Contract dispute; Contract interpretation; McKenzie v Sykes; Whether the trial court properly allowed the jury to determine the terms of the loan at issue; Whether the loan was payable on demand; Colburn v First Baptist Church & Soc’y of Monroe; Waiver; The Cadle Co v Kentwood; Recoupment; Mudge v Macomb Cnty; Set-off; Roemelmeyer v Roemelmeyer’s Estate

The court held that the trial court did not err by failing to find that a loan from plaintiffs to defendant was a “demand loan” and instead allowing the jury to determine a reasonable period for repayment. It also held that plaintiffs waived the argument as to repayment terms. Finally, it held that the trial court did not err by refusing to allow defendant to use the affirmative defenses of setoff and recoupment to offset the loan award. The parties entered into a stock purchase agreement under which plaintiffs purchased 49% of defendant’s company. They also provided him a loan to pay off company debt. Plaintiffs later sued, alleging fraud as to representations made about the company’s financial condition, as well as breach of fiduciary duty. They also sought to recover the loan money. The jury found defendant was personally liable for the loan, and determined it was to be repaid over 60 months, with an interest rate of 7%. The trial court entered a judgment consistent with the jury’s findings. The court first found that the trial court did not err when it determined that the facts “did not establish a demand loan and that it was for the jury to determine the terms of the loan.” The court also held that plaintiffs waived their claim that “the jury’s verdict—finding that repayment was to be made over 60 months—is not supported by the evidence.” It next rejected defendant’s contention on cross-appeal that the trial court erred by not allowing him to use the doctrines of recoupment or setoff to offset from the loan any amounts representing inventory or accounts receivable that the plaintiff-company allegedly appropriated after assets were transferred to its facility. Under the trial court’s ruling limiting the recoupment defense, because the jury found “plaintiffs did not suffer damages for fraud and did not prove a breach of fiduciary duty, there were no damages against which” he could claim recoupment. As to set-off, “unlike recoupment, which is available when the defendant proves a breach of contract or duty,” the court noted it was not “aware of any authority allowing setoff on the basis of something other than a debt owed.” Thus, it concluded that defendant did not “set forth a cognizable claim for setoff.” Affirmed.

Age & disability discrimination; Jurisdiction; “Final order”; Governmental immunity; The Court of Claims Act (COCA); Failure to comply with MCL 600.6431 when proceeding against a state defendant in the circuit court; Tyrrell v University of MI

The court held that given the conclusions in Tyrrell and its clear and direct application to this case, defendant “was not entitled to governmental immunity from suit based on the claim that plaintiff failed to comply with MCL 600.6431.” Thus, it affirmed the order denying defendant summary disposition. The appeal arose out of allegations of age and disability discrimination made by plaintiff, defendant’s former employee. Defendant argued that “under MCL 600.6431, plaintiff was required to file a notice of intent to sue with the Court of Claims, even though plaintiff brought her claims in circuit court. According to defendant, compliance with MCL 600.6431 is a condition precedent to suing it; thus, if the statute is not followed, the lawsuit must be dismissed.” The court disagreed, noting that in Tyrrell, it recently addressed “the very issue raised by defendant” in this case. The Tyrrell court held that “absent the Legislature conditioning its consent to suit on compliance with the COCA, a plaintiff properly bringing a claim in circuit court against the state or a state defendant to which MCL 600.6431 applies is not required to comply with MCL 600.6431 for his or her claim to proceed in that court.”

Personal jurisdiction; Forum-selection clause; “Of”; The Contract Disputes Act (CDA) (41 USC § 7101 et seq); A “pass-through” or “sponsored” claim; Whether interpreting the forum-selection clause to include state courts would render it meaningless & unenforceable; Judicial estoppel: Nawai Wardak Transportation Company (NWTC); The United States Agency for International Development (USAID)

The court agreed with plaintiff-NWTC that, “by interpreting the forum-selection clause to exclude state courts, the trial court rendered the forum-selection clause nugatory because ‘there is no federal forum with subject-matter jurisdiction over this action.’” But it held that defendants were not judicially estopped from arguing that the forum-selection clause was void or unenforceable. Thus, it vacated the trial court’s order dismissing NWTC’s claims for lack of personal jurisdiction and remanded for consideration of whether the clause was enforceable. The case concerned a subcontract for the supply of fuel to support U.S. government operations in another country. Reviewing the language of the forum-selection clause, the court found that the “dictionary definition of ‘of’ supports that, while Michigan courts may be in the United States, they are not of the United States.” Although defendants stopped short of claiming that the clause was ambiguous, they argued that “the plain language of the forum-selection clause and the circumstances surrounding the formation of the subcontract support that NWTC’s claims had to be filed in a federal court.” Because NWTC and defendant-RMA Afghanistan were subcontractors that had “no direct contact with USAID—the federal executive agency that contracted with the prime contractor in this case—neither can bring a claim under the CDA to remedy any breach of the contract between them.” In addition, “federal courts are courts of limited jurisdiction. Foreign parties such as NWTC and RMA Afghanistan cannot confer subject-matter jurisdiction upon a federal court by merely agreeing to have their disputes resolved in such courts.” Defendants conceded that NWTC could not file a claim in a federal court or file a direct claim under the CDA. But they maintained that “the trial court’s interpretation of the phrase ‘courts of the United States of America’ to refer only to federal courts does not render the forum-selection clause nugatory because NWTC can file a ‘pass-through’ claim.” However, the court concluded that “a pass-through claim does not provide a means to resolve the parties’ dispute because contracting officers have no jurisdiction over disputes between subcontractors.”

Contract dispute; Contract interpretation; McKenzie v Sykes; Whether the trial court properly allowed the jury to determine the terms of the loan at issue; Whether the loan was payable on demand; Colburn v First Baptist Church & Soc’y of Monroe; Waiver; The Cadle Co v Kentwood; Recoupment; Mudge v Macomb Cnty; Set-off; Roemelmeyer v Roemelmeyer’s Estate

The court held that the trial court did not err by failing to find that a loan from plaintiffs to defendant was a “demand loan” and instead allowing the jury to determine a reasonable period for repayment. It also held that plaintiffs waived the argument as to repayment terms. Finally, it held that the trial court did not err by refusing to allow defendant to use the affirmative defenses of setoff and recoupment to offset the loan award. The parties entered into a stock purchase agreement under which plaintiffs purchased 49% of defendant’s company. They also provided him a loan to pay off company debt. Plaintiffs later sued, alleging fraud as to representations made about the company’s financial condition, as well as breach of fiduciary duty. They also sought to recover the loan money. The jury found defendant was personally liable for the loan, and determined it was to be repaid over 60 months, with an interest rate of 7%. The trial court entered a judgment consistent with the jury’s findings. The court first found that the trial court did not err when it determined that the facts “did not establish a demand loan and that it was for the jury to determine the terms of the loan.” The court also held that plaintiffs waived their claim that “the jury’s verdict—finding that repayment was to be made over 60 months—is not supported by the evidence.” It next rejected defendant’s contention on cross-appeal that the trial court erred by not allowing him to use the doctrines of recoupment or setoff to offset from the loan any amounts representing inventory or accounts receivable that the plaintiff-company allegedly appropriated after assets were transferred to its facility. Under the trial court’s ruling limiting the recoupment defense, because the jury found “plaintiffs did not suffer damages for fraud and did not prove a breach of fiduciary duty, there were no damages against which” he could claim recoupment. As to set-off, “unlike recoupment, which is available when the defendant proves a breach of contract or duty,” the court noted it was not “aware of any authority allowing setoff on the basis of something other than a debt owed.” Thus, it concluded that defendant did not “set forth a cognizable claim for setoff.” Affirmed.

Motion to allow defendant to use medical marijuana while on probation; The Michigan Medical Marijuana Act (MMMA) (MCL 333.26421 et seq); Whether revoking probation upon the use of medical marijuana would constitute a “penalty” in violation of MCL 333.26424(a); MCL 333.26427(a) & (e); The Michigan Probation Act (MCL 771.1 et seq); MCL 771.3; Ter Beek v Wyoming; People v Koon; People v Latz; Mootness; Exception for issues of public significance likely to recur yet evade judicial review

In an issue of first impression, the court held that Michigan Probation Act provisions allowing courts “to prohibit a probationer’s MMMA-compliant use of marijuana impermissibly conflict with” the MMMA and are unenforceable. Further, revoking probation upon the MMMA-compliant use of marijuana constitutes a penalty in violation of MCL 333.26424(a). Thus, the court reversed the district court’s order denying defendant’s motion to modify his probation terms to permit him to use medical marijuana. It noted that in several cases not involving probation conditions, it and the Supreme Court have ruled “that the MMMA preempts or supersedes ordinances and statutes that conflict with the MMMA.” In addition, other states with laws like the MMMA “have held that probation terms prohibiting the use of medical marijuana in compliance with medical marijuana laws are unenforceable and illegal under those laws.” Addressing MCL 333.26427(a) and (e), the court noted there was no dispute defendant had a medical marijuana registration card and no indication he “used marijuana in violation of the MMMA.” Thus, MCL 333.26427(a) authorized him to use it. Under the plain language of that statute, and “the holdings in Ter Beek, Koon, and Latz, a statute or provision of a statute that conflicts with a defendant’s right to MMMA-compliant use of marijuana is preempted or superseded by the MMMA.” While MCL 771.3, part of the Michigan Probation Act, allows “a court to impose multiple conditions of probation on” defendants, provisions of that Act “that are inconsistent with the MMMA do not apply to the medical use of marijuana.” In addition, the court concluded that because “probation is a privilege, the revocation of probation is a penalty or the denial of a privilege. Under MCL 333.26424(a) a person is protected from penalty in any manner, or denial of any right or privilege, for the lawful use of medical marijuana. Therefore, a court cannot revoke probation upon the use of medical marijuana that otherwise complies with the terms of the MMMA.” But the court noted the MMMA does not apply to recreational use. Thus, conditions related to this may be imposed, and probation may be revoked for such use, as well as for use “in violation of the MMMA.”

Tribal defense to spear fishing in a closed stream in violation of MCL 324.48715 & MCL 324.48711; The proper legal framework for assessing whether a defendant is entitled to assert tribal status as a defense to state fishing regulations; Mackinac Tribe v Jewell; Whether the Mackinac Tribe is a political successor in interest to a “signatory” tribe to the 1836 & 1855 treaties; United States v State of Washington (9th Cir.) (Washington I & II); Whether a tribe constitutes a treaty-tribe; Treaty-tribe status; Department of Natural Resources (DNR)

In an issue of first impression in Michigan as to the proper legal framework for assessing "whether a defendant is entitled to assert his tribal status as a defense to state fishing regulations,” the court held that “whether the Mackinac Tribe is federally recognized has no bearing on whether it is entitled to treaty fishing rights.” Further, “membership in a modern-day tribe whose members descend from a signatory tribe" does not automatically entitle the modern-day tribe to treaty rights. Thus, the circuit court erred when conditioning defendant’s potential treaty rights on whether his tribe is federally recognized, and the court vacated that order. But because the district court did not evaluate the case under the proper legal framework, which the court adopted in its ruling, it remanded for an evidentiary hearing to allow him “an opportunity to establish by a preponderance of the evidence that his Tribe is a political successor in interest to a signatory tribe of the 1836 treaty.” Defendant is a member of the Mackinac Tribe. In 2018, a DNR “conservation officer cited defendant for spear fishing in a closed stream in violation of MCL 324.48715 and MCL 324.48711.” Defendant claimed that “he was a member of an Indian tribe or band granted hunting and fishing rights by 1836 and 1855 treaties with” the U.S. government. The Mackinac County district court granted his motion upon holding that the Mackinac Tribe was entitled to rights under the relevant treaties. On appeal from the prosecution, “the Mackinac County circuit court reversed on the ground that the Mackinac Tribe was not federally recognized and that federal tribal recognition is a matter for initial determination by the United States Department of the Interior.” The court held that “the Mackinac Tribe is not a ‘signatory’ to the 1836 and 1855 treaties, even though some of its members appear to be descendants of a signatory tribe.” The issue was whether it qualified as a treaty tribe. The court found that whether the “Tribe is federally recognized has no bearing on whether it is entitled to treaty fishing rights.” However, it did not agree that “membership in a modern-day tribe whose members descend from a signatory tribe automatically entitles the modern-day tribe to treaty rights.” The dispositive issue was whether the “Tribe is a political successor in interest to a signatory tribe, entitling defendant to an affirmative defense based on his tribal status.” However, neither lower court addressed this issue. Vacated and remanded.

Motion to allow defendant to use medical marijuana while on probation; The Michigan Medical Marijuana Act (MMMA) (MCL 333.26421 et seq); Whether revoking probation upon the use of medical marijuana would constitute a “penalty” in violation of MCL 333.26424(a); MCL 333.26427(a) & (e); The Michigan Probation Act (MCL 771.1 et seq); MCL 771.3; Ter Beek v Wyoming; People v Koon; People v Latz; Mootness; Exception for issues of public significance likely to recur yet evade judicial review

In an issue of first impression, the court held that Michigan Probation Act provisions allowing courts “to prohibit a probationer’s MMMA-compliant use of marijuana impermissibly conflict with” the MMMA and are unenforceable. Further, revoking probation upon the MMMA-compliant use of marijuana constitutes a penalty in violation of MCL 333.26424(a). Thus, the court reversed the district court’s order denying defendant’s motion to modify his probation terms to permit him to use medical marijuana. It noted that in several cases not involving probation conditions, it and the Supreme Court have ruled “that the MMMA preempts or supersedes ordinances and statutes that conflict with the MMMA.” In addition, other states with laws like the MMMA “have held that probation terms prohibiting the use of medical marijuana in compliance with medical marijuana laws are unenforceable and illegal under those laws.” Addressing MCL 333.26427(a) and (e), the court noted there was no dispute defendant had a medical marijuana registration card and no indication he “used marijuana in violation of the MMMA.” Thus, MCL 333.26427(a) authorized him to use it. Under the plain language of that statute, and “the holdings in Ter Beek, Koon, and Latz, a statute or provision of a statute that conflicts with a defendant’s right to MMMA-compliant use of marijuana is preempted or superseded by the MMMA.” While MCL 771.3, part of the Michigan Probation Act, allows “a court to impose multiple conditions of probation on” defendants, provisions of that Act “that are inconsistent with the MMMA do not apply to the medical use of marijuana.” In addition, the court concluded that because “probation is a privilege, the revocation of probation is a penalty or the denial of a privilege. Under MCL 333.26424(a) a person is protected from penalty in any manner, or denial of any right or privilege, for the lawful use of medical marijuana. Therefore, a court cannot revoke probation upon the use of medical marijuana that otherwise complies with the terms of the MMMA.” But the court noted the MMMA does not apply to recreational use. Thus, conditions related to this may be imposed, and probation may be revoked for such use, as well as for use “in violation of the MMMA.”

Sufficiency of the evidence for an assault by strangulation conviction; MCL 750.84; Sentencing; Scoring of OVs 3, 4, 10, & 13; MCL 777.33(1)(e); “Bodily injury”; MCL 777.34(1)(a) & (2); MCL 777.40(1)(b); “Exploit”; “Domestic relationship”; “Vulnerability”; MCL 777.43(1)(b) & (2)(a)

Holding that there was sufficient evidence to support defendant’s assault by strangulation conviction and that OVs 3, 4, 10, and 13 were properly scored, the court affirmed his conviction and his sentence. He was sentenced as a fourth-offense habitual offender to 108 to 240 months. The victim testified that he “choked and strangled her to the extent that she could not breathe. The prosecution presented” photos of her injuries, which an expert (R) testified “were consistent with the victim’s testimony and with strangulation. The prosecution also presented the text message that reflected defendant’s admission that he choked and hit” her, as well as a witness’s testimony that defendant showed how he had choked her. As to sentencing, the court first held that 5 points were properly assessed for OV 3. “The victim testified that she had a sore throat after a few of the strangulations,” and photos showed bruising around her ear “and an approximately three-inch scratch on” her leg. R opined that the “injuries were consistent with defendant strangling and hitting the victim as the victim (and defendant) described.” The court also upheld the 10-point score for OV 4. The victim testified at the sentencing hearing “that she had nightmares and flashbacks, was scared to walk by herself, and received professional treatment. Feelings of being hurt and unsafe are enough to qualify as serious psychological injuries.” It concluded that 10 points were also properly scored for OV 10, noting the “trial court could have reasonably determined that defendant and the victim were in a domestic relationship.” While she was still married to another man, she was living with defendant, whom she told law enforcement she had been dating for about a month. The evidence also suggested that she “was readily susceptible to persuasion or temptation and that defendant exploited her drug addiction and circumstances.” She returned to his “home after leaving the hospital because she was having drug withdrawals and defendant could supply her drugs.” He then continued abusing her. Finally, the court upheld the 25-point score for OV 13, concluding that “a preponderance of the evidence supported the trial court’s determination that defendant committed three or more crimes against a person in a five-year period.”

Other acts evidence; MRE 404(b)(1); People v Denson; Notice; MRE 404(b)(2); People v Hawkins; Relevance; MRE 401 & 402; Unfair prejudice; MRE 403; People v Dobek; Right to present a defense; People v Unger

The court held that the trial court erred by admitting other acts evidence, and that its admission affected defendant’s substantial rights. He was convicted of CSC II and accosting a child for immoral purposes for allegedly sexually assaulting the complainant, his stepdaughter. On appeal, the court agreed with defendant that evidence of his meth abuse and his alleged physical abuse of the complainant and her mother was inadmissible other acts evidence. The prosecution failed to provide written notice of the physical abuse evidence as required by MRE 404(b)(2), and this was plain error. The court concluded that “in light of the trial court’s affirmative statement that it would have excluded the evidence, there is more than a reasonable probability that the evidence would have been excluded at a pretrial hearing if the prosecutor had provided the mandated notice . . . .” In addition, “the trial court stated that if there had been a timely objection to the evidence” of his meth use and that he “had introduced the complainant’s mother to it, then the court would have sustained the objection.” Further, even if notice had been given, the other acts evidence did not show that he “had a motive to sexually abuse the complainant, that he intended to sexually abuse the complainant, that he had a common plan or scheme to do so. It was not needed to identify him as the perpetrator of the abuse. The purpose of the evidence was not to show the absence of a mistake or accident. The purpose of the evidence was anything but proper.” In addition, it was irrelevant, and there was no curative instruction. Finally, the court found there was “a reasonable probability that, when weighing the testimony of a child against the testimony of a man who repeatedly beat her and abused drugs, that the jury’s credibility evaluation was tainted such that the outcome of the trial was unfairly affected.” Reversed and remanded for a new trial.

Right to present a defense; Evidence of the victims’ father’s immigration status; Relevance; Sentencing; Scoring of OVs 4 & 10; MCL 777.34(1)(a) & (2); MCL 777.40(1)(a); “Predatory conduct”; People v Cannon; Reasonableness of a departure sentence; People v Dixon-Bey

While the court held that evidence of the victims’ father’s immigration status was irrelevant and properly excluded, and that the trial court did not err in scoring OVs 4 and 10, it remanded for clarification of defendant’s departure sentence or resentencing. It retained jurisdiction. He was convicted of CSC II and sentenced to 14 to 22 years. He first argued that the trial court denied him his right to present a defense, contending that their father’s status “provided a motivation for the victims to lie[.]” The court disagreed. His theory of the case was that his then-wife “Mrs. Hunt and the victims’ father had a romantic relationship and the victims fabricated allegations of sexual assault so they could remain in the United States with their father (or, presumably, with Mrs. Hunt if their father was deported).” But he did not offer any evidence that the “father was even at risk of deportation. To the contrary, the record reflects receipt of a letter from the father’s federal attorney stating that” he was not subject to deportation. Defendant also failed to offer “any logical connection between the father’s immigration status and the victims’ willingness to lie about the sexual assault allegations.” The court next upheld the 10-point score for OV 4 and the 15-point score for OV 10. But it noted that after “expressly stating that it was going to stay within” the guidelines, the trial court “sentenced defendant to a minimum term of imprisonment almost twice as high as the minimum’s maximum of 88 months (approximately 7.3 years).” The reasons it gave for this sentence included his “betrayal of the victims’ trust, the abuse of his authority as surrogate parent to exploit their vulnerability for his own sexual gratification, and the fact that the guidelines did not ‘reflect the number of times’ that” he abused them. The trial court also noted the serious nature of his crime “and deemed it ‘worthy of really a harsh sanction.’” But it was not entirely clear if it “intended these reasons as justification for a sentence at the high end of the” guidelines or for the departure sentence it actually imposed. Further, if the latter, indicating “that the guidelines may or may not take certain factors into account is not sufficient to justify ‘why the sentence imposed is more proportionate to the offense and the offender than a different sentence would have been.’”

The number & location of deputies in the courtroom; Due process right to the presumption of innocence; Holbrook v Flynn; Effect of the jury instructions; Sentencing; Scoring of OV 9; MCL 777.39(1)(c); Actions taken while fleeing the site of an armed robbery

Rejecting defendant’s claim that the number and location of deputies in the courtroom denied him a fair trial and his right to due process, and upholding the 10-point score for OV 9, the court affirmed his convictions and sentences. He was convicted of armed robbery and third-degree fleeing and eluding. He was sentenced to 13-1/2 to 20 years for armed robbery and 1 to 5 years for fleeing and eluding. He argued “that assigning a total of five deputies to the courtroom, with two within 10 feet of the defense table, ‘sen[t] the wrong message to the jury.’” The court noted the record showed that 2 “deputies were 7 to 10 feet from the defense table, but” nothing in the record established “that the presence of courtroom security was unusually alarming or troublesome.” Rather, the record showed that “courthouse security policy required five deputies in the courtroom” given that two defendants were on trial. In addition, “the presence of a weapon in evidence and defendant’s conduct in jail called for additional levels of security; and placing the deputies in alternative seating would have led to the appearance that they were focused on defendant instead of equally concerned with defendant and” his codefendant. In light of these facts, the court could not “conclude that the deputies’ placement in the courtroom was inherently prejudicial.” Defendant also failed to show actual prejudice, as he offered no basis for finding “that the jurors actually were influenced by the number and location of deputies in the courtroom.” As to OV 9, the court noted that his actions “while fleeing the jewelry counter” had to be considered in determining whether he “put two to nine victims in danger during the armed robbery.” It held that he put at least two people in danger. He threatened a store employee “and approached her while brandishing a hatchet over his head and then ran while continuing to hold the hatchet in front of him, thereby forcing [another store employee] to step out of the way to avoid a collision."

The Interstate Agreement on Detainers (IAD); Article III(a); When the 180-day period began to run; Waiver; Ineffective assistance of counsel; Failing to raise a meritless objection; Sentence credit; MCL 769.11b; Whether defendant was entitled to specific performance of the trial court’s promise to give him credit for the time he was incarcerated in Ohio before coming to Michigan; Remedy for failure to abide by a Cobbs evaluation

Noting that defendant waived his claim of an IAD violation by pleading guilty, the court added that there was no violation of his rights under the IAD. Further, defense counsel was not ineffective for failing to raise a meritless objection. The court also rejected his claims that he was entitled to sentence credit under MCL 769.11b, or to “specific performance of the trial court’s promise to give him credit for the time he was incarcerated in Ohio before coming to Michigan.” Thus, it affirmed his guilty-plea conviction of armed robbery and his sentence as a fourth-offense habitual offender to 7 to 20 years with 114 days’ credit. He argued that the prosecution violated Article III(a) of the IAD by not bringing him to trial within 180 days. But the 180-day period did not begin when he asserted that it did. Rather, using 1/17/19, the earliest date that his “notice could have been received by the prosecution, the 180 days required by Article III(a) expired on [7/16/19]. Defendant pleaded guilty on [5/23/19]. Therefore, he was ‘brought to trial within the period provided in Article III,’ and he was not entitled to a dismissal of the charge against him.” Further, the fact the prosecution had lodged a detainer against him did “not mean defendant intended to invoke his right to a timely disposition under the IAD. Thus, defendant was required to provide the prosecution with written notice of his place of imprisonment and request for a timely disposition to begin the 180-day clock.” The court also rejected his jail credit arguments. His time in jail from 10/4/18 to 2/13/19 “was not ‘because of being denied or unable to furnish bond for the offense of which he [was] convicted.’” Rather, it was due to his conviction for an unrelated offense in Ohio. He also was not entitled to credit for his time in jail from 4/26/18 to 10/4/18 as he was “incarcerated during that period because of the pending charges on an unrelated Ohio drug offense.” Finally, his specific performance argument failed for three reasons. First, he did not cite any supporting authority. “Second, the trial court’s Cobbs evaluation did not include any reference to jail credit.” Third, plea-withdrawal is the only remedy “for a trial court’s refusal to abide by a Cobbs evaluation . . . .” There was no legal basis for granting him more time served.

Compassionate release; 18 USC §§ 3582(c)(1)(A) & 3553(a); USSG § 1B1.13; A defendant’s “danger to the community” as the basis for denial; § 1B1.13(2); United States v. Elias

Because defendant-Sherwood was denied compassionate release exclusively due to his failure to satisfy § 1B1.13(2)’s requirement that a defendant not be a danger to the community, the court reversed the district court’s denial and remanded for application of the remaining § 3582(c)(1)(A) factors. Sherwood pled guilty to transporting visual depictions of minors engaged in sexually explicit conduct and to possessing child pornography. He was sentenced to 108 months. He moved for compassionate release, arguing that his age, combined with his health risks, constituted “extraordinary and compelling” circumstances warranting relief. The government acknowledged that he satisfied that standard, but argued against release based on his continuing “danger to the community." The court noted that since the enactment of the First Step Act, courts may not use § 1B1.13 (danger to the community) as an independent basis for denying a motion for compassionate release. A district court “may deny a defendant-filed motion only when it finds either that no extraordinary and compelling reasons exist or that the § 3553(a) factors weigh against release.” Thus, the case had to be remanded to weigh those factors, which will allow the district court to consider whether Sherwood was likely to present a danger to the community if released. As the court presumed “the district court’s initial balancing of the § 3553(a) factors during Sherwood’s sentencing remains an accurate assessment as to whether those factors justify a sentence reduction,” he must show why that the analysis would be different if it took place today.

Legal & physical custody; Discovery; Witness testimony by telephone; MCR 3.210(A)(4); Appointment of a lawyer-guardian ad litem (L-GAL); The Child Custody Act (MCL 722.21 et seq); MCL 722.24(2); Proper cause or a change of circumstances (COC); MCL 722.27(1)(c); Best-interest factors (b)-(e), (g)-(h), (j)-(l); Sanctions

The court rejected defendant-mother’s challenge to the trial court’s nonexistent prohibition on all discovery, as well as her claim that it abused its discretion by prohibiting her from presenting witness testimony by phone. Further, the trial court did not abuse its discretion by denying her request to appoint the children a L-GAL, and there was proper cause or a COC permitting it to revisit custody. Finally, given the circumstances and the evidence presented, the trial court did not abuse its discretion by finding clear and convincing evidence to award plaintiff-father sole legal and physical custody. As to defendant’s discovery claim, the court determined that she mischaracterized the record in support of her argument. Plaintiff claimed “defendant issued the subpoenas in bad faith after being charged with parental kidnapping and that the documents requested were protected or irrelevant.” The trial court granted his “motion to quash the three subpoenas and held that defendant ‘must purge herself of any outstanding findings of contempt of the Circuit Court as precondition for obtaining the relief that she seeks in these subpoenas.’” But the trial court did not issue a general protective order preventing her from conducting discovery. It specifically stated that one was unnecessary here. Thus, the record indicated that she “was free to conduct discovery outside of the subpoenas she issued. Additionally, the quashing of the subpoenas was only conditional, and the trial court was ultimately only able to quash two of" them because the third was responded to before the trial court issued its ruling. As to proper cause or a COC permitting the trial court to revisit custody, the record indicated she “was purposely keeping the children from plaintiff and interfering with their relationship with” him. It found that her behaviors “likely had ‘a significant effect on the child’s well-being to the extent that revisiting the custody order would be proper.’” As a result, “the trial court properly held that there was proper cause to warrant an evidentiary hearing and to revisit custody. Additionally, the trial court’s finding that defendant’s behavior also constituted a change of circumstances was proper because the record indicates that defendant’s behavior, which likely materially changed ‘the conditions surrounding custody of the child[ren]’ and significantly affected the children’s well-being, started occurring after the” 2019 custody order. After that order, they “were diagnosed with two new medical conditions, they were removed from school in Ohio, and defendant failed to discuss either of those matters with plaintiff.”

Third-party no-fault case; Dismissal based on failure to timely appear at trial without first considering other available sanctions on the record; Dean v Tucker; Vicencio v Ramirez; “Judicial dictum”

Holding in this third-party no-fault action that the trial court erred when it dismissed plaintiff’s case based on her failure to timely appear at trial without first considering other available sanctions, the court reversed and remanded. She contended that before the trial court dismissed “her case with prejudice, Michigan caselaw required the court to evaluate lesser available sanctions to determine whether they might have been more appropriate under the circumstances.” She primarily relied on Dean and Vicencio. Defendants pointed out that Dean “specifically involved a discovery violation, and this case does not.” Rather, this case involved “dismissal of an action on the basis of plaintiff’s failure to timely appear at trial.” She suggested that Vicencio resolved “the distinction by extending the Dean factors to cases beyond discovery violations.” Plaintiff contended that Vicencio required that the Dean “factors must be considered by trial courts prior to dismissing a case for reasons in addition to and other than discovery violations, including for a failure to appear at trial.” The court held that the trial court should have applied the Vicencio factors, “and that the trial court abused its discretion in failing to apply them both in its initial dismissal of plaintiff’s claim and its subsequent affirmation of the same on the basis of her motion to reinstate her case.” And it further held that, applying the Vicencio “factors, dismissal with prejudice of plaintiff’s case was a harsh penalty indeed.” While defendants pointed “out that plaintiff’s untimely appearance at trial was inexcusable, the record evidence simply does not establish that it was willful rather than accidental. Moreover, there was no history below of plaintiff having failed or refused to comply with court orders, having failed to appear at other times, or having caused deliberate delay.” There was no evidence that giving her additional time to arrive or that rescheduling “would have prejudiced defendants in anyway, and there was evidence that plaintiff attempted to cure the defect in that, at the very least, she did arrive at trial, albeit approximately one to two hours late.” Finally, the court found that “lesser sanctions might have been appropriate under the circumstances.”

Insurer priority under the No-Fault Act; MCL 500.3114(3); “Shall”; Whether policy exclusion affirmative defenses were waived; Effect of an insured’s assignment to a healthcare provider; An insured’s obligation to read the policy; Applicability of the mend-the-hold doctrine; Equitable estoppel & enforcement of policy exclusions

The court held that defendant-insurer was entitled to summary disposition under MCL 500.3114(3) because plaintiff-Matigian was driving a semi-tractor trailer owned by his employer and insured with another insurance company when the accident occurred. In addition, even if the policy exclusions at issue were affirmative defenses that defendant failed to properly assert, the court concluded that it did not waive its ability to assert their application. Further, neither the mend-the-hold doctrine nor equitable estoppel applied. Thus, the court affirmed summary disposition for defendant, which insured Matigian’s personal vehicle. The trial court based its ruling on the policy exclusions in defendant’s policy. But the court noted that because “MCL 500.3114(3) contains mandatory language stating that an employee who suffers injury ‘while an occupant of a motor vehicle owned’ by the employee’s employer ‘shall receive [PIP] benefits to which the employee is entitled from the insurer of the furnished vehicle,’ Matigian must obtain any PIP benefits he is entitled to from the insurer of” the semi-tractor trailer. In addition, as to the policy exclusions, the court noted that at “no point in either version of plaintiffs’ complaints did plaintiffs allege or disclose that Matigian was driving his employer’s vehicle at the time of the accident. Thus, plaintiffs failed to plead factual allegations sufficient to reasonably inform defendant that Matigian was involved in an accident while he was operating an employer-owned vehicle in the course of his employment and that its policy exclusions in this regard may be applicable. As a result, defendant was excused from raising the employer-owned-vehicle exclusion as an affirmative defense.” As to the other two relevant exclusions, plaintiffs admitted “that at the time of the accident, Matigian was driving a vehicle owned and insured by his employer and was driving the vehicle in the course and scope of his employment.” Thus, he was precluded by the exclusions “from seeking benefits from defendant as was” plaintiff-healthcare provider as his assignee.

Trespass; Adams v Cleveland-Cliffs Iron Co; Causing excess waters to flow onto another person’s property as a trespass; Wiggins v City of Burton; Requirement that the trespass was intentional; Cloverleaf Car Co v Phillips Petroleum Co; Private nuisance; Adkins v Thomas Solvent Co; Distinguishing nuisance from negligence; Travers Lakes Cmty Maint Ass’n v Douglas Cnty; Principle that noneconomic damages are not recoverable in a negligence claim; Leave to amend; MCR 2.118(A)(2); Futility; Weymers v Khera; Undue delay; Lane v KinderCare Learning Ctrs, Inc; Bill of costs; MCR 2.625(A)(1) & (F)(2); Remediation

In an issue of first impression, the court held that “only the failure to present a bill of costs to the clerk within the time prescribed constitutes a waiver of the right to costs.” Thus, the trial court abused its discretion by ruling that plaintiffs waived their right to costs as the prevailing party. While the trial court did not err by dismissing their negligence and nuisance claims and finding that, with only their negligence claim surviving, they were barred from recovering noneconomic damages, it did err by denying them leave to amend. Finally, the court held that the trial court did not err by finding defendant remediated the situation. Plaintiffs claimed his construction of a new road and placement of a dirt pile caused water to accumulate on their property, killing many trees and damaging their basement. The trial court granted defendant’s motion for partial summary disposition and dismissed plaintiffs’ claims of trespass and nuisance. Because only the negligence claim remained, it also dismissed their requests for noneconomic damages. The jury returned a verdict for plaintiffs on the negligence claim, awarding $50,000 in damages. The court rejected plaintiffs’ argument that the trial court erred by finding they failed to sufficiently plead trespass and nuisance claims, and thus, also erred in dismissing their claims for noneconomic damages. It noted their allegations failed to show how the intrusion of water was intentional, and there was nothing in their nuisance claim to distinguish it from their negligence claim. But it agreed with them that the trial court abused its discretion by denying their motion to amend their complaint to add factual allegations to support those claims after they were dismissed. The court found that all four of the trial court’s reasons for denying the motion to amend were erroneous. It also agreed with plaintiffs that the trial court abused its discretion by ruling that they waived their right to costs as the prevailing party, noting that although they “failed to comply with the requirement of immediately serving the bill of costs on the opposing party, that failure does not constitute a waiver under the plain language of the court rule . . . .” But the court rejected their claim that the trial court erred by finding defendant remediated the water situation on their property, noting the water now vacates the area within a day or so after serious rains. Affirmed in part, reversed in part, and remanded.

Age & disability discrimination; Jurisdiction; “Final order”; Governmental immunity; The Court of Claims Act (COCA); Failure to comply with MCL 600.6431 when proceeding against a state defendant in the circuit court; Tyrrell v University of MI

The court held that given the conclusions in Tyrrell and its clear and direct application to this case, defendant “was not entitled to governmental immunity from suit based on the claim that plaintiff failed to comply with MCL 600.6431.” Thus, it affirmed the order denying defendant summary disposition. The appeal arose out of allegations of age and disability discrimination made by plaintiff, defendant’s former employee. Defendant argued that “under MCL 600.6431, plaintiff was required to file a notice of intent to sue with the Court of Claims, even though plaintiff brought her claims in circuit court. According to defendant, compliance with MCL 600.6431 is a condition precedent to suing it; thus, if the statute is not followed, the lawsuit must be dismissed.” The court disagreed, noting that in Tyrrell, it recently addressed “the very issue raised by defendant” in this case. The Tyrrell court held that “absent the Legislature conditioning its consent to suit on compliance with the COCA, a plaintiff properly bringing a claim in circuit court against the state or a state defendant to which MCL 600.6431 applies is not required to comply with MCL 600.6431 for his or her claim to proceed in that court.”

The trial court’s jurisdiction; The Financial Institution Reform, Recovery & Enforcement Act (FIRREA); Failure to exhaust administrative proceedings; 12 USC § 1821(d)(13)(D)(ii); Claims “relating to” the acts or omissions of a failed bank or the FDIC as receiver; The effect of a purchase agreement on jurisdiction; Default as a sanction; Swain v Morse; MCR 2.119(E); Failure to appear at a contested motion hearing; Whether the default was authorized under MCR 2.401(G) or 2.504(B); Motion to set aside a default; Good cause; Shawl v Spence Bros, Inc; Meritorious defenses; Real party in interest

In this action seeking to prevent defendant-Amos Financial from foreclosing on two properties, the court held that the trial court lacked jurisdiction over most of the claims raised by plaintiffs and the intervenors due to the FIRREA. The trial court also abused its discretion in denying Amos Financial’s motion to set aside the default entered against it for failing to appear at a contested motion hearing. Further, intervenor-Stefanos Peroustianis was not a real party in interest and should be dismissed from the action in his individual capacity. Thus, the court vacated the default against Amos Financial and the trial court’s subsequent orders, including those as to “damages, attorney fees, and the return of the properties,” and remanded “for a determination of Amos Financial’s liability on the merits of the limited claims within the” trial court’s jurisdiction. It agreed with Amos Financial that many of the claims, while ostensibly pled against it, “actually related to the acts or omissions of” its predecessor in interest (Premier Bank) or the FDIC, which closed that bank and sold the loans relating to the properties to Amos Financial. As a result, the FIRREA required them “to exhaust administrative proceedings relating to these claims” and their failure to do so deprived the trial court of jurisdiction under § 1821(d)(13)(D)(ii). Plaintiffs asserted that the FIRREA’s jurisdictional restrictions did not apply “because (1) their claims involve Amos Financial rather than the FDIC or Premier Bank and (2) the purchase agreement between Amos Financial and the FDIC makes clear that Amos Financial purchased assets without any protections afforded to the FDIC, which plaintiffs” appeared to contend included FIRREA’s jurisdictional limitations. The court rejected both arguments, and determined that the only claims involving Amos Financial’s independent conduct were its post-purchase actions “involving alleged violation of the foreclosure statutes during the foreclosures on the” properties. Thus, these were “the only claims not subject to FIRREA’s administrative requirements, and . . . not jurisdictionally barred by” § 1821(d)(13)(D)(ii). It also held that default “was an extreme and unwarranted sanction on the facts of this case, and the trial court abused its discretion by failing to recognize good cause to set” it aside.

Third-party no-fault case; Dismissal based on failure to timely appear at trial without first considering other available sanctions on the record; Dean v Tucker; Vicencio v Ramirez; “Judicial dictum”

Holding in this third-party no-fault action that the trial court erred when it dismissed plaintiff’s case based on her failure to timely appear at trial without first considering other available sanctions, the court reversed and remanded. She contended that before the trial court dismissed “her case with prejudice, Michigan caselaw required the court to evaluate lesser available sanctions to determine whether they might have been more appropriate under the circumstances.” She primarily relied on Dean and Vicencio. Defendants pointed out that Dean “specifically involved a discovery violation, and this case does not.” Rather, this case involved “dismissal of an action on the basis of plaintiff’s failure to timely appear at trial.” She suggested that Vicencio resolved “the distinction by extending the Dean factors to cases beyond discovery violations.” Plaintiff contended that Vicencio required that the Dean “factors must be considered by trial courts prior to dismissing a case for reasons in addition to and other than discovery violations, including for a failure to appear at trial.” The court held that the trial court should have applied the Vicencio factors, “and that the trial court abused its discretion in failing to apply them both in its initial dismissal of plaintiff’s claim and its subsequent affirmation of the same on the basis of her motion to reinstate her case.” And it further held that, applying the Vicencio “factors, dismissal with prejudice of plaintiff’s case was a harsh penalty indeed.” While defendants pointed “out that plaintiff’s untimely appearance at trial was inexcusable, the record evidence simply does not establish that it was willful rather than accidental. Moreover, there was no history below of plaintiff having failed or refused to comply with court orders, having failed to appear at other times, or having caused deliberate delay.” There was no evidence that giving her additional time to arrive or that rescheduling “would have prejudiced defendants in anyway, and there was evidence that plaintiff attempted to cure the defect in that, at the very least, she did arrive at trial, albeit approximately one to two hours late.” Finally, the court found that “lesser sanctions might have been appropriate under the circumstances.”

Claims arising from a motor vehicle accident; Deletion of files from plaintiff’s computer; Spoliation of evidence; Brenner v Kolk; Gillett v Michigan Farm Bureau (Unpub); Expert witness; Credibility; Compliance with discovery orders; Whether sanctions short of dismissal were appropriate

The court held that the trial court’s determination that plaintiff did not intentionally destroy evidence, and it was unlikely any evidence was lost, was well-supported by the record. Further, the trial court considered its range of sanction options, and did not abuse its discretion in ruling that “neither dismissal nor a lesser sanction was appropriate other than a possible adverse jury” instruction. Thus, the court affirmed the order denying defendant-SMART’s motion to dismiss. The case arose out of a motor vehicle accident when a bus owned by defendant struck plaintiff’s vehicle while it was stopped in traffic. Defendant argued that the trial court abused its discretion in denying its “motion to dismiss because it ignored the volume and timing of the deletions” on plaintiff’s laptops, found her “computer forensic expert to be more credible than defendant’s computer forensic expert, and, most importantly, found the deletions to be unintentional.” Defendant relied heavily on Gillet. But Gillett had “numerous factual differences” and thus, was “only marginally persuasive authority.” Defendant asserted that “the trial court could not have properly found the deletion of files on plaintiff’s computer to be unintentional because plaintiff was a ‘sophisticated’ computer user.” However, the record supported “the trial court’s factual finding that plaintiff did not intentionally destroy evidence, which finding cannot be overturned absent clear error.” The trial court determined that it was “compelling that both experts agree the program at issue, CCleaner, was installed before” the case was filed, and that they “also agree the program was installed in such a manner as to be run automatically. Each time the computer was switched on, the program would automatically delete certain files and clean the hard drive.” As these facts supported the trial court’s decision, its finding that she did not knowingly destroy evidence was supported by the record and not clearly erroneous. Further, its ruling was strengthened by its finding that based on forensic analysis, it was “unlikely than any relevant evidence was lost, let alone lost intentionally. And finally, the trial court properly considered alternative sanctions, stating that” it would consider a request for an adverse inference instruction at trial if defendant requested one. Thus, there was no basis for finding an abuse of discretion.

Personal jurisdiction; Forum-selection clause; “Of”; The Contract Disputes Act (CDA) (41 USC § 7101 et seq); A “pass-through” or “sponsored” claim; Whether interpreting the forum-selection clause to include state courts would render it meaningless & unenforceable; Judicial estoppel: Nawai Wardak Transportation Company (NWTC); The United States Agency for International Development (USAID)

The court agreed with plaintiff-NWTC that, “by interpreting the forum-selection clause to exclude state courts, the trial court rendered the forum-selection clause nugatory because ‘there is no federal forum with subject-matter jurisdiction over this action.’” But it held that defendants were not judicially estopped from arguing that the forum-selection clause was void or unenforceable. Thus, it vacated the trial court’s order dismissing NWTC’s claims for lack of personal jurisdiction and remanded for consideration of whether the clause was enforceable. The case concerned a subcontract for the supply of fuel to support U.S. government operations in another country. Reviewing the language of the forum-selection clause, the court found that the “dictionary definition of ‘of’ supports that, while Michigan courts may be in the United States, they are not of the United States.” Although defendants stopped short of claiming that the clause was ambiguous, they argued that “the plain language of the forum-selection clause and the circumstances surrounding the formation of the subcontract support that NWTC’s claims had to be filed in a federal court.” Because NWTC and defendant-RMA Afghanistan were subcontractors that had “no direct contact with USAID—the federal executive agency that contracted with the prime contractor in this case—neither can bring a claim under the CDA to remedy any breach of the contract between them.” In addition, “federal courts are courts of limited jurisdiction. Foreign parties such as NWTC and RMA Afghanistan cannot confer subject-matter jurisdiction upon a federal court by merely agreeing to have their disputes resolved in such courts.” Defendants conceded that NWTC could not file a claim in a federal court or file a direct claim under the CDA. But they maintained that “the trial court’s interpretation of the phrase ‘courts of the United States of America’ to refer only to federal courts does not render the forum-selection clause nugatory because NWTC can file a ‘pass-through’ claim.” However, the court concluded that “a pass-through claim does not provide a means to resolve the parties’ dispute because contracting officers have no jurisdiction over disputes between subcontractors.”

Tribal defense to spear fishing in a closed stream in violation of MCL 324.48715 & MCL 324.48711; The proper legal framework for assessing whether a defendant is entitled to assert tribal status as a defense to state fishing regulations; Mackinac Tribe v Jewell; Whether the Mackinac Tribe is a political successor in interest to a “signatory” tribe to the 1836 & 1855 treaties; United States v State of Washington (9th Cir.) (Washington I & II); Whether a tribe constitutes a treaty-tribe; Treaty-tribe status; Department of Natural Resources (DNR)

In an issue of first impression in Michigan as to the proper legal framework for assessing "whether a defendant is entitled to assert his tribal status as a defense to state fishing regulations,” the court held that “whether the Mackinac Tribe is federally recognized has no bearing on whether it is entitled to treaty fishing rights.” Further, “membership in a modern-day tribe whose members descend from a signatory tribe" does not automatically entitle the modern-day tribe to treaty rights. Thus, the circuit court erred when conditioning defendant’s potential treaty rights on whether his tribe is federally recognized, and the court vacated that order. But because the district court did not evaluate the case under the proper legal framework, which the court adopted in its ruling, it remanded for an evidentiary hearing to allow him “an opportunity to establish by a preponderance of the evidence that his Tribe is a political successor in interest to a signatory tribe of the 1836 treaty.” Defendant is a member of the Mackinac Tribe. In 2018, a DNR “conservation officer cited defendant for spear fishing in a closed stream in violation of MCL 324.48715 and MCL 324.48711.” Defendant claimed that “he was a member of an Indian tribe or band granted hunting and fishing rights by 1836 and 1855 treaties with” the U.S. government. The Mackinac County district court granted his motion upon holding that the Mackinac Tribe was entitled to rights under the relevant treaties. On appeal from the prosecution, “the Mackinac County circuit court reversed on the ground that the Mackinac Tribe was not federally recognized and that federal tribal recognition is a matter for initial determination by the United States Department of the Interior.” The court held that “the Mackinac Tribe is not a ‘signatory’ to the 1836 and 1855 treaties, even though some of its members appear to be descendants of a signatory tribe.” The issue was whether it qualified as a treaty tribe. The court found that whether the “Tribe is federally recognized has no bearing on whether it is entitled to treaty fishing rights.” However, it did not agree that “membership in a modern-day tribe whose members descend from a signatory tribe automatically entitles the modern-day tribe to treaty rights.” The dispositive issue was whether the “Tribe is a political successor in interest to a signatory tribe, entitling defendant to an affirmative defense based on his tribal status.” However, neither lower court addressed this issue. Vacated and remanded.

Claims arising from a motor vehicle accident; Deletion of files from plaintiff’s computer; Spoliation of evidence; Brenner v Kolk; Gillett v Michigan Farm Bureau (Unpub); Expert witness; Credibility; Compliance with discovery orders; Whether sanctions short of dismissal were appropriate

The court held that the trial court’s determination that plaintiff did not intentionally destroy evidence, and it was unlikely any evidence was lost, was well-supported by the record. Further, the trial court considered its range of sanction options, and did not abuse its discretion in ruling that “neither dismissal nor a lesser sanction was appropriate other than a possible adverse jury” instruction. Thus, the court affirmed the order denying defendant-SMART’s motion to dismiss. The case arose out of a motor vehicle accident when a bus owned by defendant struck plaintiff’s vehicle while it was stopped in traffic. Defendant argued that the trial court abused its discretion in denying its “motion to dismiss because it ignored the volume and timing of the deletions” on plaintiff’s laptops, found her “computer forensic expert to be more credible than defendant’s computer forensic expert, and, most importantly, found the deletions to be unintentional.” Defendant relied heavily on Gillet. But Gillett had “numerous factual differences” and thus, was “only marginally persuasive authority.” Defendant asserted that “the trial court could not have properly found the deletion of files on plaintiff’s computer to be unintentional because plaintiff was a ‘sophisticated’ computer user.” However, the record supported “the trial court’s factual finding that plaintiff did not intentionally destroy evidence, which finding cannot be overturned absent clear error.” The trial court determined that it was “compelling that both experts agree the program at issue, CCleaner, was installed before” the case was filed, and that they “also agree the program was installed in such a manner as to be run automatically. Each time the computer was switched on, the program would automatically delete certain files and clean the hard drive.” As these facts supported the trial court’s decision, its finding that she did not knowingly destroy evidence was supported by the record and not clearly erroneous. Further, its ruling was strengthened by its finding that based on forensic analysis, it was “unlikely than any relevant evidence was lost, let alone lost intentionally. And finally, the trial court properly considered alternative sanctions, stating that” it would consider a request for an adverse inference instruction at trial if defendant requested one. Thus, there was no basis for finding an abuse of discretion.

Trespass; Adams v Cleveland-Cliffs Iron Co; Causing excess waters to flow onto another person’s property as a trespass; Wiggins v City of Burton; Requirement that the trespass was intentional; Cloverleaf Car Co v Phillips Petroleum Co; Private nuisance; Adkins v Thomas Solvent Co; Distinguishing nuisance from negligence; Travers Lakes Cmty Maint Ass’n v Douglas Cnty; Principle that noneconomic damages are not recoverable in a negligence claim; Leave to amend; MCR 2.118(A)(2); Futility; Weymers v Khera; Undue delay; Lane v KinderCare Learning Ctrs, Inc; Bill of costs; MCR 2.625(A)(1) & (F)(2); Remediation

In an issue of first impression, the court held that “only the failure to present a bill of costs to the clerk within the time prescribed constitutes a waiver of the right to costs.” Thus, the trial court abused its discretion by ruling that plaintiffs waived their right to costs as the prevailing party. While the trial court did not err by dismissing their negligence and nuisance claims and finding that, with only their negligence claim surviving, they were barred from recovering noneconomic damages, it did err by denying them leave to amend. Finally, the court held that the trial court did not err by finding defendant remediated the situation. Plaintiffs claimed his construction of a new road and placement of a dirt pile caused water to accumulate on their property, killing many trees and damaging their basement. The trial court granted defendant’s motion for partial summary disposition and dismissed plaintiffs’ claims of trespass and nuisance. Because only the negligence claim remained, it also dismissed their requests for noneconomic damages. The jury returned a verdict for plaintiffs on the negligence claim, awarding $50,000 in damages. The court rejected plaintiffs’ argument that the trial court erred by finding they failed to sufficiently plead trespass and nuisance claims, and thus, also erred in dismissing their claims for noneconomic damages. It noted their allegations failed to show how the intrusion of water was intentional, and there was nothing in their nuisance claim to distinguish it from their negligence claim. But it agreed with them that the trial court abused its discretion by denying their motion to amend their complaint to add factual allegations to support those claims after they were dismissed. The court found that all four of the trial court’s reasons for denying the motion to amend were erroneous. It also agreed with plaintiffs that the trial court abused its discretion by ruling that they waived their right to costs as the prevailing party, noting that although they “failed to comply with the requirement of immediately serving the bill of costs on the opposing party, that failure does not constitute a waiver under the plain language of the court rule . . . .” But the court rejected their claim that the trial court erred by finding defendant remediated the water situation on their property, noting the water now vacates the area within a day or so after serious rains. Affirmed in part, reversed in part, and remanded.

Interpretation & application of the Uniform Condemnation Procedures Act (UCPA) (MCL 213.51 et seq); MCL 213.55(1) & (3)(a); Good-faith written offer requirement; Indiana Michigan Power Company (IMPC)

[This opinion was previously released as an unpublished opinion on 12/17/20.] The court held that the trial court had subject-matter jurisdiction, concluding that defendant-Community Mills’ challenges to the written offer concerned whether plaintiff-IMPC “offered an amount that constituted just compensation and not whether it was made in good faith.” Thus, it reversed summary disposition for Community Mills under MCR 2.116(C)(4) and remanded. IMPC argued that the trial court erred in its interpretation and application of the UCPA. “The trial court ruled that it lacked subject-matter jurisdiction because IMPC failed to tender a good-faith written offer to obtain property interests across land owned by Community Mills.” However, the court held that “the deficiencies Community Mills complained of and found by the trial court did not reflect a failure to tender a good-faith written offer. Rather, the alleged deficiencies effectively pertained to ascertaining the proper amount of just compensation.” The court recognized that “there can be a fine line between an offer that is so unsubstantiated that it can be characterized as revealing a lack of good faith and an offer that is made in good faith but does not accurately reflect an amount that equates to just compensation.” But the record did not support a finding that IMPC tendered the written offer in bad faith. Also, “the trial court ruled that it could not entertain the condemnation action because it lacked subject-matter jurisdiction while at the same time the court effectively concluded that the written offer did not amount to just compensation because all aspects of the loss Community Mills might suffer were not considered. This is part of the determination to be made by the trier of fact during litigation, i.e., when jurisdiction is being exercised.”

Alleged zoning violation; Principle that use of land or a dwelling, building, or structure in violation of a zoning ordinance is a nuisance per se; MCL 125.3407; Special damages; Towne v Harr; Interpretation of a zoning ordinance; Brandon Charter Twp v Tippett; “Residence”; Eager v Peasley; “Tourist home”; Exclusions & permissions; Pittsfield Twp v Malcom; Independence Twp v Skibowski

The court held that defendant was violating the township zoning ordinance by operating a tourist home and thus, plaintiffs were entitled to summary disposition of their nuisance per se claim. Plaintiffs claimed defendant was conducting rental activity on its property in violation of the township zoning ordinance. The trial court denied plaintiffs’ motion for summary disposition and granted summary disposition for defendant. On appeal, the court agreed with plaintiffs that the trial court erred by denying their motion for summary disposition of their nuisance per se claim. It agreed with the township that defendant’s use of the house met the definition of a “tourist home,” which is not permitted in that district. It is a “dwelling that is being rented overnight to transient guests for compensation.” And defendant was “undoubtedly providing overnight accommodations as the renters [we]re given exclusive occupation of the house along with numerous other amenities such as the use of the boats on the property.” Reversed and remanded.

Taxable value (TV); MCL 211.27; Increase in the TV for tax year 2017 by a sum greater than the product of 1.05 times the TV; Forest Hills Coop v Ann Arbor; MCL 211.27a; "Addition"; MCL 211.34d(b)(iii); Indirect costs; Effect of a Land Use Restriction Agreement (LURA); Demolition costs; Inclusion of the general contractor's profit in the cost calculation; Functional & external obsolescence; Valuation methods; "True cash value"; MCL 211.27(1) 

The court held that the TT violated MCL 211.27 when it increased the TV of the property at issue for the 2017 tax year by a sum greater than the product of 1.05 the TV for the 2016 tax year. Thus, it remanded for modification of the TV for the 2017 tax year. It also directed the TT to correct an error by subtracting demolition costs from the land value. But the TT properly included in its cost calculation indirect costs associated with obtaining financing, and its decision to give more weight to respondent’s appraisal expert’s (E) analysis as to the effect of a LURA on the TCV was supported by substantial evidence. Further, it was not error to include the general contractor’s profit in its cost calculation, and petitioner did not meet its burden as to its obsolescence arguments. As to the TV increase, the court noted that the TV of the property for the 2016 tax year “was $12,920.797.  Multiplied by 1.05, the product is $13,566,836.85.” The TT’s imposition of a TV of $14,700,000 exceeded the statutory limit, unless additions were made in 2016. The TT made no findings as to additions in 2016. Respondent relied “on an isolated statement by petitioner suggesting that construction was completed in 2016.” However, the court found that there was no evidence of construction in 2016. Petitioner observed that E did not make any findings of new construction in 2016, citing his report, which included “a chart indicating that each of the three sections of the” property was 100% completed as of 10/31/15. E’s report also included a table summarizing construction pay data as of 10/31/15. E testified that a specific statement was the final statement he saw. “He acknowledged that the table in his report indicated that construction on the entire property was complete as of” 10/31/15. There was no evidence of any construction in 2016, and respondent’s own evidence indicated that there were no additions or construction in 2016. Further, the TT’s final opinion did “not reference any additions in 2016 to justify an increase in TV in excess of the 1.05 multiplier limitation.” Affirmed in part, reversed in part, and remanded. 

Alleged zoning violation; Principle that use of land or a dwelling, building, or structure in violation of a zoning ordinance is a nuisance per se; MCL 125.3407; Special damages; Towne v Harr; Interpretation of a zoning ordinance; Brandon Charter Twp v Tippett; “Residence”; Eager v Peasley; “Tourist home”; Exclusions & permissions; Pittsfield Twp v Malcom; Independence Twp v Skibowski

The court held that defendant was violating the township zoning ordinance by operating a tourist home and thus, plaintiffs were entitled to summary disposition of their nuisance per se claim. Plaintiffs claimed defendant was conducting rental activity on its property in violation of the township zoning ordinance. The trial court denied plaintiffs’ motion for summary disposition and granted summary disposition for defendant. On appeal, the court agreed with plaintiffs that the trial court erred by denying their motion for summary disposition of their nuisance per se claim. It agreed with the township that defendant’s use of the house met the definition of a “tourist home,” which is not permitted in that district. It is a “dwelling that is being rented overnight to transient guests for compensation.” And defendant was “undoubtedly providing overnight accommodations as the renters [we]re given exclusive occupation of the house along with numerous other amenities such as the use of the boats on the property.” Reversed and remanded.