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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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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Coronavirus Aid, Relief, & Economic Security Act (CARES Act); The Paycheck Protection Program; 15 USC §§ 636(a) & 636m; Loan forgiveness; Whether payments to independent contractors qualified as “payroll costs” under the statute; § 636(a)(36)(A)(viii)(I)(aa) & (bb)
[This appeal was from the ED-MI.] The court held that plaintiff-Veltor Underground was not entitled to have its Paycheck Protection Program loan forgiven because its “payments to independent contractors do not qualify as ‘payroll costs’ under the statute.” During the pandemic, Veltor sought a loan under the CARES Act’s Paycheck Protection Program, applying on a form prepared by defendant-Small Business Administration (SBA). It requested a loan for six employees from a participating private lender, and received $125,000—2.5 times its alleged average monthly payroll—at a 1% interest rate. Veltor accepted the conditions along with the loan. The terms provided that the loan would only be forgiven “if it spent at least 75% of the funds on ‘payroll costs.’” It sought forgiveness in 2021, claiming that the money had been spent on payroll for now five employees. However, upon review, the lender learned that the money had been paid to independent contractors, not employees. Veltor unsuccessfully appealed to the SBA, and then filed this suit. The issue was whether subsection (bb) of the statute defining “payroll costs” only permits “self-employed individuals—sole proprietors and independent contractors—to apply for a loan based on what they pay themselves? Or does it also allow businesses that pay them to count those payments as part of their ‘payroll’ when they apply for a loan?” The court found that the text, context, and structure supported the conclusion “that subsection (bb) allows sole proprietors and independent contractors to get a loan based on their own earnings, the closest thing to a ‘payroll’ they have, and does not allow other businesses to bolster their own loans based on how much they happen to pay self-employed individuals.” Because Veltor had no employees, it had “no expenses to claim under subsection (aa).” And as it was not a sole proprietorship and did not assert that it was an independent contractor, “it had no expenses to claim under subsection (bb). Without paychecks to protect, Veltor was not entitled to have its loan forgiven. It must repay the loan.” Affirmed.
The rape-shield statute (MCL 750.520j); Evidence of an alleged victim’s prior sexual abuse offered to explain the victim’s age-inappropriate sexual knowledge; “Sexual conduct”; People v Parks; People v Arenda; The admissibility test in People v Morse
In an interlocutory appeal, the court held that “evidence related to prior sexual abuse of a minor is ‘sexual conduct’ under” the rape-shield statute (the RSS). But it overruled “the admissibility test articulated in Morse to the extent that it requires evidence of a prior conviction.” Defendant is charged with CSC “arising out of allegations that he sexually abused the minor complainants[.]” He contended that evidence that one of the complainants “viewed pornography during the course of alleged sexual abuse committed by her uncle is not ‘sexual conduct’ under MCL 750.520j(1) and thus is not barred under the” RSS. He also challenged the test set forth in Morse. The court noted the RSS “does not define ‘sexual conduct.’” Consulting dictionary definitions, it interpreted “the plain meaning of ‘sexual conduct’ in MCL 750.520j(1) as encompassing individual behaviors—including acts and responses—that involve or are associated with sexual activities. This interpretation does not require an act of volition. After all, an ‘action and response to stimulation’ need not be volitional.” Thus, it held “that nonvolitional acts, such as involuntarily viewing pornography during the course of sexual abuse, constitute ‘sexual conduct’ within the meaning of the” RSS. Next, the court agreed with the Morse Court of Appeals “panel that, under some circumstances, admission of evidence regarding a complainant’s prior sexual abuse is constitutionally required in light of a defendant’s right to confrontation and right to present a defense.” But it disagreed “that admission of such evidence is constitutionally required only if there was a prior conviction for sexual abuse.” It noted that “none of the caselaw that Morse found persuasive required” this, and the court saw no “persuasive reason to include such a requirement.” It held that once a defendant makes a sufficient offer of proof, “the trial court must hold an in camera evidentiary hearing to determine whether the defendant is constitutionally entitled to present particular evidence that is otherwise excluded under the” RSS. The trial court must determine at the hearing whether “defendant has shown that (1) the prior act occurred, (2) the act closely resembled those at issue, (3) the act is relevant to a material issue, (4) the evidence is necessary to the defendant’s case, and (5) the probative value of the evidence outweighs its prejudicial effect.” Affirmed in part, vacated in part, and remanded to the trial court for such an in camera evidentiary hearing.
Guilty plea withdrawal under MCR 6.310(B)(1); Whether the plea withdrawal was within the “interests of justice”; People v Fonville; Whether there was a “fair & just” reason for withdrawing the plea; People v Bailey; Burden of proof for withdrawal of a plea
Holding that the trial court abused its discretion by allowing defendant to withdraw his guilty plea, the court reversed and remanded, ordering the trial court on remand to reinstate the plea. He was charged with felonious assault, assaulting, resisting, or obstructing a police officer, and operating a motor vehicle with a suspended or revoked license, after refusing to comply with an officer’s orders to exit his vehicle and then driving forward, striking the officer in the leg. The officer, who was responding to a call about drag racing in progress, shot defendant, striking him in the neck and causing serious injuries. Defendant pled guilty to assaulting, resisting, or obstructing, as a second-offense habitual offender, agreeing to a sentence of two years’ probation and other conditions in exchange for dismissal of the other charges. In accepting his plea, he acknowledged “that, by pleading guilty, he would be ‘automatically violating’ the terms of his existing probation.” At sentencing, after expressing concerns about the officer’s actions and the manner in which he handled the situation, the trial judge allowed defendant to withdraw his plea. On appeal, the court agreed with the prosecution that the trial court abused its discretion in allowing the plea withdrawal without establishing proper grounds. “[D]efendant willingly admitted he was guilty of the charged crime and did not challenge any of its elements, either at the plea hearing or at sentencing. Indeed, the only thing that appeared to have changed between the plea hearing and sentencing was the trial court’s perspective of the case and the terms of the plea agreement.” The court indicated that it understood “the trial court’s concern for the handling of the situation, which clearly resulted in severe injury to” defendant, and appreciated “that had the trial court reviewed the bodycam of the event prior to taking the plea, it may have suggested a conference with the parties before accepting the plea agreement. Even so, MCR 6.310(B) and relevant caselaw set forth the proper process that the trial court must follow when deciding whether to permit withdrawal of a guilty plea.” The court emphasized “that the defendant bears the burden of showing a fair and just reason to withdraw” a plea. It noted the trial court “relied heavily on its sympathy toward defendant when deciding on the motion for withdrawal, rather than on the legal standard for granting a motion for withdrawal of a plea under MCR 6.310(B). At no point did it require defendant to meet the burden of providing a fair and just reason for withdrawal of his plea under MCR 6.310(B)(1).”
Waiver of jury trial; Knowing, voluntary, & intelligent; People v Lafey; Evidentiary hearing on a motion to suppress evidence; People v Kaufman
The court concluded that defendant failed to show “the circumstances of this case rebut the presumption that” his jury trial “waiver was knowing and voluntary.” Also, because “the parties stipulated to the trial court resolving the motion” to suppress based on review of the preliminary exam “record, the trial court did not abuse its discretion by declining to” conduct an evidentiary hearing on the motion. He was convicted of assault with a dangerous weapon, assaulting, resisting, and obstructing a police officer, FIP of ammunition, and felony-firearm. Defendant argued that his jury trial “waiver was inadequate because the trial court failed to explain that a jury verdict must be reached unanimously, or to inquire in greater detail whether [he] understood the nature of a jury trial.” However, he did “not point to authority that requires the trial court to inquire or explain more specifically than directed by MCR 6.402(B) when determining whether the defendant’s waiver of the right to a jury trial was knowingly and voluntarily made. Rather, . . . when a trial court complies with the directives of MCR 6.402(B), a presumption is created that a defendant’s waiver is knowing, voluntary, and intelligent.” Here, the “waiver was conducted in open court, the trial court advised defendant of his right to trial by jury, the trial court addressed defendant personally to determine whether defendant understood his right to a jury trial, defendant stated that he was choosing voluntarily to give up that right and to be tried by the court, and a verbatim record of the waiver proceeding was made.” Thus, the court presumed that he “understood his right to a jury trial and waived that right knowingly and voluntarily absent evidence to the contrary.” Affirmed.
Alleged failures by election officials to ensure partisan parity among the election inspectors; Claims for declaratory relief & a writ of mandamus under MCL 168.674(2); Standing; Lansing Sch Educ Ass’n v Lansing Bd of Educ
In an order in lieu of granting leave to appeal, the court reversed the Court of Appeals judgment (see eJournal # 81183 in the 3/11/24 edition for the published opinion) and remanded the case to the trial court for further proceedings. It held that plaintiffs-Michigan Republican Party and Republican National Committee had “standing to challenge the partisan parity of election inspectors under MCL 168.674(2)[.]” Plaintiffs sought declaratory relief and a “writ of mandamus under MCL 168.674(2)1 for alleged failures by election officials to ensure partisan parity among the election inspectors in Flint during the 2022 election. The trial court granted defendants summary disposition” based on lack of standing, and the Court of Appeals affirmed. The court found that there was “ample support for the conclusion that plaintiffs have standing to pursue their claim through their ‘special injury or right, or substantial interest, that will be detrimentally affected in a manner different from the citizenry at large[.]’” The court agreed with the Court of Appeals dissent that “if the Court of Appeals majority’s reasoning is taken to its logical conclusion, then it is possible that no one, including the county chairs of major political parties, would have authority to challenge the parity requirement under MCL 168.674 or MCL 168.765a. More importantly, given the role of major political parties, such as plaintiff, in the electoral process through their affiliated inspectors and under Michigan’s election laws, these parties have a unique interest in ensuring the fair and equal treatment of party-affiliated candidates during voting and the counting of ballots, which is fulfilled through party-affiliated election inspectors.” Thus, the court concluded that plaintiffs were “entitled to proceed with their claims in the trial court.”
Music copyrights; “Termination right” under 17 USC § 203(a)(2)(B); Whether termination notices were ineffective, defective, or invalid; “Preclusive effect” of a state probate court order; Lack of specific factual allegations; Request for declaratory judgment
In this dispute over copyright assignments and associated royalties to songs authored by music composer Jay Livingston, the court held that defendant-Travilyn Livingston (Jay’s daughter) properly executed and filed termination notices for copyright assignments Jay had made to defendant-Jay Livingston Music, Inc. Jay coauthored “Que Sera, Sera,” “Mona Lisa,” “I’ll Always Love You,” and “Silver Bells.” Before he died, he executed the “May 2000 Agreement,” which provided that “Jay Livingston Music, Inc. would own Jay’s interests in the assigned copyrights until their terms expired. But . . . in keeping with the popular songwriters agreements, Jay Livingston Music, Inc. would continue to pay the Family Trust royalties for each assigned song.” The Family Trust later successfully filed a probate action in California to confirm that Jay Livingston Music held all of Jay’s copyright interests. Travilyn possessed Jay’s termination right under § 203(a)(2)(B), and she served termination notices for “Que Sera, Sera” and 31 other copyright grants on Jay Livingston Music (her company), with the rights immediately reverting to Travilyn. She also recorded this notice with the U.S. Copyright Office. Plaintiff-Tammy, Travilyn’s daughter and a beneficiary of the assignments, sued, challenging the terminations. The district court dismissed the case for failure to state a claim. On appeal, the court held that she failed to plausibly allege “that Travilyn’s termination notices were ineffective, defective, or invalid.” It first rejected her claim that the “notices were ineffective because, at the time they were issued, no active copyright assignments existed for Travilyn to terminate.” Pursuant to the California probate court order, the copyright interests in Jay’s songs at the time Travilyn filed her termination notices were held by Jay Livingston Music, Inc., not the Family Trust, so “there existed active popular songwriters agreements for Travilyn to terminate in 2015.” Among other things, Tammy also asserted that Travilyn’s 32 termination notices violated the Register of Copyrights’ prescribed requirements. The court noted that Tammy’s complaint broadly alleged “that all of Travilyn’s termination notices failed to comply with federal requirements. But she otherwise focused exclusively on why the termination notice for ‘Que Sera, Sera’ failed to comply with federal law; she made no specific factual allegations regarding the substance or content of any other termination notice.” And she did not challenge here the district court’s ruling in this regard as to the notice for “Que Sera, Sera.” Affirmed.
Custody; Findings on the statutory best-interest factors (MCL 722.23); Factors (b)-(f), (h), & (j)-(l); Award of sole legal custody; MCL 722.26a(1)(b); Contempt for violating trial court orders; Alleged inability to comply; Distinguishing McBride v Mathews (Unpub)
The court held that the trial court’s findings on all but one of the challenged statutory best-interest factors were not against the great weight of the evidence, and that the one error “was harmless in relation to the trial court’s overall determination that” defendant-father having sole custody was in the best interests of the parties’ child (JCS). The court also rejected plaintiff-mother’s claim that the trial court abused its discretion in “holding her in contempt for violating its orders” because she could not comply with them. Thus, it affirmed the order awarding defendant sole legal and physical custody of JCS and holding plaintiff in contempt. The court determined that the evidence did “not clearly preponderate against the trial court’s findings as to” Factors (b), (c), (d), (f), (h), (j), (k), and (l). However, as to Factor (e), which “‘concerns the permanence of the household, not its acceptability[,]’” the court noted that while “plaintiff did not provide the trial court with updated information about her housing situation, the record reflects that JCS had lived with [her] in the same place for more than a year. This is in contrast to defendant, who had recently moved, and JCS had never lived in his new home. Therefore, JCS had more permanence with plaintiff. Nevertheless, any error in this respect is harmless, because the trial court’s other findings regarding the other contested factors supported its overall best-interests conclusion.” As to the award of sole legal custody to defendant, the trial court “discussed plaintiff’s repeated exclusion of defendant from participating in, and making decisions regarding, JCS’s life, including situations involving JCS’s education, medical treatment, and religion. Thus, [it] did ‘clearly articulate’ that sole legal custody was appropriate on the basis of the best-interest factors and its finding that plaintiff could or would not cooperate with defendant in making decisions about JCS’s welfare. The evidence does not clearly preponderate against this finding.” Finally, as to the contempt ruling, the court found that the “impossibility plaintiff cites as the basis for her violation of the trial court’s orders was one of her own making[.]”
Article III standing; Lujan v Defenders of Wildlife; Effect of the absence of a valid cause of action on subject-matter jurisdiction; Steel Co v Citizens for a Better Env’t; Lexmark Int’l, Inc v Static Control Components; The “wholly insubstantial & frivolous” exception
In this action challenging the distributions of a revocable trust, the court held that the district court erred in granting defendant-David Martin’s Rule 60(b)(4) motion for relief from the judgment for plaintiffs based on lack of subject-matter jurisdiction. The alleged absence of a valid cause of action under the applicable state law did not implicate the district court’s statutory or constitutional power to adjudicate the case. The creator of the trust, Lester Martin, gave his son David his power of attorney and made him trustee of his revocable trust. Originally, Martin’s five children would inherit one-fifth of the trust. One died, leaving her two children to split her share. They later sued David and his siblings, claiming David breached his fiduciary duty as trustee by not giving them their one-fifth share to split. The district court initially granted plaintiffs summary judgment and later entered a judgment for them based on a jury verdict as to the amount of their damages. But it then granted David’s Rule 60(b)(4) motion on the basis Ohio law didn’t give “plaintiffs a right to contest David’s distributions of money from Lester’s trust.” On appeal, the court held that whether plaintiffs had a cause of action under Ohio law to sue David for breach of fiduciary duty was “irrelevant to the narrow legal question” here. Even if they “lacked a cause of action to challenge David’s distributions, the district court had subject-matter jurisdiction to decide this case.” The Supreme Court held in Steel Co it “‘is firmly established’ that ‘the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction’—that is, ‘the courts’ statutory or constitutional power to adjudicate the case.’” The court held that plaintiffs had constitutional standing under the three-part Lujan test. It also concluded “the ‘wholly insubstantial and frivolous’ principle has no application to this case.” It found that “when a plaintiff satisfies Article III’s justiciability requirements (like standing) and satisfies the requirements for diversity jurisdiction, federal subject-matter jurisdiction is proper—regardless of whether the legal theory of relief is frivolous under state law.” While some courts have extended the “‘wholly frivolous’ principle to the standing context[,]” the court noted that whether a plaintiff’s “legal theory under state law is frivolous is often a different question from whether the plaintiff’s claimed injury is frivolous for Article III purposes.” In this case, even if plaintiffs’ “theory of liability under Ohio law had been frivolous, the concrete injury they claim—the loss of money—isn’t.” Vacated and remanded.
Injuries sustained while trying to get up from an allegedly defective chair; Ordinary negligence; Alleged conduct of a defendant’s employee; Hearsay; Present-sense-impression exception (MRE 803(1)); Premises liability; Notice
The court held that the hearsay statement on which plaintiff relied “was not a present sense impression under MRE 803(1)[,]” and absent this evidence, his ordinary negligence claim failed. Further, as his “evidence was insufficient to establish a question of fact whether defendant had notice of the dangerous condition that caused plaintiff’s injury,” his premises liability claim was also properly dismissed. The case arose from injuries he “sustained while trying to get up from an allegedly defective chair on defendant’s premises” (a hospital). As to his ordinary negligence claim, he contended “that defendant was negligent because its employee directed plaintiff to sit in a chair that the employee knew was defective. Plaintiff supported this theory by testifying that the nurse working in the lab where his blood was drawn directed him to sit in the swivel chair that broke and caused his” injuries. Defendant asserted “this evidence could not sustain plaintiff’s claim because it was inadmissible hearsay.” Plaintiff did not dispute that the nurse’s statement was hearsay but argued it was admissible under MRE 803(1). However, the court found that plaintiff’s “testimony that the nurse told him to sit in a chair clearly does not fall within this exception because the nurse’s statement was not describing or explaining an event or condition ‘while or immediately after [the nurse] perceived it.’ MRE 803(1). The nurse made this statement before plaintiff fell, and the statement was not describing or explaining anything.” As to his premises liability claim, the court concluded that the “nurse saying that ‘something was wrong with the chair’ after plaintiff fell out of the chair does not demonstrate that the nurse (or anyone else) knew that the chair was defective before plaintiff fell; it instead suggests only that the nurse believed that ‘something was wrong with the chair’ after plaintiff fell. Plaintiff did not testify that the nurse said anything that would tend to establish that defendant had actual or constructive notice of the defective chair before plaintiff’s fall.” Affirmed.
Termination under §§ 19b(3)(c)(i) & (j); Child’s best interests
Finding no clear error under §§ (c)(i) and (j), or in the trial court’s finding that termination of respondent-mother’s parental rights was in the child’s (RB) best interests, the court affirmed. As to § (c)(i), “(1) 182 or more days must have elapsed since the initial dispositional order, (2) the conditions leading to adjudication must continue to exist, and (3) there must be ‘no reasonable likelihood that the conditions will be rectified within a reasonable time considering the child’s age.’ All three requirements are present here.” First, the initial disposition order was filed on 4/1/24, and the termination trial began 221 days later. Second, the court found that “the trial court did not clearly err by finding that the conditions leading to adjudication—identified as parenting skills, mental health, unemployment, housing insecurity, and substance abuse—continued to exist.” As to the third requirement, “there simply were no signs of improvement in the reasonably foreseeable future.” Thus, the court held that “the trial court did not clearly err by finding that respondent would be unable to rectify the conditions that led to adjudication within a reasonable time considering RB’s age.” As to § (j), the court found that given that respondent did not “follow the conditions of her case service plan to rectify her mental health and substance abuse barriers and that her behavior contributed to placing RB at risk of harm, the trial court did not clearly err in finding that it was reasonably likely that RB would experience emotional or physical harm if returned to” her care. The trial court did not clearly err in finding that her “continuing substance abuse presented a reasonable likelihood of harm to RB.” Respondent also highlighted “that, despite the caseworker’s testimony that allegations of physical abuse contributed to RB’s emergency removal, the record is absent of testimony of specific instances of alleged physical abuse of RB by respondent. However, this statutory ground encompasses more than actual physical harm.” The record amply supported “that respondent placed RB at the risk of both physical and emotional harm.”