Providing summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit. Over 60,000 cases summarized to date.
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Securities fraud; “Omission-based” claims; Whether defendants’ failure to inform plaintiff of their intention to obtain private equity financing supported an omission-based securities claim; Michigan common-law “fiduciary breach” claim; Reed v Pitkin; Violation of Section 10(b) of the Exchange Act & Securities & Exchange Commission Rule 10b-5; “Materiality”; Basic Inc. v Levinson; Michigan Uniform Securities Act
[This appeal was from the WD-MI.] The court affirmed summary judgment for defendant-Northern Biomedical Research, Inc. (NBR) and the individual defendants on plaintiff-Boyd’s securities law and related claims. But it reversed on three claims, holding that the district court applied an incorrect legal standard under Michigan common law. Boyd sold a majority stake in NBR to the individual defendants. He later sold them his remaining shares. The next spring, they obtained a cash infusion from a nonparty venture capital company (Avista), increasing NBR’s value. Boyd sued, alleging they violated securities law and breached Michigan common law fiduciary duties by failing to disclose their dealings with Avista or their interests in obtaining private-equity financing while they were negotiating for his remaining shares. The district court granted defendants summary judgment on all counts. The court reversed summary judgment on “Boyd’s claim in Count III that the individual defendants violated their fiduciary duties to him under Michigan common law.” It applied “Michigan’s higher standard of fiduciary duty” to this count and held that “a jury could reasonably find that Boyd was entitled to know about NBR’s consideration of equity financing and Avista’s interest in NBR.” As to his securities law claims, it held that “defendants’ failure to disclose information relevant to NBR’s purchase of Boyd’s stock was actionable.” However, their “failure to disclose information about Avista’s interest was not material as of” the date of the stock purchase. Under the “circumstances, the mere agreement ‘to establish a relationship’ between NBR and Avista was not material information under federal securities law.” In addition, “NBR’s consideration of equity financing as an option as a general matter was” highly uncertain as of that date. The court concluded that the “facts cannot support a finding of a material omission under Basic.” It also affirmed dismissal of Boyd’s claim under the Michigan Uniform Securities Act as duplicative. As his contract claims for breach of representation and indemnification were predicated on his securities-fraud claims, the court likewise upheld summary judgment on those counts. But as to Counts IV and V, alleging fraudulent misrepresentation, omission, and inducement, because he “created a genuine dispute of material fact as to whether the defendants violated their common-law fiduciary duties to disclose material information,” it reversed. Remanded.
Sufficiency of the evidence; Mens rea for first-degree arson
The court held that the evidence from the two officers “was more than sufficient to establish the requisite mens rea for first-degree arson.” Also, defendant’s sentence to 18 to 30 years was proportionate. Finally, he had “not satisfied the test for ineffective assistance of counsel.” Defendant, who was incarcerated, contended “that the prosecution presented insufficient evidence that [he] acted ‘willfully or maliciously’ in burning his cell because [he] was, instead, trying to commit suicide.” The record did not support his “argument, as the prosecution presented ample evidence in support of the requisite state of mind.” Sergeant K “testified that he saw a large fire on defendant’s bed, while defendant was the only person in the cell.” He described “the scene as follows: [T]here was like I said a large fire on the bed and [defendant] was feeding paper into it and he’d also stuffed paper into his socks and had lit all that paper on fire, so he had like a ring of fire around both ankles.” K did “not see defendant with flames on his body aside from the fires burning in his socks.” Sergeant V “acknowledged that defendant had been placed under observation in the past for exhibiting suicidal behaviors. [V] said that it was common for prisoners to engage in attention-seeking behaviors, and he characterized defendant’s self-injurious behavior ‘to be more [in] the line of attention seeking.’” V noted that the security-camera footage “video showed defendant ‘starting a fire in his cell’ and that it ‘look[ed] like he was throwing something . . . to make [the] fire spread further.’” Finally, it concluded that he had “not overcome the presumption that his within-guidelines sentence was proportional. Several people were injured from smoke inhalation as a result of the fire, including one person who required treatment at a hospital. Defendant put many others in danger as a result of the arson.” In addition, he “caused a considerable amount of damage to prison property.” As for his “history, he had a prior felony conviction, five prior misdemeanor convictions, and a juvenile record. He was serving a sentence for home invasion at the time of the arson. And he had a lengthy prison-misconduct record that included numerous assaultive incidents.” Affirmed.
Sufficiency of the evidence for meth possession conviction; MCL 333.7403(2)(b)(i); People v Oros; Knowledge element; People v McFarlane; Ineffective assistance of counsel; Conflict of interest; MRPC 1.9(a); Mickens v Taylor; Juror bias; People v Unger; Preparation & trial strategy; People v Payne
The court held that the evidence was sufficient to prove defendant knowingly possessed meth and he failed to establish ineffective assistance of counsel. Meth was discovered in his overalls during a search incident to arrest on an outstanding warrant after officers responded to a complaint at his property. He testified he found the overalls in an abandoned vehicle and had worn them only twice, claiming he did not know meth was in the pockets. The trial record showed he kept personal items in the same overalls, including paperwork, cash, pills, and a pill bottle found in the pocket with the meth. On appeal, the court held that the knowledge element could be proven with “minimal circumstantial evidence,” and the jury could reasonably infer that after two days of wearing the overalls and using the pockets, he either placed the meth there or “knew of the meth[] and decided to continue carrying it.” He also claimed counsel was ineffective due to a prior divorce representation, a juror he said was a former financial planner, and inadequate preparation. The court found no actual conflict because counsel did not “actively represent[] conflicting interests,” and he did not show prejudice. It credited the trial court’s finding that counsel was credible, including testimony that he never disclosed any relationship with the juror. The court also found counsel’s choices were “sound trial strategy,” including how counsel handled the TruNarc (a narcotics analyzer) timing issue and fingerprint requests. Affirmed.
Sufficient evidence for conviction of violent crimes in aid of “racketeering activity”; Racketeering conspiracy; Handling of suspected jury intimidation; Whether the individual jurors should have been questioned; Waiver; Forfeiture; Plain-error review; Denial of defendants’ motions for a mistrial; Burden of proof for proving mistrial-worthy bias stemming from jurors’ external contacts; The district court’s finding of impartiality; Admission of summary charts; Sentencing; Alleyne v United States
The court affirmed the three defendants’ convictions and two of the three sentences, holding that there was “abundant evidence” that defendant-Baskerville was the “chief” of a racketeering enterprise in which defendants-Smith and Springfield participated in violent gang activity. Baskerville (the “Chief of the Streets”), Smith, and Springfield were members of a gang (“Junk Yard Dogs”) that was part of “a gang war that unleashed mayhem and murder in the” suburbs of Memphis. A jury convicted all three of racketeering conspiracy, and Baskerville of murder, attempted murder, and firearm offenses; Springfield of attempted murder and firearm offenses; and Smith of attempted murder and a firearm offense. Baskerville argued that there was insufficient evidence to convict him of violent crimes in aid of racketeering. But the court held there was sufficient evidence that “the Junk Yard Dogs gang engaged in racketeering activity” and that he controlled the gang. Given his “role as Chief of the Streets, the evidence at trial firmly tied him to all the murders and attempted murders. That is true even accepting Baskerville’s point that ‘he was not present at any of the crimes.’” The court also rejected Smith’s challenge to sufficiency of the evidence to support his racketeering conspiracy conviction. All three defendants argued that the district court failed to properly deal with the allegations of jury intimidation. The court concluded that “Springfield waived his challenge by arguing against jury questioning” in the district court, and “Smith at best forfeited any request for individual questioning of the jurors[,]“ with the result that his appellate argument was subject to “the plain-error standard, which he” could not meet. The “district court involved defendants at every step of the investigation, twice interviewed the foreperson on the record, credited the foreperson’s repeated assurances of juror impartiality, confirmed that the jury had not attributed the alleged intimidation to any defendant, and was ‘persuaded’ by defendants not to individually question the remaining jurors.” Further, the district court did not abuse its discretion in denying their motions for mistrial. The court noted that “[p]rejudice is not to be presumed” and defendants had the burden of proving that “‘unauthorized communications with jurors resulted in actual juror partiality.’” The court determined that the record evidence “uniformly indicates that the jury remained impartial.” But as to sentencing, the government agreed that Smith’s 10-year mandatory-minimum “for discharging a firearm violated Alleyne” and that remand for resentencing was warranted. Affirmed except as to Smith’s sentence for his firearm conviction, which was vacated, and remanded for resentencing on that conviction.
Motion to suppress police statements; Waiver of Miranda rights; Moran v Burbine; Right to counsel; Denial of request for new counsel; Alleged discovery violation under FedRCrimP 16(a)(1)(F); Hobbs Act jury instructions; Plain error review; United States v Olano; Sentencing; “Physical restraint” enhancement (USSG § 2B3.1(b)(4)(B)); United States v Taylor (2nd Cir); “Bodily injury” enhancement (§ 2B3.1(b)(3)); “Criminal history” calculation; Whether defendant was entitled to resentencing
The court held that defendant-Daniels knowingly and intelligently waived his Miranda rights and that the district court did not abuse its discretion in denying his request for new counsel. It also found that even “if the government violated Rule 16, Daniels” did not show the district court abused its discretion in refusing to suppress a detective’s testimony. There was no plain error in the Hobbs Act jury instructions, and the court rejected his sentencing challenges, including to the district court’s application of the § 2B3.1 “physical restraint” enhancement. A jury convicted him of Hobbs Act robbery and firearm offenses. He was sentenced to 181 months. On appeal, he first argued that the statements he made after being arrested should be suppressed because he never waived his right to remain silent. But the court noted that there were no signs of coercion or deception, and when police handed him a list of his rights, he said that “he understood ‘the whole process.’” It also rejected his claim that he was denied his right to counsel where he failed to establish “good cause” for appointment of a new attorney, noting that he made his request just 10 days before trial and it was not received until 5 days before trial. Further, the district court conducted a sufficient investigation into the motion. His claim as to a discovery violation failed where the district court provided a continuance instead of suppression and Daniels showed no bad faith or prejudice. The court also found no merit to his challenge to the district court’s jury instructions on Hobbs Act robbery where he failed to object below and he could not show an obvious error under the court’s “existing cases interpreting the Hobbs Act.” It acknowledged inconsistent case law as to whether an “actual effect” on interstate commerce was required but found that this inconsistency foreclosed his claim on plain-error review. As to his sentencing, the court upheld the enhancement for “physical restraint” based on his pointing a gun at employees, limiting their movement. It considered the Second Circuit’s decision in Taylor that applied a “narrower reading of” the term, and the Sentencing Commission’s change to § 2B3.1(b)(4)(B) that follows Taylor “and requires ‘physical contact or confinement’ for the enhancement.” But noting that the Commission has not yet decided whether the change will apply retroactively, the court opted to continue to follow its current precedent here. It also upheld the “bodily injury” enhancement where Daniels sprayed mace directly in the employees’ faces. Finally, it found that he was not entitled to relief related to the district court’s calculations of his criminal-history score. Affirmed.
Sentencing for a possession of child pornography conviction; 18 USC § 2252A(a)(5)(B); Mandatory statutory minimum 10-year sentence under § 2252A(b)(2) based on a prior conviction; Failure to charge the prior conviction in the indictment & submit the fact of it to the jury; Almendarez-Torres v United States; Erlinger v United States; Whether the indictment was constitutionally defective; Probation officer’s testimony about defendant’s honesty; Harmless error; Procedural & substantive reasonableness
The court affirmed defendant-Florence’s 120-month sentence and lifetime term of supervised release for possessing child pornography, holding that under Almendarez-Torres, it was not error for the district court, rather than the jury, to determine whether he had a prior conviction. He stipulated pretrial to a prior child pornography possession conviction and that he was on supervised release at the time of the present offense. The district court ruled that based on his prior conviction, he was subject to the statutory mandatory-minimum 10-year sentence under § 2252A(b)(2) and sentenced him accordingly. Florence first argued on appeal that his conviction should be overturned because his prior conviction was not included in the indictment and that it was for the jury, not the district court, to determine the fact of the prior conviction beyond a reasonable doubt. The court noted that the “Supreme Court has long held that the Fifth and Sixth Amendments require that each element of a crime be set forth in an indictment and proved to a jury beyond a reasonable doubt.” But in Almendarez-Torres, the Supreme Court announced a narrow exception to this general rule, “‘permitt[ing] a judge to undertake the job of finding the fact of a prior conviction.’” The court held that “Erlinger did not overrule Almendarez-Torres,” and that this case fell within the exception. It noted that “Florence stipulated to the fact of his prior conviction. The district court therefore did not violate [his] constitutional rights by finding the fact of Florence’s prior conviction and applying the mandatory-minimum sentence under” § 2252A(b)(2). The court held that Florence’s argument the indictment was constitutionally defective also failed. The indictment “alleged all the elements of the offense for which Florence was charged and convicted.” It also concluded that any error in the admission of his probation officer’s opinion on Florence’s honesty was harmless in view of the “overwhelming evidence that Florence knowingly possessed the cell phone with the knowledge that it contained child pornography.” It also rejected his challenge to the imposition of lifetime supervised release, holding that it was procedurally and substantively reasonable. It noted that the supervised release term was within the Guidelines and found that the district court “did not plainly err in its explanation” of its reasoning.
Convictions of Honest Services Wire Fraud, violations of the Travel Act, & of Federal Program Bribery; Limitations on defendant’s testimony about what constituted an “official act”; Sufficiency of the evidence on the interstate element of the charged offenses, the federal aspect of the bribery charges, & the substantive aspect of the bribery charges (the quid pro quo); Supervised release condition as to excessive alcohol use; Sentencing considerations
The court affirmed defendant-Goldy’s convictions and sentences for Honest Services Wire Fraud, violations of the Travel Act, and Federal Program Bribery, holding that the government offered sufficient evidence that Goldy, a former county prosecutor, traded legal help for sexual favors. The charges arose from his involvement with a young woman (M.H.). “They agreed that she would trade sex acts and nude photos and videos for his help with her legal problems, e.g., reduction of charges, withdrawal of warrants, and release from jail.” The court first rejected his argument that the district court erred by restricting his testimony. He claimed that none of his actions constituted “an ‘official act’ under Kentucky law or as would be relevant to his federal charges[.]” The court held that to the extent he argued “that the question of how the law defines an ‘official act’ is somehow a fact question for the jury, rather than a legal question for the court, the argument” failed. To the extent he contended “that he had a right to testify as a lay witness about the meaning and effect of Kentucky law and the ordinary operation of the Kentucky judicial process,” this also failed. As to the sufficiency of the evidence, the quid pro quo for the bribery and wire fraud charges was established where a reasonable juror could find that there was a trade of sex acts for legal help. As to the interstate nexus element of his wire fraud and Travel Act offenses, the court cited the “numerous electronic communications between Goldy and M.H . . . that were conveyed on Facebook’s and Apple’s messaging programs.” The government established that they necessarily traveled interstate. The court also held that the government established the federal aspect of Federal Program Bribery, that he “was the agent of an entity that received at least $10,000 in federal funding during the one-year period at issue.” It noted that under Sixth Circuit precedent, Federal Program Bribery “‘does not require a nexus between the alleged bribes and the federal funding received by the recipient agency.’” It also noted that his challenge to the jury instructions was not preserved for appeal, and he could not show plain error. Further, it upheld the condition of his supervised release that required him to refrain from “the excessive use of alcohol[,]” where he again could not meet the plain error standard. As to the district court’s refusal “to consider certain aspects of his personal circumstances,” under Sixth Circuit precedent, the district court could not consider “collateral consequences” of his convictions, such as loss of income and disbarment.
Postjudgment divorce dispute; Interpretation of a settlement agreement; Scope of an agreement to arbitrate; Attorney fees under MCR 3.206(D)(2)(b)
In this postjudgment divorce dispute, the court held that the trial court’s interpretation of the parties’ settlement agreement (SA) as to arbitration “was consistent with the plain, unambiguous language in the” SA and the divorce judgment. It also upheld the award of attorney fees to defendant-ex-wife under MCR 3.206(D)(2)(b). Plaintiff challenged an order requiring him “to pay out-of-pocket for defendant’s then-existing and expert fees.” He argued the trial court erred in not honoring an agreement to arbitrate language disputes in the SA and the judgment. The court disagreed. The SA showed that they “agreed to arbitrate certain issues. However, the parties did not expressly agree to arbitrate the interpretation and enforcement of the judgment” or the SA’s provisions. Rather, the judgment “clearly and unambiguously states that the trial court would ‘retain jurisdiction to interpret and enforce any and all provisions of’” the judgment, including those in the merged SA. The SA “expressly reserved arbitration for ‘any language disputes regarding any subsequent settlement documents’ that were necessary to finalize the divorce. Any” such disputes “were resolved by the parties’ execution of the documents. Once [they] were finalized, there were no language disputes to arbitrate. The parties also agreed to arbitrate ‘any disputed issues described in this Agreement as being subject to arbitration.’ But the [SA] does not state that plaintiff’s obligation to pay defendant’s then-existing attorney and professional fees was subject to arbitration. On the basis of this language, the trial court concluded that it could allow the parties to arbitrate the dispute, if they agreed, but it could not compel them to” do so. The court agreed that the trial “court was permitted to make a postjudgment ruling interpreting and applying its own judgment.” It also held that the trial court’s attorney fee “award was within the range of reasonable and principled outcomes.” The evidence supported its finding that plaintiff violated the judgment’s terms “by failing to pay the professional fees for defendant’s financial expert and thus subjecting [her] to collections litigation. [She] requested $2,656.20 in costs and attorney’s fees incurred in seeking to enforce the” judgment, supported by itemized bills. The trial court awarded her $2,000 in fees. Affirmed.
Security for costs; MCR 2.109; In re Surety Bond for Costs; Reasonable & proper bond; Wells v Fruehauf Corp; Bond amount; Recoverable expenses; Attorney fees under MCL 500.3148; Dessart v Burak; Waiver by first raising an issue in a motion for reconsideration; Tolas Oil & Gas Exploration Co v Bach Servs & Mfg, LLC; Uninsured (UM) & underinsured (UIM) motorist benefits
The court held that the trial court did not abuse its discretion by requiring plaintiff to post a $25,000 security bond after remand and dismissing the case when he failed to do so. The plaintiff sought PIP benefits and UM/UIM benefits arising from an auto accident. After prior appellate proceedings, the case returned to the trial court, where defendants moved for security for costs. On appeal, the court held that ordering security was reasonable and proper because the trial court “had a good reason to believe that plaintiff’s claims under the no-fault act were groundless or unwarranted.” The court next found no abuse of discretion in setting the bond at $25,000, explaining that MCR 2.109(A) looks to “all costs and other recoverable expenses,” and concluding that “the inclusion of ‘and other recoverable expenses’ most likely refers to consideration of attorney fees that can be recovered” under a statute such as MCL 500.3148. The court also rejected plaintiff’s argument that the trial court was required to decide admissibility of surveillance evidence before ordering security, noting that “nothing in the rule dictates what the trial court may consider” and that “[t]he trial court is not required to conduct an evidentiary hearing to set a security bond.” Finally, the court held that plaintiff waived any claim of financial inability to post the bond because it was raised for the first time on reconsideration. “‘An argument raised for the first time in a motion for reconsideration does not preserve that claim of error for appellate review.’” Affirmed.
Child’s best interests; Parental bond; The doctrine of anticipatory neglect
Concluding that terminating respondent-mother’s parental rights was in the child’s (KDB) best interests, the court affirmed. The record did not support her claim that there was a bond between them. The evidence showed “that KDB had a parental bond with his caregiver, not respondent.” The court found that her “parenting ability was also concerning.” Police officers found meth “paraphernalia in areas of the home that KDB could access while in respondent’s care.” She continued to use meth “even though she became angry, belligerent, and illogical when she was high on [meth]. This was especially concerning in light of [her] history of hitting” another one of her children “after she became aggressive from drinking alcohol. Respondent did not attend parenting classes to improve her parenting skills when she was in termination proceedings regarding” another child. The court found that her treatment of those children was “indicative of how she may treat KDB, especially when she failed to take steps to improve her parenting ability by completing parenting classes during her previous termination proceedings. This weighs in favor of termination. Stability and permanency would be beneficial for KDB, who is now four years old.” Further, the court noted that “KDB’s caregiver has expressed a willingness to adopt him, which favors termination.” Respondent asserted “that she attended supervised visits with KDB weekly, which weighs against termination. A child’s placement with a relative also weighs against termination, and the trial court gave KDB’s placement with fictive kin this weight.” But it concluded that “even though the child is with fictive kin, or if the child were with relatives, it is still in his best interest to terminate the mother’s rights.” It found that her “untreated mental health issues, lack of accountability, and unstable housing situation outweighed KDB’s placement with fictive kin. The [trial] court stated that KDB needed ‘permanence and stability’ and was concerned that if something happened to the caregiver, KDB could end up with ‘an inappropriate and dangerous parent if [respondent’s] rights are not terminated.’ [It] weighed all the evidence available to it, and determined that it was in KDB’s best interests to terminate respondent’s rights.” Finally, the record included her “past conduct, and it was not erroneous for the [trial] court to consider this when” deciding if termination was in KDB’s best interests.
Timeliness of an adjudication trial; MCR 3.972(A); Waiver; Reasonable reunification efforts; Exercise of jurisdiction; MCL 712A.2(b)(1) & (2); Specification of the requirements for reunification at the initial disposition hearing; Starting the hearing without a respondent present; MCR 3.973(D)(3); Reading the petition to the jury at the adjudication trial; MCR 3.972(B)(2); Admission of a no-contest plea to fourth-degree child abuse; In re Lewis; In re Andino
The court held that respondent-mother waived the timeliness requirement for the adjudication trial, and that reasonable efforts were made to reunify her with her children. Further, the trial court did not err in exercising jurisdiction, and the court rejected her arguments related to her disposition. As to respondent-father, it held that the trial court did not plainly err in reading the petition to the jury at the adjudication trial or in allowing the jury to consider his no-contest plea. Thus, in these consolidated appeals the court affirmed the trial court’s adjudication and initial order of disposition as to the mother and the adjudication as to the father. Their three children were removed from their care. As to the mother’s claim that the DHHS did not make reasonable reunification efforts before the trial, the court found that the record was “replete with examples showing that” it did. Both an initial service plan and case service plan were created, which listed her “needs, the requirements for each need, and the services that would be provided to facilitate reunification. These services included assistance with developing parenting skills, having supervised visitation, and providing transportation.” The plans were updated months later, and they continued to list her “needs, requirements, and the offered services. A review of the case service plan shows that DHHS workers contacted [the] mother on numerous occasions and discussed services, family team meetings, and other matters with her. Testimony at the adjudication trial similarly shows that DHHS offered [her] numerous services. [It] also followed the recommendations from [her] psychological evaluation by referring her for a substance abuse assessment and offering counseling, therapy, and supervised visitation.” As to the trial court’s exercise of jurisdiction, “there was ample evidence for [it] to conclude that [the] mother subjected the children to a substantial risk of harm to their mental wellbeing and to an unfit home environment by reason of neglect, criminality, and cruelty.” As to the father, the court rejected his claim “that the trial court erred by allowing the jury to consider his no-contest plea to fourth-degree child abuse.” It noted that “there was independent proof of the misconduct that led to the no-contest plea” and it found that his conviction “was material and relevant” in this case.