Providing summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit. Over 60,000 cases summarized to date.
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Confirmation of an arbitration award; Fraudulent misrepresentation related to a real property seller’s disclosure statement; Exemplary damages; Mitigation of damages
The court concluded that most of the issues raised by plaintiff-Yaffa in challenging the arbitration award for defendants-Williamses were unreviewable, and that he failed to meet his burden to show they did not make reasonable efforts to mitigate their damages. Thus, the court affirmed the trial court’s order confirming the arbitration award. The case arose from the Williamses’ purchase of a home from Yaffa. The “arbitrator determined that Yaffa had fraudulently misrepresented that the septic system was in working order when he sold the home.” The Williamses were awarded exemplary damages and costs. Yaffa filed a complaint in the trial court to vacate the award. The trial court found “no error or violation of any law in the arbitrator’s decision.” Yaffa argued that the trial court erred in affirming the award because the Williamses failed to show he made a fraudulent misrepresentation. He first challenged the reasonable reliance element. The court noted “the arbitrator did not credit the evidence suggesting that the Williamses reliance on Yaffa’s representation was not reasonable. Instead, based on his view of the evidence, the arbitrator found that the reliance was reasonable.” This was a factual finding the court could not review. Yaffa next contended the arbitrator erred in determining his representation was fraudulent. Again, he sought a determination by the court “that the arbitrator erred by applying the correct legal framework to erroneous factual findings. Such a review of the arbitrator’s award by the trial court or by this Court is not required or authorized.” Likewise, his challenge to the award of exemplary damages was “not an argument about an error of law apparent on the face of the arbitrator’s award, but rather a challenge to the arbitrator’s thought process in applying the proper legal framework to the facts.” Thus, the court had to defer to the arbitrator’s opinion. Finally, Yaffa asserted “the Williamses failed to mitigate their damages because they did not address the septic tank problem immediately upon discovering that the toilet did not function.” However, the evidence did not establish that they “could have immediately remedied the septic problem. Nor does the record support a finding that the damages would have been minimized if [they] had installed a new septic system instead of manually removing human waste from the toilet.”
Dismissal of a Chapter 13 case; Whether the debtor had the right to have her case dismissed post-conversion to a Chapter 7; 11 USC § 1307; Whether the debtor orally requested dismissal before the case was converted
[This appeal was from the Bankr WD-MI.] The Bankruptcy Appellate Panel (BAP) held that the debtor falsely claimed she had orally requested the bankruptcy court to dismiss her Chapter 13 case before it was converted to a Chapter 7, and that she had no “absolute right” to dismiss her case post-conversion. The Chapter 13 trustee moved for summary judgment to convert the debtor’s case to a Chapter 7 or to dismiss the case with a bar to refiling. The debtor requested that the motion be denied so she could confirm her proposed Chapter 13 plan. After a hearing (the Conversion Hearing), while the matter was still pending, the debtor filed an amended Chapter 13 petition and schedules. The bankruptcy court converted the case to a Chapter 7 and appointed a Chapter 7 trustee. Although the debtor moved for reconsideration of the conversion order based on alleged creditor fraud, “she did not assert that she had requested dismissal prior to conversion.” The bankruptcy court denied reconsideration. The debtor then filed a series of motions regarding her Chapter 7 plan. More than two years after conversion, she filed a pro se motion requesting that the bankruptcy court set aside the conversion, for the first time asserting that she had made an oral request to dismiss her Chapter 13 case during the Conversion Hearing. The bankruptcy court requested additional information and legal authority, which she failed to provide. The bankruptcy court denied her motion, ruling that she had failed to adequately support her assertions, and that her actions were inconsistent with having voluntarily requested a dismissal of the Chapter 13 case. The BAP reviewed whether the debtor orally requested that her Chapter 13 case be dismissed before conversion. After “thoroughly examin[ing]” the Conversion Hearing transcript, it found “that assertion false.” The transcript showed the bankruptcy court had presented alternative ways to proceed, but that she “repeatedly insisted that, against the advice of counsel, she wanted to continue in her chapter 13 case.” Additionally, the record showed she amended her Chapter 13 plan and schedules, “[a]nd she did not file a motion to dismiss pursuant to” § 1307. The court noted that § 1307(b) “provides an absolute right for a debtor to dismiss her chapter 13 case, so long as two conditions are met. The debtor must REQUEST dismissal, and she must do so BEFORE the case is converted.” Thus, § 1307 did not apply here. Affirmed.
Constitutionality of the Horseracing Safety & Integrity Act; National Horsemen’s Benevolent & Protective Ass’n v Black (5th Cir); “Non-delegation” & “anti-commandeering” challenges; 15 USC §§ 3060(b) & 3052(f)
Holding that the amended Horseracing Integrity and Safety Act is constitutional, the court affirmed the district court’s dismissal of plaintiffs’ claims. Plaintiffs-Oklahoma, West Virginia, Louisiana, their racing commissions, and other entities (collectively, Oklahoma) sued the Federal Trade Commission (FTC) over the Act, arguing that it gave too much power to the Horseracing Integrity and Safety Authority (the Authority), a private entity, “and unlawfully commandeered the States.” In another case, the Fifth Circuit declared the Act facially unconstitutional because it delegated too much power to the Authority. While the appeal in this case was pending, Congress amended the Act to give the FTC final authority to abrogate or modify the Authority’s rules. The court first held that the amendment to the Act did not moot plaintiffs’ non-delegation and commandeering challenges, and found that remand for review by the district court was unnecessary. In considering the non-delegation claim, the court noted the difference between “impermissible delegation of unchecked lawmaking power to private entities and permissible participation by private entities in developing government standards and rules.” The court held that the Authority was properly “subordinate” to the FTC where the amended Act “gives the FTC supervision over the rules that govern the horseracing industry.” As for the commandeering claim, even if Oklahoma was “correct that § 3060(b) unlawfully orders the States to cooperate, the provision does not contain a penalty or enforcement mechanism. And Oklahoma does not point to any actual or threatened enforcement actions. An unenforceable statutory duty does not give rise to Article III standing, . . . and ‘mere conjecture’ about possible enforcement is not any better[.]” The court held that the other challenged provision, § 3052(f), “presents States with a choice, not a command.”
Successive motion for relief from judgment; Newly discovered evidence; People v Cress; Materiality; Opinion evidence; Brady violation; People v Chenault
Holding that the trial court abused its discretion by granting defendant-Smith’s successive motion for relief from judgment, the court reversed and remanded. He claimed that he was entitled to a new trial based on an affidavit from a defense expert (R) “that time-since-intercourse evidence is ‘junk science’ and evidence that the prosecution did not disclose exculpatory evidence that could have been used to impeach” a DNA analyst (H). The court concluded the trial court clearly erred by finding Smith was entitled to a new trial based on the newly discovered evidence from R. “The evidence’s materiality, not the evidence itself, was newly discovered.” In addition, Smith did not “establish that he could not, using reasonable diligence, have discovered and produced the evidence for trial. Finally, although newly discovered evidence can establish good cause for failing to bring claims in a prior motion,” Smith failed to establish actual prejudice. Contrary to the trial court’s determination, he “would not have had a reasonably likely chance of acquittal with the benefit of’ R’s expertise. Further, “Smith was allowed one DNA expert at trial, who ultimately did not challenge the opinions of the prosecution experts. Because additional expert testimony about the timing of the allegedly consensual sex would have been of questionable relevance, and possibly harmful, to the defense, Smith could not establish that the absence of expert testimony from [R] ‘was so offensive to the maintenance of a sound judicial process that the conviction should not be allowed to stand regardless of its effect on the outcome of the case.’” The court also concluded that the trial court clearly erred when it held that evidence about H’s proficiency-testing was material. “Absent materiality, no Brady violation occurred.” Because there was no Brady violation, Smith could not “establish the good cause and actual prejudice required for his motion for relief from judgment.” Moreover, the court held that “because no Brady violation occurred, and the proficiency-testing impeachment evidence was so disconnected from the case at hand, Smith could not establish an ‘irregularity . . . so offensive to the maintenance of a sound judicial process that the conviction should not be allowed to stand regardless of its effect on the outcome of the case.”’ Thus, the court concluded the trial court erred in granting relief from judgment based on H’s “performance of proficiency testing for her supervisor.”
Motion to modify custody; MCL 722.27(1)(c); Proper cause or change of circumstances; McRoberts v Ferguson; Child’s school performance & medical care; Contempt
The court held that the trial court’s ruling that plaintiff-mother did not show proper cause or a change of circumstances warranting consideration of modifying custody of the parties’ child (A) was not against the great weight of the evidence. But it was left with a “firm and definite conviction” the trial court erred in finding plaintiff in contempt for failing “to physically eject her unwilling daughter from the car” for a court-ordered return to defendant-father. Thus, the court affirmed the denial of plaintiff’s amended motion to modify custody, reversed the contempt ruling, and remanded. Plaintiff contended that the trial court’s findings about A’s “school performance and medical care were against the great weight of the evidence.” Plaintiff asserted that these “matters alone established proper cause to revisit the existing custody order.” However, the court concluded the evidence as to A’s “school performance barely conflicted and ultimately demonstrated that the child performed well in school.” Plaintiff additionally contended that lapses in defendant’s medical care of A constituted proper cause. She testified that he “refused to communicate with her” about A’s medical care. He testified that he did communicate with her on this issue. “Neither party spent much time discussing this issue before the referee; rather, the focus was on mother’s contention that father failed to provide for [A’s] medical care and treatment. The trial court” found that plaintiff did not offer evidence showing that defendant deprived A “of proper medical care and treatment.” The court concluded she did not show that this “finding was against the great weight of the evidence.” As to the contempt issue, the court found that the fact defendant’s “wife spanked a 12-year-old and that [A] preferred to live with her mother” supported plaintiff’s testimony that A was unwilling “to voluntarily return to her father’s home despite the court’s order, and substantiates mother’s testimony that [A] strenuously resisted even when told she had to do so. The evidence” also supported that plaintiff “found herself in an emotionally fraught situation, forced to choose between compelling her unwilling 12-year-old daughter to a place where she had been physically punished, and allowing the child to remain in a place where she felt safe.”
Material misrepresentation; Ambiguities in the policy; Motion for reconsideration
The court concluded that as it was undisputed “Progressive relied upon the misrepresentation, rescission is warranted under the language of the contract.” Also, given plaintiff-Musleh had “not identified any ambiguities in the policy, his claim that the trial court erred by interpreting the policy” was without merit. Finally, the trial court did not err by failing to rule on his motion for reconsideration. He argued there were genuine issues of material fact as to whether he misrepresented information on his application for insurance. He did not dispute “he made a material misrepresentation on his insurance application when he stated that each of his vehicles was garaged in Washington Township.” Instead, he stressed “he did not intentionally make a material misrepresentation.” He posited that he “would have readily complied with the garaging requirements if Progressive had described its ‘garage-related’ concerns in the insurance application, had asked more detailed questions in the application, or had defined its garage-related concerns in the" policy. The court noted that the “plain terms of the contract, however, do not require a finding of fraud or intentional misstatement. Instead, the rescission clause applies to both intentional and inadvertent material misrepresentations in the insurance application.” Thus, it was “irrelevant whether he would have accurately conveyed the information if he had been better informed by Progressive as to what it meant when it asked for his ‘garaging zip code’ and ‘rating city.’ Indeed, ‘[r]escission is justified without regard to the intentional nature of the misrepresentation, as long as it is relied upon by the insurer.”’ Musleh also suggested the policy “was ambiguous so it should be construed against Progressive.” But he did “not identify which provisions were ambiguous.” He suggested—“vaguely—that the policy is ambiguous because it does not define what he terms ‘garaging-related’ terminology. The failure to define a term, however, does not render a policy ambiguous.” In this case, it was “axiomatic that a request for information on where the vehicle is garaged refers to where the vehicle is physically stored when not in use. Indeed, the policy refers to ‘principle garaging address’ separately from the insured’s ‘mailing address’ and ‘residence address,’ which suggests that the vehicle does not have to be stored at the insured’s residence. Moreover, Musleh was not actually confused by the language used given that he sent a notarized letter indicating where each vehicle was actually garaged.” Musleh also suggested “the trial court never intended to hear his motion for reconsideration. The trial court, however, may not set aside or amend its order granting summary disposition because Musleh’s claim of appeal was treated as an application for leave to appeal and was granted.” Affirmed.
Common-law conversion; Aroma Wines & Equip, Inc v Columbian Distrib Servs, Inc; Statutory conversion; MCL 600.2919a; “Actual damages”; Alken-Ziegler, Inc v Hague; Directed verdict & judgment notwithstanding the verdict (JNOV); Waiver; Nexteer Auto Corp v Mando Am Corp; Implied consent; MCR 2.118(C)(1); Case evaluation sanctions; MCR 2.403(O); Effect of a new rule; Reitmeyer v Schultz Equip & Parts Co, Inc
The court held that the trial court did not err by denying defendants-former employee’s and his photography company’s (Q11) motions for directed verdict and JNOV regarding plaintiff-cable TV company’s (TWN) conversion action. It also held that Q11 could be held liable here, and that the trial court did not abuse its discretion by finding the new amendment to MCR 2.403(O) should not apply to this case. Plaintiff sued defendants for common-law and statutory conversion for deleting preferences on and damaging a “switcher,” deleting videos and files from his office computer, and taking various items, including two external hard drives he claimed were personal property. The jury awarded plaintiff $28,000 and the trial court entered a postjudgment order awarding plaintiff case evaluation sanctions. On appeal, the court rejected defendants’ argument that the trial court erred by denying their motion for a directed verdict, and their subsequent motion for JNOV, on the basis that the evidence was insufficient to identify the converted property and that the damages awarded were based on speculation. “Contrary to defendants’ assertions in their briefing and at oral argument, there was evidence of the value of converted property introduced into the record.” In addition, to the extent they argued “in the alternative, without citing any relevant legal authority in support, that the damages award should be reduced to $5,000 because that was the amount of TWN’s insurance deductible, this argument” lacked merit. The court also rejected defendants’ claim that Q11 could not be liable for statutory conversion as it was no longer a defendant in the case by the time the trial started. Defendants “expressly approved the jury instructions and verdict form instructing the jury to determine whether Q11 . . . was liable for statutory conversion and, by extension, expressly approved including Q11” as a defendant against whom such a claim was alleged. Finally, the court rejected defendants’ contention the trial court erred by awarding plaintiff case evaluation sanctions under MCR 2.403(O) after that rule was amended to remove the sanctions provisions. “Because the parties acted in reliance under the old rule in proceeding to trial, and the decision to proceed to trial carried consequences and rights that were eliminated by the new rule, there was a valid reason to apply the pre-amendment version of MCR 2.403(O) to avoid an injustice.” Affirmed.
Challenge to the validity of a municipal “special assessment” on a property owner; The property tax cap restriction of the Headlee Amendment; Const 1963, art 9, §§ 6, 25-34; MCL 600.308a(1); Tax Tribunal (TT) jurisdiction over the review of special assessments & proceedings for a tax refund under MCL 205.731(a) & 205.731(b); Comparing Michigan’s Adventure, Inc v Dalton Twp
The court held that the trial court erred by granting plaintiff-business partial summary disposition as to its claim challenging the validity of special assessments levied on its property by defendant-township. Defendant levied the special assessments on property, including plaintiff’s property, to fund the departments involved in fire protection, disposal, street and lighting, parks and recreation, new building, and water infrastructure. Plaintiff alleged defendant was illegally levying taxes for general governmental funding in the guise of special assessments in violation of the Headlee Amendment. The trial court granted partial summary disposition for plaintiff, but denied its request for a permanent injunction, finding it “had an adequate remedy of law for relief from any future illegal special assessments.” On appeal, the court found the trial court erred by determining it had jurisdiction of plaintiff’s claims that the special assessments amounted to an unconstitutional property tax in violation of the Headlee Amendment. When it levied the assessments, defendant “identified their purpose as defrayment of specific costs” rather than raising revenue for general governmental purposes. “With this designation, along with statutory authority to make assessments for these purposes, defendant’s assessments are not ‘so clearly a tax . . . that jurisdiction was conferred on the [trial] court under the Headlee provisions.’” Before any question of a Headlee Amendment violation can be considered, “the underlying question of the validity of the special assessment must be addressed. The questions of assessment validity—whether the assessments: (1) conferred a specific benefit on the property owners assessed, (2) had some legal source of authority, or (3) were enacted following the required statutory procedures for levying special assessments—are questions which the []TT must consider under its grant of exclusive and original jurisdiction under MCL 203.371.” By this mechanism, the Headlee Amendment “is not rendered meaningless, as plaintiff contends, but rather is supported by utilizing the expertise of the []TT in the assessment of any alleged attempts to circumvent it.” Reversed and remanded for entry of an order granting defendant summary disposition.