• Construction Law (1)
• Criminal Law (3)
• Family Law (1)
• Insurance (2)
• Litigation (1)
• Negligence & Intentional Tort (1)
• Tax (1)
• Termination of Parental Rights (3)

Construction Law

 

Issues: Validity of the plaintiff's construction lien; The Construction Lien Act (CLA)(MCL 570.1101 et seq.); DLF Trucking, Inc. v. Bach; MCL 570.1114; Whether the property at issue was a "residential structure" (MCL 570.1106(3)); Kitchen Suppliers v. Erb Lumber Co.; Titanus Cement Wall Co. v. Watson; "Unjust enrichment"; Morris Pumps v. Centerline Piping, Inc.; Tkachik v. Mandeville; Buell v. Orion State Bank; Summary disposition under MCR 2.116(C)(10); Coblentz v. City of Novi; Maiden v. Rozwood; St. Clair Med., PC v. Borgiel; Summary disposition under MCR 2.116(C)(8); Kuznar v. Raksha Corp.; Statutory interpretation; Krohn v. Home-Owners Ins. Co.; Driver v. Naini

Court: Michigan Court of Appeals (Unpublished)

Case Name: Karaus v. Bank of NY Mellon

e-Journal Number: 53590

Judge(s): Per Curiam – Hoekstra, Borrello, and Boonstra

 

Noting that it had not addressed the scope of the CLA's definition of "residential structure" in a situation analogous to this one, the court held that the trial court erred in granting defendant-Bank of New York Mellon (Mellon) summary disposition on the plaintiff's construction lien claim because there was a genuine issue of material fact as to whether the defendants-Carefs intended to or did reside on the property at issue. However, the trial court properly granted Mellon summary disposition on plaintiff's unjust enrichment claim. Thus, the court affirmed in part, reversed in part, and remanded in part for further proceedings. The case concerned plaintiff's efforts to be paid for construction work that he performed on a home owned by the Carefs. He asserted that he was not paid in full for his work and thus, he recorded a construction lien on 10/26/09. In 7/06, the Carefs refinanced their home loan and borrowed $1,000,000 from a non-party. The loan was secured by a mortgage encumbering the property in the same amount. The mortgage was recorded on 6/5/07 and was later assigned to Mellon. At the time of the motion hearing, Mellon had not foreclosed on its mortgage. Plaintiff sued on 9/13/10 and obtained a default judgment against the Carefs. In moving for partial summary disposition as to plaintiff's construction lien claim, Mellon argued that his claim of lien was invalid because he failed to provide work pursuant to a written contract, citing MCL 570.1114. The court concluded that "the determining factor in regard to whether a property constitutes a 'residential structure' or a commercial property is whether the owner or lessee contracting for the improvement intends to actually reside on the property upon completion of construction." Intent to "reside in a structure is a prerequisite to that structure being a 'residential structure.'" Mellon presented an affidavit executed by defendant-Sheldon Caref stating that he and his wife "resided at the property at different times" between 3/19/04 and 2009 in support of its claim that the property was a "residential structure." Plaintiff responded with an affidavit of his own stating that as soon as the property was habitable, the Carefs rented it out. He also stated that the property was purchased by a company (owned and controlled by Sheldon Caref), and that it clearly appeared to be an investment property. Thus, he rebutted Mellon's evidence of the Carefs' intent to reside in the property with evidence suggesting that they did not reside in the property, and in doing so established that there was a genuine issue of material fact for trial as to their intent in regard to the property.

 

Criminal Law

 

Issues: The scoring of OV 3 at 25 points; People v. Lechleitner; People v. Wiggins; People v. Lockett; People v. Houston; People v. Haacke; Alleged prosecutorial misconduct in closing and rebuttal arguments; People v. Carines; People v. Stanaway; People v. Fyda; People v. Bahoda; People v. Kennebrew; Whether the prosecutor "vouched" for the credibility of the C brothers; People v. Dobek; People v. Knapp; Ineffective assistance of counsel; People v. Sabin (On Second Remand); People v. Pickens; People v. Effinger; People v. Armstrong; People v. Long; People v. Graves

Court: Michigan Court of Appeals (Unpublished)

Case Name: People v. Montanez

e-Journal Number: 53537

Judge(s): Per Curiam - Saad and K.F. Kelly; Concurring in part, Dissenting in part - M.J. Kelly

 

The court held, inter alia, that the trial court reasonably inferred from the record evidence as to the location of AC's wound and the amount of blood the wound produced that AC suffered a "life-threatening" injury. Thus, the evidence and reasonable inferences arising from it adequately supported the trial court's 25-point score for OV 3. Defendant's convictions arose from two separate incidents involving the C brothers in 11/10. In 3/09, MC hit defendant in the head with a crowbar and served one year in jail for the assault. At the trial in this case, MC and AC both testified that on 11/19/10, defendant held a gun out a car window as he rode past their home. Then on 11/21/10 while AC was driving with MC in the passenger seat, they encountered defendant at a traffic light. AC and defendant exchanged looks, AC followed defendant's car, defendant brandished the same gun and AC urged him to "shoot, shoot, shoot." After hearing a gunshot, the C brothers observed blood coming from the back of AC's head, where he was grazed with a bullet. The defense theory at trial was that defendant was not present. He argued on appeal that the evidence did not support the 25-point score for a life-threatening injury, and that OV 3 should have been scored at only 10 points for bodily injury requiring medical treatment. The court disagreed. The trial court's scoring of the sentencing guidelines is reviewed to determine whether the trial court properly exercised its discretion and whether the record evidence adequately supports a particular score. Twenty-five points should be scored for OV 3 if "[l]ife threatening or permanent incapacitating injury occurred to a victim." The statute does not require medical testimony to prove a life-threatening injury. A score of 10 points is appropriate if "[b]odily injury requiring medical treatment occurred to a victim." The statute mandates assessment of the "highest number of points possible." The evidence at trial showed that defendant discharged a loaded firearm toward AC's vehicle, and a bullet grazed the left rear of his skull. AC testified that he felt something hot, saw blood on his hand after he touched his head, and was in pain. MC observed "a lot of blood" and described AC's injury as a "real big gash" on the back of the head. AC's uncle observed a "gush of blood" coming from AC's head and rushed him to the hospital while calling 911. The uncle explained that AC was "bleeding so much." AC received stitches and was in the hospital for three hours before being released. At trial the actual scar on the back of AC's head, along with photographs of his blood-stained shirt and his blood drippings in the car were shown. The court also held that none of the other issues defendant raised on appeal had merit and affirmed.

 

Issues: "Other acts" evidence; Admission of evidence under MCL 768.27a and MRE 404(b); Whether the trial court properly analyzed the evidence under MRE 403; People v. Kahley; People v. Babcock; People v. Watkins; People v. Sabin (After Remand); People v. Mateo; United States v. LeMay (9th Cir.)

Court: Michigan Court of Appeals (Unpublished)

Case Name: People v. Mulder

e-Journal Number: 53549

Judge(s): Per Curiam - Hoekstra, Borrello, and Boonstra

 

The court held, inter alia, that the probative value of the evidence was not substantially outweighed by the danger of unfair prejudice. Thus, the other acts evidence was admissible under MCL 768.27a because it met all the prerequisites. Because the evidence was admissible under MCL 768.27a, the propriety of its admission under MRE 404(b) was irrelevant. There was no error requiring reversal in the trial court's admission of evidence in this case. The victim was approximately 8 years old when defendant, her babysitter, engaged in three separate sexual acts with her. He touched her and inserted his penis in her mouth while she slept. He also showed her pornography and made her touch his penis with her hand. He also engaged in penile-vaginal penetration with her. Prior to trial the prosecutor provided defendant with notice that it sought to introduce other acts evidence in the form of defendant's former stepdaughter's testimony. Defendant pleaded guilty to CSC II and CSC IV against his stepdaughter about 10 years before the assaults on the victim in this case. The trial court held a hearing on the prosecution's motion and admitted the testimony under both MRE 404(b) and MCL 768.27a. The stepdaughter testified that defendant had abused her for about 4 months when she was 14. She testified that he would get home from work in the middle of the night and would come into her room. While she pretended to sleep, he touched her chest and genitals under her clothes. He would also take her hand and use it to masturbate himself. Defendant contended on appeal that MRE 404(b) controlled over MCL 768.27a. However, the Supreme Court addressed this issue in Watkins, and held that MCL 768.27a and MRE 404(b) conflict, and that the statute prevails over the rule of evidence. The court noted that evidence offered for admission under MCL 768.27a may still be inadmissible if it is precluded by MRE 403. Defendant argued that the trial court erred in failing to conduct an MRE 403 balancing analysis. However, any such error would be harmless if the evidence is in fact not excluded by MRE 403. In this case, the probative value of the other acts testimony was not substantially outweighed by the danger of unfair prejudice. Defendant's attraction to young girls was highly probative of whether he committed the charged offense. The conduct was also similar to the other acts. Further, the fact that defendant was convicted for his prior acts was highly significant and increased the probative value of that evidence without adding appreciably to the danger of prejudice. Affirmed.

 

Issues: Motion to suppress the defendant's statements to investigating officers in his home; Whether defendant was "in custody" and entitled to Miranda v. Arizona warnings; People v. Mendez; People v. Coomer; People v. Zahn; Whether defendant's confession was "involuntary"; People v. Cipriano; People v. DeLisle; "Plain error" review; People v. Carines

Court: Michigan Court of Appeals (Unpublished)

Case Name: People v. Rozema

e-Journal Number: 53593

Judge(s): Per Curiam – Hoekstra, Borrello, and Boonstra

 

The court held that the totality of the circumstances supported the conclusion that the defendant was not in custody when he made the statements at issue to investigating officers in his home and thus, he was not entitled to Miranda warnings. The court also rejected his claim that his statements were involuntary, and affirmed the trial court's decision to admit them during the trial. Defendant was convicted of CSC II. On appeal, he challenged the admission of inculpatory statements he made to the investigating officers, arguing that the trial court erred in denying his motion to suppress the statements. The trial court found that - (1) defendant had notice of the scheduled visit, (2) the officers wore plain clothes, (3) they were invited into defendant's home, (4) he was not under arrest nor was he under other restrictions, and (5) he had knowledge of his basic rights and was "'highly intelligent.'" Defendant argued that he was in custody "because a reasonable person under the circumstances would not feel free to leave." He asserted that the environment was coercive and custodial because the police questioned him in his basement and his back was against a wall, the officers' firearms were visible, the stairway that led to the only exit was accessible only by walking past one of the officers, and they would not accept his account of the events and insisted he acted inappropriately until he told them what they wanted to hear. In holding that defendant was not in custody at the time of the interview, the court noted that the officers told him he was not under arrest, they wore plain clothes, and while their weapons were visible, they were never drawn. "The entire interview took place in defendant's residence and 'interrogation in a suspect's home is usually viewed as noncustodial.'" Further, when he was questioned, defendant was 54 years of age and held 2 degrees from an accredited university. He also testified that he was aware of his rights. "Defendant's subjective belief that he was not free to leave is immaterial because '[t]he determination of custody depends on the objective circumstances of the interrogation rather than the subjective views harbored by either the interrogating officers or the person being questioned.'" As to his claim that his statements were coerced, the court again noted defendant's age and education, the fact that the interview was scheduled in advance, and the fact that he allowed the officers into his home. Further, he did not allege that he was threatened with abuse or deprivation, and there was no evidence that he was drugged, injured, in ill health, or intoxicated. The court affirmed his conviction.

 

Family Law

 

Issues: Custody; Challenge to the trial court's finding that modification of the custodial arrangement was in the child's best interests; § 8 of the Child Custody Act (MCL 722.28); Fletcher v. Fletcher; Bowers v. Bowers; Dailey v. Kloenhamer; "Best interest" factors (a), (d), (e), (g), (h), (i) and (l); Shulick v. Richards

Court: Michigan Court of Appeals (Unpublished)

Case Name: Evans v. Dickson

e-Journal Number: 53632

Judge(s): Per Curiam – Servitto, Markey, and Murray

 

The court held that the trial court's findings as to the best interest factors were not against the great weight of the evidence, and its decision to change custody of the parties' minor child, granting them joint physical and legal custody while ordering that the child was to remain in the defendant-father's care throughout the school year, was not an abuse of discretion. The parties lived together on and off for several years, but never married. Defendant acknowledged paternity and, in a stipulation and order in 1996, the parties agreed that plaintiff-mother would have sole physical and legal custody of the child and defendant would have "reasonable visitation rights." Defendant moved to Tennessee and the child lived with plaintiff for nearly all of his life, occasionally visiting defendant during summers and on holidays. However, in 8/10 the parties agreed to have the child move to the defendant's house for a year, because that is what the child wanted and because he was having behavioral issues that were affecting his schooling. In 10/11, defendant filed a petition to change custody, seeking to have the child move to Tennessee with him permanently, and to have joint custody of both of his children. Plaintiff challenged the trial court's findings as to factors (a), (d), (e), (g), (h), (i) and (l). As to factor (a), the court noted that defendant's relationship with the child's brother was not at issue in this dispute. As to factor (d), the trial court found it favored defendant because of concerns with plaintiff's "work schedule, requiring travel, overnights and late nights in conjunction with the demonstrated past behavioral and past and present school related issues of the minor child." The trial court also noted that in the year that the child lived with defendant, he did not experience the problems with behavior and schooling that he did when living with the plaintiff. While plaintiff disagreed with defendant's testimony, the court must "defer to the trial court's credibility determinations." As to factor (e), both parties appeared to be in stable, long-term relationships and the child appeared to have established stable relationships with the families of both parties. As to factor (g), the trial court found this factor "slightly" favored defendant. Plaintiff's testimony established that she had struggled with mental health issues in the past, and that her mental health issues were related in part to the child's desire to live with defendant. While she is now in fine mental health, the trial court's concern with the possibility of a reoccurrence of her depression and its slight favoring of this factor toward defendant was not against the great weight of the evidence. As to factor (h), the trial court found it favored defendant. It stated that "the minor child had behavior and attendance issues as well as poor grades when living with" plaintiff, adding that he was "flourishing" when living with defendant. Plaintiff argued that the child improved his performance in school because he repeated the eighth grade, and because the school he attended in Tennessee had low academic standards. "While both of these factors could have affected the child's academic performance, it is not clear that either caused improvement" in his grades. As to factor (i), the trial court found in favor of defendant. It found the child of sufficient age to express a preference, and found no reason to question his competence. The trial court did not interview the child. It instead relied on the testimony and opinion of the FOC investigator, who testified that the child expressed a preference to live with defendant, and that he is a "normal functioning ninth grade student." The trial court was entitled to rely on this opinion. As to factor (l), the trial court properly considered the child's difficulties in school and the length of time he lived with plaintiff throughout its opinion. Affirmed.

 

Insurance

 

Issues: Whether an auto accident victim who had been living at an adult foster care facility was a "ward" of the facility for purposes of determining insurer priority for payment of Michigan No-Fault Personal Protection Insurance Benefits (PIP); MCL 500.3115; Hartman v. Insurance Co. of N. Am.; United States Fid. & Guar. Co. v. Citizens Ins. Co.; Skinner v. Square D Co.; MCL 500.3114(1)

Court: Michigan Supreme Court

Case Name: Michigan Ins. Co. v. National Liab. & Fire Ins. Co.

e-Journal Number: 53740

Judge(s): Young, Jr., Markman, M.B. Kelly, Zahra, and McCormack; Voting to deny leave to appeal – Cavanagh; Not participating – Hathaway

 

In an order in lieu of granting leave to appeal, the court reversed the Court of Appeals judgment (see e-Journal # 50896 in the 3/12/12 edition) and remanded the case to the trial court for entry of an order granting the defendant summary disposition. "Pursuant to MCL 500.3114(1), the adult foster care resident injured as a pedestrian in this case is not a 'relative' of the adult foster care corporation named in the insurance policy." Thus, the priority for payment of PIP benefits rested with the plaintiff as the insurer of the owner of the vehicle involved in the accident, under MCL 500.3115(1), and the Court of Appeals "erred by holding that the resident may be subject to coverage under the defendant's no-fault automobile insurance policy issued to the adult foster care corporation."

 

Issues: Dispute arising under a homeowner's policy; Property loss claim due to theft; Whether the plaintiff's claim was time-barred; MCL 500.2833(1)(q); Randolph v. State Farm Fire & Cas. Co.; Smitham v. State Farm Fire & Cas. Co.; What constitutes a "formal denial" of a claim; Whether the insured's knowledge of the amount of a payment or settlement offer is sufficient; Jimenez v. Allstate Indem. Co. (ED MI); Bourke v. North River Ins. Co.; Denial of "further" liability; Payment versus a settlement offer; Whether the alleged "communication" to plaintiff was sufficiently definite and explicit to constitute a formal denial of the claim; Mt. Carmel Mercy Hosp. v. Allstate Ins. Co.; Mousa v. State Auto Ins. Cos.; The defendant's burden of showing as a matter of law that no genuine issue of material fact existed as to its denial of liability; MCR 2.116(G)(3)(b); MCR 2.116(G)(4); RDM Holdings, LTD v. Continental Plastics Co.; White v. Taylor Distrib. Co.

Court: Michigan Court of Appeals (Unpublished)

Case Name: Brown v. AAA MI Ins.

e-Journal Number: 53555

Judge(s): Per Curiam – Hoekstra, Borrello, and Boonstra

 

Assuming for the purposes of the appeal that MCL 500.2833(1)(q) controlled, the court held that the evidence did not establish the absence of a genuine issue of material fact as to whether the defendant's 11/26/08 offer of settlement met the requirements of a "formal denial" ending the tolling of the statute of limitations. Thus, the court reversed the trial court's order granting defendant summary disposition and remanded the case for further proceedings. Plaintiff had a homeowner's insurance policy with defendant that was in effect at the time that he claimed a property loss due to theft in 5/05. Plaintiff's mother contacted defendant to make the claim on 5/11/05. Defendant contended that on 11/26/08, it "communicated" a settlement offer to plaintiff, which was less than his demand. Defendant claimed that "plaintiff was 'advised' that the offer was final and that any 'additional sums' were denied." Plaintiff sued on 6/15/11. The trial court granted defendant summary disposition based on the one-year limitations period contained in the policy. The court noted that defendant appeared to concede that MCL 500.2833 applied to the policy, although a non-fire loss was involved. The "ultimate question" in the case was whether the alleged 11/26/08 "communication" to plaintiff conveyed sufficient information to constitute a "formal denial" of the claim. "It is a well-established principal of Michigan jurisprudence that 'formal denials' of insurance claims, although not required to always be in writing, must be 'definite' and 'explicit,' so as to 'unequivocally impress upon the insured the need to pursue further relief in court.'" Also, "to constitute a 'formal denial' sufficient to end the tolling of the statute of limitations, 'something more than a verbal denial by a single adjuster is required.'" Defendant argued, and the trial court found, that defendant's offer of settlement constituted a formal denial of the remainder of plaintiff's claim, thus ending the tolling period of MCL 500.2833(1)(q). However, the only evidence from which the court could discern any information about the settlement offer was an affidavit by P, a "claims specialist" employed by defendant, who was "assigned adjustment and processing" of plaintiff's claim. P's affidavit only stated, in a conclusory fashion, that a settlement offer was "communicated" to plaintiff on 11/26/08, that he was advised that the offer was a final offer, and that any additional sums demanded by him were denied. It did "not convey who made the communication, how it was made or, with any degree of specificity, the verbiage that was used." Given the lack of evidence as to the specifics of the communication, and applying the holding in Bourke, the court was unable to conclude, assuming that a denial of liability for sums over and above a settlement offer can "constitute a 'formal denial' of a claim, that the denial here was sufficiently 'direct" and 'explicit' as to 'unequivocally impress upon [plaintiff] the need to pursue further relief in court,'" and thus, to constitute a "formal denial" pursuant to MCL 500.2833(1)(q).

 

Litigation

 

Issues: Attorney fees and costs; MCR 2.405; Application of attorney fees court rule when both parties are offerors; Beveridge v. Shorecrest Lane & Lounge, Inc; MCR 2.405(D)(1) & (2); "American rule" that attorney fees and costs are not recoverable from a losing party; Haliw v. Sterling Heights; "Interest of justice" exception; MCR 2.405(D)(3); Gamesmanship; Luidens v. 63rd Dist. Court; "Actual costs" (MCR 2.405(A)(6)); Evidentiary hearing to determine reasonableness and appropriateness of fees; Miller v. Meijer, Inc.; JC Bldg. Corp. II v. Parkhurst Homes, Inc.; Walters v. Nadell; Napier v. Jacobs

Court: Michigan Supreme Court

Case Name: Baxter v. Geurink

e-Journal Number: 53739

Judge(s): Young, Jr., Cavanagh, Markman, M.B. Kelly, Zahra, and McCormack; Not participating - Hathaway

 

In an order the court denied leave to appeal the Court of Appeals judgment (see e-Journal # 51456 in the 5/7/12 edition) because it was not persuaded that the questions presented should be reviewed by the court. The application for leave to appeal as cross-appellant was considered and pursuant to MCR 7.302(H)(1), in lieu of granting leave to appeal, the court reversed in part the Court of Appeals judgment. Michigan generally follows the "raise or waive" rule of appellate review. Failure to timely raise an issue waives review of that issue on appeal. "Because the plaintiffs did not challenge the hourly rate or the amount of time expended before the trial court, the issue regarding actual costs was not preserved for appellate review." Thus, there was no need for an evidentiary hearing. The court remanded the case to the district court for entry of an order granting the defendant the entire amount of attorney fees and costs requested.

 

Negligence & Intentional Tort

 

Issues: Negligence action against the defendant-seller alleging that the conditions of the house he sold to the decedent child's (Julia) family caused the child's death; Henry v. Dow Chem. Co.; "Causation"; Skinner v. Square D Co.; "Cause in fact"; Distinguishing Genna v. Jackson; Centers for Disease Control (CDC)

Court: Michigan Court of Appeals (Unpublished)

Case Name: Estate of Julia E. Ficaj v. Pray

e-Journal Number: 53589

Judge(s): Per Curiam – Whitbeck, Fitzgerald, and Beckering

 

The court held that the evidence that mold caused the decedent child's (Julia) death was too speculative to allow a reasonable juror to find that the conditions of the house that the defendant sold to Julia's family caused her death. Thus, the court affirmed the trial court's order granting defendant summary disposition. The PR alleged that defendant's "negligent remodeling and repairs caused sewage and water to pool under the house, creating an unsafe condition that caused a large quantity of mold to grow," which in turn caused Julia's encephalomyelitis. He argued on appeal that the chain of circumstantial evidence established that Julia died from a fungal infection caused by defendant's conduct - (1) the family members experienced symptoms consistent with a fungal infection when they moved into the house, (2) the symptoms subsided when they moved out, (3) mold was later found in the house, and (4) mold could have caused the injuries to Julia's brain. Defendant responded that, inter alia, an uncontrolled immune response to insect bites could have caused her injuries, and that the CDC ruled out a fungal infection as the cause of death after her autopsy. The court held that the evidence that mold caused Julia's death was too speculative. "A plaintiff's circumstantial evidence is impermissibly conjectural if there are two or more explanations about how an event happened, and both explanations are equally plausible." Julia's doctors initially diagnosed her with erythema multiforme, an immune condition. After her brain was autopsied and tested, Dr. G (a medical center's pediatric infectious disease director) concluded that she had a unique immune system and an uncontrolled reaction to an unidentified substance. The court concluded that the PR did not present evidence that any of Julia's doctors or any witness could testify that she fell ill due to her exposure to toxic mold. Though he "presented evidence that toxic mold could cause the type of injuries that existed" in Julia's brain at her death, he "presented no evidence that toxic mold in fact caused those injuries." The court concluded that this case was distinguishable from Genna. There was a four-day gap in Genna between the plaintiffs' illnesses and the mold's discovery. Julia died in 2005, her family discovered the mold under the house in 2010, and there was no evidence that anyone who lived in the house from 2005 to 2010 became seriously ill. The PR presented evidence that another child developed a rash from insect bites in 2006, but no evidence that this led to a serious illness or linking the child's rash to mold. In Genna, a mold expert testified that there were unusually high quantities of unhealthy mold spores in the air in the living space. Here, the evidence was that the mold spore count in the living space was "'very low.'" There was also evidence in Genna that a plaintiff's doctor linked his injury to mold. While Julia's doctors initially thought that her cause of death may have been a fungal infection, the CDC later determined that there was "'no evidence of bacterial, viral, or fungal infection'" in her brain.

 

Tax

 

Issues: The Single Business Tax (SBT) Act (SBTA) (MCL 208.1 et seq.) (repealed); Whether the trial court properly found that plaintiff's application of its proprietary coatings constituted the sale of tangible personal property pursuant to MCL 208.52; Catalina Mktg. Sales Corp. v. Department of Treasury; Midwest Bus. Corp. v. Department of Treasury, Corley v. Detroit Bd. of Educ.; Coblentz v. City of Novi; MCR 2.116(C)(10); Maiden v. Rozwood; Allison v. AEW Capital Mgmt., LLP; Statutory interpretation; Farrington v. Total Petroleum, Inc.; House Speaker v. State Admin. Bd.; International Bus.  Machs. v. Department of Treasury; Determining SBT liability; Trinova Corp. v. Department of Treasury; MCL 208.45; MCL 208.52(b); "Sales" defined; MCL 208.7(1)(a)(i) & (ii); "Tangible personal property" defined; Use of a legal dictionary to define a legal term not defined in a statute; Horace v. City of Pontiac; "The performance of services" defined (MCL 208.7(1)(a)(ii)); "Incidental to service" test

Court: Michigan Court of Appeals (Unpublished)

Case Name: PFG Enters. v. Department of Treasury

e-Journal Number: 53623

Judge(s): Per Curiam – Sawyer, Saad, and Meter

 

The court held that plaintiff's application services were incidental to the sales of its proprietary coatings. Thus, plaintiff correctly characterized its business activity as the sales of tangible personal property and correctly calculated its SBT liability for the years in issue by applying MCL 208.52. Plaintiff is a Michigan manufacturing corporation. Plaintiff filed its SBT returns for the years 2002-2004 based on MCL 208.52, which sources to Michigan only those sales of tangible personal property that remain within the state. Defendant audited plaintiff's returns for the years in issue and assessed an additional SBT liability of $129,445.32, including tax and interest. Defendant characterized plaintiff's business activities as a service and thus, assessed this additional liability based on MCL 208.53. Plaintiff paid the assessment in full, under protest, and sued defendant for the full refund plus costs and attorney fees. Plaintiff argued that because its proprietary coatings were unequivocally considered tangible personal property, the sale of those coatings - even when applied to its customers' parts - was necessarily the sale of tangible personal property. Plaintiff further argued that its customers sought its proprietary coatings, the application of which was ancillary to the tangible product itself. The court agreed. The court looked to the intent of the Legislature and the plain language of the SBTA to determine plaintiff's proper SBT liability. Plaintiff annually purchased tens of thousands of gallons of chemicals and coatings that it held in inventory and used to formulate its proprietary coatings. "Undisputedly, both the inventory used to formulate the coatings, as well as plaintiff's proprietary coatings, could be 'seen, weighed, measured, felt, or touched.'" There was no dispute that, when plaintiff applied its coatings to its customers' automotive parts, it transferred title from those tangible coatings it held in inventory to its customers. This transfer of property fell squarely within the definition of sales in MCL 208.7(1)(a)(i), indicating that plaintiff's sales should be considered sales of tangible personal property. However, because plaintiff not only transferred its proprietary coatings to its customers, but also applied its coatings, it could also be argued that its sales were "the performance of services," as defined by MCL 208.7(1)(a)(ii). Thus, the court addressed plaintiff's application services within the context of SBT liability. To properly address this issue, the court looked to guidance from the Supreme Court in Catalina. Although the "incidental to service" test was originally used by both the court and the Supreme Court to determine sales tax liability, the court held that the same test was applicable here. When the test was applied in this case, plaintiff prevailed. Its customers sought its proprietary coatings, and plaintiff is in the business of formulating and supplying these proprietary coatings. It held chemicals and coatings in inventory to transfer to its customers. "The transfer of these coatings established plaintiff's profit-making venture." Further, it was the actual coatings, provided by plaintiff, that added value to its customers' automotive parts. Without the coatings, plaintiff's customers could not supply its parts to their customers - the automobile manufacturers.

 

Termination of Parental Rights

 

Issues: Termination under §§ 19b(3)(c)(i), (g), and (j); In re CR; In re Trejo Minors; The child's best interests; Jurisdiction over the child; MCR 712A.2(b); In re Hatcher; In re SLH, AJH, & VAH; Claim that respondent-mother's procedural due process rights were violated because "she may not have received notice of the adjourned termination hearing date"; People v. Metamora Water Serv., Inc.; City of Westland v. Okopski; Bay Cnty. Prosecutor v. Nugent; In re Atkins; In re Brown; In re Andeson; In re BAD

Court: Michigan Court of Appeals (Unpublished)

Case Name: In re Gatlin-Johnson

e-Journal Number: 53631

Judge(s): Per Curiam – Ronayne Krause, Servitto, and Shapiro

 

The court held, inter alia, that the trial court properly terminated the respondent-mother's parental rights to the minor child where the statutory grounds for termination were established by clear and convincing evidence and termination was in the child's best interests. The trial court did not clearly err in finding that § 19b(3)(j) was established by clear and convincing evidence. Respondent was unable to meet the child's basic material needs because she did not have a home for him to live in or a source of income with which to support him. Also, it was discovered that she had a substance abuse problem and she made little effort to overcome it as shown by the fact that she consistently tested positive for drugs or alcohol, including four positive tests after the supplemental petition for termination was filed. Considering respondent's continued drug abuse, the fact that she did not show appropriate parenting skills during visits, and that she and the child did not have any appreciable bond, the trial court did not clearly err in finding that the child was reasonably likely to be harmed if placed with respondent. She also argued that termination of her parental rights was not in the child's best interests. The evidence showed that she failed to benefit from parenting classes, that she made little effort to overcome her substance abuse problem and was still using drugs and alcohol, that she was unable to meet the child's basic material needs, and that she and the child did not have a significant bond. Considering the child's need for permanency and stability and respondent's failure to make any significant progress toward reunification during the year and a half the child was in foster care, the trial court did not clearly err in finding that termination of respondent's parental rights was in the child's best interests. Affirmed.

 

Issues: Termination of parental rights pursuant to § 19b(3)(g); In re Sours Minors; In re Trejo Minors; In re JK; In re Miller; In re Mason

Court: Michigan Court of Appeals (Unpublished)

Case Name: In re Reyes

e-Journal Number: 53595

Judge(s): Per Curiam - Hoekstra, Borrello, and Boonstra

 

The court held that the trial court properly terminated the respondent-father's parental rights to the minor child because the statutory ground for termination was established by clear and convincing evidence and termination was in the child's best interests. The minor child was born in late 1/09. The mother tested positive for marijuana at the delivery and the petition for child protective proceedings was filed in 2/09. Respondent was identified as the putative father of the child and notice of the proceedings was sent to his last known address. Several hearings as to termination were held as to the mother without the participation of respondent. In 4/11 a notice of current address was filed indicating that respondent's address was at a correctional facility. The petitioner-DHS filed a petition for termination of respondent's parental rights on 8/29/11. The petition alleged that respondent was currently incarcerated with an earliest release date of 10/30/13, and a maximum discharge date of 10/30/24. The petition alleged that respondent was unable to provide any family member or friend to care for the child. A termination hearing was scheduled and respondent was present at the hearing with an attorney. The trial court noted that it was "late in the game" when it discovered that respondent was the child's legal father. The trial court noted that respondent was in prison, but that incarcerated fathers must be offered services and the opportunity to seek familial placement. The trial court adjourned testimony as to the allegations about respondent for three months and he was to be offered services. An updated service plan dated 9/28/11 noted that respondent was offered services for substance abuse treatment, parenting classes, prison services, and general case management services. The termination hearing continued on 1/8/12. Respondent testified as to the services he participated in while incarcerated, his behavioral problems and psychiatric care. He admitted to prior substance abuse and said he had only seen the child three times, but had sent the child pictures and letters. A DOC witness testified that respondent had problems following the facility's rules and regulations and about his misconduct while incarcerated. Affirmed.

 

Issues: Termination of the respondent-father's parental rights under § 19b(3)(b)(i) and the respondent-mother's parental rights under § 19b(3)(b)(ii); Matter of Jackson; In re Rood; In re Williams; In re Fried; In re Hudson; In re HRC; In re Gazella; Best interests of the children; In re LE; In re Olive/Metts Minors; Claim that the trial court erred by admitting the minor child's (CM) out-of-court hearsay statements because the circumstances surrounding the statements did not provide adequate indicia of reliability and were not admissible under the "tender years" exception provided by MCR 3.972(C); In re Jones; In re Caldwell; MCR 3.972(C)(2); In re Archer; MCR 3.972(C)(2)(a)

Court: Michigan Court of Appeals (Unpublished)

Case Name: In re Welsh/McGowan

e-Journal Number: 53640

Judge(s): Per Curiam – Ronayne Krause, Servitto, and Shapiro

 

The court held, inter alia, that the trial court properly terminated both respondents-parents' parental rights to the minor children where the statutory grounds for termination were established by clear and convincing evidence and termination was in the children's best interests. As to the respondent-father, he inappropriately touched three children, including two of his daughters and a stepdaughter, in a sexual manner. At the beginning of the proceedings, his other daughter, JM, and his stepdaughter, CD, both alleged that he inappropriately touched them, which resulted in the filing of two separate petitions to terminate his parental rights. The father was charged with CSC IV and ultimately pleaded guilty to disorderly conduct. As to the petition involving CD, the trial court found that there was inappropriate touching but decided to place the father on a treatment plan rather than terminate his parental rights to CM and GA. After the treatment plan began, CM revealed that the father played the "tickle game" with her in which he, at the very least, touched her vagina with his finger. "Evidence of how a parent treats one child is evidence of how he or she may treat the other children." Further, the failure of the father to address these allegations supported the trial court's finding that it "received no reasonable assurance" that the abuse will not occur in the future to CM or her younger sibling. The trial court apparently believed CM's statements and the court deferred to its credibility decisions. As to the mother, for most of the proceedings, she failed to acknowledge the allegations against the father. After learning of JM's and CD's allegations, she took no real steps to ensure that the other children, including CM, would not be abused. CM's therapist testified that CM indicated that the mother witnessed at least one of the incidents of abuse taking place and merely swatted the father on the butt. She only recently acknowledged that there may be a possibility that CM was actually abused, but failed to exhibit any behavior that suggested that she was actually worried about the abuse and its effects on CM or the other children. Also, the mother did not show that she would actually be able to prevent such abuse in the future. There was also evidence that she had not benefited from her treatment plan, which required her to address her failure in preventing the inappropriate touching, and it is well-established that "a parent must benefit from the services offered so that he or she can improve parenting skills to the point where the children would no longer be at risk in the parent's custody." Evidence was presented that the mother encouraged CD to recant her allegations. There was also evidence suggesting that she was encouraging CM to refrain from speaking with authorities and to change her statement. The mother divorced the father during the course of the termination proceedings but admitted that she did not want to do so and indicated to her therapist that she only did so because she thought it would help in her court case. Affirmed.

 

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