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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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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
Dischargeability of a state-court judgment; Debts incurred by embezzlement or defalcation while acting in a fiduciary capacity; 11 USC § 523(a)(4); Collateral estoppel; Fraud; Whether partners were in a “fiduciary relationship”
In this appeal arising from an adversary proceeding to have a state-court judgment declared nondischargeable, the court held that the bankruptcy court erred by ruling that plaintiff-Long was collaterally estopped from litigating the issue of fraud. He successfully sued his business partners, defendants-Piercys, in state court over the percentage of profits they were required to pay him under their partnership agreement. After he obtained a judgment, they filed for bankruptcy. Long brought an adversary proceeding in bankruptcy court seeking a declaration that the debt could not be discharged under § 523(a)(4). The bankruptcy court granted the Piercys summary judgment, ruling that “Long was collaterally estopped from arguing that the debt arose from embezzlement because the state-court judgment was based only on breach of contract, and that there was no fiduciary relationship that would support a claim under the defalcation prong because there was no express trust created by the parties.” The district court affirmed. On appeal, the court discussed the differences between collateral estoppel and res judicata as applied to dischargeability in bankruptcy proceedings, and held that because the dischargeability issue could not have been litigated in state court, the Piercys could not assert res judicata as a defense. As to collateral estoppel, the bankruptcy court “must review the record of the state-court proceeding to determine if any factual issues relevant to dischargeability have been actually and necessarily determined by the state court.” Long asserted a claim for conversion under Tennessee law, and not contract breach alone, and the state court “judgment was just as likely based on the conversion claim as on the contract claim.” The bankruptcy court “erred in failing to consider whether the fraud issue was necessary to the state court’s judgment.” The court concluded it erred by ruling he was collaterally estopped from litigating the issue of fraud. As for § 523(a)’s “defalcation prong,” under Tennessee law, partners are in fiduciary relationships. Thus, the state-court judgment may “be declared nondischargeable as a debt for fraud or defalcation while the Piercys were acting in a fiduciary capacity under § 523(a)(4), provided that Long can produce evidence of their wrongful intent.” Reversed and remanded.
Preliminary exam; People v Laws; The magistrate’s role; People v King; Bindover; People v Hudson; Receiving & concealing stolen property; People v Pratt; Motion to quash; MCR 6.008(B); Due process; Judicial bias; People v Jackson; Amendment of an indictment; MCL 767.76; People v McGee; Amendment of an information to add new charges; MCR 6.112(H); Unfair surprise; People v Hunt; Right to counsel; Self-representation & waiver; MCR 6.005(D); People v Anderson; Substantial compliance; People v Adkins; Ineffective assistance of counsel; People v Randolph; Right to a properly instructed jury; Sufficiency of the evidence; Sentencing; Scoring of OV 19 (interference with the administration of justice); MCL 777.49(c); People v Barbee
The court held that trial court did not err by allowing amendment of the information, by granting defendant’s request to waive counsel and allow him to proceed in propria persona, or by scoring 10 points for OV 19. It also held that he was not denied the effective assistance of counsel, and that the evidence was sufficient to support his conviction. He was convicted of breaking and entering a vehicle, causing damage to the vehicle, and sentenced as a fourth habitual offender to 46 months to 10 years. On appeal, the court first found that the trial court’s decision to allow amendment of the information did not pierce the veil of impartiality or prejudice defendant, and was not unsupported by the preliminary exam evidence or an abuse of discretion. “It does not appear that the trial court held any belief as to defendant’s guilt or innocence and it showed no deep-seated antagonism toward defendant.” In addition, the trial court did not “simply amend the information on its own,” and defendant was not “unfairly surprised or prejudiced by” it. Further, there was “sufficient circumstantial evidence to establish probable cause to believe that the crime of breaking and entering causing damage to a vehicle was committed and that defendant committed it.” Moreover, amendment of the information was supported by the preliminary exam evidence. The court also rejected his claim that his request to represent himself at trial was not unequivocal and voluntary because he made the request only out of desperation when he felt his attorney was unprepared. “The record reflects that the trial court conscientiously complied with every requirement of MCR 6.005(D) and Anderson, exceeding the ‘substantial compliance’ required under Adkins.” It next rejected his contention that he was denied the effective assistance of counsel, noting he could not “logically, challenge the qualify or effectiveness of his representation of himself on appeal.” It further rejected his argument that the evidence was insufficient to support his conviction of breaking and entering a motor vehicle causing damage to the vehicle, finding each of the elements was met. Finally, it rejected his claim that the trial court erred by scoring 10 points for OV 19, noting the score was supported by a preponderance of the evidence. Affirmed.
Sentencing; Whether the trial court articulated an adequate justification for the imposition of the maximum possible sentence; People v Tanner
On remand from the Supreme Court, the court remanded for the trial court to further articulate its reasons for the departure sentence or to resentence defendant. He pled guilty to OWI causing death. The trial court departed from the minimum sentence of 36 to 71 months and imposed 10 to 15 years. While "the trial court identified three sentencing considerations that very well may justify an upward departure from the sentencing guidelines if elaborated upon, we conclude that the trial court’s remaining justifications for the departure from the guidelines range do not constitute appropriate considerations in this case." First, the record did not support the trial court’s claim that "defendant had failed to support his children. Moreover, the trial court did not articulate how or why defendant’s child support payments, or lack thereof, were relevant to whether a departure sentence was proportional to the circumstances surrounding the offense or the offender." Second, the court agreed with defendant, and the prosecution conceded, that the trial "court improperly considered as a sentencing factor defense counsel’s request that defendant undergo a forensic examination to determine whether he was competent to stand trial." Further, it was "unclear how much weight the trial court afforded to each of its stated reasons, or how each reason factored into the trial court’s conclusion that an upward departure sentence was warranted. Additionally, the trial court did not adequately justify the extent of the particular departure in this case, which resulted in the imposition of the maximum minimum sentence permissible under the two-thirds rule" in Tanner and codified in MCL 769.34(2)(b). "In this case, the trial court failed to explain how its articulated reasons and the circumstances of the offense and the offender rendered the maximum possible sentence more proportional than another sentence would have been."
Divorce; Legal custody; Consideration of the statutory best-interest factors; MCL 722.26a(1)(a); Established custodial environment; Parenting-time; Proper cause or change of circumstances; Child support; Imputing income; Carlson v Carlson; 2017 MCSF 2.01(G)(1) & (2); Assignment of student loan debts
The court affirmed the trial court’s judgment of divorce granting sole legal and physical custody of the parties’ children to plaintiff-mother, its child support determination and its assignment to her of the student loan debts she accrued during the marriage, and the denial of defendant-father's motion to increase parenting time. He argued that it was inappropriate for the trial court to consider the best-interest factors when deciding the issue of legal custody. This contention lacked merit. “The Legislature explicitly provided that the trial court should consider the best-interest factors when deciding whether joint legal custody is in a child’s best interests.” Thus, the court held that "the trial court did not err by including these factors in its analysis." Defendant further argued that “for a majority of the best interests factors, the trial court erred by discounting his parental role on the basis that he worked outside the home, and improperly assumed an established custodial environment with plaintiff on this basis.” The court concluded otherwise, determining that "the trial court did not discount the parental role of defendant because he was a working parent; rather, its decision was based on defendant’s actual role and presence in the children’s physical and psychological environments.” The trial court found that, since at least 5/16, “plaintiff had provided for the children’s emotional, religious, education, and medical needs, as well as love and guidance. It found that plaintiff had been a stay-at-home parent and home-schooled the children, while defendant’s relationship with the children had been ‘one of distance with visitation since 2016.’ The evidence did not clearly preponderate against the trial court’s findings.”
Child custody; The Child Custody Act (CCA); Standing; “Parent”; MCL 722.22(i); “Natural parent”; Stankevich v Milliron (On Remand); Distinguishing LeFever v Matthews; The equitable-parent doctrine; Van v Zahorik; Lake v Putnam; “Third person”; MCL 722.22(k); MCL 722.26b; MCL 722.26c(1)(b); Due process; Equal protection; Sheardown v Guastella
Holding that plaintiff could not achieve the status of “natural parent” under the equitable-parent doctrine given that she was not ever married to defendant, the court concluded that she was a third person under the CCA as to the child at issue. Because she did not establish the necessary factors for standing under MCL 722.26b or 722.26c(1)(b), she was not entitled as a third person to bring this custody action. The court also rejected her due process and equal protection claims. The parties had been in a romantic relationship but never married. “During the relationship, defendant underwent in-vitro fertilization and” gave birth to a child. Plaintiff admittedly “has no biological relationship to the child,” and did not adopt the child. She filed this custody complaint after defendant demanded she cease contact with the child. Plaintiff contended she had “standing to seek custody under the CCA because the parties were ‘equitably married’ at the time the child was conceived and born, and she therefore is the child’s ‘natural father.’” Thus, she urged the court to “extend the existing equitable-parent doctrine to create a new legal concept of ‘equitable marriage.’” It declined to do so, and concluded that she was “not a parent of the child.” Noting the equitable-parent doctrine only applies to married couples, it found that here, “as in Lake, because the parties were never married, plaintiff’s argument that she is an equitable parent” failed. Plaintiff contended that she had standing under LeFever’s “‘elastic definition’ of natural parent . . . .” However, the court noted that she lacked “the physical connection to the child that this Court in LeFever found determinative to being a natural parent.” She also was not an adoptive parent. Because she was “not related to the child genetically or by birth, she could only be determined to be a parent if under the equitable-parent doctrine she met the requirements for being a natural parent.” She failed to do so. While she relied on the reasoning of the Lake concurrence, “the majority opinion in that case declined to extend the equitable-parent doctrine by imposing the status of marriage upon a couple who had never married.” The court affirmed the trial court’s order granting defendant summary disposition.
Standing; Olsen v Jude & Reed, LLC; Real party in interest; MCR 2.201(B); Assignment of rights; Allardyce v Dart; Indemnification; St Luke’s Hosp v Giertz; Mootness; Duty to defend; Costs & attorney fees; Failure to address the terms of a release
The court held that the trial court erred by denying defendant-Great Lakes summary disposition of plaintiffs-medical providers’ complaint against it and its own third-party complaint against third-party defendant-Kukan. In the underlying case, Kukan sued Great Lakes and a no-fault insurer for injuries he sustained while working at a recycling plant owned by Great Lakes. Meanwhile, he assigned rights to plaintiffs. The trial court granted the insurer summary disposition, while Kukan and Great Lakes entered into a settlement agreement and release. Plaintiffs then sued Great Lakes in the present action seeking recovery “for the care and treatment they provided to Kukan because their medical bills were unpaid.” In turn, Great Lakes filed a third-party complaint contending Kukan was responsible to indemnify it for any judgment obtained by plaintiffs. On appeal, the court agreed with Great Lakes that the trial court erroneously denied it summary disposition of plaintiffs’ complaint by concluding the assignment from Kukan to plaintiffs conferred standing upon plaintiffs, allowing them to sue Great Lakes. “[T]he plain language of the assignment established that Kukan only assigned his ‘rights, privileges and remedies’ for services provided by plaintiffs to which he was entitled under the no-fault act, i.e., PIP benefits.” Given that the assignment was “plainly limited to claims under the no-fault act, the trial court erroneously found that Kukan assigned all of his legal rights to plaintiffs—including under tort and equitable theories.” In light of the court’s conclusion that plaintiffs did not have standing to pursue the claim against Great Lakes, it found they also could not obtain a judgment against Great Lakes. As such, “Great Lakes will not be held accountable to plaintiffs, and therefore, cannot obtain a recovery for indemnification” from Kukan, making the issue of indemnification moot. But the court noted that the trial court “never examined the terms of the release independent of the claimed assignment to address whether a duty to defend was invoked.” Reversed as to the denial of Great Lakes’ motion for summary disposition of plaintiffs’ complaint, vacated as to the denial of its motion for summary disposition of its third-party complaint, and remanded for further proceedings as to the third-party complaint.
Commercial general liability (CGL) coverage dispute; Hawkeye-Sec Ins Co v Vector Constr Co; “Occurrence”
On remand from the Supreme Court for consideration of any remaining issues, the court found that the issues raised by defendant-Amerisure were either irrelevant or premature. Thus, it vacated the trial court’s order denying Amerisure’s summary disposition motion and remanded for consideration in light of the Supreme Court’s opinion. Relying on Hawkeye, the court previously concluded “[i]t is an established principle of law that an ‘occurrence’ cannot include damages for the insured’s own faulty workmanship.” Thus, it had reversed the trial court “because there was no genuine issue of material fact the only damage was to” plaintiff-Skanska’s own work product. The Supreme Court reversed the court’s decision, ruling that “an ‘accident’ may include unintentionally faulty subcontractor work that damages an insured’s work product.” On remand, Amerisure asserted “there is a distinction between whether the faulty work was performed by a named insured or an additional insured and that the policy must be limited to the subcontractor’s” (defendant-MAP’s) perspective. This argument was not properly before the court because it was not presented to the trial court, and the issue required factual development. The court instructed the parties to address the issue “in the trial court, which is then to examine the scope of coverage in light of the Michigan Supreme Court’s opinion.” As to Amerisure’s argument the Supreme Court’s holding is to be only applied prospectively, the court found that “the question of prospective or retrospective application is irrelevant. The Michigan Supreme Court did not overrule Hawkeye; it determined that Hawkeye” did not apply here. On remand, the trial court must “determine whether there is coverage (i.e., whether there was an ‘occurrence’) for the damage alleged in the complaint under the language in the CGL policy and, if so, the scope of such coverage.” Amerisure also asked the court “to affirm its position on the alternative grounds that coverage was properly denied on the basis of the ‘Your Work’ exclusion” in the CGL policy. Although a fact question may exist as to “whether the exclusion applied on the basis of ‘the extent of the work product and whether damages occurred beyond it[,]’” the trial court has to first decide “if coverage applies. The exclusions Amerisure contends are dispositive may or may not apply, depending on whether the trial court determines an ‘occurrence’ took place.”
Continuing order for mental health treatment; In re Portus; Whether respondent’s requested transition to an independent, community-based setting with team support was supported by a preponderance of the evidence; MCL 330.1469a
The court held that the probate court did not abuse its discretion in ruling that “a preponderance of the evidence did not support respondent’s transition to an independent, community-based setting with support from an Assertive Community Treatment Services team." Thus, the probate court’s continuing order for mental health treatment at his current placement for up to 365 days was affirmed. Respondent was found not guilty of murdering his mother by reason of insanity in 2001 and subsequently received mental health treatment at various facilities. A 2021 petition seeking the continuation of the probate court’s mental health treatment order alleged that he “continued to be a person requiring treatment and that [he] needed combined hospitalization and assisted outpatient treatment for a period of one year.” At a hearing on the petition, his psychiatrist “opined that respondent could transition to a community-based treatment setting where he would receive treatment from an Assertive Community Treatment Services team.” But the probate court entered a continuing order for mental health treatment “based upon its finding by clear and convincing evidence that respondent continued to be an individual having a mental illness requiring treatment because, as a result of his mental illness, he could be expected to intentionally or unintentionally seriously physically injure himself or others.” The court noted that the probate court had “considered the record evidence and found that a preponderance of the evidence did not support respondent’s transition to an independent, community-based setting with support from an Assertive Community Treatment Services team. Although evidence indicated that respondent had made progress, evidence supported the probate court’s finding that it could not be predicted whether respondent would engage in violent behavior in the future.” After reviewing the entire record, the court held that this decision was correct. Thus, it also found that “the probate court did not abuse its discretion when making its dispositional decision based upon a preponderance of evidence in the record.”
Removal of a child from a parent’s care & custody; Due process; Notice of the preliminary hearing; MCR 3.920(D)(2)(b); Waiver by appearance; MCR 3.920(H); MCR 3.965(B)(1); Authorization of a supplemental petition; MCR 3.965(B)(12); MCL 712A.2(b); Allegations against a nonrespondent parent; MCR 3.961(C)(2); Preliminary hearing; In re Ferranti; Reasonable reunification efforts; MCR 3.965(C)(2)(d) & (C)(4); MCL 712A.13a(9)(d); Failure to provide reunification services before removal
The court held that the trial court did not err by authorizing a supplemental petition formally removing respondent-father’s child from his care and custody. The trial court authorized the petition on the basis that respondent was currently incarcerated, unable to care for child, and had not provided any relative to care for the child. The court rejected his argument that the trial court erred by authorizing the supplemental petition after the preliminary hearing because he lacked proper notice for that and previous hearings, noting he failed to establish that the service of process related to his preliminary exam did not comply with the relevant provisions. “By appearing at the hearing and failing to raise any objections to service, [he] waived any defects in service.” In addition, the trial court record contained a proof of service stating that notice was mailed to respondent, “and e-mail correspondence showing that the notice of hearing and petition were provided to personnel at the sheriff’s office overseeing his custody in California.” Most importantly, he indicated at the subsequent hearing that he “received copies of all of the petitions and was aware of the allegations contained therein.” The court further concluded that “the trial court did not err by finding that one or more of the allegations in the petition were true.” It noted that his parental rights “have not been terminated, and the authorization of the petition was based on factors related to—but distinct from—his incarceration.” The evidence presented at the preliminary hearing “was sufficient to find probable cause that one or more allegations in the petition were true and fell within MCL 712A.2(b).” Finally, as to his contention regarding reasonable efforts to prevent the removal of the child, given the circumstances, particularly respondent’s “incarceration, it is unclear what efforts could have been undertaken to prevent the child’s removal beyond attempting to place the child with relatives and rehabilitating the child’s mother so that she could resume custody.” Further, his argument that the DHHS “should have provided services to him directly conflates reasonable efforts to prevent removal with reasonable efforts to facilitate reunification, and [he] cites no legal authority to support his position that reunification services should have been provided before removal.” And while it appeared the trial court and attorneys briefly and mistakenly referred to him as a “putative, rather than legal, father,” the error was “corrected on the record, and in any event had no impact on [his] substantial rights.” Affirmed.
Termination under § 19b(3)(g); The children’s removal; MCL 712A.13a(9); Accepting a respondent’s plea to establish jurisdiction over the children; MCR 3.971(B)(4); In re Pederson; Sufficient factual basis for the plea; MCR 3.971(D)(2); Grounds for exercising jurisdiction; MCL 712A.2(b)(1) & (2); Evidentiary rulings at the termination hearing; Exclusion of a witness for failure to timely disclose the prospective witness; MCR 3.922(A)(1); Admission of documents; Rebuttal testimony; Reasonable reunification efforts; In re Frey; Children’s best interests; In re White; In re Olive/Metts
The court held that § (g) was established and that terminating respondent-father’s parental rights was in the children’s best interests. Further, the trial court did not plainly err in removing them from his care, or in accepting his plea and exercising jurisdiction over them. There was no merit to his claim his plea was invalid because it lacked a factual basis. The court also rejected his challenges to the admission and exclusion of evidence at the termination hearing, and his claim the DHHS did not make reasonable reunification efforts, concluding that he “failed to uphold his ‘commensurate responsibility’ to engage in and benefit from” offered services. Thus, it affirmed the order terminating his parental rights. It determined that the trial court considered all five of MCL 712A.13a(9)’s requirements in deciding to place the children in foster care. “The trial court noted the parties’ extensive history with domestic violence and respondent’s failure to comply with or benefit from services that were provided to him in previous proceedings.” The court found no plain error. As to the adjudication, the trial court complied with MCR 3.971 and the court noted the record did “not support that the trial court viewed respondent’s plea as the sole basis to terminate his parental rights.” As to the exercise of jurisdiction, to the extent respondent contended “that a nolo contendere plea is insufficient to establish jurisdiction,” he was mistaken. In addition, the evidence on which the trial court relied “was sufficient to establish support for a finding that jurisdiction was proper under MCL 712A.2(b)(1)[.]” As to a statutory ground for termination, the record was “replete with evidence that respondent acted in an intimidating and aggressive manner in the presence of caseworkers and service providers during the proceeding.” He was also at times unemployed, moved several times, “sometimes missed parenting times and struggled with effectively parenting the children throughout” the case. The court concluded that given the lack of evidence he “would be able to regulate his emotions, engage in healthy relationships, effectively parent the children, and maintain stable housing and employment, it is unlikely that he would be able to provide proper care and custody within a reasonable time.”