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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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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Member oppression action; Member qualification in a PLLC & non-licensed persons; Willfully unfair & oppressive conduct under MCL 450.4515; Availability of unjust enrichment when an operating agreement exists; Harmless error; Remedies & damages for member oppression; Dismissal of counterclaims; United Veterinary Hospitals (UVH)
The court held that plaintiffs-husband and wife investors were members of defendant-veterinary clinic (UVH) despite not being licensed veterinarians, and that defendant-Avtar, a veterinarian and owner of UVH, engaged in willfully unfair and oppressive conduct warranting a buyout of their interests. Plaintiffs sued defendants alleging Avtar excluded them from the veterinary business they co-founded, seized company funds, and falsely claimed to be sole owner. The trial court granted summary disposition for plaintiffs on their member oppression and unjust enrichment claims, finding UVH had four members with 25% interests each and that Avtar “engaged in willfully unfair and oppressive conduct against and/or unjustly enriched himself at the expense of” plaintiffs. It ordered Avtar to buy out plaintiffs’ interests at fair value, awarded damages for their expenditures and lost interest, and reduced the award to reflect plaintiffs’ retention of the UVH property. On appeal, the court rejected defendants’ argument that plaintiffs could not be members of a PLLC because they were not licensed veterinarians. It explained that under MCL 450.4202(2), “filing is conclusive evidence that all conditions precedent required to be performed under this act are fulfilled… except in an action… by the attorney general,” and “[o]nly the state has standing to contest that presumption.” Thus, “the alleged incorporation defect does not bar plaintiffs from advancing a member oppression” claim. The court also found ample evidence of oppressive conduct, noting that Avtar removed plaintiffs from bank accounts, filed tax documents falsely listing himself as sole owner, transferred $178,000 into accounts only he controlled, and used UVH funds to increase his salary, pay personal taxes, and cover his legal fees while withholding plaintiffs’ distributions. This “clearly and substantially interfered with plaintiffs’ rights and interests as members,” meeting the statutory definition of oppression under MCL 450.4515. As to unjust enrichment, the court agreed defendants were correct that such a claim cannot lie when an operating agreement governs the parties’ rights: “a contract will not be implied… where a written agreement governs.” But it held that the trial court’s error in granting summary disposition on that claim was harmless under MCR 2.613(A) because the remedies were independently proper under the oppression statute. Finally, it affirmed dismissal of defendants’ counterclaims, emphasizing that the trial court found plaintiffs did not “wrongfully withdraw money or transfer real or personal property” and that any transfers were authorized or “substantially necessary to preserve UVH’s assets.” Affirmed.
Breach of contract damages; Doe v Henry Ford Health Sys; Proof of damages with reasonable certainty; Use of business records; MRE 803(6); Directed verdict vs involuntary dismissal; MCR 2.504(B)(2); Reasonable price in indefinite contracts; Calhoun Cnty v Blue Cross Blue Shield of MI; Recovery of profits; Lawrence v Will Darrah & Assocs; Attorney fees & interest under contract; Pransky v Falcon Group, Inc; Waiver of fraud claims; Quality Prod & Concepts Co v Nagel Precision, Inc; Personal protection equipment (PPE)
The court held that plaintiff proved its contract damages with reasonable certainty but that the trial court erred in part in its damages calculation. Defendants hired plaintiff, a cleaning and restoration company, after a house fire. Plaintiff estimated the work would cost between $100,000 and $150,000. After completion, it invoiced defendants $121,264.24, but they did not pay. The trial court granted partial summary disposition for plaintiff on liability, leaving only damages for trial. Following a five-day bench trial, the court awarded $93,830. On appeal, defendants challenged both the sufficiency of proof and specific damage items. The court rejected their argument that plaintiff failed to establish damages, noting that the final invoice was properly admitted as a business record and that testimony from plaintiff’s director of operations supported the reasonableness of the charges. It further held that contracts do not fail for indefiniteness where the parties intended to be bound and a “reasonable price” can be supplied, quoting Calhoun Cnty that “when the promises and performances of each party are set forth with reasonable certainty, the contract will not fail for indefiniteness.” The court upheld the trial court’s acceptance of Xactimate, an industry-standard estimating software, as a reasonable method for calculating damages, emphasizing that defendants offered no contrary expert proof. It affirmed findings that many challenged charges, such as PPE, temporary lights, storage containers, and sink removals, were reasonable, and it upheld reductions the trial court already made for duplicative charges. But it found error where the trial court allowed two bathtub removal charges despite evidence there was only one tub, requiring a $150.02 reduction. Turning to plaintiff’s cross-appeal, the court held that plaintiff waived its fraud claim by expressly agreeing below it was unnecessary after prevailing on breach of contract. It also upheld the denial of attorney fees and interest despite a contractual clause, reasoning that the final invoice was “acknowledged [by plaintiff] as not the correct total bill,” so awarding additional sums would have been inappropriate. Finally, it concluded the trial court may have erred in reducing plaintiff’s damages for hydroxyl generators, noting that photographs showed at least three units in use contrary to the trial court’s finding of one. It remanded for reconsideration of that item but otherwise affirmed. Affirmed in part, reversed in part, and remanded.
Loss of evidence; Arizona v Youngblood; Other acts evidence; Prior sexual assaults; Unfair prejudice; MRE 403; Whether MCL 768.27a deprived defendant of due process; Prosecutorial misconduct; Hearsay; Sexual assault nurse examiner (SANE) testimony; MRE 803(4); Ineffective assistance of counsel; Failure to object to the testimony from a sergeant & the SANE; Sentencing; Proportionality
The court held that defendant failed to show: (1) “his right to due process was violated when the trial court denied his motion to dismiss”; and (2) “the trial court abused its discretion by allowing the prosecutor to admit the testimony of the victim’s friends.” Also, it rejected his claim that MCL 768.27a deprived him of due process. As to prosecutorial misconduct, the court was “unconvinced that the outcome would have been different if [the officer in charge of the case] had not testified about defendant’s evasiveness.” As such, the trial court did not err when it permitted and failed to sua sponte strike the exchange. Further, he “failed to demonstrate that the outcome of the case would have otherwise been different had the SANE not recited the victim’s accusation.” Thus, he was not entitled to relief on the hearsay claim. Additionally, he was not denied the effective assistance of counsel. Finally, the trial court’s 15 to 40 years sentence was not disproportionate or unreasonable for his CSC I convictions. He was convicted CSC I and II and sentenced to 15 to 40 years for each CSC I conviction and 5 to 15 years for each CSC II conviction. Defendant first contended, among other thing, that he was “entitled to have the charges against him dismissed because exculpatory evidence that was in the prosecution’s possession was destroyed. The evidence in question, data from the victim’s cellular telephone, was erased when a forensic analyst with the MSP was attempting to extract the data.” The court noted that the “trial court agreed with the prosecutor that the issue was whether the prosecutor failed to preserve evidence and not whether the prosecutor suppressed evidence.” Thus, the trial “court concluded that defendant had not established that the evidence was lost in bad faith.” The court agreed “that the appropriate standard is that under Youngblood.” It held that “the purported lack of evidence on the cellular telephone would, at best, be only ‘potentially exculpatory,’ depending on how the victim testified and how the jury viewed the evidence.” As to the other acts evidence, defendant had “not shown that the trial court abused its discretion by allowing the prosecutor to admit the testimony of the victim’s friends. While the testimony was undoubtedly prejudicial, it was not outside of the range of reasonable outcomes for the trial court to determine that the probative value of the other-acts testimony was not substantially outweighed by the danger of unfair prejudice.” Also, the court rejected his claim “that MCL 768.27a deprived him of due process.” Because he “failed to establish any error, let alone plain error, he is not entitled to relief.” Affirmed.
Evidentiary issue; Relevance; MRE 402; Unfair prejudice; MRE 403; Self-defense or defense of others jury instruction; Prosecutorial misconduct; Ineffective assistance of counsel; Failure to object to the alleged prosecutorial misconduct; Motion for an adjournment; Sentencing; Scoring of PRV 1; Scoring of OVs 3 & 9
The court held that: (1) the trial court “did not abuse its discretion by not permitting testimony about an alleged sexual relationship between” defendant’s minor stepson (CE) and the victim, by denying defendant’s request for a self-defense or defense of others instruction, or by denying his request for an adjournment; (2) because “there was no prosecutorial misconduct, defense counsel cannot be deemed ineffective for failure to object to the purported misconduct”; and (3) the trial court did not err in assessing 75 points for PRV 1 and 10 points for OV 9, but did err in scoring OV 3 at 5 points when it should have assessed 0 points, although he was not entitled to resentencing. He was convicted of aggravated assault and resisting or obstructing a police officer. He was sentenced as a fourth-offense habitual offender to 806 days to 15 years for resisting and obstructing and 81 days in jail for misdemeanor aggravated assault. Defendant sought to admit evidence that CE “had a sexual relationship with the victim and that CE’s sexual relationship with someone else caused the victim to go into a rage, leading to a fight between the victim and CE. The trial court determined that this testimony was irrelevant and refused to allow questions about this purported sexual relationship. Given the highly prejudicial and potentially misleading nature of evidence regarding sexual conduct, the trial court did not abuse its discretion.” The court found that the “evidence would also have had little bearing on whether defendant assaulted the victim. Furthermore, CE was permitted to testify that the victim assaulted and kicked him and that the victim had been drinking.” Also, the “trial court denied a self-defense or defense of others instruction because defendant repeatedly told police that he did not touch the victim and because defendant’s stepson testified that he was responsible for the victim’s injuries.” He contended “that there was sufficient evidence to warrant a self-defense or defense of others instruction because he was heard on a 911 call indicating that someone struck his son.” That statement was “insufficient to demonstrate that defendant witnessed an assaultive event between the victim and his stepson or otherwise acquired an honest and reasonable belief that the use of force was necessary to protect his stepson.” Affirmed.
Divorce; Motion for change of domicile for the parties’ children to Virginia; The D’Onofrio factors; D’Onofrio v D’Onofrio (NJ Super); MCL 722.31(4)(a)-(e); Children’s best interests
Concluding that the trial court’s findings as to “the D’Onofrio factors were not against the great weight of the evidence[,]” the court affirmed the order denying defendant-mother’s motion for change of domicile for the parties’ children. Also, it held that the trial court’s findings as to their “best interests were not against the great weight of the evidence.” Defendant contended “the trial court erred by finding she did not show, by a preponderance of the evidence, that the threshold D’Onofrio factors warranted a change of domicile” (to Virginia). As for the first factor, MCL 722.31(4)(a), the court held that even “if this factor constituted a close call, the facts do not clearly preponderate in the opposite direction.” As for the second factor, MCL 722.31(4)(b), the “record did not establish the relocation was ‘inspired’ by defendant’s desire to defeat or frustrate plaintiff’s [ex-husband] parenting time schedule. The trial court’s finding addressing the relocation was not against the great weight of the evidence.” As to the third factor, MCL 722.31(4)(c), the court found that the “trial court’s finding, that the parental relationship for the children and plaintiff could not be preserved, was not against the great weight of the evidence.” Concerning the fourth “factor, MCL 722.31(4)(d), the trial court found neither parent was ‘motivated by any interest in increasing or reducing child support obligations.’” There was “no evidence establishing plaintiff, the parent opposing the relocation, was motivated by any desire to secure a financial advantage. The trial court properly found this factor did not favor either party.” As to the fifth factor, MCL 722.31(4)(e), the court concluded that the trial court’s finding as to domestic violence “was not against the great weight of the evidence.”
Negligence claims related to power outages & property flooding; Duty; Proximate cause; Ray v Swager; Amendment of the complaint to add a party; Weymers v Khera; Motion to strike evidence submitted with summary disposition motions; Judicial notice; MRE 201(b); Utility Resource Group LLC (URG)
The court held that the trial court erred in granting defendants summary disposition under MCR 2.116(C)(8) in this negligence case arising from power outages and property flooding. It also erred in denying plaintiffs’ motion to add DTE Electric as a party and in regard to their motion to strike exhibits filed with defendants’ motions. Plaintiffs asserted “it was improper for the trial court to consider information apart from the pleadings and make factual determinations when granting defendants summary disposition.” The court found that it did appear “the trial court considered the extent and nature of the rainfall, either through the exhibits that defendants submitted or through information provided in plaintiffs’ other lawsuit. Specifically, [it] determined that ‘the damage suffered by Plaintiffs resulted from a series of unfortunate events that coincided with an unexpected torrential rain event’ and that there was ‘no connection between the damage done to the electric power line and the cause of the damage done to’” their homes. It also “determined that ‘the 1000-year rainfall was a superseding cause and was not reasonably foreseeable.’ This was all information outside the” third amended complaint. Thus, “this was error.” The court concluded “plaintiffs adequately put defendants on notice of plaintiffs’ claims against them.” The court noted the “trial court concluded that DTE Energy had no duty to plaintiffs, primarily resting its decision on the unforeseeable nature of the damages and the superseding cause of the rain.” Further, its opinion also appeared “to determine that DTE Energy could not have been a proximate cause of plaintiffs’ damages on the basis of superseding rain. There is not, however, enough factual support at this point in the proceedings to determine whether DTE Energy was entitled to dismissal on the basis of duty or proximate cause.” The court also held that the trial court erred in granting defendant-URG summary disposition based on “proximate cause. Plaintiffs properly pleaded that URG responded to the MISS DIG notification and that URG may be liable if they failed to mark the cable, resulting in the power outage at” a pump station and flooding of their properties. As to plaintiffs’ motion to amend, “adding DTE Electric at this stage of the proceedings would not be futile. The trial court did not address the remaining bases for denying a motion to amend, but there is also no evidence” of undue delay or bad faith by plaintiffs in “not first naming DTE Electric as a defendant.” Reversed and remanded.
Claims for property damage under the sewage disposal system event (SDSE) exception to governmental immunity; MCL 691.1407(2); SDSE “event”; MCL 691.1416(k); Defect in a sewage disposal system; MCL 691.1416(e); Substantial proximate cause; MCL 691.1417(3); “Service lead”; MCL 691.1416(k)(i); Cannon Twp v Rockford Pub Sch; Notice & foreseeability of overvoltage; MCL 691.1417(3)(c); Sufficiency of pleadings under MCR 2.111; Great Lakes Water Authority (GLWA); Public Light Department (PLD)
The court held that plaintiff presented sufficient evidence of defects in defendants’ (city and water authority (GLWA)) sewage disposal system to survive summary disposition under the SDSE exception to governmental immunity. Plaintiff-homeowner sued defendants for property damage after her home flooded during a 7/21 storm, alleging defects at defendants’ pumping station and in the sewer system. The trial court granted summary disposition for defendants, reasoning that the flooding was caused by an unforeseeable overvoltage from the PLD and thus not a cognizable defect. On appeal, the court rejected defendants’ arguments that plaintiff’s claim failed as a matter of law. It explained that under MCL 691.1416(k)(i), a “service lead” is a connection between a claimant’s property and the sewer system, not the connection between the PLD’s line and the pumping station, and thus the trial court erred in excluding plaintiff’s claim on this basis. Further, the trial court’s ruling that the overvoltage did not constitute a defect was contrary to industry standards, which require “[e]mergency pumping capability” regardless of whether power is lost through outage or overvoltage. The court also concluded that the electrical system was part of the sewage disposal system, citing Cannon Twp for the principle that instrumentalities used in connection with waste collection and disposal fall within the statute. It held that plaintiff raised a genuine issue of material fact as to defendants’ knowledge of the defect, pointing to her expert’s affidavit that voltage instability had previously affected the station, and emphasized that the trial court erred by rejecting that evidence and finding unforeseeability without record support. It further held that defendants’ alternative arguments, that the storm exceeded design capacity and that plaintiff failed to plead a defect, also failed. Defendants’ own expert acknowledged a factual dispute over storm severity, and plaintiff’s complaint sufficiently alleged that defects in design, operation, and maintenance of the pumping station caused the flood. The court concluded that “for purposes of summary disposition on the basis of governmental immunity, it is an actionable claim.” Reversed and remanded.
Surplus proceeds from tax-foreclosure sales; MCL 211.78t; Whether payment decisions must be made on a property-by-property basis; MCL 211.78m(8)(c); Harbor Watch Condo Ass’n v Emmet Cnty Treasurer; Unjust-enrichment limit under MCL 211.78t(9); Principle that when statutes conflict, the more specific provision governs over the more general one; Milne v Robinson; General Property Tax Act (GPTA); Foreclosing governmental unit (FGU)
The court held that the GPTA requires surplus proceeds to be calculated and paid on a property-by-property basis, so the treasurer could not aggregate losses from other parcels to defeat the owner’s claim to surpluses from four profitable sales. Petitioner foreclosed on 20 of claimant’s parcels for unpaid taxes. Four of those sales produced surplus proceeds, but the other 16 produced either no surplus or losses, yielding a net loss in the aggregate. Claimant sought to recover the surplus generated by the four profitable parcels. Petitioner argued that paying those surpluses would “unjustly enrich” claimant because the county suffered an overall shortfall. The trial court agreed. On appeal, the court agreed with claimant that he was entitled to the surplus proceeds that resulted from the sales of his four properties that yielded a net profit, even though the aggregate sales of all 20 of his properties resulted in a net loss. “As MCL 211.78m(8)(c) makes clear, if a payment of surplus proceeds is ordered pursuant to MCL 211.78t(9), the FGU must make the payment ‘on a property-by-property basis.’” Applying that requirement, the court concluded that “an FGU cannot aggregate the surplus proceeds from the sale of one property to offset a shortfall from the sale of another property that the claimant owned.” However, the “trial court did just that when it found that awarding claimant the remaining proceeds from the four sales that yielded surpluses would unjustly enrich claimant at the expense of the public.” As such, it “erred when it aggregated the results of the sales of claimant’s 20 properties to justify denying claimant the surplus proceeds from the sale of the four properties at a profit.” As to any conflict between MCL 211.78m(8)(c) and the unjust enrichment provision of MCL 211.78t(9), the court noted that to the extent “the two provisions of the GPTA conflict, the more specific language of MCL 211.78m(8)(c) prevails over the general proscription of unjustly enriching claimants set forth in MCL 211.78t(9).” Reversed and remanded.
Termination of parental rights; Jurisdiction over the child; Reasonable reunification efforts; Finding of aggravated circumstances; Prior abuse; MCL 722.638(1)(a); The doctrine of anticipatory neglect
The court held that the trial court did not clearly err in exercising jurisdiction over child-KV. “Its aggravated circumstances finding under MCL 722.638(1)(a), however, was erroneous as a matter of law. Aggravated circumstances exist under that statute only if a parent has abused the child or the child’s sibling; a finding of anticipatory abuse is insufficient. Because the trial court did not find that respondent[-father] abused either KV or a sibling of KV, DHHS was required to make reasonable efforts to reunify respondent with KV before seeking termination.” Thus, it affirmed the trial court’s exercise of jurisdiction, reversed its finding of aggravated circumstances, vacated the order terminating respondent’s parental rights, and remanded. As to jurisdiction, the transcript clarified that the trial “court found by a preponderance that respondent assaulted [KV's stepsister, CG] and that, as a result, it was taking jurisdiction over KV. The [trial] court later added that jurisdiction rested on respondent’s ‘failure to protect against the molestation by the male children in the home.’” Its findings turned on the trial “court’s assessment of CG’s credibility, and ‘[i]t is not for this Court to displace the trial court’s credibility determination.’” The court found that taken “together, the findings establish jurisdiction under at least MCL 712A.2(b)(2), which authorizes jurisdiction when a parent’s ‘neglect, . . . criminality, . . . or depravity’ renders the home ‘an unfit place for the juvenile to live in.’” The trial “court’s oral ruling also adequately communicated finality, as there is no dispute that it held that it had jurisdiction over KV and proceeded to the disposition phase.” The court concluded that the “trial court’s findings are not clearly erroneous, so we affirm its exercise of jurisdiction over KV.” As to aggravated circumstances, DHHS urged the trial “court to apply the doctrine of anticipatory neglect (or anticipatory abuse), and the [trial] court relied on that doctrine in finding aggravated circumstances.” The court concluded “that the statute does not permit that approach.” The court noted that MCL 722.638(1)(a) “recognizes only a narrow form of anticipatory abuse: it permits an inference that a parent who abuses a child’s sibling may also abuse that child. But when the children are not siblings, the statute does not permit extending that inference.” Moreover, as respondent pointed “out, the statute requires that the prior act of abuse be directed at either the child for whom termination is sought or that child’s sibling.” The court noted that the “trial court did not find that respondent abused KV, and neither party challenges its holding that CG is not KV’s sibling. The only abuse identified in the record— that of CG—therefore cannot satisfy MCL 722.638(1)(a) with respect to KV. To hold otherwise would improperly extend the statute beyond its terms.”
Grounds for removal; Child protective removal & contrary-to-welfare finding (MCL 712A.13a(9)); Reasonable efforts to prevent removal; Adequacy of trial court findings; In re Williams; In re Benavides; Abandonment of arguments lacking authority; In re TK; Timing of adjudication hearing under MCR 3.972(A); Role of referee in adjudication under MCR 3.913 & MCR 3.912
The court held that the trial court did not err in ordering removal of respondent-father’s children or in denying their return based on timing of adjudication. The children came to CPS’s attention after he was seen walking with them late at night on a busy road. The investigation found he lacked stable housing, often dropped the children at his brother’s home without consent or legal authority, and failed to follow up on housing resources despite a team decision-making meeting. After he disappeared with the children for hours, CPS obtained an ex parte removal order. At the emergency hearing, the CPS worker testified that respondent “would not pick [the children] up and would not take accountability for them” and that he had not secured housing despite assistance. On appeal, the court agreed with the trial court’s finding that continued placement with respondent was “contrary to the children’s welfare” and that “reasonable efforts had been made” to prevent removal through safety planning and resources, satisfying MCL 712A.13a(9) and MCR 3.965(C). It also rejected respondent’s speculation that his status as legal father would have changed the outcome, holding such claims abandoned under TK. Finally, it rejected his challenge to the timing of adjudication, noting the trial was set within 63 days, initially before a referee as permitted by MCR 3.913, and later adjourned “for good cause shown” without objection. Because respondent showed no error affecting substantial rights, the trial court’s rulings stood. Affirmed.
Termination under §§ 19b(3)(c)(i), (g), & (j); Due process; Updated case service plan; Reasonable reunification efforts
The court concluded that respondent-mother had “not established that she would have successfully reunified with her children if the case service plan had been updated as mandated and she is not entitled to relief.” Also, the trial court did not clearly err in holding that DHHS made reasonable efforts to assist her “in addressing the barriers to reunification with her children before terminating her parental rights.” She argued “that she was deprived of due process because she was not provided with an updated case service plan.” The court found that “DHHS’s failure to provide an updated case service plan every 90 days was a clear error because it did not comply with the requirements of MCL 712A.18f(5).” But it determined that “this failure did not prejudice respondent or affect the outcome of this case.” It held that “DHHS provided services for respondent and made efforts to reunite her with her children. Respondent was aware of the requirements of the case service plan; however, she denied any need for assistance with her substance use or mental health, was essentially noncompliant with them, and expressed that they were too much for her.” Thus, her “right to due process was not violated because she had notice of what actions were necessary to prevent termination of her parental rights.” And “despite DHHS offering significant services and making reasonable efforts toward reunification, respondent was noncompliant and failed to benefit from the services offered.” Finally, she also argued that the trial court erred in finding that DHHS “had made reasonable efforts at reunification because it failed to update her case service plan.” In sum, the record showed “that DHHS made reasonable efforts to rectify respondent’s barriers to reunification, but respondent failed to participate in and benefit from the services offered. Although DHHS committed a clear error in failing to continue to update [her] case service plan, [she] failed to establish that she was prejudiced. Further, [she] failed to identify what alternative services could have been provided or how she would have fared better had they been offered.” Affirmed.