Legal malpractice; Tribal sovereign immunity; Lewis v Clarke; Contract interpretation; Forum-selection clause; Franlink Inc v BACE Servs, Inc; Dismissal; Without prejudice; Turcheck v Amerifund Fin, Inc

The court concluded that plaintiff’s legal malpractice lawsuit “is not barred by tribal sovereign immunity, and further development of the record is required to determine whether the forum-selection clause requires plaintiff to bring this suit in tribal court.” Thus, it reversed the trial court’s judgment in part, vacated it in part, and remanded. Plaintiff is a wholly owned instrumentality of the Sault Ste. Marie Tribe of Chippewa Indians, defendant-law firm was the Tribe’s general counsel, and the individual defendants were attorneys at the firm who provided legal services under that arrangement. The trial court ruled that plaintiff’s suit was barred by tribal sovereign immunity because defendants, as general counsel, were agents of the Tribe, and alternatively ruled that a forum-selection clause in the general counsel agreement required dismissal of the action. The court held that when a party seeks summary disposition on grounds of tribal sovereign immunity, the motion may be brought under MCR 2.116(C)(4) in addition to or instead of MCR 2.116(C)(7). But it further held that sovereign immunity did not apply here because plaintiff was “not seeking relief from the sovereign but instead from defendants in their nonsovereign capacities for actions they took or failed to take in the scope of their work as counsel.” If plaintiff succeeds, the judgment will not operate against the Tribe or disturb tribal property. Thus, under Lewis, the real parties in interest were defendants, not the Tribe. As to the forum-selection issue, the court adopted the closely related doctrine as a matter of first impression and held that further development of the record was needed for the trial court to determine in the first instance whether plaintiff was sufficiently closely related to the Tribe to be bound by the forum-selection clause. The court also held that plaintiff’s argument under MCL 600.745, without more, did not meet its heavy burden of showing the clause should not be enforced. Finally, the court ruled that if dismissal is later based on the forum-selection clause, it must be without prejudice, not with prejudice.