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summaries of opinions as they are released from the Michigan Supreme Court, Michigan Court of Appeals (published & unpublished), and selected U.S. Sixth Circuit.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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Stay pendng arbitration; § 7 of the Uniform Arbitration Act (UAA); MCL 691.1687; MCR 3.602(C); Motion to compel arbitration; Dismissal; Motion to rescind
The court agreed that “defendants’ claim on cross-appeal that the trial court, upon granting their motion to compel arbitration, erred by purporting to dismiss the case rather than staying it pending completion of arbitration.” Also, as to their motion to compel arbitration, the “trial court did not err by concluding that the arbitration provision in the operating agreement” (OA) was effective and applied to this dispute; but it “erred to the extent it determined that the entire dispute as pleaded by plaintiff is subject to arbitration.” Finally, defendants “failed to show that the trial court erred by declining to reach the merits of the motion to rescind in this case or that we should disrupt [its] decision to dismiss that motion without prejudice.” Plaintiff’s motion to compel arbitration challenge centered “on the interaction between the [OA’s] arbitration provision and the master agreement’s forum-selection provision. According to plaintiff, the master agreement’s forum-selection provision controls over the [OA’s] arbitration provision, and the trial court erred by concluding otherwise.” The court disagreed, in part. Neither party argued “that the contractual provisions at issue are ambiguous, nor do we see any reason to conclude as much. Instead, the parties argue that the relevant provisions unambiguously support their respective positions. The parties focus on three provisions from the” two agreements. The court failed “to see such a conflict. Taken together, the forum-selection and arbitration provisions make clear that (1) judicial proceedings, as to both . . . agreements, must be brought in the state or federal courts in Wayne County; and (2) claims that are related to or arise out of the [OA] are subject to the arbitration provision, whereas all other claims are not. This reading duly aligns with and gives effect to the plain language of both provisions, and we see nothing to indicate that the parties, in agreeing to these provisions, intended otherwise.” And the court found that “this case has proceeded consistently with these provisions: plaintiff” sued in circuit court, and “defendants then moved to invoke the arbitration provision on the basis that plaintiff’s claims arose out of or related to the” OA. Plaintiff argued, “in the alternative, that the trial court erred by ordering defendants[-Sam and Abulhassan] to arbitration because neither was a party to the” OA. The court agreed, in part. It failed “to see why those claims against Sam and Abulhassan would not be subject to arbitration, regardless of whether plaintiff agreed to arbitrate disputes with them individually.” The court found that by “the same token, however, Count VIII of plaintiff’s complaint brought a claim against Abulhassan individually for tortious interference with contractual relationships and/or business expectancies.” Given that Abulhassan “did not sign the [OA] and this claim does not arise from his alleged status as [defendant-]Lefty’s agent, plaintiff did not agree to submit this claim to arbitration and it is not subject the [OA’s] arbitration provision.” Thus, it, agreed “with plaintiff that the trial court erred to the extent that it ordered this claim to arbitration.” Affirmed in part, reversed in part, and remanded.
Antitrust; Claims under §§ 1 & 2 of the Sherman Act; Private right of action; 15 USC § 15(a); “Standing”; “Proximate causation”; Apple Inc v Pepper; Illinois Brick Co v Illinois
The court held that plaintiff-United Allergy’s Sherman Act claims against defendants-insurers and an allergy-care medical group were properly dismissed because plaintiff, as an “indirect seller,” was unable to establish proximate cause. United Allergy provides allergy supplies and personnel to primary-care physicians. It sued defendants for antitrust violations under §§ 1 and 2 of the Sherman Act, seeking treble damages for allegedly conspiring to drive it and its contracting doctors out of the market. The district court dismissed United Allergy’s antitrust claims on the pleadings for lack of standing. On appeal, like the district court, the court concluded “that United Allergy has alleged only indirect injuries that flow out of the harms the defendants inflicted on physicians.” But it instead characterized “this defect as a lack of causation rather than ‘standing.’” A plaintiff suing under the antitrust laws “must show both that it suffered an antitrust injury and that the defendant proximately caused the injury. United Allergy’s suit flunks the latter element.” The court noted that the Supreme Court, relying on proximate causation principles, “has held ‘that indirect purchasers who are two or more steps removed from [an antitrust] violator in a distribution chain may not sue.’” The court found “the same rule should apply in reverse to indirect sellers for antitrust violations that a group of buyers (like the insurers here) commit. United Allergy is also an indirect seller because it is ‘two’ ‘steps removed from’ the insurers in the distribution chain. The insurers directly bought from (and harmed) the primary-care physicians by allegedly conspiring to fix their reimbursement rates and deny their claims. And that conduct harmed United Allergy only indirectly because it led the physicians not to pay United Allergy’s fees and to end their relationship.” Affirmed.
Retroactive application of Christie v Wayne State Univ to require compliance with MCL 600.6431 in circuit-court actions; Hudson v Department of Corrs; Flamont v Department of Corrs; Whether the Michigan Department of Corrections (MDOC) waived the Court of Claims Act’s (COCA) notice defense through litigation delay; MCR 2.116(D)(3); Fairley v Department of Corrs; Whether the federal Prison Rape Elimination Act (PREA) preempts MCL 600.6431; Ter Beek v City of Wyoming; Availability of equitable doctrines of laches & unclean hands to excuse noncompliance; Senters v Ottawa Sav Bank, FSB; Elliott-Larsen Civil Rights Act (ELCRA)
Holding that plaintiffs-prisoners’ ELCRA claim against defendant-MDOC was barred because they undisputedly failed to file the notice required by MCL 600.6431, the court affirmed summary disposition for the MDOC. Plaintiffs sued MDOC and a corrections officer in circuit court alleging sex discrimination. Nearly three years later Christie held that COCA notice applies in circuit court, and the MDOC successfully moved to dismiss. On appeal, the court first rejected plaintiffs’ retroactivity argument, explaining that Hudson and Flamont control and “held that Christie applies retroactively to all pending cases[,]” foreclosing relief on this argument. The court next rejected their waiver argument, emphasizing that “‘governmental immunity is not an affirmative defense, but is instead a characteristic of government,’” and that MCL 600.6431 is a “‘precondition to suing the state[.]’” As such, MCR 2.116(D)(3) permits raising immunity “at any time,” and federal waiver-in-litigation cases are inapposite. The court then rejected plaintiffs’ PREA preemption argument, noting the Act contains no express preemption clause, aims to improve corrections practices through funding incentives, and its regulations expressly preserve statute-of-limitations defenses. Under Ter Beek there is no “‘direct and positive conflict[.]’” Turning to their equity arguments, the court explained that where “‘a statute is applicable to the circumstances and dictates the requirements for relief, equity will not interfere,[]’” and plaintiffs showed neither the “proper time” element for laches nor bad faith for unclean hands. As the Supreme Court noted in Christie, MCL 600.6431 “sets forth a general rule that a party must follow, regardless of forum, if that party is to overcome immunity and bring the state before a court,” and plaintiffs did not comply. Affirmed.
42 USC § 1983 action alleging malicious prosecution & fabrication of evidence claims under the Fourth Amendment; Whether plaintiffs established a “deprivation of liberty”; Noonan v County of Oakland (Unpub 6th Cir); Albright v Oliver; Effect of failing to plead an underlying constitutional violation on claims for supervisory, failure to intervene, & Monell liability
The court affirmed the district court’s dismissal of plaintiffs’ § 1983 claims for malicious prosecution and fabrication of evidence based on their failure to establish the necessary “deprivations of liberty.” Plaintiffs were African-American athletes at the University of Kentucky. They were subject to racial taunts and physical violence at a fraternity party. After the incident, defendant-Vinlove, a Lexington police officer, brought criminal charges against plaintiffs. A grand jury refused to indict. Plaintiffs, asserting that their reputations were damaged, sued Vinlove, two other police officers, and defendant-Lexington-Fayette County Urban Government. They alleged various federal claims under § 1983 as well as state-law claims. The district court granted defendants’ motion to dismiss. On appeal, the court held that the “minimal level of criminal proceedings” plaintiffs alleged did not constitute a liberty deprivation under its case law. “‘Nowhere in [their] complaint do[] plaintiff[s] allege that [they were] “seized” or otherwise detained[.]’” They did not allege that they were ever arrested, subject to travel restrictions, or required to post bail or a bond. The court held that “the damage of having criminal proceedings brought against you under false pretenses, . . . is not a deprivation of liberty under the Fourth Amendment.” In this case, plaintiffs were “merely asserting various damages stemming from the effort to prosecute them. But the test is not damages, it is a deprivation of liberty under the Fourth Amendment.” Thus, their § 1983 malicious prosecution claim failed. In so ruling, the court rejected plaintiffs’ argument based on Justice Ginsberg’s “continuing seizure” doctrine set forth in her concurrence in Albright. The court also held that plaintiffs had no viable fabrication of evidence claim due to their failure to plead a deprivation of liberty under the Fourth Amendment. And their failure to plead an underlying constitutional violation meant that they did not have any viable claims for supervisory, failure to intervene, or Monell liability.
42 USC § 1983 action by a former employee alleging procedural due process violations; The statute of limitations; MCL 600.5805(2); Accrual; The “discovery rule”; Applicability of “equitable tolling”; Whether plaintiff stated a procedural due process claim; Michigan Department of Corrections (MDOC)
[This appeal was from the WD-MI.] The court held that because plaintiff-Bozzo’s § 1983 claim was “untimely on its face,” and he could not establish an exception to the statute of limitations, the district court properly dismissed his procedural due process claim. Bozzo, who worked for the MDOC as a prison guard, was discharged for comments to a co-worker. Years after an arbitrator ruled for the MDOC, he sued in federal court alleging various constitutional violations. The district court dismissed his case without prejudice when he failed to respond to a motion to dismiss. He then refiled, and the district court granted defendants-MDOC officials summary judgment based on the statute of limitations and his forfeiture of all his constitutional claims except due process, for which he had failed to state a claim. On appeal, he only pursued his procedural due process claim and argued his case should not have been dismissed based on the statute of limitations. The court explained that § 1983 claims borrow the applicable state law limitations period for personal-injury actions. Under Michigan law, this is three years. The issue here was the date on which his claim accrued. The accrual issue is covered by federal law, and the court has held that “a claim accrues when a ‘plaintiff knows or has reason to know of the injury which is the basis of his action.’” It noted an “apparent contradiction between the Supreme Court’s occurrence-based rule and our discovery rule.” But as the “parties assume the discovery rule applies notwithstanding Supreme Court precedent,” it took the case as presented to it. Considering the elements of a due process claim, it held that his alleged deprivation occurred when he was “formally terminated” via correspondence on 7/31/19. Bozzo argued that he had not “fully realized” his injury until the ruling on his arbitration proceeding, in 2021. The court rejected this reasoning, noting that he “had already been ‘deprived’ of his job when he attended his arbitration hearing[,]” and that the allegations he made about the arbitration proceeding amounted “to ‘dissatisf[action] with the result,’ not the process.” Given that “knowledge of procedural defects is what counts, the discovery rule” did not change the court’s conclusion as to the accrual date of his claim. It also rejected his equitable tolling argument, noting that this was “unavailable under the Michigan limitations provision at issue here.” Lastly, it held that even if his claim had been timely, he received “everything due process requires before termination” and he also “enjoyed the minimal procedures needed for a post-termination hearing.” Affirmed.
Whether candidates’ nominating petitions conformed to MCL 168.544c(1); Beydoun v Board of State Canvassers; Strict compliance with content requirements; Moore v Genesee Cnty; Failure to strike “township” from the heading; MCL 168.552a; Whether a candidate’s legal name must be included in the heading; Christenson v Secretary of State; Emergency motion for declaratory judgment & a writ of mandamus; Mootness; Issue of public significance likely to recur but evade judicial review
In this case concerning nominating petitions’ conformance to MCL 168.544c(1), the court held that (1) intervening defendant-Jenkins’s “petitions included the required content and were not rendered invalid by the failure to strike ‘township’ from the heading” and (2) there was no authority for plaintiff’s position that intervening defendant-Durhal “was required to include his legal name in the heading of” his petitions. Plaintiff sought a writ of mandamus and declaratory relief related to the 8/25 Detroit mayoral primary election. His complaint alleged that defendants-city clerk and election commission “were precluded from certifying Jenkins and Durhal as candidates in the” election because their nominating petitions failed to conform to MCL 168.544c(1). The trial court dismissed his complaint and denied his emergency motion. On appeal, as an initial matter the court agreed with defendants and Jenkins that the appeal was moot but found it “appropriate to consider the merits of the underlying issues[.]” As to Jenkins, while “the statute requires that the petition include an instruction to ‘strike one’ from the petition, i.e., either ‘city’ or ‘township’” it was apparent that the word township “was not stricken from” her petitions. The court concluded it was clear from the plain language of MCL 168.544c(1) “that the real purpose of this portion of the petition heading is to document and declare that the electors signing the nominating petition are registered and qualified voters of either a particular city or particular township. Jenkins’s petitions complied with this requirement.” Her petitions “specifically identified in the heading ‘Detroit’ as the city common to all the signatories to the nominating petition. Thus, Jenkins submitted nominating petitions that included the required content and, therefore, strictly complied with the” statute’s content requirements. Plaintiff also asserted “that Durhal’s legal name was ‘Frederick Charles Durhal, Jr.,’ and the nominating petitions incorrectly identified him as ‘Frederick Durhal.’” The court agreed with the trial court “that MCL 168.544c(1) did not require Durhal to list his legal name in the heading of the nominating petition.” The court held that the trial court did not abuse its discretion in ruling “that the issuance of a declaratory judgment or a writ of mandamus was unwarranted” and in dismissing the complaint. Affirmed.
No-fault fee caps for post-2019 amendment services; Whether home-health-aide & skilled-nursing care are subject to the Medicare-based cap or the non-Medicare cap; MCL 500.3157(2) vs MCL 500.3157(7); Definition of “Medicare” under MCL 500.3157(15)(f); Central Home Health Care Servs v Progressive MI Ins Co; Possible applicability of MCL 500.3157(8); Explanation of Benefits (EOBs)
Holding that the Medicare-based cap in MCL 500.3157(2) applies to home-health-aide and skilled-nursing care because Medicare provides an “amount payable” for those services, the court affirmed partial summary disposition for plaintiff-provider. The provider billed for 24/7 home-health-aide and skilled-nursing care for a catastrophically injured insured. After the 2019 amendments took effect, defendant-insurer reduced reimbursement from about $31 to about $19 per hour, invoking the 55% cap in MCL 500.3157(7). On appeal, the court rejected the insurer’s position that Medicare has no “amount payable” for these services on a fee-for-service basis because it pays under a home health prospective payment system. Adopting the straightforward approach articulated in Central Home Health Care, the court explained that the “simple question” is whether Medicare covers the service, and “nothing in the two subsections or the definition of Medicare indicates that the method of calculation of the amount that Medicare would pay is relevant to determining which cap applies.” Further, the Legislature’s directive to disregard “limitations unrelated to the rates” confirms that experts need not “‘plow through a vast dataset’” to find a Medicare payable number. The record showed that Medicare covers home-health-aide and skilled-nursing services and has billing codes and amounts payable that the insurer itself used on its EOBs, so the 200% cap in subsection (2) governs rather than the 55% cap in subsection (7). The court also addressed the insurer’s argument that even if subsection (2) applies, the additional cap in MCL 500.3157(8) may limit recovery to the provider’s average 1/1/19 charge, noting that subsection (8) “may be applicable,” but the trial court did not err by not deciding it on the motion for partial summary disposition because reasonableness and subsection (8)’s applicability remain for later proceedings.
Distribution of surplus proceeds after a tax foreclosure sale; Whether a foreclosing governmental unit (FGU) is entitled to attorney fees & costs incurred for postsale proceedings; MCL 211.78m & 211.78t; “Remaining proceeds”; MCL 211.78t(12); “Minimum bid”; MCL 211.78m(16); Use of proceeds as authorized by MCL 211.78m(8)(b); Documentary evidence establishing an interest under MCL 211.78t(8) & (9); Harmless error; Applicability of MCL 211.78t(6); Burden to prove interest in the remaining proceeds; Unjust enrichment; Rafaeli, LLC v Oakland Cnty; In re Petition of Chippewa Cnty Treasurer for Foreclosure; Personal representative (PR)
In an issue of first impression, the court held that MCL 211.78m and 211.78t “do not allow an FGU to recover attorney fees and costs incurred for litigating issues involving the disbursement of remaining proceeds.” And it found no reversible error in the trial court’s disbursement of the proceeds here. Petitioner-county treasurer argued that “claimants’ failure to strictly comply with the substantive and disclosure requirements of MCL 211.78t precluded their recovery of remaining proceeds and that petitioner was entitled to recover attorney fees and costs incurred for postsale proceedings.” As to the attorney fees and costs issue, the court concluded that, “read in harmony, the definition of ‘remaining proceeds’ in MCL 211.78t(12), and the definition of ‘minimum bid’ in MCL 211.78m(16), expressly allow an FGU to deduct expenses that could have been included in the minimum bid from the remaining proceeds. However, these statutes do not authorize an FGU to recover legal expenses incurred in litigation related to the disbursement of remaining proceeds.” As to the disbursements here, the court declined “to address petitioner’s unpreserved argument that a claimant forfeits his or her right to recover remaining proceeds by failing to comply with all substantive and disclosure requirements in MCL 211.78t.” As to the disbursement of remaining proceeds to claimant-Estate, to the extent the trial court erred by granting its “motion to disburse before being presented with the letters of authority, the error was harmless because the trial court’s judicial notice of the probate case file revealed that [the PR] was authorized to act on the Estate’s behalf.” As to the disbursement to claimants-Joneses, the court was “not left with a definite and firm conviction that the trial court erred by impliedly finding that the Joneses met their burden to prove their interest in the remaining proceeds.” And petitioner did not show that the disbursement of remaining proceeds to them amounted “to unjust enrichment under MCL 211.78t(9)[.]”
Tax Tribunal’s (TT) dismissal for failure to proceed; MCL 205.737(3); President Inn Props, LLC v Grand Rapids; TT’s duty to independently determine true cash value (TCV); MCL 211.27; MCL 211.27a; MCL 205.737(2); Great Lakes Div of Nat’l Steel Corp v Ecorse; Ability to adopt assessment if supported by evidence without presumptive validity; Forest Hills Coop v Ann Arbor; Taxable value (TV); State equalized value (SEV); Property Record Cards (PRCs)
The court held that the TT committed an error of law by dismissing petitioner-homeowner’s small-claims property tax appeal for failure to meet the burden of going forward instead of deciding value. Petitioner bought his residence in defendant-city in 2023 for $315,000. For 2024, respondent assessed TCV at $321,600 and TV/SEV at $160,800. In the TT, respondent timely filed sales prices and PRCs for two nearby comparables. Petitioner filed the same assessment materials and asked that his SEV be adjusted to match those comparables. After a telephone hearing, the TT dismissed, reasoning petitioner “did not provide any evidence” and relied on “mere comparison of assessed values,” concluding the burden of going forward never shifted and its “duty to make an independent determination of value was not triggered.” On appeal, the court explained that petitioners bear the burden of proof, including “the burden of persuasion” and “the burden of going forward,” but TT proceedings are de novo and the TT must make an independent TCV determination when the burden of going forward is met. The court emphasized that, even if a petitioner fails to persuade, the TT may not automatically accept the roll value and may adopt the assessment only if “competent and substantive evidence supports doing so,” without affording it presumptive validity. Here, petitioner did submit valuation evidence, albeit identical to respondent’s, so the TT’s conclusion that he “provided no evidence” conflated the failure to go forward with the failure to persuade. The TT did not cite any law (and the court found none) “specifically concluding that a petitioner fails to meet its burden of going forward for purposes of establishing a property’s appropriate TCV by relying on the same evidence as the respondent in support of its decision.”. The TT’s critique went to “the reliability and weight of that evidence, and therefore the failure to persuade, rather than the failure to go forward with the evidence.” Vacated and remanded.