e-Journal Summary

e-Journal Number : 71572
Opinion Date : 10/17/2019
e-Journal Date : 11/04/2019
Court : Michigan Court of Appeals
Case Name : Krolczyk v. Hyundai Motor Am.
Practice Area(s) : Litigation
Judge(s) : Per Curiam – Meter, O’Brien, and Swartzle
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The district court’s subject matter jurisdiction; MCL 600.8301(1); Hodge v. State Farm Mut. Auto. Ins. Co.; Transfers from circuit court to district court; MCR 2.227(A)(1) & (B)(1); Administrative Order No. 1998-1; Brooks v. Mammo; Amendment of the complaint under MCL 600.2301; Pending defined; Subject matter jurisdiction defined; Campbell v. St. John Hosp.; Effect of pleadings stating an amount in controversy greater than $25,000; Principle that a court’s acts without jurisdiction are not judicial acts; Lamberton v. Pawloski; Principle that parties may not stipulate to subject matter jurisdiction; Redding v. Redding


Based on Hodge, the court held that the district court lacked subject matter jurisdiction because the complaint pled damages over $25,000. Thus, it reversed the circuit court’s order that affirmed in part, vacated in part, and remanded in part the district court’s order entering judgment for plaintiffs, and remanded to the circuit court. The only issue on appeal was whether the district court had subject matter jurisdiction to enter judgment. The suit was originally filed in circuit court. After a case evaluation award of $14,000 for plaintiffs, “the parties entered an order stipulating that damages ‘exclusive of costs and attorney fees, are under the $25,000 jurisdictional requirement of the Circuit Court,’ and ‘stipulate[d] to the transfer of this case’ to district court '[p]ursuant to MCR 2.227.’” Plaintiffs later amended their complaint, by leave of the district court. The amended complaint “alleged the same six counts, but requested damages in excess of $25,000.” After a six-day trial, the jury found for plaintiffs on all claims. When plaintiffs moved for entry of judgment, defendants for the first time raised the issue of whether the district court lacked subject matter jurisdiction. After a hearing, “the district court entered an order granting plaintiffs leave to file a second amended complaint, which plaintiffs did. The second amended complaint requested ‘less than $25,000’ in damages.” The district court later entered judgment for them. The court concluded that, based “on Hodge, the district court was without subject matter jurisdiction to enter an order allowing plaintiffs to amend their complaint because plaintiffs’ pleadings established that the amount in controversy was more than $25,000 and defendants had not consented to amending the pleadings to conform to the jurisdictional limit, thereby divesting the district court of subject matter jurisdiction.” While the district and circuit courts reasoned that the complaint could be amended under MCL 600.2301, this “statute could not be used to cure the specific deficiency here.” The district court’s ability to exercise judicial power is limited to “cases in which the amount in controversy does not exceed $25,000.” That amount is determined by the pleadings. If the pleadings state an amount in controversy exceeding $25,000, “the district court does not have the abstract power to exercise judicial authority over the case, which includes the power to enter an order under MCL 600.2301.”

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