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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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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Construction site injuries; The common work area & retained control doctrines; Ormsby v Capital Welding, Inc; Hughes v PMG Bldg, Inc; The third element of the common work area doctrine; Alderman v JC Dev Cmtys, LLC; Denial of leave to amend the complaint to include a premises-liability claim
The court held that the trial court did not abuse its discretion in denying plaintiff leave to amend his complaint to add a premises-liability claim against defendants-construction site owners (the O’Learys). Further, he could not “establish the third element of the common work area doctrine” and as a result, the trial court did not err in granting the O’Learys and other defendants summary disposition. Plaintiff was seriously injured in a fall from a wooden platform while working on a construction project. The court first concluded as to the motion to amend the complaint that the trial court “recognized—correctly—that premises liability cannot be used as a means to unduly circumvent the common work area doctrine. Moreover, while plaintiff may not be categorically foreclosed from asserting a premises-liability claim, he still had to demonstrate that such a claim would be viable in this case.” The court found that he did not show the trial court erred in determining he failed to do so. Next, the court rejected his claim that there were genuine issues of fact “as to whether he satisfied the elements of the common work area and retained control doctrines.” He only challenged the trial court’s findings on “the third and fourth elements of the common work area doctrine. Under the third element, ‘liability should not be imputed unless the dangers in the work area involve a high degree of risk to a significant number of workers.’” The court noted it held in Hughes that this element was not satisfied where it was undisputed “‘plaintiff was one of only four men who would be working on top of the overhang.’” Here, only four people were “near or on the platform when it was being improperly used: plaintiff, [defendant-]Bueby, and two other independent contractors in Bueby’s employ. Therefore, at most, only four people were at risk of the danger in this case, and they were doing the same work for the same subcontractor. Thus, the risk was not posed to a significant number of workers.” The court noted that plaintiff did not offer any evidence that “roofers were near enough to the lift while it was being improperly used to actually be exposed to the danger at issue in this case.” In addition, his “failure to establish all the elements of the common work area doctrine necessarily means that the O’Learys cannot be held liable for his injuries regardless of whether they retained sufficient control over the project.” Affirmed.
Impeachment evidence; MRE 613(b); Prosecutorial misconduct; Questioning about defendant’s prearrest conduct & silence; People v Goodin
Given that defendant failed to address the applicable MRE, the court found that he did not establish error as to impeachment evidence warranting relief. It also rejected his prosecutorial misconduct claim, concluding that the questioning he challenged concerned his prearrest conduct and silence. He was convicted of second-degree murder, FIP of a firearm and ammunition, and felony-firearm, second offense. As to the impeachment evidence issue, two witnesses (A and C) testified “about whether defendant had a gun on the day of the shooting. [A] testified that he had never seen defendant with a gun, and [C] gave varying accounts of whether she saw defendant with a gun—she testified on direct that she did not see” him or the victim (R) with a gun before R “was shot, then testified on cross-examination that she did not see defendant with a gun but saw [R] brandish a firearm, then later still testified that” both men had guns. The prosecution then called a police witness (T). Over defendant’s objection, T “testified that [A] told him in an interview that defendant had a pistol on the night of the shooting, and that defendant always had a pistol with him.” T also testified (over defendant’s objection) that C told him “during an interview that she did not see any guns because she fled the house as soon as the confrontation became apparent.” Defendant argued that T’s “testimony was improper impeachment evidence because it concerned specific instances of misconduct but did not meet the standard for admitting such testimony under MRE 608(b). But [T’s] contested testimony clearly did not concern specific instances of misconduct—he testified about the witnesses’ prior inconsistent statements. Extrinsic evidence of a witness’s prior inconsistent statement is admissible under MRE 613(b).” Next, the court disagreed with his assertion that the prosecutor “was essentially questioning defendant about his silence,” in violation of his right against self-incrimination. “The prosecutor never referred to defendant’s remaining silent while in police custody. Because the prosecutor permissibly asked [him] about his silence before he had contact with police,” defendant did not “identify an instance of prosecutorial misconduct, let alone misconduct that deprived him of a fair trial.” Affirmed.
Sentencing enhancements; Two-level enhancement for “using a minor to commit the offense” (USSG § 3B1.4); Whether using a minor to commit the offense was already incorporated in defendant’s total offense level; § 3B1.4 cmt n2; “Double counting”; Five-level enhancement for engaging “in a pattern of activity involving prohibited sexual conduct” (§ 4B1.5(b)(1))
The court affirmed the district court’s application of the §§ 3B1.4 and 4B1.5(b)(1) sentence enhancements in sentencing defendant-Parkey. It concluded his total offense level did “not ‘incorporate[]’ using a minor in his offense,” and thus, the Guideline’s commentary limiting the § 3B1.4 enhancement did not apply. As to the five-level enhancement for “pattern of activity” under § 4B1.5(b)(1), the district court could consider activity beyond the offense of conviction. Parkey pled guilty to causing a minor to engage in sexually explicit conduct for the purpose of producing child pornography. The district court applied a two-level sentencing enhancement under § 3B1.4 for using a minor to commit the offense, and a five-level enhancement for “pattern of activity” under § 4B1.5(b)(1). It imposed a below-guidelines sentence of 270 months. Parkey first challenged the enhancement under § 3B1.4, which “does not apply if the ‘offense guideline incorporates’” using or attempting to use a person under 18 to commit the offense. The district court applied two specific-offense-characteristic adjustments to his § 2G2.1 base level – “one because the offense involved ‘a sexual act or sexual contact,’ . . . § 2G2.1(b)(2)(A), and another because it involved ‘the use of a computer . . . to . . . persuade, induce, entice, coerce, or facilitate the travel of, a minor to engage in sexually explicit conduct,’ . . . § 2G2.1(b)(6)(B)(i).” The court held that his base offense level of 36, to which he did not object, did “not explicitly incorporate the ‘use of a minor’ to commit the offense. Though it accounts for a minor being a victim, it does not account for using a minor to participate in the crime—e.g., at the defendant’s direction, the minor took photographs to help the defendant produce child pornography. Nor do any of the other enhancements the district court applied to Parkey’s sentence account for this use of the minor.” The court rejected his “double counting” argument because “Parkey ‘used’ the minor in two distinct, unlawful ways: directing the minor to both (1) take the photos and (2) be the subject of the photos.” As for the enhancement under § 4B1.5(b)(1), the court held that the district court could consider activity beyond the offense of conviction under § 4B1.5 and did not err by considering 2/23 communications and the 1/23 offense.
Search & seizure; Motion to suppress; Whether the initial traffic stop was supported by “probable cause”; Whether defendant’s warrantless arrest based on a misdemeanor was constitutional; Reasonableness; Virginia v Moore; Whether the warrantless search of his vehicle violated the Fourth Amendment; The “automobile exception” to the warrant requirement; Sufficiency of the evidence for a FIP conviction; 18 USC § 922(g)(1); Effect of defendant’s factual stipulations to the elements of his offense; Waiver; Witherspoon v United States; Lack of a guilty plea; Colloquy satisfying several of FedRCrmP 11’s requirements
The court held that the district court did not err by denying defendant-Watson’s motion to suppress drug and firearm evidence found in his vehicle where the traffic stop and his warrantless arrest were supported by probable cause, and the vehicle search was permissible under the automobile exception. It also held that there was sufficient evidence to support his FIP conviction. Watson was stopped for driving past the stop bar at a traffic light. After he refused to provide identification, he was placed under arrest. An officer saw a bag of marijuana in the vehicle through a window and a vehicle search resulted in the drug and firearm evidence. After he unsuccessfully moved to suppress the evidence, Watson “agreed to a bench trial based on stipulated facts” and was found guilty of FIP. He appealed the district court’s denial of his motion to suppress. The court first held that the officer had probable cause to stop Watson for driving past the stop bar at a traffic light. Watson’s video footage did not contradict the officer’s testimony, and the record offered no reason for the court to second-guess the district court’s determination as to the officer’s credibility. The court also held that Watson’s warrantless arrest was supported by probable cause where he had violated Ohio traffic laws by driving past a stop bar and driving on a suspended license. Watson had also refused to show the officer his driver’s license, likewise a violation of Ohio law. Watson argued that his warrantless arrest was unlawful because the driving on a suspended license offense was only a misdemeanor. But the Supreme Court previously rejected this argument in Moore. As for the warrantless search, the court held that it was permitted under the automobile exception. A bag of marijuana was spotted through the vehicle’s window. “Because there was a substantial probability that Watson possessed illegal contraband in violation of Ohio law, the officers were permitted to search the entirety of Watson’s vehicle, including any containers found inside [it], without a warrant.” Lastly, the court rejected his claim that there was insufficient evidence to convict him of FIP. His “factual stipulation to all essential elements of” the charge constituted “a waiver of his right to challenge the sufficiency of the evidence for his conviction.” The court noted that he “did not enter a guilty plea. Thus, Rule 11, by its terms,” did not apply. But the court has “encouraged district courts to conduct a colloquy, in compliance with Rule 11, when a defendant stipulates to each element of an offense.” The district court here “took appropriate and careful steps to confirm that Watson’s stipulation was knowing and voluntary.” Affirmed.
Divorce; Objection to a referee’s recommendation; MCL 552.507(4); Timeliness; “Made available”; MCR 3.215(E)(1)(c); Service in domestic relations cases; MCR 3.203; MCR 2.107(C)(3); Friend of the Court (FOC)
The court held that because plaintiff-ex-wife’s objection to the referee recommendation “was untimely, the trial court did not err by refusing to hold a de novo hearing.” Thus, it affirmed the trial court’s order denying her objection to the recommendation. The issues that she raised on appeal concerned “how to properly calculate filing deadlines. At issue is an FOC recommendation that was mailed on” 6/16/23. On 7/10/23, she “faxed the trial court an objection to this recommendation.” At an 8/11/23 hearing, the trial court ruled that her “objection was untimely and accordingly declined to consider it.” On appeal, plaintiff contended that it “erred when it determined that her objection was untimely.” The court concluded that, consistent with the applicable “rules, the FOC recommendation issued in this case stated that a party must file any objection to the recommendation ‘within 21 days from the date this order is mailed.’ The FOC recommendation’s certificate of mailing shows that it was mailed on” 6/16/23. This gave plaintiff until 7/7/23 to file her objection. Consequently, her “objection—which was, at the earliest, filed on [7/10/23]—was untimely.”
Tax foreclosure; The General Property Tax Act (GPTA); The Takings Clause of the Michigan Constitution (Const 1963, art 10, § 2); Rafaeli, LLC v Oakland Cnty; MCL 211.78t (procedure governing claims for surplus proceeds); Whether a “taking” occurs when property was not offered for sale at a public auction but instead purchased by another governmental unit for a minimum bid via the right-of-first-refusal process outlined in former MCL 211.78m; Retroactivity of the amended MCL 211.78m & 211.78t; Schafer v Kent Cnty; Hathon v Michigan; LaFontaine Saline, Inc v Chrysler Group, LLC; Foreclosing governmental unit (FGU)
The court held that the Michigan Constitution’s Takings Clause is violated “when there are no surplus funds from a public auction but instead the government obtains surplus value from foreclosed properties that were transferred between governmental units for the minimum bid under the right-of-first-refusal process set forth in former MCL 211.78m without ever offering the property for sale at a public auction.” It reaffirmed its ruling in Hathon that the amended MCL 211.78t “applies retroactively to claims that preceded its enactment, but” it concluded that it did not apply here. Lastly, it held that the amended MCL 211.78m only applies prospectively. Thus, it affirmed the Court of Appeals’ judgment in part, reversed in part, and remanded to the trial court. Plaintiffs’ “properties were foreclosed on through the GPTA—before Rafaeli was decided—and sold for the minimum bid to another governmental unit through the right-of-first-refusal procedure established by former MCL 211.78m,” without being offered for sale at a public auction. The court agreed with “the Court of Appeals to the extent that it held that this constituted a taking under” Michigan’s Takings Clause. There was no possibility here “of surplus proceeds from a foreclosure sale because the properties were never placed for public auction and the statute restricted [defendant-]City’s purchase amount upon exercise of its right of first refusal to the ‘minimum bid.’ Accordingly, there was no opportunity for the FGU to receive, let alone retain, any surplus funds.” The court found that despite “this distinction, the same principles that underpinned [its] decision in Rafaeli hold true” here. It concluded that “where, as here, there are no sales by public auction, the government commits a taking if the value of the property retained exceeds what the government was owed.” The court then considered the retroactivity of MCL 211.78m and 211.78t. The latter’s plain language was “a clear manifestation of the Legislature’s intent that the provision apply retroactively.” But because it did “not provide plaintiffs with any possibility of relief,” the statute did “not govern this dispute and claimants should proceed through standard processes of inverse condemnation, separate from the statutory process of MCL 211.78t.” The court disagreed with the Court of Appeals’ determination that the current version of MCL 211.78m applies retroactively. Given the lack of any language in the statute indicating the Legislature intended it to do so, “and the fact that retroactive application . . . would create new duties” as to completed transactions, the court held that it applies only prospectively to claims accruing on or after 1/1/21.Concurring, Justice Welch agreed with the “holding that a taking requiring just compensation occurred in this case and with the” resolution of this appeal. She wrote separately due to concern “that important questions of jurisprudential significance for Michigan property and constitutional law are being left unresolved.”
Tax foreclosure; “Surplus proceeds”; Michigan’s Takings Clause (Const 1963, art 10, § 2); Whether there is a “taking” when a foreclosing governmental unit (FGU) attempts to sell foreclosed real property to recover delinquent property taxes & that property fails to sell at a public auction; MCL 211.78m(2); Rafaeli, LLC v Oakland Cnty; Distinguishing Jackson v Southfield Neighborhood Revitalization Initiative; Principle that when a property is sold at a public auction, the result of that sale determines the value of the property; Freed v Thomas (6th Cir); Ingham County Land Bank Fast Track Authority (the Land Bank); General Property Tax Act (GPTA)
The court held that there is no compensable taking where an FGU attempts, in conformity with MCL 211.78m(2)’s requirements, to sell foreclosed real property at a public auction and the property does not sell. Thus, it reversed the Court of Appeals’ judgment in part and reinstated the trial court’s grant of summary disposition for defendants. Defendant-Treasurer, acting as the FGU, foreclosed on plaintiff’s property for failure to pay taxes and offered it for sale at a public auction. The property failed to sell, and the Treasurer deeded it to defendant-Land Bank for $1. Plaintiff sued, claiming defendants unconstitutionally took his real property without just compensation in violation of Michigan’s Takings Clause. The trial court found “there was no taking that required just compensation because there were no ‘surplus proceeds’ from a sale of the real property.” The Court of Appeals reversed and remanded, directing the trial court “‘to calculate the “surplus” owed [to plaintiff] on the property by reference to the value of the property, less what plaintiff owed on it when the foreclosure occurred.’” On leave, the court held that “Rafaeli governs this case and, because plaintiff’s foreclosed real property did not sell at the public auction held in compliance with the GPTA, there were no ‘surplus proceeds’ and, therefore, no taking that requires just compensation.” Citing Freed, it noted that “when a property is sold at a public auction, the result of that sale determines the value of the property.” As such, “an FGU has not committed a taking requiring just compensation if there is a public auction that produces no surplus proceeds because the property failed to sell at the public auction for the minimum price of the taxes and fees owed.” The court rejected plaintiff’s argument that Rafaeli is not dispositive, and distinguished Jackson. “The distinguishing fact in Jackson is not that the real properties were never sold at a public auction, but rather that those properties were not even offered for sale at a public auction. The statutorily mandated sale of a foreclosed property to another governmental entity upon the exercise of a right of first refusal for only the amount owed in taxes plus permissible costs and fees did not fairly determine if the government appropriated a property interest that exceeded what it was owed.” The foreclosure sale here “demonstrated that the value of the property interest the government retained is less than what plaintiff owes in property taxes because the property did not sell for the minimum bid. Because there were no proceeds from the sale, plaintiff is not entitled to any compensation.”
Whether taxpayers underreported their income; The “split-dollar” regulation (Treasury Regulation § 1.61-22); The “compensatory provision” (§ 1.61-22(b)(2)(i)–(ii)); Whether the trust owning the life insurance policy was a “Death Benefit Trust” (DBT); Whether the taxpayer-company “owned” the policy insurance contract; Treating an employer as the owner of the policy contract; § 1.61-22(c)(1)(iii)(C); Internal Revenue Code (IRC) § 419(e)(1); “Current access” & “future rights” (§ 1.61-22(d)(4)(ii)); Whether the split-dollar regulation contravened the IRC; Loper Bright Enters v Raimondo; § 162(a); Machacek v Commissioner
The court held that under the “split-dollar regulation,” plaintiff-McGowan “was required to ‘take into account the full value of all economic benefits’ from the Plan when calculating his gross income” and his Company (the other plaintiff) “was prohibited from deducting” its payments to a DBT that were used to pay the premiums on a life insurance policy covering McGowan. He was a dentist in his dental practice (the Company). The Plan “involved the Company compensating [him] with life insurance in a structure intended” to minimize tax burdens. It operated through a Benefits Trust Agreement that established two subtrusts, including the DBT. The IRS “concluded that McGowan should have recognized the Policy’s accumulation of cash value as taxable income each tax year, and that the Company should not have been taking deductions for its annual contributions to the DBT.” It assessed additional taxes and penalties to both. They paid them and then sued. The district court granted the government summary judgment. The case primarily concerned the split dollar regulation, Treasury Regulation § 1.61-22. “In the employment context, split-dollar agreements involve an employer contracting with an employee to pay some or all of the premiums on the employee’s life insurance[.] ” This case specifically involved the regulation’s “compensatory provision.” If the Plan here met the terms of this provision, “the split-dollar regulation requires McGowan to recognize the full value of the Plan’s economic benefits (minus any consideration he paid to the Company for those benefits) and prohibits the Company from taking deductions for its premiums paid.” The court rejected plaintiffs’ arguments that the regulation should not apply because the DBT owned the life insurance policy, not the Company. It held that the DBT constituted a “welfare benefit fund,” and thus the employer was treated as the owner of the policy. It also rejected plaintiffs’ argument that a zoo’s possible receipt of the cash value of the policy negated the premise that McGowan delegated the relevant beneficiary. Among other things, the zoo had “an interest in the Policy’s cash value, not its death benefit, the relevant consideration under subclause (C)(1).” Further, as to the death benefit, “McGowan designated his wife as the recipient . . . .” As to the fact that the tax periods occurred before vesting, “the regulation expressly defines ‘current access’ in a somewhat counterintuitive manner to include ‘future right[s][.]’” The court also found no merit in plaintiffs’ argument that the district court should have applied the current Loper Bright standard. They did not “preserve this interpretive question” and the court found that “the statutory authority behind the split-dollar regulation is readily apparent.” Affirmed.