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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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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
Michigan’s Uniform Voidable Transactions Act; MCL 566.34(1)(a), 35(1), & 37(1)(a); Whether use of a farm production history to obtain crop insurance constitutes a “transfer of assets”; Successor liability; “Piercing the corporate veil”; Discovery denials; Fed.R.Civ.P. 16(b)(4) & 56(d); Proportionality; Fed.R.Civ.P. 26(b)(1) & (2)(C)(iii)
[This appeal was from the WD-MI.] The court held that plaintiff-Helena Agri-Enterprises was not entitled to collect a debt owed by some family members and corporations from other family members and newly formed corporations based on alleged fraud where it did not establish that the new corporations “were fraudulently designed to sidestep the debt.” Helena obtained an approximately $15 million judgment against members of the Boersen family and various business entities comprising the Boersen farm. When they could not pay the debt, Helena added other family members and their newly formed corporations as defendants, alleging claims based on Michigan’s Uniform Voidable Transactions Act, successor liability, and veil piercing. The district court granted the new defendants summary judgment. On appeal, the court rejected Helena’s argument that several equipment and land leases by the new defendants and their companies should be voided. It noted that non-debtors are not subject to liability under the Act, and it found no merit to Helena’s argument that the new defendants’ use of the farm’s production history to obtain crop insurance qualified as a “transfer of assets” under the Act. It held that Helena also failed to establish its successor liability claim where it could not make the required threshold showing of “common ownership.” Further, its attempt to recover under a veil-piercing theory was unsuccessful where the new defendants “respected corporate formalities” when forming their new companies, and there was no evidence that an original defendant (Dennis Boersen) “pulled the strings in running the new companies.” In addition, nothing in the record showed “a community of interest between the old and the new companies.” The court also held that the district court did not abuse its discretion in denying a motion to extend the discovery period and compel production after concluding that “further time and money in discovery . . . would not be proportional to the needs of the case." Affirmed.
Divorce; Validity of the arbitration award; Whether the arbitration was void due to no active court case; MCL 600.5071; MCL 600.5075(2); The 60-day requirement; MCL 600.5078(1); Whether the arbitrator exceeded her authority
In these consolidated appeals arising from a divorce, the court held that plaintiff-ex-husband failed to show how the arbitration was void or without authority. Also, even assuming “that the arbitration award was untimely under MCL 600.5078(1),” he would not be entitled to any relief. Finally, he failed to show “from the face of the award how the arbitrator exceeded her authority or committed an error of law.” Plaintiff argued that the arbitration award was “void because there was no active case at the circuit court at the time of the arbitration proceedings.” The crux of his claim was “that the arbitration was void for lack of authority. But an arbitrator derived her authority from the parties’ arbitration agreement.” Here, the agreement that “was entered into while there was an active case, was not affected by the dismissal of the divorce action.” As to the fact the award was issued over 60 days after the final arbitration hearing, MCL 600.5178(1) “provides that the 60-day window does not start to run until the arbitrator’s ‘receipt of proposed findings of fact and conclusions of law.’” Further, even if the award was untimely, the statute does not “specify that an award is void if the timing requirements are not satisfied.” The court also disagreed with plaintiff’s contention that “the arbitrator exceeded her authority by acting contrary to law regarding the property division and spousal support determinations.” Affirmed.
Standing; A “person aggrieved” to appeal a bankruptcy court’s orders; The Coal Act
The court held that appellant-CONSOL Energy lacked standing to appeal from the bankruptcy court’s rulings approving a settlement between debtor-Murray Energy and various creditors where CONSOL did not establish that it was a “person aggrieved,” as required for standing in the Sixth Circuit. When Murray Energy applied for Chapter 11 protection, a committee was formed to determine its liabilities to retirees under the Coal Act. The bankruptcy court approved the settlement plan. In both its settlement order and its opinion, it “clearly stated that it made no findings or conclusions about CONSOL’s liability for the Benefits under the Coal Act” as the last signatory operator. The court first considered whether CONSOL established standing to sue under the “person aggrieved” doctrine, which applies to appeals to the Bankruptcy Appellate Panel. It held that CONSOL was not a “person aggrieved” where entry of the bankruptcy court’s rulings did not “diminish CONSOL’s property, increase its burdens, or impair its rights . . . .” Therefore, it did “not have a direct, pecuniary interest” in the bankruptcy court’s rulings. The court noted that “entry of an order that impedes a party’s defense in separate litigation does not bring about ‘person aggrieved’ standing if that defense is not one the Bankruptcy Code protects.” It concluded that “the Bankruptcy Code is not concerned with CONSOL’s interest in averting liability under the Coal Act as a last signatory operator.” Because neither the settlement order nor the bankruptcy court’s opinion imposed liability on CONSOL for benefits under the Coal Act, the court dismissed its appeal for lack of standing.
The rape-shield statute; MCL 750.520j; People v Sharpe; Exceptions; MCL 750.520j(1)(a) & (b); People v Adair; Reputation evidence; People v Slovinski; Specific instances of sexual conduct; MCL 750.520j(1); Right of confrontation; People v Hackett; Right to present a defense; People v Steele; Relevance; MRE 402; Unfair prejudice; MRE 403; Prejudice; MCL 769.26
The court held that the trial court did not abuse its discretion by precluding admission of evidence covered by the rape-shield statute, and defendant was not denied his right to present a defense. He was convicted of CSC I for sexually assaulting the victim. On appeal, the court rejected his argument that the trial court erred by excluding evidence under the rape-shield statute, noting it properly excluded his proffered testimony that the victim was a prostitute, that she had sex with another man on the night in question while defendant was present, and that she told him she had been previously raped. As for a DNA analysis of a swab collected from the victim, even assuming this “was not covered by the rape-shield statute and would have otherwise been admitted,” preclusion of this evidence was harmless. His testimony that the victim was “a well-known prostitute was reputation evidence of [her] sexual conduct and therefore plainly within the scope of the rape-shield statute.” Further, his statement that the victim “had sex with another man is an assertion of a specific instance of [her] sexual conduct, bringing it within the scope of the rape-shield statute.” The court also rejected defendant’s claim that the DNA analysis was not covered by the rape-shield statute, noting it failed to see how the fact that the victim “had sex with another man bears on the question whether defendant’s actions occurred with” her consent, and “such evidence would have been highly prejudicial.” Finally, “even if preclusion of the DNA evidence was error it would not require reversal because it could not have affected the outcome of the trial.” Affirmed.
Ineffective assistance of counsel; Aggravated stalking; People v Threatt; Showing that defendant was in violation of a probation condition; MCL 750.411i(2)(b); Trial strategy; Advice as to a plea offer; Failure to object to other acts evidence; Sentencing; Effect of a within guidelines sentence; MCL 769.34(10)
Rejecting defendant’s ineffective assistance of counsel claims, and his argument as to the interpretation of the aggravated stalking statute, the court affirmed his conviction of that offense, and his within guidelines sentence. He was also convicted of using a computer to commit a crime. He was sentenced as a fourth-offense habitual offender to 46 months to 15 years for each conviction. He argued that his trial counsel “presented a ‘novel’ but ‘foolish’ trial strategy, arguing that defendant’s continued contacts with the victim could only violate the aggravated stalking statute if defendant’s probation order contained a provision specifically forbidding him from contacting her.” The court noted that, in light of the evidence establishing that he “engaged in the ‘unconsented contact’ forbidden by the stalking statute and that he had violated the misdemeanor stalking statute . . . ; trial counsel was faced with trying to keep defendant from being convicted of the more serious felony offense of aggravated stalking.” He determined the best way to do so “was to argue to the jury that the victim initiated some of the telephone contacts and had encouraged some of the contact, while benefiting from living in the apartment leased by defendant. Trial counsel also chose to argue to the jury that the ‘blanket’ no-contact provision of the probation order did not apply because defendant ‘had a relationship with her’ and she was not specifically ‘mentioned in’” the order. This decision appeared to be a valid one “based on a reasonable trial strategy: he could present the legal issue to the trial court, likely lose, and thus be forbidden from making that argument to the jury, or he could instead make the argument directly to the jurors in the hope that they would find it persuasive.” The court has held in several unpublished decisions “that where a trial counsel lacks a viable defense, it is not unreasonable to attempt to pursue a defense of jury nullification.” It found that it was a reasonable trial strategy to present evidence the victim initiated some of the phone “calls and that she continued to live in an apartment leased by defendant, combined with defendant’s testimony that he still loved her and simply wanted to convince her to reconcile with him[.]” Trial counsel succeeded in getting him acquitted of two other charges using this evidence.
Judgment of divorce (JOD); Pension dispute; Harboring error as an appellate parachute; Hoffenblum v Hoffenblum; Harmless error; Objections to a JOD; MCR 2.602(B)(3)(b)
The court held that the trial court did not err by entering plaintiff-ex-husband’s proposed JOD. It rejected defendant-ex-wife’s argument that the trial court erred by entering plaintiff’s proposed JOD because it did not accurately reflect the parties’ settlement agreement to split her USPS “Disability Pension evenly, but to award defendant her regular USPS deferred pension in exchange for her assumption of the marital debt.” The court concluded that, given “the parties’ agreement that any claims not placed on the record were barred, and defendant’s express statement that she understood the terms of the agreement and voluntarily agreed to be bound by them, defendant cannot now claim that the trial court erred by not incorporating into the JOD an alleged trade-off that was not mentioned anywhere in the parties’ settlement or in the competing proposed JODs. If there is error, it is error harbored by defendant and from which she cannot now be allowed to benefit.” The court also rejected her claim that the JOD erroneously included a fixed monthly dollar amount to be paid to plaintiff from defendant’s pension when the parties had agreed to a percentage division, not a fixed dollar amount. It agreed with the parties that the language awarding plaintiff a fixed dollar amount did not reflect the agreement they placed on the record. But it agreed with plaintiff that the error was harmless. “[I]nclusion of the provision identifying a fixed dollar amount as effectuating the 50% split does not affect defendant’s substantive rights or the outcome of the case and, therefore, is harmless error.” Affirmed.
Divorce; Failure to disclose an expert witness; MCR 2.302(B)(4)(a)(i) & (E)(1)(a)(i); MCR 2.313(C)(1); Findings as to spousal support; Limitation on the amount of time that the parties had to present their evidence; MRE 611(a)
The court held that the trial court abused its discretion by permitting plaintiff-ex-wife’s witness (G) to testify at trial as an expert and the error was not harmless. Also, the trial court failed to make the necessary findings as to spousal support. But it did not abuse its discretion by limiting the amount of time that the parties had to present their evidence. Thus, the court affirmed in part, reversed in part, and remanded. Defendant-ex-husband contended that the trial court abused its discretion by permitting G to testify because plaintiff failed to disclose G as an expert witness until 10 days before trial. The court held that the trial court abused its discretion by failing to sanction plaintiff for not disclosing G as an expert witness until 10 days before trial. There was “no indication in the lower court record or on appeal whether plaintiff purposely violated the trial court’s trial management order by not listing” G on her witness list. But there was also no indication that she “moved in the trial court to show good cause why she did not list [G] as an expert witness as required by the trial management order.” Additionally, it was not clear why she “waited to supplement her response to defendant’s interrogatories with [G’s] information shortly before trial if she had been working with him throughout pretrial proceedings as she” asserted. Her delay in disclosing G as her expert “meant that she disclosed his identification three months after she was required to.” It was also likely that her delay in identifying G as an expert prejudiced defendant. It was not clear “whether defendant was aware of [G] during pretrial proceedings. Plaintiff claimed at the bench trial that [G] ‘was disclosed in discovery.’” She also asserted “that she notified defendant months before trial of” G’s assistance with this case. But the record did not support her claims, and regardless, there was no indication that defendant knew she was going to call G as an expert witness until plaintiff notified him 10 days before trial. Also, there was no indication that he was aware before trial of G’s specific testimony or Exhibit 42, which was G’s recalculation of defendant’s expert’s valuation. Further, the record indicated that the trial court relied to some extent on G’s testimony.
The No-Fault Act (MCL 500.3101 et seq); Healthcare provider’s claim for personal protection insurance (PIP) benefits; Exclusion of publicly available data about payments by third parties; Relevance to the reasonableness of a provider’s charges; Spectrum Health Hosps v Farm Bureau Mut Ins Co of MI
Concluding that this case was indistinguishable from a recent published case involving the same parties, the court held that the trial court committed legal error and abused its discretion when it ruled that “evidence of third-party payments was categorically inadmissible” in this action by plaintiff-healthcare provider for PIP benefits. Thus, it vacated the order granting plaintiff summary disposition and remanded. Defendant argued that “the amounts actually being paid on the open market are highly relevant to” assessing the reasonableness of a provider’s charges. The court noted it recently addressed the parties’ arguments in Spectrum, where it “held that payments by third parties may be relevant to an assessment of the reasonableness of a healthcare provider’s charges under” the No-Fault Act. As a result, it also concluded there that a “blanket exclusion of this evidence constituted an error of law amounting to an abuse of discretion.” As in Spectrum, the evidence at issue “may be relevant and admissible when assessing reasonableness under MCL 500.3107(1)(a) and MCL 500.3157. Given this error of law,” the court vacated the judgment for plaintiff, and as in Spectrum, remanded for the trial court to determine “the relevance of the specific data in question to the specific charges in this case under the proper legal framework as well as consideration of any other issues bearing on the admissibility of the evidence.” Given this ruling, it also vacated the trial court’s award of attorney fees and interest.
Action seeking personal injury protection (PIP) benefits; Limitations period for filing a claim; MCL 500.3145(1); Notice; Perkovic v Zurich Am Ins Co; “Nature of injury” requirement; Dillon v State Farm Mut Auto Ins Co
The court held that the trial court erred by granting summary disposition for defendants-insurers in this action for PIP benefits on the basis that the notice requirement was not satisfied. Plaintiff sought PIP benefits for injuries she sustained in an auto accident. On appeal, the court found that, similar to Dillon, “plaintiff’s initial complaint of a headache at the hospital suggests a head injury and is certainly consistent with her later claims which included items such as a concussion, migraines, and other injuries potentially consistent with a head injury.” As Dillon pointed out, “the statute only requires ‘the kind of notice that an ordinary layperson can provide.’ . . . Not only is an ordinary layperson not to be expected to provide a precise medical diagnosis, nor can they be expected to predict with medical certainty what future complications may arise from that injury.” Reversed and remanded.