• Attorneys (1)
• Business Law (3)
• Contracts (2)
• Criminal Law (5)
• Employment & Labor Law (1)
• Litigation (3)
• Negligence & Intentional Tort (1)
• Probate (1)
• Tax (1)
• Termination of Parental Rights (4)

Attorneys

 

This summary also appears under Probate

 

Issues: The trial court's order surcharging the defendant-attorney personally for monies he failed to ensure were properly deposited in a fiduciary account for the protected individual's benefit; Whether the trial court had subject-matter jurisdiction; In re Hatcher; MCL 700.1302(c); MCL 700.1303(1)(h-i); Applicability of the doctrine of res judicata; Energy Reserves, Inc. v. Consumers Power Co.; Harvey v. Harvey; Labor Council, MI Fraternal Order of Police v. City of Detroit; Whether there was any authority under which the trial court could sanction the attorney; Effect of the fact the "client" effectively included the estate and not just the PR; Steinway v. Bolden; MCR 8.122

Court: Michigan Court of Appeals (Published)

Case Name: In re Estate of Calvin Graves

e-Journal Number: 44166

Judge(s): Davis, Whitbeck, and Shapiro

 

Concluding there was no genuine issue of material fact the defendant-attorney gave the protected individual's (Calvin) settlement money to the wrong person, he failed to execute his duty to refrain from disgorging the money to unauthorized third parties, and as a result the money was never received into Calvin's estate, the court held the trial court's ruling the attorney was liable for the surcharge against him was correct. Calvin was injured in an auto accident when he was two years old. His mother and next friend, defendant-Graves, filed a personal injury suit and a petition with the trial court to be appointed as Calvin's conservator. The trial court issued letters of conservatorship to Graves containing restrictions, including a requirement ownership of funds received "must be in the conservator as fiduciary for the minor." Graves was appointed Calvin's conservator. The attorney received a "Notice to Attorney of Duties Under Conservatorship of a Minor," which included the instruction he must accompany the fiduciary to the bank, etc. to deposit funds received in an insured account or CD identifying the account as a fiduciary account. The trial court later approved a settlement of the personal injury case for a total of $6,122.70. The same day, the attorney issued two checks from his client trust account, payable directly to Graves individually. She cashed both checks, and they were not deposited into any sort of account for Calvin's benefit. On appeal, the attorney argued, inter alia, there was no authority under which the trial court could sanction him because he did not violate any order, statute, rule, or other law. The court agreed he did not violate any court order it could identify, noting the "notice to attorney of duties" was a clear directive, but it was a notice, not an order. However, because Graves was a PR, the attorney's "client" effectively included the estate, not just the fiduciary in her personal capacity, and as a result, he was subject to a proceeding to surcharge pursuant to MCR 8.122 by a "replacement" fiduciary. A court is permitted to impose a surcharge for unauthorized acts, and "the fulcrum" of the attorney's liability was "he engaged in an unauthorized act by issuing Calvin Graves' money to a person other than Calvin Graves or Calvin Graves' conservator." Although Graves was Calvin's conservator at the time, "the checks were not made out to her in that capacity." Thus, "they were simply made out to an unauthorized third party, resulting in Calvin Graves' estate losing the money altogether." The court also rejected the attorney's subject matter jurisdiction and res judicata arguments. Affirmed.

 

Business Law

 

This summary also appears under Contracts

 

Issues: Whether the trial court properly granted declaratory relief to intervening defendant-Wamco and granted it possession of and authorization to sell the disputed plastic injection molds because it had a priority interest in them; Claims related to the Molder's Lien Act (MLA)(MCL 445.611 et seq.) and the UCC (lien priority scheme at MCL 440.9333); Whether the plaintiffs held the superior interest in the injection molds and/or the proceeds from the sale of the molds under the MLA or whether Wamco's UCC security interest had priority; Nickell v. Lambrecht; MLA (MCL 445.618, .618a, .618b, .618c, and .618d(1)); MCL 440.9333(2) (possessory lien); Gateplex Molded Prods., Inc. v. Collins & Aikman Plastics, Inc.; Statutory construction; Gladych v. New Family Homes, Inc.

Court: Michigan Court of Appeals (Published)

Case Name: Delta Engineered Plastics, LLC v. Autolign Mfg. Group, Inc.

e-Journal Number: 44165

Judge(s): Servitto, Owens, and Gleicher

 

Deciding an issue of first impression in this dispute over the ownership of plastic injection molds used in the automotive industry, the court held the UCC (MCL 440.9333(2)) controlled, there is no express provision in the MLA stating an interest such as intervening defendant-Wamco's has absolute, unequivocal priority over possessory liens such as plaintiffs', and plaintiffs' possessory liens were entitled to priority over Wamco's interest in the molds. Thus, the court reversed and remanded to the trial court for a determination of plaintiffs' damages and appropriate remedies. The plaintiffs are in the plastic injection molding business. Defendant-Autolign was a plastic injection molder and produced parts for use in the automotive industry. Apparently, there was a fire at Autolign and it was unable to continue producing parts. It subcontracted its work, requesting plaintiffs produce parts using molds it owned, and it would pay them for parts produced. Autolign delivered various molds to plantiffs and they produced the parts. However, Autolign failed to pay for all of the parts produced. It later ended its operations. Plaintiff-Proto-Plastics sued Autolign claiming an account stated/open account, breach of contracts, and unjust enrichment. Proto-Plastics also asserted a statutory lien on the molds in its possession under the MLA, and sought monetary damages and injunctive relief. Plaintiffs-Delta and Moon Roof filed similar complaints against Autolign. The trial court treated the cases as consolidated. After learning Wamco was a lender to Autolign and asserted a first priority lien and security interest in basically all of Autolign's assets, all parties stipulated to the addition of Wamco as an intervening defendant. It filed counterclaims in all three cases for claim and delivery, contending plaintiffs were in possession of molds representing a part of Autoligns's assets used to secure repayment of its debt to Wamco and the molds were Wamco's property. It also sought a declaration its interest in the molds and its right to the proceeds from the sale of the molds was superior to the interests/rights of the plaintiffs. It asked the trial court for permission to take possession of them, to dispose of the molds, and to apply the proceeds to Autolign's debt to Wamco. Wamco moved for a declaration it was entitled to the requested relief. The trial court held Wamco established it was a secured creditor of Autolign and Wamco's security interest had priority over plaintiffs' possessory interest in the molds, and ordered Wamco to possess and liquidate the molds. The parties agreed the UCC's lien priority scheme was applicable to the cases. Wamco relied on MLA § 618d(1) to argue the Legislature intended molder's liens to be inferior to the interests of a secured creditor. The court held the statute was inapplicable to the facts and did not provide a basis for Wamco's priority claim. The court concluded UCC § 9333(2) controlled and held plaintiffs' liens had priority over Wamco's interest in the molds.

 

This summary also appears under Litigation

 

Issues: Plaintiff's claims against his former employer seeking indemnification for legal expenses incurred in successfully defending a prior suit against him under the Commodities Exchange Act (CEA)(7 USC § 1 et seq.); Whether the district court properly dismissed the plaintiff's case finding it was preempted by federal law; Subject matter jurisdiction; Bender v. Williamsport Area Sch. Dist.: Whether a limited liability company (LLC) is a citizen of its states of organization and principal place of business; Carden v. Arkoma Assocs.; Homfeld II, L.L.C. v. Comair Holdings, Inc. (6th Cir. Unpub.); Hicklin Eng'g L.C. v. Bartell (7th Cir.); Caudill v. North Am. Media Corp.; Dismissal of claim under Fed.R.Civ.P. 12(b)(6); Biegas v. Quickway Carriers, Inc.; Ascroft v. Iqbal; Whether a state law right to indemnification is preempted by the CEA; King v. Gibbs (7th Cir.); The Commodity Futures Trading Commission (CFTC)

Court: U.S. Court of Appeals Sixth Circuit

Case Name: Delay v. Rosenthal Collins Group, LLC

e-Journal Number: 44163

Judge(s): Kethledge, Sutton, and White

 

Addressing subject matter jurisdiction as it relates to a LLC and concluding when diversity jurisdiction is invoked in a case in which a LLC is a party, the court needs to know the citizenship of each member of the company and each "sub-member" as well, the court held the parties were completely diverse and it had jurisdiction over the case. The court further held federal law did not preempt a state-law indemnification right but its holding did not address whether the right existed in the first place and since the district court did not discuss the indemnification claim, the court vacated its judgment and remanded for further proceedings consistent with its opinion. According to the complaint, defendant-RCG is a "futures commission merchant" operating numerous trading desks on the floor of the Chicago Board of Trade and the Chicago Mercantile Exchange. Beginning in 2002, plaintiff worked as the manager of RCG's branch in Columbus, Ohio. He was fired in September 2005. Later, the CFTC filed a civil complaint against him in federal court alleging he had violated several provisions of the CEA. He prevailed in the suit after a bench trial. Plaintiff sued RCG in state court asserting a claim for indemnification for his expenses in defending the CFTC's claim and a claim RCG had breached his employment contract by failing to give him 90 days notice before firing him. RCG removed the case to federal court on diversity grounds and moved to dismiss the claims. The district granted the motion to dismiss as to the indemnification claim, but denied it as to the contract claim. The parties settled the contract claim which was dismissed with prejudice, clearing the way for the appeal. The court concluded Congress did not intend to displace the state-law indemnification rights, if any, of parties found not to have violated the CEA and held federal law does not preempt a state-law indemnification right. The issue of whether plaintiff can state an indemnification claim under state law appeared to be complex. The court opined the best course was to first allow the district court to analyze the various issues.

 

This summary also appears under Litigation

 

Issues: Class action claims under the Private Securities Litigation Reform Act (PSLRA) alleging defendants-corporate officers committed fraud in violation of § 10b of the Securities and Exchange Act (SEA)(15 USC § 78j) and Rule 10b-5 (17 CFR 240.10b-5); Zaluski v. United Am. Healthcare Corp.; Stoneridge Inv. Partners, LLC v. Scientific-Atlanta;  Fed.R.Civ.P. 9(b); Frank v. Dana; The "rule of specificity"; Tellabs, Inc. v. Makor Issues & Rights, Ltd.; The dispute with United Health Group (UHG); "Materiality"; Basic, Inc. v. Levinson; Rubin v. Schottenstein, Zox & Dunn; In re Ford Motor Co. Sec. Litig.; "Safe harbor"; Helwig v. Vencor, Inc.; "Corporate puffery"; San Leandro Emergency Med. Group Profit Sharing Plan v. Phillip Morris Cos. (2nd Cir.); Medicare Part D implementation; Pleading "loss causation"; Dura Pharms., Inc. v. Broudo; Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP (7th Cir.); Whether plaintiffs failed to plead loss causation under § 10b as to Omnicare's alleged misstatements premised on non-compliance with generally accepted accounting principles (GAAP); Omnicare's claims of "legal compliance"; In re Sofamor Danek Group, Inc.; Kushner v. Beverly Enters., Inc. (8th Cir.); Violation of § 11 of the SEA based on Omnicare's alleged GAAP abuses; Applying Rule 9(b); ACA Fin. Guar. Corp. v. Advest, Inc. (1st Cir.)

Court: U.S. Court of Appeals Sixth Circuit

Case Name: Indiana State Dist. Council of Laborers & Hod Carriers Pension & Welfare Fund v. Omnicare, Inc.

e-Journal Number: 44113

Judge(s): Mills, Daughtrey, and Gilman

 

Concluding the plaintiffs seized on "a few vague statements from management," to "try to turn bad corporate news into a securities class action," the court held since the PSLRA forbids "such alchemy," it affirmed the district court's dismissal, but reversed its disposition as to the claims brought under the Securities Act of 1933 (15 USC § 77k). Defendant-Omnicare, the nation's largest provider of pharmaceutical care for the elderly, handles medication distribution for nearly 1.5 million patients in most states and Canada. Omnicare's pharmacy services generated $5.3 billion in net sales in 2005. The plaintiff class consists of Omnicare investors who purchased securities between August 3, 2005 and July 27, 2006. The Laborers Council was the lead plaintiff under the PSLRA. It purchased Omnicare securities during December 2005 and January 2006, and sold all of them at the end of January 2006.  Also named as individual defendants were Omnicare officers and board members. Plaintiffs alleged defendants committed fraud in violation of § 10(b) of the SEA and Rule 10b-5. They alleged liability of the officers under § 20(a), and liability of all defendants under § 11 of the SEA. The § 10(b) fraud claims were related to (1) Medicare Part D preparedness, (2) a contract dispute with UHG, (3) violations of GAAP, and (4) the legality of Omnicare's alleged drug recycling and substitute drug programs. The claim under §11 also related to the alleged GAAP violations. As to the UHG dispute, the court held the complaint failed to allege a material misstatement or omission. As to Part D implementation, the court held "loss causation" was not adequately pleaded. As to the alleged GAAP violations, the court held the complaint did not suggest the alleged violations were ever recognized or revealed to the market, thus, loss causation was lacking. Finally, as to Omnicare's claims of legal compliance, the court held the complaint did not sufficiently establish defendants actually knew the "legal compliance" statements were false when made. "Nor did the generic claim of lawfulness, in the absence of any specifics, require the disclosure of the allegedly 'illegal' activities." The court also held, inter alia, none of plaintiffs' other claims had merit except the court reversed and remanded the district court's dismissal of the § 11 claim.

 

Contracts

 

This summary also appears under Business Law

 

Issues: Whether the trial court properly granted declaratory relief to intervening defendant-Wamco and granted it possession of and authorization to sell the disputed plastic injection molds because it had a priority interest in them; Claims related to the Molder's Lien Act (MLA)(MCL 445.611 et seq.) and the UCC (lien priority scheme at MCL 440.9333); Whether the plaintiffs held the superior interest in the injection molds and/or the proceeds from the sale of the molds under the MLA or whether Wamco's UCC security interest had priority; Nickell v. Lambrecht; MLA (MCL 445.618, .618a, .618b, .618c, and .618d(1)); MCL 440.9333(2) (possessory lien); Gateplex Molded Prods., Inc. v. Collins & Aikman Plastics, Inc.; Statutory construction; Gladych v. New Family Homes, Inc.

Court: Michigan Court of Appeals (Published)

Case Name: Delta Engineered Plastics, LLC v. Autolign Mfg. Group, Inc.

e-Journal Number: 44165

Judge(s): Servitto, Owens, and Gleicher

 

Deciding an issue of first impression in this dispute over the ownership of plastic injection molds used in the automotive industry, the court held the UCC (MCL 440.9333(2)) controlled, there is no express provision in the MLA stating an interest such as intervening defendant-Wamco's has absolute, unequivocal priority over possessory liens such as plaintiffs', and plaintiffs' possessory liens were entitled to priority over Wamco's interest in the molds. Thus, the court reversed and remanded to the trial court for a determination of plaintiffs' damages and appropriate remedies. The plaintiffs are in the plastic injection molding business. Defendant-Autolign was a plastic injection molder and produced parts for use in the automotive industry. Apparently, there was a fire at Autolign and it was unable to continue producing parts. It subcontracted its work, requesting plaintiffs produce parts using molds it owned, and it would pay them for parts produced. Autolign delivered various molds to plantiffs and they produced the parts. However, Autolign failed to pay for all of the parts produced. It later ended its operations. Plaintiff-Proto-Plastics sued Autolign claiming an account stated/open account, breach of contracts, and unjust enrichment. Proto-Plastics also asserted a statutory lien on the molds in its possession under the MLA, and sought monetary damages and injunctive relief. Plaintiffs-Delta and Moon Roof filed similar complaints against Autolign. The trial court treated the cases as consolidated. After learning Wamco was a lender to Autolign and asserted a first priority lien and security interest in basically all of Autolign's assets, all parties stipulated to the addition of Wamco as an intervening defendant. It filed counterclaims in all three cases for claim and delivery, contending plaintiffs were in possession of molds representing a part of Autoligns's assets used to secure repayment of its debt to Wamco and the molds were Wamco's property. It also sought a declaration its interest in the molds and its right to the proceeds from the sale of the molds was superior to the interests/rights of the plaintiffs. It asked the trial court for permission to take possession of them, to dispose of the molds, and to apply the proceeds to Autolign's debt to Wamco. Wamco moved for a declaration it was entitled to the requested relief. The trial court held Wamco established it was a secured creditor of Autolign and Wamco's security interest had priority over plaintiffs' possessory interest in the molds, and ordered Wamco to possess and liquidate the molds. The parties agreed the UCC's lien priority scheme was applicable to the cases. Wamco relied on MLA § 618d(1) to argue the Legislature intended molder's liens to be inferior to the interests of a secured creditor. The court held the statute was inapplicable to the facts and did not provide a basis for Wamco's priority claim. The court concluded UCC § 9333(2) controlled and held plaintiffs' liens had priority over Wamco's interest in the molds.

 

This summary also appears under Employment & Labor Law

 

Issues: Reformation of a covenant not to compete; MCL 445.774a; The trial court's authority to limit the duration and scope of the agreement; Rory v. Continental Ins. Co.; Whether the trial court limited the plaintiff's ability to present its entire damages case; Damages recoverable for breach of contract; Kewin v. Massachusetts Mut. Life Ins. Co.; Speculative damages; Allen v. Michigan Bell Tel. Co.; Limitations on the scope of discovery; MCR 2.302(B)(1); Charter Twp. of Bloomfield v. Oakland County Clerk; Judgment for the plaintiff on the basis of its expert's opinion on the amount of damages; Lewis v. LeGrow

Court: Michigan Court of Appeals (Unpublished)

Case Name: Grigg Box Co. v. Michigan Box Co.

e-Journal Number: 44131

Judge(s): Per Curiam - Davis, Whitbeck, and Shapiro

 

The trial court did not clearly err in concluding the 3-year duration of the covenant not to compete was unreasonable, it was also unreasonably restrictive in scope, and in limiting the covenant to make it reasonable pursuant to the trial court's power under MCL 445.774a. The statute governs non-compete agreements between employers and employees in Michigan. The agreement at issue was between plaintiff and defendant-Gentinne. The trial court limited the duration of the agreement to 18 months, and limited its scope to prohibit Gentinne from actually selling (as opposed to only soliciting the sale of) wooden boxes and pallets to plaintiff's exclusive customers within the 18-month period, in order to make the agreement reasonable. After a bench trial on the issue of damages for Gentinne's breach of the agreement (which the trial court determined was induced by defendant-Fontana Forest Products), the trial court awarded plaintiff $37,966, representing plaintiff's financial expert's quantification of its lost profits arising from the breach of the agreement (as limited by the trial court). Plaintiff argued, inter alia, the trial court erred in reforming the agreement and thus, improperly limited its damages. The court disagreed and held the trial court properly exercised its authority under MCL 445.774a to limit the restrictive covenant to prohibit Gentinne from selling Fontana's wood products to plaintiff's exclusive customers for 18 months. The court rejected plaintiff's claim the trial court erroneously inserted a "damages cap" into the agreement. "The trial court did not impose a 'damages cap,' but rather limited the agreement to prohibit Gentinne from making actual sales to plaintiff's customers during the 18-month period in order to make the agreement reasonable under the circumstances." Affirmed.

 

Criminal Law

 

Issues: Search and seizure; Whether the trial court properly denied the defendant's motion to suppress the evidence obtained pursuant to a search warrant; Whether the warrant was based on reliable and current information; MCL 780.651; "Probable cause"; People v. Kazmierczak; People v. Ulman; Whether the named informant was reliable; MCL 780.653(a); People v. Stumpf; Whether the information in the affidavit was "stale"; People v. Russo

Court: Michigan Court of Appeals (Unpublished)

Case Name: People v. Bencheck

e-Journal Number: 44128

Judge(s): Per Curiam - Hoekstra, Bandstra, and Servitto

 

The trial court did not err in refusing to suppress the evidence obtained pursuant to a search warrant to search defendant's home because there was a substantial basis for a reasonably cautious person to conclude the 15-year old informant spoke with personal knowledge when she told police she had seen child pornography at his house and there was only a delay of about a year between the last time she saw the photos of herself and the other girls on his computer and when the warrant was issued. Defendant contended the trial court erred in denying his motion to suppress because the warrant to search his home was based on unreliable and stale information. Here, the informant was a 15-year old girl against whom defendant had a PPO. The girl, apparently while being arrested for disorderly conduct, reported she had seen child pornography present at defendant's home. He argued because she had a motive to fabricate her story - to avoid arrest and to avenge the PPO - there was insufficient probable cause to issue the search warrant. The court disagreed. The girl gave a detailed description of the photos and videos made of her, as well as the location and description of the photos defendant had of other girls. Also, there was no claim or indication the information provided by the girl was false. The length of time before a warrant becomes stale depends on the circumstances of each case. Time is not the only factor to be considered in determining whether probable cause exists to believe evidence is presently located at the place to be searched. Other factors include "whether the crime is a single instance or an ongoing pattern of protracted violations, whether the inherent nature of a scheme suggests that it is probably continuing, and . . . whether [the property sought] is likely to be promptly disposed of or retained by the person committing the offense." In Russo, the Supreme Court upheld a six and one-half year delay between the victim last seeing the explicit photos and videos of herself and the issuance of a search warrant, concluding it was likely the defendant, a pedophile, would retain possession of the child pornography for an extended length of time. Thus, the trial court did not err in declining to suppress the evidence on the basis of staleness. Defendant's jury trial convictions of child sexually abusive activity and CSC IV were affirmed.

 

Issues: Sentencing; Dismissal of appeal as moot

Court: Michigan Court of Appeals (Unpublished)

Case Name: People v. Billings

e-Journal Number: 44098

Judge(s): Memorandum - Fort Hood, Sawyer, and Donofrio

 

Since the court issued an opinion in a related appeal in which it, inter alia, took note of the defendant's resentencing in this case, rejected her argument OV 12 should have been scored at 1 point, and upheld the scoring of OV 12 at 10 points, the court concluded this appeal challenging the trial court's rescoring of OV 12 on remand was moot because the issue was already decided. Defendant pleaded guilty to conducting a criminal enterprise. She was originally sentenced as a third habitual offender to 72 months to 40 years' imprisonment. In lieu of granting her delayed application for leave to appeal in another case, the court remanded the case to the trial court for appointment of appellate counsel and directed appellate counsel to "raise the issue whether a defendant can waive the appointment of appellate counsel as a plea condition imposed by the trial court." After appellate counsel was appointed, counsel filed a delayed application for leave to appeal, which was granted in Docket No. 282131. Counsel then filed a brief on appeal raising the appointment of appellate counsel issue and an issue as to the scoring of OV 12 at 25 points. Counsel also filed a motion for resentencing in the trial court raising the scoring issue. The trial court rejected defendant's claim OV 12 should have been scored at 1 point, held she should have received 10 points for OV 12, and resentenced her to a minimum term of 51 months, which was within the revised range of 51 to 127 months. This appeal followed the grant of defendant's delayed application for leave to appeal this order. However, after defendant filed her brief on appeal, the court issued its opinion in Docket No. 282131, rejecting her claims about the scoring of OV 12. Thus, the court dismissed this appeal as moot.

 

Issues: Sufficiency of the evidence to convict the defendant of armed robbery on an aiding and abetting theory; MCL 750.529; People v. Nowack; People v. Chambers; "Dangerous weapon"; Whether the handle of a window washer was a "dangerous weapon"; People v. Banks; People v. Hawkins; Sentencing; Whether defendant was properly sentenced as a fourth habitual offender; MCL 769.12(1); People v. Sanders; Scoring of OV 4; People v. Steele; Whether defendant was entitled to an additional 255 days credit for time served; MCL 769.11b; People v. Adkins; Applicability of People v. Parshay; People v. Prieskorn

Court: Michigan Court of Appeals (Unpublished)

Case Name: People v. Korth

e-Journal Number: 44146

Judge(s): Per Curiam - Hoekstra, Bandstra, and Servitto

 

Since under the facts of the case, a reasonable trier of fact could find beyond a reasonable doubt the codefendant fashioned the window washer stick in a manner to lead the victim to reasonably believe the stick was a dangerous weapon, the defendant's conviction of armed robbery as an aider and abettor was supported by sufficient evidence. Defendant's conviction arose from a robbery occurring at about 10:00 PM near the night deposit box of a bank. As the victim approached the deposit box, she heard a noise and was hit on her left shoulder. She heard someone demand the moneybag she was carrying. The victim turned to see her assailant, later identified as defendant's roommate, holding a stick. He pushed the victim to the ground and ran away with the bag. The victim found the black handle of a window washer at the scene, and believed she was hit on the shoulder with the handle. In a letter to the trial court, defendant admitted the armed robbery was his idea, he drove the codefendant to the bank, and gave him the window washer handle. "'To constitute armed robbery the robber must be armed with an article which is in fact a dangerous weapon --  a gun, knife, bludgeon, etc., or some article harmless in itself, but used or fashioned in a manner to induce the reasonable belief that the article is a dangerous weapon.'" Here, the victim stood outside a bank at night, holding a moneybag, when the codefendant struck her from behind and demanded the bag. The victim turned around and saw the man holding a stick and he then forced her to the ground. This was sufficient to find there was sufficient evidence of a "dangerous weapon." The court affirmed defendant's conviction, but vacated his sentence, and remanded for resentencing because the trial court erred in sentencing him as a fourth habitual offender.

 

Issues: Whether the trial court properly denied defendant's motion for a directed verdict for the counts related to possession of VIN plates and attempted UDAA; MCL 750.415(5); People v. Hill; People v. Nunez; Landon v. Titan Ins. Co.; People v. Thousand; People v. Fetterley; Sufficiency of the evidence to convict defendant of breaking or entering a vehicle causing damage; People v. Cline; People v. Wilkens; People v. Toole; Whether defendant was denied a "jury of his peers"; People v. McKinney; People v. Diapolis Smith; Whether the trial court should have sua sponte made a Batson challenge; People v. Bell; Evidentiary issues related to exhibits; MRE 401; People v. Knox; People v. McGhee; People v. Unger; Sentencing comments by the trial court prior to conviction; Applicability of People v. Cobbs; Ineffective assistance of counsel; People v. Davenport; People v. LaVearn; People v. Davis

Court: Michigan Court of Appeals (Unpublished)

Case Name: People v. Sanders

e-Journal Number: 44132

Judge(s): Per Curiam - Davis, Whitbeck, and Shapiro

 

There was sufficient evidence, inter alia, to convict the defendant of breaking or entering a vehicle causing damage based on eyewitness testimony and testimony by the owner of the vehicle to prove the damage occurred when he broke into the vehicle. At about 1:30 AM, the eyewitness, D, witnessed a red Explorer drive slowly through the apartment complex's parking lot. The vehicle stopped and defendant got out via the passenger door. He walked to a Plymouth, circled around it, went back to the Explorer, and got something. He walked back to the Plymouth's passenger door and tried to open the lock. When D saw this he called the police. Defendant succeeded in getting the door open and entering the vehicle. The police arrived, defendant left the Plymouth and headed to the Explorer. The officer saw him walk to the passenger door of the Explorer. He ordered him to stop and step to the rear of the Explorer, when the officer heard something fall to the ground. A screwdriver was found in the area where he was standing. A search of him revealed a small black flashlight and a pair of pliers. There were two other persons in the Explorer. They were arrested for having open intoxicants in the vehicle and the Explorer was impounded. The registered owner of the Explorer was not present. Another officer arrived and conducted a search of the Explorer. In the center console, he found three State of Michigan certificates of title, a VIN plate, a federal certification sticker, and a paint label all wrapped in a paper towel. The items were for the same Chrysler vehicle. The prosecution's theory was the defendant was involved in a "retagging" enterprise, where people buy a car for minimal cost at a junkyard and remove its VIN tags. They then steal a car closely matching the type of car and transfer the junkyard VIN tags onto the stolen vehicle. The owner of the Plymouth was located in the apartment complex. He testified he was the owner, saw the passenger door lock had a hole in it, and identified scratches to the door panel which were not present before. The trial court properly denied defendant's motion for directed verdict and the jury found him guilty on all three counts. Affirmed.

 

Issues: Modification of sentences pursuant to 18 USC § 3582(c)(2); Whether a district court modifying a sentence pursuant to § 3582(c)(2) has authority under United States v. Booker to reduce a sentence beyond the retroactive USSG amendment range; United States v. Cunningham (7th Cir.); United States v. Hicks (9th Cir.); Amendment 706 (altering the drug quantity table in USSG § 2D1.1 to lower the base offense level for crack cocaine offenses by two levels); Effect of the policy statement provision (§ 1B1.10(b)(2)(A)) stating sentencing courts may not reduce a sentence below the new range; Whether the district court should treat the amended range as advisory in light of Booker and Kimbrough v. United States; 28 USC § 994(u); Braxton v. United States; Whether proceedings under § 3582(c)(2) constitute a full resentencing; § 1B1.10(a)(3); United States v. Carter; United States v. Clark; United States v. Gainous (Unpub. 6th Cir.); Applicability of Booker to § 3582(c)(2) proceedings; Constitutionality of mandatory minimum sentences; Harris v. United States; Standard of review; United States v. Perdue; Statutory construction; Thompson v. North Am. Stainless, LP

Court: U.S. Court of Appeals Sixth Circuit

Case Name: United States v. Washington

e-Journal Number: 44162

Judge(s): Griffin and Siler; Concurring in the judgment - Moore

 

In an issue of first impression the court held pursuant to § 3582(c)(2), a district court is not authorized to reduce a defendant's sentence below the amended USSG range thus, the district court did not err in denying the defendant's motion for a further reduction of his sentence. Defendant was convicted of, inter alia, conspiracy to distribute crack cocaine and carrying a firearm during a drug trafficking crime. The district court determined his total offense level was 38 and his criminal history category was I, resulting in a USSG range of 235 to 293 months' imprisonment on the crack cocaine counts and a 5-year consecutive term of imprisonment on the firearm count. He was sentenced to a total of 295 months. After Amendment 706 was adopted, defendant filed a motion requesting a modification of his sentence pursuant to § 3582(c)(2). Applying the amended drug quantity table, the district court reduced his sentence on the crack cocaine counts to 188 months, the bottom of the amended USSG range. Defendant moved for a further reduction, arguing his sentence was greater than necessary to achieve its purpose under 18 USC § 3553(a). The district court ruled it lacked the authority to further reduce his sentence pursuant to § 3582(c)(2) and USSG § 1B1.10(b)(2)(A). On appeal, defendant argued, inter alia, in considering a motion to modify a sentence pursuant to § 3582(c)(2), the district court should treat the amended USSG range as advisory in light of Booker and Kimbrough, and § 1B1.10(b)(2)(A), which forbids the reduction of a sentence to a term of imprisonment less than the amended range, was an unlawful mandatory sentencing scheme under Booker and Kimbrough. The court noted of the 10 circuit courts to consider the issue, 9 have rejected Booker's application to sentence modifications under § 3582(c)(2) and held § 1B1.10's policy limitation was mandatory. The court agreed, concluding there was no inherent authority for a district court to modify an otherwise valid sentence and a district court's discretion to modify an imposed term of imprisonment was an exception to the general rule. Further, similar to mandatory minimum sentences, "the statutory parameters and restrictions imposed upon judges in reducing otherwise valid sentences do not implicate the Sixth Amendment." When Congress granted the district courts authority to reduce otherwise valid sentences pursuant to § 3582(c)(2), it explicitly restricted judicial discretion by incorporating the Commission's policy statements, which limit the extent of the reduction. Affirmed.

 

Employment & Labor Law

 

This summary also appears under Contracts

 

Issues: Reformation of a covenant not to compete; MCL 445.774a; The trial court's authority to limit the duration and scope of the agreement; Rory v. Continental Ins. Co.; Whether the trial court limited the plaintiff's ability to present its entire damages case; Damages recoverable for breach of contract; Kewin v. Massachusetts Mut. Life Ins. Co.; Speculative damages; Allen v. Michigan Bell Tel. Co.; Limitations on the scope of discovery; MCR 2.302(B)(1); Charter Twp. of Bloomfield v. Oakland County Clerk; Judgment for the plaintiff on the basis of its expert's opinion on the amount of damages; Lewis v. LeGrow

Court: Michigan Court of Appeals (Unpublished)

Case Name: Grigg Box Co. v. Michigan Box Co.

e-Journal Number: 44131

Judge(s): Per Curiam - Davis, Whitbeck, and Shapiro

 

The trial court did not clearly err in concluding the 3-year duration of the covenant not to compete was unreasonable, it was also unreasonably restrictive in scope, and in limiting the covenant to make it reasonable pursuant to the trial court's power under MCL 445.774a. The statute governs non-compete agreements between employers and employees in Michigan. The agreement at issue was between plaintiff and defendant-Gentinne. The trial court limited the duration of the agreement to 18 months, and limited its scope to prohibit Gentinne from actually selling (as opposed to only soliciting the sale of) wooden boxes and pallets to plaintiff's exclusive customers within the 18-month period, in order to make the agreement reasonable. After a bench trial on the issue of damages for Gentinne's breach of the agreement (which the trial court determined was induced by defendant-Fontana Forest Products), the trial court awarded plaintiff $37,966, representing plaintiff's financial expert's quantification of its lost profits arising from the breach of the agreement (as limited by the trial court). Plaintiff argued, inter alia, the trial court erred in reforming the agreement and thus, improperly limited its damages. The court disagreed and held the trial court properly exercised its authority under MCL 445.774a to limit the restrictive covenant to prohibit Gentinne from selling Fontana's wood products to plaintiff's exclusive customers for 18 months. The court rejected plaintiff's claim the trial court erroneously inserted a "damages cap" into the agreement. "The trial court did not impose a 'damages cap,' but rather limited the agreement to prohibit Gentinne from making actual sales to plaintiff's customers during the 18-month period in order to make the agreement reasonable under the circumstances." Affirmed.

 

Litigation

 

This summary also appears under Business Law

 

Issues: Plaintiff's claims against his former employer seeking indemnification for legal expenses incurred in successfully defending a prior suit against him under the Commodities Exchange Act (CEA)(7 USC § 1 et seq.); Whether the district court properly dismissed the plaintiff's case finding it was preempted by federal law; Subject matter jurisdiction; Bender v. Williamsport Area Sch. Dist.: Whether a limited liability company (LLC) is a citizen of its states of organization and principal place of business; Carden v. Arkoma Assocs.; Homfeld II, L.L.C. v. Comair Holdings, Inc. (6th Cir. Unpub.); Hicklin Eng'g L.C. v. Bartell (7th Cir.); Caudill v. North Am. Media Corp.; Dismissal of claim under Fed.R.Civ.P. 12(b)(6); Biegas v. Quickway Carriers, Inc.; Ascroft v. Iqbal; Whether a state law right to indemnification is preempted by the CEA; King v. Gibbs (7th Cir.); The Commodity Futures Trading Commission (CFTC)

Court: U.S. Court of Appeals Sixth Circuit

Case Name: Delay v. Rosenthal Collins Group, LLC

e-Journal Number: 44163

Judge(s): Kethledge, Sutton, and White

 

Addressing subject matter jurisdiction as it relates to a LLC and concluding when diversity jurisdiction is invoked in a case in which a LLC is a party, the court needs to know the citizenship of each member of the company and each "sub-member" as well, the court held the parties were completely diverse and it had jurisdiction over the case. The court further held federal law did not preempt a state-law indemnification right but its holding did not address whether the right existed in the first place and since the district court did not discuss the indemnification claim, the court vacated its judgment and remanded for further proceedings consistent with its opinion. According to the complaint, defendant-RCG is a "futures commission merchant" operating numerous trading desks on the floor of the Chicago Board of Trade and the Chicago Mercantile Exchange. Beginning in 2002, plaintiff worked as the manager of RCG's branch in Columbus, Ohio. He was fired in September 2005. Later, the CFTC filed a civil complaint against him in federal court alleging he had violated several provisions of the CEA. He prevailed in the suit after a bench trial. Plaintiff sued RCG in state court asserting a claim for indemnification for his expenses in defending the CFTC's claim and a claim RCG had breached his employment contract by failing to give him 90 days notice before firing him. RCG removed the case to federal court on diversity grounds and moved to dismiss the claims. The district granted the motion to dismiss as to the indemnification claim, but denied it as to the contract claim. The parties settled the contract claim which was dismissed with prejudice, clearing the way for the appeal. The court concluded Congress did not intend to displace the state-law indemnification rights, if any, of parties found not to have violated the CEA and held federal law does not preempt a state-law indemnification right. The issue of whether plaintiff can state an indemnification claim under state law appeared to be complex. The court opined the best course was to first allow the district court to analyze the various issues.

 

This summary also appears under Business Law

 

Issues: Class action claims under the Private Securities Litigation Reform Act (PSLRA) alleging defendants-corporate officers committed fraud in violation of § 10b of the Securities and Exchange Act (SEA)(15 USC § 78j) and Rule 10b-5 (17 CFR 240.10b-5); Zaluski v. United Am. Healthcare Corp.; Stoneridge Inv. Partners, LLC v. Scientific-Atlanta;  Fed.R.Civ.P. 9(b); Frank v. Dana; The "rule of specificity"; Tellabs, Inc. v. Makor Issues & Rights, Ltd.; The dispute with United Health Group (UHG); "Materiality"; Basic, Inc. v. Levinson; Rubin v. Schottenstein, Zox & Dunn; In re Ford Motor Co. Sec. Litig.; "Safe harbor"; Helwig v. Vencor, Inc.; "Corporate puffery"; San Leandro Emergency Med. Group Profit Sharing Plan v. Phillip Morris Cos. (2nd Cir.); Medicare Part D implementation; Pleading "loss causation"; Dura Pharms., Inc. v. Broudo; Tricontinental Indus., Ltd. v. PricewaterhouseCoopers, LLP (7th Cir.); Whether plaintiffs failed to plead loss causation under § 10b as to Omnicare's alleged misstatements premised on non-compliance with generally accepted accounting principles (GAAP); Omnicare's claims of "legal compliance"; In re Sofamor Danek Group, Inc.; Kushner v. Beverly Enters., Inc. (8th Cir.); Violation of § 11 of the SEA based on Omnicare's alleged GAAP abuses; Applying Rule 9(b); ACA Fin. Guar. Corp. v. Advest, Inc. (1st Cir.)

Court: U.S. Court of Appeals Sixth Circuit

Case Name: Indiana State Dist. Council of Laborers & Hod Carriers Pension & Welfare Fund v. Omnicare, Inc.

e-Journal Number: 44113

Judge(s): Mills, Daughtrey, and Gilman

 

Concluding the plaintiffs seized on "a few vague statements from management," to "try to turn bad corporate news into a securities class action," the court held since the PSLRA forbids "such alchemy," it affirmed the district court's dismissal, but reversed its disposition as to the claims brought under the Securities Act of 1933 (15 USC § 77k). Defendant-Omnicare, the nation's largest provider of pharmaceutical care for the elderly, handles medication distribution for nearly 1.5 million patients in most states and Canada. Omnicare's pharmacy services generated $5.3 billion in net sales in 2005. The plaintiff class consists of Omnicare investors who purchased securities between August 3, 2005 and July 27, 2006. The Laborers Council was the lead plaintiff under the PSLRA. It purchased Omnicare securities during December 2005 and January 2006, and sold all of them at the end of January 2006.  Also named as individual defendants were Omnicare officers and board members. Plaintiffs alleged defendants committed fraud in violation of § 10(b) of the SEA and Rule 10b-5. They alleged liability of the officers under § 20(a), and liability of all defendants under § 11 of the SEA. The § 10(b) fraud claims were related to (1) Medicare Part D preparedness, (2) a contract dispute with UHG, (3) violations of GAAP, and (4) the legality of Omnicare's alleged drug recycling and substitute drug programs. The claim under §11 also related to the alleged GAAP violations. As to the UHG dispute, the court held the complaint failed to allege a material misstatement or omission. As to Part D implementation, the court held "loss causation" was not adequately pleaded. As to the alleged GAAP violations, the court held the complaint did not suggest the alleged violations were ever recognized or revealed to the market, thus, loss causation was lacking. Finally, as to Omnicare's claims of legal compliance, the court held the complaint did not sufficiently establish defendants actually knew the "legal compliance" statements were false when made. "Nor did the generic claim of lawfulness, in the absence of any specifics, require the disclosure of the allegedly 'illegal' activities." The court also held, inter alia, none of plaintiffs' other claims had merit except the court reversed and remanded the district court's dismissal of the § 11 claim.

 

This summary also appears under Negligence & Intentional Tort

 

Issues: Negligence claims against an auto repair shop (defendant-Adrian Dodge); Applicability of res judicata; Richards v. Tibaldi; Adair v. State; Whether the facts and evidence essential to the plaintiff's negligence case were identical to the facts and evidence essential to her prior small claims case; In re Hamlet (After Remand); Applicability of collateral estoppel; People v. Gates; Storey v. Meijer, Inc.; Ditmore v. Michalik; Eaton County Rd. Comm'rs v. Schultz; Detroit v. Qualls; Whether there was a genuine issue of material fact Adrian Dodge owed plaintiff a "duty"; Rakowski v. Sarb; Terrell v. LBJ Elecs.; Schenk v. Mercury Marine Div.; Schanz v. New Hampshire Ins. Co.; Evidence Adrian Dodge owed plaintiff a contractual duty to exercise reasonable care in inspecting and repairing her vehicle; Fultz v. Union-Commerce Assocs.

Court: Michigan Court of Appeals (Unpublished)

Case Name: Webb v. David Eric Williams, L.L.C.

e-Journal Number: 44123

Judge(s): Per Curiam - Murphy, Meter, and Beckering

 

The trial court erred in granting the defendant-auto repair shop (Adrian Dodge) summary disposition in this negligence case because neither res judicata nor collateral estoppel applied and a genuine issue of material fact existed about the "duty" (if any) Adrian Dodge owed the plaintiff to exercise reasonable care in inspecting and repairing her vehicle. Plaintiff hit a large object in the road while driving her vehicle, which sustained lower, front-end damage. She reported the accident to her insurer and it was towed to Adrian Dodge for repairs. After she picked the vehicle up, she complained to Adrian Dodge the vehicle vibrated when driven and there was no vibration before the accident. She testified, inter alia, an Adrian Dodge employee told her the tires were out of balance. When the vibration worsened, she eventually took the vehicle to a tire shop and she was told there was damage to the front axle and a motor mount was loose. Plaintiff sued Adrian Dodge in small claims for failing to complete fixing the damage to her vehicle caused by the accident. The magistrate entered a judgment for no cause of action. Less than two months after plaintiff filed her small claim, she lost control of the vehicle when it began to shake, it veered off the road, and flipped over, causing her severe injuries. A mechanic, W, who inspected the vehicle a month later concluded the accident resulted from a tie rod socket disengaging from a ball stud, which was attached to a steering knuckle, causing a loss of steering control. W concluded the damage occurred in the initial accident, a proper inspection of the steering system would have revealed it, and the steering/suspension system should have been properly checked if plaintiff complained of vibration. The court held res judicata did not bar plaintiff's negligence claim against Adrian Dodge "because the claim was not and could not have been resolved in the small claims proceeding." Further, the "facts and evidence essential to plaintiff's negligence action were not identical to the facts and evidence essential to the prior action." Collateral estoppel also did not bar her claim because the issue of Adrian Dodge's duty to plaintiff "was not actually and necessarily determined by the small claims magistrate." Further, a genuine issue of material fact existed as to "the existence and scope of Adrian Dodge's duty to plaintiff." There was evidence allowing a reasonable jury to find Adrian Dodge undertook inspections of plaintiff's vehicle to discover the reason for the complained-of vibration and thus, it owed her a duty to exercise reasonable care in inspecting and/or repairing it. There was also evidence Adrian Dodge owed her "a contractual duty to exercise reasonable care in inspecting and repairing her vehicle . . . ." Reversed and remanded. 

 

Negligence & Intentional Tort

 

This summary also appears under Litigation

 

Issues: Negligence claims against an auto repair shop (defendant-Adrian Dodge); Applicability of res judicata; Richards v. Tibaldi; Adair v. State; Whether the facts and evidence essential to the plaintiff's negligence case were identical to the facts and evidence essential to her prior small claims case; In re Hamlet (After Remand); Applicability of collateral estoppel; People v. Gates; Storey v. Meijer, Inc.; Ditmore v. Michalik; Eaton County Rd. Comm'rs v. Schultz; Detroit v. Qualls; Whether there was a genuine issue of material fact Adrian Dodge owed plaintiff a "duty"; Rakowski v. Sarb; Terrell v. LBJ Elecs.; Schenk v. Mercury Marine Div.; Schanz v. New Hampshire Ins. Co.; Evidence Adrian Dodge owed plaintiff a contractual duty to exercise reasonable care in inspecting and repairing her vehicle; Fultz v. Union-Commerce Assocs.

Court: Michigan Court of Appeals (Unpublished)

Case Name: Webb v. David Eric Williams, L.L.C.

e-Journal Number: 44123

Judge(s): Per Curiam - Murphy, Meter, and Beckering

 

The trial court erred in granting the defendant-auto repair shop (Adrian Dodge) summary disposition in this negligence case because neither res judicata nor collateral estoppel applied and a genuine issue of material fact existed about the "duty" (if any) Adrian Dodge owed the plaintiff to exercise reasonable care in inspecting and repairing her vehicle. Plaintiff hit a large object in the road while driving her vehicle, which sustained lower, front-end damage. She reported the accident to her insurer and it was towed to Adrian Dodge for repairs. After she picked the vehicle up, she complained to Adrian Dodge the vehicle vibrated when driven and there was no vibration before the accident. She testified, inter alia, an Adrian Dodge employee told her the tires were out of balance. When the vibration worsened, she eventually took the vehicle to a tire shop and she was told there was damage to the front axle and a motor mount was loose. Plaintiff sued Adrian Dodge in small claims for failing to complete fixing the damage to her vehicle caused by the accident. The magistrate entered a judgment for no cause of action. Less than two months after plaintiff filed her small claim, she lost control of the vehicle when it began to shake, it veered off the road, and flipped over, causing her severe injuries. A mechanic, W, who inspected the vehicle a month later concluded the accident resulted from a tie rod socket disengaging from a ball stud, which was attached to a steering knuckle, causing a loss of steering control. W concluded the damage occurred in the initial accident, a proper inspection of the steering system would have revealed it, and the steering/suspension system should have been properly checked if plaintiff complained of vibration. The court held res judicata did not bar plaintiff's negligence claim against Adrian Dodge "because the claim was not and could not have been resolved in the small claims proceeding." Further, the "facts and evidence essential to plaintiff's negligence action were not identical to the facts and evidence essential to the prior action." Collateral estoppel also did not bar her claim because the issue of Adrian Dodge's duty to plaintiff "was not actually and necessarily determined by the small claims magistrate." Further, a genuine issue of material fact existed as to "the existence and scope of Adrian Dodge's duty to plaintiff." There was evidence allowing a reasonable jury to find Adrian Dodge undertook inspections of plaintiff's vehicle to discover the reason for the complained-of vibration and thus, it owed her a duty to exercise reasonable care in inspecting and/or repairing it. There was also evidence Adrian Dodge owed her "a contractual duty to exercise reasonable care in inspecting and repairing her vehicle . . . ." Reversed and remanded. 

 

Probate

 

This summary also appears under Attorneys

 

Issues: The trial court's order surcharging the defendant-attorney personally for monies he failed to ensure were properly deposited in a fiduciary account for the protected individual's benefit; Whether the trial court had subject-matter jurisdiction; In re Hatcher; MCL 700.1302(c); MCL 700.1303(1)(h-i); Applicability of the doctrine of res judicata; Energy Reserves, Inc. v. Consumers Power Co.; Harvey v. Harvey; Labor Council, MI Fraternal Order of Police v. City of Detroit; Whether there was any authority under which the trial court could sanction the attorney; Effect of the fact the "client" effectively included the estate and not just the PR; Steinway v. Bolden; MCR 8.122

Court: Michigan Court of Appeals (Published)

Case Name: In re Estate of Calvin Graves

e-Journal Number: 44166

Judge(s): Davis, Whitbeck, and Shapiro

 

Concluding there was no genuine issue of material fact the defendant-attorney gave the protected individual's (Calvin) settlement money to the wrong person, he failed to execute his duty to refrain from disgorging the money to unauthorized third parties, and as a result the money was never received into Calvin's estate, the court held the trial court's ruling the attorney was liable for the surcharge against him was correct. Calvin was injured in an auto accident when he was two years old. His mother and next friend, defendant-Graves, filed a personal injury suit and a petition with the trial court to be appointed as Calvin's conservator. The trial court issued letters of conservatorship to Graves containing restrictions, including a requirement ownership of funds received "must be in the conservator as fiduciary for the minor." Graves was appointed Calvin's conservator. The attorney received a "Notice to Attorney of Duties Under Conservatorship of a Minor," which included the instruction he must accompany the fiduciary to the bank, etc. to deposit funds received in an insured account or CD identifying the account as a fiduciary account. The trial court later approved a settlement of the personal injury case for a total of $6,122.70. The same day, the attorney issued two checks from his client trust account, payable directly to Graves individually. She cashed both checks, and they were not deposited into any sort of account for Calvin's benefit. On appeal, the attorney argued, inter alia, there was no authority under which the trial court could sanction him because he did not violate any order, statute, rule, or other law. The court agreed he did not violate any court order it could identify, noting the "notice to attorney of duties" was a clear directive, but it was a notice, not an order. However, because Graves was a PR, the attorney's "client" effectively included the estate, not just the fiduciary in her personal capacity, and as a result, he was subject to a proceeding to surcharge pursuant to MCR 8.122 by a "replacement" fiduciary. A court is permitted to impose a surcharge for unauthorized acts, and "the fulcrum" of the attorney's liability was "he engaged in an unauthorized act by issuing Calvin Graves' money to a person other than Calvin Graves or Calvin Graves' conservator." Although Graves was Calvin's conservator at the time, "the checks were not made out to her in that capacity." Thus, "they were simply made out to an unauthorized third party, resulting in Calvin Graves' estate losing the money altogether." The court also rejected the attorney's subject matter jurisdiction and res judicata arguments. Affirmed.

 

Tax

 

Issues: Foreclosure; Challenge to the trial court's order setting aside a prior forfeiture; Whether the trial court had subject-matter jurisdiction to decide whether the property was exempt or whether the Michigan Tax Tribunal had exclusive jurisdiction; The General Property Tax Act (GPTA)(MCL 211.1 et seq.); In re Petition by Wayne County Treasurer for Foreclosure of Certain Lands for Unpaid Prop. Taxes; The Tax Tribunal Act (MCL 205.701 et seq.); Wikman v. City of Novi; MCL 205.731(a); MCL 211.78h; MCL 211.78k(2)(c); MCL 205.707; Reading statutes in pari materia; People v. Webb; Forfeiture under MCL 211.78g(1); MCL 211.7s (exemption for houses of public worship, etc.); Effect of the existence of factual issues requiring the tribunal's expertise; Michigan Consol. Gas Co. v. China Twp.; Joy Mgmt. Co. v. Detroit; State Treasurer v. Eaton; Grosse Ile Comm. for Legal Taxation v. Grosse Ile Twp.

Court: Michigan Court of Appeals (Published)

Case Name: In re Petition of the Wayne County Treasurer

e-Journal Number: 44164

Judge(s): Davis, Whitbeck, and Shapiro

 

Concluding under the circumstances, resolving the "exemption status" of the parcel of property at issue involved the kind of factual issues requiring the Tax Tribunal's expertise and the petitioner-property owner's challenge was a direct challenge to a tax assessment per se, the court held the case fell squarely within the Tax Tribunal's exclusive jurisdiction. Thus, the court reversed the trial court's order setting aside the forfeiture and dismissing the foreclosure action, and remanded the case to the trial court. The petitioner owned a parcel of property, which has a single tax assessment identity but contains three lots, consisting of a church, an activity center, and an outreach center. The respondent-county treasurer assessed taxes against the property for 2004, which apparently included delinquent sewerage and water charges. The basis for the assessment was the outreach center, which was leased to a private party at least until 2003. The treasurer filed this foreclosure action in 2006 under the GPTA. The petitioner raised several objections to entry of a foreclosure judgment and petitioned to set aside the past forfeiture. It argued, inter alia, the property was used for religious purposes and thus, was exempt from property taxes under the "houses of public worship" exemption in MCL 211.7s. The treasurer argued the outreach center fell outside the MCL 211.7s exemption. The only issue on appeal was whether the trial court had subject-matter jurisdiction to decide if the property was exempt. The treasurer argued the Michigan Tax Tribunal had exclusive jurisdiction, and the court agreed. The court noted the "'need to preserve the tribunal's exclusive jurisdiction is especially great where . . . factual issues requiring the tribunal's expertise are present.'" The petitioner's argument was not "the tax was assessed pursuant to an illegal statute, but rather that the factual circumstances make the tax assessment illegal under unchallenged statutes." Its challenge was "directly to the validity of the tax assessment itself," and not "on peripheral issues relevant to enforcing a tax assessment." Similar to the court in State Treasurer, the court concluded the Tax Tribunal provided the exclusive forum to determine whether the property was exempt from property tax. Reversed and remanded.

 

Termination of Parental Rights

 

Issues: The respondent-mother's challenge to the termination of her parental rights under  § 19b(3)(1) where her rights to another child were voluntarily terminated under the Adoption Code; Termination justified under § 19b(3)(m); The best interests of the child; MCL 712A.19b(5)(as amended by 2008 PA 199 effective July 11, 2008); MCR 3.977(J); In re JK; Opinion testimony as to the risk of HIV transmission; In re Utrera; Purpose for which the evidence was offered; People v. Sabin (After Remand)

Court: Michigan Court of Appeals (Published)

Case Name: In re Jones

e-Journal Number: 44167

Judge(s): Owens, Talbot, and Gleicher

 

While the trial court clearly erred in terminating the respondent-mother's parental rights to her son under § 19b(3)(1), the error was harmless because termination was fully justified under § 19b(3)(m) ("parent's rights to another child were voluntarily terminated following the initiation of proceedings under § 2(b) of this chapter . . .  "), the same judge terminated respondent's parental rights to the prior child after the voluntary release of those rights under the Adoption Code, and since a court may take judicial notice of its own files and records, it was without question termination of respondent's rights to this child was fully justified under § 19b(3)(m). Respondent did not challenge whether sufficient evidence supported the termination, but argued she was unwilling to concede a statutory basis for termination existed. Although her parental rights to her daughter were previously terminated, the termination was not "as a result of proceedings under § 2(b) of this chapter." Proceedings under § 2(b) were initiated as to the daughter, the child was made a temporary ward of the court after adjudication, and a supplemental petition seeking termination of both respondent's and the father's parental rights was filed. Facing involuntary termination, both parents instead voluntarily released the daughter to the DHS under the Adoption Code. Their rights were then terminated and the child was committed to the DHS. After the termination, the trial court attempted to again terminate their rights to the daughter, make the child a permanent ward of the court, and commit the child to the DHS, this time under the Juvenile Code, giving as the legal reason the parents' voluntary release of their parental rights under the Adoption Code. This attempted termination had no effect and was clearly improper, as the parents no longer had any parental rights to be terminated where they were previously terminated under the Adoption Code. Once a parent voluntarily releases a child to the DHS or to a child-placing agency under the Adoption Code, the release is accepted by the trial court, and the trial court enters an order terminating the parent's rights, the parent no longer has any parental rights subject to termination under the Juvenile Code. Thus, the trial court erroneously terminated respondent's parental rights to the child in this case under § 19b(3)(1). The court also held respondent's other issues had no merit. Affirmed.

 

Issues: Termination pursuant to §§ 19b(3)(a)(ii), (c)(i), (g), and (j); Child's best interests; In re Trejo Minors

Court: Michigan Court of Appeals (Unpublished)

Case Name: In re Robinson-Banks

e-Journal Number: 44106

Judge(s): Memorandum - Fort Hood, Sawyer, and Donofrio

 

The trial court did not clearly err in determining §§ 19b(3)(c)(i), (g), and (j) were established by clear and convincing evidence and in terminating the respondent-mother's parental rights to her minor child. The child came into care in September 2006 because respondent had a substance abuse problem. While respondent was offered services to help her achieve sobriety, she continued to use drugs as shown by positive drug screens and a contempt citation. She did not obtain a substance abuse assessment until June 2007. She began the recommended outpatient treatment in July 2007 but dropped out the next month. She did not participate in services again until April 2008, when she again tested positive for marijuana. After she tested positive for opiates in May 2008, she again dropped out of services and she had not completed substance abuse treatment when the supplemental petition was filed in January 2009. The trial court also did not err in finding termination of respondent's parental rights was in the child's best interests in light of the fact respondent was unable to resolve her substance abuse problem, the length of time the child was out of her care, and her failure to maintain regular contact with the child while the case was pending. Affirmed.

 

Issues: Termination pursuant to § 19b(3)(j); In re Utrera; In re Trejo Minors

Court: Michigan Court of Appeals (Unpublished)

Case Name: In re Ruiz

e-Journal Number: 44109

Judge(s): Memorandum - Fort Hood, Sawyer, and Donofrio

 

The trial court did not clearly err in determining § 19b(3)(j) was established by clear and convincing evidence and in terminating the respondent-mother's parental rights to her three minor children. The two girls were previously made court wards in part because respondent could not protect them or herself from domestic violence. Despite participating in services to help her end her victimization and to protect the children, she refused to recognize she had to put their needs above her own. "She maintained a relationship with her abusive partner, became pregnant by him, and lied to try to conceal the relationship when it was discovered just a month after" the trial court ended its jurisdiction in the prior case. The court held considering the fact "respondent was willing to maintain a relationship with an abusive partner despite having received extensive services designed to enable her to free herself from further victimization" and thus, also protect the children, the trial court did not clearly err in determining the children were likely to be harmed if placed in her home. Affirmed.

 

Issues: Termination pursuant to §§ 19b(3)(g) and (j); Whether termination of the respondents-parents' parental rights was premature; In re Terry; Child's best interests; In re Trejo Minors

Court: Michigan Court of Appeals (Unpublished)

Case Name: In re Whipple

e-Journal Number: 44103

Judge(s): Per Curiam - Saad, O'Connell, and Zahra

 

The trial court did not clearly err in determining §§ 19b(3)(g) and (j) were established by clear and convincing evidence as to both respondents-parents and in terminating their parental rights to their minor child. The child suffered a severe head injury resulting in a subdural hematoma and retinal hemorrhaging when he was about seven months old. The injury was found to be nonaccidental, but the underlying cause and the person responsible were never determined because several people cared for him during the period when the injury could have been inflicted. The evidence indicated both respondents were young, inexperienced parents, their relationship was marked by domestic violence and substance abuse, and they relied on friends and relatives for housing and support. The respondent-mother was diagnosed with bipolar disorder, for which she did not regularly seek treatment. The court held in light of the respondents' circumstances and the serious injury already inflicted on the child, the DHS was justified in seeking termination of respondents' parental rights at the initial dispositional hearing and in not providing services toward reunification. Further, the "evidence of the child's severe injury and his exposure to an environment marked by domestic violence and substance abuse showed" the respondents failed to provide proper care and custody. They were both unemployed, continued to depend on others for housing and support, and "minimized the seriousness of their domestic violence and substance abuse issues." According to a doctor, they both were inclined to place their own interests ahead of the child's interests, and the mother lacked the motivation to improve her circumstances. The court held termination was warranted under § 19b(3)(g), and even stronger evidence supported termination under § 19b(3)(j). While the trial court was unable to find either respondent was directly responsible for the child's severe head injury, their "unstable circumstances and the various issues in their lives contributed to an environment" placing the child at risk of more harm. Affirmed.

 

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