Dispute arising from the alleged removal of the general partner from a limited partnership; Declaratory judgment; Actual controversy; MCR 2.605(A)(1); Michigan Ass’n of Home Builders v City of Troy; Laches; Bayberry Group, Inc v Crystal Beach Condo Ass’n; Yankee Springs Twp v Fox

The court held that the trial court erred by granting summary disposition based on its conclusion that an actual controversy did not exist, and by dismissing plaintiffs’ declaratory-relief claim based on laches. It declined to consider whether plaintiff-Kings Lane GP was properly removed as the general partner under the parties’ limited partnership agreement (LPA). Plaintiffs sought a declaration that Kings Lane GP had not been removed as general partner of the parties’ limited partnership. Plaintiffs also brought several other contract and tort claims. The trial court granted defendants’ motions for summary disposition and dismissed all of plaintiffs’ claims. In a prior appeal, the court reversed as to the declaratory judgment claim. On remand, the trial court concluded there was no actual controversy, and rejected plaintiffs’ argument that the court had previously decided this issue to the contrary. It also found plaintiffs’ claim for declaratory relief was barred by laches. As such, it severed the counterclaims and entered an order of dismissal. In the present appeal, the court agreed, in part, with plaintiffs that the trial court erred by granting defendants’ motions for summary disposition and by denying plaintiffs’ motion for summary disposition. “Because some of the claims against Kings Lane GP are based on its alleged failure to comply with terms of the LPA following its removal as general partner of the limited partnership, the validity of those claims and the availability of monetary relief could be impacted by a determination that Kings Lane GP was not properly removed as the general partner. Because such a determination is necessary to decide ‘the rights and other legal relations’ of plaintiffs and the limited partners, the trial court erred by concluding that an actual controversy did not exist under MCR 2.605(A)(1).” Further, because the undisputed evidence did not establish that the delay in this case “was ‘unexcused or unexplained,’” dismissal based on laches was erroneous. Finally, it noted that the lack of evidence on remand “may be because defendants collectively moved for summary disposition under MCR 2.116(C)(4), claiming that declaratory relief was not appropriate under MCR 2.605(A)(1) because an actual controversy did not exist.” Because the court “is an error-correcting” court, it concluded that it “would not be appropriate for [it] to decide this issue on appeal.” Reversed and remanded.