Kaitlyn Elias Fishman Stewart PLLC Jessica Fleetham Bill Gilbride Ingham County Bar Association Tim Kramer Dan Kielczewski Nicholas H. Klaus MDTC Tom Quilter Steven Susser
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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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.
Full Text Opinion
Objections to a domestic relations arbitration award; A trial court’s authority to vacate a domestic relations arbitration award; MCL 600.5081(2)(c); Claim that a domestic relations arbitrator exceeded his or her authority; Washington v Washington; Arbitrability; Rooyakker & Sitz, PLLC v Plante & Moran, PLLC; Comparing Gordon Sel-Way, Inc v Spence Bros, Inc; Division of marital property under MCL 552.19; Reeves v Reeves
The court held that the trial court did not err by denying defendant-ex-husband’s objections to a domestic relations arbitration award. During their divorce, the parties settled most of the issues about division of property. The issue of a vacation home purchased for $59,000 during the marriage, but with only defendant and his mother, Rose, on the deed was decided by arbitration. The arbitrator found Rose bought the property with defendant as her agent, that the money he subsequently paid Rose was in repayment for unrelated premarital loans, that he used the parties’ joint checking account to make these payments, and that he paid Rose a total of about $64,000. Based on these findings, the arbitrator concluded defendant was required to pay plaintiff half the amount of money he paid to Rose, or refinance the vacation property or the current marital home to remit this amount. Finding the arbitrator acted well within his authority to issue the award, the trial court declined to vacate it. On appeal, the court rejected defendant’s argument that the arbitrator exceeded his authority in contravention of MCL 600.5081(2)(c), and the trial court erred by declining to vacate the award. “Like the arbitration clause in Gordon Sel-Way, the arbitration clause at issue here was written in broad, comprehensive language. [It] gave the arbitrator the authority to decide all issues regarding the [vacation property], and did not limit the type of remedy the arbitrator could provide.” As such, in the absence of express language to the contrary, “the arbitrator’s award was within his authority to grant.” In addition, Rose “was not compelled to arbitrate, so her explicit assent to the arbitration agreement was unnecessary.” Further, none of the “alleged inconsistencies in the arbitrator’s award caused him to exceed his authority.” Finally, the court found “nothing to suggest the arbitrator failed to apply Michigan law when fashioning his award, and . . . no error on the face of the award.” Affirmed.
Whether a contractual limitations period barred plaintiff-former employee’s claims; Applicability to an abuse of process claim; Unconscionability; Clark v DaimlerChrysler Corp; Estoppel; Effect of alleged violation of the Bullard-Plawecki Employee Right to Know Act (ERKA); MCL 423.502 & 423.503
Holding that the Employee Handbook Acknowledgment plaintiff-former employee signed agreeing to a six-month limitations period applied to all her claims against defendant, the court affirmed the dismissal of her case on the basis she filed it outside the shortened limitations period. She contended that the Acknowledgment was not enforceable because it was “unconscionable and, alternatively, defendant should be estopped from relying on it because defendant violated the ERKA.” In addition, she asserted that it did not apply to her abuse of process claim “because defendant’s pursuit of criminal charges was not an ‘employment action,’ given that her claim did not accrue until after her termination.” But the court noted that the Acknowledgment’s language was broad—it applied “to ‘any claim or lawsuit arising out of [her] employment . . . with defendant[;]’ the term ‘employment action’ that plaintiff relies on does not define the claims to which the shortened limitations period applies, but rather, relates to the accrual date of the claim.” The court also noted that she argued “defendant’s ulterior purpose of the criminal proceedings was to justify plaintiff’s termination and create a pretext to obscure that her termination was retaliatory. Because the factual allegations of plaintiff’s abuse-of-process claim are related to, and result from, her employment with defendant,” it was a claim arising out of her employment. Thus, the shortened limitations period also applied to this claim. As to unconscionability, there was no evidence to support that, when she signed the agreement about a week after beginning her job, “plaintiff had no realistic alternative to employment with defendant. While plaintiff’s bargaining power may have been less than defendant’s—accepting her claim that she could not negotiate the terms—nothing in the record” showed she was not free to accept or reject the offered terms. The circumstances did “not support a determination of procedural unconscionability” and the court further concluded that nothing in the record established “that the Acknowledgement was substantively unconscionable.” It also agreed with the trial court that she failed to show “defendant should be estopped from relying on the Acknowledgment for violating the ERKA.”
Motion for relief from judgment; Newly discovered evidence; People v Johnson
In an order in lieu of granting leave to appeal the Court of Appeals order dismissing defendant’s motion to remand and application for delayed leave to appeal, the court vacated the trial court’s order and remanded the case to the trial court for reconsideration of his motion for relief from judgment. It held that the trial court erred in not analyzing “the newly discovered evidence in terms of ‘whether a reasonable juror could find the testimony credible on retrial.’” The court directed the trial court on remand to answer this question and to “‘consider the impact of that testimony in conjunction with the evidence that would be presented on retrial’ in deciding whether to grant the motion.” It denied leave to appeal in all other respects because it was not persuaded that it should review the remaining questions presented.
Application to set aside a juvenile conviction of CSC II; MCL 712A.18e(1) & (9); Comparing People v Rosen; A trial court’s discretion to grant or deny an application to set aside a conviction; People v Van Heck; Principle that courts speak through written orders & judgments, not oral pronouncements; Remand before a different judge; Swain v Morse
The court held that while the trial court’s decision to alter its initial oral ruling did not constitute error in and of itself, remand was appropriate because it made an error of law, and thereby abused its discretion, by denying respondent’s application to set aside his juvenile adjudication for CSC II. It also ordered that the matter be reassigned to a different judge. When respondent was 16 years old, he pled no contest to CSC II for allegedly engaging in sexual conduct with a 9-year-old when he was 14. He was adjudicated responsible, and in exchange for his no-contest plea, other charges were dismissed. When he was 18, he sought to set aside the CSC II adjudication. In its oral ruling the trial court found the statutory prerequisites for doing so were met. But it subsequently indicated it mistakenly believed it was required to grant the application if those prerequisites were met, and would have denied it if it had known it had discretion to do so. The trial court “found that the circumstances and behavior of respondent did not justify setting aside” his juvenile adjudication, and that doing so was contrary to the public welfare. It then entered a written order denying his application. The court first noted that because the trial court “never entered a written order granting” the application, it “was empowered to alter its initial oral ruling.” In addition, it “explained that its initial oral ruling was based upon the mistaken belief that it lacked the discretion to deny” the application. However, as in Rosen, the trial court abused its discretion because it denied the application based “solely upon the nature of respondent’s adjudication of responsibility for” CSC II. Notably, it did not “consider the circumstances and behavior of respondent from the date of [his] adjudication to the filing of the application, and . . . whether setting aside the adjudication was consistent with the public welfare.” Under Rosen, “‘[t]he nature of the offense itself does not preclude the setting aside of an offender’s conviction. That reason, standing alone, is insufficient to warrant denial of an application to set aside a conviction.’” Thus, remand for a proper determination, after considering “the circumstances and behavior of respondent since his adjudication and the public welfare, is necessary.” Finally, the court held that remand before a different judge was required based on the trial judge’s comments indicating “she would have substantial difficulty putting aside her previously expressed views” on the nature of CSC cases. Reversed and remanded.
Hearsay; People v Musser; Principle that a statement offered to show why police officers acted as they did is not hearsay; Statements made for purposes of medical treatment or diagnosis; MRE 803(4); People v LaLone; Distinguishing People v Shaw; Expert testimony; MRE 702; People v Thorpe; Ineffective assistance of counsel; Trial strategy; Failure to make a meritless argument; Sentencing; Upward departure; People v Steanhouse; Reasonableness & proportionality; People v Milbourn; Scoring of OV 4 (serious psychological injury requiring professional treatment); MCL 777.34(1)(a)
The court held that the trial court did not abuse its discretion by allowing inadmissible hearsay testimony or by departing upward from the sentencing guidelines, that a medical expert’s testimony did not improperly invade the province of the jury, and that defendant was not denied the effective assistance of counsel. He was convicted of multiple counts of CSC I and CSC II for sexually abusing the victim, his girlfriend’s daughter, when she was between 10 and 13 years old. The trial court sentenced him to 50 to 90 years for CSC I and 10 to 15 for CSC II. On appeal, the court rejected his argument that the trial court abused its discretion by allowing inadmissible hearsay testimony from the victim’s friend, her ex-boyfriend, the investigating detective, and the expert, finding each of his claims meritless. The court also rejected his claim that the expert’s testimony improperly invaded the province of the jury because he vouched for the victim’s credibility by asserting he believed her statements, noting he “was careful to say that there may have been more to the story than he was told, and clearly stated that he ‘cannot attest to the truth of what she said.’” It further rejected defendant’s contention that he was denied the effective assistance of counsel, finding that counsel “was not ineffective for failing to raise futile objections” to admissible testimony or make a meritless request for a Walker hearing, that counsel’s line of questioning sufficiently undermined the credibility of the expert’s testimony, and that other decisions were matters of trial strategy. Finally, the court rejected his argument that the trial court abused its discretion by imposing a sentence that was an upward departure from the minimum guidelines range, noting the departure “was well-supported, reasonable, and proportional to the seriousness of the offense.” Affirmed.
Ineffective assistance of counsel; Failure to move for a mistrial or take other actions due to a witness’s conduct; Challenges to a police expert witness; MRE 702; People v Kowalski; Qualifications; Failure to request a Daubert hearing; Failure to call a defense cell phone expert; Failure to raise a right of confrontation argument as to a cell phone provider’s certification; People v Nunley; United States v Yeley-Davis (10th Cir); Prejudice; Failure to request a voluntary manslaughter jury instruction & to object to the homicide instructions; Prosecutorial misconduct; Sentencing; Scoring of OV 3; Consideration of failure to admit guilt; People v Payne; Reasonableness challenge to a within-guidelines sentence; MCL 769.34(10); Cruel &/or unusual punishment; People v Bowling
Rejecting defendant’s ineffective assistance of counsel claims and finding no merit in his sentencing issues, the court affirmed his second-degree murder, FIP, and felony-firearm convictions and sentences. He was sentenced as a third-offense habitual offender to concurrent terms of 65 to 100 years for murder and 2 to 10 years for FIP, to be served consecutive to 5-year terms for his felony-firearm convictions. He argued, among other things, that defense counsel should have moved for a mistrial due to a witness’s (J) “inflammatory outburst” on the way to the witness stand. The court noted he appeared to overstate J’s conduct. J “did not make any statements to defendant, and his objectionable conduct of giving ‘an angry look’ was immediately halted.” Given that the trial court denied defense counsel’s motion to disqualify J, there was no reasonable probability it would have granted a motion for a mistrial. The court also rejected defendant’s claim that defense counsel’s challenges to a police expert witness (Q) were inadequate. It concluded that his claims did not sufficiently challenge Q’s “qualifications to render an opinion using cell phone records and towers to track locations.” The court also found that defendant’s speculation that a defense cell phone expert could have given “unspecified favorable testimony is insufficient to show that defense counsel’s failure to call an expert was objectively unreasonable, or” a reasonable probability there would have been a different outcome if one had been called. He also claimed defense counsel was ineffective for failing to raise a right of confrontation objection when the trial court admitted Sprint’s records, which “were accompanied by a declaration of authenticity from Sprint.” The court disagreed, concluding it was “evident that Sprint’s business records were created for the administration of its affairs as a cell phone provider and not for the purpose of establishing or proving a fact at trial. Further, the records in this case were properly authenticated, because it is undisputed that a declaration of authenticity accompanied” them. Thus, they were not testimonial and there was no Sixth Amendment violation. The court also upheld the 25-point score for OV 3, and rejected his claims that the trial court improperly considered his refusal to admit guilt and that his within-guidelines murder sentence was cruel and/or unusual punishment.
Sentencing; Departure; Reasonableness & proportionality; People v Lampe; People v Walden; Cruel & unusual punishment; People v Benton
The court held that because defendant’s sentence was proportional, and because the trial court was justified in using the prior friendship between defendant and the victim as the reason for departure, there was no abuse of discretion and resentencing was not warranted. It also held that his 30-year minimum sentence did not constitute cruel or unusual punishment. He was convicted of AWIM and receiving and concealing stolen property less than $20,000. The trial court sentenced him to 30 to 60 years for the AWIM conviction, an upward departure from the guidelines range of 171 to 285 months. After a long procedural history, the trial court ultimately denied his motion for resentencing. On appeal, the court rejected his argument that the sentence was not proportional or reasonable. “[I]n addition to the 130-point OV score, the trial court properly identified defendant’s ruthlessness and lack of conscience exhibited by his decision to befriend [the victim], gain his trust, and then betray him by hitting him, stealing from him, and ultimately attempting to kill him.” The trial court provided “sufficient reasoning to render the departure sentence proportional to the crime and the offender.” The court also rejected his claim that the upward departure and the resulting 30-year minimum sentence violated the constitutional prohibitions against cruel and unusual punishment. “The shocking nature of the offense” had been noted by the trial court and the court. “The record indicates defendant befriended [the victim] and then stole from him, struck him on the head with a wrench, and slit his throat while he was unconscious.” Defendant offered no evidence that his AWIM sentence was “disproportionate compared to similar assaultive crimes in Michigan or other states.” Indeed, he did not “compare his sentence to other similar cases at all; he only” argued it was unconstitutional because it was disproportionate. Affirmed.
Ineffective assistance of counsel; People v Vaughn; Trial strategy; People v Trakhtenberg; Failure to make a futile objection; Prejudice; People v Gioglio (On Remand); Jury instructions; People v Chapo; Self-defense instruction; Inconsistent verdicts; People v Garcia
Holding that defendant was not denied the effective assistance of counsel, the court affirmed her conviction. She was acquitted of second-degree murder, but convicted of felony-firearm, arising out of an incident in which she shot the victim, allegedly in self-defense. In a prior appeal, the court affirmed. However, the Supreme Court vacated and remanded for a Ginther hearing to determine whether she was denied the effective assistance of trial counsel. Following the hearing, the trial court found defendant was not denied effective assistance and denied her motion for a new trial. On appeal, the court rejected her argument that “her trial lawyer provided ineffective assistance by failing to object to the jury instructions, by not arguing during closing argument that self-defense applied to the felony-firearm charge, and by not requesting the trial court to specifically instruct the jury that self-defense applied to” this charge. First, although the trial court “could have more clearly stated that self-defense was applicable to the charge of felony-firearm, the instructions given nevertheless fairly presented the issues to be tried and sufficiently protected” defendant’s rights. As such, “any objection to the instructions given would have been futile.” In addition, her lawyer’s performance “did not fall below an objective standard of reasonableness when he declined to request that the jury be given redundant—albeit more explicit—instructions that related to the less serious charge.” Finally, because the jury “was likely either compromised or was lenient when returning the verdict,” the court could not “say with any degree of certainty—much less a reasonable probability—that additional jury instructions or arguments would have made any difference to the outcome of the trial.”
Divorce; Spousal support; MCL 552.23(1); Richards v Richards
Concluding that defendant-ex-wife failed to show that the trial court clearly erred in considering the spousal support factors, the court held that she was not entitled to modification or reversal of its decision not to award spousal support. The trial court analyzed each of the relevant factors in its opinion following the divorce trial. The record supported its findings as to the parties’ ability to pay alimony. “The trial court found that plaintiff ‘incurred significant debt’ to pay the family’s ‘basic living expenses’” and that going forward, the parties would “each have similar but separate expenses . . . .” It additionally determined “that plaintiff’s ‘income alone [was] sufficient to pay his own expenses, including the child support debt to [d]efendant,’ but did ‘not provide an ability to pay alimony, as well.’” Based on the record, the court could not conclude that its findings as to each party’s gross annual income constituted clear error. While defendant asserted that the trial erroneously found no evidence showed she had a diminished capacity to work, the record established that it considered her “particular circumstances and responsibilities in making its spousal support decision.” It analyzed the parties’ present situation, “their health, parental obligations, and needs. The trial court did not ignore defendant’s financial condition nor disregard her care for the parties’ special needs adult son.” As to the parties’ past relations and conduct factor, the “trial court was in the best position to make findings regarding allegations of domestic violence and abuse and the credibility of the parties in this regard.” Further, it did not clearly err in determining “that no evidence supported defendant’s allegations of plaintiff’s infidelity.” The court also found no clear error in its findings as to the source and amount of property awarded factor, or in its findings as to the parties’ present situation. It noted they both were employed, and found “that plaintiff’s employment ‘appear[ed] permanent’ and that defendant ‘may have an[] increased earning ability in the future as she has just entered her current workforce.’ The trial court also noted that although defendant had family support at the time of the opinion, plaintiff did not.” It further found that they each “needed to ‘secure their own separate housing and will have their own regular living expenses in the future.’” The evidence supported these findings. Affirmed.
Medical malpractice; The two-year limitations period; MCL 600.5805(8); The “discovery rule”; MCL 600.5838a(2); Solowy v Oakwood Hosp Corp; Bowman v St John Hosp & Med Ctr; Distinguishing Jendrusina v Mishra; Notice of intent (NOI)
The court held that because the facts available to plaintiff following her appointment with an eye specialist were sufficient to allow her to infer malpractice by defendant-eye doctor, she should have discovered her claim at that time. Because she filed her complaint more than six months after the appointment, and more than two years after her final visit with defendant, it was time-barred, and the trial court should have granted summary disposition for defendant. Roughly 18 months after being informed by a specialist that she suffered permanent vision damage as a result of defendant’s delay in diagnosing her glaucoma, plaintiff served defendant with a NOI asserting this information. Several months later she filed her complaint against defendant. The trial court denied defendant’s motion for summary disposition. On appeal, the court agreed with defendant that she was entitled to for summary disposition. “Applying the standard announced in Solowy and reiterated in Bowman to the facts of this case, we have little difficulty concluding that plaintiff ‘should have discovered’ a possible cause of action” when the specialist informed her that she had suffered permanent vision damage due to the delay in diagnosing her glaucoma. Based on the information known to plaintiff after that appointment, “plaintiff ‘could have inferred, without speculation or conjecture, that [defendant] might have committed malpractice,’ and she therefore '“should have discovered” a possible cause of action’ at that time.” Further, contrary to plaintiff’s argument, defendant provided support for her claim that the specialist “told plaintiff that her permanent vision loss was the result of a delayed diagnosis” by pointing to plaintiff’s NOI, wherein she stated that at this appointment, she was told by the specialist that “‘her optic nerves have been damaged and cannot be repaired, a direct result of the delayed diagnosis.’” Finally, the court distinguished Jendrusina, noting it “simply does not support plaintiff’s argument that ‘[o]nly when [plaintiff] possessed sufficient knowledge of . . . the standard of care for optometrists diagnosing and treating glaucoma did the statutory obligation to institute the instant claim within 6 months begin.’ Yet, even if Jendrusina did support plaintiff’s argument (which it does not), it would unquestionably conflict with both Solowy and Bowman, and we therefore could not follow it.” Reversed.
Action seeking PIP benefits for replacement services & attendant care; MCL 500.3105(1); MCL 500.3107(1)(a) & (c); Fraud; Meemic Ins Co v Fortson
In an order in lieu of granting leave to appeal, the court vacated the Court of Appeals judgment (see e-Journal # 75104 in the 4/2/21 edition) and remanded the case to the Court of Appeals for reconsideration in light of the court’s opinion in Fortson.
Insurer priority for payment of PIP benefits; MCL 500.3114(1) & (4)(a); Amerisure Ins Co v Coleman; “Domicile”; Grange Ins Co of MI v Lawrence; Determining domicile; Workman v Detroit Auto Inter-Ins Exch; Other indicia; Dairyland Ins Co v Auto-Owners Ins Co; Student domicile; Goldstein v Progressive Cas Ins Co; Effect of domicile; MCL 500.3163; Tienda v Integon Nat’l Ins Co; Corwin v DaimlerChrysler Ins Co
The court held that the trial court properly concluded, as a matter of law, that plaintiff’s domicile at the time of his accident was at his parents’ Dearborn, Michigan home, not in California. Thus, because defendant-insurer (MIC) insured his parents and he was domiciled in their home, the trial court also properly concluded MIC was the insurer highest in priority and responsible for providing his PIP benefits. Plaintiff was injured when he slipped and fell on a patch of ice in a Dearborn parking lot while stepping out of a rental car he was driving that was insured by defendant-Liberty Mutual. He returned to California, where he received all of his medical care arising from the accident. He sued defendants, asking the trial court to determine which insurer was responsible for providing him PIP benefits. On appeal, the court rejected MIC’s argument that because no record evidence rebutted the presumption that plaintiff’s domicile ceased being his parents’ Dearborn home when he moved into his first marital home years earlier, the trial court erred by finding his domicile at the time of the accident was Dearborn, and by denying its motion for summary disposition. Given that most of the Workman-Dairyland factors weighed in favor of a Dearborn domicile, the court held that “the trial court correctly concluded that plaintiff was domiciled at his parents’ Dearborn home at the time of the accident.” The undisputed facts established he “intended to remain domiciled in Michigan and that he considered his permanent home to be his parents’ Dearborn home, where he exclusively lived while in Michigan.” For that reason, this “was plaintiff’s ‘true, fixed, permanent home,’ to which he intended to return whenever he was absent. [His] home in California, on the other hand, was merely a ‘place of abode’ for the ‘mere special or temporary purpose’ of attending medical school and at which he never intended to stay permanently.” The court noted that even if it “were to apply MIC’s suggested presumption about the domiciles of spouses, that presumption was significantly rebutted by the evidence in this case demonstrating plaintiff was domiciled at his parents’ Dearborn home at the time of the accident.” Moreover, that home remained his domicile “regardless of whether he intended to move into that home when he returned to Michigan, and it would only cease being his domicile if he established a new domicile once he returned to Michigan.” Affirmed.
Garnishment action by one insurer against another; Collateral estoppel; Wilcox v Sealey; Res judicata; Privity; Cloud v Vance; Effect of failing to pursue appellate review of the order denying a motion to intervene in a related declaratory judgment action; Whether the garnishment action was a “collateral attack” on the settlement in the declaratory judgment action; Workers’ Comp Agency Dir v MacDonald’s Indus Prod, Inc (On Reconsideration); Coverage under a homeowner’s policy; “Resident”; Grange Ins Co of MI v Lawrence
The court held that neither collateral estoppel nor res judicata applied to bar third-party plaintiff-Allstate’s current garnishment action against garnishee defendant-Pioneer. Further, the fact Allstate did not pursue appellate review of an order denying its motion to intervene in Pioneer’s declaratory judgment action against third-party defendant-Odeh did not render this garnishment action an impermissible collateral attack on the settlement in that case. Finally, the trial court did not err in granting Allstate summary disposition as to whether Odeh had coverage under his mother’s Pioneer homeowner’s policy. The home of Allstate’s insured, plaintiff-Muha, was destroyed by fire. It was “highly contested” whether Odeh resided there or in his mother’s home. After Muha sued Allstate, it filed “a third-party subrogation complaint against Odeh based on negligence.” He forwarded it to Pioneer seeking to have it defend and indemnify him. Pioneer did not name Allstate, Muha, or his mother as defendants in its declaratory judgment action against him. After receiving the “final order” in that action, Allstate unsuccessfully moved to intervene and to set it aside. Following a bench trial on its third-party complaint, Odeh was found liable to Allstate and a judgment was entered. It then filed a request and writ for garnishment on Pioneer. On appeal, the court determined that the second element of collateral estoppel was not met here because “Pioneer’s deliberate actions denied Allstate a full and fair opportunity to litigate the issue of Odeh’s coverage under the Pioneer policy.” As to res judicata, Allstate was not a party to the declaratory judgment action, and it was not in privity with Odeh. The court found Cloud “dispositive. Pioneer knew of Allstate’s claim against Odeh, yet it did not provide meaningful notice to Allstate. Allstate was denied the right to intervene, and deprived of a full and fair opportunity to litigate the question of whether Odeh resided in his mother’s home and” thus, was insured under her policy. Further, Pioneer did not persuasively explain “how this garnishment action constituted an impermissible collateral attack of” a trial court order. Lastly, “the trial court did not err by finding that Odeh simultaneously maintained two residences, one of them being the home that he shared with his mother. As such, he is an ‘insured’ under the plain language of the” Pioneer policy. Affirmed.
Actions arising from the foreclosure & sale of a condo; Motion for relief from judgment pursuant to MCR 2.612(B); Lawrence M Clarke, Inc v Richco Constr, Inc; Whether the trial court complied with the court’s remand instructions; MCL 600.3238’s notice requirements; Mootness; Scope of the court’s remand instructions; Detroit Club Holdings (DCH)
Rejecting defendant-Edward’s (also known as Kloian) argument that the circuit court failed to comply with remand instructions, the court affirmed its order affirming the district court’s order denying his motion for relief from judgment and dismissing his third amended complaint in one of these consolidated cases. The cases arose from the foreclosure and later sale of a condo Kloian had purchased. In 2016, the condo association posted a Notice of a Foreclosure Sale on the condo and published it in a newspaper. A sheriff’s sale was later held, and plaintiff-DCH purchased the unit. It later filed a complaint in district court against Kloian, alleging he remained in possession of the condo and that DCH had a right to enter into possession of it pursuant to MCL 600.3238. A default judgment was entered against him. He “filed a motion for relief from judgment pursuant to MCR 2.612(B), contending, in relevant part, that he had never received notice of any actions against the property[.]” In another case on appeal, plaintiffs-Soule and Langenderfer sued “Kloian to quiet title and for slander of title as to the property.” He then sued them, DCH, and others. In a prior appeal, the court “required that 'on remand, if the circuit court again determines that DCH failed to comply with the notice requirements in MCL 600.3238, it must determine whether [Soule and Langenderfer] are innocent third parties who will be prejudiced if the default judgment is set aside.’” On remand, the circuit court “affirmed the district court’s decision to deny Kloian’s motion for relief from judgment on the ground that Soule and Langenderfer would be prejudiced if the district court’s judgment were set aside.” In this appeal, Kloian asserted the circuit court failed to comply with the court’s instructions because they required it “to determine whether DCH complied with MCL 600.3238 before deciding whether Soule and Langenderfer were innocent third persons who would be prejudiced under MCR 2.612(B).” But the court found that the conditional nature of its language on which he relied showed “that the circuit court did not err.” Further, the circuit court “addressed whether DCH complied with the notice requirements in MCL 600.3238 by ruling that the issue was moot in light of” its ruling on the status of Soule and Langenderfer. Kloian failed to show it erred in this determination.
The General Property Tax Act (GPTA); Retention of surplus proceeds after a tax-foreclosure sale; Rafaeli, LLC v Oakland Cnty; Post-Rafaeli GPTA amendments providing a limited mechanism for obtaining surplus proceeds; 2020 PA 256; Applicability of Rafaeli or the GPTA amendments; Retroactive application of judicial decisions; County of Wayne v Hathcock; MCL 211.78t(1); Qualified immunity; Holeton v City of Livonia; Inverse condemnation & unjust enrichment; Michigan’s Takings Clause; Available remedies; Post-tax sale interest; Federal takings claim; Freed v Thomas (ED MI); Fox v City of Saginaw (ED MI); MCL 211.78; Excessive fines claims; Class action certification
In these consolidated appeals, the court held that plaintiffs’ inverse condemnation and unjust enrichment claims for defendants’ retention of surplus proceeds after tax-foreclosure sales of plaintiffs’ properties were viable under Rafaeli. Further, Rafaeli applied to pending cases such as those of the named plaintiffs here. It also held that the individual defendants-municipal officials were entitled to qualified immunity. The court rejected plaintiffs’ argument that they were “entitled to any recovery beyond the surplus proceeds from the tax-foreclosure sale but” agreed they were entitled to post-tax sale interest on those proceeds. Finally, it upheld dismissal of their excessive fines claims and found the trial courts did not err in not certifying the cases as class actions. The court concluded that, “as explained in Rafaeli, in their inverse-condemnation and unjust-enrichment claims, plaintiffs alleged viable claims of violation of their common-law property rights protected under Michigan’s Takings Clause to collect the surplus proceeds that are realized from the tax-foreclosure sale of property.” Thus, the trial courts erred in dismissing those claims. In addition, the court rejected defendants’ assertion that the wrong defendants were sued. Defendants’ argument that Rafaeli should only be given prospective application and thus, did not apply to these cases, also failed. The court did not find that the “Supreme Court in Rafaeli overruled clear and uncontradicted caselaw or specifically announced a new rule that at least had not been previously foreshadowed.” Rather, the court held “that Rafaeli, like Hathcock, should be applied to pending cases, such as those of the named plaintiffs, in which a challenge has been raised and preserved.” The court agreed with plaintiffs that the Supreme Court had “indicated its intent that Rafaeli be applied to cases in which the parties are similarly situated to the named plaintiffs’ claims in these cases.” It further found that they “stated valid federal takings claims” and thus, if they prevail, “interest should be added to any judgments . . . .” In ruling that the individual defendants were entitled to qualified immunity, the court noted that at the time of the alleged wrongdoing, Rafaeli had not yet been issued and “governmental entities and their officials could reasonably rely on” U.S. Supreme Court precedent. Affirmed in part, reversed in part, and remanded.