Divorce; Domestic relations arbitration; Judicial review; Grounds for vacating an award; MCL 600.5081(2); Accounting for a party’s premarital contributions; Whether the parties formed a contract based on an email; Offer & acceptance; Valuation of one party’s dental practice; Kowalesky v Kowalesky; “Going-concern value”

The court held that defendant-husband did not identify “a legal error apparent on the face of the arbitrator’s award” as to his premarital contributions to one of plaintiff-wife’s dental practices, the existence of a contract between them, or the arbitrator’s valuation of one of the practices. Thus, it affirmed the divorce judgment that included the terms of the domestic relations arbitration award. Defendant contended the “arbitrator made a legal error by failing to compensate him for” premarital contributions he made to plaintiff’s dental practices (Modern and Brite). The arbitrator determined, based on the arguments and the evidence, that defendant had been adequately compensated for those contributions. That factual finding was beyond the scope of the court’s review. And the arbitrator’s express refusal to consider defendant’s “evidence of a premarital implied-in-fact contract was not an error apparent on the face of the award because no argument about the existence of” such a contract was before her. Defendant next argued that, if such a contract could not be found, the parties entered into an “express contract granting him an ownership interest in” Modern. This claim was based on an email, which the arbitrator concluded lacked the necessary elements to form a valid contract and did not satisfy the statute of frauds. The court held that the email did not “create a legally enforceable contract because—even granting for the sake of argument, as the arbitrator did, that [it] constitutes an effective offer—husband did not implicitly accept that offer by performing under the contract.” Given that no legally binding contract was formed, the court found that, even “assuming an error in law apparent on the face of the arbitrator’s award, the award would not have been substantially different and may not be set aside.” Finally, defendant asserted “the arbitrator impermissibly valued Modern based on the sale price of” Brite. He asserted that because plaintiff did not intend to sell Modern, “the arbitrator erred by accepting a valuation” based on Brite’s sale price. The court disagreed. The record did not support a finding “that Brite was sold as if it were going out of business.” The arbitrator relied on an expert valuation that “expressly factored goodwill into its valuation of Modern because [it] ‘was the main value used in’” Brite’s price.

42 USC § 1983 action arising from a zoning & licensing approval process; Whether a City official was entitled to qualified immunity; Claims under the Due Process Clause; “Legitimate claim of entitlement”; Takings claim; Governmental delay; Equal protection claim; Class-of-one theory; Use of the “cat’s paw” theory to establish municipal liability; Monell v Department of Soc Servs

[This appeal was from the ED-MI.] The court held that because defendant-City of Pontiac’s officials retained the discretion whether to allow medical marijuana facilities to operate at plaintiff-Rubicon’s proposed development site, neither Rubicon nor its tenants had any cognizable property interest in obtaining benefits from the City and could not raise a due process claim. Plaintiffs’ takings claim failed because there was no extraordinary delay, and the equal protection claim failed due to the lack of evidence of intentional discrimination. Finally, the court declined to “extend the cat’s paw theory into the land of Monell.” Rubicon is a property developer who purchased land in Pontiac, intending to have it rezoned to develop shops, including two medical marijuana facilities. The project fell apart, and plaintiffs sued the City and the then-interim city clerk, defendant-Doyle, under § 1983. The district court granted defendants summary judgment on all claims. On appeal, the court first rejected Rubicon’s due process claim against Doyle, holding that “neither Rubicon nor its potential tenants possessed a ‘legitimate claim of entitlement’” to use the property for marijuana cultivation or processing where the officials retained discretion whether to permit medical marijuana facilities to operate at the proposed site. Next, assuming, but not deciding, that Rubicon had a protected property interest for a takings claim, it noted that “for governmental delay to amount to a taking, the lag must be ‘extraordinary’” and it held that the delay here was not. Doyle’s actions “at most delayed the project a couple of months” and there was no evidence of “bad faith.” Rubicon’s class-of-one theory equal protection claim against Doyle also failed. As to the claims against the City, the court held that plaintiffs failed to connect any alleged employee constitutional violation to a “municipal policy or custom.” A First Amendment retaliation claim brought by two of the plaintiffs using the “cat’s paw” theory also failed. “The concept of a municipality, through no fault of its own, being held liable for the single act of its agents sounds a lot like respondeat superior, which Monell expressly forecloses.” Affirmed.

42 USC § 1983 action arising from a zoning & licensing approval process; Whether a City official was entitled to qualified immunity; Claims under the Due Process Clause; “Legitimate claim of entitlement”; Takings claim; Governmental delay; Equal protection claim; Class-of-one theory; Use of the “cat’s paw” theory to establish municipal liability; Monell v Department of Soc Servs

[This appeal was from the ED-MI.] The court held that because defendant-City of Pontiac’s officials retained the discretion whether to allow medical marijuana facilities to operate at plaintiff-Rubicon’s proposed development site, neither Rubicon nor its tenants had any cognizable property interest in obtaining benefits from the City and could not raise a due process claim. Plaintiffs’ takings claim failed because there was no extraordinary delay, and the equal protection claim failed due to the lack of evidence of intentional discrimination. Finally, the court declined to “extend the cat’s paw theory into the land of Monell.” Rubicon is a property developer who purchased land in Pontiac, intending to have it rezoned to develop shops, including two medical marijuana facilities. The project fell apart, and plaintiffs sued the City and the then-interim city clerk, defendant-Doyle, under § 1983. The district court granted defendants summary judgment on all claims. On appeal, the court first rejected Rubicon’s due process claim against Doyle, holding that “neither Rubicon nor its potential tenants possessed a ‘legitimate claim of entitlement’” to use the property for marijuana cultivation or processing where the officials retained discretion whether to permit medical marijuana facilities to operate at the proposed site. Next, assuming, but not deciding, that Rubicon had a protected property interest for a takings claim, it noted that “for governmental delay to amount to a taking, the lag must be ‘extraordinary’” and it held that the delay here was not. Doyle’s actions “at most delayed the project a couple of months” and there was no evidence of “bad faith.” Rubicon’s class-of-one theory equal protection claim against Doyle also failed. As to the claims against the City, the court held that plaintiffs failed to connect any alleged employee constitutional violation to a “municipal policy or custom.” A First Amendment retaliation claim brought by two of the plaintiffs using the “cat’s paw” theory also failed. “The concept of a municipality, through no fault of its own, being held liable for the single act of its agents sounds a lot like respondeat superior, which Monell expressly forecloses.” Affirmed.

Home Solicitation Sales Act (HSSA); “Home solicitation sale”; MCL 445.111(a); “There given”; Brown v Jacob; Patrick v US Tangible Inv Corp; Notice of cancellation; MCL 445.113(1); Unenforceable contract for failing to comply with the statute’s requirements; MCL 445.117; Involuntary dismissal; MCR 2.504(B)(2)

The court held that the HSSA did not govern the parties’ roofing contract because defendants’ agreement was not “there given” at the time of plaintiff’s home solicitation. Thus, the court reversed the circuit court’s order and reinstated the district court’s orders, which were in plaintiff’s favor. Plaintiff sued defendants after replacing their roof. Defendants argued the contract was unenforceable because it lacked the HSSA’s three-day cancellation notice. The court first held that a home solicitation sale requires the buyer’s agreement to be “there given” to the seller, which, under binding precedent, means “the seller’s solicitation and the buyer’s agreement must occur at the same time and at the same place (at the buyer’s residence).” The court relied on Patrick, which held that a transaction was outside the HSSA because the purchase agreement was not “there given at the place of the sales presentation[.]” The court next held that plaintiff’s initial door-knocker visit was a solicitation because the door knockers went to homeowners and said, “Hey, we’ve got a service we can provide for you,” and the purpose was to get “a new roof” through an insurance claim. But the court held that the contract fell outside the HSSA because defendants did not sign until “at least two weeks—possibly more” after that solicitation. Thus, the court reasoned, the agreement was not “there given” because “considerable time elapsed between the initial solicitation and” a defendant’s eventual assent. The court declined to create a bright-line timing rule, explaining that whether an agreement is “there given” depends on “the particular facts and circumstances of each case.”

Home Solicitation Sales Act (HSSA); “Home solicitation sale”; MCL 445.111(a); “There given”; Brown v Jacob; Patrick v US Tangible Inv Corp; Notice of cancellation; MCL 445.113(1); Unenforceable contract for failing to comply with the statute’s requirements; MCL 445.117; Involuntary dismissal; MCR 2.504(B)(2)

The court held that the HSSA did not govern the parties’ roofing contract because defendants’ agreement was not “there given” at the time of plaintiff’s home solicitation. Thus, the court reversed the circuit court’s order and reinstated the district court’s orders, which were in plaintiff’s favor. Plaintiff sued defendants after replacing their roof. Defendants argued the contract was unenforceable because it lacked the HSSA’s three-day cancellation notice. The court first held that a home solicitation sale requires the buyer’s agreement to be “there given” to the seller, which, under binding precedent, means “the seller’s solicitation and the buyer’s agreement must occur at the same time and at the same place (at the buyer’s residence).” The court relied on Patrick, which held that a transaction was outside the HSSA because the purchase agreement was not “there given at the place of the sales presentation[.]” The court next held that plaintiff’s initial door-knocker visit was a solicitation because the door knockers went to homeowners and said, “Hey, we’ve got a service we can provide for you,” and the purpose was to get “a new roof” through an insurance claim. But the court held that the contract fell outside the HSSA because defendants did not sign until “at least two weeks—possibly more” after that solicitation. Thus, the court reasoned, the agreement was not “there given” because “considerable time elapsed between the initial solicitation and” a defendant’s eventual assent. The court declined to create a bright-line timing rule, explaining that whether an agreement is “there given” depends on “the particular facts and circumstances of each case.”

Breach of contract; Employment agreement; Bonuses; Judicial questioning; MRE 614; Preservation; Curative instruction; Frivolous counterclaim; Sanctions; MCL 600.2591; MCR 1.109(E); Attorney fees

The court held that defendant was not entitled to relief from the jury verdict based on the trial court’s questioning of a witness, but that remand was required for adequate findings supporting sanctions for defendant’s counterclaim. Plaintiff sued defendant for unpaid bonuses under an employment agreement. The jury found defendant breached the agreement and awarded plaintiff $38,000 while rejecting defendant’s unjust-enrichment counterclaim. On appeal, the court first held that defendant did not preserve its judicial-questioning claim because MRE 614(c) permits a party to object to judicial questioning “either at the time or at the next opportunity when the jury is not present,” and defendant “did neither.” The court also held that relief was not warranted despite the trial court’s probing questions because review occurred “through the ‘heavy presumption of judicial impartiality,’” and the trial court instructed the jury that “nothing I say is meant to reflect my opinions about the facts of this case.” Thus, the questioning did not create a “manifest injustice” requiring reversal despite defendant’s failure to object. As to sanctions, the court held that the trial court failed to make sufficient findings before awarding plaintiff $48,940 in attorney fees for a frivolous counterclaim. The court explained that “‘[a] trial court must articulate a sufficiently clear basis for its decision to allow this Court to review the finding for clear error,’” but the trial court merely granted sanctions “[f]or the reasons stated” in plaintiff’s motion and brief. Because plaintiff offered “several alternative reasons” for sanctions, it was “‘impossible to ascertain whether the trial court clearly erred’” in finding the counterclaim frivolous. Affirmed in part, reversed in part, and remanded for further findings on sanctions.

Criminal discovery; MCR 6.201; Complainants’ cell-phone data; Brady v Maryland material; Right to present a defense; Chambers v Mississippi; In camera review; People v Stanaway; Privileged therapy records; MCR 6.201(C)(2); “Fishing expedition”; People v Davis-Christian

The court held that defendant was not entitled to the complainants’ entire extracted cell-phone data, but that remand was appropriate for further proceedings if he continued to seek additional discoverable material. It also upheld the trial court’s denial of his motion for an in camera review of one complainant’s therapy records. Defendant was charged with CSC I based on allegations from three complainants concerning conduct more than 25 years earlier. He sought their full cell-phone extractions and one complainant’s therapy records. As to the phone data, the court held that Brady, Chambers, and MCR 6.201 required disclosure of exculpatory or otherwise discoverable material, but “none of these authorities” required the prosecution to surrender “the entirety of a complainant’s cellular phone data to a defendant.” The court reasoned that some data, such as texts about defendant or the case, might be discoverable as “statements[] pertaining to the case,” but it was “virtually inconceivable that the universe of all phone data” fell within MCR 6.201(A)(2), Brady, or other discovery authority. The court adopted principles from persuasive authority requiring an in camera process because neither defendant nor a defense expert is entitled to review phone data before the trial court does so, and only data “properly subject to disclosure or discovery” may be provided. It also held that interested parties should be heard about “the least intrusive method” for identifying relevant material. The court separately held that defendant was not entitled to an in camera review of a complainant’s therapy records because he waived any privilege challenge and failed to show a good-faith belief grounded in articulable fact. The court reasoned that the request was “essentially, a fishing expedition” because defendant identified no specific evidence likely to be found in the records. Affirmed and remanded for further proceedings concerning cell-phone data if necessary.

Motion to reissue the judgment of sentence & restore appellate rights; MCR 6.428; Distinguishing People v Tardy; Failure to comply with requirements in effect at the time of defendant’s plea & sentencing; Former MCL 770.3a(4); MCR 6.302(B); MCR 6.425(E)(2); Halbert v Michigan; Effect of defendant’s pursuit of collateral proceedings

Concluding that defendant “was denied the appointment of appellate counsel, and effectively the opportunity for counseled first-tier appellate review, because of court error or other factors outside his control[,]” the court held that the trial court abused its discretion in denying him relief under MCR 6.428. Thus, it vacated the trial court’s order and remanded for entry of an order restarting the time for him “to file an application for leave to appeal or request appellate counsel under MCR 6.428.” The court found that the “trial court failed to comply with several requirements in effect at the time of” his 2004 plea and sentencing, including those in former MCL 770.3a(4), MCR 6.302(B), and MCR 6.425(E)(2). And these omissions were “not merely technical. MCR 6.428 does not require a defendant to prove that a timely application for leave to appeal would have succeeded. It requires a showing that the defendant was denied appellate review or the appointment of appellate counsel because of court error, attorney error, or another factor outside defendant’s control. [He] was not told at the plea hearing that he was waiving the assistance of appointed counsel to file an application for leave to appeal. He was not told at sentencing that he could file an application for leave to appeal. And the record is devoid of evidence that he was given the required appellate form at sentencing. The [trial] court’s omissions occurred at the exact points in the proceedings when defendant was entitled to receive the information necessary to pursue first-tier appellate review.” The court rejected the prosecution’s argument that he could “not establish causation because the circuit court administrator’s office later mailed him appellate-counsel forms in” 7/05. While the letter was important, it did “not cure the errors at plea and sentencing.” The court concluded that defendant showed “he was denied the appointment of appellate counsel because of court error or another factor outside his control. The trial court’s failure to advise [him] properly at the plea and sentencing hearings triggered the problem. [Its] later failure to appoint appellate counsel or process [his] asserted request during the still-open appeal period completed it.” As to his later motion for relief from judgment and pursuit of federal habeas relief, those “collateral proceedings were not the appellate review contemplated by MCR 6.428.”

Divorce; Domestic relations arbitration; Judicial review; Grounds for vacating an award; MCL 600.5081(2); Accounting for a party’s premarital contributions; Whether the parties formed a contract based on an email; Offer & acceptance; Valuation of one party’s dental practice; Kowalesky v Kowalesky; “Going-concern value”

The court held that defendant-husband did not identify “a legal error apparent on the face of the arbitrator’s award” as to his premarital contributions to one of plaintiff-wife’s dental practices, the existence of a contract between them, or the arbitrator’s valuation of one of the practices. Thus, it affirmed the divorce judgment that included the terms of the domestic relations arbitration award. Defendant contended the “arbitrator made a legal error by failing to compensate him for” premarital contributions he made to plaintiff’s dental practices (Modern and Brite). The arbitrator determined, based on the arguments and the evidence, that defendant had been adequately compensated for those contributions. That factual finding was beyond the scope of the court’s review. And the arbitrator’s express refusal to consider defendant’s “evidence of a premarital implied-in-fact contract was not an error apparent on the face of the award because no argument about the existence of” such a contract was before her. Defendant next argued that, if such a contract could not be found, the parties entered into an “express contract granting him an ownership interest in” Modern. This claim was based on an email, which the arbitrator concluded lacked the necessary elements to form a valid contract and did not satisfy the statute of frauds. The court held that the email did not “create a legally enforceable contract because—even granting for the sake of argument, as the arbitrator did, that [it] constitutes an effective offer—husband did not implicitly accept that offer by performing under the contract.” Given that no legally binding contract was formed, the court found that, even “assuming an error in law apparent on the face of the arbitrator’s award, the award would not have been substantially different and may not be set aside.” Finally, defendant asserted “the arbitrator impermissibly valued Modern based on the sale price of” Brite. He asserted that because plaintiff did not intend to sell Modern, “the arbitrator erred by accepting a valuation” based on Brite’s sale price. The court disagreed. The record did not support a finding “that Brite was sold as if it were going out of business.” The arbitrator relied on an expert valuation that “expressly factored goodwill into its valuation of Modern because [it] ‘was the main value used in’” Brite’s price.

Whether the court had jurisdiction to review the Board of Immigration Appeals’ (BIA) reversal of the immigration judge’s (IJ) grant of cancellation of removal; 8 USC §§ 1252(a)(2)(B)(i) & (D); Denial of petitioner’s motion to reconsider or reopen; Failure to preserve a challenge to the IJ’s removability determination; Whether the BIA had a duty to determine his removability

The court held that it lacked jurisdiction to review the BIA’s discretionary denial of petitioner-Dodaj’s application for cancellation of removal and that he waived his challenges to removability by not appealing the IJ’s ruling to the BIA. Dodaj was ordered removed to Albania after he added convictions for a firearm offense and two crimes involving moral turpitude to his extensive criminal record. The IJ ruled that Dodaj was removable based on his criminal record, but later cancelled his removal based on “the hardships that his family would face if he was removed.” The Department of Homeland Security appealed, and the BIA reversed. It then denied his motion to reconsider and reopen. In petitioning for review, Dodaj argued that the BIA erred as to both the denial of cancellation of removal and the denial of his reconsideration motion. The court first noted that it lacks jurisdiction to review judgments as to discretionary cancellation of removal, subject to the exception in § 1252(a)(2)(D), which provides review only to the extent that a petitioner asserts that the BIA “misinterpreted or misapplied the law.” The court considered Dodaj’s various arguments and concluded that they rested on disagreements about how the BIA exercised its discretion, leaving it without jurisdiction to review the cancellation of removal. While it had jurisdiction to consider the denial of his motion to reconsider or reopen, it concluded that his real dispute was not with the BIA’s denial of relief from removability but rather the IJ’s initial finding of removability, and he failed to preserve that claim when he did not appeal it. It also held that the BIA had no duty to independently determine his removability. The court noted that “he initially challenged his removability and then, on appeal, requested summary affirmance of the IJ decision finding him removable. That waiver dooms his petition.” Both petitions for review were denied.

Insurer priority under the No-Fault Act (NFA); Personal protection insurance (PIP) benefits; MCL 500.3114(3) (employee entitled to benefits from the insurer of employer’s furnished vehicle); Whether an individual is an employee or an independent contractor; The economic reality test; Parham v Preferred Risk Mut Ins Co; McKissic v Bodine; Adanalic v Harco Nat’l Ins Co; Duckworth v Cherokee Ins Co; Powell v Employment Sec Comm’n; Auto Club Insurance Association (AAA)

The court held that plaintiff qualified as an employee of the nonparty company (TS) for whom he was acting as a truck driver at the time of his accident. Thus, because defendant-Carolina Casualty Insurance Company insured the truck, it was first in priority for paying PIP benefits under MCL 500.3114(3). This insurer priority dispute was between Carolina and defendant-AAA, which insured the personal vehicles of plaintiff and his spouse. The trial court granted Carolina summary disposition, ruling that AAA was first in priority because plaintiff was an independent contractor, not a TS employee, under the economic reality test. On appeal, the court reviewed case precedent, including recent cases “interpreting MCL 500.3114(3) in the context of injured semi-truck drivers[.]” Among other things, it noted “the fact that an individual may be regarded as an independent contractor for tax purposes does not control the determination of employee status under” the NFA. It found that the “more salient aspect of plaintiff’s compensation is that he was remunerated solely by [TS], for whom he exclusively hauled cargo.” It concluded that the factual record here did not support a finding that he fit within the description of quintessential independent contractors. It did support a finding that he “was wholly dependent on [TS] for the income derived from his central professional pursuit.” As to the rights to hire, fire, and discipline, the “facts collectively point to an at-will, terminable relationship, and the record does not reflect any likelihood that [TS] would incur liability upon” its dissolution. This factor weighed “in favor of an employee-employer relationship.” Further, while he had “a measure of discretion in the performance of his duties, such discretion is consistent with the inherent nature of the work and does not equate to the autonomy characteristic of an independent contractor.” The court also concluded that he was “subject to a degree of control congruent with the economic realities of the relationship” and that this supported “a finding of employee status.” In addition, the evidence showed that he “was one among several drivers employed by [TS] and that the company’s ongoing operations were fundamentally reliant upon this cadre of drivers to carry out its essential activities.” Reversed and remanded for entry of an order granting AAA summary disposition.

No-fault insurance; PIP benefits; Attendant care; One-year-back rule; MCL 500.3145; Requests for admission; MCR 2.312(D); Assignment; Consolidated actions; Misnomer doctrine; Directed verdict motion

The court held that the trial court erred by denying one defendant-insurer’s (Home-Owners) motion for a directed verdict, but that judgment should be entered against the other defendant-insurer (Auto-Owners) for attendant-care services provided to one insured only. Plaintiff-healthcare provider sued Auto-Owners for no-fault PIP benefits for attendant-care services, even though Home-Owners was the insureds’ actual no-fault insurer, and the insureds sued Home-Owners in a separate case. The two related actions were later consolidated. On remand from the Supreme Court, the court first held that the consolidation did not merge plaintiff’s provider action with the insureds’ action because “‘consolidated cases should retain their separate identities[,]’” and the cases “remained separate matters consolidated for efficiency purposes.” Thus, plaintiff could recover only for services provided to the insured who had assigned her claim before suit was filed, not the other insured whose assignment was not filed until years later. The court next held that Auto-Owners’ erroneous admissions that it insured the claimants remained binding because “a trial court cannot disregard a judicial admission unless there has been a formal withdrawal or amendment,” and Auto-Owners never moved to withdraw or amend under MCR 2.312(D)(1). As a result, “for purposes of this case Auto-Owners was the responsible insurer,” even though it had no contract with the insureds. The court also held that the misnomer doctrine did not apply because it is “inapplicable to the substitution or addition of new or different parties,” and plaintiff sued “the wrong insurer.” Finally, the court held that Home-Owners’ directed-verdict motion was procedurally proper because “proofs had been presented, in the form of medical bills establishing the dates of service,” and the undisputed evidence allowed the trial court to decide the one-year-back issue. Reversed and remanded for entry of an order adding Auto-Owners back as a defendant and entering judgment against Auto-Owners for attendant-care services provided to the one insured only.

No-fault insurance; PIP benefits; Attendant care; One-year-back rule; MCL 500.3145; Requests for admission; MCR 2.312(D); Assignment; Consolidated actions; Misnomer doctrine; Directed verdict motion

The court held that the trial court erred by denying one defendant-insurer’s (Home-Owners) motion for a directed verdict, but that judgment should be entered against the other defendant-insurer (Auto-Owners) for attendant-care services provided to one insured only. Plaintiff-healthcare provider sued Auto-Owners for no-fault PIP benefits for attendant-care services, even though Home-Owners was the insureds’ actual no-fault insurer, and the insureds sued Home-Owners in a separate case. The two related actions were later consolidated. On remand from the Supreme Court, the court first held that the consolidation did not merge plaintiff’s provider action with the insureds’ action because “‘consolidated cases should retain their separate identities[,]’” and the cases “remained separate matters consolidated for efficiency purposes.” Thus, plaintiff could recover only for services provided to the insured who had assigned her claim before suit was filed, not the other insured whose assignment was not filed until years later. The court next held that Auto-Owners’ erroneous admissions that it insured the claimants remained binding because “a trial court cannot disregard a judicial admission unless there has been a formal withdrawal or amendment,” and Auto-Owners never moved to withdraw or amend under MCR 2.312(D)(1). As a result, “for purposes of this case Auto-Owners was the responsible insurer,” even though it had no contract with the insureds. The court also held that the misnomer doctrine did not apply because it is “inapplicable to the substitution or addition of new or different parties,” and plaintiff sued “the wrong insurer.” Finally, the court held that Home-Owners’ directed-verdict motion was procedurally proper because “proofs had been presented, in the form of medical bills establishing the dates of service,” and the undisputed evidence allowed the trial court to decide the one-year-back issue. Reversed and remanded for entry of an order adding Auto-Owners back as a defendant and entering judgment against Auto-Owners for attendant-care services provided to the one insured only.

Breach of contract; Employment agreement; Bonuses; Judicial questioning; MRE 614; Preservation; Curative instruction; Frivolous counterclaim; Sanctions; MCL 600.2591; MCR 1.109(E); Attorney fees

The court held that defendant was not entitled to relief from the jury verdict based on the trial court’s questioning of a witness, but that remand was required for adequate findings supporting sanctions for defendant’s counterclaim. Plaintiff sued defendant for unpaid bonuses under an employment agreement. The jury found defendant breached the agreement and awarded plaintiff $38,000 while rejecting defendant’s unjust-enrichment counterclaim. On appeal, the court first held that defendant did not preserve its judicial-questioning claim because MRE 614(c) permits a party to object to judicial questioning “either at the time or at the next opportunity when the jury is not present,” and defendant “did neither.” The court also held that relief was not warranted despite the trial court’s probing questions because review occurred “through the ‘heavy presumption of judicial impartiality,’” and the trial court instructed the jury that “nothing I say is meant to reflect my opinions about the facts of this case.” Thus, the questioning did not create a “manifest injustice” requiring reversal despite defendant’s failure to object. As to sanctions, the court held that the trial court failed to make sufficient findings before awarding plaintiff $48,940 in attorney fees for a frivolous counterclaim. The court explained that “‘[a] trial court must articulate a sufficiently clear basis for its decision to allow this Court to review the finding for clear error,’” but the trial court merely granted sanctions “[f]or the reasons stated” in plaintiff’s motion and brief. Because plaintiff offered “several alternative reasons” for sanctions, it was “‘impossible to ascertain whether the trial court clearly erred’” in finding the counterclaim frivolous. Affirmed in part, reversed in part, and remanded for further findings on sanctions.

Setting aside a default judgment; MCR 2.603(D)(1); Saffian v Simmons (Saffian I & II); Sanders v McLaren-Macomb & Mount Clemens Reg’l Med Ctr; Intentional infliction of emotional distress (IIED); Notice of intent (NOI)

Holding that the trial court erred as a matter of law in concluding the default judgment had to be set aside due to plaintiff’s prematurely filed complaint, the court vacated the order setting aside and vacating the default judgment against the individual defendants-doctors, and remanded. Plaintiff sued defendants for medical malpractice and IIED. On appeal, the court agreed with plaintiff “that the trial court’s reasons for setting aside the default judgment constituted an abuse of discretion.” The trial court did not set it aside on the grounds provided “in MCR 2.603(D)(1). Instead of basing its decision on a showing of good cause and a meritorious defense, [it] found that the default judgment needed to be set aside because plaintiff prematurely filed her complaint. [It] noted that while the 182-day notice period can be shortened, plaintiff did not meet the” statutory criteria. Relying on Saffian and Sanders, plaintiff asserted this “ruling was incorrect because the alleged defects in her complaint did not relieve” defendants of their obligation to respond. The court concluded that its “decision in Saffian I dictates that the correct inquiry in a motion to set aside a default judgment is whether a defendant showed good cause and a meritorious defense.” The trial court here instead “incorrectly set aside its default judgment on the ground that plaintiff’s complaint was never properly commenced. Regardless of plaintiff’s potential failure to comply with statutory requirements for commencing a medical malpractice action, [defendants] could not make that determination on their own” – rather, they “had to respond to the complaint and present the issue of plaintiff’s compliance to the trial court.” In addition, as in Sanders, “plaintiff made a good-faith effort to commence the action. [She] waited several weeks after serving her NOI to file her complaint, successfully served defendants, and her complaint properly included an affidavit from [her] expert detailing the merits of her allegations. As [she] made a prima facie showing of her compliance with the requirements to properly commence the action like the plaintiff in Sanders, defendants were required to respond.”

Diversity jurisdiction; 28 USC § 1332; Removal; § 1441(a); Motion to remand; The “fraudulent-joinder doctrine”; Whether the complaint alleged a “colorable claim” against the one non-diverse defendant

The court affirmed the district court’s denial of plaintiffs-investors’ motion to remand under the fraudulent-joinder doctrine, holding that there was no “colorable claim” against the single non-diverse defendant. Plaintiffs sued defendant-PNC and a PNC employee, Koutrodimos, in state court related to the loss of millions they had invested with a nonparty’s (A) investment companies. A had created accounts for his companies at PNC. Plaintiffs’ claims against Koutrodimos were based on allegations that he aided A. PNC removed the case to federal court, asserting that “no colorable cause of action existed against Koutrodimos, the sole non-diverse defendant[.]” The district court agreed, dismissed Koutrodimos from the case, and denied plaintiffs’ motion to remand. It also dismissed the action for failure to state a claim. On appeal, the court reviewed the principles of the fraudulent-joinder doctrine and held that the “four claims against Koutrodimos fall well short of colorable[.]” Without his “citizenship, federal diversity jurisdiction exists over this lawsuit, and PNC permissibly removed it to federal court.” The court further held that the district court “correctly granted PNC’s motion to dismiss the remaining claims against it” because, among other things, the complaint failed “to satisfy Federal Civil Rules 8 and 9(b)[.]”

Negligent hiring & retention; Negligent supervision & training; Foreseeability; Actual or constructive knowledge; Employee criminal conduct; Background check; Hearsay; MRE 801(c) & 802; Loss of consortium

The court held that defendant-employer was entitled to summary disposition on plaintiffs’ negligent hiring, retention, supervision, and training claims arising from an employee’s sexual misconduct toward customers. Defendant’s employee (defendant-Harnden) sexually harassed plaintiffs while they were shopping at defendant’s gas station store, and plaintiffs alleged defendant negligently hired, retained, supervised, and trained him. On appeal, the court first held that defendant had no duty to conduct a background check because employers are “generally not automatically required to conduct ‘in-depth’ background investigations,” and plaintiffs cited no authority showing that defendant was required to do so. The court next held that defendant lacked actual or constructive notice making the employee’s conduct foreseeable. The employee’s prior convictions were “substantially different from the sexual misconduct at issue,” and the length of time between the prior conduct and the later sexual misconduct weighed against foreseeability. The court also rejected plaintiffs’ reliance on one plaintiff’s alleged report to another employee because there was “no evidence that plaintiffs reported Harnden’s inappropriate statements to defendant” before the later incident. The court further held that the negligent-supervision and negligent-training claims failed because the employee’s conduct was “outrageous and fell outside social norms,” and Michigan law permits employers to assume employees will not engage in criminal conduct. The court also held that plaintiffs’ testimony about what a trooper allegedly said about prior misconduct was inadmissible hearsay, and even if admissible, it did not show defendant knew or should have known of those alleged encounters. Finally, the court held that the loss-of-consortium claim failed because it “stands or falls” with the underlying negligence claim. Affirmed.

Child’s best interests; Effect of relative placement; In re Olive/Metts Minors; Neonatal intensive-care unit (NICU)

Concluding that the trial court misapplied the factor of the child’s relative placement in determining whether termination was in the child’s best interests, the court vacated the order terminating respondent-mother’s parental rights and remanded. “When discussing the child’s best interests, the trial court primarily spoke about the child’s close bond with his relative placement and the other children in the home and referenced respondent’s lack of ability and interest in parenting, as demonstrated by her lack of contact with the child beyond two NICU visits.” The court found no error in its factual findings as “to the child’s placement with family and how well he was doing in that placement.” But in its review of the best-interest hearing, it “identified a legal error that was not identified by respondent but which nevertheless amounted to an abuse of discretion. The trial court stated that, ‘the fact that the child is in placement with a relative does not weigh against termination of parental rights’ and ‘[r]elative placement, again, for purposes of best interest, does not weigh against termination as this relative is not interested in guardianship but is only interested in adoption of this child[.]’” The court noted that the “law is clear, that ‘placement with relatives weighs against termination under MCL 712A.19a(6)(a).’” The court could not “separate the decision to terminate from this error of law.”

Child protective proceedings; Jurisdiction; MCL 712A.2(b)(1); Jury instructions; Waiver; Ineffective assistance of counsel; Hearsay; Therapy records; Failure to move for a directed verdict; Termination under § 19b(3)(j); Child’s best interests; Relative placement

The court held that: 1) jurisdiction was supported, 2) respondent-father was not denied effective assistance of counsel, 3) § (j) supported termination, and 4) termination was in the child’s best interests. The DHHS filed a petition alleging respondent sexually abused his child, and after an adjudicative trial and termination hearing, the trial court terminated his parental rights. On appeal, the court first held that respondent waived his challenge to the jury instructions because counsel expressly stated he had no objections, and “[w]aiver extinguishes any error, leaving nothing for this Court to review.” The court next held that jurisdiction was supported under MCL 712A.2(b)(1) because the child testified respondent sexually abused her, including by “oral penetration” and sexual contact, and the resulting trauma affected her mental well-being. The court reasoned that she required therapy for anxiety and depression and reported she did not feel safe at home. The court also rejected respondent’s ineffective-assistance claims. As to the child’s testimony, the court held it was not hearsay because she testified about “memories she had concerning respondent,” not merely prior out-of-court statements. As to therapy records, counsel’s decision not to use them was reasonable because they contained “more contemporaneous statements about respondent’s sexual assaults” that would have harmed the defense. As to not moving for a directed verdict, the court held counsel was not ineffective because conflicting evidence required the jury to decide whether sexual abuse occurred. The court next held that § (j) supported termination because the trial court reasonably found that respondent sexually abused the child, denied responsibility, and the resulting anxiety, depression, and lack of safety showed an “actualized risk of emotional harm.” Finally, the court held that termination was in the child’s best interests despite their bond and the child’s relative placement because respondent’s ability to parent was “highly suspect,” he did not accept responsibility, and the trial court adequately considered that relative placement weighed against termination. Affirmed.