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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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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Whether an arbitrator exceeded his authority; Beck v Park W Galleries, Inc; Arbitrator’s alleged errors of law; The Financial Crimes Enforcement Network (FinCEN) regulations issued by the U.S. Department of Treasury; Marijuana-related business (MRB) addendum
Concluding that the arbitrator did not exceed his authority and finding no error of law was “discernible from the face of the” award, the court affirmed the trial court’s ruling confirming the award. Defendant “was the victim of an advance-fee scam. The money it lost came out of its account with” plaintiff-bank, resulting in an account deficit. Plaintiff “invoked the mediation and arbitration provisions of the agreement governing the account. The arbitrator ruled in” plaintiff’s favor. Defendant argued on appeal that the arbitrator exceeded his authority by not enforcing provisions of the MRB addendum to the agreement governing the account. The court found that defendant misconstrued “the arbitrator’s authority. According to the agreement, the parties were to mediate any dispute that ‘arises in any way out of the relationship between the parties subject to the Agreement or this Addendum,’ with the arbitrator resolving disputes that could not be successfully mediated. This dispute arose out of defendant’s negative account balance, which was inarguably a function of ‘the relationship between the parties subject to the Agreement or this Addendum.’” As the parties were not able to resolve the dispute in mediation, “by the plain language of the contract, the arbitrator had the authority to adjudicate” it. In addition, defendant argued that the arbitrator improperly disregarded FinCEN regulations “that required plaintiff to apply enhanced due diligence, and that the MRB addendum required plaintiff to apply enhanced due diligence as well and to refuse to process the transactions at issue.” The court again disagreed, determining the “addendum language merely acknowledges the existence of regulatory obligations that plaintiff faces that explain the need for various restrictions it is imposing on the services it would provide defendant. It does not impose a duty on plaintiff to refuse to process international checks or wire transfers exceeding $100,000. Absent any authority requiring plaintiff to bear liability for defendant’s decision to accept fraudulent checks and initiate international wire transfers, the arbitrator neither exceeded his authority nor committed a facially discernible legal error.”
Receiver’s power to reject executory contracts under the Michigan Receivership Act (MRA); Application of the MRA to a marijuana business; Meaning of “reject” vs “terminate”; Cross-default provisions in commercial cannabis leases; Receivership courts sitting in equity; Antiassignment provisions in leases; Adequacy of assurance of performance
Holding that the MRA authorized the receiver to reject executory contracts and the trial court properly declined to enforce cross-default provisions in the leases, but that remand was required on the adequacy of the receiver’s compliance with antiassignment clauses, the court affirmed in part, reversed in part, and remanded. Plaintiff-Tropics sued Skymint, a group of marijuana businesses, as a creditor after Skymint defaulted on loans exceeding $120 million, and the trial court appointed a receiver with authority over Skymint’s contracts and leases. The trial court granted the receiver’s motion to reject the Ypsilanti lease with appellant-Koach, rejected several leases with 3Fifteen, struck cross-default provisions, and approved the sale of Skymint’s assets to a stalking horse bidder designated by Tropics. The trial court also found that the stalking horse bidder had provided adequate assurance of performance despite antiassignment restrictions. On appeal, the court rejected Koach’s argument that the MRA does not allow rejection of leases by a tenant-receiver, holding that under MCL 554.1022(2)(d) and MCL 554.1012(e), “the plain language of the MRA explicitly grants the receiver the authority to reject leases.” It also found that the trial court properly treated “reject” and “terminate” synonymously, noting that the MRA allows the receiver’s powers to be “expanded, modified, or limited by court order.” Further, it upheld the trial court’s refusal to enforce the cross-default provisions, emphasizing that “receivership is a matter of equity” and that the MRA gives courts “broad discretion” to allow rejection of contracts “on terms appropriate under the circumstances.” Quoting the trial court, it noted that “[t]his is the year of receivership and receivership changes everything. And that’s why these broad powers are given to the Receiver. Save the business. If save the business means sell it, save the business.” However, the court agreed with Koach that the record was inadequate on whether the antiassignment conditions had been satisfied. While the receiver submitted an assurance letter, the court found it insufficient to establish compliance with the leases’ requirements that the assignee’s net worth equal or exceed the tenant’s and that all terms of the lease be satisfied. Because “nothing in the record indicates that the other terms and requirements of the transfer have been satisfied,” remand was required for an evidentiary hearing and factual findings.
Student-on-student racial discrimination in school; 42 USC § 2000d; Davis ex rel LaShonda D v Monroe Cnty Bd of Educ; Whether defendant-school responded to plaintiff’s claims with “deliberate indifference”; Whether a school’s ineffective response automatically results in a jury issue based on deliberate indifference; Foster v Board of Regents of Univ of MI; Whether the school should have issued harsher suspensions
[This appeal was from the ED-MI.] The court affirmed summary judgment for defendant-Croswell-Lexington School District on plaintiff-CM’s student-on-student racial harassment claim where the plaintiff failed to show that the school responded to her claim with “deliberate indifference.” When CM was in the sixth, seventh, and ninth grades, she was subjected to student-on-student racial harassment. This included being mocked, called the “n-word,” and threatened, as well as being physically assaulted. She transferred to another school in the middle of her freshman year. She sued the school defendants, alleging they failed to adequately respond to her complaints, thus violating her civil rights. The district court granted defendants summary judgment explaining that under Davis, CM was required to show that she “suffered ‘actionable’ harassment and that her school responded to her complaints with ‘deliberate indifference.’” The school was only required to show that it “‘respond[ed] in good faith’” to harassment allegations to avoid liability. Here, the court held that there was no deliberate indifference to any of the alleged incidents. It reviewed the allegations by school year and found that the school’s responses were “not unreasonable” and in “good faith” where it took “affirmative steps to investigate the problem and discipline those involved.” It also took “proactive measures” to guard against further harassment. This lack of deliberate indifference was also fatal to her other claims. It rejected her argument that the school’s response was ineffective because it was in fact effective as to the student harassers involved in the particular incident at issue. The school could not take responsibility for future harassment incidents by unknown actors. An ineffective response does not necessarily result in a jury issue based on deliberate indifference. The court also found meritless CM’s argument that the suspensions applied to the harassers should have been “harsher” where the school properly acted “incrementally.”
Motion to quash evidence; Cell phone search warrants; Probable cause; Particularity requirement; People v Carson; The exclusionary rule; People v LoCicero (After Remand); The good-faith exception; People v Hughes; The independent source doctrine; People v Smith; Oral argument; MCR 2.119(E)(3); Evidentiary hearing; Franks v Delaware
Holding that the second warrant at issue in this case was sufficiently particular pursuant to both Carson and “the independent source doctrine because it draws from sources independent of the” first warrant, the court affirmed the denial of defendant’s motion to quash the evidence obtained pursuant to the second warrant. He moved to quash the evidence obtained from his cell phone during an investigation into an arson and murder. The trial court denied the motion, finding that arguments pertaining to the validity of the first warrant were moot because a second warrant was issued, and that the second warrant was valid. It also denied his motion for reconsideration. On appeal, the court first declined to consider the validity of the first warrant, finding it moot based on its holding as to the second warrant. It then agreed with the prosecution that the second warrant “was valid pursuant to the independent source doctrine because it drew from sources independent of the [first] warrant, and therefore any property seized under that warrant does not harken back to the purportedly invalid” first warrant as its source. “[D]efendant has not alleged, let alone demonstrated, that the affidavits for the search warrants that allowed police to obtain data from the victim’s bank account, delivery service, videogame service, or PayPal, referred to defendant’s cell phone or anything found on” it. Thus, the second warrant “was valid because it drew from sources independent of the” first warrant. The court also rejected defendant’s claim that the trial court wrongfully denied him the right to present oral argument at the hearing on his motion to quash. “[T]he trial court properly invoked MCR 2.119(E)(3), explaining that the parties’ briefs were so thorough as to require no additional elaboration[.]” The record demonstrated “that the issues were, in fact, thoroughly briefed in the” trial court. As such, it did not “abuse its discretion by omitting oral argument as to his motion to quash the search warrants.” Finally, the court rejected his contention that the trial court erred by not conducting an evidentiary hearing as to the issuance of the warrants in this matter under Franks. He “effectively abandoned the issue of whether the trial court should have held an evidentiary hearing as to the veracity of the warrants issued in this matter by failing to actually make that argument here and, instead, presented arguments that were never made to the trial court in defendant’s motion to quash.”
Habeas corpus; 28 USC § 2254; Whether the district court adjudicated the habeas petition on an “incomplete record” where it denied petitioner’s request to expand the record to include all the exhibits offered in his state trial; Adams v Holland; Clark v Waller
The court affirmed the denial of defendant-Heiney’s habeas petition, concluding the district court’s refusal to expand the record to include all state trial exhibits did not result in an “incomplete record.” A jury convicted Heiney, an orthopedic surgeon, of gross sexual imposition and of tampering with records. When his Ohio state court appeals failed, he petitioned for federal habeas relief, mainly challenging the sufficiency of the evidence. The magistrate judge granted his motion to supplement the record in part, “allowing documents already filed in state court and an affidavit from another orthopedic doctor” while disallowing “duplicative or procedurally barred materials, which swept in some of the trial exhibits at issue.” The district court denied his subsequent “separate motion to include the state trial exhibits,” and his petition on the merits. It ruled that the Ohio appellate court’s “sufficiency-of-the-evidence analysis was reasonable and that the state court record—specifically, the trial transcript—adequately supported the verdict.” On appeal, the court first noted that “the Supreme Court has held that in federal habeas proceedings, ‘review under § 2254(d)(1) is limited to the record that was before the state court that adjudicated the claim on the merits.’” The court explained that the general rule in this “circuit is that a district court must ‘make a review of the entire state court trial transcript in a habeas cases.’” But it has “never held that a district court must obtain and review trial exhibits in a habeas case.” The court found that no remand was necessary as “Heiney has neither identified any factual inaccuracy in the state court’s summary nor pointed to a gap in the evidence on which it relied.” Rather, the district court in this case “had access to all the materials necessary to adjudicate his claims, including evidence covering the same ground as the trial exhibits Heiney sought to add.” Thus, the court concluded that neither Clark exception applied, and the record did not compel it “to extend Adams any further.”
The Whistleblowers’ Protection Act (WPA); Violation of the common law as a protected activity under MCL 15.362; Whether gross negligence is a violation of a law; Meaning of “a”; Common law claim for gross negligence; Xu v Gay; Whether plaintiff’s actions constituted reporting a claim of gross negligence under the WPA; “Report”
On remand from the Supreme Court, the court held “that gross negligence constitutes a violation of ‘a’ law and that” a question of fact existed as to whether plaintiff-Stefanski’s “conduct constituted a report under MCL 15.362.” Thus, it reversed summary disposition for defendant-former employer and remanded. The “Supreme Court held that reporting a violation of the common law is a protected activity under MCL 15.362.” It remanded the case to the court “‘for consideration of whether gross negligence is a violation of “a” law and whether plaintiff’s actions constituted a “report” under the WPA.’” The court first considered the meaning of the word “a.” It determined that, in “context, it is apparent that the use of the word ‘a’ in MCL 15.362 is meant to denote a reported violation of a singular law. And . . . the term ‘law’ includes violations of the common law. Under the common law, a plaintiff can bring a claim for gross negligence.” It then considered the definition of gross negligence provided by case law and various statutes. The court found it “apparent that a claim for gross negligence reflects a violation of a singular, well-defined principle of the common law. As a result, reporting gross negligence is a protected activity under the WPA.” Turning to the question of whether “Stefanski’s actions constituted reporting claim of gross negligence under the WPA[,]” the court had “little difficulty determining that a question of fact remains as to whether” he reported that a supervisor’s (B) “conduct amounted to gross negligence.” Considering the definition of the word report, the court found that Stefanski’s conversation with the county 911 director (W) could “be reasonably seen as charging [B] with unlawful conduct, specifically, with gross negligence related to his handling of” calls related to a shooting. “Regardless of whether Stefanski used the words ‘gross negligence’ when making his report, his allegations amounted to a charge that [B’s] actions were grossly negligent.” The court concluded that “viewed in the light most favorable to the nonmoving party, the record reflects that Stefanski reported an unknown violation of law to [W] in an attempt to remedy the situation or harm done by the violation.” His report that B “improperly coded the call and his call for [B] to be retrained or disciplined, therefore, brought to light a claim that [B’s] actions were grossly negligent.”
Motion to terminate an ex parte PPO; MCL 600.2950(1) & (4); Showing of a likelihood of immediate & irreparable injury, loss or damage required by MCL 600.2950(12); “Stalking” (MCL 750.411h(1)(e)); “Harassment” (MCL 750.411h(1)(d)); Procedural due process; Principle that the court presiding over the PPO action should be familiar with other actions affecting the parties; MCR 3.703(D)(1); Questioning by the trial court; MRE 614
The court held that the trial court did not abuse its discretion either in granting petitioner’s ex parte petition for a PPO or in denying respondent’s motion to terminate the PPO. Respondent is the father of petitioner’s two children. The court noted that the trial court “judge presiding over the PPO action” also presided over the parties’ child custody proceedings. The petition included allegations “that respondent stalked petitioner by tracking her son’s cell phone, which she discovered” in 1/23 when the child “came to her, very upset, saying his father was demanding to know where” they were. Petitioner “looked at her son’s phone and ‘the location was on,’ and it indicated that respondent’s business was looking for the location of the child’s phone. The petition alleged further stalking by respondent during petitioner’s parenting time on [11/10/23], when he was seen standing in the park across the street from the school of one of the children, watching petitioner’s partner pick the child up from school. Petitioner further indicated that she moved . . . to get away from respondent and that, on [12/28/23], her children informed her that [he] had been coming up to the area, which petitioner perceived to be respondent stalking her. Further, the petition alleged that, just four days later, . . . petitioner and her partner were harassed by respondent, during an exchange of the children at” a police department, “when he stared them down and began taking pictures of their vehicle and its license plate.” The petition also alleged that a week later, “respondent, who lived over an hour away from petitioner, was stalking her by sending her a message on a parenting app stating that he was in” an area close to her new home. She alleged that he “had never come to that area before [she] moved there, and petitioner likewise believed this to be an act of stalking.” The court concluded that while it may be “that none of these allegations, considered separately, would satisfy the requirement for issuance of an ex parte PPO pursuant to MCL 600.2950(12), taken as a whole, a series of incidents were alleged to have occurred between [1/23] and [2/24], which support a finding that the trial court did not abuse its discretion when it found that it clearly appeared from those facts that immediate and irreparable injury, loss, or damage would result from the delay required to effectuate notice or that notice itself would precipitate adverse action before a PPO could issue.” Affirmed.
Termination under §§ 19b(3)(c)(i) & (j); Reasonable reunification efforts; Aggravated circumstances; MCL 712A.19a(2); In re Rippy; Disability accommodations; In re Hicks/Brown; Children’s best interests
The court held that: (1) the DHHS provide reasonable reunification efforts for respondent-father; (2) § (c)(i) was met; and (3) termination of respondents-parents’ parental rights was in the children’s best interests. Their rights were terminated primarily on the basis of abuse and unsanitary living conditions. On appeal, the court rejected the father’s argument that the DHHS did not make reasonable efforts to reunify him with the children because it failed to reasonably accommodate his disabilities. First, the foster-care worker (L) “neither ignored nor deemed” the psychologist’s (K) “recommendation to be wrong—she accurately reported [K’s] findings to the” trial court, which ordered the DHHS to provide reasonable accommodations. Another problem was that neither K nor anyone else said that the father’s “lackluster participation” in K’s tests prevented him from making a proper evaluation. This “foundationless assertion” was not enough to establish error. Further, while the record does establish that he had seizures, he “never stated that his seizures affected his ability to exercise parenting time.” The court next rejected both respondents’ argument that a statutory ground was not met, noting (c)(i) was met. As to the father, his “unwillingness or inability to protect the children and care for their wellbeing is what led to his adjudication, and, by the end of this case, that condition remained.” He also refused to participate in programs, frequently missed parenting, and showed a lack of interest in the children’s well-being. As to respondent-mother, considering she “failed to obtain stable employment throughout nearly two years that this case was pending and still did not have suitable housing by the time of termination,” the court was “not definitely and firmly convinced that the trial court made a mistake by finding that there was no reasonable likelihood that [she] would be able to obtain stable housing and employment within a reasonable time considering the children’s ages.” Finally, the court rejected their claim that termination was not in the children’s best interests. As to the father, “[t]he trial court thoroughly explained why it found that terminating [his] parental rights was in the children’s best interests, and none of [his] arguments on appeal” persuaded it that this was in error. As to the mother, the court was “not definitely and firmly convinced that the trial court made a mistake by finding that terminating [her] parental rights would provide the children with greater permanency and stability.” In addition, the trial court’s ruling “reflects that it carefully considered the pertinent factors, and nothing suggests that it was predisposed to reject the possibility of a guardianship.” In fact, the “record supports that the DHHS repeatedly tried to explore the possibility of a guardianship, but their efforts were stifled by the lack of cooperation by the potential guardians.” Affirmed.