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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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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Denial of discharge under 11 USC § 727; Whether the debtors transferred or concealed property intending to “to hinder, delay, or defraud” the trustee when they chose to apply their tax overpayments to their future tax liabilities; § 727(a)(2)(B); Whether the trustee established the necessary “specific intent”; Kawaauhau v Geiger; In re Wise (Bankr ED MI)
[This appeal was from the ED-MI.] The court held that the trustee failed to establish that the debtors (the Wylies) transferred their anticipated tax refunds “with intent to hinder” the trustee when they applied overpayments to future tax liabilities instead of receiving refunds. Thus, it affirmed the district court’s reversal of the bankruptcy court’s ruling denying them a Chapter 7 discharge under § 727(a)(2)(B). Contemplating filing for bankruptcy, the Wylies delayed filing their 2018 and 2019 federal and state tax returns. When these were filed, they used the overpayments to which they were entitled to cover any tax they would owe the next year. Plaintiff-trustee filed an adversary proceeding to deny them a discharge, arguing, among other things, that by choosing to apply their tax overpayments to their future tax liabilities, they had transferred or concealed property intending to “to hinder, delay, or defraud” the trustee, under § 727(a)(2)(B). The bankruptcy court found for the trustee, but the district court reversed on appeal. The issue before the court was whether the Wylies, in deciding to apply their tax overpayments to their future tax liabilities, “acted ‘with intent to hinder’ the trustee.” Focusing on the bankruptcy court’s ruling, the court noted that the trustee had to show “culpable, specific intent" by a preponderance of the evidence. The Supreme Court interpreted a similar intent-based Bankruptcy Code section (§ 523(a)) in Kawaauhau, where it determined that “‘actual intent’ requires that the debtor intend ‘the consequences of an act, not simply the act itself.’” Thus, the court concluded that “to support a factual finding that the debtor acted ‘with intent to hinder’ a trustee under § 727(a)(2)(B), there must be evidence that the debtor acted with the specific intent to make it more difficult for the trustee to facilitate creditors’ collection of debts from the estate.” The court considered the fact that the bankruptcy court dismissed a count under § 727(a)(2)(A) based on lack of specific intent as to the 2018 tax overpayments. Yet it determined “the Wylies ‘did intend to hinder the Trustee in making their 2019 Tax Refund Transfers,’” without identifying any “meaningful factual differences between the 2018 and 2019 tax elections to support this different finding.” The court found that the decisions as to the two counts were “irreconcilable.” It concluded that, “[b]y the bankruptcy court’s own reasoning and findings,” evidence showing “that the Wylies acted specifically intending to hinder the trustee . . . was lacking.”
Sentencing; Whether it is permissible to proscribe the use of marijuana as a condition of probation for nonmarijuana-related crimes; Conditions of probation; MCL 771.3(1)-(3); People v Houston; Tailoring of discretionary conditions; MCL 771.3(11); Recreational use of marijuana under the Michigan Regulation & Taxation of Marihuana Act (MRTMA); MCL 333.27955; People v Thue; People v Lopez-Hernandez; Federal prohibition of recreational marijuana use; 21 USC § 844(a); Holmes Youthful Trainee Act (HYTA)
Addressing an issue of first impression, the court held that the district court did not abuse “its discretion by denying defendant’s motion to amend the terms of her probation and dismiss her probation violations on the basis that the condition of her probation prohibiting the use of marijuana was unlawful under the MRTMA.” She pled guilty to third-degree retail fraud and was sentenced to 12 months’ probation under the HYTA. The order prohibited her from using or possessing marijuana and required that she submit to drug screening. However, she twice tested positive for marijuana, resulting in two probation violations. She pled guilty to the first violation, but after the second violation she moved the district court to amend the terms of her probation to allow the use and possession of marijuana, to vacate her first violation, and to dismiss her second violation. She argued that the probation against recreational use of marijuana violated the plain language of the MRTMA. The district court denied her motion, found she violated a lawful term of her probation, revoked her HYTA status, and sentenced her to 10 days in jail. The circuit court denied her application for leave to appeal. On appeal, the court rejected her argument that the district court abused its discretion by denying her motion and revoking her probation, concluding it is permissible to “proscribe the use of marijuana as a condition of probation for nonmarijuana-related crimes.” The federal controlled substances act “considers ‘marijuana an unlawful controlled substance.’ 21 USC § 844(a) states, in relevant part, ‘[i]t shall be unlawful for any person knowingly or intentionally to possess a controlled substance unless such substance was obtained directly, or pursuant to a valid prescription or order, from a practitioner, while acting in the course of his professional practice . . . .’ Clearly, as a condition of probation, probationers ‘shall not violate any criminal law of this state, the United States, or another state or any ordinance.’ Using recreational marijuana may be permissible in Michigan but it is still prohibited by federal law.” In this case, defendant “was ordered to obey all state, federal, and local laws. She did not. She violated her lawfully imposed terms of probation.” Affirmed.
Hearsay; Adoptive admission; MRE 801(d)(2)(B); Sufficiency of the evidence; Delivery of a controlled substance; MCL 333.7401(2)(b)(ii); Delivery of Suboxone; MCL 333.7401; People v Collins; Intent; “Deliver” & “delivery”; MCL 333.7105(1); People v Maleski; Sentencing; Principle that a trial court cannot base a sentence on a defendant’s refusal to admit guilt; People v Carlson; Resentencing before a different judge; People v Dixon-Bey
The court held that “[a]lthough the trial court erred by finding out-of-court statements were admissible as adoptive admissions under MRE 801(d)(2)(B), because the statements are not hearsay, they were properly admitted.” It also held that there was sufficient evidence to prove defendant knowingly delivered a controlled substance. Finally, it held that “although defendant is entitled to resentencing because the trial court impermissibly relied on her refusal to admit guilt when imposing her sentence,” she was not entitled to a different judge. She was convicted of delivery of a controlled substance for bringing drugs to her husband in prison in a glasses case. The trial court sentenced her to 2 years’ probation and 300 days in jail. As to her argument that the trial court erred by admitting hearsay evidence as an adoptive admission by defendant, the court noted that although “the evidence was not admissible as adoptive admissions,” they were admissible because they were not hearsay. The court also rejected her claim that the evidence was insufficient to support her conviction. “Based on [the] evidence, the jury could have found that it was unlikely that defendant did not know there was something unusual about the glasses case before delivering it.” Finally, the court agreed that defendant was entitled to resentencing because the trial court judge improperly based her sentence on her failure to admit guilt. But it found she was not entitled to sentencing before a different judge. It noted that because the trial court’s actions did “not demonstrate any prejudice against defendant and nothing the record suggests that the trial court would have substantial difficulty putting out of its mind any previously expressed views or erroneous findings,” remand for resentencing before a new judge was unnecessary. Affirmed, but remanded for resentencing.
Motion for relief from judgment; MCR 6.508(D)(3); “Good cause”; A retroactive change to the law; People v Poole; Registration under the Sex Offenders Registration Act (SORA); Actual prejudice; People v Betts; People v Lymon
The court held that the trial court abused its discretion in finding that defendant failed to show good cause under MCR 6.508(D)(3)(a), and in concluding he did not cite “sufficient authority to potentially establish actual prejudice.” Thus, it vacated the trial court’s opinion and order denying his motion for relief from judgment related to his 1995 guilty plea conviction for CSC II and remanded. He “asked the trial court to enter an order stating that he was no longer required to register under SORA because he had completed his original 25-year SORA-registration requirement, and the 2011 SORA and the current version of SORA enacted by 2020 PA 295 (the 2021 SORA) constituted impermissible ex post facto laws that lengthened his sentence.” In determining that he did not establish good cause, the trial court provided two grounds, both which the court found “legally deficient. First, [it] reasoned that defendant had not established good cause because he was ‘not currently required to comply with the registration requirement as he is not a Michigan Resident.’ By so reasoning, the [trial] court conflated whether defendant was presently required to register with Michigan authorities pursuant to SORA with whether” he was subject to SORA’s requirements. Second, it stated that his “‘conviction alone, not an order of this Court, has subjected him to sex offender registries in other jurisdictions.’ This, too, was incorrect as a matter of law.” Defendant moved to Florida at some point after his conviction. He was “subject to Florida’s registration requirements because he was convicted and remains subject to registration in Michigan as if he were a resident of Michigan. While the trial court was correct that it could not remove [him] from Florida’s registry,” he was correct that it could remove him “from the SORA-registration requirement he is currently subjected to, which was what he (at least in part) requested.” As to actual prejudice, the court found he sufficiently briefed the issue, and when the trial court issued its opinion, there was “binding authority finding the 2021 SORA unconstitutional (albeit the relevant portion of Lymon has since been vacated), and defendant had cited relevant authority bringing into question the retroactive application of the 2021 SORA.” On remand, the trial court is to address the merits of his claim “that his sentence was invalid, i.e., whether [he] established actual prejudice under MCR 6.508(D)(3)(b)(iv).”
Motion for relief from judgment; Good cause; MCR 6.508(D)(3)(a); “Actual prejudice”; MCR 6.508(D)(3)(b) & (b)(ii); Good cause waiver; Actual innocence; MCR 6.580(D)(3); Ineffective assistance of appellate counsel; People v Reed; Admissibility & reliability of the victim’s identification; Comparing People v Thew; Whether an eyewitness identification had an independent basis; People v Gray; Actual prejudice; People v White
The court held that the trial court did not abuse its discretion by denying defendant-Romero’s motion for relief from judgment. He pled no contest to home invasion and AWIGBH for assaulting the victim at a house party. The trial court sentenced him as a third-offense habitual offender to 15 to 40 years for the home invasion conviction and 10 to 20 for the AWIGBH conviction. In his first appeal, the court denied leave. The trial court then denied his motion for relief from judgment. In his present appeal, the court rejected his argument that the good cause requirement should be waived because the victim’s single photo identification of him was unreliable, leading to the possibility he is actually innocent. It noted Romero “did not sufficiently prove there was a significant possibility he was innocent.” The court also rejected his claim that good cause existed because his original appellate counsel was ineffective. “We know from present appellate counsel’s own affidavit, as well as Romero’s, that original appellate counsel shared at least some of the evidentiary landscape with [him] and the risks and rewards of a plea withdrawal. That is further supported by the plea transcript, where Romero answered affirmatively questions about understanding the rights he was forgoing and the consequences he faced.” In addition, “we know that the risk/reward calculus of plea withdrawal remains unchanged in many respects in the event that [the victim’s] identification was inadmissible because there were other ways in which Romero could have been identified, including both video evidence and additional eyewitness identification.” Given the record, “we find no avenue in which, even with further development of the record, Romero can demonstrate that it is ‘manifestly unjust to allow the conviction to stand.’” Affirmed.
Public policy wrongful discharge claim; Preemption; Stegall v Resource Tech Corp; The Whistleblower’s Protection Act (WPA); MCL 15.362; “Employee” (MCL 15.361(a)); Advanced Healthcare Hospital, d/b/a Pioneer Specialty Hospital (PSH)
The court held that the trial court erred in dismissing plaintiff-Hadden’s public policy wrongful discharge claim against defendant-Pine Creek as a matter of law. But her WPA claim against defendant-PSH was properly dismissed because she did not “establish a genuine dispute of material fact that she was” its employee. She had worked as a nurse at Pine Creek. After she was terminated from her employment there and filed suit, she applied for a position at PSH. She “stated that she did not know that PSH was also owned by” the same individual who owned Pine Creek through the same company. She asserted she was offered the job and accepted it but “she never received a start date for the job at PSH and no one would return her calls.” As a result, she filed an amended complaint adding a WPA retaliation claim against PSH. On appeal, the court agreed with Hadden that the trial court erred in dismissing her public policy wrongful termination claim against Pine Creek on the ground the WPA preempted it. The “Supreme Court has made clear that the WPA does not preempt claims like Hadden’s[.]” The WPA clearly did not apply “because she did not report and was not about to report a violation of law or regulation to a public body. Rather, Hadden reported her concern about inadequate nursing coverage to” Pine Creek’s director of nursing. “In contrast to a claim under the WPA, a claim that a discharge violates public policy may be premised on internal reports of a plaintiff’s good-faith belief about a violation of law or regulation. As” the Supreme Court recognized in Stegall, “this is so because limiting the public policy exception to external reports would not serve the welfare of state residents by protecting employees who report violations of law and because, if limited to public reports of wrongdoing, a claim that a discharge violated public policy would necessarily be preempted by the WPA. Because Hadden was not acting pursuant to the WPA, [it] does not provide an exclusive—or any—remedy to her wrongful discharge claim and” thus, could not “preempt her public policy tort claim.” But her WPA claim against PSH failed because all the evidence showed she “never performed work for PSH and was never an employee of PSH. Because Hadden was not an employee entitled to any protection from wrongful discharge under the WPA,” summary disposition was proper on this claim. Affirmed in part, reversed in part, and remanded.
Denial of a FOIA request on the basis the requested record does not exist; MCL 15.235(5)(b); The Single State Construction Code Act (SSCCA); MCL 125.1510(1); Supporting a summary disposition motion under MCR 2.116(C)(10); MCR 2.116(G)(4); The Construction Code Commission (CCC)
The court held that the trial court in this FOIA action did not err in granting defendant-LARA summary disposition on the basis the requested record did not exist. Plaintiff’s request related to applications “‘submitted by a government subdivision where the [CCC] prescribe[d] the government subdivision’s form for making an application for a’” building, mechanical, electrical, or plumbing permit. LARA denied the request under MCL 15.235(5)(b). In seeking summary disposition, it submitted an affidavit from the Deputy Director (L) for the Bureau of Construction Codes. Plaintiff countered with his own affidavit. The court held that L’s “affidavit satisfied defendant’s obligation to support its summary-disposition motion in accordance with MCR 2.116(G)(4), and the evidence attached to and referenced in plaintiff’s response, even when viewed in the light most favorable to” him, did not show a genuine issue of material fact as to “the existence of responsive records.” It noted that L “attested that defendant did not prescribe permit forms through approval of any governmental subdivision’s application to administer and enforce the SSCCA. And plaintiff’s affidavit was insufficient to rebut defendant’s evidence.” He attached e-mailed responses from the City of Galesburg’s contractor (GL) to his “requests. In that e-mail, [GL] did not state that the [CCC] specifically approved a permit form attached to the City [of] Galesburg’s application to administer and enforce, as plaintiff implies. Instead, plaintiff posed to [GL], ‘MCL 125.1510(1) requires that the form on which an application for a permit be prescribed by the [CCC]; please email me a copy of the City of Galesburg’s application for mechanical permit that was prescribed by the [CCC],’ to which [GL] responded, ‘See the attached copy as submitted and approved by the CCC.’ A copy of the mechanical permit application was then attached. While this” was evidence that “Galesburg submitted a mechanical permit form with its application to administer and enforce the SSCCA, and that application to administer and enforce was approved by the [CCC], it does not create a genuine issue of fact regarding the [CCC’s] alleged prescription of that permit application form.” The court concluded “defendant complied with the clear requirements of MCL 15.235(5)(b) by certifying that the record(s) requested by plaintiff did not exist, and adequately supported its” summary disposition motion, but plaintiff did not show a genuine issue of material fact as to its denial of his FOIA request. Affirmed.
Action seeking personal protection insurance (PIP) benefits for injuries sustained by a semi-truck driver; Insurer priority; Whether the truck driver was an employee or an independent contractor for purposes of MCL 500.3114(3); The economic-reality test; Duckworth v Cherokee Ins Co; Adanalic v Harco Nat’l Ins Co; The McKissic factors; McKissic v Bodine; Totality of the circumstances; Clark v United Techs Auto, Inc
The court held that the trial court erred by granting summary disposition for defendant-insurer (Berkely) by finding plaintiff-truck driver (Umicevic) was not an employee for purposes of recovering no-fault benefits from Berkley’s insured (non-party trucking company Red Line) under MCL 500.3114(3). Umicevic sought PIP benefits from Berkley for injuries he sustained when he drove a semi-truck owned by Red Line off the road and collided with a power line tower in Texas (while delivering goods from Michigan to Texas on behalf of Red Line). The trial court agreed with Berkley that Umicevic and intervening plaintiff-ZMC failed to raise a genuine factual dispute as to Umicevic’s status as an independent contractor and, thus, Berkley was not required to pay PIP benefits under its policy with Red Line. As such, it granted summary disposition for Berkley. On appeal, the court found the trial court erred in its analysis of the issues in this case. “As this Court stated in Duckworth, all factors under the economic-reality test should be considered, and, when applying the economic-reality test, courts should consider the totality of the circumstances.” In doing so here, “the economic-reality test suggests that there was sufficient evidence to establish a disputed question of fact that an employee-employer relationship may have existed between Red Line and Umicevic.” Thus, the trial court erred by finding Umicevic was not an employee of Red Line. Reversed and remanded.
Retention of surplus proceeds after a tax-foreclosure sale; Schafer v Kent Cnty; Hathon v State of MI; Inverse condemnation & unjust enrichment claims; Available remedies; Federal takings claims
In an order in lieu of granting leave to appeal, the court vacated Part II-B and II-C of the Court of Appeals judgment (see eJournal # 76774 in the 1/10/22 edition for the published opinion) and remanded the case to that court for reconsideration in light of Schafer and Hathon. It denied leave in all other respects because it was not persuaded that it should review the remaining questions presented.
Tax foreclosure sale proceeds; Rafaeli, LLC v Oakland Cnty; Constitutionality of MCL 211.78t as applied to claimants; In re Petition of Muskegon Treasurer for Foreclosure; Failure to comply with the notice requirement in MCL 211.78t(2); Foreclosing governmental unit (FGU)
Noting that it was bound by Muskegon Treasurer, the court held that the trial court in this case concerning tax foreclosure sale proceeds erred in “ruling that presale notice of the right to claim remaining proceeds did not satisfy due process.” Further, based on this error, the trial court erred in determining that petitioner-county treasurer’s “retention of claimants’ remaining proceeds resulted in an unconstitutional taking.” Thus, the court reversed the “order granting claimants’ amended motion for the disbursement of remaining proceeds and” remanded for entry of an order denying their motion. “Like the respondents in Muskegon Treasurer, what claimants really wanted is a different, i.e., postsale, process.” But as the court observed there, while “some states had adopted the type of process advocated by claimants, that was not the system that Michigan’s Legislature adopted. ‘So long as the statutory scheme adopted by our Legislature comports with due process—as MCL 211.78t does—whether such a scheme makes sense or not, or whether a “better” scheme could be devised, are policy questions for the Legislature, not legal ones for the Judiciary.’” Pursuant to Muskegon Treasurer, the trial court erred in ruling “that our Legislature’s statutory scheme for returning remaining proceeds did not satisfy due process because it required petitioners to send notices regarding remaining proceeds to property owners before the tax-foreclosure sales. [Its] erroneous due-process determination was the basis for [its] conclusion that petitioner’s retention of claimants’ remaining proceeds, including the 5% sales commission, was an unconstitutional taking.” The reasoning that applied in Muskegon Treasurer applied here. “Claimants failed to avail themselves of a validly enacted, constitutional process for recovering remaining proceeds; therefore, they did not suffer a compensable taking.” The court noted that its “holding in Muskegon Treasurer speaks to both facial challenges and as-applied challenges to our Legislature’s scheme for returning remaining proceeds. An FGU’s compliance with the notice requirements in MCL 211.78 is essential to due process.” Although the record here raised “questions about the level of petitioner’s compliance with MCL 211.78’s notice requirements. . . . claimants’ only argument about the inadequacy of the process was that it was not a postsale process.”
Termination under §§ 19b(3)(c)(i), (g), & (j); Advising a parent of appellate rights under MCR 3.965(B)(15); MCR 3.971(B)(6)-(8); The 63-day requirement; MCR 3.972(A); Waiver; In re MJC; Reasonable reunification efforts; In re Sanborn; A parent’s commensurate responsibility to participate in the services that are offered; In re Frey
The court held that: (1) the trial court adequately advised respondent-father of certain appellate rights, (2) he waived his 63-day rule challenge, and (3) the DHHS made reasonable reunification efforts. Thus, it affirmed termination of his parental rights to the children, which was based on his alcoholism and physical abuse (he pled guilty to assaulting one of the children and was sentenced to probation). On appeal, the court rejected his argument that the referee failed to advise him of his appellate rights pursuant to MCR 3.965(B)(15) at the preliminary hearing. The DHHS conceded that the trial court failed to comply with the statute. However, the trial court did advise him “of his appellate rights and ability to challenge the assumption of jurisdiction or ‘any errors in the adjudicatory process’ under MCR 3.971(B)(6)-(8) at the adjudication hearing.” The court also rejected his claim that the trial court violated the 63-day requirement in MCR 3.972(A) by allowing a six-month gap between the preliminary hearing and the plea taken at the adjudication that occurred during the rescheduled pretrial/review hearing, noting it was contradicted by the record. Respondent “waived the matter, which is an intentional relinquishment of a known right that eliminates any error and forecloses appellate review.” Finally, the court rejected his contention that the DHHS failed to make reasonable reunification efforts. “The record is replete with various services that were provided to the children . . . , especially mental health counseling and treatment as well as trauma assessments, which” respondent did not dispute. “The record is equally filled with examples of respondent[‘s] noncompliance with his alcohol and drugs screenings, as well as various parenting classes and substance abuse counseling that he was ordered to complete.” Although it was “unfortunate that family counseling did not begin earlier in this matter due in part to the trauma he inflicted on the children, respondent . . . did not demonstrate sufficient compliance with, or benefit from, the services that were offered to address the primary bases for the petition being filed: [his] alcoholism, emotional instability and poor parenting skills, which culminated in his assault of” one of the children. As such, even if the “DHHS’s services had been more thorough or started sooner, [he] cannot establish that the outcome of this matter would have been different . . . .” While the “DHHS established reasonable efforts for reunification at the outset of the case, respondent . . . never fully availed himself of the serv[ic]es nor benefitted from them.”
Suspension of parenting time; MCL 712A.13a(13); Termination under § 19b(3)(j); Children’s best interests
The court did not abuse its discretion or violate MCL 712A.13a(13) by suspending respondent-father’s parenting time throughout the proceedings. Also, the trial court did not clearly err by finding § (j) existed and determining that termination was in the children’s best interests. The trial court did not clearly err when it found that allowing him to “have parenting time, even if supervised, may be harmful to the children.” Contrary to his “arguments on appeal, his parenting time was not suspended merely because of drug use.” The court noted that “it was suspended because (1) [he] was uncooperative and aggressive; (2) [he] failed to comply with and benefit from services to address his mental health and anger management issues; (3) [he] refused to take accountability; and (4) the children, who were exposed to abuse and domestic violence at the hands of respondent, feared [him] and did not want to see him. The trial court did not clearly err by finding parenting time may be harmful to the children’s lives, physical health, or mental well being.” Affirmed.