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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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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Racial discrimination; Elliott-Larsen Civil Rights Act; Prima facie case of hostile work environment; Major v Village of Newberry; Retaliation; MCL 37.2701
The court concluded that the trial court did not err when it granted defendant summary disposition of plaintiff’s racial harassment and retaliation claims. He “was suspended from his employment with defendant after allegedly hitting his supervisor” in the face. Plaintiff argued that he successfully created a genuine issue of material fact as to “whether he was racially discriminated against while in defendant’s employment, and” that the trial court failed to consider his “allegations collectively.” The court held that “plaintiff failed to create a genuine issue of material fact concerning whether he was subjected to a racially hostile work environment, and the trial court properly considered the totality of the circumstances in reaching its conclusion.” It determined that although there was “no dispute that plaintiff is part of a protected racial class because he is African-American, the lower court record does not otherwise demonstrate that plaintiff could establish a genuine issue of fact on the remaining four elements” of a hostile work environment claim. He also failed to create a material issue of fact as to “the first prong of his retaliation claim because he provided no evidence demonstrating that he engaged in a protected activity by filing complaints about racial discrimination with defendant.” Affirmed.
Tax foreclosure sale proceeds; Rafaeli, LLC v Oakland Cnty; MCL 211.78t; Enforceability of § 78t(2)’s deadline for filing a notice of intent; Due process; In re Petition of Muskegon Cnty Treasurer for Foreclosure; Harsh & unreasonable consequences; Claims under the state & federal Takings Clauses; MCL 211.78m(8); Unjust enrichment
Noting that it rejected the same claims raised here in Muskegon Treasurer, the court affirmed the trial court’s order denying respondents’ motions to disburse remaining tax foreclosure sale proceeds. Petitioner-county treasurer opposed their motions because they did not meet “the statutory requirement to give timely notice of their intent to claim the proceeds.” Respondents argued the procedures “in MCL 211.78t are not the exclusive means for recovering surplus proceeds and that petitioner” committed an unconstitutional taking. They further asserted “§ 78t(2)’s deadline for filing a notice of intent to claim the proceeds is unenforceable and that they were not provided adequate due process.” The court resolved these issues in Muskegon Treasurer, a published opinion. Like the respondents there, respondents here contended “that alternate means of recovering the proceeds that remain after the sale or transfer of their property and the satisfaction of their tax debts and associated costs is suggested by: (1) the difference between Rafaeli’s ‘surplus proceeds’ and the statute’s ‘remaining proceeds’; (2) use of the permissive ‘may’ in MCL 211.78t(1); and (3) the fact that ‘claimants’ are a subset of foreclosed property owners.” However, the court was “bound by the holding in Muskegon Treasurer that the Legislature intended MCL 211.78t as the exclusive mechanism for claiming and recovering remaining proceeds.” And, as it did in Muskegon Treasurer, the court rejected “respondents’ attempt to frame their ‘arguments in terms of substantive due process.’” This theory merged with their takings claims under the federal and state constitutions. “If ‘a constitutional claim is covered by a specific constitutional provision the claim must be analyzed under the standard appropriate to that specific provision, not under the rubric of substantive due process.’” Respondents’ harsh and unreasonable consequences argument was also “raised and rejected in Muskegon Treasurer.” As to their takings claims, they did “not identify any statutory provision relevant to the facts of this case that would allow petitioner to distribute proceeds to respondents when they have not complied with § 78t(2). To the extent that petitioner complied with the requirements of § 78m(8), it neither seized nor confiscated respondents’ proceeds.” Finally, the court found that “petitioner was not ‘unjustly enriched.’”
Real property purchase agreement; Whether an “as is” clause barred innocent misrepresentation claims; Coosard v Tarrant; Common-law fraud; Fraud in the inducement
The court held that “the trial court properly found that the ‘as is’ clause in the parties’ purchase agreement barred plaintiffs’ claim of innocent misrepresentation, but erroneously found that” it also barred their common-law fraud and fraud in the inducement claims. Thus, it affirmed in part, reversed in part, and remanded. Plaintiffs contended the trial court erred in holding that the “as is” clause barred their fraud claims. As to common-law fraud, the court held that as plaintiffs established a question of fact as to whether defendant-Giles “engaged in common-law fraud, which serves as an exception to the transfer of risk to a property purchaser under an as-is clause, . . . and as an exception to the common-law rule of caveat emptor in real estate transactions,” the trial court erred in granting summary disposition to Giles. As to fraud in the inducement, the allegations of fraud were “firmly and inextricably tied to the purchase agreement and sufficient evidence has been presented which, when viewed in the light most favorable to plaintiffs, present questions of material fact concerning whether Giles fraudulently induced plaintiffs to enter into the purchase agreement.” Thus, the trial court erred in granting Giles summary disposition on the claim of fraud in the inducement. Finally, “‘innocent misrepresentation is premised upon the seller having no knowledge of the falsity of a representation, and “as is” clauses are fundamentally intended to allocate the risk of unknown losses.’” Thus, if innocent misrepresentation claims could avoid application of such clauses, they “‘would essentially become universally invalid.’” As a result, the court concluded plaintiffs’ claim of innocent misrepresentation was barred by the “as is” clause.
Sufficiency of the evidence; Possession with intent to deliver 50 grams or more but less than 450 grams of a controlled substance (MCL 333.7401(2)(a)(iii)) & keeping or maintaining a drug house (MCL 333.7405(1)(d)); Ineffective assistance of counsel; Cross-examination; Failure to object; MRE 701 & 702; People v Dobek; Detroit Police Department (DPD)
The court held that there was sufficient evidence to support defendant’s convictions of possession with intent to deliver 50 grams or more but less than 450 grams of a controlled substance and of keeping or maintaining a drug house. It also rejected his ineffective assistance of counsel claims. As to his convictions under MCL 333.7401(2)(a)(iii), the evidence “at trial showed a connection between defendant and the cocaine and fentanyl to establish [he] constructively possessed them. For example, officers seized over $10,000 in cash at the property, with $1,760 in smaller denominations being seized from [his] person, and $8,700, in larger denominations, being seized from inside the backpack in the kitchen. The jury could reasonably infer that the backpack belonged to defendant because a DPD E-ticket with his name on it was found inside.” Based on their experience and knowledge as narcotics “officers, the officers believed the cash in smaller denominations found on defendant’s person were proceeds from narcotics sales to individual buyers, and the larger sums of cash in the backpack were from ‘middleman’ sales to other dealers to then resell to individuals. This, coupled with [an officer’s] seeing defendant make many hand-to-hand transactions that were short in duration during his surveillance of the property, established a sufficient nexus between [him] and the large quantity of cocaine and fentanyl seized at the property to support a conclusion [he] had constructive possession of the narcotics.” In addition, given “the officers’ observations before the raid, and the way the untested substances on the coffee table were packaged, it was reasonable to infer defendant intended to deliver” them. The court also concluded the “facts, taken together and viewed in the light most favorable to the prosecution,” were sufficient to support his conviction under MCL 333.7405(1)(d). As to his ineffective assistance claims, defense “counsel’s theory was the officers’ failure to establish proof of residency from evidence obtained during the raid absolved defendant of guilt, but would have implicated the other two men residing at the property. This was a reasonable strategy . . . .” Further, the cross-examinations as to “whether defendant possessed any of the firearms seized during the raid were successful in creating sufficient reasonable doubt for the jury to acquit [him] of any firearm charges.” And any objection to testimony that was admissible under MRE 701 and 702 would have been futile. Affirmed.
Challenge to the accuracy of the PSIR; MCR 6.425(D)(1)(b) & (D)(2)(a); MCL 771.14(6); Principle that the trial court must respond to any challenge to the accuracy of the PSIR; People v Lloyd; The trial court’s authority to amend the PSIR; MCR 6.429; Timing for filing a challenge to the accuracy of the PSIR; MCR 6.429(B)(3); MCR 7.205(2)(a)
Holding that the trial court erred by finding it did not have the authority to amend defendant’s PSIR, the court vacated its order denying his motion to amend the PSIR, and remanded for the trial court to consider it. He pled guilty to OWI-III and was sentenced as a fourth-offense habitual offender to 48 to 240 months. On appeal, the court agreed with defendant that the trial court erred by finding it did not have authority to amend the PSIR. It noted he was sentenced on 10/31/22 and filed his motion to amend the PSIR on 3/13/23, which “was within the six-month time frame required to file a challenge to his sentence.” Although he “did not challenge the validity of his sentence in his motion to amend the PSIR, [he] challenged the relevancy and accuracy of information contained in the PSIR.” As such, his “motion challenged the information relied upon in determining a sentence and should be treated as a motion for resentencing.” Because a “‘challenge to the validity of information contained in the PSIR may be raised at sentencing, in a proper motion for resentencing, or in a proper motion to remand,’” and defendant’s “motion was timely, the trial court erred when it concluded that it did not have authority to consider” his request to amend the PSIR.
Jury instructions; Lesser included offenses; MCL 768.32(1); Sentencing; Mandatory minimum under MCL 769.12(1)(a); Habitual-offender notice
The court held that defendant was not entitled to a new trial. Also, it concluded that the trial court did not plainly err by sentencing him to a mandatory minimum sentence of 25 years under MCL 769.12(1)(a). He was convicted of AWIGBH or by strangulation and domestic assault. Defendant argued “that the trial court erred by failing to instruct the jury on aggravated assault as a lesser included offense of [AWIGBH], and that he” was thus entitled to a new trial. A week before trial, he requested a jury instruction on the lesser offense of aggravated assault. “Following voir dire, the trial court instructed the jury on the charged crimes and did not include the lesser offense. At the conclusion of trial, defense counsel renewed the motion for the requested jury instruction on the lesser offense of aggravated assault. The prosecutor responded that ‘misdemeanors are not necessarily lesser included offenses.’” The court noted that the “trial court denied defendant’s motion, stating: ‘I agree. First of all, they’re asking for a misdemeanor, which is a one year misdemeanor. I don’t believe that it would be appropriate under the facts and circumstances that we heard. Under Michigan law, a misdemeanor is not a required necessary instruction on a lesser included offense.’” The court held the trial court erred. But aggravated assault “is, at most, a cognate lesser offense of” AWIGBH, and “defendants are not entitled to jury instructions on cognate lesser offenses.” As a result, although “the trial court erroneously relied on the common-law restriction against including a misdemeanor as a lesser included offense for a felony charge, we will not reverse when a lower court reaches the right result for the wrong reason.” Affirmed.
Ineffective assistance of counsel; Prior convictions of possession of child sexual abuse material; “Listed offense”; Prejudice; MRE 403; Trial strategy; Failure to challenge five jurors for cause; Sufficiency of the evidence; CSC I & II; Whether the assault occurred during one single transaction; “Sexual contact”; Distinguishing People v Callahan; Sentencing; Scoring of OVs 10 & 13
Finding no errors warranting reversal, the court affirmed defendant’s CSC I and II convictions and sentences. He was sentenced as a third offense habitual offender to serve concurrent sentences of 25 to 35 years for CSC I and 15 to 30 years for CSC II. Defendant first argued “that his trial counsel was ineffective because he voluntarily presented evidence of defendant’s prior convictions at trial during defendant’s direct examination.” He claimed “this evidence permitted the jury to render a verdict on the basis of defendant’s bad character rather than the evidence of his guilt.” The court held that admission “of defendant’s prior conviction of possession of child sexual abuse material was not unfairly prejudicial because it was a criminal conviction that happened near the time of defendant’s alleged assault of the victim and was also a crime involving defendant’s sexual misconduct with respect to another minor.” Although the record did not show “whether defendant was given notice of the prosecutor’s intent to use this evidence, defendant was clearly aware that his prior conviction was for sexual misconduct involving a minor. Furthermore, by admitting this evidence before the prosecutor, trial counsel could have reasonably been attempting to control the narrative regarding the conviction.” Also, the court found that “trial counsel could have reasonably believed that if defendant testified, he would be subject to cross-examination regarding his prior convictions under MRE 609.” As to juror bias, “counsel was not ineffective for failing to take a meritless position.” The court next rejected his argument that there was insufficient evidence to support his convictions because the sexual assault occurred during one single transaction. It held that because CSC I and II are two separate crimes, “and sufficient evidence was presented on all the elements of both crimes, it is immaterial that the events occurred during a single continuous transaction.”
Petition for guardianship of a child; MCL 700.5204(2)(b); In re Guardianship of Versalle; MCL 700.5213(2); MCL 700.5212; Parental permission; Deschaine v St Germain; Special immigrant juvenile (SIJ) status under 8 USC § 1101(a)(27)(J); In re LFOC; In re Velasquez; The Child Abuse & Neglect Prevention Act; Michigan’s Child Protection Law; Michigan’s Uniform Child-Custody Jurisdiction & Enforcement Act; “Neglect” & “abandonment”; The Estates & Protected Individuals Code (EPIC)
The court held that the trial court abused its discretion by denying the guardianship petition without a proper basis and erred in failing to make factual findings on the issue of the child’s (BAM-L) SIJ status. Further, it concluded appointing petitioner as BAM-L’s guardian was required under MCL 700.5212 and 700.5213. And the record showed “there was evidence to establish each factual finding relevant to SIJ status by a preponderance of the evidence.” Thus, the court vacated the trial court’s order, appointed petitioner as guardian of BAM-L (his nephew), and entered an “order with special findings of fact to establish SIJ status for” BAM-L, who was born in Guatemala in 2006. His mother moved to the U.S. in 2014, leaving him with his grandparents. He entered the U.S. in 2022 and moved in with petitioner, who then sought to be appointed his guardian under MCL 700.5204(2)(b). BAM-L also nominated him as his guardian under MCL 700.5212. The evidence presented to “the trial court established that all three requirements under MCL 700.5204(2)(b) were satisfied and, therefore, petitioner was qualified to be appointed as guardian of BAM-L. Moreover, under MCL 700.5213(2), the trial court was required to make such an appointment if BAM-L’s welfare would be served by” it. The record indicated that his “welfare would be served by appointing petitioner as his guardian. Therefore, MCL 700.5213(2) required the trial court to make the appointment, and its failure to do constituted an abuse of discretion.” The same was true under MCL 700.5212. The court further found “that the trial court erred by refusing to make any factual findings on the issue of SIJ status.” The court exercised its “discretion to make SIJ-status findings on the basis of the lower court record, and adopt the authority provided by Velasquez to do so.” Three factual findings are required to obtain SIJ status. The first, “that BAM-L was declared dependent upon a juvenile court, is established by a preponderance of the evidence under appointment of petitioner as” BAM-L’s guardian. The second involved whether “BAM-L’s reunification with one or both of his parents is not viable because of neglect, abandonment, or a similar basis.” The court concluded “that, for all intents and purposes, BAM-L’s mother abandoned and neglected him.” Finally, as to the third finding, it applied EPIC’s best-interest factors and found “by a preponderance of the evidence, that BAM-L’s interests would not be served by returning to Guatemala” but rather by staying in the U.S.
Healthcare provider action to recover insurance benefits; Res judicata; Whether the dismissal of a prior case was a decision on the merits; Standing to pursue reimbursement for any unpaid benefits; Supplementing the complaint; Assignment of rights; Whether a requested jury instruction was supported by the evidence; Home-Owners Insurance Company (HOIC)
The court held that res judicata did not apply and that the trial court was correct in denying some jury instructions requested by defendant-insurer (HOIC). But it also held that plaintiff-healthcare provider (Riversbend) did not have “any assigned right to pursue a portion of the benefits” at issue. Thus, it vacated the judgment for plaintiff as to that portion of its recovery and remanded for entry of a corrected judgment and any other necessary proceedings. HOIC’s insured, B, was injured in an auto accident and was treated at Riversbend. HOIC argued that res judicata precluded this case due to the dismissal of a 2018 action by plaintiff. If the order of dismissal “had only stated that the 2018 case was dismissed with prejudice, that language would be dispositive as a resolution on the merits.” But the court noted that the order also contained a provision ordering “‘that all claims for unpaid medical’” before 7/30/18 made in the case here were barred by the one-year back rule. “This provision must also be given effect.” The court found that while “not an express statement that there would be further proceedings, . . . there would be no reason to include a statement explicitly addressing some of the potential claims here unless this case was to remain pending. Otherwise, the second provision in the order would be nugatory and irrelevant. In any event,” its presence made the order ambiguous and allowed the court “to consider extrinsic evidence to resolve” its meaning. Extrinsic evidence clearly showed “that both parties and the trial court expected that this case would remain ongoing.” The court held that “the trial court properly (1) concluded that this case was left undisturbed by its order dismissing the 2018 case and (2) denied HOIC’s motion to dismiss.” In addition, Riversbend had “standing, because it had a valid assignment of some rights when it filed its complaint in this case. And the trial court did not err by permitting [it] to supplement its complaint, irrespective of the label given to that supplementation. However, the assignments of rights ultimately failed to convey to Riversbend any right to recover for benefits that went unpaid between” 7/30/19 and 3/2/21. Because B had “filed a claim against HOIC on [3/2/22] for the same benefits at issue as in the 2022 assignment, she had a right to recover benefits up to a year before this date. Therefore, she could have assigned rights to recover benefits that went unpaid as far back as [3/2/21], but no further.”
Accounting malpractice; MCL 600.2962; Broz v Plante & Moran, PLLC; Negligence; Loweke v Ann Arbor Ceiling & Partition Co, LLC; Duty; Hill v Sears, Roebuck & Co; Breach of fiduciary duty; Yadlosky v Grant Thornton LLP; Unjust enrichment; Morris Pumps v Centerline Piping, Inc
The court held that plaintiffs’ claims against defendant for professional malpractice, negligence, breach of fiduciary duty, and unjust enrichment were properly dismissed by the trial court for failure to state a claim. In the underlying case, plaintiffs’ home was foreclosed on and then purchased through a sheriff’s deed. Plaintiffs claimed the amounts (as stated in an affidavit attached to the sheriff’s deed) were incorrect and filed suit against the buyer. The trial court in that case appointed defendant to investigate the amounts owed. After the investigation, it granted summary disposition for the buyer. Plaintiffs then sued defendant alleging it failed to perform a proper forensic audit and failed to authenticate signatures and loan documents. The suit alleged unjust enrichment, accountant malpractice, negligence of defendant’s professional duties, and breach of fiduciary duties. On appeal, the court found the trial court did not err by granting summary disposition as to any of plaintiffs’ claims. First, “[b]ecause of the lack of a client-professional relationship, plaintiffs cannot establish a cause of action for accountant malpractice under the common law.” They also “did not allege fraud or intentional misrepresentation, or allege that defendant was informed by the ‘client’ that its services were primarily intended ‘to benefit or influence’ plaintiffs.” Rather, the trial court’s order “stated the purpose of the appointment was ‘to determine the amounts owing,’ and that defendant’s report ‘shall not be binding upon the parties, but may otherwise be offered by any party to be admitted into evidence.’ Because the language of the order eliminates all grounds on which plaintiffs’ claim for malpractice could be based, the malpractice claim is so clearly unenforceable as a matter of law, no factual development could justify recovery . . . .” In addition, plaintiffs’ negligence claim “is premised on defendant’s alleged professional duties owed to plaintiffs. This claim is, therefore, duplicative of plaintiffs’ professional malpractice claim. And because our preceding analysis of plaintiffs’ malpractice claim also applies to the negligence claim in that under the trial court’s order, no relationship was established between plaintiffs and defendant such that a duty arose . . . .” Further, nothing in the order gave rise to a fiduciary relationship, and “plaintiffs have otherwise failed to show a basis for liability under MCL 600.2962(1) . . . .” Finally, courts “cannot ‘imply a contract in order to prevent unjust enrichment’ when a contract addressing the subject of the matter at issue already exists . . . .” Affirmed.
Officer liability for unpaid taxes; MCL 205.27a(5); “Responsible person”; MCL 205.27a(15)(b); “Willfully” or “willful”; Distinguishing Hedayat v Department of Treasury (Unpub) & Huggins v Department of Treasury (Unpub); Assessment of a successor purchaser; Tax Tribunal (TT)
Finding no errors warranting reversal, the court affirmed the TT’s order granting respondent summary disposition under MCR 2.116(C)(10) and denying petitioner’s summary disposition motion as to “his petition challenging respondent’s imposition of officer liability for unpaid taxes.” Petitioner contended that “respondent failed to make a prima facie case that petitioner was a ‘responsible person.’ According to petition[er], he was not an officer of” the company (nonparty-Howard Finishing) “when the default occurred and there was no evidence that the failure to pay taxes was either willful or reckless.” Petitioner asserted, and respondent conceded, “that petitioner did not sign any of the returns at issue during the 2016 period of default.” Thus, the question was “whether, aside from petitioner’s signature on the tax returns certifying that he was an officer, there is evidence that he was in fact an officer in charge of tax matters when he signed the tax returns in 2015.” Petitioner’s position was “that he was neither a de jure nor de facto officer when he was appointed controller.” He relied on Hedayat. “But Hedayat is distinguishable because Howard Finishing was a limited-liability company, not a corporation. Although there are many similarities between the two business forms, corporations are required to follow certain formalities that LLCs are not.” The court noted a corporation is “required to have officers—at a minimum a president, secretary, and treasurer, and optionally a board chairperson and one or more vice-presidents, and other officers designated by the corporate bylaws.” In contrast, no “statute either requires LLCs to have, or forbids them from having, any officers.” Petitioner also relied on Huggins. “Unlike Huggins, there was simply no record evidence to suggest that petitioner was simply acting at someone else’s direction.” The court held that the TT “did not err when it granted respondent’s motion for summary disposition on the issue of petitioner’s status as a ‘responsible person.’” Also, the 2017 request for tax clearance could not “reasonably be characterized as having ‘clearly identifie[d]’ a purchaser.” The court concluded that because “respondent did not know the identity of the purchaser when it assessed petitioner, it did not violate MCL 205.27a.” Thus, the TT did not err when it granted respondent summary disposition.