Attorney fees; Domestic relations action; MCR 3.206(D)(2)(b); Refusal to comply with a court order; Richards v Richards; Reasonableness of fees; Pirgu v United Servs Auto Ass’n; Judicial notice; MRE 201; Parenting time noncompliance

The court held that the trial court did not abuse its discretion by awarding defendant’s counsel $4,742 in attorney fees arising from plaintiff’s repeated noncompliance with parenting-time orders. The parties’ domestic-relations dispute involved child support and parenting time. Plaintiff repeatedly failed to present the child for exchanges, leading to multiple contempt motions or show-cause proceedings. On appeal, the court first rejected plaintiff’s claim that the trial court merely adopted another judge’s decision to award fees because the record showed that the first judge only directed defense counsel to file a bill of costs and “did not indicate that those costs would be simply adopted,” while the second judge heard plaintiff’s objections, examined the history of noncompliance, and applied the reasonableness factors. The court next held that fees were proper under MCR 3.206(D)(2)(b) because plaintiff “did not abide by the visitation schedule” and “unilaterally decided on numerous occasions” not to produce the child for parenting time. The court further rejected plaintiff’s ability-to-pay argument because MCR 3.206(D)(2)(b) addresses fees incurred when a party refuses to comply with a court order, and that rule “does not consider the party’s ability to pay, but only the party’s behavior.” Finally, the court held that the amount awarded was reasonable because the trial court considered the Pirgu factors, including counsel’s experience, reputation, fixed rate, difficulty of the case, length of representation, preclusion from other work, expenses incurred, and a reduction in the actual hours claimed. Plaintiff’s repeated parenting-time violations caused defendant to incur fees, and the trial court’s factual findings were not erroneous. Affirmed.

Sentencing; Proportionality; Presumption for within-guidelines sentences; People v Posey; People v Snow factors; Giving greater weight to the reformation factor; People v Boykin; Operating while impaired (OWI)

Holding that the trial court did not abuse its discretion in “imposing a proportionate and reasonable minimum sentence within the recommended guidelines range[,]” the court affirmed defendant’s sentence. He was convicted of meth possession and possession of less than 25 grams of fentanyl. The trial court imposed a within-guidelines sentence (as a fourth habitual offender) of 24 months to 20 years for the meth offense. He argued on appeal that this “was unreasonable and disproportionate.” The court noted that within-guidelines sentences are afforded a presumption of proportionality. At sentencing, the trial court recognized that defendant “was 34 years’ old, had obtained his GED, and had accumulated four prior felony and nine misdemeanor convictions. The circumstances surrounding the offense were that the police went to arrest [him] on an unrelated warrant and found him in possession of both meth[] and fentanyl. The [trial] court further recognized that the guidelines recommended a minimum sentence between 10 and 46 months, and that it was required to impose a proportionate sentence. [It] determined that defendant was not ‘an appropriate candidate for a probationary sentence,’ referencing its imposition of an 18-month to 5-year prison term for” his OWI, third offense conviction over six months earlier. He asserted that its “rationale was insufficient because it was too focused on his reformation as opposed to the other Snow considerations. But the sentencing court was free to put greater weight on the reformation factor.” The court added that “the Snow factors are ‘not the only relevant sentencing criteria[.]’” Further, because “the trial court presided over defendant’s trial, it was fully aware of [his] history and the circumstances surrounding the offense.” The record showed that it “imposed an individualized sentence.”

Motion for relief from judgment; Good cause; Evidence of a favorable plea agreement for a prosecution witness; Brady v Maryland; People v Chenault; Materiality; Prosecution’s failure to correct false testimony

The court held that the trial court erred in denying defendant-Davis’s motion for relief from judgment based on his Brady claim related to a favorable plea agreement provided to the prosecution’s key witness (R). Davis was convicted of second-degree murder, CCW, FIP, and felony-firearm. The court affirmed in Davis I. After the trial court initially denied his motion for relief from judgment, the court remanded for an evidentiary hearing. The trial court again denied his motion. In this appeal, the court first determined that Davis established “good cause for failing to previously raise his Brady claim. Although [his] appellate attorney in Davis I touched on the issue, counsel failed to properly raise the argument.” The court further concluded that the trial court erred in denying Davis’s motion “because the prosecution suppressed evidence of a favorable plea agreement provided to” R in exchange for his testimony, did not correct R’s “false testimony that he did not receive consideration for testifying against Davis, and falsely stated during closing argument that [R] did not receive a benefit for his testimony.” It found that the “trial court clearly erred by determining that [R] did not receive a favorable plea deal in exchange for his testimony. A review of [R’s] calendar conference, plea, and sentencing transcripts compels no other conclusion. Although the trial court opined that the witnesses at the evidentiary hearing failed to ‘disclose[] any secret deals,’ [it] failed to appreciate [their] general lack of recollection of the relevant events and the unlikelihood that a witness would have been inclined to disclose a ‘secret deal.’” The court also concluded the prosecutor “compounded the Brady error by eliciting testimony from [R] that the plea deal he accepted was not in exchange for his testimony against Davis.” In addition, during closing argument the prosecutor asserted that R “did not receive consideration in his case in exchange for testifying against Davis.” The court determined “the suppressed evidence was material and there exists a reasonable probability that absent the errors involving [R’s] testimony—the failure to disclose [R’s] plea agreement, the failure to correct his false testimony, and the affirmative assertion to the jury that [R] did not receive special consideration in exchange for his testimony—Davis would have had a reasonably likely chance of acquittal.” Reversed and remanded for a new trial.

Attorney fees; Domestic relations action; MCR 3.206(D)(2)(b); Refusal to comply with a court order; Richards v Richards; Reasonableness of fees; Pirgu v United Servs Auto Ass’n; Judicial notice; MRE 201; Parenting time noncompliance

The court held that the trial court did not abuse its discretion by awarding defendant’s counsel $4,742 in attorney fees arising from plaintiff’s repeated noncompliance with parenting-time orders. The parties’ domestic-relations dispute involved child support and parenting time. Plaintiff repeatedly failed to present the child for exchanges, leading to multiple contempt motions or show-cause proceedings. On appeal, the court first rejected plaintiff’s claim that the trial court merely adopted another judge’s decision to award fees because the record showed that the first judge only directed defense counsel to file a bill of costs and “did not indicate that those costs would be simply adopted,” while the second judge heard plaintiff’s objections, examined the history of noncompliance, and applied the reasonableness factors. The court next held that fees were proper under MCR 3.206(D)(2)(b) because plaintiff “did not abide by the visitation schedule” and “unilaterally decided on numerous occasions” not to produce the child for parenting time. The court further rejected plaintiff’s ability-to-pay argument because MCR 3.206(D)(2)(b) addresses fees incurred when a party refuses to comply with a court order, and that rule “does not consider the party’s ability to pay, but only the party’s behavior.” Finally, the court held that the amount awarded was reasonable because the trial court considered the Pirgu factors, including counsel’s experience, reputation, fixed rate, difficulty of the case, length of representation, preclusion from other work, expenses incurred, and a reduction in the actual hours claimed. Plaintiff’s repeated parenting-time violations caused defendant to incur fees, and the trial court’s factual findings were not erroneous. Affirmed.

Child custody; Established custodial environment (ECE); MCL 722.27(1)(c); Parenting time; MCL 722.27a; Child’s surname; Best interests; Garling v Spiering; Legal custody; Joint decision-making; MCL 722.26a; Bofysil v Bofysil; Transportation costs; MCL 722.27a(9)

The court held that the trial court did not err in awarding defendant-father progressive parenting time, but erred by changing the child’s surname without making a best-interests finding and by granting alternating sole legal custody. The parties separated before the child was born, plaintiff-mother moved to Michigan, defendant lived out of state, and the child had lived only with plaintiff by the time of trial. On appeal, the court first held that the parenting-time award did not alter the child’s ECE with plaintiff because the child would “remain with plaintiff most of the time and continue to look to her for guidance, discipline, the necessities of life, and parental comfort.” The court also held that parenting time was proper because the trial court considered the case’s “special concerns and considerations,” including the child’s limited relationship with defendant, the parties’ distance, the child’s age, and possible separation anxiety, and it adopted a gradual schedule moving from video visits to daytime visits, overnight visits, and longer visits. But the court vacated the name-change ruling because the trial court focused on plaintiff’s motivation in using her maiden name rather than whether the change was in the child’s best interests, and “‘parental disputes regarding a child’s surname should be resolved in accordance with the best interests of the child.’” On defendant’s cross-appeal, the court held that the trial court did not err by declining joint legal custody because the parties had not communicated, could not cooperate, and the trial court “could not ‘expect that the parties could agree or cooperate on important decisions concerning the welfare of the child.’” However, it vacated the portion giving each parent sole legal custody during that parent’s time because, when parents cannot cooperate, the court “‘has no alternative but to determine which parent shall have sole custody[.]’” Finally, the court upheld the travel-cost allocation because the order accounted for both parties’ burdens and was not “‘palpably and grossly violative of fact and logic[.]’” Affirmed in part, vacated in part, and remanded.

Removal; The 30-day limitation on removing a case to federal court; 28 USC § 1446(b)(1); Whether plaintiffs’ class certification attempt in state court after remand “reset the removal clock”; Metz v Unizan Bank; Whether the 30-day deadline could be equitably tolled: Enbridge Energy, LP v Nessel ex rel MI; The Class Action Fairness Act (CAFA)

The court held that defendant-GateHouse Media’s second removal of plaintiffs’ putative class action to federal court was untimely under the 30-day deadline, and that equitable tolling of the removal deadline was foreclosed under the Supreme Court’s decision in Enbridge. This case was originally filed in state court, then timely removed under the CAFA to federal court, which eventually denied class certification and remanded to state court on the basis federal jurisdiction disappeared with the certification denial. Eight months later, plaintiffs filed a renewed motion in state court to certify a class, and GateHouse responded by again removing the case to federal court based on the CAFA. Plaintiffs argued that the removal was untimely and moved for remand to state court, but the district court denied the motion based on equitable tolling. On appeal, the court first rejected GateHouse’s argument that plaintiffs’ class certification attempt in state court after the remand reset the removal clock because “once commenced, that clock cannot be reset by later developments in a case, including those tied to class certification.” The court noted that the prior remand was improper, as a denial of class certification “‘does not divest federal courts of [CAFA] jurisdiction.’” However, despite this, “the district court was not authorized to absolve GateHouse of the untimeliness of its second removal.” The Supreme Court recently addressed the viability of equitable tolling in the removal context in Enbridge, and held that § 1446(b)(1)’s 30-day deadline cannot be equitably tolled. Thus, the court reversed the district court’s judgment with instructions to again remand the case to state court.

Excise tax; Failure to collect an air transportation “ticket tax” (26 USC §§ 4261(a), (e)(1)(C), (e)(5), & 4262(a)(1)); Whether the taxpayer’s fixed fees for “overhead & management costs” for its clients’ private jets constituted payments for “transportation by air” & were subject to excise tax

The court held that because the excise “ticket tax” only applies to usage charges for each flight and not to fixed charges for overhead and management costs, plaintiff-Flight Options was not liable for uncollected excise taxes. Flight Options, a fractional-share jet company, challenged the IRS’s effort to impose a $39 million judgment arising from its failure to collect a 7.5% excise tax on the fixed fees it charged its clients for overhead and management of their private jets. This tax applies to “‘amount[s] paid for’ domestic ‘transportation by air[.]’” The IRS began to enforce “the tax on all fixed fees for management and overhead and, to that end, began audits of Flight Options and other fractional-share jet operators.” Congress later amended the Tax Code and exempted “fractional-share jet owners from all taxes under § 4261, whether applied to usage fees or fixed fees.” But litigation continued “over potential liability for the operators for failing to withhold the tax on fixed fees charged before the 2012 effective date” of the amendment, including this case involving the IRS’s assessment against Flight Options for the period from 1/1/09 through 3/31/12. A magistrate judge ruled in the IRS’s favor and “also imposed failure-to-collect penalties on Flight Options.” On appeal, after analyzing the text and context of § 4261, the court held that “[t]he tax does not apply.” Flight Options’ fixed fees were not “payments for ‘transportation by air.’ The monthly and membership fees provide neither a ‘fare’ nor a ‘ticket’ nor ‘the right to transportation.’ They instead provide the option to purchase flight hours—an option that fractional owners and jet members may exercise only after paying the hourly usage fee.” Additionally, the court found “that Flight Options lacked adequate notice of its tax-collection responsibility. Because the statute never clarifies how it would apply beyond the flight-by-flight context of a ticket tax, it never describes what types of fixed charges could count as paying ‘for transportation.’” Reversed.