Jennifer Dukarski Fishman Stewart Matthew W. Frank Cynthia Haffey Michael D. Hanchett Mary Massaron Megan Mitchell Ryan C. Washburn
Providing summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit. Over 60,000 cases summarized to date.
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Workplace negligence action; Whether the exclusive remedy provision of the Worker’s Disability Compensation Act (WDCA) bars an employee for a subcontractor from bringing a negligence action against another subcontractor; MCL 418.131; Effect of an owner-controlled insurance program (OCIP) policy; MCL 418.621(3); Whether MCL 418.171 applied; Burger v Midland Cogeneration Venture; Security for payment of compensation required under the WDCA; MCL 418.611
The court held that the trial court erred by granting summary disposition for defendants-general contractor (Barton Malow) and subcontractor (Saylor’s). Thus, the court reversed, concluding plaintiff may “recover in tort against defendants because he was employed only by” non-party-subcontractor-Universal Glass. Plaintiff, who worked as a window installer on the project, was injured when a Saylor’s employee caused a large piece of fireproofing material to land on him. He sued defendants for his injuries. The trial court granted summary disposition for defendants, rejecting plaintiff’s argument that the WDCA’s exclusive remedy provision did not apply because he was employed by Universal Glass, not Saylor’s or Barton Malow. On appeal, the court agreed with plaintiff’s position. “Barton Malow, Saylor’s, and Universal Glass all provided WDCA-compliant insurance via the policy that” the project owner, non-party Bedrock Management, procured. “Defendants’ position would suggest that a potential claimant, for the purposes of the exclusive-remedy position, is ‘employed’ by each entity that uses the same insurer as the potential claimant’s actual employer, but this clearly was not the Legislature’s intent.” And MCL 418.171 did “not apply to this case because all of the relevant contractors and subcontractors were in compliance with Section 611 by virtue of Bedrock Management’s OCIP policy.” Further, while “there have been changes with respect to wrap-up policies versus OCIP policies, the application of Section 171 remains unchanged.”
Preemption under the Fair Credit Reporting Act (FCRA); 15 USC § 1681t(b)(1)(F); State-law defamation claim; Scott v First Nat’l Bank; Department of Transportation (DOT) regulations; 49 CFR §§ 391.23(a)(2) & 391.23(l); 49 USC § 508; Discovery
The court held that plaintiff-McKenna’s state-law defamation claim was preempted under the FCRA. He was a truck driver for defendant-Dillon Transportation. After McKenna’s tractor-trailer overturned, Dillon fired him. Dillon made a “Drive-a-Check Report” (DAC report) to a nonparty consumer reporting agency (HireRight) “that collects information about truck drivers and then provides that information to employers who are thinking about hiring” them. Dillon informed the agency "that McKenna had an unsatisfactory safety record and noted that he had been involved in an accident—information available to anyone who viewed HireRight’s report. But according to HireRight’s records, no motor carriers have requested McKenna’s DAC report.” And he admitted he could not show that it had been requested by any carrier. The district court granted Dillon summary judgment, ruling that the FCRA preempted McKenna’s state-law claim. It also denied his request for further discovery. On appeal, the court noted that in Scott, it held that “§ 1681t(b)(1)(F) ‘preempts state common law claims involving a furnisher’s reporting of information to consumer reporting agencies.’” McKenna cited a statute related to motor carriers (§ 508) and DOT regulations. Unlike “the FCRA, § 508 does not exempt from suit those ‘who knowingly furnish false information.’” McKenna contended that, given his case involved a motor carrier, his suit could “be brought under this statute.” However, the court explained that even if § 508 covered McKenna, the court could still give both statutes full effect. It held that the two preemption provisions “complement” one another and do not conflict. “One regulates the consumer reporting industry. Another regulates the hiring of commercial drivers.” The court concluded “Dillon can invoke one preemption clause even if it cannot invoke the other.” The court also found that the district court did not err in denying McKenna additional discovery on a new claim. Affirmed.
Sufficiency of the evidence; Second-degree murder; People v Goecke; Malice; People v Robinson; Aiding & abetting; People v Carines; Circumstantial evidence; People v Xun Wang; Ineffective assistance of counsel; Admissibility of a guilty plea that was later withdrawn or vacated; MRE 410(a)(1); Waiver; People v Stevens; Trial strategy
The court held that defendant’s second-degree murder conviction was supported by the evidence, and that defense counsel did not provide ineffective assistance by asking him about his withdrawn guilty plea because he “expressly waived the protections of MRE 410, which would have otherwise prevented evidence of [his] withdrawn plea from being admitted.” He was convicted of second-degree murder on a theory that he shot the victim or aided and abetted in the shooting. On appeal, the court rejected his argument that there was insufficient evidence to prove this theory beyond a reasonable doubt. “[T]he victim was plainly killed by a gunshot wound, and the jury could reasonably conclude both that defendant was the one who shot the victim and that the shooting was done with malice.” Even if he “did not intend to kill the victim by shooting him, malice can be inferred from evidence that defendant, using a gun to shoot the victim, intentionally set in motion a force likely to cause death or great bodily harm.” In addition, if defendant’s accomplice, “rather than defendant, shot and killed the victim, a reasonable trier of fact could still conclude that the victim’s death was within the common enterprise that defendant aided.” Further, so long as “an inference drawn from circumstantial evidence is reasonable, it can be sufficient to support a defendant’s conviction beyond a reasonable doubt. Defendant does not assert that any necessary inference drawn from the circumstantial evidence in this case was unreasonable.” The court also rejected defendant’s claim that he was denied the effective assistance of counsel when defense counsel introduced evidence of defendant’s withdrawn guilty plea. “Defendant signed a special consideration agreement with the prosecution in which he agreed to plead guilty in exchange for a lesser sentence.” Under the language of the agreement, he “consented to statements he made during his guilty plea being used against him in future proceedings, unequivocally waiving the protections afforded to him by MRE 410(a)(1).” As such, after he “withdrew his guilty plea and proceeded to trial, MRE 410(a)(1) no longer constrained the prosecution from bringing up defendant’s guilty plea during trial. It was thus reasonable for defense counsel to address defendant’s guilty plea before the prosecution could. Doing so allowed the defense to get ahead of the issue. It also gave defendant the opportunity to explain why he took the guilty plea—because he was scared. That explanation was not only rational but painted defendant in a sympathetic light.” Affirmed.
Evidentiary rulings; Harmless error; FedRCrimP 52(b); The “deliberate-ignorance” or “ostrich” jury instruction; United States v Matthews; Sentencing; Calculation of the amount of “loss”; The “government-benefits” rule (USSG § 2B1.1 cmt. n.3(F)(ii)); The “credits-against-loss” rule (§ 2B1.1 cmt. n.3(E)(i)); Restitution; The Mandatory Victims Restitution Act; 18 USC §§ 3663A(a)(1) & (c)(1)(B); Forfeiture; Department of Energy (DOE)
The court held that the evidentiary and instructional errors alleged by defendant-Agrawal were harmless given the overwhelming evidence offered by the government and her admission that she intentionally concealed her company’s actual expenditures, confirming “her knowledge of the fraud.” The court also rejected her challenges to her sentence, the restitution award, and the forfeiture decision. Agrawal was convicted of wire fraud, conspiracy to commit wire fraud, and money laundering related to grant money her company received from the DOE. The district court sentenced her to 42 months, varying downward from the Guidelines range. It also ordered her to pay restitution in the amount of $1,048,255 to the DOE and $500,000 to a state, and entered a $1,548,000 forfeiture judgment against her. On appeal, the court first determined that any of the alleged evidentiary and instructional errors were harmless. It explained that her evidentiary challenges focused on the “scienter” requirements of the charged offenses, but “the government presented ‘overwhelming’ evidence that Agrawal acted with the required state of mind.” The court also held that even if the district court erred by giving the “deliberate-ignorance” jury instruction, the harmless-error analysis would again preclude reversal. When “a court tells a jury that it may convict a defendant based on either the defendant’s actual knowledge or the defendant’s deliberate ignorance, courts will find any sufficiency-of-the-evidence problems with the deliberate-ignorance instruction harmless if sufficient evidence showed the defendant’s actual knowledge.” Agrawal could not “argue that the prosecution presented insufficient evidence of her knowledge.” As to her sentencing challenges, she argued the district court erred in applying the commentary’s “government-benefits” rule when calculating the loss amount. But the court agreed with the district court that the DOE would not have awarded her the grant if it had known that about the forged letter.in the grant application. It also rejected her claim that the district court wrongly failed to give her credit under the commentary’s “credits-against-loss” rule, accepting the district court’s finding that the patents on which she relied in making this argument “had a ‘de minimis value[.]’” The court also upheld the district court’s restitution calculations, noting that she “made no independent arguments for reducing the restitution award distinct from her” unsuccessful arguments for reducing the “loss” amount. Her narrow arguments as to the forfeiture judgment likewise failed. Affirmed.
Divorce; Distribution of marital property; Cunningham v Cunningham; Fair & equitable distribution of property; Byington v Byington; “Windfall”; The trial court’s duty to explain any significant departures from congruence; Welling v Welling
The court held that the trial court did not err by finding the parties’ second home was defendant-ex-wife’s separate property, and that the distribution was fair and equitable in light of the facts. At trial, the parties stipulated to the distribution of all assets and liabilities of the marital estate except for the marital home and a second home that was previously owned by defendant’s mother. The trial court awarded defendant the marital home and ordered her to refinance it, remove plaintiff-ex-husband’s name, and pay him for half of the equity. It then awarded the second home to defendant as her separate property. On appeal, the court rejected plaintiff’s argument that the trial court erred by finding the second home was defendant’s separate property and not part of the marital estate. “[W]hile the second home was jointly titled to defendant and plaintiff, and both of their names were on the loans secured by the mortgages, the course of conduct and testimony taken by the parties established that the second home was defendant’s separate property.” Although plaintiff “was a titled owner of the second home, he did not contribute any of his own finances in maintaining or renovating the home.” And defendant’s mother approached her “alone to purchase the second home and discussed with her the intention for defendant to own the home until [her mother] felt ‘more secure’ in her finances.” The court also rejected plaintiff’s claim that the award of the second home to defendant was a “windfall,” and thus, its division of property was not fair or equitable. “The trial court explicitly considered all the factors in its opinion after trial.” It found that the parties’ marriage was a “short-term” marriage and that “plaintiff ‘expended very little effort to obtain the [second home]’ and ‘did nominal projects that would be expected for a son-in-law to help his widowed mother-in-law.’” In addition, “neither party ‘indicated any significant health problems’” and both parties worked and earned similar incomes. Further, defendant “‘convincingly testified’ that plaintiff began taking steroids during the marriage, and as a result, he suffered a significant personality change.” Finally, plaintiff “‘made no credible argument for invasion through need or’” contribution, and the sale of the second home “was ‘an unsophisticated estate planning technique . . . .’” Affirmed.
Interpretation of the No-Fault Act; Whether MCL 500.3114 impacted plaintiff’s eligibility for PIP benefits through the Michigan Assigned Claims Plan (MACP) for injuries arising from an out-of-state car accident; MCL 500.3111; “Against whom an individual may make a claim for benefits”; MCL 500.3172(1)
On remand from the Supreme Court for reconsideration to “address the impact, if any, of MCL 500.3114 on whether” plaintiff-Steanhouse is eligible to claim benefits through defendant-MACP, the court concluded it did not. It reaffirmed “that MCL 500.3172(1) controls the outcome in this case and requires an individual claiming PIP benefits through the MACP to show that the accident giving rise to the claim occurred in Michigan. Steanhouse’s injuries arose from an out-of-state accident, so he is ineligible to claim PIP benefits through the MACP.” The court noted that to understand whether MCL 500.3114 impacted Steanhouse’s eligibility for benefits, one must first look to MCL 500.3111. Looking at MCL 500.3111 alone, the court held that “PIP benefits ‘are payable’ to Steanhouse because he is a Michigan resident who was injured while an occupant of a vehicle involved in an out-of-state accident.” It next looked to MCL 500.3114. According to Steanhouse, “because PIP benefits are payable to him under MCL 500.3111 and because MCL 500.3114(4) provides that he ‘shall claim’ those benefits under the MACP, he is necessarily eligible for PIP benefits through the MACP.” The court found that this “conclusion skips the last step of the analysis. MCL 500.3114(4) instructs that claims for PIP benefits made to the MACP are governed by the provisions of MCL 500.3171 through MCL 500.3175. And these statutory provisions contain their own eligibility requirements.” Thus, being in the “order of priority does not by itself mean that the MACP is obligated to pay benefits, nor does it automatically mean that Steanhouse is eligible for benefits under the MACP’s requirements.” The court noted that “relying on the ‘in this state’ phrase, we previously held that MCL 500.3172(1) ‘requires a claimant seeking benefits through the MACP to show that the accident giving rise to the claim occurred in Michigan.’” As a result, the court held that “defendants were entitled to deny Steanhouse’s claim for benefits because the underlying accident occurred in Ohio.” Steanhouse challenged this interpretation, claiming “that MCL 500.3172(1) has no application to out-of-state accidents; if the accident occurs out of state, MCL 500.3111 and MCL 500.3114(4) control entitlement to benefits through the MACP.” The court disagreed and reaffirmed its prior interpretation. “Under MCL 500.3172(1), a claimant is ineligible for PIP benefits through the MACP when the claimant’s injury arises from an out-of-state accident.” The court held that under “the priority statute, one must look to MCL 500.3171 through MCL 500.3175 to determine whether a claimant is eligible for benefits through the MACP.” It determined that here, “looking to MCL 500.3172(1), Steanhouse is ineligible for PIP benefits because his injury stems from an out-of-state accident.” Reversed and remanded.
“False advertising” claim under the Lanham Act; 15 USC § 1125(a)(1)(B); Pizza Hut, Inc v Papa John’s Int’l, Inc (5th Cir); Whether statements were actionable “statements of fact”
The court held that because plaintiff-FedEx Ground’s (FXG) false-advertising complaint against defendant-Route Consultant failed to allege any false or misleading statement of fact, the district court did not err by dismissing FXG’s false-advertising claim. FXG sued Route Consultant under the Lanham Act’s false-advertising provision and under state law, claiming that Route Consultant publicized nine false or misleading statements about FXG’s business practices, “to foster discontent between FXG and its contractors, which would damage FXG and benefit Route Consultant.” FXG asserted Route Consultant “launched a promotional campaign premised on a ‘fictional crisis’ between FXG and” its contracted service providers (CPSs) to encourage the “CPSs to renegotiate their contracts with FXG, which would in turn allow Route Consultant to position itself as the intermediary for the renegotiations.” The district court ruled that “FXG failed to plausibly allege that Route Consultant made a single false or misleading statement[.]” On appeal, the court noted that for a Lanham Act false-advertising claim, “only statements of fact are actionable. That is, the statement must assert a ‘specific and measurable claim, capable of being proved false or of being reasonably interpreted as a statement of objective fact.’” The court noted that statements of opinion, including “puffery,” are insufficient to support a false-advertising claim. The same is true of statements that qualify as “rhetorical hyperbole.” Reviewing the statements at issue in context, the court held that FXG failed to show “literal falsity” as to some of those that qualified as statements of fact, and it did not try to show they were misleading. The court agreed with the district court that the complaint did not actually plead that other statements of fact were false or misleading, and that others did not qualify as statements of fact. Affirmed.
Service of the summons & supplemental petition seeking termination; MCR 3.902; Substitute service; MCL 712A.13; Jurisdictional defect; In re Atkins; Due process; Allowing an attorney to withdraw; MRPC 1.16(b)(5); Prejudice; Ineffective assistance of counsel; Withdrawal on the day of the termination hearing without notice to respondent
The court held that reversal of the order terminating respondent-mother’s parental rights was required because she was not properly served with the summons and notice of the termination hearing and she was not present at the hearing. Further, the trial court violated her due process rights by permitting her attorney to withdraw at the beginning of the hearing and continuing with it in respondent’s absence when she had not been properly served. Finally, the court found she was denied the effective assistance of counsel. Thus, it vacated the termination order and remanded. There was no evidence in the trial court record that she “was personally served with the summons and the supplemental petition. Moreover, there is no evidence that alternate service was requested or granted.” The court found it was difficult to determine from the record how she “was provided notice, if at all, of the” 7/23 termination hearing. Yet the trial court went forward with it without her presence despite the “obvious failings to serve respondent,” and in addition, permitted her “counsel to withdraw from representation as a result of respondent’s failure to appear. Because respondent was not served in accordance with the requirements of MCL 712A.13 and the court rules, the trial court lacked jurisdiction to terminate her parental rights at the [7/23] termination hearing and, accordingly, plainly erred when it proceeded with the termination proceeding.” The court also agreed with respondent that her right to due process was violated when her attorney was allowed to withdraw. The court noted that “the simple fact that respondent failed to appear was insufficient to demonstrate that representation of her was ‘unreasonably difficult’” for purposes of MRPC 1.16(b)(5). When an attorney seeks to withdraw, the attorney and the trial court both “have an obligation that the client is reasonably informed and given an opportunity to obtain other counsel.” Further, the trial court may not allow “the attorney to withdraw without first determining whether the attorney has good cause to do so. . . . Neither of these requirements were satisfied here[.]” Finally, the court agreed with respondent “that she was denied the effective assistance of counsel when her attorney withdrew his representation of her on the day of the termination hearing and without giving” her notice.