Butler upon
her retirement, which provides:
LIFE INSURANCE (All Plans)
The basic life insurance you carried as an active em-
ployee will be reduced to $5,000, depending on your cover-
age group. Supplemental life insurance can be continued at
2010] B
UTLER V
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a maximum of $11,500 by monthly payroll deduction, if
applicable. You will not receive a policy, but a statement of
coverage and beneficiaries can be obtained upon request.
Butler testified that she had no discussions regarding
what the rate for SLI coverage would be, but that she
“continued it, because I was under the impression that
it was the same [as when she was an active employee].”
However, she admitted that no one ever told her that
the amount of the premium would not change, but she
had simply assumed that the amount would remain the
same because it was a benefit continued from when she
was working. Furthermore, when counsel was attempt-
ing to clarify Butler’s testimony regarding how rates
had changed since she retired, she testified, “I don’t
know about a flat rate. I don’t know anything about a
flat rate.”
Nothing in this evidence supports a conclusion that
defendants intentionally chose to reject the express
terms of the CBA that permitted them to implement an
age-rated-premium structure at the county’s option.
Plaintiffs’ argument that a past practice was created
because defendants waited 16 years to implement the
age-rated-premium structure is also unavailing in light
of the express language in the Plan. Defendants’ failure
to implement the change to an age-rated-premium
structure as permitted by the Plan did not prevent
them from doing so in the future. See Amalgamated,
437 Mich at 458 n 15 (noting that the Michigan Em-
ployment Relations Commission had previously
“opined that merely refraining from action does not
establish a ‘past practice’ precluding future action”).
Further, “[s]imply because a party ‘knew or should have
known’ it was acting contrary to the agreement is
insufficient to overcome express language of the agree-
ment.” Port Huron, 452 Mich at 332. Thus, because the
682 289 M
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Plan and, therefore, the CBA expressly permitted de-
fendants, at their option, to implement an age-rated-
premium structure, the fact that defendants inserted
the language in 1991 but did not implement the change
until 2007 did not, by itself, constitute a past practice
that would amend the CBA.
Having shown no agreement that SLI premiums
would forever remain at a flat rate and no actions by
defendants that they intended to modify the CBA to
supplant the express language in the Plan, plaintiffs
failed to meet their burden. Id. at 312. Accordingly, the
trial court erred when it concluded that there was a past
practice that amended the CBA to provide a contractual
right to a perpetual flat-rate-premium structure.
Furthermore, even if we were to evaluate this case
under the reduced “tacit agreement” standard from
Amalgamated, 437 Mich at 454-455, we would reach the
same result.
Plaintiffs argued in closing before the trial court that
a “past-practice case arises to fill a void in the agree-
ment, and clearly there was a void in this agreement.
How would you know what the cost of the insurance
was unless the parties mutually, through tacit agree-
ment established it.” This argument actually benefits
defendants. That is, retirees have always paid the rates
set by the insurers. Thus, the past practice was that the
insurers set the rates and, if retirees wanted to continue
to receive the SLI, each retiree would be responsible for
paying 100 percent of whatever rate the insurance
companies set. Thus, if there is any past practice at all,
it is that retirees simply pay the rates set by the
insurers.
The evidence shows that rates were unilaterally set
by the insurer and, although defendants might have
negotiated rates to some degree, or shopped for differ-
2010] B
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ent rates from other insurers, defendants ultimately
only had the power to accept or reject the rates provided
by the insurers. As defendants noted in their closing
arguments, “The practice testified to by [various wit-
nesses] was that the premiums would be negotiated
between the County and the carriers. They arrived at a
premium and that premium would be incorporated.”
Our review of the record supports this conclusion.
Edward Maitland, owner of an insurance company
that “worked with Wayne County on the retiree life
contract through, with Prudential,” indicated that he,
as an insurance broker, presented age-banded premium
rates to the county as a way to address the shortfall
between what the insurance was costing the county and
what the retirees were paying for the insurance. He
believed that he provided the rates to Yee and Under-
wood. Underwood testified that “it was a determination
made by Prudential that the $2.36 rate, flat rate was
inadequate, that the County should have had an age-
banded rate.” Lyn Roberts, a division director employed
by the Wayne County employees retirement system,
testified that “[t]he County did not change the
rates,...[t]he rates were changed.”
Salvatore Saputo, former director of risk manage-
ment for Wayne County, testified that it was his “re-
sponsibility to negotiate with the insurance carriers as
to the renewal rates and, and then to transmit the new
rates on to Retirement who had responsibility to do the
billings and to process the payroll deductions.” The
negotiations occurred annually, at which time the in-
surers would submit proposals for rates for SLI. If the
county was unhappy with the rates provided, it would
attempt to negotiate and obtain alternative proposals to
make the rates lower, but once a proposal was accepted,
the proposal was transmitted to the retirement office so
684 289 M
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664 [Sept
it could take care of billing for the premiums. Thus,
once the county and the carrier agreed on the rates, the
rate sheets were transmitted to the retirement office
and implemented for billing purposes, without further
input.
Consistent with this testimony, Yee testified that he
was a steward and ultimately a committee person for
AFSCME Council 25, Local 1659, and that he attended
bargaining sessions in the early 1980s representing
Local 1659. He testified that he understood SLI to be “a
voluntary life insurance program, so if you were in it
you paid for it, regardless. I mean, whatever it was you
paid for it.” Yee further testified that when Prudential
took over the insurance, it mentioned that there would
be a problem continuing to charge a flat-rate premium
because the premiums being collected would not pay for
the benefit being provided. All this testimony supports
the conclusion that it was the insurer who determined
how rates were calculated and provided those rates to
the county. Once the rates were implemented, retirees
who wished to continue to receive the benefit would
need to pay 100 percent of whatever the new rates were.
The evidence is clear that the premium rates were set
by the insurance company and that the rates could and
did change. Furthermore, there is no evidence that
anyone was ever promised that the method for calculat-
ing premiums (flat-rate as opposed to age-rated) would
remain the same. Plaintiffs’ brief also points to lan-
guage in the summary plan description for coverage
under the employee term life insurance policy, which
stated that coverage only ends when “you fail to pay,
when due, any contribution required.” However, as
before, this language does not indicate what contribu-
tion is required or how it will be calculated. Indeed, it
supports the position that the insurance companies
2010] B
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determine how premiums are calculated and that de-
fendants’ obligation is to simply provide plaintiffs with
the opportunity to purchase the insurance at whatever
premium rates the insurers set.
Accordingly, we find that the record shows no evi-
dence of a tacit agreement between plaintiffs and de-
fendants that the SLI premiums would retain a flat-
rate-premium structure in perpetuity. Indeed, we hold
that if any past practice was shown to exist by tacit
agreement, it was that the insurers set the rates for SLI
and determined how they were calculated, those rates
were provided to the county, and once the county
accepted the rates, retirees who wished to maintain the
SLI benefit were required to pay 100 percent of what-
ever rates were accepted by the county. Under such
circumstances, defendants’ implementation of the new
age-based SLI premium structure would have been
consistent with that past practice and, therefore, en-
tirely permissible.
However, because we believe that Port Huron, rather
than Amalgamated, provides the appropriate standard
for this case, we hold that plaintiffs failed to establish a
past practice that amended the clear language of the
CBA that an age-rated-premium structure would be
implemented “at the County’s option,” and that the
trial court erred as a result of its conclusions to the
contrary.
IV. CONCLUSION
Because plaintiffs failed to meet their burden to
prove a past practice, there was no express contractual
right or a past practice that amended the CBA to
provide a right to a flat-rate SLI premium structure in
perpetuity and, therefore, nothing that could have
vested. Absent a vested right, defendants could unilat-
686 289 M
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664 [Sept
erally modify the SLI premium rate structure without
plaintiffs’ consent.
6
See Allied Chem, 404 US at 181 n
20. Accordingly, we reverse the trial court’s determina-
tion that plaintiffs are entitled to a flat-rate-premium
structure on the basis of a vested contract right and
remand for entry of an order consistent with this
opinion. We do not retain jurisdiction.
6
In light of our conclusion that reversal is required because of
plaintiffs’ failure to prove a past practice, it is unnecessary to address the
applicability of the reservation-of-rights language in the Plan.
2010] B
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MACKEY v DEPARTMENT OF HUMAN SERVICES
Docket No. 288966. Submitted June 15, 2010, at Lansing. Decided
September 7, 2010, at 9:05 a.m.
Elizabeth A. Marden submitted an application for Medicaid benefits
to the Department of Human Services (DHS). The DHS found that
Marden was eligible for Medicaid but applied a divestment penalty,
refusing to pay for long-term-care services for 18 months and 23
days. The DHS applied the penalty as a result of Marden’s
investment of $111,460 in the Marden Family L.L.C. (the LLC).
Marden’s daughter and attorney-in-fact, Betsy Mackey, had
formed the LLC approximately one month before Marden applied
for Medicaid benefits. Mackey was assigned 100 investment units
of the LLC and all 100 voting units. Marden was assigned 111,460
investment units of the LLC. As the sole voting member of the
LLC, Mackey disallowed the transfer of investment units during a
two-year holding period from the date of investment. After two
years, investment units could be sold with a guaranteed com-
pounded two percent interest rate on the amount paid for the units
from the date of purchase to the date of sale. Marden appealed the
DHS’s decision to apply a divestment penalty. A hearing referee
affirmed the application of the penalty, concluding that Marden
had not received fair market value for her money. Marden then
appealed in the Grand Traverse Circuit Court. The court, Philip E.
Rodgers, Jr., J., reversed, concluding that the investment was not
a divestment and that Marden had received fair market value for
her money. The Court of Appeals granted the DHS’s application
for leave to appeal. Following Marden’s subsequent death, the
Court of Appeals substituted Mackey, her personal representative,
as appellee.
The Court of Appeals held:
Federal law requires that a state determining Medicaid eligi-
bility must look back a specific period to determine if the applicant
made any asset transfers solely to become eligible for Medicaid.
Under 42 USC 1396p(c), a Medicaid applicant eligible for long-
term-care benefits is subject to a divestment penalty if he or she
transferred a resource during the applicable look-back period for
less than fair market value and the transfer was not otherwise
688 289 M
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excluded as a divestment. To determine the fair market value of a
resource, one must discern the value of the resource on the open
market in an arm’s-length transaction. Shell transactions between
relatives that have little or no economic benefit to the applicant
are not for fair market value. Marden’s investment units in the
LLC were not purchased on the open market in an arm’s-length
transaction. Therefore, the transaction did not reveal a fair
market value. Given that the LLC was admittedly created to make
Marden eligible for Medicaid, that Marden ceded total control over
the investment to her daughter and fiduciary, and that Marden
would receive only a marginal return on her unsecured investment
after two years, the investment was not for fair market value. The
investment was a divestment, and the DHS properly applied a
divestment penalty. The trial court erred by ruling otherwise.
Reversed.
S
OCIAL
S
ERVICES —
M
EDICAID —
D
IVESTMENT OF
R
ESOURCES —
F
AIR
M
ARKET
V
ALUE —
A
RM
’
S
-L
ENGTH
T
RANSACTIONS —
D
IVESTMENT
P
ENALTIES
.
A Medicaid applicant eligible for long-term-care benefits is subject to
a divestment penalty if he or she transferred a resource during the
applicable look-back period for less than fair market value and the
transfer was not otherwise excluded as a divestment; to determine
the fair market value of a resource, one must discern the value of
the resource on the open market in an arm’s-length transaction;
shell transactions between relatives that have little or no economic
benefit to the applicant are not for fair market value (42 USC
1396p[c]).
Rizzo & Associates, PLC (by John J. Rizzo III), for
petitioner.
Michael A. Cox, Attorney General, B. Eric Restuccia,
Solicitor General, and Jonathan S. Ludwig, Assistant
Attorney General, for respondent.
Before: M
URRAY
,P.J., and S
AAD
and M. J. K
ELLY
,JJ.
M
URRAY
,P.J. Respondent, the Department of Human
Services (DHS), appeals on leave granted the circuit
court order reversing the hearing referee’s decision that
the DHS properly imposed a Medicaid benefit divest-
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ment penalty on petitioner, Elizabeth Marden.
1
We
conclude that the circuit court’s ruling was in error
because the circumstances of petitioner’s investment in
a closely held L.L.C. rendered the transaction a transfer
for less than fair market value. Accordingly, the circuit
court’s order is reversed.
I. FACTS AND PROCEEDINGS
The underlying facts are not in dispute. On Novem-
ber 29, 2005, petitioner and her husband applied for
Medicaid, but they failed to disclose certain annuity
contracts they held, which, had they been disclosed,
would have rendered them ineligible for Medicaid ben-
efits. On November 9, 2006, Mr. Marden died. Shortly
thereafter, petitioner’s case was due for redetermina-
tion, but was closed when she failed to return the
required form.
On January 11, 2007, petitioner again applied for
Medicaid, but was denied eligibility the following June
because she had too much money in her bank account.
After her second application had been denied, petitioner
received close to $100,000 in payouts as a result of her
husband’s death. In preparation for submitting a third
request for Medicaid benefits, petitioner’s daughter and
attorney-in-fact, Betsy Mackey, formed the Marden
Family L.L.C. Mackey was assigned, in her own name,
100 investment (nonvoting) units of the L.L.C. and all
100 voting units. Petitioner was assigned 111,460 in-
vestment units, for which she (through Mackey’s power
of attorney) paid the L.L.C. $111,460. The same day,
Mackey, as sole voting member of the L.L.C., acted to
disallow any transfer of investment units during a
1
Elizabeth Marden died April 23, 2009, and Betsy Mackey was substi-
tuted as the personal representative of Marden’s estate. For clarity,
Marden will be referred to as petitioner throughout this opinion.
690 289 M
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two-year holding period. Thus, under the L.L.C.’s oper-
ating agreement, petitioner could not sell, transfer, or
liquidate her units for two years from the date of
investment without a supermajority of the voting mem-
bers. After two years, the agreement permitted sale of
the units and guaranteed compounding two percent
interest on the amount paid for the units from the date
of purchase to the date of sale. During the two years,
petitioner would not receive any payments from the
L.L.C.
That September, petitioner again applied for Medic-
aid, including a retroactive application for the month of
August (the month the L.L.C. was created). The DHS
found that petitioner was eligible for Medicaid, but
applied a divestment penalty,
2
refusing to pay for long-
term-care services for 18 months and 23 days. Peti-
tioner appealed the DHS determination, and the hear-
ing referee found that petitioner had not received fair
market value for her money, and affirmed the decision
of the DHS to apply the divestment penalty. Specifically,
the hearing referee found that because petitioner’s
investment within the five-year “look-back” period ren-
dered an otherwise available cash asset unavailable for
two years, the investment was for less than fair market
value and a divestment penalty was appropriate. Addi-
tionally, the hearing referee rejected petitioner’s argu-
ment that the investment was a permissible conversion
2
A divestment penalty is computed by dividing the uncompensated
value of the resource divested ($111,432.47) by the average monthly
long-term-care costs in Michigan for the applicant’s baseline date ($5,938
in 2007). Family Independence Agency, Program Eligibility Manual
(PEM) 405 (April 1, 2004), pp 8-9. The penalty would preclude petitioner
from receiving benefits for just over 18 months. Note that the DHS,
which produces the eligibility manual, was previously named the Family
Independence Agency. The DHS recently renamed the Program Eligibil-
ity Manual the Bridges Eligibility Manual.
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of the annuity proceeds
3
since the annuity was actually
cashed out—and was thus available as a cash asset—
before it was invested in the L.L.C.
Petitioner then appealed to the circuit court, which
reversed the hearing referee, holding that petitioner’s
purchase of the L.L.C. shares was not a divestment
because she received fair market value for her money.
In reaching this conclusion, the court initially observed
that federal law permits certain annuity purchases and
asset transfers for a spouse’s benefit in order to circum-
vent countable asset provisions and qualify for Medic-
aid long-term-care benefits,
4
and noted that this was
the third case wherein the DHS ruled that an appli-
cant’s investment in a closely held L.L.C. guaranteeing
compound interest after a set period of time was a
divestment.
5
As in the prior case it had decided, the
court ruled that
the purchase of stock in the family limited liability com-
pany in this case was not, by definition, a “divestment”
because the transfer was not “for less than fair market
value.” In fact, the value of the asset did not change — the
asset merely took another form — a form that legally made
it unavailable and uncountable. Based on the authority
cited herein, not only is the value of the stock not count-
able, but the income stream from that investment is also
not countable.
3
“Converting an asset from one form to another of equal value is not
divestment even if the new asset is exempt. Most purchases are conver-
sions.” Id.at7.
4
The court cited § 6012(a) of the Deficit Reduction Act of 2005, PL
109-171, 120 Stat 4; 42 USC 1396p(c)(2)(B)(i); 42 USC 1396p(d)(2)(A)(ii);
Mertz v Houstoun, 155 F Supp 2d 415, 426-427 (ED Pa, 2001); and James v
Richman, 465 F Supp 2d 395 (MD Pa, 2006), aff’d 547 F3d 214 (CA 3, 2008).
5
See In re Gault, unpublished opinion of the Grand Traverse Circuit
Court, issued March 16, 2007 (File No. 06-25485-AA), and In re Olsen,
unpublished opinion of the Manistee Circuit Court, issued June 6, 2007
(File No. 06-12519-AA). The DHS appealed neither case to this Court.
692 289 M
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Accordingly, the court reversed the hearing referee’s
decision and determined that petitioner was entitled to
long-term-care benefits without a divestment penalty.
We granted the DHS’s application for leave to appeal,
Marden v Dep’t of Human Servs, unpublished order of
the Court of Appeals, entered March 18, 2009 (Docket
No. 288966), and now reverse.
II. ANALYSIS
A. GENERAL MEDICAID BACKGROUND
In 1965, Congress enacted Title XIX of the Social
Security Act, commonly known as the Medicaid act. See
42 USC 1396 et seq. This statute created a cooperative
program in which the federal government reimburses
state governments for a portion of the costs to provide
medical assistance to low-income individuals. Cook v
Dep’t of Social Servs, 225 Mich App 318, 320; 570 NW2d
684 (1997). Participation in Medicaid is essentially
need-based, with states setting specific eligibility re-
quirements in compliance with broad mandates im-
posed by federal statutes and regulations.
6
Id.; see also
Atkins v Rivera, 477 US 154, 156-157; 106 S Ct 2456; 91
L Ed 2d 131 (1986), Nat’l Bank of Detroit v Dep’t of
Social Servs, 240 Mich App 348, 354-355; 614 NW2d
655 (2000), and Gillmore v Illinois Dep’t of Human
Servs, 218 Ill 2d 302, 305; 843 NE2d 336 (2006).
Like many federal programs, since its inception the
cost of providing Medicaid benefits has continued to
skyrocket. The act, with all of its complicated rules and
regulations, has also become a legal quagmire that has
resulted in the use of several “loopholes” taken advan-
6
In Michigan, the Department of Community Health oversees the
Medicaid program, which the DHS administers pursuant to the Social
Welfare Act, MCL 400.1 et seq.
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tage of by wealthier individuals to obtain government-
paid long-term care they otherwise could afford. The
Florida District Court of Appeal accurately described
this situation, and Congress’s attempt to curb such
practices:
After the Medicaid program was enacted, a field of legal
counseling arose involving asset protection for future dis-
ability. The practice of “Medicaid Estate Planning,”
whereby “individuals shelter or divest their assets to
qualify for Medicaid without first depleting their life sav-
ings,” is a legal practice that involves utilization of the
complex rules of Medicaid eligibility, arguably comparable
to the way one uses the Internal Revenue Code to his or her
advantage in preparing taxes. See generally Kristin A.
Reich, Note, Long-Term Care Financing Crisis—Recent
Federal and State Efforts to Deter Asset Transfers as a
Means to Gain Medicaid Eligibility, 74 N.D. L.Rev. 383
(1998). Serious concern then arose over the widespread
divestiture of assets by mostly wealthy individuals so that
those persons could become eligible for Medicaid benefits.
Id.; see also Rainey v. Guardianship of Mackey, 773 So.2d
118 (Fla. 4th DCA 2000). As a result, Congress enacted
several laws to discourage the transfer of assets for Med-
icaid qualification purposes. See generally Laura Herpers
Zeman, Estate Planning: Ethical Considerations of Using
Medicaid to Plan for Long-Term Medical Care for the
Elderly, 13 Quinnipiac Prob. L.J. 187 (1988). Recent at-
tempts by Congress imposed periods of ineligibility for
certain Medicaid benefits where the applicant divested
himself or herself of assets for less than fair market value.
42 U.S.C. § 1396p(c)(1)(A); 42 U.S.C. § 1396p(c)(1)(B)(i);
Fla. Admin. Code R. 65A-1.712(3). More specifically, if a
transfer of assets for less than fair market value is found
within 36 months of an individual’s application for Medic-
aid, the state must withhold payment for various long-term
care services, i.e., payment for nursing home room and
board, for a period of time referred to as the penalty period.
Fla. Admin. Code R. 65A-1.712(3). Medicaid does not,
however, prohibit eligibility altogether. It merely penalizes
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the asset transfer for a certain period of time. See generally
Omar N. Ahmad, Medicaid Eligibility Rules for the Elderly
Long-Term Care Applicant, 20 J. Legal Med. 251 (1999).
[Thompson v Dep’t of Children & Families, 835 So 2d 357,
359-360 (Fla App, 2003).]
In Gillmore the Illinois Supreme Court recognized
this same history, noting that over the years (and
particularly in 1993), Congress enacted certain mea-
sures to prevent persons who were not actually “needy”
from making themselves eligible for Medicaid:
In 1993, Congress sought to combat the rapidly increas-
ing costs of Medicaid by enacting statutory provisions to
ensure that persons who could pay for their own care did
not receive assistance. Congress mandated that, in deter-
mining Medicaid eligibility, a state must “look-back” into a
three- or five-year period, depending on the asset, before a
person applied for assistance to determine if the person
made any transfers solely to become eligible for Medicaid.
See 42 U.S.C. § 1396p(c)(1)(B) (2000). If the person dis-
posed of assets for less than fair market value during the
look-back period, the person is ineligible for medical assis-
tance for a statutory penalty period based on the value of
the assets transferred. See 42 U.S.C. § 1396p(c)(1)(A)
(2000). [Gillmore, 218 Ill 2d at 306 (emphasis added).]
See, also, ES v Div of Med Assistance & Health Servs,
412 NJ Super 340, 344; 990 A2d 701 (2010) (noting that
the purpose of this close scrutiny while looking back is
“to determine if [the asset transfers] were made for the
sole purpose of Medicaid qualification”).
7
7
Both the executive and legislative branches have supported elimination
of any loopholes that allow individuals with resources to transfer assets as a
way of qualifying for Medicaid benefits. For example, when signing into law
the Deficit Reduction Act of 2005, PL 109-171, 120 Stat 4, President George
W. Bush stated that the act “ ‘tightens the loopholes that allowed people to
game the system by transferring assets to their children so they can qualify
for Medicaid benefits.’ ” See Reif, A Penny Saved Can Be A Penalty Earned:
Nursing Homes, Medicaid Planning, The Deficit Reduction Act of 2005,
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This statutory look-back period, noted in Gillmore
and Thompson and contained within 42 USC
1396p(c)(1), requires a state to look back a number of
years (in this case five) from the date of an asset
transfer to determine if the applicant made the transfer
solely to become eligible for Medicaid, which can be
established if the transfer was made for less than fair
market value. See Family Independence Agency, Pro-
gram Eligibility Manual (PEM) 405 (April 1, 2004), pp
1, 4; see also Gillmore, 218 Ill 2d at 306. “Less than fair
market value means the compensation received in re-
turn for a resource was worth less than the fair market
value of the resource.” PEM 405, p 6.
A transfer for less than fair market value during the
“look-back” period is referred to as a “divestment,” and
unless falling under one of several exclusions, subjects
the applicant to a penalty period during which payment
of long-term-care benefits is suspended. See, generally,
PEM 405, pp 1, 4-9. “Congress’s imposition of a penalty
for the disposal of assets or income for less than fair
market value during the look-back period is intended to
maximize the resources for Medicaid for those truly in
need.” ES, 412 NJ Super at 344.
Turning to the case before us, then, the issue pre-
sented is this: whether the 93-year-old petitioner’s
investment of $111,460.47 in an L.L.C. formed by her
daughter for the sole purpose of qualifying petitioner
for Medicaid benefits constituted a divestment, and if
so, is it otherwise excluded as a divestment.
B. WAS THIS A DIVESTMENT?
“This Court reviews a decision of an administrative
agency in the same limited manner as does the circuit
And The Problem of Transferring Assets, 34 NYU Rev L & Soc Change 339,
347 (2010) (citation omitted).
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court.” Barker Bros Constr v Bureau of Safety & Regu-
lation, 212 Mich App 132, 141; 536 NW2d 845 (1995).
Thus, our review
is limited to determining whether the decision was con-
trary to law, was supported by competent, material, and
substantial evidence on the whole record, was arbitrary or
capricious, was clearly an abuse of discretion, or was
otherwise affected by a substantial and material error of
law. “Substantial” means evidence that a reasoning mind
would accept as sufficient to support a conclusion. [Dignan
v Mich Pub Sch Employees Retirement Bd, 253 Mich App
571, 576; 659 NW2d 629 (2002) (citations omitted); see also
MCL 24.306.]
The substantial evidence standard is indistinguishable
from the clearly erroneous standard of review. Boyd v
Civil Serv Comm, 220 Mich App 226, 234; 559 NW2d
342 (1996). A finding is clearly erroneous when, “on
review of the whole record, this Court is left with the
definite and firm conviction that a mistake has been
made.” Id. at 235.
At the outset we recognize that in creating the L.L.C.,
petitioner made no pretense that the corporation’s
purpose was for any reason other than circumventing
Medicaid rules that would otherwise render her ineli-
gible for long-term-care benefits for a certain period.
Such a purpose flies in the face of the general Congres-
sional intent in creating the Medicaid program, i.e., to
provide benefits to the truly needy, and of the 1993
amendments, i.e., to preclude asset transfers by those
with wealth who would rather pass on their accumu-
lated wealth and at the same time qualify for Medicaid
without penalty. See ES, 412 NJ Super at 352; Estate of
Gonwa v Wisconsin Dep’t of Health & Family Servs, 265
Wis 2d 913, 934-935; 668 NW2d 122 (2003), citing
Cohen v Massachusetts Comm’r of Div of Med Assis-
tance, 423 Mass 399, 403-404; 668 NE2d 769 (1996);
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Gillmore, 218 Ill 2d at 306. Petitioner admitted at oral
argument before the trial court that the purpose in
establishing the L.L.C. was to allow her to qualify for
Medicaid without suffering a divestment penalty.
8
That
admission, coupled with the timing of the share pur-
chase and the particulars of the transaction, make it
crystal clear that the only purpose of this asset transfer
was to create eligibility for Medicaid.
As one court has noted, however, Medicaid contains
loopholes permitting transfers that are inconsistent
with the goals of that legislation, Mertz v Houstoun, 155
F Supp 2d 415, 427-428 (ED Pa, 2001), and our judicial
duty is to enforce the purposes of the law as expressed in
the applicable statutory provisions, James v Richman,
547 F3d 214, 219 (CA 3, 2008) (in interpreting 42 USC
1396, the court noted that “we do not create rules based
on our own sense of the ultimate purpose of the law...
but rather seek to implement the purpose of Congress
as expressed in the text of the statutes it passed”), not
to just enforce a generalized purpose or intent. We
therefore turn to the actual statutory language and the
PEM rules to determine the fate of petitioner’s cause.
To be eligible for Medicaid long-term-care benefits in
Michigan, an individual must meet a number of criteria,
including having $2,000 or less in countable assets.
Department of Human Services, Bridges Eligibility
Manual 400 (January 1, 2010), pp 4-5; Ronney v Dep’t of
Social Servs, 210 Mich App 312, 315; 532 NW2d 910
(1995). As previously set forth, a Medicaid applicant
eligible for long-term-care benefits is subject to a divest-
ment penalty if she transfers a resource during the
five-year look-back period for less than fair market
8
At oral argument before the trial court petitioner admitted that the
intent in creating the L.L.C. was to qualify her for Medicaid long-term-
care benefits, but that her intent was not relevant.
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value and that resource is not otherwise excluded as a
divestment. 42 USC 1396p(c)(1); PEM 405, p 1.
With respect to fair market value, PEM 405, p 6,
instructs that the phrase, “[l]ess than fair market
value[,] means the compensation received in return for
a resource was worth less than the fair market value of
the resource” and elaborates that compensation must
have “tangible form” and “instrinsic value.” Neither
the Medicaid act nor the PEM offers a definition of “fair
market value.” However, this Court has explained that
the common understanding of “fair market value” is
“the amount of money that a ready, willing, and able
buyer would pay for the asset on the open market ....”
Wolfe-Haddad Estate v Oakland Co, 272 Mich App 323,
325-326; 725 NW2d 80 (2006) (emphasis added). Black’s
Law Dictionary similarly defines “fair market value” as
“[t]he price that a seller is willing to accept and a buyer
is willing to pay on the open market and in an arm’s-
length transaction; the point at which supply and de-
mand intersect.” Black’s Law Dictionary (7th ed), p
1549 (emphasis added). An “arm’s-length” transaction,
in turn, is defined as “relating to dealings between two
parties who are not related...andwhoarepresumed
to have roughly equal bargaining power; not involving a
confidential relationship[.]” Id. at 103.
Although no Michigan court has attempted to define
the parameters of an arm’s-length transaction, several
courts in our sister states have indicated “that an
arm[’]s-length transaction is characterized by three
elements: it is voluntary, i.e., without compulsion or
duress; it generally takes place in an open market; and
the parties act in their own self-interest.” Bison Twp v
Perkins Co, 2000 SD 38, ¶ 17; 607 NW2d 589, 593
(2000), citing Walters v Knox Co Bd of Revision, 47 Ohio
St 3d 23, 25; 546 NE2d 932 (1989), and Beach Prop, Inc
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v Town of Ferrisburg, 161 Vt 368, 375-376; 640 A2d 50
(1994). And, we have recognized that family members
deal with each other in financial matters differently
than they do “with strangers in arm[’]s-length transac-
tions....”Morrison v Secura Ins, 286 Mich App 569,
574; 781 NW2d 151 (2009). Hence, to determine the fair
market value of a resource, we must be able to discern
what the value of that resource was on the open market.
While no Michigan case specifically addresses the
issue before us today, other courts’ treatments of asset
transfers to circumvent countable asset requirements
in similar contexts are instructive. For example, the
Wisconsin Court of Appeals held that the purchase of a
balloon annuity (an annuity where a substantial por-
tion of the benefit is paid toward the end of the benefit
term) from close relatives constituted a divestment
because the transfer was for less than fair market value.
Buettner v Wisconsin Dep’t of Health & Family Servs,
2003 WI App 90, ¶¶ 1-2 and 18-19; 264 Wis 2d 700,
705-706, 716-717; 663 NW2d 282 (2003). In Buettner,
the applicant and her spouse purchased two irrevocable
balloon annuities from their children that “were non-
assignable and unsecured, and were private financial
instruments that paid a rate of return of less than one
percent, with exceptionally low monthly income pay-
ments of fifty dollars per annuity.” Id. at ¶ 19; 264 Wis
2d at 717. The court found that under those circum-
stances, an “arm’s-length transaction” had not oc-
curred because “ ‘[n]o person of sound mind would give
[$200,000] to an unrelated third party in exchange for
the unsecured, low yield, and non-alienable promises in
the instant document,’ ” and therefore the exchange
constituted a transfer for less than fair market value.
Id. at ¶¶ 19-20; 264 Wis 2d at 717-718 (alteration in
Buettner) (citation omitted).
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The Commonwealth Court of Pennsylvania decided
two cases on the same day, Pyle v Dep’t of Pub Welfare,
730 A2d 1046 (Pa Commw Ct, 1999), and Ptashkin v
Dep’t of Pub Welfare, 731 A2d 238 (Pa Commw Ct,
1999), that addressed Medicaid eligibility. In both of
those cases, the court decided appeals from Pennsylva-
nia Department of Public Welfare denials of applica-
tions for medical assistance benefits on the basis that
available assets had been transferred for less than fair
market value. In Pyle, the applicant transferred two
large sums of money to a trust, the trustee of which was
her daughter. In return for the lump sum payments, the
applicant received from the trust a nonnegotiable prom-
issory note that provided for a return of eight percent,
plus an additional two percent premium in consider-
ation of the fact that if Pyle died before the maturation
date, the trust would have no further payment obliga-
tion. Both promissory notes required a minimal
monthly payment followed by a balloon payment on the
last month of the note’s term. Pyle, 730 A2d at 1047-
1048. In Ptashkin, the applicant’s husband passed
away, so the family home was sold. The applicant’s two
sons each executed a nonnegotiable promissory note
payable to the applicant in exchange for the proceeds of
the home sale. Ptashkin, 731 A2d at 239. These nonne-
gotiable promissory notes had the same eight percent
and two percent interest rate provisions, with the
payments being $17.18 per month with a balloon pay-
ment plus any accrued interest being payable at the
maturity date of the note. Id. at 239-240.
In addressing these similar fact scenarios, the court
utilized Pennsylvania’s definition of fair market value,
which is the “ ‘price which property could be expected
to sell for on the open market or would have been
expected to sell on the open market in the geographic
area in which the property is located.’ ” Ptashkin, 731
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A2d at 245, quoting 55 Pa Code 178.2. Focusing on the
“open market” part of the definition similar to what we
have in Michigan, in both cases the court concluded
that the transactions involving the loan of large sums of
money in exchange for low monthly payments followed
by balloon payments were not fair market value trans-
actions. Critical to the court’s conclusion that both
deals were “absurd” were the facts that the applicants
were surrendering the principal without any security
while receiving a monthly payment lower than what
was required by the prescribed interest rates. Ptashkin,
731 A2d at 245; Pyle, 730 A2d at 1050. Indeed, the court
noted that neither applicant was receiving any real
benefit from the transaction other than to transfer
large sums of money to relatives while avoiding paying
for long-term care. Ptashkin, 731 A2d at 245; Pyle, 730
A2d at 1050.
Also analogous is the situation presented to the
United States District Court in Wesner v Velez, unpub-
lished opinion of the United States District Court for
the District of New Jersey, issued April 19, 2010 (Docket
No. 10-308). In that case, Wesner gave an $80,000 gift to
her close friend and power of attorney, Aamland. That
same month (December 2008) Wesner purchased a
promissory note from Aamland for $60,000, with the
payments going to Wesner to cover her nursing care for
the 13 months before her request for Medicaid funds.
The promissory note was not disclosed in her January
2009 application for benefits, but once the note was
disclosed to the state, Wesner filed suit seeking to enjoin
the state from treating the note as a prohibited trust-
like device. In deciding Wesner’s motion for a prelimi-
nary injunction, the court noted that the close relation-
ship of the parties, coupled with the fiduciary duties to
Wesner placed on Aamland through the power of attor-
ney and the admission that the note was part of a
702 289 M
ICH
A
PP
688 [Sept
“Medicaid planning technique,” showed that the trans-
action was likely a “sham”:
Wesner asserts that 42 U.S.C. § 1396p(c)(1)(I)(i)-(iii)
was enacted by Congress to avoid “sham transactions.”
The transaction entered into by Wesner and Aamland
appears to be a “sham transaction” designed to avoid
application of the rules governing Medicaid eligibility.
The loan between Wesner and Aamland has all the
characteristics of a trust-like device under the POMS.
[
9
]
This was not an arm[’]s-length transaction between two
unrelated parties. Aamland and Wesner apparently enjoy a
close friendship; Wesner gave Aamland an $80,000.00
uncompensated gift and has made Aamland her [power of
attorney]. As such, Aamland owes Wesner a fiduciary duty.
Further, Wesner admits that the gift/loan transaction en-
tered into with Aamland was part of a “Medicaid planning
technique.” Based a [sic] review of the evidence before the
Court at this time, the Court concludes that Wesner has
failed to establish that she is likely to succeed on the merits
of her claim; therefore, Wesner’s motion for a preliminary
injunction is denied. [Wesner, unpub op at 10-11 (citation
omitted).]
Turning to the case before us, we recognize that the
potential return on the sale of petitioner’s interest would
exceed the amount of her original investment after two
years.
10
Additionally, not only does the DHS make no
claim impugning the formation or legitimacy of the
L.L.C. as an entity under Michigan law, see MCL
450.4201, but also, as petitioner makes clear, the
9
“The Social Security Administration has published a Program Oper-
ating Manual System (POMS) representing the publicly available oper-
ating instructions for processing Social Security claims. While not the
product of formal rulemaking, the POMS provide guidance to the courts
and warrant respect.” Wesner, unpub op at 6 (quotation marks and
citations omitted).
10
Petitioner calculated the return on the sale of her investment to be
$113,922.98, or a profit of $2,490.51.
2010] M
ACKEY V
D
EP
’
TOF
H
UMAN
S
ERVICES
703
L.L.C.’s terms of investment are consistent with rel-
evant IRS and SEC regulations.
11
While the DHS contests the transfer on the grounds
that the two-year waiting period, alone, rendered the
transaction for less than fair market value, we are hard
pressed to reach that conclusion where the investment
would increase in value over the two-year restriction
period. However, that petitioner would not realize this
value for two years is a relevant factor to consider, it is
just not alone dispositive of this issue. In so concluding,
and for the reasons detailed below, we agree with the
DHS that the circuit court erred in reversing the
hearing referee, as under these unique facts the pur-
chase of the L.L.C. shares was for less than fair market
value.
Utilizing the foregoing dictionary definitions and
caselaw, we hold that petitioner’s purchase of shares in
an L.L.C. (1) that is unsecured, (2) operated exclusively
by her daughter (and her attorney-in-fact), (3) that is
not an approved investment vehicle under PEM 405, (4)
whose shares are unavailable in the open market and
are nonassignable, (5) where there is no evidence of
actuarial soundness, (6) where no monthly distribu-
tions are made to petitioner during the two-year period,
and (7) was purchased to make petitioner eligible for
Medicaid, was not the result of an “arm’s-length”
transaction made on the open market. Consequently, it
was a purchase for less than fair market value, and
therefore the assets are subject to the divestment
penalty.
12
11
Specifically, petitioner points to 17 CFR 230.144(d) and IRS Revenue
Ruling 59-60, § 8.
12
Petitioner’s reliance on the ruling of the United States Court of
Appeals for the Third Circuit in James is unavailing as the central issue
in that case was “whether a non-revocable, non-transferable annuity may
704 289 M
ICH
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PP
688 [Sept
Indeed, these circumstances reveal that this transac-
tion was an impermissibly abusive attempt to shelter
assets. Gillmore, 218 Ill 2d at 324-325; see also Thomp-
son, 835 So 2d at 359-360. The evidence reveals an
unsecured private transaction between relatives, one of
whom was the other’s fiduciary, wherein a purchase of
shares was made without any ability to sell or otherwise
exchange the shares for a two-year period. The L.L.C.
was operated exclusively by an individual who was both
a close relative and fiduciary, and the L.L.C. had no real
business other than to return petitioner’s investment,
plus two percent compounded interest, at the end of two
years.
13
Additionally, and unlike the balloon annuity
found deficient in Gillmore, the purchase of shares in
the L.L.C. did not result in any monthly payments to
petitioner. See Pyle, 730 A2d at 1050. And, we must also
consider the admitted purpose in creating the L.L.C. (to
make petitioner eligible for Medicaid payments without
divestment) in conjunction with the fact that petition-
er’s daughter (who was also an attorney-in-fact for
petitioner) created the L.L.C. and controlled 100 per-
cent of the voting shares, including having unfettered
discretion on expenditures of reserve funds.
In sum, taken together these facts point to the
inescapable conclusion that this was not an asset that
was purchased on the open market, but instead was an
arrangement between relatives, not strangers in an
be treated as an available resource by the [Pennsylvania Department of
Public Welfare] for the purposes of calculating Medicaid eligibility.”
James, 547 F3d at 218. In contrast, the DHS in this case found petitioner
eligible despite the transaction, but instead sought to delay the payment
of benefits pending the divestment penalty period.
13
Interestingly, the records for the Marden Family L.L.C. bank account
reveal that a four percent interest rate was applied to deposited monies,
highlighting the fact that the two percent rate awarded by the L.L.C. was
lower than what was available on the open market.
2010] M
ACKEY V
D
EP
’
TOF
H
UMAN
S
ERVICES
705
arm’s-length transaction. Thus, the compensation peti-
tioner was ultimately to receive “was worth less than
the fair market value of the resource” because nothing
about this transaction revealed a fair market value, i.e.,
it was not made through an arm’s length transaction on
the open market. Accordingly, the DHS properly con-
cluded that this particular transaction was for less than
fair market value, and was subject to the divestment
penalty.
14
In making her arguments, petitioner fails to recognize,
or at least appreciate, the private, non-arm’s-length rela-
tionship involved in the transaction. The definitions and
caselaw recited clearly indicate that shell transactions
between relatives that have little or no economic benefit to
the applicant, are not for fair market value. This point was
made by the court in Mertz, a case relied upon by the trial
court. There, the applicant’s spouse had purchased two
commercial annuities with $106,000 of joint assets, receiv-
ing in return just under $2,000 a month, or a 2
1
/
2
percent
return. In recognizing that the purchases at issue were
inconsistent with the purposes of Medicaid, but not the
language of the act, the court noted that private, unse-
cured, nonassignable transactions between relatives—like
those involved in Pyle and Ptashkin—were on much
different footing. Mertz, 155 F Supp 2d at 427-428 n 16.
Likewise, petitioner’s analogy to United States savings
bonds misses the point, because purchasing unsecured
shares in a private L.L.C. operated by a relative bears
little, if any, resemblance to a purchase of savings bonds
on the open market from the United States government.
Nor was the asset transfer in this case otherwise
excluded as a divestment under the PEM. See PEM 405,
14
This is not to say, however, that investment in an L.L.C. or even a
closely held corporation would be a per se divestment, but only that the
scheme at issue in this case constitutes a transfer for less than fair
market value.
706 289 M
ICH
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PP
688 [Sept
pp 6-9. While PEM 405 certainly provides numerous
categories of transfers that are excluded from consider-
ation as a divestment, PEM 405 provides no exclusion
category for an asset transfer for an interest in a closely
held limited liability corporation, as is the case here.
Consequently, the trial court’s ruling that the invest-
ment was essentially a conversion of the asset into a
form rendering the asset unavailable and uncountable
was incorrect.
15
Key to the definition of an asset con-
version on this point is that the conversion must be
“from one form to another of equal value.” See PEM
405, p 7 (emphasis supplied). The examples provided in
PEM 405 are purchases of automobiles or boats, where
the applicant buys an asset on the open market and
obtains the asset, presumably at market price. As
previously concluded, however, given the circumstances
of this transaction it was not established that what
petitioner received for her assets was for fair market
value, and so by definition could not be considered a
conversion to a form of equal value. Indeed, to hold to
the contrary would enable the exception to swallow the
rule.
III. CONCLUSION
Petitioner invested a sizeable sum in the Marden
Family L.L.C., which was created solely for the purpose
of circumventing Medicaid eligibility requirements and
15
Whether petitioner’s investment was unavailable and uncountable
on account of the transfer does not impact whether the transfer is a
divestment, but rather goes to the initial determination of whether an
applicant is eligible for Medicaid benefits. ES, 412 NJ Super at 348
(stating that “[i]f any of the applicant’s resources are transferred for less
than fair market value during the look-back period, they are included in
the eligibility analysis as funds available to the applicant,” and result in
delayed eligibility and imposition of a transfer penalty); see also 42 USC
1396p(c)(1)(A).
2010] M
ACKEY V
D
EP
’
TOF
H
UMAN
S
ERVICES
707
which ceded total control to petitioner’s daughter (and
fiduciary) for a fraction of the cost of petitioner’s
investment. Under the terms of the agreement, peti-
tioner would only receive a marginal return on her
unsecured investment after two years. A willing buyer
could not acquire such an asset on the open market in
an arm’s-length transaction. Therefore, the transaction
was for less than fair market value and constituted a
divestment of assets not subject to an exclusion. The
hearing referee’s conclusion affirming the imposition of
a divestment penalty by the DHS was appropriate,
albeit for the wrong reason. Thorin v Bloomfield Hills
Sch Dist, 179 Mich App 1, 6; 445 NW2d 448 (1989)
(“The familiar rule that appellate courts affirm the
right result reached for the wrong reason is appropriate
in the administrative context.”). The circuit court erred
in ruling otherwise.
Reversed.
No costs, a public question being involved.
708 289 M
ICH
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688 [Sept
BOYLAN v FIFTY EIGHT LIMITED LIABILITY COMPANY
Docket No. 291141. Submitted August 6, 2010, at Detroit. Decided
September 7, 2010, at 9:10 a.m.
Cheryl Boylan brought an action against her landlord, Fifty Eight
Limited Liability Company, in the 52-1 District Court, alleging
negligence, breach of contract, and several other claims arising out
of the failure of her home’s septic system. Fifty Eight filed a
third-party complaint against Pamar Enterprises, Inc., and
Giffels-Webster Engineering, Inc., asserting claims for negligence,
trespass, and “violation of Michigan’s law of surface waters” and
alleging that the septic system failed because Pamar had improp-
erly graded the property when it installed a water main, eliminat-
ing a swale that diverted surface water and causing surface water
to overflow and flood where it had not done before installation of
the water main. Pamar had installed the water main under a
contract it had with Lyon Township and had entered Fifty Eight’s
property in order to perform the contract. Pamar moved for
summary disposition, asserting that under Fultz v Union-
Commerce Assoc, 470 Mich 460 (2004), it owed no duty to Fifty
Eight as a matter of law. Pamar also argued that it had not
trespassed because it was authorized to enter the land and that
Michigan’s law of surface waters did not apply to the case. The
court, Dennis N. Powers, J., granted Pamar’s motion for summary
disposition on all counts and denied Fifty Eight’s request to amend
its third-party complaint to add a third-party-beneficiary claim.
Fifty Eight appealed in the Oakland Circuit Court, but the circuit
court, Daniel P. O’Brien, J., affirmed the district court’s decisions,
agreeing with it that under Fultz, Pamar owed no duty to Fifty
Eight. Fifty Eight appealed by leave granted.
The Court of Appeals held:
1. The lower courts erred by concluding that Pamar owed no
duty to Fifty Eight. Tort liability may attach in the presence of a
duty that arises separately and distinctly from a contractual
agreement. Under Fultz, the creation of a “new hazard” during the
performance of a contract may give rise to a breach of duty
separate and distinct from the contract. Although Fifty Eight
would have had no cause of action had the flooding been caused
2010] B
OYLAN V
F
IFTY
E
IGHT
LLC 709
only by negligent performance of the contract, Pamar bore a duty
separate and distinct from that under its contract to exercise due
care when it entered onto and altered private property. This entry
onto Fifty Eight’s land triggered a duty to avoid interfering with
the physical condition of the land and a duty to avoid increasing
the burden of the easement it held over the portion of Fifty Eight’s
property during the course of the water-main construction. In
addition, Pamar’s water-main construction interfered with the
property’s drainage, eliminating the swale and creating a new
hazard that posed a danger to third persons. Viewed in the light
most favorable to Fifty Eight, the record supported that Pamar
breached duties owed to Fifty Eight by interfering with the
drainage of the property, causing an excess of water to overflow the
property, and creating a new condition that it should have foreseen
could predispose the property to flooding.
2. The lower courts erred by granting Pamar summary dispo-
sition on Fifty Eight’s claim for common-law trespass. When a
person is authorized to use property, a common-law trespass may
occur if the user’s activities exceed the scope of the landowner’s
permission. The record showed that the property never flooded
until Pamar changed the grade of the land. Fifty Eight’s allega-
tions that Pamar knew or should have known that its activities
would result in a physical intrusion of water onto Fifty Eight’s
land and that Pamar’s actions on the land exceeded the scope of its
authorized use presented questions of fact.
3. Michigan’s law of surface waters applies to adjoining land-
owners and has not been extended to impose liability on a party
who neither owns nor controls a dominant estate. The circuit court
properly affirmed summary disposition of this claim.
4. Not every person incidentally benefited by a contractual
promise may sue for breach of the promise. The status of third-
party beneficiary requires that the promisor undertook to give or
do or refrain from doing something directly to or for the person. At
best, Fifty Eight qualified only as an incidental beneficiary of
portions of Pamar’s contract with Lyon Township. Because it
would have been futile to amend the third-party complaint to add
a third-party-beneficiary claim, the circuit court properly affirmed
the denial of Fifty Eight’s motion to amend the complaint.
Affirmed in part, reversed in part, and remanded.
1. N
EGLIGENCE —
D
UTIES TO
T
HIRD
P
ARTIES —
N
ECESSITY OF AN
I
NDEPENDENT
D
UTY
.
Tort liability may attach in the presence of a duty that arises
separately and distinctly from a contractual agreement; the cre-
710 289 M
ICH
A
PP
709 [Sept
ation of a new hazard during the performance of a contract may
give rise to a breach of duty separate and distinct from the
contract; a party entering onto private property to perform a
contract may bear duties separate and distinct from those under
the contract, such as a duty to exercise due care to avoid interfer-
ing with the physical condition of the land and to avoid increasing
the burden of any easement it may hold over the property.
2. T
RESPASS —
E
ASEMENTS —
U
SE OF
P
ROPERTY IN
E
XCESS OF
E
ASEMENT
.
A person authorized to use property may commit a common-law
trespass if the user’s activities exceed the scope of the landowner’s
permission.
Pierce, Duke, Farrell & Tafelski, PLC (by Mark C.
Pierce), for Fifty Eight Limited Liability Company.
Berry, Johnston, Sztykiel & Hunt, P.C. (by James F.
Hunt and W. James Fitzgibbons), for Pamar Enter-
prises, Inc.
Before: G
LEICHER
,P.J., and Z
AHRA
and K. F. K
ELLY
,JJ.
P
ER
C
URIAM.
In early 2007, flooding and sewage
backup damaged a residence owned by Fifty Eight
Limited Liability Company (Fifty Eight). An investiga-
tion revealed that surface water pooling in the home’s
front yard had incapacitated the septic system. Fifty
Eight concluded that during the construction of a water
main for Lyon Township, Pamar Enterprises, Inc., had
eliminated a swale protecting the home from surface-
water runoff. We must now decide whether Pamar owed
Fifty Eight any duty separate and distinct from those
under Pamar’s contract with Lyon Township. We find
that Pamar did owe Fifty Eight a duty separate and
distinct from those under the Pamar-Lyon Township
contract, and on that basis we reverse the circuit court’s
order granting Pamar summary disposition of Fifty
Eight’s negligence claim. We also reverse the circuit
court’s order granting Pamar summary disposition of
2010] B
OYLAN V
F
IFTY
E
IGHT
LLC 711
Fifty Eight’s common-law trespass count, but we affirm
the circuit court’s orders granting Pamar summary
disposition of Fifty Eight’s statutory trespass and
surface-water-law claims and denying Fifty Eight’s mo-
tion to file an amended third-party complaint.
I. UNDERLYING FACTS AND PROCEEDINGS
Fifty Eight owned a home located on Ten Mile Road
in Lyon Township, which it rented to plaintiff Cheryl
Boylan. Between January 2007 and March 2007, vari-
ous portions of the home flooded and sewage backed up
into the bathroom and kitchen sinks. Boylan reported
the flooding to Fifty Eight, which undertook an inves-
tigation into the cause. Fifty Eight’s property manager,
William Clark, concluded that during Pamar’s partici-
pation in the installation of a new water main for Lyon
Township, Pamar had improperly graded the earth on
Fifty Eight’s property. An affidavit of Clark attests, in
pertinent part:
3. . . . I have reviewed the video taken prior to construc-
tion of the property... and it is my opinion that the
flooding experienced by the property involved in this
lawsuit was directly caused by improper final grading by
Defendant Pamar.
4. During the approximate [sic] ten years that we have
owned the property, we never experienced any flooding in
the front yard until January, 2007. As a result of the
grading of our property by Pamar at the conclusion of the
installation of the water main, Pamar negligently graded
the property so that the surface water run-off from 10 Mile
Road flowed to the house instead of to the catch basin that
was on the east side of the property. Prior to the installa-
tion of the water main by Pamar, there was a swale that ran
parallel to Ten Mile Road that directed the surface water
run-off to a catch basin. Pamar eliminated the swale, and
as a result, water ponded on the front yard of the house.
712 289 M
ICH
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709 [Sept
5. The septic system is located underneath the front
yard of the house. The ponding of water on top of the septic
system caused the septic system to become saturated to the
point of failure. As a result, raw sewage backed up into the
house....
In May 2007, Boylan filed suit against Fifty Eight in
the 52-1 District Court, alleging negligence, breach of
contract, and several other claims. In October 2007,
Fifty Eight filed a third-party complaint against Pamar
and Giffels-Webster Engineering, Inc., asserting claims
for negligence, trespass, and “violation of Michigan’s
law of surface waters.”
1
According to Fifty Eight’s
third-party complaint, Pamar violated its duty to
properly design the grade of the earth, and to grade the
earth so as to not cause a larger volume or velocity of water
to enter or flow to the Property after the completion of the
Project when compared to the volume or velocity of water
that entered or flowed to the Property before the Project
was started.
Pamar moved for summary disposition under MCR
2.116(C)(8) and (10), contending that pursuant to Fultz
v Union-Commerce Assoc, 470 Mich 460; 683 NW2d 587
(2004), it owed no duty to Fifty Eight as a matter of law.
Pamar further argued that because it had entered Fifty
Eight’s land with authorization, Fifty Eight could not
prove trespass, and that Michigan’s law of surface
waters lacked applicability under the circumstances of
this case.
The district court granted Pamar’s motion for sum-
mary disposition and denied Fifty Eight’s request to file
an amended complaint that would have added a third-
party beneficiary contract claim. Fifty Eight appealed in
the Oakland Circuit Court, which affirmed the district
1
Fifty Eight apparently settled with Boylan and Giffels-Webster, nei-
ther of whom is a party to this appeal.
2010] B
OYLAN V
F
IFTY
E
IGHT
LLC 713
court’s decisions. Both the district and circuit courts
opined that pursuant to the Supreme Court’s decision
in Fultz, Pamar owed Fifty Eight no duty in tort. The
circuit court concluded that Pamar’s grading of the
worksite on Fifty Eight’s land did not give rise to “a
separate and distinct duty” or a “new hazard,” but
instead constituted “a foreseeable consequence of the
terms of the contract that caused this undisputed screw
up by Pamar and it’s because it trickles from the very
terms of the contract that the court finds it doesn’t
qualify as a new hazard....”Wegranted Fifty Eight
leave to appeal.
II. SUMMARY DISPOSITION STANDARD OF REVIEW
Fifty Eight contests the circuit court’s summary
disposition ruling, which we review de novo.
2
Walsh v
Taylor, 263 Mich App 618, 621; 689 NW2d 506 (2004).
“Summary disposition is appropriate under MCR
2.116(C)(10) if there is no genuine issue regarding any
material fact and the moving party is entitled to judg-
ment as a matter of law.” West v Gen Motors Corp, 469
Mich 177, 183; 665 NW2d 468 (2003). “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 favor-
able to the nonmoving party to determine whether any
genuine issue of material fact exists to warrant a trial.”
Walsh, 263 Mich App at 621. “A genuine issue of
material fact exists when the record, giving the benefit
2
In the district and circuit courts, the parties attached and referred to
documentary evidence and deposition testimony beyond the pleadings.
The circuit court’s ruling expressly referred to the contract between
Pamar and Lyon Township, which the pleadings do not include. Accord-
ingly, we treat Pamar’s motion, and the circuit court’s ruling, as governed
by the standards set forth in MCR 2.116(C)(10).
714 289 M
ICH
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709 [Sept
of reasonable doubt to the opposing party, leaves open
an issue upon which reasonable minds might differ.”
West, 469 Mich at 183.
III. NEGLIGENCE
Fifty Eight first contends that the circuit court’s
determination that Pamar owed no duty to Fifty Eight
rests on a misinterpretation of Fultz. Fifty Eight main-
tains that Fultz does not stand for the proposition that
the mere existence of a contract between Pamar and
Lyon Township completely “immunizes” Pamar from
any potential tort liability relating to its construction of
the water main. Pamar responds that Fultz plainly
dictates that it owed no duty to “a third party to its
contract” with Lyon Township. Because the parties
argue at length concerning the interpretation and ap-
plication of Fultz, we now turn to a careful examination
of that decision.
The plaintiff in Fultz slipped and fell in an icy
parking lot owned by Comm-Co Equities. Fultz, 470
Mich at 461. Comm-Co had contracted with Creative
Maintenance Limited (CML) for snow removal services.
Id. at 462. The plaintiff sued both Comm-Co and CML,
claiming that CML’s negligent failure to plow or salt
the parking lot had caused her fall. Id. The plaintiff
theorized that CML owed her “a common-law duty...
to exercise reasonable care in performing its contrac-
tual duties” and that CML breached this duty by failing
to perform its contractual duty of plowing or salting the
parking lot. Id. at 463-464. The Supreme Court ob-
served that the plaintiff had “allege[d] no duty owed to
her independent of the contract,” but instead relied on
“common-law tort principles expressed in Restatement
Torts, 2d, § 324A....”Id. at 464, 468.
2010] B
OYLAN V
F
IFTY
E
IGHT
LLC 715
The Supreme Court held that as a matter of law,
CML “owed no contractual or common-law duty to
plaintiff to plow or salt the parking lot.” Id. at 463. In
reaching this conclusion, the Supreme Court rejected
that a common-law duty to the plaintiff arose solely
from CML’s breach of its contract with Comm-Co. The
Court instructed lower courts to instead analyze tort
claims brought by third parties to a contract “by using
a ‘separate and distinct’ mode of analysis. Specifically,
the threshold question is whether the defendant owed a
duty to the plaintiff that is separate and distinct from
the defendant’s contractual obligations. If no indepen-
dent duty exists, no tort action based on a contract will
lie.” Id. at 467.
The “separate and distinct duty” analysis described
in Fultz refutes Pamar’s sweeping assertion that a
contractor owes no duties to any third party. Rather,
Fultz specifically contemplated that despite the exist-
ence of a contract, under certain circumstances tort
duties to third parties may lie:
If defendant negligently performs a contractual duty or
breaches a duty arising by implication from the relation of
the parties created by the contract, the action may be
either in contract or in tort. In such cases, however, no tort
liability arises for failing to fulfill a promise in the absence
of a duty to act that is separate and distinct from the
promise made. [Id. at 469-470.]
Stated differently, tort liability may attach in the pres-
ence of a duty that arises separately and distinctly from
the contractual agreement.
In Fultz, the Supreme Court posited that the creation
ofa“new hazard” may give rise to a breach of a duty
separate and distinct from the contract. Id.at469
(emphasis in original). Fultz’s “new hazard” reference
derived from this Court’s decision in Osman v Summer
716 289 M
ICH
A
PP
709 [Sept
Green Lawn Care, Inc, 209 Mich App 703; 532 NW2d
186 (1995), overruled in part on other grounds by Smith
v Globe Life Ins Co, 460 Mich 446; 597 NW2d 28 (1999).
3
The plaintiff in Osman also slipped and fell on an icy
surface subject to a snow removal contract. Osman, 209
Mich App at 704. This Court summarized the plaintiff’s
allegations that the defendant
breached its duty by negligently, carelessly, and recklessly
removing snow from the premises and placing it on a
portion of the premises when it knew, or should have been
known or anticipated, that the snow would melt and freeze
into ice on the abutting sidewalk, steps, and walkway, thus
posing a dangerous and hazardous condition to individuals
who traverse those areas. Plaintiff alleged that defendant
was negligent in failing to keep the premises and all
common areas fit for their foreseeable uses and in failing to
remove ice from areas after notice of the dangerous condi-
tion, in allowing ice to build up, in maintaining a hazardous
condition when it could have been reasonably discovered,
and in failing to remove a dangerous condition. [Id.]
The defendant argued that its contract with the land-
owner “indicated that defendant assumed no duty or
responsibilities of the premises owner,” nor “any of the
responsibility for damage or injury caused by slipping
and falling on any pavement surface.” Id. at 705.
This Court found that the contract at issue “al-
low[ed] only one interpretation,” and specifically re-
ferred to the following contractual language: “ ‘Nothing
contained in this agreement shall relieve Provider from
liability for its breach of this agreement or damages
3
In Smith, the Supreme Court held that in Osman, this Court had
“erroneously applied” incorrect standards for summary disposition de-
rived from Rizzo v Kretschmer, 389 Mich 363; 207 NW2d 316 (1973).
Smith, 460 Mich at 455 n 2. The Supreme Court clarified that Osman and
several other cited decisions “that approve of Rizzo-based standards for
reviewing motions for summary disposition brought under MCR
2.116(C)(10) are overruled to the extent that they do so.” Id.at456n2.
2010] B
OYLAN V
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caused to person or property as a result of Provider’s,
its employees’, its agents’ or representatives’ negli-
gence.’ ” Id. at 706-707 (emphasis omitted). The Court
in Osman explained that when “[r]ead as a whole,” the
contractual language obligated the defendant “to pro-
vide snow removal services in a reasonable manner,
holding defendant liable for its negligent conduct in the
snow removal process.” Id. at 707. The Court elabo-
rated that the defendant’s tort duty to the plaintiff
stemmed from two sources:
Not only did the contract articulate that defendant
would remain liable for its negligent conduct, but such duty
also arose out of defendant’s undertaking to perform the
task of snow plowing. The duty allegedly owing is that
which accompanies every contract, a common-law duty to
perform with ordinary care the things agreed to be done.
Those foreseeably injured by the negligent performance of
a contractual undertaking are owed a duty of care. [Id.at
707-708 (citation omitted).]
The common-law duty of care existed “separate and
apart from the contract itself” as part of “a general duty
owed by defendant to the public of which plaintiff is a
part.” Id. at 710.
In Fultz, the Supreme Court declined to overrule
this portion of Osman. The Supreme Court reasoned
that in Osman, the defendant had created a new
hazard by placing snow near pedestrian walkways, in
an area where melting and freezing snow foreseeably
created a danger “ ‘to individuals who traverse those
areas.’ ” Fultz, 470 Mich at 469, quoting Osman, 209
Mich App at 704. The Fultz Court emphasized that
unlike the defendant in Osman, “CML’s failure to
carry out its snow-removal duties owed to [Comm-Co]
created no new hazard to plaintiff.” Fultz, 470 Mich
at 469.
718 289 M
ICH
A
PP
709 [Sept
The subject of Pamar’s contract with Lyon Township
was the installation of a new water main. By virtue of
the contract, Pamar assumed a duty to construct the
water main according to certain detailed specifications.
Presumably, Pamar fulfilled its contractual obligations
by successfully installing the water main. Notwith-
standing that the new water main would potentially
benefit neighboring property owners, Fultz teaches that
no duty to perform the water-main contract existed
with respect to Pamar and third parties. Alternatively
phrased, Fifty Eight would have no cause of action had
the flooding occurred simply because Pamar neglected
to install the water main. However, separate and dis-
tinct from Pamar’s contract to install a new water main
for Lyon Township, Pamar bore a duty to exercise
reasonable care when it entered onto and altered pri-
vate property. Pamar’s contract with Lyon Township for
“[i]nstallation of approximately 6,600 linear feet of
[16-inch] water main along Ten Mile Road, intersecting
Milford Road, in Lyon Township, Michigan,” neither
created this separate duty of care nor eliminated it.
In contrast with the facts described in Fultz, Fifty
Eight’s tort claim against Pamar did not arise solely
from Pamar’s performance under the contract with
Lyon Township. Irrespective of the existence of a con-
tract, Pamar’s entry onto Fifty Eight’s land triggered
several separate and distinct common-law duties to
avoid permanently damaging the property. The com-
mon law indisputably recognizes a landowner’s right to
the full enjoyment of his or her land. For example, the
private nuisance doctrine penalizes
an interference with the occupation or use of land or an
interference with servitudes relating to land. There are
countless ways to interfere with the use and enjoyment of
land including interference with the physical condition of
the land itself, disturbance in the comfort or conveniences
2010] B
OYLAN V
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IGHT
LLC 719
of the occupant including his peace of mind, and threat of
future injury that is a present menace and interference
with enjoyment. The essence of private nuisance is the
protection of a property owner’s or occupier’s reasonable
comfort in occupation of the land in question. [Adkins v
Thomas Solvent Co, 440 Mich 293, 303; 487 NW2d 715
(1992).]
Furthermore, the parties agree that Pamar held an
easement over a portion of Fifty Eight’s property in the
course of the water-main construction. “An easement
does not displace the general possession of the land by
its owner, but merely grants the holder of the easement
qualified possession only to the extent necessary for
enjoyment of the rights conferred by the easement.”
Schadewald v Brulé, 225 Mich App 26, 35; 570 NW2d
788 (1997). “A principle which underlies the use of all
easements is that the owner of an easement cannot
materially increase the burden of it upon the servient
estate or impose thereon a new and additional burden.”
Delaney v Pond, 350 Mich 685, 687; 86 NW2d 816
(1957). Viewed in the light most favorable to Fifty
Eight, Pamar’s elimination of the swale materially
increased the easement’s burden by predisposing the
land to flooding.
The existence of these separate and distinct duties of
care readily distinguish this case from Banaszak v
Northwest Airlines, Inc, 477 Mich 895 (2006). In that
case, the Supreme Court held that a contract required a
defendant “to provide a cover over the ‘wellway,’ an
opening at the end of the moving walkway that contains
the mechanical elements. The purpose of the cover was
to protect persons using that area.” Id. Because the
hazard created by the defendant’s failure to properly
install the cover “was the subject of the...contract,”
the Supreme Court held that the defendant “owed no
duty to plaintiff that was ‘separate and distinct’ from its
720 289 M
ICH
A
PP
709 [Sept
duties under the contract.” Id. Fifty Eight asserts that
Pamar entered onto Fifty Eight’s land, disrupted the
drainage contours, failed to recognize this error, and
neglected to correct it. And no evidence of record
suggests that maintenance of surface drainage contours
served as “the subject of the contract” between Pamar
and Lyon Township.
Additionally, Pamar’s water-main-construction work
created a new hazard consisting of interference with the
property’s drainage system. Record evidence estab-
lished that in the course of constructing the water
main, Pamar entered onto Fifty Eight’s property,
graded the land, and eliminated a swale that had been
present before the water-main work commenced. Fultz
explained that a party to a contract breaches a duty
separate and distinct from the contract when it creates
a new hazard that it should have anticipated would pose
a dangerous condition to third persons. Fultz, 470 Mich
at 468-469. Viewed in the light most favorable to Fifty
Eight, the facts reasonably support that Pamar’s rear-
rangement of the soil on Fifty Eight’s premises and
Pamar’s elimination of a preexisting swale created a
new condition on the premises that it should have
foreseen could predispose the property to flooding.
Notably, the Pamar-Lyon Township contract itself
envisions that the parties intended Pamar to shoulder
responsibility for remedying damage to residential
property. The contract directed Pamar to:
6.20 . . . take all necessary precautions for the safety of,
and shall provide the necessary protection to prevent
damage, injury or loss to:
***
6.20.3 other property at the site or adjacent thereto,
including trees, shrubs, lawns, walks, pavements, road-
2010] B
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IGHT
LLC 721
ways, structures, utilities and Underground Facilities not
designated for removal, relocation or replacement in the
course of construction.
. . . All damage, injury or loss to any property referred to
in paragraph 6.20.2 or 6.20.3 caused, directly or indirectly,
in whole or in part, by CONTRACTOR... shall be rem-
edied by CONTRACTOR....
Like the contract in Osman, this language reinforces
the contract’s contemplation that Pamar would conduct
its operations in a reasonable manner and that the
contract does not shield Pamar from liability. See Os-
man, 209 Mich App at 707, 709-710. Viewed in the light
most favorable to Fifty Eight, Pamar violated a recog-
nized tort duty, independent of its contract with Lyon
Township, when it interfered with the drainage on Fifty
Eight’s property. Consequently, we conclude that the
circuit court erred by affirming the district court’s
order granting Pamar summary disposition of Fifty
Eight’s negligence claim.
In reaching our conclusions, we specifically reject
Pamar’s assertion that the Supreme Court overruled
Osman through its peremptory order in Mierzejewski v
Torre & Bruglio, Inc, 477 Mich 1087 (2007). In that
brief order, the Supreme Court specifically invoked
Fultz in support of its holding that “[t]he defendant did
not owe any duty to the plaintiffs separate and distinct
from the contractual promise made under its snow
removal contract with the premises owner.” Id.Asin
Banaszak, the Supreme Court’s statement in Mierze-
jewski signals that any purported “new hazard” created
by the snow removal contractor in fact fell within the
scope of the contract’s performance requirements and
therefore did not arise from the breach of a separate
and distinct duty of care. In contrast, Pamar has failed
to identify any portion of its contract with Lyon Town-
722 289 M
ICH
A
PP
709 [Sept
ship that obligated it to alter or influence the drainage
characteristics of Fifty Eight’s land.
IV. TRESPASS
Fifty Eight next challenges the circuit court’s affir-
mance of summary disposition regarding Fifty Eight’s
trespass claim. Fifty Eight asserts that Pamar commit-
ted a “direct trespass” by changing the grade of the land
in the absence of any authority, thereby “caus[ing]
water to enter [Fifty Eight’s] property.” Pamar replies
that because it had authorization to enter onto Fifty
Eight’s land, Fifty Eight cannot establish a trespass.
“Recovery for trespass to land in Michigan is avail-
able only upon proof of an unauthorized direct or
immediate intrusion of a physical, tangible object onto
land over which the plaintiff has a right of exclusive
possession.” Adams v Cleveland-Cliffs Iron Co, 237
Mich App 51, 67; 602 NW2d 215 (1999). “[A] ‘direct or
immediate’ invasion for purposes of trespass is one that
is accomplished by any means that the offender knew or
reasonably should have known would result in the
physical invasion of the plaintiff’s land.” Id.at71.
Damages may be recovered for “any appreciable intru-
sion.” Id. at 72. Surface-water diversion may effect an
intrusion onto land. See Kernen v Homestead Dev Co,
232 Mich App 503, 512; 591 NW2d 369 (1998).
Notwithstanding Pamar’s authority to enter onto
Fifty Eight’s land, a common-law trespass may occur if
the user’s activities exceeded the scope of the landown-
er’s permission. In Embrey v Weissman, 74 Mich App
138, 140; 253 NW2d 687 (1977), the plaintiff, a land-
owner, granted Oakland County an easement for con-
struction of a sewer line. The county hired the defen-
dant, Weissman Contracting Corporation, to install the
sewer line. Id. The plaintiff alleged that Weissman’s
2010] B
OYLAN V
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IGHT
LLC 723
activities “seriously disturbed the land” and sued under
theories including trespass, negligence, and breach of
contract. Id. Although this Court reversed a jury verdict
awarding treble damages for a statutory trespass under
MCL 600.2919(1), id. at 141-142, we recognized that a
properly instructed jury nevertheless could have found
that Weissman committed a common-law trespass:
The use of the land was controlled by the contract
between plaintiff and the county, and it is certainly possible
that the corporation’s activities, beyond the scope of the
use created, injured the interest plaintiff retained as owner
of the construction area. An easement is an interest that
can be limited not only in area, but also in use. Cf. Carlton
v Warner, 46 Mich App 60; 207 NW2d 465 (1973). The
court’s instruction, however, should have made clear that,
within the construction area, only those activities that
went beyond the reasonable exercise of the use granted
could constitute trespass. See 3 Tiffany, Real Property,
§ 802, p 322. [Id. at 142-143.]
See also Schadewald, 225 Mich App at 40 (observing
that activities exceeding the “reasonable exercise of the
use granted by the easement may constitute a tres-
pass”).
Clark’s affidavit attested that the front yard of Fifty
Eight’s property never flooded before Pamar changed
the grade of the land. Although Pamar entered the land
with authority, Fifty Eight’s allegations that (1) Pamar
knew or reasonably should have known that its activi-
ties would result in a physical intrusion of water onto
Fifty Eight’s land and (2) Pamar’s actions on the land
exceeded the scope of its authorized use present ques-
tions of fact appropriate for jury determination. There-
fore, we conclude that the circuit court erred by affirm-
ing the district court’s order granting Pamar summary
disposition of Fifty Eight’s common-law trespass claim.
724 289 M
ICH
A
PP
709 [Sept
Fifty Eight’s complaint also sets forth a trespass
claim under MCL 600.2919(1), which provides in rel-
evant part:
Any person who:
(a) cuts down or carries off any wood, underwood, trees,
or timber or despoils or injures any trees on another’s
lands, or
(b) digs up or carries away stone, ore, gravel, clay, sand,
turf, or mould or any root, fruit, or plant from another’s
lands, or
(c) cuts down or carries away any grass, hay, or any kind
of grain from another’s lands
without the permission of the owner of the lands, or on the
lands or commons of any city, township, village, or other
public corporation without license to do so, is liable to the
owner of the land or the public corporation for 3 times the
amount of actual damages. If upon the trial of an action
under this provision or any other action for trespass on
lands it appears that the trespass was casual and involun-
tary, or that the defendant had probable cause to believe
that the land on which the trespass was committed was his
own, or that the wood, trees, or timber taken were taken
for the purpose of making or repairing any public road or
bridge judgment shall be given for the amount of single
damages only.
Imposition of treble damages for statutory trespass
requires a showing “that the trespass was intentional
and with knowledge that it was without right.” Kelly v
Fine, 354 Mich 384, 387; 92 NW2d 511 (1958) (constru-
ing 1948 CL 692.451, a predecessor statute with sub-
stantially similar language). If the trespass “was casual
and involuntary,” treble damages are inappropriate.
MCL 600.2919(1)(c); see also Embrey, 74 Mich App at
141.
“[A] trespasser’s good faith and honest belief that
he possessed the legal authority to commit the
2010] B
OYLAN V
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IFTY
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IGHT
LLC 725
complained-of act are sufficient to avoid treble damage
liability.” Governale v City of Owosso, 59 Mich App 756,
759; 229 NW2d 918 (1975). “Treble damages under
MCL 600.2919...may not... be awarded where the
trespass was merely negligent.” Iacobelli Constr Co, Inc
v Western Cas & Surety Co, 130 Mich App 255, 262; 343
NW2d 517 (1983). Under the statute, a plaintiff need
not show that a defendant acted with malice or an
intent to injure the land, but must substantiate that the
trespass occurred as the result of more than mere
negligence. Id. at 262-263. No evidence of record in this
case tends to suggest that Pamar intentionally changed
the drainage contours on Fifty Eight’s property or that
Pamar intended that its actions would have an impact
on Fifty Eight’s property drainage. We conclude that
the circuit court correctly affirmed the district court’s
order granting Pamar summary disposition of Fifty
Eight’s statutory trespass claim.
V. SURFACE-WATER DIVERSION
Fifty Eight asserts that the circuit court incorrectly
affirmed summary disposition of its claim invoking
Michigan’s surface-water laws. Fifty Eight believes that
a question of fact exists concerning whether Pamar
altered the surface-water runoff in a fashion that di-
verted water onto Fifty Eight’s property. Pamar con-
tends that surface-water-law principles do not apply,
given that it does not own any adjacent or neighboring
property.
The owner of the lower or servient estate must accept
surface water from the upper or dominant estate in its
natural flow. By the same token, the owner of the dominant
estate may not, by changing conditions on his land, put a
greater burden on the servient estate by increasing and
726 289 M
ICH
A
PP
709 [Sept
concentrating the volume and velocity of the surface water.
[Lewallen v City of Niles, 86 Mich App 332, 334; 272 NW2d
350 (1978).]
Michigan’s law of surface waters applies to adjoining
landowners, but has never been extended to impose
liability on a party who neither owns nor controls a
dominant estate. Because no caselaw supports Fifty
Eight’s assertion that the law of surface waters affords
a cause of action under the facts presented, we conclude
that the circuit court correctly affirmed summary dis-
position of this claim.
VI. AMENDMENT OF FIFTY EIGHT’S THIRD-PARTY COMPLAINT
Lastly, Fifty Eight challenges the circuit court’s de-
cision to deny its motion to amend the third-party
complaint to add a third-party-beneficiary claim. We
review for an abuse of discretion a circuit court’s
decision to grant or deny leave to amend a pleading; we
will only reverse the court’s ruling if it occasions an
injustice. Casey v Auto-Owners Ins Co, 273 Mich App
388, 400-401; 729 NW2d 277 (2006). A court does not
abuse its discretion if it selects an outcome falling
within the range of reasonable and principled outcomes.
Maldonado v Ford Motor Co, 476 Mich 372, 388; 719
NW2d 809 (2006).
Fifty Eight sought to amend its third-party com-
plaint in conformity with MCR 2.116(I)(5), which
states, “If the grounds asserted are based on subrule
(C)(8), (9), or (10), the court shall give the parties an
opportunity to amend their pleadings as provided by
MCR 2.118, unless the evidence then before the court
shows that amendment would not be justified.” Except
in limited circumstances, a “party may amend a plead-
ing only by leave of the court or by written consent of
the adverse party. Leave shall be freely given when
2010] B
OYLAN V
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IFTY
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IGHT
LLC 727
justice so requires.” MCR 2.118(A)(2). A court should
freely grant the nonprevailing party leave to amend the
pleadings unless the amendment would be futile or
otherwise unjustified. Ormsby v Capital Welding, Inc,
471 Mich 45, 52-53; 684 NW2d 320 (2004). Motions to
amend a complaint should be denied only for particu-
larized reasons, such as undue delay, bad faith, or
dilatory motive on the part of the movant, a repeated
failure to cure deficiencies in the pleadings, undue
prejudice to the opposing party by virtue of allowing the
amendment, or the futility of amendment. Casey, 273
Mich App at 401.
In MCL 600.1405, the Legislature has defined, in
relevant part as follows, who may claim third-party-
beneficiary status with respect to an agreement entered
into by other parties:
Any person for whose benefit a promise is made by way
of contract, as hereinafter defined, has the same right to
enforce said promise that he would have had if the said
promise had been made directly to him as the promisee.
(1) A promise shall be construed to have been made for
the benefit of a person whenever the promisor of said
promise has undertaken to give or to do or refrain from
doing something directly to or for said person.
The Michigan Supreme Court has summarized that
the plain language of this statute reflects that not every
person incidentally benefitted by a contractual promise has
a right to sue for breach of that promise, but rather only if
the promisor has “undertaken to give or to do or refrain
from doing something directly to or for said person.”
[Brunsell v City of Zeeland, 467 Mich 293, 296; 651 NW2d
388 (2002).]
“By using the modifier ‘directly,’ the Legislature in-
tended ‘to assure that contracting parties are clearly
aware that the scope of their contractual undertakings
728 289 M
ICH
A
PP
709 [Sept
encompasses a third party, directly referred to in the
contract, before the third party is able to enforce the
contract.’ ” Schmalfeldt v North Pointe Ins Co, 469
Mich 422, 428; 670 NW2d 651 (2003), quoting Koenig v
South Haven, 460 Mich 667, 677; 597 NW2d 99 (1999).
When determining whether MCL 600.1405 applies to a
purported third-party beneficiary, “a court should look
no further than the form and meaning of the contract
itself” and should view the contract objectively.
Schmalfeldt, 469 Mich at 428 (quotation marks omit-
ted).
In Kisiel v Holz, 272 Mich App 168; 725 NW2d 67
(2006), this Court considered facts somewhat analogous
to those presented here. The plaintiff in Kisiel con-
tracted with the Holz Building Company, Inc, for the
construction of a home. Id. at 169. Holz’s owner sub-
contracted with GFA Development, Inc., for excavation
and concrete work. Id. When numerous cracks ap-
peared in the basement walls and floor, the plaintiff
sued Holz and several other defendants, contending
that he was an intended third-party beneficiary under
the agreement between Holz and GFA. Id. at 169-170.
This Court rejected the argument that the plaintiff
could maintain a contract action “merely because he or
she would receive a benefit from its performance or
would be injured by its breach.” Id. at 170-171.
In general, although work performed by a subcontractor
on a given parcel of property ultimately benefits the
property owner, the property owner is not an intended
third-party beneficiary of the contract between the general
contractor and the subcontractor. 9 Corbin, Contracts
(interim ed), § 779D, p 41; see also 2 Restatement Con-
tracts, 2d, § 302, comment e, illustration 19, p 444 (prop-
erty owner is only an incidental beneficiary of construction
subcontract between general contractor and subcontrac-
tor). Absent clear contractual language to the contrary, a
2010] B
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IFTY
E
IGHT
LLC 729
property owner does not attain intended third-party-
beneficiary status merely because the parties to the sub-
contract knew, or even intended, that the construction
would ultimately benefit the property owner. [Id. at 171.]
After reviewing the language employed in the con-
tract between Pamar and Lyon Township in light of
these governing legal principles, we discern no support
for Fifty Eight’s contention that it qualifies as a third-
party beneficiary of this agreement. The contract no-
where refers to Fifty Eight. At best, Fifty Eight quali-
fies as an incidental beneficiary of the portion of the
contract requiring Pamar to “provide the necessary
protection to prevent damage, injury or loss to...other
property at the site....”Because amendment of Fifty
Eight’s complaint to add a third-party-beneficiary claim
would have proved futile, we conclude that the circuit
court correctly affirmed the district court’s denial of
Fifty Eight’s motion to amend its third-party com-
plaint.
Affirmed in part, reversed in part, and remanded for
further proceedings consistent with this opinion. We do
not retain jurisdiction.
730 289 M
ICH
A
PP
709 [Sept
WHITE v TAYLOR DISTRIBUTING COMPANY, INC
Docket No. 292066. Submitted July 14, 2010, at Detroit. Decided Sep-
tember 9, 2010, at 9:00 a.m.
Sherita and Derrick White brought a negligence action in the
Oakland Circuit Court against Taylor Distributing Company,
Inc., Penske Truck Leasing Company, L.P., and James Birken-
heuer after a tractor-trailer Birkenheuer was driving struck a
van Sherita White was driving when Birkenheuer allegedly
passed out following a severe gastrointestinal disturbance. The
court, Deborah G. Tyner, J., granted defendants’ motion for
summary disposition on the basis of the sudden-emergency
doctrine, and plaintiffs appealed. The Court of Appeals, M
ARKEY
,
P.J., and M
URPHY
,J.(K.F.K
ELLY
, J., dissenting), held that the
trial court erred by granting summary disposition in favor of
defendants. 275 Mich App 615 (2007). Defendants applied for
leave to appeal, which the Supreme Court granted. 480 Mich
961 (2007). The Supreme Court affirmed the decision of the
Court of Appeals and remanded the case to the trial court,
concluding that there was a genuine issue of material fact
regarding whether the sudden-emergency doctrine applied. 482
Mich 136 (2008). On remand, the trial court, Daniel Patrick
O’Brien, J., again granted summary disposition in favor of
defendants. The trial court concluded that a release Sherita
White had signed when she settled a first-party action against
her no-fault insurer, which stated that the release referred to
“any and all...claims/benefits” arising out of the accident, also
released defendants from liability. Plaintiffs appealed.
The Court of Appeals held:
To create a third-party beneficiary, a contract must expressly
contain a promise to act to the benefit of the third party. While the
release in this case identified the insurer and its agents, it made no
mention of other persons, including defendants. Consequently, the
question was whether a sufficiently designated class existed in the
release for the direct benefit of whom Sherita White demonstrated
an undertaking. The trial court conflated who was being released
with what was being released. The language at issue, which stated
that the release referred to “any and all... claims/benefits”
2010] W
HITE V
T
AYLOR
D
ISTRIBUTING
C
O,
I
NC
731
arising out of the accident, only underscored the absolute immu-
nity that the express beneficiaries of the release—Sherita White’s
insurer and those who might be subject to liability because of a
relationship with her insurer—enjoyed. It did not release all
potential defendants from liability.
Reversed and remanded.
R
ELEASE —
S
COPE —
T
HIRD
-P
ARTY
B
ENEFICIARIES
.
To create a third-party beneficiary, a release must expressly promise
to act to benefit a third party or a sufficiently designated class.
Gursten, Koltonow, Gursten, Christensen & Raitt,
P. C . (by Steven M. Gursten, Ian M. Freed, and Kathleen
E. Johnson), for plaintiffs.
Kopka, Pinkus, Dolin & Eads, P.L.C. (by John T.
Eads, III, and John M. Callahan), for defendants.
Before: S
HAPIRO
,P.J., and S
AAD
and S
ERVITTO
,JJ.
P
ER
C
URIAM.
In this automobile negligence action,
plaintiffs appeal as of right the trial court’s order granting
summary disposition to defendants—an individual, his
employer, and the owner of the truck the individual was
driving when the underlying accident occurred. We re-
verse and remand. This appeal has been decided without
oral argument pursuant to MCR 7.214(E).
On March 15, 2004, plaintiff
1
was stopped in her van
when defendant James Birkenheuer, driving a tractor-
trailer owned by defendant Penske Truck Leasing Com-
pany, L.P., in the course of his employment with defen-
dant Taylor Distributing Company, Inc., collided with
the rear of plaintiff’s vehicle, allegedly causing serious
injury. Birkenheuer maintained that the sudden onset
1
Because plaintiff Derrick White’s interest in this case is derivative of
that of plaintiff Sherita White, in this opinion use of the singular
“plaintiff” will refer to the latter.
732 289 M
ICH
A
PP
731 [Sept
O
PINION OF THE
C
OURT
of a medical condition caused him unexpectedly to faint
before he was able to stop.
The trial court initially granted summary disposition
in favor of defendants on the ground that the accident
was the result of a sudden emergency, but this Court
reversed. White v Taylor Distrib Company, Inc., 275
Mich App 615, 631; 739 NW2d 132 (2007), aff’d 482
Mich 136 (2008).
On remand, defendants argued that a release plain-
tiff signed when settling a first-party action with her
no-fault insurer, Amex Insurance Company, relieved
defendants of liability in this matter. That release
included the following provisions:
IN CONSIDERATION of the payment to the under-
signed, . . . [plaintiff] does hereby release and forever
discharge AMEX INSURANCE COMPANY...,andtheir
officers, employees, principals, shareholders, executors,
administrators, agents, successors, insurers and assigns of
and from any and all actions, causes of action, claims,
demands, damages, costs, loss of services, expenses and/or
compensation on account of, or in any way growing out of,
any and all known and unknown personal injures and
property damage resulting or to result from an accident
that occurred on or about March 15, 2004.
IT IS expressly agreed that this Release also refers to
any and all (past, present and future) claims/benefits
arising or that may arise from the March 15, 2004 accident.
***
THIS release contains the ENTIRE AGREEMENT be-
tween the parties hereto, and the terms of this release are
contractual and not a mere recital.
In construing this release as precluding plaintiff’s
recovering from defendants, the trial court stated, “I
find that the court’s decision is...dictated by appellate
2010] W
HITE V
T
AYLOR
D
ISTRIBUTING
C
O,
I
NC
733
O
PINION OF THE
C
OURT
law by precedent and in this instance I find that the
case of Romska [v Opper, 234 Mich App 512; 594 NW2d
853 (1999)], or the cases upon which it[’]s based is stare
decisis to this case,” but expressed doubts that this
ruling reflected plaintiff’s actual intent in signing the
release.
2
This Court reviews de novo a trial court’s decision
on a motion for summary disposition as a question of
law. Ardt v Titan Ins Co, 233 Mich App 685, 688; 593
NW2d 215 (1999). Contract interpretation likewise
presents a question of law, calling for review de novo.
Archambo v Lawyers Title Ins Corp, 466 Mich 402,
408; 646 NW2d 170 (2002). When construing a con-
tract, this Court will read it as a whole and attempt to
apply its plain language. Old Kent Bank v Sobczak,
243 Mich App 57, 63; 620 NW2d 663 (2000). Accord-
ingly, the various parts of a contract should be read
together. See JAM Corp v AARO Disposal, Inc, 461
Mich 161, 170; 600 NW2d 617 (1999); First Baptist
Church of Dearborn v Solner, 341 Mich 209, 215; 67
NW2d 252 (1954).
Defendants are nonparties to the release and thus
are claiming rights under it as third-party beneficia-
ries. In Michigan, a third-party beneficiary of a
contract “stands in the shoes of the promisee” and
thus may enforce the contract against the promisor.
Koppers Co, Inc v Garling & Langlois, 594 F2d 1094,
1098 (CA 6, 1979), citing MCL 600.1405. However, to
create a third-party beneficiary, a contract must
expressly contain a promise to act to benefit the third
party. Dynamic Constr Co v Barton Malow Co, 214
Mich App 425, 427-428; 543 NW2d 31 (1995), citing
MCL 600.1405.
2
Seen3ofthis opinion.
734 289 M
ICH
A
PP
731 [Sept
O
PINION OF THE
C
OURT
The instant release identified plaintiff’s insurer and
its agents in great detail, but made no mention of any
other persons, including defendants. The question,
then, is whether defendants were members of a class
somehow identified within the release. “[T]o qualify as
third-party beneficiaries, the language of the release[]
must have demonstrated an undertaking by plaintiff
directly for the benefit of [defendants] or for a suffi-
ciently designated class that would include [defen-
dants].” Shay v Aldrich, 487 Mich 648, 663; 790 NW2d
629 (2010).
In Romska, the release language interpreted as
applying to all potential defendants was “ ‘I/we
hereby release and discharge [two named individu-
als]... and all other parties, firms, or corporations
who are or might be liable, from all claims....’”234
Mich App at 514.
3
As plaintiff points out, this language,
indicating who was released, was broader than any-
thing found in the instant release. In the latter, the only
class described was plaintiff’s insurance company and
its “officers, employees, principals, shareholders, execu-
tors, administrators, agents, successors, insurers and
assigns....”This description was an attempt to iden-
tify those persons or entities who might be subject to
liability because of a relationship with the insurer.
There is no way to read that description as including
defendants.
3
In Shay, 487 Mich at 651, 653-654, 660-661, our Supreme Court
overruled Romska’s prohibition on parol evidence in interpreting
generic “all other persons” language. Accordingly, determinations of
what parties are intended to be included by ambiguous “all other
persons” language is now determined on a case-by-case basis. How-
ever, because the language of the present release unambiguously
excluded defendants, Romska as it existed before Shay was inappli-
cable to the instant case, and we need not remand for a determination
in light of parol evidence under Shay.
2010] W
HITE V
T
AYLOR
D
ISTRIBUTING
C
O,
I
NC
735
O
PINION OF THE
C
OURT
Defendants persuaded the trial court to interpret the
second paragraph of the release as applying to any
potential defendant, thus including themselves: “IT IS
expressly agreed that this Release also refers to any and
all (past, present and future) claims/benefits arising or
that may arise from the March 15, 2004 accident.”
Defendants argued, and the trial court agreed, that
“any and all...claims/benefits” meant all such claims
in connection with any defendant. We disagree that this
language invoked all humanity as released from poten-
tial liability and instead agree with plaintiffs that it in
fact underscored the absolute immunity that the speci-
fied class was to enjoy.
By interpreting the second paragraph to universally
release any potential defendant, the trial court confused
and conflated who was being released with what was
being released. We read the second paragraph’s specifi-
cation of release from “any and all...claims/benefits”
as comporting with the first paragraph’s listing of “any
and all actions, causes of action, claims, demands,
damages, costs, loss of services, expenses and/or com-
pensation on account of, or in any way growing out of,
any and all known and unknown personal injures and
property damage resulting or to result from an acci-
dent” by way of supplementing that list of particulars
with a general provision intended to ensure that plain-
tiff would thereafter place no demands whatever on the
specified persons or entities.
Supporting this reasoning is Batshon v Mar-Que Gen
Contractors, Inc, 463 Mich 646, 650; 624 NW2d 903
(2001), in which our Supreme Court held that broad
language describing what was released—“ ‘all conse-
quences of the injuries, losses and damages
sustained,’ ”—applied to the more narrowly identified
persons and entities being released.
736 289 M
ICH
A
PP
731 [Sept
O
PINION OF THE
C
OURT
For these reasons, the trial court erred by granting
defendants summary disposition pursuant to MCR
2.116(C)(7) (claim barred by release). We therefore
vacate that order and remand this case to the trial court
for further proceedings consistent with this opinion.
Reversed and remanded. We do not retain jurisdiction.
S
AAD
,J.(concurring). I concur in the result only.
2010] W
HITE V
T
AYLOR
D
ISTRIBUTING
C
O,
I
NC
737
C
ONCURRING
O
PINION BY
S
AAD
,J.
S
PECIAL
O
RDERS
SPECIAL ORDERS
In this section are orders of the Court of general
interest to the bench and bar of the state.
Order Entered July 20, 2010:
P
EOPLE
vB
RYANT
, Docket No. 280073. The Court orders that the June
22, 2010, opinion is hereby vacated, and a new opinion is attached.*
The June 22, 2010, opinion indicated that the prosecution did not file
a brief on appeal. In fact, the prosecution did file a brief on appeal, which
this Court received the first day of the case call to which this case was
assigned. The new opinion merely omits references to the fact that the
prosecution did not file a brief on appeal.
* Reported at 289 Mich App 260—R
EPORTER
.
S
PECIAL
O
RDERS
801
INDEX-DIGEST
INDEX–DIGEST
ACTIONS
See, also,
A
RBITRATION
1
E
MPLOYMENT
L
AW
1. Under the doctrine of conflict preemption, federal law
preempts state law to the extent that the state law
conflicts with the purposes and objectives of Congress;
the Labor-Management Reporting and Disclosure Act
(LMRDA) preempts state-law wrongful-discharge
claims brought by discharged union employees who
were in policymaking or policy-implementing positions
because those claims would undermine the LMRDA’s
purpose of ensuring union democracy by infringing on
the elected-union leadership’s ability to implement the
policies on which they were elected (29 USC 401 et seq.).
Packowski v United Food & Commercial Workers Local
951, 289 Mich App 132.
O
FFER OF
J
UDGMENT
2. The offer-of-judgment rule applies to a case involving
both claims at law and claims in equity in which the
offer of judgment addresses only monetary damages of a
sum certain and the equitable claims are to be dismissed
(MCR 2.405). McManus v Toler, 289 Mich App 283.
R
ES
J
UDICATA
3. TBCI, PC v State Farm Mutual Automobile Ins Co, 289
Mich App 39.
ACTIONS FOR RECOVERY OF MONETARY DAMAGES
AFTER JUDGMENT FOR FORECLOSURE—See
C
OURTS
1
851
ADMINISTRATIVE RECOVERY—See
E
MINENT
D
OMAIN
1
AGREEMENTS TO MAKE MUTUAL WILLS—See
D
ECEDENTS’
E
STATES
1
APEX-DEPOSITION RULE—See
P
RETRIAL
P
ROCEDURE
2
APPELLATE COMMISSION—See
W
ORKERS’
C
OMPENSATION
1
APPLICANTS—See
S
OCIAL
S
ECURITY
1, 2
ARBITRARY TIME LIMITS—See
W
ITNESSES
1
ARBITRATION
C
ONFIRMATION OF
A
RBITRATION
A
WARDS
1. A party seeking confirmation of a statutory arbitration
award under MCR 3.602(I) and the Michigan arbitra-
tion act must, if there is no action pending between the
parties, file a complaint in the circuit court in order to
invoke the circuit court’s jurisdiction (MCL 600.5001 et
seq.). Jaguar Trading Ltd Partnership v Presler, 289
Mich App 319.
D
OMESTIC
R
ELATIONS
A
RBITRATION
A
CT
2. A court must vacate an arbitration award when a party
applies under MCL 600.5081(2) if the award was pro-
cured by corruption, fraud, or other undue means; if
there was evident partiality by an arbitrator appointed
as a neutral, corruption of an arbitrator, or misconduct
prejudicing a party’s rights; if the arbitrator exceeded
his or her powers; or if the arbitrator refused to post-
pone the hearing on a showing of sufficient cause,
refused to hear evidence material to the controversy, or
otherwise conducted the hearing to prejudice substan-
tially a party’s rights; in order for a court to vacate an
arbitration award because of an error of law, the error
must have been so substantial that, but for the error, the
award would have been substantially different. Cipriano
v Cipriano, 289 Mich App 361.
852 289 M
ICH
A
PP
L
AW-OF-THE
-C
ASE
D
OCTRINE
3. The law-of-the-case doctrine does not apply to arbitra-
tion proceedings. Cipriano v Cipriano, 289 Mich App
361.
M
ODIFICATION OF
A
RBITRATION
A
WARDS
4. A party seeking modification of an arbitration award
must file a complaint to modify the award within 21
days after the date of the award if there is no pending
action between the parties (MCR 3.602[K][1]). Cipriano
v Cipriano, 289 Mich App 361.
5. A court must modify or correct an arbitration award, on
motion made within 91 days after the date of the award,
if (a) there is an evident miscalculation of figures or an
evident mistake in the description of a person, a thing,
or property referred to in the award, (b) the arbitrator
awarded on a matter not submitted to the arbitrator and
the award may be corrected without affecting the merits
of the decision on the issues submitted, or (c) the award
is imperfect in a matter of form, not affecting the merits
of the controversy (MCR 3.602[K][2]). Cipriano v Cipri-
ano, 289 Mich App 361.
ARBITRATION AWARDS—See
A
RBITRATION
1, 2
ARM’S-LENGTH TRANSACTIONS—See
S
OCIAL
S
ERVICES
1
ARREST—See
S
EARCHES AND
S
EIZURES
1
ATTORNEY FEES—See
P
RETRIAL
P
ROCEDURE
1
BANKRUPTCY—See
G
ARNISHMENT
1
BOARD-CERTIFIED PHYSICIANS—See
N
EGLIGENCE
2
BUSINESS-INTERRUPTION DAMAGES—See
E
MINENT
D
OMAIN
1, 2
CAP ON NONECONOMIC DAMAGES—See
D
AMAGES
1
I
NDEX
-D
IGEST
853
CASE-EVALUATION SANCTIONS—See
P
RETRIAL
P
ROCEDURE
1
CATASTROPHIC CLAIMS—See
I
NSURANCE
2
CHILD ABUSE—See
C
RIMINAL
L
AW
1
CHILD PROTECTION LAW—See
C
RIMINAL
L
AW
1
CHILD PROTECTIVE PROCEEDINGS—See
P
ARENT AND
C
HILD
1
CLAIMS AT LAW—See
A
CTIONS
2
CLASSIFICATION OF PROPERTY—See
T
AXATION
1
CODEFENDANT’S TESTIMONY—See
C
RIMINAL
L
AW
3
COMMON-LAW DUTIES TO PATIENTS—See
N
EGLIGENCE
4
COMPLAINTS—See
A
RBITRATION
1, 4
COMPLAINTS TO MODIFY ARBITRATION
AWARDS—See
A
RBITRATION
4
CONFIRMATION OF ARBITRATION AWARDS—See
A
RBITRATION
1
CONFLICT PREEMPTION—See
A
CTIONS
1
CONFRONTATION CLAUSE—See
C
ONSTITUTIONAL
L
AW
1, 2, 3
854 289 M
ICH
A
PP
CONSENT JUDGMENTS—See
J
UDGMENTS
1
CONSTITUTIONAL LAW
C
ONFRONTATION
C
LAUSE
1. The Sixth Amendment bars the admission of testimo-
nial 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 testimonial if the declarant should
reasonably have 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. People v Dendel (On
Second Remand), 289 Mich App 445.
2. Findings that are alleged to be the result of neutral
scientific testing are not exempt from challenge under
the Confrontation Clause because of the possibility of
error or bias with regard to such findings (US Const, Am
VI). People v Dendel (On Second Remand), 289 Mich
App 445.
3. The use of a screen that prevents a witness from being
able to see the defendant is not inherently prejudicial;
before it may allow the taking of a witness’s testimony
from behind a screen, the trial court must make case-
specific findings that the screen is necessary to protect a
witness who would otherwise be traumatized by the
presence of the defendant and that the emotional dis-
tress to the witness in the absence of the screen would
be more than de minimis. People v Rose, 289 Mich App
499.
J
URY
4. The selection of a jury from a representative cross
section of the community is an essential component of
the Sixth Amendment right to a jury trial; while a
defendant is not entitled to a jury that mirrors the
community, the fair-cross-section requirement guaran-
tees an opportunity for a representative jury by requir-
ing that the jury wheels, pools of names, panels, or
venires from which juries are drawn not systematically
exclude distinctive groups in the community and
I
NDEX
-D
IGEST
855
thereby fail to constitute a fair cross section of the
community. People v Bryant, 289 Mich App 260.
5. A prima facie showing that a jury was not selected from
a fair cross section of the community is made when the
defendant shows that the group alleged to be excluded
was a distinctive group in the community, the represen-
tation of this group in venires from which juries were
selected was not fair and reasonable in relation to the
number of such persons in the community, and this
underrepresentation was attributable to systematic ex-
clusion of the group in the jury-selection process; sys-
tematic exclusion is exclusion inherent in the particular
jury-selection process utilized and is not shown by one
or two incidents of disproportionate venires; once a
defendant establishes a prima facie violation of the
fair-cross-section requirement, the government may
overcome the right to a proper jury by proffering a
significant state interest that manifestly and primarily
advances those aspects of the jury-selection process that
would result in the disproportionate exclusion of a
distinctive group. People v Bryant, 289 Mich App 260.
6. The United States Supreme Court has not specified the
preferred method for measuring whether representation
of a distinctive group in a jury venire is fair and reason-
able; courts have applied three different methods, the
absolute-disparity test, the comparative-disparity test, and
the standard-deviation test, but, because each test has
been criticized, no individual method should be used to the
exclusion of the others, and a case-by-case approach should
be employed; provided that the parties proffer sufficient
evidence, courts should consider the results of all the tests
in determining whether representation was fair and rea-
sonable. People v Bryant, 289 Mich App 260.
CONTRACTS
I
NTERPRETATION OF
C
ONTRACTS
1. Ajax Paving Industries, Inc v Vanopdenbosch Construc-
tion Co, 289 Mich App 639.
P
AST
-P
RACTICE
D
OCTRINE
2. When a past practice of the parties to a contract is
clearly contrary to the clear language of the contract,
the clear language controls unless the past practice is so
widely acknowledged and mutually accepted that it
856 289 M
ICH
A
PP
amends the contract; the party seeking to supplant the
contract language must show that the parties had a
meeting of the minds with respect to the new terms or
conditions so that there was an agreement to modify the
contract. Butler v Wayne County, 289 Mich App 664.
CONTROLLED SUBSTANCES—See
C
RIMINAL
L
AW
2
CORPORATE OFFICERS—See
P
RETRIAL
P
ROCEDURE
2
COURT OF CLAIMS—See
C
OURTS
1
COURTS
C
OURT OF
C
LAIMS
1. The Court of Claims has original and exclusive jurisdic-
tion over actions for the recovery of monetary damages
brought by the owner of any extinguished recorded or
unrecorded interest in a parcel of property who claims
after a judgment of foreclosure that he or she did not
receive any notice required under the General Property
Tax Act regardless of whether the defendant is a gov-
ernmental entity (MCL 211.78l). River Investment
Group, LLC v Casab, 289 Mich App 353.
CRIMES AGAINST A PERSON—See
S
ENTENCES
1
CRIMINAL-ACT EXCLUSIONS—See
I
NSURANCE
1
CRIMINAL CONTEMPT—See
G
ARNISHMENT
1
CRIMINAL LAW
C
HILD
P
ROTECTION
L
AW
1. The purpose of the Child Protection Law is, in part, to
require the reporting of child abuse and neglect by
certain persons; the act requires the reporting of sus-
pected child abuse to Children’s Protective Services by
various enumerated professional disciplines only if the
perpetrator is the parent, legal guardian, teacher, teach-
I
NDEX
-D
IGEST
857
er’s aide, clergyman, “or any other person responsible
for the child’s health or welfare,” including a “nonpar-
ent adult,” as those terms are defined in the act; the
duty to report is based not on the occurrence of such
abuse, but on the type of relationship the alleged perpe-
trator had with the minor child (MCL 722.622[f],[t], and
[u]; MCL 722.623[1][a]). Doe v Doe (On Rem), 289 Mich
App 211.
C
ONTROLLED
S
UBSTANCES
2. The affirmative defense provided under the Michigan
Medical Marihuana Act for defendants facing
marijuana-related criminal charges applies only to of-
fenses committed on or after December 4, 2008 (MCL
333.26428). People v Campbell, 289 Mich App 533.
N
EW
T
RIAL
3. A codefendant’s posttrial or postconviction testimony
does not constitute newly discovered evidence sufficient
to warrant a new trial when the defendant was aware of
the evidence before trial; such evidence is not newly
discovered, but merely newly available, even when the
codefendant invoked his or her Fifth Amendment right
to not testify at trial (MCR 6.431[B]). People v Terrell,
289 Mich App 553.
DAMAGES
I
NTEREST
1. A plaintiff is entitled to prejudgment interest on an award
for past noneconomic damages, not on an award for future
noneconomic damages; when the jury finds that the plain-
tiff has past noneconomic damages in excess of the appli-
cable cap on noneconomic damages in a medical malprac-
tice action, the plaintiff is entitled to prejudgment interest
on the full amount of the capped award, regardless of
whether the jury also awarded the plaintiff future noneco-
nomic damages; if the past noneconomic damages do not
exceed the cap, the plaintiff is entitled to interest on the
actual amount of past noneconomic damages awarded
(MCL 600.1483, 600.6013). Dawe v Dr Reuven Bar-Levav
& Associates, PC (On Remand), 289 Mich App 380.
DECEDENTS’ ESTATES
A
GREEMENTS TO
M
AKE
M
UTUAL
W
ILLS
1. Michigan does not recognize a cause of action for breach of
an implied covenant of good faith and fair dealing and does
858 289 M
ICH
A
PP
not recognize implied limitations on the transfer of assets
by the surviving spouse in the case of an agreement to
make mutual wills. In re Leix Estate, 289 Mich App 574.
DECISIONS—See
W
ORKERS’
C
OMPENSATION
1
DEFEND—See
W
ORDS AND
P
HRASES
1
DENIALS—See
S
OCIAL
S
ECURITY
1, 2
DEPOSITIONS—See
P
RETRIAL
P
ROCEDURE
2
DIRECT EMPLOYERS—See
W
ORKERS’
C
OMPENSATION
2
DISCHARGES OF RAW HUMAN SEWAGE—See
E
NVIRONMENT
1
DISCOVERY OF MEDICAL RECORDS—See
I
NSURANCE
3
DIVESTMENT OF RESOURCES—See
S
OCIAL
S
ERVICES
1
DIVESTMENT PENALTIES—See
S
OCIAL
S
ERVICES
1
DIVORCE
See, also,
J
UDGMENTS
1
P
ROPERTY
D
IVISIONS
1. Worker’s compensation benefits are marital property to
the extent that they compensate for wages lost during
the marriage, i.e., between the beginning and the end of
the marriage (MCL 552.19). Cunningham v Cunning-
ham, 289 Mich App 195.
S
POUSAL
S
UPPORT
2. Retroactive modification of a spousal-support order is a
matter within the discretion of the trial court; retroactive
modification is permissible from the date that notice of the
I
NDEX
-D
IGEST
859
petition for modification was given to the payer or recipi-
ent of support; the modification may not take effect before
the time the petition to modify was filed (MCL 552.603[2]).
Cipriano v Cipriano, 289 Mich App 361.
DOMESTIC RELATIONS ARBITRATION ACT—See
A
RBITRATION
2
DUTIES TO THIRD PARTIES—See
N
EGLIGENCE
1
DUTY TO WARN OR PROTECT PATIENTS—See
N
EGLIGENCE
4
EASEMENTS
See, also,
N
EGLIGENCE
1
T
RESPASS
1
L
AND
D
IVISION
A
CT
1. The Land Division Act does not define the extent to
which a public utility may use an easement for public
utilities dedicated under the act (MCL 560.190).
D’Andrea v AT&T Michigan, 289 Mich App 70.
T
RESPASS
2. Activities by the owner of the dominant estate that go
beyond the reasonable exercise of the use granted by an
easement may constitute a trespass to the owner of the
servient estate. D’Andrea v AT&T Michigan, 289 Mich
App 70.
EFFECT OF BANKRUPTCY PETITION BY A
DEBTOR—See
G
ARNISHMENT
1
EFFECTIVE DATES OF STATUTES—See
C
RIMINAL
L
AW
2
EMINENT DOMAIN
J
UST
C
OMPENSATION
1. Just compensation for the taking of property includes
business-interruption damages; business-interruption
damages may include moving and relocation expenses,
but do not include lost profits resulting from a business
860 289 M
ICH
A
PP
interruption (MCL 213.51 et seq.). Dep’t of Transporta-
tion v Gilling, 289 Mich App 219.
2. The cost of moving fixtures, including trade fixtures, may
be included in an award for business-interruption dam-
ages; an item is a trade fixture if it is constructively
annexed to the property because it is intended to be
permanent, would lose value if removed from the property,
and enables and is essential to the business. Dep’t of
Transportation v Gilling, 289 Mich App 219.
EMPLOYEE RIGHT TO KNOW ACT—See
M
ASTER AND
S
ERVANT
1
EMPLOYMENT LAW—See
A
CTIONS
1
ENVIRONMENT
W
ATER
P
OLLUTION
1. The unauthorized discharge of raw human sewage into
the waters of this state creates a rebuttable presump-
tion that the municipality in which the discharge origi-
nated was the source of the discharge; the presumption
is rebutted by evidence that the discharge did not occur
through the agency of the municipality or as a result of
the municipality that is, that no action of the munici-
pality led to the discharge (MCL 324.3109[2]). Dep’t of
Environmental Quality v Worth Twp, 289 Mich App 414.
EQUITABLE CLAIMS—See
A
CTIONS
2
EVIDENCE
See, also,
N
EGLIGENCE
3
E
XCLUSION
1. A trial court’s need to complete witness testimony, how-
ever urgent, does not absolve it from its obligation to
permit an offer of proof in accordance with MRE 103(a)(2)
after the court has excluded evidence. Barksdale v Bert’s
Marketplace, 289 Mich App 652.
EVIDENCE IN TERMINATION PROCEEDINGS—See
P
ARENT AND
C
HILD
1
EXAMINATION—See
W
ITNESSES
1
I
NDEX
-D
IGEST
861
EXCEPTIONS—See
G
OVERNMENTAL
I
MMUNITY
1
EXCLUSION—See
E
VIDENCE
1
EXCLUSIONARY RULE—See
S
EARCHES AND
S
EIZURES
2
EXCLUSIONS—See
I
NSURANCE
1
FACE-TO-FACE CONFRONTATION—See
C
ONSTITUTIONAL
L
AW
3
FAILURE TO RESPOND—See
G
ARNISHMENT
1
FAIR CROSS-SECTION OF COMMUNITY—See
C
ONSTITUTIONAL
L
AW
4, 5, 6
FAIR MARKET VALUE—See
S
OCIAL
S
ERVICES
1
FEDERAL PREEMPTION—See
A
CTIONS
1
FIXTURES—See
E
MINENT
D
OMAIN
2
FORECLOSURES—See
C
OURTS
1
FOURTH AMENDMENT—See
S
EARCHES AND
S
EIZURES
2
FUTURE NONECONOMIC DAMAGES—See
D
AMAGES
1
GARNISHMENT
W
RITS OF
G
ARNISHMENT
1. A criminal contempt judgment against a garnishee is
inextricably linked to enforcement of the prior judgment
862 289 M
ICH
A
PP
against the debtor; after the debtor has filed a bank-
ruptcy petition, a court may not enter a contempt
judgment against a garnishee in favor of the creditor for
the amount of the debtor’s judgment debt because doing
so would violate the automatic stay issued by the
bankruptcy court (11 USC 362; MCR 3.101). Vanderpool
v Pineview Estates L.C., 289 Mich App 119.
GOOD-FAITH EXCEPTION—See
S
EARCHES AND
S
EIZURES
2
GOVERNMENTAL EMPLOYEES—See
G
OVERNMENTAL
I
MMUNITY
2, 3
GOVERNMENTAL IMMUNITY
E
XCEPTIONS
1. The “medical care or treatment” exception to govern-
mental immunity is not limited to the medical care or
treatment of physical illness or disease alone, but in-
cludes the care or treatment of mental illness or disease
(MCL 691.1407[4]). McLean v McElhaney, 289 Mich
App 592.
G
OVERNMENTAL
E
MPLOYEES
2. A plaintiff must present evidence sufficient for a reason-
able finder of fact to conclude that a governmental
employee was grossly negligent in order to survive a
motion for summary disposition premised on the immu-
nity afforded to governmental employees; the court may
decide the question as a matter of law if there is no
question of fact about whether the allegedly negligent
conduct rises to the level of gross negligence; evidence of
ordinary negligence does not create a material question
of fact concerning gross negligence; to find gross negli-
gence, there must be evidence that the governmental
employee engaged in conduct so reckless as to demon-
strate a substantial lack of concern for whether an
injury would result (MCL 691.1407 [2][c], [7][a]).
LaMeau v Royal Oak, 289 Mich App 153.
3. A governmental employee is immune from tort liability if
the employee is acting (or reasonably believes that he or
she is acting) within the scope of the employee’s authority
and if the governmental agency is engaged in the exercise
or discharge of a governmental function unless the em-
ployee’s conduct amounted to gross negligence and that
I
NDEX
-D
IGEST
863
gross negligence was the proximate cause of the injury or
damage, that is, the one most immediate, efficient, and
direct cause of the injury or damage (MCL 691.1407[2][c]).
LaMeau v Royal Oak, 289 Mich App 153.
H
IGHWAY
E
XCEPTION
4. A municipality must maintain its public highways,
roads, and streets, including the bridges, sidewalks,
trailways, crosswalks, and culverts on the highway, in
reasonable repair; a municipality does not have a duty to
maintain in reasonable repair alleys, trees, and utility
poles; the fact that a municipality does not have a duty
to maintain utility poles in reasonable repair does not
relieve the municipality of its duty to maintain its
sidewalks in reasonable repair even when a utility pole
causes a sidewalk’s state of disrepair (MCL 691.1401[e],
691.1402[1]). LaMeau v Royal Oak, 289 Mich App 153.
S
IDEWALKS
5. The governmental tort liability act imposes liability on
municipalities for injuries caused by defects in sidewalks
over which they have jurisdiction even if the defects are
occasioned by the presence of a structure that the
municipality would normally not have a duty to main-
tain in reasonable repair (MCL 691.1401[e],
691.1402[1]). LaMeau v Royal Oak, 289 Mich App 153.
GRIEVANCE INVESTIGATIONS—See
M
ASTER AND
S
ERVANT
1
GROSS NEGLIGENCE—See
G
OVERNMENTAL
I
MMUNITY
2, 3
HEARINGS—See
S
OCIAL
S
ECURITY
1, 2
HIGHWAY EXCEPTION—See
G
OVERNMENTAL
I
MMUNITY
4
IMPLIED COVENANTS OF GOOD FAITH AND FAIR
DEALING—See
D
ECEDENTS’
E
STATES
1
IMPLIED LIMITATIONS ON TRANSFERS OF
ASSETS—See
D
ECEDENTS’
E
STATES
1
864 289 M
ICH
A
PP
INCARCERATED PARENTS—See
P
ARENT AND
C
HILD
1
INDEMNIFICATION OF INSURERS FOR
CATASTROPHIC CLAIMS—See
I
NSURANCE
2
INDEMNITY
See, also,
P
ARENT AND
C
HILD
1
C
ONTRACTS
1. Ajax Paving Industries, Inc v Vanopdenbosch Construc-
tion Co, 289 Mich App 639.
INDUSTRIAL PERSONAL PROPERTY—See
T
AXATION
1
INSURANCE
E
XCLUSIONS
1. Auto Club Group Ins Co v Booth, 289 Mich App 606.
N
O
-F
AULT
2. United Services Automobile Ass’n v Michigan Cata-
strophic Claims Ass’n, 289 Mich App 24.
3. An insurance company has the statutory right to de-
mand copies of records from a physician, hospital, clinic,
or other medical institution about an insured person’s
history, condition, treatment, and dates and costs of
treatment in relation to that person’s claim; the services
need not have been billed, nor need payment be out-
standing, for an insurer to exercise this right; a refusal
to comply with this demand gives rise to a dispute over
which a court has jurisdiction (MCL 500.3158[2],
500.3159). State Farm Mutual Ins Co v Broe Rehabili-
tation Services, Inc, 289 Mich App 277.
4. An insured person is entitled to notice that an insurer
has sought information under MCL 500.3158(2) from a
physician, hospital, clinic, or other medical institution
about that person’s history, condition, treatment, and
dates and costs of treatment. State Farm Mutual Ins Co
v Broe Rehabilitation Services, Inc, 289 Mich App 277.
P
ENALTY
I
NTEREST
5. The decision in Griswold Props, LLC v Lexington Ins Co,
I
NDEX
-D
IGEST
865
276 Mich App 551 (2007), which held that a first-party
insured is entitled to 12 percent penalty interest if a claim
is not timely paid, irrespective of whether the claim is
reasonably in dispute, applies retroactively. McNeel v
Farm Bureau General Ins Co of Michigan, 289 Mich App
76.
INTENTIONAL ACTS—See
I
NSURANCE
1
INTEREST—See
D
AMAGES
1
INTERPRETATION OF CONTRACTS—See
C
ONTRACTS
1
INTERPRETATION OF INDEMNITY
CONTRACTS—See
I
NDEMNITY
1
JOINDER OF PARTIES—See
W
ORKERS’
C
OMPENSATION
2
JUDGMENTS
R
ELIEF FROM
J
UDGMENTS
1. The statutory right to seek modification of a spousal-
support provision may be waived by the parties to a
divorce when the parties specifically forgo that right and
agree in a consent judgment that the spousal-support
provision is nonmodifiable; when the parties to a con-
sent judgment have chosen to make the judgment non-
modifiable, a court considering granting relief from the
judgment must strictly apply the factors limiting relief
from a judgment; the motion may only be granted in
extraordinary situations not otherwise specifically enu-
merated by the court rule, and courts must refrain from
vacating the judgment if doing so would detrimentally
affect the substantial rights of the opposing party (MCR
2.612[C][1][f]). Rose v Rose, 289 Mich App 45.
JUDICIAL CONSTRUCTION OF POLICIES—See
I
NSURANCE
1
JURISDICTION—See
C
OURTS
1
866 289 M
ICH
A
PP
JURY—See
C
ONSTITUTIONAL
L
AW
4, 5, 6
JUST-CAUSE REQUIREMENT FOR DISCHARGE
FROM EMPLOYMENT—See
A
CTIONS
1
JUST COMPENSATION—See
E
MINENT
D
OMAIN
1, 2
LABOR-MANAGEMENT REPORTING AND
DISCLOSURE ACT—See
A
CTIONS
1
LAND DIVISION ACT—See
E
ASEMENTS
1
LAW-OF-THE-CASE DOCTRINE—See
A
BITRATION
3
MAJORITY OF WORKERS’ COMPENSATION
COMMISSIONERS—See
W
ORKERS’
C
OMPENSATION
1
MARIJUANA—See
C
RIMINAL
L
AW
2
MARITAL ASSETS—See
D
IVORCE
1
MASTER AND SERVANT
E
MPLOYEE
R
IGHT TO
K
NOW
A
CT
1. The Employee Right to Know Act excludes from the
definition of “personnel record” records limited to griev-
ance investigations that are kept separately and are not
used relative to an employee’s qualifications for employ-
ment, promotion, transfer, additional compensation, or
disciplinary action; a “grievance investigation” is a
systematic or official inquiry into a grievance that is not
used for original or new actions related to an employee’s
qualifications for employment, promotion, transfer, ad-
I
NDEX
-D
IGEST
867
ditional compensation, or disciplinary action, so notes
from a grievance investigation of a disciplinary action
fall within the grievance-investigation exclusion (MCL
423.501[2][c][vi]). Wright v Kellogg Co, 289 Mich App
63.
P
ENSIONS
2. Vested retirement rights may not be altered without the
pensioner’s consent; a retiree’s contractual rights vest,
if at all, at the time of retirement absent explicit
contractual language to the contrary; a retiree relying
on the past-practice doctrine to show that a past practice
may have amended a contract covering the retiree
before the retiree retired must show that the past
practice had modified the contract under which the
retiree retired; a claim based on the past-practice doc-
trine must fail if any of the actions upon which the
retiree relies to assert a past practice occurred after the
retiree’s date of retirement. Butler v Wayne County, 289
Mich App 664.
MEDICAID—See
S
OCIAL
S
ECURITY
1, 2
S
OCIAL
S
ERVICES
1
MEDICAL CARE OR TREATMENT EXCEPTION—See
G
OVERNMENTAL
I
MMUNITY
1
MEDICAL MALPRACTICE—See
D
AMAGES
1
N
EGLIGENCE
2, 3
MEDICAL RECORDS—See
I
NSURANCE
3, 4
MENTAL-HEALTH PROFESSIONALS—See
N
EGLIGENCE
4
MENTAL ILLNESS OR DISEASE—See
G
OVERNMENTAL
I
MMUNITY
1
MICHIGAN MEDICAL MARIHUANA ACT—See
C
RIMINAL
L
AW
2
868 289 M
ICH
A
PP
MODIFICATION OF ARBITRATION AWARDS—See
A
RBITRATION
4, 5
MOTIONS AND ORDERS—See
G
OVERNMENTAL
I
MMUNITY
2
MOVING AND RELOCATION EXPENSES—See
E
MINENT
D
OMAIN
1, 2
MUNICIPAL CORPORATIONS—See
E
NVIRONMENT
1
NECESSITY—See
W
ORKERS’
C
OMPENSATION
1
NECESSITY OF AN INDEPENDENT DUTY—See
N
EGLIGENCE
1
NEGLIGENCE
D
UTIES TO
T
HIRD
P
ARTIES
1. Tort liability may attach in the presence of a duty that
arises separately and distinctly from a contractual
agreement; the creation of a new hazard during the
performance of a contract may give rise to a breach of
duty separate and distinct from the contract; a party
entering onto private property to perform a contract
may bear duties separate and distinct from those under
the contract, such as a duty to exercise due care to avoid
interfering with the physical condition of the land and to
avoid increasing the burden of any easement it may hold
over the property. Boylan v Fifty Eight Limited Liability
Co, 289 Mich App 709.
M
EDICAL
M
ALPRACTICE
2. The applicable standard of care in a medical-malpractice
action against a board-certified physician is the one
most relevant standard of practice or care, i.e., that
standard of practice or care applicable to the specialty
engaged in by the physician during the course of the
alleged malpractice; the proper standard of care is a
matter of law and must be determined before trial (MCL
600.2169[1][a]). Jilek v Stockson, 289 Mich App 291.
3. Practice guidelines, policies, and procedures adopted or
used by medical providers do not establish the standard
I
NDEX
-D
IGEST
869
of care at issue in a medical-practice action, but they are
admissible when they are relevant to the standard of
care and to the injury alleged. Jilek v Stockson, 289 Mich
App 291.
M
ENTAL
-H
EALTH
P
ROFESSIONALS
4. A psychiatrist-patient relationship is a special rela-
tionship that imposes a duty on the psychiatrist to
protect the patient from harm by a third party and to
treat the patient within the standard of care appli-
cable to medical professionals; when the patient is
among the class of persons who could foreseeably be
harmed by the psychiatrist’s decision to place a third
party in group therapy, the psychiatrist owes the
patient a duty to take reasonable precautions to
ensure that the third party is suitable for group
therapy. Dawe v Dr Reuven Bar-Levav & Associates,
PC (On Remand), 289 Mich App 380.
NEUTRAL SCIENTIFIC TESTING RESULTS—See
C
ONSTITUTIONAL
L
AW
2
NEW TRIAL—See
C
RIMINAL
L
AW
3
NEWLY DISCOVERED EVIDENCE—See
C
RIMINAL
L
AW
3
NO-FAULT—See
I
NSURANCE
2, 3, 4
NONMODIFIABLE SPOUSAL-SUPPORT
PROVISION—See
J
UDGMENTS
1
NONRESIDENTS REQUIRED TO REGISTER MOTOR
VEHICLES IN MICHIGAN—See
I
NSURANCE
2
NOTICE OF DISCOVERY TO INSUREDS—See
I
NSURANCE
4
NOTICE OF UNDERLYING ACTIONS—See
I
NDEMNITY
1
870 289 M
ICH
A
PP
NOTICES—See
S
OCIAL
S
ECURITY
1, 2
OFFENSE CATEGORY DESIGNATIONS—See
S
ENTENCES
1
OFFENSE VARIABLES 12 AND 13—See
S
ENTENCES
1
OFFER OF JUDGMENT—See
A
CTIONS
2
OFFER OF PROOF—See
E
VIDENCE
1
OPINIONS BY APPELLATE COURTS—See
I
NSURANCE
5
PARENT AND CHILD
T
ERMINATION OF
P
ARENTAL
R
IGHTS
1. In re DMK, 289 Mich App 246.
PARTICIPATION IN CHILD PROTECTIVE
PROCEEDINGS—See
P
ARENT AND
C
HILD
1
PAST NONECONOMIC DAMAGES—See
D
AMAGES
1
PAST-PRACTICE DOCTRINE—See
C
ONTRACTS
2
M
ASTER AND
S
ERVANT
2
PATIENTS—See
N
EGLIGENCE
4
PENALTY INTEREST—See
I
NSURANCE
5
PENSIONS—See
M
ASTER AND
S
ERVANT
2
PERSONNEL RECORDS—See
M
ASTER AND
S
ERVANT
1
I
NDEX
-D
IGEST
871
PHYSICIANS—See
N
EGLIGENCE
2
PRACTICE GUIDELINES FOR MEDICAL CARE—See
N
EGLIGENCE
3
PRESUMPTION OF INNOCENCE—See
C
ONSTITUTIONAL
L
AW
3
PRETRIAL PROCEDURE
C
ASE
-E
VALUATION
S
ANCTIONS
1. McNeel v Farm Bureau General Ins Co of Michigan, 289
Mich App 76.
D
EPOSITIONS
2. The apex-deposition rule applies in Michigan to high-
ranking officials in the public sector and to high-
ranking corporate officers in the private sector; the
rule provides that, before a plaintiff may take the
deposition of a high-ranking or apex governmental
official or corporate officer, the plaintiff must demon-
strate both that the governmental official or corporate
officer possesses superior or unique information rel-
evant to the issues being litigated and that the
information cannot be obtained by a less intrusive
method, such as by deposing lower-level officials or
employees; when the party opposing the deposition
demonstrates by affidavit or other testimony that the
proposed deponent lacks personal knowledge or
unique or superior information relevant to the claims
at issue, the party seeking the deposition must dem-
onstrate that the relevant information cannot be
obtained absent the disputed deposition. Alberto v
Toyota Motor Corp, 289 Mich App 328.
PRIMA FACIE CASE—See
C
ONSTITUTIONAL
L
AW
5
PROPERTY DIVISIONS—See
D
IVORCE
1
PROXIMATE CAUSE OF INJURY OR DAMAGE—See
G
OVERNMENTAL
I
MMUNITY
3
PUBLIC POLICY—See
I
NSURANCE
1
872 289 M
ICH
A
PP
PUBLIC UTILITY EASEMENTS—See
E
ASEMENTS
1
REBUTTABLE PRESUMPTIONS—See
E
NVIRONMENT
1
RELEASE
S
COPE
1. To create a third-party beneficiary, a release must
expressly promise to act to benefit a third party or a
sufficiently designated class. White v Taylor Distribut-
ing Co, Inc, 289 Mich App 731.
RELIEF FROM JUDGMENTS—See
J
UDGMENTS
1
REPORTING REQUIREMENTS—See
C
RIMINAL
L
AW
1
RES JUDICATA—See
A
CTIONS
3
W
ORKERS’
C
OMPENSATION
2
RETROACTIVE APPLICATION OF OPINIONS—See
I
NSURANCE
5
RETROACTIVE AWARDS OF WORKERS’
COMPENSATION BENEFITS DURING THE
MARRIAGE FOR PREMARITAL INJURIES—See
D
IVORCE
1
RETROACTIVE MODIFICATION OF SPOUSAL
SUPPORT—See
D
IVORCE
2
REVIEW—See
W
ORKERS’
C
OMPENSATION
1
RIGHT TO CONFRONTATION—See
C
ONSTITUTIONAL
L
AW
1, 2, 3
RIGHT TO DISCOVERY OF MEDICAL RECORDS—See
I
NSURANCE
4
I
NDEX
-D
IGEST
873
SCOPE—See
R
ELEASE
1
SCREENS TO SHIELD WITNESSES—See
C
ONSTITUTIONAL
L
AW
3
SEARCHES AND SEIZURES
A
RREST
1. Arizona v Gant, 556 US 332 (2009), which held that
police officers may search a vehicle incident to a
recent occupant’s arrest only when the arrestee is
unsecured and within reaching distance of the vehi-
cle’s passenger compartment or if it is reasonable to
believe that evidence relevant to the crime of arrest
might be found in the vehicle, applies retroactively to
cases pending at the time the Court issued the opinion
(US Const, Am XIV). People v Short, 289 Mich App
538.
F
OURTH
A
MENDMENT
2. The good-faith exception to the exclusionary rule ap-
plies to an otherwise unlawful search when a police
officer undertakes the search in reasonable and good-
faith reliance on caselaw in existence at the time of the
search, even if the caselaw is subsequently overturned
(US Const, Am XIV). People v Short, 289 Mich App 538.
SENTENCES
S
ENTENCING
G
UIDELINES
1. “Crimes against a person” is a technical term as used in
the sentencing guidelines; only crimes with the offense
category designated as “person” in the sentencing
guidelines can be considered crimes against a person for
purposes of scoring offense variable 12 (contemporane-
ous felonious criminal acts) and offense variable 13
(continuing pattern of criminal behavior) (MCL 777.5;
MCL 777.6; MCL 777.42; MCL 777.43). People v Wig-
gins, 289 Mich App 126.
SENTENCING GUIDELINES—See
S
ENTENCES
1
SEPARATE ASSETS—See
D
IVORCE
1
874 289 M
ICH
A
PP
SIDEWALKS—See
G
OVERNMENTAL
I
MMUNITY
4, 5
SINGLE BUSINESS TAX ACT—See
T
AXATION
1
SOCIAL SECURITY
M
EDICAID
1. A state plan for administrating the Medicaid program
must provide for granting an opportunity for a fair
hearing to any individual whose application for medi-
cal assistance is denied or is not acted upon with
reasonable promptness; the agency must inform the
applicant, in writing at the time of the application, of
the right to a hearing, the method by which to obtain
a hearing, and that the applicant may represent
himself or use legal counsel, a relative, a friend, or
other spokesman; the agency must then allow the
applicant a reasonable time to request a hearing; the
information provided need not conform with the re-
quirements for a notice of action provided in 42 CFR
431.210 and need not inform the applicant of the
specific regulations that support the agency’s deci-
sions (42 USC 1396a[a][3]; 42 CFR 431.200,
431.206[b] and [c][1], 431.220[a][1], and 431.221[d]).
Schreur v Department of Human Services, 289 Mich
App 1.
2. The Michigan Administrative Code provides the right to a
hearing to a Medicaid applicant whose claim has been
denied; the notice of such denial need not cite the specific
provisions supporting the denial, and the applicant must
be given a reasonable time within which to request a
hearing (Mich Admin Code, R 400.901, 400.903). Schreur
v Department of Human Services, 289 Mich App 1.
SOCIAL SERVICES
M
EDICAID
1. A Medicaid applicant eligible for long-term-care benefits
is subject to a divestment penalty if he or she trans-
ferred a resource during the applicable look-back period
for less than fair market value and the transfer was not
otherwise excluded as a divestment; to determine the
fair market value of a resource, one must discern the
value of the resource on the open market in an arm’s-
I
NDEX
-D
IGEST
875
length transaction; shell transactions between relatives
that have little or no economic benefit to the applicant
are not for fair market value (42 USC 1396p[c]). Mackey
v Department of Human Services, 289 Mich App 688.
SOURCES OF A DISCHARGE—See
E
NVIRONMENT
1
SPECIALISTS—See
N
EGLIGENCE
2
SPOUSAL SUPPORT—See
D
IVORCE
2
J
UDGMENTS
1
STANDARD OF CARE—See
N
EGLIGENCE
2, 3
STATUTES—See
C
RIMINAL
L
AW
2
STATUTORY EMPLOYERS—See
W
ORKERS’
C
OMPENSATION
2
SUM CERTAIN—See
A
CTIONS
2
SUMMARY DISPOSITION—See
G
OVERNMENTAL
I
MMUNITY
2
SUPPLEMENTAL PETITIONS FOR TERMINATION
OF PARENTAL RIGHTS—See
P
ARENT AND
C
HILD
1
TAXATION
S
INGLE
B
USINESS
T
AX
A
CT
1. A taxpayer may claim a tax credit under the former
Single Business Tax Act for “industrial personal prop-
erty,” which is defined as property classified as indus-
trial personal property under MCL 211.34c(3), a provi-
sion of the General Property Tax Act; property meets
this definition only if it has been classified by the
assessor as industrial personal property (former MCL
876 289 M
ICH
A
PP
208.35d[6][a]). Walter Toebe Construction Co v Depart-
ment of Treasury, 289 Mich App 659.
TENDER OF A DEFENSE—See
I
NDEMNITY
1
TERMINATION OF PARENTAL RIGHTS—See
P
ARENT AND
C
HILD
1
TESTIMONIAL STATEMENTS—See
C
ONSTITUTIONAL
L
AW
1
THIRD-PARTY BENEFICIARIES—See
R
ELEASE
1
TIME LIMITS ON EXAMINATION—See
W
ITNESSES
1
TRADE FIXTURES—See
E
MINENT
D
OMAIN
2
TRESPASS
See, also,
E
ASEMENTS
2
E
ASEMENTS
1. A person authorized to use property may commit a
common-law trespass if the user’s activities exceed the
scope of the landowner’s permission. Boylan v Fifty
Eight Limited Liability Co, 289 Mich App 709.
USE OF PROPERTY IN EXCESS OF EASEMENT—See
T
RESPASS
1
USE OF PUBLIC UTILITY EASEMENTS—See
E
ASEMENTS
1
UTILITY POLES—See
G
OVERNMENTAL
I
MMUNITY
4
VACATION OF ARBITRATION AWARDS—See
A
RBITRATION
2
VEHICLE SEARCHES INCIDENT TO ARREST—See
S
EARCHES AND
S
EIZURES
1
I
NDEX
-D
IGEST
877
VENIRES—See
C
ONSTITUTIONAL
L
AW
4, 5, 6
VESTED RETIREMENT RIGHTS—See
M
ASTER AND
S
ERVANT
2
WATER POLLUTION—See
E
NVIRONMENT
1
WITNESSES
See, also,
C
ONSTITUTIONAL
L
AW
3
E
XAMINATION
1. A trial court must exercise reasonable control over the
mode and order of interrogating witnesses and present-
ing evidence so as to make the interrogation and pre-
sentation effective for the ascertainment of truth, avoid
needless consumption of time, and protect witnesses
from harassment or undue embarrassment; a trial court
abuses its discretion by imposing a time limit on the
examination of a witness that is arbitrary and not
necessary to advance trial-management goals (MRE
611[a]). Barksdale v Bert’s Marketplace, 289 Mich App
652.
WORDS AND PHRASES
See, also,
M
ASTER AND
S
ERVANT
1
D
EFEND
1. Ajax Paving Industries, Inc v Vanopdenbosch Construc-
tion Co, 289 Mich App 639.
WORKERS’ COMPENSATION
A
PPELLATE
C
OMMISSION
1. For a decision of the Workers’ Compensation Appellate
Commission to be reviewable by the Court of Appeals, it
must be a true majority decision; a true majority deci-
sion is one in which a majority of the commissioners are
in agreement regarding the material facts and the
ultimate outcome (MCL 418.274[8]). Findley v Daimler-
Chrysler Corp, 289 Mich App 483.
R
ES
J
UDICATA
2. An injured employee may bring separate workers’ com-
pensation actions against his or her direct employer and
statutory employer without joining all potentially liable
878 289 M
ICH
A
PP
parties in one proceeding, and the doctrine of res
judicata may not be applied to bar the employee’s action
against his or her statutory employer even though his or
her direct employer has already been ordered to pay
benefits in a separate action (MCL 418.171). Bennett v
Mackinac Bridge Auth, 289 Mich App 616.
WORKERS’ COMPENSATION BENEFITS—See
D
IVORCE
1
WRITS OF GARNISHMENT—See
G
ARNISHMENT
1
WRONGFUL DISCHARGE—See
A
CTIONS
1
I
NDEX
-D
IGEST
879
